Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Apr. 15, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41227 | ||
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 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Trading Symbol | CISO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 165,667,445 | ||
Entity Common Stock, Shares Outstanding | 136,719,649 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 178 | ||
Auditor Name | Semple, Marchal & Cooper, LLP | ||
Auditor Location | Phoenix, Arizona |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 2,725,035 | $ 5,197,030 |
Accounts receivable, net of allowances for doubtful accounts of $77,811 and $40,000, respectively | 4,840,802 | 1,006,834 |
Inventory | 727,974 | |
Prepaid expenses and other current assets | 960,965 | 142,144 |
Total Current Assets | 9,254,776 | 6,346,008 |
Notes receivable, related party | 1,090,903 | |
Property and equipment, net of accumulated depreciation of $102,000 and $14,000, respectively | 1,856,046 | 80,630 |
Right of use asset, net | 277,578 | 13,426 |
Intangible assets, net of accumulated amortization of $323,000 and $116,000, respectively | 6,540,269 | 2,105,432 |
Goodwill | 16,792,535 | 4,101,369 |
Total Assets | 35,812,107 | 12,646,865 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 2,709,066 | 809,804 |
Deferred revenue | 52,824 | |
Stock payable | 46,000 | |
Settlement liability | 470,000 | |
Lease liability, current portion | 196,472 | 8,989 |
Loans payable, current portion | 213,199 | 9,405 |
Line of credit | 3,000 | |
Convertible note payable, net of debt discount, related party | 1,500,000 | 2,926,609 |
Note payable, related party | 59,787 | |
Total Current Liabilities | 5,141,561 | 3,863,594 |
Long-term Liabilities: | ||
Loans payable, net of current portion | 5,284,301 | 1,037,115 |
Lease liability, net of current portion | 88,040 | 4,693 |
Total Liabilities | 10,513,902 | 4,905,402 |
Commitments and Contingencies | ||
Stockholders’ Equity: | ||
Common stock, $.00001 par value; 250,000,000 shares authorized; 125,852,971 and 116,104,971 shares issued and outstanding on December 31, 2021 and 2020, respectively | 1,258 | 1,161 |
Additional paid-in capital | 69,309,369 | 12,607,074 |
Accumulated deficit | (44,012,422) | (4,866,772) |
Total Stockholders’ Equity | 25,298,205 | 7,741,463 |
Total Liabilities and Stockholders’ Equity | $ 35,812,107 | $ 12,646,865 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 77,811 | $ 40,000 |
Property and equipment, accumulated depreciation | 102,466 | 14,473 |
Intangible assets, accumulated depreciation | $ 323,331 | $ 116,468 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 125,852,971 | 116,104,971 |
Common stock, shares outstanding | 125,852,971 | 116,104,971 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | ||
Total revenue | $ 15,142,559 | $ 7,240,828 |
Cost of revenue: | ||
Total cost of revenue | 13,334,296 | 4,365,566 |
Total gross profit | 1,808,263 | 2,875,262 |
Operating expenses: | ||
Professional fees | 1,189,319 | 926,526 |
Advertising and marketing | 435,016 | 150,236 |
Selling, general and administrative | 9,809,200 | 3,309,086 |
Stock based compensation | 8,076,688 | 1,896,276 |
Impairment of goodwill (Note 6) | 22,078,064 | |
Total operating expenses | 41,588,287 | 6,282,124 |
Loss from operations | (39,780,024) | (3,406,862) |
Other income (expense): | ||
Other income (expense) | (39,063) | 10,751 |
Interest expense, net | (307,363) | (17,151) |
PPP loan forgiveness | 980,800 | |
Total other income (expense) | 634,374 | (6,400) |
Net loss | $ (39,145,650) | $ (3,413,262) |
Net loss per common share - basic | $ (0.33) | $ (0.03) |
Net loss per common share - diluted | $ (0.33) | $ (0.03) |
Weighted average shares outstanding - basic | 118,906,765 | 111,511,895 |
Weighted average shares outstanding - diluted | 118,906,765 | 111,511,895 |
Security Managed Services [Member] | ||
Revenue: | ||
Total revenue | $ 11,797,719 | $ 5,359,101 |
Cost of revenue: | ||
Total cost of revenue | 3,089,599 | 991,275 |
Professional Services [Member] | ||
Revenue: | ||
Total revenue | 3,344,840 | 1,881,727 |
Cost of revenue: | ||
Total cost of revenue | 515,171 | 87,271 |
Cost Of Payroll [Member] | ||
Cost of revenue: | ||
Total cost of revenue | $ 9,729,526 | $ 3,287,020 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 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 |
Beginning balance, shares at Dec. 31, 2019 | 107,912,500 | ||||
Stock based compensation - stock options | 1,533,777 | 1,533,777 | |||
Stock based compensation - common stock | $ 7 | 362,493 | 362,500 | ||
Stock based compensation - common stock, shares | 725,000 | ||||
Stock issued for cash | $ 9 | 1,131,000 | 1,131,009 | ||
Stock issued for cash, shares | 845,200 | ||||
Stock issued for Technologyville acquisition | $ 34 | 1,356,874 | 1,356,908 | ||
Stock issued for Technologyville acquisition, shares | 3,392,271 | ||||
Stock issued for Clear Skies acquisition | $ 23 | 931,977 | 932,000 | ||
Stock issued for Clear Skies acquisition, shares | 2,330,000 | ||||
Stock issued for Alpine Security acquisition | $ 9 | 1,844,991 | 1,845,000 | ||
Stock issued for Alpine Security acquisition, shares | 900,000 | ||||
Return of treasury stock to authorized capital | $ (60) | (2,399,940) | 2,400,000 | ||
Beneficial conversion feature related to convertible note | 75,000 | 75,000 | |||
Net loss | (3,413,262) | $ (3,413,262) | |||
Exercise of stock options, shares | |||||
Ending balance, value at Dec. 31, 2020 | $ 1,161 | 12,607,074 | (4,866,772) | $ 7,741,463 | |
Ending balance, shares at Dec. 31, 2020 | 116,104,971 | ||||
Stock based compensation - stock options | 7,802,096 | 7,802,096 | |||
Stock based compensation - common stock | $ 4 | 2,407,142 | 2,407,146 | ||
Stock based compensation - common stock, shares | 392,900 | ||||
Stock issued for cash | $ 16 | 3,249,984 | 3,250,000 | ||
Stock issued for cash, shares | 1,625,000 | ||||
Net loss | (39,145,650) | (39,145,650) | |||
Exercise of stock options | $ 1 | 49,999 | $ 50,000 | ||
Exercise of stock options, shares | 100,000 | 100,000 | |||
Stock issued for conversion of convertible debt | $ 15 | 2,999,985 | $ 3,000,000 | ||
Stock issued for conversion of convertible debt, shares | 1,500,000 | 1,500,000 | |||
Stock issued for VelocIT acquisition | $ 23 | 13,603,924 | $ 13,603,947 | ||
Stock issued for VelocIT acquisition, shares | 2,310,100 | ||||
Stock issued for Atlantic acquisition | $ 2 | 1,049,998 | 1,050,000 | ||
Stock issued for Atlantic acquisition, shares | 200,000 | ||||
Stock issued for Red74 acquisition | $ 3 | 2,107,997 | 2,108,000 | ||
Stock issued for Red74 acquisition, shares | 306,000 | ||||
Stock issued for Arkavia acquisition | $ 29 | 14,569,971 | 14,570,000 | ||
Stock issued for Arkavia acquisition, shares | 2,914,000 | ||||
Stock issued for settlement agreement | $ 4 | 1,999,996 | 2,000,000 | ||
Stock issued for settlement agreement. shares | 400,000 | ||||
Replacement options issued in VelocIT acquisition | 6,861,203 | 6,861,203 | |||
Ending balance, value at Dec. 31, 2021 | $ 1,258 | $ 69,309,369 | $ (44,012,422) | $ 25,298,205 | |
Ending balance, shares at Dec. 31, 2021 | 125,852,971 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (39,145,650) | $ (3,413,262) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation - stock options | 7,802,096 | 1,533,777 |
Stock based compensation - common stock | 2,407,146 | 362,500 |
Issuance of common stock for services | 46,000 | |
Depreciation and amortization | 294,858 | 116,145 |
Right of use amortization | 123,378 | 5,967 |
Amortization of debt discount | 73,391 | |
Settlement liability | 2,000,000 | |
Forgiveness of PPP Loan | (980,800) | |
Loss on write-off of accounts receivable | 55,528 | |
Impairment of goodwill | 22,078,064 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,358,896) | (107,262) |
Inventory | 497,893 | |
Other current assets | (229,813) | (71,867) |
Accounts payable and accrued expenses | (405,915) | (168,366) |
Lease liability | (111,749) | (5,711) |
Deferred revenue | 45,340 | |
Settlement liability | 470,000 | |
Net cash used in operating activities | (7,385,129) | (1,702,079) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (249) | |
Cash acquired in acquisitions, net | 2,050,057 | 285,546 |
Net cash provided by investing activities | 2,050,057 | 285,297 |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 3,250,000 | 1,131,009 |
Proceeds from stock option exercise | 50,000 | |
Proceeds from PPP loans | 709,600 | |
Proceeds from loan payable | 9,110 | |
Proceeds from notes payable, related party | 133,018 | |
Proceeds from convertible note payable, related party | 1,500,000 | 3,000,000 |
Proceeds from line of credit | 221,346 | 63,000 |
Payment on line of credit | (224,346) | (93,705) |
Payment on loans payable | (1,859,820) | (2,737) |
Payment on notes payable, related party | (216,231) | (50,000) |
Distributions to member | (20,000) | |
Net cash provided by financing activities | 2,863,077 | 4,737,167 |
Net increase (decrease) in cash and cash equivalents | (2,471,995) | 3,320,385 |
Cash and cash equivalents - beginning of the period | 5,197,030 | 1,876,645 |
Cash and cash equivalents - end of the period | 2,725,035 | 5,197,030 |
Cash paid for: | ||
Interest | 91,490 | |
Income taxes | ||
Non-cash investing and financing activities: | ||
Right of use asset and lease liability | 387,530 | 19,393 |
Forgiveness of PPP Loan | 980,800 | |
Beneficial conversion feature | 75,000 | |
Common stock issued in Technologyville acquisition | 1,356,908 | |
Common stock issued in Clear Skies acquisition | 932,000 | |
Common stock issued in Alpine Security acquisition | 1,845,000 | |
Common stock issued in VelocIT acquisition | 13,603,947 | |
Common stock issued in Atlantic acquisition | 1,050,000 | |
Common stock issued in RED 74 acquisition | 2,108,000 | |
Common stock issued in Arkavia acquisition | 14,570,000 | |
Options issued for VelocIT acquistion | $ 6,861,203 |
NATURE OF THE ORGANIZATION AND
NATURE OF THE ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE ORGANIZATION AND BUSINESS | NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS Nature of the Business We are a cybersecurity and compliance company comprised of highly trained and seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization. We provide a full range of cybersecurity consulting and related services, encompassing all three pillars of compliance, cybersecurity, and culture. Our services include secured managed services, compliance services, security operations center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified forensics, technical assessments, and cybersecurity training. We believe that culture is the foundation of every successful cybersecurity and compliance program. To deliver that outcome, we developed our unique offering of MCCP+ (“Managed Compliance & Cybersecurity Provider + Culture”), which is the only holistic solution that provides all three of these pillars under one roof from a dedicated team of subject matter experts. In contrast to the majority of cybersecurity firms that are focused on a specific technology or service, we seek to differentiate ourselves by remaining technology agnostic, focusing on accumulating highly sought-after topic experts. We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients. We believe that bringing together a world-class team of technological experts with multi-faceted expertise in the critical aspects of cybersecurity is key to providing technology agnostic solutions to our clients in a business environment that has suffered from a chronic lack of highly skilled professionals, thereby setting us apart from competitors and in-house security teams. Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending. Our brand rallies around the battle cry: “Cybersecurity is a Culture, not a Product.” Corporate and Acquisition History We were formed on March 5, 2019 as a Delaware corporation. Our principal offices are located at 6900 East Camelback Road, Suite 240, Scottsdale, Arizona 85251. On April 1, 2019, we acquired GenResults. GenResults was established on June 22, 2015. Prior to our acquisition of GenResults, GenResults was wholly owned by an entity affiliated with David G. Jemmett, our Chief Executive Officer and a director of our company. Due to the companies being under common control, we accounted for the acquisition as a reorganization. On April 12, 2019, we consummated a transaction whereby VCAB Six Corporation, a Texas corporation, (“VCAB”) merged with and into us (the “VCAB Merger”). At the time of the VCAB Merger, VCAB was subject to a bankruptcy proceeding and had minimal assets, no equity owners, and no liabilities, except for approximately 1,500 holders of Class 5 Allowed General Unsecured Claims and a holder of allowed administrative expenses (collectively the “Claim Holders”). Pursuant to the terms of the VCAB Merger, and in accordance with the bankruptcy plan, we issued an aggregate of 2,000,000 On October 1, 2019, we entered into an agreement and plan of merger with TalaTek (the “TalaTek Merger”) pursuant to which TalaTek became our wholly owned subsidiary. Under the TalaTek Merger, all issued and outstanding units representing membership interests in TalaTek were converted into an aggregate of 6,200,000 On October 2, 2019, we filed a registration statement on Form 10-12G with the SEC to effect registration of our common stock, par value $ 0.00001 On May 25, 2020, we entered into a stock purchase agreement with Techville and its sole shareholder, pursuant to which we acquired all of the issued and outstanding common stock of Techville (the “Techville Acquisition”) (see Note 3). On August 1, 2020, we entered into a stock purchase agreement with Clear Skies and its equity holders, pursuant to which we acquired all of the issued and outstanding equity securities of Clear Skies (the “Clear Skies Acquisition”) (see Note 3). On December 16, 2020, we entered into an agreement and plan of merger with Alpine and its sole member, pursuant to which Alpine became our wholly owned subsidiary (the “Alpine Acquisition”) (see Note 3). On October 1, 2021, we entered into a stock purchase agreement with ATS, ATE, James Montagne as the sole shareholder of ATS, and James Montagne and Miriam Montagne, as the sole shareholders of ATE (the “Shareholders”) (see Note 3). On October 8, 2021, we entered into a merger agreement with RED74 and Ticato Holdings, Inc., a New Jersey corporation (“Ticato”), and Tim Coleman, as sole shareholder of Ticato. Tim Coleman and Ticato were the sole shareholders of RED74 (see Note 3). On July 26, 2021, we entered into an agreement and plan of merger with VelocIT, pursuant to which VelocIT became a wholly owned subsidiary of our company (see Note 3). On December 1, 2021, we entered into a stock purchase agreement with Arkavia and all of the owners of Arkavia, pursuant to which we acquired all of the issued and outstanding equity securities of Arkavia (the “Arkavia Acquisition”) (see Note 3). On January 5, 2022, we entered into a stock purchase agreement (the “True Digital Stock Purchase Agreement”) with certain stockholders of True Digital and an agreement and plan of merger (the “True Digital Merger Agreement”) with True Digital and certain of its other stockholders. On January 19, 2022, the transactions contemplated by the True Digital Stock Purchase Agreement and the True Digital Merger Agreement were consummated, with True Digital becoming a wholly owned subsidiary of our company. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding our consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of our management, who is responsible for their integrity and objectivity. We operate in one business segment, which is cybersecurity. Consolidation The consolidated financial statements include the accounts of our company and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain reclassifications have been made to the financial statements for the year ended December 31, 2020 to conform to the financial statement presentation for the year ended December 31, 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the accompanying 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, share price, and expected dividend rate. Revenue Our revenue is derived from two major types of services to clients: security managed services and professional services. With respect to Security Managed Services, we provide 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 Professional Services, we provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Security Managed Services We have four distinct revenue streams under security managed services: compliance, secured managed services, SOC managed services, and vCISO. We derive revenue from compliance by ensuring our customers are implementing the right controls, properly prioritizing risks, and investing in the appropriate remediation, so our customers can achieve compliance, adhere to industry standards and guidelines, and manage continuous monitoring over time. We derive revenue from secured managed services through security focused end-to-end network and device management solutions for companies that want to outsource their administration needs to a team of senior engineers who provide modern strategy, insights, and support. We derive revenue from SOC managed services by offering SOC-as-a-service, which is a subscription-based service that manages and monitors clients’ logs, devices, clouds, network, and assets for possible cyber threats. We derive revenue from vCISO when corporations are in need of cybersecurity services, but many do not have the capital resources or knowledge base to hire a Chief Information Security Officer. We offer this service to companies on an ongoing managed service basis as a resource to augment their management team. vCISO services include road mapping the future state for the client and providing our knowledgeable expertise to help them achieve their security needs. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Compliance Secured Managed Services SOC Managed Services vCISO Professional Services We have four distinct revenue streams under professional services: technical assessments, incident response and forensics, training, and other cybersecurity services. We derive revenue from technical assessments by utilizing the same tools and techniques a malicious cybercriminal would use to try to gain unauthorized access to highly guarded corporate systems and data to evaluate technical controls and quantify business risks in a meaningful way. We derive revenue from incident response and forensics by providing our customers with certified experts experienced in locating and neutralizing threat actors who have breached their environments. Our team is able to identify and contain a cyberattack quickly, implement patches or configuration changes to prevent re-infection, perform forensic analysis to determine root cause, and provide a plan of attack for improvements that will prevent a similar attack from succeeding in the future. We derive revenue from training by offering cybersecurity awareness training required under most compliance frameworks, and recommended as a best practice under National Institute of Standards and Technology standards, to help reduce the risk of a successful cyber-attack. We derive revenue from other cybersecurity services for hardware and software for customers IT infrastructure along with occasional staffing services. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Technical Assessments Incident Response and Forensics Training Other Cybersecurity Services Disaggregated Revenue Revenue consisted of the following by service offering for the year ended December 31, 2021: SCHEDULE OF DISAGGREGATION OF REVENUES Security Managed Services Professional Services Total Primary Sector Markets Public $ 3,389,899 $ 44,579 $ 3,434,478 Private 8,052,315 3,226,641 11,278,956 Not-for-profit 355,505 73,620 429,125 Revenue $ 11,797,719 $ 3,344,840 $ 15,142,559 Major Service Lines Compliance $ 4,234,839 $ - $ 4,234,839 Secured managed services 6,990,306 - 6,990,306 SOC managed services 375,644 - 375,644 vCISO 196,930 - 196,930 Technical assessments - 2,641,171 2,641,171 Incident response and forensics - 523,080 523,080 Training - 149,529 149,529 Other cybersecurity services - 31,060 31,060 Revenue $ 11,797,719 $ 3,344,840 $ 15,142,559 Revenue consisted of the following by service offering for the year ended December 31, 2020: Security Managed Services Professional Services Total Primary Sector Markets Public $ 3,390,166 $ 5,068 $ 3,395,234 Private 1,823,530 1,867,659 3,691,189 Not-for-profit 145,405 9,000 154,405 Revenue $ 5,359,101 $ 1,881,727 $ 7,240,828 Major Service Lines Compliance $ 3,446,157 $ - $ 3,446,157 Secured managed services 1,340,468 - 1,340,468 SOC managed services 496,050 - 496,050 vCISO 76,426 - 76,426 Technical assessments - 801,055 801,055 Incident response and forensics - 750,069 750,069 Training - 97,706 97,706 Other cybersecurity services - 232,897 232,897 Revenue $ 5,359,101 $ 1,881,727 $ 7,240,828 Cash and Cash Equivalents We consider all highly liquid investments with original 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. Receivables are unsecured and non-interest bearing. We provide for allowances for doubtful receivables based on our estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of December 31, 2021 and 2020, our allowance for doubtful accounts was $ 77,811 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. 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 will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. Impairment of Long-Lived Assets We review 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. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. During the year ended December 31, 2021, we recognized a loss on impairment of goodwill of $ 22,078,064 Intangible Assets We record its intangible assets at estimated fair value in accordance with Accounting Standards Code (“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 6). Advertising and Marketing Costs We expense advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 435,016 150,236 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. Fair Value of Financial Instruments The carrying value of cash, accounts receivable, accounts payable and accrued expenses, and other current liabilities approximate their fair values using Level 3 inputs, based on the short-term maturity of these instruments. The carrying amount of notes payable approximate the estimated fair value for this financial instrument as management believes that such debt and interest payable on the notes approximates our incremental borrowing rate. The long-lived assets (i.e., goodwill and intangible assets) were valued utilizing Level 3 inputs. Significant unobservable inputs used in fair value measurement of the intangible assets include projected revenue, gross profit and operating expenses, income tax rates, discount rates, royalty rates, and attrition rates. 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 outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options and shares issuable upon conversion have been excluded from our computation of net loss per common share for the years ended December 31, 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 our 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 December 31, 2021 December 31, 2020 Stock options 31,372,148 24,573,700 Convertible debt 300,000 1,500,000 Total 31,672,148 26,073,700 Stock-Based Compensation We apply the provisions of ASC 718, Compensation - Stock Compensation For stock options issued to employees and members of our Board of Directors for their services, we estimate 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, we recognize 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 our company’s limited history and lack of public market for its common stock, we 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 our company is the lessee are comprised of corporate offices and property and equipment. All of the leases are classified as operating leases. We lease multiple office spaces with a remaining weighted average term of 1.47 0.5 Right-of-use (“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 we will exercise that option. 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 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. We utilize ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations when a determination is made that such expense is likely. Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. We expect to use the extended transition period for any new or revised accounting standards during the period which we remain an emerging growth company. Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Entity. The ASU simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a beneficial or cash conversion feature. As a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Additionally, the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, the standard requires applying the if-converted method to calculate convertible instruments’ impact on diluted earnings per share (“EPS”). The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. It can be adopted on either a full retrospective or modified retrospective basis. We adopted this standard on January 1, 2021 on a modified retrospective basis. The adoption of this standard did not have a material effect on the consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force). The ASU requires issuers to account for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the ASU, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that adopting this standard will have on the consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that adopting this standard will have on the consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 3 – ACQUISITIONS 4 2020 Acquisitions Technologyville, Inc. Acquisition On May 25, 2020, we entered into a stock purchase agreement with Techville and its sole shareholder, pursuant to which we acquired all of the issued and outstanding common stock of Techville (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 The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED 1 Consideration paid $ 1,356,908 Tangible assets acquired: Cash 65,037 Accounts receivable 80,289 Inventory - Prepaid expenses - Other receivables - Property and equipment - Vehicle 58,693 Total tangible assets 204,019 Intangible assets acquired: Tradename - trademarks 330,300 IP/Technology 224,000 Customer base 164,000 Non-competes 32,800 Total intangible assets 751,100 Assumed liabilities: Line of credit 33,705 Accounts payable - Accrued expenses 117,742 Loan payable 50,896 Member distributions - SBA loan payoff - Other liabilities 1,128 Total assumed liabilities 203,471 Net assets acquired 751,648 Net liabilities acquired - Goodwill (a) $ 605,260 (a) Goodwill is not deductible for tax purposes. Clear Skies Security LLC Acquisition On August 1, 2020, we entered into a stock purchase agreement with Clear Skies and its equity holders, pursuant to which we acquired all of the issued and outstanding equity securities of Clear Skies (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 4 The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 932,000 Tangible assets acquired: Cash 189,143 Accounts receivable 189,150 Total tangible assets 378,293 Intangible assets acquired: Tradename - trademarks 175,000 IP/Technology 175,000 Non-competes 20,300 Total intangible assets 370,300 Assumed liabilities: Accounts payable 21,340 Loan payable 134,200 Member distributions 297,451 Total assumed liabilities 452,991 Net assets acquired 295,602 Goodwill (a) $ 636,398 (a) Goodwill is not deductible for tax purposes. Alpine Security, LLC Acquisition On December 16, 2020, we entered into an agreement and plan of merger with Alpine and its sole member, pursuant to which Alpine became our wholly owned subsidiary (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 The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 1,845,000 Tangible assets acquired: Cash 31,366 Accounts receivable 98,168 Property and equipment 24,503 Total tangible assets 154,037 Intangible assets acquired: Tradename - trademarks 117,300 IP/Technology 93,000 Customer base 14,000 Non-competes 5,700 Total intangible assets 230,000 Loans payable 151,051 Accrued expenses 95,118 Total assumed liabilities 246,169 Net assets acquired 137,868 Goodwill (a) $ 1,707,132 (a) Goodwill is not deductible for tax purposes. 2021 Acquisitions Catapult Acquisition Corporation On July 26, 2021, we entered into an agreement and plan of merger with VelocIT, pursuant to which VelocIT became a wholly owned subsidiary of our company. All issued and outstanding shares of common stock of VelocIT were converted into the right to receive an aggregate of up to 2,566,778 256,678 1,542,251 6,861,203 The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 20,465,150 Tangible assets acquired: Cash 270,397 Accounts receivable 649,810 Prepaid expenses 26,282 Property and equipment 24,862 IT assets 10,780 Total tangible assets 982,131 Intangible assets acquired: Tradename - trademarks 542,800 Intellectual property 355,000 Non-competes 59,100 Total intangible assets 956,900 Assumed liabilities: Accounts payable 351,190 Accrued expenses 192,034 Loans payable 549,507 SBA loan payoff 1,056,960 Total assumed liabilities 2,149,691 Net liabilities acquired 210,660 Goodwill (a) $ 20,675,810 (a) Goodwill is not deductible for tax purposes. Atlantic Technology Systems, Inc. Acquisition On October 1, 2021, we entered into a stock purchase agreement with ATS, ATE, James Montagne as the sole shareholder of ATS, and James Montagne and Miriam Montagne, as the sole shareholders of ATE (the “Shareholders”). Pursuant to the agreement, we purchased from the Shareholders all of the outstanding shares of ATE and ATS. The aggregate purchase price for the shares was 200,000 shares of our common stock and $ 75,000 in cash. Furthermore, the Shareholders shall receive an additional 100,000 shares of our common stock based upon Atlantic achieving certain revenue and earnings thresholds and an additional $ 150,000 in cash upon our listing to a national exchange. The acquisition of Atlantic provided the Company potential sales synergies resulting from the Company’s access to Atlantic’s current client-base to offer additional services. At December 31, 2021, the Company noted that Atlantic would not achieve the certain revenue and earnings threshold for additional equity consideration and, therefore, was not included in the transaction price. The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 1,260,000 Tangible assets acquired: Cash 30,612 Accounts receivable 20,778 Prepaid expenses 4,311 Inventory 15,425 Property and equipment 54,023 Total tangible assets 125,149 Intangible assets acquired: Tradename - trademarks 115,500 Intellectual property 29,000 Non-competes 18,800 Total intangible assets 163,300 Assumed liabilities: Accounts payable 4,314 Accrued expenses 3,212 Total assumed liabilities 7,526 Net assets acquired 280,923 Goodwill (a) $ 979,077 (a) Goodwill is the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets. Goodwill is not deductible for tax purposes. RED74 LLC Acquisition On October 8, 2021, we entered into a merger agreement with RED74 and Ticato Holdings, Inc., a New Jersey corporation (“Ticato”), and Tim Coleman, as sole shareholder of Ticato. Tim Coleman and Ticato were the sole shareholders of RED74. Pursuant to the agreement, the merger became effective at such time as a certificate of merger was accepted by the Secretary of State of New Jersey, or November 9, 2021 (the “Effective Time”). All shares of RED74 issued and outstanding immediately prior to the Effective Time were converted into the right to receive an aggregate of 340,000 50,000 10 RED74 provides secured managed services and key IT security management expertise to small-to-mid-market businesses in New Jersey. RED74 focuses primarily on clients within two industry verticals: financial services and distribution/warehouse management. RED74 offers strategic solutions that address the specific needs of these smaller enterprises made possible by their experienced and personable staff and industry-leading technology processes. Its experienced staff members are well-versed in either partial or total secured managed solutions for businesses. RED74 has a single office location in Pennington, New Jersey and supports clients in New Jersey, Manhattan, and Eastern Pennsylvania. The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 2,158,000 Tangible assets acquired: Cash 115,855 Accounts receivable 115,612 Other assets 81,844 Property and equipment 1,539 Total tangible assets 314,850 Intangible assets acquired: Tradename - trademarks 328,900 Intellectual property 70,000 Customer base 279,000 Non-competes 42,500 Total intangible assets 720,400 Assumed liabilities: Accounts payable 36,119 Accrued expenses 12,249 Total assumed liabilities 48,368 Net assets acquired 986,882 Goodwill (a) $ 1,171,118 (a) Goodwill is not deductible for tax purposes. Southford Equities, Inc. (Arkavia) Acquisition On December 1, 2021, we entered into a stock purchase agreement with Arkavia and all of the owners of Arkavia, pursuant to which we acquired all of the issued and outstanding equity securities of Arkavia (the “Arkavia Acquisition”). Under the terms of the Arkavia Acquisition, all of the issued and outstanding equity securities of Arkavia were exchanged for an aggregate of 2,914,000 Arkavia, a cybersecurity services company headquartered in Santiago, Chile, is oriented to solve problems with the best technological alternatives and their recognized IT Engineering services. Founded in 2010, Arkavia provides consulting, delivery, managed security service provider, and network monitoring services to a diversified client base throughout South America. With years of experience backed by multiple certifications of its specialists, Arkavia’s customers include multiple leading brands in the market in each important business segment. The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 14,570,000 Tangible assets acquired: Cash 1,753,193 Accounts receivable 744,400 Inventory 1,210,442 Prepaids 465,791 Other receivables 1,067,477 Property and equipment 1,424,760 Total tangible assets 6,666,063 Intangible assets acquired: Tradename - trademarks 811,100 Intellectual property 460,000 Customer base 987,000 Non-competes 313,000 Intangible assets Total intangible assets 2,571,100 Assumed liabilities: Accounts payable 1,125,396 Accrued liabilities 460,496 Other 98,268 Long-term debt 5,156,228 Total assumed liabilities 6,840,388 Net assets acquired 2,396,775 Goodwill (a) $ 12,173,225 (a) Goodwill is not deductible for tax purposes. Unaudited Pro Forma Financial Information The following unaudited pro forma information presents the consolidated results of operations of our company, VelocIT, Atlantic, RED74, and Arkavia as if the acquisitions consummated on August 12, 2021, October 1, 2021, November 9, 2021, and December 1, 2021, respectively, had been consummated on January 1, 2020. Such unaudited pro forma information is based on historical unaudited financial information with respect to the 2021 acquisitions and does not include operational or other charges which might have been affected by us. The unaudited pro forma information for the years ended December 31, 2021 and 2020 presented below is for illustrative purposes only and is not necessarily indicative of the results that would have been achieved or results that may be achieved in the future: SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION Year Ended December 31, Year Ended December 31, 2021 2020 (unaudited) (unaudited) Net revenue $ 28,441,648 $ 26,949,996 Net loss $ (30,723,427 ) $ (23,040,252 ) |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS December 31, 2021 December 31, 2020 Prepaid expenses $ 453,498 $ 124,874 Prepaid taxes 231,014 3,524 Prepaid insurance 46,751 13,746 Deferred interest 229,702 - Total prepaid expenses and other current assets $ 960,965 $ 142,144 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2021 December 31, 2020 Computer equipment $ 495,235 $ - Building 1,047,020 - Leasehold improvements 109,626 - Vehicle 63,052 63,052 Furniture and fixtures 33,358 6,224 Software 210,221 10,092 Property and equipment gross 1,958,512 95,103 Less: accumulated depreciation (102,466 ) (14,473 ) Property and equipment, net $ 1,856,046 $ 80,630 Total depreciation expense was $ 87,993 and $ 13,715 for the years ended December 31, 2021 and 2020, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 6 – INTANGIBLE ASSETS AND GOODWILL At December 31, 2021, we engaged a third-party valuation firm to assist in performing a quantitative assessment to determine whether it was more likely than not that the carrying value of goodwill in our reporting units was impaired as of December 31, 2021. We deem the Company to be one reporting unit. The fair value estimates for the reporting unit was based on a blended analysis of the present value of future cash flows and the market value approach. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, projected cash flows, and the long-term rate of growth. The significant estimates used in the market approach model included identifying public companies engaged in businesses that are considered comparable to those of the reporting unit and assessing comparable revenue and earnings multiples in estimating the fair value of the reporting unit. The excess of the reporting unit’s carrying value over the estimate of the fair value was recorded as goodwill impairment of $ 22,078,064 The following table summarizes the changes in goodwill during the years ended December 31, 2021 and 2020, respectively: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2019 $ 922,579 Acquisition of goodwill 3,178,790 Impairment - Balance December 31, 2020 4,101,369 Acquisition of goodwill 34,999,230 Impairment (22,078,064 ) Reclassification based on valuation report (1) (230,000 ) Ending balance, December 31, 2021 $ 16,792,535 (1) During the year ended December 31, 2021, we obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in our Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, changed and, therefore, goodwill changed. The following table summarizes the identifiable intangible assets as of December 31, 2021 and 2020: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life 2021 2020 Tradenames – trademarks Indefinite $ 3,010,100 $ 1,094,500 Customer base 15 years 1,650,000 370,000 Non-compete agreements 2 years 675,500 236,400 Intellectual property/technology 10 years 1,528,000 521,000 6,863,600 2,221,900 Less accumulated amortization (323,331 ) (116,468 ) Total $ 6,540,269 $ 2,105,432 The weighted average useful life remaining of identifiable amortizable intangible assets remaining is 10.13 Accumulated amortization was as follows for the years ended December 31, 2021 and 2020. SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS Tradenames - Trademarks Customer Base Non-Compete Agreements Intellectual Property/Technology Accumulated Amortization Balance as of January 1, 2020 $ - $ 3,433 $ 9,165 $ 3,050 $ 15,648 Amortization expense - 20,111 49,610 31,100 100,821 Balance as of December 31, 2020 - 23,544 58,775 34,150 116,469 Amortization expense - 33,717 95,878 77,267 206,862 Balance as of December 31, 2021 $ - $ 57,261 $ 154,653 $ 111,417 $ 323,331 Amortization expense of identifiable intangible assets for the years ended December 31, 2021 and 2020, was $ 206,862 and $ 100,821 , respectively. The below table summarizes the future amortization expense as of December 31, 2021 for the next five years and thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2022 $ 532,610 2023 486,339 2024 290,295 2025 262,800 2026 262,800 Thereafter 1,695,325 Future Amortization Expense $ 3,530,169 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2021 December 31, 2020 Accounts payable $ 1,700,260 $ 328,368 Accrued payroll 482,588 39,670 Accrued expenses 513,718 417,832 Accrued interest – related party 12,500 23,934 Total accounts payable and accrued expenses $ 2,709,066 $ 809,804 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 8 - RELATED PARTY TRANSACTIONS Note Payable – Related Party On December 31, 2018, GenResults entered into an unsecured note payable with Jemmett Enterprises, LLC, an entity controlled by our majority stockholder, in the original principal amount of $ 200,000 June 30, 2020 6 zero 59,787 0 23,934 4,595 12,812 Convertible Note Payable – Related Party On December 23, 2020, we issued an unsecured convertible note to Hensley & Company in the principal amount of $ 3,000,000 6 December 31, 2021 2.00 3,000,000 On December 31, 2021, Hensley & Company converted the principal amount of $ 3,000,000 1,500,000 2.00 Convertible Note Payable, Consulting, and Stock Payable – Related Party On November 1, 2021, we entered into a two-year consulting agreement with Smile on Fridays LLP (“Smile”) pursuant to which Smile will represent us as the Chief Marketing Officer. Upon execution of the agreement, we were to issue a total of 432,000 2,311,200 25 108,000 On January 16, 2020, we entered into a consulting agreement, with Eskenzi PR Limited (“Eskenzi”), whose sole owner is also the sole owner of Smile, pursuant to which Eskenzi will provide various marketing and public relations services to us. The initial term of the agreement was for twelve months and automatically renews for an additional twelve months unless either we or Eskenzi provides at least three months advance written notice of termination. Upon execution of the agreement, we were to issue 120,000 48,000 0 46,000 On January 1, 2021, we entered into a two-year consulting agreement with Smile, pursuant to which Smile will provide marketing and public relations services to us. Upon execution of the agreement, we were to issue a total of 312,000 639,600 52,000 On October 27, 2021, we issued to Neil Stinchcombe, the sole owner of Smile, a convertible note in the principal amount of $ 1,500,000 5 January 27, 2022 5.00 1,500,000 12,500 12,500 Note Receivable – Related Party During the year ended December 31, 2021, Arkavia provided cash infusions to a related party to fund an intended wholly-owned subsidiary, Arkavia Peru, for start-up and operational costs. As of December 31, 2021, the subsidiary has yet to be incorporated and as such, Arkavia has recorded the amount as a receivable. The amount outstanding at December 31, 2021, is $ 1,090,903 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | Note 9 - STOCKHOLDERS’ EQUITY Equity Transactions During the year ended December 31, 2020, we issued an aggregate of 350,000 495,200 0.40 2.00 1,131,009 During the year ended December 31, 2021, we issued 1,625,000 shares of common stock with a fair value of $ 2.00 per share to investors for cash proceeds of $ 3,250,000 . During the year ended December 31, 2021, we issued an aggregate of 392,900 2.05 On December 31, 2021, we issued an aggregate of 1,500,000 3,000,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | |
STOCK-BASED COMPENSATION | Note 10 – STOCK-BASED COMPENSATION We account for our stock-based compensation in accordance with the fair value recognition provisions of ASC 718. 2019 Equity Incentive Plan Our Board of Directors approved our 2019 Equity Incentive Plan (the “2019 Plan”) on June 6, 2019, and our stockholders holding a majority of the outstanding shares of our common stock approved and adopted the 2019 Plan. The maximum number of shares of our common stock that may be issued under our 2019 Plan is 25,000,000 Options We granted options for the purchase of 11,091,691 We granted options for the purchase of 10,593,700 In applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions: SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED For the Year Ended For the Year Ended December 31, 2021 December 31, 2020 Risk free interest rate 0.42 1.34 % 0.21 1.67 % Contractual term (years) 5.00 10.00 3.00 10.00 Expected volatility 73.43 85.22 % 71.51 74.28 % The weighted average grant date fair value of options issued and vested during the year ended December 31, 2021 was $ 12,472,505 and $ 2,136,509 , respectively. The weighted average grant date fair value of options issued and vested during the year ended December 31, 2020 was $ 2,030,144 and $ 776,925 , respectively. Compensation-based stock option activity for qualified and nonqualified stock options is summarized as follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2020 17,245,000 $ 0.46 Granted 10,593,700 1.43 Exercised - - Expired or cancelled (3,265,000 ) 0.53 Outstanding at December 31, 2020 24,573,700 0.86 Granted 11,091,691 3.60 Exercised (100,000 ) 0.50 Expired or cancelled (4,193,243 ) 0.83 Outstanding at December 31, 2021 31,372,148 $ 1.84 The following table summarizes information about options to purchase shares of our common stock outstanding and exercisable at December 31, 2021: SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE Weighted-Average Exercise Prices Outstanding Options Remaining Life In Years Weighted-Average Exercise Price Number Exercisable $ 0.38 2,833,333 2.62 $ 0.38 2,833,333 0.40 3,600,000 2.56 0.40 3,600,000 0.50 9,014,424 3.09 0.50 7,173,190 1.40 1,417,251 5.64 1.40 1,371,145 2.00 6,107,700 3.89 2.00 1,393,473 2.05 1,552,000 4.28 2.05 247,500 3.05 170,000 4.57 3.05 - 3.60 155,000 4.58 3.60 - 4.00 624,340 4.55 4.00 - 5.00 5,803,100 9.77 5.00 34,000 6.75 95,000 4.57 6.75 - 31,372,148 4.60 $ 1.84 16,652,642 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 $ 7,802,096 and $ 1,533,777 for the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, the Company attributed $ 2,132,554 5,669,542 30,481,049 with a weighted average recognition period of 2.26 years related to the options. The aggregate intrinsic value totaled $ 96,269,656 71,776,022 5.00 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES Maxim Settlement Agreement On October 27, 2020, we entered into an advisory agreement (the “Advisory Agreement”) with Maxim Group LLC (“Maxim”), pursuant to which the parties agreed to certain compensation obligations in the form of our common stock, cash and future rights. Certain disputes arose between the parties regarding the duties and obligations pursuant to the Advisory Agreement, resulting in the parties agreeing to enter into a settlement and release agreement on January 13, 2022 (see Note 16). As a result, we recorded a settlement liability at December 31, 2021 of $ 470,000 on the statement of operations. Subsequent to December 31, 2021, the Company issued 400,000 shares of common stock, with a fair value of $ 5.00 per share, pursuant to the settlement. Legal Claims There are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors, officers or affiliates, any owner of record or beneficially of more than 5% of any class of its voting securities |
LOANS PAYABLE, CONVERTIBLE NOTE
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT | NOTE 12 – LOANS PAYABLE, CONVERTIBLE NOTE 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 2, 2017, Techville entered into a secured revolving line of credit with Wintrust Bank (“Wintrust”) for $ 75,000 . The line of credit was renewed on August 11, 2020. The line of credit bears interest at Prime plus 1.75 % with a floor rate of 6 % and a maturity date of August 24, 2021 6 %. The line of credit is collateralized by all of Techville’s assets. During the year ended December 31, 2021 Techville drew $ 220,776 against the line of credit and made payments of $ 223,766 . At December 31, 2021 and 2020, there was $ 0 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 an interest rate of 5.77 % per annum. During the years ended December 31, 2021 and 2020, we made cash payments of $ 13,629 and $ 5,567 , respectively, of which $ 13,407 and $ 222 and $ 5,010 and $ 557 was attributed to principal and interest, respectively. The loan is collateralized by a vehicle. At December 31, 2021 and 2020, $ 32,474 and $ 45,881 was outstanding, respectively. 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 1 June 22, 2025 179,600 179,600 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 1 April 17, 2022 530,000 530,000 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 1 May 8, 2022 134,200 134,200 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 1 April 8, 2022 137,000 137,000 On August 21, 2020, Alpine entered into a Future Receipts Sale Agreement with a financial institution for $ 70,000 38,755 50,000 10,350 575 500 200 19,840 Catapult Acquisition Corp. On July 9, 2016, Catapult Acquisition Corp. entered into several seller notes payable with shareholders of VelocIT. The total borrowing amount was $ 600,000 5 July 31, 2023 150,000 600,000 446,239 As part of the VelocIT Acquisition, the Company assumed $ 1,056,960 Arkavia At December 31, 2021, notes payable consist of the following amounts: SCHEDULE OF NOTES PAYABLE December 31, 2021 Total notes payable 5,018,788 4.22 March 30, 2026 $ 607,915 4.22 March 30, 2026 437,178 4.81 April 10, 2028 148,665 4.81 April 10, 2028 168,308 4.20 June 3, 2024 33,418 4.20 March 6, 2026 998,759 3.48 May 15, 2023 129,692 4.88 August 8, 2024 179,591 3.50 May 26, 2021 5,817 3.50 December 1, 2023 58,805 4.69 April 15, 2024 206,993 6.48 February 17, 2022 191,792 3.50 April 15, 2024 182,088 7.14 December 3, 2029 557,445 7.14 December 3, 2029 99,574 7.14 December 3, 2029 869,179 7.14 December 3, 2029 143,569 Total notes payable 5,018,788 Less current portion (213,199 ) Long term notes payable $ 4,805,589 At various times during the period December 1, 2021 (date of acquisition) through December 31, 2021, Arkavia paid an aggregate of $ 137,411 Convertible Note Payable On December 23, 2020, we issued to Hensley & Company an unsecured 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 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 our 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 $ 73,391 and $ 1,609 during the years ended December 31, 2021 and 2020, respectively. Total interest expense on the note was approximately $ 182,500 and $ 4,000 for the years ended December 31, 2021 and 2020. On December 31, 2021, Hensley & Company converted the principal amount of $ 3,000,000 1,500,000 2.00 On October 27, 2021, we issued to Neil Stinchcombe, the sole owner of Smile, a convertible note in the principal amount of $ 1,500,000 5 January 27, 2022 5.00 October 27, 2022 1,500,000 12,500 12,500 Future minimum payments under the above notes payable following the year ended December 31, 2021, are as follows: SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE December 31, 2021 2022 $ 2,972,754 2023 1,023,084 2024 835,606 2025 708,973 2026 263,945 Thereafter 1,193,138 Total future minimum payments 6,997,500 Les: discount - Loans payable 6,997,500 Less: current (1,713,199 ) Total future minimum payments $ 5,284,301 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
LEASES | NOTE 13 – LEASES During the years ended December 31, 2021 and 2020, we recognized offsetting ROU assets and lease liabilities of $ 387,543 19,393 When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using our estimated incremental borrowing rate at the recognition dates during the years ended December 31, 2021 and 2020. The weighted average incremental borrowing rate applied was 5.77 1.51 The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Year Ended December 31, 2021 Year Ended December 31, 2020 Lease cost Operating lease cost (cost resulting from lease payments) $ 130,289 $ 6,362 Short term lease cost 59,306 36,983 Net lease cost $ 189,595 $ 43,345 Operating lease – operating cash flows (fixed payments) $ 130,289 $ 6,362 Operating lease – operating cash flows (liability reduction) $ 118,252 $ 5,712 Non-current leases – right of use assets $ 277,578 $ 13,426 Current liabilities – operating lease liabilities $ 196,472 $ 8,989 Non-current liabilities – operating lease liabilities $ 88,040 $ 4,693 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2021, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES December 31, 2021 Fiscal Year Operating Leases 2022 $ 207,995 2023 88,938 Total future minimum lease payments 296,933 Amount representing interest (12,421 ) Present value of net future minimum lease payments $ 284,512 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 – INCOME TAXES We identified our federal and Arizona and Virginia state tax returns as our “major” tax jurisdictions. The periods for income tax returns that are subject to examination for these jurisdictions is 2018 through 2021. At December 31, 2021, we had approximately $ 5,500,000 Our net deferred tax assets, liabilities and valuation allowance as of December 31, 2021 and 2020 are summarized as follows: SCHEDULE OF DEFERRED TAX ASSETS, LIABILITIES AND VALUATION ALLOWANCE Year Ended December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 1,035,400 $ 765,000 Stock compensation expense 2,791,900 703,500 Accounts payable and accrued expenses 657,700 30,600 Goodwill impairment 5,587,000 - Depreciation 391,900 - Amortization 37,900 25,900 Allowance for doubtful accounts 19,700 7,800 Total deferred tax assets 10,521,500 1,532,800 Valuation allowance (10,521,500 ) (1,341,300 ) Deferred tax assets after valuation allowance $ - $ 191,500 Deferred tax liabilities: Accounts receivable $ - $ (156,400 ) Prepaid expenses - (35,000 ) Total deferred tax liabilities - (191,500 ) Net deferred tax assets $ - $ 100 We recorded a valuation allowance in the full amount of our net deferred tax assets since realization of such tax benefits has been determined by our management to be less likely than not. The valuation allowance increased by $ 9,180,200 1,003,500 during the years ended December 31, 2021 and 2020, respectively. A reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2021 and 2020 is as follows: SCHEDULE OF RECONCILIATION OF THE STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT 2021 2020 Federal statutory blended income tax rates (21 )% (21 )% State statutory income tax rate, net of federal benefit (4 ) (4 ) Change in valuation allowance 25 25 Effective tax rate - % - % As of the date of this filing, we have not filed our 2021 federal and state corporate income tax returns. We expect to file these documents as soon as practicable. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 15 – CONCENTRATION OF CREDIT RISK Cash Deposits Financial instruments that potentially subject us 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 1,119,000 4,252,000 SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR Revenue One client accounted for 20 Client A 20 % Two clients accounted for 59 Client A 44 % Client B 15 % Accounts Receivable There were no Two clients accounted for 41 Client A 25 % Client B 16 % Vendors Two vendors accounted for 48 Vendor A 32 % Vendor B 16 % Two vendors accounted for 32 Vendor A 20 % Vendor B 12 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Acquisition On January 5, 2022, we entered into a stock purchase agreement (the “True Digital Stock Purchase Agreement”) with certain stockholders of True Digital and an agreement and plan of merger (the “True Digital Merger Agreement”) with True Digital and certain of its other stockholders. On January 19, 2022, the transactions contemplated by the True Digital Stock Purchase Agreement and the True Digital Merger Agreement were consummated, with True Digital becoming a wholly owned subsidiary of our company. In connection with consummation of the transactions, we paid aggregate consideration of $ 6,153,000 8,229,000 Uplist and Public Offering On January 19, 2022, we completed a public offering of our common stock. Pursuant to the public offering, we issued and sold 2,000,000 5.00 161,000 5.00 9,471,000 721,000 108,000 On January 14, 2022, we were approved to list our common stock on The Nasdaq Capital Market (“Nasdaq”) under the symbol “CISO.” Option Grants During January 2022, we issued options to purchase an aggregate of 1,000,000 shares of our common stock to two employees. The options have a ten -year term, an exercise price of $ 2.00 per share, and vest at 30% at the one-year anniversary of our uplist to Nasdaq and then linearly for 24 months. Resignations and Appointments of Certain Directors or Officers Effective February 15, 2022, Bryce Hancock resigned as our President and Chief Operating Officer. As a result of his resignation, Mr. Hancock forfeited 2,156,250 On February 18, 2022, our Board of Directors appointed David Bennett as our Chief Operating Officer. Effective March 15, 2022, Sandra D. Morgan resigned from her position as a member of our Board of Directors. At the time of her resignation, Ms. Morgan served on the Audit Committee and the Governance and Nominating Committee. Effective March 21, 2022, our Board of Directors appointed Ashley N. Devoto as our Chief Information Security Officer and as a director our company. Settlement Agreement On January 13, 2022, we entered into a settlement and release agreement with Maxim regarding a dispute between the parties in connection with our public offering, pursuant to which we will pay Maxim (i) $ 470,000 400,000 5.00 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The summary of significant accounting policies presented below is designed to assist in understanding our consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of our management, who is responsible for their integrity and objectivity. We operate in one business segment, which is cybersecurity. |
Consolidation | Consolidation The consolidated financial statements include the accounts of our company and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications have been made to the financial statements for the year ended December 31, 2020 to conform to the financial statement presentation for the year ended December 31, 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the accompanying 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, share price, and expected dividend rate. |
Revenue | Revenue Our revenue is derived from two major types of services to clients: security managed services and professional services. With respect to Security Managed Services, we provide 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 Professional Services, we provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Security Managed Services We have four distinct revenue streams under security managed services: compliance, secured managed services, SOC managed services, and vCISO. We derive revenue from compliance by ensuring our customers are implementing the right controls, properly prioritizing risks, and investing in the appropriate remediation, so our customers can achieve compliance, adhere to industry standards and guidelines, and manage continuous monitoring over time. We derive revenue from secured managed services through security focused end-to-end network and device management solutions for companies that want to outsource their administration needs to a team of senior engineers who provide modern strategy, insights, and support. We derive revenue from SOC managed services by offering SOC-as-a-service, which is a subscription-based service that manages and monitors clients’ logs, devices, clouds, network, and assets for possible cyber threats. We derive revenue from vCISO when corporations are in need of cybersecurity services, but many do not have the capital resources or knowledge base to hire a Chief Information Security Officer. We offer this service to companies on an ongoing managed service basis as a resource to augment their management team. vCISO services include road mapping the future state for the client and providing our knowledgeable expertise to help them achieve their security needs. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Compliance Secured Managed Services SOC Managed Services vCISO Professional Services We have four distinct revenue streams under professional services: technical assessments, incident response and forensics, training, and other cybersecurity services. We derive revenue from technical assessments by utilizing the same tools and techniques a malicious cybercriminal would use to try to gain unauthorized access to highly guarded corporate systems and data to evaluate technical controls and quantify business risks in a meaningful way. We derive revenue from incident response and forensics by providing our customers with certified experts experienced in locating and neutralizing threat actors who have breached their environments. Our team is able to identify and contain a cyberattack quickly, implement patches or configuration changes to prevent re-infection, perform forensic analysis to determine root cause, and provide a plan of attack for improvements that will prevent a similar attack from succeeding in the future. We derive revenue from training by offering cybersecurity awareness training required under most compliance frameworks, and recommended as a best practice under National Institute of Standards and Technology standards, to help reduce the risk of a successful cyber-attack. We derive revenue from other cybersecurity services for hardware and software for customers IT infrastructure along with occasional staffing services. Performance Obligations Our contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have determined the performance obligations for the following services: Technical Assessments Incident Response and Forensics Training Other Cybersecurity Services Disaggregated Revenue Revenue consisted of the following by service offering for the year ended December 31, 2021: SCHEDULE OF DISAGGREGATION OF REVENUES Security Managed Services Professional Services Total Primary Sector Markets Public $ 3,389,899 $ 44,579 $ 3,434,478 Private 8,052,315 3,226,641 11,278,956 Not-for-profit 355,505 73,620 429,125 Revenue $ 11,797,719 $ 3,344,840 $ 15,142,559 Major Service Lines Compliance $ 4,234,839 $ - $ 4,234,839 Secured managed services 6,990,306 - 6,990,306 SOC managed services 375,644 - 375,644 vCISO 196,930 - 196,930 Technical assessments - 2,641,171 2,641,171 Incident response and forensics - 523,080 523,080 Training - 149,529 149,529 Other cybersecurity services - 31,060 31,060 Revenue $ 11,797,719 $ 3,344,840 $ 15,142,559 Revenue consisted of the following by service offering for the year ended December 31, 2020: Security Managed Services Professional Services Total Primary Sector Markets Public $ 3,390,166 $ 5,068 $ 3,395,234 Private 1,823,530 1,867,659 3,691,189 Not-for-profit 145,405 9,000 154,405 Revenue $ 5,359,101 $ 1,881,727 $ 7,240,828 Major Service Lines Compliance $ 3,446,157 $ - $ 3,446,157 Secured managed services 1,340,468 - 1,340,468 SOC managed services 496,050 - 496,050 vCISO 76,426 - 76,426 Technical assessments - 801,055 801,055 Incident response and forensics - 750,069 750,069 Training - 97,706 97,706 Other cybersecurity services - 232,897 232,897 Revenue $ 5,359,101 $ 1,881,727 $ 7,240,828 |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original 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. Receivables are unsecured and non-interest bearing. We provide for allowances for doubtful receivables based on our estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of December 31, 2021 and 2020, our allowance for doubtful accounts was $ 77,811 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. 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 will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review 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. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. During the year ended December 31, 2021, we recognized a loss on impairment of goodwill of $ 22,078,064 |
Intangible Assets | Intangible Assets We record its intangible assets at estimated fair value in accordance with Accounting Standards Code (“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 6). |
Advertising and Marketing Costs | Advertising and Marketing Costs We expense advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 435,016 150,236 |
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. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash, accounts receivable, accounts payable and accrued expenses, and other current liabilities approximate their fair values using Level 3 inputs, based on the short-term maturity of these instruments. The carrying amount of notes payable approximate the estimated fair value for this financial instrument as management believes that such debt and interest payable on the notes approximates our incremental borrowing rate. The long-lived assets (i.e., goodwill and intangible assets) were valued utilizing Level 3 inputs. Significant unobservable inputs used in fair value measurement of the intangible assets include projected revenue, gross profit and operating expenses, income tax rates, discount rates, royalty rates, and attrition rates. |
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 outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options and shares issuable upon conversion have been excluded from our computation of net loss per common share for the years ended December 31, 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 our 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 December 31, 2021 December 31, 2020 Stock options 31,372,148 24,573,700 Convertible debt 300,000 1,500,000 Total 31,672,148 26,073,700 |
Stock-Based Compensation | Stock-Based Compensation We apply the provisions of ASC 718, Compensation - Stock Compensation For stock options issued to employees and members of our Board of Directors for their services, we estimate 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, we recognize 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 our company’s limited history and lack of public market for its common stock, we 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 our company is the lessee are comprised of corporate offices and property and equipment. All of the leases are classified as operating leases. We lease multiple office spaces with a remaining weighted average term of 1.47 0.5 Right-of-use (“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 we will exercise that option. 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 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. We utilize ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations when a determination is made that such expense is likely. |
Emerging Growth Company Status | Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. We expect to use the extended transition period for any new or revised accounting standards during the period which we remain an emerging growth company. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Entity. The ASU simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a beneficial or cash conversion feature. As a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Additionally, the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, the standard requires applying the if-converted method to calculate convertible instruments’ impact on diluted earnings per share (“EPS”). The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. It can be adopted on either a full retrospective or modified retrospective basis. We adopted this standard on January 1, 2021 on a modified retrospective basis. The adoption of this standard did not have a material effect on the consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force). The ASU requires issuers to account for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the ASU, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that adopting this standard will have on the consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that adopting this standard will have on the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUES | Revenue consisted of the following by service offering for the year ended December 31, 2021: SCHEDULE OF DISAGGREGATION OF REVENUES Security Managed Services Professional Services Total Primary Sector Markets Public $ 3,389,899 $ 44,579 $ 3,434,478 Private 8,052,315 3,226,641 11,278,956 Not-for-profit 355,505 73,620 429,125 Revenue $ 11,797,719 $ 3,344,840 $ 15,142,559 Major Service Lines Compliance $ 4,234,839 $ - $ 4,234,839 Secured managed services 6,990,306 - 6,990,306 SOC managed services 375,644 - 375,644 vCISO 196,930 - 196,930 Technical assessments - 2,641,171 2,641,171 Incident response and forensics - 523,080 523,080 Training - 149,529 149,529 Other cybersecurity services - 31,060 31,060 Revenue $ 11,797,719 $ 3,344,840 $ 15,142,559 Revenue consisted of the following by service offering for the year ended December 31, 2020: Security Managed Services Professional Services Total Primary Sector Markets Public $ 3,390,166 $ 5,068 $ 3,395,234 Private 1,823,530 1,867,659 3,691,189 Not-for-profit 145,405 9,000 154,405 Revenue $ 5,359,101 $ 1,881,727 $ 7,240,828 Major Service Lines Compliance $ 3,446,157 $ - $ 3,446,157 Secured managed services 1,340,468 - 1,340,468 SOC managed services 496,050 - 496,050 vCISO 76,426 - 76,426 Technical assessments - 801,055 801,055 Incident response and forensics - 750,069 750,069 Training - 97,706 97,706 Other cybersecurity services - 232,897 232,897 Revenue $ 5,359,101 $ 1,881,727 $ 7,240,828 |
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION | 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 our 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 December 31, 2021 December 31, 2020 Stock options 31,372,148 24,573,700 Convertible debt 300,000 1,500,000 Total 31,672,148 26,073,700 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Acquisition [Line Items] | |
SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION | SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION Year Ended December 31, Year Ended December 31, 2021 2020 (unaudited) (unaudited) Net revenue $ 28,441,648 $ 26,949,996 Net loss $ (30,723,427 ) $ (23,040,252 ) |
Techville [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED 1 Consideration paid $ 1,356,908 Tangible assets acquired: Cash 65,037 Accounts receivable 80,289 Inventory - Prepaid expenses - Other receivables - Property and equipment - Vehicle 58,693 Total tangible assets 204,019 Intangible assets acquired: Tradename - trademarks 330,300 IP/Technology 224,000 Customer base 164,000 Non-competes 32,800 Total intangible assets 751,100 Assumed liabilities: Line of credit 33,705 Accounts payable - Accrued expenses 117,742 Loan payable 50,896 Member distributions - SBA loan payoff - Other liabilities 1,128 Total assumed liabilities 203,471 Net assets acquired 751,648 Net liabilities acquired - Goodwill (a) $ 605,260 (a) Goodwill is not deductible for tax purposes. |
Clear Skies Security L L C [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 932,000 Tangible assets acquired: Cash 189,143 Accounts receivable 189,150 Total tangible assets 378,293 Intangible assets acquired: Tradename - trademarks 175,000 IP/Technology 175,000 Non-competes 20,300 Total intangible assets 370,300 Assumed liabilities: Accounts payable 21,340 Loan payable 134,200 Member distributions 297,451 Total assumed liabilities 452,991 Net assets acquired 295,602 Goodwill (a) $ 636,398 (a) Goodwill is not deductible for tax purposes. |
Alpine security [LLCMember] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 1,845,000 Tangible assets acquired: Cash 31,366 Accounts receivable 98,168 Property and equipment 24,503 Total tangible assets 154,037 Intangible assets acquired: Tradename - trademarks 117,300 IP/Technology 93,000 Customer base 14,000 Non-competes 5,700 Total intangible assets 230,000 Loans payable 151,051 Accrued expenses 95,118 Total assumed liabilities 246,169 Net assets acquired 137,868 Goodwill (a) $ 1,707,132 (a) Goodwill is not deductible for tax purposes. |
Catapult Acquisition Corporation [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 20,465,150 Tangible assets acquired: Cash 270,397 Accounts receivable 649,810 Prepaid expenses 26,282 Property and equipment 24,862 IT assets 10,780 Total tangible assets 982,131 Intangible assets acquired: Tradename - trademarks 542,800 Intellectual property 355,000 Non-competes 59,100 Total intangible assets 956,900 Assumed liabilities: Accounts payable 351,190 Accrued expenses 192,034 Loans payable 549,507 SBA loan payoff 1,056,960 Total assumed liabilities 2,149,691 Net liabilities acquired 210,660 Goodwill (a) $ 20,675,810 (a) Goodwill is not deductible for tax purposes. |
Atlantic Technology Systems [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 1,260,000 Tangible assets acquired: Cash 30,612 Accounts receivable 20,778 Prepaid expenses 4,311 Inventory 15,425 Property and equipment 54,023 Total tangible assets 125,149 Intangible assets acquired: Tradename - trademarks 115,500 Intellectual property 29,000 Non-competes 18,800 Total intangible assets 163,300 Assumed liabilities: Accounts payable 4,314 Accrued expenses 3,212 Total assumed liabilities 7,526 Net assets acquired 280,923 Goodwill (a) $ 979,077 (a) Goodwill is the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets. Goodwill is not deductible for tax purposes. |
Red 74 LLC Acquisition [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 2,158,000 Tangible assets acquired: Cash 115,855 Accounts receivable 115,612 Other assets 81,844 Property and equipment 1,539 Total tangible assets 314,850 Intangible assets acquired: Tradename - trademarks 328,900 Intellectual property 70,000 Customer base 279,000 Non-competes 42,500 Total intangible assets 720,400 Assumed liabilities: Accounts payable 36,119 Accrued expenses 12,249 Total assumed liabilities 48,368 Net assets acquired 986,882 Goodwill (a) $ 1,171,118 (a) Goodwill is not deductible for tax purposes. |
Arkavia Acquisition [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED Consideration paid $ 14,570,000 Tangible assets acquired: Cash 1,753,193 Accounts receivable 744,400 Inventory 1,210,442 Prepaids 465,791 Other receivables 1,067,477 Property and equipment 1,424,760 Total tangible assets 6,666,063 Intangible assets acquired: Tradename - trademarks 811,100 Intellectual property 460,000 Customer base 987,000 Non-competes 313,000 Intangible assets Total intangible assets 2,571,100 Assumed liabilities: Accounts payable 1,125,396 Accrued liabilities 460,496 Other 98,268 Long-term debt 5,156,228 Total assumed liabilities 6,840,388 Net assets acquired 2,396,775 Goodwill (a) $ 12,173,225 (a) Goodwill is not deductible for tax purposes. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS December 31, 2021 December 31, 2020 Prepaid expenses $ 453,498 $ 124,874 Prepaid taxes 231,014 3,524 Prepaid insurance 46,751 13,746 Deferred interest 229,702 - Total prepaid expenses and other current assets $ 960,965 $ 142,144 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT December 31, 2021 December 31, 2020 Computer equipment $ 495,235 $ - Building 1,047,020 - Leasehold improvements 109,626 - Vehicle 63,052 63,052 Furniture and fixtures 33,358 6,224 Software 210,221 10,092 Property and equipment gross 1,958,512 95,103 Less: accumulated depreciation (102,466 ) (14,473 ) Property and equipment, net $ 1,856,046 $ 80,630 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN GOODWILL | The following table summarizes the changes in goodwill during the years ended December 31, 2021 and 2020, respectively: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2019 $ 922,579 Acquisition of goodwill 3,178,790 Impairment - Balance December 31, 2020 4,101,369 Acquisition of goodwill 34,999,230 Impairment (22,078,064 ) Reclassification based on valuation report (1) (230,000 ) Ending balance, December 31, 2021 $ 16,792,535 (1) During the year ended December 31, 2021, we obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in our Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, changed and, therefore, goodwill changed. |
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS | The following table summarizes the identifiable intangible assets as of December 31, 2021 and 2020: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life 2021 2020 Tradenames – trademarks Indefinite $ 3,010,100 $ 1,094,500 Customer base 15 years 1,650,000 370,000 Non-compete agreements 2 years 675,500 236,400 Intellectual property/technology 10 years 1,528,000 521,000 6,863,600 2,221,900 Less accumulated amortization (323,331 ) (116,468 ) Total $ 6,540,269 $ 2,105,432 |
SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS | Accumulated amortization was as follows for the years ended December 31, 2021 and 2020. SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS Tradenames - Trademarks Customer Base Non-Compete Agreements Intellectual Property/Technology Accumulated Amortization Balance as of January 1, 2020 $ - $ 3,433 $ 9,165 $ 3,050 $ 15,648 Amortization expense - 20,111 49,610 31,100 100,821 Balance as of December 31, 2020 - 23,544 58,775 34,150 116,469 Amortization expense - 33,717 95,878 77,267 206,862 Balance as of December 31, 2021 $ - $ 57,261 $ 154,653 $ 111,417 $ 323,331 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | The below table summarizes the future amortization expense as of December 31, 2021 for the next five years and thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2022 $ 532,610 2023 486,339 2024 290,295 2025 262,800 2026 262,800 Thereafter 1,695,325 Future Amortization Expense $ 3,530,169 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2021 December 31, 2020 Accounts payable $ 1,700,260 $ 328,368 Accrued payroll 482,588 39,670 Accrued expenses 513,718 417,832 Accrued interest – related party 12,500 23,934 Total accounts payable and accrued expenses $ 2,709,066 $ 809,804 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | |
SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED | In applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions: SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED For the Year Ended For the Year Ended December 31, 2021 December 31, 2020 Risk free interest rate 0.42 1.34 % 0.21 1.67 % Contractual term (years) 5.00 10.00 3.00 10.00 Expected volatility 73.43 85.22 % 71.51 74.28 % |
SCHEDULE OF STOCK OPTION ACTIVITY | Compensation-based stock option activity for qualified and nonqualified stock options is summarized as follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2020 17,245,000 $ 0.46 Granted 10,593,700 1.43 Exercised - - Expired or cancelled (3,265,000 ) 0.53 Outstanding at December 31, 2020 24,573,700 0.86 Granted 11,091,691 3.60 Exercised (100,000 ) 0.50 Expired or cancelled (4,193,243 ) 0.83 Outstanding at December 31, 2021 31,372,148 $ 1.84 |
SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE | The following table summarizes information about options to purchase shares of our common stock outstanding and exercisable at December 31, 2021: SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE Weighted-Average Exercise Prices Outstanding Options Remaining Life In Years Weighted-Average Exercise Price Number Exercisable $ 0.38 2,833,333 2.62 $ 0.38 2,833,333 0.40 3,600,000 2.56 0.40 3,600,000 0.50 9,014,424 3.09 0.50 7,173,190 1.40 1,417,251 5.64 1.40 1,371,145 2.00 6,107,700 3.89 2.00 1,393,473 2.05 1,552,000 4.28 2.05 247,500 3.05 170,000 4.57 3.05 - 3.60 155,000 4.58 3.60 - 4.00 624,340 4.55 4.00 - 5.00 5,803,100 9.77 5.00 34,000 6.75 95,000 4.57 6.75 - 31,372,148 4.60 $ 1.84 16,652,642 |
LOANS PAYABLE, CONVERTIBLE NO_2
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF NOTES PAYABLE | At December 31, 2021, notes payable consist of the following amounts: SCHEDULE OF NOTES PAYABLE December 31, 2021 Total notes payable 5,018,788 4.22 March 30, 2026 $ 607,915 4.22 March 30, 2026 437,178 4.81 April 10, 2028 148,665 4.81 April 10, 2028 168,308 4.20 June 3, 2024 33,418 4.20 March 6, 2026 998,759 3.48 May 15, 2023 129,692 4.88 August 8, 2024 179,591 3.50 May 26, 2021 5,817 3.50 December 1, 2023 58,805 4.69 April 15, 2024 206,993 6.48 February 17, 2022 191,792 3.50 April 15, 2024 182,088 7.14 December 3, 2029 557,445 7.14 December 3, 2029 99,574 7.14 December 3, 2029 869,179 7.14 December 3, 2029 143,569 Total notes payable 5,018,788 Less current portion (213,199 ) Long term notes payable $ 4,805,589 |
SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE | Future minimum payments under the above notes payable following the year ended December 31, 2021, are as follows: SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE December 31, 2021 2022 $ 2,972,754 2023 1,023,084 2024 835,606 2025 708,973 2026 263,945 Thereafter 1,193,138 Total future minimum payments 6,997,500 Les: discount - Loans payable 6,997,500 Less: current (1,713,199 ) Total future minimum payments $ 5,284,301 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION | The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Year Ended December 31, 2021 Year Ended December 31, 2020 Lease cost Operating lease cost (cost resulting from lease payments) $ 130,289 $ 6,362 Short term lease cost 59,306 36,983 Net lease cost $ 189,595 $ 43,345 Operating lease – operating cash flows (fixed payments) $ 130,289 $ 6,362 Operating lease – operating cash flows (liability reduction) $ 118,252 $ 5,712 Non-current leases – right of use assets $ 277,578 $ 13,426 Current liabilities – operating lease liabilities $ 196,472 $ 8,989 Non-current liabilities – operating lease liabilities $ 88,040 $ 4,693 |
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES | Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2021, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES December 31, 2021 Fiscal Year Operating Leases 2022 $ 207,995 2023 88,938 Total future minimum lease payments 296,933 Amount representing interest (12,421 ) Present value of net future minimum lease payments $ 284,512 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF DEFERRED TAX ASSETS, LIABILITIES AND VALUATION ALLOWANCE | Our net deferred tax assets, liabilities and valuation allowance as of December 31, 2021 and 2020 are summarized as follows: SCHEDULE OF DEFERRED TAX ASSETS, LIABILITIES AND VALUATION ALLOWANCE Year Ended December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 1,035,400 $ 765,000 Stock compensation expense 2,791,900 703,500 Accounts payable and accrued expenses 657,700 30,600 Goodwill impairment 5,587,000 - Depreciation 391,900 - Amortization 37,900 25,900 Allowance for doubtful accounts 19,700 7,800 Total deferred tax assets 10,521,500 1,532,800 Valuation allowance (10,521,500 ) (1,341,300 ) Deferred tax assets after valuation allowance $ - $ 191,500 Deferred tax liabilities: Accounts receivable $ - $ (156,400 ) Prepaid expenses - (35,000 ) Total deferred tax liabilities - (191,500 ) Net deferred tax assets $ - $ 100 |
SCHEDULE OF RECONCILIATION OF THE STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT | A reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2021 and 2020 is as follows: SCHEDULE OF RECONCILIATION OF THE STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT 2021 2020 Federal statutory blended income tax rates (21 )% (21 )% State statutory income tax rate, net of federal benefit (4 ) (4 ) Change in valuation allowance 25 25 Effective tax rate - % - % |
CONCENTRATION OF CREDIT RISK (T
CONCENTRATION OF CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR | SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR Revenue One client accounted for 20 Client A 20 % Two clients accounted for 59 Client A 44 % Client B 15 % Accounts Receivable There were no Two clients accounted for 41 Client A 25 % Client B 16 % Vendors Two vendors accounted for 48 Vendor A 32 % Vendor B 16 % Two vendors accounted for 32 Vendor A 20 % Vendor B 12 % |
NATURE OF THE ORGANIZATION AN_2
NATURE OF THE ORGANIZATION AND BUSINESS (Details Narrative) - shares | Oct. 02, 2019 | Oct. 01, 2019 | Apr. 12, 2019 |
Tala Tek LLC [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Conversion of stock | 0.00001 | 6,200,000 | |
VCAB Six Corporation [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of common stock issued in connection with merger as full settlement of claims | 2,000,000 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | ||
Public | $ 3,434,478 | $ 3,395,234 |
Private | 11,278,956 | 3,691,189 |
Not-for-profit | 429,125 | 154,405 |
Revenue | 15,142,559 | 7,240,828 |
Compliance | 4,234,839 | 3,446,157 |
Secured managed services | 6,990,306 | 1,340,468 |
SOC managed services | 375,644 | 496,050 |
vCISO | 196,930 | 76,426 |
Technical assessments | 2,641,171 | 801,055 |
Incident response and forensics | 523,080 | 750,069 |
Training | 149,529 | 97,706 |
Other cybersecurity services | 31,060 | 232,897 |
Revenue | 15,142,559 | 7,240,828 |
Security Managed Services [Member] | ||
Product Information [Line Items] | ||
Public | 3,389,899 | 3,390,166 |
Private | 8,052,315 | 1,823,530 |
Not-for-profit | 355,505 | 145,405 |
Revenue | 11,797,719 | 5,359,101 |
Compliance | 4,234,839 | 3,446,157 |
Secured managed services | 6,990,306 | 1,340,468 |
SOC managed services | 375,644 | 496,050 |
vCISO | 196,930 | 76,426 |
Technical assessments | ||
Incident response and forensics | ||
Training | ||
Other cybersecurity services | ||
Revenue | 11,797,719 | 5,359,101 |
Professional Services [Member] | ||
Product Information [Line Items] | ||
Public | 44,579 | 5,068 |
Private | 3,226,641 | 1,867,659 |
Not-for-profit | 73,620 | 9,000 |
Revenue | 3,344,840 | 1,881,727 |
Compliance | ||
Secured managed services | ||
SOC managed services | ||
vCISO | ||
Technical assessments | 2,641,171 | 801,055 |
Incident response and forensics | 523,080 | 750,069 |
Training | 149,529 | 97,706 |
Other cybersecurity services | 31,060 | 232,897 |
Revenue | $ 3,344,840 | $ 1,881,727 |
SUMMARY OF SECURITIES EXCLUDED
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 31,672,148 | 26,073,700 |
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 | 31,372,148 | 24,573,700 |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 300,000 | 1,500,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Accounts Receivable | $ 77,811 | $ 40,000 |
Impairment of goodwill | 22,078,064 | |
Marketing and Advertising Expense | $ 435,016 | $ 150,236 |
Operating lease, weighted average remaining lease term | 1 year 6 months 3 days | |
Office Building [Member] | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Operating lease, weighted average remaining lease term | 1 year 5 months 19 days | |
Vehicle [Member] | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Operating lease, weighted average remaining lease term | 6 months |
SCHEDULE OF FAIR VALUES OF ASSE
SCHEDULE OF FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) | Dec. 31, 2021 | Dec. 01, 2021 | Oct. 08, 2021 | Oct. 01, 2021 | Jul. 26, 2021 | Dec. 31, 2020 | Dec. 16, 2020 | Aug. 01, 2020 | May 25, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||||||||||
Inventory | |||||||||||
Prepaid expenses | |||||||||||
Other receivables | |||||||||||
Property and equipment | |||||||||||
Intangible assets | $ 6,863,600 | $ 2,221,900 | |||||||||
Accounts payable | |||||||||||
Member distributions | |||||||||||
SBA loan payoff | |||||||||||
Net liabilities acquired | |||||||||||
Goodwill (a) | 16,792,535 | 4,101,369 | $ 922,579 | ||||||||
Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 1,528,000 | 521,000 | |||||||||
Customer Base [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 1,650,000 | 370,000 | |||||||||
Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 675,500 | $ 236,400 | |||||||||
Techville [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | 1,356,908 | ||||||||||
Cash | 65,037 | ||||||||||
Accounts receivable | 80,289 | ||||||||||
Other assets | 58,693 | ||||||||||
Total tangible assets | 204,019 | ||||||||||
Total intangible assets | 751,100 | ||||||||||
Line of credit | 33,705 | ||||||||||
Accrued expenses | 117,742 | ||||||||||
Long-term debt | 50,896 | ||||||||||
Other | 1,128 | ||||||||||
Total assumed liabilities | 203,471 | ||||||||||
Net assets acquired | 751,648 | ||||||||||
Goodwill (a) | [1] | 605,260 | |||||||||
Techville [Member] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 330,300 | ||||||||||
Techville [Member] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 224,000 | ||||||||||
Techville [Member] | Customer Base [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 164,000 | ||||||||||
Techville [Member] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 32,800 | ||||||||||
Clear Skies Security L L C [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 932,000 | ||||||||||
Cash | 189,143 | ||||||||||
Accounts receivable | 189,150 | ||||||||||
Total tangible assets | 378,293 | ||||||||||
Total intangible assets | 370,300 | ||||||||||
Accounts payable | 21,340 | ||||||||||
Long-term debt | 134,200 | ||||||||||
Member distributions | 297,451 | ||||||||||
Total assumed liabilities | 452,991 | ||||||||||
Net assets acquired | 295,602 | ||||||||||
Goodwill (a) | [2] | 636,398 | |||||||||
Clear Skies Security L L C [Member] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 175,000 | ||||||||||
Clear Skies Security L L C [Member] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 175,000 | ||||||||||
Clear Skies Security L L C [Member] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 20,300 | ||||||||||
Alpine security [LLCMember] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 1,845,000 | ||||||||||
Cash | 31,366 | ||||||||||
Accounts receivable | 98,168 | ||||||||||
Property and equipment | 24,503 | ||||||||||
Total tangible assets | 154,037 | ||||||||||
Total intangible assets | 230,000 | ||||||||||
Accrued expenses | 95,118 | ||||||||||
Long-term debt | 151,051 | ||||||||||
Total assumed liabilities | 246,169 | ||||||||||
Net assets acquired | 137,868 | ||||||||||
Goodwill (a) | [3] | 1,707,132 | |||||||||
Alpine security [LLCMember] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 117,300 | ||||||||||
Alpine security [LLCMember] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 93,000 | ||||||||||
Alpine security [LLCMember] | Customer Base [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 14,000 | ||||||||||
Alpine security [LLCMember] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 5,700 | ||||||||||
Catapult Acquisition Corporation [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 20,465,150 | ||||||||||
Cash | 270,397 | ||||||||||
Accounts receivable | 649,810 | ||||||||||
Prepaid expenses | 26,282 | ||||||||||
Property and equipment | 24,862 | ||||||||||
Other assets | 10,780 | ||||||||||
Total tangible assets | 982,131 | ||||||||||
Total intangible assets | 956,900 | ||||||||||
Accounts payable | 351,190 | ||||||||||
Accrued expenses | 192,034 | ||||||||||
Long-term debt | 549,507 | ||||||||||
SBA loan payoff | 1,056,960 | ||||||||||
Total assumed liabilities | 2,149,691 | ||||||||||
Net liabilities acquired | 210,660 | ||||||||||
Goodwill (a) | [4] | 20,675,810 | |||||||||
Catapult Acquisition Corporation [Member] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 542,800 | ||||||||||
Catapult Acquisition Corporation [Member] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 355,000 | ||||||||||
Catapult Acquisition Corporation [Member] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 59,100 | ||||||||||
Atlantic Technology Systems [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 1,260,000 | ||||||||||
Cash | 30,612 | ||||||||||
Accounts receivable | 20,778 | ||||||||||
Inventory | 15,425 | ||||||||||
Prepaid expenses | 4,311 | ||||||||||
Property and equipment | 54,023 | ||||||||||
Total tangible assets | 125,149 | ||||||||||
Total intangible assets | 163,300 | ||||||||||
Accounts payable | 4,314 | ||||||||||
Other | 3,212 | ||||||||||
Total assumed liabilities | 7,526 | ||||||||||
Net assets acquired | 280,923 | ||||||||||
Goodwill (a) | [5] | 979,077 | |||||||||
Atlantic Technology Systems [Member] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 115,500 | ||||||||||
Atlantic Technology Systems [Member] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 29,000 | ||||||||||
Atlantic Technology Systems [Member] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 18,800 | ||||||||||
Red 74 LLC Acquisition [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 2,158,000 | ||||||||||
Cash | 115,855 | ||||||||||
Accounts receivable | 115,612 | ||||||||||
Property and equipment | 1,539 | ||||||||||
Other assets | 81,844 | ||||||||||
Total tangible assets | 314,850 | ||||||||||
Total intangible assets | 720,400 | ||||||||||
Accounts payable | 36,119 | ||||||||||
Other | 12,249 | ||||||||||
Total assumed liabilities | 48,368 | ||||||||||
Net assets acquired | 986,882 | ||||||||||
Goodwill (a) | [6] | 1,171,118 | |||||||||
Red 74 LLC Acquisition [Member] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 328,900 | ||||||||||
Red 74 LLC Acquisition [Member] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 70,000 | ||||||||||
Red 74 LLC Acquisition [Member] | Customer Base [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 279,000 | ||||||||||
Red 74 LLC Acquisition [Member] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 42,500 | ||||||||||
Arkavia Acquisition [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 14,570,000 | ||||||||||
Cash | 1,753,193 | ||||||||||
Accounts receivable | 744,400 | ||||||||||
Inventory | 1,210,442 | ||||||||||
Other receivables | 1,067,477 | ||||||||||
Property and equipment | 1,424,760 | ||||||||||
Total tangible assets | 6,666,063 | ||||||||||
Total intangible assets | 2,571,100 | ||||||||||
Accounts payable | 1,125,396 | ||||||||||
Long-term debt | 5,156,228 | ||||||||||
Other | 98,268 | ||||||||||
Total assumed liabilities | 6,840,388 | ||||||||||
Net assets acquired | 2,396,775 | ||||||||||
Goodwill (a) | [7] | 12,173,225 | |||||||||
Prepaids | 465,791 | ||||||||||
Accrued liabilities | 460,496 | ||||||||||
Arkavia Acquisition [Member] | Trade Names [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 811,100 | ||||||||||
Arkavia Acquisition [Member] | Intellectual Property/Technology [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 460,000 | ||||||||||
Arkavia Acquisition [Member] | Customer Base [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 987,000 | ||||||||||
Arkavia Acquisition [Member] | Noncompete Agreements [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 313,000 | ||||||||||
[1] | Goodwill is not deductible for tax purposes. | ||||||||||
[2] | Goodwill is not deductible for tax purposes. | ||||||||||
[3] | Goodwill is not deductible for tax purposes. | ||||||||||
[4] | Goodwill is not deductible for tax purposes. | ||||||||||
[5] | Goodwill is the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets. Goodwill is not deductible for tax purposes. | ||||||||||
[6] | Goodwill is not deductible for tax purposes. | ||||||||||
[7] | Goodwill is not deductible for tax purposes. |
SCHEDULE OF UNAUDITED PRO FORMA
SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||
Net revenue | $ 28,441,648 | $ 26,949,996 |
Net loss | $ (30,723,427) | $ (23,040,252) |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | Dec. 01, 2021 | Oct. 08, 2021 | Oct. 01, 2021 | Jul. 26, 2021 | Dec. 16, 2020 | Aug. 01, 2020 | May 25, 2020 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||||
Aggregate Acquisition of shares | $ 932,000 | |||||||
Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 2,330,000 | |||||||
Aggregate Acquisition of shares | $ 23 | |||||||
Catapult Acquisition Corporation [Member] | VelocIT acquisition [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 2,566,778 | |||||||
Holdback common stock shares | 256,678 | |||||||
Purchase and aggregate of common stock shares | 1,542,251 | |||||||
Fair value of common stock | $ 6,861,203 | |||||||
Red 74 LLC Acquisition [Member] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 50,000 | |||||||
Aggregate Acquisition of shares | $ 340,000 | |||||||
Common stock hold back percentage | 10.00% | |||||||
Arkavia Acquisition [Member] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 2,914,000 | |||||||
Stock Purchase Agreement [Member] | Techville [Member] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 3,392,271 | |||||||
Stock Purchase Agreement [Member] | Clear Skies Security L L C [Member] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 2,330,000 | |||||||
Stock Purchase Agreement [Member] | Alpine security [LLCMember] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 900,000 | |||||||
Stock Purchase Agreement [Member] | Atlantic Technology Systems Inc [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisitions stock exchanged | 200,000 | |||||||
Aggregate Acquisition of shares | $ 75,000 | |||||||
[custom:AdditionalCommonStockShares] | 100,000 | |||||||
[custom:AdditionalThresholdEarnings] | $ 150,000 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 453,498 | $ 124,874 |
Prepaid taxes | 231,014 | 3,524 |
Prepaid insurance | 46,751 | 13,746 |
Deferred interest | 229,702 | |
Total prepaid expenses and other current assets | $ 960,965 | $ 142,144 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,958,512 | $ 95,103 |
Less: accumulated depreciation | (102,466) | (14,473) |
Property and equipment, net | 1,856,046 | 80,630 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 495,235 | |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,047,020 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 109,626 | |
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 | 33,358 | 6,224 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 210,221 | $ 10,092 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 87,993 | $ 13,715 |
SCHEDULE OF CHANGES IN GOODWILL
SCHEDULE OF CHANGES IN GOODWILL (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Balance beginning | $ 4,101,369 | $ 922,579 | |
Acquisition of goodwill | 34,999,230 | 3,178,790 | |
Impairment | (22,078,064) | ||
Reclassification based on valuation report | [1] | (230,000) | |
Ending balance | $ 16,792,535 | $ 4,101,369 | |
[1] | During the year ended December 31, 2021, we obtained a third-party valuation for the December 16, 2020 acquisition of Alpine. As such, the purchase price allocation disclosed in our Annual Report in Form 10-K for December 31, 2020, filed on March 31, 2021, changed and, therefore, goodwill changed. |
SUMMARY OF IDENTIFIABLE INTANGI
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, gross | $ 6,863,600 | $ 2,221,900 |
Useful life | 10 years 1 month 17 days | |
Less accumulated amortization | $ (323,331) | (116,468) |
Total | $ 6,540,269 | 2,105,432 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | Indefinite | |
Identifiable intangible assets, gross | $ 3,010,100 | 1,094,500 |
Customer Base [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, gross | $ 1,650,000 | 370,000 |
Useful life | 15 years | |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, gross | $ 675,500 | 236,400 |
Useful life | 2 years | |
Intellectual Property/Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, gross | $ 1,528,000 | $ 521,000 |
Useful life | 10 years |
SCHEDULE OF ACCUMULATED AMORTIZ
SCHEDULE OF ACCUMULATED AMORTIZATION OF INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 206,862 | $ 100,821 |
Ending balance | 3,530,169 | |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Begining balance | ||
Amortization expense | ||
Ending balance | ||
Customer Base [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Begining balance | 23,544 | 3,433 |
Amortization expense | 33,717 | 20,111 |
Ending balance | 57,261 | 23,544 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Begining balance | 58,775 | 9,165 |
Amortization expense | 95,878 | 49,610 |
Ending balance | 154,653 | 58,775 |
Intellectual Property/Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Begining balance | 34,150 | 3,050 |
Amortization expense | 77,267 | 31,100 |
Ending balance | 111,417 | 34,150 |
Accumulated Amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Begining balance | 116,469 | 15,648 |
Amortization expense | 206,862 | 100,821 |
Ending balance | $ 323,331 | $ 116,469 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 532,610 |
2023 | 486,339 |
2024 | 290,295 |
2025 | 262,800 |
2026 | 262,800 |
Thereafter | 1,695,325 |
Future Amortization Expense | $ 3,530,169 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment | $ 22,078,064 | |
Finite-lived intangible asset, useful life | 10 years 1 month 17 days | |
Amortization of intangible assets | $ 206,862 | $ 100,821 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 1,700,260 | $ 328,368 |
Accrued payroll | 482,588 | 39,670 |
Accrued expenses | 513,718 | 417,832 |
Accrued interest – related party | 12,500 | 23,934 |
Total accounts payable and accrued expenses | $ 2,709,066 | $ 809,804 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 01, 2021 | Oct. 27, 2021 | Jan. 16, 2021 | Jan. 02, 2021 | Dec. 23, 2020 | Dec. 31, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||||||
Note payable | $ 5,018,788 | |||||||
Number of shares converted, shares | $ 3,000,000 | |||||||
Stock issued during the period convertible stock, shares | 1,500,000 | |||||||
Stock payable current | $ 46,000 | |||||||
Accrued interest | 12,500 | |||||||
Interest expense | 307,363 | 17,151 | ||||||
Note Receivable - Related Party | 1,090,903 | |||||||
Neil Stinchcombe [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount | 1,500,000 | |||||||
Debt maturity date | Jan. 27, 2022 | |||||||
Interest rate | 5.00% | |||||||
Conversion price | $ 5 | |||||||
Stock issued during the period convertible stock, shares | 1,500,000 | |||||||
Accrued interest | 12,500 | |||||||
Interest expense | $ 12,500 | |||||||
Unsecured Debt [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount | $ 3,000,000 | |||||||
Debt maturity date | Dec. 31, 2021 | |||||||
Interest rate | 6.00% | |||||||
Conversion price | $ 2 | |||||||
Convertible notes payable | 3,000,000 | |||||||
Unsecured Debt [Member] | Hensleyand Company [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Conversion price | $ 2 | |||||||
Number of shares converted, shares | $ 3,000,000 | |||||||
Stock issued during the period convertible stock, shares | 1,500,000 | |||||||
Jemmett Enterprises, LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount | $ 200,000 | |||||||
Debt maturity date | Jun. 30, 2020 | |||||||
Interest rate | 6.00% | |||||||
Note payable | $ 0 | 59,787 | ||||||
Accrued interest related party | 0 | 23,934 | ||||||
Interest expense | $ 4,595 | 12,812 | ||||||
Fridays LLP [Member] | Two Year Consulting Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock issued during the period restricted common stock, shares | 432,000 | 312,000 | ||||||
Stock issued during the period restricted common stock | $ 2,311,200 | $ 639,600 | ||||||
Deemed vested and earned share percentage | 25.00% | |||||||
Restricted stock issued | 52,000 | |||||||
Fridays LLP [Member] | Two Year Consulting Agreement [Member] | Restricted Stock [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Restricted stock issued | 108,000 | |||||||
Fridays LLP [Member] | Eskenzi [Member] | Consulting Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock issued during the period restricted common stock, shares | 120,000 | |||||||
Stock issued during the period restricted common stock | $ 48,000 | |||||||
Stock payable current | $ 46,000 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Proceeds from sale of common stock | $ 3,250,000 | $ 1,131,009 |
Stock issued for conversion of debt, shares | 1,500,000 | |
Stock issued for conversion of debt | $ 3,000,000 | |
Investors [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Common stock shares issued | 1,625,000 | |
Fair value per share | $ 2 | |
Proceeds from sale of common stock | $ 3,250,000 | $ 1,131,009 |
Consultant [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value per share | $ 2.05 | |
Common stock shares issued | $ 392,900 | |
Investor [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Common stock shares issued | 350,000 | |
Fair value per share | $ 0.40 | |
Investor One [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Common stock shares issued | 495,200 | |
Fair value per share | $ 2 |
SCHEDULE OF BLACK-SCHOLES STOCK
SCHEDULE OF BLACK-SCHOLES STOCK OPTIONS GRANTED (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Minimum [Member] | ||
Risk free interest rate | 0.42% | 0.21% |
Contractual term (years) | 5 years | 3 years |
Expected volatility | 73.43% | 71.51% |
Maximum [Member] | ||
Risk free interest rate | 1.34% | 1.67% |
Contractual term (years) | 10 years | 10 years |
Expected volatility | 85.22% | 74.28% |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | ||
Shares, Outstanding beginning | 24,573,700 | 17,245,000 |
Weighted Average Exercise Price Outstanding, beginning | $ 0.86 | $ 0.46 |
Shares, Granted | 11,091,691 | 10,593,700 |
Weighted Average Exercise Price, Granted | $ 3.60 | $ 1.43 |
Shares, Exercised | (100,000) | |
Weighted Average Exercise Price, Exercised | $ 0.50 | |
Shares, Expired or cancelled | (4,193,243) | (3,265,000) |
Weighted Average Exercise Price, Expired or cancelled | $ 0.83 | $ 0.53 |
Shares, Outstanding ending | 31,372,148 | 24,573,700 |
Weighted Average Exercise Price Outstanding, ending | $ 1.84 | $ 0.86 |
SUMMARY OF OPTIONS TO PURCHASE
SUMMARY OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options | 31,372,148 |
Weighted-Average Remaining Life In Years | 4 years 7 months 6 days |
Weighted-Average Exercise Price | $ / shares | $ 1.84 |
Number Exercisable | 16,652,642 |
Exercise Price Range One [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 0.38 |
Outstanding Options | 2,833,333 |
Weighted-Average Remaining Life In Years | 2 years 7 months 13 days |
Weighted-Average Exercise Price | $ / shares | $ 0.38 |
Number Exercisable | 2,833,333 |
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 | 2 years 6 months 21 days |
Weighted-Average Exercise Price | $ / shares | $ 0.40 |
Number Exercisable | 3,600,000 |
Exercise Price RangeThree [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 0.50 |
Outstanding Options | 9,014,424 |
Weighted-Average Remaining Life In Years | 3 years 1 month 2 days |
Weighted-Average Exercise Price | $ / shares | $ 0.50 |
Number Exercisable | 7,173,190 |
Exercise Price Range Four [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 1.40 |
Outstanding Options | 1,417,251 |
Weighted-Average Remaining Life In Years | 5 years 7 months 20 days |
Weighted-Average Exercise Price | $ / shares | $ 1.40 |
Number Exercisable | 1,371,145 |
Exercise Price Range Five [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 2 |
Outstanding Options | 6,107,700 |
Weighted-Average Remaining Life In Years | 3 years 10 months 20 days |
Weighted-Average Exercise Price | $ / shares | $ 2 |
Number Exercisable | 1,393,473 |
Exercise Price Range Six [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 2.05 |
Outstanding Options | 1,552,000 |
Weighted-Average Remaining Life In Years | 4 years 3 months 10 days |
Weighted-Average Exercise Price | $ / shares | $ 2.05 |
Number Exercisable | 247,500 |
Exercise Price Range Seven [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 3.05 |
Outstanding Options | 170,000 |
Weighted-Average Remaining Life In Years | 4 years 6 months 25 days |
Weighted-Average Exercise Price | $ / shares | $ 3.05 |
Number Exercisable | |
Exercise Price Range Eight [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 3.60 |
Outstanding Options | 155,000 |
Weighted-Average Remaining Life In Years | 4 years 6 months 29 days |
Weighted-Average Exercise Price | $ / shares | $ 3.60 |
Number Exercisable | |
Exercise Price Range Nine [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 4 |
Outstanding Options | 624,340 |
Weighted-Average Remaining Life In Years | 4 years 6 months 18 days |
Weighted-Average Exercise Price | $ / shares | $ 4 |
Number Exercisable | |
Exercise Price Range Ten [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 5 |
Outstanding Options | 5,803,100 |
Weighted-Average Remaining Life In Years | 9 years 9 months 7 days |
Weighted-Average Exercise Price | $ / shares | $ 5 |
Number Exercisable | 34,000 |
Exercise Price Range Eleven [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise prices | $ / shares | $ 6.75 |
Outstanding Options | 95,000 |
Weighted-Average Remaining Life In Years | 4 years 6 months 25 days |
Weighted-Average Exercise Price | $ / shares | $ 6.75 |
Number Exercisable |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Jun. 06, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock options granted | 11,091,691 | 10,593,700 | |
Share based compensation expenses | $ 7,802,096 | $ 1,533,777 | |
2019 Equity Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock options granted | 11,091,691 | 10,593,700 | |
Weighted average grant date fair value of options issued | $ 12,472,505 | $ 2,030,144 | |
Weighted average grant date fair value of options vested | 2,136,509 | 776,925 | |
Share based compensation expenses | 7,802,096 | 1,533,777 | |
Employee Benefits and Share-based Compensation | 2,132,554 | $ 5,669,542 | |
Unrecognized share based compensation | $ 30,481,049 | ||
Unrecognized share based compensation, recognition period | 2 years 3 months 3 days | ||
Aggregate instrinsic value, outstanding | $ 96,269,656 | ||
Aggregate instrinsic value, exercisable | $ 71,776,022 | ||
Estimated fair value of common stock | $ 5 | ||
2019 Equity Incentive Plan [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common shares issued | 25,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Director [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Voting rights | 5% of any class of its voting securities | |
Common Stock [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Stock issued for cash, shares | 1,625,000 | 845,200 |
Maxim Group LLC [Member] | Avisory Agreement [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Litigation Settlement, Expense | $ 470,000 | |
Share Price | $ 5 | |
Maxim Group LLC [Member] | Avisory Agreement [Member] | Common Stock [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Stock issued for cash, shares | 400,000 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) | Dec. 31, 2021USD ($) |
Short-term Debt [Line Items] | |
Notes payable | $ 5,018,788 |
Notes payable current | (213,199) |
Notes payable noncurrent | 4,805,589 |
Notes Payable One [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 607,915 |
Notes Payable Two [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 437,178 |
Notes Payable Three [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 148,665 |
Notes Payable Four [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 168,308 |
Notes Payable Five [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 33,418 |
Notes Payable Six [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 998,759 |
Notes Payable Seven [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 129,692 |
Notes Payable Eight [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 179,591 |
Notes Payable Nine [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 5,817 |
Notes Payable Ten [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 58,805 |
Notes Payable Eleven [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 206,993 |
Notes Payable Twelve [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 191,792 |
Notes Payable Threeteen [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 182,088 |
Notes Payable Fourteen [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 557,445 |
Notes Payable Fifteen [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 99,574 |
Notes Payable Sixteen [Member] | |
Short-term Debt [Line Items] | |
Notes payable | 869,179 |
Notes Payable Seventeen [Member] | |
Short-term Debt [Line Items] | |
Notes payable | $ 143,569 |
SCHEDULE OF NOTES PAYABLE (De_2
SCHEDULE OF NOTES PAYABLE (Details) (Paranthetical) | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable One [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.22% |
Debt instrument maturity date | Mar. 30, 2026 |
Notes Payable Two [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.22% |
Debt instrument maturity date | Mar. 30, 2026 |
Notes Payable Three [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.81% |
Debt instrument maturity date | Apr. 10, 2028 |
Notes Payable Four [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.81% |
Debt instrument maturity date | Apr. 10, 2028 |
Notes Payable Five [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.20% |
Debt instrument maturity date | Jun. 3, 2024 |
Notes Payable Six [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.20% |
Debt instrument maturity date | Mar. 6, 2026 |
Notes Payable Seven [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 3.48% |
Debt instrument maturity date | May 15, 2023 |
Notes Payable Eight [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.88% |
Debt instrument maturity date | Aug. 8, 2024 |
Notes Payable Nine [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 3.50% |
Debt instrument maturity date | May 26, 2021 |
Notes Payable Ten [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 3.50% |
Debt instrument maturity date | Dec. 1, 2023 |
Notes Payable Eleven [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 4.69% |
Debt instrument maturity date | Apr. 15, 2024 |
Notes Payable Twelve [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 6.48% |
Debt instrument maturity date | Feb. 17, 2022 |
Notes Payable Threeteen [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 3.50% |
Debt instrument maturity date | Apr. 15, 2024 |
Notes Payable Fourteen [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 7.14% |
Debt instrument maturity date | Dec. 3, 2029 |
Notes Payable Fifteen [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 7.14% |
Debt instrument maturity date | Dec. 3, 2029 |
Notes Payable Sixteen [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 7.14% |
Debt instrument maturity date | Dec. 3, 2029 |
Notes Payable Seventeen [Member] | |
Short-term Debt [Line Items] | |
Debt instrument interest rate stated percentage | 7.14% |
Debt instrument maturity date | Dec. 3, 2029 |
SCHEDULE OF FUTURE PAYMENTS UND
SCHEDULE OF FUTURE PAYMENTS UNDER NOTES PAYABLE (Details) | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 2,972,754 |
2023 | 1,023,084 |
2024 | 835,606 |
2025 | 708,973 |
2026 | 263,945 |
Thereafter | 1,193,138 |
Total future minimum payments | 6,997,500 |
Les: discount | |
Loans payable | 6,997,500 |
Less: current | (1,713,199) |
Total future minimum payments | $ 5,284,301 |
LOANS PAYABLE, CONVERTIBLE NO_3
LOANS PAYABLE, CONVERTIBLE NOTE PAYABLE AND LINES OF CREDIT (Details Narrative) - USD ($) | Mar. 10, 2022 | Oct. 27, 2021 | Dec. 23, 2020 | Aug. 21, 2020 | Jun. 22, 2020 | May 08, 2020 | Apr. 18, 2020 | Apr. 17, 2020 | Jul. 29, 2019 | Apr. 29, 2019 | Aug. 02, 2017 | Jul. 09, 2016 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 5,018,788 | |||||||||||||
Proceeds from Lines of Credit | 221,346 | $ 63,000 | ||||||||||||
Repayments of Lines of Credit | 224,346 | 93,705 | ||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | $ 75,000 | |||||||||||||
Stock issued for conversion of debt | $ 3,000,000 | |||||||||||||
Stock issued for conversion of debt, shares | 1,500,000 | |||||||||||||
Interest payable current and noncurrent | $ 12,500 | |||||||||||||
Interest and debt expense | $ 12,500 | |||||||||||||
Investors [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Shares issued price per share | $ 2 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock issued for conversion of debt | $ 15 | |||||||||||||
Stock issued for conversion of debt, shares | 1,500,000 | |||||||||||||
VelocIT acquisition [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repaid loan | $ 1,056,960 | |||||||||||||
Arkavia [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Cash | 137,411 | |||||||||||||
Convertible Note Payable [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument interest rate stated percentage | 5.00% | 6.00% | ||||||||||||
Debt instrument, maturity date | Jan. 27, 2022 | Dec. 31, 2021 | ||||||||||||
Debt instrument face amount | $ 1,500,000 | $ 3,000,000 | 1,500,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.50% | |||||||||||||
Debt instrument convertible conversion price1 | $ 5 | $ 2 | ||||||||||||
Share Price | $ 2.05 | |||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 3,075,000 | |||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 73,391 | 1,609 | ||||||||||||
Interest Expense, Debt | 182,500 | $ 4,000 | ||||||||||||
Convertible Note Payable [Member] | Subsequent Event [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, maturity date | Oct. 27, 2022 | |||||||||||||
Wintrust Bank [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, maturity date | Aug. 24, 2021 | |||||||||||||
Wintrust Bank [Member] | Maximum [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 75,000 | |||||||||||||
Prime Rate [Member] | Wintrust Bank [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument interest rate stated percentage | 1.75% | |||||||||||||
Floor Rate [Member] | Wintrust Bank [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument interest rate stated percentage | 6.00% | 6.00% | ||||||||||||
SunTrust Bank[Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Secured line of credit | $ 500,000 | |||||||||||||
SunTrust Bank[Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit interest rate percentage | 2.25% | |||||||||||||
Technologyville, Inc., [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Secured line of credit | 0 | $ 3,000 | ||||||||||||
Debt instrument interest rate stated percentage | 5.77% | |||||||||||||
Debt instrument, maturity date | May 12, 2025 | |||||||||||||
Proceeds from Lines of Credit | 220,776 | |||||||||||||
Repayments of Lines of Credit | 223,766 | |||||||||||||
Debt instrument face amount | $ 59,905 | 32,474 | 45,881 | |||||||||||
Debt cash payment | 13,629 | 5,567 | ||||||||||||
Debt Instrument, Periodic Payment, Principal | 13,407 | 5,010 | ||||||||||||
Debt Instrument, Periodic Payment, Interest | 222 | 557 | ||||||||||||
Technologyville, Inc., [Member] | U.S. Small Business Administration's Payroll Protection Program [Member] | ||||||||||||||
Debt Instrument [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] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 530,000 | |||||||||||||
Debt instrument interest rate stated percentage | 1.00% | 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 One [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 134,200 | |||||||||||||
Debt instrument, maturity date | May 8, 2022 | |||||||||||||
Loans payable, outstanding | 134,200 | 134,200 | ||||||||||||
Clear Skies Security L L C [Member] | U.S. Small Business Administration's Payroll Protection Program Two [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Loans payable, outstanding | 137,000 | 137,000 | ||||||||||||
Alpine security [LLCMember] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 137,000 | |||||||||||||
Debt instrument interest rate stated percentage | 1.00% | |||||||||||||
Debt instrument, maturity date | Apr. 8, 2022 | |||||||||||||
Alpine security [LLCMember] | Future Receipts Sale Agreement [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 70,000 | |||||||||||||
Debt instrument face amount | 10,350 | $ 19,840 | ||||||||||||
Proceeds from notes payable | 38,755 | |||||||||||||
Payments to note payable | 50,000 | |||||||||||||
Alpine security [LLCMember] | Future Receipts Sale Agreement [Member] | August 18, 2020 through August 21, 2020 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt cash payment | 575 | |||||||||||||
Alpine security [LLCMember] | Future Receipts Sale Agreement [Member] | August 25, 2020 through March 10, 2021 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt cash payment | 500 | |||||||||||||
Alpine security [LLCMember] | Future Receipts Sale Agreement [Member] | For March 12, 2021 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt cash payment | $ 200 | |||||||||||||
Catapult Acquistion Corp [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable | $ 600,000 | |||||||||||||
Debt instrument interest rate stated percentage | 5.00% | |||||||||||||
Debt instrument, maturity date | Jul. 31, 2023 | |||||||||||||
Catapult Acquisition Corp [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 150,000 | |||||||||||||
Loans payable, outstanding | $ 446,239 | |||||||||||||
Debt instrument increase accrued interest | $ 600,000 |
SCHEDULE OF LEASE COST AND OTHE
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | ||
Operating lease cost (cost resulting from lease payments) | $ 130,289 | $ 6,362 |
Short term lease cost | 59,306 | 36,983 |
Net lease cost | 189,595 | 43,345 |
Operating lease – operating cash flows (fixed payments) | 130,289 | 6,362 |
Operating lease – operating cash flows (liability reduction) | 118,252 | 5,712 |
Non-current leases – right of use assets | 277,578 | 13,426 |
Current liabilities – operating lease liabilities | 196,472 | 8,989 |
Non-current liabilities – operating lease liabilities | $ 88,040 | $ 4,693 |
SCHEDULE OF FUTURE MINIMUM UNDE
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES (Details) | Dec. 31, 2021USD ($) |
Leases | |
2022 | $ 207,995 |
2023 | 88,938 |
Total future minimum lease payments | 296,933 |
Amount representing interest | (12,421) |
Present value of net future minimum lease payments | $ 284,512 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Operating lease liability current | $ 88,040 | $ 4,693 |
Weighted average incremental borrowing rate | 5.77% | |
Operating lease, weighted average remaining lease term | 1 year 6 months 3 days | |
Offsetting ROU [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Operating lease liability current | $ 387,543 | $ 19,393 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS, LIABILITIES AND VALUATION ALLOWANCE (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 1,035,400 | $ 765,000 |
Stock compensation expense | 2,791,900 | 703,500 |
Accounts payable and accrued expenses | 657,700 | 30,600 |
Goodwill impairment | 5,587,000 | |
Depreciation | 391,900 | |
Amortization | 37,900 | 25,900 |
Allowance for doubtful accounts | 19,700 | 7,800 |
Total deferred tax assets | 10,521,500 | 1,532,800 |
Valuation allowance | (10,521,500) | (1,341,300) |
Deferred tax assets after valuation allowance | 191,500 | |
Accounts receivable | (156,400) | |
Prepaid expenses | (35,000) | |
Total deferred tax liabilities | (191,500) | |
Net deferred tax assets | $ 100 |
SCHEDULE OF RECONCILIATION OF T
SCHEDULE OF RECONCILIATION OF THE STATUTORY FEDERAL INCOME TAX BENEFIT TO ACTUAL TAX BENEFIT (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory blended income tax rates | (21.00%) | (21.00%) |
State statutory income tax rate, net of federal benefit | (4.00%) | (4.00%) |
Change in valuation allowance | 25.00% | 25.00% |
Effective tax rate |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax examination, description | The periods for income tax returns that are subject to examination for these jurisdictions is 2018 through 2021. | |
Net operating loss carry-forwards | $ 5,500,000 | |
Change in valuation allowance | $ 9,180,200 | $ 1,003,500 |
SCHEDULES OF CONCENTRATION OF R
SCHEDULES OF CONCENTRATION OF RISK, BY RISK FACTOR (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Client A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 20.00% | 44.00% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Client B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 15.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Client A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 25.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Client B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 16.00% | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 32.00% | 20.00% |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 16.00% | 12.00% |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
FDIC insured, value | $ 1,119,000 | $ 4,252,000 |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Client [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Clients [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 59.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Clients [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 41.00% | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Vendors [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 48.00% | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Vendor [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 32.00% | |
Maximum [Member] | ||
Concentration Risk [Line Items] | ||
FDIC insured, value | $ 250,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Feb. 15, 2022 | Jan. 31, 2022 | Jan. 19, 2022 | Jan. 13, 2022 | Jan. 05, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | |||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 3.60 | $ 1.43 | |||||
Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Business consideration shares | 2,330,000 | ||||||
Stock issued for cash, shares | 1,625,000 | 845,200 | |||||
Subsequent Event [Member] | Underwriter [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Purchase of warrant | 161,000 | ||||||
Exercise price | $ 5 | ||||||
Subsequent Event [Member] | Two Employee [Member] | Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Repurchased During Period, Shares | 1,000,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | vest at 30% at the one-year anniversary of our uplist to Nasdaq and then linearly for 24 months. | ||||||
Subsequent Event [Member] | President And Chief Operating Officer [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock options forfeited shares | 2,156,250 | ||||||
Subsequent Event [Member] | Public Offering [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock issued for cash, shares | 2,000,000 | ||||||
Share price | $ 5 | ||||||
Proceeds from issuance initial public offering | $ 9,471,000 | ||||||
Discounts and commissions | 721,000 | ||||||
Deferred offering costs | $ 108,000 | ||||||
Subsequent Event [Member] | True Digital Stock Purchase Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Business combination consideration transferred | $ 6,153,000 | ||||||
Business consideration shares | 8,229,000 | ||||||
Subsequent Event [Member] | Settement And Release Agreement [Member] | Maxim [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Cash | $ 470,000 | ||||||
Subsequent Event [Member] | Settement And Release Agreement [Member] | Public Offering [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock issued for cash, shares | 400,000 | ||||||
Share price | $ 5 |