Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 16, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
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, $0.00001 par value | |
Trading Symbol | CISO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 124,704,567 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 3,862,907 | $ 2,725,035 |
Accounts receivable, net of allowances for doubtful accounts of $91,707 and $77,811, respectively | 5,945,709 | 4,840,802 |
Notes receivable, related party | 1,161,718 | 1,090,903 |
Inventory | 735,887 | 189,596 |
Prepaid expenses and other current assets | 2,165,525 | 960,965 |
Contract asset | 218,153 | |
Total Current Assets | 14,089,899 | 9,807,301 |
Property and equipment, net of accumulated depreciation of $256,540 and $102,466, respectively | 3,442,937 | 2,394,424 |
Right of use asset, net | 406,770 | 277,578 |
Intangible assets, net of accumulated amortization of $628,245 and $323,331, respectively | 6,397,492 | 6,540,269 |
Goodwill | 59,274,429 | 16,792,535 |
Other assets | 18,681 | |
Total Assets | 83,630,208 | 35,812,107 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 6,221,551 | 2,709,066 |
Deferred revenue | 1,952,543 | 52,824 |
Settlement liability | 470,000 | |
Lease liability, current portion | 211,752 | 196,472 |
Loans payable, current portion | 212,262 | 213,199 |
Line of credit | 369,829 | |
Convertible note payable, net of debt discount, related party | 1,500,000 | 1,500,000 |
Note payable, related party | 419,472 | |
Total Current Liabilities | 10,887,409 | 5,141,561 |
Long-term Liabilities: | ||
Loans payable, net of current portion | 5,279,424 | 5,284,301 |
Lease liability, net of current portion | 202,918 | 88,040 |
Total Liabilities | 16,369,751 | 10,513,902 |
Commitments and Contingencies | ||
Stockholders’ Equity: | ||
Common stock, $.00001 par value; 250,000,000 shares authorized; 135,458,071 and 125,852,971 shares issued and outstanding on March 31, 2022 and December 31, 2021, respectively | 1,354 | 1,258 |
Additional paid-in capital | 118,311,695 | 69,309,369 |
Accumulated translation adjustment | 902,441 | |
Accumulated deficit | (51,955,033) | (44,012,422) |
Total Stockholders’ Equity | 67,260,457 | 25,298,205 |
Total Liabilities and Stockholders’ Equity | $ 83,630,208 | $ 35,812,107 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 91,707 | $ 77,811 |
Property and equipment, accumulated depreciation | 256,540 | 102,466 |
Intangible assets, accumulated depreciation | $ 628,245 | $ 323,331 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 135,458,071 | 125,852,971 |
Common stock, shares outstanding | 135,458,071 | 125,852,971 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue: | ||
Total revenue | $ 9,329,410 | $ 2,559,778 |
Cost of revenue: | ||
Total cost of revenue | 9,280,693 | 1,840,088 |
Total gross profit | 48,717 | 719,690 |
Operating expenses: | ||
Professional fees | 623,061 | 157,354 |
Advertising and marketing | 155,341 | 45,227 |
Selling, general and administrative | 4,616,374 | 1,487,641 |
Stock based compensation | 2,565,510 | 737,837 |
Total operating expenses | 7,960,286 | 2,428,059 |
Loss from operations | (7,911,569) | (1,708,369) |
Other income (expense): | ||
Other income (expense) | 12,543 | 205 |
Interest expense, net | (43,585) | (68,695) |
Total other income (expense) | (31,042) | (68,490) |
Net loss | (7,942,611) | (1,776,859) |
Foreign currency translation adjustment | 902,441 | |
Comprehensive loss | $ (7,040,170) | $ (1,776,859) |
Net loss per common share - basic and diluted | $ (0.06) | $ (0.02) |
Weighted average shares outstanding - basic | 133,983,960 | 116,418,173 |
Security Managed Services [Member] | ||
Revenue: | ||
Total revenue | $ 8,052,225 | $ 1,871,817 |
Cost of revenue: | ||
Total cost of revenue | 2,602,924 | 193,667 |
Professional Services [Member] | ||
Revenue: | ||
Total revenue | 1,277,185 | 687,961 |
Cost of revenue: | ||
Total cost of revenue | 110,337 | 117,794 |
Cost of Payroll [Member] | ||
Cost of revenue: | ||
Total cost of revenue | 4,445,850 | 1,427,702 |
Stockbased Compensation [Member] | ||
Cost of revenue: | ||
Total cost of revenue | $ 2,121,583 | $ 100,925 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 1,161 | $ 12,607,074 | $ (4,866,772) | $ 7,741,463 | |
Beginning balance, shares at Dec. 31, 2020 | 116,104,971 | ||||
Stock based compensation - stock options | 838,762 | 838,762 | |||
Net loss | (1,776,859) | (1,776,859) | |||
Stock issued for cash | $ 16 | 3,249,984 | 3,250,000 | ||
Stock issued for cash, shares | 1,625,000 | ||||
Ending balance, value at Mar. 31, 2021 | $ 1,177 | 16,695,820 | 902,441 | (6,643,631) | 10,053,366 |
Ending balance, shares at Mar. 31, 2021 | 117,729,971 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 1,161 | 12,607,074 | (4,866,772) | 7,741,463 | |
Beginning balance, shares at Dec. 31, 2020 | 116,104,971 | ||||
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 | ||||
Stock based compensation - stock options | 4,687,093 | 4,687,093 | |||
Stock based compensation - common stock | 79,949 | 79,949 | |||
Stock based compensation - common stock, shares | 39,000 | ||||
Exercise of options | $ 1 | 37,999 | $ 38,000 | ||
Exercise of stock options, shares | 100,000 | 100,000 | |||
Stock issued for cash in public offering | $ 21 | 9,470,979 | $ 9,471,000 | ||
Stock issued for cash in public offering, shares | 2,060,000 | ||||
Stock issued for True Digital acquisition | $ 74 | 34,726,306 | 34,726,380 | ||
Stock issued for True Digital acquisition, shares | 7,406,100 | ||||
Foreign currency translation | 902,441 | 902,441 | |||
Net loss | (7,942,611) | (7,942,611) | |||
Ending balance, value at Mar. 31, 2022 | $ 1,354 | $ 118,311,695 | $ 902,441 | $ (51,955,033) | $ 67,260,457 |
Ending balance, shares at Mar. 31, 2022 | 135,458,071 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (7,942,611) | $ (1,776,859) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation - stock options | 4,687,093 | 838,762 |
Issuance of common stock for services | 79,949 | 2,000 |
Depreciation and amortization | 458,988 | 57,515 |
Right of use amortization | 45,387 | 13,257 |
Settlement liability | (470,000) | |
Gain on termination of operating lease | (22,289) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 397,548 | (176,484) |
Inventory | (522,342) | |
Contract assets | (86,811) | |
Prepaids and other current assets | (865,483) | (13,426) |
Accounts payable and accrued expenses | 1,149,469 | (62,166) |
Lease liability | (16,156) | (12,772) |
Deferred revenue | 91,463 | |
Net cash used in operating activities | (3,015,795) | (1,130,173) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (103,858) | |
Cash paid in acquisitions, net | (4,917,768) | |
Net cash used in investing activities | (5,021,626) | |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 9,471,000 | 3,250,000 |
Proceeds from stock option exercise | 38,000 | |
Proceeds from line of credit | 86,585 | 221,346 |
Payment on line of credit | (190,988) | |
Payment on loans payable | (458,719) | (20,606) |
Payment on notes payable, related party | (125,861) | |
Net cash provided by financing activities | 9,011,005 | 3,259,752 |
Effect of exchange rates on cash and cash equivalents | 164,288 | |
Net increase in cash and cash equivalents | 1,137,872 | 2,129,579 |
Cash and cash equivalents - beginning of the period | 2,725,035 | 5,197,030 |
Cash and cash equivalents - end of the period | 3,862,907 | 7,326,609 |
Cash paid for: | ||
Interest | 36,069 | 34,163 |
Income taxes | ||
Non-cash investing and financing activities: | ||
Right of use asset and lease liability recorded upon adoption of ASC 842 | 175,759 | |
Common stock issued in True Digital acquisition | $ 34,726,380 |
NATURE OF THE ORGANIZATION AND
NATURE OF THE ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2022 | |
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. Cybersecurity, also known as computer security or information technology security, is the protection of computer systems and networks from information disclosure, theft of or damage to their hardware, software, or electronic data, as well as from the disruption or misdirection of the services they provide. The cybersecurity industry has a supply and demand issue wherein there is more demand for cybersecurity services than there are expert and seasoned compliance and cybersecurity professionals available in the market. We seek to identify, attract, and retain highly skilled cyber and compliance teams and bring them together to provide holistic cyber services. We accomplish this through acquisitions, direct hiring, and incentivizing employees with stock options to help retain them. On an ongoing basis, we seek to identify cyber talent that is culturally aligned and that offers operating leverage through both existing customer revenue and relationships. We have invested in enterprise solutions and executive talent to integrate our different organizations into an ecosystem that works together to provide complete and holistic cybersecurity through cross pollination of solutions. The ecosystem is intended to provide additional revenue opportunities and drive overall recurring revenue. 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 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. 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. 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. 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. 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. 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. 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. 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. On January 18, 2022, we completed a $ 10,300,000 2,060,000 144,200 Liquidity The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business. At March 31, 2022, we had an accumulated deficit of $ 51,955,033 and working capital surplus of $ 3,202,490 . For the three months ended March 31, 2022, we had a loss from operations of $ 7,911,569 and negative cash flows from operations of approximately $ 3,015,795 . Although we are showing positive revenue, gross profit is trending negatively primarily due to increased stock compensation related to sales activity, we expect to incur further losses through the end of 2022. To date, we have funded operations primarily through the sale of equity in private placements and revenue generated by our services. During the three months ended March 31, 2022, we received $ 9,471,000 Although we expect that we will need to raise additional capital for future acquisitions, based on our current cash resources and commitments, we believe we will be able to maintain our current planned development and corresponding level of expenditure for at least 12 months from the date of the issuance of these unaudited condensed consolidated financial statements, although no assurance can be given that we will not need additional funds prior to such time. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of March 31, 2022, and for the three months ended March 31, 2022 and 2021, has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results and cash flows for such periods. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (the “SEC”). These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, 2021, included in our Annual Report on Form 10-K filed with the SEC on April 15, 2022. Consolidation The unaudited condensed 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 three months ended March 31, 2021, to conform to the financial statements presentation for the three months ended March 31, 2022. 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 materially differ from those estimates. We believe the critical accounting policies discussed below affects our more significant judgments and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements. Significant estimates include the allowance for doubtful accounts, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and assumptions used in the Black-Scholes option 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. Disaggregated Revenue Revenue consisted of the following by service offering for the three months ended March 31, 2022: SCHEDULE OF DISAGGREGATION OF REVENUES Security Managed Professional Total Primary Sector Markets Public $ 1,118,844 $ 136,272 $ 1,255,116 Private 6,746,088 1,110,530 7,856,618 Not-for-profit 187,293 30,383 217,676 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Major Service Lines Compliance $ 1,612,167 $ - $ 1,612,167 Secured managed services 5,790,764 - 5,790,764 SOC managed services 629,561 - 629,561 vCISO 19,733 - 19,733 Technical assessments - 908,232 908,232 Incident reporting and forensics - 158,447 158,447 Training - 2,550 2,550 Other cybersecurity services - 207,956 207,956 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Major Geographic Location U.S. $ 7,183,987 $ 1,222,243 $ 8,406,230 Chile 868,238 54,942 923,180 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Revenue consisted of the following by service offering for the three months ended March 31, 2021: Security Managed Professional Total Primary Sector Markets Public $ 971,834 $ 6,000 $ 977,834 Private 848,463 681,961 1,530,424 Not-for-profit 51,520 - 51,520 Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Major Service Lines Compliance $ 1,066,628 $ - $ 1,066,628 Secured managed services 567,594 - 567,594 SOC managed services 206,035 - 206,035 vCISO 31,560 - 31,560 Technical assessments - 561,297 561,297 Incident reporting and forensics - 85,350 85,350 Training - 40,725 40,725 Other cybersecurity services - 589 589 Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Major Geographic Location U.S. $ 1,871,817 $ 687,961 $ 2,559,778 Chile - - - Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Cash and Cash Equivalents We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. We periodically assess our accounts and other receivables for collectability on a specific identification basis. We provide for allowances for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of March 31, 2022 and December 31, 2021, our allowance for doubtful accounts was $ 91,707 77,811 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 are removed from the accounts, and the resulting gain or loss, if any, is reflected in results of operations. Inventory Inventory consists of software licenses and computer equipment for sale to customers. Inventory is measured using the first-in, first-out (“FIFO”) method and stated at lower of cost or net realizable value as of March 31, 2022 and December 31, 2021. The value of inventories is reduced for excess and obsolete inventories. We monitor inventory to identify events that would require impairment due to obsolete inventory and adjusts the value of inventory when required. We recorded no 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. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. Intangible Assets We record our intangible assets at fair value in accordance with ASC 350, Intangibles – Goodwill and Other Goodwill Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at year end, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit level (see Note 6). Advertising and Marketing Costs We expense advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 155,341 and $ 45,227 for the three months ended March 31, 2022 and 2021, respectively, and are recorded in operating expenses on the unaudited condensed consolidated statements of operations. Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All vested outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. 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 thereof have been excluded from our computation of net loss per common share for the three months ended March 31, 2022 and 2021. 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 March 31, 2022 March 31, 2021 Stock options 34,820,131 25,404,533 Convertible debt 300,000 1,500,000 Total 35,120,131 26,904,533 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 option pricing model. The use of the Black-Scholes 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 limited history and lack of public trading volume for our common stock, we used the average of historical share prices of similar companies within our industry to calculate volatility for use in the Black-Scholes 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 we are 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 2.21 years. We lease a vehicle with a remaining term of 0.25 years. In accordance with ASC 842, Leases Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the lease. We generally invoice customers in advance or in milestone-based installments. Deferred revenue of approximately $ 54,000 1,952,543 D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE March 31, 2022 December 31, 2021 Security managed services $ 1,724,543 $ 52,824 Professional services 228,000 - Total deferred revenue $ 1,952,543 $ 52,824 Foreign Currency Arkavia, uses the local currency as their functional currency. Assets and liabilities for Arkavia have been translated into U.S. dollars at the exchange rates prevailing at the end of the period and results of operations at the average exchange rates for the period. Unrealized exchange gains and losses arising from the translation of the financial statements of our non-U.S. functional currency operations are accumulated in the cumulative foreign currency translation adjustments account in the unaudited condensed consolidated statements of operations and comprehensive loss. Accumulated Other Comprehensive Gain Foreign currency translation adjustments of $ 902,441 represent the difference between net loss and comprehensive gain for the three months ended March 31, 2022. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, 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 unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. Recently Issued Accounting Standards 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 adopted the standard on January 1, 2022 and management noted that there is no material impact to the unaudited condensed consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in business combinations 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 unaudited condensed consolidated financial statements. All newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to us. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 3 – ACQUISITIONS On January 5, 2022, we entered into True Digital Stock Purchase Agreement with certain stockholders of True Digital and 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 (the “True Digital Acquisition”). True Digital’s outstanding common stock was exchanged for the right to receive an aggregate of $ 6,153,000 in cash and 8,229,000 shares of our common stock, subject to a 10% holdback. In the event that no claim is made by a Cerberus Indemnitee (as defined in the Merger Agreement) within one year from closing, then we shall pay the entire amount of the 10% holdback to the shareholders of True Digital. Subsequent to the issuance of these financial statements, we expect to obtain a third-party valuation on the fair value of the assets acquired, including identifiable intangible assets, and the liabilities assumed for use in the purchase price allocation. 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: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 40,879,380 Tangible assets acquired: Cash 485,232 Accounts receivable 1,404,386 Contract assets 131,342 Prepaid expenses and other current assets 196,825 Property and equipment 906,006 Other assets 17,505 Total tangible assets 3,141,296 Assumed liabilities: Accounts payable 419,100 Accrued expenses 812,091 Deferred revenue 1,796,330 Line of credit 283,244 Loans payable 156,783 Loans payable - shareholder 543,581 Other liabilities 17,012 Total assumed liabilities 4,028,141 Net liabilities assumed (886,845 ) Goodwill ( a $ 41,766,225 (a) Goodwill and intangibles are not deductible for tax purposes. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 Prepaid expenses $ 1,182,061 $ 453,498 Prepaid taxes 688,100 231,014 Prepaid insurance 51,130 46,751 Deferred interest 244,234 229,702 Total prepaid expenses and other current assets $ 2,165,525 $ 960,965 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 Computer equipment $ 687,086 $ 495,235 Building 1,047,020 1,047,020 Leasehold improvements 177,853 109,626 Vehicle 63,052 63,052 Furniture and fixtures 45,835 33,358 Software 1,678,631 748,599 Property and equipment gross 3,699,477 2,496,890 Less: accumulated depreciation (256,540 ) (102,466 ) Property and equipment, net $ 3,442,937 $ 2,394,424 Total depreciation expense was $ 154,074 4,424 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 6 – INTANGIBLE ASSETS AND GOODWILL The following table summarizes the changes in goodwill during the three months ended March 31, 2022: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2021 $ 16,792,535 Acquisition of goodwill 41,766,225 Foreign currency translation adjustment 715,669 Ending balance, March 31, 2022 (1) $ 59,274,429 (1) As of March 31, 2022, we had not obtained a third-party valuation for the January 19, 2022 acquisition of True Digital. As such, the purchase price allocation disclosed in this Quarterly Report for True Digital may change, and, therefore, goodwill from the acquisition may change. The following table summarizes the identifiable intangible assets as of March 31, 2022 and December 31, 2021: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life March 31, 2022 December 31, 2021 Tradenames – trademarks Indefinite $ 1,211,800 $ 1,211,800 Tradenames - trademarks 5 1,849,449 1,798,300 Customer base 5 10 1,712,242 1,650,000 Non-compete agreements 2 5 695,238 675,500 Intellectual property/technology 5 10 1,557,008 1,528,000 Identifiable intangible assets 7,025,737 6,863,600 Less accumulated amortization (628,245 ) (323,331 ) Total $ 6,397,492 $ 6,540,269 The weighted average remaining useful life of identifiable amortizable intangible assets remaining is 3.88 years. Amortization of identifiable intangible assets for the three months ended March 31, 2022 and 2021 was $ 304,914 and $ 34,994 , respectively. The below table summarizes the future amortization expense for the remainder of 2021 and the next four years thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2022 (excluding the three months ended March 31, 2022) $ 879,235 2023 1,166,080 2024 940,215 2025 909,440 2026 865,360 Thereafter 425,362 Future Amortization Expense $ 5,185,692 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 Accounts payable $ 2,975,474 $ 1,700,260 Accrued payroll 453,147 482,588 Accrued expenses 2,032,540 513,718 Accrued commissions 729,397 - Accrued interest – related party 30,993 12,500 Total accounts payable and accrued expenses $ 6,221,551 $ 2,709,066 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 8 - RELATED PARTY TRANSACTIONS 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 shares of our common stock. The shares shall be deemed vested and earned to 25% upon the execution of the agreement and 25% at the beginning of each subsequent six-month period. As of March 31, 2022, 108,000 shares of our stock have been issued. 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 shares of our common stock. As of March 31, 2022, 156,000 shares of our common stock have been issued. 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 bearing an interest rate of 5% per annum payable at maturity with an original maturity date of January 27, 2022 , with a conversion price of $ 5.00 per share. Pursuant to the note, the maturity date, at our election, was extended to April 22, 2022. On March 10, 2022, we entered into an amendment to the note pursuant to which the maturity date was extended to October 27, 2022. The outstanding principal of this note was $ 1,500,000 on March 31, 2022 and December 31, 2021. During the three months ended March 31, 2022, we recorded $ 18,493 in accrued interest. Note Receivable – Related Party 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 March 31, 2022, the subsidiary has yet to be incorporated and as such, Arkavia has recorded the amount as a receivable. The amount outstanding at March 31, 2022 is $ 1,161,718 and is considered short-term and non-interest bearing. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | Note 9 – STOCKHOLDERS’ EQUITY 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 the 2019 Plan is 25,000,000 shares. The 2019 Plan has a term of ten years Warrant and Option Valuation We computed the fair value of options granted using the Black-Scholes option pricing model. The expected terms for options issued to non-employees is the contractual life and the expected term used for options issued to employees and directors is the estimated period of time that options granted are expected to be outstanding. We utilize the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. We utilize an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within our industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. Options We granted options for the purchase of 6,025,815 We granted options for the purchase of 900,000 shares of common stock during the three months ended March 31, 2022. In applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions: SCHEDULE OF STOCK OPTIONS ASSUMPTIONS For the Three For the Three March 31, 2022 March 31, 2021 Risk free interest rate 0.63% 2.46% 0.42 0.48 Contractual term (years) 10.00 5.00 Expected volatility 65 % 74 % Expected dividends 0.00 % 0.00 % The following table summarize stock option activity: SCHEDULE OF STOCK OPTIONS ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2022 31,372,148 $ 1.84 Granted 6,025,815 3.95 Exercised (100,000 ) 0.38 Expired or cancelled (2,477,832 ) 1.84 Outstanding at March 31, 2022 34,820,131 $ 2.21 The following table summarizes information about options to purchase shares of our common stock outstanding and exercisable at March 31, 2022: SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE Weighted- Weighted- Average Average Outstanding Remaining Life Exercise Number Exercise Prices Options In Years Price Exercisable $ 0.38 2,733,333 2.37 $ 0.38 2,733,333 0.40 3,600,000 2.31 0.40 3,600,000 0.50 8,732,388 3.12 0.50 8,412,538 1.40 1,417,251 5.39 1.40 1,372,395 2.00 5,045,200 4.83 2.00 2,251,750 2.05 1,421,703 3.92 2.05 342,396 2.25 1,100,000 9.78 2.25 - 3.05 170,000 4.33 3.05 - 3.20 22,000 9.93 3.20 - 3.46 12,000 9.94 3.46 - 3.60 155,000 4.33 3.60 - 4.00 624,340 4.30 4.00 - 4.12 12,000 9.93 4.12 - 4.21 18,000 9.97 4.21 - 4.82 1,062,827 9.96 4.82 - 5.00 8,599,088 9.60 5.00 52,958 $ 6.75 95,000 4.33 5.00 - 34,820,131 5.42 $ 2.21 18,765,371 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 $ 4,687,093 and $ 838,762 for the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022, we attributed $ 2,121,583 and $ 2,565,510 of compensation expense related to the options to cost of payroll and selling, general, and administrative expenses, respectively. During the three months ended March 31, 2021, we attributed $ 100,925 and $ 737,837 of compensation expense related to the options to cost of payroll and selling, general, and administrative expenses, respectively. As of March 31, 2022, there was future compensation expense of $ 46,517,161 with a weighted average recognition period of 2.20 years related to the options. The aggregate intrinsic value totaled $ 105,004,192 and $ 85,717,281 , for total outstanding and exercisable options, respectively, and was based on our estimated fair value of the common stock of $ 5.32 as of March 31, 2022, which is the aggregate fair value of the common stock that would have been received by the option holders had all option holders exercised their options as of that date, net of the aggregate exercise price. Warrant Activity Summary In applying the Black-Scholes option pricing model to warrants granted or issued, we used the following assumptions: SCHEDULE OF STOCK WARRANTS ASSUMPTIONS For the Three Months Ended March 31, 2022 Risk free interest rate 1.47 1.62 % Contractual term (years) 4.00 5.00 Expected volatility 84 % Expected dividends 0.00 % A summary of the warrant activity during the three months ended March 31, 2022 is presented below: SCHEDULE OF STOCK WARRANT ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2022 - $ - Granted 144,200 5.00 Exercised - - Expired or cancelled - - Outstanding at March 31, 2022 144,200 $ 5.00 The following table summarizes information about warrants to purchase shares of our common stock outstanding and exercisable at March 31, 2022: SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE Weighted- Weighted- Average Average Outstanding Remaining Life Exercise Number Exercise Prices Options In Years Price Exercisable $ 5.00 144,200 4.76 $ 5.00 144,200 144,200 4.76 $ 5.00 144,200 The aggregate intrinsic value totaled $ 46,144 5.32 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – 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. As a result, the Company recorded a settlement liability at December 31, 2021 of $ 470,000 400,000 5.00 470,000 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 our voting securities, or security holder is a party adverse to us or has a material interest adverse to us. |
LOANS PAYABLE AND LINES OF CRED
LOANS PAYABLE AND LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE AND LINES OF CREDIT | NOTE 11 – LOANS PAYABLE AND LINES OF CREDIT Lines of Credit TalaTek, Inc. On July 29, 2019, TalaTek entered into a secured line of credit with SunTrust Bank (“SunTrust”) for $ 500,000 2.25% True Digital On September 9, 2021, True Digital entered into a secured line of credit with Blue Sky Bank (“Blue Sky”) for $ 500,000 3.25% August 9, 2022 369,829 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 three months ended March 31, 2022, we made cash payments of $ 5,532 The loan is collateralized by a vehicle. At March 31, 2022 and December 31, 2021, $ 27,122 32,474 was outstanding, respectively. 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 and each loan bears interest at 5% per annum with a maturity date of July 31, 2023 . Pursuant to the terms of the loans, principal and interest payments were deferred for two years on three of the loans, making up $ 150,000 of the $ 600,000 total amount borrowed. During the three months ended March 31, 2022, we made cash payments totaling $ 80,956 75,652 5,304 370,587 446,239 . Arkavia At March 31, 2022 and December 31, 2021, notes payable consist of the following amounts: SCHEDULE OF NOTES PAYABLE March 31, 2022 December 31, 2021 Total notes payable 4,697,586 5,018,788 4.22% March 30, 2026 $ 557,582 $ 607,915 4.22% March 30, 2026 400,981 437,178 4.81% April 10, 2028 141,804 148,665 4.81% April 10, 2028 160,530 168,308 4.20% June 3, 2024 29,230 33,418 4.20% March 6, 2026 939,066 998,759 3.48% May 15, 2023 109,774 129,692 4.88% August 8, 2024 149,538 179,591 3.50% May 26, 2021 - 5,817 3.50% December 1, 2023 45,936 58,805 4.69% April 15, 2024 136,172 206,993 6.48% February 17, 2022 196,206 191,792 3.50% April 15, 2024 136,172 182,088 7.14% December 3, 2029 540,933 557,445 7.14% December 3, 2029 95,981 99,574 7.14% December 3, 2029 924,168 869,179 7.14% December 3, 2029 133,513 143,569 Total notes payable 4,697,586 5,018,788 Less current portion (196,206 ) (213,199 ) Long term notes payable $ 4,501,380 $ 4,805,589 At various times during the three months ended March 31, 2022, Arkavia paid an aggregate of $ 337,680 in cash towards outstanding principal. True Digital On April 26, 2018, True Digital entered into a loan agreement with a shareholder for the principal amount of $ 250,000 April 25, 2022 6 97,731 On April 13, 2020, True Digital entered into a promissory note with a financial institution for the principal amount of $ 1,271,000 April 13, 2022 1 seventeen monthly payments 71,171 74,427 On February 10, 2020, True Digital entered into a promissory note with a shareholder for the principal amount of $ 113,975 February 10, 2027 6 2,693 92,834 On February 2, 2021, True Digital entered into a promissory note with a shareholder for the principal amount of $ 510,000 May 2, 2024 4 23,685 326,639 Convertible Note Payable 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 bearing an interest rate of 5% per annum payable at maturity with a maturity date of January 27, 2022 , with a conversion price of $ 5.00 per share. On March 10, 2022, we entered into an amendment to the note pursuant to which the maturity date was extended to October 27, 2022 . The outstanding principal of this note was $ 1,500,000 at March 31, 2022. At March 31, 2022 and December 31, 2021, we recorded accrued interest of $ 30,993 and $ 12,500 with respect to this note. We recorded interest expense of $ 18,493 during the three months ended March 31, 2022. Future minimum payments under the above line of credit and notes payable following the three months ended March 31, 2022, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT March 31, 2022 2022 (excluding the three months ended March 31, 2022) $ 3,465,848 2023 1,069,214 2024 1,207,280 2025 752,419 2026 278,215 Thereafter 1,008,011 Total future minimum payments 7,780,987 Less: current (2,501,563 ) Long term debt, noncurrent $ 5,279,424 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
LEASES | NOTE 12 – LEASES All of our leases are classified as operating leases. With the adoption of Topic 842, operating lease agreements are required to be recognized on the condensed consolidated balance sheet as ROU assets and corresponding lease liabilities. On January 19, 2022, we recognized additional ROU assets and lease liabilities of $ 226,942 . We elected to not recognize ROU assets and lease liabilities arising from office leases with initial terms of twelve months or less (deemed immaterial) on the unaudited condensed consolidated balance sheets. 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. When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using our estimated incremental borrowing rate at January 1, 2022. The weighted average incremental borrowing rate applied was 6%. As of March 31, 2022, our leases had a remaining weighted average term of 2.21 years. Operating leases are included in the unaudited condensed consolidated balance sheets as follows: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Classification March 31, 2022 December 31, 2021 Lease assets Operating lease cost ROU assets Assets $ 406,770 $ 277,578 Total lease assets $ 406,770 $ 277,578 Lease liabilities Operating lease liabilities, current Current liabilities $ 211,752 $ 196,472 Operating lease liabilities, non-current Liabilities 202,918 88,040 Total lease liabilities $ 414,670 $ 284,512 The components of lease costs, which are included in income from operations in our unaudited condensed consolidated statements of operations, were as follows: SCHEDULE OF LEASE COST 2022 2021 Three Months Ended March 31, 2022 2021 Leases costs Operating lease costs $ 158,041 $ 14,194 Total lease costs $ 158,041 $ 14,194 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the three months ended March 31, 2022, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES March 31, 2022 Fiscal Year Operating Leases (Unaudited) 2022 (excluding the three months ended March 31, 2022) $ 189,657 2023 144,866 2024 57,605 2025 54,389 Total future minimum lease payments 446,517 Amount representing interest (31,846 ) Present value of net future minimum lease payments $ 414,670 |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 13 – GEOGRAPHIC INFORMATION Revenue by geography is based on the customer’s billing address for the three months ended March 31, 2022 was as follows: SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS Secured Managed Services Professional Services Total Major Geographic Location U.S. $ 7,183,987 $ 1,222,243 $ 8,406,230 Chile 868,238 54,942 923,180 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Revenue by geography is based on the customer’s billing address for the three months ended March 31, 2021, was as follows: Secured Managed Services Professional Services Total U.S. $ 1,871,817 $ 687,961 $ 2,559,778 Chile - - - Revenue $ 1,871,817 $ 687,961 $ 2,559,778 No international country represented more than 10% of total revenue in any period presented. Property and equipment, net by geography was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS March 31, 2022 December 31, 2021 U.S. $ 1,064,519 $ 95,069 Chile 2,378,418 2,299,355 Property and equipment net $ 3,442,937 $ 2,394,424 No other international country represented more than 10% of property and equipment, net in any period presented. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 14 – 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 . As of March 31, 2022, and December 31, 2021, we had approximately $ 1,894,000 and $ 1,119,000 , respectively, in excess of the FDIC insured limit. Revenue No clients accounted for more than 10% One client accounted for 32% Accounts Receivable No clients accounted for more than 10% One client accounted for 20% of accounts receivable as of March 31, 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS In accordance with ASC 855, Subsequent Events |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of March 31, 2022, and for the three months ended March 31, 2022 and 2021, has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results and cash flows for such periods. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (the “SEC”). These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, 2021, included in our Annual Report on Form 10-K filed with the SEC on April 15, 2022. |
Consolidation | Consolidation The unaudited condensed 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 three months ended March 31, 2021, to conform to the financial statements presentation for the three months ended March 31, 2022. 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 materially differ from those estimates. We believe the critical accounting policies discussed below affects our more significant judgments and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements. Significant estimates include the allowance for doubtful accounts, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and assumptions used in the Black-Scholes option 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. Disaggregated Revenue Revenue consisted of the following by service offering for the three months ended March 31, 2022: SCHEDULE OF DISAGGREGATION OF REVENUES Security Managed Professional Total Primary Sector Markets Public $ 1,118,844 $ 136,272 $ 1,255,116 Private 6,746,088 1,110,530 7,856,618 Not-for-profit 187,293 30,383 217,676 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Major Service Lines Compliance $ 1,612,167 $ - $ 1,612,167 Secured managed services 5,790,764 - 5,790,764 SOC managed services 629,561 - 629,561 vCISO 19,733 - 19,733 Technical assessments - 908,232 908,232 Incident reporting and forensics - 158,447 158,447 Training - 2,550 2,550 Other cybersecurity services - 207,956 207,956 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Major Geographic Location U.S. $ 7,183,987 $ 1,222,243 $ 8,406,230 Chile 868,238 54,942 923,180 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Revenue consisted of the following by service offering for the three months ended March 31, 2021: Security Managed Professional Total Primary Sector Markets Public $ 971,834 $ 6,000 $ 977,834 Private 848,463 681,961 1,530,424 Not-for-profit 51,520 - 51,520 Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Major Service Lines Compliance $ 1,066,628 $ - $ 1,066,628 Secured managed services 567,594 - 567,594 SOC managed services 206,035 - 206,035 vCISO 31,560 - 31,560 Technical assessments - 561,297 561,297 Incident reporting and forensics - 85,350 85,350 Training - 40,725 40,725 Other cybersecurity services - 589 589 Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Major Geographic Location U.S. $ 1,871,817 $ 687,961 $ 2,559,778 Chile - - - Revenue $ 1,871,817 $ 687,961 $ 2,559,778 |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. We periodically assess our accounts and other receivables for collectability on a specific identification basis. We provide for allowances for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of March 31, 2022 and December 31, 2021, our allowance for doubtful accounts was $ 91,707 77,811 |
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 are removed from the accounts, and the resulting gain or loss, if any, is reflected in results of operations. |
Inventory | Inventory Inventory consists of software licenses and computer equipment for sale to customers. Inventory is measured using the first-in, first-out (“FIFO”) method and stated at lower of cost or net realizable value as of March 31, 2022 and December 31, 2021. The value of inventories is reduced for excess and obsolete inventories. We monitor inventory to identify events that would require impairment due to obsolete inventory and adjusts the value of inventory when required. We recorded no |
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. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. |
Intangible Assets | Intangible Assets We record our intangible assets at fair value in accordance with ASC 350, Intangibles – Goodwill and Other |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at year end, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit level (see Note 6). |
Advertising and Marketing Costs | Advertising and Marketing Costs We expense advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 155,341 and $ 45,227 for the three months ended March 31, 2022 and 2021, respectively, and are recorded in operating expenses on the unaudited condensed consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements As defined in ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. |
Net Loss per Common Share | Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All vested outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. 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 thereof have been excluded from our computation of net loss per common share for the three months ended March 31, 2022 and 2021. 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 March 31, 2022 March 31, 2021 Stock options 34,820,131 25,404,533 Convertible debt 300,000 1,500,000 Total 35,120,131 26,904,533 |
Stock-Based | 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 option pricing model. The use of the Black-Scholes 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 limited history and lack of public trading volume for our common stock, we used the average of historical share prices of similar companies within our industry to calculate volatility for use in the Black-Scholes 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 we are 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 2.21 years. We lease a vehicle with a remaining term of 0.25 years. In accordance with ASC 842, Leases |
Deferred Revenue | Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the lease. We generally invoice customers in advance or in milestone-based installments. Deferred revenue of approximately $ 54,000 1,952,543 D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE March 31, 2022 December 31, 2021 Security managed services $ 1,724,543 $ 52,824 Professional services 228,000 - Total deferred revenue $ 1,952,543 $ 52,824 |
Foreign Currency | Foreign Currency Arkavia, uses the local currency as their functional currency. Assets and liabilities for Arkavia have been translated into U.S. dollars at the exchange rates prevailing at the end of the period and results of operations at the average exchange rates for the period. Unrealized exchange gains and losses arising from the translation of the financial statements of our non-U.S. functional currency operations are accumulated in the cumulative foreign currency translation adjustments account in the unaudited condensed consolidated statements of operations and comprehensive loss. |
Accumulated Other Comprehensive Gain | Accumulated Other Comprehensive Gain Foreign currency translation adjustments of $ 902,441 represent the difference between net loss and comprehensive gain for the three months ended March 31, 2022. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, 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 unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards 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 adopted the standard on January 1, 2022 and management noted that there is no material impact to the unaudited condensed consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in business combinations 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 unaudited condensed consolidated financial statements. All newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to us. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUES | Revenue consisted of the following by service offering for the three months ended March 31, 2022: SCHEDULE OF DISAGGREGATION OF REVENUES Security Managed Professional Total Primary Sector Markets Public $ 1,118,844 $ 136,272 $ 1,255,116 Private 6,746,088 1,110,530 7,856,618 Not-for-profit 187,293 30,383 217,676 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Major Service Lines Compliance $ 1,612,167 $ - $ 1,612,167 Secured managed services 5,790,764 - 5,790,764 SOC managed services 629,561 - 629,561 vCISO 19,733 - 19,733 Technical assessments - 908,232 908,232 Incident reporting and forensics - 158,447 158,447 Training - 2,550 2,550 Other cybersecurity services - 207,956 207,956 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Major Geographic Location U.S. $ 7,183,987 $ 1,222,243 $ 8,406,230 Chile 868,238 54,942 923,180 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Revenue consisted of the following by service offering for the three months ended March 31, 2021: Security Managed Professional Total Primary Sector Markets Public $ 971,834 $ 6,000 $ 977,834 Private 848,463 681,961 1,530,424 Not-for-profit 51,520 - 51,520 Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Major Service Lines Compliance $ 1,066,628 $ - $ 1,066,628 Secured managed services 567,594 - 567,594 SOC managed services 206,035 - 206,035 vCISO 31,560 - 31,560 Technical assessments - 561,297 561,297 Incident reporting and forensics - 85,350 85,350 Training - 40,725 40,725 Other cybersecurity services - 589 589 Revenue $ 1,871,817 $ 687,961 $ 2,559,778 Major Geographic Location U.S. $ 1,871,817 $ 687,961 $ 2,559,778 Chile - - - Revenue $ 1,871,817 $ 687,961 $ 2,559,778 |
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 March 31, 2022 March 31, 2021 Stock options 34,820,131 25,404,533 Convertible debt 300,000 1,500,000 Total 35,120,131 26,904,533 |
SCHEDULE OF DEFERRED REVENUE | D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE March 31, 2022 December 31, 2021 Security managed services $ 1,724,543 $ 52,824 Professional services 228,000 - Total deferred revenue $ 1,952,543 $ 52,824 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 40,879,380 Tangible assets acquired: Cash 485,232 Accounts receivable 1,404,386 Contract assets 131,342 Prepaid expenses and other current assets 196,825 Property and equipment 906,006 Other assets 17,505 Total tangible assets 3,141,296 Assumed liabilities: Accounts payable 419,100 Accrued expenses 812,091 Deferred revenue 1,796,330 Line of credit 283,244 Loans payable 156,783 Loans payable - shareholder 543,581 Other liabilities 17,012 Total assumed liabilities 4,028,141 Net liabilities assumed (886,845 ) Goodwill ( a $ 41,766,225 (a) Goodwill and intangibles are not deductible for tax purposes. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 Prepaid expenses $ 1,182,061 $ 453,498 Prepaid taxes 688,100 231,014 Prepaid insurance 51,130 46,751 Deferred interest 244,234 229,702 Total prepaid expenses and other current assets $ 2,165,525 $ 960,965 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT March 31, 2022 December 31, 2021 Computer equipment $ 687,086 $ 495,235 Building 1,047,020 1,047,020 Leasehold improvements 177,853 109,626 Vehicle 63,052 63,052 Furniture and fixtures 45,835 33,358 Software 1,678,631 748,599 Property and equipment gross 3,699,477 2,496,890 Less: accumulated depreciation (256,540 ) (102,466 ) Property and equipment, net $ 3,442,937 $ 2,394,424 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN GOODWILL | The following table summarizes the changes in goodwill during the three months ended March 31, 2022: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2021 $ 16,792,535 Acquisition of goodwill 41,766,225 Foreign currency translation adjustment 715,669 Ending balance, March 31, 2022 (1) $ 59,274,429 (1) As of March 31, 2022, we had not obtained a third-party valuation for the January 19, 2022 acquisition of True Digital. As such, the purchase price allocation disclosed in this Quarterly Report for True Digital may change, and, therefore, goodwill from the acquisition may change. |
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS | The following table summarizes the identifiable intangible assets as of March 31, 2022 and December 31, 2021: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life March 31, 2022 December 31, 2021 Tradenames – trademarks Indefinite $ 1,211,800 $ 1,211,800 Tradenames - trademarks 5 1,849,449 1,798,300 Customer base 5 10 1,712,242 1,650,000 Non-compete agreements 2 5 695,238 675,500 Intellectual property/technology 5 10 1,557,008 1,528,000 Identifiable intangible assets 7,025,737 6,863,600 Less accumulated amortization (628,245 ) (323,331 ) Total $ 6,397,492 $ 6,540,269 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | The below table summarizes the future amortization expense for the remainder of 2021 and the next four years thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2022 (excluding the three months ended March 31, 2022) $ 879,235 2023 1,166,080 2024 940,215 2025 909,440 2026 865,360 Thereafter 425,362 Future Amortization Expense $ 5,185,692 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 Accounts payable $ 2,975,474 $ 1,700,260 Accrued payroll 453,147 482,588 Accrued expenses 2,032,540 513,718 Accrued commissions 729,397 - Accrued interest – related party 30,993 12,500 Total accounts payable and accrued expenses $ 6,221,551 $ 2,709,066 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF STOCK OPTIONS ASSUMPTIONS | In applying the Black-Scholes option pricing model to stock options granted, we used the following assumptions: SCHEDULE OF STOCK OPTIONS ASSUMPTIONS For the Three For the Three March 31, 2022 March 31, 2021 Risk free interest rate 0.63% 2.46% 0.42 0.48 Contractual term (years) 10.00 5.00 Expected volatility 65 % 74 % Expected dividends 0.00 % 0.00 % |
SCHEDULE OF STOCK OPTIONS ACTIVITY | The following table summarize stock option activity: SCHEDULE OF STOCK OPTIONS ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2022 31,372,148 $ 1.84 Granted 6,025,815 3.95 Exercised (100,000 ) 0.38 Expired or cancelled (2,477,832 ) 1.84 Outstanding at March 31, 2022 34,820,131 $ 2.21 |
SCHEDULE OF STOCK WARRANTS ASSUMPTIONS | In applying the Black-Scholes option pricing model to warrants granted or issued, we used the following assumptions: SCHEDULE OF STOCK WARRANTS ASSUMPTIONS For the Three Months Ended March 31, 2022 Risk free interest rate 1.47 1.62 % Contractual term (years) 4.00 5.00 Expected volatility 84 % Expected dividends 0.00 % |
SCHEDULE OF STOCK WARRANT ACTIVITY | A summary of the warrant activity during the three months ended March 31, 2022 is presented below: SCHEDULE OF STOCK WARRANT ACTIVITY Weighted Average Shares Exercise Price Outstanding at January 1, 2022 - $ - Granted 144,200 5.00 Exercised - - Expired or cancelled - - Outstanding at March 31, 2022 144,200 $ 5.00 |
Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE | The following table summarizes information about warrants to purchase shares of our common stock outstanding and exercisable at March 31, 2022: SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE Weighted- Weighted- Average Average Outstanding Remaining Life Exercise Number Exercise Prices Options In Years Price Exercisable $ 5.00 144,200 4.76 $ 5.00 144,200 144,200 4.76 $ 5.00 144,200 |
Equity Option [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE | The following table summarizes information about options to purchase shares of our common stock outstanding and exercisable at March 31, 2022: SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE Weighted- Weighted- Average Average Outstanding Remaining Life Exercise Number Exercise Prices Options In Years Price Exercisable $ 0.38 2,733,333 2.37 $ 0.38 2,733,333 0.40 3,600,000 2.31 0.40 3,600,000 0.50 8,732,388 3.12 0.50 8,412,538 1.40 1,417,251 5.39 1.40 1,372,395 2.00 5,045,200 4.83 2.00 2,251,750 2.05 1,421,703 3.92 2.05 342,396 2.25 1,100,000 9.78 2.25 - 3.05 170,000 4.33 3.05 - 3.20 22,000 9.93 3.20 - 3.46 12,000 9.94 3.46 - 3.60 155,000 4.33 3.60 - 4.00 624,340 4.30 4.00 - 4.12 12,000 9.93 4.12 - 4.21 18,000 9.97 4.21 - 4.82 1,062,827 9.96 4.82 - 5.00 8,599,088 9.60 5.00 52,958 $ 6.75 95,000 4.33 5.00 - 34,820,131 5.42 $ 2.21 18,765,371 |
LOANS PAYABLE AND LINES OF CR_2
LOANS PAYABLE AND LINES OF CREDIT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF NOTES PAYABLE | At March 31, 2022 and December 31, 2021, notes payable consist of the following amounts: SCHEDULE OF NOTES PAYABLE March 31, 2022 December 31, 2021 Total notes payable 4,697,586 5,018,788 4.22% March 30, 2026 $ 557,582 $ 607,915 4.22% March 30, 2026 400,981 437,178 4.81% April 10, 2028 141,804 148,665 4.81% April 10, 2028 160,530 168,308 4.20% June 3, 2024 29,230 33,418 4.20% March 6, 2026 939,066 998,759 3.48% May 15, 2023 109,774 129,692 4.88% August 8, 2024 149,538 179,591 3.50% May 26, 2021 - 5,817 3.50% December 1, 2023 45,936 58,805 4.69% April 15, 2024 136,172 206,993 6.48% February 17, 2022 196,206 191,792 3.50% April 15, 2024 136,172 182,088 7.14% December 3, 2029 540,933 557,445 7.14% December 3, 2029 95,981 99,574 7.14% December 3, 2029 924,168 869,179 7.14% December 3, 2029 133,513 143,569 Total notes payable 4,697,586 5,018,788 Less current portion (196,206 ) (213,199 ) Long term notes payable $ 4,501,380 $ 4,805,589 |
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT | Future minimum payments under the above line of credit and notes payable following the three months ended March 31, 2022, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT March 31, 2022 2022 (excluding the three months ended March 31, 2022) $ 3,465,848 2023 1,069,214 2024 1,207,280 2025 752,419 2026 278,215 Thereafter 1,008,011 Total future minimum payments 7,780,987 Less: current (2,501,563 ) Long term debt, noncurrent $ 5,279,424 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION | Operating leases are included in the unaudited condensed consolidated balance sheets as follows: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Classification March 31, 2022 December 31, 2021 Lease assets Operating lease cost ROU assets Assets $ 406,770 $ 277,578 Total lease assets $ 406,770 $ 277,578 Lease liabilities Operating lease liabilities, current Current liabilities $ 211,752 $ 196,472 Operating lease liabilities, non-current Liabilities 202,918 88,040 Total lease liabilities $ 414,670 $ 284,512 |
SCHEDULE OF LEASE COST | The components of lease costs, which are included in income from operations in our unaudited condensed consolidated statements of operations, were as follows: SCHEDULE OF LEASE COST 2022 2021 Three Months Ended March 31, 2022 2021 Leases costs Operating lease costs $ 158,041 $ 14,194 Total lease costs $ 158,041 $ 14,194 |
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 three months ended March 31, 2022, are as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES March 31, 2022 Fiscal Year Operating Leases (Unaudited) 2022 (excluding the three months ended March 31, 2022) $ 189,657 2023 144,866 2024 57,605 2025 54,389 Total future minimum lease payments 446,517 Amount representing interest (31,846 ) Present value of net future minimum lease payments $ 414,670 |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS | Revenue by geography is based on the customer’s billing address for the three months ended March 31, 2022 was as follows: SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS Secured Managed Services Professional Services Total Major Geographic Location U.S. $ 7,183,987 $ 1,222,243 $ 8,406,230 Chile 868,238 54,942 923,180 Revenue $ 8,052,225 $ 1,277,185 $ 9,329,410 Revenue by geography is based on the customer’s billing address for the three months ended March 31, 2021, was as follows: Secured Managed Services Professional Services Total U.S. $ 1,871,817 $ 687,961 $ 2,559,778 Chile - - - Revenue $ 1,871,817 $ 687,961 $ 2,559,778 |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS | Property and equipment, net by geography was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS March 31, 2022 December 31, 2021 U.S. $ 1,064,519 $ 95,069 Chile 2,378,418 2,299,355 Property and equipment net $ 3,442,937 $ 2,394,424 |
NATURE OF THE ORGANIZATION AN_2
NATURE OF THE ORGANIZATION AND BUSINESS (Details Narrative) - USD ($) | Jan. 18, 2022 | Oct. 01, 2019 | Apr. 12, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Oct. 02, 2019 |
Restructuring Cost and Reserve [Line Items] | |||||||
Common stock, shares outstanding | 135,458,071 | 125,852,971 | |||||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Number of shares issued, value | $ 3,250,000 | ||||||
Retained Earnings (Accumulated Deficit) | $ 51,955,033 | $ 44,012,422 | |||||
Working capital | 3,202,490 | ||||||
Operating Income (Loss) | 7,911,569 | 1,708,369 | |||||
Net Cash Provided by (Used in) Operating Activities | 3,015,795 | 1,130,173 | |||||
Proceeds from sale of common stock | $ 9,471,000 | $ 3,250,000 | |||||
IPO [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of shares issued, shares | 10,300,000 | ||||||
Number of shares issued, value | $ 2,060,000 | ||||||
IPO [Member] | Underwriter [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Warrants granted | 144,200 | ||||||
VCAB Merger [Member] | Claim Holders [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Common stock, shares outstanding | 1,500 | ||||||
Number of shares issued, shares | 2,000,000 | ||||||
TalaTek Merger [Member] | TalaTek Shares [Member] | Common Stock [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Conversion of stock, shares issued | 6,200,000 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Public | $ 1,255,116 | $ 977,834 |
Private | 7,856,618 | 1,530,424 |
Not-for-profit | 217,676 | 51,520 |
Revenue | 9,329,410 | 2,559,778 |
Compliance | 1,612,167 | 1,066,628 |
Secured managed services | 5,790,764 | 567,594 |
SOC managed services | 629,561 | 206,035 |
vCISO | 19,733 | 31,560 |
Technical assessments | 908,232 | 561,297 |
Incident reporting and forensics | 158,447 | 85,350 |
Training | 2,550 | 40,725 |
Other cybersecurity services | 207,956 | 589 |
Revenue | 9,329,410 | 2,559,778 |
UNITED STATES | ||
Product Information [Line Items] | ||
Revenue | 8,406,230 | 2,559,778 |
CHILE | ||
Product Information [Line Items] | ||
Revenue | 923,180 | |
Security Managed Services [Member] | ||
Product Information [Line Items] | ||
Public | 1,118,844 | 971,834 |
Private | 6,746,088 | 848,463 |
Not-for-profit | 187,293 | 51,520 |
Revenue | 8,052,225 | 1,871,817 |
Compliance | 1,612,167 | 1,066,628 |
Secured managed services | 5,790,764 | 567,594 |
SOC managed services | 629,561 | 206,035 |
vCISO | 19,733 | 31,560 |
Technical assessments | ||
Incident reporting and forensics | ||
Training | ||
Other cybersecurity services | ||
Revenue | 8,052,225 | 1,871,817 |
Security Managed Services [Member] | UNITED STATES | ||
Product Information [Line Items] | ||
Revenue | 7,183,987 | 1,871,817 |
Security Managed Services [Member] | CHILE | ||
Product Information [Line Items] | ||
Revenue | 868,238 | |
Professional Services [Member] | ||
Product Information [Line Items] | ||
Public | 136,272 | 6,000 |
Private | 1,110,530 | 681,961 |
Not-for-profit | 30,383 | |
Revenue | 1,277,185 | 687,961 |
Compliance | ||
Secured managed services | ||
SOC managed services | ||
vCISO | ||
Technical assessments | 908,232 | 561,297 |
Incident reporting and forensics | 158,447 | 85,350 |
Training | 2,550 | 40,725 |
Other cybersecurity services | 207,956 | 589 |
Revenue | 1,277,185 | 687,961 |
Professional Services [Member] | UNITED STATES | ||
Product Information [Line Items] | ||
Revenue | 1,222,243 | 687,961 |
Professional Services [Member] | CHILE | ||
Product Information [Line Items] | ||
Revenue | $ 54,942 |
SUMMARY OF SECURITIES EXCLUDED
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE CALCULATION (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 35,120,131 | 26,904,533 |
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 | 34,820,131 | 25,404,533 |
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 |
SCHEDULE OF DEFERRED REVENUE (D
SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Security managed services | $ 1,724,543 | $ 52,824 |
Professional services | 228,000 | |
Total deferred revenue | $ 1,952,543 | $ 52,824 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Allowances for doubtful accounts | $ 91,707 | $ 77,811 | |
Impairment charges on inventory | 0 | $ 0 | |
Advertising and marketing expenses | $ 155,341 | $ 45,227 | |
Weighted average remaining term | 2 years 2 months 15 days | ||
Deferred revenue | $ 54,000 | ||
Deferred revenue related to customer payments | 1,952,543 | ||
Foreign currency translation adjustments | $ 902,441 | ||
Office Building [Member] | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Weighted average remaining term | 2 years 2 months 15 days | ||
Vehicle [Member] | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Weighted average remaining term | 3 months |
SUMMARY OF SIGNIFICANT FAIR VAL
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Consideration paid | $ 40,879,380 | |
Goodwill (a) | 59,274,429 | $ 16,792,535 |
Veloc I T [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 485,232 | |
Accounts receivable | 1,404,386 | |
Contract assets | 131,342 | |
Prepaid expenses and other current assets | 196,825 | |
Property and equipment | 906,006 | |
Other assets | 17,505 | |
Total tangible assets | 3,141,296 | |
Accounts payable | 419,100 | |
Accrued expenses | 812,091 | |
Deferred revenue | 1,796,330 | |
Line of credit | 283,244 | |
Loans payable | 156,783 | |
Loans payable - shareholder | 543,581 | |
Other liabilities | 17,012 | |
Total assumed liabilities | 4,028,141 | |
Net liabilities assumed | (886,845) | |
Goodwill (a) | $ 41,766,225 |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | Jan. 19, 2022 | Mar. 31, 2022 |
Business Acquisition [Line Items] | ||
Stock issued for True Digital acquisition | $ 34,726,380 | |
True Digital Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Stock issued for True Digital acquisition | $ 6,153,000 | |
Stock issued for True Digital acquisition, shares | 8,229,000 | |
Holdback common stock percentage | 10.00% | |
True Digital Acquisition [Member] | Merger Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Holdback common stock percentage | 10.00% |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 1,182,061 | $ 453,498 |
Prepaid taxes | 688,100 | 231,014 |
Prepaid insurance | 51,130 | 46,751 |
Deferred interest | 244,234 | 229,702 |
Total prepaid expenses and other current assets | $ 2,165,525 | $ 960,965 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 3,699,477 | $ 2,496,890 |
Less: accumulated depreciation | (256,540) | (102,466) |
Property and equipment, net | 3,442,937 | 2,394,424 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 687,086 | 495,235 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,047,020 | 1,047,020 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 177,853 | 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 | 45,835 | 33,358 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,678,631 | $ 748,599 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 154,074 | $ 4,424 |
SCHEDULE OF CHANGES IN GOODWILL
SCHEDULE OF CHANGES IN GOODWILL (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance beginning | $ 16,792,535 |
Goodwill, Acquired During Period | 41,766,225 |
Foreign currency translation adjustment | 715,669 |
Ending balance | $ 59,274,429 |
SUMMARY OF IDENTIFIABLE INTANGI
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 7,025,737 | $ 6,863,600 |
Finite-Lived Intangible Asset, Useful Life | 3 years 10 months 17 days | |
Less accumulated amortization | $ (628,245) | (323,331) |
Total | $ 6,397,492 | 6,540,269 |
Tala Tek L L C [Member] | Trade Names Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets, useful life description | Indefinite | |
Identifiable intangible assets | $ 1,211,800 | 1,211,800 |
Tala Tek L L C [Member] | Trade Names Trademarks One [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 1,849,449 | 1,798,300 |
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Tala Tek L L C [Member] | Customerbase [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 1,712,242 | 1,650,000 |
Tala Tek L L C [Member] | Customerbase [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Tala Tek L L C [Member] | Customerbase [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Tala Tek L L C [Member] | Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 695,238 | 675,500 |
Tala Tek L L C [Member] | Noncompete Agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Tala Tek L L C [Member] | Noncompete Agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Tala Tek L L C [Member] | Intellectual Property Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 1,557,008 | $ 1,528,000 |
Tala Tek L L C [Member] | Intellectual Property Technology [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Tala Tek L L C [Member] | Intellectual Property Technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Mar. 31, 2022USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (excluding the three months ended March 31, 2022) | $ 879,235 |
2023 | 1,166,080 |
2024 | 940,215 |
2025 | 909,440 |
2026 | 865,360 |
Thereafter | 425,362 |
Future Amortization Expense | $ 5,185,692 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Weighted average remaining useful life | 3 years 10 months 17 days | |
Amortization of identifiable intangible assets | $ 304,914 | $ 34,994 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 2,975,474 | $ 1,700,260 |
Accrued payroll | 453,147 | 482,588 |
Accrued expenses | 2,032,540 | 513,718 |
Accrued commissions | 729,397 | |
Accrued interest – related party | 30,993 | 12,500 |
Total accounts payable and accrued expenses | $ 6,221,551 | $ 2,709,066 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 01, 2021 | Oct. 27, 2021 | Jan. 02, 2021 | Mar. 31, 2022 |
Neil Stinchcombe [Member] | ||||
Related Party Transaction [Line Items] | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1,500,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |||
Debt Instrument, Maturity Date | Jan. 27, 2022 | |||
Debt Instrument, Convertible, Conversion Price | $ 5 | |||
Debt Instrument, Face Amount | $ 1,500,000 | |||
Interest Payable | 18,493 | |||
Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
Notes receivable related parties | $ 1,161,718 | |||
Two Year Consulting Agreement [Member] | Fridays LLP [Member] | ||||
Related Party Transaction [Line Items] | ||||
Number of shares issued for common stock | 432,000 | 312,000 | ||
Shares deemed vested and earned | 25.00% | |||
Shares issued | 156,000 | |||
Two Year Consulting Agreement [Member] | Fridays LLP [Member] | Restricted Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Shares issued | 108,000 |
SCHEDULE OF STOCK OPTIONS ASSUM
SCHEDULE OF STOCK OPTIONS ASSUMPTIONS (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contractual term (years) | 10 years | 5 years |
Expected volatility | 65.00% | 74.00% |
Expected dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Risk free interest rate | 0.63% | 0.42% |
Maximum [Member] | ||
Risk free interest rate | 2.46% | 0.48% |
SCHEDULE OF STOCK OPTIONS ACTIV
SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Equity [Abstract] | ||
Shares, Outstanding beginning | 31,372,148 | |
Weighted Average Exercise Price Outstanding, beginning | $ 1.84 | |
Shares, Granted | 6,025,815 | 900,000 |
Weighted Average Exercise Price, Granted | $ 3.95 | |
Shares, Exercised | (100,000) | |
Weighted Average Exercise Price, Exercised | $ 0.38 | |
Shares, Expired or cancelled | (2,477,832) | |
Weighted Average Exercise Price, Expired or cancelled | $ 1.84 | |
Shares, Outstanding ending | 34,820,131 | |
Weighted Average Exercise Price Outstanding, ending | $ 2.21 |
SUMMARY OF STOCK OUTSTANDING AN
SUMMARY OF STOCK OUTSTANDING AND EXERCISABLE (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Outstanding Options | 34,820,131 |
Weighted-Average Remaining Life In Years | 5 years 5 months 1 day |
Weighted-Average Exercise Price | $ / shares | $ 2.21 |
Number Exercisable | 18,765,371 |
Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Outstanding Options | 144,200 |
Weighted-Average Remaining Life In Years | 4 years 9 months 3 days |
Weighted-Average Exercise Price | $ / shares | $ 5 |
Number Exercisable | 144,200 |
Exercise Price Range One [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 0.38 |
Outstanding Options | 2,733,333 |
Weighted-Average Remaining Life In Years | 2 years 4 months 13 days |
Weighted-Average Exercise Price | $ / shares | $ 0.38 |
Number Exercisable | 2,733,333 |
Exercise Price Range One [Member] | Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 5 |
Outstanding Options | 144,200 |
Weighted-Average Remaining Life In Years | 4 years 9 months 3 days |
Weighted-Average Exercise Price | $ / shares | $ 5 |
Number Exercisable | 144,200 |
Exercise Price Range Two [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 0.40 |
Outstanding Options | 3,600,000 |
Weighted-Average Remaining Life In Years | 2 years 3 months 21 days |
Weighted-Average Exercise Price | $ / shares | $ 0.40 |
Number Exercisable | 3,600,000 |
Exercise Price Range Three [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 0.50 |
Outstanding Options | 8,732,388 |
Weighted-Average Remaining Life In Years | 3 years 1 month 13 days |
Weighted-Average Exercise Price | $ / shares | $ 0.50 |
Number Exercisable | 8,412,538 |
Exercise Price Range Four [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 1.40 |
Outstanding Options | 1,417,251 |
Weighted-Average Remaining Life In Years | 5 years 4 months 20 days |
Weighted-Average Exercise Price | $ / shares | $ 1.40 |
Number Exercisable | 1,372,395 |
Exercise Price Range Five [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 2 |
Outstanding Options | 5,045,200 |
Weighted-Average Remaining Life In Years | 4 years 9 months 29 days |
Weighted-Average Exercise Price | $ / shares | $ 2 |
Number Exercisable | 2,251,750 |
Exercise Price Range Six [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 2.05 |
Outstanding Options | 1,421,703 |
Weighted-Average Remaining Life In Years | 3 years 11 months 1 day |
Weighted-Average Exercise Price | $ / shares | $ 2.05 |
Number Exercisable | 342,396 |
Exercise Price Range Seven [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 2.25 |
Outstanding Options | 1,100,000 |
Weighted-Average Remaining Life In Years | 9 years 9 months 10 days |
Weighted-Average Exercise Price | $ / shares | $ 2.25 |
Number Exercisable | |
Exercise Price Range Eight [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 3.05 |
Outstanding Options | 170,000 |
Weighted-Average Remaining Life In Years | 4 years 3 months 29 days |
Weighted-Average Exercise Price | $ / shares | $ 3.05 |
Number Exercisable | |
Exercise Price Range Nine [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 3.20 |
Outstanding Options | 22,000 |
Weighted-Average Remaining Life In Years | 9 years 11 months 4 days |
Weighted-Average Exercise Price | $ / shares | $ 3.20 |
Number Exercisable | |
Exercise Price Range Ten [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 3.46 |
Outstanding Options | 12,000 |
Weighted-Average Remaining Life In Years | 9 years 11 months 8 days |
Weighted-Average Exercise Price | $ / shares | $ 3.46 |
Number Exercisable | |
Exercise Price Range Eleven [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 3.60 |
Outstanding Options | 155,000 |
Weighted-Average Remaining Life In Years | 4 years 3 months 29 days |
Weighted-Average Exercise Price | $ / shares | $ 3.60 |
Number Exercisable | |
Exercise Price Range Twelve [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 4 |
Outstanding Options | 624,340 |
Weighted-Average Remaining Life In Years | 4 years 3 months 18 days |
Weighted-Average Exercise Price | $ / shares | $ 4 |
Number Exercisable | |
Exercise Price Range Thirteen [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 4.12 |
Outstanding Options | 12,000 |
Weighted-Average Remaining Life In Years | 9 years 11 months 4 days |
Weighted-Average Exercise Price | $ / shares | $ 4.12 |
Number Exercisable | |
Exercise Price Range Fourteen [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 4.21 |
Outstanding Options | 18,000 |
Weighted-Average Remaining Life In Years | 9 years 11 months 19 days |
Weighted-Average Exercise Price | $ / shares | $ 4.21 |
Number Exercisable | |
Exercise Price Range Fifteen [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 4.82 |
Outstanding Options | 1,062,827 |
Weighted-Average Remaining Life In Years | 9 years 11 months 15 days |
Weighted-Average Exercise Price | $ / shares | $ 4.82 |
Number Exercisable | |
Exercise Price Range Sixteen [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 5 |
Outstanding Options | 8,599,088 |
Weighted-Average Remaining Life In Years | 9 years 7 months 6 days |
Weighted-Average Exercise Price | $ / shares | $ 5 |
Number Exercisable | 52,958 |
Exercise Price Range Seventeen [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Range of exercise prices | $ / shares | $ 6.75 |
Outstanding Options | 95,000 |
Weighted-Average Remaining Life In Years | 4 years 3 months 29 days |
Weighted-Average Exercise Price | $ / shares | $ 5 |
Number Exercisable |
SCHEDULE OF STOCK WARRANTS ASSU
SCHEDULE OF STOCK WARRANTS ASSUMPTIONS (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Contractual term (years) | 10 years | 5 years |
Expected volatility | 65.00% | 74.00% |
Expected dividends | 0.00% | 0.00% |
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Expected volatility | 84.00% | |
Expected dividends | 0.00% | |
Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Risk free interest rate | 0.63% | 0.42% |
Minimum [Member] | Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Risk free interest rate | 1.47% | |
Contractual term (years) | 4 years | |
Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Risk free interest rate | 2.46% | 0.48% |
Maximum [Member] | Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Risk free interest rate | 1.62% | |
Contractual term (years) | 5 years |
SCHEDULE OF STOCK WARRANT ACTIV
SCHEDULE OF STOCK WARRANT ACTIVITY (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Number of Warrants Outstanding, Beginning Balance | shares | |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ / shares | |
Number of Warrants, Granted | shares | 144,200 |
Weighted Average Exercise Price, Granted | $ / shares | $ 5 |
Number of Warrants, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Warrants, Expired or cancelled | shares | |
Weighted Average Exercise Price, Expired or Cancelled | $ / shares | |
Number of Warrants Outstanding, Ending Balance | shares | 144,200 |
Weighted Average Exercise Price, Outstanding Ending Balance | $ / shares | $ 5 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Jun. 06, 2019 | Mar. 31, 2022 | Mar. 31, 2021 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stock options granted | 6,025,815 | 900,000 | |
Stock based compensation | $ 4,687,093 | $ 838,762 | |
Unrecognized stock-based compensation expense | $ 46,517,161 | ||
Unrecognized stock-based compensation expense, recognition period | 2 years 2 months 12 days | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 105,004,192 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 85,717,281 | ||
Fair value of common stock | $ 5.32 | ||
Warrants outstanding and exercisable aggregate intrinsic value | $ 46,144 | ||
Common Stock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Fair value of common stock | $ 5.32 | ||
Cost of Payroll [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stock based compensation | $ 2,121,583 | 100,925 | |
Selling, General and Administrative Expenses [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stock based compensation | $ 2,565,510 | $ 737,837 | |
2019 Equity Incentive Plan [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Maximum number of shares authorized under plan | 25,000,000 | ||
Share-based compensation arrangement expiration period | 10 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Share issued price per share | $ 5.32 | |
Maxim Settlement Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Litigation settlement expense | $ 470,000 | |
Number of shares issued, shares | 400,000 | |
Share issued price per share | $ 5 | |
Repayment of debt | $ 470,000 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Total notes payable | $ 4,697,586 | $ 5,018,788 |
Less current portion | (196,206) | (213,199) |
Long term notes payable | 4,501,380 | 4,805,589 |
Notes Payable One [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 557,582 | 607,915 |
Notes Payable Two [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 400,981 | 437,178 |
Notes Payable Three [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 141,804 | 148,665 |
Notes Payable Four [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 160,530 | 168,308 |
Notes Payable Five [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 29,230 | 33,418 |
Notes Payable Six [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 939,066 | 998,759 |
Notes Payable Seven [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 109,774 | 129,692 |
Notes Payable Eight [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 149,538 | 179,591 |
Notes Payable Nine [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 5,817 | |
Notes Payable Ten [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 45,936 | 58,805 |
Notes Payable Eleven [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 136,172 | 206,993 |
Notes Payable Twelve [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 196,206 | 191,792 |
Notes Payable Threeteen [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 136,172 | 182,088 |
Notes Payable Fourteen [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 540,933 | 557,445 |
Notes Payable Fifteen [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 95,981 | 99,574 |
Notes Payable Sixteen [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 924,168 | 869,179 |
Notes Payable Seventeen [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | $ 133,513 | $ 143,569 |
SCHEDULE OF NOTES PAYABLE (De_2
SCHEDULE OF NOTES PAYABLE (Details) (Parenthetical) | 3 Months Ended |
Mar. 31, 2022 | |
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 Thirteen [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 MINIMUM PAYM
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT (Details) | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
2022 (excluding the three months ended March 31, 2022) | $ 3,465,848 |
2023 | 1,069,214 |
2024 | 1,207,280 |
2025 | 752,419 |
2026 | 278,215 |
Thereafter | 1,008,011 |
Total future minimum payments | 7,780,987 |
Less: current | (2,501,563) |
Long term debt, noncurrent | $ 5,279,424 |
LOANS PAYABLE AND LINES OF CR_3
LOANS PAYABLE AND LINES OF CREDIT (Details Narrative) - USD ($) | Mar. 10, 2022 | Oct. 27, 2021 | Sep. 09, 2021 | Feb. 02, 2021 | Apr. 13, 2020 | Feb. 10, 2020 | Jul. 29, 2019 | Apr. 29, 2019 | Apr. 26, 2018 | Jul. 09, 2016 | Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||||||||||||
Lines of credit, current | $ 369,829 | $ 369,829 | |||||||||||
Notes payable | 4,697,586 | 4,697,586 | 5,018,788 | ||||||||||
True Digital [Member] | Loan Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 250,000 | ||||||||||||
Debt maturity date | Apr. 25, 2022 | ||||||||||||
Interest rate | 6.00% | ||||||||||||
Repayments of notes payable | 97,731 | ||||||||||||
Arkavia [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Proceeds from (Repayments of) Notes Payable | 337,680 | ||||||||||||
Promissory Note [Member] | True Digital [Member] | Shareholder [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 113,975 | ||||||||||||
Debt maturity date | Feb. 10, 2027 | ||||||||||||
Interest rate | 600.00% | ||||||||||||
Repayments of notes payable | 2,693 | ||||||||||||
Notes payable | 92,834 | 92,834 | |||||||||||
Promissory Note [Member] | True Digital [Member] | Financial Institution [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 1,271,000 | ||||||||||||
Debt maturity date | Apr. 13, 2022 | ||||||||||||
Interest rate | 100.00% | ||||||||||||
Notes payable | 74,427 | 74,427 | |||||||||||
Debt frequency of periodic payment | seventeen monthly payments | ||||||||||||
Debt periodic payment | $ 71,171 | ||||||||||||
Promissory Note One [Member] | True Digital [Member] | Shareholder [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 510,000 | ||||||||||||
Debt maturity date | May 2, 2024 | ||||||||||||
Interest rate | 400.00% | ||||||||||||
Repayments of notes payable | 23,685 | ||||||||||||
Notes payable | 326,639 | 326,639 | |||||||||||
Convertible Note Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 1,500,000 | ||||||||||||
Debt maturity date | Oct. 27, 2022 | Jan. 27, 2022 | |||||||||||
Interest rate | 5.00% | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 5 | ||||||||||||
Convertible Notes Payable | 1,500,000 | 1,500,000 | |||||||||||
Interest Payable | 30,993 | 30,993 | 12,500 | ||||||||||
Interest Expense, Debt | 18,493 | ||||||||||||
Blue Sky Bank [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit | $ 500,000 | ||||||||||||
Line of credit expiration date | Aug. 9, 2022 | ||||||||||||
Lines of credit, current | 369,829 | 369,829 | |||||||||||
SunTrust Bank[Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
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% | ||||||||||||
Blue Sky Bank [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit interest rate percentage | 3.25% | ||||||||||||
Technologyville Inc [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 59,905 | ||||||||||||
Debt maturity date | May 12, 2025 | ||||||||||||
Interest rate | 5.77% | ||||||||||||
Repayments of notes payable | 5,532 | ||||||||||||
Notes payable | 27,122 | 27,122 | 32,474 | ||||||||||
Catapult Acquistion Corp [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 600,000 | ||||||||||||
Debt maturity date | Jul. 31, 2023 | ||||||||||||
Interest rate | 5.00% | ||||||||||||
Repayments of notes payable | 80,956 | ||||||||||||
Notes payable | $ 370,587 | 370,587 | $ 446,239 | ||||||||||
Catapult Acquistion Corp [Member] | Principal Amount [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of notes payable | 75,652 | ||||||||||||
Catapult Acquistion Corp [Member] | Accrued Interest [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of notes payable | $ 5,304 | ||||||||||||
Catapult Acquistion Corp [Member] | Three Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 150,000 |
SCHEDULE OF LEASE COST AND OTHE
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION (Details) - USD ($) | Mar. 31, 2022 | Jan. 19, 2022 | Dec. 31, 2021 |
Leases | |||
Operating lease cost ROU assets | $ 406,770 | $ 226,942 | $ 277,578 |
Total lease assets | 406,770 | 277,578 | |
Operating lease liabilities, current | 211,752 | $ 226,942 | 196,472 |
Operating lease liabilities, non-current | 202,918 | 88,040 | |
Total lease liabilities | $ 414,670 | $ 284,512 |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases | ||
Operating lease costs | $ 158,041 | $ 14,194 |
Total lease costs | $ 158,041 | $ 14,194 |
SCHEDULE OF FUTURE MINIMUM UNDE
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases | ||
2022 (excluding the three months ended March 31, 2022) | $ 189,657 | |
2023 | 144,866 | |
2024 | 57,605 | |
2025 | 54,389 | |
Total future minimum lease payments | 446,517 | |
Amount representing interest | (31,846) | |
Total lease liabilities | $ 414,670 | $ 284,512 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Mar. 31, 2022 | Jan. 19, 2022 | Dec. 31, 2021 |
Leases | |||
Operating lease liabilities | $ 211,752 | $ 226,942 | $ 196,472 |
Operating lease right-of-use assets | $ 406,770 | $ 226,942 | $ 277,578 |
Weighted average discount rate | 6.00% | ||
Weighted average remaining lease term | 2 years 2 months 15 days |
SCHEDULE OF REVENUE BY GEOGRAPH
SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 9,329,410 | $ 2,559,778 |
UNITED STATES | ||
Revenue from External Customer [Line Items] | ||
Revenue | 8,406,230 | 2,559,778 |
CHILE | ||
Revenue from External Customer [Line Items] | ||
Revenue | 923,180 | |
Service [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 8,052,225 | 1,871,817 |
Service [Member] | UNITED STATES | ||
Revenue from External Customer [Line Items] | ||
Revenue | 7,183,987 | 1,871,817 |
Service [Member] | CHILE | ||
Revenue from External Customer [Line Items] | ||
Revenue | 868,238 | |
Professional Services [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,277,185 | 687,961 |
Professional Services [Member] | UNITED STATES | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,222,243 | 687,961 |
Professional Services [Member] | CHILE | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 54,942 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | $ 3,442,937 | $ 2,394,424 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | 1,064,519 | 95,069 |
CHILE | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | $ 2,378,418 | $ 2,299,355 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | |||
FDIC insured amount | $ 1,894,000 | $ 1,119,000 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Clients [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 32.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Clients [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 20.00% | ||
Maximum [Member] | |||
Concentration Risk [Line Items] | |||
FDIC insured amount | $ 250,000 | ||
Maximum [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | No Client [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Maximum [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | No Clients [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% |