Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-56059 | |
Entity Registrant Name | CERBERUS CYBER SENTINEL CORPORATION | |
Entity Central Index Key | 0001777319 | |
Entity Tax Identification Number | 83-4210278 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 6900 E. Camelback Road | |
Entity Address, Address Line Two | Suite 240 | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85251 | |
City Area Code | (480) | |
Local Phone Number | 389-3444 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 117,729,971 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | |
Current Assets: | |||
Cash and cash equivalents | $ 5,724,749 | $ 5,197,030 | |
Accounts receivable, net of allowances for doubtful accounts of $55,264 and $40,000, respectively | 1,609,339 | 1,006,834 | |
Prepaid expenses and other current assets | 302,671 | 142,144 | |
Total Current Assets | 7,636,759 | 6,346,008 | |
Property and equipment, net of accumulated depreciation of $23,321 and $14,473, respectively | 71,782 | 80,630 | |
Right of use asset, net | 150,155 | 13,426 | |
Intangible assets, net of accumulated amortization of $186,456 and $116,468, respectively | 2,035,444 | 2,105,432 | |
Goodwill | 4,101,369 | [1] | 4,101,369 |
Total Assets | 13,995,509 | 12,646,865 | |
Current Liabilities: | |||
Accounts payable and accrued expenses | 858,564 | 809,804 | |
Stock payable | 160,750 | 46,000 | |
Lease liability | 103,770 | 8,989 | |
Loans payable | 9,451 | 9,405 | |
Line of credit | 3,000 | ||
Convertible note payable, net of debt discount, related party | 2,962,802 | 2,926,609 | |
Note payable - related party | 9,787 | 59,787 | |
Total Current Liabilities | 4,105,124 | 3,863,594 | |
Long-term Liabilities: | |||
Loans payable, net of current portion | 1,014,527 | 1,037,115 | |
Lease liability, net of current portion | 48,228 | 4,693 | |
Total Liabilities | 5,167,879 | 4,905,402 | |
Commitments and Contingencies | |||
Stockholders’ Equity: | |||
Common stock, $.00001 par value; 250,000,000 shares authorized; 117,729,971 and 116,104,971 shares issued and outstanding on June 30, 2021 and December 31, 2020, respectively | 1,177 | 1,161 | |
Additional paid-in capital | 17,586,946 | 12,607,074 | |
Accumulated deficit | (8,760,493) | (4,866,772) | |
Total Stockholders’ Equity | 8,827,630 | 7,741,463 | |
Total Liabilities and Stockholders’ Equity | $ 13,995,509 | $ 12,646,865 | |
[1] | As of June 30, 2021, the Company has not obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in the Company’s Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, may change and, therefore, goodwill resulting from the acquisition may change. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 55,264 | $ 40,000 |
Property plant and equipment, accumulated depreciation | 23,321 | 14,473 |
Intangible assets, accumulated depreciation | $ 186,456 | $ 116,468 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 117,729,971 | 116,104,971 |
Common stock, shares outstanding | 117,729,971 | 116,104,971 |
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 | |
Total revenue | $ 2,949,677 | $ 1,550,487 | $ 5,509,455 | $ 2,618,708 |
Total cost of revenue | 2,012,344 | 858,501 | 3,751,507 | 1,633,742 |
Total gross profit | 937,333 | 691,986 | 1,757,948 | 984,966 |
Operating expenses: | ||||
Professional fees | 244,261 | 204,956 | 401,615 | 401,310 |
Advertising and marketing | 172,468 | 45,708 | 217,695 | 73,570 |
Selling, general and administrative | 1,667,614 | 634,078 | 3,155,255 | 1,214,276 |
Stock based compensation | 891,126 | 343,910 | 1,729,888 | 669,339 |
Loss on write-off of account receivable | 15,264 | 15,000 | 15,264 | 15,000 |
Total operating expenses | 2,990,733 | 1,243,652 | 5,519,717 | 2,373,495 |
Loss from operations | (2,053,400) | (551,666) | (3,761,769) | (1,388,529) |
Other income (expense): | ||||
Other income | 2,179 | 10,000 | 2,384 | 10,000 |
Interest expense, net | (65,641) | (4,437) | (134,336) | (6,718) |
Total other income (expense) | (63,462) | 5,563 | (131,952) | 3,282 |
Loss before provision for income taxes | (2,116,862) | (546,103) | (3,893,721) | (1,385,247) |
Provision for income taxes | ||||
Net loss | $ (2,116,862) | $ (546,103) | $ (3,893,721) | $ (1,385,247) |
Net loss per common share - basic | $ (0.02) | $ 0 | $ (0.03) | $ (0.01) |
Net loss per common share - diluted | $ (0.02) | $ 0 | $ (0.03) | $ (0.01) |
Weighted average shares outstanding - basic | 117,729,971 | 109,604,497 | 117,081,360 | 108,847,565 |
Weighted average shares outstanding - diluted | 117,729,971 | 109,604,497 | 117,081,360 | 108,847,565 |
Managed Services [Member] | ||||
Total revenue | $ 554,768 | $ 616,344 | $ 995,185 | $ 754,257 |
Total cost of revenue | 264,452 | 26,167 | 458,119 | 45,137 |
Consulting Services [Member] | ||||
Total revenue | 2,394,909 | 934,143 | 4,514,270 | 1,864,451 |
Total cost of revenue | 215,982 | 205,877 | 333,776 | 321,724 |
Cost Of Payroll [Member] | ||||
Total cost of revenue | $ 1,531,910 | $ 626,457 | $ 2,959,612 | $ 1,266,881 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 1,139 | $ 7,770,902 | $ (1,453,510) | $ (2,400,000) | $ 3,918,531 |
Balance, shares at Dec. 31, 2019 | 107,912,500 | ||||
Stock based compensation - stock options | 325,429 | 325,429 | |||
Stock issued for cash | $ 4 | 139,996 | 140,000 | ||
Stock issued for cash, shares | 350,000 | ||||
Return of treasury stock to authorized capital | $ (60) | (2,399,940) | 2,400,000 | ||
Net loss | (839,144) | (839,144) | |||
Ending balance, value at Mar. 31, 2020 | $ 1,083 | 5,836,387 | (2,292,654) | 3,544,816 | |
Balance, shares at Mar. 31, 2020 | 108,262,500 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 1,139 | 7,770,902 | (1,453,510) | (2,400,000) | 3,918,531 |
Balance, shares at Dec. 31, 2019 | 107,912,500 | ||||
Net loss | (1,385,247) | ||||
Ending balance, value at Jun. 30, 2020 | $ 1,117 | 7,537,171 | (2,838,757) | 4,699,531 | |
Balance, shares at Jun. 30, 2020 | 111,654,771 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 1,083 | 5,836,387 | (2,292,654) | 3,544,816 | |
Balance, shares at Mar. 31, 2020 | 108,262,500 | ||||
Stock based compensation - stock options | 343,910 | 343,910 | |||
Stock issued for Technologyville acquisition | $ 34 | 1,356,874 | 1,356,908 | ||
Stock issued for Technologyville acquisition, shares | 3,392,271 | ||||
Net loss | (546,103) | (546,103) | |||
Ending balance, value at Jun. 30, 2020 | $ 1,117 | 7,537,171 | (2,838,757) | 4,699,531 | |
Balance, shares at Jun. 30, 2020 | 111,654,771 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 1,161 | 12,607,074 | (4,866,772) | 7,741,463 | |
Balance, shares at Dec. 31, 2020 | 116,104,971 | ||||
Stock based compensation - stock options | 838,762 | 838,762 | |||
Stock issued for cash | $ 16 | 3,249,984 | 3,250,000 | ||
Stock issued for cash, shares | 1,625,000 | ||||
Net loss | (1,776,859) | (1,776,859) | |||
Ending balance, value at Mar. 31, 2021 | $ 1,177 | 16,695,820 | (6,643,631) | 10,053,366 | |
Balance, shares at Mar. 31, 2021 | 117,729,971 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 1,161 | 12,607,074 | (4,866,772) | 7,741,463 | |
Balance, shares at Dec. 31, 2020 | 116,104,971 | ||||
Net loss | (3,893,721) | ||||
Ending balance, value at Jun. 30, 2021 | $ 1,177 | 17,586,946 | (8,760,493) | 8,827,630 | |
Balance, shares at Jun. 30, 2021 | 117,729,971 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 1,177 | 16,695,820 | (6,643,631) | 10,053,366 | |
Balance, shares at Mar. 31, 2021 | 117,729,971 | ||||
Stock based compensation - stock options | 891,126 | 891,126 | |||
Net loss | (2,116,862) | (2,116,862) | |||
Ending balance, value at Jun. 30, 2021 | $ 1,177 | $ 17,586,946 | $ (8,760,493) | $ 8,827,630 | |
Balance, shares at Jun. 30, 2021 | 117,729,971 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (3,893,721) | $ (1,385,247) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation - stock options | 1,729,888 | 669,339 |
Loss on write-off of accounts receivable | 15,264 | 15,000 |
Issuance of common stock for services | 114,750 | 22,000 |
Depreciation and amortization | 78,836 | 34,676 |
Right of use amortization | 39,029 | 1,492 |
Amortization of debt discount | 36,193 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (617,769) | (209,278) |
Other current assets | (160,527) | (176,744) |
Accounts payable and accrued expenses | 48,760 | 223,615 |
Lease liability | (37,442) | (1,407) |
Deferred revenue | 66,434 | |
Net cash used in operating activities | (2,646,739) | (740,120) |
Cash flows from investing activities: | ||
Cash acquired in acquisitions | 65,037 | |
Net cash provided by investing activities | 65,037 | |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 3,250,000 | 140,000 |
Proceeds from PPP loans | 709,600 | |
Proceeds from line of credit | 221,346 | 60,000 |
Payment on line of credit | (224,346) | (66,705) |
Payment on loans payable | (22,542) | (988) |
Payment on notes payable, related party | (50,000) | |
Net cash provided by financing activities | 3,174,458 | 841,907 |
Net increase in cash and cash equivalents | 527,719 | 166,824 |
Cash and cash equivalents - beginning of the period | 5,197,030 | 1,876,645 |
Cash and cash equivalents - end of the period | 5,724,749 | 2,043,469 |
Supplemental cash flow information: | ||
Interest | 91,490 | 169 |
Income taxes | 5,882 | |
Non-cash investing and financing activities: | ||
Right of use asset and lease liability recorded | $ 175,758 | $ 19,393 |
NATURE OF THE ORGANIZATION AND
NATURE OF THE ORGANIZATION AND BUSINESS | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE ORGANIZATION AND BUSINESS | NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS Corporate History Cerberus Cyber Sentinel Corporation (“Cerberus Sentinel,” “Cerberus,” or the “Company”) was formed on March 5, 2019 as a Delaware corporation. The Company’s principal offices are located at 6900 E. Camelback Road, Suite 240, Scottsdale, AZ 85258. Effective May 25, 2020, the Company entered into a Stock Purchase Agreement with Technologyville, Inc., an Illinois corporation (“Techville”), and its sole shareholder, pursuant to which Techville became a wholly owned subsidiary of the Company (the “Techville Acquisition”). Under the terms of the Techville Acquisition, all issued and outstanding common stock of Techville was exchanged for an aggregate of 3,392,271 Effective August 1, 2020, the Company entered into a Stock Purchase Agreement with Clear Skies Security, LLC, a Georgia limited liability company (“Clear Skies”), and its equity holders, pursuant to which Clear Skies became a wholly owned subsidiary of the Company (the “Clear Skies Acquisition”). Under the terms of the Clear Skies Acquisition, all issued and outstanding equity securities in Clear Skies were exchanged for an aggregate of 2,330,000 Effective December 16, 2020, the Company entered into an Agreement and Plan of Merger with Alpine Security, LLC, an Illinois limited liability company (“Alpine”), and its sole member, pursuant to which Alpine became a wholly owned subsidiary of the Company (the “Alpine Acquisition”). Under the terms of the Alpine Acquisition, all issued and outstanding membership units in Alpine were exchanged for an aggregate of 900,000 Nature of the Business Cerberus Sentinel is a security services company comprised of security professionals who work with clients throughout the United States to create a continuously aware security culture. We do not sell cybersecurity products. We position the Company as a trusted cybersecurity advisor and are committed to delivering tailored security solutions to organizations of different sizes and across all geographies and industries to fit their budgetary needs and limit their cyber threat exposure. We currently provide a multitude of cybersecurity services including managed security service, cybersecurity consulting, technology consulting, compliance auditing, vulnerability assessment, penetration testing, security remediation, Security Operations Center (“SOC”) set-up and consulting and cybersecurity training. We differentiate ourselves from our competitors by staying technology agnostic. We believe that many cybersecurity service providers in the market today are committed to a specific technology solution which limits their service scope and ability to quickly respond to any emerging cybersecurity challenges. In addition, as we continue to serve our clients within our existing capacities, we plan to continue making strategic acquisitions of small-to-medium-sized engineer-led cybersecurity service firms to continue to expand our service scope and geographical coverage. We believe that having a world-class technology team with multi-faceted expertise is key to providing technology agnostic solutions to our clients and maximizing their return on investment from information technology (“IT”) and cybersecurity spending. Liquidity The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business. At June 30, 2021, the Company had an accumulated deficit of approximately $ 8,760 3,532,000 . For the six months ended June 30, 2021, the Company had a loss from operations of approximately $ 3,762 and negative cash flows from operations of approximately $ 2,647 . Although the Company is showing positive revenues and gross profit trends, the Company expects to incur further losses through the end of 2021. To date the Company has been funding operations primarily through the sale of equity in private placements and revenues generated by the Company’s services. During the six months ended June 30, 2021, the Company received $ 3,250,000 Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development and corresponding level of expenditure for at least twelve months from the date of the issuance of these unaudited condensed consolidated financial statements, although no assurance can be given that it will not need additional funds prior to such time. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial information as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results and cash flows for such periods. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021. Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, GenResults, LLC (“GenResults”), TalaTek, Inc. (“TalaTek”), Techville, Clear Skies, and Alpine. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain reclassifications have been made to the financial statements for the three and six months ended June 30, 2020 to conform to the financial statements presentation for the three and six months ended June 30, 2021. These reclassifications had no effect on net loss or cash flows as previously reported. Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company believes the critical accounting policies discussed below affect its more significant judgments and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements. Significant estimates include the allowance for doubtful accounts, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations and assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility, risk-free interest rate, and expected divided rate. Revenue The Company’s revenues are derived from two major types of services to clients: Managed Services and Consulting Services. With respect to Managed Services, the Company provides culture education and enablement, tools and technology provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services including, but not limited to, antivirus and patch management. With respect to Consulting Services, the Company provides cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Practical Expedients As part of Accounting Standards Codification (“ASC”) 606, the Company has adopted several practical expedients including the following: (i) the Company has determined that it need not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised service to the customer and when the customer pays for that service will be one year or less and (ii) the Company recognizes any incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Disaggregated Revenues Revenue consists of the following by service offering for the six months ended June 30, 2021: SCHEDULE OF DISAGGREGATION OF REVENUES Managed Services Consulting Services Total Primary Sector Markets Public $ - $ 2,019,470 $ 2,019,470 Private 920,674 2,224,751 3,145,425 Not-for-Profit 74,511 270,049 344,560 $ 995,185 $ 4,514,270 $ 5,509,455 Major Service Lines Gap and Risk Assessment $ - $ 4,185,885 $ 4,185,385 Managed Security Services - - - Tech Connect 977,090 - 977,090 Hardware - 320,833 320,833 Other 18,095 7,552 25,647 $ 995,185 $ 4,514,270 $ 5,509,455 Revenue consists of the following by service offering for the six months ended June 30, 2020: Managed Services Consulting Services Total Primary Sector Markets Public $ 3,250 $ 1,593,598 $ 1,596,848 Private 740,849 268,259 1,009,108 Not-for-Profit 10,158 2,594 12,752 $ 754,257 $ 1,864,451 $ 2,618,708 Major Service Lines Gap and Risk Assessment $ - $ 1,803,928 $ 1,803,928 Managed Security Services 657,226 - 657,226 Tech Connect 96,771 22,263 119,034 Hardware - 13,253 13,253 Other 260 25,007 25,267 $ 754,257 $ 1,864,451 $ 2,618,708 Contract Modifications There were no contract modifications during the six months ended June 30, 2021. Contract modifications are not routine in the performance of the Company’s contracts. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. The Company periodically assesses its accounts and other receivables for collectability on a specific identification basis. The Company provides for allowances for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of June 30, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $ 55,264 40,000 Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally between three and five years. Expenditures that enhance the useful lives of the assets are capitalized and depreciated. Computer equipment costs for the Company are capitalized, as incurred, and depreciated on a straight-line basis over three years. TalaTek capitalizes all equipment costs over $ 5,000 and depreciates these costs on a straight-line basis over three years. Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation is removed from the accounts and the resulting gain or loss, if any, is reflected in results of operations. Impairment of Long-Lived Assets The Company reviews long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. During the three and six months ended June 30, 2021, the Company did not record a loss on impairment. Intangible Assets The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other Goodwill Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at year end, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit level (See Note 5). Advertising and Marketing Costs The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 172,468 and $ 45,708 for the three months ended June 30, 2021 and 2020, respectively, and are recorded in operating expenses on the unaudited condensed consolidated statements of operations. Advertising and marketing expenses were $ 217,695 and $ 73,570 for the six months ended June 30, 2021 and 2020, respectively, and are recorded in operating expenses on the unaudited condensed consolidated statements of operations. Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All vested outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options have been excluded from the Company’s computation of net loss per common share for the three and six months ended June 30, 2021 and 2020. The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to the Company’s net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION June 30, 2021 June 30, 2020 Stock Options 25,843,700 20,820,000 Convertible Debt 1,500,000 - Total 27,343,700 20,820,000 Stock-based Compensation The Company applies the provisions of ASC 718, Compensation - Stock Compensation For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black-Scholes-Merton option pricing model. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. Due to the Company’s limited history and lack of public trading volume for its common stock, the Company used the average of historical share prices of similar companies within its industry to calculate volatility for use in the Black-Scholes-Merton option pricing model. Pursuant to Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting Leases Leases in which the Company is the lessee are comprised of corporate offices and property and equipment. All of the leases are classified as operating leases. The Company leases multiple office spaces with a remaining weighted average term of 1.42 years. The Company leases a vehicle with a remaining term of 0.92 years. In accordance with ASC 842, Leases Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company utilizes ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. Recently Issued Accounting Standards All newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2021 December 31, 2020 Prepaid expenses $ 200,595 $ 128,398 Prepaid insurance 71,221 13,746 Other current assets 30,855 - Total prepaid expenses and other current assets $ 302,671 $ 142,144 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consists of the following: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2021 December 31, 2020 Computer equipment $ 15,735 $ 15,735 Vehicle 63,052 63,052 Furniture and fixtures 6,224 6,224 Software 10,092 10,092 Property and equipment, gross 95,103 95,103 Less: accumulated depreciation (23,321 ) (14,473 ) Property and equipment, net $ 71,782 $ 80,630 Total depreciation expense was $ 4,424 2,404 8,848 3,308 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 5 – INTANGIBLE ASSETS AND GOODWILL The following table summarizes the changes in goodwill during the six months ended June 30, 2021: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2020 (1) $ 4,101,369 Acquisition of goodwill - Impairment - Ending balance, June 30, 2021 (1) $ 4,101,369 (1) As of June 30, 2021, the Company has not obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in the Company’s Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, may change and, therefore, goodwill resulting from the acquisition may change. The following table summarizes the identifiable intangible assets as of June 30, 2021 and December 31, 2020: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life 2021 2020 Tradenames – trademarks (1) Indefinite $ 1,094,500 $ 1,094,500 Customer base (1) 15 370,000 370,000 Non-compete agreements (1) 5 236,400 236,400 Intellectual property/technology (1) 10 521,000 521,000 Identifiable intangible assets 2,221,900 2,221,900 Less accumulated amortization (186,456 ) (116,468 ) Total $ 2,035,444 $ 2,105,432 (1) These intangible assets were acquired in the acquisitions of TalaTek, Techville and Clear Skies. The weighted average remaining useful life of identifiable amortizable intangible assets remaining is 8.18 years. Amortization of identifiable intangible assets for the three months ended June 30, 2021 and 2020, was $ 34,994 15,648 69,988 31,296 The below table summarizes the future amortization expense for the remainder of 2021 following June 30, 2021, and the next four years thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Remainder of 2021 $ 69,987 2022 127,027 2023 113,427 2024 104,262 2025 76,767 Thereafter 449,474 $ 940,944 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES June 30, 2021 December 31, 2020 Accounts payable $ 476,797 $ 328,368 Accrued payroll 193,786 39,670 Accrued expenses 147,124 417,832 Accrued commissions 17,703 - Accrued interest – related party 23,154 23,934 Total accounts payable and accrued expenses $ 858,564 $ 809,804 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 7 - RELATED PARTY TRANSACTIONS Note Payable – Related Party On December 31, 2018, GenResults entered into an unsecured note payable with Jemmett Enterprises, LLC which is controlled by the Company’s Chief Executive Officer and is the Company’s majority stockholder, in the original principal amount of $ 200,000 . The note has a maturity date of June 15, 2021 , and bears an interest rate at 6% per annum. The outstanding principal balance of this loan was $ 9,787 and $ 59,787 as of June 30, 2021 and December 31, 2020 (See Note 11). On May 30, 2021 the Company paid $ 50,000 towards the outstanding principal balance of the note. At June 30, 2021 and December 31, 2020, the Company has recorded accrued interest of $ 23,154 and $ 23,934 , respectively, with respect to this note payable. The Company has recorded interest expense of $ 1,426 and $ 3,060 during the three months ended June 30, 2021 and 2020, respectively. The Company has recorded interest expense of $ 4,409 and $ 5,689 during the six months ended June 30, 2021 and 2020, respectively. Convertible Note Payable, Accounts Receivable and Revenue – Related Party On December 23, 2020, the Company issued to a related party a convertible note in the principal amount of $ 3,000,000 bearing interest at 6% per annum, payable at maturity, with a maturity date of December 31, 2021 and a conversion price of $2.00 per share. The outstanding principal balance of this loan was $ 3,000,000 at June 30, 2021 and December 31, 2020, respectively. See Note 11 for additional details. At June 30, 2021, the Company had $ 29,321 122,791 Agreement with Eventus Consulting, P.C. On November 8, 2019, the Company entered into a financial consulting agreement with Eventus Consulting, P.C., an Arizona corporation, (“Eventus”), of which Neil Reithinger, Chief Financial Officer advisor to the Company, is the sole shareholder, pursuant to which Eventus provides financial and accounting consulting services to the Company. In consideration for Eventus’ services, the Company agreed to pay Eventus according to its standard hourly rate structure. The term of the agreement is perpetual unless otherwise terminated upon thirty days’ notice by either Eventus or the Company. For the six months ended June 30, 2021, Eventus was paid $ 82,557 and was owed $ 37,543 for accrued and unpaid services under the financial consulting agreement at June 30, 2021. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | Note 8 - STOCKHOLDERS’ EQUITY Equity Transactions During the Period During the six months ended June 30, 2021, the Company issued an aggregate of 1,625,000 2.00 3,250,000 Stock Payable On January 16, 2020, the Company entered into a consulting agreement, with Eskenzi PR Limited (“Eskenzi”). As per the agreement, Eskenzi will provide various marketing and public relations services to the Company. The initial term of the agreement was for twelve months and automatically renews for an additional twelve months unless either the Company or Eskenzi provides at least three months advance written notice of termination. On January 16, 2021, the consulting agreement was automatically renewed per the terms of the agreement. Upon execution of the consulting agreement the Company was to issue 120,000 shares of the Company’s restricted common stock, valued at $ 48,000 to Eskenzi. Upon the renewal of the consulting agreement the Company was to issue 312,000 shares of the Company’s restricted stock, valued at $ 639,600 . As of June 30, 2021, these shares have yet to be issued. As such, the Company recorded a stock payable in the amount of $ 160,750 and $ 46,000 representing the fair value of services performed through the six months and year ended June 30, 2021 and December 31, 2020, respectively. See Note 9 for disclosure of additional equity related transactions. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2021 | |
Compensation Related Costs [Abstract] | |
STOCK-BASED COMPENSATION | Note 9 – STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation in accordance with the fair value recognition provisions of ASC 718. 2019 Equity Incentive Plan The Board of Directors approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) on June 6, 2019 and the stockholders of the Company holding a majority of the outstanding shares of common stock of the Company approved and adopted the 2019 Plan. The maximum number of shares of the Company’s common stock that may be issued under the Company’s 2019 Plan is 25,000,000 Options The Company granted options for the purchase of 1,400,000 The Company granted options for the purchase of 3,775,000 The weighted average grant date fair value of options issued and vested during the six months ended June 30, 2021 was $ 587,143 243,534 8,147,973 The weighted average grant date fair value of options issued during the six months ended June 30, 2020 was $ 165,982 1,785,954 Compensation-based stock option activity for qualified and unqualified stock options is summarized as follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2021 24,573,700 $ 0.86 Granted 1,400,000 2.00 Exercised - - Expired or cancelled (130,000 ) 0.54 Outstanding at June 30, 2021 25,843,700 $ 0.92 The following table summarizes information about options to purchase shares of the Company’s common stock outstanding and exercisable at June 30, 2021: SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE Weighted- Weighted- Average Average Outstanding Remaining Life Exercise Number Exercise Prices Options In Years Price Exercisable $ 0.38 3,000,000 3.12 $ 0.38 2,666,667 0.40 3,600,000 3.06 0.40 2,750,000 0.50 11,626,000 3.63 0.50 6,977,417 2.00 6,277,700 4.39 2.00 66,667 2.05 1,340,000 4.41 2.05 - 25,843,700 3.72 $ 0.92 12,460,751 The compensation expense attributed to the issuance of the options is recognized ratably over the vesting period. Options granted under the 2019 Plan are exercisable for a specified period, generally five to ten years from the grant date and generally vest over three to four years from the grant date. Total compensation expense related to the options was $ 891,126 and $ 343,910 for the three months ended June 30, 2021 and 2020, respectively. Total compensation expense related to the options was $ 1,729,888 and $ 669,339 for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, there was future compensation expense of $ 6,525,546 with a weighted average recognition period of 2.11 years related to the options. The aggregate intrinsic value totaled $ 186,672,318 95,695,130 8.14 On February 1, 2021, the Company granted options to purchase 500,000 2.00 30% 2.05 2.00 74% 0.42% 0% 3.53 On February 1, 2021, the Company granted options to purchase 200,000 2.00 2.05 2.00 74% 0.42% 0% 3.25 On February 8, 2021, the Company granted options to purchase 500,000 2.00 30% 2.05 2.00 74% 0.48% 0% 3.53 On May 5, 2021, the Company granted options to purchase 200,000 2.00 2.25 2.00 73% 0.80% 0% 3.25 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Legal Claims There are no material pending legal proceedings in which the Company or any of its subsidiaries is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of its voting securities, or security holder is a party adverse to us or has a material interest adverse to the Company. |
LOANS PAYABLE AND LINES OF CRED
LOANS PAYABLE AND LINES OF CREDIT | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE AND LINES OF CREDIT | NOTE 11 – LOANS PAYABLE AND LINES OF CREDIT Lines of Credit TalaTek, Inc. On July 29, 2019, TalaTek entered into a secured line of credit with SunTrust Bank (“SunTrust”) for $ 500,000 2.25% Technologyville, Inc. On August 24, 2017, Techville entered into a secured revolving line of credit with Wintrust Bank (“Wintrust”) for $ 75,000 . The line of credit bears interest at 1.99% for the first twelve (12) months, then Prime plus 2% , with a floor rate of 6% and a maturity date of August 24, 2021 . The interest rate at June 30, 2021 was 6% . The line of credit is collateralized by all of Techville’s assets. There are no financial covenants requiring the Company to maintain specific financial ratios. During the six months ended June 30, 2021 Techville drew $ 221,346 against the line of credit and made payments of $ 224,346 . At June 30, 2021 and December 31, 2020 there was zero and $ 3,000 outstanding, respectively. Loans Payable Technologyville, Inc. On April 29, 2019, Techville entered into a note payable with VCI Account Services, that subsequently was assigned to U.S. Bancorp, in the original principal amount of $ 59,905 . The note has a maturity date of May 12, 2025 and bears interest at 5.77% per annum. During the six months ended June 30, 2021, the Company made cash payments of $ 2,925 , of which $ 2,702 and $ 222 was attributed to principal and interest, respectively. The loan is collateralized by a vehicle. There are no financial covenants requiring the Company to maintain specific financial ratios. At June 30, 2021, $ 43,178 was outstanding. On June 22, 2020, under the U.S. Small Business Administration’s Paycheck Protection Program, Techville entered into a note payable with a financial institution for $ 179,600 bearing interest at 1% per annum and a maturity date of June 22, 2025 . Pursuant to the note, principal and interest payments were deferred for ten months. Techville applied for loan forgiveness on a timely basis, and at June 30, 2021, $ 179,600 was outstanding. GenResults, LLC On December 31, 2018, GenResults entered into an unsecured note payable with Jemmett Enterprises, LLC, the Company’s majority stockholder that is controlled by the Company’s Chief Executive Officer, in the original principal amount of $ 200,000 . The note has a maturity date of June 15, 2021 , and bears interest at 6% per annum. On May 30, 2021 the Company paid $50,000 towards the outstanding principal balance of the note. The outstanding principal balance of this loan was $ 9,787 as of June 30, 2021 and December 31, 2020. At June 30, 2021 and December 31, 2020, the Company has recorded accrued interest of $ 23,154 and $ 23,934 , respectively, with respect to this note payable. The Company has recorded interest expense of $ 1,426 and $ 3,060 during the three months ended June 30, 2021 and 2020, respectively. The Company has recorded interest expense of $ 4,409 and $ 5,689 during the six months ended June 30, 2021 and 2020, respectively. Cerberus Cyber Sentinel Corporation On April 17, 2020, under the U.S. Small Business Administration’s Paycheck Protection Program, Cerberus entered into a note payable with a financial institution for $ 530,000 bearing interest at 1% per annum and a maturity date of April 17, 2022 . Pursuant to the note, principal and interest payments were deferred for six months. The Company applied for loan forgiveness on a timely basis, and at June 30, 2021, $ 530,000 Clear Skies Security LLC On May 8, 2020, under the U.S. Small Business Administration’s Paycheck Protection Program, Clear Skies entered into a loan payable with a financial institution for $ 134,200 bearing interest at 1% per annum and a maturity date of May 8, 2022 . Pursuant to the loan, principal and interest payments were deferred for six months. Clear Skies applied for loan forgiveness on a timely basis, and at June 30, 2021, $ 134,200 Alpine Security, LLC On April 18, 2020, under the U.S. Small Business Administration’s Paycheck Protection Program, Alpine entered into a loan payable with a financial institution for $ 137,000 bearing interest at 1% per annum and a maturity date of April 8, 2022 . Pursuant to the loan, principal and interest payments were deferred for six months. Alpine applied for loan forgiveness on a timely basis, and at June 30, 2021, $ 137,000 Convertible Note Payable On December 23, 2020, the Company issued to a related party lender a convertible note payable in the principal amount of $ 3,000,000 . The convertible note bears interest at 6% per annum, with an effective interest rate, due to the if converted value of the note, of 8.5% per annum, payable at maturity with a maturity date of December 31, 2021. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the holder, at a conversion price of $ 2.00 per share. At December 31, 2020, the if converted value of the note, at the market price of $ 2.05 per share, would be $ 3,075,000 . The issuance of the note resulted in a discount from the beneficial conversion feature totaling $ 75,000 . Total straight-line amortization of this discount totaled $ 36,998 during the six months ended June 30, 2021 and has a remaining amortization period of 0 .50 years. Total interest expense on the note was $ 45,500 and $ 90,500 for the three and six months ended June 30, 2021. Future minimum payments under the above notes payable for the remainder of 2021 following June 30, 2021, and thereafter, and the amount of loans payable, net of current portion, are as follows: SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE June 30, 2021 2021 $ 3,019,238 2022 1,014,527 Total future minimum payments 4,033,765 Less: discount (37,198 ) Loans payable 3,996,567 Less: current (2,982,040 ) Loans payable, noncurrent $ 1,014,527 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
LEASES | NOTE 12 – LEASES A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. All of the Company’s leases are classified as operating leases. With the adoption of Topic 842, operating lease agreements are required to be recognized on the condensed consolidated balance sheet as ROU assets and corresponding lease liabilities. On January 1, 2021 and February 1, 2021, the Company recognized additional ROU assets and lease liabilities of $ 37,932 137,826 ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate at January 1, 2021. The weighted average incremental borrowing rate applied was 6% 1.39 The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Six Months Ended June 30, 2021 Lease cost Operating lease cost (cost resulting from lease payments) $ 41,504 Short term lease cost 12,872 Net lease cost $ 54,376 Operating lease – operating cash flows (fixed payments) $ 41,504 Operating lease – operating cash flows (liability reduction) $ 37,442 Non-current leases – right of use assets $ 150,155 Current liabilities – operating lease liabilities $ 103,770 Non-current liabilities – operating lease liabilities $ 48,228 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the six months ended June 30, 2021, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2021 (excluding the six months ended June 30, 2021) $ 54,620 2022 104,491 Total future minimum lease payments 159,111 Amount representing interest (7,113 ) Present value of net future minimum lease payments $ 151,988 |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 13 – CONCENTRATION OF CREDIT RISK Cash Deposits Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 4,761,000 4,252,000 SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR Revenues One client accounted for 30% . Two clients accounted for 80% Client A 59 % Client B 21 % Accounts Receivable One client accounted for 16% Three clients accounted for 70% Client A 32 % Client B 20 % Client C 18 % Accounts Payable Two vendors accounted for 32% Vendor A 18 % Vendor B 14 % Three vendors accounted for 44% of the accounts payable as of June 30, 2020, as set forth below. Vendor A 17 % Vendor B 14 % Vendor C 13 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS Acquisition of VelocIT On June 30, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Catapult Acquisition Merger Sub, LLC (“Merger Sub”), Catapult Acquisition Corporation d/b/a VelocIT (“VelocIT”), the shareholders of Catapult Acquisition Corporation (the “Catapult Shareholders”) and Derek Hahn, in his capacity as the shareholder representative (the “Shareholder Representative”). Pursuant to the Merger Agreement, Catapult agreed to merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a wholly-owned subsidiary of the Company. On July 26, 2021, the Company, Merger Sub, VelocIT, the Catapult shareholders and the Shareholder Representative entered into an Amended and Restated Agreement and Plan of Merger to provide, among other things, that Merger Sub would merge with and into VelocIT, with VelocIT surviving the Merger as a wholly-owned subsidiary of the Company. All issued and outstanding shares of common stock of VelocIT immediately prior to the Effective Time were converted into the right to receive an aggregate of up to 2,566,778 shares of common stock 256,678 Subsequent to June 30, 2021, the Company received approval from the U.S. Small Business Adminitstration’s Paycheck Protection Program for the forgiveness of its outstanding $ 801,200 Subsequent to June 30, 2021, the Company granted options to purchase an aggregate of 854,340 3.05 6.75 The options vest at a one-year cliff and then monthly over the subsequent 36 months |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial information as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results and cash flows for such periods. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021. |
Consolidation | Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, GenResults, LLC (“GenResults”), TalaTek, Inc. (“TalaTek”), Techville, Clear Skies, and Alpine. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications have been made to the financial statements for the three and six months ended June 30, 2020 to conform to the financial statements presentation for the three and six months ended June 30, 2021. These reclassifications had no effect on net loss or cash flows as previously reported. |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company believes the critical accounting policies discussed below affect its more significant judgments and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements. Significant estimates include the allowance for doubtful accounts, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations and assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility, risk-free interest rate, and expected divided rate. |
Revenue | Revenue The Company’s revenues are derived from two major types of services to clients: Managed Services and Consulting Services. With respect to Managed Services, the Company provides culture education and enablement, tools and technology provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services including, but not limited to, antivirus and patch management. With respect to Consulting Services, the Company provides cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Practical Expedients As part of Accounting Standards Codification (“ASC”) 606, the Company has adopted several practical expedients including the following: (i) the Company has determined that it need not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised service to the customer and when the customer pays for that service will be one year or less and (ii) the Company recognizes any incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Disaggregated Revenues Revenue consists of the following by service offering for the six months ended June 30, 2021: SCHEDULE OF DISAGGREGATION OF REVENUES Managed Services Consulting Services Total Primary Sector Markets Public $ - $ 2,019,470 $ 2,019,470 Private 920,674 2,224,751 3,145,425 Not-for-Profit 74,511 270,049 344,560 $ 995,185 $ 4,514,270 $ 5,509,455 Major Service Lines Gap and Risk Assessment $ - $ 4,185,885 $ 4,185,385 Managed Security Services - - - Tech Connect 977,090 - 977,090 Hardware - 320,833 320,833 Other 18,095 7,552 25,647 $ 995,185 $ 4,514,270 $ 5,509,455 Revenue consists of the following by service offering for the six months ended June 30, 2020: Managed Services Consulting Services Total Primary Sector Markets Public $ 3,250 $ 1,593,598 $ 1,596,848 Private 740,849 268,259 1,009,108 Not-for-Profit 10,158 2,594 12,752 $ 754,257 $ 1,864,451 $ 2,618,708 Major Service Lines Gap and Risk Assessment $ - $ 1,803,928 $ 1,803,928 Managed Security Services 657,226 - 657,226 Tech Connect 96,771 22,263 119,034 Hardware - 13,253 13,253 Other 260 25,007 25,267 $ 754,257 $ 1,864,451 $ 2,618,708 Contract Modifications There were no contract modifications during the six months ended June 30, 2021. Contract modifications are not routine in the performance of the Company’s contracts. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. The Company periodically assesses its accounts and other receivables for collectability on a specific identification basis. The Company provides for allowances for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of June 30, 2021, and December 31, 2020, the Company’s allowance for doubtful accounts was $ 55,264 40,000 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally between three and five years. Expenditures that enhance the useful lives of the assets are capitalized and depreciated. Computer equipment costs for the Company are capitalized, as incurred, and depreciated on a straight-line basis over three years. TalaTek capitalizes all equipment costs over $ 5,000 and depreciates these costs on a straight-line basis over three years. Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation is removed from the accounts and the resulting gain or loss, if any, is reflected in results of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. During the three and six months ended June 30, 2021, the Company did not record a loss on impairment. |
Intangible Assets | Intangible Assets The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at year end, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit level (See Note 5). |
Advertising and Marketing Costs | Advertising and Marketing Costs The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 172,468 and $ 45,708 for the three months ended June 30, 2021 and 2020, respectively, and are recorded in operating expenses on the unaudited condensed consolidated statements of operations. Advertising and marketing expenses were $ 217,695 and $ 73,570 for the six months ended June 30, 2021 and 2020, respectively, and are recorded in operating expenses on the unaudited condensed consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. |
Net Loss per Common Share | Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All vested outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options have been excluded from the Company’s computation of net loss per common share for the three and six months ended June 30, 2021 and 2020. The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to the Company’s net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION June 30, 2021 June 30, 2020 Stock Options 25,843,700 20,820,000 Convertible Debt 1,500,000 - Total 27,343,700 20,820,000 |
Stock-based Compensation | Stock-based Compensation The Company applies the provisions of ASC 718, Compensation - Stock Compensation For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black-Scholes-Merton option pricing model. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. Due to the Company’s limited history and lack of public trading volume for its common stock, the Company used the average of historical share prices of similar companies within its industry to calculate volatility for use in the Black-Scholes-Merton option pricing model. Pursuant to Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting |
Leases | Leases Leases in which the Company is the lessee are comprised of corporate offices and property and equipment. All of the leases are classified as operating leases. The Company leases multiple office spaces with a remaining weighted average term of 1.42 years. The Company leases a vehicle with a remaining term of 0.92 years. In accordance with ASC 842, Leases |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company utilizes ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards All newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUES | SCHEDULE OF DISAGGREGATION OF REVENUES Managed Services Consulting Services Total Primary Sector Markets Public $ - $ 2,019,470 $ 2,019,470 Private 920,674 2,224,751 3,145,425 Not-for-Profit 74,511 270,049 344,560 $ 995,185 $ 4,514,270 $ 5,509,455 Major Service Lines Gap and Risk Assessment $ - $ 4,185,885 $ 4,185,385 Managed Security Services - - - Tech Connect 977,090 - 977,090 Hardware - 320,833 320,833 Other 18,095 7,552 25,647 $ 995,185 $ 4,514,270 $ 5,509,455 Revenue consists of the following by service offering for the six months ended June 30, 2020: Managed Services Consulting Services Total Primary Sector Markets Public $ 3,250 $ 1,593,598 $ 1,596,848 Private 740,849 268,259 1,009,108 Not-for-Profit 10,158 2,594 12,752 $ 754,257 $ 1,864,451 $ 2,618,708 Major Service Lines Gap and Risk Assessment $ - $ 1,803,928 $ 1,803,928 Managed Security Services 657,226 - 657,226 Tech Connect 96,771 22,263 119,034 Hardware - 13,253 13,253 Other 260 25,007 25,267 $ 754,257 $ 1,864,451 $ 2,618,708 |
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION | SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION June 30, 2021 June 30, 2020 Stock Options 25,843,700 20,820,000 Convertible Debt 1,500,000 - Total 27,343,700 20,820,000 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2021 December 31, 2020 Prepaid expenses $ 200,595 $ 128,398 Prepaid insurance 71,221 13,746 Other current assets 30,855 - Total prepaid expenses and other current assets $ 302,671 $ 142,144 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2021 December 31, 2020 Computer equipment $ 15,735 $ 15,735 Vehicle 63,052 63,052 Furniture and fixtures 6,224 6,224 Software 10,092 10,092 Property and equipment, gross 95,103 95,103 Less: accumulated depreciation (23,321 ) (14,473 ) Property and equipment, net $ 71,782 $ 80,630 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN GOODWILL | SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2020 (1) $ 4,101,369 Acquisition of goodwill - Impairment - Ending balance, June 30, 2021 (1) $ 4,101,369 (1) As of June 30, 2021, the Company has not obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in the Company’s Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, may change and, therefore, goodwill resulting from the acquisition may change. |
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS | SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life 2021 2020 Tradenames – trademarks (1) Indefinite $ 1,094,500 $ 1,094,500 Customer base (1) 15 370,000 370,000 Non-compete agreements (1) 5 236,400 236,400 Intellectual property/technology (1) 10 521,000 521,000 Identifiable intangible assets 2,221,900 2,221,900 Less accumulated amortization (186,456 ) (116,468 ) Total $ 2,035,444 $ 2,105,432 (1) These intangible assets were acquired in the acquisitions of TalaTek, Techville and Clear Skies. |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | SCHEDULE OF FUTURE AMORTIZATION EXPENSE Remainder of 2021 $ 69,987 2022 127,027 2023 113,427 2024 104,262 2025 76,767 Thereafter 449,474 $ 940,944 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES June 30, 2021 December 31, 2020 Accounts payable $ 476,797 $ 328,368 Accrued payroll 193,786 39,670 Accrued expenses 147,124 417,832 Accrued commissions 17,703 - Accrued interest – related party 23,154 23,934 Total accounts payable and accrued expenses $ 858,564 $ 809,804 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Compensation Related Costs [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2021 24,573,700 $ 0.86 Granted 1,400,000 2.00 Exercised - - Expired or cancelled (130,000 ) 0.54 Outstanding at June 30, 2021 25,843,700 $ 0.92 |
SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE | SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE Weighted- Weighted- Average Average Outstanding Remaining Life Exercise Number Exercise Prices Options In Years Price Exercisable $ 0.38 3,000,000 3.12 $ 0.38 2,666,667 0.40 3,600,000 3.06 0.40 2,750,000 0.50 11,626,000 3.63 0.50 6,977,417 2.00 6,277,700 4.39 2.00 66,667 2.05 1,340,000 4.41 2.05 - 25,843,700 3.72 $ 0.92 12,460,751 |
LOANS PAYABLE AND LINES OF CR_2
LOANS PAYABLE AND LINES OF CREDIT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE | SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE June 30, 2021 2021 $ 3,019,238 2022 1,014,527 Total future minimum payments 4,033,765 Less: discount (37,198 ) Loans payable 3,996,567 Less: current (2,982,040 ) Loans payable, noncurrent $ 1,014,527 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION | SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Six Months Ended June 30, 2021 Lease cost Operating lease cost (cost resulting from lease payments) $ 41,504 Short term lease cost 12,872 Net lease cost $ 54,376 Operating lease – operating cash flows (fixed payments) $ 41,504 Operating lease – operating cash flows (liability reduction) $ 37,442 Non-current leases – right of use assets $ 150,155 Current liabilities – operating lease liabilities $ 103,770 Non-current liabilities – operating lease liabilities $ 48,228 |
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES | SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2021 (excluding the six months ended June 30, 2021) $ 54,620 2022 104,491 Total future minimum lease payments 159,111 Amount representing interest (7,113 ) Present value of net future minimum lease payments $ 151,988 |
CONCENTRATION OF CREDIT RISK (T
CONCENTRATION OF CREDIT RISK (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR | SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR Revenues One client accounted for 30% . Two clients accounted for 80% Client A 59 % Client B 21 % Accounts Receivable One client accounted for 16% Three clients accounted for 70% Client A 32 % Client B 20 % Client C 18 % Accounts Payable Two vendors accounted for 32% Vendor A 18 % Vendor B 14 % Three vendors accounted for 44% of the accounts payable as of June 30, 2020, as set forth below. Vendor A 17 % Vendor B 14 % Vendor C 13 % |
NATURE OF THE ORGANIZATION AN_2
NATURE OF THE ORGANIZATION AND BUSINESS (Details Narrative) - USD ($) | Dec. 16, 2020 | Aug. 01, 2020 | May 25, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Retained Earnings (Accumulated Deficit) | $ 8,760,493 | $ 8,760,493 | $ 4,866,772 | |||||
Working capital | (3,532,000) | (3,532,000) | ||||||
Operating Income (Loss) | $ 2,053,400 | $ 551,666 | 3,761,769 | $ 1,388,529 | ||||
Net Cash Provided by (Used in) Operating Activities | 2,646,739 | $ 740,120 | ||||||
U S Small Business Administrations Payroll Protection Program [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Proceeds from issuance of private placement | $ 3,250,000 | |||||||
Stock Purchase Agreement [Member] | Alpine Security L L C [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Number of shares converted | 900,000 | |||||||
Stock Purchase Agreement [Member] | Technologyville Inc [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Number of shares converted | 3,392,271 | |||||||
Share Purchase Agreement [Member] | Clear Skies Security L L C [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Number of shares converted | 2,330,000 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product Information [Line Items] | ||||
Primary Sector Markets - Public | $ 2,019,470 | $ 1,596,848 | ||
Primary Sector Markets - Private | 3,145,425 | 1,009,108 | ||
Primary Sector Markets - Not-for-Profit | 344,560 | 12,752 | ||
Total Primary Sector Markets | 5,509,455 | 2,618,708 | ||
Gap and Risk Assessment | 4,185,385 | 1,803,928 | ||
Managed Security Services | 657,226 | |||
Tech Connect | 977,090 | 119,034 | ||
Hardware | 320,833 | 13,253 | ||
Other | 25,647 | 25,267 | ||
Revenue | $ 2,949,677 | $ 1,550,487 | 5,509,455 | 2,618,708 |
Managed Services [Member] | ||||
Product Information [Line Items] | ||||
Primary Sector Markets - Public | 3,250 | |||
Primary Sector Markets - Private | 920,674 | 740,849 | ||
Primary Sector Markets - Not-for-Profit | 74,511 | 10,158 | ||
Total Primary Sector Markets | 995,185 | 754,257 | ||
Gap and Risk Assessment | ||||
Managed Security Services | 657,226 | |||
Tech Connect | 977,090 | 96,771 | ||
Hardware | ||||
Other | 18,095 | 260 | ||
Revenue | 554,768 | 616,344 | 995,185 | 754,257 |
Consulting Services [Member] | ||||
Product Information [Line Items] | ||||
Primary Sector Markets - Public | 2,019,470 | 1,593,598 | ||
Primary Sector Markets - Private | 2,224,751 | 268,259 | ||
Primary Sector Markets - Not-for-Profit | 270,049 | 2,594 | ||
Total Primary Sector Markets | 4,514,270 | 1,864,451 | ||
Gap and Risk Assessment | 4,185,885 | 1,803,928 | ||
Managed Security Services | ||||
Tech Connect | 22,263 | |||
Hardware | 320,833 | 13,253 | ||
Other | 7,552 | 25,007 | ||
Revenue | $ 2,394,909 | $ 934,143 | $ 4,514,270 | $ 1,864,451 |
SUMMARY OF SECURITIES EXCLUDED
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION (Details) - shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 27,343,700 | 20,820,000 |
Share-based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 25,843,700 | 20,820,000 |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 1,500,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Allowances for doubtful accounts | $ 55,264 | $ 55,264 | $ 40,000 | ||
Capitalized Costs, Support Equipment and Facilities | 5,000 | 5,000 | |||
Marketing and Advertising Expense | $ 172,468 | $ 45,708 | $ 217,695 | $ 73,570 | |
Operating Lease, Weighted Average Remaining Lease Term | 1 year 4 months 20 days | 1 year 4 months 20 days | |||
Office Building [Member] | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Operating Lease, Weighted Average Remaining Lease Term | 1 year 5 months 1 day | 1 year 5 months 1 day | |||
Vehicle [Member] | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Operating Lease, Weighted Average Remaining Lease Term | 11 months 1 day | 11 months 1 day |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 200,595 | $ 128,398 |
Prepaid insurance | 71,221 | 13,746 |
Other current assets | 30,855 | |
Total prepaid expenses and other current assets | $ 302,671 | $ 142,144 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 95,103 | $ 95,103 |
Less: accumulated depreciation | (23,321) | (14,473) |
Property and equipment, net | 71,782 | 80,630 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,735 | 15,735 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 63,052 | 63,052 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,224 | 6,224 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 10,092 | $ 10,092 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Property and equipment, depreciation expense | $ 4,424 | $ 2,404 | $ 8,848 | $ 3,308 |
SCHEDULE OF CHANGES IN GOODWILL
SCHEDULE OF CHANGES IN GOODWILL (Details) | 6 Months Ended | |
Jun. 30, 2021USD ($) | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance beginning | $ 4,101,369 | |
Acquisition of goodwill | ||
Impairment | ||
Ending balance | $ 4,101,369 | [1] |
[1] | As of June 30, 2021, the Company has not obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in the Company’s Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, may change and, therefore, goodwill resulting from the acquisition may change. |
SUMMARY OF IDENTIFIABLE INTANGI
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets | $ 2,221,900 | $ 2,221,900 | |
Identifiable intangible assets, useful life | 8 years 2 months 4 days | ||
Less accumulated amortization | $ (186,456) | (116,468) | |
Total | $ 2,035,444 | 2,105,432 | |
Tala Tek L L C [Member] | Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets, useful life description | Indefinite | ||
Identifiable intangible assets | [1] | $ 1,094,500 | 1,094,500 |
Tala Tek L L C [Member] | Customerbase [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets | [1] | $ 370,000 | 370,000 |
Identifiable intangible assets, useful life | 15 years | ||
Tala Tek L L C [Member] | Noncompete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets | [1] | $ 236,400 | 236,400 |
Identifiable intangible assets, useful life | 5 years | ||
Tala Tek L L C [Member] | Intellectual Property Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets | [1] | $ 521,000 | $ 521,000 |
Identifiable intangible assets, useful life | 10 years | ||
[1] | These intangible assets were acquired in the acquisitions of TalaTek, Techville and Clear Skies. |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Jun. 30, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 69,987 |
2022 | 127,027 |
2023 | 113,427 |
2024 | 104,262 |
2025 | 76,767 |
Thereafter | 449,474 |
Future amortization expense | $ 940,944 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Finite-Lived Intangible Asset, Useful Life | 8 years 2 months 4 days | |||
Amortization of identifiable intangible assets | $ 34,994 | $ 15,648 | $ 69,988 | $ 31,296 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 476,797 | $ 328,368 |
Accrued payroll | 193,786 | 39,670 |
Accrued expenses | 147,124 | 417,832 |
Accrued commissions | 17,703 | |
Accrued interest – related party | 23,154 | 23,934 |
Total accounts payable and accrued expenses | $ 858,564 | $ 809,804 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | May 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 23, 2020 | Dec. 31, 2018 |
Entity Listings [Line Items] | ||||||||
Repayments of Related Party Debt | $ 50,000 | $ 50,000 | ||||||
Debt Instrument, Increase, Accrued Interest | 23,154 | $ 23,934 | ||||||
Interest Expense, Related Party | $ 1,426 | $ 3,060 | 4,409 | 5,689 | ||||
Accounts Receivable, Related Parties | 29,321 | 29,321 | ||||||
Revenues from related party | 122,791 | |||||||
Professional Fees | 244,261 | $ 204,956 | 401,615 | $ 401,310 | ||||
Financial Consulting Agreement [Member] | ||||||||
Entity Listings [Line Items] | ||||||||
Professional Fees | 82,557 | |||||||
Accrued and unpaid fees owed | 37,543 | 37,543 | ||||||
Convertible Note Payable Related Party [Member] | ||||||||
Entity Listings [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||
Debt Instrument, Face Amount | $ 3,000,000 | $ 3,000,000 | ||||||
Jemmett Enterprises L L C [Member] | ||||||||
Entity Listings [Line Items] | ||||||||
Notes Payable | $ 200,000 | |||||||
Debt Instrument, Maturity Date | Jun. 15, 2021 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||
Loans Payable | $ 9,787 | $ 9,787 | $ 59,787 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Jan. 16, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Proceeds from issuance of common stock | $ 3,250,000 | $ 140,000 | ||||
Stock Issued During Period, Value, New Issues | $ 3,250,000 | $ 140,000 | ||||
Stock payable | $ 160,750 | $ 46,000 | ||||
Restricted Stock [Member] | ||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Number of common shares issued | 312,000 | |||||
Stock Issued During Period, Value, New Issues | $ 639,600 | |||||
Eskenzi P R Limited [Member] | Restricted Stock [Member] | ||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Number of common shares issued | 120,000 | |||||
Stock Issued During Period, Value, New Issues | $ 48,000 | |||||
Investors [Member] | ||||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||||||
Number of common shares issued | 1,625,000 | |||||
Shares issued fair value per share | $ 2 | |||||
Proceeds from issuance of common stock | $ 3,250,000 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Compensation Related Costs [Abstract] | |
Shares, Outstanding beginning | shares | 24,573,700 |
Weighted Average Exercise Price Outstanding, beginning | $ / shares | $ 0.86 |
Shares, Granted | shares | 1,400,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2 |
Shares, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Shares, Expired or cancelled | shares | (130,000) |
Weighted Average Exercise Price, Expired or cancelled | $ / shares | $ 0.54 |
Shares, Outstanding ending | shares | 25,843,700 |
Weighted Average Exercise Price Outstanding, ending | $ / shares | $ 0.92 |
SUMMARY OF OPTIONS TO PURCHASE
SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options | 25,843,700 |
Weighted-Average Remaining Life In Years | 3 years 8 months 19 days |
Weighted-Average Exercise Price | $ / shares | $ 0.92 |
Number Exercisable | 12,460,751 |
Exercise Price Range One [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 0.38 |
Outstanding Options | 3,000,000 |
Weighted-Average Remaining Life In Years | 3 years 1 month 13 days |
Weighted-Average Exercise Price | $ / shares | $ 0.38 |
Number Exercisable | 2,666,667 |
Exercise Price RangeTwo [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 0.40 |
Outstanding Options | 3,600,000 |
Weighted-Average Remaining Life In Years | 3 years 21 days |
Weighted-Average Exercise Price | $ / shares | $ 0.40 |
Number Exercisable | 2,750,000 |
Exercise Price RangeThree [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 0.50 |
Outstanding Options | 11,626,000 |
Weighted-Average Remaining Life In Years | 3 years 7 months 17 days |
Weighted-Average Exercise Price | $ / shares | $ 0.50 |
Number Exercisable | 6,977,417 |
Exercise Price Range Four [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 2 |
Outstanding Options | 6,277,700 |
Weighted-Average Remaining Life In Years | 4 years 4 months 20 days |
Weighted-Average Exercise Price | $ / shares | $ 2 |
Number Exercisable | 66,667 |
Exercise Price Range Five [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 2.05 |
Outstanding Options | 1,340,000 |
Weighted-Average Remaining Life In Years | 4 years 4 months 28 days |
Weighted-Average Exercise Price | $ / shares | $ 2.05 |
Number Exercisable |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | May 05, 2021 | Feb. 08, 2021 | Feb. 02, 2021 | Jun. 06, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Number of stock options granted | 1,400,000 | |||||||
Aggregate instrinsic value, outstanding | $ 186,672,318 | $ 186,672,318 | ||||||
Aggregate instrinsic value, exercisable | $ 95,695,130 | $ 95,695,130 | ||||||
Estimated fair value of common stock | $ 8.14 | $ 8.14 | ||||||
Options granted, exercise price | $ 2 | |||||||
Share-based Payment Arrangement, Option [Member] | Employees [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Number of stock options granted | 500,000 | |||||||
Options granted, exercise price | $ 2 | |||||||
Vesting percentage | 30.00% | |||||||
Stock price | $ 2.05 | |||||||
Strike price | $ 2 | |||||||
Expected volatility | 74.00% | |||||||
Risk-free interest rate | 0.42% | |||||||
Dividend rate | 0.00% | |||||||
Expected term | 3 years 6 months 10 days | |||||||
Share-based Payment Arrangement, Option [Member] | Board Member [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Number of stock options granted | 200,000 | 500,000 | 200,000 | |||||
Options granted, exercise price | $ 2 | $ 2 | $ 2 | |||||
Vesting percentage | 30.00% | |||||||
Stock price | 2.25 | $ 2.05 | 2.05 | |||||
Strike price | $ 2 | $ 2 | $ 2 | |||||
Expected volatility | 73.00% | 74.00% | 74.00% | |||||
Risk-free interest rate | 0.80% | 0.48% | 0.42% | |||||
Dividend rate | 0.00% | 0.00% | 0.00% | |||||
Expected term | 3 years 3 months | 3 years 6 months 10 days | 3 years 3 months | |||||
Two Thousand Nineteen Equity Incentive Plan [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Number of stock options granted | 1,400,000 | 3,775,000 | ||||||
Options granted, weighted average grant date fair value | $ 587,143 | $ 165,982 | ||||||
Options vested, weighted average grant date fair value | 243,534 | |||||||
Employee Benefits and Share-based Compensation | $ 891,126 | $ 343,910 | 1,729,888 | 669,339 | ||||
Stock options future compensation cost | $ 6,525,546 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 1 month 9 days | |||||||
Two Thousand Nineteen Equity Incentive Plan [Member] | Nonvested Options [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Options vested, weighted average grant date fair value | $ 8,147,973 | $ 1,785,954 | ||||||
Two Thousand Nineteen Equity Incentive Plan [Member] | Maximum [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Number of common shares issued | 25,000,000 |
SCHEDULE OF FUTURE PAYMENTS UND
SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE (Details) - Convertible Note Payable [Member] | Jun. 30, 2021USD ($) |
Short-term Debt [Line Items] | |
2021 | $ 3,019,238 |
2022 | 1,014,527 |
Total future minimum payments | 4,033,765 |
Less: discount | (37,198) |
Loans payable | 3,996,567 |
Less: current | (2,982,040) |
Loans payable, noncurrent | $ 1,014,527 |
LOANS PAYABLE AND LINES OF CR_3
LOANS PAYABLE AND LINES OF CREDIT (Details Narrative) - USD ($) | Jun. 22, 2020 | May 08, 2020 | Apr. 18, 2020 | Apr. 17, 2020 | Jul. 29, 2019 | Apr. 29, 2019 | Dec. 31, 2018 | Aug. 24, 2017 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 23, 2020 |
Short-term Debt [Line Items] | |||||||||||||||
Proceeds from Lines of Credit | $ 221,346 | $ 60,000 | |||||||||||||
Repayments of Lines of Credit | 224,346 | 66,705 | |||||||||||||
Debt Instrument, Increase, Accrued Interest | 23,154 | $ 23,934 | |||||||||||||
Amortization of Debt Discount (Premium) | 36,193 | ||||||||||||||
Unsecured Note Payable [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Notes Payable | $ 200,000 | 9,787 | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||||||||||||
Debt Instrument, Maturity Date | Jun. 15, 2021 | ||||||||||||||
Debt Instrument, Increase, Accrued Interest | 23,154 | $ 23,934 | |||||||||||||
Interest Expense, Debt | $ 1,426 | $ 3,060 | 4,409 | $ 5,689 | |||||||||||
Convertible Note Payable [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||||||||||||
Debt Instrument, Face Amount | $ 3,000,000 | ||||||||||||||
Interest Expense, Debt | $ 45,500 | 90,500 | |||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.50% | ||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 2 | ||||||||||||||
Share Price | $ 2.05 | ||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 3,075,000 | ||||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 75,000 | ||||||||||||||
Amortization of Debt Discount (Premium) | $ 36,998 | ||||||||||||||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 6 months | ||||||||||||||
Wintrust Bank [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Notes Payable | $ 75,000 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.99% | 6.00% | 6.00% | ||||||||||||
Debt Instrument, Maturity Date | Aug. 24, 2021 | ||||||||||||||
Prime Rate [Member] | Wintrust Bank [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | ||||||||||||||
Floor Rate [Member] | Wintrust Bank [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||||||||||||
SunTrust Bank[Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Secured line of credit | $ 500,000 | ||||||||||||||
SunTrust Bank[Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Line of credit interest rate percentage | 2.25% | ||||||||||||||
Technologyville Inc [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Secured line of credit | $ 0 | $ 0 | $ 3,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.77% | ||||||||||||||
Debt Instrument, Maturity Date | May 12, 2025 | ||||||||||||||
Proceeds from Lines of Credit | $ 221,346 | ||||||||||||||
Repayments of Lines of Credit | $ 224,346 | ||||||||||||||
Debt Instrument, Face Amount | $ 59,905 | 43,178 | 43,178 | ||||||||||||
Debt Instrument, Periodic Payment | 2,925 | ||||||||||||||
Debt Instrument, Periodic Payment, Principal | 2,702 | ||||||||||||||
Debt Instrument, Periodic Payment, Interest | 222 | ||||||||||||||
Technologyville Inc [Member] | U S Small Business Administrations Payroll Protection Program [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Notes Payable | $ 179,600 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||||||||||
Debt Instrument, Maturity Date | Jun. 22, 2025 | ||||||||||||||
Debt Instrument, Face Amount | 179,600 | 179,600 | |||||||||||||
Cerberus Cyber Sentinel Corporation [Member] | U.S. Small Business Administration's Payroll Protection Program One [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Notes Payable | $ 530,000 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||||||||||
Debt Instrument, Maturity Date | Apr. 17, 2022 | ||||||||||||||
Loans payable, outstanding | 530,000 | 530,000 | |||||||||||||
Clear Skies Security L L C [Member] | U.S. Small Business Administration's Payroll Protection Program Two [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Notes Payable | $ 134,200 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||||||||||
Debt Instrument, Maturity Date | May 8, 2022 | ||||||||||||||
Loans payable, outstanding | 134,200 | 134,200 | |||||||||||||
Alpine Security L L C [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Notes Payable | $ 137,000 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||||||||||
Debt Instrument, Maturity Date | Apr. 8, 2022 | ||||||||||||||
Alpine Security L L C [Member] | Paycheck Protection Program [Member] | Principal Forgiveness [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Loans payable, outstanding | $ 137,000 | $ 137,000 |
SCHEDULE OF LEASE COST AND OTHE
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2021 | Feb. 02, 2021 | Jan. 02, 2021 | Dec. 31, 2020 | |
Leases | ||||
Operating lease cost (cost resulting from lease payments) | $ 41,504 | |||
Short term lease cost | 12,872 | |||
Net lease cost | 54,376 | |||
Operating lease – operating cash flows (fixed payments) | 41,504 | |||
Operating lease – operating cash flows (liability reduction) | 37,442 | |||
Non-current leases - right of use assets | 150,155 | $ 137,826 | $ 37,932 | $ 13,426 |
Current liabilities - operating lease liabilities | 103,770 | $ 137,826 | $ 37,932 | 8,989 |
Non-current liabilities - operating lease liabilities | $ 48,228 | $ 4,693 |
SCHEDULE OF FUTURE MINIMUM UNDE
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES (Details) | Jun. 30, 2021USD ($) |
Leases | |
2021 (excluding the three months ended March 31, 2021) | $ 54,620 |
2022 | 104,491 |
Total future minimum lease payments | 159,111 |
Amount representing interest | (7,113) |
Present value of net future minimum lease payments | $ 151,988 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Jun. 30, 2021 | Feb. 02, 2021 | Jan. 02, 2021 | Dec. 31, 2020 |
Leases | ||||
ROU assets | $ 150,155 | $ 137,826 | $ 37,932 | $ 13,426 |
Lease liabilities | $ 103,770 | $ 137,826 | $ 37,932 | $ 8,989 |
Weighted average incremental borrowing rate | 6.00% | |||
Operating lease, weighted average remaining lease term | 1 year 4 months 20 days |
SCHEDULES OF CONCENTRATION OF R
SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR (Details) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Client A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 59.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Client B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 21.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Client A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 32.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Client B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 20.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Client C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 18.00% | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 18.00% | 17.00% |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14.00% | 14.00% |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13.00% |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||
Deposits in excess of the FDIC insured | $ 4,761,000 | $ 4,252,000 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Client [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 30.00% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Clients [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 80.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Client [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Clients [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 70.00% | ||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Vendors [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 32.00% | ||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Three Vendor [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 44.00% | ||
Maximum [Member] | |||
Concentration Risk [Line Items] | |||
FDIC insured, value | $ 250,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 26, 2021 | Jul. 02, 2021 | Jun. 30, 2021 |
Subsequent Event [Line Items] | |||
Option to purchase common stock | 854,340 | ||
Options granted, exercise price | $ 2 | ||
Vesting period description | The options vest at a one-year cliff and then monthly over the subsequent 36 months | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Stock Issued During Period, Shares, Conversion of Units | 2,566,778 | ||
Common stock, shares holdback | 256,678 | ||
Subsequent Event [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Options granted, exercise price | $ 3.05 | ||
Subsequent Event [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Options granted, exercise price | $ 6.75 | ||
Subsequent Event [Member] | Paycheck Protection Program [Member] | |||
Subsequent Event [Line Items] | |||
Loan, decrease, forgiveness | $ 801,200 |