Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 26, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Verb Technology Company, Inc. | ||
Entity Central Index Key | 0001566610 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 28,969,000 | ||
Entity Common Stock, Shares Outstanding | 62,451,830 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 1,815,000 | $ 983,000 |
Accounts receivable, net of allowance of $361,000 and $230,000, respectively | 919,000 | 1,271,000 |
Inventory, net of allowance of $51,000 and $2,000, respectively | 34,000 | 103,000 |
Prepaid expenses | 900,000 | 236,000 |
Total current assets | 3,668,000 | 2,593,000 |
Right-of-use assets | 2,730,000 | 3,275,000 |
Property and equipment, net of accumulated depreciation of $338,000 and $164,000, respectively | 862,000 | 720,000 |
Intangible assets, net of accumulated amortization of $2,310,000 and $975,000, respectively (including provisional intangible assets of $1,042,000 at December 31, 2020) | 5,153,000 | 5,365,000 |
Goodwill (including provisional goodwill of $3,723,000 at December 31, 2020) | 20,060,000 | 16,337,000 |
Other assets | 69,000 | 69,000 |
Total assets | 32,542,000 | 28,359,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 5,097,000 | 4,338,000 |
Accrued officers' salary | 822,000 | 207,000 |
Accrued interest (including $102,000 and $82,000 payable to related parties) | 114,000 | 82,000 |
Advance on future receipts, net of discount of $67,000 and $274,000, respectively | 110,000 | 732,000 |
Notes payable - related party | 1,077,000 | 112,000 |
Deferred incentive compensation, current | 521,000 | |
Operating lease liability, current | 596,000 | 391,000 |
Deferred revenue and customer deposits | 272,000 | 306,000 |
Derivative liability | 8,266,000 | 5,048,000 |
Total current liabilities | 16,875,000 | 11,216,000 |
Long Term liabilities: | ||
Notes payable | 1,458,000 | |
Note payable - related party, non-current | 1,065,000 | |
Deferred incentive compensation to officers | 521,000 | 1,042,000 |
Operating lease liability, non-current | 2,943,000 | 3,591,000 |
Total liabilities | 21,797,000 | 16,914,000 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized: Series A Convertible Preferred Stock, 6,000 shares authorized; 2,006 and 4,396 issued and outstanding as of December 31, 2020 and 2019 | ||
Class A units, 100 issued and authorized as of December 31, 2020 | ||
Class B units, 2,642,159 shares authorized, 2,642,159 issued and outstanding as of December 31, 2020 | 3,065,000 | |
Common stock, $0.0001 par value, 200,000,000 shares authorized, 47,795,009 and 24,496,197 shares issued and outstanding as of December 31, 2020 and 2019 | 5,000 | 2,000 |
Additional paid-in capital | 89,216,000 | 68,028,000 |
Accumulated deficit | (81,541,000) | (56,585,000) |
Total stockholders' equity | 10,745,000 | 11,445,000 |
Total liabilities and stockholders' equity | $ 32,542,000 | $ 28,359,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable allowance | $ 361,000 | $ 230,000 |
Inventory allowance | 51,000 | 2,000 |
Property and Equipment, net of accumulated depreciation | 338,000 | 164,000 |
Intangible assets, net of amortization | 2,310,000 | 975,000 |
Provisional intangible assets | 1,042,000 | |
Provisional goodwill | 3,723,000 | |
Accrued interest, related parties | 102,000 | 82,000 |
Net of discount on future receipts | $ 67,000 | $ 274,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Class A units, shares authorized | 100 | |
Class A units, shares issued | 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 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 47,795,009 | 24,496,197 |
Common stock, shares outstanding | 47,795,009 | 24,496,197 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 2,006 | 4,396 |
Preferred stock, shares outstanding | 2,006 | 4,396 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | ||
Total revenue | $ 9,965,000 | $ 9,100,000 |
Cost of revenue | ||
Total cost of revenue | 4,801,000 | 4,870,000 |
Gross margin | 5,164,000 | 4,230,000 |
Operating expenses: | ||
Research and development | 7,933,000 | 4,312,000 |
Depreciation and amortization | 1,510,000 | 1,042,000 |
General and administrative | 20,458,000 | 14,710,000 |
Total operating expenses | 29,901,000 | 20,064,000 |
Loss from operations | (24,737,000) | (15,834,000) |
Other income (expense), net | ||
Other expense, net | 102,000 | (11,000) |
Financing costs | (248,000) | (1,625,000) |
Interest expense - amortization of debt discount | (493,000) | (1,658,000) |
Change in fair value of derivative liability | 574,000 | 1,862,000 |
Debt extinguishment, net | 1,536,000 | |
Interest expense (including $141,000 and $141,000 to related parties) | (153,000) | (186,000) |
Total other expense, net | (218,000) | (82,000) |
Loss before income tax provision | (24,955,000) | (15,916,000) |
Income tax provision | 1,000 | 2,000 |
Net Loss | (24,956,000) | (15,918,000) |
Deemed dividend to Series A preferred shareholders | (3,951,000) | |
Net loss to common stockholders | $ (28,907,000) | $ (15,918,000) |
Loss per share - basic and diluted | $ (0.80) | $ (0.79) |
Weighted average number of common shares outstanding - basic and diluted | 36,012,395 | 20,186,249 |
SaaS Recurring Subscription Revenue [Member] | ||
Revenue | ||
Total revenue | $ 5,114,000 | $ 2,815,000 |
Other Digital [Member] | ||
Revenue | ||
Total revenue | 1,384,000 | 1,425,000 |
Digital [Member] | ||
Cost of revenue | ||
Total cost of revenue | 1,416,000 | 660,000 |
Design, Printing, and Fulfillment [Member] | ||
Revenue | ||
Total revenue | 2,744,000 | 3,913,000 |
Cost of revenue | ||
Total cost of revenue | 2,701,000 | 3,273,000 |
Shipping [Member] | ||
Revenue | ||
Total revenue | 723,000 | 947,000 |
Cost of revenue | ||
Total cost of revenue | $ 684,000 | $ 937,000 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Interest expense - related parties | $ 141,000 | $ 141,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Class A Units [Member] | Class B Units [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 | ||||||
Conversion of convertible debt | 410,000 | 410,000 | |||||
Conversion of convertible debt, shares | 182,333 | ||||||
Common stock issued upon exercise of warrants | 45,000 | 45,000 | |||||
Common stock issued upon exercise of warrants, shares | 189,237 | ||||||
Common stock upon issuance of convertible debt | 182,000 | 182,000 | |||||
Common stock upon issuance of convertible debt, shares | 25,272 | ||||||
Fair value of common shares issued for services | 1,778,000 | 1,778,000 | |||||
Fair value of common shares issued for services, shares | 1,015,981 | ||||||
Issuance of fractional shares due to reverse split | |||||||
Issuance of fractional shares due to reverse split, shares | 139,036 | ||||||
Issuance of Series A convertible preferred stock for cash | 4,688,000 | 4,688,000 | |||||
Issuance of Series A convertible preferred stock for cash, shares | 5,030 | ||||||
Conversion of series A preferred shares | |||||||
Conversion of series A preferred shares, shares | (634) | 409,032 | |||||
Fair value of warrants issued with the Series A convertible preferred stock | (4,688,000) | (4,688,000) | |||||
Fair value of vested stock options and warrants | 2,400,000 | 2,400,000 | |||||
Fair value of vested stock options and warrants, shares | |||||||
Net loss | (15,918,000) | (15,918,000) | |||||
Balance at Dec. 31, 2019 | $ 2,000 | 68,028,000 | (56,585,000) | 11,445,000 | |||
Balance, shares at Dec. 31, 2019 | 4,396 | 24,496,197 | |||||
Sale of common stock from public offering | $ 2,000 | 12,335,000 | 18,363,000 | ||||
Sale of common stock from public offering, shares | 12,545,453 | ||||||
Fair value of common shares issued for services | 1,190,000 | 1,190,000 | |||||
Fair value of common shares issued for services, shares | 1,007,583 | ||||||
Fair value of vested stock options and warrants | 1,977,000 | 1,977,000 | |||||
Fair value of vested stock options and warrants, shares | |||||||
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 | ||||||
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 | (2,390) | 1,768,909 | |||||
Fair value of warrants issued to Series A Preferred stockholders treated as a deemed dividend | (3,951,000) | (3,951,000) | |||||
Fair value of vested restricted stock awards | 2,870,000 | 2,870,000 | |||||
Fair value of vested restricted stock awards, shares | 1,773,440 | ||||||
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 | (24,956,000) | (24,956,000) | |||||
Balance at Dec. 31, 2020 | $ 3,065,000 | $ 5,000 | $ 89,216,000 | $ (81,541,000) | $ 10,745,000 | ||
Balance, shares at Dec. 31, 2020 | 2,006 | 100 | 2,642,159 | 47,795,009 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities: | ||
Net loss | $ (24,956,000) | $ (15,918,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Fair value of common shares issued for services and vested stock options | 6,119,000 | 4,178,000 |
Financing costs | 248,000 | 1,625,000 |
Amortization of debt discount | 493,000 | 1,658,000 |
Change in fair value of derivative liability | (574,000) | (1,862,000) |
Debt extinguishment costs, net | (1,536,000) | |
Depreciation and amortization | 1,510,000 | 1,042,000 |
Amortization of right-of-use assets | 545,000 | 349,000 |
Inventory reserve | 49,000 | (14,000) |
Allowance for doubtful account | 130,000 | 199,000 |
Effect of changes in assets and liabilities: | ||
Accounts receivable | 440,000 | (380,000) |
Inventory | 20,000 | 127,000 |
Prepaid expenses | (485,000) | (11,000) |
Other assets | (41,000) | |
Accounts payable, accrued expenses, and accrued interest | 788,000 | 2,123,000 |
Deferred revenue and customer deposits | (177,000) | (479,000) |
Deferred incentive compensation | 1,042,000 | |
Operating lease liability | (444,000) | (220,000) |
Net cash used in operating activities | (16,294,000) | (8,118,000) |
Investing Activities: | ||
Acquisition of subsidiary | (15,000,000) | |
Cash acquired from acquisition of subsidiary | 229,000 | 557,000 |
Purchases of property and equipment | (317,000) | (146,000) |
Net cash used by investing activities | (88,000) | (14,589,000) |
Financing Activities: | ||
Proceeds from sale of common stock | 16,781,000 | 18,525,000 |
Proceeds from sale of preferred stock | 4,688,000 | |
Proceeds from notes payable | 1,367,000 | 1,300,000 |
Advances on future receipts | 728,000 | 728,000 |
Proceeds from convertible note payable | 432,000 | |
Proceeds from warrant exercise | 2,165,000 | 45,000 |
Proceeds from related party note payable | 58,000 | |
Payment of convertible notes payable | (2,025,000) | |
Payment of notes payable | (630,000) | |
Payment of acquisition note payable | (1,885,000) | |
Payment of related party notes payable | (100,000) | (58,000) |
Payment of advances of future receipts | (1,842,000) | (7,000) |
Net cash provided by financing activities | 17,214,000 | 23,056,000 |
Net change in cash | 832,000 | 349,000 |
Cash - beginning of period | 983,000 | 634,000 |
Cash - end of period | 1,815,000 | 983,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 120,000 | 146,000 |
Cash paid for income taxes | 1,000 | 2,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
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 | 1,410,000 | |
Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features | 3,951,000 | 6,561,000 |
Fair value of 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 | |
Discount recognized from advances on future receipts | 285,000 | 285,000 |
Fair value of common stock issued for prepaid subscription agreement | 340,000 | |
Fair value of restricted awards returned - payroll taxes | 485,000 | |
Goodwill and intangible assets acquired from acquisition | 4,846,000 | 22,677,000 |
Assets acquired from the acquisition of subsidiary | 436,000 | 3,364,000 |
Liabilities assumed from the acquisition of subsidiary | 331,000 | 3,221,000 |
Issuance of note payable upon acquisition of subsidiary | $ 1,885,000 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 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 4, 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”). 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. On April 12, 2019, we acquired Sound Concepts Inc. (“Sound Concepts”). The acquisition was intended to augment and diversify Verb’s internet and SaaS business (see Note 3). 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”) for the acquisition of Solofire. The acquisition was intended to augment and diversify Verb’s internet and SaaS business (see Note 3). 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. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the year ended December 31, 2020, the Company incurred a net loss of $24,956,000 and used cash in operations of $16,294,000. 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. Subsequent to December 31, 2020, the Company generated cash in the aggregate of $15,480,000 from the sale of our common stock as part of a public offering and exercise of stock options and warrants. In addition, the Company also received cash of $4.4 million from advances from the sale of future receipts (see Note 20). 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. COVID-19 In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses. This outbreak could decrease spending, adversely affect demand for the Company’s products, and harm the Company’s business and results of operations. In the three months ended June 30, 2020, we experienced some uncertainty regarding whether there would be variability in demand for the services we provide on our platform after lock-down measures were implemented. We expect demand variability for our products and services may continue as a result of the COVID-19 pandemic; however, our sales team reported a higher level of interest in our products and services during the year ended December 31, 2020. Although the impact has not been material to date, a prolonged downturn in economic conditions could have a material adverse effect on our customers and demand for our services. The Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. As of December 31, 2020, the Company has been following the recommendations of local health authorities to minimize exposure risk for its employees, including the temporary closure of its corporate office and having employees work remotely. Most vendors have transitioned to electronic submission of invoices and payments. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc., Verb Direct, LLC, and Verb Acquisition Co., LLC. Intercompany accounts have been eliminated in the consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services are recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Statements of Consolidated Operations. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales are generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. A description of our principal revenue generating activities is as follows: 1. Digital Revenue which is divided into two main categories: a. SaaS recurring digital revenue based on contract-based subscriptions to our verb app products and platform services which include verbCRM, verbLEARN, verbLIVE, and verbTeams. The revenue is recognized over the subscription period. b. Non-SaaS, non-recurring digital revenue, which is revenue generated by the use of our app products and in-app purchases, such as sampling and other services obtained through the app. 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. 2. Non-digital revenue, which is revenue we generate from non-app, non-digital sources through ancillary services we provide as an accommodation to our clients and customers. These services, which we now outsource to a strategic partner as part of a cost reduction plan we instituted in 2020, include: a. Design, printing services, and fulfillment. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. b. Shipping services. The revenue is recognized when the corresponding products or fulfillment are shipped. Revenues during the years ended December 31, 2020 and 2019 were all generated from the United States of America. Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of revenue upon sale of products to our customers. Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for year ended December 31, 2020 and 2019: Year Ended Year Ended December 31, 2020 December 31, 2019 Verb’s largest customers are presented below as a percentage of Verb’s aggregate: Revenues None 1 major customer accounted for 13% of revenues Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate: Purchases 1 major vendor accounted for 40% of accounts payable individually and in aggregate None Accounts payable 2 major vendors accounted for 10% and 28% of accounts payable individually and 38% in aggregate 1 major vendor accounted for 14% of accounts payable individually and in aggregate Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. Leases We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 94 months. Pursuant to ASC 840, Leases, lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets (see Note 5). Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. No impairment of long-lived assets was required for the years ended December 31, 2020 and 2019. Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board’s (“FASB”) ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carry-forwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of operations. As of December 31, 2020, and 2019, the Company has not established a liability for uncertain tax positions. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. Share Based Payment The Company issues stock options and warrants, shares of Common Stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation 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. The Company values stock options using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options issued during the years ended December 31, 2020 and 2019 are as follows: Year Ended Year Ended December 31, 2020 December 31, 2019 Expected life in years 3.0, 4.0 and 5.0 1.0, 2.0 and 5.0 Stock price volatility 255%-271 % 180%-414 % Risk free interest rate 0.17-0.39 % 1.51-2.75 % Expected dividends 0 % 0 % Forfeiture rate 21.2 – 21.3 % 22.48 % The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company’s cloud-based, Verb interactive video CRM SaaS platform. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of December 31, 2020, and 2019, the Company had total outstanding options of 6,031,775 and 4,233,722, respectively, and warrants of 13,351,251 and 10,930,991, respectively, and outstanding restricted stock awards of 2,185,946 and 1,486,354, respectively, 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. Acquisitions and Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from, acquired technology, trade-marks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is the period needed to gather all information necessary to make the purchase price allocation, not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing is performed annually at December 31 (its fiscal year end). Recoverability of goodwill is determined by comparing the fair value of Company’s reporting unit 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. As of December 31, 2020 and 2019, management determined there were no indications of impairment. Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. As of December 31, 2020 and 2019 there was no impairment of intangible assets. Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. Segments The Company has acquired two operating subsidiaries, Verb Direct and Ascend Certification (see Note 3) with various revenue channels. Operations of these two subsidiaries are integrated since they have similar customer base and the Company having a single sales team, marketing department, customer service department, operations department, finance and accounting department to support its operations. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that there is only one reporting unit or segment. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS a. ACQUISITION OF VERB DIRECT On April 12, 2019, Verb completed its previously announced acquisition of Verb Direct through a two-step merger, consisting of merging Merger Sub 1 with and into Sound Concepts, with Sound Concepts surviving the “first step” of the merger as a wholly-owned subsidiary of Verb (and the separate corporate existence of Merger Sub 1 then having ceased) and, immediately thereafter, merging Sound Concepts (as of the closing of the first step, then known as Verb Direct, Inc.) with and into Merger Sub 2, with Merger Sub 2 surviving the “second step” of the merger, such that, upon the conclusion of the “second step” of the merger, the separate corporate existence of Verb Direct, Inc. (formerly Sound Concepts) then having ceased and Merger Sub 2 continued its limited liability company existence under Utah law as the surviving entity and as a wholly-owned subsidiary of Verb, then known as Verb Direct. On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the merger, each share of Sound Concepts Capital Stock issued and outstanding immediately prior to the effective time, was cancelled in exchange for cash payment by Verb of an aggregate of $15,000,000, and the issuance of an aggregate of 3,327,791 restricted shares of Verb’s Common Stock. The Acquisition Cash Payment was paid using a portion of the net proceeds Verb received as a result of the public offering of the units. Pursuant to the requirements of current accounting guidance, Verb valued the acquisition shares at $7,820,000, the fair value of the shares at the closing date of the transaction. The acquisition was intended to augment and diversify Verb’s internet and SaaS business. Key factors that contributed to the recorded goodwill and intangible assets in the aggregate of $22,677,000 were the opportunity to consolidate and complement existing operations of Verb, certain software and customer list, and the opportunity to generate future synergies within the internet and SaaS business. The allocation of the purchase price was determined with the assistance of a valuation specialist. The following table summarizes the assets acquired, liabilities assumed and purchase price allocation: Assets Acquired: Other current assets $ 2,004,000 Property and equipment 58,000 Other assets 1,302,000 $ 3,364,000 Liabilities Assumed: Current liabilities (2,153,000 ) Long-term liabilities (1,068,000 ) (3,221,000 ) Intangible assets 6,340,000 Goodwill 16,337,000 Purchase Price $ 22,820,000 The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is not expected to be deductible for tax purposes. Goodwill is not amortized but will be tested for impairment on an annual basis. The intangible assets, which consist mostly of developed technology of $4,700,000 are being amortized over 5-years, customer relationships of $1,200,000 are being amortized on an accelerated basis over its estimated useful life of 5 years and domain names of $440,000 are determined to have infinite lives but will be tested for impairment on an annual basis. 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 $4,845,000 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. As of December 31, 2020, management has not yet finalized the purchase price allocation. 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 207,000 $ 436,000 Liabilities Assumed: Current liabilities (241,000 ) Long-term liabilities (90,000 ) (331,000 ) Intangible assets (provisional) 1,122,000 Goodwill (provisional) 3,723,000 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 $1,000,000 are being amortized over 5-years, customer relationships of $70,000 are being amortized over 3 years, non-competition clause of $50,000 is being amortized over 3 years, and domain names of $2,000 are determined to have infinite lives but will be tested for impairment on an annual basis. During the year ended December 31, 2020 and 2019, the Company recorded amortization expense of $1,335,000 and $975,000, respectively, related to the intangibles discussed above. The following table summarizes the amortization expense for both Verb Direct and Ascend to be recorded in future periods for intangible assets that are subject to amortization and excludes intangible assets with infinite life (i.e. domain names) of $442,000: Year ending Amortization 2021 $ 1,435,000 2022 1,375,000 2023 1,302,000 2024 465,000 2025 and thereafter 133,000 Total amortization $ 4,710,000 The following unaudited pro forma statements of operations present the Company’s pro forma results of operations after giving effect to the purchase of Verb Direct and Verb Acquisition based on the historical financial statements of the Company, Verb Direct, and Verb Acquisition. The unaudited pro forma statements of operations for the year ended December 31, 2020 and 2019 give effect to the transaction as if they had occurred on January 1, 2019. Year Ended December 31, Year Ended (Proforma, unaudited) (Proforma, unaudited) SaaS recurring subscription revenue $ 6,077,000 $ 4,625,000 Other digital revenue 1,384,000 1,698,000 Design, printing, and fulfilment 2,744,000 6,178,000 Shipping 723,000 1,624,000 Total Revenue 10,928,000 14,125,000 Cost of revenue 4,980,000 7,322,000 Gross margin 5,948,000 6,803,000 Operating expenses 30,679,000 23,135,000 Other expense, net (218,000 ) (99,000 ) Loss before income tax provision (24,949,000 ) (16,332,000 ) Income tax provision 1,000 2,000 Net loss (24,950,000 ) (16,431,000 ) Deemed dividend to Series A preferred (3,951,000 ) - Net loss to common stockholders $ (28,901,000 ) $ (16,433,000 ) Pursuant to the provisions of ASC 805, the following results of operations of Verb Direct and Verb Acquisition subsequent to the acquisitions are as follows: Verb Direct Verb Revenue $ 9,041,000 $ 128,000 Cost of revenue 4,766,000 139,000 Operating expenses 6,208,000 889,000 Other expense 11,000 22,000 Net loss $ (1,944,000 ) $ (900,000 ) These amounts were included in the accompany Consolidated Statement of Operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of December 31, 2020 and 2019. December 31, 2020 December 31, 2019 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 39,000 39,000 Leasehold improvement 1,058,000 741,000 Total property and equipment 1,201,000 884,000 Accumulated depreciation (339,000 ) (164,000 ) Total property and equipment, net $ 862,000 $ 720,000 Depreciation expense amounted to $175,000 and $67,000 for the year ended December 31, 2020 and 2019, respectively. |
Right-of-use Assets and Operati
Right-of-use Assets and Operating Lease Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Right-of-use Assets and Operating Lease Liabilities | 5. RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES The Company leases certain warehouse, corporate office space and equipment under an operating lease agreement. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets pursuant to ASC 842, Leases. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Period Ended December 31, 2020 Period Ended December 31, 2019 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 520,000 $ 499,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 577,000 $ 366,000 Weighted average remaining lease term – operating leases (in years) 4.54 5.25 Average discount rate – operating leases 4.0 % 4.0 % December 31, 2020 December 31, 2019 Operating leases Right-of-use assets $ 2,730,000 $ 3,275,000 Short-term operating lease liabilities $ 596,000 $ 391,000 Long-term operating lease liabilities 2,943,000 3,591,000 Total operating lease liabilities $ 3,539,000 $ 3,982,000 Year ending Operating Leases 2021 776,000 2022 751,000 2023 773,000 2024 472,000 2025 and thereafter 1,189,000 Total lease payments 3,961,000 Less: Imputed interest/present value discount (422,000 ) Present value of lease liabilities $ 3,539,000 |
Advance on Future Receipts
Advance on Future Receipts | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Advance on Future Receipts | 6. ADVANCE ON FUTURE RECEIPTS The Company has the following advances on future receipts as of December 31, 2020: Note Issuance Date Maturity Date Interest Original Borrowing Balance at Balance at Note 1 December 24, 2019 June 30, 2020 28 % $ 506,000 $ - $ 503,000 Note 2 December 24, 2019 June 30, 2020 28 % 506,000 - 503,000 Note 3 June 30, 2020 February 25, 2021 28 % 506,000 89,000 - Note 4 June 30, 2020 February 25, 2021 28 % 506,000 88,000 - Total $ 1,012,000 177,000 1,006,000 Debt discount (67,000 ) (274,000 ) Net $ 110,000 $ 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 year ended December 31, 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 notes did not bear any interest, however, the interest was imputed at a rate of 28% based on the face value of the note. 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 year ended December 31, 2020, the Company paid $835,000 of the balance outstanding and amortized $218,000 of the debt discount. As of December 31, 2020 outstanding balance of the notes amounted to $177,000 and the unamortized balance of the debt discount was $67,000. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | 7. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties outstanding notes payable as of December 31, 2020 and 2019: Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2021 12.0 % $ 1,249,000 $ 725,000 $ 825,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Note 4 (D) March 22, 2019 April 30, 2019 5.0 % 58,000 - - Total notes payable – related parties 1,077,000 1,177,000 Non-current - (1,065,000 ) Current $ 1,077,000 $ 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 matured on February 8, 2021, as amended. A total of 30% of the original note balance or $375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $825,000 is not convertible. As of December 31, 2019, outstanding balance of the note amounted to $825,000. During the year ended December 31, 2020, the Company made payments of $100,000. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. Subsequent to December 31, 2020, the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2020 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. A total of 30% of the original note balance or $103,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $240,000 is not convertible. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended. As of December 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. (D) On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company’s Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2020 and 2019. Total interest expense for notes payable to related parties was $141,000 for the year ended December 31, 2020 and 2019, respectively. The Company paid $100,000 of principal and 2020. In addition, the Company paid $120,000 and $101,000 in interest related to these notes for the year ended December 31, 2020 and 2019, respectively. |
Deferred Incentive Compensation
Deferred Incentive Compensation to Officers | 12 Months Ended |
Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Deferred Incentive Compensation to Officers | 8. DEFERRED INCENTIVE COMPENSATION TO OFFICERS Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 430,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 324,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 125,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 163,000 163,000 Total 1,042,000 1,042,000 Non-current (521,000 ) (1,042,000 ) Current $ 521,000 $ - (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $430,000 and $125,000, respectively for services rendered. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. Subsequent to December 31, 2020, the Company paid $215,000 of the amount due and will pay the remaining $63,000 during the remainder of 2021. (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $163,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. Subsequent to December 31, 2020, the Company paid $162,000 of the amount due and will pay the remaining $82,000 during remainder of 2021. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | 9. NOTES PAYABLE The Company has the following outstanding notes payable as of December 31, 2020: Note Issuance Date Maturity Date Interest Balance at Note A April 17, 2020 April 17, 2022 1.00 % $ 1,218,000 Note B May 15, 2020 May 15, 2050 3.75 % 150,000 Note C May 1, 2020 May 1, 2022 3.75 % 90,000 Note D September 4, 2020 October 1, 2020 0.14 % - Total notes payable $ 1,458,000 (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 December 31, 2020. On January 4, 2020 the entire note and accrued interest was forgiven and will be accounted as a gain in fiscal 2021. (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) As a result of the acquisition of Solofire in September 2020, the Company assumed Solofire’s PPP loan of $90,000 it obtained in May 2020 under the Paycheck Protection Program (“PPP”) (see discussion “a”). The Company is currently in the process of applying for the forgiveness of the PPP loan. (D) On September 4, 2020, Verb Acquisition issued a note payable to the owners of SoloFire, in the amount of $1,885,000, as adjusted, as part of the consideration related to the acquisition of SoloFire. The note bears interest at a rate of 0.14% per annum, and was paid in full on October 1, 2020. |
Convertible Series A Preferred
Convertible Series A Preferred Stock and Warrant Offering | 12 Months Ended |
Dec. 31, 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 the SPA with the Preferred Purchasers, pursuant to which we agreed to issue and sell to the Preferred Purchasers up to an aggregate of 6,000 shares of Series A Preferred Stock (which, at the initial conversion price, are convertible into an aggregate of up to approximately 3.87 million shares of Common Stock) and the August Warrants to purchase up to an equivalent number of shares of Common Stock. We closed the offering on August 14, 2019, and issued 5,030 shares of Series A Preferred Stock and granted the August Warrants to purchase up to 3,245,162 shares of Common Stock in connection therewith. We received proceeds of $4,688,000, net of direct costs of $342,000. The offering was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering. The SPA grants the Preferred Purchasers a right to participate, up to a certain amount, in subsequent financings for a period of 24 months. The SPA also prohibits us from entering into any agreement to issue, or announcing the issuance or proposed issuance, of any shares of Common Stock or Common Stock equivalents for a period of 90 days after the date that the registration statement, registering the shares issuable upon conversion of the Series A Preferred Stock and exercise of the August Warrants, is declared effective. We are also prohibited, until the date that the Preferred Purchasers no longer collectively hold at least 20% of the then-outstanding shares of Series A Preferred Stock issued pursuant to the SPA, from entering into an agreement to effect any issuance by us of Common Stock or Common Stock equivalents involving certain variable rate transactions. We also cannot enter into agreements related to “at-the-market” transactions for a period of 12 months. At the later of (i) the date that the August Warrants are fully exercised, and (ii) 12 months from the date of the SPA, we cannot draw down on any existing or future agreement with respect to “at-the-market” transactions if the sale of the shares in such transactions has a per share purchase price that is less than $3.76 (two times the exercise price of the Warrants). On September 16, 2019, we filed a registration statement on Form S-3 with the SEC to register the shares of Common Stock underlying the Series A Preferred Stock and the August Warrants. The registration statement was declared effective on September 19, 2019. We have agreed to keep such registration statement continuously effective for a period of 24 months. Each share of Series A Preferred Stock is convertible, at any time and from time to time from and after the issuance date, at the holder’s option in to that number of shares of Common Stock equal to the stated value per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock is convertible into approximately 645 shares of Common Stock. In certain circumstances, the Series A Preferred Stock is mandatorily convertible into shares of Common Stock after the Company obtains stockholder approval to issue a number of shares of Common Stock in excess of 19.99% and the closing price of the Common Stock is 100% greater than the then-base conversion price on each trading day for any 20 trading days during a consecutive 30-trading-day period. The holders of the Series A Preferred Stock have no voting rights. However, we cannot, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the rights, preferences, or restrictions given to the Series A Preferred Stock or alter or amend the Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption, or distribution of assets upon a liquidation senior to, or otherwise pari passu with, the Series A Preferred Stock, (c) amend our Articles of Incorporation, or other charter documents in any manner that materially and adversely affects any rights of the holders, (d) increase the number of authorized shares of Series A Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing. The holders of Series A Preferred Stock cannot convert the Series A Preferred Stock if, after giving effect to the conversion, the number of shares of our Common Stock beneficially held by the holder (together with such holder’s affiliates) would be in excess of 4.99% (or, upon election by a holder prior to the issuance of any shares, 9.99% of the number of shares of Common Stock issued and outstanding immediately after giving effect to the issuance of any shares of Common Stock issuance upon conversion of the Series A Preferred Stock held by the holder). The conversion price of the Series A Preferred Stock is subject to certain customary adjustments, including upon certain subsequent equity sales and rights offerings. We are also prevented from issuing shares of Common Stock upon conversion of the Series A Preferred Stock or exercise of the August Warrants, which, when aggregated with any shares of Common Stock issued on or after the issuance date and prior to such conversion date or exercise date, as applicable (i) in connection with any conversion of the Series A Preferred Stock issued pursuant to the SPA, (ii) in connection with the exercise of any August Warrants issued pursuant to the SPA, and (iii) in connection with the exercise of any warrants issued to any registered broker-dealer as a fee in connection with the issuance of the securities pursuant to the SPA, would exceed 4,459,725 shares of Common Stock (the “19.99% Cap”). This prohibition will terminate upon the approval by our stockholders of a release from such 19.99% Cap. The August Warrants have an initial exercise price of $1.88 per share, subject to customary adjustments, are exercisable six months after the date of issuance, and will expire five years from the date of issuance. The exercise price is subject to certain customary adjustments, including upon certain subsequent equity sales and rights offerings. In addition, the August Warrants also included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the August Warrants are accounted as derivative liability with a fair value upon issuance in 2019 of $6,173,000, of which, $4,688,000 was recorded as a reduction to additional paid in capital while the remaining fair value of $1,485,000 was accounted for as a financing cost during the year ended December 31, 2019. During the year ended December 31, 2020, in preparation for 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. In return for the waiver, the Company granted these Series A stockholders warrants to purchase 2,303,861 shares of Common Stock valued at $3,951,000 (see Note 12). During the year ended December 31, 2020 and 2019, 2,390 and 634 shares of Preferred Stock were converted into 1,768,909 and 409,032 shares of Common Stock. As of December 31, 2020, 1,706 shares Series A Preferred stock are outstanding. |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 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 issued certain convertible note whose conversion price contains reset provisions based on a discounted future market price. However, since the number of shares to be issued is not explicitly limited, the Company is unable to conclude that enough authorized and unissued shares are available to settle the conversion option. In addition, the Company also granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the conversion feature of the notes and the fundamental transaction clause of these warrants are accounted for as a derivative liability in accordance with ASC 815 and are being re-measured every reporting period with the change in value reported in the statement of operations. The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: December 31, 2020 Upon Issuance 2020 December 31, 2019 Upon Issuance 2019 Stock Price $ 1.65 $ 1.70 $ 1.55 $ 4.78 Exercise Price $ 1.41 $ 1.55 $ 1.88 $ 3.76 Expected Life 3.17 5.0 3.53 2.75 Volatility 107 % 212 % 216 % 192 % Dividend Yield 0 % 0 % 0 % 0 % Risk-Free Interest Rate 0.23 % 2.47 % 1.64 % 1.99 % Warrants $ 8,266,000 $ 3,951,000 $ 5,048,000 $ 6,173,000 Convertible Notes - - - 388,000 Total Fair Value $ 8,266,000 $ 3,951,000 $ 5,048,000 $ 6,561,000 The expected life of the note and warrants was based on the remaining contractual term of the instruments. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. The risk-free interest rate was based on rates established by the Federal Reserve Bank. As of December 31, 2018, the outstanding fair value of the derivative liability amounted to $2,576,000. During the year ended December 31, 2019, the Company recorded derivative liabilities of $388,000 as a result of the issuance of a convertible note and $6,173,000 as a result of the issuance of the August Warrants issued as part of the Company’s Series A Preferred Stock offering, or an aggregate of $6,561,000. The Company recorded a charge of ($1,862,000) to account for the changes in the fair value of these derivative liabilities for the year ended December 31, 2019. In addition, the Company also recorded a gain on debt extinguishment of $2,227,000 to account for the extinguishment of derivative liabilities associated with the settlement of all convertible debt accounted as derivative liability. At December 31, 2019, the fair value of the derivative liability amounted to $5,048,000. During the year ended December 31, 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 that contained a fundamental transaction clause (see Note 12). The Company recorded a charge of ($574,000) to account for the changes in the fair value of these derivative liabilities during year ended December 31, 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 December 31, 2020, the fair value of the derivative liability amounted to $8,266,000. The details of derivative liability transactions for the year ended December 31, 2020 are as follows: December 31, 2020 December 31, 2019 Beginning balance $ 5,048,000 $ 2,576,000 Fair value upon issuance of notes payable and/or warrants 3,951,000 6,561,000 Change in fair value (574,000 ) (1,862,000 ) Extinguishment (159,000 ) (2,227,000 ) Ending balance $ 8,266,000 $ 5,048,000 |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Common Stock | 12. COMMON STOCK The following were Common Stock transactions during the year ended December 31, 2020: Sale of common stock from 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 10). In return for the waiver, the Company granted these Series A stockholders warrants to purchase 2,303,861 shares of Common Stock. The warrants are exercisable in August 2020, expire in 5 years and are exercisable at $1.20 per share, as adjusted. The exercise price is subject to certain customary adjustments, including subsequent equity sales and rights offerings. In addition, the warrants also included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result of this fundamental transaction provision, the warrants 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. Sale of common stock from 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 year ended December 31, 2020, the Company issued 1,007,583 shares of Common Stock to vendors for services rendered and to be rendered with a fair value of $1,190,000. 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. During the year ended December 31, 2020 the Company expensed $1,035,000 to selling, general, and administrative for services rendered. At December 31, 2020, common stock issued in fiscal 2020 with fair value of $155,000 was recorded as prepaid expense as the corresponding services has not been rendered to the Company. The following were Common Stock transactions during the year ended December 31, 2019: Shares and Warrants Issued as Part of the Company’s Underwritten Public Offering On April 4, 2019, we entered into an Underwriting Agreement (the “Underwriter Agreement”) with A.G.P./Alliance Global Partners, as representative of the several underwriters named therein (the “Underwriter” or “AGP”), relating to a firm commitment public offering (the “Public Offering”) of 6,389,776 units (the “Units”) consisting of an aggregate of (i) 6,389,776 shares (the “Firm Shares”) of Common Stock, and (ii) warrants to purchase up to 6,389,776 shares of Common Stock (the “Firm Warrants”; and the shares of Common Stock issuable from time to time upon exercise of the Firm Warrants, the “Firm Warrant Shares”), at a public offering price of $3.13 per Unit. Pursuant to the Underwriting Agreement, we also granted the Underwriter an option, exercisable for 45 days, to purchase up to 958,466 additional Units, consisting of an aggregate of (x) 958,466 shares of Common Stock (the “Option Shares”; and, together with the Firm Shares, the “Shares”) and (y) warrants to purchase up to 958,466 shares of Common Stock (the “Option Warrants”; and together, with the Firm Warrants, the “Warrants”; and the shares of Common Stock issuable from time to time upon exercise of the Option Warrants, the “Option Warrant Shares”; and, together with the Firm Warrant Shares, the “Warrant Shares”). The Warrants have an initial per share exercise price of $3.443, subject to customary adjustments, are exercisable immediately, and will expire five years from the date of issuance, or April 9, 2024. On April 9, 2019, we closed the Public Offering and issued 6,389,776 Units, consisting of an aggregate of 6,389,776 Firm Shares and Firm Warrants to purchase up to an aggregate of 6,389,776 Firm Warrant Shares. In connection with the closing, the Underwriter partially exercised its over-allotment option and purchased an additional 159,820 Units, consisting of an aggregate of 159,820 Option Shares and Option Warrants to purchase up to an aggregate of 159,820 Option Warrant Shares. In the aggregate, we issued 6,549,596 shares of common stock and received net proceeds of approximately $18,525,000, net of underwriting commissions and other offering expenses in the aggregate of $2,138,000. Included in the offering expenses were $162,000 in various legal and professional expenses that were incurred and paid in fiscal 2018 and accounted for as a deferred offering costs as of December 31, 2018. This amount was derecognized upon close of the public offering in April 2019 and was recorded as a reduction to paid in capital. In connection with the Public Offering, we also issued the Underwriter warrants to purchase up to 319,488 shares of our Common Stock (the “Underwriter Warrants”), at an exercise price of $3.913. The Underwriter Warrants are exercisable at any time, and from time to time, in whole or in part, during the four-year period commencing one year from the effective date of the Registration Statement. Shares Issued for the Acquisition of Verb Direct – Acquisition of Verb Direct Shares Issued for Services Shares Issued Upon Issuance of Convertible Note Convertible Notes Payable, Conversion of Notes Payable – Notes Payable, Convertible Notes Payable Conversion of Accounts Payable – |
Restricted Stock Units
Restricted Stock Units | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Stock Units | |
Restricted Stock Units | 13. RESTRICTED STOCK UNITS On December 20, 2019, we held the 2019 Annual Meeting of Stockholders (the “Meeting”), at which our stockholders approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “Plan”). A summary of restricted stock unit activity for the years ended December 31, 2020 and 2019 are presented below. Weighted- Average Grant Date Shares Fair Value Fair Value Non-vested at December 31, 2018 - $ - $ - Granted 1,923,001 2,615,000 1.36 Vested (436,647 ) (616,000 ) 1.36 Forfeited - - Non-vested at December 31, 2019 1,486,354 $ 1,999,000 $ 1.36 Granted 2,871,471 3,391,000 1.18 Vested/deemed vested, net of 336,533 returned shares for payroll taxes (1,773,440 ) (3,355,000 ) 1.31 Forfeited (61,906 ) (92,000 ) 1.47 Non-vested at December 31, 2020 2,185,946 $ 1,943,000 $ 1.17 A summary of activity for the year ended December 31, 2020: 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 unit 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 unit 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 shares 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 year ended December 31, 2020, the Company granted an additional 2,282,373 shares of its restricted stock to employees and members of Board of Directors. The Restricted Stock Units vest in various dates, starting on grant date up to July 2024. These Restricted Stock Units were valued based on market value of the Company’s stock price at the respective date of grant and had aggregate fair value of $2,525,000, which is being amortized as stock compensation expense over its vesting term. During the year ended December 31, 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 unit that vested or deemed vested for the year ended December 31, 2020 was $3,355,000 and is included in selling, general and administrative expenses in the accompanying statements of operations. As of December 31, 2020 the amount of unvested compensation related to issuances of restricted stock unit was $1,943,000 which will be recognized as an expense in future periods as the shares vest. When calculating basic net income (loss) per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income (loss) per share, these shares are included in weighted average common shares outstanding as of their grant date. A summary of activity for the year ended December 31, 2019: On December 23, 2019, the Company granted 1,923,001 restricted stock units to employees and directors. The restricted stock units vest starting on grant date through January 10, 2022. These restricted stock units were valued based on market value of the Company’s stock price at the date of grant and had aggregate fair value of $2,615,000. The total fair value of restricted stock unit vested during the year ended December 31, 2019 was $616,000 respectively, and is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 14. STOCK OPTIONS On December 20, 2019, the Company adopted its 2019 Omnibus Incentive Plan (the “Plan”). A summary of option activity for the years ended December 31, 2020 and 2019 are presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2018 2,478,974 $ 5.25 2.93 $ - Granted 2,531,971 2.07 - - Forfeited (777,223 ) 6.42 - - Exercised - - - - Outstanding at December 31, 2019 4,233,722 1.73 2.54 995,000 Granted 2,111,308 1.35 - - Forfeited (313,255 ) 2.53 - - Exercised - - - - Outstanding at December 31, 2020 6,031,775 $ 1.55 2.68 $ 1,932,000 Vested December 31, 2020 2,979,724 $ 1.71 $ 945,000 Exercisable at December 31, 2020 2,036,652 $ 2.00 $ 522,000 At December 31, 2020 and December 31, 2019, the intrinsic value was $1,935,000 and $995,000, respectively. The following were stock options transactions during the year ended December 31, 2020: During the year ended December 31, 2020, the Company granted stock options to employees and consultants to purchase a total 2,111,308 shares of Common Stock for services rendered. The options have an average exercise price of $1.35 per share, expire between four and five years, vesting from 0.43 and four years from grant date. The total fair value of these options at grant date was approximately $2,438,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the year ended December 31, 2020 amounted to $1,728,000. As of December 31, 2020, the total unrecognized stock-based compensation expense was $4,146,000, which is expected to be recognized as part of operating expense through December 2024. The following were stock options transactions during the year ended December 31, 2019: On December 23, 2019, the Company amended the exercise price of stock options of certain employees and consultants granted in prior period to purchase 1,340,333 shares of common stock to $1.36 per share. As a result of this amendment, the Company determined the fair value of these stock options before and after the amendment using the Black-Scholes Option Pricing model. The incremental difference of the fair value before and after the amendment amounted to $32,000, of which, $12,000 was recorded as part of stock based compensation expenses and the remaining $20,000 will be recognized as part of operating expense through July 2023 based upon its vesting. During the year ended December 31, 2019, the Company granted stock options to employees and consultants to purchase a total 2,531,971 shares of Common Stock for services rendered. The options have an average exercise price of $2.07 per share, expire between one and five years, vest starting from grant date through four years. The total fair value of these options at grant date was approximately $4,564,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the year ended December 31, 2019 amounted to $1,961,000. The fair value of the share option awards was estimated using the Black-Scholes method based on the following weighted-average assumptions: Years Ended December 31, 2020 2019 Risk-free interest rate 0.17% - 0.39 % 1.51%-2.75 % Average expected term (years) 5 years 5 years Expected volatility 255.23 - 270.57 % 180%-413.83 % 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. |
Stock Warrants
Stock Warrants | 12 Months Ended |
Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Stock Warrants | 15. STOCK WARRANTS The Company has the following warrants as of December 31, 2020 and 2019 are presented below: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2018 940,415 $ 3.60 2.32 $ 1,806,000 Granted 10,386,181 2.97 - - Forfeited (46,667 ) 7.29 - - Exercised (348,938 ) 1.17 - - Outstanding at December 31, 2019 10,930,991 3.07 4.25 - Granted 4,630,654 1.17 - - Forfeited (244,800 ) 4.58 - - Exercised (1,965,594 ) 1.10 - - Outstanding at December 31, 2020, all vested 13,351,251 $ 2.48 3.38 $ 3,022,000 At December 31, 2020 and December 31, 2019 the intrinsic value was $3,022,000 and $0, respectively. The following were stock warrant transactions during the year ended December 31, 2020: During the year ended December 31, 2020, the Company granted 416,199 warrants to a consultant as part of a private placement offering and 2,303,861 warrants to Series A stockholders (see Note 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, have an average exercise price of $1.17 per share, expire between 0.01 and 5 years 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 cost. During the year ended December 31, 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. The following were stock warrant transactions during the year ended December 31, 2019: On April 9, 2019, the Company granted warrants to purchase a total of 6,869,084 shares of Common Stock as part of a public offering. The warrants are exercisable at an average price of $3.46 per share and will expire in April 2024. See Note 12, Common Stock, On April 11, 2019, the Company granted fully vested warrants to purchase a total of 163,739 shares of Common Stock for services rendered. The warrants are exercisable at an average price of $3.76 per share and will expire in April 2024. The total fair value of these warrants at the grant date was approximately $439,000 using the Black-Scholes Option pricing model and was expensed upon grant. On July 8, 2019, the Company granted fully vested warrants to purchase a total of 108,196 shares of Common Stock as partial consideration for the conversion of notes payable. The warrants are exercisable at an average price of $3.44 per share and will expire in July 2024. The total fair value of these warrants at the grant date was approximately $217,000 using the Black-Scholes Option pricing model and was expensed upon grant. See Note 6, Notes Payable On August 15, 2019, the Company granted warrants to purchase a total of 3,245,162 shares of Common Stock as part of a preferred stock offering. The warrants are exercisable at a price of $1.88 per share and will expire in August 2024. See Note 12, Common Stock, |
Issuance of Class A and B Units
Issuance of Class A and B Units | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2020, the Company created an separate class of equity instrument called Class A Units. Concurrently, the Company formed a wholly owned subsidiary, Verb Acquisition, and issued 100 Class A units as part of the organization of Verb Acquisition. The Class A Units have the following rights and privileges: 1. Class A units are a standalone financial instrument; 2. Priority on distributions; 3. Ability to remove the manager; 4. Drag-along rights; 5. Power to dissolve Verb Acquisition provided that a majority of the Class B Units also approve the dissolution; 6. Ability to appoint a liquidator to wind up the affairs of Verb Acquisition; 7. Entitled to distributions; 8. Approve board appointments; and 9. 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 year ended December 31, 2020, the Company created a separate class of an equity instrument called Class B Units. Concurrently, our wholly owned subsidiary, 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. Class B units are a standalone financial instrument; 2. Exchangeable for shares of the Company’s Common Stock at a conversion rate of 1 to 1; 3. Power to dissolve Verb Acquisition, provided that a majority of the Class A Units also approve the dissolution; 4. Entitled to profit distributions; 5. Approve board appointments made by the Class A Units; and 6. 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. Subsequent to December 31, 2020 all Class B units were exchanged into Verb Technology Common Stock. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. INCOME TAXES Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 December 31, 2019 Net operating loss carry-forwards $ 13,350,000 $ 7,591,000 Share based compensation (457,000 ) (635,000 ) Non-cash interest and financing expenses (177,000 ) (472,000 ) Other temporary differences (569,000 ) (63,000 ) Less: Valuation allowance (12,147,000 ) (6,421,000 ) Deferred tax assets, net $ - $ - The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: December 31, 2020 December 31, 2019 Statutory federal income tax rate (21.0 )% (21.0 )% State taxes, net of federal benefit (6.9 )% (6.9 )% Non-deductible items (1.0 )% (1.0 )% Change in valuation allowance 28.9 % 28.9 % 0.0 % 0.0 % ASC 740 requires that the tax benefit of net operating losses carry forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry forward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a 100% valuation allowance against the asset amounts. Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities. The Company has no liabilities related to uncertain tax positions or unrecognized benefits as of the year end December 31, 2020 or 2019. The Company has not accrued for interest or penalties associated with unrecognized tax liabilities. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) was enacted into law. The TCJ Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”), that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. The Company is currently assessing the extensive changes under the TCJ Act and its overall impact on the Company; however, based on its preliminary assessment of the reduction in the federal corporate tax rate from 35% to 21% to become effective on January 1, 2018, the Company currently expects that its effective tax rate for 2018 will be between 20% and 23%. Such estimated range is based on management’s current assumptions with respect to, among other things, the Company’s earnings, state income tax levels and tax deductions. The Company’s actual effective tax rate in 2019 may differ from management’s estimate. As of December 31, 2020, the Company had federal and state net operating loss carry forwards of approximately $28.7 million, which may be available to offset future taxable income for tax purposes. These net operating losses carry forwards begin to expire in 2034. This carry forward may be limited upon the ownership change under IRC Section 382. IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2020 but believes the provisions will not limit the availability of losses to offset future income. The Company is subject to income taxes in the U.S. federal jurisdiction and the state of Nevada. The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply. As of December 31, 2020, tax years 2015 through 2018 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years. |
Accrued Officers' Salary
Accrued Officers' Salary | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Accrued Officers' Salary | 18. ACCRUED OFFICERS’ SALARY Accrued officers’ salary consists of unpaid salaries for the Company’s Chief Executive Officer and Chief Financial Officer, who are also the owner of approximately 8.3% of the Company’s outstanding shares of Common Stock. As of December 31, 2020, and 2019, accrued officers’ salary amounted to $822,000 and $207,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 19. COMMITMENTS AND CONTINGENCIES Employment Agreements On December 20, 2019, we entered into an Executive Employment Agreement with Mr. Cutaia (the “Employment Agreement”), which terminates and replaces his original employment agreement dated November 1, 2014, as subsequently amended by an amendment dated October 30, 2019. The Employment Agreement sets forth the terms and conditions of Mr. Cutaia’s employment. The Employment Agreement is for a four-year term, and can be extended for additional one-year periods. In addition to certain payments due to Mr. Cutaia upon termination of employment, the Employment Agreement contains customary non-competition, non-solicitation, and confidentiality provisions. Mr. Cutaia is entitled to an annual base salary of $430,000, which shall not be subject to reduction during the initial term, but will be subject to annual reviews and increases, if and as approved in the sole discretion of our Board, after it has received and reviewed advice from the Compensation Committee (who may or may not utilize the services of its outside compensation consultants, as it shall determine under the circumstances). In addition, Mr. Cutaia is eligible to receive performance-based cash and/or stock bonuses upon attainment of performance targets established by our Board in its sole discretion, after it has received and reviewed advice from the Compensation Committee (who may or may not utilize the services of its outside compensation consultants, as it shall determine under the circumstances). The Company shall make annual equity grants to Mr. Cutaia as determined by our Board in its sole discretion, after it has received and reviewed advice from the Compensation Committee (who may or may not utilize the services of its outside compensation consultants, as it shall determine under the circumstances). Finally, Mr. Cutaia is eligible for certain other benefits, such as health, vision, and dental insurance, life insurance, and 401(k) matching. The Employment Agreement provides that Mr. Cutaia is entitled to the following severance package in the event he is “terminated without cause,” “terminated for good reason,” or “terminated upon permanent disability”: (i) monthly payments of $35,833 or such sum equal to his monthly base compensation at the time of the termination, whichever is higher, for a period of 36 months from the date of such termination and (ii) reimbursement for COBRA health insurance costs for 18 months from the date of such termination and, thereafter, reimbursement for health insurance costs for Mr. Cutaia and his family during the immediately subsequent 18-month period. In addition, all of Mr. Cutaia’s then-unvested RSAs or other awards will immediately vest, without restriction, and any unearned and unpaid bonus compensation, expense reimbursement, and all accrued vacation, personal, and sick days, and related items shall be deemed earned, vested, and paid immediately. For purposes of the Employment Agreement, “terminated without cause” means if Mr. Cutaia were to be terminated for any reason other than a discharge for cause or due to Mr. Cutaia’s death or permanent disability. For purposes of the Employment Agreement, “terminated for good reason” means the voluntary termination of the Employment Agreement by Mr. Cutaia if any of the following were to occur without his prior written consent, which consent cannot be unreasonably withheld considering our then-current financial condition, and, in each case, which continues uncured for 30 days following receipt by us of Mr. Cutaia’s written notice: (i) there is a material reduction by us in (A) Mr. Cutaia’s annual base salary then in effect or (B) the annual target bonus, as set forth in the Employment Agreement, or the maximum additional amount up to which Mr. Cutaia is eligible pursuant to the Employment Agreement; (ii) we reduce Mr. Cutaia’s job title and position such that Mr. Cutaia (A) is no longer our Chief Executive Officer; (B) is no longer our Chairman of the Board; or (C) is involuntarily removed from our Board; or (iii) Mr. Cutaia is required to relocate to an office location outside of Orange County, California, or outside of a 30-mile radius of Newport Beach, California. For purposes of the Employment Agreement, “terminated upon permanent disability” means if Mr. Cutaia were to be terminated because he is then unable to perform his duties due to a physical or mental condition for (i) a period of 120 consecutive days or (ii) an aggregate of 180 days in any 12-month period. On July 29, 2020, the Compensation Committee approved a 3% salary increase for Mr. Cutaia resulting in an annual salary of $490,000. Litigation a. EMA Financial, LLC On April 24, 2018, EMA Financial, LLC, or 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 set forth four causes of action and sought 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 it 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 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. On February 9, 2021, the former employee’s counsel filed a motion for summary judgment, or in the alternative, summary adjudication against the Company. The Company does not believe the court will grant this motion and it has instructed its counsel to continue its efforts in seeking a 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 Hartmann Class Action 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 which were confidential and subject to several contingencies, including, without limitation, court approval. On October 27, 2020, the court granted preliminary approval of the class action settlement. On February 18, 2021, the court entered a final order and judgment approving the class action settlement and dismissed the Hartmann Class Action with prejudice. The stipulation of settlement approved (the “Stipulation of Settlement”) by the court on February 18, 2021 provided for, amongst other things, a full and final release, settlement, and discharge of all claims arising from the Hartmann Class Action in consideration of the Company’s payment of a $640,000 settlement amount, which is payable over 12 months. Furthermore, amongst other things, the Stipulation of Settlement provided that (1) the Company denied each and all of the claims alleged by plaintiffs, (2) the Company denied any allegation of wrongdoing, fault, liability, violation of the law, or damage whatsoever arising out of its conduct, (3) the Company denied that it or any of its officers, directors, or employees made any material misstatements or omissions, (4) the Company maintained that it had a meritorious defense to all claims alleged in the Hartmann Class Action, and (5) the Company agreed that the basis of us entering into the Stipulation of Settlement was to avoid the uncertainties, burden, and expense of further litigation and to put the claims arising from the Hartmann Class Action to rest, finally and forever. The Company believes that the settlement of the Hartmann Class Action approved by the court is favorable to the Company and ultimately benefits its shareholders. The Company has established an appropriate reserve to account for the $75,000 settlement of the Hartmann Class Action. 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 Moore Derivative Action . On November 5, 2020, the Company 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 which were confidential and subject to several contingencies, including, without limitation, court approval. On March 1, 2021, the court preliminarily approved the settlement of the Moore Derivative Action. The stipulation and agreement of settlement preliminarily approved (the “Stipulation and Agreement of Settlement”) by the court on March 1, 2021 provided for, amongst others things, a full and final release, settlement, and discharge of all claims arising from the Moore Derivative Action in consideration of the Company’s agreement to institute certain changes and/or modifications to its corporate governance and business ethics practices and plaintiff’s counsel receiving its attorneys’ fees and expenses, which amounted to $75,000. Furthermore, amongst other things, the Stipulation and Agreement of Settlement preliminarily approved by the court provided that (1) the Company denied each and every claim alleged by plaintiff, and (2) the Company denied any allegation of wrongdoing, fault, and liability, (3) the Company denied committing any violation of the law or breach of fiduciary duty, and (4) the Company concluded that it is desirable that the Moore Derivative Action be settled on the terms and subject to the conditions of the Stipulation and Settlement Agreement to avoid the ongoing cost and distraction of litigation. The Company believes that the settlement of the Moore Derivative Action preliminarily approved by the court is favorable to the Company and ultimately benefits its shareholders. The court intends to set a hearing for the final approval of the settlement of the Moore Derivative Action approximately 60 days after March 1, 2021. 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 $450,000 in board fees to its five board members over the term of their appointment for services to be rendered. Board fees are accrued and paid monthly. The members will serve on the board until the annual meeting for the year in which their term expires or until their successors has been elected and qualified. Total board fees expensed and paid in 2020 totaled $426,000. As of December 31, 2020, total board fees to be recognized in 2021 amounted to $450,000 and will be recognized once the service has been rendered. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. SUBSEQUENT EVENTS Issuances of Common Stock Subsequent to December 31, 2020 the Company completed a registered direct offering with institutional investors for the purchase and sale of 9,375,000 shares of common stock at a purchase price of $1.60 per share. Net proceeds were approximately $14,000,000. Subsequent to December 31, 2020, the Company issued 935,994 shares of Common Stock to vendors for services rendered with a fair value of $1,638,000 These shares of Common Stock were valued based on the market value of the Company’s stock price at the issuance date or the date the Company entered into the agreement related to the issuance. Subsequent to December 31, 2020, the Company issued 272,728 shares of Common Stock upon conversion of 300 Series A Preferred shares. Subsequent to December 31, 2020, the Company issued 247,703 shares of Common Stock to an employee associated with the vesting of a Restricted Stock Unit. Subsequent to December 31, 2020, 4,641 shares granted to employees that vested were returned to the Company in exchange for the Company paying the corresponding income and payroll taxes of these employees amounting $8,200. Pursuant to current accounting guidelines, the Company accounted the return of the 4,641 shares and the payment of $8,200 for income and payroll taxes paid on behalf the employees as a reduction in additional paid in capital. Exchange of Verb Acquisition Class B Shares Subsequent to December 31, 2020, 2,642,159 of Verb Acquisition Class B Shares were exchanged for 2,642,159 shares of common stock. After the exchange there are no Verb Acquisition Class B Shares outstanding. Exercise of Warrants Subsequent to December 31, 2020, a total of 1,067,578 warrants were exercised into 855,148 shares of Common Stock at a weighted average exercise price of $1.10. The Company received cash of $1,103,000 upon exercise of the warrants. Exercise of Options Subsequent to December 31, 2020, a total of 332,730 options were exercised into 332,730 shares of Common Stock at a weighted average exercise price of $1.13. The Company received cash of $377,000 upon exercise of the options. Issuance of Restricted Stock Units Subsequent to December 31, 2020, the Company granted an additional 813,265 shares of its restricted stock to employees and members of Board of Directors. The Restricted Stock Units vest in various dates, starting on January 4, 2021 up to January 4, 2024. These Restricted Stock Units were valued based on market value of the Company’s stock price at the respective date of grant and had aggregate fair value of $1,374,000, which is being amortized as stock compensation expense over its vesting term. Issuances of Warrants Subsequent to December 31, 2020, the Company issued warrants to purchase 138,889 shares of Common Stock to an officer for extending a note payable until February 8, 2023. The warrants have an exercise price of $2.61, expire in three years, and vested on grant date. The total fair value of these options at the grant date was $361,000 using the Black-Scholes option pricing model. Issuances of Stock Options Subsequent to December 31, 2020, the Company granted stock options to employees and consultants to purchase a total of 659,000 stock options for services to be rendered. The options have an average exercise price of $1.68 per share, expire in five years, and vest between one and four years from grant date. The total fair value of these options at the grant date was $1,101,000 using the Black-Scholes option pricing model. Advance on Future Receipts Subsequent to December 31, 2020, the Company received advances from unaffiliated third parties totaling $4,387,000 for the purchase of future receipts/revenues of $5,423,000. Pursuant to the terms of the agreement the unaffiliated third-parties will auto withdraw an aggregate of $24,000 from the Company’s operating account each banking day plus an average monthly payment of $283,000 over the next six months. The term of the agreement extends until the advances are paid in full. The Company may pay off the advances for $4,908,000 if paid within 30 days of funding; for $5,106,000 if paid between 31 and 60 days of funding; or for $5,228,000 if paid within 61 to 90 days of funding. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc., Verb Direct, LLC, and Verb Acquisition Co., LLC. Intercompany accounts have been eliminated in the consolidation. |
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, assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. |
Revenue Recognition | Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services are recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Statements of Consolidated Operations. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales are generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. A description of our principal revenue generating activities is as follows: 1. Digital Revenue which is divided into two main categories: a. SaaS recurring digital revenue based on contract-based subscriptions to our verb app products and platform services which include verbCRM, verbLEARN, verbLIVE, and verbTeams. The revenue is recognized over the subscription period. b. Non-SaaS, non-recurring digital revenue, which is revenue generated by the use of our app products and in-app purchases, such as sampling and other services obtained through the app. 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. 2. Non-digital revenue, which is revenue we generate from non-app, non-digital sources through ancillary services we provide as an accommodation to our clients and customers. These services, which we now outsource to a strategic partner as part of a cost reduction plan we instituted in 2020, include: a. Design, printing services, and fulfillment. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. b. Shipping services. The revenue is recognized when the corresponding products or fulfillment are shipped. Revenues during the years ended December 31, 2020 and 2019 were all generated from the United States of America. |
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 revenue upon sale of products to our customers. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250,000. The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for year ended December 31, 2020 and 2019: Year Ended Year Ended December 31, 2020 December 31, 2019 Verb’s largest customers are presented below as a percentage of Verb’s aggregate: Revenues None 1 major customer accounted for 13% of revenues Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate: Purchases 1 major vendor accounted for 40% of accounts payable individually and in aggregate None Accounts payable 2 major vendors accounted for 10% and 28% of accounts payable individually and 38% in aggregate 1 major vendor accounted for 14% of accounts payable individually and in aggregate |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. |
Leases | Leases We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 94 months. Pursuant to ASC 840, Leases, lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets (see Note 5). |
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. No impairment of long-lived assets was required for the years ended December 31, 2020 and 2019. |
Income Taxes | Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board’s (“FASB”) ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carry-forwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of operations. As of December 31, 2020, and 2019, the Company has not established a liability for uncertain tax positions. |
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 Payment | Share Based Payment The Company issues stock options and warrants, shares of Common Stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation 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. The Company values stock options using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options issued during the years ended December 31, 2020 and 2019 are as follows: Year Ended Year Ended December 31, 2020 December 31, 2019 Expected life in years 3.0, 4.0 and 5.0 1.0, 2.0 and 5.0 Stock price volatility 255%-271 % 180%-414 % Risk free interest rate 0.17-0.39 % 1.51-2.75 % Expected dividends 0 % 0 % Forfeiture rate 21.2 – 21.3 % 22.48 % The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. |
Research and Development Costs | Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company’s cloud-based, Verb interactive video CRM SaaS platform. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of December 31, 2020, and 2019, the Company had total outstanding options of 6,031,775 and 4,233,722, respectively, and warrants of 13,351,251 and 10,930,991, respectively, and outstanding restricted stock awards of 2,185,946 and 1,486,354, respectively, 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. |
Acquisitions and Business Combinations | Acquisitions and Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from, acquired technology, trade-marks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is the period needed to gather all information necessary to make the purchase price allocation, not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Goodwill | Goodwill In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing is performed annually at December 31 (its fiscal year end). Recoverability of goodwill is determined by comparing the fair value of Company’s reporting unit 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. As of December 31, 2020 and 2019, management determined there were no indications of impairment. |
Intangible Assets with Finite Useful Lives | Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. As of December 31, 2020 and 2019 there was no impairment of intangible assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. |
Segments | Segments The Company has acquired two operating subsidiaries, Verb Direct and Ascend Certification (see Note 3) with various revenue channels. Operations of these two subsidiaries are integrated since they have similar customer base and the Company having a single sales team, marketing department, customer service department, operations department, finance and accounting department to support its operations. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that there is only one reporting unit or segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Assumptions Used in Black-Scholes Model to Options Issued | The Company values stock options using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options issued during the years ended December 31, 2020 and 2019 are as follows: Year Ended Year Ended December 31, 2020 December 31, 2019 Expected life in years 3.0, 4.0 and 5.0 1.0, 2.0 and 5.0 Stock price volatility 255%-271 % 180%-414 % Risk free interest rate 0.17-0.39 % 1.51-2.75 % Expected dividends 0 % 0 % Forfeiture rate 21.2 – 21.3 % 22.48 % |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Amortization Expense for Future Periods for Intangible Assets | The following table summarizes the amortization expense for both Verb Direct and Ascend to be recorded in future periods for intangible assets that are subject to amortization and excludes intangible assets with infinite life (i.e. domain names) of $442,000: Year ending Amortization 2021 $ 1,435,000 2022 1,375,000 2023 1,302,000 2024 465,000 2025 and thereafter 133,000 Total amortization $ 4,710,000 |
Schedule of Pro Forma Statements of Operations | The unaudited pro forma statements of operations for the year ended December 31, 2020 and 2019 give effect to the transaction as if they had occurred on January 1, 2019. Year Ended December 31, Year Ended (Proforma, unaudited) (Proforma, unaudited) SaaS recurring subscription revenue $ 6,077,000 $ 4,625,000 Other digital revenue 1,384,000 1,698,000 Design, printing, and fulfilment 2,744,000 6,178,000 Shipping 723,000 1,624,000 Total Revenue 10,928,000 14,125,000 Cost of revenue 4,980,000 7,322,000 Gross margin 5,948,000 6,803,000 Operating expenses 30,679,000 23,135,000 Other expense, net (218,000 ) (99,000 ) Loss before income tax provision (24,949,000 ) (16,332,000 ) Income tax provision 1,000 2,000 Net loss (24,950,000 ) (16,431,000 ) Deemed dividend to Series A preferred (3,951,000 ) - Net loss to common stockholders $ (28,901,000 ) $ (16,433,000 ) |
Schedule of Results of Operation of Subsidiary | Pursuant to the provisions of ASC 805, the following results of operations of Verb Direct and Verb Acquisition subsequent to the acquisitions are as follows: Verb Direct Verb Revenue $ 9,041,000 $ 128,000 Cost of revenue 4,766,000 139,000 Operating expenses 6,208,000 889,000 Other expense 11,000 22,000 Net loss $ (1,944,000 ) $ (900,000 ) |
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 207,000 $ 436,000 Liabilities Assumed: Current liabilities (241,000 ) Long-term liabilities (90,000 ) (331,000 ) Intangible assets (provisional) 1,122,000 Goodwill (provisional) 3,723,000 Purchase Price $ 4,950,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31, 2020 and 2019. December 31, 2020 December 31, 2019 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 39,000 39,000 Leasehold improvement 1,058,000 741,000 Total property and equipment 1,201,000 884,000 Accumulated depreciation (339,000 ) (164,000 ) Total property and equipment, net $ 862,000 $ 720,000 |
Right-of-use Assets and Opera_2
Right-of-use Assets and Operating Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Cost | Period Ended December 31, 2020 Period Ended December 31, 2019 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 520,000 $ 499,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 577,000 $ 366,000 Weighted average remaining lease term – operating leases (in years) 4.54 5.25 Average discount rate – operating leases 4.0 % 4.0 % |
Schedule of Operating Leases | December 31, 2020 December 31, 2019 Operating leases Right-of-use assets $ 2,730,000 $ 3,275,000 Short-term operating lease liabilities $ 596,000 $ 391,000 Long-term operating lease liabilities 2,943,000 3,591,000 Total operating lease liabilities $ 3,539,000 $ 3,982,000 |
Schedule of Present Value of Lease Liabilities | Year ending Operating Leases 2021 776,000 2022 751,000 2023 773,000 2024 472,000 2025 and thereafter 1,189,000 Total lease payments 3,961,000 Less: Imputed interest/present value discount (422,000 ) Present value of lease liabilities $ 3,539,000 |
Advance on Future Receipts (Tab
Advance on Future Receipts (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Advances on Future Receipts | The Company has the following advances on future receipts as of December 31, 2020: Note Issuance Date Maturity Date Interest Original Borrowing Balance at Balance at Note 1 December 24, 2019 June 30, 2020 28 % $ 506,000 $ - $ 503,000 Note 2 December 24, 2019 June 30, 2020 28 % 506,000 - 503,000 Note 3 June 30, 2020 February 25, 2021 28 % 506,000 89,000 - Note 4 June 30, 2020 February 25, 2021 28 % 506,000 88,000 - Total $ 1,012,000 177,000 1,006,000 Debt discount (67,000 ) (274,000 ) Net $ 110,000 $ 732,000 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable to Related Parties | The Company has the following related parties outstanding notes payable as of December 31, 2020 and 2019: Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2021 12.0 % $ 1,249,000 $ 725,000 $ 825,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Note 4 (D) March 22, 2019 April 30, 2019 5.0 % 58,000 - - Total notes payable – related parties 1,077,000 1,177,000 Non-current - (1,065,000 ) Current $ 1,077,000 $ 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 matured on February 8, 2021, as amended. A total of 30% of the original note balance or $375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $825,000 is not convertible. As of December 31, 2019, outstanding balance of the note amounted to $825,000. During the year ended December 31, 2020, the Company made payments of $100,000. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. Subsequent to December 31, 2020, the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of December 31, 2020 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $343,000, to consolidate all advances made by Mr. Cutaia to the Company during the period December 2015 through March 2016. A total of 30% of the original note balance or $103,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $240,000 is not convertible. The note bears interest at a rate of 12% per annum, is secured by the Company’s assets, and will mature on June 4, 2021, as amended. As of December 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. (D) On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company’s Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2020 and 2019. |
Deferred Incentive Compensati_2
Deferred Incentive Compensation to Officers (Tables) | 12 Months Ended |
Dec. 31, 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 the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. Subsequent to December 31, 2020, the Company paid $215,000 of the amount due and will pay the remaining $63,000 during the remainder of 2021. (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $163,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. Subsequent to December 31, 2020, the Company paid $162,000 of the amount due and will pay the remaining $82,000 during remainder of 2021. |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The Company has the following outstanding notes payable as of December 31, 2020: Note Issuance Date Maturity Date Interest Balance at Note A April 17, 2020 April 17, 2022 1.00 % $ 1,218,000 Note B May 15, 2020 May 15, 2050 3.75 % 150,000 Note C May 1, 2020 May 1, 2022 3.75 % 90,000 Note D September 4, 2020 October 1, 2020 0.14 % - Total notes payable $ 1,458,000 (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 December 31, 2020. On January 4, 2020 the entire note and accrued interest was forgiven and will be accounted as a gain in fiscal 2021. (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) As a result of the acquisition of Solofire in September 2020, the Company assumed Solofire’s PPP loan of $90,000 it obtained in May 2020 under the Paycheck Protection Program (“PPP”) (see discussion “a”). The Company is currently in the process of applying for the forgiveness of the PPP loan. (D) On September 4, 2020, Verb Acquisition issued a note payable to the owners of SoloFire, in the amount of $1,885,000, as adjusted, as part of the consideration related to the acquisition of SoloFire. The note bears interest at a rate of 0.14% per annum, and was paid in full on October 1, 2020. |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liability Using Binomial Pricing Model Assumptions | The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: December 31, 2020 Upon Issuance 2020 December 31, 2019 Upon Issuance 2019 Stock Price $ 1.65 $ 1.70 $ 1.55 $ 4.78 Exercise Price $ 1.41 $ 1.55 $ 1.88 $ 3.76 Expected Life 3.17 5.0 3.53 2.75 Volatility 107 % 212 % 216 % 192 % Dividend Yield 0 % 0 % 0 % 0 % Risk-Free Interest Rate 0.23 % 2.47 % 1.64 % 1.99 % Warrants $ 8,266,000 $ 3,951,000 $ 5,048,000 $ 6,173,000 Convertible Notes - - - 388,000 Total Fair Value $ 8,266,000 $ 3,951,000 $ 5,048,000 $ 6,561,000 |
Schedule of Derivative Liability Transactions | The details of derivative liability transactions for the year ended December 31, 2020 are as follows: December 31, 2020 December 31, 2019 Beginning balance $ 5,048,000 $ 2,576,000 Fair value upon issuance of notes payable and/or warrants 3,951,000 6,561,000 Change in fair value (574,000 ) (1,862,000 ) Extinguishment (159,000 ) (2,227,000 ) Ending balance $ 8,266,000 $ 5,048,000 |
Restricted Stock Units (Tables)
Restricted Stock Units (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Stock Units | |
Summary of Restricted Stock Award Activity | A summary of restricted stock unit activity for the years ended December 31, 2020 and 2019 are presented below. Weighted- Average Grant Date Shares Fair Value Fair Value Non-vested at December 31, 2018 - $ - $ - Granted 1,923,001 2,615,000 1.36 Vested (436,647 ) (616,000 ) 1.36 Forfeited - - Non-vested at December 31, 2019 1,486,354 $ 1,999,000 $ 1.36 Granted 2,871,471 3,391,000 1.18 Vested/deemed vested, net of 336,533 returned shares for payroll taxes (1,773,440 ) (3,355,000 ) 1.31 Forfeited (61,906 ) (92,000 ) 1.47 Non-vested at December 31, 2020 2,185,946 $ 1,943,000 $ 1.17 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | A summary of option activity for the years ended December 31, 2020 and 2019 are presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2018 2,478,974 $ 5.25 2.93 $ - Granted 2,531,971 2.07 - - Forfeited (777,223 ) 6.42 - - Exercised - - - - Outstanding at December 31, 2019 4,233,722 1.73 2.54 995,000 Granted 2,111,308 1.35 - - Forfeited (313,255 ) 2.53 - - Exercised - - - - Outstanding at December 31, 2020 6,031,775 $ 1.55 2.68 $ 1,932,000 Vested December 31, 2020 2,979,724 $ 1.71 $ 945,000 Exercisable at December 31, 2020 2,036,652 $ 2.00 $ 522,000 |
Schedule of Fair Value Assumptions Using Black-Scholes Method | The fair value of the share option awards was estimated using the Black-Scholes method based on the following weighted-average assumptions: Years Ended December 31, 2020 2019 Risk-free interest rate 0.17% - 0.39 % 1.51%-2.75 % Average expected term (years) 5 years 5 years Expected volatility 255.23 - 270.57 % 180%-413.83 % Expected dividend yield - - |
Stock Warrants (Tables)
Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrants Outstanding | The Company has the following warrants as of December 31, 2020 and 2019 are presented below: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2018 940,415 $ 3.60 2.32 $ 1,806,000 Granted 10,386,181 2.97 - - Forfeited (46,667 ) 7.29 - - Exercised (348,938 ) 1.17 - - Outstanding at December 31, 2019 10,930,991 3.07 4.25 - Granted 4,630,654 1.17 - - Forfeited (244,800 ) 4.58 - - Exercised (1,965,594 ) 1.10 - - Outstanding at December 31, 2020, all vested 13,351,251 $ 2.48 3.38 $ 3,022,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 December 31, 2019 Net operating loss carry-forwards $ 13,350,000 $ 7,591,000 Share based compensation (457,000 ) (635,000 ) Non-cash interest and financing expenses (177,000 ) (472,000 ) Other temporary differences (569,000 ) (63,000 ) Less: Valuation allowance (12,147,000 ) (6,421,000 ) Deferred tax assets, net $ - $ - |
Schedule of Provision of Income Taxes | The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: December 31, 2020 December 31, 2019 Statutory federal income tax rate (21.0 )% (21.0 )% State taxes, net of federal benefit (6.9 )% (6.9 )% Non-deductible items (1.0 )% (1.0 )% Change in valuation allowance 28.9 % 28.9 % 0.0 % 0.0 % |
Description of Business (Detail
Description of Business (Details Narrative) - USD ($) | Feb. 04, 2019 | Mar. 26, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Reverse stock split | 1-for-15 reverse stock split | |||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Net loss | $ (24,956,000) | $ (15,918,000) | ||
Net cash used in operating activities | (16,294,000) | (8,118,000) | ||
Cash received advance sales of common stock | $ 728,000 | $ 728,000 | ||
Subsequent Event [Member] | ||||
Sale of common stock from public offering and exercise of stock options and warrants | $ 15,480,000 | |||
Cash received advance sales of common stock | $ 4,400,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment of useful life | 5 years | ||
Impairment of long-lived assets | |||
Intangible assets with finite lived estimated useful life | 5 years | ||
Impairment of intangible assets, finite-lived | $ 0 | $ 0 | |
Outstanding Options [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 6,031,775 | 4,233,722 | |
Outstanding Warrants [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 13,351,251 | 10,930,991 | |
Restricted Stock [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 2,185,946 | 1,486,354 | |
Shares Issuable from Class B Units [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 2,642,159 | ||
Customer Concentration Risk [Member] | Revenues [Member] | |||
Concentration risk, percentage | 0.00% | ||
Customer Concentration Risk [Member] | Revenues [Member] | One Customer [Member] | |||
Concentration risk, percentage | 13.00% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration risk, percentage | 0.00% | 0.00% | |
Supplier Concentration Risk [Member] | Purchase [Member] | |||
Concentration risk, percentage | 0.00% | ||
Supplier Concentration Risk [Member] | Purchase [Member] | Major Vendors One [Member] | |||
Concentration risk, percentage | 40.00% | ||
Supplier Concentration Risk [Member] | Accounts Payable [Member] | |||
Concentration risk, percentage | 38.00% | ||
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Major Vendors One [Member] | |||
Concentration risk, percentage | 10.00% | 14.00% | |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Major Vendors Two [Member] | |||
Concentration risk, percentage | 28.00% | ||
Maximum [Member] | |||
Cash FDIC insured amount | $ 250,000 | ||
Operating lease term | 94 months | ||
Minimum [Member] | |||
Operating lease term | 36 months |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Assumptions Used in Black-scholes Model to Options Issued (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Expected life in years | 5 years | 5 years |
Expected dividends | 0.00% | 0.00% |
Forfeiture rate | 22.48% | |
Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Expected life in years | 3 years | 1 year |
Stock price volatility | 255.00% | 180.00% |
Risk free interest rate | 0.17% | 1.51% |
Forfeiture rate | 21.20% | |
Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Expected life in years | 4 years | 2 years |
Stock price volatility | 271.00% | 414.00% |
Risk free interest rate | 0.39% | 2.75% |
Forfeiture rate | 21.30% |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Sep. 04, 2020 | Apr. 12, 2019 | Sep. 04, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash payment of acquisition | $ 15,000,000 | ||||
Amortization expense | $ 2,310,000 | 975,000 | |||
Estimated useful life | 5 years | ||||
Stock issued during period for acquisition value | 7,820,000 | ||||
Intangible assets unamortized balance | $ 5,153,000 | 5,365,000 | |||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | |||||
Cash payment of acquisition | $ 15,000,000 | ||||
Issuance of restricted shares | 3,327,791 | ||||
Issuance of shares of common stock with a fair market value | $ 7,820,000 | ||||
Aggregated goodwill and intangible assets | $ 22,677,000 | ||||
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] | |||||
Amortization expense | $ 1,335,000 | $ 975,000 | |||
Purchase price | $ 5,700,000 | ||||
Business combination post closing adjustments | 750,000 | ||||
Adjusted purchase price | 4,950,000 | ||||
Provisional goodwill and intangible assets | 4,845,000 | $ 4,845,000 | |||
Intangible assets unamortized balance | $ 442,000 | ||||
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 for acquisition | 2,642,159 | ||||
Stock issued for exchange | 2,642,159 | ||||
Stock issued during period for acquisition 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 | $ 1,000,000 | ||||
Estimated useful life | 5 years | ||||
Membership Interest Purchase Agreement [Member] | Customer Relationships [Member] | Ascend Certification [Member] | |||||
Amortization expense | $ 70,000 | ||||
Estimated useful life | 3 years | ||||
Membership Interest Purchase Agreement [Member] | Domain Names [Member] | Ascend Certification [Member] | |||||
Amortization expense | $ 2,000 | ||||
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 | $ 50,000 | ||||
Estimated useful life | 3 years |
Acquisitions - Schedule of Fair
Acquisitions - Schedule of Fair Value of Assets Assumed and Liabilities Acquired (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill | $ 20,060,000 | $ 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 | 207,000 | |
Total assets acquired | 436,000 | |
Current liabilities | (241,000) | |
Long-term liabilities | (90,000) | |
Total liabilities assumed | (331,000) | |
Intangible assets | 1,122,000 | |
Goodwill | 3,723,000 | |
Purchase Price | $ 4,950,000 |
Acquisition - Schedule of Amort
Acquisition - Schedule of Amortization Expense for Future Periods for Intangible Assets (Details) | Dec. 31, 2020USD ($) |
Business Combinations [Abstract] | |
2021 | $ 1,435,000 |
2022 | 1,375,000 |
2023 | 1,302,000 |
2024 | 465,000 |
2025 and thereafter | 133,000 |
Total amortization | $ 4,710,000 |
Acquisition - Schedule of Pro F
Acquisition - Schedule of Pro Forma Statements of Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SaaS Recurring Subscription Revenue [Member] | ||
Revenue | $ 6,077,000 | $ 4,625,000 |
Other Digital Revenue [Member] | ||
Revenue | 1,384,000 | 1,698,000 |
Design, Printing, and Fulfillment [Member] | ||
Revenue | 2,744,000 | 6,178,000 |
Shipping [Member] | ||
Revenue | 723,000 | 1,624,000 |
Merger Agreement [Member] | ||
Revenue | 10,928,000 | 14,125,000 |
Cost of revenue | 4,980,000 | 7,322,000 |
Gross margin | 5,948,000 | 6,803,000 |
Operating expenses | 30,679,000 | 23,135,000 |
Other expense, net | (218,000) | (99,000) |
Loss before income tax provision | (24,949,000) | (16,332,000) |
Income tax provision | 1,000 | 2,000 |
Net loss | (24,950,000) | (16,431,000) |
Deemed dividend to Series A preferred | (3,951,000) | |
Net loss to common stockholders | $ (28,901,000) | $ (16,433,000) |
Acquisition - Schedule of Resul
Acquisition - Schedule of Results of Operation of Subsidiary (Details) - USD ($) | 4 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 9,965,000 | $ 9,100,000 | ||
Cost of revenue | 4,801,000 | 4,870,000 | ||
Operating expenses | 29,901,000 | 20,064,000 | ||
Net loss | $ (24,956,000) | $ (15,918,000) | ||
Verb Direct [Member] | ||||
Revenue | $ 9,041,000 | |||
Cost of revenue | 4,766,000 | |||
Operating expenses | 6,208,000 | |||
Other expense | 11,000 | |||
Net loss | $ (1,944,000) | |||
Verb Acquisition [Member] | ||||
Revenue | $ 128,000 | |||
Cost of revenue | 139,000 | |||
Operating expenses | 889,000 | |||
Other expense | 22,000 | |||
Net loss | $ (900,000) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 175,000 | $ 67,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,201,000 | $ 884,000 |
Less: accumulated depreciation | (338,000) | (164,000) |
Property and equipment, net | 862,000 | 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 | 39,000 | 39,000 |
Leasehold Improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,058,000 | $ 741,000 |
Right-of-Use Assets and Opera_3
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost (included in general and administration in the Company's statement of operations) | $ 520,000 | $ 499,000 |
Cash paid for amounts included in the measurement of lease liabilities | $ 577,000 | $ 366,000 |
Weighted average remaining lease term - operating leases (in years) | 4 years 6 months 14 days | 5 years 2 months 30 days |
Average discount rate - operating leases | 4.00% | 4.00% |
Right-of-Use Assets and Opera_4
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Operating Leases (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right-of-use assets | $ 2,730,000 | $ 3,275,000 |
Short-term operating lease liabilities | 596,000 | 391,000 |
Long-term operating lease liabilities | 2,943,000 | 3,591,000 |
Total operating lease liabilities | $ 3,539,000 | $ 3,982,000 |
Right-of-Use Assets and Opera_5
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Present Value of Lease Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 776,000 | |
2022 | 751,000 | |
2023 | 773,000 | |
2024 | 472,000 | |
2025 and thereafter | 1,189,000 | |
Total lease payments | 3,961,000 | |
Less: Imputed interest/present value discount | (422,000) | |
Present value of lease liabilities | $ 3,539,000 | $ 3,982,000 |
Advance on Future Receipts (Det
Advance on Future Receipts (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 24, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
Debt discount | $ 67,000 | $ 274,000 | |||
Outstanding balance of debt | 177,000 | 1,006,000 | |||
Payments of debt | 1,842,000 | 7,000 | |||
Repayments of notes | 630,000 | ||||
Two Secured Advances [Member] | |||||
Debt discount | 274,000 | ||||
Outstanding balance of debt | 1,006,000 | ||||
Unamortized debt discount | $ 274,000 | ||||
Payments of debt | 1,006,000 | ||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||
Debt principal amount | $ 728,000 | $ 728,000 | |||
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 | |||
Interest rate | 28.00% | 28.00% | |||
Advance future receipts | $ 1,012,000 | ||||
Debt discount | $ 285,000 | ||||
Outstanding balance of debt | 177,000 | ||||
Unamortized debt discount | 67,000 | ||||
Payments of debt | 835,000 | ||||
Amortization of debt discount | $ 218,000 | ||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Advance on Future Receipts [Member] | |||||
Advance future receipts | 1,012,000 | ||||
Debt discount | $ 284,000 | ||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid within 30 Days of Funding [Member] | |||||
Repayments of notes | $ 446,000 | ||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid Between 31 and 60 Days of Funding [Member] | |||||
Repayments of notes | 465,000 | ||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | Paid Between 61 and 90 Days of Funding [Member] | |||||
Repayments of notes | $ 484,000 |
Advance on Future Receipts - Sc
Advance on Future Receipts - Schedule of Advances on Future Receipts (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Original Borrowing | $ 1,012,000 | ||
Total | 177,000 | $ 1,006,000 | |
Debt discount | (67,000) | (274,000) | |
Net | $ 110,000 | 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 | |
Note 4 [Member] | |||
Issuance Date | [4] | Mar. 22, 2019 | |
Maturity Date | [4] | Apr. 30, 2019 | |
Interest Rate | [4] | 5.00% | |
Original Borrowing | [4] | $ 58,000 | |
Advance on Future Receipts [Member] | Note 1 [Member] | |||
Issuance Date | Dec. 24, 2019 | ||
Maturity Date | Jun. 30, 2020 | ||
Interest Rate | 28.00% | ||
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 | 28.00% | ||
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 | 28.00% | ||
Original Borrowing | $ 506,000 | ||
Total | $ 89,000 | ||
Advance on Future Receipts [Member] | Note 4 [Member] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 506,000 | ||
Total | $ 88,000 | ||
[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 matured on February 8, 2021, as amended. A total of 30% of the original note balance or $375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $825,000 is not convertible. As of December 31, 2019, outstanding balance of the note amounted to $825,000. During the year ended December 31, 2020, the Company made payments of $100,000. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. Subsequent to December 31, 2020, the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. | ||
[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 December 31, 2020 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | ||
[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. A total of 30% of the original note balance or $103,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $240,000 is not convertible. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | ||
[4] | On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company's Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2020 and 2019. |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Interest expense, related parties | $ 141,000 | $ 141,000 |
Interest payable | 114,000 | 82,000 |
Notes Payable [Member] | ||
Interest expense, related parties | 141,000 | 141,000 |
Principal Amount | 100,000 | |
Interest payable | $ 120,000 | $ 101,000 |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2019 | ||
Original Borrowing | $ 1,012,000 | |||
Notes payable - related parties, net | 1,077,000 | $ 1,177,000 | ||
Non-current | (1,065,000) | |||
Current | $ 1,077,000 | 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] | $ 725,000 | 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 | |
Note 4 [Member] | ||||
Issuance Date | [4] | Mar. 22, 2019 | ||
Maturity Date | [4] | Apr. 30, 2019 | ||
Interest Rate | [4] | 5.00% | ||
Original Borrowing | [4] | $ 58,000 | ||
Notes payable - related parties, net | [4] | |||
[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 matured on February 8, 2021, as amended. A total of 30% of the original note balance or $375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $825,000 is not convertible. As of December 31, 2019, outstanding balance of the note amounted to $825,000. During the year ended December 31, 2020, the Company made payments of $100,000. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. Subsequent to December 31, 2020, the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. | |||
[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 December 31, 2020 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | |||
[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. A total of 30% of the original note balance or $103,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $240,000 is not convertible. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | |||
[4] | On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company's Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2020 and 2019. |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) (Parenthetical) - USD ($) | Apr. 11, 2019 | Apr. 04, 2016 | Dec. 01, 2015 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2021 | Mar. 22, 2019 | |
Debt Conversion amount | $ 182,000 | ||||||||
Notes payable - related parties, net | $ 1,077,000 | 1,177,000 | |||||||
Repayments of debt | $ 1,842,000 | 7,000 | |||||||
Note 1 [Member] | |||||||||
Interest rate | [1] | 12.00% | |||||||
Notes payable - related parties, net | [1] | $ 725,000 | 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 | ||||||
Note 4 [Member] | |||||||||
Interest rate | [4] | 5.00% | |||||||
Notes payable - related parties, net | [4] | ||||||||
Mr. Rory J. Cutaia [Member] | Note 1 [Member] | |||||||||
Interest rate | 12.00% | ||||||||
Mr. Cutaia [Member] | Note 1 [Member] | |||||||||
Maturity date description | February 8, 2021 | ||||||||
Percentage of debt conversion | 30.00% | ||||||||
Debt Conversion amount | $ 375,000 | ||||||||
Outstanding balance | 725,000 | 825,000 | |||||||
Principal Amount | 100,000 | ||||||||
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 | ||||||||
Percentage of debt conversion | 30.00% | ||||||||
Debt Conversion amount | $ 103,000 | ||||||||
Outstanding balance | $ 343,000 | ||||||||
Notes payable - related parties, net | $ 240,000 | $ 240,000 | |||||||
Mr. Jeff Clayborne [Member] | Note 4 [Member] | |||||||||
Interest rate | 5.00% | ||||||||
Maturity date description | April 30, 2019 | ||||||||
Outstanding balance | $ 58,000 | ||||||||
Repayments of debt | $ 58,000 | ||||||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and matured on February 8, 2021, as amended. A total of 30% of the original note balance or $375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $825,000 is not convertible. As of December 31, 2019, outstanding balance of the note amounted to $825,000. During the year ended December 31, 2020, the Company made payments of $100,000. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. Subsequent to December 31, 2020, the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. | ||||||||
[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 December 31, 2020 and 2018, the outstanding principal balance of the note amounted to $112,000, respectively. As of December 31, 2020, the note was past due, and remains past due. The Company is currently in negotiations with the noteholder to settle the past due note. | ||||||||
[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. A total of 30% of the original note balance or $103,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $240,000 is not convertible. The note bears interest at a rate of 12% per annum, is secured by the Company's assets, and will mature on June 4, 2021, as amended. As of December 31, 2020, and December 31, 2019, the outstanding balance of the note amounted to $240,000, respectively. | ||||||||
[4] | On March 22, 2019, the Company issued a note payable to Mr. Jeffrey Clayborne, the Company's Chief Financial Officer, in the amount of $58,000. The note was unsecured, bore interest at a rate of 5% per annum, and matured on April 30, 2019. On April 11, 2019, the Company paid off the balance of $58,000 and there was no outstanding balance as of December 31, 2020 and 2019. |
Deferred Incentive Compensati_3
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 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 | 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 | 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 | 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 | 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 the Employees. The Company will pay 50% of the Annual Incentive Compensation on January 10, 2021 and the remaining 50% on January 10, 2022. Subsequent to December 31, 2020, the Company paid $215,000 of the amount due and will pay the remaining $63,000 during the remainder of 2021. | ||
[2] | On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $324,000 and $163,000, respectively. The Company has determined that it is in its best interest and in the best interest of its stockholders to defer payments to the Employees. The Company will pay 50% of the Nasdaq Up-Listing Award on January 10, 2021 and the remaining 50% on January 10, 2022. Subsequent to December 31, 2020, the Company paid $162,000 of the amount due and will pay the remaining $82,000 during remainder of 2021. |
Deferred Incentive Compensati_4
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) (Parenthetical) - USD ($) | Dec. 23, 2019 | Mar. 20, 2021 |
Subsequent Event [Member] | Employee One [Member] | ||
Annual incentive compensation | $ 215,000 | |
Subsequent Event [Member] | Employee Two [Member] | ||
Annual incentive compensation | 162,000 | |
Remainder Of 2021 [Member] | Subsequent Event [Member] | Employee One [Member] | ||
Annual incentive compensation | 63,000 | |
Remainder Of 2021 [Member] | Subsequent Event [Member] | Employee Two [Member] | ||
Annual incentive compensation | $ 82,000 | |
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% |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($) | ||
Total notes payable | $ 1,458,000 | |
Note A [Member] | ||
Issuance Date | Apr. 17, 2020 | [1] |
Maturity Date | Apr. 17, 2022 | [1] |
Interest Rate | 1.00% | [1] |
Total notes payable | $ 1,218,000 | [1] |
Note B [Member] | ||
Issuance Date | May 15, 2020 | [2] |
Maturity Date | May 15, 2050 | [2] |
Interest Rate | 3.75% | [2] |
Total notes payable | $ 150,000 | [2] |
Note C [Member] | ||
Issuance Date | May 1, 2020 | [3] |
Maturity Date | May 1, 2022 | [3] |
Interest Rate | 3.75% | [3] |
Total notes payable | $ 90,000 | [3] |
Note D [Member] | ||
Issuance Date | Sep. 4, 2020 | [4] |
Maturity Date | Oct. 1, 2020 | [4] |
Interest Rate | 0.14% | [4] |
Total notes payable | [4] | |
[1] | 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 December 31, 2020. On January 4, 2020 the entire note and accrued interest was forgiven and will be accounted as a gain in fiscal 2021. | |
[2] | 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. | |
[3] | As a result of the acquisition of Solofire in September 2020, the Company assumed Solofire's PPP loan of $90,000 it obtained in May 2020 under the Paycheck Protection Program ("PPP") (see discussion "a"). The Company is currently in the process of applying for the forgiveness of the PPP loan. | |
[4] | On September 4, 2020, Verb Acquisition issued a note payable to the owners of SoloFire, in the amount of $1,885,000, as adjusted, as part of the consideration related to the acquisition of SoloFire. The note bears interest at a rate of 0.14% per annum, and was paid in full on October 1, 2020. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Sep. 04, 2020 | May 15, 2020 | May 01, 2020 | Apr. 17, 2020 | Dec. 31, 2020 | |
Notes payable | $ 1,458,000 | |||||
Note A [Member] | ||||||
Interest rate | [1] | 1.00% | ||||
Maturity date | [1] | Apr. 17, 2022 | ||||
Notes payable | [1] | $ 1,218,000 | ||||
Note A [Member] | Paycheck Protection Program [Member] | ||||||
Loan received | $ 1,218,000 | |||||
Interest rate | 1.00% | |||||
Note B [Member] | ||||||
Interest rate | [2] | 3.75% | ||||
Maturity date | [2] | May 15, 2050 | ||||
Notes payable | [2] | $ 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] | 3.75% | ||||
Maturity date | [3] | May 1, 2022 | ||||
Notes payable | [3] | $ 90,000 | ||||
Note C [Member] | Paycheck Protection Program [Member] | SoloFire [Member] | ||||||
Loan received | $ 90,000 | |||||
Note D [Member] | ||||||
Interest rate | [4] | 0.14% | ||||
Maturity date | [4] | Oct. 1, 2020 | ||||
Notes payable | [4] | |||||
Note D [Member] | SoloFire [Member] | ||||||
Interest rate | 0.14% | |||||
Maturity date | Oct. 1, 2020 | |||||
Notes payable | $ 1,885,000 | |||||
[1] | 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 December 31, 2020. On January 4, 2020 the entire note and accrued interest was forgiven and will be accounted as a gain in fiscal 2021. | |||||
[2] | 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. | |||||
[3] | As a result of the acquisition of Solofire in September 2020, the Company assumed Solofire's PPP loan of $90,000 it obtained in May 2020 under the Paycheck Protection Program ("PPP") (see discussion "a"). The Company is currently in the process of applying for the forgiveness of the PPP loan. | |||||
[4] | On September 4, 2020, Verb Acquisition issued a note payable to the owners of SoloFire, in the amount of $1,885,000, as adjusted, as part of the consideration related to the acquisition of SoloFire. The note bears interest at a rate of 0.14% per annum, and was paid in full on October 1, 2020. |
Convertible Series A Preferre_2
Convertible Series A Preferred Stock and Warrant Offering (Details Narrative) - USD ($) | Aug. 14, 2019 | Jul. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 15, 2019 | Apr. 11, 2019 |
Warrant to purchase of common stock | 1,965,594 | |||||
Number of share warrants granted to issue | 1,910,594 | 4,630,654 | 10,386,181 | |||
Warrant exercise price | $ 1.10 | |||||
Series A Preferred Stock and Warrants [Member] | ||||||
Proceeds from issuance of preferred shares and warrants | $ 4,688,000 | |||||
Direct costs of issuance | 342,000 | |||||
Warrants [Member] | ||||||
Direct costs of issuance | $ 1,485,000 | |||||
Derivative liability | 6,173,000 | |||||
Reduction to additional paid in capital | $ 4,688,000 | |||||
Common Stock [Member] | ||||||
Number of shares issued, shares | 4,237,833 | |||||
Warrant to purchase of common stock | 3,245,162 | 163,739 | ||||
Warrant exercise price | $ 1.88 | $ 3.76 | ||||
Conversion of stock, number of shares issued | 1,768,909 | 409,032 | ||||
Securities Purchase Agreement [Member] | ||||||
Warrant to purchase of common stock | 3,870,000 | |||||
Warrant exercise price | $ 1.88 | |||||
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% | |||||
Number of common stock to be issued causing ineligibility to issue common stock | 4,459,725 | |||||
Securities Purchase Agreement [Member] | Maximum [Member] | ||||||
Number of share warrants granted to issue | 3,245,162 | |||||
Series A Preferred Shares [Member] | ||||||
Number of shares issued, shares | 5,030 | |||||
Series A Preferred Shares [Member] | Securities Purchase Agreement [Member] | ||||||
Number of shares issued, shares | 6,000 | |||||
Series A Convertible Preferred Stock [Member] | ||||||
Warrants to purchase shares of common stock | 2,303,861 | |||||
Common stock, value, outstanding | $ 3,951,000 | |||||
Conversion of stock, number of shares issued | 2,390 | 634 | ||||
Preferred stock, shares outstanding | 2,006 | 4,396 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative liability | $ 8,266,000 | $ 5,048,000 | $ 2,576,000 |
Change in fair value of derivative liability | 574,000 | 1,862,000 | |
Gain on extinguishment of derivative liability | 159,000 | 2,227,000 | |
Series A Preferred Shares [Member] | |||
Derivative liability | 2,303,861 | 6,561,000 | |
Convertible Note [Member] | |||
Derivative liability | 388,000 | ||
Warrants [Member] | |||
Derivative liability | 3,951,000 | $ 6,173,000 | |
Series A Warrants [Member] | |||
Derivative liability | $ 95,000 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liability Using Binomial Pricing Model Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Stock Price | $ / shares | $ 1.65 | $ 1.55 |
Fair Value | $ 8,266,000 | $ 5,048,000 |
Exercise Price [Member] | ||
Fair value assumptions, measurement input, exercise price per share | shares | 1.41 | 1.88 |
Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 3 years 2 months 1 day | 3 years 6 months 1 day |
Volatility [Member] | ||
Fair value assumptions, measurement input, percentage | 107 | 216 |
Dividend Yield [Member] | ||
Fair value assumptions, measurement input, percentage | 0 | 0 |
Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentage | 0.23 | 1.64 |
Warrants [Member] | ||
Fair Value | $ 8,266,000 | $ 5,048,000 |
Convertible Notes [Member] | ||
Fair Value | ||
Upon Issuance [Member] | ||
Stock Price | $ / shares | $ 1.70 | $ 4.78 |
Fair Value | $ 3,951,000 | $ 6,561,000 |
Upon Issuance [Member] | Exercise Price [Member] | ||
Fair value assumptions, measurement input, exercise price per share | shares | 1.55 | 3.76 |
Upon Issuance [Member] | Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 5 years | 2 years 9 months |
Upon Issuance [Member] | Volatility [Member] | ||
Fair value assumptions, measurement input, percentage | 212 | 192 |
Upon Issuance [Member] | Dividend Yield [Member] | ||
Fair value assumptions, measurement input, percentage | 0 | 0 |
Upon Issuance [Member] | Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentage | 2.47 | 1.99 |
Upon Issuance [Member] | Warrants [Member] | ||
Fair Value | $ 3,951,000 | $ 6,173,000 |
Upon Issuance [Member] | Convertible Notes [Member] | ||
Fair Value | $ 388,000 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Liability Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 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 | (574,000) | (1,862,000) |
Extinguishment | (159,000) | (2,227,000) |
Ending balance | $ 8,266,000 | $ 5,048,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Jul. 24, 2020 | Feb. 05, 2020 | Apr. 30, 2019 | Apr. 09, 2019 | Apr. 04, 2019 | Apr. 30, 2019 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2020 | Aug. 15, 2019 | Jul. 08, 2019 | Apr. 11, 2019 |
Common per-share price | $ 1.65 | $ 1.55 | ||||||||||||
Warrant to purchase of common stock | 1,965,594 | |||||||||||||
Warrant term | 5 years | |||||||||||||
Warrant exercise price | $ 1.10 | |||||||||||||
Value of shares issued for services | $ 1,190,000 | $ 1,778,000 | ||||||||||||
Selling, general and administrative expenses | 1,035,000 | |||||||||||||
Prepaid expense | $ 900,000 | 236,000 | ||||||||||||
Value of shares issued for acquisition | $ 7,820,000 | |||||||||||||
Number of stock options granted | 2,111,308 | 2,531,971 | ||||||||||||
Debt conversion amount | $ 182,000 | |||||||||||||
Note Holder [Member] | ||||||||||||||
Number of stock options granted | 25,272 | |||||||||||||
Number of stock options granted, value | $ 182,000 | |||||||||||||
Note Payable [Member] | ||||||||||||||
Warrant to purchase of common stock | 108,196 | |||||||||||||
Warrant exercise price | $ 3.44 | |||||||||||||
Warrant expiration date | Jul. 31, 2024 | |||||||||||||
Number of common stock shares issued upon conversion | 780,619 | |||||||||||||
Accounts Payable [Member] | ||||||||||||||
Debt conversion amount | $ 10,000 | |||||||||||||
Conversion of accounts payable into common stock shares | 4,142 | |||||||||||||
Conversion of accounts payable into common stock | $ 10,000 | |||||||||||||
Underwriting Agreement [Member] | ||||||||||||||
Warrant to purchase of common stock | 6,389,776 | |||||||||||||
Number of shares issued, shares | 6,389,776 | |||||||||||||
Number of units issued under offering | 6,389,776 | |||||||||||||
Underwriting Agreement [Member] | Alliance Global Partners [Member] | ||||||||||||||
Warrant to purchase of common stock | 6,389,776 | |||||||||||||
Number of shares issued, shares | 6,389,776 | |||||||||||||
Number of units issued under offering | 6,389,776 | |||||||||||||
Shares issued price per share | $ 3.13 | |||||||||||||
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 | 1,007,583 | |||||||||||||
Value of shares issued for services | $ 1,190,000 | |||||||||||||
Vendor [Member] | ||||||||||||||
Number of shares issued for services | 579,334 | |||||||||||||
Value of shares issued for services | $ 1,162,000 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Sale and issuance of common stock | 12,545,453 | 6,549,596 | ||||||||||||
Warrant to purchase of common stock | 3,245,162 | 163,739 | ||||||||||||
Warrant exercise price | $ 1.88 | $ 3.76 | ||||||||||||
Number of shares issued, shares | 4,237,833 | |||||||||||||
Number of shares issued for services | 1,007,583 | 1,015,981 | ||||||||||||
Value of shares issued for services | ||||||||||||||
Prepaid expense | $ 155,000 | |||||||||||||
Warrant expiration date | Aug. 31, 2024 | Apr. 30, 2024 | ||||||||||||
Stock issued during period for acquisition | 3,327,791 | 3,327,791 | ||||||||||||
Value of shares issued for acquisition | $ 7,820,000 | |||||||||||||
Number of common stock shares issued upon conversion | 25,272 | |||||||||||||
Debt conversion amount | ||||||||||||||
Private Placement [Member] | ||||||||||||||
Common per-share price | $ 1.20 | |||||||||||||
Sale and issuance description | The sale and issuance of up to five million shares of its Common Stock at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of the Company's Common Stock on that day. | |||||||||||||
Cash fee aggregate amount | $ 499,000 | |||||||||||||
Private placement description | 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. | |||||||||||||
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 | |||||||||||||
Direct fees and expense | $ 641,000 | |||||||||||||
Private Placement [Member] | Maximum [Member] | ||||||||||||||
Sale and issuance of common stock | 5,000,000 | |||||||||||||
Public Offering [Member] | ||||||||||||||
Proceeds from issuance of stock | $ 18,525,000 | |||||||||||||
Other offering expense | $ 2,138,000 | |||||||||||||
Legal and professional expenses | $ 162,000 | |||||||||||||
Public Offering [Member] | Common Stock [Member] | ||||||||||||||
Number of shares issued, shares | 12,545,453 | |||||||||||||
Proceeds from issuance of stock | $ 12,337,000 | |||||||||||||
Public Offering [Member] | Common Stock [Member] | Overallotment Option [Member] | ||||||||||||||
Number of shares issued, shares | 1,636,363 | |||||||||||||
Public Offering [Member] | Underwriter Warrants [Member] | ||||||||||||||
Warrant to purchase of common stock | 319,488 | |||||||||||||
Warrant exercise price | $ 3.913 | |||||||||||||
Option Shares [Member] | Underwriting Agreement [Member] | Alliance Global Partners [Member] | ||||||||||||||
Warrant to purchase of common stock | 958,466 | |||||||||||||
Warrant term | 5 years | |||||||||||||
Warrant exercise price | $ 3.443 | |||||||||||||
Number of shares issued, shares | 958,466 | |||||||||||||
Number of units issued under offering | 958,466 | |||||||||||||
Warrant expiration date | Apr. 9, 2024 | |||||||||||||
Overallotment Option [Member] | Underwriting Agreement [Member] | ||||||||||||||
Warrant to purchase of common stock | 159,820 | |||||||||||||
Number of shares issued, shares | 159,820 | |||||||||||||
Number of units issued under offering | 159,820 |
Restricted Stock Units (Details
Restricted Stock Units (Details Narrative) - USD ($) | Apr. 10, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of shares granted of restricted stock awards | 2,871,471 | 1,923,001 | |
Fair value of granted restricted stock | $ 3,355,000 | $ 616,000 | |
Number of share vested and returned | 1,773,440 | 436,647 | |
Unvested compensation related to issuances of restricted stock award | $ 1,943,000 | ||
Restricted Stock [Member] | |||
Number of shares granted of restricted stock awards | 2,282,373 | 1,923,001 | |
Fair value of granted restricted stock | $ 2,525,000 | $ 2,615,000 | |
Number of share vested and returned | 336,533 | ||
Payment of income and payroll taxes | $ 485,000 | ||
Cash Preservation Plan [Member] | |||
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 unit 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 unit 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 shares 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. | ||
Number of shares granted of restricted stock awards | 589,098 | ||
Fair value of granted restricted stock | $ 866,000 |
Restricted Stock Units - Summar
Restricted Stock Units - Summary of Restricted Stock Award Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Awards Abstract | ||
Number of Non-vested Shares, Outstanding Beginning | 1,486,354 | |
Shares, Granted | 2,871,471 | 1,923,001 |
Shares, Vested | (1,773,440) | (436,647) |
Shares, Forfeited | (61,906) | |
Number of Non-vested Shares, Outstanding Ending | 2,185,946 | 1,486,354 |
Fair Value, Outstanding Beginning | $ 1,999,000 | |
Fair Value, Granted | 3,391,000 | 2,615,000 |
Fair Value, Vested | (3,355,000) | (616,000) |
Fair Value, Forfeited | (92,000) | |
Fair Value, Outstanding Ending | $ 1,943,000 | $ 1,999,000 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ 1.36 | |
Weighted Average Grant Date Fair Value, Granted | 1.18 | 1.36 |
Weighted Average Grant Date Fair Value, Vested | 1.31 | 1.36 |
Weighted Average Grant Date Fair Value, Forfeited | 1.47 | |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ 1.17 | $ 1.36 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | Dec. 23, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Intrinsic value exercise | $ 1,932,000 | $ 995,000 | ||
Number of stock options granted | 2,111,308 | 2,531,971 | ||
Exercise price of common stock granted | $ 1.35 | $ 2.07 | ||
Employees and Consultants [Member] | ||||
Number of stock options granted | 1,340,333 | 2,111,308 | 2,531,971 | |
Exercise price of common stock granted | $ 1.36 | $ 1.35 | $ 2.07 | |
Expiration period | 5 years | 5 years | ||
Stock option vesting period | 4 years | 4 years | ||
Fair value of stock options grants | $ 2,438,000 | $ 4,564,000 | ||
Expense recognized relating to stock options | 1,728,000 | $ 1,961,000 | ||
Unrecognized stock based compensation expense | $ 4,146,000 | |||
Stock option, description | expected to be recognized as part of operating expense through December 2024 | |||
Fair value before amendment amount | $ 32,000 | |||
Stock based compensation expenses | 12,000 | |||
Recognized of operating expense | $ 20,000 |
Stock Options - Schedule of Sto
Stock Options - Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of options outstanding beginning balance | 4,233,722 | 2,478,974 |
Number of options granted | 2,111,308 | 2,531,971 |
Number of options forfeited | (313,255) | (777,223) |
Number of options exercised | ||
Number of options outstanding ending balance | 6,031,775 | 4,233,722 |
Number of options vested | 2,979,724 | |
Number of options exercisable | 2,036,652 | |
Weighted average exercise price outstanding beginning balance | $ 1.73 | $ 5.25 |
Weighted average exercise price granted | 1.35 | 2.07 |
Weighted average exercise price forfeited | 2.53 | 6.42 |
Weighted average exercise price exercised | ||
Weighted average exercise price outstanding ending balance | 1.55 | $ 1.73 |
Weighted average exercise price vested | 1.71 | |
Weighted average exercise price exercisable | $ 2 | |
Weighted average remaining contractual term outstanding | 2 years 6 months 14 days | 2 years 11 months 4 days |
Weighted average remaining contractual term outstanding | 2 years 8 months 5 days | 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 | 1,932,000 | $ 995,000 |
Aggregate intrinsic value vested | 945,000 | |
Aggregate intrinsic value exercisable | $ 522,000 |
Stock Options - Schedule of Fai
Stock Options - Schedule of Fair Value Assumptions Using Black-Scholes Method (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Average expected term (years) | 5 years | 5 years |
Expected dividend yield | 0.00% | 0.00% |
Maximum [Member] | ||
Risk-free interest rate | 0.17% | 1.51% |
Expected volatility | 255.23% | 180.00% |
Minimum [Member] | ||
Risk-free interest rate | 0.39% | 2.75% |
Expected volatility | 270.57% | 413.83% |
Stock Warrants (Details Narrati
Stock Warrants (Details Narrative) - USD ($) | Jul. 08, 2019 | Apr. 11, 2019 | Jul. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 05, 2020 | Aug. 15, 2019 | Apr. 09, 2019 | Dec. 31, 2018 |
Intrinsic value exercise price | $ 3,022,000 | $ 1,806,000 | |||||||
Number of share warrants granted to issue | 1,910,594 | 4,630,654 | 10,386,181 | ||||||
Warrant exercisable | $ 1.17 | ||||||||
Warrant expire term | 5 years | ||||||||
Fair value of warrant | $ 248,000 | ||||||||
Warrant to purchase of common stock | 1,965,594 | ||||||||
Warrants exercise price | $ 1.10 | ||||||||
Proceeds from exercise of warrant | $ 2,165,000 | $ 45,000 | |||||||
Note Payable [Member] | |||||||||
Fair value of warrant | $ 217,000 | ||||||||
Warrant to purchase of common stock | 108,196 | ||||||||
Warrants exercise price | $ 3.44 | ||||||||
Warrants expire date | Jul. 31, 2024 | ||||||||
Common Stock [Member] | |||||||||
Fair value of warrant | $ 439,000 | ||||||||
Warrant to purchase of common stock | 163,739 | 3,245,162 | |||||||
Warrants exercise price | $ 3.76 | $ 1.88 | |||||||
Warrants expire date | Apr. 30, 2024 | Aug. 31, 2024 | |||||||
Public Offering [Member] | |||||||||
Warrant to purchase of common stock | 6,869,084 | ||||||||
Warrants exercise price | $ 3.46 | ||||||||
Warrants expire date | Apr. 30, 2024 | ||||||||
Series A Shareholders [Member] | |||||||||
Number of share warrants granted to issue | 2,303,861 | ||||||||
Warrant expire term | 5 years | ||||||||
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 |
Stock Warrants - Schedule of Wa
Stock Warrants - Schedule of Warrants Outstanding (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |||
Number of Shares, Warrants Outstanding Beginning | 10,930,991 | 940,415 | |
Number of Shares, Warrants granted | 1,910,594 | 4,630,654 | 10,386,181 |
Number of Shares, Warrants forfeited | (244,800) | (46,667) | |
Number of Shares, Warrants exercised | (1,965,594) | (348,938) | |
Number of Shares, Warrants Outstanding Ending | 13,351,251 | 10,930,991 | |
Weighted-Average Exercise Price, Outstanding Beginning | $ 3.07 | $ 3.60 | |
Weighted-Average Exercise Price, granted | 1.17 | 2.97 | |
Weighted-Average Exercise Price, forfeited | 4.58 | 7.29 | |
Weighted-Average Exercise Price, exercised | 1.10 | 1.17 | |
Weighted-Average Exercise Price, Outstanding Ending | $ 2.48 | $ 3.07 | |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 4 years 2 months 30 days | 2 years 3 months 26 days | |
Weighted Average Remaining Contractual Life (Years), Outstanding Ending | 3 years 4 months 17 days | 4 years 2 months 30 days | |
Aggregate Intrinsic Value Outstanding Beginning | $ 1,806,000 | ||
Aggregate Intrinsic Value Outstanding Ending | $ 3,022,000 |
Issuance of Class A and B Uni_2
Issuance of Class A and B Units (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 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 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Percentage of valuation allowance against the asset amount | 100.00% | |
Statutory federal corporate tax rate | 21.00% | 21.00% |
Income tax rate description | The Company is currently assessing the extensive changes under the TCJ Act and its overall impact on the Company; however, based on its preliminary assessment of the reduction in the federal corporate tax rate from 35% to 21% to become effective on January 1, 2018, the Company currently expects that its effective tax rate for 2018 will be between 20% and 23%. Such estimated range is based on management's current assumptions with respect to, among other things, the Company's earnings, state income tax levels and tax deductions. | |
Federal and state net operating loss carry forwards | $ 28,700,000 | |
Change in control percentage | 50.00% | |
Tax Cuts and Jobs Act [Member] | ||
Statutory federal corporate tax rate | 21.00% | |
Income tax rate description | The Tax Cuts and Jobs Act (the "TCJ Act") was enacted into law. The TCJ Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the "Code"), that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forwards | $ 13,350,000 | $ 7,591,000 |
Share based compensation | (457,000) | (635,000) |
Non-cash interest and financing expenses | (177,000) | (472,000) |
Other temporary differences | (569,000) | (63,000) |
Less: Valuation allowance | (12,147,000) | (6,421,000) |
Deferred tax assets, net |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision of Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | (21.00%) | (21.00%) |
State taxes, net of federal benefit | (6.90%) | (6.90%) |
Non-deductible items | (1.00%) | (1.00%) |
Change in valuation allowance | 28.90% | 28.90% |
Provision for income taxes | 0.00% | 0.00% |
Accrued Officers' Salary (Detai
Accrued Officers' Salary (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued officers' salary | $ 822,000 | $ 207,000 |
Chief Executive Officer [Member] | ||
Ownership percentage | 8.30% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 01, 2021 | Feb. 18, 2021 | Jan. 21, 2021 | Jul. 29, 2020 | Dec. 20, 2019 | Apr. 30, 2018 | Dec. 31, 2020 | Feb. 17, 2021 |
Sought value by employee | $ 300,000 | |||||||
Board fees expensed | $ 426,000 | |||||||
Board fees to be recognized | 450,000 | |||||||
Subsequent Event [Member] | ||||||||
Litigation reserve | $ 75,000 | |||||||
Litigation settlement amount | $ 640,000 | |||||||
Subsequent Event [Member] | EMA Financial, LLC [Member] | ||||||||
Cash payment to others | $ 463,572 | |||||||
Litigation reserve | $ 464,000 | |||||||
Mr. Cutaia [Member] | ||||||||
Annual salary | $ 490,000 | |||||||
Monthly payments description | On July 29, 2020, the Compensation Committee approved a 3% salary increase for Mr. Cutaia resulting in an annual salary of $490,000. | |||||||
Five Board Members [Member] | ||||||||
Aggregate board fees | $ 450,000 | |||||||
Employment Agreement [Member] | Mr. Cutaia [Member] | ||||||||
Agreement term description | The Employment Agreement is for a four-year term, and can be extended for additional one-year periods. | |||||||
Annual salary | $ 430,000 | |||||||
Monthly payments description | The Employment Agreement provides that Mr. Cutaia is entitled to the following severance package in the event he is "terminated without cause," "terminated for good reason," or "terminated upon permanent disability": (i) monthly payments of $35,833 or such sum equal to his monthly base compensation at the time of the termination, whichever is higher, for a period of 36 months from the date of such termination and (ii) reimbursement for COBRA health insurance costs for 18 months from the date of such termination and, thereafter, reimbursement for health insurance costs for Mr. Cutaia and his family during the immediately subsequent 18-month period. In addition, all of Mr. Cutaia's then-unvested RSAs or other awards will immediately vest, without restriction, and any unearned and unpaid bonus compensation, expense reimbursement, and all accrued vacation, personal, and sick days, and related items shall be deemed earned, vested, and paid immediately. For purposes of the Employment Agreement, "terminated without cause" means if Mr. Cutaia were to be terminated for any reason other than a discharge for cause or due to Mr. Cutaia's death or permanent disability. For purposes of the Employment Agreement, "terminated for good reason" means the voluntary termination of the Employment Agreement by Mr. Cutaia if any of the following were to occur without his prior written consent, which consent cannot be unreasonably withheld considering our then-current financial condition, and, in each case, which continues uncured for 30 days following receipt by us of Mr. Cutaia's written notice: (i) there is a material reduction by us in (A) Mr. Cutaia's annual base salary then in effect or (B) the annual target bonus, as set forth in the Employment Agreement, or the maximum additional amount up to which Mr. Cutaia is eligible pursuant to the Employment Agreement; (ii) we reduce Mr. Cutaia's job title and position such that Mr. Cutaia (A) is no longer our Chief Executive Officer; (B) is no longer our Chairman of the Board; or (C) is involuntarily removed from our Board; or (iii) Mr. Cutaia is required to relocate to an office location outside of Orange County, California, or outside of a 30-mile radius of Newport Beach, California. For purposes of the Employment Agreement, "terminated upon permanent disability" means if Mr. Cutaia were to be terminated because he is then unable to perform his duties due to a physical or mental condition for (i) a period of 120 consecutive days or (ii) an aggregate of 180 days in any 12-month period. | |||||||
Monthly payments | $ 35,833 | |||||||
Stipulation and Agreement of Settlement [Member] | Subsequent Event [Member] | ||||||||
Sought value by employee | $ 75,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 23, 2019 | Aug. 14, 2019 | Apr. 11, 2019 | Jul. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 15, 2019 | Dec. 31, 2018 |
Proceeds from common stock | $ 16,781,000 | $ 18,525,000 | |||||||
Number of shares services rendered | $ 1,190,000 | $ 1,778,000 | |||||||
Shares granted | 2,111,308 | 2,531,971 | |||||||
Warrants exercised shares | 1,965,594 | 348,938 | |||||||
Warrants, weighted average exercise price | $ 1.10 | $ 1.17 | |||||||
Proceeds from exercise of warrants | $ 2,165,000 | $ 45,000 | |||||||
Stock options shares issued | 6,031,775 | 4,233,722 | 2,478,974 | ||||||
Stock options shares exercised | |||||||||
Stock options, weighted average exercise price | $ 1.55 | $ 1.73 | $ 5.25 | ||||||
Number of restricted stock shares granted | 2,871,471 | 1,923,001 | |||||||
Fair value of restricted stock awards | $ 3,355,000 | $ 616,000 | |||||||
Warrant to purchase of common stock | 1,965,594 | ||||||||
Warrants exercise price | $ 1.10 | ||||||||
Warrants term | 5 years | ||||||||
Fair value of warrant | $ 248,000 | ||||||||
Exercise price of common stock granted | $ 1.35 | $ 2.07 | |||||||
Restricted Stock [Member] | |||||||||
Number of restricted stock shares granted | 2,282,373 | 1,923,001 | |||||||
Common Stock [Member] | |||||||||
Number of shares issued, shares | 4,237,833 | ||||||||
Number of shares services rendered, shares | 1,007,583 | 1,015,981 | |||||||
Number of shares services rendered | |||||||||
Warrant to purchase of common stock | 163,739 | 3,245,162 | |||||||
Warrants expire date | Apr. 30, 2024 | Aug. 31, 2024 | |||||||
Warrants exercise price | $ 3.76 | $ 1.88 | |||||||
Fair value of warrant | $ 439,000 | ||||||||
Series A Preferred Shares [Member] | |||||||||
Number of shares issued, shares | 5,030 | ||||||||
Vendors [Member] | |||||||||
Number of shares services rendered, shares | 1,007,583 | ||||||||
Number of shares services rendered | $ 1,190,000 | ||||||||
Employees and Consultants [Member] | |||||||||
Shares granted | 1,340,333 | 2,111,308 | 2,531,971 | ||||||
Exercise price of common stock granted | $ 1.36 | $ 1.35 | $ 2.07 | ||||||
Expiration period | 5 years | 5 years | |||||||
Fair value of stock options grants | $ 2,438,000 | $ 4,564,000 | |||||||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | |||||||||
Advances from unaffiliated third parties | $ 4,387,000 | ||||||||
Purchase of future receipts/revenues | 5,423,000 | ||||||||
Payments to related party debt | 24,000 | ||||||||
Monthly payment | 283,000 | ||||||||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | Paid within 30 Days [Member] | |||||||||
Advances from unaffiliated third parties | 4,908,000 | ||||||||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | Paid Between 31 and 60 Days [Member] | |||||||||
Advances from unaffiliated third parties | 5,106,000 | ||||||||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | Paid within 61 to 90 Days [Member] | |||||||||
Advances from unaffiliated third parties | $ 5,228,000 | ||||||||
Subsequent Event [Member] | Options [Member] | |||||||||
Stock options shares issued | 332,730 | ||||||||
Stock options shares exercised | 332,730 | ||||||||
Stock options, weighted average exercise price | $ 1.13 | ||||||||
Proceeds from exercise of options | $ 377,000 | ||||||||
Subsequent Event [Member] | Warrants [Member] | |||||||||
Warrants exercised shares | 1,067,578 | ||||||||
Warrants, weighted average exercise price | $ 1.10 | ||||||||
Proceeds from exercise of warrants | $ 1,103,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||||
Number of shares issued, shares | 855,148 | ||||||||
Subsequent Event [Member] | Series A Preferred Shares [Member] | |||||||||
Number of shares issued, shares | 272,728 | ||||||||
Conversion of shares | 300 | ||||||||
Subsequent Event [Member] | Verb Acquisition Class B Shares [Member] | |||||||||
Number of shares issued, shares | 2,642,159 | ||||||||
Exchange of common shares | 2,642,159 | ||||||||
Subsequent Event [Member] | Institutional Investors [Member] | |||||||||
Number of shares issued, shares | 9,375,000 | ||||||||
Stock price per share | $ 1.60 | ||||||||
Proceeds from common stock | $ 14,000,000 | ||||||||
Subsequent Event [Member] | Vendors [Member] | |||||||||
Number of shares services rendered, shares | 935,994 | ||||||||
Number of shares services rendered | $ 1,638,000 | ||||||||
Subsequent Event [Member] | Employee [Member] | |||||||||
Number of shares restricted stock award | 247,703 | ||||||||
Shares granted | 4,641 | ||||||||
Proceeds from income and payroll taxes | $ 8,200 | ||||||||
Return of shares | 4,641 | ||||||||
Payments for income and payroll taxes | $ 8,200 | ||||||||
Subsequent Event [Member] | Employees and Members of Board of Directors [Member] | Restricted Stock [Member] | |||||||||
Number of restricted stock shares granted | 813,265 | ||||||||
Fair value of restricted stock awards | $ 1,374,000 | ||||||||
Subsequent Event [Member] | Officer [Member] | Warrants [Member] | |||||||||
Warrant to purchase of common stock | 138,889 | ||||||||
Warrants expire date | Feb. 8, 2023 | ||||||||
Warrants exercise price | $ 2.61 | ||||||||
Warrants term | 3 years | ||||||||
Fair value of warrant | $ 361,000 | ||||||||
Subsequent Event [Member] | Employees and Consultants [Member] | |||||||||
Number of shares services rendered, shares | 659,000 | ||||||||
Exercise price of common stock granted | $ 1.68 | ||||||||
Expiration period | 5 years | ||||||||
Stock option vesting, description | The options have an average exercise price of $1.68 per share, expire in five years, and vest between one and four years from grant date. | ||||||||
Fair value of stock options grants | $ 1,101,000 |