Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-38834 | ||
Entity Registrant Name | Verb Technology Company, Inc. | ||
Entity Central Index Key | 0001566610 | ||
Entity Tax Identification Number | 90-1118043 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 782 Auto Mall Dr. | ||
Entity Address, City or Town | American Fork | ||
Entity Address, State or Province | UT | ||
Entity Address, Postal Zip Code | 84003 | ||
City Area Code | (855) | ||
Local Phone Number | 250-2300 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 119,638,000 | ||
Entity Common Stock, Shares Outstanding | 80,167,176 | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement for its 2022 annual meeting of stockholders, to be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s fiscal year ended December 31, 2021, are incorporated by reference into Part III, Items 10–14 of this Annual Report on Form 10-K | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 572 | ||
Auditor Name | Weinberg & Company, P.A. | ||
Auditor Location | Los Angeles, California | ||
Common Stock [Member] | |||
Title of 12(b) Security | Common Stock, $0.0001 par value | ||
Trading Symbol | VERB | ||
Security Exchange Name | NASDAQ | ||
Common Stock Purchase Warrants [Member] | |||
Title of 12(b) Security | Common Stock Purchase Warrants | ||
Trading Symbol | VERBW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 937,000 | $ 1,815,000 |
Accounts receivable, net | 1,382,000 | 919,000 |
Inventory, net | 28,000 | 34,000 |
Prepaid expenses and other current assets | 847,000 | 900,000 |
Total current assets | 3,194,000 | 3,668,000 |
Capitalized software development costs | 4,348,000 | |
Property and equipment, net | 702,000 | 862,000 |
Operating lease right-of-use assets | 2,177,000 | 2,730,000 |
Intangible assets, net | 3,953,000 | 5,153,000 |
Goodwill | 19,764,000 | 20,060,000 |
Other assets | 293,000 | 69,000 |
Total assets | 34,431,000 | 32,542,000 |
Current liabilities | ||
Accounts payable | 3,751,000 | 2,566,000 |
Accrued expenses | 3,500,000 | 2,645,000 |
Accrued officers’ salary | 1,209,000 | 822,000 |
Advances on future receipts, net | 4,181,000 | 110,000 |
Notes payable - related party | 40,000 | 1,077,000 |
Deferred incentive compensation to officers, current | 521,000 | 521,000 |
Operating lease liabilities, current | 592,000 | 596,000 |
Contract liabilities | 986,000 | 272,000 |
Derivative liability | 3,155,000 | 8,266,000 |
Total current liabilities | 17,935,000 | 16,875,000 |
Long-term liabilities | ||
Notes payable, non-current | 150,000 | 1,458,000 |
Notes payable - related party, non-current | 725,000 | |
Deferred incentive compensation to officers, non-current | 521,000 | |
Operating lease liabilities, non-current | 2,299,000 | 2,943,000 |
Total liabilities | 21,109,000 | 21,797,000 |
Commitments and contingencies (Note 21) | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized: Series A Convertible Preferred Stock, 6,000 shares authorized; 0 and 2,006 issued and outstanding as of December 31, 2021 and 2020 | ||
Class A units, 100 shares issued and authorized as of December 31, 2021 and 2020 | ||
Class B units, 2,642,159 shares authorized, 0 and 2,642,159 issued and outstanding as of December 31, 2021 and 2020 | 3,065,000 | |
Common stock, $0.0001 par value, 200,000,000 shares authorized, 72,942,948 and 47,795,009 shares issued and outstanding as of December 31, 2021 and 2020 | 7,000 | 5,000 |
Additional paid-in capital | 129,342,000 | 89,216,000 |
Accumulated deficit | (116,027,000) | (81,541,000) |
Total stockholders’ equity | 13,322,000 | 10,745,000 |
Total liabilities and stockholders’ equity | $ 34,431,000 | $ 32,542,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Class A units, shares issued | 100 | 100 |
Class A units, shares authorized | 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 | 72,942,948 | 47,795,009 |
Common stock, shares outstanding | 72,942,948 | 47,795,009 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 0 | 2,006 |
Preferred stock, shares outstanding | 0 | 2,006 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Digital revenue | ||
Total digital revenue | $ 8,178,000 | $ 6,498,000 |
Non-digital revenue | ||
Design, printing, fulfillment, and shipping | 2,346,000 | 3,467,000 |
Total revenue | 10,524,000 | 9,965,000 |
Cost of revenue | ||
Total cost of revenue | 4,504,000 | 4,801,000 |
Gross margin | 6,020,000 | 5,164,000 |
Operating expenses | ||
Research and development | 12,345,000 | 7,933,000 |
Depreciation and amortization | 1,677,000 | 1,510,000 |
General and administrative | 25,710,000 | 20,458,000 |
Total operating expenses | 39,732,000 | 29,901,000 |
Loss from operations | (33,712,000) | (24,737,000) |
Other income (expense), net | ||
Other income, net | 92,000 | 102,000 |
Interest expense | (2,575,000) | (894,000) |
Change in fair value of derivative liability | 598,000 | 574,000 |
Debt extinguishment, net | 1,112,000 | |
Total other expense, net | (773,000) | (218,000) |
Loss before income tax | (34,485,000) | (24,955,000) |
Income tax | 1,000 | 1,000 |
Net loss | (34,486,000) | (24,956,000) |
Deemed dividend to Series A preferred stockholders | (348,000) | (3,951,000) |
Net loss to common stockholders | $ (34,834,000) | $ (28,907,000) |
Loss per share – basic and diluted | $ (0.55) | $ (0.80) |
Weighted average number of common shares outstanding – basic and diluted | 63,324,440 | 36,012,395 |
SaaS Recurring Subscription Revenue [Member] | ||
Digital revenue | ||
Total digital revenue | $ 6,831,000 | $ 5,114,000 |
Other Digital [Member] | ||
Digital revenue | ||
Total digital revenue | 1,347,000 | 1,384,000 |
Digital [Member] | ||
Cost of revenue | ||
Total cost of revenue | 2,249,000 | 1,416,000 |
Non Digital [Member] | ||
Cost of revenue | ||
Total cost of revenue | $ 2,255,000 | $ 3,385,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member]Common Class A [Member] | Common Stock [Member]Common Class B [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 2,000 | $ 68,028,000 | $ (56,585,000) | $ 11,445,000 | |||
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 4,396 | 24,496,197 | |||||
Sale of common stock from private placement | $ 1,000 | 4,443,000 | 4,444,000 | ||||
Sale of common stock from private placement, shares | 1,768,909 | 4,237,833 | |||||
Sale of common stock from public offering | $ 2,000 | 12,335,000 | 12,337,000 | ||||
Sale of Stock, Number of Shares Issued in Transaction | 12,545,453 | ||||||
Issuance of common stock from warrant exercise | 2,165,000 | $ 2,165,000 | |||||
Issuance of common stock from warrant exercise, shares | 1,965,594 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | |||||||
Conversion of Series A Preferred to common stock | |||||||
Conversion of Series A Preferred to common stock, shares | (2,390) | 1,768,909 | |||||
Fair value of warrants issued to Series A Preferred stockholders treated as a deemed dividend | (3,951,000) | (3,951,000) | |||||
Fair value of common shares issued for services | 1,190,000 | 1,190,000 | |||||
Stock Issued During Period, Shares, Issued for Services | 1,007,583 | ||||||
Fair value of vested restricted stock awards | 2,870,000 | 2,870,000 | |||||
Fair value of vested restricted stock awards, shares | 1,773,440 | ||||||
Fair value of vested stock options and warrants | 1,977,000 | 1,977,000 | |||||
Extinguishment of derivative liability | 159,000 | 159,000 | |||||
Class A units issued upon incorporation of Verb Acquisition Co. | |||||||
Class A units issued upon incorporation of Verb Acquisition Co., shares | 100 | ||||||
Fair value of Class B units issued for the acquisition of Ascend Certification | $ 3,065,000 | 3,065,000 | |||||
Fair value of Class B units issued for the acquisition of Ascend Certification,shares | 2,642,159 | ||||||
Net loss | (24,956,000) | (24,956,000) | |||||
Ending balance, value at Dec. 31, 2020 | $ 3,065,000 | $ 5,000 | 89,216,000 | (81,541,000) | 10,745,000 | ||
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 2,006 | 100 | 2,642,159 | 47,795,009 | |||
Sale of common stock from public offering | $ 2,000 | 22,064,000 | 22,066,000 | ||||
Sale of Stock, Number of Shares Issued in Transaction | 14,076,696 | ||||||
Issuance of common stock from warrant exercise | 2,784,000 | 2,784,000 | |||||
Issuance of common stock from warrant exercise, shares | 2,254,411 | ||||||
Issuance of common stock from option exercise | 802,000 | $ 802,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 676,715 | 747,480 | |||||
Fair value of common shares issued upon conversion of note payable – related party | 200,000 | $ 200,000 | |||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 194,175 | ||||||
Fair value of common shares issued to settle lawsuit | 678,000 | 678,000 | |||||
Fair value of common shares issued to settle lawsuit, shares | 600,000 | ||||||
Conversion of Series A Preferred to common stock | 348,000 | 348,000 | |||||
Conversion of Series A Preferred to common stock, shares | (2,006) | 1,978,728 | |||||
Fair value of warrants issued to Series A Preferred stockholders treated as a deemed dividend | (348,000) | (348,000) | |||||
Fair value of common shares issued for services | 2,188,000 | 2,188,000 | |||||
Stock Issued During Period, Shares, Issued for Services | 1,344,499 | ||||||
Fair value of vested restricted stock awards | 1,627,000 | 1,627,000 | |||||
Fair value of vested restricted stock awards, shares | 1,177,378 | ||||||
Fair value of vested stock options and warrants | 1,596,000 | 1,596,000 | |||||
Extinguishment of derivative liability upon exercise of warrants | $ 4,513,000 | $ 4,513,000 | |||||
Fair value of common shares issued to settle accounts payable and accrued expenses | 322,000 | 322,000 | |||||
Fair value of common shares issued to settle accounts payable by shares | 203,178 | ||||||
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 | (34,486,000) | (34,486,000) | |||||
Ending balance, value at Dec. 31, 2021 | $ 7,000 | $ 129,342,000 | $ (116,027,000) | $ 13,322,000 | |||
Shares, Outstanding, Ending Balance at Dec. 31, 2021 | 100 | 72,942,948 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities: | ||
Net loss | $ (34,486,000) | $ (24,956,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 5,668,000 | 6,119,000 |
Financing costs | 248,000 | |
Amortization of debt discount | 2,461,000 | 493,000 |
Change in fair value of derivative liability | (598,000) | (574,000) |
Debt extinguishment costs, net | (1,112,000) | |
Depreciation and amortization | 1,677,000 | 1,510,000 |
Amortization of operating lease right-of-use assets | 553,000 | 545,000 |
Allowance for inventory | (51,000) | 49,000 |
Gain on disposal of property and equipment | (5,000) | |
Allowance for doubtful accounts | 300,000 | 130,000 |
Effect of changes in assets and liabilities: | ||
Accounts receivable | (763,000) | 440,000 |
Inventory | 57,000 | 20,000 |
Prepaid expenses and other current assets | (102,000) | (485,000) |
Other assets | (224,000) | |
Accounts payable, accrued expenses, and accrued interest | 1,218,000 | 788,000 |
Contract liabilities | 714,000 | (177,000) |
Deferred incentive compensation | (521,000) | |
Operating lease liabilities | (648,000) | (444,000) |
Net cash used in operating activities | (25,862,000) | (16,294,000) |
Investing Activities: | ||
Cash acquired from acquisition of subsidiary | 229,000 | |
Proceeds from sale of property and equipment | 11,000 | |
Capitalized software development costs | (2,248,000) | |
Purchases of property and equipment | (26,000) | (317,000) |
Net cash used by investing activities | (2,263,000) | (88,000) |
Financing Activities: | ||
Proceeds from sale of common stock | 22,066,000 | 16,781,000 |
Proceeds from notes payable | 1,367,000 | |
Advances on future receipts | 12,778,000 | 728,000 |
Proceeds from warrant exercise | 2,784,000 | 2,165,000 |
Payment of acquisition note payable | (1,885,000) | |
Payment of related party notes payable | (100,000) | |
Payment of advances of future receipts | (11,168,000) | (1,842,000) |
Proceeds from option exercise | 802,000 | |
Payment for debt issuance costs | (15,000) | |
Net cash provided by financing activities | 27,247,000 | 17,214,000 |
Net change in cash | (878,000) | 832,000 |
Cash - beginning of period | 1,815,000 | 983,000 |
Cash - end of period | $ 937,000 | $ 1,815,000 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Our Business 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 subsidiaries on a consolidated basis. Verb conducts its operations through various subsidiaries. On April 12, 2019, the Company acquired Sound Concepts Inc. (“Sound Concepts”). The acquisition was intended to augment and diversify Verb’s internet and Software-as-a-Service (“SaaS”) business. Sound Concepts is now known as Verb Direct, LLC. On September 4, 2020, Verb Acquisition Co., LLC (“Verb Acquisition”), a subsidiary of the Company, acquired Ascend Certification, LLC, dba SoloFire (“SoloFire”). The acquisition was intended to augment and diversify Verb’s internet and SaaS business (see Note 3). On October 18, 2021, the Company established verbMarketplace, LLC (“Market LLC”), a Nevada limited liability company. Market LLC is a wholly owned subsidiary of the Company established for our MARKET platform. We are a 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 (“CRM”) application, verbLEARN, our Learning Management System application, verbLIVE, our Live Stream eCommerce application, verbPULSE, our business/augmented intelligence notification and sales coach application, and verbTEAMS, our self-onboarding video-based CRM and content management application for professional sports teams, small business, and solopreneurs, with seamless synchronization with Salesforce, that also comes bundled with verbLIVE, and more recently, we introduced verbMAIL, our interactive video-based sales communication tool integrated into Microsoft Outlook. We provide certain non-digital services to some of our enterprise clients such as printing and fulfillment services. We design and print welcome kits and starter kits for their marketing needs and provide fulfillment services, which consist of managing the preparation, handling and shipping of our client’s custom-branded merchandise they use for marketing purposes at conferences and other events, and product sample packs that verbCRM users order through the app for automated delivery and tracking to their customers and prospects. We use the term “client” and “customer” interchangeably. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the year ended December 31, 2021, the Company incurred a net loss of $ 34,486,000 and used cash in operations of $ 25,862,000 . 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. Subsequent to December 31, 2021, the Company entered into the following financing agreements (see Note 22): Equity financing On January 12, 2022, the Company entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) with Tumim Stone Capital LLC (the “Investor”). Pursuant to the agreement, the Company has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to $ 50,000,000 of newly issued shares (the “Total Commitment”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) from time to time during the term of the agreement, subject to certain limitations and conditions . The Total Commitment is inclusive of 607,287 shares of Common Stock, valued at $ 750,000 at the time of issuance (the “Commitment Shares”), issued to the Investor as consideration for its commitment to purchase shares of Common Stock under the Common Stock Purchase Agreement. The Common Stock Purchase Agreement initially precludes the Company from issuing and selling more than 14,747,065 shares of its Common Stock, including the Commitment Shares, which number of shares equals 19.99% of the Common Stock issued and outstanding immediately prior to the execution of the agreement, unless the Company obtains stockholder approval to issue additional shares, or unless certain exceptions apply. Debt financing On January 12, 2022, the Company also entered into a securities purchase agreement with three institutional investors (collectively, the “Note Holders”) providing for the sale and issuance of an aggregate original principal amount of $ 6,300,000 due 2023 The Company received $ 6,000,000 6.0 5.0 12 3.00 Beginning on May 12, 2022, the Company is required to make nine monthly principal payments of $ 333,333 3,300,000 There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business, the results of which would be that our stockholders would lose some or all of their investment. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. COVID-19 As of the date of this filing, there continues to be widespread concern regarding the ongoing impacts and disruptions caused by the COVID-19 pandemic in the regions in which the Company operates. Our sales team reported a higher level of interest in our digital products and services during the year ended December 31, 2021 compared to the same period in 2020. However, our non-digital services have been negatively impacted during the year ended December 31, 2021. Although the impacts of the COVID-19 pandemic have not been material to date, a prolonged downturn in economic conditions could have a material adverse effect on our customers and demand for our services. The Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. As of December 31, 2021, we continue to actively communicate with and listen to our customers to ensure we are responding to their needs in the current environment with innovative solutions that will not only be beneficial now but also over the long-term. We monitor developments related to COVID-19 and remain flexible in our response to the challenges presented by the pandemic. To mitigate the adverse impact COVID-19 may have on our business and operations, we implemented a number of measures in the year ended December 31, 2021 to protect the health and safety of our employees, as well as to strengthen our financial position. These efforts include eliminating, reducing, or deferring non-essential expenditures, as well as complying with local and state government recommendations to protect our workforce. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Verb, Verb Direct, LLC, Verb Acquisition Co., LLC, and verbMarketplace, LLC. All intercompany accounts have been eliminated in the consolidation. Certain prior period amounts have been reclassified to conform to the current presentation. 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 for reserves of uncollectible accounts receivable, assumptions made in valuing assets acquired in business combinations, impairment testing of goodwill and long-lived assets, the valuation allowance for deferred tax assets, assumptions used in valuing derivative liabilities, assumptions used in valuing share-based compensation, and accruals for potential liabilities. 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. The Company also derives revenue 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 is 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 for as part of contract liabilities 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 Consolidated Statements of Operations. The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) ASC 606, Revenue from Contracts with Customers 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 is 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. Returns from customers in the past and during the years ended December 31, 2021 and 2020 are immaterial. 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, verbTEAMS, and verbPULSE. The revenue is recognized straight-line 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, includes design, printing services, fulfillment and shipping services. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. Revenues during the years ended December 31, 2021 and 2020 were substantially all generated from the United States. Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees and contractors, digital content costs, purchase price of consumer products, 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. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company considers certain internal sales commissions as incremental costs of obtaining the contract with customers. Internal sales commissions for subscription offerings where the Company expect the benefit of those costs to continue throughout the subscription are capitalized and amortized ratably over the period of benefit, which generally ranges over a period of one year. Total capitalized costs to obtain a contract are not significant and are included in prepaid expenses and other current assets in our consolidated balance sheets. Contract Liabilities Contract liabilities represent consideration received from customers under revenue contracts for which the Company has not yet delivered or completed its performance obligation to the customer. Contract liabilities are recognized over the contract period. Accounts Receivable, net Accounts receivable is recorded at the invoiced amount and is non-interest bearing. We estimate losses on receivables based on expected losses, including our historical experience of actual losses. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. At December 31, 2021 and 2020, the allowance for doubtful accounts balance was $ 615,000 361,000 Capitalized Software Development Costs The Company capitalizes internal and external costs directly associated with developing internal-use software, and hosting arrangements that include an internal-use software license, during the application development stage of its projects. The Company’s internal-use software is reported at cost less accumulated depreciation. Depreciation begins once the project has been completed and is ready for its intended use. The Company will depreciate the asset on a straight-line basis over a period of three years, which is the estimated useful life. Software maintenance activities or minor upgrades are expensed in the period performed. As of December 31, 2021 and 2020, the Company capitalized $ 4,348,000 0 Depreciation expense related to capitalized software development costs are recorded in Cost of revenue in the consolidated statements of operations. There has been no depreciation expense related to capitalized software development costs for the years ended December 31, 2021 and 2020 as the software has not been completed and utilized. Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years Business Combinations Pursuant to FASB ASC 805, Business Combinations Intangible Assets We have certain intangible assets that were initially recorded at their fair value at the time of acquisition. The finite-lived intangible assets consist of developed technology and customer contracts. Indefinite-lived intangible assets consist of domain names. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. As of December 31, 2021 and 2020 there was no Goodwill In accordance with FASB ASC 350, Intangibles-Goodwill and Other no Long-Lived Assets The Company evaluates long-lived assets, other than goodwill and indefinite lived intangible assets, for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. No Leases We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 94 months. We determine whether a contract contains a lease at contract inception. A contract is or contains a lease if the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Control is determined based on the right to obtain all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. Operating lease right-of-use assets (“ROU”) for operating leases represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Income Taxes The Company accounts for income taxes under FASB ASC 740, Income Taxes. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of operations. As of December 31, 2021, and 2020, the Company has not established a liability for uncertain tax positions. Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 (“ASC 820”) and FASB ASC 825 for disclosure and measurement of the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair value due to their short-term nature. The carrying amount of the Company’s financial 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. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. Share-Based Compensation The Company issues stock options and warrants, shares of common stock and restricted stock units as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation in accordance with FASB ASC 718, Compensation – Stock Compensation Research and Development Costs Research and development costs included payroll and contractor costs involved in the development of new and existing products and technology. These costs primarily represent the Company’s cloud-based, Verb interactive video CRM SaaS platform. Research and development costs are expensed as incurred. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of common stock that were outstanding during the period. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options. No dilutive potential shares of common stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of December 31, 2021, and 2020, the Company had total outstanding options of 5,404,223 and 6,031,775 , respectively, and warrants of 10,984,740 and 13,351,251 , respectively, and outstanding restricted stock awards of 1,821,833 and 2,185,946 , respectively, and common shares potentially issuable from our Class B Units that were issued in August 2020 of 0 and 2,642,159 , were excluded from the computation of net loss per share because they are anti-dilutive. Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $ 250,000 The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for the years ended December 31, 2021 and 2020: SCHEDULE OF CONCENTRATION RISK Years Ended December 31, 2021 2020 Verb’s largest customers are presented below as a percentage of Verb’s aggregate Revenues and Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate Purchases 2 major vendors accounted for 25 25 50 1 major vendor accounted for 40 Accounts payable 1 major vendor accounted for 40 2 major vendors accounted for 10 28 38 Supplemental Cash Flow Information SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures of cash flow information Cash paid for interest $ 135,000 $ 120,000 Cash paid for income taxes $ 1,000 $ 1,000 Supplemental disclosure of non-cash investing and financing activities Far value of class B units issued upon acquisition of subsidiary $ - $ 3,065,000 Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features - 3,951,000 Fair value of derivative liability extinguished 4,513,000 - Fair value of common shares issued to settle accounts payable and accrued expenses 322,000 - Reclassification of Class B upon conversion to common stock 3,065,000 - Fair value of common stock issued to settle notes payable – related party 200,000 - Fair value of common stock received in exchange for employee’s payroll taxes 139,000 - Fair value of common stock issued for future services 164,000 - Fair value of debt forgiveness 1,399,000 - Accrued capitalized software development costs 2,100,000 - Fair value of common stock issued to settle lawsuit 678,000 - Discount recognized from advances on future receipts 3,194,000 285,000 Fair value of common stock issued for prepaid subscription agreement - 340,000 Fair value of restricted awards returned – payroll taxes - 485,000 Goodwill and intangible assets acquired from acquisition - 4,846,000 Assets acquired from the acquisition of subsidiary - 207,000 Liabilities assumed from the acquisition of subsidiary - 331,000 Issuance of note payable upon acquisition of subsidiary $ - $ 1,885,000 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 a 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). In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
ACQUISITION OF SOLOFIRE
ACQUISITION OF SOLOFIRE | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION OF SOLOFIRE | 3. ACQUISITION OF SOLOFIRE The Company made the following acquisition in order to augment and diversify its internet and SaaS business: On September 4, 2020, Verb Acquisition, a subsidiary of the Company, entered into a membership interest purchase agreement with SoloFire, the sellers party thereto (collectively, the “Sellers”), and Steve Deverall, solely in his capacity as the seller representative, under which Sellers sold their entire interest in SoloFire, representing all of the outstanding limited liability company membership interests of SoloFire, to Verb Acquisition 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 were exchangeable for 2,642,159 shares of Verb’s common stock with an estimated fair value of $ 3,065,000 (see Note 19) for a total purchase price of $ 4,950,000 . The promissory note was unsecured, bore interest at a rate of 0.14 % per annum and was paid in full at maturity on October 1, 2020. Key factors that contributed to the recorded goodwill and intangible assets in the aggregate of $ 4,845,000 The following table summarizes the fair value of the tangible assets acquired, identifiable intangible assets acquired, and liabilities assumed for SoloFire on the date of acquisition: SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED Dec 31,2021 Cash $ 229,000 Accounts receivable 207,000 Current liabilities (241,000 ) Long-term liabilities (90,000 ) Net tangible assets 105,000 Intangible assets 1,418,000 Goodwill 3,427,000 Purchase price $ 4,950,000 See Note 6 for details regarding the amortization of intangible assets. The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is not expected to be deductible for tax purposes. Goodwill is not amortized but will be tested for impairment on an annual basis. The following unaudited pro forma statements of operations present the Company’s pro forma results of operations after giving effect to the purchase of SoloFire based on the historical financial statements of the Company and SoloFire. The unaudited pro forma statements of operations for the year ended December 31, 2020 give effect to the transaction as if they had occurred on January 1, 2020. SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS 2021 2020 Years Ended December 31, 2021 2020 (Proforma, unaudited) SaaS recurring subscription revenue $ 6,831,000 $ 6,077,000 Other digital revenue 1,347,000 1,384,000 Design, printing, fulfilment, and shipping 2,346,000 3,467,000 Total revenue 10,524,000 10,928,000 Cost of revenue 4,504,000 4,980,000 Gross margin 6,020,000 5,948,000 Operating expenses 39,732,000 30,679,000 Other expense, net (773,000 ) (218,000 ) Loss before income tax provision (34,485,000 ) (24,949,000 ) Income tax provision 1,000 1,000 Net loss (34,486,000 ) (24,950,000 ) Deemed dividend to Series A preferred stockholders (348,000 ) (3,951,000 ) Net loss to common stockholders $ (34,834,000 ) $ (28,901,000 ) The results of operations of SoloFire were included in the accompanying Consolidated Statements of Operations from September 4, 2020 through December 31, 2021. The amount of revenue and net loss of SoloFire in the Company’s consolidated statements of operations during the years ended December 31, 2021 and 2020, was $ 1,139,000 128,000 554,000 900,000 |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | 12 Months Ended |
Dec. 31, 2021 | |
Research and Development [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | 4. CAPITALIZED SOFTWARE DEVELOPMENT COSTS In 2020, the Company began developing MARKET, the next generation of interactive livestream ecommerce, and has capitalized $ 4,348,000 5,750,000 4,100,000 2,000,000 2,100,000 1,150,000 500,000 248,000 There has been no Option to Acquire Primary Contractor In August 2021, the Company entered into an agreement providing the Company the option to purchase the Primary Contractor. In November 2021, the Company exercised this option. As of December 31, 2021, the Company and the Primary Contractor have reached an agreement on the terms for the Company’s acquisition of the Primary Contractor, which is subject to the execution of a share purchase agreement (the “SPA”) and the completion of an audit of the Primary Contractor (the “Primary Contractor Audit”). As of the date of the issuance of these financial statements, the Primary Contractor Audit is ongoing. If the Company enters into the SPA and successfully completes the Primary Contractor Audit and thereafter determines not to consummate the acquisition of the Primary Contractor, the Company may be liable for a $ 1,000,000 12,000,000 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of December 31, 2021 and 2020: SCHEDULE OF PROPERTY AND EQUIPMENT 2021 2020 As of December 31, 2021 2020 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 49,000 39,000 Leasehold improvement 1,058,000 1,058,000 Total property and equipment 1,211,000 1,201,000 Accumulated depreciation (509,000 ) (339,000 ) Total property and equipment, net $ 702,000 $ 862,000 Depreciation expense amounted to $ 181,000 175,000 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill are as follows: SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS 2021 2020 As of December 31, 2021 2020 Beginning balance $ 20,060,000 $ 16,337,000 Additions: Acquisition (see Note 3) - 3,723,000 Adjustment to provisional goodwill (296,000 ) - Ending balance $ 19,764,000 $ 20,060,000 In September 2021, the Company finalized the purchase price allocation of SoloFire which the Company acquired in September 2020. As a result, the Company adjusted $ 296,000 Intangible assets The changes in the carrying amount of intangible assets are as follows: 2021 2020 As of December 31, 2021 2020 Beginning balance $ 5,153,000 $ 5,366,000 Additions: Acquisition (see Note 3) - 1,122,000 Adjustment to provisional finite-lived intangible asset 296,000 - Amortization of intangible assets (1,496,000 ) (1,335,000 ) Ending balance $ 3,953,000 $ 5,153,000 Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS December 31, 2021 Gross carrying amount Accumulated amortization Net carrying amount Weighted-average amortization period (years) Finite-lived intangible assets Developed technology $ 6,100,000 $ (2,958,000 ) $ 3,142,000 5 Customer contracts 1,217,000 (848,000 ) 369,000 5 Indefinite-lived intangible assets Domain names 442,000 - 442,000 $ 7,759,000 $ (3,806,000 ) $ 3,953,000 December 31, 2020 Gross carrying amount Accumulated amortization Net carrying amount Weighted- average amortization period (years) Finite-lived intangible assets Developed technology $ 5,700,000 $ (1,712,000 ) $ 3,988,000 5 Customer contracts 1,271,000 (592,000 ) 679,000 5 Non-compete 50,000 (6,000 ) 44,000 3 Indefinite-lived intangible assets Domain names 442,000 - 442,000 $ 7,463,000 $ (2,310,000 ) $ 5,153,000 Estimated amortization expense: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Year ending Amortization 2022 $ 1,421,000 2023 1,359,000 2024 545,000 2025 and thereafter 186,000 Total amortization $ 3,511,000 During the years ended December 31, 2021 and 2020, the Company recorded amortization expense of $ 1,496,000 1,335,000 |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Operating Leases | |
OPERATING LEASES | 7. OPERATING LEASES The Company leases warehouse, corporate office space, and equipment under certain operating lease agreements. 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 operating lease liabilities in our consolidated balance sheets pursuant to ASC 842, Leases Operating 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: SCHEDULE OF LEASE COST Years Ended December 31, 2021 2020 Lease cost Operating lease cost (included in general and administrative expenses in the Company’s statement of operations) $ 598,000 $ 520,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 667,000 $ 577,000 Weighted average remaining lease term – operating leases (in years) 4.34 4.54 Weighted average discount rate – operating leases 4.0 % 4.0 % SCHEDULE OF OPERATING LEASES 2021 2020 As of December 31, 2021 2020 Operating leases Right-of-use assets $ 2,177,000 $ 2,730,000 Short-term operating lease liabilities $ 592,000 $ 596,000 Long-term operating lease liabilities 2,299,000 2,943,000 Total operating lease liabilities $ 2,891,000 $ 3,539,000 SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES Year ending Operating Leases 2022 $ 751,000 2023 773,000 2024 472,000 2025 484,000 2026 and thereafter 705,000 Total lease payments 3,185,000 Less: Imputed interest/present value discount (294,000 ) Present value of lease liabilities $ 2,891,000 Subsequent to year end, the Company terminated operating leases for certain buildings and warehouses. See Note 22 for Subsequent Events. |
ACCRUED OFFICERS_ SALARY
ACCRUED OFFICERS’ SALARY | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Officers Salary | |
ACCRUED OFFICERS’ SALARY | 8. ACCRUED OFFICERS’ SALARY Accrued officers’ salary consists of unpaid salaries for the Company’s Chief Executive Officer and former Chief Financial Officer, who are also the owners of approximately 6.6 As of December 31, 2021, and 2020, accrued officers’ salary amounted to $ 1,209,000 822,000 |
ADVANCES ON FUTURE RECEIPTS
ADVANCES ON FUTURE RECEIPTS | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
ADVANCES ON FUTURE RECEIPTS | 9. ADVANCES ON FUTURE RECEIPTS The Company has the following advances on future receipts as of December 31, 2021: SCHEDULE OF ADVANCES ON FUTURE RECEIPTS Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at December 31, 2021 Balance at December 31, 2020 Note A June 30, 2020 February 25, 2021 28 % $ 506,000 $ - $ 89,000 Note B June 30, 2020 February 25, 2021 28 % 506,000 - 88,000 Note C October, 29, 2021 April 28, 2022 5 % 2,120,000 1,299,000 - Note D October 29, 2021 July 25, 2022 28 % 3,808,000 2,993,000 - Note E December 23, 2021 June 22, 2022 5 % 689,000 689,000 - Other January 13,2021 June 30, 2021 September 10, 2021 March 1, 2022 3% 28 % 9,355,000 - - Total $ 16,984,000 4,981,000 177,000 Debt discount (800,000 ) (67,000 ) Net $ 4,181,000 $ 110,000 Note A and B 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 withdrew an aggregate of $ 6,000 from the Company’s operating account each banking day. The term of the agreement extended until the advances were 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 was amortized over the term of the agreement. As of December 31, 2020, the outstanding balance of the notes amounted to $ 177,000 and the unamortized balance of the debt discount was $ 67,000 . During the year ended December 31, 2021, the Company paid the entire balance due of $ 177,000 67,000 Note C On October 29, 2021, the Company received secured advances from an unaffiliated third party totaling $ 2,015,000 for the purchase of future receipts/revenues of $ 2,120,000 . Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $ 353,000 5% 2,120,000 to account for the future receipts sold and a debt discount of $ 105,000 to account for the difference between the future receipts sold and the cash received. The debt discount was amortized over the term of the agreement. During the year ended December 31, 2021, the Company paid $ 821,000 35,000 1,299,000 70,000 Note D On October 29, 2021, the Company received secured advances from an unaffiliated third party totaling $ 2,744,000 for the purchase of future receipts/revenues of 3,808,000 . Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $ 19,040 28% 3,808,000 to account for the future receipts sold and a debt discount of $ 1,064,000 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 using the effective interest rate method. During the year ended December 31, 2021, the Company paid $ 815,000 370,000 2,993,000 694,000 Note E On December 23, 2021, the Company received secured advances from an unaffiliated third party totaling $ 651,000 for the purchase of future receipts/revenues of $ 689,000 . Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $ 115,000 5% 689,000 to account for the future receipts sold and a debt discount of $ 38,000 to account for the difference between the future receipts sold and the cash received. The debt discount is being amortized over the term of the agreement. During the year ended December 31, 2021, the Company paid $ 0 2,000 689,000 36,000 Other During the year ended December 31, 2021, the Company received secured advances from unaffiliated third parties totaling $ 7,368,000 9,355,000 9,355,000 1,987,000 During the year ended December 31, 2021, the Company paid the entire balance of $ 9,355,000 1,987,000 |
NOTES PAYABLE _ RELATED PARTIES
NOTES PAYABLE – RELATED PARTIES | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable Related Parties | |
NOTES PAYABLE – RELATED PARTIES | 10. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties outstanding notes payable as of December 31, 2021 and 2020: SCHEDULE OF NOTES PAYABLE RELATED PARTIES 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 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % $ 343,000 40,000 240,000 Total notes payable – related parties 765,000 1,077,000 Non-current (725,000 ) - Current $ 40,000 $ 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 February 8, 2021 30 375,000 825,000 100,000 725,000 In February 2021, Mr. Cutaia and the 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. As the fair value of the warrants granted amounted to $ 287,000 or approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted for the modification as an extinguishment of debt which required 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. On May 19, 2021 the Board approved the ability to convert the note payable into equity of the Company at the discretion of the holder. The conversion price is the fair market value of the Company’s common stock on the day of conversion. As of December 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 12% April 2017 112,000 On September 24, 2021 the Company settled the entire note payable and all corresponding accrued interest and accounts payable related to the former board member for $ 140,000 82,000 (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 As of December 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $ 40,000 240,000 Total interest expense for notes payable to related parties was $ 111,000 and $ 141,000 for the years ended December 31, 2021 and 2020, respectively. In addition, the Company paid $ 135,000 and $ 120,000 in interest related to these notes for the years ended December 31, 2021 and 2020, respectively. |
NOTES PAYABLE, NON-CURRENT
NOTES PAYABLE, NON-CURRENT | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable Non-current | |
NOTES PAYABLE, NON-CURRENT | 11. NOTES PAYABLE, NON-CURRENT The Company has the following outstanding notes payable as of December 31, 2021 and 2020: SCHEDULE OF NOTES PAYABLE 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 Total notes payable, non-current $ 150,000 $ 1,458,000 (A) On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 The PPP loan was payable over two years at an interest rate of 1 1,218,000 On January 4, 2021 the entire PPP loan and accrued interest, totaling $ 1,226,000 (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 30 3.75 May 15, 2022 As part of the loan, the Company also received an advance of $ 10,000 10,000 (C) As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ 90,000 On May 17, 2021 the entire note and accrued interest, totaling $ 91,000 The following table provides a breakdown of interest expense: SCHEDULE OF INTEREST EXPENSE 2021 2020 Years Ended December 31, 2021 2020 Financing costs $ - $ (248,000 ) Interest expense - amortization of debt discount (see Note 9) (2,461,000 ) (493,000 ) Interest expense- other (see Note 10) (114,000 ) (153,000 ) Total interest expense $ (2,575,000 ) $ (894,000 ) |
DEFERRED INCENTIVE COMPENSATION
DEFERRED INCENTIVE COMPENSATION TO OFFICERS | 12 Months Ended |
Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | |
DEFERRED INCENTIVE COMPENSATION TO OFFICERS | 12. DEFERRED INCENTIVE COMPENSATION TO OFFICERS 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, 50% on January 10, 2022 $ 215,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021, 50% on January 10, 2022 161,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021, 50% on January 10, 2022 63,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021, 50% on January 10, 2022 82,000 163,000 Total 521,000 1,042,000 Non-current - (521,000 ) Current $ 521,000 $ 521,000 (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, former Chief Financial Officer, Annual Incentive Compensation of $ 430,000 and $ 125,000 , respectively for services rendered. The Company had determined that it was in its best interest and in the best interest of its stockholders to defer payments to these employees. The Company paid 50 % of the Annual Incentive Compensation on January 10, 2021, and subsequently paid the remaining 50 % on January 20, 2022. See Note 22 for subsequent events. During the year ended December 31, 2021, the Company paid $ 278,000 278,000 (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, former Chief Financial Officer, a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $ 324,000 163,000 50 50 During the year ended December 31, 2021, the Company paid $ 243,000 243,000 |
CONVERTIBLE SERIES A PREFERRED
CONVERTIBLE SERIES A PREFERRED STOCK and WARRANT OFFERING | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Series Preferred Stock And Warrant Offering | |
CONVERTIBLE SERIES A PREFERRED STOCK and WARRANT OFFERING | 13. CONVERTIBLE SERIES A PREFERRED STOCK and WARRANT OFFERING On August 14, 2019, we entered into the Securities Purchase Agreement (“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, were convertible into an aggregate of up to approximately 3.87 million shares of common stock) and warrants (“Series A” warrants) to purchase 3.2 5,030 shares of Series A Preferred Stock and granted Series A warrants to purchase up to 3,245,162 shares of common stock. 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, as a transaction by an issuer not involving any public offering. On September 17, 2019, we filed a registration statement on Form S-3 with the SEC to register the shares of common stock underlying the Series A warrants. The registration statement was declared effective on September 19, 2019 and we agreed to keep such registration statement continuously effective for a period of 24 months. We are also prevented from issuing shares of common stock upon exercise of the Series A Warrants, which, when aggregated with any shares of common stock issued on or after the issuance date and prior to such exercise date, (i) in connection with the exercise of any Series A Warrants issued pursuant to the SPA, and (ii) 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 Series A 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 Series A Warrants included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the Series A Warrants were accounted for as a derivative liability issuance in 2019 and are remeasured to fair value at the end of each reporting period (see Note 14). During the year ended December 31, 2021, the entire 2,006 1,978,728 155,087 348,000 348,000 no During the year ended December 31, 2020, 2,390 1,768,909 2,006 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | 14. 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 years, the Company granted certain warrants that included fundamental transaction provisions that could give rise to an obligation to pay cash to the warrant holder. As a result, the fundamental transaction clause of these warrants is 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 weighted-average assumptions: SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS December 31, 2021 Upon Extinguishment in 2021 December 31, 2020 Stock Price $ 1.24 $ 2.47 $ 1.65 Exercise Price $ 1.11 $ 1.10 $ 1.12 Expected Life 2.97 3.32 3.84 Volatility 119 % 144 % 162 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.97 % 0.33 % 0.29 % Total Fair Value $ 3,155,000 $ 4,513,000 $ 8,266,000 The expected life of the 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. During the year ended December 31, 2021, the Company recorded other income of $ 598,000 to account for the decrease in the fair value of derivative liabilities. In addition, the Company recorded a decrease in derivative liability of $ 4,513,000 1,829,190 warrants and the forfeiture of 33,334 warrants. The extinguishment was accounted for as an increase to equity. At December 31, 2021, the balance of derivative liabilities was $ 3,155,000 During the year ended December 31, 2020, the Company recorded additions to derivative liability of $ 3,951,000 related to the issuance of 2,303,861 warrants exercisable into shares of common stock that contained a fundamental transaction clause. The Company also recorded other income of $ 574,000 to account for the decrease in the fair value of derivative liabilities. In addition, the Company recorded a decrease in derivative liability of $ 159,000 95,000 Series A warrants. Pursuant to current accounting guidelines, the extinguishment was accounted for as an increase to equity. At December 31, 2020, the balance of derivative liabilities was $ 8,266,000 The following table sets forth a summary of the changes in the estimated fair value of the derivative liabilities during the years ended December 31, 2021 and 2020: SCHEDULE OF DERIVATIVE LIABILITY TRANSACTION Years Ended December 31, 2021 2020 Beginning balance $ 8,266,000 $ 5,048,000 Recognition of derivative liabilities - 3,951,000 Change in fair value (598,000 ) (574,000 ) Extinguishment (4,513,000 ) (159,000 ) Ending balance $ 3,155,000 $ 8,266,000 |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
COMMON STOCK | 15. COMMON STOCK The Company’s common stock activity for the year ended December 31, 2021 was as follows: Shares Issued as Part of Public Offering On March 15, 2021, the Company completed a registered direct offering with institutional investors and sold 9,375,000 shares of common stock at a price of $ 1.60 per share, which resulted in aggregate net proceeds of $ 14,129,000 . Included in the $ 14,129,000 is a refund of $ 144,000 from the underwriter. Shares Issued as Part of ATM Agreement In August 2021 and November 2021, the Company entered into two separate at-the-market issuance sales agreements (the “August 2021 ATM” and the “November 2021 ATM”, respectively) with Truist Securities, Inc., pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-252167). The August 2021 ATM was terminated in October 2021. In January 2022, the aggregate offering price of the shares of the Company’s common stock that may be sold under the November 2021 ATM was reduced from $ 30,000,000 7,300,000 During the year ended December 31, 2021, the Company received net proceeds of $ 7,937,000 Shares Issued for Services During the year ended December 31, 2021, the Company granted 1,546,599 shares of common stock to certain employees and vendors for services rendered and to be rendered with an aggregate fair value of $ 2,541,000 . The 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 and is being amortized over its vesting term. The Company recorded stock compensation expense of $ 2,438,000 and issued 1,344,499 shares of common stock to account for common shares vested. In addition, 112,100 shares granted to employees that vested were returned to the Company in exchange for the Company paying the corresponding income and payroll taxes of the employees amounting to $ 139,000 . The Company accounted for the return of the 112,100 shares and the payment of $ 139,000 for income and payroll taxes paid on behalf of the employees as a reduction in additional paid-in capital. Accordingly, the net increase to additional paid-in capital related to shares issued for services in 2021 is $ 2,188,000 . Shares Issued from Conversion of Note Payable – Related Party During the year ended December 31, 2021, the Company issued 194,175 200,000 1.03 Shares Issued for Settlement of Accounts Payable and Accrued Expense During the year ended December 31, 2021, the Company issued 192,678 shares of common stock to employees as settlement of $ 303,000 of previously recorded 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. During the year ended December 31, 2021, the Company issued 10,500 19,000 Shares Issued for Settlement of Litigation During the year ended December 31, 2021, the Company issued 600,000 shares to EMA Financial to settle a litigation. The fair market value of the shares issued was based on the closing price of Company’s stock on the day of settlement which amounted to $ 678,000 . As of the settlement date the Company had previously accrued $ 585,000 and as a result the Company recorded an additional $ 93,000 in general and administrative expenses to account for the difference between the fair value of the common shares issued and amount accrued at December 31, 2020. The Company’s common stock activity for the year ended December 31, 2020 was as follows: Sale of common stock from private placement In February 2020, the Company initiated a private placement for the sale and issuance of up to five million shares of its common stock at a per-share price of $ 1.20 4,237,833 4,444,000 641,000 In preparation for this private placement offering, the Company separately negotiated with certain Series A stockholders to waive their rights in order not to ratchet down the conversion price of their Series A preferred shares (see Note 13). In return for the waiver, the Company granted these Series A stockholders warrants to purchase 2,303,861 5 1.20 3,951,000 3,951,000 Sale of common stock from public offering On July 24, 2020, the Company concluded its public offering pursuant to a registration statement on Form S-1 (File No. 333-239055) and issued 12,545,453 1,636,363 12,337,000 Shares Issued for Services During the year ended December 31, 2020, the Company issued 1,007,583 1,190,000 1,035,000 155,000 |
RESTRICTED STOCK UNITS
RESTRICTED STOCK UNITS | 12 Months Ended |
Dec. 31, 2021 | |
Restricted Stock Units | |
RESTRICTED STOCK UNITS | 16. RESTRICTED STOCK UNITS On December 20, 2019, our stockholders approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “2019 Omnibus Incentive Plan”). A summary of restricted stock unit activity for the years ended December 31, 2021 and 2020 are presented below: SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY Weighted- Average Grant Date Shares Fair Value Non-vested at January 1, 2020 1,486,354 $ 1.36 Granted 2,871,471 1.18 Vested/ deemed vested (1,773,440 ) 1.31 Shares returned for payroll taxes (336,533 ) 1.31 Forfeited (61,906 ) 1.47 Non-vested at December 31, 2020 2,185,946 $ 1.17 Granted 813,265 1.69 Vested/deemed vested (1,177,378 ) 1.15 Forfeited - - Non-vested at December 31, 2021 1,821,833 $ 1.41 A summary of activity for the year ended December 31, 2021: On January 4, 2021, the Company granted 813,265 1,374,000 The total fair value of restricted stock units vested or deemed vested during the year ended December 31, 2021 was $ 1,626,000 , and is included in general and administrative expenses in the accompanying Consolidated Statements of Operations. As of December 31, 2021 the amount of unvested compensation related to issuances of restricted stock units was $ 1,691,000 1 4 A summary of activity for the year ended December 31, 2020: On April 10, 2020, the board of directors of the Company, approved management’s COVID-19 Full Employment and Cash Preservation Plan (the “Cash Preservation Plan”), pursuant to which all directors and senior level management would reduce their cash compensation by 25%, and all other employees and consultants would reduce their cash compensation by 20% (the “Cash Reduction Amount”) for a period of three months. The Cash Reduction Amount is to be paid to the affected individuals in shares of the Company’s common stock issued through the Company’s 2019 Omnibus Incentive Plan. The shares were granted pursuant to agreements entered into effective April 10, 2020, with each of the Company’s directors, executive officers, employees, and consultants. The shares vested on July 18, 2020, as long as the recipient remained in continuous service to the Company from the grant date through the vesting date. On April 10, 2020, a total of 589,098 shares of restricted stock with a fair value of $ 866,000 was granted pursuant to the Cash Preservation Plan. The shares were valued based on the market value of the Company’s common stock price on the date of grant. During the year ended December 31, 2020, the Company granted an additional 2,282,373 shares of its restricted stock to employees and members of Board of Directors. The restricted stock units vest in various dates, starting on grant date up to July 2024. These restricted stock units were valued based on market value of the Company’s stock price at the respective date of grants and had aggregate fair value of $ 2,525,000 , 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 year ended December 31, 2020 was $ 3,355,000 and is included in general and administrative expenses in the accompanying statements of operations. During the year ended December 31, 2020, 336,533 shares granted to various employees that vested were returned to the Company in exchange for the Company paying the corresponding income and payroll taxes of these employees amounting to $ 485,000 . Pursuant to current accounting guidelines, the Company accounted for the return of the 336,533 shares and the payment of $ 485,000 for income and payroll taxes paid on behalf the employees as a reduction in additional paid-in capital. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | 17. STOCK OPTIONS A summary of option activity for the years ended December 31, 2021 and 2020 are presented below. SCHEDULE OF STOCK OPTION ACTIVITY Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at January 1, 2020 4,233,722 $ 1.73 2.54 $ 995,000 Granted 2,111,308 1.35 - - Forfeited (313,255 ) 2.53 - - Exercised - - - - Outstanding at December 31, 2020 6,031,775 1.55 2.68 1,932,000 Granted 2,494,333 1.71 - - Forfeited (2,374,405 ) 2.68 - - Exercised (747,480 ) 2.03 - - Outstanding at December 31, 2021 5,404,223 $ 1.72 2.24 $ 107,000 Vested December 31, 2021 2,899,884 $ 2.22 $ 116,000 Exercisable at December 31, 2021 1,934,874 $ 2.04 $ 21,000 The following were stock options transactions during the year ended December 31, 2021: During the year ended December 31, 2021, the Company granted stock options to employees and consultants to purchase a total of 2,494,333 shares of common stock for services rendered. The options have an average exercise price of $ 1.71 per share, expire between zero and five years, vesting from zero and four years from grant date. The total fair value of these options at grant date was approximately $ 3,927,000 , determined using the Black-Scholes option pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the year ended December 31, 2021 amounted to $ 1,596,000 . As of December 31, 2021, the total unrecognized share-based compensation expense was $ 2,591,000 , which is expected to be recognized as part of operating expense through December 2025. The following were stock options transactions during the year ended December 31, 2020: During the year ended December 31, 2020, the Company granted stock options to employees and consultants to purchase a total of 2,111,308 shares of common stock for services rendered. The options have an average exercise price of $ 1.35 per share, expire between four and five years, vesting from 0.43 to four years from grant date. The total fair value of these options at grant date was approximately $ 2,438,000 using the Black-Scholes option pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the year ended December 31, 2020 amounted to $ 1,728,000 . As of December 31, 2020, the total unrecognized share-based compensation expense was $ 4,146,000 , which is expected to be recognized as part of operating expense through December 2024. The fair value of the share option awards was estimated using the Black-Scholes method based on the following weighted-average assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD Years Ended December 31, 2021 2020 Expected life in years 1 5 3.0 4.0 5.0 Stock price volatility 230 271 % 255 271 % Risk free interest rate 0.17 1.26 % 0.17 0.39 % Expected dividends 0 % 0 % Forfeiture rate 25.56 39.66 % 21.2 21.3 % The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. |
STOCK WARRANTS
STOCK WARRANTS | 12 Months Ended |
Dec. 31, 2021 | |
Stock Warrants | |
STOCK WARRANTS | 18. STOCK WARRANTS The Company has the following warrants as of December 31, 2021 and 2020 are presented below: SCHEDULE OF WARRANTS OUTSTANDING Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at January 1, 2020 10,930,991 $ 3.07 4.25 $ - Granted 4,630,654 1.17 - - Forfeited (244,800 ) 4.58 - - Exercised (1,965,594 ) 1.10 - - Outstanding at December 31, 2020 13,351,251 2.48 3.38 3,022,000 Granted 138,889 2.61 - - Forfeited (220,011 ) 6.25 - - Exercised (2,285,389 ) 1.25 - - Outstanding at December 31, 2021 10,984,740 $ 2.67 2.38 $ 507,000 The following were stock warrant transactions during the year ended December 31, 2021: During the year ended December 31, 2021, the Company granted 138,889 2.61 3 years 363,000 During the year ended December 31, 2021, a total of 2,285,389 warrants were exercised into 2,254,411 shares of common stock at a weighted average exercise price of $ 1.25 . The Company received cash of $ 2,784,000 upon exercise of the warrants. The following were stock warrant transactions during the year ended December 31, 2020: During the year ended December 31, 2020, the Company granted 416,199 warrants to a consultant as part of a private placement offering and 2,303,861 warrants to Series A stockholders. In addition, the Company also granted warrants to certain shareholders to purchase 1,910,594 shares of common stock as part of settlement with regards to the Company’s public offering that occurred in July 2020. The warrants were fully vested upon grant, have an average exercise price of $ 1.17 per share, expire between 0.01 and 5 years with an estimated fair value of $ 248,000 using the Black-Scholes option pricing model. The Company accounted for the estimated fair value of $ 248,000 as a financing cost. During the year ended December 31, 2020, a total of 1,965,594 warrants were exercised into 1,965,594 shares of common stock at a weighted average exercise price of $ 1.10 . The Company received cash of $ 2,165,000 upon exercise of the warrants. |
ISSUANCE OF CLASS A and B UNITS
ISSUANCE OF CLASS A and B UNITS | 12 Months Ended |
Dec. 31, 2021 | |
Issuance Of Class And B Units | |
ISSUANCE OF CLASS A and B UNITS | 19. ISSUANCE OF CLASS A and B UNITS a. Class A Units – During the year ended December 31, 2020, the Company created a separate class of equity instrument called Class A Units. Concurrently, the Company formed a wholly owned subsidiary, Verb Acquisition, and issued 100 1. Class A units are a standalone financial instrument; 2. Priority on distributions; 3. Ability to remove the manager; 4. Drag-along rights; 5. Power to dissolve Verb Acquisition provided that a majority of the Class B Units also approve the dissolution; 6. Ability to appoint a liquidator to wind up the affairs of Verb Acquisition; 7. Entitled to distributions; 8. Approve board appointments; and 9. Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class B Units also approve the amendment. b. Class B Units – During the year ended December 31, 2020, the Company created a separate class of an equity instrument called Class B Units. Concurrently, our wholly owned subsidiary, Verb Acquisition, issued 2,642,159 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 . During the year ended December 31, 2021, all Class B units were exchanged into Verb Technology common stock, consistent with the terms of the agreement. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 20. INCOME TAXES The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: SCHEDULE OF PROVISION OF INCOME TAXES Years Ended December 31, 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal benefit 6.9 % 6.9 % Non-deductible items 1.0 % 1.0 % Change in valuation allowance (28.9 )% (28.9 )% Effective income tax rate 0.0 % 0.0 % Significant components of the Company’s deferred tax assets and liabilities are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES Years Ended December 31, 2021 2020 Net operating loss carry-forwards $ 20,950,000 $ 13,350,000 Share based compensation (422,000 ) (457,000 ) Non-cash interest and financing expenses (358,000 ) (177,000 ) Other temporary differences (388,000 ) (569,000 ) Less: Valuation allowance (19,782,000 ) (12,147,000 ) Deferred tax assets, net $ - $ - ASC 740 requires that the tax benefit of net operating loss carry-forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry forward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a 100 % valuation allowance against the asset amounts. Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities. The Company has no liabilities related to uncertain tax positions or unrecognized benefits for the years ended December 31, 2021 and 2020. As of December 31, 2021 and 2020, the Company had federal net operating loss carry-forwards of approximately $ 79.2 million and $ 48.0 million, respectively, and state net operating loss carry-forwards of approximately $ 76.9 million and $ 45.7 million, respectively, which may be available to offset future taxable income for tax purposes. These net operating loss carry-forwards begin to expire in 2034. This carry-forward may be limited upon the ownership change under IRS Section 382. IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry-forwards after a change in control (generally greater than 50 % change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry-forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2021 but believes the provisions will not limit the availability of losses to offset future income. The Company is subject to income taxes in the U.S. federal jurisdiction and the state of Nevada. The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply. As of December 31, 2021, tax years 2015 through 2020 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 21. COMMITMENTS AND CONTINGENCIES Litigation a. 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 b. Legal Malpractice Action The Company is currently in a dispute with Baker Hostetler LLP (“BH”) relating to corporate legal services provided by BH to the Company. The Company filed its complaint in the Superior Court of California for the County of Los Angeles on May 17, 2021, styled Verb Technology Company, Inc. v. Baker Hostetler LLP, et al. 915,000 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 Total board fees expensed and paid in 2021 totaled $ 475,000 475,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 22. SUBSEQUENT EVENTS Equity Financing Common Stock Purchase Agreement: On January 12, 2022, the Company entered into a common stock purchase agreement with Tumim Stone Capital LLC. Pursuant to the agreement, the Company has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to $ 50,000,000 of newly issued shares of the Company’s common stock, par value $ 0.0001 per share from time to time during the term of the agreement, subject to certain limitations and conditions. The Total Commitment is inclusive of 607,287 shares of common stock, valued at $ 750,000 at the time of issuance, issued to the Investor as consideration for its commitment to purchase shares of common stock under the Common Stock Purchase Agreement. The common stock purchase agreement initially precludes the Company from issuing and selling more than 14,747,065 shares of its common stock, including the commitment shares, which number of shares equals 19.99% of the common stock issued and outstanding immediately prior to the execution of the agreement, unless the Company obtains stockholder approval to issue additional shares, or unless certain exceptions apply. From the effective date of the agreement through March 25, 2022, the Company received $ 5,542,000 5,146,683 Debt Financing Securities Purchase Agreement, Convertible Notes, and Security Agreement: On January 12, 2022, the Company also entered into a securities purchase agreement with three institutional investors providing for the sale and issuance of an aggregate original principal amount of $ 6,300,000 in convertible notes due 2023. The Company and the Note Holders also entered into a security agreement, dated January 12, 2022, in connection with the note offering, pursuant to which the Company granted a security interest to the Note Holders in substantially all of its assets. The Company received $ 6,000,000 6.0 5.0 3.00 Beginning on May 12, 2022, the Company is required to make nine monthly principal payments of $ 333,333 3,300,000 As a result of the debt financing, the Company paid $ 380,000 300,000 Issuances of Common Stock From January to March 2022, the Company issued 372,446 shares of common stock to vendors and employees for services rendered with a fair value of $ 442,000 . 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. From January to March 2022, the Company issued 432,046 Exercise of Options From January to March 2022, a total of 332,730 332,730 1.13 377,000 Issuances of Restricted Stock Units From January to March 2022, the Company granted an additional 1,033,669 shares of its restricted stock to employees and members of Board of Directors. The Restricted Stock Units vest in various dates, starting on January 20, 2022 up to February 1, 2026. 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 $ 1,261,000 , which is being amortized as stock compensation expense over its vesting term. Issuances of Stock Options From January to March 2022, the Company granted stock options to employees and consultants to purchase a total of 1,983,555 1.25 1,835,000 Termination of Lease Agreements On January 3, 2022, the Company terminated the lease agreements with JMCC properties for four office and warehouse leases in American Fork, Utah. The lease for the spaces were terminated as of January 15, 2022. On this date, and in accordance with ASC 842, the Company derecognized the right of use asset of $ 1,287,000 , net of accumulated amortization of $ 744,000 . The Company has also derecognized the corresponding lease liabilities of $ 521,000 , resulting in a net loss on termination of $ 22,000 . Payment of Deferred Incentive Compensation to Officers On January 20, 2022, the Company paid the remaining balance of $ 377,000 Departure and Replacement of Officers On January 20, 2022, Jeffrey Clayborne, the Company’s Chief Financial Officer and Treasurer, resigned. Pursuant to a consulting agreement, Mr. Clayborne continued as a consultant with the Company to assist with transition matters. Mr. Clayborne’s departure is not due to a dispute or disagreement with the Company. As part of a separation agreement, the Company issued 116,160 144,000 On January 20, 2022, the Company eliminated the Chief Information Officer position. The employment of Mitchell Bledsoe, the Company’s former Chief Information officer, ended on January 20, 2022 and his role and responsibilities were reassigned to existing personnel. On January 20, 2022, the Company appointed Salman H. Khan as Interim Chief Financial Officer, Treasurer, Principal Financial Officer and Principal Accounting Officer. On March 30, 2022, the Company’s Board of Directors approved Mr. Khan’s appointment as the Company’s permanent Chief Financial Officer. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Verb, Verb Direct, LLC, Verb Acquisition Co., LLC, and verbMarketplace, LLC. All intercompany accounts have been eliminated in the consolidation. Certain prior period amounts have been reclassified to conform to the current presentation. |
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 for reserves of uncollectible accounts receivable, assumptions made in valuing assets acquired in business combinations, impairment testing of goodwill and long-lived assets, the valuation allowance for deferred tax assets, assumptions used in valuing derivative liabilities, assumptions used in valuing share-based compensation, and accruals for potential liabilities. 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. The Company also derives revenue 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 is 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 for as part of contract liabilities 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 Consolidated Statements of Operations. The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) ASC 606, Revenue from Contracts with Customers 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 is 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. Returns from customers in the past and during the years ended December 31, 2021 and 2020 are immaterial. 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, verbTEAMS, and verbPULSE. The revenue is recognized straight-line 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, includes design, printing services, fulfillment and shipping services. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. Revenues during the years ended December 31, 2021 and 2020 were substantially all generated from the United States. |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees and contractors, digital content costs, purchase price of consumer products, 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. |
Assets Recognized from the Costs to Obtain a Contract with a Customer | Assets Recognized from the Costs to Obtain a Contract with a Customer The Company considers certain internal sales commissions as incremental costs of obtaining the contract with customers. Internal sales commissions for subscription offerings where the Company expect the benefit of those costs to continue throughout the subscription are capitalized and amortized ratably over the period of benefit, which generally ranges over a period of one year. Total capitalized costs to obtain a contract are not significant and are included in prepaid expenses and other current assets in our consolidated balance sheets. |
Contract Liabilities | Contract Liabilities Contract liabilities represent consideration received from customers under revenue contracts for which the Company has not yet delivered or completed its performance obligation to the customer. Contract liabilities are recognized over the contract period. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable is recorded at the invoiced amount and is non-interest bearing. We estimate losses on receivables based on expected losses, including our historical experience of actual losses. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. At December 31, 2021 and 2020, the allowance for doubtful accounts balance was $ 615,000 361,000 |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company capitalizes internal and external costs directly associated with developing internal-use software, and hosting arrangements that include an internal-use software license, during the application development stage of its projects. The Company’s internal-use software is reported at cost less accumulated depreciation. Depreciation begins once the project has been completed and is ready for its intended use. The Company will depreciate the asset on a straight-line basis over a period of three years, which is the estimated useful life. Software maintenance activities or minor upgrades are expensed in the period performed. As of December 31, 2021 and 2020, the Company capitalized $ 4,348,000 0 Depreciation expense related to capitalized software development costs are recorded in Cost of revenue in the consolidated statements of operations. There has been no depreciation expense related to capitalized software development costs for the years ended December 31, 2021 and 2020 as the software has not been completed and utilized. |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years |
Business Combinations | Business Combinations Pursuant to FASB ASC 805, Business Combinations |
Intangible Assets | Intangible Assets We have certain intangible assets that were initially recorded at their fair value at the time of acquisition. The finite-lived intangible assets consist of developed technology and customer contracts. Indefinite-lived intangible assets consist of domain names. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. As of December 31, 2021 and 2020 there was no |
Goodwill | Goodwill In accordance with FASB ASC 350, Intangibles-Goodwill and Other no |
Long-Lived Assets | Long-Lived Assets The Company evaluates long-lived assets, other than goodwill and indefinite lived intangible assets, for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. No |
Leases | Leases We lease certain corporate office space and office equipment under lease agreements with monthly payments over a period of 36 to 94 months. We determine whether a contract contains a lease at contract inception. A contract is or contains a lease if the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Control is determined based on the right to obtain all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. Operating lease right-of-use assets (“ROU”) for operating leases represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. |
Income Taxes | Income Taxes The Company accounts for income taxes under FASB ASC 740, Income Taxes. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of operations. As of December 31, 2021, and 2020, the Company has not established a liability for uncertain tax positions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 (“ASC 820”) and FASB ASC 825 for disclosure and measurement of the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair value due to their short-term nature. The carrying amount of the Company’s financial 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. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. |
Share-Based Compensation | Share-Based Compensation The Company issues stock options and warrants, shares of common stock and restricted stock units as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation in accordance with FASB ASC 718, Compensation – Stock Compensation |
Research and Development Costs | Research and Development Costs Research and development costs included payroll and contractor costs involved in the development of new and existing products and technology. These costs primarily represent the Company’s cloud-based, Verb interactive video CRM SaaS platform. Research and development costs are expensed as incurred. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of common stock that were outstanding during the period. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options. No dilutive potential shares of common stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of December 31, 2021, and 2020, the Company had total outstanding options of 5,404,223 and 6,031,775 , respectively, and warrants of 10,984,740 and 13,351,251 , respectively, and outstanding restricted stock awards of 1,821,833 and 2,185,946 , respectively, and common shares potentially issuable from our Class B Units that were issued in August 2020 of 0 and 2,642,159 , were excluded from the computation of net loss per share because they are anti-dilutive. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $ 250,000 The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for the years ended December 31, 2021 and 2020: SCHEDULE OF CONCENTRATION RISK Years Ended December 31, 2021 2020 Verb’s largest customers are presented below as a percentage of Verb’s aggregate Revenues and Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate Purchases 2 major vendors accounted for 25 25 50 1 major vendor accounted for 40 Accounts payable 1 major vendor accounted for 40 2 major vendors accounted for 10 28 38 |
Supplemental Cash Flow Information | Supplemental Cash Flow Information SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures of cash flow information Cash paid for interest $ 135,000 $ 120,000 Cash paid for income taxes $ 1,000 $ 1,000 Supplemental disclosure of non-cash investing and financing activities Far value of class B units issued upon acquisition of subsidiary $ - $ 3,065,000 Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features - 3,951,000 Fair value of derivative liability extinguished 4,513,000 - Fair value of common shares issued to settle accounts payable and accrued expenses 322,000 - Reclassification of Class B upon conversion to common stock 3,065,000 - Fair value of common stock issued to settle notes payable – related party 200,000 - Fair value of common stock received in exchange for employee’s payroll taxes 139,000 - Fair value of common stock issued for future services 164,000 - Fair value of debt forgiveness 1,399,000 - Accrued capitalized software development costs 2,100,000 - Fair value of common stock issued to settle lawsuit 678,000 - Discount recognized from advances on future receipts 3,194,000 285,000 Fair value of common stock issued for prepaid subscription agreement - 340,000 Fair value of restricted awards returned – payroll taxes - 485,000 Goodwill and intangible assets acquired from acquisition - 4,846,000 Assets acquired from the acquisition of subsidiary - 207,000 Liabilities assumed from the acquisition of subsidiary - 331,000 Issuance of note payable upon acquisition of subsidiary $ - $ 1,885,000 |
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 a 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). In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF CONCENTRATION RISK | SCHEDULE OF CONCENTRATION RISK Years Ended December 31, 2021 2020 Verb’s largest customers are presented below as a percentage of Verb’s aggregate Revenues and Accounts receivable None None Verb’s largest vendors are presented below as a percentage of Verb’s aggregate Purchases 2 major vendors accounted for 25 25 50 1 major vendor accounted for 40 Accounts payable 1 major vendor accounted for 40 2 major vendors accounted for 10 28 38 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION | SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures of cash flow information Cash paid for interest $ 135,000 $ 120,000 Cash paid for income taxes $ 1,000 $ 1,000 Supplemental disclosure of non-cash investing and financing activities Far value of class B units issued upon acquisition of subsidiary $ - $ 3,065,000 Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features - 3,951,000 Fair value of derivative liability extinguished 4,513,000 - Fair value of common shares issued to settle accounts payable and accrued expenses 322,000 - Reclassification of Class B upon conversion to common stock 3,065,000 - Fair value of common stock issued to settle notes payable – related party 200,000 - Fair value of common stock received in exchange for employee’s payroll taxes 139,000 - Fair value of common stock issued for future services 164,000 - Fair value of debt forgiveness 1,399,000 - Accrued capitalized software development costs 2,100,000 - Fair value of common stock issued to settle lawsuit 678,000 - Discount recognized from advances on future receipts 3,194,000 285,000 Fair value of common stock issued for prepaid subscription agreement - 340,000 Fair value of restricted awards returned – payroll taxes - 485,000 Goodwill and intangible assets acquired from acquisition - 4,846,000 Assets acquired from the acquisition of subsidiary - 207,000 Liabilities assumed from the acquisition of subsidiary - 331,000 Issuance of note payable upon acquisition of subsidiary $ - $ 1,885,000 |
ACQUISITION OF SOLOFIRE (Tables
ACQUISITION OF SOLOFIRE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED | SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED Dec 31,2021 Cash $ 229,000 Accounts receivable 207,000 Current liabilities (241,000 ) Long-term liabilities (90,000 ) Net tangible assets 105,000 Intangible assets 1,418,000 Goodwill 3,427,000 Purchase price $ 4,950,000 |
SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS | SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS 2021 2020 Years Ended December 31, 2021 2020 (Proforma, unaudited) SaaS recurring subscription revenue $ 6,831,000 $ 6,077,000 Other digital revenue 1,347,000 1,384,000 Design, printing, fulfilment, and shipping 2,346,000 3,467,000 Total revenue 10,524,000 10,928,000 Cost of revenue 4,504,000 4,980,000 Gross margin 6,020,000 5,948,000 Operating expenses 39,732,000 30,679,000 Other expense, net (773,000 ) (218,000 ) Loss before income tax provision (34,485,000 ) (24,949,000 ) Income tax provision 1,000 1,000 Net loss (34,486,000 ) (24,950,000 ) Deemed dividend to Series A preferred stockholders (348,000 ) (3,951,000 ) Net loss to common stockholders $ (34,834,000 ) $ (28,901,000 ) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following as of December 31, 2021 and 2020: SCHEDULE OF PROPERTY AND EQUIPMENT 2021 2020 As of December 31, 2021 2020 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 49,000 39,000 Leasehold improvement 1,058,000 1,058,000 Total property and equipment 1,211,000 1,201,000 Accumulated depreciation (509,000 ) (339,000 ) Total property and equipment, net $ 702,000 $ 862,000 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS | The changes in the carrying amount of goodwill are as follows: SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS 2021 2020 As of December 31, 2021 2020 Beginning balance $ 20,060,000 $ 16,337,000 Additions: Acquisition (see Note 3) - 3,723,000 Adjustment to provisional goodwill (296,000 ) - Ending balance $ 19,764,000 $ 20,060,000 In September 2021, the Company finalized the purchase price allocation of SoloFire which the Company acquired in September 2020. As a result, the Company adjusted $ 296,000 Intangible assets The changes in the carrying amount of intangible assets are as follows: 2021 2020 As of December 31, 2021 2020 Beginning balance $ 5,153,000 $ 5,366,000 Additions: Acquisition (see Note 3) - 1,122,000 Adjustment to provisional finite-lived intangible asset 296,000 - Amortization of intangible assets (1,496,000 ) (1,335,000 ) Ending balance $ 3,953,000 $ 5,153,000 |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS December 31, 2021 Gross carrying amount Accumulated amortization Net carrying amount Weighted-average amortization period (years) Finite-lived intangible assets Developed technology $ 6,100,000 $ (2,958,000 ) $ 3,142,000 5 Customer contracts 1,217,000 (848,000 ) 369,000 5 Indefinite-lived intangible assets Domain names 442,000 - 442,000 $ 7,759,000 $ (3,806,000 ) $ 3,953,000 December 31, 2020 Gross carrying amount Accumulated amortization Net carrying amount Weighted- average amortization period (years) Finite-lived intangible assets Developed technology $ 5,700,000 $ (1,712,000 ) $ 3,988,000 5 Customer contracts 1,271,000 (592,000 ) 679,000 5 Non-compete 50,000 (6,000 ) 44,000 3 Indefinite-lived intangible assets Domain names 442,000 - 442,000 $ 7,463,000 $ (2,310,000 ) $ 5,153,000 |
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE | Estimated amortization expense: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Year ending Amortization 2022 $ 1,421,000 2023 1,359,000 2024 545,000 2025 and thereafter 186,000 Total amortization $ 3,511,000 During the years ended December 31, 2021 and 2020, the Company recorded amortization expense of $ 1,496,000 1,335,000 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Operating Leases | |
SCHEDULE OF LEASE COST | The components of lease expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF LEASE COST Years Ended December 31, 2021 2020 Lease cost Operating lease cost (included in general and administrative expenses in the Company’s statement of operations) $ 598,000 $ 520,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 667,000 $ 577,000 Weighted average remaining lease term – operating leases (in years) 4.34 4.54 Weighted average discount rate – operating leases 4.0 % 4.0 % |
SCHEDULE OF OPERATING LEASES | SCHEDULE OF OPERATING LEASES 2021 2020 As of December 31, 2021 2020 Operating leases Right-of-use assets $ 2,177,000 $ 2,730,000 Short-term operating lease liabilities $ 592,000 $ 596,000 Long-term operating lease liabilities 2,299,000 2,943,000 Total operating lease liabilities $ 2,891,000 $ 3,539,000 |
SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES | SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES Year ending Operating Leases 2022 $ 751,000 2023 773,000 2024 472,000 2025 484,000 2026 and thereafter 705,000 Total lease payments 3,185,000 Less: Imputed interest/present value discount (294,000 ) Present value of lease liabilities $ 2,891,000 |
ADVANCES ON FUTURE RECEIPTS (Ta
ADVANCES ON FUTURE RECEIPTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF ADVANCES ON FUTURE RECEIPTS | The Company has the following advances on future receipts as of December 31, 2021: SCHEDULE OF ADVANCES ON FUTURE RECEIPTS Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at December 31, 2021 Balance at December 31, 2020 Note A June 30, 2020 February 25, 2021 28 % $ 506,000 $ - $ 89,000 Note B June 30, 2020 February 25, 2021 28 % 506,000 - 88,000 Note C October, 29, 2021 April 28, 2022 5 % 2,120,000 1,299,000 - Note D October 29, 2021 July 25, 2022 28 % 3,808,000 2,993,000 - Note E December 23, 2021 June 22, 2022 5 % 689,000 689,000 - Other January 13,2021 June 30, 2021 September 10, 2021 March 1, 2022 3% 28 % 9,355,000 - - Total $ 16,984,000 4,981,000 177,000 Debt discount (800,000 ) (67,000 ) Net $ 4,181,000 $ 110,000 |
NOTES PAYABLE _ RELATED PARTI_2
NOTES PAYABLE – RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable Related Parties | |
SCHEDULE OF NOTES PAYABLE RELATED PARTIES | The Company has the following related parties outstanding notes payable as of December 31, 2021 and 2020: SCHEDULE OF NOTES PAYABLE RELATED PARTIES 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 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % $ 343,000 40,000 240,000 Total notes payable – related parties 765,000 1,077,000 Non-current (725,000 ) - Current $ 40,000 $ 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 February 8, 2021 30 375,000 825,000 100,000 725,000 In February 2021, Mr. Cutaia and the 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. As the fair value of the warrants granted amounted to $ 287,000 or approximately 40% of the outstanding note payable, pursuant to ASC 470, the Company accounted for the modification as an extinguishment of debt which required 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. On May 19, 2021 the Board approved the ability to convert the note payable into equity of the Company at the discretion of the holder. The conversion price is the fair market value of the Company’s common stock on the day of conversion. As of December 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 12% April 2017 112,000 On September 24, 2021 the Company settled the entire note payable and all corresponding accrued interest and accounts payable related to the former board member for $ 140,000 82,000 (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 As of December 31, 2021, and December 31, 2020, the outstanding balance of the note amounted to $ 40,000 240,000 |
NOTES PAYABLE, NON-CURRENT (Tab
NOTES PAYABLE, NON-CURRENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable Non-current | |
SCHEDULE OF NOTES PAYABLE | The Company has the following outstanding notes payable as of December 31, 2021 and 2020: SCHEDULE OF NOTES PAYABLE 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 Total notes payable, non-current $ 150,000 $ 1,458,000 (A) On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 The PPP loan was payable over two years at an interest rate of 1 1,218,000 On January 4, 2021 the entire PPP loan and accrued interest, totaling $ 1,226,000 (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 30 3.75 May 15, 2022 As part of the loan, the Company also received an advance of $ 10,000 10,000 (C) As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ 90,000 On May 17, 2021 the entire note and accrued interest, totaling $ 91,000 |
SCHEDULE OF INTEREST EXPENSE | The following table provides a breakdown of interest expense: SCHEDULE OF INTEREST EXPENSE 2021 2020 Years Ended December 31, 2021 2020 Financing costs $ - $ (248,000 ) Interest expense - amortization of debt discount (see Note 9) (2,461,000 ) (493,000 ) Interest expense- other (see Note 10) (114,000 ) (153,000 ) Total interest expense $ (2,575,000 ) $ (894,000 ) |
DEFERRED INCENTIVE COMPENSATI_2
DEFERRED INCENTIVE COMPENSATION TO OFFICERS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | |
SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS | 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, 50% on January 10, 2022 $ 215,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021, 50% on January 10, 2022 161,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021, 50% on January 10, 2022 63,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021, 50% on January 10, 2022 82,000 163,000 Total 521,000 1,042,000 Non-current - (521,000 ) Current $ 521,000 $ 521,000 (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, former Chief Financial Officer, Annual Incentive Compensation of $ 430,000 and $ 125,000 , respectively for services rendered. The Company had determined that it was in its best interest and in the best interest of its stockholders to defer payments to these employees. The Company paid 50 % of the Annual Incentive Compensation on January 10, 2021, and subsequently paid the remaining 50 % on January 20, 2022. See Note 22 for subsequent events. During the year ended December 31, 2021, the Company paid $ 278,000 278,000 (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, former Chief Financial Officer, a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $ 324,000 163,000 50 50 During the year ended December 31, 2021, the Company paid $ 243,000 243,000 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 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 weighted-average assumptions: SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS December 31, 2021 Upon Extinguishment in 2021 December 31, 2020 Stock Price $ 1.24 $ 2.47 $ 1.65 Exercise Price $ 1.11 $ 1.10 $ 1.12 Expected Life 2.97 3.32 3.84 Volatility 119 % 144 % 162 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.97 % 0.33 % 0.29 % Total Fair Value $ 3,155,000 $ 4,513,000 $ 8,266,000 |
SCHEDULE OF DERIVATIVE LIABILITY TRANSACTION | The following table sets forth a summary of the changes in the estimated fair value of the derivative liabilities during the years ended December 31, 2021 and 2020: SCHEDULE OF DERIVATIVE LIABILITY TRANSACTION Years Ended December 31, 2021 2020 Beginning balance $ 8,266,000 $ 5,048,000 Recognition of derivative liabilities - 3,951,000 Change in fair value (598,000 ) (574,000 ) Extinguishment (4,513,000 ) (159,000 ) Ending balance $ 3,155,000 $ 8,266,000 |
RESTRICTED STOCK UNITS (Tables)
RESTRICTED STOCK UNITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restricted Stock Units | |
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY | A summary of restricted stock unit activity for the years ended December 31, 2021 and 2020 are presented below: SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY Weighted- Average Grant Date Shares Fair Value Non-vested at January 1, 2020 1,486,354 $ 1.36 Granted 2,871,471 1.18 Vested/ deemed vested (1,773,440 ) 1.31 Shares returned for payroll taxes (336,533 ) 1.31 Forfeited (61,906 ) 1.47 Non-vested at December 31, 2020 2,185,946 $ 1.17 Granted 813,265 1.69 Vested/deemed vested (1,177,378 ) 1.15 Forfeited - - Non-vested at December 31, 2021 1,821,833 $ 1.41 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of option activity for the years ended December 31, 2021 and 2020 are presented below. SCHEDULE OF STOCK OPTION ACTIVITY Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at January 1, 2020 4,233,722 $ 1.73 2.54 $ 995,000 Granted 2,111,308 1.35 - - Forfeited (313,255 ) 2.53 - - Exercised - - - - Outstanding at December 31, 2020 6,031,775 1.55 2.68 1,932,000 Granted 2,494,333 1.71 - - Forfeited (2,374,405 ) 2.68 - - Exercised (747,480 ) 2.03 - - Outstanding at December 31, 2021 5,404,223 $ 1.72 2.24 $ 107,000 Vested December 31, 2021 2,899,884 $ 2.22 $ 116,000 Exercisable at December 31, 2021 1,934,874 $ 2.04 $ 21,000 |
SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD | The fair value of the share option awards was estimated using the Black-Scholes method based on the following weighted-average assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD Years Ended December 31, 2021 2020 Expected life in years 1 5 3.0 4.0 5.0 Stock price volatility 230 271 % 255 271 % Risk free interest rate 0.17 1.26 % 0.17 0.39 % Expected dividends 0 % 0 % Forfeiture rate 25.56 39.66 % 21.2 21.3 % |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock Warrants | |
SCHEDULE OF WARRANTS OUTSTANDING | The Company has the following warrants as of December 31, 2021 and 2020 are presented below: SCHEDULE OF WARRANTS OUTSTANDING Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at January 1, 2020 10,930,991 $ 3.07 4.25 $ - Granted 4,630,654 1.17 - - Forfeited (244,800 ) 4.58 - - Exercised (1,965,594 ) 1.10 - - Outstanding at December 31, 2020 13,351,251 2.48 3.38 3,022,000 Granted 138,889 2.61 - - Forfeited (220,011 ) 6.25 - - Exercised (2,285,389 ) 1.25 - - Outstanding at December 31, 2021 10,984,740 $ 2.67 2.38 $ 507,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROVISION OF INCOME TAXES | The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: SCHEDULE OF PROVISION OF INCOME TAXES Years Ended December 31, 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal benefit 6.9 % 6.9 % Non-deductible items 1.0 % 1.0 % Change in valuation allowance (28.9 )% (28.9 )% Effective income tax rate 0.0 % 0.0 % |
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES | Significant components of the Company’s deferred tax assets and liabilities are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES Years Ended December 31, 2021 2020 Net operating loss carry-forwards $ 20,950,000 $ 13,350,000 Share based compensation (422,000 ) (457,000 ) Non-cash interest and financing expenses (358,000 ) (177,000 ) Other temporary differences (388,000 ) (569,000 ) Less: Valuation allowance (19,782,000 ) (12,147,000 ) Deferred tax assets, net $ - $ - |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | May 12, 2022 | Jan. 12, 2022 | Jan. 12, 2022 | Jan. 12, 2021 | Mar. 25, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Net Income (Loss) Attributable to Parent | $ 34,486,000 | $ 24,956,000 | |||||
Net Cash Provided by (Used in) Operating Activities | $ 25,862,000 | 16,294,000 | |||||
Stock Issued During Period, Value, New Issues | $ 4,444,000 | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||
Gross proceeds from notes payable | $ 1,367,000 | ||||||
Debt Financing [Member] | Forecast [Member] | |||||||
Debt Instrument, Periodic Payment, Principal | $ 333,333 | ||||||
Debt Financing [Member] | Forecast [Member] | |||||||
Debt Instrument, Annual Principal Payment | 3,300,000 | ||||||
Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | |||||||
Equity financing, description | per share (the “Common Stock”) from time to time during the term of the agreement, subject to certain limitations and conditions | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | ||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | |||||||
Stock Issued During Period, Value, New Issues | $ 5,542,000 | ||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | |||||||
Equity financing, description | the Company | ||||||
Stock Issued During Period, Value, New Issues | $ 750,000 | $ 50,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||
Total commitment, shares | 607,287 | ||||||
Total commitment | $ 750,000 | ||||||
Description for commitment shares for issued and outstanding rate | The Common Stock Purchase Agreement initially precludes the Company from issuing and selling more than 14,747,065 shares of its Common Stock, including the Commitment Shares, which number of shares equals 19.99% of the Common Stock issued and outstanding immediately prior to the execution of the agreement, unless the Company obtains stockholder approval to issue additional shares, or unless certain exceptions apply. | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||
Debt instrument principal value | $ 6,300,000 | $ 6,300,000 | |||||
Gross proceeds from notes payable | $ 6,000,000 | ||||||
Debt interest rate | 6.00% | 6.00% | |||||
Debt instrument initial conversion price | $ 3 | $ 3 | |||||
Debt Instrument, Periodic Payment, Principal | 333,333 | ||||||
Debt Instrument, Annual Principal Payment | $ 3,300,000 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Three Institutional Investors [Member] | |||||||
Debt instrument principal value | $ 6,300,000 | $ 6,300,000 | |||||
Debt instrument maturity date, description | due 2023 | ||||||
Gross proceeds from notes payable | $ 6,000,000 | ||||||
Debt interest rate | 6.00% | 6.00% | |||||
Debt original issue discount rate | 5.00% | 5.00% | |||||
Debt instrument term | 12 months | ||||||
Debt instrument initial conversion price | $ 3 | $ 3 |
SCHEDULE OF CONCENTRATION RISK
SCHEDULE OF CONCENTRATION RISK (Details) - Supplier Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues and Accounts Receivables [Member] | Customers [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 0.00% |
Purchase [Member] | First Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 25.00% | |
Purchase [Member] | Second Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 25.00% | |
Purchase [Member] | Two Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 50.00% | |
Purchase [Member] | One Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 40.00% | |
Accounts Payable [Member] | First Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 10.00% | |
Accounts Payable [Member] | Second Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 28.00% | |
Accounts Payable [Member] | Two Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 38.00% | |
Accounts Payable [Member] | One Vendors [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 40.00% |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | $ 135,000 | $ 120,000 |
Cash paid for income taxes | 1,000 | 1,000 |
Supplemental disclosure of non-cash investing and financing activities | ||
Far value of class B units issued upon acquisition of subsidiary | 3,065,000 | |
Fair value of derivative liability from issuance of convertible debt, inducement shares and warrant features | 3,951,000 | |
Fair value of derivative liability extinguished | 4,513,000 | |
Fair value of common shares issued to settle accounts payable and accrued expenses | 322,000 | |
Reclassification of Class B upon conversion to common stock | 3,065,000 | |
Fair value of common stock issued to settle notes payable – related party | 200,000 | |
Fair value of common stock received in exchange for employee’s payroll taxes | 139,000 | |
Fair value of common stock issued for future services | 164,000 | |
Fair value of debt forgiveness | 1,399,000 | |
Accrued capitalized software development costs | 2,100,000 | |
Fair value of common stock issued to settle lawsuit | 678,000 | |
Discount recognized from advances on future receipts | 3,194,000 | 285,000 |
Fair value of common stock issued for prepaid subscription agreement | 340,000 | |
Fair value of restricted awards returned – payroll taxes | 485,000 | |
Goodwill and intangible assets acquired from acquisition | 4,846,000 | |
Assets acquired from the acquisition of subsidiary | 207,000 | |
Liabilities assumed from the acquisition of subsidiary | 331,000 | |
Issuance of note payable upon acquisition of subsidiary | $ 1,885,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Accounts Receivable, Allowance for Credit Loss | $ 615,000 | $ 361,000 |
Capitalized software development costs | $ 4,348,000 | |
Property and equipment of useful life | 5 years | |
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | 0 |
Goodwill, Impairment Loss | 0 | 0 |
Impairment of Long-Lived Assets to be Disposed of | 0 | $ 0 |
FDIC Insured Amount | $ 250,000 | |
Share-based Payment Arrangement, Option [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,404,223 | 6,031,775 |
Warrant [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 10,984,740 | 13,351,251 |
Restricted Stock [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,821,833 | 2,185,946 |
Common Class B Units [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 2,642,159 |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 36 months | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 94 months |
SCHEDULE OF FAIR VALUE OF ASSET
SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 19,764,000 | $ 20,060,000 | $ 16,337,000 |
SoloFire [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 229,000 | ||
Accounts receivable | 207,000 | ||
Current liabilities | (241,000) | ||
Long-term liabilities | (90,000) | ||
Net tangible assets | (105,000) | ||
Intangible assets | 1,418,000 | ||
Goodwill | 3,427,000 | ||
Purchase price | $ 4,950,000 |
SCHEDULE OF PRO FORMA STATEMENT
SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenue | $ 10,524,000 | $ 10,928,000 |
Cost of revenue | 4,504,000 | 4,980,000 |
Gross margin | 6,020,000 | 5,948,000 |
Operating expenses | 39,732,000 | 30,679,000 |
Other expense, net | (773,000) | (218,000) |
Loss before income tax provision | (34,485,000) | (24,949,000) |
Income tax provision | 1,000 | 1,000 |
Net loss | (34,486,000) | (24,950,000) |
Deemed dividend to Series A preferred stockholders | (348,000) | (3,951,000) |
Net loss to common stockholders | (34,834,000) | (28,901,000) |
SaaS Recurring Subscription Revenue [Member] | ||
Total revenue | 6,831,000 | 6,077,000 |
Other Digital Revenue [Member] | ||
Total revenue | 1,347,000 | 1,384,000 |
Design Printing and Fulfillment and Shipping [Member] | ||
Total revenue | $ 2,346,000 | $ 3,467,000 |
ACQUISITION OF SOLOFIRE (Detail
ACQUISITION OF SOLOFIRE (Details Narrative) - USD ($) | Sep. 04, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Net income loss | $ (34,486,000) | $ (24,956,000) | |
SoloFire [Member] | |||
Business Acquisition [Line Items] | |||
Revenues | 1,139,000 | 128,000 | |
Net income loss | $ 554,000 | $ 900,000 | |
Membership Interest Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Business combination adjusted consideration transferred one | $ 4,950,000 | ||
Membership Interest Purchase Agreement [Member] | Ascend Certification, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Provisional goodwill and intangible assets | 4,845,000 | ||
Membership Interest Purchase Agreement [Member] | Promissory Note [Member] | |||
Business Acquisition [Line Items] | |||
Debt Instrument, Face Amount | $ 1,885,000 | ||
Membership Interest Purchase Agreement [Member] | Promissory Note [Member] | Class B Units Stock [Member] | |||
Business Acquisition [Line Items] | |||
Stock Issued During Period, Shares, Acquisitions | 2,642,159 | ||
Conversion of Stock, Shares Issued | 2,642,159 | ||
Stock Issued During Period, Value, Acquisitions | $ 3,065,000 | ||
Business Combination, Consideration Transferred | $ 4,950,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.14% |
CAPITALIZED SOFTWARE DEVELOPM_2
CAPITALIZED SOFTWARE DEVELOPMENT COSTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2022 | Oct. 31, 2021 | Aug. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Accrued other capitalized software development costs | $ 248,000 | ||||
Depreciation | 181,000 | $ 175,000 | |||
Break up fee payable | $ 1,000,000 | ||||
Payments for related party | $ 12,000,000 | ||||
Primary Contractor [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Payments for capitalized bill by contractor | 2,000,000 | ||||
Remaining software development commitment | 1,150,000 | ||||
Bonus payments | 500,000 | ||||
Primary Contractor [Member] | Subsequent Event [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Payments for capitalized bill by contractor | $ 2,100,000 | ||||
Software and Software Development Costs [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized contract cost, net | 4,348,000 | ||||
License fee | $ 5,750,000 | ||||
Software and Software Development Costs [Member] | Primary Contractor [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized fees | 4,100,000 | ||||
Software Development [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 0 | $ 0 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,211,000 | $ 1,201,000 |
Accumulated depreciation | (509,000) | (339,000) |
Total property and equipment, net | 702,000 | 862,000 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 29,000 | 29,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 75,000 | 75,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 49,000 | 39,000 |
Leaseholds and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,058,000 | $ 1,058,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 181,000 | $ 175,000 |
SCHEDULE OF GOODWILL AND INTANG
SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning balance | $ 20,060,000 | $ 16,337,000 |
Acquisition (see Note 3) | 3,723,000 | |
Adjustment to provisional goodwill | (296,000) | |
Ending balance | 19,764,000 | 20,060,000 |
Beginning balance | 5,153,000 | 5,366,000 |
Acquisition (see Note 3) | 1,122,000 | |
Adjustment to provisional finite-lived intangible asset | 296,000 | |
Amortization of intangible assets | (1,496,000) | (1,335,000) |
Ending balance | $ 3,953,000 | $ 5,153,000 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization, Net | $ (3,806,000) | $ (2,310,000) | |
Finite-lived intangible assets non compete net carrying amount | 3,511,000 | ||
Indefinite-lived intangible assets net carrying amount | 442,000 | 442,000 | |
Gross carrying amount, Net | 7,759,000 | 7,463,000 | |
Net carrying amount | 3,953,000 | 5,153,000 | $ 5,366,000 |
Developed Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets non compete gross carrying amount | 6,100,000 | 5,700,000 | |
Accumulated amortization, Net | (2,958,000) | (1,712,000) | |
Finite-lived intangible assets non compete net carrying amount | $ 3,142,000 | $ 3,988,000 | |
Finite-lived intangible assets non compete weighted-average amortization period (years) | 5 years | 5 years | |
Customer Contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets non compete gross carrying amount | $ 1,217,000 | $ 1,271,000 | |
Accumulated amortization, Net | (848,000) | (592,000) | |
Finite-lived intangible assets non compete net carrying amount | $ 369,000 | $ 679,000 | |
Finite-lived intangible assets non compete weighted-average amortization period (years) | 5 years | 5 years | |
Domain Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets net carrying amount | $ 442,000 | $ 442,000 | |
Noncompete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets non compete gross carrying amount | 50,000 | ||
Accumulated amortization, Net | (6,000) | ||
Finite-lived intangible assets non compete net carrying amount | $ 44,000 | ||
Finite-lived intangible assets non compete weighted-average amortization period (years) | 3 years |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE (Details) | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 1,421,000 |
2023 | 1,359,000 |
2024 | 545,000 |
2025 and thereafter | 186,000 |
Total amortization | $ 3,511,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Adjustment to provisional finite-lived intangible asset | $ 296,000 | |
Amortization expense | $ 1,496,000 | $ 1,335,000 |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Leases | ||
Operating lease cost (included in general and administrative expenses in the Company's statement of operations) | $ 598,000 | $ 520,000 |
Cash paid for amounts included in the measurement of lease liabilities | $ 667,000 | $ 577,000 |
Weighted average remaining lease term - operating leases (in years) | 4 years 4 months 2 days | 4 years 6 months 14 days |
Average discount rate - operating leases | 4.00% | 4.00% |
SCHEDULE OF OPERATING LEASES (D
SCHEDULE OF OPERATING LEASES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
Right-of-use assets | $ 2,177,000 | $ 2,730,000 |
Short-term operating lease liabilities | 592,000 | 596,000 |
Long-term operating lease liabilities | 2,299,000 | 2,943,000 |
Total operating lease liabilities | $ 2,891,000 | $ 3,539,000 |
SCHEDULE OF PRESENT VALUE OF LE
SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2022 | $ 751,000 | |
2023 | 773,000 | |
2024 | 472,000 | |
2025 | 484,000 | |
2026 and thereafter | 705,000 | |
Total lease payments | 3,185,000 | |
Less: Imputed interest/present value discount | (294,000) | |
Present value of lease liabilities | $ 2,891,000 | $ 3,539,000 |
ACCRUED OFFICERS_ SALARY (Detai
ACCRUED OFFICERS’ SALARY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accrued Officers Salary | ||
Percentage of Accured Officers Salary | 6.60% | |
Accrued officers' salary | $ 1,209,000 | $ 822,000 |
SCHEDULE OF ADVANCES ON FUTURE
SCHEDULE OF ADVANCES ON FUTURE RECEIPTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Short-term Debt [Line Items] | |||
Original Borrowing | $ 16,984,000 | ||
Total | 4,981,000 | $ 177,000 | |
Total | (800,000) | (67,000) | |
Total | $ 4,181,000 | 110,000 | |
Note One [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2023 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Note One [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 89,000 | ||
Note Two [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Note Two [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 88,000 | ||
Note Three [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Note Three [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Oct. 29, 2021 | ||
Maturity Date | Apr. 28, 2022 | ||
Interest Rate | 5.00% | ||
Original Borrowing | $ 2,120,000 | ||
Total | $ 1,299,000 | ||
Note Four [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Oct. 29, 2021 | ||
Maturity Date | Jul. 25, 2022 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 3,808,000 | ||
Total | $ 2,993,000 | ||
Note Five [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Dec. 23, 2021 | ||
Maturity Date | Jun. 22, 2022 | ||
Interest Rate | 5.00% | ||
Original Borrowing | $ 689,000 | ||
Total | 689,000 | ||
Other [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Original Borrowing | $ 9,355,000 | ||
Other [Member] | Advance on Future Receipts [Member] | Minimum [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jan. 13, 2021 | ||
Maturity Date | Sep. 10, 2021 | ||
Interest Rate | 3.00% | ||
Other [Member] | Advance on Future Receipts [Member] | Maximum [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2021 | ||
Maturity Date | Mar. 1, 2022 | ||
Interest Rate | 28.00% | ||
[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 February 8, 2021 30 375,000 825,000 100,000 725,000 | ||
[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 12% April 2017 112,000 | ||
[3] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
ADVANCES ON FUTURE RECEIPTS (De
ADVANCES ON FUTURE RECEIPTS (Details Narrative) - USD ($) | Dec. 23, 2021 | Oct. 29, 2021 | Jun. 30, 2020 | Dec. 23, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 29, 2022 | |
Short-term Debt [Line Items] | ||||||||
Debt discount | $ 800,000 | $ 67,000 | ||||||
Payments of debt | 11,168,000 | 1,842,000 | ||||||
Outstanding balance of debt | $ 4,981,000 | 177,000 | ||||||
Note A and B [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt principal amount | 177,000 | |||||||
Debt discount | $ 67,000 | |||||||
Note Three [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt interest rate | [1] | 12.00% | ||||||
Unaffiliated Third Party [Member] | Two Secured Advances [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt principal amount | $ 728,000 | |||||||
Purchase of future receipts | 1,012,000 | |||||||
Principal payment | $ 6,000 | |||||||
Debt interest rate | 28.00% | |||||||
Agreement terms | % based on the face value of the note and the proceeds received. As a result, the Company recorded a liability of $ | |||||||
Advance future receipts sold | $ 1,012,000 | |||||||
Debt discount | $ 284,000 | |||||||
Payments of debt | $ 177,000 | |||||||
Amortization of debt discount | 67,000 | |||||||
Unaffiliated Third Party One [Member] | Secured Advances [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt principal amount | $ 2,015,000 | |||||||
Purchase of future receipts | 2,120,000 | |||||||
Principal payment | $ 353,000 | |||||||
Debt interest rate | 5.00% | |||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $353,000 from the Company’s operating account each month. The term of the agreement extends until the advances are paid in full. The Company also granted security interest to the unaffiliated third party with respect to all accounts receivable, present and future instruments, documents, chattel paper and general intangibles and all cash deposits and reserves. The notes did not bear any interest, however, the interest was imputed at a rate of 5% based on the face value of the notes and the proceeds received. As a result, the Company recorded a liability of $2,120,000 | |||||||
Advance future receipts sold | $ 2,120,000 | |||||||
Debt discount | 105,000 | |||||||
Unaffiliated Third Party One [Member] | Note Three [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Payments of debt | 821,000 | |||||||
Amortization of debt discount | 35,000 | |||||||
Outstanding balance of debt | 1,299,000 | |||||||
Unamortized debt discount | 70,000 | |||||||
Unaffiliated Third Party One [Member] | Note Four [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt principal amount | 2,744,000 | |||||||
Purchase of future receipts | 3,808,000 | |||||||
Principal payment | $ 19,040 | |||||||
Debt interest rate | 28.00% | |||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $19,040 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The Company also granted security interest to the unaffiliated third party with respect to all accounts receivable, present and future instruments, documents, chattel paper and general intangibles and all cash deposits and reserves. The notes did not bear any interest, however, the interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. | |||||||
Advance future receipts sold | $ 3,808,000 | |||||||
Debt discount | $ 1,064,000 | |||||||
Payments of debt | 815,000 | |||||||
Amortization of debt discount | 370,000 | |||||||
Outstanding balance of debt | 2,993,000 | |||||||
Unamortized debt discount | 694,000 | |||||||
Unaffiliated Third Party One [Member] | Note Five [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt principal amount | $ 651,000 | $ 651,000 | ||||||
Purchase of future receipts | $ 689,000 | |||||||
Principal payment | $ 115,000 | |||||||
Debt interest rate | 5.00% | 5.00% | ||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $115,000 from the Company’s operating account each month. The term of the agreement extends until the advances are paid in full. The Company also granted security interest to the unaffiliated third party with respect to all accounts receivable, present and future instruments, documents, chattel paper and general intangibles and all cash deposits and reserves. The notes did not bear any interest, however, the interest was imputed at a rate of 5% based on the face value of the notes and the proceeds received. | |||||||
Advance future receipts sold | $ 689,000 | $ 689,000 | ||||||
Debt discount | $ 38,000 | $ 38,000 | ||||||
Payments of debt | 0 | |||||||
Amortization of debt discount | 2,000 | |||||||
Outstanding balance of debt | 689,000 | |||||||
Unamortized debt discount | 36,000 | |||||||
Unaffiliated Third Party One [Member] | Other [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt principal amount | 7,368,000 | |||||||
Purchase of future receipts | 9,355,000 | |||||||
Advance future receipts sold | 9,355,000 | |||||||
Debt discount | 1,987,000 | |||||||
Payments of debt | 9,355,000 | |||||||
Amortization of debt discount | $ 1,987,000 | |||||||
[1] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
SCHEDULE OF NOTES PAYABLE RELAT
SCHEDULE OF NOTES PAYABLE RELATED PARTIES (Details) - USD ($) | May 19, 2021 | Apr. 04, 2016 | Dec. 01, 2015 | Feb. 28, 2021 | Dec. 31, 2021 | Dec. 31, 2018 | Sep. 24, 2021 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | |||||||||
Original Borrowing | $ 16,984,000 | ||||||||
Notes payable - related parties, net | 765,000 | $ 1,077,000 | |||||||
Notes payable - related parties, net | (725,000) | ||||||||
Notes payable - related parties, net | $ 40,000 | 1,077,000 | |||||||
Note One [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
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 One [Member] | Mr Cutaia [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Maturity Date | Feb. 8, 2021 | ||||||||
Interest Rate | 12.00% | ||||||||
Debt Instrument, Maturity Date, Description | extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years | ||||||||
Convertible Debt | $ 725,000 | $ 825,000 | 725,000 | ||||||
Debt Conversion, Converted Instrument, Rate | 30.00% | ||||||||
Debt Conversion, Converted Instrument, Amount | $ 375,000 | ||||||||
Note Two [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
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 | |||||||
Note Two [Member] | Mr Cutaia [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest Rate | 12.00% | ||||||||
Notes payable - related parties, net | $ 112,000 | $ 140,000 | |||||||
Debt Instrument, Maturity Date, Description | April 2017 | ||||||||
Debt Instrument, Face Amount | 112,000 | ||||||||
Note Three [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
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] | 40,000 | 240,000 | ||||||
Note Three [Member] | Mr Cutaia [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest Rate | 12.00% | ||||||||
Notes payable - related parties, net | $ 40,000 | $ 240,000 | |||||||
Debt Instrument, Maturity Date, Description | June 4, 2021 | ||||||||
Convertible Debt | $ 343,000 | ||||||||
Debt Conversion, Converted Instrument, Rate | 30.00% | ||||||||
Debt Conversion, Converted Instrument, Amount | $ 200,000 | $ 103,000 | |||||||
Remaining debt amount | $ 240,000 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | 194,175 | ||||||||
Debt Instrument, Convertible, Conversion Price | $ 1.03 | ||||||||
[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 February 8, 2021 30 375,000 825,000 100,000 725,000 | ||||||||
[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 12% April 2017 112,000 | ||||||||
[3] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
SCHEDULE OF NOTES PAYABLE REL_2
SCHEDULE OF NOTES PAYABLE RELATED PARTIES (Details) (Parenthetical) - USD ($) | Sep. 24, 2021 | May 19, 2021 | Apr. 04, 2016 | Dec. 01, 2015 | Aug. 31, 2021 | Feb. 28, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||||||||||
Repayments of Related Party Debt | $ 12,000,000 | |||||||||
Gain (Loss) on Extinguishment of Debt | $ 1,112,000 | |||||||||
Notes payable - related parties, net | $ 765,000 | 1,077,000 | ||||||||
Note One [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt interest rate | [1] | 12.00% | ||||||||
Maturity date | [1] | Feb. 8, 2023 | ||||||||
Notes payable - related parties, net | [1] | $ 725,000 | 725,000 | |||||||
Note One [Member] | Mr Cutaia [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt interest rate | 12.00% | |||||||||
Maturity date | Feb. 8, 2021 | |||||||||
Percentage of debt conversion | 30.00% | |||||||||
Conversion into common stock value issued | $ 375,000 | |||||||||
Outstanding balance | $ 725,000 | 725,000 | $ 825,000 | |||||||
Repayments of Related Party Debt | 100,000 | |||||||||
Debt Instrument, Maturity Date, Description | extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years | |||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 138,889 | |||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 287,000 | |||||||||
Share Price | $ 2.61 | |||||||||
Percentage of outstanding notes payable | 40.00% | |||||||||
Gain (Loss) on Extinguishment of Debt | $ 287,000 | |||||||||
Note Two [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt interest rate | [2] | 12.00% | ||||||||
Maturity date | [2] | Apr. 1, 2017 | ||||||||
Notes payable - related parties, net | [2] | 112,000 | ||||||||
Note Two [Member] | Mr Cutaia [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt interest rate | 12.00% | |||||||||
Debt Instrument, Maturity Date, Description | April 2017 | |||||||||
Notes payable - related parties, net | $ 140,000 | $ 112,000 | ||||||||
Gain on settlement of notes | $ 82,000 | |||||||||
Note Three [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt interest rate | [3] | 12.00% | ||||||||
Maturity date | [3] | Jun. 4, 2021 | ||||||||
Notes payable - related parties, net | [3] | $ 40,000 | 240,000 | |||||||
Note Three [Member] | Mr Cutaia [Member] | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Debt interest rate | 12.00% | |||||||||
Percentage of debt conversion | 30.00% | |||||||||
Conversion into common stock value issued | $ 200,000 | $ 103,000 | ||||||||
Outstanding balance | $ 343,000 | |||||||||
Debt Instrument, Maturity Date, Description | June 4, 2021 | |||||||||
Notes payable - related parties, net | $ 40,000 | $ 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 February 8, 2021 30 375,000 825,000 100,000 725,000 | |||||||||
[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 12% April 2017 112,000 | |||||||||
[3] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
NOTES PAYABLE _ RELATED PARTI_3
NOTES PAYABLE – RELATED PARTIES (Details Narrative) - Notes payable [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | ||
Interest Expense, Related Party | $ 111,000 | $ 141,000 |
Interest Payable, Current | $ 135,000 | $ 120,000 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Short-term Debt [Line Items] | |||
Total notes payable, non-current | $ 150,000 | $ 1,458,000 | |
Note A [Member] | |||
Short-term Debt [Line Items] | |||
Issuance date | [1] | Apr. 17, 2020 | |
Maturity date | [1] | Apr. 17, 2022 | |
Debt interest rate | [1] | 1.00% | |
Total notes payable, non-current | [1] | 1,218,000 | |
Note B [Member] | |||
Short-term Debt [Line Items] | |||
Issuance date | [2] | May 15, 2020 | |
Maturity date | [2] | May 15, 2050 | |
Debt interest rate | [2] | 3.75% | |
Total notes payable, non-current | [2] | $ 150,000 | 150,000 |
Note C [Member] | |||
Short-term Debt [Line Items] | |||
Issuance date | [3] | May 1, 2020 | |
Maturity date | [3] | May 1, 2022 | |
Debt interest rate | [3] | 3.75% | |
Total notes payable, non-current | [3] | $ 90,000 | |
[1] | On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 | ||
[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 30 3.75 May 15, 2022 | ||
[3] | As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ 90,000 |
SCHEDULE OF NOTES PAYABLE (De_2
SCHEDULE OF NOTES PAYABLE (Details) (Parenthetical) - USD ($) | May 17, 2021 | Jan. 04, 2021 | May 15, 2020 | Apr. 17, 2020 | May 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Gain on debt extinguishment | $ 1,112,000 | |||||||
Note A [Member] | ||||||||
Debt interest rate | [1] | 1.00% | ||||||
Maturity date | [1] | Apr. 17, 2022 | ||||||
Note A [Member] | Paycheck Protection Program [Member] | ||||||||
Loan received | $ 1,218,000 | $ 1,218,000 | ||||||
Debt interest rate | 1.00% | |||||||
Gain on debt extinguishment | $ 1,226,000 | |||||||
Note B [Member] | ||||||||
Debt interest rate | [2] | 3.75% | ||||||
Maturity date | [2] | May 15, 2050 | ||||||
Note B [Member] | Economic Injury Disaster Loan Program [Member] | ||||||||
Debt interest rate | 3.75% | |||||||
Unsecured Loan | $ 150,000 | |||||||
Debt term | 30 years | |||||||
Maturity date | May 15, 2022 | |||||||
Note B [Member] | Economic Injury Disaster Loan Program [Member] | Other Income [Member] | ||||||||
Advance received from unsecured loan | $ 10,000 | |||||||
Note C [Member] | ||||||||
Debt interest rate | [3] | 3.75% | ||||||
Maturity date | [3] | May 1, 2022 | ||||||
Note C [Member] | Paycheck Protection Program [Member] | ||||||||
Gain on debt extinguishment | $ 91,000 | |||||||
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 | |||||||
[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 30 3.75 May 15, 2022 | |||||||
[3] | As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ 90,000 |
SCHEDULE OF INTEREST EXPENSE (D
SCHEDULE OF INTEREST EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Notes Payable Non-current | ||
Financing costs | $ (248,000) | |
Interest expense - amortization of debt discount (see Note 9) | (2,461,000) | (493,000) |
Interest expense- other (see Note 10) | (114,000) | (153,000) |
Total interest expense | $ (2,575,000) | $ (894,000) |
SCHEDULE OF DEFERRED INCENTIVE
SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Total | $ 521,000 | $ 1,042,000 | |
Non-current | (521,000) | ||
Current | $ 521,000 | 521,000 | |
Rory Cutaia [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | [1] | Dec. 23, 2019 | |
Debt Instrument, Maturity Date, Description | [1] | 50% on January 10, 2021, 50% on January 10, 2022 | |
Total | [1] | $ 215,000 | 430,000 |
Rory Cutaia One [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | [2] | Dec. 23, 2019 | |
Debt Instrument, Maturity Date, Description | [2] | 50% on January 10, 2021, 50% on January 10, 2022 | |
Total | [2] | $ 161,000 | 324,000 |
Jeff Clayborne [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | [1] | Dec. 23, 2019 | |
Debt Instrument, Maturity Date, Description | [1] | 50% on January 10, 2021, 50% on January 10, 2022 | |
Total | [1] | $ 63,000 | 125,000 |
Jeff Clayborne One [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | [2] | Dec. 23, 2019 | |
Debt Instrument, Maturity Date, Description | [2] | 50% on January 10, 2021, 50% on January 10, 2022 | |
Total | [2] | $ 82,000 | $ 163,000 |
[1] | On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, former Chief Financial Officer, Annual Incentive Compensation of $ 430,000 and $ 125,000 , respectively for services rendered. The Company had determined that it was in its best interest and in the best interest of its stockholders to defer payments to these employees. The Company paid 50 % of the Annual Incentive Compensation on January 10, 2021, and subsequently paid the remaining 50 % on January 20, 2022. See Note 22 for subsequent events. During the year ended December 31, 2021, the Company paid $ 278,000 278,000 | ||
[2] | On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, former Chief Financial Officer, a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $ 324,000 163,000 50 50 |
SCHEDULE OF DEFERRED INCENTIV_2
SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS (Details) (Paranthetical) - USD ($) | Dec. 23, 2019 | Dec. 31, 2021 |
Rory Cutaia [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 430,000 | |
Rory Cutaia [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 324,000 | |
Rory Cutaia [Member] | January 10, 2021 [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Rory Cutaia [Member] | January 10, 2022 [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Jeff Clayborne [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 125,000 | |
Jeff Clayborne [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 163,000 | |
Jeff Clayborne [Member] | January 10, 2021 [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Jeff Clayborne [Member] | January 10, 2022 [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Rory Cutaia and Jeff Clayborne [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 278,000 | |
Payments for deferred incentive compensation to officers | 278,000 | |
Rory Cutaia and Jeff Clayborne [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | 243,000 | |
Payments for deferred incentive compensation to officers | $ 243,000 |
CONVERTIBLE SERIES A PREFERRE_2
CONVERTIBLE SERIES A PREFERRED STOCK and WARRANT OFFERING (Details Narrative) - USD ($) | Aug. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Warrant purchase, shares | 2,285,389 | 1,965,594 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.25 | $ 1.10 | |
Maximum [Member] | |||
Warrants and Rights Outstanding, Term | 5 years | ||
Series A Warrants [Member] | |||
Warrant purchase, shares | 3,200,000 | ||
Common Stock [Member] | |||
Number of shares issued | 4,237,833 | ||
Conversion of shares | 1,978,728 | ||
Warrant purchase, shares | 2,254,411 | 1,965,594 | |
Series A Preferred Stock and Warrants [Member] | |||
Proceeds from Issuance of Preferred Stock, Preference Stock, and Warrants | $ 4,688,000 | ||
Stock issuance costs | $ 342,000 | ||
Preferred Stock [Member] | |||
Number of shares issued | 1,768,909 | ||
Conversion of shares | 2,006 | 2,390 | |
Securities Purchase Agreement [Member] | |||
Number of shares issued | 155,087 | ||
Fair value of shares issued | $ 348,000 | ||
Fair value of deemed dividend | $ 348,000 | ||
Securities Purchase Agreement [Member] | Maximum [Member] | |||
Warrant purchase, shares | 3,245,162 | ||
Securities Purchase Agreement [Member] | Common Stock [Member] | |||
Conversion of shares | 3,870,000 | ||
Securities Purchase Agreement [Member] | Series A Preferred Stock and Warrants [Member] | |||
Number of common stock to be issued causing ineligibility to issue common stock | 4,459,725 | ||
Shareholders' approval percentage for mandatory conversion | 19.99% | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.88 | ||
Warrants and Rights Outstanding, Term | 5 years | ||
Series A Preferred Stock [Member] | |||
Number of shares issued | 5,030 | ||
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Series A Preferred Stock [Member] | Preferred Stock [Member] | |||
Conversion of shares | 2,006 | ||
Series A Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||
Number of shares issued | 6,000 |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($)$ / shares | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair Value | $ | $ 3,155,000 | $ 8,266,000 |
Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair Value | $ | $ 4,513,000 | |
Measurement Input, Share Price [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 1.24 | 1.65 |
Measurement Input, Share Price [Member] | Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 2.47 | |
Measurement Input, Exercise Price [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 1.11 | 1.12 |
Measurement Input, Exercise Price [Member] | Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 1.10 | |
Measurement Input, Expected Term [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input, term | 2 years 11 months 19 days | 3 years 10 months 2 days |
Measurement Input, Expected Term [Member] | Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input, term | 3 years 3 months 25 days | |
Measurement Input, Price Volatility [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 119 | 162 |
Measurement Input, Price Volatility [Member] | Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 144 | |
Measurement Input, Expected Dividend Rate [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0 | 0 |
Measurement Input, Expected Dividend Rate [Member] | Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0 | |
Measurement Input, Risk Free Interest Rate [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0.97 | 0.29 |
Measurement Input, Risk Free Interest Rate [Member] | Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0.33 |
SCHEDULE OF DERIVATIVE LIABIL_2
SCHEDULE OF DERIVATIVE LIABILITY TRANSACTION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beginning balance | $ 8,266,000 | $ 5,048,000 |
Recognition of derivative liabilities | 3,951,000 | |
Change in fair value | (598,000) | (574,000) |
Extinguishment | (4,513,000) | (159,000) |
Ending balance | $ 3,155,000 | $ 8,266,000 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, Gain (Loss) on Derivative, Net | $ 598,000 | $ 574,000 |
Derivative Liability, Fair Value, Gross Liability | $ 3,155,000 | $ 8,266,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | 2,285,389 | 1,965,594 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures | 220,011 | 244,800 |
Derivative Liability | $ 3,951,000 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,285,389 | 1,965,594 |
Gain on extinguishment of derivative liability | $ 4,513,000 | $ 159,000 |
Warrant [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,303,861 | |
Upon Extinguishment [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | $ 4,513,000 | |
Series A Warrants [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | 1,829,190 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures | 33,334 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 95,000 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) | Mar. 15, 2021 | Jul. 24, 2020 | Feb. 05, 2020 | Apr. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 21, 2021 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Value of shares issued for services | $ 2,188,000 | $ 1,190,000 | |||||
General and Administrative Expense | $ 25,710,000 | $ 20,458,000 | |||||
Warrant to purchase of common stock | 2,285,389 | 1,965,594 | |||||
Warrant exercise price | $ 1.25 | $ 1.10 | |||||
Fair value derivative liability upon issuance | $ 3,951,000 | ||||||
Selling, general and administrative expenses | 1,035,000 | ||||||
Prepaid expense | $ 847,000 | $ 900,000 | |||||
Accounts Payable [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Conversion of accounts payable into common stock shares | 10,500 | ||||||
Debt conversion amount | $ 19,000 | ||||||
Notes payable [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 194,175 | ||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 200,000 | ||||||
Debt Instrument, Convertible, Conversion Price | $ 1.03 | ||||||
Truist Securities, Inc [Member] | Sales Agreement [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds sold of common stock | $ 7,937,000 | ||||||
EMA Financial, LLC [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
[custom:SharesIssuedForSettlementOfLitigation] | 600,000 | ||||||
[custom:SharesIssuedForSettlementOfLitigationValue-0] | $ 678,000 | ||||||
[custom:AccruedSettlementAmount-0] | 585,000 | ||||||
General and Administrative Expense | $ 93,000 | ||||||
Minimum [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Warrant term | 3 days | ||||||
Maximum [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Warrant term | 5 years | ||||||
Underwriter [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Refund from underwriter | $ 144,000 | ||||||
Employees and Vendors [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued for services | 1,546,599 | ||||||
Value of shares issued for services | $ 2,541,000 | ||||||
Share-based Payment Arrangement, Expense | $ 2,438,000 | ||||||
Number of shares issued, shares | 1,344,499 | ||||||
Employees [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock Repurchased During Period, Shares | 112,100 | ||||||
Stock Repurchased During Period, Value | $ 139,000 | ||||||
Stock issued during period shares issued settlement of payroll | 192,678 | ||||||
Stock issued during period value issued settlement of payroll | $ 303,000 | ||||||
Series A Shareholders [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Warrant to purchase of common stock | 2,303,861 | ||||||
Warrant term | 5 years | ||||||
Warrant exercise price | $ 1.20 | ||||||
Fair value derivative liability upon issuance | $ 3,951,000 | ||||||
Vendors [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued for services | 1,007,583 | ||||||
Value of shares issued for services | $ 1,190,000 | ||||||
Common Stock [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale and issuance of common stock | 14,076,696 | 12,545,453 | |||||
Number of shares issued for services | 1,344,499 | 1,007,583 | |||||
Value of shares issued for services | |||||||
Number of shares issued, shares | 4,237,833 | ||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 194,175 | ||||||
Conversion of accounts payable into common stock shares | 1,978,728 | ||||||
Warrant to purchase of common stock | 2,254,411 | 1,965,594 | |||||
Prepaid expense | $ 155,000 | ||||||
Common Stock [Member] | At The Market Agreements [Member] | Minimum [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock sold | 30,000,000 | ||||||
Common Stock [Member] | At The Market Agreements [Member] | Maximum [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock sold | 7,300,000 | ||||||
IPO [Member] | Common Stock [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale and issuance of common stock | 9,375,000 | ||||||
Sale of Stock, Price Per Share | $ 1.60 | ||||||
Proceeds sold of common stock | $ 14,129,000 | ||||||
Number of shares issued, shares | 12,545,453 | ||||||
Proceeds from issuance of stock | $ 12,337,000 | ||||||
IPO [Member] | Common Stock [Member] | Over-Allotment Option [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued, shares | 1,636,363 | ||||||
Private Placement [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale and issuance description | the sale and issuance of up to five million shares of its common stock at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of the Company’s common stock on that day. | ||||||
Common per-share price | $ 1.20 | ||||||
Private Placement [Member] | Common Stock [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale and issuance of common stock | 4,237,833 | ||||||
Proceeds sold of common stock | $ 4,444,000 | ||||||
Direct fees and expense | $ 641,000 |
SUMMARY OF RESTRICTED STOCK AWA
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Stock Units | ||
Number of Non-vested Shares, Outstanding Beginning | 2,185,946 | 1,486,354 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ 1.17 | $ 1.36 |
Shares, Granted | 813,265 | 2,871,471 |
Weighted Average Grant Date Fair Value, Granted | $ 1.69 | $ 1.18 |
Number of Shares, Vested/deemed vested | (1,177,378) | (1,773,440) |
Weighted Average Grant Date Fair Value, Vested/deemed vested | $ 1.15 | $ 1.31 |
Number of Shares, Shares returned for payroll taxes | (336,533) | |
Weighted Average Grant Date Fair Value, Shares returned for payroll taxes | $ 1.31 | |
Shares, Forfeited | (61,906) | |
Weighted Average Grant Date Fair Value, Forfeited | $ 1.47 | |
Number of Non-vested Shares, Outstanding Ending | 1,821,833 | 2,185,946 |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ 1.41 | $ 1.17 |
RESTRICTED STOCK UNITS (Details
RESTRICTED STOCK UNITS (Details Narrative) - USD ($) | Jan. 04, 2021 | Apr. 10, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted of restricted stock awards | 813,265 | 2,871,471 | ||
Selling, General and Administrative Expense | $ 1,035,000 | |||
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock fair value | $ 3,355,000 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted of restricted stock awards | 813,265 | 2,282,373 | ||
Fair value of granted restricted stock | $ 1,374,000 | $ 2,525,000 | ||
Selling, General and Administrative Expense | $ 1,626,000 | |||
Issuance of restricted stock units gross | $ 1,691,000 | |||
Stock Repurchased During Period, Shares | 336,533 | |||
Stock Repurchased During Period, Value | $ 485,000 | |||
Restricted Stock [Member] | Cash Preservation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted of restricted stock awards | 589,098 | |||
Fair value of granted restricted stock | $ 866,000 | |||
Debt Instrument, Description | On April 10, 2020, the board of directors of the Company, approved management’s COVID-19 Full Employment and Cash Preservation Plan (the “Cash Preservation Plan”), pursuant to which all directors and senior level management would reduce their cash compensation by 25%, and all other employees and consultants would reduce their cash compensation by 20% (the “Cash Reduction Amount”) for a period of three months. The Cash Reduction Amount is to be paid to the affected individuals in shares of the Company’s common stock issued through the Company’s 2019 Omnibus Incentive Plan. The shares were granted pursuant to agreements entered into effective April 10, 2020, with each of the Company’s directors, executive officers, employees, and consultants. The shares vested on July 18, 2020, as long as the recipient remained in continuous service to the Company from the grant date through the vesting date. On April 10, 2020, a total of | |||
Restricted Stock [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation vesting periods | 1 year | |||
Restricted Stock [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation vesting periods | 4 years |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Number of options outstanding beginning balance | 6,031,775 | 4,233,722 |
Weighted average exercise price outstanding beginning balance | $ 0.0155 | $ 0.0173 |
Weighted average remaining contractual life | 2 years 8 months 4 days | 2 years 6 months 14 days |
Aggregate intrinsic value beginning balance | $ 1,932,000 | $ 995,000 |
Number of options outstanding granted | 2,494,333 | 2,111,308 |
Weighted average exercise price outstanding granted | $ 0.0171 | $ 0.0135 |
Number of options outstanding forfeited | (2,374,405) | (313,255) |
Weighted average exercise price outstanding forfeited | $ 0.0268 | $ 0.0253 |
Number of options outstanding exercised | (747,480) | |
Weighted average exercise price outstanding exercised | $ 0.0203 | |
Number of options outstanding Ending balance | 5,404,223 | 6,031,775 |
Weighted average exercise price outstanding ending balance | $ 0.0172 | $ 0.0155 |
Weighted average remaining contractual life | 2 years 2 months 26 days | |
Aggregate intrinsic value ending balance | $ 107,000 | $ 1,932,000 |
Number of options outstanding vested | 2,899,884 | |
Weighted average exercise price outstanding vested | $ 2.22 | |
Aggregate intrinsic value vested | $ 116,000 | |
Number of options outstanding exercisable | 1,934,874 | |
Weighted average exercise price outstanding exercisable | $ 2.04 | |
Aggregate intrinsic value exercisable | $ 21,000 |
SCHEDULE OF FAIR VALUE ASSUMPTI
SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life in years | 5 years | |
Stock price volatility, minimum | 230.00% | 255.00% |
Stock price volatility, maximum | 271.00% | 271.00% |
Risk free interest rate, minimum | 0.17% | 0.17% |
Risk free interest rate, maximum | 1.26% | 0.39% |
Expected dividends | 0.00% | 0.00% |
Forfeiture rate, minimum | 25.56% | 21.20% |
Forfeiture rate, maximum | 39.66% | 21.30% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life in years | 1 year | 3 years |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life in years | 5 years | 4 years |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,494,333 | 2,111,308 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.0171 | $ 0.0135 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 116,000 | |
Employees and Consultants [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,494,333 | 2,111,308 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.71 | $ 1.35 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 3,927,000 | $ 2,438,000 |
Stock or Unit Option Plan Expense | 1,596,000 | 1,728,000 |
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 2,591,000 | $ 4,146,000 |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Warrants | ||
Number of Shares, Warrants Outstanding Beginning | 13,351,251 | 10,930,991 |
Weighted-Average Exercise Price, Outstanding Beginning | $ 2.48 | $ 3.07 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 3 years 4 months 17 days | 4 years 3 months |
Aggregate Intrinsic Value Outstanding Beginning | $ 3,022,000 | |
Number of Shares, Warrants granted | 138,889 | 4,630,654 |
Weighted-Average Exercise Price, granted | $ 2.61 | $ 1.17 |
Number of Shares, Warrants forfeited | (220,011) | (244,800) |
Weighted-Average Exercise Price, forfeited | $ 6.25 | $ 4.58 |
Number of Shares, Warrants exercised | (2,285,389) | (1,965,594) |
Weighted-Average Exercise Price, exercised | $ 1.25 | $ 1.10 |
Number of Shares, Warrants Outstanding Ending | 10,984,740 | 13,351,251 |
Weighted-Average Exercise Price, Outstanding Ending | $ 2.67 | $ 2.48 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Ending | 2 years 4 months 17 days | |
Aggregate intrinsic value outstanding ending | $ 507,000 | $ 3,022,000 |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Feb. 05, 2020 | |
Number of share warrants granted to issue | 138,889 | 4,630,654 | |
Warrant exercise price | $ 1.25 | $ 1.10 | |
Fair value of warrant | $ 248,000 | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,285,389 | 1,965,594 | |
Proceeds from Warrant Exercises | $ 2,784,000 | $ 2,165,000 | |
[custom:WarrantAverageExercisePrice-0] | $ 1.17 | ||
Financing costs | $ 248,000 | ||
Minimum [Member] | |||
Warrant expire term | 3 days | ||
Maximum [Member] | |||
Warrant expire term | 5 years | ||
Common Stock [Member] | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,254,411 | 1,965,594 | |
Officer [Member] | |||
Number of share warrants granted to issue | 138,889 | ||
Warrant exercise price | $ 2.61 | ||
Warrant expire term | 3 years | ||
Fair value of warrant | $ 363,000 | ||
Consultant [Member] | |||
Number of share warrants granted to issue | 416,199 | ||
Series A Shareholders [Member] | |||
Number of share warrants granted to issue | 2,303,861 | ||
Warrant exercise price | $ 1.20 | ||
Warrant expire term | 5 years | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,303,861 | ||
Shareholders [Member] | |||
Number of share warrants granted to issue | 1,910,594 |
ISSUANCE OF CLASS A and B UNI_2
ISSUANCE OF CLASS A and B UNITS (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Class A Units Stock [Member] | Verb Acquisition [Member] | |
Stock issued during period for acquisition | 100 |
Class B Units Stock [Member] | SoloFire [Member] | |
Stock issued during period for acquisition | 2,642,159 |
Stock Issued During Period, Value, Acquisitions | $ | $ 3,065,000 |
SCHEDULE OF PROVISION OF INCOME
SCHEDULE OF PROVISION OF INCOME TAXES (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 6.90% | 6.90% |
Non-deductible items | 1.00% | 1.00% |
Change in valuation allowance | (28.90%) | (28.90%) |
Effective income tax rate | 0.00% | 0.00% |
SCHEDULE OF COMPONENTS OF DEFER
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forwards | $ 20,950,000 | $ 13,350,000 |
Share based compensation | (422,000) | (457,000) |
Non-cash interest and financing expenses | (358,000) | (177,000) |
Other temporary differences | (388,000) | (569,000) |
Less: Valuation allowance | (19,782,000) | (12,147,000) |
Deferred tax assets, net | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Percentage of valuation allowance against the asset amount | 100.00% | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 50.00% | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 48 | $ 79.2 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 45.7 | $ 76.9 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Oct. 05, 2021 | Dec. 31, 2021 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 300,000 | |
Legal fees | $ 915,000 | |
Board fees expensed | 475,000 | |
Board fees to be recognized | 475,000 | |
Five Board Members [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Aggregate board fees | $ 475,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | May 12, 2022 | Jan. 20, 2022 | Jan. 12, 2022 | Jan. 12, 2022 | Jan. 03, 2022 | Jan. 04, 2021 | Mar. 25, 2022 | Mar. 25, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 12, 2021 |
Subsequent Event [Line Items] | |||||||||||
Consideration received for the shares | $ 4,444,000 | ||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||||
Proceeds from notes payable | $ 1,367,000 | ||||||||||
Payment for debt issuance cost | 15,000 | ||||||||||
Stock Issued During Period, Value, Issued for Services | $ 2,188,000 | $ 1,190,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 747,480 | ||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.0203 | ||||||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 802,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 813,265 | 2,871,471 | |||||||||
Operating lease, right-of-use asset | $ 2,177,000 | $ 2,730,000 | |||||||||
Operating lease, liability | $ 2,891,000 | $ 3,539,000 | |||||||||
Chief Executive Officer [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Remaining balance | $ 377,000 | ||||||||||
Restricted Stock [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 813,265 | 2,282,373 | |||||||||
Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | ||||||||||
Securities Purchase Agreement [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued | 155,087 | ||||||||||
Subsequent Event [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Shares, Issued | 372,446 | 372,446 | |||||||||
Stock Issued During Period, Value, Issued for Services | $ 442,000 | ||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 432,046 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 332,730 | ||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 1.13 | ||||||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 377,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ 1,835,000 | ||||||||||
Number of shares issued for services | 1,983,555 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 1.25 | $ 1.25 | |||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued | 116,160 | ||||||||||
Remaining balance | $ 144,000 | ||||||||||
Subsequent Event [Member] | Restricted Stock [Member] | Employees and Members of Board of Directors [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,033,669 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ 1,261,000 | ||||||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Consideration received for the shares | $ 5,542,000 | ||||||||||
Number of shares issued | 5,146,683 | ||||||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Consideration received for the shares | $ 750,000 | $ 50,000,000 | |||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||||
Number of shares issued | 607,287 | ||||||||||
Percentage of shares issued | 19.99% | ||||||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | Maximum [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Consideration received for the shares | $ 50,000,000 | ||||||||||
Number of shares issued | 14,747,065 | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt instrument principal value | $ 6,300,000 | $ 6,300,000 | |||||||||
Proceeds from notes payable | $ 6,000,000 | ||||||||||
Debt interest rate | 6.00% | 6.00% | |||||||||
Unamortized discount, percentage | 5.00% | 5.00% | |||||||||
Debt conversion price | $ 3 | $ 3 | |||||||||
Monthly principal payments | $ 333,333 | ||||||||||
Remaining principal payment | $ 3,300,000 | ||||||||||
Payment for debt issuance cost | $ 380,000 | ||||||||||
Debt unamortized discount | $ 300,000 | $ 300,000 | |||||||||
Subsequent Event [Member] | Lease Arrangement [Member] | JMCC properties [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Operating lease, right-of-use asset | $ 1,287,000 | ||||||||||
Accumulated amortization | 744,000 | ||||||||||
Operating lease, liability | 521,000 | ||||||||||
Gain (loss) on termination of lease | $ 22,000 |