nDivision (NDVNQ) S-1/A 14 Apr 21 IPO registration (amended) Financial data

Cover

Cover	12 Months Ended
	Dec. 31, 2020
Cover [Abstract]
Entity Registrant Name	nDivision Inc.
Entity Central Index Key	0001659183
Document Type	S-1/A
Amendment Flag	true
Amendment Description	Amendment
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Filer Category	Non-accelerated Filer
Entity Ex Transition Period	true

CONSOLDIATED BALANCE SHEETS

CONSOLDIATED BALANCE SHEETS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash	$ 1,806,606	$ 1,757,695
Accounts receivable, net (allowance for doubtful accounts was $26,000 at December 31, 2020 and $10,000 at December 31, 2019)	531,244	548,825
Prepaid expenses	121,339	107,428
Total current assets	2,459,189	2,413,948
Equipment and software licenses - at cost, less accumulated depreciation and amortization	540,918	210,004
Other assets
Intangible asset, less accumulated amortization	455,320	657,871
Right-of-use asset	441,940	542,975
Total other assets	897,260	1,200,846
Total assets	3,897,367	3,824,798
Current liabilities
Accounts payable	153,427	137,582
Accrued liabilities	373,487	479,081
Deferred revenue	870,184	1,977,825
Current portion of note payable	514,678	0
Current portion of acquisition note payable	18,102	57,492
Current portion of operating lease payable	105,615	124,452
Current portion of finance lease obligations	125,449	129,532
Total current liabilities	2,160,942	2,905,964
Note payable	195,822	0
Acquisition note payable	0	14,666
Convertible notes payable, net of discount	734,282	0
Operating lease payable, net of current portion	336,520	412,302
Finance lease obligations, net of current portion	380,209	27,006
Total long-term liabilities	1,646,833	453,974
Commitments	0	0
Stockholders' equity
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $0.001 par value, 180,000,000 shares authorized, and 42,499,783 and 41,249,783 shares issued and outstanding, respectively	42,500	41,250
Additional paid in capital	7,160,175	6,037,767
Accumulated deficit	(7,113,083)	(5,614,157)
Total stockholders' equity	89,592	464,860
Total liabilities and stockholders' equity	$ 3,897,367	$ 3,824,798

CONSOLDIATED BALANCE SHEETS (Pa

CONSOLDIATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Current assets
Allowance for doubtful debts	$ 26,000	$ 10,000
Stockholder's equity
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	42,499,783	41,249,783
Common stock, shares outstanding	42,499,783	41,249,783

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS
Service revenue	$ 5,927,173	$ 5,872,767
Service costs	4,107,556	3,794,196
Gross profit	1,819,617	2,078,571
Operating expenses
Selling, general and administrative expenses	3,217,188	3,008,496
Change in contingent consideration	0	(30,757)
Total Operating expenses	3,217,188	2,977,739
Loss from operations	(1,397,571)	(899,168)
Other (expense) income
Interest expense	(109,810)	(81,057)
Other income	8,455	0
Other (expense) income	(101,355)	(81,057)
Net loss before income tax	(1,498,926)	(980,225)
Income tax expense	0	0
Net loss	$ (1,498,926)	$ (980,225)
Basic and diluted loss per share	$ (0.04)	$ (0.02)
Weighted average shares outstanding	41,437,625	41,014,810

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Balance, shares at Dec. 31, 2018		40,504,005
Balance, amount at Dec. 31, 2018	$ 591,065	$ 40,504	$ 5,184,493	$ (4,633,932)
Amortization of stock option and warrant expense	566,019	$ 0	566,019	0
Common stock issued for cash, net, shares		745,778
Common stock issued for cash, net, amount	288,001	$ 746	287,255	0
Net loss	(980,225)	$ 0	0	(980,225)
Balance, shares at Dec. 31, 2019		41,249,783
Balance, amount at Dec. 31, 2019	464,860	$ 41,250	6,037,767	(5,614,157)
Amortization of stock option and warrant expense	690,571	0	690,571	0
Net loss	(1,498,926)	0	0	(1,498,926)
Beneficial conversion feature	336,300	$ 0	336,300	0
Common stock issued for services, shares		1,250,000
Common stock issued for services, amount	96,787	$ 1,250	95,537	0
Balance, shares at Dec. 31, 2020		42,499,783
Balance, amount at Dec. 31, 2020	$ 89,592	$ 42,500	$ 7,160,175	$ (7,113,083)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net loss	$ (1,498,926)	$ (980,225)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization	432,278	511,142
Provision for doubtful accounts	24,624	22,413
Amortization of beneficial conversion feature	20,582	0
Non-cash lease expense	101,035	12,968
Stock based compensation	787,358	566,019
Loss on sale of assets	88	4,533
Change in contingent consideration	0	(30,757)
Changes in assets and liabilities
Accounts receivable	(7,043)	(93,064)
Prepaid expenses	(13,911)	135,221
Accounts payable and accrued liabilties	(89,749)	(53,970)
Deferred revenue	(1,107,641)	1,977,825
Operating lease payable	(94,619)	(19,189)
Net cash (used in) provided by operating activities	(1,445,924)	2,052,916
Cash flows from investing activities
Repayment of debt related to acquisition	(54,056)	(88,262)
Proceeds from sale of equipment and software license	401	31,699
Acquisition of equipment and software licenses	(11,064)	(56,994)
Net cash used in investing activities	(64,719)	(113,557)
Cash flows from financing activities
Proceeds from issuance of common stock, net	0	288,001
Proceeds of Paycheck Protection note payable	710,500	0
Repayment factor credit facility	0	(169,257)
Proceeds (repayments) of notes payable	1,050,000	(13,358)
Repayment of finance lease obligations	(200,946)	(441,991)
Net cash provided by (used in) financing activities	1,559,554	(336,605)
Net increase in cash	48,911	1,602,754
Cash, beginning of year	1,757,695	154,941
Cash, end of year	1,806,606	1,757,695
Supplemental cash flow disclosures
Interest paid	33,318	60,024
Non-cash financing activities
Operating lease asset obtained in exchange for operating lease obligation	34,000	555,943
Purchase of equipment under capital lease	550,066	0
Beneficial conversion feature	$ 336,300	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	12 Months Ended
	Dec. 31, 2020
DESCRIPTION OF BUSINESS
1. DESCRIPTION OF BUSINESS	nDivision Inc. (“nDivision” or the “Company”) was incorporated under the laws of the state of Texas. nDivision’s registered office is located at located at 7301 N. State Highway 161, Suite 100, Irving, TX, 75039. The Company provides managed IT services and project-based professional services in the information technology industry, selling its services directly to customers and through global service providers (GSP). The Company operates in most states of the United States of America.

LIQUIDITY

LIQUIDITY	12 Months Ended
	Dec. 31, 2020
LIQUIDITY
2. LIQUIDITY	The Company has experienced significant losses and negative cash flows from operations in the past. Management has secured new managed services contracts, implemented a strategy which includes cost reduction efforts, as well as identifying strategic acquisitions to improve the overall profitability and cash flows of the Company. During the year ended December 31, 2020, the Company received proceeds from the issuance of notes payable of approximately $1,760,500. The Company also has working capital of $298,247 at December 31, 2020. Management intends to finance operating costs over the next twelve months from the date of the issuance of these consolidated financial statements with existing cash on hand and expected cash flow from operations, in addition to the issuance of additional convertible debt to invest in sales and marketing activities. Management believes the expected cash flow from operations, cash flow from the issuance of convertible notes and cash on hand will be sufficient to finance operations over the next twelve months from the date of this report. In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, as of August the Company has transitioned its operations to 100% work from home and there has been minimal impact to our internal operations from the transition. The Company is unable to determine if there will be a material future impact to its customers’ operations and ultimately an impact to the Company’s overall revenues.

SUMMMARY OF SIGNIFICANT ACCOUNT

SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2020
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3. SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Basis of Presentation The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. Principles of Consolidation The consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. Use of Estimates Management uses estimates and assumptions in preparing these consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Revenue Recognition For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company recognizes revenue upon completion of our performance obligations or expiration of the contractual time to use services such as professional service hours purchased in bulk for a given time period. Any early termination fees are recognized in the period the contract is terminated and the termination invoice is paid. The Company has elected the following practical expedients in applying ASC 606: Unsatisfied Performance Obligations - all performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Contract Costs - all incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration. Sales Tax Exclusion from the Transaction Price - the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer. Cash and Cash Equivalents For purposes of the consolidated financial statements, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are primarily maintained at a single bank. Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations. Accounts Receivable Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company’s estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that a $26,000 and $10,000 allowance was required for the fiscal years ended December 31, 2020 and 2019, respectively. The Company does not accrue interest on past due receivables. Intangible Assets Customer contracts acquired were recorded at their estimated fair value at the date of acquisition and are being amortized over their estimated useful life of five years using the straight-line method. Impairment of Long-lived Assets The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. The Company did not record any impairment during the years ended December 31, 2020 and December 31, 2019. Paycheck Protection Note Payable The Company received a loan from the Paycheck Protection Program in the amount of $710,500 established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan is subject to a note dated May 2, 2020 and may be forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. No determination has been made as to whether the Company will be eligible for forgiveness, in whole or in part. The loan bears interest at a rate of 1% and is payable in monthly installments of principal and interest over 24 months beginning 6 months from the date of the note. The loan may be repaid at any time with no prepayment penalty. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable. See Note 15 for significant customer concentration disclosure. Cash is maintained with a major financial institution in the United States and may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk. Equipment and Software Licenses Equipment and software licenses are stated at cost. Depreciation is calculated using the straight-line method over an estimated useful life of one to ten years. Convertible Debt and Securities The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option's in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. Earnings and Loss per Share Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. There were approximately 9,488,750 and 2,585,177 of common stock equivalents excluded for the fiscal years ended December 31, 2020 and 2019, respectively because their effect is anti-dilutive. Marketing Costs Marketing costs, which are expensed as incurred, totaled approximately $56,943 and $92,144 for the fiscal years ended December 31, 2020 and 2019, respectively and is included in selling, general and administrative expenses. Stock-Based Compensation Compensation expense related to share-based transactions, including employee stock options, is measured in the financial statements based on a determination of the fair value. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. See Note 12 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. Leases The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use ("ROU") assets are included in right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, net of current portion, respectively on the consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases of assets where the Company has assumed substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The interest element of the finance leases are accounted for as finance costs and expensed over the lease term using the effective interest rate method. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2020, no accrued interest or penalties are included on the related tax liability line in the balance sheet.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	12 Months Ended
	Dec. 31, 2020
RECENT ACCOUNTING PRONOUNCEMENTS
4. RECENT ACCOUNTING PRONOUNCEMENTS	New Accounting Pronouncements Recently Adopted In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2021. Early adoption is permitted. The impact of adopting this ASU did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company’s present or future consolidated financial statements.

EQUIPMENT AND SOFTWARE LICENSES

EQUIPMENT AND SOFTWARE LICENSES	12 Months Ended
	Dec. 31, 2020
EQUIPMENT AND SOFTWARE LICENSES
5. EQUIPMENT AND SOFTWARE LICENSES	Equipment and software licenses consist of the following: December 31, 2020 December 31, 2019 Equipment and software $ 599,900 $ 489,151 Software licenses 1,302,141 868,041 1,902,041 1,357,192 Less - Accumulated depreciation and amortization (1,361,123 ) (1,147,188 ) $ 540,918 $ 210,004 Depreciation and amortization expense related to assets for the fiscal years ended December 31, 2020 and 2019 was approximately $58,157 and $31,614 respectively. Included in the above paragraph is depreciation and amortization expense related to leased assets for the years ended December 31, 2020 and 2019 was approximately $171,570 and $276,505, respectively. During the year ended December 31, 2020, the Company disposed of $16,105 of equipment and software and related accumulated depreciation of $15,792, for proceeds of $401 which resulted in a gain $88. During the year ended December 31, 2019, the Company disposed of $790,803 of equipment and software and related accumulated depreciation of $754,570, for proceeds of $31,699 which resulted in a gain $4,533.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2020
INTANGIBLE ASSETS
6. INTANGIBLE ASSETS	Intangible Assets As of December 31, 2020 Useful Life Cost Accumulated Amortization Net Book Value Service Contracts 5 $ 1,012,335 $ 557,015 $ 455,320 There was approximately $202,551 of amortization expense for the fiscal year ended December 31, 2020 and 2019. Service contracts are amortized based on the future undiscounted cash flows or straight – line basis over estimated remaining useful lives of five years. Over the next three years, annual amortization expense for these finite life intangible assets will total approximately $455,320, as follows: fiscal 2021- $202,551, fiscal 2022- $202,551, fiscal 2023 - $50,218. Long-lived assets, including purchased intangibles subject to amortization, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company regularly evaluates whether events and circumstances have occurred that indicate possible impairment and relies on several factors, including operating results, business plans, economic projections, and anticipated future cash flows. The Company uses an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. As of December 31, 2020 and 2019, the Company has not recorded any impairments.

ACCRUED LIABILITIES

ACCRUED LIABILITIES	12 Months Ended
	Dec. 31, 2020
ACCRUED LIABILITIES
7. ACCRUED LIABILITIES	December 31, December 31, 2020 2019 Accrued compensation $ 138,707 $ 128,942 Accrued interest 23,185 - Accrued sales tax 23,525 140,683 Accrued franchise tax 11,832 5,000 Accrued professional fees and other payables 176,238 204,456 Total accrued liabilities $ 373,487 $ 479,081

FACTORING CREDIT FACILITY

FACTORING CREDIT FACILITY	12 Months Ended
	Dec. 31, 2020
FACTORING CREDIT FACILITY
8. FACTORING CREDIT FACILITY	The Company has agreements with an unrelated third party for factoring of specific accounts receivable. Under this arrangement, the Company has transferred the relevant receivables to the factor in exchange for cash and is prevented from selling or pledging the receivables. The agreement provides for an advanced rate of 90% with a fee of 1.9% to be charged on the gross face amount of the invoices purchased for 30 days, and an additional 0.06% charge for each additional day until the invoice(s) are paid. The Company has retained late payment and credit risk related to the factored receivables and therefore continues to recognize the factored receivables in their entirety on its balance sheet. The receivables under factoring arrangements are recorded within accounts receivable and factoring credit facility. The balance of the accounts receivable amount factored, and the related factor payable is $0 as of December 31, 2020 and 2019. The Company has recognized $0 and $24,676 in interest expense related to these arrangements for the fiscal year ended December 31, 2020 and 2019, respectively.

NOTE PAYABLE

NOTE PAYABLE	12 Months Ended
	Dec. 31, 2020
NOTE PAYABLE
9. NOTE PAYABLE	On May 2, 2020, the Company entered into a Paycheck Protection Program loan for $710,500 in connection with the CARES Act related to COVID-19. $514,678 of the Paycheck Protection Program loan is classified as current. The promissory note has a fixed payment schedule, commencing ten months following the funding of the note and consisting of seventeen monthly payments of principal and interest, with the principal component of each payment based upon the level of amortization of principal over a two year period from the funding date. A final payment for the unpaid principal and accrued interest will be payable no later than May 2, 2022. The note will bear interest at a rate of 1.00% per annum and is deferred for the first six months of the loan. Certain portions of the loan and accrued interest may qualify for loan forgiveness based on the terms of the program. The Company is in the process of applying for forgiveness of this loan, however at the date of this report has not submitted the application.

CONVERTIBLE NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE	12 Months Ended
	Dec. 31, 2020
CONVERTIBLE NOTES PAYABLE
10. CONVERTIBLE NOTES PAYABLE	The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence. During the year ended December 31, 2020, the Company entered several promissory notes with various investors of the Company with a face value of $1,050,000, $200,000 of which to a related party (“the Notes”). The Notes have an initial beneficial conversion feature valued at $336,300, which is recorded as a discount. The total discount on the Notes will be amortized over the life of the Notes and recorded as interest expense. For the year ended December 31, 2020, the Company has amortized $20,582 of the discount to interest expense. The notes have an interest rate of 8%. The principle and interest of the note is due in full during 2022 or can be converted into the Company’s common stock at a purchase price of the lesser of $0.40 per common share at any time after issuance or a 25% discount of the common stock price of a Qualified Offering.

LEASE OBLIGATIONS

LEASE OBLIGATIONS	12 Months Ended
	Dec. 31, 2020
LEASE OBLIGATIONS
11. LEASE OBLIGATIONS	The Company finances certain property and equipment using finance leases. These leases range from one to five years. The finance lease obligations represent the present value of the minimum lease payments, net of imputed interest. The finance lease obligations are secured by the underlying leased assets. Leases are payable in monthly installments ranging from $354 to $10,813 including interest, ranging from 3.6% to 13.2% per annum. Future minimum lease payments, including principal and interest, under the finance leases for subsequent years are as follows: Year ended 2021 $ 161,394 2022 145,374 2023 125,790 2024 116,918 2025 43,970 Total 593,446 Less: interest (87,788 ) Present value of net minimum lease payments 505,658 Short term 125,449 Long term total $ 380,209 Lease payments for the years ended December 31, 2020 and 2019 aggregated approximately $194,478 and $494,691, respectively. The finance lease obligations are secured by underlying leased assets with a net book value of approximately $509,050 and $125,553 as of December 31, 2020 and 2019, respectively. Operating Lease The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option will result in an economic penalty. All of the Company’s real estate leases are classified as operating leases. Most real estate leases include one or more options to renew, with renewal terms that generally can extend the lease term for an additional four to five years. The exercise of lease renewal options is at the Company’s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2020 are: Weighted average remaining lease term 47 Months Weighted average incremental borrowing rate 5.0 % The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized in the condensed consolidated balance sheet as of December 31, 2020: 2021 $ 105,615 2022 129,392 2023 131,859 2024 120,871 2025 - Total undiscounted future minimum lease payments 487,737 Less: Imputed interest (45,602 ) Present value of operating lease obligation $ 442,135 The Company has one leased facility which is office, manufacturing, and warehouse space. The Company is responsible for real estate taxes, utilities, and repairs under the terms of certain of the operating leases. Therefore, all lease and non-lease components are combined and accounted for as single lease component. For the year ended December 31, 2020, the components of lease expense, included in cost of services and general and administrative expenses and the related interest expense in the consolidated statements of operations income, are as follows: December 31, 2020 Operating lease cost: Operating lease cost $ 124,457 Financing lease cost: Amortization of leased assets 99,662 Interest expense 24,817 Total lease cost $ 124,479

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	12 Months Ended
	Dec. 31, 2020
STOCK BASED COMPENSATION
12. STOCK BASED COMPENSATION	Number of options outstanding: 2018 Equity Incentive Plan 7,401,677 Options granted not part of a shareholder approved plan 2,200,000 December 31, 2020 9,601,677 The Board of Directors approved the Company’s 2018 Equity Incentive Plan (the “2018 Plan”). The purpose of the 2018 Plan is to provide additional incentives to select persons who can make, are making, and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons, and to encourage and reward such contributions, by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restricted stock. The 2018 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2018 Plan (the “Committee”). The Committee has full authority to administer and interpret the provisions of the 2018 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2018 Plan. The maximum number of shares that may be granted under the 2018 Plan is 8,000,000. This number is subject to adjustment to reflect changes in the capital structure or organization of the Company. The following table reflects the stock options for year ended December 31, 2020 and 2019: A summary of stock option activity is as follows: 2020 2019 Number of options outstanding: Beginning of year 6,939,178 5,901,678 Granted 2,825,000 1,325,000 Exercised, converted - - Forfeited / exchanged / modification (162,501 ) (287,500 ) End of year 9,601,677 6,939,178 Number of options exercisable at end of year 6,513,572 3,507,661 Number of options available for grant at end of year 598,323 1,060,822 Weighted average option prices per share: Granted during the year $ 0.30 $ 0.61 Exercised during the year - - Terminated during the year 0.60 0.38 Outstanding at end of year 0.39 0.45 Exercisable at end of year $ 0.40 $ 0.39 Stock-based compensation expense attributable to stock options, restricted stock awards and warrants was $787,358 for the year ended December 31, 2020. As of December 31, 2020, there was approximately $1,419,423 of unrecognized compensation expense related to unvested stock options, restricted stock awards and warrants outstanding, and the weighted average vesting period for those options and warrants was 5 years. During the year ended December 31, 2020, the Company granted options to purchase 625,000 shares of common stock with an average vesting period of 3 years, an average expected life of 6.5 years and an average exercise price of $0.35 per common share. Total value was approximately $190,175. On August 11, 2020, the Company issued an option to an employee to purchase up to 2,000,000 shares of common stock at a per common share price of $0.34 per common share and an average expected life of 6.5 years. The option vests over 5 years; 400,000 shares on the employees 12 month anniversary and vests the remaining 1,600,000 shares 1/48 th On August 27, 2020, the Company issued an option to an employee to purchase up to 200,000 shares of common stock at a per common share price of $0.35 per common share and an average expected life of 6.5 years. The option vested immediately. Total value of this option was $61,172. These shares were not part of the Shareholder approved stock option plan and issued as an inducement of the employee. During the year ended December 31, 2019, the Company granted options to purchase 1,325,000 shares of common stock with an average vesting period of 3 years, an average expected life of 6.5 years and an average exercise price of $0.61 per common share. Total value was approximately $755,000. 2020 2019 Expected option life (years) 7.5 6.5 Expected stock price volatility 114-116 % 137-145 % Expected dividend yield — % — % Risk-free interest rate 2.07 % 2.40-2.90 % During the year ended December 31, 2020, the Company issued a warrant to a related party consultant to purchase up to 750,000 shares of common stock at a per common share price of $0.625. The consulting contract is for eighteen months and the warrant term is eighteen months. The warrant vests immediately and the total value was approximately $174,000. The Gamwell contract acquisition warrants remain outstanding. The warrant can be exercised for 122,752 of the Company’s common stock at an exercise price of $0.375 per share and expire April 23, 2028.

COMMON STOCK

COMMON STOCK	12 Months Ended
	Dec. 31, 2020
COMMON STOCK
13. COMMON STOCK	During the years ended December 31, 2020 and 2019, the Company issued the following stock: 2020 During the year ended December 31, 2020, the Company entered into three consulting agreements in which 1,250,000 shares of common stock, valued at $0.35 per share, were issued for consulting services. The value of these shares was $437,500, of which $95,537 was recognized as stock compensation expense during the year ended December 31, 2020 and the remainder of the services and value to be amortized during the years ended December 31, 2021 and 2022. 2019 The Company issued approximately 745,778 shares of common stock and received $288,001 with no material fees.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2020
RELATED PARTY TRANSACTIONS
14. RELATED PARTY TRANSACTIONS	The Company contracted with Norco Professional Services, LLC. (“Norco”) to provide consulting services. The Company spent $72,500 for the year ended December 31, 2020 and $90,000 for the year ended December 31, 2019. Norco is owned by Andrew J. Norstrud, who joined the Company in January of 2019, as the Company’s Chief Financial Officer. The Company continues to contract Andrew Norstrud’s services through Norco. The Company obtained $200,000 in debt and granted a warrant to a related party, see note 10 and 12 for additional related party transaction details. The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties.

SIGNIFICANT CUSTOMER

SIGNIFICANT CUSTOMER	12 Months Ended
	Dec. 31, 2020
SIGNIFICANT CUSTOMER
15. SIGNIFICANT CUSTOMERS	The Company had significant customers in each of the years presented. A significant customer is defined as one that makes up ten percent or more of total revenues in a particular quarter or ten-percent of outstanding accounts receivable balance as of the year end. Net revenues for the years ended December 31, 2020 and 2019 include revenues from significant customers as follows: Year Ended December 31, 2020 2019 Customer A 43 % 44 % Customer C 27 % 6 % Accounts receivable balances as of December 31, 2020 and 2019 from significant customers are as follows: December 31, December 31, 2020 2019 Customer A 79 % 75 % Customer D 0 % 17 % Customer E 14 % 0 %

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2020
INCOME TAXES
16. INCOME TAXES	Year Ended December 31, 2020 2019 Current expense (benefit): Federal $ - $ - State - - Total current expense (benefit): - - Deferred expense (benefit): Federal - - State - - Total deferred expense (benefit): - - Total income tax expense (benefit): $ - $ - A reconciliation of the Company’s tax provision for (benefit from) income taxes as computed by applying the U.S. statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2020 2019 Income at US Statutory Rate $ (439,687 ) $ (211,240 ) State taxes, net of Federal benefit - - Valuation allowance 439,687 211,240 Total $ 0 $ 0 The net deferred income tax asset balance related to the following: Years Ended December 31, 2020 2019 Net Operating Losses $ 1,391,824 $ 1,032,904 Stock Options 335,726 250,182 Other 806 240 Total Deferred tax assets $ 1,728,356 $ 1,283,326 Depreciation (17,358 ) (12,015 ) Total deferred tax liability $ (17,358 ) $ (12,015 ) Deferred tax asset (liability) $ 1,710,998 $ 1,271,311 Valuation allowance (1,710,998 ) (1,271,311 ) Net deferred tax asset (liability) $ - $ - As of December 31, 2020, the Company had federal and state net operating loss carryforwards of approximately $6,627,773. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of December 31, 2019 and 2018, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably predicted by considering past trends or by extrapolating past results. Moreover, the Company’s earnings are strongly influenced by national economic conditions and have been volatile in the past. Considering these factors, the Company determined that it was not possible to reasonably quantify future taxable income. The Company determined that it is more likely than not that all of the deferred tax assets will not be realized. Accordingly, the Company maintained a full valuation allowance as of December 31, 2019 and 2018. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which we operate or do business in. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We record tax positions as liabilities in accordance with ASC 740 and adjust these liabilities when our judgement changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the recognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2019, and 2018 we have not recorded any uncertain tax positions in our financial statements. We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2019, and 2018, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheet. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under statute from December 31, 2014, to the present. Earlier years may be examined to the extent that the net operating loss carryforwards from those earlier years are used in future periods. The resolution of tax matters is not expected to have a material effect on the Company’s consolidated financial statements.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2020
SUBSEQUENT EVENTS
17. SUBSEQUENT EVENTS	Subsequent to December 31, 2020, the Company entered into several promissory notes with various investors of the Company with a face value of $535,000 (“the Notes”). The Notes have a beneficial conversion feature valued at $389,500, which is recorded as a discount. The total discount on the Notes will be amortized over the life of the Notes and recorded as interest expense. The notes have an interest rate of 8% and are payable quarterly and twelve months after issuance, 1/12 of the principle will repaid monthly. The principal and interest of the note is convertible into the Company’s common stock at a purchase price of the lesser of $0.40 per common share at any time after issuance or a 25% discount of the common stock price of a Qualified Offering. On January 15, 2021, the Company leased equipment under a finance lease. The lease is for three years with a monthly payment of $856. The finance lease obligation is secured by the underlying leased assets valued at $24,788. On January 12, 2021, the Company issued 500,000 common stock options to an individual for services rendered valued at $243,964. The option vests 20% on January 12, 2022 with the remainder vesting monthly over 48 months. Subsequent to December 31, 2020, the Company issued 85,103 shares of common stock related to the cashless exercise of stock options.

SUMMMARY OF SIGNIFICANT ACCOU_2

SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2020
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.
Principles of Consolidation	The consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation.
Use of Estimates	Management uses estimates and assumptions in preparing these consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.
Revenue Recognition	For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company recognizes revenue upon completion of our performance obligations or expiration of the contractual time to use services such as professional service hours purchased in bulk for a given time period. Any early termination fees are recognized in the period the contract is terminated and the termination invoice is paid. The Company has elected the following practical expedients in applying ASC 606: Unsatisfied Performance Obligations - all performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Contract Costs - all incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration. Sales Tax Exclusion from the Transaction Price - the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer.
Cash and Cash Equivalents	For purposes of the consolidated financial statements, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are primarily maintained at a single bank. Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations.
Accounts Receivable	Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company’s estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that a $26,000 and $10,000 allowance was required for the fiscal years ended December 31, 2020 and 2019, respectively. The Company does not accrue interest on past due receivables.
Intangible Assets	Customer contracts acquired were recorded at their estimated fair value at the date of acquisition and are being amortized over their estimated useful life of five years using the straight-line method.
Impairment of Long-lived Assets	The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. The Company did not record any impairment during the years ended December 31, 2020 and December 31, 2019.
Paycheck Protection Note Payable	The Company received a loan from the Paycheck Protection Program in the amount of $710,500 established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan is subject to a note dated May 2, 2020 and may be forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. No determination has been made as to whether the Company will be eligible for forgiveness, in whole or in part. The loan bears interest at a rate of 1% and is payable in monthly installments of principal and interest over 24 months beginning 6 months from the date of the note. The loan may be repaid at any time with no prepayment penalty.
Concentration of Risk	Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable. See Note 15 for significant customer concentration disclosure. Cash is maintained with a major financial institution in the United States and may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk.
Equipment and Software Licenses	Equipment and software licenses are stated at cost. Depreciation is calculated using the straight-line method over an estimated useful life of one to ten years.
Convertible Debt and Securities	The Company follows beneficial conversion feature guidance in ASC 470-20, which applies to convertible stock as well as convertible debt. A beneficial conversion feature is defined as a nondetachable conversion feature that is in the money at the commitment date. The beneficial conversion feature guidance requires recognition of the conversion option's in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument, if a stated maturity date exists, or to the earliest conversion date, if there is no stated maturity date. If the earliest conversion date is immediately upon issuance, the expense must be recognized at inception. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.
Earnings and Loss per Share	Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. There were approximately 9,488,750 and 2,585,177 of common stock equivalents excluded for the fiscal years ended December 31, 2020 and 2019, respectively because their effect is anti-dilutive.
Marketing Costs	Marketing costs, which are expensed as incurred, totaled approximately $56,943 and $92,144 for the fiscal years ended December 31, 2020 and 2019, respectively and is included in selling, general and administrative expenses.
Stock-Based Compensation	Compensation expense related to share-based transactions, including employee stock options, is measured in the financial statements based on a determination of the fair value. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. See Note 12 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation.
Leases	The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use ("ROU") assets are included in right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, net of current portion, respectively on the consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases of assets where the Company has assumed substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The interest element of the finance leases are accounted for as finance costs and expensed over the lease term using the effective interest rate method.
Income Taxes	The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2020, no accrued interest or penalties are included on the related tax liability line in the balance sheet.

EQUIPMENT AND SOFTWARE LICENS_2

EQUIPMENT AND SOFTWARE LICENSES (Tables)	12 Months Ended
	Dec. 31, 2020
EQUIPMENT AND SOFTWARE LICENSES
Schedule of Equipment and software licenses	December 31, 2020 December 31, 2019 Equipment and software $ 599,900 $ 489,151 Software licenses 1,302,141 868,041 1,902,041 1,357,192 Less - Accumulated depreciation and amortization (1,361,123 ) (1,147,188 ) $ 540,918 $ 210,004

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2020
INTANGIBLE ASSETS
Schedule of Intangible Assets	Useful Life Cost Accumulated Amortization Net Book Value Service Contracts 5 $ 1,012,335 $ 557,015 $ 455,320

ACCRUED LIABILITIES (Tables)

ACCRUED LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2020
CONVERTIBLE NOTES PAYABLE
Schedule of accrued liabilities	December 31, December 31, 2020 2019 Accrued compensation $ 138,707 $ 128,942 Accrued interest 23,185 - Accrued sales tax 23,525 140,683 Accrued franchise tax 11,832 5,000 Accrued professional fees and other payables 176,238 204,456 Total accrued liabilities $ 373,487 $ 479,081

LEASE OBLIGATION (Tables)

LEASE OBLIGATION (Tables)	12 Months Ended
	Dec. 31, 2020
LEASE OBLIGATIONS
Schedule of future minimum lease payments	Year ended 2021 $ 161,394 2022 145,374 2023 125,790 2024 116,918 2025 43,970 Total 593,446 Less: interest (87,788 ) Present value of net minimum lease payments 505,658 Short term 125,449 Long term total $ 380,209
Schedule of weighted average remaining lease term and discount rate for operating leases	Weighted average remaining lease term 47 Months Weighted average incremental borrowing rate 5.0 %
Schedule of minimum lease commitments	2021 $ 105,615 2022 129,392 2023 131,859 2024 120,871 2025 - Total undiscounted future minimum lease payments 487,737 Less: Imputed interest (45,602 ) Present value of operating lease obligation $ 442,135
Schedule of consolidated statements of operations income	December 31, 2020 Operating lease cost: Operating lease cost $ 124,457 Financing lease cost: Amortization of leased assets 99,662 Interest expense 24,817 Total lease cost $ 124,479

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2020
STOCK BASED COMPENSATION
Schedule of stock based compensation	Number of options outstanding: 2018 Equity Incentive Plan 7,401,677 Options granted not part of a shareholder approved plan 2,200,000 December 31, 2020 9,601,677
Summary of Stock option activity	2020 2019 Number of options outstanding: Beginning of year 6,939,178 5,901,678 Granted 2,825,000 1,325,000 Exercised, converted - - Forfeited / exchanged / modification (162,501 ) (287,500 ) End of year 9,601,677 6,939,178 Number of options exercisable at end of year 6,513,572 3,507,661 Number of options available for grant at end of year 598,323 1,060,822 Weighted average option prices per share: Granted during the year $ 0.30 $ 0.61 Exercised during the year - - Terminated during the year 0.60 0.38 Outstanding at end of year 0.39 0.45 Exercisable at end of year $ 0.40 $ 0.39
Schedule of granted options	2020 2019 Expected option life (years) 7.5 6.5 Expected stock price volatility 114-116 % 137-145 % Expected dividend yield — % — % Risk-free interest rate 2.07 % 2.40-2.90 %

SIGNIFICANT CUSTOMERS (Tables)

SIGNIFICANT CUSTOMERS (Tables)	12 Months Ended
	Dec. 31, 2020
SIGNIFICANT CUSTOMERS (Tables)
Schedules of Concentration	Year Ended December 31, 2020 2019 Customer A 43 % 44 % Customer C 27 % 6 %
Schedule of customer accounts receivable, concentration	December 31, December 31, 2020 2019 Customer A 79 % 75 % Customer D 0 % 17 % Customer E 14 % 0 %

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2020
INCOME TAXES
Schedule of reconciliation between the statutory rate and the effective tax rate	Year Ended December 31, 2020 2019 Current expense (benefit): Federal $ - $ - State - - Total current expense (benefit): - - Deferred expense (benefit): Federal - - State - - Total deferred expense (benefit): - - Total income tax expense (benefit): $ - $ -
Schedule of provision for income taxes (benefit)	Year Ended December 31, 2020 2019 Income at US Statutory Rate $ (439,687 ) $ (211,240 ) State taxes, net of Federal benefit - - Valuation allowance 439,687 211,240 Total $ 0 $ 0
Schedule of deferred tax assets	Years Ended December 31, 2020 2019 Net Operating Losses $ 1,391,824 $ 1,032,904 Stock Options 335,726 250,182 Other 806 240 Total Deferred tax assets $ 1,728,356 $ 1,283,326 Depreciation (17,358 ) (12,015 ) Total deferred tax liability $ (17,358 ) $ (12,015 ) Deferred tax asset (liability) $ 1,710,998 $ 1,271,311 Valuation allowance (1,710,998 ) (1,271,311 ) Net deferred tax asset (liability) $ - $ -

LIQUIDITY (Details Narrative)

LIQUIDITY (Details Narrative)	12 Months Ended
	Dec. 31, 2020USD ($)
LIQUIDITY (Details Narrative)
Proceeds from the issuance of notes payable	$ 1,760,500
Working capital	$ 298,247

SUMMMARY OF SIGNIFICANT ACCOU_3

SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	May 02, 2020
Allowance for doubtful accounts	$ 26,000	$ 10,000
Marketing costs	$ 56,943	$ 92,144
Useful life of intangible assets	5 years
Interest rate	8.00%
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share	9,488,750	2,585,177
Minimum [Member] | Equipment and software [Member]
Property and equipment, useful life	1 year
Maximum [Member] | Equipment and software [Member]
Property and equipment, useful life	10 years
Paycheck Protection Program [Member]
Interest rate	1.00%
Loan amount			$ 710,500
Interest rate description	The loan bears interest at a rate of 1% and is payable in monthly installments of principal and interest over 24 months beginning 6 months from the date of the note.

EQUIPMENT AND SOFTWARE LICENS_3

EQUIPMENT AND SOFTWARE LICENSES (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment, Gross	$ 1,902,041	$ 1,357,192
Less - accumulated depreciation and amortization	(1,361,123)	(1,147,188)
Property, Plant and Equipment, Net	540,918	210,004
Equipment and software [Member]
Property, Plant and Equipment, Gross	599,900	489,151
Software License [Member]
Property, Plant and Equipment, Gross	$ 1,302,141	$ 868,041

EQUIPMENT AND SOFTWARE LICENS_4

EQUIPMENT AND SOFTWARE LICENSES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
EQUIPMENT AND SOFTWARE LICENSES
Depreciation and amortization related to assets	$ 58,157	$ 31,614
Equipment and software disposed	16,105	790,803
Proceeds from sale of equipment and software license	401	31,699
Gain on disposed of assets	88	4,533
Related accumulated depreciation	15,792	754,570
Depreciation and amortization expenses related to leased assets	$ 171,570	$ 276,505

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details)	12 Months Ended
	Dec. 31, 2020USD ($)
Intangible assets net	$ 455,320
Useful life of intangible assets	5 years
Service Contracts [Member]
Intangible assets gross	$ 1,012,335
Accumulated amortization	557,015
Intangible assets net	$ 455,320
Useful life of intangible assets	5 years

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Amortization expense	$ 202,551	$ 202,551
2021	202,551
2022	202,551
2023	50,218
Intangible assets net	$ 455,320
Useful life of intangible assets	5 years
Service Contracts [Member]
Intangible assets net	$ 455,320
Useful life of intangible assets	5 years

ACCRUED LIABILITIES (Details)

ACCRUED LIABILITIES (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
NOTE PAYABLE
Accrued compensation	$ 138,707	$ 128,942
Accrued interest	23,185	0
Accrued sales tax	23,525	140,683
Accrued franchise tax	11,832	5,000
Accrued professional fees and other payables	176,238	204,456
Total accrued liabilities	$ 373,487	$ 479,081

FACTORING CREDIT FACILITY (Deta

FACTORING CREDIT FACILITY (Details Narrative) - Factoring Credit Facility [Member] - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Accounts receivable amount factored	$ 0	$ 0
Interest expense	$ 0	$ 24,676
Agreement description	The agreement provides for an advanced rate of 90% with a fee of 1.9% to be charged on the gross face amount of the invoices purchased for 30 days, and an additional 0.06% charge for each additional day until the invoice(s) are paid.

NOTE PAYABLE (Details Narrative

NOTE PAYABLE (Details Narrative) - Investor [Member]	1 Months Ended
	May 02, 2020USD ($)
Proceeds from loan	$ 514,678
Interest rate	1.00%
Repayment of loan, Desciption	The promissory note has a fixed payment schedule, commencing ten months following the funding of the note and consisting of seventeen monthly payments of principal and interest, with the principal component of each payment based upon the level of amortization of principal over a two year period from the funding date. A final payment for the unpaid principal and accrued interest will be payable no later than May 2, 2022.
Loan amount	$ 710,500

CONVERTIBLE NOTES PAYABLE (Deta

CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Beneficial conversion feature	$ 336,300	$ 0
Interest expense	$ 109,810	$ 81,057
Rate of interest	8.00%
A Related Party [Member]
Convertible promissory note	$ 200,000
Several Investors [Member]
Convertible promissory note	1,050,000
Beneficial conversion feature	336,300
Interest expense	$ 20,582
Rate of interest	8.00%
Price per share	$ 0.40
Discount rate	25.00%

LEASE OBLIGATIONS (Details)

LEASE OBLIGATIONS (Details)	Dec. 31, 2020USD ($)
LEASE OBLIGATIONS
2021	$ 161,394
2022	145,374
2023	125,790
2024	116,918
2025	43,970
Total	593,446
Less: interest	(87,788)
Present value of net minimum lease payments	505,658
Short term	125,449
Long term total	$ 380,209

LEASE OBLIGATIONS (Details 1)

LEASE OBLIGATIONS (Details 1)	12 Months Ended
	Dec. 31, 2020
LEASE OBLIGATIONS
Weighted average remaining lease term	47 months
Weighted average incremental borrowing rate	5.00%

LEASE OBLIGATIONS (Details 2)

LEASE OBLIGATIONS (Details 2)	Dec. 31, 2020USD ($)
LEASE OBLIGATIONS
2021	$ 105,615
2022	129,392
2023	131,859
2024	120,871
2025	0
Total undiscounted future minimum lease payments	487,737
Less: Imputed interest	(45,602)
Present value of operating lease obligation	$ 442,135

LEASE OBLIGATIONS (Details 3)

LEASE OBLIGATIONS (Details 3)	12 Months Ended
	Dec. 31, 2020USD ($)
Operating lease cost
Operating lease cost	$ 124,457
Finance lease cost
Amortization of leased assets	99,662
Interest expense	24,817
Total lease cost	$ 124,479

LEASE OBLIGATIONS (Details Narr

LEASE OBLIGATIONS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Lease payments	$ 194,478	$ 494,691
Leased assets, net book value	509,050	$ 125,553
Minimum [Member]
Leases Periodic payments	$ 354
Interest rate	3.60%
Lease term	1 year
Maximum [Member]
Leases Periodic payments	$ 10,813
Interest rate	13.20%
Lease term	5 years

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details)	12 Months Ended
	Dec. 31, 2020shares
Number of options outstanding
2018 Equity incentive plan	7,401,677
Options granted not part of a shareholder approved plan	2,200,000
December 31, 2020	9,601,677

STOCK BASED COMPENSATION (Det_2

STOCK BASED COMPENSATION (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number of options outstanding
Number of options outstanding, begining balance	$ 6,939,178	$ 5,901,678
Granted	2,825,000	1,325,000
Exercised, converted
Forfeited / exchanged / modification	(162,501)	(287,500)
Number of options outstanding, ending balance	9,601,677	6,939,178
Number of options exercisable at end of period	6,513,572	3,507,661
Number of options available for grant at end of period	598,323	1,060,822
Weighted average option prices per share
Granted during the period	$ 0.30	$ 0.61
Exercised during the period	0	0
Terminated during the period	0.60	0.38
Outstanding at end of the period	0.39	0.45
Exercisable at end of period	$ 0.40	$ 0.39

STOCK BASED COMPENSATION (Det_3

STOCK BASED COMPENSATION (Details 2)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Expected option life (years)	7 years 5 months 30 days	6 years 5 months 30 days
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	2.07%
Minimum [Member]
Risk-free interest rate		2.40%
Expected stock price volatility	114.00%	137.00%
Maximum [Member]
Risk-free interest rate		2.90%
Expected stock price volatility	116.00%	145.00%

STOCK BASED COMPENSATION (Det_4

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	Aug. 11, 2020	Aug. 27, 2020	Dec. 31, 2020	Dec. 31, 2019
Stock-based compensation expense			$ 787,358
Unrecognized compensation expense			$ 1,419,423
Average expected life			3 years
Exercise price			$ 0.61
Weighted average vesting period of options			5 years
Warrants [Member] | Consultant [Member]
Exercise price			$ 0.625
Common stock shares issuable upon exercise of options/rights			750,000
Term of options/rights			18 months
Total value of options/rights granted			$ 174,000
Stock Options [Member]
Average expected life			6 years 5 months 30 days	6 years 5 months 30 days
Exercise price			$ 0.35	$ 0.61
Weighted average vesting period of options			3 years	3 years
Common stock shares issuable upon exercise of options/rights			625,000	1,325,000
Total value of options/rights granted			$ 190,175	$ 755,000
Stock Options [Member] | Employee [Member]
Average expected life	6 years 5 months 30 days	6 years 5 months 30 days
Exercise price	$ 0.34	$ 0.35
Weighted average vesting period of options	5 years
Common stock shares issuable upon exercise of options/rights	2,000,000	200,000
Total value of options/rights granted	$ 597,214	$ 61,172
Option shares descriptions	The option vests over 5 years; 400,000 shares on the employees 12 month anniversary and vests the remaining 1,600,000 shares 1/48th per month over the following 48 months
The Gamwell Contract [Member] | Warrants [Member]
Exercise price			$ 0.375
Common stock shares issuable upon exercise of options/rights			122,752
Expiration date			Apr. 23, 2028
2018 Equity Incentive Plan
Maximum number of shares granted under plan			8,000,000

COMMON STOCK (Details Narrative

COMMON STOCK (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Shared issued for services, value	$ 96,787
Stock-based compensation expense	787,358
Proceeds from issuance of common stock, net	$ 0	$ 288,001
Common Stock [Member]
Common stock issued shares		745,778
Proceeds from issuance of common stock, net		$ 288,001
Three Consulting Agreements [Member]
Common stock price per share	$ 0.35
Shared issued for services, value	$ 437,500
Stock-based compensation expense	$ 95,537
Common stock issued shares	1,250,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Related party expenses	$ 72,500	$ 90,000
A Related Party [Member]
Convertible promissory note	$ 200,000

SIGNIFICANT CUSTOMERS (Details)

SIGNIFICANT CUSTOMERS (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Net Revenue [Member] | Customer A [Member]
Concentration percentage	43.00%	44.00%
Net Revenue [Member] | Customer C [Member]
Concentration percentage	27.00%	6.00%
Accounts receivable [Member] | Customer A [Member]
Concentration percentage	79.00%	75.00%
Accounts receivable [Member] | Customer D
Concentration percentage	0.00%	17.00%
Accounts receivable [Member] | Customer E
Concentration percentage	14.00%	0.00%

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current expense (benefit):
Federal	$ 0	$ 0
State	0	0
Total current expense (benefit):	0	0
Deferred expense (benefit):
Federal	0	0
State	0	0
Total deferred expense (benefit):	0	0
Total income tax expense (benefit):	$ 0	$ 0

INCOME TAXES (Details 1)

INCOME TAXES (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
INCOME TAXES
Income at US Statutory Rate	$ (439,687)	$ (211,240)
State taxes, net of Federal benefit	0	0
Valuation allowance	439,687	211,240
Total income tax expense (benefit)	$ 0	$ 0

INCOME TAXES (Details 2)

INCOME TAXES (Details 2) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
INCOME TAXES
Net Operating Losses	$ 1,391,824	$ 1,032,904
Stock Options	335,726	250,182
Other	806	240
Total Deferred tax assets	1,728,356	1,283,326
Depreciation	(17,358)	(12,015)
Total deferred tax liability	(17,358)	(12,015)
Deferred tax asset (liability)	1,710,998	1,271,311
Valuation allowance	(1,710,998)	(1,271,311)
Net deferred tax asset (liability)	$ 0	$ 0

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative)	Dec. 31, 2020USD ($)
INCOME TAXES
Federal and state net operating loss carryforwards	$ 6,627,773

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended			12 Months Ended
	Jan. 12, 2022	Jan. 15, 2021	Jan. 12, 2021	Dec. 31, 2020	Dec. 31, 2019
Debt instrument interest rate, description				The notes have an interest rate of 8% and are payable quarterly and twelve months after issuance,1/12 of the principle will repaid monthly
Debt instrument face value				$ 535,000
Debt instrument interest rate				8.00%
Debt instrument beneficial conversion feature				$ 389,500
Shares issued, cashless exercise of options				85,103
Debt instrument conversion price, descriptions				The principle and interest of the note is convertible into the Company’s common stock at a purchase price of the lesser of $0.40 per common share at any time after issuance or 25% of the common stock price of a Qualified Offering.
Lease payments				$ 194,478	$ 494,691
Subsequent Event [Member]
Description for options vested or expected to vest	The option vests 20% on January 12, 2022 with the remainder vesting monthly over 48 months
Lease payments		$ 24,788
Lease term		3 years
Leases Periodic payments, monthly		$ 856
Common stock options issued for services, value			$ 243,964
Common stock options issued for services			500,000