nDivision (NDVNQ) 10-Q 16 Aug 21 2021 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2021	Aug. 13, 2021
Cover [Abstract]
Entity Registrant Name	NDIVISION INC.
Entity Central Index Key	0001659183
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Ex Transition Period	true
Entity Common Stock Shares Outstanding		43,719,870
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	333-212446
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	47-5133966
Entity Address Address Line 1	7301 N. State Highway 161
Entity Address Address Line 2	Suite 100
Entity Address City Or Town	Irving
Entity Address State Or Province	TX
Entity Address Postal Zip Code	75039
City Area Code	214
Local Phone Number	785-6355

CONDENSED CONSOLDIATED BALANCE

CONDENSED CONSOLDIATED BALANCE SHEETS - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets
Cash	$ 784,970	$ 1,806,606
Accounts receivable, net (allowance for doubtful accounts was $10,000 at June 30, 2021 and $26,000 at December 31, 2020)	721,396	531,244
Prepaid expenses	280,460	121,339
Total current assets	1,786,826	2,459,189
Equipment and software licenses - at cost, less accumulate depreciation and amortization	472,794	540,918
Other assets
Intangible asset, less accumulated amortization	354,044	455,320
Right-of-use asset	390,748	441,940
Total other assets	744,792	897,260
Total assets	3,004,412	3,897,367
Current liabilities
Accounts payable	141,376	153,427
Accrued liabilities	434,557	373,487
Deferred revenue	543,042	870,184
Current portion of acquisition note payable		18,102
Current portion of notes payable		514,678
Current portion of operating lease payable	89,894	105,615
Current portion of finance lease obligations	132,522	125,449
Total current liabilities	1,341,391	2,160,942
Note payable, net of current portion	0	195,822
Convertible notes payable, net of discount	897,632	734,282
Operating lease payable, net of current portion	300,053	336,520
Finance lease obligations, net of current portion	334,325	380,209
Total long-term liabilities	1,532,010	1,646,833
Commitments	0	0
Stockholders' equity
Common stock, $0.001 par value, 180,000,000 shares authorized, and 43,719,870 and 42,499,783 shares issued and outstanding, respectively	43,720	42,500
Additional paid in capital	8,820,931	7,160,175
Accumulated deficit	(8,733,640)	(7,113,083)
Total stockholders' equity	131,011	89,592
Total liabilities and stockholders' equity	$ 3,004,412	$ 3,897,367

CONDENSED CONSOLDIATED BALANC_2

CONDENSED CONSOLDIATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets
Allowance for doubtful debts	$ 10,000	$ 26,000
Stockholder's equity
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	43,719,870	42,499,783
Common stock, shares outstanding	43,719,870	42,499,783

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Service revenue	$ 1,571,072	$ 1,503,056	$ 2,948,526	$ 3,169,946
Service costs	1,251,361	1,010,975	2,393,384	2,031,127
Gross profit	319,711	492,081	555,142	1,138,819
Operating expenses
Selling, general and administrative expenses	1,219,531	697,198	2,590,125	1,433,151
Loss from operations	(899,820)	(205,117)	(2,034,983)	(294,332)
Other income (expense)
Interest expense	(189,739)	(28,750)	(302,975)	(58,797)
Gain on SBA PPP extinguishment	716,982	0	716,982	0
Other income	208	0	419	0
Other income (expense)	527,451	(28,750)	414,426	(58,797)
Net loss before income tax	(372,369)	(233,867)	(1,620,557)	(353,129)
Income tax expense	0	0
Net loss	$ (372,369)	$ (233,867)	$ (1,620,557)	$ (353,129)
Basic and diluted loss per share	$ (0.01)	$ (0.01)	$ (0.04)	$ (0.01)
Weighted average shares outstanding	42,806,010	41,249,783	42,663,616	41,249,783

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
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 options	145,797	0	145,797	0
Net loss	(119,262)	$ 0	0	(119,262)
Balance, shares at Mar. 31, 2020		41,249,783
Balance, amount at Mar. 31, 2020	491,395	$ 41,250	6,183,564	(5,733,419)
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)
Net loss	(353,129)
Balance, shares at Jun. 30, 2020		41,249,783
Balance, amount at Jun. 30, 2020	396,173	$ 41,250	6,322,209	(5,967,286)
Balance, shares at Mar. 31, 2020		41,249,783
Balance, amount at Mar. 31, 2020	491,395	$ 41,250	6,183,564	(5,733,419)
Amortization of stock options	138,645	0	138,645	0
Net loss	(233,867)	$ 0	0	(233,867)
Balance, shares at Jun. 30, 2020		41,249,783
Balance, amount at Jun. 30, 2020	396,173	$ 41,250	6,322,209	(5,967,286)
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)
Net loss	(1,248,188)			(1,248,188)
Amortization of stock option and warrant expense	297,417		297,417
Beneficial conversion feature	620,375		620,375
Exercise of stock options, shares		85,103
Exercise of stock options, amount	0	$ 85	(85)
Balance, shares at Mar. 31, 2021		42,584,886
Balance, amount at Mar. 31, 2021	(240,804)	$ 42,585	8,077,882	(8,361,271)
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)
Net loss	(1,620,557)
Balance, shares at Jun. 30, 2021		43,719,870
Balance, amount at Jun. 30, 2021	131,011	$ 43,720	8,820,931	(8,733,640)
Balance, shares at Mar. 31, 2021		42,584,886
Balance, amount at Mar. 31, 2021	(240,804)	$ 42,585	8,077,882	(8,361,271)
Net loss	(372,369)	0	0	(372,369)
Amortization of stock option and warrant expense	178,765	0	178,765	0
Beneficial conversion feature	405,000	$ 0	405,000	0
Conversion of notes payable and accrued interest, net of unamortized discount, shares		1,134,984
Conversion of notes payable and accrued interest, net of unamortized discount, amount	160,419	$ 1,135	159,284	0
Balance, shares at Jun. 30, 2021		43,719,870
Balance, amount at Jun. 30, 2021	$ 131,011	$ 43,720	$ 8,820,931	$ (8,733,640)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities
Net loss	$ (1,620,557)	$ (353,129)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	200,404	226,016
Provision for doubtful accounts	(16,000)	(8,190)
Amortization of beneficial conversion feature	154,252
Non-cash lease expense	51,192	44,185
Stock based compensation	476,182	284,442
Forgiveness of SBA PPP loan	(716,982)	0
Loss of sale of asset	0	1,473
Changes in assets and liabilities
Accounts receivable	(174,152)	146,764
Prepaid expenses	(159,121)	(67,842)
Change in operating lease liability	(52,188)	(20,127)
Accounts payable and accrued liabilities	60,393	(65,381)
Deferred revenue	(327,142)	(742,658)
Net cash used in operating activities	(2,123,719)	(554,447)
Cash flows from investing activities
Repayment of debt related to acquisition	(18,102)	(25,677)
Acquisition of equipment and software licenses	(3,892)	(3,272)
Net cash used in investing activities	(21,994)	(28,949)
Cash flows from financing activities
Proceeds from convertible notes payable	1,190,000	710,500
Repayment of finance lease obligations	(65,923)	(138,050)
Net cash provided by financing activities	1,124,077	572,450
Net decrease in cash	(1,021,636)	(10,946)
Cash, beginning of period	1,806,606	1,757,695
Cash, end of period	784,970	1,746,749
Supplemental cash flow disclosures
Interest paid	22,723	11,542
Non-cash financing activities:
Purchase of equipment under capital lease	27,112	550,066
Conversion of notes payable to common stock, net of unamortized discount	160,419	0
Beneficial conversion feature	$ 1,025,375	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2021
DESCRIPTION OF BUSINESS
1. DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS nDivision Inc. (“nDivision” or the “Company”) was incorporated under the laws of the state of Nevada. nDivision’s registered office is 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	6 Months Ended
	Jun. 30, 2021
LIQUIDITY
2. 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 new strategic growth strategy to increase monthly recuring revenue to improve the overall profitability and cash flows of the Company. During the six months ended June 30, 2021, the Company received proceeds from the issuance of convertible notes payable of approximately $1,190,000. The Company also has working capital of $445,435 at June 30, 2021. The Company has continued to increase the monthly recurring revenue during the six months ended June 30, 2021, however the Company has had to increase resources to support the new implementations and increased business at an accelerated rate. The Company has not factored any receivables under this agreement for the three and six months ended June 30, 2021, and 2020, however management does expect to use the factoring of certain account receivable for cash flow purposes in the next twelve months. 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. Management believes the expected cash flow from operations, 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 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, 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	6 Months Ended
	Jun. 30, 2021
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3. SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Form 10-K filed on March 30, 2021 from which the accompanying December 31, 2020 results are derived. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiary, nDivision Services Inc. (incorporated in the state of Texas). All inter-company accounts and transactions are eliminated in consolidation. Use of Estimates Management uses estimates and assumptions in preparing these unaudited condensed 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 due to risks and uncertainties, including uncertainty in the current economic environment due to COVID-19. Revenue Recognition For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, we perform 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. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that we 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, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize 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 managed services and 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 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 unaudited condensed consolidated statements of cash flows, 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 maintained at one bank. Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations. Accounts Receivable Accounts receivables 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. The Company recorded an allowance for doubtful accounts of $10,000 and $26,000 as of June 30, 2021 and December 31, 2020, 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 three and six months ended June 30, 2021, and 2020. Paycheck Protection Note Payable The Company received a loan from the Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the amount of $710,500. The loan was subject to a note dated May 2, 2020 and has been forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. The Company applied for full forgiveness of this loan. As of May 15, 2021, the SBA confirmed the application for forgiveness has been approved and that the PPP loan in the amount of $710,500 plus accrued interest of $6,482 has been forgiven. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable. See Note 14 for significant customer concentration disclosure. Cash is maintained with one 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. For 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 14,455,500 and 13,524,000 of common stock equivalents excluded for the three and six months ended June 30, 2021, and 6,916,000 and 6,932,500 of common stock equivalents excluded for the three and six months ended June 30, 2020, respectively because their effect is anti-dilutive. Marketing Costs Marketing costs, which are expensed as incurred, totaled approximately $188,670 and $347,529 for the three and six months ended June 30, 2021 and $2,405 and $7,496 for the three and six months ended June 30, 2020, 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 unaudited condensed 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 unaudited condensed 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 unaudited condensed consolidated statement of operations. As of June 30, 2021, no accrued interest or penalties are included on the related tax liability line in the balance sheet.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2021
RECENT ACCOUNTING PRONOUNCEMENTS
4. RECENT ACCOUNTING PRONOUNCEMENTS	4. RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements 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 were effective for the Company in the first quarter of 2021. The Company determined that the adoption of this ASU had no impact on its consolidated financial statements. New Accounting Pronouncements Not Yet Adopted 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 unaudited condensed consolidated financial statements.

EQUIPMENT AND SOFTWARE LICENSES

EQUIPMENT AND SOFTWARE LICENSES	6 Months Ended
	Jun. 30, 2021
EQUIPMENT AND SOFTWARE LICENSES
5. EQUIPMENT AND SOFTWARE LICENSES	5. EQUIPMENT AND SOFTWARE LICENSES Equipment and software licenses consist of the following: June 30, December 31, 2021 2020 Equipment and software $ 630,904 $ 599,900 Software licenses 1,302,141 1,302,141 1,933,045 1,902,041 Less - Accumulated depreciation and amortization (1,460,251 ) (1,361,123 ) $ 472,794 $ 540,918 Depreciation and amortization expense related to assets for the three and six months ended June 30, 2021, and 2020 was approximately $49,306 and $99,128, and $62,139 and $124,740, respectively. Included in the above paragraph is depreciation and amortization expense related to leased assets for the three and six months ended June 30, 2021, of approximately $40,181 and $80,803, and approximately $44,800 and $88,363 for the three and six months ended June 30, 2020, respectively.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2021
INTANGIBLE ASSETS
6. INTANGIBLE ASSETS	6. INTANGIBLE ASSETS Intangible Assets As of June 30, 2021 Useful Life Cost Accumulated Amortization Net Book Value Service Contracts 5 $ 1,012,335 $ 658,291 $ 354,044 There was approximately $50,638 and $101,276 of amortization expense for each of the three and six month periods ended June 30, 2021 and 2020. 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 fiscal years annual amortization expense for these finite life intangible assets will total approximately $354,044 as follows: remainder of fiscal 2021 - $101,276, fiscal 2022 - $202,551, fiscal 2023 - $50,217. 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 a number of 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 June 30, 2021, the Company has not recorded any impairments.

ACCRUED LIABILITIES

ACCRUED LIABILITIES	6 Months Ended
	Jun. 30, 2021
ACCRUED LIABILITIES
7. ACCRUED LIABILITIES	7. ACCRUED LIABILITIES June 30, December 31, 2021 2020 Accrued compensation $ 155,913 $ 138,707 Accrued interest 80,815 23,185 Accrued sales tax 6,091 23,525 Accrued franchise tax 12,388 11,832 Accrued professional fees and other payables 179,350 176,238 Total accrued liabilities $ 434,557 $ 373,487

FACTORING CREDIT FACILITY

FACTORING CREDIT FACILITY	6 Months Ended
	Jun. 30, 2021
FACTORING CREDIT FACILITY
8. 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 Company has not factored any receivables under this agreement for the three and six months ended June 30, 2021, and 2020, however management does expect to use the factoring of certain account receivable for cash flow purposes in the next twelve months.

NOTE PAYABLE

NOTE PAYABLE	6 Months Ended
	Jun. 30, 2021
NOTE PAYABLE
9. 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. Under the PPP of the Coronavirus Aid, Relief and Economic Security Act (the “Act”), up to the full principal amount of a loan and any accrued interest can be forgiven if the borrower uses all of the loan proceeds for forgivable purposes (payroll, benefits, lease/mortgage payments and/or utilities) required under the Act and any rule, regulation, or guidance issued by the Small Business Administration (the “SBA”) pursuant to the Act (collectively, the “Forgiveness Provisions”). The amount of forgiveness of the PPP loan depends on the borrower’s payroll costs over either an eight-week or twenty-four-week period beginning on the date of funding. Any processes or procedures established under the Forgiveness Provisions must be followed and any requirements of the Forgiveness Provisions must be fully satisfied to obtain such loan forgiveness. Pursuant to the provisions of the Act, the first six monthly payments of principal and interest will be deferred. Interest will accrue during the deferment period. The borrower must pay principal and interest payments on the fifth day of each month beginning seven months from the date of the applicable promissory note. On April 30, 2021, the Company submitted its PPP Loan Forgiveness Application to the SBA. On May 15, 2021, the SBA confirmed the application for forgiveness has been approved and that its PPP loan, in the amount of $710,500 plus accrued interest of $6,482, has been forgiven and included in other income on the unaudited condensed consolidated statements of operations. Aggregate interest expense on this loan at the time of forgiveness was approximately $6,482.

CONVERTIBLE NOTES PAYABLE

CONVERTIBLE NOTES PAYABLE	6 Months Ended
	Jun. 30, 2021
CONVERTIBLE NOTES PAYABLE
10. CONVERTIBLE NOTES PAYABLE	10. CONVERTIBLE NOTES PAYABLE The Company entered into promissory notes (“the Notes”) with investors of the Company with a face value of $2,240,000 of which $200,000 is from a related party, with $1,190,000 raised during the six months ended June 30, 2021, and $1,050,000 raised during the year ended December 31, 2020. The Notes had an initial beneficial conversion feature valued at $1,361,675, 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 three and six months ended June 30, 2021, the Company amortized $129,919 and $154,253 of the discount to interest expense. The Notes have an interest rate of 8%. The principle and interest of the Notes are due in full beginning September 2022 through April 2023 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 debt or equity offering that occurs subsequent to the date of the closing of the offering that results in gross offering proceeds of at least $5,000,000. During the three months ended June 30, 2021, $550,000 of the Notes and $3,994 of accrued interest was converted into 1,134,984 shares of common stock and the related unamortized discount of $393,575 was netted against additional paid in capital.

LEASE OBLIGATIONS

LEASE OBLIGATIONS	6 Months Ended
	Jun. 30, 2021
LEASE OBLIGATIONS
11. LEASE OBLIGATIONS	11. LEASE OBLIGATIONS The Company finances certain property and equipment using finance leases. 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 $4,397, including interest, ranging from 3.6% to 12% per annum. Future minimum lease payments, including principle and interest, under the finance leases for subsequent years are as follows: Year ended Remainder of 2021 $ 84,844 2022 155,642 2023 136,058 2024 117,774 2025 43,970 Total 538,288 Less: interest (71,441 ) Present value of net minimum lease payments 466,847 Short term (132,522 ) Long term total $ 334,325 Lease payments for the three and six months ended June 30, 2021 and 2020 were approximately $42,905 and $85,962 and $76,917, and $146,662, respectively. The finance lease obligations are secured by underlying leased assets with a net book value of approximately $454,474 and $509,050 as of June 30, 2021 and December 31, 2020, respectively. Operating Lease The Company determines if a contract contains a lease at inception. US GAAP requires 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. 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 June 30, 2021, are: Weighted average remaining lease term 41 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 unaudited condensed consolidated balance sheet as of June 30, 2021: Remainder of 2021 $ 42,381 2022 129,392 2023 131,859 2024 120,871 Total undiscounted future minimum lease payments 424,503 Less: Imputed interest (34,556 ) Present value of operating lease obligation $ 389,947 Short term (89,894 ) Long term total $ 300,053 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 three and six months ended June 30, 2021, 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: Three months ended June 30, 2021 Three months ended June 30, 2020 Operating lease cost: Operating lease cost $ 31,617 $ 33,194 Financing lease cost: Amortization of financed lease assets $ 34,077 $ 44,800 Interest expense 8,850 3,526 Total lease cost $ 42,927 $ 48,326 Six months ended June 30, 2021 Six months ended June 30, 2020 Operating lease cost: Operating lease cost $ 63,234 $ 64,313 Financing lease cost: Amortization of financed lease assets $ 67,668 $ 88,363 Interest expense 19,197 7,523 Total lease cost $ 86,865 $ 95,886

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	6 Months Ended
	Jun. 30, 2021
STOCK BASED COMPENSATION
12. STOCK BASED COMPENSATION	12. STOCK BASED COMPENSATION Number of options outstanding: 2018 Equity Incentive Plan 8,326,677 Options granted not part of a shareholder approved plan 700,000 June 30, 2021 9,026,677 Effective on May 5, 2021, the Board approved an amended and restated stock option plan that increases the available options from 8,000,000 shares to 18,000,000 shares, which was approved majority written consent of the shareholders. 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 option activity for the six months ended June 30, 2021: Number of options outstanding: Beginning of year 9,601,677 Granted 1,100,000 Exercised (175,000 ) Forfeited (1,500,000 ) June 30, 2021 9,026,677 Number of options exercisable at end of period 7,600,913 Number of options available for grant at end of period 9,673,323 Weighted average option prices per share: $ 0.40 Granted during the period 0.76 Exercised during the period 0.375 Forfeited during the period 0.34 Outstanding at end of the period 0.37 Exercisable at end of period $ 0.40 Stock-based compensation expense attributable to stock options was $137,449 and $280,946 for the three and six month periods ended June 30, 2021, and $138,645 and $284,442 for the three and six month periods ended June 30, 2020, respectively. As of June 30, 2021, there was approximately $1,101,100 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 5 years. During the six month period ended June 30, 2021, the Company granted options to purchase 1,100,000 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 $0.76 per common share. Total value was $691,128. The Company did not issue any options or warrants during the six month period ended June 30, 2020. 2021 Expected option life (years) 6.5 Expected stock price volatility 114%-117 % Expected dividend yield — % Risk-free interest rate 1.15%-1.58 % 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. Stock-based compensation expense attributable to issued warrants was $28,988 and $57,996 for the three and six month periods ended June 30, 2021, respectively. There was no expense during the three and six month periods ended June 30, 2020. As of June 30, 2021, there was approximately $96,660 of unrecognized stock compensation expense related to these warrants. During the year ended December 31, 2020, the Company issued 1,250,000 share of Company stock to consultants, valued $437,500 or $0.35 per common share. These services are for a 19 months and are expensed over that period. Stock-based compensation expense attributable to issued Company common stock was $69,079 and $137,240 for the three and six month periods ended June 30, 2021, respectively. There was no expense during the three and six month periods ended June 30, 2020. As of June 30, 2021, there was approximately $204,723 of unrecognized stock compensation expense related to the stock issuance. 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.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2021
RELATED PARTY TRANSACTIONS
13. RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS The Company contracted with Norco Professional Services, LLC. (“Norco”) to provide consulting services. The Company spent approximately $45,000 for the six-month period ended June 30, 2021. 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. During the year ended December 31, 2020, the Company obtained $200,000 in debt and granted a warrant to a related party for consulting services over the following 18 months, see Notes 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	6 Months Ended
	Jun. 30, 2021
SIGNIFICANT CUSTOMER
14. SIGNIFICANT CUSTOMERS	14. SIGNIFICANT CUSTOMERS The Company had significant customers in each of the quarters 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 end of the period. Net revenues for the three and six months ended June 30, 2021 and 2020 include revenues from significant customers as follows: Three Month Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Customer A 59% 38% 57% 39% Customer C 10% 34% 11% 33% Accounts receivable balances as of June 30, 2021 and December 31, 2020 from significant customers are as follows: June 30, December 31, 2021 2020 Customer A 76% 79% Customer C 9% 14%

SUMMMARY OF SIGNIFICANT ACCOU_2

SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2021
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Form 10-K filed on March 30, 2021 from which the accompanying December 31, 2020 results are derived.
Principles of Consolidation	The unaudited condensed consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiary, nDivision Services Inc. (incorporated in the state of Texas). All inter-company accounts and transactions are eliminated in consolidation.
Use of Estimates	Management uses estimates and assumptions in preparing these unaudited condensed 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 due to risks and uncertainties, including uncertainty in the current economic environment due to COVID-19.
Revenue Recognition	For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, we perform 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. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that we 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, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize 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 managed services and 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 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 unaudited condensed consolidated statements of cash flows, 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 maintained at one bank. Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations.
Accounts Receivable	Accounts receivables 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. The Company recorded an allowance for doubtful accounts of $10,000 and $26,000 as of June 30, 2021 and December 31, 2020, 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 three and six months ended June 30, 2021, and 2020.
Paycheck Protection Note Payable	The Company received a loan from the Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the amount of $710,500. The loan was subject to a note dated May 2, 2020 and has been forgiven to the extent proceeds of the loan are used for eligible expenditures such as payroll and other expenses described in the CARES Act. The Company applied for full forgiveness of this loan. As of May 15, 2021, the SBA confirmed the application for forgiveness has been approved and that the PPP loan in the amount of $710,500 plus accrued interest of $6,482 has been forgiven.
Concentration of Risk	Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable. See Note 14 for significant customer concentration disclosure. Cash is maintained with one 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. For 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 14,455,500 and 13,524,000 of common stock equivalents excluded for the three and six months ended June 30, 2021, and 6,916,000 and 6,932,500 of common stock equivalents excluded for the three and six months ended June 30, 2020, respectively because their effect is anti-dilutive.
Marketing Costs	Marketing costs, which are expensed as incurred, totaled approximately $188,670 and $347,529 for the three and six months ended June 30, 2021 and $2,405 and $7,496 for the three and six months ended June 30, 2020, 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 unaudited condensed 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 unaudited condensed 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 unaudited condensed consolidated statement of operations. As of June 30, 2021, 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)	6 Months Ended
	Jun. 30, 2021
EQUIPMENT AND SOFTWARE LICENSES
Schedule of equipment and software licenses	June 30, December 31, 2021 2020 Equipment and software $ 630,904 $ 599,900 Software licenses 1,302,141 1,302,141 1,933,045 1,902,041 Less - Accumulated depreciation and amortization (1,460,251 ) (1,361,123 ) $ 472,794 $ 540,918

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2021
INTANGIBLE ASSETS
Intangible Assets	Useful Life Cost Accumulated Amortization Net Book Value Service Contracts 5 $ 1,012,335 $ 658,291 $ 354,044

ACCRUED LIABILITIES (Tables)

ACCRUED LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2021
ACCRUED LIABILITIES
Schedule of accrued liabilities	June 30, December 31, 2021 2020 Accrued compensation $ 155,913 $ 138,707 Accrued interest 80,815 23,185 Accrued sales tax 6,091 23,525 Accrued franchise tax 12,388 11,832 Accrued professional fees and other payables 179,350 176,238 Total accrued liabilities $ 434,557 $ 373,487

LEASE OBLIGATIONS (Tables)

LEASE OBLIGATIONS (Tables)	6 Months Ended
	Jun. 30, 2021
LEASE OBLIGATIONS (Tables)
Schedule of future minimum lease payments	Year ended Remainder of 2021 $ 84,844 2022 155,642 2023 136,058 2024 117,774 2025 43,970 Total 538,288 Less: interest (71,441 ) Present value of net minimum lease payments 466,847 Short term (132,522 ) Long term total $ 334,325
Schedule of weighted average remaining lease term and discount rate for operating leases	Weighted average remaining lease term 41 Months Weighted average incremental borrowing rate 5.0 %
Schedule of minimum lease commitments	Remainder of 2021 $ 42,381 2022 129,392 2023 131,859 2024 120,871 Total undiscounted future minimum lease payments 424,503 Less: Imputed interest (34,556 ) Present value of operating lease obligation $ 389,947 Short term (89,894 ) Long term total $ 300,053
Schedule of consolidated statements of operations income	Three months ended June 30, 2021 Three months ended June 30, 2020 Operating lease cost: Operating lease cost $ 31,617 $ 33,194 Financing lease cost: Amortization of financed lease assets $ 34,077 $ 44,800 Interest expense 8,850 3,526 Total lease cost $ 42,927 $ 48,326 Six months ended June 30, 2021 Six months ended June 30, 2020 Operating lease cost: Operating lease cost $ 63,234 $ 64,313 Financing lease cost: Amortization of financed lease assets $ 67,668 $ 88,363 Interest expense 19,197 7,523 Total lease cost $ 86,865 $ 95,886

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2021
STOCK BASED COMPENSATION
Schedule of stock based compensation	Number of options outstanding: 2018 Equity Incentive Plan 8,326,677 Options granted not part of a shareholder approved plan 700,000 June 30, 2021 9,026,677
Summary of Stock option activity	Number of options outstanding: Beginning of year 9,601,677 Granted 1,100,000 Exercised (175,000 ) Forfeited (1,500,000 ) June 30, 2021 9,026,677 Number of options exercisable at end of period 7,600,913 Number of options available for grant at end of period 9,673,323 Weighted average option prices per share: $ 0.40 Granted during the period 0.76 Exercised during the period 0.375 Forfeited during the period 0.34 Outstanding at end of the period 0.37 Exercisable at end of period $ 0.40
Schedule of granted options	2021 Expected option life (years) 6.5 Expected stock price volatility 114%-117 % Expected dividend yield — % Risk-free interest rate 1.15%-1.58 %

SIGNIFICANT CUSTOMERS (Tables)

SIGNIFICANT CUSTOMERS (Tables)	6 Months Ended
	Jun. 30, 2021
Schedules of Concentration	Three Month Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Customer A 59% 38% 57% 39% Customer C 10% 34% 11% 33%
Schedules of customer accounts receivable,concenteration	June 30, December 31, 2021 2020 Customer A 76% 79% Customer C 9% 14%

LIQUIDITY (Details Narrative)

LIQUIDITY (Details Narrative)	6 Months Ended
	Jun. 30, 2021USD ($)
LIQUIDITY
Proceeds from the issuance of notes payable	$ 1,190,000
Working capital	$ 445,435

SUMMMARY OF SIGNIFICANT ACCOU_3

SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	May 15, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	May 02, 2020
Allowance for doubtful accounts		$ 10,000		$ 10,000		$ 26,000
Marketing costs		$ 188,670	$ 2,405	$ 347,529	$ 7,496
Accrued interest	$ 6,482
Paycheck Protection Program [Member]
Loan amount							$ 710,500
Forgiveness of loan	710,500
Accrued interest	$ 6,482
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share		14,455,500	6,916,000	13,524,000	6,932,500

EQUIPMENT AND SOFTWARE LICENS_3

EQUIPMENT AND SOFTWARE LICENSES (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Property, Plant and Equipment, Gross	$ 1,933,045	$ 1,902,041
Less - accumulated depreciation and amortization	(1,460,251)	(1,361,123)
Property, Plant and Equipment, Net	472,794	540,918
Equipment and software [Member]
Property, Plant and Equipment, Gross	630,904	599,900
Software License [Member]
Property, Plant and Equipment, Gross	$ 1,302,141	$ 1,302,141

EQUIPMENT AND SOFTWARE LICENS_4

EQUIPMENT AND SOFTWARE LICENSES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
EQUIPMENT AND SOFTWARE LICENSES
Depreciation and amortization related to assets	$ 49,306	$ 62,139	$ 99,128	$ 124,740
Depreciation and amortization expenses related to leased assets	$ 40,181	$ 44,800	$ 80,803	$ 88,363

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details)	6 Months Ended
	Jun. 30, 2021USD ($)
Intangible assets net	$ 354,044
Service Contracts [Member]
Intangible assets gross	1,012,335
Accumulated amortization	658,291
Intangible assets net	$ 354,044
Useful life of intangible assets	5 years

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
INTANGIBLE ASSETS
Amortization expense	$ 50,638	$ 50,638	$ 101,276	$ 101,276
2021	101,276		101,276
2022	202,551		202,551
2023	50,217		50,217
Intangible assets net	$ 354,044		$ 354,044

ACCRUED LIABILITIES (Details)

ACCRUED LIABILITIES (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
NOTE PAYABLE
Accrued compensation	$ 155,913	$ 138,707
Accrued interest	3,994	23,185
Accrued sales tax	6,091	23,525
Accrued franchise tax	12,388	11,832
Accrued professional fees and other payables	179,350	176,238
Total accrued liabilities	$ 434,557	$ 373,487

FACTORING CREDIT FACILITY (Deta

FACTORING CREDIT FACILITY (Details Narrative)	6 Months Ended
	Jun. 30, 2021
Factoring Credit Facility [Member]
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) - USD ($)	May 15, 2021	May 02, 2020
Accrued interest	$ 6,482
Investor [Member]
Accrued interest	6,482
Proceeds from loan		$ 710,500
Loan amount	$ 710,500

CONVERTIBLE NOTES PAYABLE (Deta

CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Proceeds from offering , gross			$ 5,000,000
Convertible promissory note	$ 550,000		550,000
Accrued interest	3,994		$ 3,994		$ 23,185
Convertible common stock, shares			1,134,984
Unamortized discount			$ 393,575
Interest expense	189,739	$ 28,750	302,975	$ 58,797
Several Investors [Member]
Convertible promissory note	1,190,000		1,190,000		1,050,000
Interest expense	$ 129,919		154,253
Beneficial conversion feature			$ 1,361,675
Rate of interest			8.00%
Price per share	$ 0.40		$ 0.40
Due to related party	$ 2,240,000		$ 2,240,000
Discount rate			25.00%
A Related Party [Member]
Convertible promissory note	$ 200,000		$ 200,000		$ 200,000

LEASE OBLIGATIONS (Details)

LEASE OBLIGATIONS (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
LEASE OBLIGATIONS (Tables)
2021	$ 84,844
2022	155,642
2023	136,058
2024	117,774
2025	43,970
Total	538,288
Less: interest	71,441
Present value of net minimum lease payments	(466,847)
Short term	(132,522)	$ (125,449)
Long term total	$ 334,325	$ 380,209

LEASE OBLIGATIONS (Details 1)

LEASE OBLIGATIONS (Details 1)	6 Months Ended
	Jun. 30, 2021
LEASE OBLIGATIONS (Tables)
Weighted average remaining lease term	41 years
Weighted average incremental borrowing rate	5.00%

LEASE OBLIGATIONS (Details 2)

LEASE OBLIGATIONS (Details 2) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
LEASE OBLIGATIONS (Tables)
2021	$ 42,381
2022	129,392
2023	131,859
2024	120,871
Total undiscounted future minimum lease payments	424,503
Less: Imputed interest	(34,556)
Present value of operating lease obligation	389,947
Short term	(89,894)	$ (105,615)
Long term total	$ 300,053	$ 336,520

LEASE OBLIGATIONS (Details 3)

LEASE OBLIGATIONS (Details 3) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Operating lease cost
Operating lease cost	$ 31,617	$ 33,194	$ 63,234	$ 64,313
Finance lease cost
Amortization of leased assets	34,077	44,800	67,668	88,363
Interest expense	8,850	3,526	19,197	7,523
Total lease cost	$ 42,927	$ 48,326	$ 86,865	$ 95,886

LEASE OBLIGATIONS (Details Narr

LEASE OBLIGATIONS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Lease payments	$ 42,905	$ 76,917	$ 86,962	$ 146,662
Leased assets, net book value	$ 454,474		454,474		$ 509,050
Minimum [Member]
Leases periodic payments			$ 354
Interest rate			3.60%
Maximum [Member]
Leases periodic payments			$ 4,397
Interest rate			12.00%

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details)	6 Months Ended
	Jun. 30, 2021shares
Number of options outstanding
2018 Equity incentive plan	8,326,677
Options granted not part of a shareholder approved plan	700,000
June 30, 2021	9,026,677

STOCK BASED COMPENSATION (Det_2

STOCK BASED COMPENSATION (Details 1) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Number of options outstanding
Number of options outstanding, begining balance	$ 9,601,677
Granted	1,100,000	1,250,000
Exercised, converted	(175,000)
Forfeited / exchanged / modification	(1,500,000)
Number of options outstanding, ending balance	9,026,677
Number of options exercisable at end of period	7,600,913
Number of options available for grant at end of period	9,673,323
Weighted average option prices per share
Weighted average option prices per share	$ 0.40
Granted during the period	0.76
Exercised during the period	0.375
Forfeited during the period	0.34
Outstanding at end of the period	0.37
Exercisable at end of period	$ 0.40

STOCK BASED COMPENSATION (Det_3

STOCK BASED COMPENSATION (Details 2)	6 Months Ended
	Jun. 30, 2021
STOCK BASED COMPENSATION
Expected option life (years)	6 years 6 months
Expected stock price volatility, minimum	114.00%
Expected stock price volatility, maximum	117.00%
Expected dividend yield	0.00%
Risk-free interest rate, minimum	1.15%
Risk-free interest rate, maximum	1.58%

STOCK BASED COMPENSATION (Det_4

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	May 05, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Stock-based compensation expense		$ 137,449	$ 138,645	$ 280,946	$ 284,442
Unrecognized compensation expense		1,101,100		$ 1,101,100
Average expected life				6 years 6 months
Average vesting period of options				3 years
Stock option granted during the period				1,100,000		1,250,000
Total value of options/rights granted				$ 691,128		$ 437,500
Exercise price				$ 0.76		$ 0.35
Weighted average vesting period of options				5 years		19 months
2018 Equity Incentive Plan [Member]
Maximum number of shares granted under plan	18,000,000			8,000,000
Stock option shares available	8,000,000
Warrants [Member]
Stock-based compensation expense		28,988	0	$ 57,996	0
Unrecognized compensation expense		$ 96,660		$ 96,660
Warrants [Member] | Consultant [Member]
Total value of options/rights granted						$ 174,000
Exercise price						$ 0.625
Common stock shares issuable upon exercise of options/rights						750,000
Term of options/rights						18 months
Warrants [Member] | The Gamwell Contract [Member]
Exercise price				$ 0.375
Common stock shares issuable upon exercise of options/rights		122,752		122,752
Expiration date				Apr. 23, 2028
Common Stock [Member]
Stock-based compensation expense		$ 69,079	$ 0	$ 137,240	$ 0
Unrecognized compensation expense		$ 204,723		$ 204,723

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Convertible promissory note	$ 550,000
Norco Professional Services, LLC [Member]
Related party expenses	45,000
A Related Party [Member]
Convertible promissory note	$ 200,000	$ 200,000

SIGNIFICANT CUSTOMERS (Details)

SIGNIFICANT CUSTOMERS (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Net Revenue [Member] | Customer A [Member]
Concentration percentage	59.00%	38.00%	57.00%	39.00%
Net Revenue [Member] | Customer C [Member]
Concentration percentage	10.00%	34.00%	11.00%	33.00%
Accounts receivable [Member] | Customer A [Member]
Concentration percentage			76.00%		79.00%
Accounts receivable [Member] | Customer C [Member]
Concentration percentage			9.00%		14.00%