Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 11, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Boxlight Corp | |
Entity Central Index Key | 0001624512 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,120,390 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current asset: | ||
Cash and cash equivalents | $ 6,133,053 | $ 1,172,994 |
Accounts receivable - trade, net of allowances | 5,356,940 | 3,665,057 |
Inventories, net of reserves | 2,868,192 | 3,318,857 |
Prepaid expenses and other current assets | 3,172,768 | 1,765,741 |
Total current assets | 17,530,953 | 9,922,649 |
Property and equipment, net of accumulated depreciation | 198,653 | 207,397 |
Intangible assets, net of accumulated amortization | 5,574,666 | 5,559,097 |
Goodwill | 4,723,549 | 4,723,549 |
Other assets | 62,327 | 56,193 |
Total assets | 28,090,148 | 20,468,885 |
Current liabilities: | ||
Accounts payable and accrued expenses | 3,802,221 | 4,721,417 |
Accounts payable and accrued expenses - related parties | 2,221,350 | 5,031,367 |
Warranty reserve | 2,713 | 12,775 |
Current portion of debt - third parties | 5,388,350 | 4,536,227 |
Current portions of debt - related parties | 383,726 | 368,383 |
Earn-out payable - related party | 122,372 | 387,118 |
Deferred revenues - short-term | 1,577,992 | 1,972,565 |
Derivative liabilities | 192,304 | 146,604 |
Other short-term liabilities | 30,560 | 31,417 |
Total current liabilities | 13,721,588 | 17,207,873 |
Deferred revenues - long-term | 2,350,154 | 2,582,602 |
Long-term debt - third parties | 1,277,980 | 1,201,139 |
Long-term debt - related parties | 108,228 | |
Other long-term liabilities | 9,006 | 16,696 |
Total liabilities | 17,358,728 | 21,116,538 |
Commitments and contingencies (Note 14) | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 shares issued and outstanding | 17 | 17 |
Common stock, $0.0001 par value, 200,000,000 shares authorized; 31,857,327 and 11,698,697 Class A shares issued and outstanding, respectively | 3,186 | 1,170 |
Additional paid-in capital | 45,596,815 | 30,735,815 |
Subscriptions receivable | (200) | (200) |
Accumulated deficit | (34,722,050) | (31,346,431) |
Accumulated other comprehensive loss | (146,348) | (38,024) |
Total stockholders' equity (deficit) | 10,731,420 | (647,653) |
Total liabilities and stockholders' equity (deficit) | $ 28,090,148 | $ 20,468,885 |
Consolidated Condensed Balanc_2
Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 167,972 | 167,972 |
Preferred stock, shares outstanding | 167,972 | 167,972 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Class A Common Stock [Member] | ||
Common stock, shares issued | 31,857,327 | 11,698,697 |
Common stock, shares outstanding | 31,857,327 | 11,698,697 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 7,827,718 | $ 10,801,523 | $ 13,550,767 | $ 15,794,923 |
Cost of revenues | 5,137,168 | 7,812,079 | 9,269,157 | 11,133,412 |
Gross profit | 2,690,550 | 2,989,444 | 4,281,610 | 4,661,511 |
Operating expense: | ||||
General and administrative expenses | 3,199,486 | 3,896,374 | 7,137,215 | 7,662,442 |
Research and development | 285,210 | 324,582 | 601,966 | 560,578 |
Total operating expense | 3,484,695 | 4,220,956 | 7,739,181 | 8,223,020 |
Loss from operations | (794,146) | (1,231,512) | (3,457,571) | (3,561,509) |
Other income (expense): | ||||
Interest expense, net | (628,216) | (479,022) | (1,087,536) | (759,625) |
Other income, net | 17,655 | 23,670 | 75,605 | 44,879 |
Changes in fair value of derivative liabilities | (74,363) | 263,260 | (45,700) | (1,899,235) |
Gain from settlements of liabilities | 53,074 | 1,139,583 | 146,434 | |
Total other income (expense) | (631,850) | (192,092) | 81,952 | (2,467,547) |
Net loss | (1,425,996) | (1,423,604) | (3,375,619) | (6,029,056) |
Comprehensive loss: | ||||
Net loss | (1,425,996) | (1,423,604) | (3,375,619) | (6,029,056) |
Other comprehensive loss: | ||||
Foreign currency translation gain (loss) | (4,897) | 22,962 | (108,324) | (15,186) |
Total comprehensive loss | $ (1,430,893) | $ (1,400,642) | $ (3,483,943) | $ (6,044,242) |
Net loss per common share - basic and diluted | $ (0.08) | $ (0.13) | $ (0.22) | $ (0.58) |
Weighted average number of common shares outstanding - basic and diluted | 17,637,458 | 10,590,451 | 15,065,644 | 10,424,054 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Class A Common Stock and Additional Paid-in Capital [Member] | Subscription Receivable [Member] | Other comprehensive loss [Member] | Accumulated Deficit [Member] | Total |
Beginning balances at Dec. 31, 2018 | $ 25 | $ 27,280,949 | $ (225) | $ (106,419) | $ (19,206,271) | $ 7,968,059 |
Shares issued for: Cash | ||||||
Shares issued for: Conversion of accounts payable | 382,525 | 382,525 | ||||
Shares issued for: Acquisitions | 500,000 | 500,000 | ||||
Shares issued for: Other shared-based payments | 24,000 | 24,000 | ||||
Shares issued for: Closing fees for issuance of notes payable | 199,509 | 199,509 | ||||
Shares issued for: Stock compensation expense | 278,603 | 278,603 | ||||
Payment received from stockholder | 25 | 25 | ||||
Foreign currency translation income loss | (15,186) | (15,186) | ||||
Cumulative effects of adoption of new accounting standards in prior period | (2,738,082) | (2,738,082) | ||||
Net loss | (6,029,056) | (6,029,056) | ||||
Ending balance at Jun. 30, 2019 | 25 | 28,665,586 | (200) | (121,605) | (27,973,409) | 570,397 |
Beginning balances at Mar. 31, 2019 | 25 | 28,493,844 | (225) | (144,566) | (26,549,805) | 1,799,274 |
Shares issued for: Cash | ||||||
Shares issued for: Conversion of accounts payable | ||||||
Shares issued for: Acquisitions | ||||||
Shares issued for: Other shared-based payments | 12,000 | 12,000 | ||||
Shares issued for: Closing fees for issuance of notes payable | ||||||
Shares issued for: Stock compensation expense | 159,742 | 159,742 | ||||
Payment received from stockholder | 25 | 25 | ||||
Foreign currency translation income loss | (22,961) | (22,961) | ||||
Cumulative effects of adoption of new accounting standards in prior period | ||||||
Net loss | (1,423,604) | (1,423,604) | ||||
Ending balance at Jun. 30, 2019 | 25 | 28,665,586 | (200) | (121,605) | (27,973,409) | 570,397 |
Beginning balances at Dec. 31, 2019 | 17 | 30,736,985 | (200) | (38,024) | (31,346,431) | (647,653) |
Shares issued for: Cash | 10,693,937 | 10,693,937 | ||||
Shares issued for: Conversion of accounts payable | 1,269,275 | 1,269,275 | ||||
Shares issued for: Conversion of notes payable | 2,292,369 | 2,292,369 | ||||
Shares issued for: Acquisitions | ||||||
Shares issued for: Other shared-based payments | 8,000 | 8,000 | ||||
Shares issued for: Closing fees for issuance of notes payable | 79,371 | 79,371 | ||||
Shares issued for: Stock compensation expense | 520,064 | 520,064 | ||||
Payment received from stockholder | ||||||
Foreign currency translation income loss | (108,324) | (103,427) | ||||
Cumulative effects of adoption of new accounting standards in prior period | ||||||
Net loss | (3,375,619) | (3,375,619) | ||||
Ending balance at Jun. 30, 2020 | 17 | 45,600,001 | (200) | (146,348) | (34,722,050) | 10,731,420 |
Beginning balances at Mar. 31, 2020 | 17 | 32,765,380 | (200) | (141,451) | (33,296,054) | (672,308) |
Shares issued for: Cash | 10,693,937 | 10,693,937 | ||||
Shares issued for: Conversion of accounts payable | 702,608 | 702,608 | ||||
Shares issued for: Conversion of notes payable | 1,158,854 | 1,158,854 | ||||
Shares issued for: Acquisitions | ||||||
Shares issued for: Other shared-based payments | ||||||
Shares issued for: Closing fees for issuance of notes payable | 30,358 | 30,358 | ||||
Shares issued for: Stock compensation expense | 248,864 | 248,864 | ||||
Payment received from stockholder | ||||||
Foreign currency translation income loss | (4,897) | (4,897) | ||||
Cumulative effects of adoption of new accounting standards in prior period | ||||||
Net loss | (1,425,996) | (1,425,996) | ||||
Ending balance at Jun. 30, 2020 | $ 17 | $ 45,600,001 | $ (200) | $ (146,348) | $ (34,722,050) | $ 10,731,420 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (3,375,619) | $ (6,029,056) |
Adjustments to reconcile net loss to net cash (used) in operating activities: | ||
Amortization of debt discount | 407,298 | 143,448 |
Bad debt expense | 93,290 | (52,134) |
Gain on settlement of liabilities | (1,139,583) | (146,434) |
Change in allowance for sales returns and volume rebate | 122,370 | (150,087) |
Change in inventory reserve | (21,100) | 91,726 |
Change in fair value of derivative liability | 45,700 | 1,899,235 |
Change in fair value of earn-out payable | 3,552 | |
Shares issued for interest payment on notes payable | 147,184 | |
Stock compensation expense | 520,064 | 321,188 |
Other share-based payments | 8,000 | 24,000 |
Depreciation and amortization | 439,824 | 467,409 |
Changes in operating assets and liabilities: | ||
Accounts receivable - trade | (1,716,042) | (3,548,193) |
Inventories | 507,925 | 1,259,485 |
Prepaid expenses and other current assets | (1,432,376) | (168,443) |
Other assets | (6,134) | |
Accounts payable and accrued expenses | (952,752) | 2,848,976 |
Warranty reserve | (10,062) | (70,247) |
Accounts payable and accrued expenses - related parties | 189,982 | (615,759) |
Other short-term liabilities | (8,547) | 32,061 |
Deferred revenues | (627,020) | (310,069) |
Net cash (used) provided in operating activities | (6,970,197) | (4,002,894) |
Cash flows from investing activities: | ||
Cash paid related to acquisition | (100,000) | |
Cash receipts from acquisitions | 747 | 10,261 |
Net cash provided by investing activities | (99,253) | 10,261 |
Cash flows from financing activities: | ||
Proceeds from subscription receivable | 25 | |
Net Proceeds from issuance of common stock | 10,693,937 | |
Proceeds from payment protection plan loan | 1,008,575 | |
Proceeds from short-term debt | 5,666,844 | 9,675,867 |
Principal payments on short-term debt | (5,940,273) | (9,454,143) |
Proceeds from convertible notes payable | 750,000 | 4,000,000 |
Debt issuance costs | (41,250) | (170,000) |
Net cash provided by financing activities | 12,137,833 | 4,051,749 |
Effect of foreign currency exchange rates | (108,324) | (15,186) |
Net decrease in cash and cash equivalents | 4,960,059 | 43,930 |
Cash and cash equivalents, beginning of the period | 1,172,994 | 901,459 |
Cash and cash equivalents, end of the period | 6,133,053 | 945,389 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 890,562 | 744,744 |
Non-cash investment and financing transactions: | ||
Shares issued to convert accounts payable | 1,269,275 | |
Shares issued to convert notes payable - Lind Global | 2,292,369 | 382,525 |
Shares issued for closing fees related to outstanding notes payable | 79,371 | 199,509 |
Notes payable issued as consideration for acquisition of MyStemKit | 350,000 | |
Shares and notes payable issued as consideration for acquisition of Modern Robotics, Inc. net of cash received | $ 559,739 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES THE COMPANY Boxlight Corporation (the “Company” or “Boxlight Parent”) was incorporated in the State of Nevada on September 18, 2014 with its headquarters in Atlanta, Georgia for the purpose of becoming a technology company that sells interactive educational products. In 2016, the Company acquired Boxlight, Inc., Boxlight Latinoamerica, S.A. DE C.V. (“BLA”) and Boxlight Latinoamerica Servicios, S.A. DE C.V. (“BLS”) (together, “Boxlight Group”), Mimio LLC (“Mimio”) and Genesis Collaboration, LLC (“Genesis”). In 2018, the Company acquired Cohuborate Ltd. (“Cohuba”), Qwizdom Inc. and its subsidiary Qwizdom UK Limited (“Qwizdom Companies”) and EOSEDU, LLC (“EOS”). In 2019, the Company acquired Modern Robotics, Inc. (“MRI”). The Company currently designs, produces and distributes interactive technology solutions to the education market. In 2020, the Company acquired MyStemKits Inc., (“MyStemKits”). MyStemKits is in the business of developing, selling and distributing 3D printable science, technology, engineering and math curriculums incorporating 3D printed project kits for education, and owns the right to manufacture, market and distribute Robo 3Dbranded 3D printers and associated hardware for the global education market. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying consolidated condensed financial statements include the accounts of Boxlight Parent, Boxlight Group, Mimio, Genesis, Cohuba, Qwizdom Companies, EOS, MRI and MyStemKits. Transactions and balances among all of the companies have been eliminated. The accompanying unaudited consolidated condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim unaudited consolidated condensed financial information and interim financial reporting guidelines and rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. The unaudited consolidated condensed financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019 and notes thereto contained in the Company’s Annual Report on Form 10-K. Certain information and note disclosures normally included in the consolidated financial statements have been condensed. The December 31, 2019 balance sheet included herein was derived from the audited consolidated financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements. ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. The coronavirus disease (“COVID-19”) pandemic has negatively impacted, and may continue to negatively impact, the macroeconomic environment in the United States and globally, including our business, financial condition and results of operations. Due to the evolving and uncertain nature of COVID-19 and its effects on the U.S. and global economy, it is reasonably possible that it could materially impact our estimates, particularly those that require consideration of forecasted financial information, in the near to medium term. These estimates relate to certain accounts including, but not limited to, the valuation allowance related to deferred taxes, intangible assets, and other long-lived assets. The magnitude of the impact will depend on numerous evolving factors that we may not be able to accurately predict or prepare for, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions taken in response to the pandemic, changes in consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are stated at contractual amounts, net of an allowance for doubtful accounts. The allowance for doubtful accounts represents management’s estimate of the amounts that ultimately will not be realized in cash. The Company reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical payment trends, the age of receivables and knowledge of the individual customers. When the analysis indicates, management increases or decreases the allowance accordingly. However, if the financial condition of our customers were to deteriorate, additional allowances might be required. INVENTORIES Inventories are stated at the lower of cost or net realizable value and includes spare parts and finished goods. Inventories are primarily determined using the specific identification method and the first-in, first-out (“FIFO”) cost method. Cost includes direct cost from the contract manufacturer (“CM”) or original equipment received from the manufacturer (“OEM”), plus material overhead related to the purchase, inbound freight and import duty costs. The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and the mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. Intangible assets AND GOODWILL Intangible assets, other than goodwill are amortized using the straight-line method over their estimated period of benefit. We periodically evaluate the recoverability of intangible assets, other than goodwill, and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. No material impairments of intangible assets have been identified during any of the periods presented. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a market approach. Goodwill is not amortized and is not deductible for tax purposes. DERIVATIVES The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required. The Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification as equity instruments due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole control of the Company. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments primarily include cash, accounts receivable, derivative liabilities, accounts payable and debt. Due to the short-term nature of cash, accounts receivables and accounts payable, the carrying amounts of these assets and liabilities approximate their fair value. Debt approximates fair value due to either the short-term nature or recent execution of the debt agreement. The amount of consideration received is deemed to be the fair value of long-term debt net of any debt discount and issuance cost. Derivative liabilities and the earn–out payable are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of June 30, 2020 and December 31, 2019: Markets for Other Significant Carrying June 30, Description (Level 1) (Level 2) (Level 3) 2020 Derivative liabilities - warrant instruments $ - $ - $ 192,304 $ 192,304 Earn-out payable – related party 122,372 122,372 Note Payable – STEM Education Holdings - - 350,000 350,000 $ 664,676 $ 664,676 Markets for Other Significant Carrying December 31, Description (Level 1) (Level 2) (Level 3) 2019 Derivative liabilities - warrant instruments $ - $ - $ 146,604 $ 146,604 Earn-out payable – related party - - 387,118 387,118 $ 533,722 $ 533,722 The following table shows the change in the Company’s earn-out payable rollforward for the six months ended June 30, 2020: Amount Balance, December 31, 2019 $ 387,118 Amount paid (268,298 ) Change in fair value of earn-out payable 3,552 Balance, June 30, 2020 $ 122,372 See rollforward of Derivative liabilities - warrant instruments in Note 10. REVENUE RECOGNITION In accordance with the FASB’s Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Nature of Products and Services and Related Contractual Provisions The Company’s sales of interactive devices, including panels, projectors, and other interactive devices generally include hardware maintenance services, a license to software, and the provision of related software maintenance. In most cases, interactive devices are sold with hardware maintenance services with terms ranging from 36 – 60 months. Software maintenance includes technical support, product updates on a when and if available basis, and error correction services. At times, non-interactive projectors are also sold with hardware maintenance services with terms ranging from 36-60 months. The Company also licenses software independently of its interactive devices, in which case it is bundled with software maintenance, and in some cases, subscription services that include access to on-line content, access to replacement parts, and cloud-based applications. The Company’s software subscription services provide access to content and software applications on an as needed basis over the Internet, but do not provide the right to take delivery of the software applications. The Company’s products sales, including those with software and related services, generally include a single payment up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the Company’s expectations and historical experience. For most of the Company’s product sales, control transfers, and therefore, revenue is recognized when products are shipped at the point of origin. When the Company transfers control of its products to the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation. For software product sales, control is transferred when the customer receives the related interactive hardware since the customer’s connection to the interactive hardware activates the software license at which time the software is made available to the customer. For the Company’s software maintenance, hardware maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the best output measure of how those services are transferred to the customer. The Company’s installation, training and professional development services are generally sold separately from the Company’s products. Control of these services is transferred to our customers over time with hours/time incurred in providing the service being the best depiction of the transfer of services since the customer is receiving the benefit of the services as the work is performed. For the sale of third-party products and services where the Company obtains control of the products and services before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of the third-party products and services including, but not limited to, evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product or service. The Company has not historically entered into transactions where it does not take control of the product or service prior to transfer to the customer. The Company excludes all taxes assessed by a governmental agency that are both imposed on and concurrent with the specific revenue-producing transaction from revenue (for example, sales and use taxes). In essence, the Company is reporting these amounts collected on behalf of the applicable government agency on a net basis as though they are acting as an agent. The taxes collected and not yet remitted to the governmental agency are included in accounts payable and accrued expenses in the accompanying consolidated condensed balance sheets. Significant Judgments For contracts with multiple performance obligations, each of which represent promises within a contract that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). The Company’s products and services included in its contracts with multiple performance obligations generally are not sold separately and there are no observable prices available to determine the SSP for those products and services. Since observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, when applicable, the estimated cost to provide the performance obligation, market trends in the pricing for similar offerings, product-specific business objectives, and competitor or other relevant market pricing and margins. When pricing is highly variable or uncertain, the Company applies the residual approach to determining SSP by subtracting the SSP of other products or services from the total transaction price to arrive at the SSP for the performance obligations with highly variable or uncertain pricing. When multiple performance obligations in a contract have highly variable or uncertain pricing, the Company allocates the residual value to those performance obligations using an alternative method of allocation that is consistent with the allocation objective and the guidance on determining SSPs in Topic 606 considering, when applicable, the estimated cost to provide the performance obligation, market pricing for competing product or service offerings, product-specific business objectives, incremental values for bundled transactions that include a service relative to similar transactions that exclude the service, and competitor pricing and margins. A separate price has not been established by the Company for its hardware maintenance services and software maintenance services. In addition, hardware maintenance services, software solutions, and the related maintenance services are never separately and are proprietary in nature, and the related selling price of these products and services is highly variable or uncertain. Therefore, the SSP of these products and services is estimated using the alternative method described above, which includes residual value techniques. The Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of contracts that contain the same performance obligations and are priced in a consistent manner. The Company believes that the application of the portfolio approach produces the same result as if they were applied at the contract level. Contract Balances The timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences can result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated condensed balance sheets. Fees for the Company’s products and most of its service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30-60 days of contract execution. Fees for installation, training, and professional development services are fixed and generally become due as the services are performed. The Company has an established history of collecting under the terms of its contracts without providing refunds or concessions to its customers. The Company’s contractual payment terms do not vary when products are bundled with services that are provided over multiple years. In such contracts services are expected to be transferred on an ongoing basis for several years after the related payment, and the Company has determined that the contracts generally do not include a significant financing component. The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the customer continues to use the related services, so that the customer will receive the optimal benefit from the products over their lives. Additionally, the Company has elected the practical expedient to exclude any financing component from consideration for contracts where, at contract inception, the period between the transfer of services and the timing of the related payment is not expected to exceed one year. The Company has an unconditional right to consideration for all products and services transferred to the customer. That unconditional right to consideration is reflected in accounts receivable in the accompanying consolidated condensed balance sheets in accordance with Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers Variable Consideration The Company’s otherwise fixed consideration in its customer contracts may vary when refunds or credits are provided for sales returns, stock rotation rights, or in connection with certain rebate provisions. The Company generally does not allow product returns other than under assurance warranties or hardware maintenance contracts. However, the Company, on a case by case basis, will grant exceptions, most often in cases of “buyer’s remorse” where the distributor or reseller’s end customer either did not understand what they were ordering or determined that the product did not meet their needs. An allowance for sales returns is estimated based on an analysis of historical trends. In very limited situations, a customer may return previous purchases held in inventory for a specified period of time in exchange for credits toward additional purchases. In addition, rebates are provided to certain customers when specified volume purchase thresholds have been met. The Company includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant reversal. These estimates are generally made using the expected value method based on historical experience and are measured at each reporting date. There was no material revenue recognized in 2020 related to changes in estimated variable consideration that existed at December 31, 2019. Remaining Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting within the contract. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies performance obligations at contract inception so that it can monitor and account for the obligations over the life of the contract. Remaining performance obligations represent the portion of the transaction price in a contract allocated to products and services not yet transferred to the customer. As of June 30, 2020, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was approximately $3.9 million. The Company expects to recognize revenue on approximately 24% of the remaining performance obligations in 2020, 57% in 2021 and 2022, with the remainder recognized thereafter. In accordance with Topic 606, the Company has elected not to disclose the value of remaining performance obligations for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed (for example, a time-and-materials professional services contracts). In addition, the Company has elected not to disclose the value of remaining performance obligations for contracts with performance obligations that are expected, at contract inception, to be satisfied over a period that does not exceed one year. Disaggregated Revenue The Company disaggregates revenue based upon the nature of its products and services and the timing and manner in which it is transferred to the customer. Although all product revenue is transferred to the customer at a point in time, hardware revenue is generally transferred at the point of shipment, while software is generally transferred to the customer at the time the hardware is received by the customer or when software product keys are delivered electronically to the customer. All service revenue is transferred over time to the customer; however, professional services are generally transferred to the customer within a year from the contract date as measured based upon hours or time incurred while software maintenance, hardware maintenance, and subscription services are generally transferred over 3-5 years from the contract execution date as measured based upon the passage of time. Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Product Revenues: Hardware $ 6,656,167 $ 9,698,634 $ 11,445,995 $ 14,013,733 Software 286,784 580,250 444,539 616,813 Service Revenues: Professional Services 353,802 204,600 696,112 495,122 Maintenance and Subscription Services 530,964 318,039 964,121 669,255 $ 7,827,718 $ 10,801,523 $ 13,550,767 $ 15,794,923 Contract Costs The Company capitalizes incremental costs to obtain a contract with a customer if the Company expects to recover those costs. The incremental costs to obtain a contract are those that the Company incurs to obtain a contract with a customer that it would not have otherwise incurred if the contract were not obtained (e.g. a sales commission). The Company capitalizes the costs incurred to fulfill a contract only if those costs meet all of the following criteria: ● The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. ● The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. ● The costs are expected to be recovered. Certain sales commissions incurred by the Company were determined to be incremental costs to obtain the related contracts, which are deferred and amortized ratably over the estimated economic benefit period. For these sales commissions that are incremental costs to obtain where the period of amortization would have been recognized over a period that is one year or less, the Company elected the practical expedient to expense those costs as incurred. Commission costs that are deferred are classified as current or non-current assets based on the timing of when the Company expects to recognize the expense, and are included in prepaid and other assets and other assets, respectively, in the accompanying consolidated condensed balance sheets. Total deferred commissions as of June 30, 2020 and December 31, 2019 and the related amortization for 2019 were less than $0.1 million. No impairment losses were recognized for the six months ended June 30, 2020 and 2019. The Company has not historically incurred any material fulfillment costs that meet the criteria for capitalization. The Company’s consolidated condensed statements of operations and cash flows for the six months ended June 30, 2019 were recorded under the prior GAAP, without including the adjustments now required under Topic 606. As such, we have revised these statements to be comparable to the June 30, 2020 period which are recorded under Topic 606. The following table presents the effects of adopting Topic 606 on the Company’s consolidated condensed statement of operations for the three and six months ended June 30, 2019: Reconciliation of Topic 606 Adjustments for the three months ended June 30, 2019 Balances under Balances under Topic 606 Adjustments Prior GAAP STATEMENT OF OPERATIONS Revenues $ 10,801,523 $ (294,493 ) $ 11,096,016 Cost of revenues 7,812,079 (35,711 ) 7,847,790 Gross profit 2,989,444 (258,782 ) 3,248,226 General and administrative expenses 3,896,374 2,220 3,894,154 Total operating expense 4,220,956 2,220 4,218,736 Loss from operations (1,231,512 ) (261,002 ) (970,510 ) Net loss/income $ (1,423,604 ) $ (261,002 ) $ (1,162,602 ) Net loss per common share – basic and diluted $ (0.13 ) $ (0.02 ) $ (0.11 ) Reconciliation of Topic 606 Adjustments for the six months ended June 30, 2019 Balances under Balances under Topic 606 Adjustments Prior GAAP STATEMENT OF OPERATIONS Revenues $ 15,794,923 $ (313,807 ) $ 16,108,730 Cost of revenues 11,133,412 (142,552 ) 11,275,964 Gross profit 4,661,511 (171,255 ) 4,832,766 General and administrative expenses 7,662,442 8,176 7,654,266 Total operating expense 8,223,020 8,176 8,214,844 Loss from operations (3,561,509 ) (179,431 ) (3,382,078 ) Net loss/income $ (6,029,056 ) $ (179,431 ) $ (5,849,625 ) Net loss per common share – basic and diluted $ (0.58 ) $ (0.02 ) $ (0.56 ) The following table presents the effects of adopting Topic 606 on the Company’s consolidated condensed statement of cash flows for the six months ended June 30, 2019: Balances under Balances under Topic 606 Adjustments Prior GAAP CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (6,029,056 ) $ (179,431 ) $ (5,849,625 ) Prepaid expense and other current assets (168,443 ) 8,176 (176,619 ) Warranty reserve (70,247 ) (142,552 ) 72,305 Deferred revenues (310,069 ) 313,807 (623,876 ) Cash used for operating activities $ 4,002,894 $ - $ 4,002,894 WARRANTY RESERVE For customers that do not purchase hardware maintenance services, the Company generally provides warranty coverage on projectors and accessories, batteries and computers. This warranty coverage does not exceed 24 months, and the Company establishes a liability for estimated product warranty costs, included in other short-term liabilities in the consolidated condensed statements of operations, at the time the related product revenue is recognized. The warranty obligation is affected by historical product failure rates and the related use of materials, labor costs and freight incurred in correcting any product failure. Should actual product failure rates, use of materials, or other costs differ from the Company’s estimates, additional warranty liabilities could be required, which would reduce its gross profit. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs are expensed as incurred and consists primarily of personnel related costs, prototype and sample costs, design costs, and global product certifications mostly for wireless certifications. INCOME TAXES An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. STOCK COMPENSATION The Company estimates the fair value of each stock compensation award at the grant date by using the Black-Scholes option pricing model. The fair value determination represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. NEW ACCOUNTING STANDARDS In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Since the Company is an Emerging Growth Company, the ASU is effective for annual reporting periods beginning after December 15, 2020, and inte |
Liquidity
Liquidity | 6 Months Ended |
Jun. 30, 2020 | |
Liquidity | |
Liquidity | NOTE 2 – LIQUIDITY These consolidated condensed financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The long-term continuation of the Company as a going concern is dependent upon attainment of profitable operations. As of June 30, 2020, the Company had an accumulated deficit of $34,722,050 and a working capital surplus of $3,809,365. During the six months ended June 30, 2020, the Company incurred a net loss of $3,375,619 and net cash used in operations was $6,213,357. During June and July of 2020, the Company raised significant capital and is not dependent on obtaining funds for operations through public or private sales of equity and debt securities or from bank or other loans in the near term. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3 – ACQUISITIONS The acquisition described below was accounted for as a business combination which requires, among other things, that assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired would be recorded as goodwill. The Company has not yet finalized its evaluation and determination of the fair value of certain assets acquired and liabilities assumed. The Company recorded provisional amounts based on initial measurements of the assets acquired and liabilities assumed. The provisional amounts are subject to change and could result in goodwill, which could be significant. The Company will finalize the amounts recognized no later than one year from the acquisition date. On April 17, 2020, the Company acquired the assets, and assumed certain liabilities of MyStemKits and STEM Education Holdings, Pty, an Australian corporation (“STEM”) which is the sole shareholder of MyStemKits, for consideration of $450,000, after working capital adjustments of $150,000. Consideration included $100,000 paid in cash at closing with the balance payable in the form of a $350,000 purchase note payable in four equal installments of $87,500 (the “Installment Payments”) on July 31, 2020, October 31, 2020, January 31, 2021 and April 30, 2021. Further, acknowledging the ongoing COVID-19 pandemic, the Letter Agreement states that potential adjustments may be made to the Installment Payments due on July 31, 2020 and October 31, 2020 in the event the actual gross revenue of MyStemKits is materially below budget. Assets acquired: Cash $ 747 Inventories 36,159 Total assets acquired 36,906 Total liabilities assumed (33,555 ) Net assets acquired 3,351 Customer relationships 148,883 Trademarks 148,883 Technology $ 148,883 Consideration paid: Cash $ 100,000 Note Payable 350,000 Total $ 450,000 |
Accounts Receivable - Trade
Accounts Receivable - Trade | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable - Trade | NOTE 4 – ACCOUNTS RECEIVABLE - TRADE Accounts receivable consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Accounts receivable - trade $ 6,238,395 $ 4,522,352 Allowance for doubtful accounts (451,515 ) (358,225 ) Allowance for sales returns and volume rebates (429,940 ) (499,070 ) Accounts receivable - trade, net of allowances $ 5,356,940 $ 3,665,057 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5 – INVENTORIES Inventories consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Finished goods $ 2,769,796 $ 3,239,038 Spare parts 270,557 273,080 Reserve for inventory obsolescence (172,161 ) (193,261 ) Inventories, net $ 2,868,192 $ 3,318,857 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid Expenses And Other Current Assets | |
Prepaid Expenses and Other Current Assets | NOTE 7 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Building $ 199,708 $ 199,708 Building improvements 9,086 9,086 Leasehold improvements 3,355 3,355 Office equipment 40,062 40,062 Other equipment 42,485 42,485 Property and equipment, at cost 294,696 294,696 Accumulated depreciation (96,043 ) (87,299 ) Property and equipment, net of accumulated depreciation $ 198,653 $ 207,397 For the six months ended June 30, 2020 and 2019, the Company recorded depreciation expense of $8,744 and $16,768, respectively. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 7 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Building $ 199,708 $ 199,708 Building improvements 9,086 9,086 Leasehold improvements 3,355 3,355 Office equipment 40,062 40,062 Other equipment 42,485 42,485 Property and equipment, at cost 294,696 294,696 Accumulated depreciation (96,043 ) (87,299 ) Property and equipment, net of accumulated depreciation $ 198,653 $ 207,397 For the six months ended June 30, 2020 and 2019, the Company recorded depreciation expense of $8,744 and $16,768, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 8 – INTANGIBLE ASSETS AND GOODWILL Intangible assets and goodwill consisted of the following at June 30, 2020 and December 31, 2019: Useful lives 2020 2019 Patents 9 years $ 81,683 $ 81,683 Customer relationships 10 years 4,158,238 4,009,355 Technology 5 years 420,468 271,585 Domain 15 years 13,955 13,955 Trademarks 10 years 4,066,473 3,917,590 Intangible assets, at cost 8,740,817 8,294,168 Accumulated amortization (3,166,151 ) (2,735,071 ) Intangible assets, net of accumulated amortization $ 5,574,666 $ 5,559,097 Goodwill from acquisition of EOS N/A $ 78,411 $ 78,411 Goodwill from acquisition of Qwizdom N/A 463,147 463,147 Goodwill from acquisition of Mimio N/A 44,931 44,931 Goodwill from acquisition of Boxlight N/A 4,137,060 4,137,060 $ 4,723,549 $ 4,723,549 For the six months ended June 30, 2020 and 2019, the Company recorded amortization expense of $431,080 and $450,641, respectively. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 – DEBT The following is a summary of our debt as of June 30, 2020 and December 31, 2019: 2020 2019 Debt – Third Parties Note payable – Lind Global $ 4,079,166 $ 4,797,221 Accounts receivable financing – Sallyport Commercial 1,639,251 1,551,500 Paycheck Protection Program loan 1,008,575 - Note Payable – STEM Education Holdings 350,000 - Total debt – third parties 7,076,992 6,348,721 Less: Discount and issuance cost – Lind Global 410,662 611,355 Current portion of debt – third parties 5,388,350 4,536,227 Long-term debt – third parties $ 1,277,980 $ 1,201,139 Debt – Related Parties Note payable – Qwizdom (Darin & Silvia Beamish) $ 381,563 $ 381,563 Note payable – Mark Elliott 2,163 23,548 Note payable – Steve Barker - 17,500 Note payable – Logical Choice Corporation – Delaware - 54,000 Total debt – related parties 383,726 476,611 Less: current portion of debt – related parties 383,726 368,383 Long-term debt – related parties $ - $ 108,228 Total debt $ 7,050,056 $ 6,213,977 Debt - Third Parties: Lind Global Marco Fund, LP On March 22, 2019, the Company entered into a securities purchase agreement with Lind that contemplates a $4,000,000 working capital financing. The investment is in the form of a $4,400,000 principal amount convertible secured Boxlight Parent note, payable at an 8% interest rate, compounded monthly with a maturity date of 24 months. The note is convertible at the option of Lind into the Company’s Class A voting common stock at a fixed conversion price of $4.00 per share. The Company will have the right to convert up to 50% of the outstanding amount of the note if the volume weighted average closing price of our Class A common stock trades above $8.00 for 30 consecutive days; and convert up to 100% of the outstanding amount of the note if the volume weighted average closing price of our Class A common stock trades above $12.00 for 30 consecutive days. A commitment fee in the amount of $125,000 was paid to Lind. The Company paid Lind $275,428 for closing fees by issuing 108,091 shares of Class A common stock. As of June 30, 2020 and December 31, 2019, the Company paid principal of $1,466,666 and $977,778, respectively, interest of $91,259 and $106,643, respectively, through issuance of Class A common stock to Lind. On December 13, 2019, the Company entered into a second securities purchase agreement with Lind that contemplates a $1,250,000 working capital financing. The investment is in the form of a $1,375,000 principal amount convertible secured Boxlight Parent note, payable at an 8% interest rate, compounded monthly with a maturity date of 24 months. The note is convertible at the option of Lind into the Company’s Class A voting common stock at a fixed conversion price of $2.50 per share. The Company will have the right to convert up to 50% of the outstanding amount of the note if the volume weighted average closing price of our Class A common stock trades above $5.00 for 30 consecutive days; and convert up to 100% of the outstanding amount of the note if the volume weighted average closing price of our Class A common stock trades above $6.25 for 30 consecutive days. A commitment fee in the amount of $43,750 was paid to Lind. The Company paid Lind $93,022 for closing fees by issuing 69,420 shares of Class A common stock. As of June 30, 2020 and December 31, 2019, the Company paid principal of $76,388 and $0, respectively, interest of $55,925 and $0, respectively, through issuance of Class A common stock to Lind. On February 4, 2020, the Company and Lind entered into a third securities purchase agreement pursuant to which the Company is to receive on February 6, 2020 $750,000 in exchange for the issuance to Lind of (1) an $825,000 convertible promissory note, payable at an 8% interest rate, compounded monthly (the “2020 Note”), (2) certain shares of restricted Class A common stock valued at $60,000, calculated based on the 20-day volume average weighted price of the Class A common stock for the period ended February 4, 2020, and (3) a commitment fee of $26,250. The Note matures over 24 months, with repayment to commence on August 4, 2020, after which time the Company will be obligated to make monthly payments of $45,833, plus interest. Interest shall accrue during the first six months of the note, after which time the interest payments, including accrued interest will be payable monthly in either conversion shares or in cash. A commitment fee in the amount of $26,250 was paid to Lind. The Company paid Lind $60,000 for closing fees by issuing 44,557 shares of Class A common stock. As of June 30, 2020 the outstanding principal net of debt issuance cost and discount, and accrued interest owed to Lind were $3,668,504 and $62,872, respectively. As of December 31, 2019, the outstanding principal net of debt issuance cost and discount, and accrued interest owed to Lind were $4,185,866 and $5,425, respectively. Principal of $3,417,537 is due within one year from June 30, 2020. Accounts Receivable Financing – Sallyport Commercial Finance On August 15, 2017, Boxlight Inc., and Genesis Collaboration, LLC (“Genesis”) entered into a 12-month term account sale and purchase agreement with Sallyport Commercial Finance, LLC (“Sallyport”). Pursuant to the agreement, Sallyport agreed to purchase 85% of the eligible accounts receivable of the Company with a right of recourse back to the Company if the receivables are not collectible. This agreement requires a minimum monthly sales volume of $1,250,000 with a maximum facility limit of $6,000,000. Advances against this agreement accrue interest at the rate of 4.00% in excess of the highest prime rate publicly announced from time to time with a floor of 4.25%. In addition, the Company is required to pay a daily audit fee of $950 per day. The Company granted Sallyport a security interest in all of the assets of Boxlight Inc. and Genesis. As of June 30, 2020, outstanding principal and accrued interest were $1,639,251 and $0, respectively. For the six months ended June 30, 2020, the Company incurred interest expense of $411,267. Paycheck Protection Program Loan On May 22, 2020, the Company received loan proceeds of approximately $1,008,575 under the Paycheck Protection Program (“PPP”) established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The loans and accrued interest received under the PPP are forgivable to the extent borrowers use the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains their payroll levels during the designated eight-week period prior to which the PPP would otherwise be repayable. The amount of loan forgiveness is reduced if the borrower terminates employees or reduces salaries during the eight-week period. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. The Company intends to use the proceeds for purposes consistent with the PPP. As of June 30, 2020, outstanding principal and accrued interest were $1,008,575 and $1,121, respectively. STEM Education Holdings On April 17, 2020, the Company issued a note to STEM Education Holdings, the sole shareholder of MyStemKits, in the amount of $350,000 bearing a 7% interest rate. The note was issued as part of the purchase price pursuant to the asset purchase agreement. The principal is payable in four equal installments of $87,500. Further, acknowledging the ongoing COVID-19 pandemic, the Letter Agreement states that potential adjustments may be made to the Installment Payments due on July 31, 2020 and October 31, 2020 in the event the actual gross revenue of MyStemKits continues to be materially below budget. As of June 30, 2020, outstanding principal and accrued interest under this note were $350,000 and $5,036, respectively. Debt - Related Parties: Long Term Note Payable- Qwizdom Shareholders On June 22, 2018, the Company issued a note to Darin and Silvia Beamish, the previous 100% shareholders of Qwizdom, in the amount of $656,000 bearing an 8% interest rate. The note was issued as a part of the purchase price pursuant to a stock purchase agreement. The principal and accrued interest of the $656,000 note is due and payable in 12 equal quarterly installments. The first quarterly payment was due September 2018 and subsequent quarterly payments are due through June 2021. Principal and accrued interest become due and payable in full upon the completion of a public offering of Class A common stock or private placement of debt or equity securities for $10,000,000 or more. As of June 30, 2020, outstanding principal and accrued interest under this note were $381,563 and $22,555, respectively. As of December 31, 2019, outstanding principal and accrued interest under this agreement was $381,563 and $7,334, respectively. Principal in the amount of $381,563 is due within a year from June 30, 2020. Note Payable – Steve Barker On March 12, 2019, the Company purchased the net assets of MRI for 200,000 shares of the Company’s Class A common stock and a $70,000 note payable. The note was paid in full on March 31, 2020. Line of Credit - Logical Choice Corporation-Delaware On May 21, 2014, the Company entered into a line of credit agreement (the “LCC Line of Credit”) with Logical Choice Corporation, a-Delaware corporation (“LCC-Delaware”), the former sole member of Genesis. The LCC Line of Credit allowed the Company to borrow up to $500,000 for working capital and business expansion. The funds when borrowed accrued interest at the rate of 10% per annum. The note was paid in full on June 26, 2020. Note Payable – Mark Elliott On January 16, 2015, the Company issued a note to James Mark Elliott, the Company’s Chief Executive Officer, in the amount of $50,000. The note, as later amended, was due on December 31, 2019 and bears interest at an annual rate of 10%, compounded monthly. The note is convertible into the Company’s common stock at the lesser of (i) $6.28 per share, (ii) a discount of 20% to the stock price if the Company’s common stock is publicly traded, or (iii) if applicable, such other amount negotiated by the Company. The note holder may convert all, but not less than all, of the outstanding principal and interest due under this note. On July 3, 2018, Mr. Elliott and the Company amended the note to eliminate the conversion provision of the note. As of June 30, 2020, outstanding principal and accrued interest under this note were $2,163 and $1,744, respectively. The note is currently in default. As of December 31, 2019, outstanding principal and accrued interest under this note were $23,548 and $593, respectively. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | NOTE 10 – DERIVATIVE LIABILITIES The Company had issued warrants that contain net cash settlement provisions or do not have fixed settlement provisions because their conversion and exercise prices may be lowered if the Company issues securities at lower prices in the future. The Company concluded that the warrants should be accounted for as derivative liabilities. In determining the fair value of the derivative liabilities, the Company used the Black-Scholes option pricing model at June 30, 2020 and 2019: June 30, 2020 Common stock issuable upon exercise of warrants 295,000 Market value of common stock on measurement date $ 0.92 Exercise price $ 0.43 Risk free interest rate (1) 0.16 % Expected life in years 1.50 years Expected volatility (2) 122.90 % Expected dividend yields (3) 0 % June 30, 2019 Common stock issuable upon exercise of warrants 1,189,949 Market value of common stock on measurement date $ 3.07 Exercise price $ 1.20 to 2.78 Risk free interest rate (1) 1.71 – 2.09 % Expected life in years 0.5-2.5 years Expected volatility (2) 74-76 % Expected dividend yields (3) 0 % (1) The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date. (2) The expected volatility was determined by calculating the volatility of the Company’s common stock. (3) The Company does not expect to pay a dividend in the foreseeable future. The following table shows the change in the Company’s derivative liabilities rollforward for the six months ended June 30, 2020 and 2019: Amount Balance, December 31, 2019 $ 146,604 Change in fair value of derivative liabilities 45,700 Balance, June 30, 2020 $ 192,304 Amount Balance, December 31, 2018 $ 326,452 Initial valuation of derivative liabilities upon issuance of warrants 42,585 Change in fair value of derivative liabilities 1,899,235 Balance, June 30, 2019 $ 2,268,272 The change in fair value of derivative liabilities includes losses from exercise price modifications. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Equity | NOTE 11 – EQUITY Preferred Shares The Company’s articles of incorporation provide that the Company is authorized to issue 50,000,000 shares of preferred stock consisting of: 1) 250,000 shares of non-voting Series A preferred stock, with a par value of $0.0001 per share; 2) 1,200,000 shares of voting Series B preferred stock, with a par value of $0.0001 per share; 3) 270,000 shares of voting Series C preferred stock, with a par value of $0.0001 per share; and 4) 48,280,000 shares of “blank check” preferred stock to be designated by the Company’s Board of Directors. At the time of the Company’s initial public offering, 250,000 shares of the Company’s non-voting convertible Series A preferred stock were issued to Vert Capital for the acquisition of Genesis. All of the Series A preferred stock was convertible into 398,406 shares of Class A common stock. On August 5, 2019, 82,028 of these preferred shares were converted into 130,721 shares of Class A common stock. Common Stock The Company’s common stock consists of 1) 150,000,000 shares of Class A voting common stock and 2) 50,000,000 shares of Class B non-voting common stock. Class A and Class B common stock have the same rights except that Class A common stock is entitled to one vote per share while Class B common stock has no voting rights. Upon any public or private sale or disposition by any holder of Class B common stock, such shares of Class B common stock shall automatically convert into shares of Class A common stock. As of June 30, 2020 and December 31, 2019, the Company had 31,857,327 and 11,698,697 shares of Class A common stock issued and outstanding, respectively. No Class B shares were outstanding at June 30, 2020 and December 31, 2019. Issuance of common stock Public Offering On June 11, 2020, the Company issued 13,333,333 shares of the Company’s Class A common stock at a public offering price of $0.75 per share. In addition, on June 24, 2020 the Company issued an additional 1,999,667 shares of Class A common stock to the underwriter at $0.75 per share. Gross proceeds from the issuances were $11,499,750. Net proceeds were $10,593,937 after deducting underwriting discounts and offering expenses of $905,814. Debt Conversion During the period ended June 30, 2020, the Company issued 2,340,056 shares of Class A common stock in lieu of $2,929,369 in principal and interest payments due in relation to notes payable to Lind Global. In addition, the Company issued 80,467 shares of Class A common stock in lieu of payment of the closing fees of the convertible debt with an aggregate amount of $79,371 to Lind Global. Accounts Payable Conversion During the period ended June 30, 2020, the Company entered into an agreement with a related party, Everest Display, Inc., to convert $3.0 million in accounts payable owed in exchange for 2,202,898 shares of Class A common stock with an aggregate value of $1,269,275 resulting in the Company recording a $1,730,725 gain from settlement of liabilities. Other On April 17, 2020, the Company issued 142,857 shares to Stemify at a purchase price of $0.70 per share for a total proceeds of $100,000. On June 30, 2020, the Company issued 52,241 shares to Michael Pope as part of his stock compensation as the Chief Executive Officer. The shares vested during the second quarter of the year. During the period ended June 30, 2020, the Company issued 7,111 shares of Class A common stock in lieu of payment for services with an aggregate amount of $8,000. Exercise of stock options No options to purchase common stock were exercised during the six months ended June 30, 2020. |
Stock Compensation
Stock Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation | NOTE 12 – STOCK COMPENSATION The total number of underlying shares of the Company’s Class A common stock available for grant to directors, officers, key employees and consultants of the Company or a subsidiary of the Company under the Company’s 2014 Equity Inventive Plan, as amended (the “Equity Incentive Plan”), is 2,690,438 shares. Grants made under the Equity Incentive Plan must be approved by the Company’s Board of Directors. As of June 30, 2020, the Company had 747,011 shares reserved for issuance under the Equity Incentive Plan. On April 15, 2020, the Equity Incentive Plan was amended, whereby the Board of Directors approved increasing the shares available for issuance under the Equity Incentive Plan by 3,700,000 shares; the Company is seeking shareholder approval of the aforementioned action at the Company’s upcoming annual meeting, to be held on September 4, 2020. Stock Options Under our stock option program, pursuant to the Equity Incentive Plan, an employee receives an award that provides the opportunity in the future to purchase the Company’s shares at the market price of our stock on the date the award is granted (strike price). The options become exercisable over a range of immediately vested to four-year vesting periods and expire five years from the grant date, unless stated differently in the option agreements, if they are not exercised. Stock options have no financial statement effect on the date they are granted but rather are reflected over time through compensation expense. We record compensation expense based on the estimated fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period. Accordingly, total expense related to the award is reduced by the fair value of options that are forfeited by employees that leave the Company prior to vesting. Following is a summary of the option activities during the six months ended June 30, 2020: Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding, December 31, 2019 2,384,688 $ 3.35 4.15 Granted 2,900,000 0.75 Cancelled (384,761 ) 4.03 Outstanding, June 30, 2020 4,899,927 1.76 4.10 Exercisable, June 30, 2020 1,884,562 3.01 3.25 The Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model. As of June 30, 2020, the options had an intrinsic value of approximately $0.8 million. On April 15, 2020, the Company granted an aggregate of 2,550,000 stock options in total to its employees with an exercise price of $0.70 per share vesting monthly over four years. The expiration date of these options is five years from the grant date. These options had an aggregated fair value of approximately $1,503,645 on the grant date. On January 13, 2020, the Company granted 50,000 stock options to Mark Elliott as part of his new employment agreement as the Company’s Chief Commercial Officer with an exercise price of $1.20 per share, which options vest monthly over one-year period. The expiration date of these options is five years from the grant date. These options had an aggregated fair value of approximately $46,700 on the grant date that was calculated using the Black-Scholes option-pricing model. On January 2, 2020, the Company granted 100,000 stock options each, for a total of 300,000 options to purchase common stock, to its President, Chairman and Chief Executive Officer, its Chief Commercial Officer and its Chief Operating Officer; such options have an exercise price of $1.30 per share, and vest monthly over one-year period. The expiration date of these options is five years from the grant date. These options had an aggregated fair value of approximately $268,512 on the grant date that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for options granted during the six months ended June 30, 2020 include: (1) discount rate of 0.29% – 1.61%, (2) expected life, using simplified method, of 3- 4 years, (3) expected volatility of 141%, and (4) zero expected dividends. Warrants Following is a summary of the warrant activities during the six months ended June 30, 2020: Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding, December 31, 2019 350,000 $ 2.20 2.11 Granted 20,000 0.70 Cancelled (5,000 ) 4.80 Outstanding, June 30, 2020 365,000 2.06 1.78 Exercisable, June 30, 2020 345,000 2.14 1.60 On April 20, 2020, the Company granted 20,000 stock options to Ryan Legudi, the managing director of Stemify, as part of his compensation with an exercise price of $0.70 per share, which options vest quarterly over four-year period. The expiration of these options is five years from the grant date. The options had an aggregated fair value of approximately $16,444 on the grant date. Stock compensation expense For the six months ended June 30, 2020 and 2019, the Company recorded the following stock compensation in general and administrative expense: 2020 2019 Stock options $ 498,742 $ 278,603 Restricted stock award 21,322 - Warrants - 42,585 Total stock compensation expense $ 520,064 $ 321,188 As of June 30, 2020, there was approximately $2.3 million of unrecognized compensation expense related to unvested options, which will be amortized over the remaining vesting period. Of that total, approximately $0.6 million is estimated to be recorded as compensation expense in the remaining six months of 2020. |
Other Related Party Transaction
Other Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Other Related Party Transactions | NOTE 13 – OTHER RELATED PARTY TRANSACTIONS Management Agreement On January 31, 2018, the Company entered into a management agreement (the “Management Agreement”) with an entity owned and controlled by our Chief Executive Officer, President and Director, Michael Pope. The Management Agreement is separate and apart from Mr. Pope’s employment agreement with the Company. The Management Agreement, effective as of the first day of the same month that Mr. Pope’s employment with the Company terminates, and, for a term of 13 months thereafter, Mr. Pope will provide consulting services to the Company including sourcing and analyzing strategic acquisitions, assisting with financing activities, and other services. As consideration for the services provided, the Company will pay a management fee equal to 0.375% of the consolidated net revenues of the Company, payable in monthly installments, not to exceed $250,000 in any calendar year. At his option, Mr. Pope may defer payment until the end of each year and receive payment in the form of shares of the Company’s Class A common stock. Sales and Purchases - EDI Everest Display Inc. (“EDI”), an affiliate of the Company’s major shareholder K-Laser Technology, Inc., is a major supplier of products to the Company. For the six months ended June 30, 2020 and 2019, the Company had purchases of $317,327 and $379,627, respectively, from EDI. For the six months ended June 30, 2020 and 2019, the Company had sales of $35,654 and $21,336, respectively, to EDI. The Company entered into an agreement with EDI, to convert $3.0 million in accounts payable owed in exchange for 2,202,898 shares of common stock valued at $1,269,275 resulting in the Company recording a $1,730,725 gain from settlement of liabilities. As of June 30, 2020, and December 31, 2019, the Company had accounts payable of $2,066,848 and $5,037,569, respectively, to EDI. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14 – COMMITMENTS AND CONTINGENCIES Operating Lease Commitments The Company leases three offices under non-cancelable lease agreements. The leases provide that the Company pays only monthly rental fees and is not responsible for taxes, insurance or maintenance expenses related to the properties. Future minimum lease payments of the Company’s operating leases with a term over one year subsequent to June 30, 2020 are as follows: Year ending December 31, Amount 2020 $ 202,172 2021 369,914 2022 135,239 Net Minimum Lease Payments $ 707,325 For the six months ended June 30, 2020 and 2019, aggregate rent expense was $219,650 and $206,227 respectively. |
Customer and Supplier Concentra
Customer and Supplier Concentration | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Customer and Supplier Concentration | NOTE 15 – CUSTOMER AND SUPPLIER CONCENTRATION Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases. The Company’s revenues were concentrated among two significant customers for the six months ended June 30, 2020 and 2019: Customer Total revenues from the Accounts receivable 1 17 % $ 869 2 12 % 285 Customer Total revenues from the Accounts receivable 1 20 % $ 877 2 13 % 1,210 The loss of one of the above significant customers or the failure to attract new customers could have a material adverse effect on our business, results of operations and financial condition. The Company’s purchases were concentrated among a few vendors for the six months ended June 30, 2020 and 2019: Vendor Total purchases from the Accounts payable 1 31 % $ (1,319 ) Vendor Total purchases from the Accounts payable 1 27 % $ (2,215 ) 2 17 % - The Company believes there are other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 – SUBSEQUENT EVENTS On July 13, 2020, the Company issued 118,781 shares of Class A common stock at $0.72 to Lind Global in lieu of principal and interest payment on notes payable with an aggregate amount of $85,046. On July 16, 2020, the Company issued 488,888 shares of Class A common stock at $2.50 per share to Lind Global to convert a loan from Lind with an outstanding loan amount of $1,222,222. On July 22, 2020, the Company issued 338,792 shares of Class A common stock at $0.76 per share to Lind Global in lieu of principal and interest payment of notes payable with an aggregate amount of $257,481. On July 31, 2020, the Company issued 17,250,000 shares of Class A common stock at $2.00 per share, through a public offering. The Company received net proceeds of $32,025,000, after subtracting underwriting fees of $2,475,000. On August 4, 2020, the Company issued 66,602 shares of Class A common stock at $1.19 per share to Lind Global in lieu of principal and interest payment of notes payable with an aggregate amount of $79,388. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | THE COMPANY Boxlight Corporation (the “Company” or “Boxlight Parent”) was incorporated in the State of Nevada on September 18, 2014 with its headquarters in Atlanta, Georgia for the purpose of becoming a technology company that sells interactive educational products. In 2016, the Company acquired Boxlight, Inc., Boxlight Latinoamerica, S.A. DE C.V. (“BLA”) and Boxlight Latinoamerica Servicios, S.A. DE C.V. (“BLS”) (together, “Boxlight Group”), Mimio LLC (“Mimio”) and Genesis Collaboration, LLC (“Genesis”). In 2018, the Company acquired Cohuborate Ltd. (“Cohuba”), Qwizdom Inc. and its subsidiary Qwizdom UK Limited (“Qwizdom Companies”) and EOSEDU, LLC (“EOS”). In 2019, the Company acquired Modern Robotics, Inc. (“MRI”). The Company currently designs, produces and distributes interactive technology solutions to the education market. In 2020, the Company acquired MyStemKits Inc., (“MyStemKits”). MyStemKits is in the business of developing, selling and distributing 3D printable science, technology, engineering and math curriculums incorporating 3D printed project kits for education, and owns the right to manufacture, market and distribute Robo 3Dbranded 3D printers and associated hardware for the global education market. |
Basis of Presentation and Principles of Consolidation | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying consolidated condensed financial statements include the accounts of Boxlight Parent, Boxlight Group, Mimio, Genesis, Cohuba, Qwizdom Companies, EOS, MRI and MyStemKits. Transactions and balances among all of the companies have been eliminated. The accompanying unaudited consolidated condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim unaudited consolidated condensed financial information and interim financial reporting guidelines and rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. The unaudited consolidated condensed financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019 and notes thereto contained in the Company’s Annual Report on Form 10-K. Certain information and note disclosures normally included in the consolidated financial statements have been condensed. The December 31, 2019 balance sheet included herein was derived from the audited consolidated financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements. |
Estimates and Assumptions | ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. The coronavirus disease (“COVID-19”) pandemic has negatively impacted, and may continue to negatively impact, the macroeconomic environment in the United States and globally, including our business, financial condition and results of operations. Due to the evolving and uncertain nature of COVID-19 and its effects on the U.S. and global economy, it is reasonably possible that it could materially impact our estimates, particularly those that require consideration of forecasted financial information, in the near to medium term. These estimates relate to certain accounts including, but not limited to, the valuation allowance related to deferred taxes, intangible assets, and other long-lived assets. The magnitude of the impact will depend on numerous evolving factors that we may not be able to accurately predict or prepare for, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions taken in response to the pandemic, changes in consumer behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19. |
Accounts Receivable and Allowance for Doubtful Accounts | ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are stated at contractual amounts, net of an allowance for doubtful accounts. The allowance for doubtful accounts represents management’s estimate of the amounts that ultimately will not be realized in cash. The Company reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical payment trends, the age of receivables and knowledge of the individual customers. When the analysis indicates, management increases or decreases the allowance accordingly. However, if the financial condition of our customers were to deteriorate, additional allowances might be required. |
Inventories | INVENTORIES Inventories are stated at the lower of cost or net realizable value and includes spare parts and finished goods. Inventories are primarily determined using the specific identification method and the first-in, first-out (“FIFO”) cost method. Cost includes direct cost from the contract manufacturer (“CM”) or original equipment received from the manufacturer (“OEM”), plus material overhead related to the purchase, inbound freight and import duty costs. The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and the mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. |
Intangible Assets and Goodwill | Intangible assets AND GOODWILL Intangible assets, other than goodwill are amortized using the straight-line method over their estimated period of benefit. We periodically evaluate the recoverability of intangible assets, other than goodwill, and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. No material impairments of intangible assets have been identified during any of the periods presented. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a market approach. Goodwill is not amortized and is not deductible for tax purposes. |
Derivatives | DERIVATIVES The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required. The Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification as equity instruments due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole control of the Company. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments primarily include cash, accounts receivable, derivative liabilities, accounts payable and debt. Due to the short-term nature of cash, accounts receivables and accounts payable, the carrying amounts of these assets and liabilities approximate their fair value. Debt approximates fair value due to either the short-term nature or recent execution of the debt agreement. The amount of consideration received is deemed to be the fair value of long-term debt net of any debt discount and issuance cost. Derivative liabilities and the earn–out payable are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of June 30, 2020 and December 31, 2019: Markets for Other Significant Carrying June 30, Description (Level 1) (Level 2) (Level 3) 2020 Derivative liabilities - warrant instruments $ - $ - $ 192,304 $ 192,304 Earn-out payable – related party 122,372 122,372 Note Payable – STEM Education Holdings - - 350,000 350,000 $ 664,676 $ 664,676 Markets for Other Significant Carrying December 31, Description (Level 1) (Level 2) (Level 3) 2019 Derivative liabilities - warrant instruments $ - $ - $ 146,604 $ 146,604 Earn-out payable – related party - - 387,118 387,118 $ 533,722 $ 533,722 The following table shows the change in the Company’s earn-out payable rollforward for the six months ended June 30, 2020: Amount Balance, December 31, 2019 $ 387,118 Amount paid (268,298 ) Change in fair value of earn-out payable 3,552 Balance, June 30, 2020 $ 122,372 See rollforward of Derivative liabilities - warrant instruments in Note 10. |
Revenue Recognition | REVENUE RECOGNITION In accordance with the FASB’s Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Nature of Products and Services and Related Contractual Provisions The Company’s sales of interactive devices, including panels, projectors, and other interactive devices generally include hardware maintenance services, a license to software, and the provision of related software maintenance. In most cases, interactive devices are sold with hardware maintenance services with terms ranging from 36 – 60 months. Software maintenance includes technical support, product updates on a when and if available basis, and error correction services. At times, non-interactive projectors are also sold with hardware maintenance services with terms ranging from 36-60 months. The Company also licenses software independently of its interactive devices, in which case it is bundled with software maintenance, and in some cases, subscription services that include access to on-line content, access to replacement parts, and cloud-based applications. The Company’s software subscription services provide access to content and software applications on an as needed basis over the Internet, but do not provide the right to take delivery of the software applications. The Company’s products sales, including those with software and related services, generally include a single payment up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the Company’s expectations and historical experience. For most of the Company’s product sales, control transfers, and therefore, revenue is recognized when products are shipped at the point of origin. When the Company transfers control of its products to the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation. For software product sales, control is transferred when the customer receives the related interactive hardware since the customer’s connection to the interactive hardware activates the software license at which time the software is made available to the customer. For the Company’s software maintenance, hardware maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the best output measure of how those services are transferred to the customer. The Company’s installation, training and professional development services are generally sold separately from the Company’s products. Control of these services is transferred to our customers over time with hours/time incurred in providing the service being the best depiction of the transfer of services since the customer is receiving the benefit of the services as the work is performed. For the sale of third-party products and services where the Company obtains control of the products and services before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of the third-party products and services including, but not limited to, evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product or service. The Company has not historically entered into transactions where it does not take control of the product or service prior to transfer to the customer. The Company excludes all taxes assessed by a governmental agency that are both imposed on and concurrent with the specific revenue-producing transaction from revenue (for example, sales and use taxes). In essence, the Company is reporting these amounts collected on behalf of the applicable government agency on a net basis as though they are acting as an agent. The taxes collected and not yet remitted to the governmental agency are included in accounts payable and accrued expenses in the accompanying consolidated condensed balance sheets. Significant Judgments For contracts with multiple performance obligations, each of which represent promises within a contract that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). The Company’s products and services included in its contracts with multiple performance obligations generally are not sold separately and there are no observable prices available to determine the SSP for those products and services. Since observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, when applicable, the estimated cost to provide the performance obligation, market trends in the pricing for similar offerings, product-specific business objectives, and competitor or other relevant market pricing and margins. When pricing is highly variable or uncertain, the Company applies the residual approach to determining SSP by subtracting the SSP of other products or services from the total transaction price to arrive at the SSP for the performance obligations with highly variable or uncertain pricing. When multiple performance obligations in a contract have highly variable or uncertain pricing, the Company allocates the residual value to those performance obligations using an alternative method of allocation that is consistent with the allocation objective and the guidance on determining SSPs in Topic 606 considering, when applicable, the estimated cost to provide the performance obligation, market pricing for competing product or service offerings, product-specific business objectives, incremental values for bundled transactions that include a service relative to similar transactions that exclude the service, and competitor pricing and margins. A separate price has not been established by the Company for its hardware maintenance services and software maintenance services. In addition, hardware maintenance services, software solutions, and the related maintenance services are never separately and are proprietary in nature, and the related selling price of these products and services is highly variable or uncertain. Therefore, the SSP of these products and services is estimated using the alternative method described above, which includes residual value techniques. The Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of contracts that contain the same performance obligations and are priced in a consistent manner. The Company believes that the application of the portfolio approach produces the same result as if they were applied at the contract level. Contract Balances The timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences can result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated condensed balance sheets. Fees for the Company’s products and most of its service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30-60 days of contract execution. Fees for installation, training, and professional development services are fixed and generally become due as the services are performed. The Company has an established history of collecting under the terms of its contracts without providing refunds or concessions to its customers. The Company’s contractual payment terms do not vary when products are bundled with services that are provided over multiple years. In such contracts services are expected to be transferred on an ongoing basis for several years after the related payment, and the Company has determined that the contracts generally do not include a significant financing component. The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the customer continues to use the related services, so that the customer will receive the optimal benefit from the products over their lives. Additionally, the Company has elected the practical expedient to exclude any financing component from consideration for contracts where, at contract inception, the period between the transfer of services and the timing of the related payment is not expected to exceed one year. The Company has an unconditional right to consideration for all products and services transferred to the customer. That unconditional right to consideration is reflected in accounts receivable in the accompanying consolidated condensed balance sheets in accordance with Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers Variable Consideration The Company’s otherwise fixed consideration in its customer contracts may vary when refunds or credits are provided for sales returns, stock rotation rights, or in connection with certain rebate provisions. The Company generally does not allow product returns other than under assurance warranties or hardware maintenance contracts. However, the Company, on a case by case basis, will grant exceptions, most often in cases of “buyer’s remorse” where the distributor or reseller’s end customer either did not understand what they were ordering or determined that the product did not meet their needs. An allowance for sales returns is estimated based on an analysis of historical trends. In very limited situations, a customer may return previous purchases held in inventory for a specified period of time in exchange for credits toward additional purchases. In addition, rebates are provided to certain customers when specified volume purchase thresholds have been met. The Company includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant reversal. These estimates are generally made using the expected value method based on historical experience and are measured at each reporting date. There was no material revenue recognized in 2020 related to changes in estimated variable consideration that existed at December 31, 2019. Remaining Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting within the contract. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies performance obligations at contract inception so that it can monitor and account for the obligations over the life of the contract. Remaining performance obligations represent the portion of the transaction price in a contract allocated to products and services not yet transferred to the customer. As of June 30, 2020, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was approximately $3.9 million. The Company expects to recognize revenue on approximately 24% of the remaining performance obligations in 2020, 57% in 2021 and 2022, with the remainder recognized thereafter. In accordance with Topic 606, the Company has elected not to disclose the value of remaining performance obligations for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed (for example, a time-and-materials professional services contracts). In addition, the Company has elected not to disclose the value of remaining performance obligations for contracts with performance obligations that are expected, at contract inception, to be satisfied over a period that does not exceed one year. Disaggregated Revenue The Company disaggregates revenue based upon the nature of its products and services and the timing and manner in which it is transferred to the customer. Although all product revenue is transferred to the customer at a point in time, hardware revenue is generally transferred at the point of shipment, while software is generally transferred to the customer at the time the hardware is received by the customer or when software product keys are delivered electronically to the customer. All service revenue is transferred over time to the customer; however, professional services are generally transferred to the customer within a year from the contract date as measured based upon hours or time incurred while software maintenance, hardware maintenance, and subscription services are generally transferred over 3-5 years from the contract execution date as measured based upon the passage of time. Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Product Revenues: Hardware $ 6,656,167 $ 9,698,634 $ 11,445,995 $ 14,013,733 Software 286,784 580,250 444,539 616,813 Service Revenues: Professional Services 353,802 204,600 696,112 495,122 Maintenance and Subscription Services 530,964 318,039 964,121 669,255 $ 7,827,718 $ 10,801,523 $ 13,550,767 $ 15,794,923 Contract Costs The Company capitalizes incremental costs to obtain a contract with a customer if the Company expects to recover those costs. The incremental costs to obtain a contract are those that the Company incurs to obtain a contract with a customer that it would not have otherwise incurred if the contract were not obtained (e.g. a sales commission). The Company capitalizes the costs incurred to fulfill a contract only if those costs meet all of the following criteria: ● The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. ● The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. ● The costs are expected to be recovered. Certain sales commissions incurred by the Company were determined to be incremental costs to obtain the related contracts, which are deferred and amortized ratably over the estimated economic benefit period. For these sales commissions that are incremental costs to obtain where the period of amortization would have been recognized over a period that is one year or less, the Company elected the practical expedient to expense those costs as incurred. Commission costs that are deferred are classified as current or non-current assets based on the timing of when the Company expects to recognize the expense, and are included in prepaid and other assets and other assets, respectively, in the accompanying consolidated condensed balance sheets. Total deferred commissions as of June 30, 2020 and December 31, 2019 and the related amortization for 2019 were less than $0.1 million. No impairment losses were recognized for the six months ended June 30, 2020 and 2019. The Company has not historically incurred any material fulfillment costs that meet the criteria for capitalization. The Company’s consolidated condensed statements of operations and cash flows for the six months ended June 30, 2019 were recorded under the prior GAAP, without including the adjustments now required under Topic 606. As such, we have revised these statements to be comparable to the June 30, 2020 period which are recorded under Topic 606. The following table presents the effects of adopting Topic 606 on the Company’s consolidated condensed statement of operations for the three and six months ended June 30, 2019: Reconciliation of Topic 606 Adjustments for the three months ended June 30, 2019 Balances under Balances under Topic 606 Adjustments Prior GAAP STATEMENT OF OPERATIONS Revenues $ 10,801,523 $ (294,493 ) $ 11,096,016 Cost of revenues 7,812,079 (35,711 ) 7,847,790 Gross profit 2,989,444 (258,782 ) 3,248,226 General and administrative expenses 3,896,374 2,220 3,894,154 Total operating expense 4,220,956 2,220 4,218,736 Loss from operations (1,231,512 ) (261,002 ) (970,510 ) Net loss/income $ (1,423,604 ) $ (261,002 ) $ (1,162,602 ) Net loss per common share – basic and diluted $ (0.13 ) $ (0.02 ) $ (0.11 ) Reconciliation of Topic 606 Adjustments for the six months ended June 30, 2019 Balances under Balances under Topic 606 Adjustments Prior GAAP STATEMENT OF OPERATIONS Revenues $ 15,794,923 $ (313,807 ) $ 16,108,730 Cost of revenues 11,133,412 (142,552 ) 11,275,964 Gross profit 4,661,511 (171,255 ) 4,832,766 General and administrative expenses 7,662,442 8,176 7,654,266 Total operating expense 8,223,020 8,176 8,214,844 Loss from operations (3,561,509 ) (179,431 ) (3,382,078 ) Net loss/income $ (6,029,056 ) $ (179,431 ) $ (5,849,625 ) Net loss per common share – basic and diluted $ (0.58 ) $ (0.02 ) $ (0.56 ) The following table presents the effects of adopting Topic 606 on the Company’s consolidated condensed statement of cash flows for the six months ended June 30, 2019: Balances under Balances under Topic 606 Adjustments Prior GAAP CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (6,029,056 ) $ (179,431 ) $ (5,849,625 ) Prepaid expense and other current assets (168,443 ) 8,176 (176,619 ) Warranty reserve (70,247 ) (142,552 ) 72,305 Deferred revenues (310,069 ) 313,807 (623,876 ) Cash used for operating activities $ 4,002,894 $ - $ 4,002,894 |
Warranty Reserve | WARRANTY RESERVE For customers that do not purchase hardware maintenance services, the Company generally provides warranty coverage on projectors and accessories, batteries and computers. This warranty coverage does not exceed 24 months, and the Company establishes a liability for estimated product warranty costs, included in other short-term liabilities in the consolidated condensed statements of operations, at the time the related product revenue is recognized. The warranty obligation is affected by historical product failure rates and the related use of materials, labor costs and freight incurred in correcting any product failure. Should actual product failure rates, use of materials, or other costs differ from the Company’s estimates, additional warranty liabilities could be required, which would reduce its gross profit. |
Research and Development Expenses | RESEARCH AND DEVELOPMENT EXPENSES Research and development costs are expensed as incurred and consists primarily of personnel related costs, prototype and sample costs, design costs, and global product certifications mostly for wireless certifications. |
Income Taxes | INCOME TAXES An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. |
Stock Compensation | STOCK COMPENSATION The Company estimates the fair value of each stock compensation award at the grant date by using the Black-Scholes option pricing model. The fair value determination represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. |
New Accounting Standards | NEW ACCOUNTING STANDARDS In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Since the Company is an Emerging Growth Company, the ASU is effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual reporting periods beginning after December 15, 2021. Earlier application is permitted. The new standard is to be applied using a modified retrospective approach. The Company is currently evaluating the impact of the new pronouncement on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes” (Topic 740). The new guidance modifies the requirements for the timing of adoption of enacted change in tax law. The effects of changes on taxes currently payable or refundable for the current year must be reflected in the computation of annual effective tax rate in the first interim period that includes the enactment date of the new legislation, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have, if any, on its financial statements. There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Financial Liabilities Measured on a Recurring Basis | The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of June 30, 2020 and December 31, 2019: Markets for Other Significant Carrying June 30, Description (Level 1) (Level 2) (Level 3) 2020 Derivative liabilities - warrant instruments $ - $ - $ 192,304 $ 192,304 Earn-out payable – related party 122,372 122,372 Note Payable – STEM Education Holdings - - 350,000 350,000 $ 664,676 $ 664,676 Markets for Other Significant Carrying December 31, Description (Level 1) (Level 2) (Level 3) 2019 Derivative liabilities - warrant instruments $ - $ - $ 146,604 $ 146,604 Earn-out payable – related party - - 387,118 387,118 $ 533,722 $ 533,722 |
Schedule of Earn-out Payable Rollforward | The following table shows the change in the Company’s earn-out payable rollforward for the six months ended June 30, 2020: Amount Balance, December 31, 2019 $ 387,118 Amount paid (268,298 ) Change in fair value of earn-out payable 3,552 Balance, June 30, 2020 $ 122,372 |
Schedule of Disaggregates Revenue | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Product Revenues: Hardware $ 6,656,167 $ 9,698,634 $ 11,445,995 $ 14,013,733 Software 286,784 580,250 444,539 616,813 Service Revenues: Professional Services 353,802 204,600 696,112 495,122 Maintenance and Subscription Services 530,964 318,039 964,121 669,255 $ 7,827,718 $ 10,801,523 $ 13,550,767 $ 15,794,923 |
Schedule of Cumulative Effect of Adjustments of Income Tax Effects on Financial Information | The following table presents the effects of adopting Topic 606 on the Company’s consolidated condensed statement of operations for the three and six months ended June 30, 2019: Reconciliation of Topic 606 Adjustments for the three months ended June 30, 2019 Balances under Balances under Topic 606 Adjustments Prior GAAP STATEMENT OF OPERATIONS Revenues $ 10,801,523 $ (294,493 ) $ 11,096,016 Cost of revenues 7,812,079 (35,711 ) 7,847,790 Gross profit 2,989,444 (258,782 ) 3,248,226 General and administrative expenses 3,896,374 2,220 3,894,154 Total operating expense 4,220,956 2,220 4,218,736 Loss from operations (1,231,512 ) (261,002 ) (970,510 ) Net loss/income $ (1,423,604 ) $ (261,002 ) $ (1,162,602 ) Net loss per common share – basic and diluted $ (0.13 ) $ (0.02 ) $ (0.11 ) Reconciliation of Topic 606 Adjustments for the six months ended June 30, 2019 Balances under Balances under Topic 606 Adjustments Prior GAAP STATEMENT OF OPERATIONS Revenues $ 15,794,923 $ (313,807 ) $ 16,108,730 Cost of revenues 11,133,412 (142,552 ) 11,275,964 Gross profit 4,661,511 (171,255 ) 4,832,766 General and administrative expenses 7,662,442 8,176 7,654,266 Total operating expense 8,223,020 8,176 8,214,844 Loss from operations (3,561,509 ) (179,431 ) (3,382,078 ) Net loss/income $ (6,029,056 ) $ (179,431 ) $ (5,849,625 ) Net loss per common share – basic and diluted $ (0.58 ) $ (0.02 ) $ (0.56 ) The following table presents the effects of adopting Topic 606 on the Company’s consolidated condensed statement of cash flows for the six months ended June 30, 2019: Balances under Balances under Topic 606 Adjustments Prior GAAP CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (6,029,056 ) $ (179,431 ) $ (5,849,625 ) Prepaid expense and other current assets (168,443 ) 8,176 (176,619 ) Warranty reserve (70,247 ) (142,552 ) 72,305 Deferred revenues (310,069 ) 313,807 (623,876 ) Cash used for operating activities $ 4,002,894 $ - $ 4,002,894 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | Assets acquired: Cash $ 747 Inventories 36,159 Total assets acquired 36,906 Total liabilities assumed (33,555 ) Net assets acquired 3,351 Customer relationships 148,883 Trademarks 148,883 Technology $ 148,883 Consideration paid: Cash $ 100,000 Note Payable 350,000 Total $ 450,000 |
Accounts Receivable - Trade (Ta
Accounts Receivable - Trade (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable - Trade | Accounts receivable consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Accounts receivable - trade $ 6,238,395 $ 4,522,352 Allowance for doubtful accounts (451,515 ) (358,225 ) Allowance for sales returns and volume rebates (429,940 ) (499,070 ) Accounts receivable - trade, net of allowances $ 5,356,940 $ 3,665,057 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Finished goods $ 2,769,796 $ 3,239,038 Spare parts 270,557 273,080 Reserve for inventory obsolescence (172,161 ) (193,261 ) Inventories, net $ 2,868,192 $ 3,318,857 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid Expenses And Other Current Assets | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Prepayments to vendors $ 2,961,653 $ 1,389,044 Prepaid licenses and other 206,430 315,354 Prepaid local taxes 4,685 26,088 Prepaid insurance - 35,255 Prepaid expenses and other current assets $ 3,172,768 $ 1,765,741 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at June 30, 2020 and December 31, 2019: 2020 2019 Building $ 199,708 $ 199,708 Building improvements 9,086 9,086 Leasehold improvements 3,355 3,355 Office equipment 40,062 40,062 Other equipment 42,485 42,485 Property and equipment, at cost 294,696 294,696 Accumulated depreciation (96,043 ) (87,299 ) Property and equipment, net of accumulated depreciation $ 198,653 $ 207,397 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The following is a summary of our debt as of June 30, 2020 and December 31, 2019: 2020 2019 Debt – Third Parties Note payable – Lind Global $ 4,079,166 $ 4,797,221 Accounts receivable financing – Sallyport Commercial 1,639,251 1,551,500 Paycheck Protection Program loan 1,008,575 - Note Payable – STEM Education Holdings 350,000 - Total debt – third parties 7,076,992 6,348,721 Less: Discount and issuance cost – Lind Global 410,662 611,355 Current portion of debt – third parties 5,388,350 4,536,227 Long-term debt – third parties $ 1,277,980 $ 1,201,139 Debt – Related Parties Note payable – Qwizdom (Darin & Silvia Beamish) $ 381,563 $ 381,563 Note payable – Mark Elliott 2,163 23,548 Note payable – Steve Barker - 17,500 Note payable – Logical Choice Corporation – Delaware - 54,000 Total debt – related parties 383,726 476,611 Less: current portion of debt – related parties 383,726 368,383 Long-term debt – related parties $ - $ 108,228 Total debt $ 7,050,056 $ 6,213,977 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following is a summary of our debt as of June 30, 2020 and December 31, 2019: 2020 2019 Debt – Third Parties Note payable – Lind Global $ 4,079,166 $ 4,797,221 Accounts receivable financing – Sallyport Commercial 1,639,251 1,551,500 Paycheck Protection Program loan 1,008,575 - Note Payable – STEM Education Holdings 350,000 - Total debt – third parties 7,076,992 6,348,721 Less: Discount and issuance cost – Lind Global 410,662 611,355 Current portion of debt – third parties 5,388,350 4,536,227 Long-term debt – third parties $ 1,277,980 $ 1,201,139 Debt – Related Parties Note payable – Qwizdom (Darin & Silvia Beamish) $ 381,563 $ 381,563 Note payable – Mark Elliott 2,163 23,548 Note payable – Steve Barker - 17,500 Note payable – Logical Choice Corporation – Delaware - 54,000 Total debt – related parties 383,726 476,611 Less: current portion of debt – related parties 383,726 368,383 Long-term debt – related parties $ - $ 108,228 Total debt $ 7,050,056 $ 6,213,977 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Liabilities | In determining the fair value of the derivative liabilities, the Company used the Black-Scholes option pricing model at June 30, 2020 and 2019: June 30, 2020 Common stock issuable upon exercise of warrants 295,000 Market value of common stock on measurement date $ 0.92 Exercise price $ 0.43 Risk free interest rate (1) 0.16 % Expected life in years 1.50 years Expected volatility (2) 122.90 % Expected dividend yields (3) 0 % June 30, 2019 Common stock issuable upon exercise of warrants 1,189,949 Market value of common stock on measurement date $ 3.07 Exercise price $ 1.20 to 2.78 Risk free interest rate (1) 1.71 – 2.09 % Expected life in years 0.5-2.5 years Expected volatility (2) 74-76 % Expected dividend yields (3) 0 % (1) The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date. (2) The expected volatility was determined by calculating the volatility of the Company’s common stock. (3) The Company does not expect to pay a dividend in the foreseeable future. |
Schedule of Change in Derivative Liabilities | The following table shows the change in the Company’s derivative liabilities rollforward for the six months ended June 30, 2020 and 2019: Amount Balance, December 31, 2019 $ 146,604 Change in fair value of derivative liabilities 45,700 Balance, June 30, 2020 $ 192,304 Amount Balance, December 31, 2018 $ 326,452 Initial valuation of derivative liabilities upon issuance of warrants 42,585 Change in fair value of derivative liabilities 1,899,235 Balance, June 30, 2019 $ 2,268,272 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activities | Following is a summary of the option activities during the six months ended June 30, 2020: Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding, December 31, 2019 2,384,688 $ 3.35 4.15 Granted 2,900,000 0.75 Cancelled (384,761 ) 4.03 Outstanding, June 30, 2020 4,899,927 1.76 4.10 Exercisable, June 30, 2020 1,884,562 3.01 3.25 |
Schedule of Warrant Activity | Following is a summary of the warrant activities during the six months ended June 30, 2020: Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding, December 31, 2019 350,000 $ 2.20 2.11 Granted 20,000 0.70 Cancelled (5,000 ) 4.80 Outstanding, June 30, 2020 365,000 2.06 1.78 Exercisable, June 30, 2020 345,000 2.14 1.60 |
Schedule of Stock Compensation Expenses | For the six months ended June 30, 2020 and 2019, the Company recorded the following stock compensation in general and administrative expense: 2020 2019 Stock options $ 498,742 $ 278,603 Restricted stock award 21,322 - Warrants - 42,585 Total stock compensation expense $ 520,064 $ 321,188 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | . Future minimum lease payments of the Company’s operating leases with a term over one year subsequent to June 30, 2020 are as follows: Year ending December 31, Amount 2020 $ 202,172 2021 369,914 2022 135,239 Net Minimum Lease Payments $ 707,325 |
Customer and Supplier Concent_2
Customer and Supplier Concentration (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration Risk | The Company’s revenues were concentrated among two significant customers for the six months ended June 30, 2020 and 2019: Customer Total revenues from the Accounts receivable 1 17 % $ 869 2 12 % 285 Customer Total revenues from the Accounts receivable 1 20 % $ 877 2 13 % 1,210 The loss of one of the above significant customers or the failure to attract new customers could have a material adverse effect on our business, results of operations and financial condition. The Company’s purchases were concentrated among a few vendors for the six months ended June 30, 2020 and 2019: Vendor Total purchases from the Accounts payable 1 31 % $ (1,319 ) Vendor Total purchases from the Accounts payable 1 27 % $ (2,215 ) 2 17 % - |
Organization and Significant _4
Organization and Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Deferred revenue | $ 700,000 | $ 700,000 | |
Remaining performance obligations | 3,900,000 | ||
Deferred commissions related amortization | 100,000 | $ 100,000 | |
Impairment losses recognized | |||
Minimum [Member] | |||
Revenue performance obligation transfer of contract | P3Y | ||
Maximum [Member] | |||
Revenue performance obligation transfer of contract | P5Y | ||
2020 [Member] | |||
Remaining performance obligations percentage | 24.00% | ||
2021 [Member] | |||
Remaining performance obligations percentage | 57.00% | ||
2022 [Member] | |||
Remaining performance obligations percentage | 57.00% |
Organization and Significant _5
Organization and Significant Accounting Policies - Schedule of Financial Liabilities Measured on a Recurring Basis (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative liabilities | $ 664,676 | $ 533,722 |
Warrant Instruments [Member] | ||
Derivative liabilities | 192,304 | 146,604 |
Earn-out Payable - Related Party [Member] | ||
Derivative liabilities | 122,372 | 387,118 |
Note Payable - STEM Education Holdings [Member] | ||
Derivative liabilities | 350,000 | |
Markets for Identical Assets (Level 1) [Member] | ||
Derivative liabilities | ||
Markets for Identical Assets (Level 1) [Member] | Warrant Instruments [Member] | ||
Derivative liabilities | ||
Markets for Identical Assets (Level 1) [Member] | Earn-out Payable - Related Party [Member] | ||
Derivative liabilities | ||
Markets for Identical Assets (Level 1) [Member] | Note Payable - STEM Education Holdings [Member] | ||
Derivative liabilities | ||
Other Observable Inputs (Level 2) [Member] | ||
Derivative liabilities | ||
Other Observable Inputs (Level 2) [Member] | Warrant Instruments [Member] | ||
Derivative liabilities | ||
Other Observable Inputs (Level 2) [Member] | Earn-out Payable - Related Party [Member] | ||
Derivative liabilities | ||
Other Observable Inputs (Level 2) [Member] | Note Payable - STEM Education Holdings [Member] | ||
Derivative liabilities | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Derivative liabilities | 664,676 | 533,722 |
Significant Unobservable Inputs (Level 3) [Member] | Warrant Instruments [Member] | ||
Derivative liabilities | 192,304 | 146,604 |
Significant Unobservable Inputs (Level 3) [Member] | Earn-out Payable - Related Party [Member] | ||
Derivative liabilities | 122,372 | $ 387,118 |
Significant Unobservable Inputs (Level 3) [Member] | Note Payable - STEM Education Holdings [Member] | ||
Derivative liabilities | $ 350,000 |
Organization and Significant _6
Organization and Significant Accounting Policies - Schedule of Earn-out Payable Rollforward (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance | $ 387,118 | |
Amount paid | (268,298) | |
Change in fair value of earn-out payable | 3,552 | |
Balance | $ 122,372 |
Organization and Significant _7
Organization and Significant Accounting Policies - Schedule of Disaggregates Revenue (Details) - USD ($) | Jan. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Revenue | $ 250,000 | $ 7,827,718 | $ 10,801,523 | $ 13,550,767 | $ 15,794,923 |
Product Revenues [Member] | Hardware [Member] | |||||
Revenue | 6,656,167 | 9,698,634 | 11,445,995 | 14,013,733 | |
Product Revenues [Member] | Software [Member] | |||||
Revenue | 286,784 | 580,250 | 444,539 | 616,813 | |
Service Revenues [Member] | Professional Services [Member] | |||||
Revenue | 353,802 | 204,600 | 696,112 | 495,122 | |
Service Revenues [Member] | Maintenance and Subscription Services [Member] | |||||
Revenue | $ 530,964 | $ 318,039 | $ 964,121 | $ 669,255 |
Organization and Significant _8
Organization and Significant Accounting Policies - Schedule of Cumulative Effect of Adjustments of Income Tax Effects on Financial Information (Details) - USD ($) | Jan. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Revenues | $ 250,000 | $ 7,827,718 | $ 10,801,523 | $ 13,550,767 | $ 15,794,923 |
Cost of revenues | 5,137,168 | 7,812,079 | 9,269,157 | 11,133,412 | |
Gross profit | 2,690,550 | 2,989,444 | 4,281,610 | 4,661,511 | |
General and administrative expenses | 3,199,486 | 3,896,374 | 7,137,215 | 7,662,442 | |
Total operating expense | 3,484,695 | 4,220,956 | 7,739,181 | 8,223,020 | |
Loss from operations | (794,146) | (1,231,512) | (3,457,571) | (3,561,509) | |
Net loss/income | $ (1,425,996) | $ (1,423,604) | $ (3,375,619) | $ (6,029,056) | |
Net loss per common share - basic and diluted | $ (0.08) | $ (0.13) | $ (0.22) | $ (0.58) | |
Net loss | $ (1,425,996) | $ (1,423,604) | $ (3,375,619) | $ (6,029,056) | |
Prepaid expense and other current assets | (1,432,376) | (168,443) | |||
Warranty Reserve | (10,062) | (70,247) | |||
Deferred revenues | (627,020) | (310,069) | |||
Cash used for operating activities | $ (6,970,197) | (4,002,894) | |||
Adjustments [Member] | |||||
Revenues | (294,493) | (313,807) | |||
Cost of revenues | (35,711) | (142,552) | |||
Gross profit | (258,782) | (171,255) | |||
General and administrative expenses | 2,220 | 8,176 | |||
Total operating expense | 2,220 | 8,176 | |||
Loss from operations | (261,002) | (179,431) | |||
Net loss/income | $ (261,002) | $ (179,431) | |||
Net loss per common share - basic and diluted | $ (0.02) | $ (0.02) | |||
Net loss | $ (261,002) | $ (179,431) | |||
Prepaid expense and other current assets | 8,176 | ||||
Warranty Reserve | (142,552) | ||||
Deferred revenues | 313,807 | ||||
Cash used for operating activities | |||||
Balances under Prior GAAP [Member] | |||||
Revenues | 11,096,016 | 16,108,730 | |||
Cost of revenues | 7,847,790 | 11,275,964 | |||
Gross profit | 3,248,226 | 4,832,766 | |||
General and administrative expenses | 3,894,154 | 7,654,266 | |||
Total operating expense | 4,218,736 | 8,214,844 | |||
Loss from operations | (970,510) | (3,382,078) | |||
Net loss/income | $ (1,162,602) | $ (5,849,625) | |||
Net loss per common share - basic and diluted | $ (0.11) | $ (0.56) | |||
Net loss | $ (1,162,602) | $ (5,849,625) | |||
Prepaid expense and other current assets | (176,619) | ||||
Warranty Reserve | 72,305 | ||||
Deferred revenues | (623,876) | ||||
Cash used for operating activities | 4,002,894 | ||||
Adjusted for Topic 606 [Member] | |||||
Revenues | 10,801,523 | 15,794,923 | |||
Cost of revenues | 7,812,079 | 11,133,412 | |||
Gross profit | 2,989,444 | 4,661,511 | |||
General and administrative expenses | 3,896,374 | 7,662,442 | |||
Total operating expense | 4,220,956 | 8,223,020 | |||
Loss from operations | (1,231,512) | (3,561,509) | |||
Net loss/income | $ (1,423,604) | $ (6,029,056) | |||
Net loss per common share - basic and diluted | $ (0.13) | $ (0.58) | |||
Net loss | $ (1,423,604) | $ (6,029,056) | |||
Prepaid expense and other current assets | (168,443) | ||||
Warranty Reserve | (70,247) | ||||
Deferred revenues | (310,069) | ||||
Cash used for operating activities | $ 4,002,894 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Liquidity | |||||
Accumulated deficit | $ (34,722,050) | $ (34,722,050) | $ (31,346,431) | ||
Working capital surplus | 3,809,365 | 3,809,365 | |||
Net loss | $ (1,425,996) | $ (1,423,604) | (3,375,619) | $ (6,029,056) | |
Net cash used in operations | $ (6,970,197) | $ (4,002,894) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - MyStemKits, Inc. [Member] - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 17, 2020 |
Consideration amount | $ 450,000 | ||||
Working capital adjustments | 150,000 | ||||
Consideration paid in cash | 100,000 | ||||
Note payable | $ 350,000 | ||||
Forecast [Member] | |||||
Installment payments | $ 87,500 | $ 87,500 | $ 87,500 | ||
Subsequent Event [Member] | |||||
Installment payments | $ 87,500 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - MyStemKits, Inc. [Member] | Apr. 17, 2020USD ($) |
Cash | $ 747 |
Inventories | 36,159 |
Total assets acquired | 36,906 |
Total liabilities assumed | (33,556) |
Net assets acquired | 3,351 |
Customer relationships | 148,883 |
Trademarks | 148,883 |
Technology | 148,883 |
Cash | 100,000 |
Note Payable | 350,000 |
Total | $ 450,000 |
Accounts Receivable - Trade - S
Accounts Receivable - Trade - Schedule of Accounts Receivable - Trade (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable - trade | $ 6,238,395 | $ 4,522,352 |
Allowance for doubtful accounts | (451,515) | (358,225) |
Allowance for sales returns and volume rebates | (429,940) | (499,070) |
Accounts receivable - trade, net of allowances | $ 5,356,940 | $ 3,665,057 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 2,769,796 | $ 3,239,038 |
Spare parts | 270,557 | 273,080 |
Reserve for inventory obsolescence | (172,161) | (193,261) |
Inventories, net | $ 2,868,192 | $ 3,318,857 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Prepaid expenses and other current assets | $ 3,172,768 | $ 1,765,741 |
Prepayments to Vendors [Member] | ||
Prepaid expenses and other current assets | 2,961,653 | 1,389,044 |
Prepaid Licenses and Other [Member] | ||
Prepaid expenses and other current assets | 206,430 | 315,354 |
Prepaid Local Taxes [Member] | ||
Prepaid expenses and other current assets | 4,685 | 26,088 |
Prepaid Insurance [Member] | ||
Prepaid expenses and other current assets | $ 35,255 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 8,744 | $ 16,768 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Property and equipment, at cost | $ 294,696 | $ 294,696 |
Accumulated depreciation | (96,043) | (87,299) |
Property and equipment, net of accumulated depreciation | 198,653 | 207,397 |
Building [Member] | ||
Property and equipment, at cost | 199,708 | 199,708 |
Building Improvements [Member] | ||
Property and equipment, at cost | 9,086 | 9,086 |
Leasehold Improvements [Member] | ||
Property and equipment, at cost | 3,355 | 3,355 |
Office Equipment [Member] | ||
Property and equipment, at cost | 40,062 | 40,062 |
Other Equipment [Member] | ||
Property and equipment, at cost | $ 42,485 | $ 42,485 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 431,080 | $ 450,641 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Intangible Assets and Goodwill (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Intangible assets, at cost | $ 8,740,817 | $ 8,294,168 |
Accumulated amortization | (3,166,151) | (2,735,071) |
Intangible assets, net of accumulated amortization | 5,574,666 | 5,559,097 |
Goodwill | 4,723,549 | 4,723,549 |
EOS [Member] | ||
Goodwill | 78,411 | 78,411 |
Qwizdom, Inc [Member] | ||
Goodwill | 463,147 | 463,147 |
Mimio [Member] | ||
Goodwill | 44,931 | 44,931 |
Boxlight [Member] | ||
Goodwill | $ 4,137,060 | 4,137,060 |
Patents [Member] | ||
Useful lives | 9 years | |
Intangible assets, at cost | $ 81,683 | 81,683 |
Customer Relationships [Member] | ||
Useful lives | 10 years | |
Intangible assets, at cost | $ 4,158,238 | 4,009,355 |
Technology [Member] | ||
Useful lives | 5 years | |
Intangible assets, at cost | $ 420,468 | 271,585 |
Domain [Member] | ||
Useful lives | 15 years | |
Intangible assets, at cost | $ 13,955 | 13,955 |
Trademarks [Member] | ||
Useful lives | 10 years | |
Intangible assets, at cost | $ 4,066,473 | $ 3,917,590 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | May 22, 2020 | Apr. 17, 2020 | Feb. 06, 2020 | Dec. 13, 2019 | Mar. 22, 2019 | Mar. 22, 2019 | Mar. 12, 2019 | Jun. 22, 2018 | Aug. 15, 2017 | Jan. 16, 2015 | May 21, 2014 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Number of common stock issued, value | $ 10,693,937 | $ 10,693,937 | ||||||||||||||
Proceeds from convertible note | 750,000 | 4,000,000 | ||||||||||||||
Interest expenses | 628,216 | $ 479,022 | 1,087,536 | 759,625 | ||||||||||||
Proceeds from loan | 1,008,575 | |||||||||||||||
Proceeds from financing | $ 25 | |||||||||||||||
Qwizdom, Inc [Member] | ||||||||||||||||
Debt instrument principal amount | $ 656,000 | |||||||||||||||
Debt interest rate percentage | 8.00% | |||||||||||||||
Percentage for shareholders | 100.00% | |||||||||||||||
Long term note payable | $ 656,000 | |||||||||||||||
Mark Elliott [Member] | ||||||||||||||||
Debt instrument principal amount | 2,163 | 2,163 | $ 23,548 | |||||||||||||
Debt instrument conversion price | $ 6.28 | |||||||||||||||
Debt conversion percentage | 20.00% | |||||||||||||||
Accrued interest | 1,744 | 1,744 | 593 | |||||||||||||
Debt interest rate percentage | 10.00% | |||||||||||||||
Notes payable | $ 50,000 | |||||||||||||||
Class A Common Stock [Member] | Steve Barker [Member] | ||||||||||||||||
Issuance of class a common stock | $ 200,000 | |||||||||||||||
Note payable | $ 70,000 | |||||||||||||||
Lind [Member] | ||||||||||||||||
Debt instrument principal amount | 3,668,504 | 3,668,504 | 4,185,866 | |||||||||||||
Accrued interest | 62,872 | 62,872 | 5,425 | |||||||||||||
Notes payable | 3,417,537 | 3,417,537 | ||||||||||||||
Lind [Member] | Class A Common Stock [Member] | ||||||||||||||||
Debt instrument principal amount | 1,466,666 | 1,466,666 | 977,778 | |||||||||||||
Accrued interest | 91,259 | 91,259 | 106,643 | |||||||||||||
Sallyport Commercial Finance, LLC [Member] | ||||||||||||||||
Debt instrument principal amount | 1,639,251 | 1,639,251 | ||||||||||||||
Accrued interest | 0 | 0 | ||||||||||||||
Interest expenses | 411,267 | |||||||||||||||
STEM Education Holdings [Member] | ||||||||||||||||
Debt instrument principal amount | 350,000 | 350,000 | ||||||||||||||
Accrued interest | 5,036 | 5,036 | ||||||||||||||
Debt interest rate percentage | 7.00% | |||||||||||||||
Notes payable | $ 350,000 | |||||||||||||||
STEM Education Holdings [Member] | Four Equal Installments [Member] | ||||||||||||||||
Repayment of principal amount | $ 87,500 | |||||||||||||||
Qwizdom, Inc [Member] | ||||||||||||||||
Debt instrument principal amount | 381,563 | 381,563 | 381,563 | |||||||||||||
Accrued interest | 22,555 | 22,555 | 7,334 | |||||||||||||
Long term note payable | 381,563 | $ 381,563 | ||||||||||||||
Quarterly payment description | The principal and accrued interest of the $656,000 note is due and payable in 12 equal quarterly payments. The first quarterly payment was due September 2018 and subsequent quarterly payments are due through June 2021. Principal and accrued interest become due and payable in full upon the completion of a public offering of Class A common stock or private placement of debt or equity securities for $10,000,000 or more. | |||||||||||||||
Qwizdom, Inc [Member] | Class A Common Stock [Member] | ||||||||||||||||
Proceeds from financing | $ 10,000,000 | |||||||||||||||
Securities Purchase Agreement [Member] | 2020 Note [Member] | ||||||||||||||||
Convertible note payable | $ 825,000 | |||||||||||||||
Debt interest rate percentage | 8.00% | |||||||||||||||
Securities Purchase Agreement [Member] | Class A Common Stock [Member] | ||||||||||||||||
Number of common stock issued, value | $ 60,000 | |||||||||||||||
Securities Purchase Agreement [Member] | Lind [Member] | ||||||||||||||||
Working capital financing amount | $ 4,000,000 | $ 4,000,000 | ||||||||||||||
Debt instrument principal amount | $ 4,400,000 | $ 4,400,000 | ||||||||||||||
Debt weighted average interest rate | 8.00% | 8.00% | 8.00% | |||||||||||||
Debt maturity period | 24 months | 24 months | ||||||||||||||
Debt instrument conversion price | $ 2.50 | |||||||||||||||
Debt conversion percentage | 50.00% | |||||||||||||||
Debt commitment fee | $ 125,000 | |||||||||||||||
Proceeds from convertible note | $ 1,250,000 | |||||||||||||||
Convertible note payable | $ 1,375,000 | |||||||||||||||
Securities Purchase Agreement [Member] | Lind [Member] | Class A Common Stock [Member] | ||||||||||||||||
Debt instrument principal amount | 76,388 | $ 76,388 | 0 | |||||||||||||
Debt instrument conversion price | $ 4 | $ 4 | ||||||||||||||
Debt conversion percentage | 50.00% | 100.00% | ||||||||||||||
Debt conversion price per share increase | $ 26,250 | |||||||||||||||
Debt commitment fee | $ 43,750 | |||||||||||||||
Number of common stock issued | 44,557 | 69,420 | 275,428 | |||||||||||||
Number of common stock issued, value | $ 93,022 | $ 108,091 | ||||||||||||||
Accrued interest | 91,259 | 91,259 | $ 0 | |||||||||||||
Payment of closing fee | $ 60,000 | |||||||||||||||
Securities Purchase Agreement [Member] | Lind [Member] | Class A Common Stock [Member] | Minimum [Member] | ||||||||||||||||
Debt conversion price per share increase | $ 5 | $ 8 | ||||||||||||||
Securities Purchase Agreement [Member] | Lind [Member] | Class A Common Stock [Member] | Maximum [Member] | ||||||||||||||||
Debt conversion price per share increase | $ 6.25 | $ 12 | ||||||||||||||
Securities Purchase Agreement [Member] | Lind Global Macro Fund, LP [Member] | ||||||||||||||||
Debt commitment fee | 26,250 | |||||||||||||||
Number of common stock issued, value | 750,000 | |||||||||||||||
Repayment of principal amount | $ 45,833 | |||||||||||||||
Debt maturity description | The Note matures over 24 months, with repayment to commence August 4, 2020, after which time the Company will be obligated to make monthly payments of $45,833, plus interest. | |||||||||||||||
Sale and Purchase Agreement [Member] | Sallyport Commercial Finance, LLC [Member] | ||||||||||||||||
Debt commitment fee | $ 950 | |||||||||||||||
Purchase of eligible accounts receivable percentage | 85.00% | |||||||||||||||
Minimum monthly sales volume | $ 1,250,000 | |||||||||||||||
Line of credit maximum borrowing capacity | 6,000,000 | |||||||||||||||
Auditor fee | $ 950 | |||||||||||||||
Sale and Purchase Agreement [Member] | Sallyport Commercial Finance, LLC [Member] | Floor Rate [Member] | ||||||||||||||||
Accrued interest rate percentage | 4.25% | |||||||||||||||
Sale and Purchase Agreement [Member] | Sallyport Commercial Finance, LLC [Member] | Maximum [Member] | Prime Rate [Member] | ||||||||||||||||
Accrued interest rate percentage | 4.00% | |||||||||||||||
Paycheck Protection Program [Member] | ||||||||||||||||
Debt instrument principal amount | 1,008,575 | 1,008,575 | ||||||||||||||
Accrued interest | $ 1,121 | $ 1,121 | ||||||||||||||
Debt interest rate percentage | 1.00% | |||||||||||||||
Debt maturity description | The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. | |||||||||||||||
Proceeds from loan | $ 1,008,575 | |||||||||||||||
Line of Credit Agreement [Member] | Logical Choice Corporation [Member] | ||||||||||||||||
Line of credit maximum borrowing capacity | $ 500,000 | |||||||||||||||
Accrued interest rate percentage | 10.00% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Total debt | $ 7,050,056 | $ 6,213,977 |
Third Parties [Member] | ||
Total debt - third parties | 7,076,992 | 6,348,721 |
Less: Discount and issuance cost - Lind Global | 410,662 | 611,355 |
Current portion of debt - third parties | 5,388,350 | 4,536,227 |
Long-term debt - third parties | 1,277,980 | 1,201,139 |
Third Parties [Member] | Paycheck Protection Program [Member] | ||
Total debt - third parties | 1,008,575 | |
Third Parties [Member] | Note Payable - Lind Global [Member] | ||
Total debt - third parties | 4,079,166 | 4,797,221 |
Third Parties [Member] | Accounts Receivable Financing - Sallyport Commercial [Member] | ||
Total debt - third parties | 1,639,251 | 1,551,500 |
Third Parties [Member] | Note Payable - STEM Education Holdings [Member] | ||
Total debt - third parties | 350,000 | |
Related Parties [Member] | ||
Total debt - third parties | 383,726 | 476,611 |
Current portion of debt - third parties | 383,726 | 368,383 |
Long-term debt - third parties | 108,228 | |
Related Parties [Member] | Note payable - Qwizdom (Darin & Silvia Beamish) [Member] | ||
Total debt - third parties | 381,563 | 381,563 |
Related Parties [Member] | Note payable - Mark Elliott [Member] | ||
Total debt - third parties | 2,163 | 23,548 |
Related Parties [Member] | Note payable -Steve Barker [Member] | ||
Total debt - third parties | 17,500 | |
Related Parties [Member] | Note payable - Logical Choice Corporation - Delaware [Member] | ||
Total debt - third parties | $ 54,000 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Fair Value of Derivative Liabilities (Details) | 6 Months Ended | ||
Jun. 30, 2020$ / sharesshares | Jun. 30, 2019$ / sharesshares | ||
Common stock issuable upon exercise of warrants | shares | 295,000 | 1,189,949 | |
Market Value of Common Stock on Measurement Date [Member] | |||
Derivative liability, measurement input, per shares | $ 0.92 | $ 3.07 | |
Exercise Price [Member] | |||
Derivative liability, measurement input, per shares | $ 0.43 | ||
Exercise Price [Member] | Minimum [Member] | |||
Derivative liability, measurement input, per shares | 1.20 | ||
Exercise Price [Member] | Maximum [Member] | |||
Derivative liability, measurement input, per shares | $ 2.78 | ||
Risk free Interest Rate [Member] | |||
Derivative liability, measurement input, percent | [1] | 0.16 | |
Risk free Interest Rate [Member] | Minimum [Member] | |||
Derivative liability, measurement input, percent | [1] | 1.71 | |
Risk free Interest Rate [Member] | Maximum [Member] | |||
Derivative liability, measurement input, percent | [1] | 2.09 | |
Expected Life in Years [Member] | |||
Derivative liability, measurement input term | 1 year 6 months | ||
Expected Life in Years [Member] | Minimum [Member] | |||
Derivative liability, measurement input term | 6 months | ||
Expected Life in Years [Member] | Maximum [Member] | |||
Derivative liability, measurement input term | 2 years 6 months | ||
Expected Volatility [Member] | |||
Derivative liability, measurement input, percent | [2] | 122.90 | |
Expected Volatility [Member] | Minimum [Member] | |||
Derivative liability, measurement input, percent | [2] | 74 | |
Expected Volatility [Member] | Maximum [Member] | |||
Derivative liability, measurement input, percent | [2] | 76 | |
Expected Dividend Yields [Member] | |||
Derivative liability, measurement input, percent | [3] | 0 | 0 |
[1] | The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date. | ||
[2] | The expected volatility was determined by calculating the volatility of the Company's common stock. | ||
[3] | The Company does not expect to pay a dividend in the foreseeable future. |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Change in Derivative Liabilities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Derivative liabilities, beginning balance | $ 146,604 | $ 326,452 | ||
Initial valuation of derivative liabilities upon issuance of warrants | 42,585 | |||
Change in fair value of derivative liabilities | $ 74,363 | $ (263,260) | 45,700 | 1,899,235 |
Derivative liabilities, Ending balance | $ 192,304 | $ 2,268,272 | $ 192,304 | $ 2,268,272 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Jun. 11, 2020 | Apr. 17, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Aug. 05, 2019 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Net proceeds from issuance of stock | $ 10,693,937 | |||||||
Number of common stock issued, value | $ 10,693,937 | 10,693,937 | ||||||
Gain from settlements of liabilities | $ 53,074 | $ 1,139,583 | 146,434 | |||||
Stemify [Member] | ||||||||
Number of common stock issued | 142,857 | |||||||
Share price per share | $ 0.70 | |||||||
Number of common stock issued, value | $ 100,000 | |||||||
Board of Directors [Member] | ||||||||
Preferred stock, shares authorized | 48,280,000 | 48,280,000 | ||||||
Michael Pope [Member] | ||||||||
Number of common stock issued | 52,241 | |||||||
Series A Preferred Stock [Member] | ||||||||
Preferred voting shares | 250,000 shares of non-voting | |||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||||
Number of shares issued for acquisition | ||||||||
Series A Preferred Stock [Member] | Genesis [Member] | ||||||||
Number of shares issued for acquisition | 250,000 | |||||||
Converted shares | 398,406 | 398,406 | ||||||
Series B Preferred Stock [Member] | ||||||||
Preferred voting shares | 1,200,000 shares of voting | |||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||||
Series C Preferred Stock [Member] | ||||||||
Preferred voting shares | 270,000 shares of voting | |||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||||
Preferred Stock [Member] | ||||||||
Converted shares | 82,028 | |||||||
Class A Common Stock and Additional Paid-in Capital [Member] | ||||||||
Converted shares | 130,721 | |||||||
Number of common stock issued, value | $ 10,693,937 | $ 10,693,937 | ||||||
Class A Voting Common Stock [Member] | ||||||||
Common stock voting right | 150,000,000 shares of Class A voting common stock | |||||||
Class B Non Voting Common Stock [Member] | ||||||||
Common stock voting right | 50,000,000 shares of Class B non-voting common stock | |||||||
Class A Common Stock [Member] | ||||||||
Common stock, shares issued | 31,857,327 | 31,857,327 | 11,698,697 | |||||
Common stock, shares outstanding | 31,857,327 | 31,857,327 | 11,698,697 | |||||
Number of shares issued for service | 7,111 | |||||||
Number of shares issued for service, value | $ 8,000 | |||||||
Class A Common Stock [Member] | Notes Payable [Member] | Lind [Member] | ||||||||
Debt converted into shares | 2,340,056 | |||||||
Debt converted into shares, value | $ 2,929,369 | |||||||
Class A Common Stock [Member] | Convertible Debt [Member] | Lind [Member] | ||||||||
Debt converted into shares | 80,467 | |||||||
Debt converted into shares, value | $ 79,371 | |||||||
Class A Common Stock [Member] | Accounts Payable [Member] | Everest Display, Inc [Member] | ||||||||
Debt converted into shares | 2,202,898 | |||||||
Debt converted into shares, value | $ 1,269,275 | |||||||
Accounts Payable | $ 3,000,000 | 3,000,000 | ||||||
Gain from settlements of liabilities | $ 1,730,725 | |||||||
Class B Common Stock [Member] | ||||||||
Common stock, shares outstanding | ||||||||
Number of common stock issued | 13,333,333 | |||||||
Share price per share | $ 0.75 | |||||||
Gross proceeds from issuance of stock | $ 11,499,750 | |||||||
Net proceeds from issuance of stock | 10,593,937 | |||||||
Underwriting discounts and offering expenses | $ 905,814 |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) | Apr. 20, 2020 | Apr. 15, 2020 | Jan. 13, 2020 | Jan. 02, 2019 | Jun. 30, 2020 |
Number of shares reserved for future issuance | 747,011 | ||||
Options intrinsic value | $ 800,000 | ||||
Number of stock options issued during period | 2,900,000 | ||||
Option exercise price per share | $ 0.75 | ||||
Expected volatility | 141.00% | ||||
Expected dividends | 0.00% | ||||
Unrecognized compensation expense | $ 2,300,000 | ||||
Compensation expense | $ 600,000 | ||||
Minimum [Member] | |||||
Discount rate | 0.29% | ||||
Expected life | 3 years | ||||
Maximum [Member] | |||||
Discount rate | 1.61% | ||||
Expected life | 4 years | ||||
Stock Options [Member] | |||||
Option vested years | 4 years | 1 year | 1 year | 4 years | |
Option expiration term | 5 years | 5 years | 5 years | 5 years | |
Number of stock options issued during period | 2,550,000 | 50,000 | 300,000 | ||
Option exercise price per share | $ 0.70 | $ 1.20 | $ 1.30 | ||
Fair value of stock options | $ 1,503,645 | $ 46,700 | $ 268,512 | ||
Stock Options [Member] | President [Member] | |||||
Number of stock options issued during period | 100,000 | ||||
Stock Options [Member] | Chief Executive Officer [Member] | |||||
Number of stock options issued during period | 100,000 | ||||
Stock Options [Member] | Chief Operating Officer [Member] | |||||
Number of stock options issued during period | 100,000 | ||||
Directors Officers Key Employees Consultants [Member] | |||||
Share based compensation stock option available for grant | 2,690,438 | ||||
Directors, Officers and Employees [Member] | Equity Incentive Plan [Member] | |||||
Share based compensation stock option available for grant | 3,700,000 | ||||
Ryan Legudi [Member] | |||||
Option vested years | 4 years | ||||
Option expiration term | 5 years | ||||
Number of stock options issued during period | 20,000 | ||||
Option exercise price per share | $ 0.70 | ||||
Fair value of stock options | $ 16,444 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Stock Option Activities (Details) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Units, Outstanding, Beginning balance | shares | 2,384,688 |
Number of Units, Granted | shares | 2,900,000 |
Number of Units, Cancelled | shares | (384,761) |
Number of Units, Outstanding, Ending balance | shares | 4,899,927 |
Number of Units, Exercisable | shares | 1,884,562 |
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares | $ 3.35 |
Weighted Average Exercise Price, Granted | $ / shares | 0.75 |
Weighted Average Exercise Price, Cancelled | $ / shares | 4.03 |
Weighted Average Exercise Price, Outstanding, Ending | $ / shares | 1.76 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 3.01 |
Weighted Average Remaining Contractual Terms (in Years), Outstanding Beginning | 4 years 1 month 24 days |
Weighted Average Remaining Contractual Terms (in Years), Outstanding Ending | 4 years 1 month 6 days |
Weighted Average Remaining Contractual Terms (in Years), Exercisable | 3 years 2 months 30 days |
Stock Compensation - Schedule_2
Stock Compensation - Schedule of Warrant Activity (Details) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Units, Outstanding, Beginning Balance | shares | 350,000 |
Number of Units, Granted | shares | 20,000 |
Number of Units, Cancelled | shares | (5,000) |
Number of Units, Outstanding, Ending Balance | shares | 365,000 |
Number of Units, Exercisable | shares | 345,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 2.20 |
Weighted Average Exercise Price, Granted | $ / shares | 0.70 |
Weighted Average Exercise Price, Cancelled | $ / shares | 4.80 |
Weighted Average Exercise Price, Ending Balance | $ / shares | 2.06 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 2.14 |
Weighted Average Remaining Contractual Term (in years), Beginning Balance | 2 years 1 month 9 days |
Weighted Average Remaining Contractual Term (in years), Ending Balance | 1 year 9 months 11 days |
Weighted Average Remaining Contractual Term (in years), Exercisable | 1 year 7 months 6 days |
Stock Compensation - Schedule_3
Stock Compensation - Schedule of Stock Compensation Expenses (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Total stock compensation expense | $ 520,064 | $ 321,188 |
Warrants [Member] | ||
Total stock compensation expense | 42,585 | |
Stock Options [Member] | ||
Total stock compensation expense | 498,742 | 278,603 |
Restricted Stock Award [Member] | ||
Total stock compensation expense | $ 21,322 |
Other Related Party Transacti_2
Other Related Party Transactions (Details Narrative) - USD ($) | Jan. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Percentage of annual management fee payable in cash | 0.375% | |||||
Revenues | $ 250,000 | $ 7,827,718 | $ 10,801,523 | $ 13,550,767 | $ 15,794,923 | |
Number of common stock issued, value | 10,693,937 | 10,693,937 | ||||
Gain from settlements of liabilities | 53,074 | 1,139,583 | 146,434 | |||
Everest Display, Inc [Member] | ||||||
Payments to acquire products | 317,327 | 379,627 | ||||
Proceeds from sale | 35,654 | $ 21,336 | ||||
Accounts payable | 2,066,848 | 2,066,848 | $ 5,037,569 | |||
Everest Display, Inc [Member] | Asset Purchases Agreement [Member] | ||||||
Accounts payable | $ 3,000,000 | $ 3,000,000 | ||||
Number of common stock issued | 2,202,898 | |||||
Number of common stock issued, value | $ 1,269,275 | |||||
Gain from settlements of liabilities | $ 1,730,725 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 219,650 | $ 206,227 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Jun. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 202,172 |
2021 | 369,914 |
2022 | 135,239 |
Net Minimum Lease Payments | $ 707,325 |
Customer and Supplier Concent_3
Customer and Supplier Concentration (Details Narrative) | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration risk, description | Significant customers and suppliers are those that account for greater than 10% of the Company's revenues and purchases. |
Customer and Supplier Concent_4
Customer and Supplier Concentration - Schedule of Concentration Risk (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue [Member] | Customer One [Member] | ||
Concentration risk percentage | 17.00% | 20.00% |
Revenue [Member] | Customer Two [Member] | ||
Concentration risk percentage | 12.00% | 13.00% |
Accounts Receivable [Member] | Customer One [Member] | ||
Accounts receivable | $ 869,000 | $ 877,000 |
Accounts Receivable [Member] | Customer Two [Member] | ||
Accounts receivable | $ 285,000 | $ 1,210,000 |
Purchases [Member] | Vendor One [Member] | ||
Concentration risk percentage | 31.00% | 27.00% |
Purchases [Member] | Vendor Two [Member] | ||
Concentration risk percentage | 17.00% | |
Accounts Payable [Member] | Vendor One [Member] | ||
Accounts payable (prepayment) | $ (1,319,000) | $ (2,215,000) |
Accounts Payable [Member] | Vendor Two [Member] | ||
Accounts payable (prepayment) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Aug. 04, 2020 | Jul. 31, 2020 | Jul. 22, 2020 | Jul. 16, 2020 | Jul. 13, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Number of common stock shares issued, value | $ 10,693,937 | $ 10,693,937 | |||||||
Proceeds from common stock | $ 10,693,937 | ||||||||
Subsequent Event [Member] | Class A Common Stock [Member] | |||||||||
Number of common stock shares issued | 66,602 | 17,250,000 | 338,792 | 488,888 | 118,781 | ||||
Number of common stock shares issued, value | $ 79,388 | $ 257,481 | $ 1,222,222 | $ 85,046 | |||||
Purchase price per share | $ 1.19 | $ 2 | $ 0.76 | $ 2.50 | $ 0.72 | ||||
Proceeds from common stock | $ 32,025,000 | ||||||||
Underwriting fees | $ 2,475,000 |