Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 10, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Verb Technology Company, Inc. | |
Entity Central Index Key | 0001566610 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 62,767,092 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 12,946,000 | $ 1,815,000 |
Accounts receivable, net of allowance of $484,000 and $361,000, respectively | 1,199,000 | 919,000 |
Inventory, net of allowance of $51,000 and $51,000, respectively | 38,000 | 34,000 |
Prepaid expenses and other current assets | 1,098,000 | 900,000 |
Total current assets | 15,281,000 | 3,668,000 |
Right-of-use assets | 2,590,000 | 2,730,000 |
Property and equipment, net of accumulated depreciation of $372,000 and $339,000, respectively | 813,000 | 862,000 |
Intangible assets, net of amortization of $2,680,000 and $2,310,000, respectively (including provisional intangible assets of $982,000 and $1,042,000, respectively) | 4,783,000 | 5,153,000 |
Goodwill (including provisional goodwill of $3,723,000, respectively | 20,060,000 | 20,060,000 |
Other assets | 67,000 | 69,000 |
Total assets | 43,594,000 | 32,542,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 5,148,000 | 5,097,000 |
Accrued officers' salary | 937,000 | 822,000 |
Accrued interest (including $100,000 and $102,000 payable to related parties) | 105,000 | 114,000 |
Advance on future receipts, net of discount of $725,000 and $67,000, respectively | 3,170,000 | 110,000 |
Notes payable - related party | 352,000 | 1,077,000 |
Deferred incentive compensation, current | 664,000 | 521,000 |
Operating lease liability, current | 591,000 | 596,000 |
Deferred revenue and customer deposits | 298,000 | 272,000 |
Derivative liability | 5,480,000 | 8,266,000 |
Total current liabilities | 16,745,000 | 16,875,000 |
Long Term liabilities: | ||
Notes payable | 240,000 | 1,458,000 |
Note payable - related party, non-current | 725,000 | |
Deferred incentive compensation to officers | 521,000 | |
Operating lease liability, non-current | 2,786,000 | 2,943,000 |
Total liabilities | 20,496,000 | 21,797,000 |
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; 1,706 and 2,006 issued and outstanding as of March 31, 2021 and December 31, 2020 | ||
Class A units, 100 issued and authorized as of March 31, 2021 and December 31, 2020 | ||
Class B units, 2,642,159 shares authorized, 0 and 2,642,159 issued and outstanding as of March 31, 2021 and December 31, 2020 | 3,065,000 | |
Common stock, $0.0001 par value, 200,000,000 shares authorized, 62,633,282 and 47,795,009 shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 6,000 | 5,000 |
Additional paid-in capital | 112,978,000 | 89,216,000 |
Accumulated deficit | (89,886,000) | (81,541,000) |
Total stockholders' equity | 23,098,000 | 10,745,000 |
Total liabilities and stockholders' equity | $ 43,594,000 | $ 32,542,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounts receivable allowance | $ 484,000 | $ 361,000 |
Inventory allowance | 51,000 | 51,000 |
Property and Equipment, net of accumulated depreciation | 372,000 | 339,000 |
Intangible assets, net of amortization | 2,680,000 | |
Provisional intangible assets | 982,000 | 1,042,000 |
Provisional goodwill | 3,723,000 | 3,723,000 |
Accrued interest, related parties | 100,000 | 102,000 |
Net of discount on future receipts | $ 725,000 | $ 67,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Class A units, shares authorized | 100 | 100 |
Class A units, shares issued | 100 | 100 |
Class B units, shares authorized | 2,642,159 | 2,642,159 |
Class B units, shares issued | 0 | 2,642,159 |
Class B units, shares outstanding | 0 | 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 | 62,633,282 | 47,795,009 |
Common stock, shares outstanding | 62,633,282 | 47,795,009 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 1,706 | 2,006 |
Preferred stock, shares outstanding | 1,706 | 2,006 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | ||
Total revenue | $ 2,526,000 | $ 2,354,000 |
Cost of revenue | ||
Total cost of revenue | 1,215,000 | 1,063,000 |
Gross margin | 1,311,000 | 1,291,000 |
Operating expenses: | ||
Research and development | 2,884,000 | 1,274,000 |
Depreciation and amortization | 414,000 | 363,000 |
General and administrative | 7,343,000 | 3,514,000 |
Total operating expenses | 10,641,000 | 5,151,000 |
Loss from operations | (9,330,000) | (3,860,000) |
Other income (expense), net | ||
Other income (expense), net | 54,000 | (6,000) |
Interest expense - amortization of debt discount | (475,000) | (137,000) |
Change in fair value of derivative liability | 500,000 | 2,092,000 |
Gain on extinguishment of PPP note payable | 1,226,000 | |
Debt extinguishment, net | (287,000) | |
Interest expense (including $32,000 and $35,000 to related parties) | (33,000) | (35,000) |
Total other expense, net | 985,000 | 1,914,000 |
Net Loss | (8,345,000) | (1,946,000) |
Deemed dividend to Series A preferred shareholders | (3,951,000) | |
Net loss to common stockholders | $ (8,345,000) | $ (5,897,000) |
Loss per share - basic and diluted | $ (0.16) | $ (0.23) |
Weighted average number of common shares outstanding - basic and diluted | 52,045,428 | 25,992,426 |
SaaS Recurring Subscription Revenue [Member] | ||
Revenue | ||
Total revenue | $ 1,461,000 | $ 1,057,000 |
Other Digital [Member] | ||
Revenue | ||
Total revenue | 340,000 | 400,000 |
Design, Printing, and Fulfillment [Member] | ||
Revenue | ||
Total revenue | 615,000 | 728,000 |
Cost of revenue | ||
Total cost of revenue | 585,000 | 676,000 |
Shipping [Member] | ||
Revenue | ||
Total revenue | 110,000 | 169,000 |
Cost of revenue | ||
Total cost of revenue | 90,000 | 157,000 |
Digital [Member] | ||
Cost of revenue | ||
Total cost of revenue | $ 540,000 | $ 230,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Interest expense - related parties | $ 32,000 | $ 35,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 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, 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 private placement | $ 1,000 | 3,429,000 | 3,430,000 | ||||
Sale of common stock from private placement, shares | 3,392,833 | ||||||
Fair value of warrants issued to Series A Preferred stockholders | (3,951,000) | (3,951,000) | |||||
Conversion of Series A Preferred to common stock | |||||||
Conversion of Series A Preferred to common stock, shares | (1,150) | 741,933 | |||||
Fair value of common shares issued for services | 321,000 | 321,000 | |||||
Fair value of common shares issued for services, shares | 320,601 | ||||||
Fair value of vested restricted stock awards | 241,000 | 241,000 | |||||
Fair value of vested restricted stock awards, shares | 11,025 | ||||||
Fair value of vested stock options and warrants | 381,000 | 381,000 | |||||
Net loss | (1,946,000) | (1,946,000) | |||||
Balance at Mar. 31, 2020 | $ 3,000 | 68,449,000 | (58,531,000) | 9,921,000 | |||
Balance, shares at Mar. 31, 2020 | 3,246 | 28,962,589 | |||||
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 | 2,642,159 | 47,795,009 | ||||
Conversion of Series A Preferred to common stock | |||||||
Conversion of Series A Preferred to common stock, shares | (300) | 272,728 | |||||
Fair value of common shares issued for services | 1,414,000 | 1,414,000 | |||||
Fair value of common shares issued for services, shares | 809,511 | ||||||
Fair value of vested restricted stock awards | 447,000 | 447,000 | |||||
Fair value of vested restricted stock awards, shares | 247,703 | ||||||
Fair value of vested stock options and warrants | 448,000 | 448,000 | |||||
Sale of common stock from public offering | $ 1,000 | 14,128,000 | 14,129,000 | ||||
Sale of common stock from public offering, shares | 9,375,000 | ||||||
Issuance of common stock from warrant exercise | 1,103,000 | 1,103,000 | |||||
Issuance of common stock from warrant exercise, shares | 1,036,600 | ||||||
Issuance of common stock from option exercise | 377,000 | $ 377,000 | |||||
Issuance of common stock from option exercise, shares | 332,730 | 332,730 | |||||
Extinguishment of derivative liability upon exercise of warrants | 2,286,000 | $ 2,286,000 | |||||
Fair value of common shares issued to settle accrued expenses | 207,000 | 207,000 | |||||
Fair value of common shares issued to settle accrued expenses, shares | 121,842 | ||||||
Fair value of warrants issued to officer to modify note payable | 287,000 | 287,000 | |||||
Conversion of Class B Units to common shares | $ (3,065,000) | 3,065,000 | |||||
Conversion of Class B Units to common shares, shares | (2,642,159) | 2,642,159 | |||||
Net loss | (8,345,000) | (8,345,000) | |||||
Balance at Mar. 31, 2021 | $ 6,000 | $ 112,978,000 | $ (89,886,000) | $ 23,098,000 | |||
Balance, shares at Mar. 31, 2021 | 1,706 | 62,633,282 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Activities: | ||
Net loss | $ (8,345,000) | $ (5,897,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Fair value of common shares issued for services and vested stock options | 2,402,000 | 943,000 |
Gain on extinguishment of PPP note payable | (1,226,000) | |
Debt extinguishment from modification of related party note payable | 287,000 | |
Deemed dividend to Series A preferred stockholders | 3,951,000 | |
Amortization of debt discount | 475,000 | 137,000 |
Change in fair value of derivative liability | (500,000) | (2,092,000) |
Depreciation and amortization | 414,000 | 363,000 |
Amortization of right-of-use assets | 140,000 | 135,000 |
Inventory reserve | (2,000) | |
Allowance for doubtful account | 124,000 | 50,000 |
Effect of changes in assets and liabilities: | ||
Accounts receivable | (259,000) | 9,000 |
Inventory | (4,000) | 30,000 |
Prepaid expenses | (281,000) | (12,000) |
Other assets | (45,000) | |
Accounts payable, accrued expenses, and accrued interest | 362,000 | 255,000 |
Deferred revenue and customer deposits | 26,000 | (44,000) |
Deferred incentive compensation | (377,000) | |
Operating lease liability | (161,000) | (47,000) |
Net cash provided (used) in operating activities | (6,923,000) | (2,266,000) |
Investing Activities: | ||
Gain on disposal of fixed assets | 5,000 | |
Purchases of property and equipment | (121,000) | |
Net cash provided by (used in) investing activities | 5,000 | (121,000) |
Financing Activities: | ||
Proceeds from sale of common stock | 13,985,000 | 3,430,000 |
Advances on future receipts | 4,290,000 | |
Proceeds from warrant exercise | 1,103,000 | |
Proceeds from option exercise | 377,000 | |
Payment of advances of future receipts | (1,706,000) | (411,000) |
Net cash provided by financing activities | 18,049,000 | 3,019,000 |
Net change in cash | 11,131,000 | 632,000 |
Cash - beginning of period | 1,815,000 | 983,000 |
Cash - end of period | 12,946,000 | 1,615,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 34,000 | 10,000 |
Cash paid for income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Fair value of derivative liability extinguished | 2,286,000 | |
Fair value of common share issued to settle accrued expenses | 207,000 | |
Reclassification of Class B upon conversion to common stock | 3,065,000 | |
Discount recognized from advances on future receipts | 1,133,000 | |
Fair value of derivative liability from issuance of warrants to Series A stockholders considered as a deemed dividend | $ 3,951,000 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
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 Quarterly Report on Form 10-Q 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. 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, verbLIVE, our Live Stream eCommerce application, and verbTEAMS, our self-onboarding video-based CRM and content management application for small business and solopreneurs, with seamless synchronization with Salesforce, that also comes bundled with verbLIVE. Historically, we 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. 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 quarter ended March 31, 2021. 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 March 31, 2021, 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 | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 31, 2021 (the “2020 Annual Report”). The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc., Verb Direct, LLC, and Verb Acquisition Co., LLC. Intercompany accounts have been eliminated in the consolidation. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the quarter ended March 31, 2021, the Company incurred a net loss of $8,345,000 and used cash in operations of $6,923,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. 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 three months ended March 31, 2021 and 2020 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. As of March 31, 2021, we have one vendor that accounted for 40% of our purchases individually and in aggregate. In addition, we had 2 vendors that account for 10% and 28% of accounts payable individually and 38% in aggregate as of March 31, 2021. 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. Reclassifications Certain revenue amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications consist of reclassification of digital revenue of $400,000 between SaaS recurring subscription revenue and other digital revenue to provide additional clarity. These reclassifications had no effect to the previously reported net loss. Contract Liabilities Contract liabilities represents consideration received from customers under a revenue contract, but the Company has not yet delivered or completed its performance obligation to the customer. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of March 31, 2021, and 2020, the Company had total outstanding options of 5,799,013 and 4,417,108, respectively, and warrants of 12,422,562 and 13,651,050, respectively, and outstanding restricted stock awards of 2,751,508 and 1,475,329, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive. 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 March 31, 2021 and December 31, 2020, management determined there were no indications of impairment. The Company will perform their next impairment analysis in December 2021. 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 March 31, 2021 and December 31, 2020, there was no impairment of intangible assets. The Company will perform their next impairment analysis in December 2021. 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. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). 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 | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS a. ACQUISITION OF VERB DIRECT On April 12, 2019, Verb completed the acquisition of Verb Direct (formerly Sound Concepts, Inc.). The acquisition was intended to augment and diversify Verb’s internet and SaaS business. As a result of this acquisition, the Company recorded goodwill of $16,337,000 and intangible assets of $6,340,000. The goodwill recognized 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 March 31, 2021, 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 quarters ended March 31, 2021 and 2020, the Company recorded amortization expense of $370,000 and $325,000, 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 remaining $ 1,065,000 2022 1,375,000 2023 1,302,000 2024 465,000 2025 and thereafter 133,000 Total amortization $ 4,340,000 The following unaudited pro forma statement of operations present the Company’s pro forma results of operations for the quarters ended March 31, 2020 to give effect to the acquisition of Ascent Certification as if it had occurred on January 1, 2020. Quarter Ended (Proforma, unaudited) SaaS recurring subscription revenue $ 1,312,000 Other digital revenue 400,000 Design, printing, and fulfilment 728,000 Shipping 169,000 Total Revenue 2,609,000 Cost of revenue 1,122,000 Gross margin 1,487,000 Operating expenses 5,412,000 Other income, net 1,914,000 Net loss (2,011,000 ) Deemed dividend to Series A preferred (3,951,000 ) Net loss to common stockholders $ (5,962,000 ) Pursuant to the provisions of ASC 805, the following results of operations of Verb Acquisition subsequent to the acquisition are as follows: Verb Acquisition September 1, 2020 through March 31, 2021 (unaudited) Revenue $ 439,000 Cost of revenue 202,000 Operating expenses 1,295,000 Other income / (expense) - Net loss $ (1,058,000 ) |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of March 31, 2021 and December 31, 2020. March 31, 2021 December 31, 2020 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 23,000 39,000 Leasehold improvement 1,058,000 1,058,000 Total property and equipment 1,185,000 1,201,000 Accumulated depreciation (372,000 ) (339,000 ) Total property and equipment, net $ 813,000 $ 862,000 During the period ended March 31, 2021, the Company sold certain machinery and equipment with a cost of $16,000 and accumulated depreciation of $11,000 for cash proceeds of $11,000. As a result, the Company recognized a gain of $6,000 and was reported as part of other income. Depreciation expense amounted to $44,000 and $35,000 for the three months ended March 31, 2021 and 2020, respectively. |
Right-of-use Assets and Operati
Right-of-use Assets and Operating Lease Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 Period Ended March 31, 2020 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 175,000 $ 175,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 196,000 $ - Weighted average remaining lease term – operating leases (in years) 4.54 5.11 Average discount rate – operating leases 4.0 % 4.0 % March 31, 2021 December 31, 2020 Operating leases Right-of-use assets $ 2,590,000 $ 2,730,000 Short-term operating lease liabilities $ 591,000 $ 596,000 Long-term operating lease liabilities 2,786,000 2,943,000 Total operating lease liabilities $ 3,377,000 $ 3,539,000 Year ending Operating Leases 2021 595,000 2022 751,000 2023 773,000 2024 472,000 2025 and thereafter 1,189,000 Total lease payments 3,780,000 Less: Imputed interest/present value discount (403,000 ) Present value of lease liabilities $ 3,377,000 |
Advance on Future Receipts
Advance on Future Receipts | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Advance on Future Receipts | 6. ADVANCE OF FUTURE RECEIPTS The Company has the following advances on future receipts as of March 31, 2021: Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at March 31, 2021 Balance at December 31, 2020 Note 1 June 30, 2020 February 25, 2021 108 % 506,000 - 89,000 Note 2 June 30, 2020 February 25, 2021 108 % 506,000 - 88,000 Note 3 January 13, 2021 September 10, 2021 108 % 844,000 556,000 - Note 4 January 13, 2021 September 10, 2021 108 % 844,000 556,000 - Note 5 January 22, 2021 July 1, 2021 108 % 2,040,000 1,454,000 - Note 6 February 18, 2021 – March 3, 2021 August 3, 2021 – August 15, 2021 12 % 1,696,000 1,329,000 - Total $ 1,012,000 3,895,000 177,000 Debt discount (725,000 ) (67,000 ) Net $ 3,170,000 $ 110,000 Note 1 and 2 On June 30, 2020, the Company received two secured advances from an unaffiliated third party totaling $728,000 for the purchase of future receipts/revenues of $1,012,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the average interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. 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 quarter ended March 31, 2021, the Company paid the entire balance due of $177,000 and amortized the remaining debt discount of $67,000. Note 3 and 4 On January 13, 2021, the Company received two secured advances from the same unaffiliated third party (see Note 1 and 2) totaling $1,213,000 for the purchase of future receipts/revenues of $1,688,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $11,000 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 average interest was imputed at a rate of 28% based on the face value of the note and proceeds received. The Company may pay off either note for $744,000 if paid within 30 days of funding; for $775,000 if paid between 31 and 60 days of funding; or for $806,000 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 $1,688,000 to account for the future receipts sold and a debt discount of $475,000 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 quarter ended March 31, 2021, the Company paid $753,000 of the balance outstanding and amortized $148,000 of the debt discount. As of March 31, 2021 outstanding balance of the notes amounted to $1,112,000 and the unamortized balance of the debt discount was $327,000. Note 5 On January 22, 2020, the Company received a secured advance from an unaffiliated third party totaling $1,440,000 for the purchase of future receipts/revenues of $2,040,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $13,000 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 29% based on the face value of the note and the proceeds received. The Company may pay off either note for $1,725,000 if paid within 30 days of funding; for $1,860,000 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 $2,040,000 to account for the future receipts sold and a debt discount of $600,000 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 quarter ended March 31, 2021, the Company paid $587,000 of the balance outstanding and amortized $248,000 of the debt discount. As of March 31, 2021 outstanding balance of the notes amounted to $1,454,000 and the unamortized balance of the debt discount was $352,000. Note 6 In February and March, the Company received secured advances from an unaffiliated third party totaling $1,637,000 for the purchase of future receipts/revenues of $1,696,000. Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $283,000 from the Company’s operating account each month. 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 3% based on the face value of the notes and the proceeds received. As a result, the Company recorded a liability of $1,696,000 to account for the future receipts sold and a debt discount of $59,000 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 quarter ended March 31, 2021, the Company paid $367,000 of the balance outstanding and amortized $12,000 of the debt discount. As of March 31, 2021 outstanding balance of the notes amounted to $1,329,000 and the unamortized balance of the debt discount was $46,000. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | 7. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties notes payable as of March 31, 2021 and December 31, 2020: Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2023 12.0 % $ 1,249,000 $ 725,000 $ 725,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Total notes payable – related parties 1,077,000 1,077,000 Non-current (725,000 ) - Current $ 352,000 $ 1,077,000 (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. During the year ended December 31, 2020, the Company made payments of $100,000. On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years. In exchange for the extension, the Company issued Mr. Cutaia warrants to purchase 138,889 shares of common stock with a fair value of $287,000. The warrants are fully vested, exercisable at $2.61 per share and will expire in three years. There were no other changes to the original terms of the note payable. In accordance with ASC 450-70, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. The instruments are considered “substantially different” when the present value of the cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. As the fair value of the warrants granted amounted to $287,000 for which is approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted the modification as an extinguishment of debt which requires the measurement of the modified debt and additional consideration to be at fair value. As a result, the Company recognized a loss on debt extinguishment of $287,000 and a corresponding credit to contributed capital. As of March 31, 2021, the outstanding balance of the note amounted to $725,000. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2021 and December 31, 2020, the outstanding principal balance of the note amounted to $112,000, respectively. As of March 31, 2021, 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 March 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $240,000, respectively. Total interest expense for notes payable to related parties was $32,000 and $35,000 for three months ended March 31, 2021 and 2020, respectively. The Company paid $34,000 and $10,000 in interest for the three months ended March 31, 2021 and 2020, respectively. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | 8. NOTES PAYABLE The Company has the following notes payable as of March 31, 2021: Note Issuance Date Maturity Date Interest Balance at 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 % 150,000 150,000 Note C May 1, 2020 May 1, 2022 3.75 % 90,000 90,000 Total notes payable 240,000 1,458,000 Non-current (240,000 ) (1,458,000 ) Current $ - $ - (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, 2021 the entire note and accrued interest, totaling $1,226,000, was forgiven and accounted as a gain on debt extinguishment. (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 fiscal 2020. (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. |
Deferred Incentive Compensation
Deferred Incentive Compensation to Officers | 3 Months Ended |
Mar. 31, 2021 | |
Compensation Related Costs [Abstract] | |
Deferred Incentive Compensation to Officers | 9. DEFERRED INCENTIVE COMPENSATION TO OFFICERS Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 215,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 161,000 324,000 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 664,000 1,042,000 Non-current - (521,000 ) Current $ 664,000 $ 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. On January 12, 2021, the Company paid $215,000 and paid the remaining $63,000 due subsequent to March 31, 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. On January 12, 2021, the Company paid $163,000 and paid the remaining $81,000 due subsequent to March 31, 2021. |
Convertible Series A Preferred
Convertible Series A Preferred Stock and Warrant Offering | 3 Months Ended |
Mar. 31, 2021 | |
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 (see Note 11). 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). As of December 31, 2020, 2,006 shares of Series A Preferred stock are outstanding. During the period ended March 31, 2021, 300 shares of Preferred Stock were converted into 272,278 shares of Common Stock. As of March 31, 2021, 1,706 shares Series A Preferred stock are outstanding. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2021 | |
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. In prior year, the Company granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the 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: March 31, 2021 Upon Extinguishment in 2021 December 31, 2020 Stock Price $ 1.40 $ 2.45 $ 1.65 Exercise Price $ 1.41 $ 1.10 $ 1.41 Expected Life 2.92 3.83 3.17 Volatility 135 % 157 % 107 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.27 % 0.34 % 0.23 % Warrants $ 5,480,000 $ - $ 8,266,000 Convertible Notes - - - Total Fair Value $ 5,480,000 $ 2,286,000 $ 8,266,000 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, 2020, the outstanding fair value of the derivative liability amounted to $8,266,000. During the period ended March 31, 2021, the Company recorded a charge of ($500,000) to account for the changes in the fair value of these derivative liabilities during the period ended March 31, 2021. In addition, 1,027,578 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 ($2,286,000) and the pursuant to current accounting guidelines, the extinguishment was accounted as part of equity. At March 31, 2021, the fair value of the derivative liability amounted to $5,480,000. The details of derivative liability transactions for the period ended March 31, 2021 and 2020 are as follows: March 31, 2021 March 31, 2020 Beginning balance $ 8,266,000 $ 5,048,000 Fair value upon issuance of notes payable and/or warrants - 3,951,000 Change in fair value (500,000 ) (2,092,000 ) Extinguishment (2,286,000 ) - Ending balance $ 5,480,000 $ 6,907,000 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Common Stock | 12. COMMON STOCK The Company’s Common Stock activity for the three months ended March 31, 2021 is as follows: Common Stock Shares Issued as Part of the Company’s Public Offering On March 15, 2021, 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 which resulted in net proceeds of $14,129,000. Included in the $14,129,000 is a refund of $144,000 from the underwriter that was received subsequent to March 31, 2021. Shares Issued for Services During the three months ended March 31, 2021, the Company issued 935,994 shares of Common Stock to vendors for services rendered and to be rendered with a fair value of $1,424,000. 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. In addition, 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 $10,000. Pursuant to current accounting guidelines, the Company accounted the return of the 4,641 shares and the payment of $10,000 for income and payroll taxes paid on behalf the employees as a reduction in additional paid in capital. Shares Issued for Debt During the three months ended March 31, 2021, the Company issued 121,842 shares of Common Stock to vendors certain employees as settlement of payroll of $207,000 that was previously recorded as accrued payroll as of December 31, 2020. These shares of Common Stock were valued based on the market value of the Company’s Common Stock price at the issuance date and approximates the carrying value of the accrued payroll. |
Restricted Stock Awards
Restricted Stock Awards | 3 Months Ended |
Mar. 31, 2021 | |
Restricted Stock Awards | |
Restricted Stock Awards | 13. RESTRICTED STOCK AWARDS On December 20, 2019, the Company approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “Plan”). A summary of restricted stock unit activity for the quarter ended March 31, 2021 is presented below. Weighted- Average Grant Date Shares Fair Value Fair Value Non-vested at December 31, 2020 2,185,946 $ 1,943,000 $ 1.17 Granted 813,265 1,374,000 1.69 Vested/deemed vested (247,703 ) (447,000 ) 1.16 Forfeited - - - Non-vested at March 31, 2021 2,751,508 $ 2,870,000 $ 1.33 On January 4, 2021, 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 up to January 2025. 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. The total fair value of restricted stock units that vested or deemed vested for the quarter ended March 31, 2021 was $447,000 and is included in selling, general and administrative expenses in the accompanying statements of operations. As of March 31, 2021 the amount of unvested compensation related to issuances of restricted stock units was $2,870,000 which will be recognized as an expense in future periods as the shares vest. When calculating basic net loss per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net loss per share, these shares are included in weighted average common shares outstanding as of their grant date. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 14. STOCK OPTIONS On December 20, 2019, the Company adopted its 2019 Omnibus Incentive Plan (the “Plan”). At its discretion, the Company grants share option awards to certain employees and non-employees under the Plan and accounts for it in accordance with ASC 718, Compensation – Stock Compensation. A summary of option activity for the three months ended March 31, 2021 is presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2020 6,031,775 $ 1.55 2.68 $ 1,932,000 Granted 664,000 1.38 - - Forfeited (564,032 ) 1.87 - - Exercised (332,730 ) 1.13 - - Outstanding at March 31, 2021 5,799,013 $ 1.62 2.46 $ 387,000 Vested March 31, 2021 3,304,078 $ 1.71 $ 322,000 Exercisable at March 31, 2021 2,023,118 $ 1.94 $ 133,000 At March 31, 2021, the intrinsic value of the outstanding options was $387,000. During the quarter ended March 31, 2021, the Company granted stock options to employees to purchase a total of 664,000 shares of Common Stock for services rendered. The options have an average exercise price of $1.76 per share, expire in five years, vesting one and four years from grant date. The total fair value of these options at grant date was approximately $1,103,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the quarter ended March 31, 2021 amounted to $448,000. As of March 31, 2021, the total unrecognized stock-based compensation expense was $4,059,000, which is expected to be recognized as part of operating expense through March 2025. In addition, a total of 332,730 shares of stock options were exercised. As a result of the exercise of the option, the Company issued 332,730 shares of common stock and received cash of $377,000. The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Three months ended March 31, 2021 2020 Risk-free interest rate 0.10% - 0.36 % 0.39 % Average expected term 5 years 5 years Expected volatility 240.03 % 270.1 % Expected dividend yield - - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s Common Stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2021 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 15. WARRANTS The Company has the following warrants outstanding as of March 31, 2021, all of which are exercisable: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2020 13,351,251 $ 2.48 3.38 $ 3,022,000 Granted 138,889 2.61 - - Forfeited - - - - Exercised (1,067,578 ) 1.10 - - Outstanding at March 31, 2021, all vested 12,422,562 $ 2.60 3.14 $ 1,328,000 At March 31, 2021 the intrinsic value of the outstanding warrants was $1,328,000. During the quarter ended March 31, 2021, the Company granted 138,889 warrants to an officer as part of a note extension (see Note 7). During the quarter ended March 31, 2021, a total of 1,067,578 warrants were exercised into 1,036,600 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. |
Issuance of Class A and B Units
Issuance of Class A and B Units | 3 Months Ended |
Mar. 31, 2021 | |
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. There were no issued and outstanding shares of Class A Unit as of March 31, 2021 and December 31, 2020. 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. On March 4, 2021, 2,642,159 all Class B units were converted into 2,642,159 shares of Verb Technology common stock. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. COMMITMENTS AND CONTINGENCIES 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. This former employee filed his complaint in the Superior Court of California for the County of Los Angeles on November 20, 2019, styled Meyerson v. Verb Technology Company, Inc., et al 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 Legal Proceedings 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, among 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 $640,000 settlement of the Hartmann Class Action. During the period ended March 31, 2021, the Company paid $56,000 pursuant to the Stipulation of Settlement. As of March 31, 2021, outstanding balance due amounted to $468,000. 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. On April 1, 2021, the Company paid $75,000 to cover the attorney fees and expenses that were due. The Company knows of no material proceedings in which any of its directors, officers, or affiliates, or any registered or beneficial stockholder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. The Company believes it has adequately reserved for all litigation within its financial statements. Board of Directors The Company has committed an aggregate of $475,000 in board fees to its five board members over the term of their appointment for services to be rendered. Board fees are accrued and paid monthly. The members will serve on the board until the annual meeting for the year in which their term expires or until their successors has been elected and qualified. Total board fees expensed during the quarter ended March 31, 2021 was $119,000 As of March 31, 2021, total board fees to be recognized in future period amounted to $356,000 and will be recognized once the service has been rendered. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS Issuance of Common Stock Subsequent to March 31, 2021, the Company issued 233,959 shares of Common Stock to vendors for services rendered with a fair value of $283,000. 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 March 31, 2021, 100,149 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 $121,000. Pursuant to current accounting guidelines, the Company accounted the return of the 100,149 shares and the payment of $121,000 for income and payroll taxes paid on behalf the employees as a reduction in additional paid in capital. Grant of Stock Options Subsequent to March 31, 2021, the Company granted stock options to an employee to purchase a total of 225,000 shares of Common Stock for to be services rendered. The options have an exercise price of $1.36 per share, expire in five years, and vest over a period of 4 years from grant date. The total fair value of these options at the grant date was $286,000 using the Black-Scholes option pricing model. Employment Activities On April 28, 2021, in the Company’s process to reorganize its development team and related processes, it eliminated the position of Chief Product Officer. Accordingly, the employment of Julie Ann Holdren, the Company’s former Chief Product Officer, ended on the same date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 31, 2021 (the “2020 Annual Report”). The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc., Verb Direct, LLC, and Verb Acquisition Co., LLC. Intercompany accounts have been eliminated in the consolidation. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the quarter ended March 31, 2021, the Company incurred a net loss of $8,345,000 and used cash in operations of $6,923,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. |
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 three months ended March 31, 2021 and 2020 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. As of March 31, 2021, we have one vendor that accounted for 40% of our purchases individually and in aggregate. In addition, we had 2 vendors that account for 10% and 28% of accounts payable individually and 38% in aggregate as of March 31, 2021. |
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. |
Reclassifications | Reclassifications Certain revenue amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications consist of reclassification of digital revenue of $400,000 between SaaS recurring subscription revenue and other digital revenue to provide additional clarity. These reclassifications had no effect to the previously reported net loss. |
Contract Liabilities | Contract Liabilities Contract liabilities represents consideration received from customers under a revenue contract, but the Company has not yet delivered or completed its performance obligation to the customer. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of March 31, 2021, and 2020, the Company had total outstanding options of 5,799,013 and 4,417,108, respectively, and warrants of 12,422,562 and 13,651,050, respectively, and outstanding restricted stock awards of 2,751,508 and 1,475,329, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive. |
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 March 31, 2021 and December 31, 2020, management determined there were no indications of impairment. The Company will perform their next impairment analysis in December 2021. |
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 March 31, 2021 and December 31, 2020, there was no impairment of intangible assets. The Company will perform their next impairment analysis in December 2021. |
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. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). 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 (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
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 |
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 remaining $ 1,065,000 2022 1,375,000 2023 1,302,000 2024 465,000 2025 and thereafter 133,000 Total amortization $ 4,340,000 |
Schedule of Pro Forma Statements of Operations | The following unaudited pro forma statement of operations present the Company’s pro forma results of operations for the quarters ended March 31, 2020 to give effect to the acquisition of Ascent Certification as if it had occurred on January 1, 2020. Quarter Ended (Proforma, unaudited) SaaS recurring subscription revenue $ 1,312,000 Other digital revenue 400,000 Design, printing, and fulfilment 728,000 Shipping 169,000 Total Revenue 2,609,000 Cost of revenue 1,122,000 Gross margin 1,487,000 Operating expenses 5,412,000 Other income, net 1,914,000 Net loss (2,011,000 ) Deemed dividend to Series A preferred (3,951,000 ) Net loss to common stockholders $ (5,962,000 ) |
Schedule of Results of Operation of Subsidiary | Pursuant to the provisions of ASC 805, the following results of operations of Verb Acquisition subsequent to the acquisition are as follows: Verb Acquisition September 1, 2020 through March 31, 2021 (unaudited) Revenue $ 439,000 Cost of revenue 202,000 Operating expenses 1,295,000 Other income / (expense) - Net loss $ (1,058,000 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of March 31, 2021 and December 31, 2020. March 31, 2021 December 31, 2020 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 23,000 39,000 Leasehold improvement 1,058,000 1,058,000 Total property and equipment 1,185,000 1,201,000 Accumulated depreciation (372,000 ) (339,000 ) Total property and equipment, net $ 813,000 $ 862,000 |
Right-of-use Assets and Opera_2
Right-of-use Assets and Operating Lease Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease Cost | The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Period Ended March 31, 2021 Period Ended March 31, 2020 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 175,000 $ 175,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 196,000 $ - Weighted average remaining lease term – operating leases (in years) 4.54 5.11 Average discount rate – operating leases 4.0 % 4.0 % |
Schedule of Operating Leases | March 31, 2021 December 31, 2020 Operating leases Right-of-use assets $ 2,590,000 $ 2,730,000 Short-term operating lease liabilities $ 591,000 $ 596,000 Long-term operating lease liabilities 2,786,000 2,943,000 Total operating lease liabilities $ 3,377,000 $ 3,539,000 |
Schedule of Present Value of Lease Liabilities | Year ending Operating Leases 2021 595,000 2022 751,000 2023 773,000 2024 472,000 2025 and thereafter 1,189,000 Total lease payments 3,780,000 Less: Imputed interest/present value discount (403,000 ) Present value of lease liabilities $ 3,377,000 |
Advance on Future Receipts (Tab
Advance on Future Receipts (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Advances on Future Receipts | The Company has the following advances on future receipts as of March 31, 2021: Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at March 31, 2021 Balance at December 31, 2020 Note 1 June 30, 2020 February 25, 2021 108 % 506,000 - 89,000 Note 2 June 30, 2020 February 25, 2021 108 % 506,000 - 88,000 Note 3 January 13, 2021 September 10, 2021 108 % 844,000 556,000 - Note 4 January 13, 2021 September 10, 2021 108 % 844,000 556,000 - Note 5 January 22, 2021 July 1, 2021 108 % 2,040,000 1,454,000 - Note 6 February 18, 2021 – March 3, 2021 August 3, 2021 – August 15, 2021 12 % 1,696,000 1,329,000 - Total $ 1,012,000 3,895,000 177,000 Debt discount (725,000 ) (67,000 ) Net $ 3,170,000 $ 110,000 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable to Related Parties | The Company has the following related parties notes payable as of March 31, 2021 and December 31, 2020: Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2023 12.0 % $ 1,249,000 $ 725,000 $ 725,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 112,000 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 240,000 240,000 Total notes payable – related parties 1,077,000 1,077,000 Non-current (725,000 ) - Current $ 352,000 $ 1,077,000 (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. During the year ended December 31, 2020, the Company made payments of $100,000. On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years. In exchange for the extension, the Company issued Mr. Cutaia warrants to purchase 138,889 shares of common stock with a fair value of $287,000. The warrants are fully vested, exercisable at $2.61 per share and will expire in three years. There were no other changes to the original terms of the note payable. In accordance with ASC 450-70, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. The instruments are considered “substantially different” when the present value of the cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. As the fair value of the warrants granted amounted to $287,000 for which is approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted the modification as an extinguishment of debt which requires the measurement of the modified debt and additional consideration to be at fair value. As a result, the Company recognized a loss on debt extinguishment of $287,000 and a corresponding credit to contributed capital. As of March 31, 2021, the outstanding balance of the note amounted to $725,000. (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $112,000, representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017. As of March 31, 2021 and December 31, 2020, the outstanding principal balance of the note amounted to $112,000, respectively. As of March 31, 2021, 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 March 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The Company has the following notes payable as of March 31, 2021: Note Issuance Date Maturity Date Interest Balance at 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 % 150,000 150,000 Note C May 1, 2020 May 1, 2022 3.75 % 90,000 90,000 Total notes payable 240,000 1,458,000 Non-current (240,000 ) (1,458,000 ) Current $ - $ - (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, 2021 the entire note and accrued interest, totaling $1,226,000, was forgiven and accounted as a gain on debt extinguishment. (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 fiscal 2020. (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. |
Deferred Incentive Compensati_2
Deferred Incentive Compensation to Officers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 $ 215,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 161,000 324,000 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 664,000 1,042,000 Non-current - (521,000 ) Current $ 664,000 $ 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. On January 12, 2021, the Company paid $215,000 and paid the remaining $63,000 due subsequent to March 31, 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. On January 12, 2021, the Company paid $163,000 and paid the remaining $81,000 due subsequent to March 31, 2021. |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liability Using Binomial Pricing Model Assumptions | The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: March 31, 2021 Upon Extinguishment in 2021 December 31, 2020 Stock Price $ 1.40 $ 2.45 $ 1.65 Exercise Price $ 1.41 $ 1.10 $ 1.41 Expected Life 2.92 3.83 3.17 Volatility 135 % 157 % 107 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.27 % 0.34 % 0.23 % Warrants $ 5,480,000 $ - $ 8,266,000 Convertible Notes - - - Total Fair Value $ 5,480,000 $ 2,286,000 $ 8,266,000 |
Schedule of Derivative Liability Transactions | The details of derivative liability transactions for the period ended March 31, 2021 and 2020 are as follows: March 31, 2021 March 31, 2020 Beginning balance $ 8,266,000 $ 5,048,000 Fair value upon issuance of notes payable and/or warrants - 3,951,000 Change in fair value (500,000 ) (2,092,000 ) Extinguishment (2,286,000 ) - Ending balance $ 5,480,000 $ 6,907,000 |
Restricted Stock Awards (Tables
Restricted Stock Awards (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restricted Stock Awards | |
Summary of Restricted Stock Award Activity | A summary of restricted stock unit activity for the quarter ended March 31, 2021 is presented below. Weighted- Average Grant Date Shares Fair Value Fair Value Non-vested at December 31, 2020 2,185,946 $ 1,943,000 $ 1.17 Granted 813,265 1,374,000 1.69 Vested/deemed vested (247,703 ) (447,000 ) 1.16 Forfeited - - - Non-vested at March 31, 2021 2,751,508 $ 2,870,000 $ 1.33 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | A summary of option activity for the three months ended March 31, 2021 is presented below. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2020 6,031,775 $ 1.55 2.68 $ 1,932,000 Granted 664,000 1.38 - - Forfeited (564,032 ) 1.87 - - Exercised (332,730 ) 1.13 - - Outstanding at March 31, 2021 5,799,013 $ 1.62 2.46 $ 387,000 Vested March 31, 2021 3,304,078 $ 1.71 $ 322,000 Exercisable at March 31, 2021 2,023,118 $ 1.94 $ 133,000 |
Schedule of Fair Value Assumptions Using Black-Scholes Method | The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Three months ended March 31, 2021 2020 Risk-free interest rate 0.10% - 0.36 % 0.39 % Average expected term 5 years 5 years Expected volatility 240.03 % 270.1 % Expected dividend yield - - |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrants Outstanding | The Company has the following warrants outstanding as of March 31, 2021, all of which are exercisable: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2020 13,351,251 $ 2.48 3.38 $ 3,022,000 Granted 138,889 2.61 - - Forfeited - - - - Exercised (1,067,578 ) 1.10 - - Outstanding at March 31, 2021, all vested 12,422,562 $ 2.60 3.14 $ 1,328,000 |
Description of Business (Detail
Description of Business (Details Narrative) - $ / shares | Feb. 04, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | |||
Reverse stock split | 1-for-15 reverse stock split | ||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Net loss | $ (8,345,000) | $ (1,946,000) | |
Net cash used in operating activities | (6,923,000) | $ (2,266,000) | |
Goodwill, Impairment Loss | |||
Intangible assets with finite lived estimated useful life | 5 years | ||
Impairment of intangible assets, finite-lived | |||
Outstanding Options [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 5,799,013 | 4,417,108 | |
Outstanding Warrants [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 12,422,562 | 13,651,050 | |
Restricted Stock [Member] | |||
Number of options warrants and restricted stock excluded from the computation of net loss per share as anti-dilutive | 2,751,508 | 1,475,329 | |
Digital [Member] | |||
Reclassification of digital revenue | $ 400,000 | ||
Customer Concentration Risk [Member] | Accounts Payable [Member] | Vendors One [Member] | |||
Concentration risk, percentage | 40.00% | ||
Customer Concentration Risk [Member] | Accounts Payable [Member] | Major Vendors One [Member] | |||
Concentration risk, percentage | 10.00% | ||
Customer Concentration Risk [Member] | Accounts Payable [Member] | Major Vendors Two [Member] | |||
Concentration risk, percentage | 28.00% | ||
Customer Concentration Risk [Member] | Accounts Payable [Member] | Two Major Vendors [Member] | |||
Concentration risk, percentage | 38.00% | ||
Maximum [Member] | |||
Cash FDIC insured amount | $ 250,000 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Sep. 04, 2020 | Apr. 12, 2019 | Apr. 12, 2019 | Apr. 12, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 04, 2020 | Dec. 31, 2020 |
Amortization expense | $ 2,680,000 | $ 2,310,000 | ||||||
Estimated useful life | 5 years | |||||||
Intangible assets unamortized balance | $ 4,783,000 | $ 5,153,000 | ||||||
Merger Agreement [Member] | Sound Concepts, Inc. [Member] | ||||||||
Goodwill acquired | $ 16,337,000 | |||||||
Intangible Assets Acquired | $ 6,340,000 | |||||||
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 | $ 370,000 | $ 325,000 | ||||||
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 ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill (provisional) | $ 20,060,000 | $ 20,060,000 |
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 (provisional) | 1,122,000 | |
Goodwill (provisional) | 3,723,000 | |
Purchase Price | $ 4,950,000 |
Acquisition - Schedule of Amort
Acquisition - Schedule of Amortization Expense for Future Periods for Intangible Assets (Details) | Mar. 31, 2021USD ($) |
Business Combinations [Abstract] | |
2021 remaining | $ 1,065,000 |
2022 | 1,375,000 |
2023 | 1,302,000 |
2024 | 465,000 |
2025 and thereafter | 133,000 |
Total amortization | $ 4,340,000 |
Acquisition - Schedule of Pro F
Acquisition - Schedule of Pro Forma Statements of Operations (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
SaaS Recurring Subscription Revenue [Member] | |
Revenue | $ 1,312,000 |
Other Digital Revenue [Member] | |
Revenue | 400,000 |
Design, Printing, and Fulfillment [Member] | |
Revenue | 728,000 |
Shipping [Member] | |
Revenue | 169,000 |
Merger Agreement [Member] | |
Revenue | 2,609,000 |
Cost of revenue | 1,122,000 |
Gross margin | 1,487,000 |
Operating expenses | 5,412,000 |
Other income, net | 1,914,000 |
Net loss | (2,011,000) |
Deemed dividend to Series A preferred | (3,951,000) |
Net loss to common stockholders | $ (5,962,000) |
Acquisition - Schedule of Resul
Acquisition - Schedule of Results of Operation of Subsidiary (Details) - USD ($) | 3 Months Ended | 7 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | |
Revenue | $ 2,526,000 | $ 2,354,000 | |
Cost of revenue | 1,215,000 | 1,063,000 | |
Operating expenses | 10,641,000 | 5,151,000 | |
Net loss | $ (8,345,000) | $ (1,946,000) | |
Verb Acquisition [Member] | |||
Revenue | $ 439,000 | ||
Cost of revenue | 202,000 | ||
Operating expenses | 1,295,000 | ||
Other expense | |||
Net loss | $ (1,058,000) |
Property and Equipment (Details
Property and Equipment (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Property, Plant and Equipment [Abstract] | |
Machinery and equipment, gross , cost | $ 16,000 |
Accumulated Depreciation | 11,000 |
Cash proceeds | 11,000 |
Gain (loss) on property plant equipment | $ 6,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,185,000 | $ 1,201,000 |
Less: accumulated depreciation | (372,000) | (339,000) |
Property and equipment, net | 813,000 | 862,000 |
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 | 23,000 | 39,000 |
Leasehold Improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,058,000 | $ 1,058,000 |
Right-of-Use Assets and Opera_3
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Lease Cost (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost (included in general and administration in the Company's statement of operations) | $ 175,000 | $ 175,000 |
Cash paid for amounts included in the measurement of lease liabilities | $ 196,000 | |
Weighted average remaining lease term - operating leases (in years) | 4 years 6 months 14 days | 5 years 1 month 9 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 ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right-of-use assets | $ 2,590,000 | $ 2,730,000 |
Short-term operating lease liabilities | 591,000 | 596,000 |
Long-term operating lease liabilities | 2,786,000 | 2,943,000 |
Total operating lease liabilities | $ 3,377,000 | $ 3,539,000 |
Right-of-Use Assets and Opera_5
Right-of-Use Assets and Operating Lease Liabilities - Schedule of Present Value of Lease Liabilities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 595,000 | |
2022 | 751,000 | |
2023 | 773,000 | |
2024 | 472,000 | |
2025 and thereafter | 1,189,000 | |
Total lease payments | 3,780,000 | |
Less: Imputed interest/present value discount | (403,000) | |
Present value of lease liabilities | $ 3,377,000 | $ 3,539,000 |
Advance on Future Receipts (Det
Advance on Future Receipts (Details Narrative) - USD ($) | Mar. 02, 2021 | Feb. 18, 2021 | Jan. 13, 2021 | Jun. 30, 2020 | Jan. 22, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 04, 2021 | Dec. 31, 2020 |
Debt discount | $ 725,000 | $ 67,000 | |||||||
Outstanding balance of debt | 3,895,000 | $ 177,000 | |||||||
Payments of debt | 1,706,000 | $ 411,000 | |||||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||||||
Debt principal amount | $ 728,000 | ||||||||
Purchase of future receipts | $ 1,012,000 | ||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company's operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of 108% based on the face value of the note and the proceeds received. | ||||||||
Principal payment | $ 6,000 | ||||||||
Interest rate | 108.00% | ||||||||
Advance future receipts sold | $ 1,012,000 | ||||||||
Debt discount | $ 284,000 | ||||||||
Payments of debt | 177,000 | ||||||||
Amortization of debt discount | 67,000 | ||||||||
Two Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||||||
Debt principal amount | $ 1,213,000 | ||||||||
Purchase of future receipts | $ 1,688,000 | ||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $11,000 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 108% based on the face value of the note and proceeds received. The Company may pay off either note for $744,000 if paid within 30 days of funding; for $775,000 if paid between 31 and 60 days of funding; or for $806,000 if paid within 61 to 90 days of funding. | ||||||||
Principal payment | $ 11,000 | ||||||||
Interest rate | 28.00% | ||||||||
Advance future receipts sold | $ 1,688,000 | ||||||||
Debt discount | $ 475,000 | 215,000 | |||||||
Outstanding balance of debt | 1,112,000 | ||||||||
Unamortized debt discount | 327,000 | ||||||||
Payments of debt | 753,000 | ||||||||
Amortization of debt discount | 148,000 | ||||||||
Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||||||
Debt principal amount | $ 1,440,000 | ||||||||
Purchase of future receipts | $ 2,040,000 | ||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $13,000 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 108% based on the face value of the note and the proceeds received. The Company may pay off either note for $1,725,000 if paid within 30 days of funding; for $1,860,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. | ||||||||
Principal payment | $ 13,000 | ||||||||
Interest rate | 29.00% | ||||||||
Advance future receipts sold | $ 2,040,000 | ||||||||
Debt discount | $ 600,000 | 248,000 | |||||||
Outstanding balance of debt | 1,454,000 | ||||||||
Unamortized debt discount | 352,000 | ||||||||
Payments of debt | 587,000 | ||||||||
Amortization of debt discount | 248,000 | ||||||||
Secured Advances [Member] | Unaffiliated Third-Party [Member] | |||||||||
Debt principal amount | $ 1,637,000 | $ 1,637,000 | |||||||
Purchase of future receipts | $ 1,696,000 | $ 1,696,000 | |||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $283,000 from the Company's operating account each month. 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 12% based on the face value of the notes and the proceeds received. | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $283,000 from the Company's operating account each month. 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 12% based on the face value of the notes and the proceeds received. | |||||||
Principal payment | $ 283,000 | $ 283,000 | |||||||
Interest rate | 3.00% | 3.00% | |||||||
Advance future receipts sold | $ 1,696,000 | $ 1,696,000 | |||||||
Debt discount | $ 59,000 | $ 59,000 | |||||||
Outstanding balance of debt | 1,329,000 | ||||||||
Unamortized debt discount | 46,000 | ||||||||
Payments of debt | 367,000 | ||||||||
Amortization of debt discount | $ 12,000 |
Advance on Future Receipts - Sc
Advance on Future Receipts - Schedule of Advances on Future Receipts (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Original Borrowing | $ 1,012,000 | ||
Total | 3,895,000 | $ 177,000 | |
Debt discount | (725,000) | (67,000) | |
Net | $ 3,170,000 | 110,000 | |
Note 1 [Member] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2023 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Note 2 [Member] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Note 3 [Member] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Advance on Future Receipts [Member] | Note 1 [Member] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 108.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 89,000 | ||
Advance on Future Receipts [Member] | Note 2 [Member] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 108.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 88,000 | ||
Advance on Future Receipts [Member] | Note 3 [Member] | |||
Issuance Date | Jan. 13, 2021 | ||
Maturity Date | Sep. 10, 2021 | ||
Interest Rate | 108.00% | ||
Original Borrowing | $ 844,000 | ||
Total | $ 556,000 | ||
Advance on Future Receipts [Member] | Note 4 [Member] | |||
Issuance Date | Jan. 13, 2021 | ||
Maturity Date | Sep. 10, 2021 | ||
Interest Rate | 108.00% | ||
Original Borrowing | $ 844,000 | ||
Total | $ 556,000 | ||
Advance on Future Receipts [Member] | Note 5 [Member] | |||
Issuance Date | Jan. 22, 2021 | ||
Maturity Date | Jul. 1, 2021 | ||
Interest Rate | 108.00% | ||
Original Borrowing | $ 2,040,000 | ||
Total | $ 1,454,000 | ||
Advance on Future Receipts [Member] | Note 6 [Member] | |||
Interest Rate | 12.00% | ||
Original Borrowing | $ 1,696,000 | ||
Total | $ 1,329,000 | ||
Advance on Future Receipts [Member] | Note 6 [Member] | Minimum [Member] | |||
Issuance Date | Feb. 18, 2021 | ||
Maturity Date | Aug. 3, 2021 | ||
Advance on Future Receipts [Member] | Note 6 [Member] | Maximum [Member] | |||
Issuance Date | Mar. 3, 2021 | ||
Maturity Date | Aug. 15, 2021 | ||
[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. During the year ended December 31, 2020, the Company made payments of $100,000. On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years. In exchange for the extension, the Company issued Mr. Cutaia warrants to purchase 138,889 shares of common stock with a fair value of $287,000. The warrants are fully vested, exercisable at $2.61 per share and will expire in three years. There were no other changes to the original terms of the note payable. In accordance with ASC 450-70, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. The instruments are considered "substantially different" when the present value of the cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. As the fair value of the warrants granted amounted to $287,000 for which is approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted the modification as an extinguishment of debt which requires the measurement of the modified debt and additional consideration to be at fair value. As a result, the Company recognized a loss on debt extinguishment of $287,000 and a corresponding credit to contributed capital. As of March 31, 2021, the outstanding balance of the note amounted to $725,000. | ||
[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 March 31, 2021 and December 31, 2020, the outstanding principal balance of the note amounted to $112,000, respectively. As of March 31, 2021, 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 March 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Interest expense, related parties | $ 32,000 | $ 35,000 | |
Interest payable | 105,000 | $ 114,000 | |
Notes Payable [Member] | |||
Interest expense, related parties | 32,000 | 35,000 | |
Interest payable | $ 34,000 | $ 10,000 |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Original Borrowing | $ 1,012,000 | ||
Notes payable - related parties, net | 1,077,000 | $ 1,077,000 | |
Non-current | (725,000) | ||
Current | $ 352,000 | 1,077,000 | |
Note 1 [Member] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2023 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Notes payable - related parties, net | [1] | $ 725,000 | 725,000 |
Note 2 [Member] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Notes payable - related parties, net | [2] | $ 112,000 | 112,000 |
Note 3 [Member] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Notes payable - related parties, net | [3] | $ 240,000 | $ 240,000 |
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company's majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company's assets, and 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. During the year ended December 31, 2020, the Company made payments of $100,000. On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years. In exchange for the extension, the Company issued Mr. Cutaia warrants to purchase 138,889 shares of common stock with a fair value of $287,000. The warrants are fully vested, exercisable at $2.61 per share and will expire in three years. There were no other changes to the original terms of the note payable. In accordance with ASC 450-70, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. The instruments are considered "substantially different" when the present value of the cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. As the fair value of the warrants granted amounted to $287,000 for which is approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted the modification as an extinguishment of debt which requires the measurement of the modified debt and additional consideration to be at fair value. As a result, the Company recognized a loss on debt extinguishment of $287,000 and a corresponding credit to contributed capital. As of March 31, 2021, the outstanding balance of the note amounted to $725,000. | ||
[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 March 31, 2021 and December 31, 2020, the outstanding principal balance of the note amounted to $112,000, respectively. As of March 31, 2021, 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 March 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) (Parenthetical) - USD ($) | Apr. 04, 2016 | Dec. 01, 2015 | Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Notes payable - related parties, net | $ 1,077,000 | $ 1,077,000 | |||||||
Gain (loss) on extinguishment of Debt | $ (287,000) | ||||||||
Note 1 [Member] | |||||||||
Interest rate | [1] | 12.00% | |||||||
Notes payable - related parties, net | [1] | $ 725,000 | 725,000 | ||||||
Note 2 [Member] | |||||||||
Interest rate | [2] | 12.00% | |||||||
Notes payable - related parties, net | [2] | $ 112,000 | 112,000 | ||||||
Note 3 [Member] | |||||||||
Interest rate | [3] | 12.00% | |||||||
Notes payable - related parties, net | [3] | $ 240,000 | 240,000 | ||||||
Mr. Rory J. Cutaia [Member] | Note 1 [Member] | |||||||||
Interest rate | 12.00% | ||||||||
Mr. Cutaia [Member] | Note 1 [Member] | |||||||||
Maturity date description | February 8, 2021 | February 8, 2021 to February 8, 2023 or an extension of two years | |||||||
Percentage of debt conversion | 30.00% | ||||||||
Debt Conversion amount | $ 375,000 | ||||||||
Outstanding balance | 725,000 | 725,000 | $ 825,000 | ||||||
Principal Amount | 100,000 | ||||||||
Number of shares common stock with a fair value | 138,889 | ||||||||
common stock with a fair value | $ 287,000 | ||||||||
Debt Instrument, Description | The warrants are fully vested, exercisable at $2.61 per share and will expire in three years. There were no other changes to the original terms of the note payable. In accordance with ASC 450-70, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. The instruments are considered "substantially different" when the present value of the cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. As the fair value of the warrants granted amounted to $287,000 which is approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted the modification as an extinguishment of debt which requires the measurement of the modified debt and additional consideration to be at fair value. | ||||||||
Gain (loss) on extinguishment of Debt | $ 287,000 | ||||||||
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 | |||||||
[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. During the year ended December 31, 2020, the Company made payments of $100,000. On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $725,000. In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years. In exchange for the extension, the Company issued Mr. Cutaia warrants to purchase 138,889 shares of common stock with a fair value of $287,000. The warrants are fully vested, exercisable at $2.61 per share and will expire in three years. There were no other changes to the original terms of the note payable. In accordance with ASC 450-70, modifications or exchanges are considered extinguishments with gains or losses recognized in current earnings if the terms of the new debt and original instrument are substantially different. The instruments are considered "substantially different" when the present value of the cash flows under the terms of the new debt instrument is at least 10% different from the present value of the remaining cash flows under the terms of the original instrument. As the fair value of the warrants granted amounted to $287,000 for which is approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted the modification as an extinguishment of debt which requires the measurement of the modified debt and additional consideration to be at fair value. As a result, the Company recognized a loss on debt extinguishment of $287,000 and a corresponding credit to contributed capital. As of March 31, 2021, the outstanding balance of the note amounted to $725,000. | ||||||||
[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 March 31, 2021 and December 31, 2020, the outstanding principal balance of the note amounted to $112,000, respectively. As of March 31, 2021, 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 March 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $240,000, respectively. |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Total notes payable | $ 240,000 | $ 1,458,000 | |
Non-current | (240,000) | (1,458,000) | |
Current | |||
Note A [Member] | |||
Issuance Date | [1] | Apr. 17, 2020 | |
Maturity Date | [1] | Apr. 17, 2022 | |
Interest Rate | [1] | 1.00% | |
Total notes payable | [1] | 1,218,000 | |
Note B [Member] | |||
Issuance Date | [2] | May 15, 2020 | |
Maturity Date | [2] | May 15, 2050 | |
Interest Rate | [2] | 3.75% | |
Total notes payable | [2] | $ 150,000 | 150,000 |
Note C [Member] | |||
Issuance Date | [3] | May 1, 2020 | |
Maturity Date | [3] | May 1, 2022 | |
Interest Rate | [3] | 3.75% | |
Total notes payable | [3] | $ 90,000 | $ 90,000 |
[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, 2021 the entire note and accrued interest, totaling $1,226,000, was forgiven and accounted as a gain on debt extinguishment. | ||
[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 fiscal 2020. | ||
[3] | As a result of the acquisition of Solofire in September 2020,the Company assumed Solofire's PPP loan of $90,000 it obtained in May 2020 under the Paycheck Protection Program ("PPP") (see discussion "a"). The Company is currently in the process of applying for the forgiveness of the PPP loan. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Jan. 04, 2021 | May 15, 2020 | May 01, 2020 | Apr. 17, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Gain (loss) on extinguishment of debt | $ (287,000) | ||||||
Note A [Member] | |||||||
Interest rate | [1] | 1.00% | |||||
Maturity date | [1] | Apr. 17, 2022 | |||||
Note A [Member] | Paycheck Protection Program [Member] | |||||||
Loan received | $ 1,218,000 | ||||||
Interest rate | 1.00% | ||||||
Gain (loss) on extinguishment of debt | $ 1,226,000 | ||||||
Note B [Member] | |||||||
Interest rate | [2] | 3.75% | |||||
Maturity date | [2] | May 15, 2050 | |||||
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 | |||||
Note C [Member] | Paycheck Protection Program [Member] | SoloFire [Member] | |||||||
Loan received | $ 90,000 | ||||||
[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, 2021 the entire note and accrued interest, totaling $1,226,000, was forgiven and accounted as a gain on debt extinguishment. | ||||||
[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 fiscal 2020. | ||||||
[3] | As a result of the acquisition of Solofire in September 2020,the Company assumed Solofire's PPP loan of $90,000 it obtained in May 2020 under the Paycheck Protection Program ("PPP") (see discussion "a"). The Company is currently in the process of applying for the forgiveness of the PPP loan. |
Deferred Incentive Compensati_3
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Total | $ 664,000 | $ 1,042,000 | |
Non-current | (521,000) | ||
Current | $ 664,000 | 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] | $ 215,000 | 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] | $ 161,000 | 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. On January 12, 2021, the Company paid $215,000 and paid the remaining $63,000 due subsequent to March 31, 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. On January 12, 2021, the Company paid $163,000 and paid the remaining $81,000 due subsequent to March 31, 2021. |
Deferred Incentive Compensati_4
Deferred Incentive Compensation to Officers - Schedule of Deferred Incentive Compensation to Officers (Details) (Parenthetical) - USD ($) | Dec. 23, 2019 | May 17, 2021 | Jan. 12, 2021 |
Employee One [Member] | |||
Annual incentive compensation | $ 215,000 | ||
Employee Two [Member] | |||
Annual incentive compensation | $ 163,000 | ||
Remainder Of 2021 [Member] | Employee One [Member] | Subsequent Event [Member] | |||
Annual incentive compensation | $ 63,000 | ||
Remainder Of 2021 [Member] | Employee Two [Member] | Subsequent Event [Member] | |||
Annual incentive compensation | $ 81,000 | ||
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% |
Convertible Series A Preferre_2
Convertible Series A Preferred Stock and Warrant Offering (Details Narrative) - USD ($) | Aug. 14, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Warrant to purchase of common stock | 1,067,578 | |||
Number of share warrants granted to issue | 138,889 | |||
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 | |||
Common Stock [Member] | ||||
Number of shares issued, shares | 3,392,833 | |||
Warrant to purchase of common stock | 1,036,600 | |||
Conversion of stock, number of shares issued | 272,278 | |||
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 | |||
Preferred stock, shares outstanding | 1,706 | 2,006 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative liability | $ 5,480,000 | $ 6,907,000 | $ 8,266,000 | $ 5,048,000 |
Change in fair value of derivative liability | 500,000 | $ 2,092,000 | ||
Series A Warrants [Member] | ||||
Change in fair value of derivative liability | $ 2,286,000 | |||
Number of addition shares | 1,027,578 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liability Using Binomial Pricing Model Assumptions (Details) | 3 Months Ended | |
Mar. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($)$ / shares | |
Fair Value | $ 5,480,000 | $ 8,266,000 |
Upon Extinguishment in [Member] | ||
Fair Value | $ 2,286,000 | |
Share Price [Member] | ||
Derivative liability, measurement input | $ / shares | 1.40 | 1.65 |
Share Price [Member] | Upon Extinguishment in [Member] | ||
Derivative liability, measurement input | $ / shares | 2.45 | |
Exercise Price [Member] | ||
Derivative liability, measurement input | $ / shares | 1.41 | 1.41 |
Exercise Price [Member] | Upon Extinguishment in [Member] | ||
Derivative liability, measurement input | $ / shares | 1.10 | |
Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 2 years 11 months 1 day | 3 years 2 months 1 day |
Expected Life [Member] | Upon Extinguishment in [Member] | ||
Fair value assumptions, measurement input, term | 3 years 9 months 29 days | |
Volatility [Member] | ||
Derivative liability, measurement input | 135 | 107 |
Volatility [Member] | Upon Extinguishment in [Member] | ||
Derivative liability, measurement input | 157 | |
Dividend Yield [Member] | ||
Derivative liability, measurement input | 0 | 0 |
Dividend Yield [Member] | Upon Extinguishment in [Member] | ||
Derivative liability, measurement input | 0 | |
Risk Free Interest Rate [Member] | ||
Derivative liability, measurement input | 0.27 | 0.23 |
Risk Free Interest Rate [Member] | Upon Extinguishment in [Member] | ||
Derivative liability, measurement input | 0.34 | |
Warrants [Member] | ||
Fair Value | $ 5,480,000 | $ 8,266,000 |
Warrants [Member] | Upon Extinguishment in [Member] | ||
Fair Value | ||
Convertible Notes [Member] | ||
Fair Value | ||
Convertible Notes [Member] | Upon Extinguishment in [Member] | ||
Fair Value |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Derivative Liability Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beginning balance | $ 8,266,000 | $ 5,048,000 |
Fair value upon issuance of notes payable and/or warrants | 3,951,000 | |
Change in fair value | (500,000) | (2,092,000) |
Extinguishment | (2,286,000) | |
Ending balance | $ 5,480,000 | $ 6,907,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Mar. 15, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Value of shares issued for services | $ 1,414,000 | $ 321,000 | |
Number of stock options granted | 664,000 | ||
Accounts Payable [Member] | |||
Number of stock options granted | 4,641 | ||
Number of stock options granted, value | $ 10,000 | ||
Accrued Payroll [Member] | |||
Stock issued during period for acquisition | 121,842 | ||
Value of shares issued for acquisition | $ 207,000 | ||
Vendors [Member] | |||
Number of shares issued for services | 935,994 | ||
Value of shares issued for services | $ 144,000 | ||
Common Stock [Member] | |||
Sale and issuance of common stock | 9,375,000 | ||
Number of shares issued for services | 809,511 | 320,601 | |
Value of shares issued for services | |||
Public Offering [Member] | Common Stock [Member] | |||
Sale and issuance of common stock | 9,375,000 | ||
Common per-share price | $ 1.60 | ||
Proceeds sold of common stock | $ 14,129,000 |
Restricted Stock Awards (Detail
Restricted Stock Awards (Details Narrative) - USD ($) | Jan. 04, 2021 | Mar. 31, 2021 |
Number of shares granted of restricted stock awards | 813,265 | |
Fair value of granted restricted stock | $ 1,374,000 | |
Number of share vested and returned | 447,000 | |
Unvested compensation related to issuances of restricted stock award | $ 2,870,000 | |
Restricted Stock [Member] | ||
Number of shares granted of restricted stock awards | 813,265 |
Restricted Stock Awards - Summa
Restricted Stock Awards - Summary of Restricted Stock Award Activity (Details) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of Non-vested Shares, Outstanding Beginning | shares | 2,185,946 |
Shares, Granted | shares | 813,265 |
Number of Shares, Vested/deemed vested | shares | (247,703) |
Shares, Forfeited | shares | |
Number of Non-vested Shares, Outstanding Ending | shares | 2,751,508 |
Fair Value, Outstanding Beginning | $ | $ 1,943,000 |
Fair Value, Granted | $ | 1,374,000 |
Fair Value, Vested/deemed vested | $ | (447,000) |
Fair Value, Forfeited | $ | |
Fair Value, Outstanding Ending | $ | $ 2,870,000 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares | $ 1.17 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 1.69 |
Weighted Average Grant Date Fair Value, Vested/deemed vested | $ / shares | 1.16 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ / shares | $ 1.33 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Intrinsic value of outstanding options | $ 387,000 | $ 1,932,000 | |
Number of stock options granted | 664,000 | ||
Exercise price of common stock granted | $ 1.38 | ||
Number of options exercised | (332,730) | ||
Proceeds from options exercised | $ 377,000 | ||
Employees [Member] | |||
Number of stock options granted | 664,000 | ||
Exercise price of common stock granted | $ 1.76 | ||
Expiration period | 5 years | ||
Stock option vesting period | 4 years | ||
Fair value of stock options grants | $ 1,103,000 | ||
Expense recognized relating to stock options | 448,000 | ||
Unrecognized stock based compensation expense | $ 4,059,000 | ||
Stock option, description | Expected to be recognized as part of operating expense through March 2025. |
Stock Options - Schedule of Sto
Stock Options - Schedule of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of options outstanding beginning balance | shares | 6,031,775 |
Number of options granted | shares | 664,000 |
Number of options forfeited | shares | (564,032) |
Number of options exercised | shares | (332,730) |
Number of options outstanding ending balance | shares | 5,799,013 |
Number of options vested | shares | 3,304,078 |
Number of options exercisable | shares | 2,023,118 |
Weighted average exercise price outstanding beginning balance | $ 1.55 |
Weighted average exercise price granted | 1.38 |
Weighted average exercise price forfeited | 1.87 |
Weighted average exercise price exercised | 1.13 |
Weighted average exercise price outstanding ending balance | 1.62 |
Weighted average exercise price vested | 1.71 |
Weighted average exercise price exercisable | $ 1.94 |
Weighted average remaining contractual term outstanding | 2 years 8 months 5 days |
Weighted average remaining contractual term outstanding | 2 years 5 months 16 days |
Aggregate intrinsic value outstanding beginning balance | $ | $ 1,932,000 |
Aggregate intrinsic value granted | |
Aggregate intrinsic value forfeited | |
Aggregate intrinsic value exercised | $ | |
Aggregate intrinsic value outstanding ending balance | $ | 387,000 |
Aggregate intrinsic value vested | $ | 322,000 |
Aggregate intrinsic value exercisable | $ | $ 133,000 |
Stock Options - Schedule of Fai
Stock Options - Schedule of Fair Value Assumptions Using Black-Scholes Method (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Risk-free interest rate, minimum | 0.10% | |
Risk-free interest rate, maximum | 0.36% | |
Risk-free interest rate | 0.39% | |
Average expected term (years) | 5 years | 5 years |
Expected volatility | 240.03% | 270.10% |
Expected dividend yield | 0.00% | 0.00% |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Intrinsic value of warrants outstanding | $ 1,328,000 | |
Number of share warrants granted | 138,889 | |
Warrant to purchase of common stock | 1,067,578 | |
Warrants exercise price | $ 1.10 | |
Proceeds from exercise of warrant | $ 1,103,000 | |
Common Stock [Member] | ||
Warrant to purchase of common stock | 1,036,600 | |
Officer [Member] | ||
Number of share warrants granted | 138,889 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
Number of Shares, Warrants Outstanding Beginning | shares | 13,351,251 |
Number of Shares, Warrants granted | shares | 138,889 |
Number of Shares, Warrants forfeited | shares | |
Number of Shares, Warrants exercised | shares | (1,067,578) |
Number of Shares, Warrants Outstanding Ending | shares | 12,422,562 |
Weighted-Average Exercise Price, Outstanding Beginning | $ 2.48 |
Weighted-Average Exercise Price, granted | 2.61 |
Weighted-Average Exercise Price, forfeited | |
Weighted-Average Exercise Price, exercised | 1.10 |
Weighted-Average Exercise Price, Outstanding Ending | $ 2.60 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 3 years 4 months 17 days |
Weighted Average Remaining Contractual Life (Years), Outstanding Ending | 3 years 1 month 20 days |
Aggregate Intrinsic Value Outstanding Beginning | $ 3,022,000 |
Aggregate Intrinsic Value Outstanding Ending | $ 1,328,000 |
Issuance of Class A and B Uni_2
Issuance of Class A and B Units (Details Narrative) - USD ($) | Mar. 04, 2021 | Dec. 31, 2020 |
Class A Units Stock [Member] | ||
Stock issued during period for acquisition | 100 | |
Class B Units Stock [Member] | Common Stock [Member] | ||
Shares converted during period, shares | 2,642,159 | |
Class B Units Stock [Member] | SoloFire [Member] | ||
Stock issued during period for acquisition | 2,642,159 | |
Stock issued during period for acquisition value | $ 3,065,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 02, 2021 | Feb. 18, 2021 | Jan. 21, 2021 | Apr. 30, 2018 | Mar. 31, 2021 |
Litigation reserve | $ 75,000 | ||||
Sought value by employee | $ 300,000 | ||||
Litigation settlement amount | 640,000 | $ 468,000 | |||
Payments of litigation settlement | 56,000 | ||||
Board fees expensed | 119,000 | ||||
Board fees to be recognized | 356,000 | ||||
EMA Financial, LLC [Member] | |||||
Cash payment to others | $ 463,572 | ||||
Litigation reserve | $ 464,000 | ||||
Five Board Members [Member] | |||||
Aggregate board fees | $ 475,000 | ||||
Stipulation and Agreement of Settlement [Member] | |||||
Sought value by employee | $ 75,000 | ||||
Litigation settlement amount | $ 524,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 03, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Number of shares services rendered | $ 1,414,000 | $ 321,000 | |
Number of shares issued, values | $ 3,430,000 | ||
Number of options granted | 664,000 | ||
Stock options, exercise price | $ 1.38 | ||
Vendors [Member] | |||
Number of shares services rendered, shares | 935,994 | ||
Number of shares services rendered | $ 144,000 | ||
Employees [Member] | |||
Number of options granted | 664,000 | ||
Stock options, exercise price | $ 1.76 | ||
Fair value of stock options | $ 1,103,000 | ||
Subsequent Event [Member] | Vendors [Member] | |||
Number of shares services rendered, shares | 233,959 | ||
Number of shares services rendered | $ 283,000 | ||
Subsequent Event [Member] | Employees [Member] | |||
Number of shares issued, shares | 100,149 | ||
Number of shares issued, values | $ 121,000 | ||
Return of shares | 100,149 | ||
Payments for income and payroll taxes | $ 121,000 | ||
Number of options granted | 225,000 | ||
Stock options, exercise price | $ 1.36 | ||
Fair value of stock options | $ 286,000 |