Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 10, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
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 | 3401 North Thanksgiving Way | |
Entity Address, Address Line Two | Suite 240 | |
Entity Address, City or Town | Lehi | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84043 | |
City Area Code | (855) | |
Local Phone Number | 250-2300 | |
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 Common Stock, Shares Outstanding | 116,166,300 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | VERB | |
Security Exchange Name | NASDAQ | |
Common Stock Purchase Warrants [Member] | ||
Title of 12(b) Security | Common Stock Purchase Warrants | |
Trading Symbol | VERBW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 921 | $ 937 |
Accounts receivable, net | 1,438 | 1,382 |
Prepaid expenses and other current assets | 738 | 875 |
Total current assets | 3,097 | 3,194 |
Capitalized software development costs, net | 6,444 | 4,348 |
Property and equipment, net | 582 | 702 |
Operating lease right-of-use assets | 1,624 | 2,177 |
Intangible assets, net | 2,966 | 3,953 |
Goodwill | 19,764 | 19,764 |
Other assets | 306 | 293 |
Total assets | 34,783 | 34,431 |
Current liabilities | ||
Accounts payable | 3,833 | 3,751 |
Accrued expenses | 2,096 | 3,500 |
Accrued officers’ compensation | 1,274 | 1,209 |
Advances on future receipts, net | 2,197 | 4,181 |
Convertible notes payable, current | 4,171 | 40 |
Deferred incentive compensation to officers, current | 521 | |
Operating lease liabilities, current | 481 | 592 |
Contract liabilities | 1,549 | 986 |
Derivative liability | 795 | 3,155 |
Total current liabilities | 16,396 | 17,935 |
Long-term liabilities | ||
Notes payable, non-current | 150 | 875 |
Operating lease liabilities, non-current | 1,705 | 2,299 |
Total liabilities | 18,251 | 21,109 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized: Series A Convertible Preferred Stock, 6,000 shares authorized; 0 issued and outstanding as of September 30, 2022 and December 31, 2021 | ||
Common stock value | 10 | 7 |
Additional paid-in capital | 153,940 | 129,342 |
Accumulated deficit | (137,418) | (116,027) |
Total stockholders’ equity | 16,532 | 13,322 |
Total liabilities and stockholders’ equity | 34,783 | 34,431 |
Common Class A [Member] | ||
Stockholders’ equity | ||
Common stock value | ||
Common Class B [Member] | ||
Stockholders’ equity | ||
Common stock value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 102,604,851 | 72,942,948 |
Common stock, shares outstanding | 102,604,851 | 72,942,948 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock, shares authorized | 100 | 100 |
Common stock, shares issued | 100 | 100 |
Common Class B [Member] | ||
Common stock, shares authorized | 2,642,159 | 2,642,159 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Digital revenue | ||||
Total digital revenue | $ 2,016 | $ 2,356 | $ 6,327 | $ 5,967 |
Non-digital revenue | 171 | 544 | 950 | 1,851 |
Total revenue | 2,187 | 2,900 | 7,277 | 7,818 |
Cost of revenue | ||||
Total cost of revenue | 736 | 1,086 | 2,544 | 3,420 |
Gross margin | 1,451 | 1,814 | 4,733 | 4,398 |
Operating expenses | ||||
Research and development | 1,372 | 3,513 | 4,334 | 9,610 |
Depreciation and amortization | 790 | 400 | 1,594 | 1,214 |
General and administrative | 6,965 | 6,130 | 20,563 | 20,018 |
Total operating expenses | 9,127 | 10,043 | 26,491 | 30,842 |
Loss from operations | (7,676) | (8,229) | (21,758) | (26,444) |
Other income (expense) | ||||
Interest expense | (550) | (525) | (1,948) | (1,629) |
Change in fair value of derivative liability | 198 | (141) | 2,360 | (2,086) |
Other income (expense), net | 8 | (45) | 85 | |
Debt extinguishment, net | 82 | 1,112 | ||
Total other income (expense), net | (352) | (576) | 367 | (2,518) |
Net loss | (8,028) | (8,805) | (21,391) | (28,962) |
Deemed dividends to Series A stockholders | (348) | (348) | ||
Net loss to common stockholders | $ (8,028) | $ (9,153) | $ (21,391) | $ (29,310) |
Loss per share - basic and diluted | $ (0.08) | $ (0.14) | $ (0.23) | $ (0.48) |
Weighted average number of common shares outstanding - basic and diluted | 102,110,182 | 66,760,177 | 92,040,783 | 60,705,062 |
SaaS Recurring Subscription Revenue [Member] | ||||
Digital revenue | ||||
Total digital revenue | $ 1,851 | $ 1,846 | $ 5,829 | $ 4,908 |
Other Digital [Member] | ||||
Digital revenue | ||||
Total digital revenue | 165 | 510 | 498 | 1,059 |
Digital [Member] | ||||
Cost of revenue | ||||
Total cost of revenue | 580 | 542 | 1,746 | 1,651 |
Non-Digital [Member] | ||||
Cost of revenue | ||||
Total cost of revenue | $ 156 | $ 544 | $ 798 | $ 1,769 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | 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, 2020 | $ 3,065 | $ 5 | $ 89,216 | $ (81,541) | $ 10,745 | ||
Beginning balance, shares at Dec. 31, 2020 | 2,006 | 100 | 2,642,159 | 47,795,009 | |||
Sale of common stock from public offering | $ 2 | 18,849 | 18,851 | ||||
Sale of common stock from public offering, shares | 11,915,000 | ||||||
Issuance of common stock from option exercise | 569 | 569 | |||||
Issuance of common stock from option exercise, shares | 509,465 | ||||||
Fair value of common shares issued for services | 1,926 | 1,926 | |||||
Fair value of common shares issued for services, shares | 1,198,610 | ||||||
Fair value of common shares issued to settle accrued expenses | 281 | 281 | |||||
Fair value of common shares issued to settle accrued expenses, shares | 182,397 | ||||||
Net loss | (28,962) | (28,962) | |||||
Issuance of common stock from warrant exercise | 2,784 | 2,784 | |||||
Issuance of common stock from warrant exercise, shares | 2,254,411 | ||||||
Fair value of common shares issued to settle note payable – related party | 200 | 200 | |||||
Fair value of common shares issued to settle note payable - related party, shares | 194,175 | ||||||
Fair value of common shares issued to settle lawsuit | 678 | 678 | |||||
Fair value of common shares issued to settle lawsuit, shares | 600,000 | ||||||
Conversion of Series A Preferred to common stock | 348 | 348 | |||||
Conversion of Series A Preferred to common stock, shares | (2,006) | 1,978,728 | |||||
Fair value of warrants issued to Series A preferred stockholders – deemed dividend | (348) | (348) | |||||
Fair value of common shares issued to settle accounts payable | 19 | 19 | |||||
Fair value of common shares issued to settle accounts payable shares | 10,500 | ||||||
Fair value of vested restricted stock awards | 1,285 | 1,285 | |||||
Fair value of vested restricted stock awards, shares | 889,212 | ||||||
Fair value of vested stock options and warrants | 1,234 | 1,234 | |||||
Extinguishment of derivative liability upon exercise of warrants | 4,513 | 4,513 | |||||
Fair value of warrants issued to officer to modify note payable | 287 | 287 | |||||
Conversion of Class B Units to common shares | $ (3,065) | 3,065 | |||||
Conversion of Class B Units to common shares, shares | (2,642,159) | 2,642,159 | |||||
Ending balance, value at Sep. 30, 2021 | $ 7 | 124,906 | (110,503) | 14,410 | |||
Ending balance, shares at Sep. 30, 2021 | 100 | 70,169,666 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 6 | 115,179 | (101,698) | 13,487 | |||
Beginning balance, shares at Jun. 30, 2021 | 1,706 | 100 | 63,795,968 | ||||
Sale of common stock from public offering | $ 1 | 4,721 | 4,722 | ||||
Sale of common stock from public offering, shares | 2,540,000 | ||||||
Issuance of common stock from option exercise | 192 | 192 | |||||
Issuance of common stock from option exercise, shares | 176,735 | ||||||
Fair value of common shares issued for services | 157 | 157 | |||||
Fair value of common shares issued for services, shares | 81,143 | ||||||
Net loss | (8,805) | (8,805) | |||||
Issuance of common stock from warrant exercise | 1,681 | 1,681 | |||||
Issuance of common stock from warrant exercise, shares | 1,217,811 | ||||||
Conversion of Series A Preferred to common stock | 348 | 348 | |||||
Conversion of Series A Preferred to common stock, shares | (1,706) | 1,706,000 | |||||
Fair value of common shares issued to settle accounts payable | 19 | 19 | |||||
Fair value of common shares issued to settle accounts payable shares | 10,500 | ||||||
Fair value of vested restricted stock awards | 380 | 380 | |||||
Fair value of vested restricted stock awards, shares | 641,509 | ||||||
Fair value of vested stock options and warrants | 364 | 364 | |||||
Extinguishment of derivative liability upon exercise of warrants | 2,213 | 2,213 | |||||
Fair value of warrants issued to Series A preferred stockholders – deemed dividend | (348) | (348) | |||||
Ending balance, value at Sep. 30, 2021 | $ 7 | 124,906 | (110,503) | 14,410 | |||
Ending balance, shares at Sep. 30, 2021 | 100 | 70,169,666 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 7 | 129,342 | (116,027) | 13,322 | |||
Beginning balance, shares at Dec. 31, 2021 | 100 | 72,942,948 | |||||
Sale of common stock from public offering | $ 3 | 20,147 | 20,150 | ||||
Sale of common stock from public offering, shares | 25,844,250 | ||||||
Issuance of common stock for commitment fee related to equity line of credit agreement | |||||||
Issuance of common stock for commitment fee related to equity line of credit agreement, shares | 607,287 | ||||||
Issuance of common stock from option exercise | 377 | $ 377 | |||||
Issuance of common stock from option exercise, shares | 332,730 | 332,730 | |||||
Fair value of common shares issued for services | 1,461 | $ 1,461 | |||||
Fair value of common shares issued for services, shares | 1,813,251 | ||||||
Fair value of common shares issued to settle accrued expenses | 450 | 450 | |||||
Fair value of common shares issued to settle accrued expenses, shares | 477,038 | ||||||
Fair value of vested restricted stock awards, stock options and warrants | 2,163 | 2,163 | |||||
Fair value of vested restricted stock awards, stock options and warrants, shares | 587,347 | ||||||
Net loss | (21,391) | (21,391) | |||||
Ending balance, value at Sep. 30, 2022 | $ 10 | 153,940 | (137,418) | 16,532 | |||
Ending balance, shares at Sep. 30, 2022 | 100 | 102,604,851 | |||||
Beginning balance, value at Jun. 30, 2022 | $ 10 | 152,910 | (129,390) | 23,530 | |||
Beginning balance, shares at Jun. 30, 2022 | 100 | 101,958,787 | |||||
Fair value of common shares issued for services | 335 | 335 | |||||
Fair value of common shares issued for services, shares | 521,951 | ||||||
Fair value of vested restricted stock awards, stock options and warrants | 695 | 695 | |||||
Fair value of vested restricted stock awards, stock options and warrants, shares | 124,113 | ||||||
Net loss | (8,028) | (8,028) | |||||
Ending balance, value at Sep. 30, 2022 | $ 10 | $ 153,940 | $ (137,418) | $ 16,532 | |||
Ending balance, shares at Sep. 30, 2022 | 100 | 102,604,851 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities: | ||
Net loss | $ (21,391) | $ (28,962) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 3,668 | 4,652 |
Amortization of debt discount | 1,214 | 1,537 |
Amortization of debt issuance costs | 390 | |
Change in fair value of derivative liability | (2,360) | 2,086 |
Debt extinguishment, net | (1,112) | |
Depreciation and amortization | 1,594 | 1,214 |
Loss on lease termination | 22 | |
(Gain)/loss on disposal of property and equipment | 10 | (6) |
Allowance for doubtful accounts | 405 | 151 |
Effect of changes in assets and liabilities: | ||
Accounts receivable | (461) | (721) |
Prepaid expenses and other current assets | 146 | (301) |
Operating lease right-of-use assets | 222 | 424 |
Other assets | (13) | |
Accounts payable, accrued expenses, and accrued interest | 790 | 910 |
Contract liabilities | 563 | 631 |
Deferred incentive compensation | (377) | (521) |
Operating lease liabilities | (397) | (493) |
Net cash used in operating activities | (15,975) | (20,511) |
Investing Activities: | ||
Proceeds from sale of property and equipment | 3 | 11 |
Capitalized software development costs | (4,299) | (41) |
Purchases of property and equipment | (24) | (26) |
Purchases of intangible assets | (82) | |
Net cash used in investing activities | (4,402) | (56) |
Financing Activities: | ||
Proceeds from sale of common stock | 20,150 | 18,851 |
Proceeds from convertible notes payable | 6,000 | |
Advances on future receipts | 2,500 | 7,368 |
Proceeds from warrant exercise | 2,784 | |
Payments of convertible notes payable | (2,740) | |
Payments of advances on future receipts | (5,381) | (7,162) |
Proceeds from option exercise | 377 | 569 |
Payments for debt issuance costs | (545) | |
Net cash provided by financing activities | 20,361 | 22,410 |
Net change in cash | (16) | 1,843 |
Cash - beginning of period | 937 | 1,815 |
Cash - end of period | $ 921 | $ 3,658 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Our Business References in this Quarterly Report to the “Company,” “Verb,” “we,” “us,” or “our” are to Verb Technology Company, Inc., together with its consolidated subsidiaries unless the context otherwise requires. Throughout this Quarterly Report, the terms “client” and “customer” are used interchangeably. The Company is 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 verbMAIL, our interactive video-based sales communication tool integrated into Microsoft Outlook. MARKET.live is our multi-vendor, multi-presenter, livestream social shopping platform that combines ecommerce and entertainment. The Company also provides certain non-digital services to some of its enterprise clients such as printing and fulfillment services. Economic Disruption Our business is dependent in part on general economic conditions. Many jurisdictions in which our customers are located and our products are sold have experienced and could continue to experience unfavorable general economic conditions, such as inflation, increased interest rates and recessionary concerns, which could negatively affect demand for our products. Under difficult economic conditions, customers may seek to cease spending on our current products or fail to adopt our new products, which could negatively affect our financial performance. We cannot predict the timing or magnitude of an economic slowdown or the timing or strength of any economic recovery. These and other economic factors could have a material adverse effect on our business, financial condition, and results of operations. COVID-19 As of the date of this filing, there continues to be concern regarding the ongoing impacts and disruptions caused by the COVID-19 pandemic in the regions in which the Company operates. Although the impacts of the pandemic on our business have not been material to date, a prolonged downturn in economic conditions as a result of the pandemic could have a material adverse effect on our customers and demand for our products. At this time, it is not possible for the Company to predict the duration or magnitude of the impacts of the pandemic, or other outbreaks of communicable diseases, on the Company’s business, financial condition and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 31, 2022 (the “2021 Annual Report”). The consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with 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. Going Concern The accompanying condensed 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 condensed consolidated financial statements, during the nine months ended September 30, 2022, the Company incurred a net loss of $ 21,391 15,975 On January 12, 2022, the Company entered into a common stock purchase agreement (the “January 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 0.0001 607,287 On January 12, 2022, the Company also entered into a securities purchase agreement (the “January Note Purchase Agreement”) with three institutional investors (collectively, the “January Note Holders”) providing for the sale and issuance of an aggregate original principal amount of $ 6,300 The January Note Purchase Agreement also gives the January Note Holders the right to require the Company to use up to 15% of the gross proceeds raised from future debt or equity financings to redeem the Notes, which redemptions have been elected by the January Note Holders as described below. On April 20, 2022, the Company entered into a securities purchase agreement, which provides for the sale and issuance by the Company of an aggregate of (i) 14,666,667 14,666,667 0.75 11,000 1.10 2.10 0.75 1,650 As of September 30, 2022, the Company had cash of $ 921 . The Company, through its Professional Employer Organization, filed for federal government assistance for the second and third quarters of 2021 in the aggregate amount of approximately $ 1,500 Prior to September 30, 2022, the U.S. Small Business Administration (“SBA”) approved an additional loan of $ 350 On October 25, 2022, the Company entered into a securities purchase agreement (the “October Purchase Agreement”), which provides for the sale and issuance by the Company of an aggregate of (i) 12,500,000 shares of Common Stock, at a purchase price of $ 0.32 per share, and (ii) warrants to purchase 12,500,000 shares of the common stock at an exercise price of $ 0.34 per share, for aggregate gross proceeds of $ 4,000 before deducting placement agent commissions and other offering expenses (the “October Registered Direct Offering”). As a result of this transaction, certain warrants which previously had an exercise price of $ 0.75 per share, had the exercise price reduced to $ 0.34 per share. Further, in connection with the October Purchase Agreement, the Company is restricted from (i) issuing or filing any registration statement to offer the sale of any Common Stock or securities convertible into or exercisable for shares of Common Stock until 75 days after the date thereof; and (ii) entering into an agreement to effect any issuance of Common Stock involving a Variable Rate Transaction (as defined therein) during the term of the agreement, subject to certain exceptions set forth therein. As a result of this transaction, the Company paid $ 1,172 towards principal and accrued interest on the Notes. The Company and the January Note Holders also agreed to interest only payments with a final principal payment of $ 2,545 due on the maturity date. On November 7, 2022, the Company entered into a note purchase agreement (the “November Note Purchase Agreement”) and promissory note with an institutional investor (the “November Note Holder”) providing for the sale and issuance of an unsecured, non-convertible promissory in the original principal amount of $ 5,470 470 5,000 The November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in part prior to the maturity date for a 10% premium. The November Note requires the Company to use 20% of the gross proceeds raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject to a cap on the aggregate prepayment amount. If the Company is unable to generate sufficient cash flow from operations to operate its business and pay its debt obligations as they become due, it will need to seek to raise additional capital, borrow additional funds, dispose of subsidiaries or assets, reduce or delay capital expenditures, or change its business strategy. However, in light of the restrictive covenants imposed by certain of the Company’s prior financing arrangements, in combination with the recent decline in the trading price of the Common Stock, the Company may be unable to raise additional capital in sufficient amounts when needed to operate its business, service its debt or execute on its strategic plans. Further, notwithstanding such restrictions, there can be no assurance that debt or equity financing will be available in the amounts, on terms, or at times deemed acceptable by the Company. The issuance of additional equity securities would result in significant dilution in the equity interests of the Company’s current stockholders and could include rights or preferences senior to those of the current stockholders. Borrowing additional funds would increase the Company’s liabilities and future cash commitments and potentially impose significant operational or financial restrictions and require the Company to further encumber its assets. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the Company may be unable to continue to operate its business or pay its obligations as they become due, and as a result may be required to curtail or cease operations, which may result in stockholders or noteholders losing some or all of their investment. For additional information, refer to Note 1 to the condensed consolidated financial statements, and the section titled “Risk Factors,” within the 2021 Annual Report. 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. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, and other factors that management believes to be reasonable. In addition, the Company has considered the potential impact of the pandemic, as well as certain macroeconomic factors, including inflation, rising interest rates, and recessionary concerns, on its business and operations. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Some of those assumptions can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) ASC 606, Revenue from Contracts with Customers 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 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 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, collectability is reasonably assured, and the app is delivered to the customer. 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 mobile applications. These fees are accounted for as part of contract liabilities and amortized over the estimated life of the agreement. Revenue is measured as the amount of consideration expected to be received in exchange for transferring the products or services to a customer. 2. Non-digital revenue, which is revenue generated from non-app, non-digital sources through ancillary services provided as an accommodation to clients and customers. These services include design, printing services, fulfillment and shipping services. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. Effective April 1, 2022, the Company entered into a customer referral agreement with a third party for its cart site and printing business. Under the agreement, the Company earns a certain percentage for customer referrals and merchandise sales as well as cart site design fees, all of which will be recognized as non-digital revenue on a net basis. The non-digital 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. 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 condensed consolidated statements of operations. Historically, we have not experienced any significant payment delays from customers. The Company allows returns within 30 days of purchase from end-users. Customers may return purchased products under certain circumstances. Returns from customers during the three and nine months ended September 30, 2022 and 2021 were immaterial. Revenue during the three and nine months ended September 30, 2022 and 2021 were substantially all generated from clients and customers located within the United States of America, though some utilize the Company’s applications outside the United States of America. 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. 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. 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 amortization. Amortization begins once the project has been completed and is ready for its intended use. The Company will amortize 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. Amortization expense related to capitalized software development costs are recorded in depreciation and amortization in the condensed consolidated statements of operations. Goodwill and Intangible Assets Management reviews goodwill and indefinite lived intangible assets for impairment at least annually or whenever events or circumstances indicate a potential impairment. Management reviews all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. As of September 30, 2022, management concluded that there were no impairment indicators. If economic uncertainty increases and/or the global economy worsens, the Company’s business, financial condition and results of operations may be sufficiently impacted to result in future impairment charges in the short-term. Management will continue to monitor the effects that macroeconomic conditions have on its business and operations and will review impairment indicators to the extent necessary in the upcoming months. Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three 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 levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values of financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for 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 condensed 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 condensed consolidated 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, 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 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 or conversion. As of September 30, 2022, and 2021, the Company had total outstanding options of 5,252,119 5,528,405 25,651,407 11,008,302 2,071,849 2,109,999 1,209,610 0 3.00 808,900 742,278 1.03 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 The Company evaluates the concentration of credit risk associated with key customers. During the three months ended September 30, 2022, we had one customer that accounted for 11 10% 10 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 credit worthiness of its customers. As of September 30, 2022 and December 31, 2021, we had no customers that accounted for 10 The Company also evaluates the concentration of risk associated with key vendors. For the three and nine months ended September 30, 2022, we had two vendors that accounted for 54 45 11 16 65 61 17 31 16 20 48 36 42 40 Reclassification Adjustment The Company reclassified $ 2,288 Supplemental Cash Flow Information SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION 2022 2021 Nine Months Ended September 30, 2022 2021 Supplemental disclosures of cash flow information: Cash paid for interest $ 203 $ 112 Cash paid for income taxes 1 1 Supplemental disclosure of non-cash investing and financing activities: Fair value of derivative liability extinguished - 4,513 Fair value of common shares issued to settle accounts payable - 19 Fair value of common shares issued to settle accrued expenses 450 281 Reclassification of Class B Units upon conversion to common stock - 3,065 Fair value of common stock issued to settle notes payable – related party - 200 Fair value of common stock received in exchange for employee’s payroll taxes 8 130 Fair value of common stock issued for future services - 164 Discount recognized from advances on future receipts 900 2,484 Fair value of debt forgiveness - 1,400 Fair value of warrants issued to Series A preferred stockholders – deemed dividend - 348 Fair value of common stock issued to settle lawsuit - 678 Accrued software development costs 291 2,288 Discount recognized from convertible notes payable 300 - Derecognition of operating lease right-of-use assets 543 - Derecognition of operating lease liabilities 521 - Recognition of operating lease right-of-use asset and related lease liability 212 - Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements 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 In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832)—Disclosures by Business Entities about Government Assistance Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Credit Losses – Measurement of Credit Losses on Financial Instruments (“ASC 326”). |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | 9 Months Ended |
Sep. 30, 2022 | |
Research and Development [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | 3. CAPITALIZED SOFTWARE DEVELOPMENT COSTS In 2020, the Company began developing MARKET.live, a livestream ecommerce platform, and has capitalized $ 6,838 4,348 10 5,750 500 524 248 For the three and nine months ended September 30, 2022 and 2021, the Company amortized $ 394 0 394 0 Capitalized software development costs, net consisted of the following: SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS September 30, 2022 December 31, 2021 Beginning balance $ 4,348 $ - Additions 2,490 4,348 Amortization (394 ) - Ending balance $ 6,444 $ 4,348 Option to Acquire Primary Contractor In August 2021, the Company entered into a term sheet that provided the Company the option to purchase the Primary Contractor provided certain conditions are met. In November 2021, the Company exercised this option. The Company and the Primary Contractor subsequently reached an agreement-in-principle on the terms for the Company’s acquisition of the Primary Contractor, the final consummation of which is subject to the execution of a share purchase agreement (the “SPA”) and the completion of an audit of the Primary Contractor that is satisfactory to the Company (the “Primary Contractor Audit”), as well as the fulfillment by the Primary Contractor of certain other conditions set forth in the term sheet. The term sheet stipulates that if the Company had entered into the SPA and the Primary Contractor had the Primary Contractor Audit successfully completed prior to May 15, 2022 (or a subsequent mutually agreed upon date) and the Company thereafter determines not to consummate the acquisition of the Primary Contractor, the Company would have been liable for a $ 1,000 the purchase price for the Primary Contractor would be $12,000, which can be paid in cash and/or stock, although the final terms of the acquisition will be set forth in the SPA. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 4. INTANGIBLE ASSETS Intangible assets, net consisted of the following: SCHEDULE OF INTANGIBLE ASSETS September 30, 2022 December 31, 2021 Amortizable finite-lived intangible assets $ 7,399 $ 7,317 Accumulated amortization (4,875 ) (3,806 ) Finite-lived intangible assets, net 2,524 3,511 Indefinite-lived intangible assets 442 442 Intangible assets, net $ 2,966 $ 3,953 Amortizable finite-lived intangible assets are being amortized over a period of three five years no 352 355 1,069 1,080 The expected future amortization expense for amortizable finite-lived intangible assets as of September 30, 2022, is as follows: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Year ending Amortization 2022 remaining $ 354 2023 1,386 2024 573 2025 211 Total amortization $ 2,524 |
OPERATING LEASES
OPERATING LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Operating Leases | |
OPERATING LEASES | 5. OPERATING LEASES On January 3, 2022, the Company terminated the lease agreements relating to our office and warehouse leases in American Fork, Utah. In accordance with ASC 842, the Company derecognized the right-of-use assets of $ 543 521 22 On April 26, 2022, the Company entered into an office space sub-lease agreement. The agreement requires us to pay $ 12 212 The components of lease expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF LEASE COST 2022 2021 Nine Months Ended September 30, 2022 2021 Lease cost Operating lease cost (included in general and administrative expenses in the Company’s condensed consolidated statements of operations) $ 373 $ 524 Other information Cash paid for amounts included in the measurement of lease liabilities $ 458 $ 593 Weighted average remaining lease term – operating leases (in years) 3.99 4.15 Weighted average discount rate – operating leases 4.2 % 4.0 % SCHEDULE OF OPERATING LEASES September 30, 2022 December 31, 2021 Operating leases Right-of-use assets $ 1,624 $ 2,177 Short-term operating lease liabilities $ 481 $ 592 Long-term operating lease liabilities 1,705 2,299 Total operating lease liabilities $ 2,186 $ 2,891 SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES Year ending Operating Leases 2022 remaining $ 150 2023 583 2024 472 2025 484 2026 and thereafter 705 Total lease payments 2,394 Less: Imputed interest/present value discount (208 ) Present value of lease liabilities $ 2,186 |
ADVANCES ON FUTURE RECEIPTS
ADVANCES ON FUTURE RECEIPTS | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
ADVANCES ON FUTURE RECEIPTS | 6. ADVANCES ON FUTURE RECEIPTS The Company has the following advances on future receipts as of September 30, 2022 and December 31, 2021: SCHEDULE OF ADVANCES ON FUTURE RECEIPTS Note Issuance Maturity Interest Original Borrowing Balance as of September 30, Balance as of December 31, 2021 Note 1 October 29, 2021 April 28, 2022 5 % $ 2,120 $ - $ 1,299 Note 2 October 29, 2021 July 25, 2022 28 % 3,808 - 2,993 Note 3 December 23, 2021 June 22, 2022 5 % 689 - 689 Note 4 August 25, 2022 May 11, 2023 26 % 3,400 2,971 - Total $ 10,017 2,971 4,981 Debt discount (697 ) (800 ) Debt issuance costs (77 ) - Net $ 2,197 $ 4,181 Note 1 On October 29, 2021, the Company received secured advances from an unaffiliated third party totaling $ 2,015 2,120 1,270 41 0 0 Note 2 On October 29, 2021, the Company received secured advances from an unaffiliated third party totaling $ 2,744 3,808 2,993 694 0 0 Note 3 On December 23, 2021, the Company received secured advances from an unaffiliated third party totaling $ 651 689 689 36 0 0 Note 4 On August 25, 2022, the Company received secured advances from an unaffiliated third party totaling $ 2,500 3,400 100 429 203 23 2,971 697 77 |
CONVERTIBLE NOTES PAYABLE AND N
CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable And Notes Payable | |
CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE | 7. CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE The Company has the following outstanding notes payable as of September 30, 2022 and December 31, 2021: SCHEDULE OF NOTES PAYABLE RELATED PARTIES Note Issuance Maturity Date Interest Original Borrowing Balance as of September 30, 2022 Balance as of December 31, 2021 Related party convertible note payable (A) December 1, 2015 April 1, 2023 12.0 % $ 1,249 $ 725 $ 725 Related party convertible note payable (B) April 4, 2016 June 4, 2021 12.0 % 343 40 40 Note payable (C) May 15, 2020 May 15, 2050 3.75 % 150 150 150 Convertible Notes Due 2023 (D) January 12, 2022 January 12, 2023 6.0 % $ 6,300 3,560 - Debt discount (61 ) - Debt issuance costs (93 ) - Total notes payable 4,321 915 Non-current (150 ) (875 ) Current $ 4,171 $ 40 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 19, 2021, the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $ 1.03 April 1, 2023 725 (B) On April 4, 2016, the Company issued a convertible note payable to Mr. Cutaia, in the amount of $ 343 1.03 40 (C) On May 15, 2020, the Company executed an unsecured loan with the SBA under the Economic Injury Disaster Loan program in the amount of $ 150 . Installment payments, including principal and interest, began on October 26, 2022. Prior to September 30, 2022, the SBA approved an additional loan of $ 350 150 , respectively. (D) On January 12, 2022, the Company entered into the January Note Offering, which provided for the sale and issuance of an aggregate original principal amount of $ 6,300 The Company received $ 6,000 6.0 5.0 3.00 In connection with the January Note Offering, the Company paid $ 460 300 239 367 61 93 As of September 30, 2022, and December 31, 2021, the outstanding balance of the Notes amounted to $ 3,560 0 2,740 On October 28, 2022, the Company paid $ 1,172 2,545 The following table provides a breakdown of interest expense for the periods presented: SCHEDULE OF INTEREST EXPENSE 2022 2021 Three Months Ended September 30, 2022 2021 Interest expense – amortization of debt discount $ 306 $ 497 Interest expense – amortization of debt issuance costs 126 - Interest expense – other 118 28 Total interest expense $ 550 $ 525 Total interest expense for notes payable to related parties (see Notes A and B above) was $ 23 27 0 78 The following table provides a breakdown of interest expense for the periods presented: 2022 2021 Nine Months Ended September 30, 2022 2021 Interest expense – amortization of debt discount $ 1,214 $ 1,537 Interest expense – amortization of debt issuance costs 390 - Interest expense – other 344 92 Total interest expense $ 1,948 $ 1,629 Total interest expense for notes payable to related parties (see Notes A and B above) was $ 69 88 0 112 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | 8. DERIVATIVE LIABILITY In prior years, the Company granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the fundamental transaction clause of these warrants 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 Company’s condensed consolidated statements of operations. The derivative liabilities were valued using a Binomial pricing model with the following assumptions: SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS September 30, 2022 December 31, 2021 Stock Price $ 0.47 $ 1.24 Exercise Price $ 0.75 $ 1.11 Expected Life 2.23 2.97 Volatility 101 % 119 % Dividend Yield 0 % 0 % Risk-Free Interest Rate 4.23 % 0.97 % Total Fair Value $ 795 $ 3,155 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 nine months ended September 30, 2022, the Company recorded a gain of $ 2,360 During the nine months ended September 30, 2021, the Company recorded expense of $ 2,086 1,829,190 33,334 4,513 The details of derivative liability transactions for the nine months ended September 30, 2022 and 2021 are as follows: SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS 2022 2021 Nine Months Ended September 30, 2022 2021 Beginning balance $ 3,155 $ 8,266 Change in fair value (2,360 ) 2,086 Extinguishment - (4,513 ) Ending balance $ 795 $ 5,839 |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
COMMON STOCK | 9. COMMON STOCK The Company’s common stock activity for the nine months ended September 30, 2022, was as follows: During the nine months ended September 30, 2022, the Company issued 14,666,667 10,242 758 During the nine months ended September 30, 2022, the Company issued 11,096,683 9,836 197 607,287 During the nine months ended September 30, 2022, the Company issued 1,813,251 1,461 During the nine months ended September 30, 2022, the Company issued 189,394 100 During the nine months ended September 30, 2022, the Company issued 227,136 277 During the nine months ended September 30, 2022, the Company issued 587,347 |
RESTRICTED STOCK UNITS
RESTRICTED STOCK UNITS | 9 Months Ended |
Sep. 30, 2022 | |
Restricted Stock Units | |
RESTRICTED STOCK UNITS | 10. RESTRICTED STOCK UNITS A summary of restricted stock unit activity for the nine months ended September 30, 2022, is presented below. SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY Weighted- Average Grant Date Shares Fair Value Non-vested as of January 1, 2022 1,821,833 $ 1.41 Granted 1,334,270 1.17 Vested/deemed vested (587,347 ) 1.54 Forfeitures and other (496,907 ) 1.33 Non-vested as of September 30, 2022 2,071,849 $ 1.24 During the nine months ended September 30, 2022, the Company granted 1,334,270 The restricted stock units vest on various dates from January 2023 through March 2026 1,561 The total fair value of restricted stock units that vested during the three and nine months ended September 30, 2022, was $ 311 876 1,741 |
STOCK OPTIONS
STOCK OPTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS | 11. STOCK OPTIONS A summary of option activity for the nine months ended September 30, 2022, is presented below. SCHEDULE OF STOCK OPTION ACTIVITY Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding as of January 1, 2022 5,404,223 $ 1.72 2.24 $ 107 Granted 2,741,555 1.06 - - Forfeited (2,560,929 ) 1.70 - - Exercised (332,730 ) 1.13 - - Outstanding as of September 30, 2022 5,252,119 $ 1.55 2.00 $ 19 Vested as of September 30, 2022 2,707,084 $ 1.81 $ - Exercisable as of September 30, 2022 1,686,439 $ 2.22 $ - As of September 30, 2022, the intrinsic value of the outstanding options was $ 19 During the nine months ended September 30, 2022, the Company granted stock options to certain employees and consultants to purchase a total of 2,741,555 1.06 2,622 387 1,292 2,793 During the nine months ended September 30, 2022, a total of 332,730 332,730 377 The grant date fair value of option awards is estimated using the Black-Scholes option pricing model based on the following assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD Nine Months Ended September 30, 2022 2021 Risk-free interest rate 1.24 3.37 % 0.10 0.92 % Average expected term 5 5 Expected volatility 143.6 149.5 % 232.8 240.0 % Expected dividend yield - - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that option awards 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 | 9 Months Ended |
Sep. 30, 2022 | |
Stock Warrants | |
STOCK WARRANTS | 12. STOCK WARRANTS The Company has the following warrants outstanding as of September 30, 2022: SCHEDULE OF WARRANTS OUTSTANDING Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of January 1, 2022, all vested 10,984,740 $ 2.67 2.38 $ 507 Granted, unvested as of September 30, 2022 14,666,667 0.75 5.07 - Forfeited - - - - Exercised - - - - Outstanding as of September 30, 2022 25,651,407 $ 1.52 3.52 $ - In connection with the April Registered Direct Offering on April 20, 2022, the Company issued 14,666,667 0.75 3,704,826 1.10 2.10 0.75 200 0.75 0.34 0 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 13. 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 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 c. Dispute with Warrant Holder The Company is currently in a dispute with Iroquois Capital Investment Group LLC and Iroquois Master Fund, Ltd (collectively, “Iroquois”) relating to a securities purchase agreement (the “SPA”) entered between the Company, Iroquois and certain other investors. The Company filed a complaint in the Supreme Court of New York for the County of New York on April 6, 2022, styled Verb Technology Company, Inc. v. Iroquois Capital Investment Group LLC, et al 1,500 From time to time, the Company is involved in various other legal proceedings, disputes or claims arising from or related to the normal course of its business activities. Although the results of legal proceedings, disputes and other claims cannot be predicted with certainty, the Company believes it is not currently a party to any other legal proceedings, disputes or claims which, if determined adversely to the Company, would, individually or taken together, have a material adverse effect on the Company’s business, operating results, financial condition or cash flows. However, regardless of the merit of the claims raised or the outcome, legal proceedings may have an adverse impact on the Company as a result of defense and settlement costs, diversion of management time and resources, and other factors. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company has evaluated subsequent events through November 14, 2022, the date these condensed consolidated financial statements were issued. There were no material events or transactions that require disclosure in the financial statements other than the items discussed below. Equity Financing Subsequent to September 30, 2022, the Company issued 867,741 302 On October 25, 2022, the Company entered into the October Purchase Agreement, which provides for the sale and issuance by the Company of an aggregate of (i) 12,500,000 0.32 12,500,000 0.34 4,000 0.75 0.34 In addition, the Company paid $ 1,172 2,545 Debt Financing Subsequent to September 30, 2022, the Company received secured advances from an unaffiliated third party totaling $ 225 322 11 On November 7, 2022, the Company entered into the November Note Purchase Agreement with the November Note Holder providing for the sale and issuance of an unsecured, non-convertible promissory note in the original principal amount of $ 5,470 470 5,000 The November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in part prior to the maturity date for a 10% premium. The November Note requires the Company to use 20% of the gross proceeds raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject to a cap on the aggregate prepayment amount. Issuance of Common Stock Subsequent to September 30, 2022, the Company issued 187,523 shares of common stock to vendors for services rendered with a grant date fair value of $ 64 . These shares of common stock were valued based on the closing price of the Company’s common stock on the date of issuance or the date the Company entered into the agreement related to the issuance. Subsequent to September 30, 2022, the Company issued 6,185 Issuances of Stock Options Subsequent to September 30, 2022, the Company granted stock options to certain employees to purchase a total of 32,000 stock options for services to be rendered. The options have an average exercise price of $ 0.38 per share, expire in five years , and vest four years from grant date. The total grant date fair value of these options was $ 8 based on the Black-Scholes option pricing model. Other On November 9, 2022, the Company received a written notification from the Nasdaq Stock Market Listing Qualifications Staff (the “Staff”) indicating that the Company has been granted an additional 180-calendar-day period, or until May 8, 2023, to regain compliance with the $ 1.00 Nasdaq’s determination was based on (i) the Company having met the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the sole exception of the Minimum Bid Price Requirement, and (ii) the Company’s written notice to Nasdaq of its intention to cure the deficiency during the compliance period, including by potentially effecting a reverse stock split if necessary. If, at any time during this additional compliance period, the closing bid price of the Common Stock is at least $ 1.00 The Company will monitor the closing bid price of its Common Stock and will consider various options to regain compliance with the Minimum Bid Price Requirement before May 8, 2023. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 31, 2022 (the “2021 Annual Report”). The consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements have been prepared in accordance with 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. |
Going Concern | Going Concern The accompanying condensed 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 condensed consolidated financial statements, during the nine months ended September 30, 2022, the Company incurred a net loss of $ 21,391 15,975 On January 12, 2022, the Company entered into a common stock purchase agreement (the “January 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 0.0001 607,287 On January 12, 2022, the Company also entered into a securities purchase agreement (the “January Note Purchase Agreement”) with three institutional investors (collectively, the “January Note Holders”) providing for the sale and issuance of an aggregate original principal amount of $ 6,300 The January Note Purchase Agreement also gives the January Note Holders the right to require the Company to use up to 15% of the gross proceeds raised from future debt or equity financings to redeem the Notes, which redemptions have been elected by the January Note Holders as described below. On April 20, 2022, the Company entered into a securities purchase agreement, which provides for the sale and issuance by the Company of an aggregate of (i) 14,666,667 14,666,667 0.75 11,000 1.10 2.10 0.75 1,650 As of September 30, 2022, the Company had cash of $ 921 . The Company, through its Professional Employer Organization, filed for federal government assistance for the second and third quarters of 2021 in the aggregate amount of approximately $ 1,500 Prior to September 30, 2022, the U.S. Small Business Administration (“SBA”) approved an additional loan of $ 350 On October 25, 2022, the Company entered into a securities purchase agreement (the “October Purchase Agreement”), which provides for the sale and issuance by the Company of an aggregate of (i) 12,500,000 shares of Common Stock, at a purchase price of $ 0.32 per share, and (ii) warrants to purchase 12,500,000 shares of the common stock at an exercise price of $ 0.34 per share, for aggregate gross proceeds of $ 4,000 before deducting placement agent commissions and other offering expenses (the “October Registered Direct Offering”). As a result of this transaction, certain warrants which previously had an exercise price of $ 0.75 per share, had the exercise price reduced to $ 0.34 per share. Further, in connection with the October Purchase Agreement, the Company is restricted from (i) issuing or filing any registration statement to offer the sale of any Common Stock or securities convertible into or exercisable for shares of Common Stock until 75 days after the date thereof; and (ii) entering into an agreement to effect any issuance of Common Stock involving a Variable Rate Transaction (as defined therein) during the term of the agreement, subject to certain exceptions set forth therein. As a result of this transaction, the Company paid $ 1,172 towards principal and accrued interest on the Notes. The Company and the January Note Holders also agreed to interest only payments with a final principal payment of $ 2,545 due on the maturity date. On November 7, 2022, the Company entered into a note purchase agreement (the “November Note Purchase Agreement”) and promissory note with an institutional investor (the “November Note Holder”) providing for the sale and issuance of an unsecured, non-convertible promissory in the original principal amount of $ 5,470 470 5,000 The November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in part prior to the maturity date for a 10% premium. The November Note requires the Company to use 20% of the gross proceeds raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject to a cap on the aggregate prepayment amount. If the Company is unable to generate sufficient cash flow from operations to operate its business and pay its debt obligations as they become due, it will need to seek to raise additional capital, borrow additional funds, dispose of subsidiaries or assets, reduce or delay capital expenditures, or change its business strategy. However, in light of the restrictive covenants imposed by certain of the Company’s prior financing arrangements, in combination with the recent decline in the trading price of the Common Stock, the Company may be unable to raise additional capital in sufficient amounts when needed to operate its business, service its debt or execute on its strategic plans. Further, notwithstanding such restrictions, there can be no assurance that debt or equity financing will be available in the amounts, on terms, or at times deemed acceptable by the Company. The issuance of additional equity securities would result in significant dilution in the equity interests of the Company’s current stockholders and could include rights or preferences senior to those of the current stockholders. Borrowing additional funds would increase the Company’s liabilities and future cash commitments and potentially impose significant operational or financial restrictions and require the Company to further encumber its assets. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, the Company may be unable to continue to operate its business or pay its obligations as they become due, and as a result may be required to curtail or cease operations, which may result in stockholders or noteholders losing some or all of their investment. For additional information, refer to Note 1 to the condensed consolidated financial statements, and the section titled “Risk Factors,” within the 2021 Annual Report. |
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. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, and other factors that management believes to be reasonable. In addition, the Company has considered the potential impact of the pandemic, as well as certain macroeconomic factors, including inflation, rising interest rates, and recessionary concerns, on its business and operations. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Some of those assumptions can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) ASC 606, Revenue from Contracts with Customers 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 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 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, collectability is reasonably assured, and the app is delivered to the customer. 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 mobile applications. These fees are accounted for as part of contract liabilities and amortized over the estimated life of the agreement. Revenue is measured as the amount of consideration expected to be received in exchange for transferring the products or services to a customer. 2. Non-digital revenue, which is revenue generated from non-app, non-digital sources through ancillary services provided as an accommodation to clients and customers. These services include design, printing services, fulfillment and shipping services. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. Effective April 1, 2022, the Company entered into a customer referral agreement with a third party for its cart site and printing business. Under the agreement, the Company earns a certain percentage for customer referrals and merchandise sales as well as cart site design fees, all of which will be recognized as non-digital revenue on a net basis. The non-digital 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. 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 condensed consolidated statements of operations. Historically, we have not experienced any significant payment delays from customers. The Company allows returns within 30 days of purchase from end-users. Customers may return purchased products under certain circumstances. Returns from customers during the three and nine months ended September 30, 2022 and 2021 were immaterial. Revenue during the three and nine months ended September 30, 2022 and 2021 were substantially all generated from clients and customers located within the United States of America, though some utilize the Company’s applications outside the United States of America. |
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. |
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. |
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 amortization. Amortization begins once the project has been completed and is ready for its intended use. The Company will amortize 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. Amortization expense related to capitalized software development costs are recorded in depreciation and amortization in the condensed consolidated statements of operations. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Management reviews goodwill and indefinite lived intangible assets for impairment at least annually or whenever events or circumstances indicate a potential impairment. Management reviews all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. As of September 30, 2022, management concluded that there were no impairment indicators. If economic uncertainty increases and/or the global economy worsens, the Company’s business, financial condition and results of operations may be sufficiently impacted to result in future impairment charges in the short-term. Management will continue to monitor the effects that macroeconomic conditions have on its business and operations and will review impairment indicators to the extent necessary in the upcoming months. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three 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 levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values of financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for derivative financial instruments. |
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 condensed 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 condensed consolidated 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, 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 |
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 or conversion. As of September 30, 2022, and 2021, the Company had total outstanding options of 5,252,119 5,528,405 25,651,407 11,008,302 2,071,849 2,109,999 1,209,610 0 3.00 808,900 742,278 1.03 |
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 The Company evaluates the concentration of credit risk associated with key customers. During the three months ended September 30, 2022, we had one customer that accounted for 11 10% 10 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 credit worthiness of its customers. As of September 30, 2022 and December 31, 2021, we had no customers that accounted for 10 The Company also evaluates the concentration of risk associated with key vendors. For the three and nine months ended September 30, 2022, we had two vendors that accounted for 54 45 11 16 65 61 17 31 16 20 48 36 42 40 |
Reclassification Adjustment | Reclassification Adjustment The Company reclassified $ 2,288 Supplemental Cash Flow Information SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION 2022 2021 Nine Months Ended September 30, 2022 2021 Supplemental disclosures of cash flow information: Cash paid for interest $ 203 $ 112 Cash paid for income taxes 1 1 Supplemental disclosure of non-cash investing and financing activities: Fair value of derivative liability extinguished - 4,513 Fair value of common shares issued to settle accounts payable - 19 Fair value of common shares issued to settle accrued expenses 450 281 Reclassification of Class B Units upon conversion to common stock - 3,065 Fair value of common stock issued to settle notes payable – related party - 200 Fair value of common stock received in exchange for employee’s payroll taxes 8 130 Fair value of common stock issued for future services - 164 Discount recognized from advances on future receipts 900 2,484 Fair value of debt forgiveness - 1,400 Fair value of warrants issued to Series A preferred stockholders – deemed dividend - 348 Fair value of common stock issued to settle lawsuit - 678 Accrued software development costs 291 2,288 Discount recognized from convertible notes payable 300 - Derecognition of operating lease right-of-use assets 543 - Derecognition of operating lease liabilities 521 - Recognition of operating lease right-of-use asset and related lease liability 212 - |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements 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 In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832)—Disclosures by Business Entities about Government Assistance Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Credit Losses – Measurement of Credit Losses on Financial Instruments (“ASC 326”). |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION | Supplemental Cash Flow Information SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION 2022 2021 Nine Months Ended September 30, 2022 2021 Supplemental disclosures of cash flow information: Cash paid for interest $ 203 $ 112 Cash paid for income taxes 1 1 Supplemental disclosure of non-cash investing and financing activities: Fair value of derivative liability extinguished - 4,513 Fair value of common shares issued to settle accounts payable - 19 Fair value of common shares issued to settle accrued expenses 450 281 Reclassification of Class B Units upon conversion to common stock - 3,065 Fair value of common stock issued to settle notes payable – related party - 200 Fair value of common stock received in exchange for employee’s payroll taxes 8 130 Fair value of common stock issued for future services - 164 Discount recognized from advances on future receipts 900 2,484 Fair value of debt forgiveness - 1,400 Fair value of warrants issued to Series A preferred stockholders – deemed dividend - 348 Fair value of common stock issued to settle lawsuit - 678 Accrued software development costs 291 2,288 Discount recognized from convertible notes payable 300 - Derecognition of operating lease right-of-use assets 543 - Derecognition of operating lease liabilities 521 - Recognition of operating lease right-of-use asset and related lease liability 212 - |
CAPITALIZED SOFTWARE DEVELOPM_2
CAPITALIZED SOFTWARE DEVELOPMENT COSTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Research and Development [Abstract] | |
SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS | Capitalized software development costs, net consisted of the following: SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS September 30, 2022 December 31, 2021 Beginning balance $ 4,348 $ - Additions 2,490 4,348 Amortization (394 ) - Ending balance $ 6,444 $ 4,348 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets, net consisted of the following: SCHEDULE OF INTANGIBLE ASSETS September 30, 2022 December 31, 2021 Amortizable finite-lived intangible assets $ 7,399 $ 7,317 Accumulated amortization (4,875 ) (3,806 ) Finite-lived intangible assets, net 2,524 3,511 Indefinite-lived intangible assets 442 442 Intangible assets, net $ 2,966 $ 3,953 |
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE | The expected future amortization expense for amortizable finite-lived intangible assets as of September 30, 2022, is as follows: SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE Year ending Amortization 2022 remaining $ 354 2023 1,386 2024 573 2025 211 Total amortization $ 2,524 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 2021 Nine Months Ended September 30, 2022 2021 Lease cost Operating lease cost (included in general and administrative expenses in the Company’s condensed consolidated statements of operations) $ 373 $ 524 Other information Cash paid for amounts included in the measurement of lease liabilities $ 458 $ 593 Weighted average remaining lease term – operating leases (in years) 3.99 4.15 Weighted average discount rate – operating leases 4.2 % 4.0 % |
SCHEDULE OF OPERATING LEASES | SCHEDULE OF OPERATING LEASES September 30, 2022 December 31, 2021 Operating leases Right-of-use assets $ 1,624 $ 2,177 Short-term operating lease liabilities $ 481 $ 592 Long-term operating lease liabilities 1,705 2,299 Total operating lease liabilities $ 2,186 $ 2,891 |
SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES | SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES Year ending Operating Leases 2022 remaining $ 150 2023 583 2024 472 2025 484 2026 and thereafter 705 Total lease payments 2,394 Less: Imputed interest/present value discount (208 ) Present value of lease liabilities $ 2,186 |
ADVANCES ON FUTURE RECEIPTS (Ta
ADVANCES ON FUTURE RECEIPTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF ADVANCES ON FUTURE RECEIPTS | The Company has the following advances on future receipts as of September 30, 2022 and December 31, 2021: SCHEDULE OF ADVANCES ON FUTURE RECEIPTS Note Issuance Maturity Interest Original Borrowing Balance as of September 30, Balance as of December 31, 2021 Note 1 October 29, 2021 April 28, 2022 5 % $ 2,120 $ - $ 1,299 Note 2 October 29, 2021 July 25, 2022 28 % 3,808 - 2,993 Note 3 December 23, 2021 June 22, 2022 5 % 689 - 689 Note 4 August 25, 2022 May 11, 2023 26 % 3,400 2,971 - Total $ 10,017 2,971 4,981 Debt discount (697 ) (800 ) Debt issuance costs (77 ) - Net $ 2,197 $ 4,181 |
CONVERTIBLE NOTES PAYABLE AND_2
CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable And Notes Payable | |
SCHEDULE OF NOTES PAYABLE RELATED PARTIES | The Company has the following outstanding notes payable as of September 30, 2022 and December 31, 2021: SCHEDULE OF NOTES PAYABLE RELATED PARTIES Note Issuance Maturity Date Interest Original Borrowing Balance as of September 30, 2022 Balance as of December 31, 2021 Related party convertible note payable (A) December 1, 2015 April 1, 2023 12.0 % $ 1,249 $ 725 $ 725 Related party convertible note payable (B) April 4, 2016 June 4, 2021 12.0 % 343 40 40 Note payable (C) May 15, 2020 May 15, 2050 3.75 % 150 150 150 Convertible Notes Due 2023 (D) January 12, 2022 January 12, 2023 6.0 % $ 6,300 3,560 - Debt discount (61 ) - Debt issuance costs (93 ) - Total notes payable 4,321 915 Non-current (150 ) (875 ) Current $ 4,171 $ 40 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 19, 2021, the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $ 1.03 April 1, 2023 725 (B) On April 4, 2016, the Company issued a convertible note payable to Mr. Cutaia, in the amount of $ 343 1.03 40 (C) On May 15, 2020, the Company executed an unsecured loan with the SBA under the Economic Injury Disaster Loan program in the amount of $ 150 . Installment payments, including principal and interest, began on October 26, 2022. Prior to September 30, 2022, the SBA approved an additional loan of $ 350 150 , respectively. (D) On January 12, 2022, the Company entered into the January Note Offering, which provided for the sale and issuance of an aggregate original principal amount of $ 6,300 The Company received $ 6,000 6.0 5.0 3.00 In connection with the January Note Offering, the Company paid $ 460 300 239 367 61 93 As of September 30, 2022, and December 31, 2021, the outstanding balance of the Notes amounted to $ 3,560 0 2,740 On October 28, 2022, the Company paid $ 1,172 2,545 |
SCHEDULE OF INTEREST EXPENSE | The following table provides a breakdown of interest expense for the periods presented: SCHEDULE OF INTEREST EXPENSE 2022 2021 Three Months Ended September 30, 2022 2021 Interest expense – amortization of debt discount $ 306 $ 497 Interest expense – amortization of debt issuance costs 126 - Interest expense – other 118 28 Total interest expense $ 550 $ 525 Total interest expense for notes payable to related parties (see Notes A and B above) was $ 23 27 0 78 The following table provides a breakdown of interest expense for the periods presented: 2022 2021 Nine Months Ended September 30, 2022 2021 Interest expense – amortization of debt discount $ 1,214 $ 1,537 Interest expense – amortization of debt issuance costs 390 - Interest expense – other 344 92 Total interest expense $ 1,948 $ 1,629 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 assumptions: SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS September 30, 2022 December 31, 2021 Stock Price $ 0.47 $ 1.24 Exercise Price $ 0.75 $ 1.11 Expected Life 2.23 2.97 Volatility 101 % 119 % Dividend Yield 0 % 0 % Risk-Free Interest Rate 4.23 % 0.97 % Total Fair Value $ 795 $ 3,155 |
SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS | The details of derivative liability transactions for the nine months ended September 30, 2022 and 2021 are as follows: SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS 2022 2021 Nine Months Ended September 30, 2022 2021 Beginning balance $ 3,155 $ 8,266 Change in fair value (2,360 ) 2,086 Extinguishment - (4,513 ) Ending balance $ 795 $ 5,839 |
RESTRICTED STOCK UNITS (Tables)
RESTRICTED STOCK UNITS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restricted Stock Units | |
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY | A summary of restricted stock unit activity for the nine months ended September 30, 2022, is presented below. SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY Weighted- Average Grant Date Shares Fair Value Non-vested as of January 1, 2022 1,821,833 $ 1.41 Granted 1,334,270 1.17 Vested/deemed vested (587,347 ) 1.54 Forfeitures and other (496,907 ) 1.33 Non-vested as of September 30, 2022 2,071,849 $ 1.24 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of option activity for the nine months ended September 30, 2022, is presented below. SCHEDULE OF STOCK OPTION ACTIVITY Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding as of January 1, 2022 5,404,223 $ 1.72 2.24 $ 107 Granted 2,741,555 1.06 - - Forfeited (2,560,929 ) 1.70 - - Exercised (332,730 ) 1.13 - - Outstanding as of September 30, 2022 5,252,119 $ 1.55 2.00 $ 19 Vested as of September 30, 2022 2,707,084 $ 1.81 $ - Exercisable as of September 30, 2022 1,686,439 $ 2.22 $ - |
SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD | The grant date fair value of option awards is estimated using the Black-Scholes option pricing model based on the following assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD Nine Months Ended September 30, 2022 2021 Risk-free interest rate 1.24 3.37 % 0.10 0.92 % Average expected term 5 5 Expected volatility 143.6 149.5 % 232.8 240.0 % Expected dividend yield - - |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock Warrants | |
SCHEDULE OF WARRANTS OUTSTANDING | The Company has the following warrants outstanding as of September 30, 2022: SCHEDULE OF WARRANTS OUTSTANDING Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of January 1, 2022, all vested 10,984,740 $ 2.67 2.38 $ 507 Granted, unvested as of September 30, 2022 14,666,667 0.75 5.07 - Forfeited - - - - Exercised - - - - Outstanding as of September 30, 2022 25,651,407 $ 1.52 3.52 $ - |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 203 | $ 112 |
Cash paid for income taxes | 1 | 1 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Fair value of derivative liability extinguished | 4,513 | |
Fair value of common shares issued to settle accounts payable | 19 | |
Fair value of common shares issued to settle accrued expenses | 450 | 281 |
Reclassification of Class B Units upon conversion to common stock | 3,065 | |
Fair value of common stock issued to settle notes payable – related party | 200 | |
Fair value of common stock received in exchange for employee’s payroll taxes | 8 | 130 |
Fair value of common stock issued for future services | 164 | |
Discount recognized from advances on future receipts | 900 | 2,484 |
Fair value of debt forgiveness | 1,400 | |
Fair value of warrants issued to Series A preferred stockholders – deemed dividend | 348 | |
Fair value of common stock issued to settle lawsuit | 678 | |
Accrued software development costs | 291 | 2,288 |
Discount recognized from convertible notes payable | 300 | |
Derecognition of operating lease right-of-use assets | 543 | |
Derecognition of operating lease liabilities | 521 | |
Recognition of operating lease right-of-use asset and related lease liability | $ 212 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 07, 2022 | Oct. 25, 2022 | Apr. 20, 2022 | Jan. 12, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Sep. 29, 2022 | |
Product Information [Line Items] | |||||||||||
Net loss | $ 8,028,000 | $ 8,805,000 | $ 21,391,000 | $ 28,962,000 | |||||||
Net cash used in operating activities | $ 15,975,000 | 20,511,000 | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Repayments of Debt | $ 5,381,000 | $ 7,162,000 | |||||||||
Cash and Cash Equivalents, at Carrying Value | $ 921,000 | 921,000 | $ 937,000 | ||||||||
Employee Retention Credit provisions | $ 1,500 | $ 1,500 | |||||||||
FDIC Insured Amount | $ 250,000 | 250,000 | |||||||||
Reclassification of cash | $ 2,288,000 | ||||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 11% | ||||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | No Customer [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 10% | 10% | 10% | ||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | No Customer [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 10% | 10% | |||||||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor One [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 54% | 17% | 45% | 31% | |||||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor Two [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 11% | 16% | 16% | 20% | |||||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | One Vendor [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 42% | 40% | |||||||||
Purchase [Member] | Supplier Concentration Risk [Member] | Two Vendors [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk, percentage | 65% | 48% | 61% | 36% | |||||||
Share-Based Payment Arrangement, Option [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Antidilutive securities | 5,252,119 | 5,528,405 | |||||||||
Warrant [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Antidilutive securities | 25,651,407 | 11,008,302 | |||||||||
Restricted Stock [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Antidilutive securities | 2,071,849 | 2,109,999 | |||||||||
Convertible Notes Due 2023 [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Debt converted instrument, amount | $ 1,209,610 | $ 0 | |||||||||
Debt converted instrument, price per share | $ 3 | $ 3 | $ 3 | $ 3 | |||||||
Subsequent Event [Member] | Convertible Notes Due 2023 [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Debt Instrument, Periodic Payment | $ 1,172,000 | ||||||||||
Debt Instrument, Periodic Payment, Principal | $ 2,545,000 | ||||||||||
Related Party [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Debt converted instrument, amount | $ 808,900 | $ 742,278 | |||||||||
Debt converted instrument, price per share | $ 1.03 | $ 1.03 | $ 1.03 | $ 1.03 | |||||||
U.S. Small Business Administration [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Loan payable | $ 350,000 | ||||||||||
Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Common stock, par value | $ 0.0001 | ||||||||||
Shares issued, shares | 607,287 | ||||||||||
Common Stock Purchase Agreement [Member] | Tumim Stone Capital LLC [Member] | Maximum [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Shares issued, value | $ 50,000,000 | ||||||||||
January Note Purchase Agreement [Member] | Three Institutional Investors [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Debt original principal amount | $ 6,300,000 | ||||||||||
Securities Purchase Agreement [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Shares issued, shares | 14,666,667 | ||||||||||
Warrants purchase | 14,666,667 | ||||||||||
Warrant exercise price per share | $ 0.75 | ||||||||||
Proceeds from issuance of warrants | $ 11,000,000 | ||||||||||
Repayments of Debt | $ 1,650,000 | ||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Shares issued, shares | 12,500,000 | ||||||||||
Warrants purchase | 12,500,000 | ||||||||||
Warrant exercise price per share | $ 0.75 | ||||||||||
Proceeds from issuance of warrants | $ 4,000,000 | ||||||||||
Increase decrease warrant exercise price per share | $ 0.34 | ||||||||||
Share Price | $ 0.32 | ||||||||||
Securities Purchase Agreement [Member] | Series A Warrants [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Increase decrease warrant exercise price per share | $ 0.75 | ||||||||||
Securities Purchase Agreement [Member] | Maximum [Member] | Series A Warrants [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Warrant exercise price per share | 2.10 | ||||||||||
Securities Purchase Agreement [Member] | Minimum [Member] | Series A Warrants [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Warrant exercise price per share | $ 1.10 | ||||||||||
November Note Purchase Agreement [Member] | Subsequent Event [Member] | November Note Holder [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Debt original principal amount | $ 5,470 | ||||||||||
Original issue discount | 470 | ||||||||||
Debt gross proceeds | $ 5,000 | ||||||||||
Debt instrument, description | The November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in part prior to the maturity date for a 10% premium. The November Note requires the Company to use 20% of the gross proceeds raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject to a cap on the aggregate prepayment amount. |
SCHEDULE OF CAPITALIZED SOFTWAR
SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Research and Development [Abstract] | ||
Beginning balance | $ 4,348 | |
Additions | 2,490 | 4,348 |
Amortization | (394) | |
Ending balance | $ 6,444 | $ 4,348 |
CAPITALIZED SOFTWARE DEVELOPM_3
CAPITALIZED SOFTWARE DEVELOPMENT COSTS (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2021 | Aug. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Apr. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||||||||
Accrued other capitalized software development costs | $ 524 | $ 524 | $ 248 | |||||
Amortization expense of software development costs | 394 | |||||||
Break up fee payable | $ 1,000 | |||||||
Consideration transfer assumption, description | the purchase price for the Primary Contractor would be $12,000, which can be paid in cash and/or stock, although the final terms of the acquisition will be set forth in the SPA. | |||||||
Primary Contractor [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Accrued Bonuses, Current | $ 500 | |||||||
License and Services Agreement [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Debt instrument term | 10 years | |||||||
Software and Software Development Costs [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Capitalized contract cost net | 6,838 | 6,838 | $ 4,348 | |||||
License fee | $ 5,750 | |||||||
Software Development [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Amortization expense of software development costs | $ 394 | $ 0 | $ 394 | $ 0 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortizable finite-lived intangible assets | $ 7,399 | $ 7,317 |
Accumulated amortization | (4,875) | (3,806) |
Finite-lived intangible assets, net | 2,524 | 3,511 |
Indefinite-lived intangible assets | 442 | 442 |
Intangible assets, net | $ 2,966 | $ 3,953 |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 remaining | $ 354 | |
2023 | 1,386 | |
2024 | 573 | |
2025 | 211 | |
Finite-lived intangible assets, net | $ 2,524 | $ 3,511 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment charges | $ 0 | |||
Amortization expense | $ 352 | $ 355 | $ 1,069 | $ 1,080 |
Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortizable finite-lived identifiable intangible assets, term | 3 years | |||
Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortizable finite-lived identifiable intangible assets, term | 5 years |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Leases | ||
Operating lease cost (included in general and administrative expenses in the Company’s condensed consolidated statements of operations) | $ 373 | $ 524 |
Cash paid for amounts included in the measurement of lease liabilities | $ 458 | $ 593 |
Weighted average remaining lease term - operating leases (in years) | 3 years 11 months 26 days | 4 years 1 month 24 days |
Weighted average discount rate - operating leases | 4.20% | 4% |
SCHEDULE OF OPERATING LEASES (D
SCHEDULE OF OPERATING LEASES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Right-of-use assets | $ 1,624 | $ 2,177 |
Short-term operating lease liabilities | 481 | 592 |
Long-term operating lease liabilities | 1,705 | 2,299 |
Total operating lease liabilities | $ 2,186 | $ 2,891 |
SCHEDULE OF PRESENT VALUE OF LE
SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2022 remaining | $ 150 | |
2023 | 583 | |
2024 | 472 | |
2025 | 484 | |
2026 and thereafter | 705 | |
Total lease payments | 2,394 | |
Less: Imputed interest/present value discount | (208) | |
Present value of lease liabilities | $ 2,186 | $ 2,891 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||||
Apr. 26, 2022 | Jan. 03, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Operating lease right of use assets | $ 1,624 | $ 2,177 | |||
Gain (Loss) on Termination of Lease | (22) | ||||
Operating lease liability | $ 2,186 | $ 2,891 | |||
Lease Arrangement [Member] | JMCC Properties [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Operating lease right of use assets | $ 543 | ||||
Derecognized lease liabilities | 521 | ||||
Gain (Loss) on Termination of Lease | $ 22 | ||||
Sub Lease Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Operating lease right of use assets | $ 212 | ||||
Lease payment description | The agreement requires us to pay $12 per month for an initial term of eighteen months, which increases by 3% per annum after twelve months. In accordance with ASC 842, the Company recognized a right-of-use asset and the related lease liability of $212 on the commencement date of the lease | ||||
Payments for rent | $ 12 | ||||
Operating lease liability | $ 212 |
SCHEDULE OF ADVANCES ON FUTURE
SCHEDULE OF ADVANCES ON FUTURE RECEIPTS (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2022 | Jan. 12, 2022 | Dec. 31, 2021 | |||
Short-Term Debt [Line Items] | |||||
Original Borrowing | $ 10,017 | ||||
Total | 2,971 | $ 4,981 | |||
Debt discount | (697) | (800) | |||
Debt issuance costs | (77) | ||||
Net | $ 2,197 | 4,181 | |||
Note One [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | [1] | Dec. 01, 2015 | |||
Maturity Date | [1] | Apr. 01, 2023 | |||
Interest Rate | [1] | 12% | |||
Original Borrowing | [1] | $ 1,249 | |||
Note One [Member] | Advance on Future Receipts [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | Oct. 29, 2021 | ||||
Maturity Date | Apr. 28, 2022 | ||||
Interest Rate | 5% | ||||
Original Borrowing | $ 2,120 | ||||
Total | 1,299 | ||||
Note Two [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | [2] | Apr. 04, 2016 | |||
Maturity Date | [2] | Jun. 04, 2021 | |||
Interest Rate | [2] | 12% | |||
Original Borrowing | [2] | $ 343 | |||
Note Two [Member] | Advance on Future Receipts [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | Oct. 29, 2021 | ||||
Maturity Date | Jul. 25, 2022 | ||||
Interest Rate | 28% | ||||
Original Borrowing | $ 3,808 | ||||
Total | 2,993 | ||||
Note Three [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | [3] | May 15, 2020 | |||
Maturity Date | [3] | May 15, 2050 | |||
Interest Rate | [3] | 3.75% | |||
Original Borrowing | [3] | $ 150 | |||
Note Three [Member] | Advance on Future Receipts [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | Dec. 23, 2021 | ||||
Maturity Date | Jun. 22, 2022 | ||||
Interest Rate | 5% | ||||
Original Borrowing | $ 689 | ||||
Total | 689 | ||||
Note Four [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | [4] | Jan. 12, 2022 | |||
Maturity Date | [4] | Jan. 12, 2023 | |||
Interest Rate | 6% | [4] | 6% | ||
Original Borrowing | [4] | $ 6,300 | |||
Debt discount | $ (61) | ||||
Note Four [Member] | Advance on Future Receipts [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance Date | Aug. 25, 2022 | ||||
Maturity Date | May 11, 2023 | ||||
Interest Rate | 26% | ||||
Original Borrowing | $ 3,400 | ||||
Total | $ 2,971 | ||||
[1]On December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 19, 2021, the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $ 1.03 April 1, 2023 725 343 1.03 40 6,300 |
ADVANCES ON FUTURE RECEIPTS (De
ADVANCES ON FUTURE RECEIPTS (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Aug. 25, 2022 | Jan. 12, 2022 | Dec. 23, 2021 | Oct. 29, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Short-Term Debt [Line Items] | ||||||||||
Debt instrument face amount | $ 10,017 | |||||||||
Amortization of debt discount | $ 306 | $ 497 | 1,214 | $ 1,537 | ||||||
Outstanding balance of debt | 2,971 | 2,971 | $ 4,981 | |||||||
Payment of debt issuance cost | 545 | |||||||||
Amortization of debt issuance cost | 126 | 390 | ||||||||
Unamortized debt discount | 697 | 697 | 800 | |||||||
Debt issuance cost | 77 | 77 | ||||||||
Note One [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Debt instrument face amount | [1] | 1,249 | ||||||||
Note Two [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Debt instrument face amount | [2] | 343 | ||||||||
Note Three [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Debt instrument face amount | [3] | 150 | ||||||||
Note Four [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Face amount | $ 6,300 | |||||||||
Debt instrument face amount | [4] | 6,300 | ||||||||
Amortization of debt discount | 239 | |||||||||
Payment of debt issuance cost | $ 460 | |||||||||
Amortization of debt issuance cost | 367 | |||||||||
Unamortized debt discount | 61 | 61 | ||||||||
Unaffiliated Third Party [Member] | Note One [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Face amount | $ 2,015 | |||||||||
Purchase of future receipts | 2,120 | |||||||||
Debt instrument face amount | 1,270 | |||||||||
Amortization of debt discount | 41 | |||||||||
Outstanding balance of debt | 0 | 0 | ||||||||
Unamortized debt discount | 0 | 0 | ||||||||
Unaffiliated Third Party [Member] | Note Two [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Face amount | 2,744 | |||||||||
Purchase of future receipts | $ 3,808 | |||||||||
Debt instrument face amount | 2,993 | |||||||||
Amortization of debt discount | 694 | |||||||||
Outstanding balance of debt | 0 | 0 | ||||||||
Unamortized debt discount | 0 | 0 | ||||||||
Unaffiliated Third Party [Member] | Note Three [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Face amount | $ 651 | |||||||||
Purchase of future receipts | $ 689 | |||||||||
Debt instrument face amount | 689 | |||||||||
Amortization of debt discount | 36 | |||||||||
Outstanding balance of debt | 0 | 0 | ||||||||
Unamortized debt discount | $ 0 | 0 | ||||||||
Unaffiliated Third Party [Member] | Note Four [Member] | ||||||||||
Short-Term Debt [Line Items] | ||||||||||
Face amount | $ 2,500 | |||||||||
Purchase of future receipts | 3,400 | |||||||||
Debt instrument face amount | 429 | |||||||||
Amortization of debt discount | 203 | |||||||||
Payment of debt issuance cost | $ 100 | |||||||||
Amortization of debt issuance cost | $ 23 | |||||||||
[1]On December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 19, 2021, the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $ 1.03 April 1, 2023 725 343 1.03 40 6,300 |
SCHEDULE OF NOTES PAYABLE RELAT
SCHEDULE OF NOTES PAYABLE RELATED PARTIES (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2022 | Sep. 29, 2022 | Jan. 12, 2022 | Dec. 31, 2021 | |||
Short-Term Debt [Line Items] | ||||||
Original Borrowing | $ 10,017 | |||||
Total notes payable | 4,321 | $ 915 | ||||
Debt discount | [1] | (61) | ||||
Debt issuance costs | [1] | (93) | ||||
Non-current | (150) | (875) | ||||
Current | $ 4,171 | 40 | ||||
U.S. Small Business Administration [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Loan payable | $ 350 | |||||
Note One [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Issuance Date | [2] | Dec. 01, 2015 | ||||
Maturity Date | [2] | Apr. 01, 2023 | ||||
Interest Rate | [2] | 12% | ||||
Original Borrowing | [2] | $ 1,249 | ||||
Related party note payable | [2] | $ 725 | 725 | |||
Note Two [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Issuance Date | [3] | Apr. 04, 2016 | ||||
Maturity Date | [3] | Jun. 04, 2021 | ||||
Interest Rate | [3] | 12% | ||||
Original Borrowing | [3] | $ 343 | ||||
Related party note payable | [3] | $ 40 | 40 | |||
Note Three [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Issuance Date | [1] | May 15, 2020 | ||||
Maturity Date | [1] | May 15, 2050 | ||||
Interest Rate | [1] | 3.75% | ||||
Original Borrowing | [1] | $ 150 | ||||
Total notes payable | [1] | $ 150 | 150 | |||
Note Four [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Issuance Date | [4] | Jan. 12, 2022 | ||||
Maturity Date | [4] | Jan. 12, 2023 | ||||
Interest Rate | 6% | [4] | 6% | |||
Original Borrowing | [4] | $ 6,300 | ||||
Total notes payable | [4] | $ 3,560 | ||||
[1]On May 15, 2020, the Company executed an unsecured loan with the SBA under the Economic Injury Disaster Loan program in the amount of $[2]On December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 19, 2021, the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $ 1.03 April 1, 2023 725 343 1.03 40 6,300 |
SCHEDULE OF NOTES PAYABLE REL_2
SCHEDULE OF NOTES PAYABLE RELATED PARTIES (Details) (Parenthetical) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||||
Oct. 28, 2022 | May 12, 2022 | Jan. 12, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Oct. 15, 2022 | Dec. 31, 2021 | May 19, 2021 | Apr. 04, 2016 | ||||
Short-Term Debt [Line Items] | ||||||||||||||
Notes payable | $ 4,321 | $ 4,321 | $ 915 | |||||||||||
Proceeds from notes payable | 6,000 | |||||||||||||
Payment of debt issuance costs | 545 | |||||||||||||
Amortized debt discount | 306 | $ 497 | 1,214 | 1,537 | ||||||||||
Debt issuance costs | 126 | 390 | ||||||||||||
Unamortized debt discount | 697 | $ 697 | 800 | |||||||||||
Note One [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Maturity date | [1] | Apr. 01, 2023 | ||||||||||||
Related party note payable | [1] | $ 725 | $ 725 | 725 | ||||||||||
Debt instrument interest rate percentage | [1] | 12% | 12% | |||||||||||
Note One [Member] | Mr Cutaia [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Conversion price | $ 1.03 | |||||||||||||
Maturity date | Apr. 01, 2023 | |||||||||||||
Related party note payable | $ 725 | $ 725 | 725 | |||||||||||
Note Two [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Maturity date | [2] | Jun. 04, 2021 | ||||||||||||
Related party note payable | [2] | $ 40 | $ 40 | 40 | ||||||||||
Debt instrument interest rate percentage | [2] | 12% | 12% | |||||||||||
Note Two [Member] | Mr Cutaia [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Conversion price | $ 1.03 | |||||||||||||
Related party note payable | $ 40 | $ 40 | 40 | |||||||||||
Convertible notes payable | $ 343 | |||||||||||||
Note Three [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Maturity date | [3] | May 15, 2050 | ||||||||||||
Notes payable | [3] | $ 150 | $ 150 | 150 | ||||||||||
Debt instrument interest rate percentage | [3] | 3.75% | 3.75% | |||||||||||
Note Three [Member] | Mr Cutaia [Member] | Subsequent Event [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Notes payable | $ 150 | |||||||||||||
Note Four [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Conversion price | $ 3 | |||||||||||||
Maturity date | [4] | Jan. 12, 2023 | ||||||||||||
Notes payable | [4] | $ 3,560 | $ 3,560 | |||||||||||
Principal amount of convertible notes | $ 6,300 | |||||||||||||
Proceeds from notes payable | $ 6,000 | |||||||||||||
Debt instrument interest rate percentage | 6% | 6% | [4] | 6% | [4] | |||||||||
Debt Instrument discount percentage | 5% | |||||||||||||
Payment of debt issuance costs | $ 460 | |||||||||||||
Amortization of debt discount and issuance cost | $ 300 | |||||||||||||
Amortized debt discount | $ 239 | |||||||||||||
Debt issuance costs | 367 | |||||||||||||
Unamortized debt discount | $ 61 | 61 | ||||||||||||
Debt issuance costs | $ 93 | 93 | ||||||||||||
Debt instrument periodic payment principal | $ 1,172 | $ 2,740 | ||||||||||||
Final principal payment | $ 2,545 | |||||||||||||
[1]On December 1, 2015, the Company issued a convertible note payable to Mr. Cutaia, the Company’s Chief Executive Officer and a director, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. On May 19, 2021, the Company amended the note to allow for conversion of the note at any time at the discretion of the holder at a fixed conversion price of $ 1.03 April 1, 2023 725 343 1.03 40 6,300 |
SCHEDULE OF INTEREST EXPENSE (D
SCHEDULE OF INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Convertible Notes Payable And Notes Payable | ||||
Interest expense – amortization of debt discount | $ 306 | $ 497 | $ 1,214 | $ 1,537 |
Amortization of debt issuance costs | 126 | 390 | ||
Interest expense – other | 118 | 28 | 344 | 92 |
Total interest expense | $ 550 | $ 525 | $ 1,948 | $ 1,629 |
CONVERTIBLE NOTES PAYABLE AND_3
CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Short-Term Debt [Line Items] | ||||
Interest paid to relatedparty | $ 550,000 | $ 525,000 | $ 1,948,000 | $ 1,629,000 |
Notes payable [Member] | ||||
Short-Term Debt [Line Items] | ||||
Interest expense related party | 23,000 | 27,000 | 69,000 | 88,000 |
Interest paid to relatedparty | $ 0 | $ 78 | $ 0 | $ 112 |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ | $ 795 | $ 3,155 |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.47 | 1.24 |
Measurement Input, Exercise Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.75 | 1.11 |
Measurement Input, Expected Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input, term | 2 years 2 months 23 days | 2 years 11 months 19 days |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 101 | 119 |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0 | 0 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 4.23 | 0.97 |
SCHEDULE OF DERIVATIVE LIABIL_2
SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Beginning balance | $ 3,155 | $ 8,266 | ||
Change in fair value | $ (198) | $ 141 | (2,360) | 2,086 |
Extinguishment | (4,513) | |||
Ending balance | $ 795 | $ 5,839 | $ 795 | $ 5,839 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Change in fair value | $ 198 | $ (141) | $ 2,360 | $ (2,086) |
Change in fair value | $ (198) | 141 | $ (2,360) | 2,086 |
Derivative liability exercised shares | ||||
Derivative liability forfeited shares | ||||
Derivative liabilities | $ 4,513 | $ 4,513 | ||
Series A Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative liability exercised shares | 1,829,190 | |||
Derivative liability forfeited shares | 33,334 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued | 102,604,851 | 102,604,851 | 72,942,948 | ||
Stock Issued During Period, Value, Issued for Services | $ 335 | $ 157 | $ 1,461 | $ 1,926 | |
Restricted stock issued | 587,347 | ||||
Employees and Vendors [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued for service | 1,813,251 | ||||
Stock Issued During Period, Value, Issued for Services | $ 1,461 | ||||
Chief Executive Officer [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued | 189,394 | ||||
Stock Issued During Period, Value, New Issues | $ 100 | ||||
Chief Financial Officer [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued | 227,136 | ||||
Stock Issued During Period, Value, New Issues | $ 277 | ||||
Common Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued | 14,666,667 | 14,666,667 | |||
Cash | $ 10,242 | $ 10,242 | |||
Deferred offering costs | $ 758 | $ 758 | |||
Common stock shares issued for service | 521,951 | 81,143 | 1,813,251 | 1,198,610 | |
Stock Issued During Period, Value, Issued for Services | |||||
Common stock shares issued | 332,730 | ||||
Common Stock [Member] | Common Stock Purchase Agreement [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares issued | 11,096,683 | 11,096,683 | |||
Cash | $ 9,836 | $ 9,836 | |||
Deferred offering costs | $ 197 | $ 197 | |||
Shares issued | 607,287 | 607,287 |
SUMMARY OF RESTRICTED STOCK AWA
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Restricted Stock Units | |
Number of Non-vested Shares, Outstanding Beginning | shares | 1,821,833 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares | $ 1.41 |
Shares, Granted | shares | 1,334,270 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 1.17 |
Number of Shares, Vested/deemed vested | shares | (587,347) |
Weighted Average Grant Date Fair Value, Vested/deemed vested | $ / shares | $ 1.54 |
Shares, Forfeited | shares | (496,907,000) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 1.33 |
Number of Non-vested Shares, Outstanding Ending | shares | 2,071,849 |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ / shares | $ 1.24 |
RESTRICTED STOCK UNITS (Details
RESTRICTED STOCK UNITS (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 1,334,270 | |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Grant date fair value | $ 311 | $ 876 |
Unvested, value | $ 1,741 | $ 1,741 |
Restricted Stock [Member] | Employees and Members of Board of Directors [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 1,334,270 | |
Vesting period | The restricted stock units vest on various dates from January 2023 through March 2026 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ 1,561 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of options outstanding beginning balance | 5,404,223 | |
Weighted average exercise price outstanding beginning balance | $ 1.72 | |
Weighted average remaining contractual life | 2 years | 2 years 2 months 26 days |
Aggregate intrinsic value beginning balance | $ 107 | |
Number of options outstanding granted | 2,741,555 | |
Weighted average exercise price outstanding granted | $ 1.06 | |
Number of options outstanding forfeited | (2,560,929) | |
Weighted average exercise price outstanding forfeited | $ 1.70 | |
Number of options outstanding exercised | (332,730) | |
Weighted average exercise price outstanding exercised | $ 1.13 | |
Number of options outstanding Ending balance | 5,252,119 | 5,404,223 |
Weighted average exercise price outstanding ending balance | $ 1.55 | $ 1.72 |
Aggregate intrinsic value ending balance | $ 19 | $ 107 |
Number of options outstanding ending balance | 2,707,084 | |
Weighted average exercise price outstanding vested | $ 1.81 | |
Number of options outstanding exercisable ending balance | 1,686,439 | |
Weighted average exercise price outstanding exercisable | $ 2.22 |
SCHEDULE OF FAIR VALUE ASSUMPTI
SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Risk-free interest rate, minimum | 1.24% | 0.10% |
Risk-free interest rate, maximum | 3.37% | 0.92% |
Average expected term (years) | 5 years | 5 years |
Expected volatility, minimum | 143.60% | 232.80% |
Expected volatility, maximum | 149.50% | 240% |
Expected dividend yield |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||
Stock option intrinsic value | $ 19 | $ 19 | $ 107 | ||
Stock option granted | 2,741,555 | ||||
Stock option weighted average exercise price | $ 1.06 | ||||
Option, exercised | 332,730 | ||||
Proceeds from option exercise | $ 377 | $ 569 | |||
Common Stock [Member] | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||
Option, exercised | 176,735 | 332,730 | 509,465 | ||
Shares issued, shares | 332,730 | ||||
Proceeds from option exercise | $ 377 | ||||
Employees and Consultants [Member] | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||
Stock option granted | 2,741,555 | ||||
Stock option weighted average exercise price | $ 1.06 | ||||
Stock option grant date fair value | $ 2,622 | ||||
Stock option plan expense | 387 | 1,292 | |||
Unrecognized share-based compensation expense | $ 2,793 | $ 2,793 |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Stock Warrants | |
Number of Shares, Warrants Outstanding Beginning | shares | 10,984,740 |
Weighted-Average Exercise Price, Outstanding Beginning | $ / shares | $ 2.67 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 2 years 4 months 17 days |
Aggregate Intrinsic Value Outstanding Beginning | $ | $ 507 |
Number of Shares, Warrants granted | shares | 14,666,667 |
Weighted-Average Exercise Price, granted | $ / shares | $ 0.75 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Granted | 5 years 25 days |
Number of Shares, Warrants forfeited | shares | |
Weighted-Average Exercise Price, forfeited | $ / shares | |
Weighted-Average Exercise Price, exercised | shares | |
Weighted-Average Exercise Price, exercised | $ / shares | |
Number of Shares, Warrants Outstanding Ending | shares | 25,651,407 |
Weighted-Average Exercise Price, Outstanding Ending | $ / shares | $ 1.52 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Ending | 3 years 6 months 7 days |
Aggregate intrinsic value outstanding ending | $ |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - USD ($) | 1 Months Ended | ||||
Jan. 02, 2022 | Oct. 31, 2022 | Sep. 30, 2022 | Apr. 20, 2022 | Dec. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Intrinsic value non vested | $ 507,000 | ||||
April Registered Direct Offering [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Purchase of warrants | 14,666,667 | ||||
Warrant exercise price per share | $ 0.75 | ||||
Warrants outstanding | $ 3,704,826 | ||||
Repriced exercise price | $ 0.75 | ||||
Fair value of warrants | $ 200,000 | ||||
Intrinsic value non vested | $ 0 | ||||
April Registered Direct Offering [Member] | Subsequent Event [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Warrant exercise price per share | $ 0.75 | ||||
Increase decrease warrant exercise price per share | $ 0.34 | ||||
April Registered Direct Offering [Member] | Minimum [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Warrant exercise price per share | $ 1.10 | ||||
April Registered Direct Offering [Member] | Maximum [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Warrant exercise price per share | $ 2.10 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 9 Months Ended | ||
May 05, 2022 | Oct. 05, 2021 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Loss contigency damages sought value | $ 300,000 | ||
Legal fees | $ 915,000 | ||
Securities Purchase Agreement [Member] | Iroquois Capital Investment Group LLC [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Loss contigency damages sought value | $ 1,500 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Nov. 07, 2022 | Oct. 25, 2022 | Apr. 20, 2022 | Nov. 14, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Nov. 09, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | ||||||||||
Net proceeds | $ 20,150,000 | $ 18,851,000 | ||||||||
Payment of debt issuance costs | 545,000 | |||||||||
Stock Issued During Period, Value, Issued for Services | $ 335,000 | $ 157,000 | $ 1,461,000 | $ 1,926,000 | ||||||
Number of common stock shares issued, restricted stock | 587,347 | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1.55 | $ 1.55 | $ 1.72 | |||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of common stock shares issued, restricted stock | 6,185 | |||||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 32,000 | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.38 | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 5 years | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 4 years | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested in Period, Fair Value | $ 8,000 | |||||||||
Closing bid price | $ 1 | |||||||||
Subsequent Event [Member] | Minimum [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Closing bid price | $ 1 | |||||||||
Subsequent Event [Member] | Vendors For Services [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 187,523 | |||||||||
Stock Issued During Period, Value, Issued for Services | $ 64,000 | |||||||||
Subsequent Event [Member] | Unaffiliated Third Party [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt original principal amount | 225,000 | |||||||||
Purchase of future receipts | 322,000 | |||||||||
Payment of debt issuance costs | $ 11,000 | |||||||||
Subsequent Event [Member] | Convertible Notes Due 2023 [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt instrument periodic payment | $ 1,172,000 | |||||||||
Debt instrument periodic payment principal | $ 2,545,000 | |||||||||
ATM [Member] | Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Shares issued, shares | 867,741 | |||||||||
Net proceeds | $ 302,000 | |||||||||
Securities Purchase Agreement [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Shares issued, shares | 14,666,667 | |||||||||
Warrants purchase | 14,666,667 | |||||||||
Proceeds from issuance of warrants | $ 11,000,000 | |||||||||
Warrant exercise price | $ 0.75 | |||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Shares issued, shares | 12,500,000 | |||||||||
Share Price | $ 0.32 | |||||||||
Warrants purchase | 12,500,000 | |||||||||
Repriced warrant exercise price | $ 0.34 | |||||||||
Proceeds from issuance of warrants | $ 4,000,000 | |||||||||
Warrant exercise price | $ 0.75 | |||||||||
November Note Purchase Agreement [Member] | Subsequent Event [Member] | November Note Holder [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt original principal amount | $ 5,470 | |||||||||
Original issue discount | 470 | |||||||||
Debt gross proceeds | $ 5,000 | |||||||||
Debt instrument, description | The November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in part prior to the maturity date for a 10% premium. The November Note requires the Company to use 20% of the gross proceeds raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject to a cap on the aggregate prepayment amount. |