Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 26, 2020 | Jun. 28, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | INTELLINETICS, INC. | ||
Entity Central Index Key | 0001081745 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 794,756 | ||
Entity Common Stock, Shares Outstanding | 2,810,840 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 404,165 | $ 1,088,630 |
Accounts receivable, net | 329,571 | 135,739 |
Prepaid expenses and other current assets | 138,396 | 162,495 |
Total current assets | 872,132 | 1,386,864 |
Property and equipment, net | 6,919 | 9,131 |
Right of use asset | 97,239 | |
Other assets | 10,284 | 10,284 |
Total assets | 986,574 | 1,406,279 |
Current liabilities: | ||
Accounts payable and accrued expenses | 371,017 | 308,121 |
Lease liability - current | 47,397 | |
Deferred revenues | 754,073 | 723,619 |
Deferred compensation | 117,166 | 165,166 |
Accrued interest payable | 1,212,498 | |
Notes payable, net | 3,339,963 | |
Notes payable - related party, net | 1,467,400 | 46,807 |
Total current liabilities | 7,309,514 | 1,243,713 |
Long-term liabilities: | ||
Notes payable | 3,144,926 | |
Notes payable - related party | 1,045,937 | |
Lease liability - net of current portion | 53,318 | |
Accrued interest payable | 502,295 | |
Total long-term liabilities | 53,318 | 4,693,158 |
Total liabilities | 7,362,832 | 5,936,871 |
Stockholders' deficit: | ||
Common stock, $0.001 par value, 1,500,000 shares authorized; 370,497 and 354,588 shares issued and outstanding at December 31, 2019 and 2018, respectively | 31,528 | 30,733 |
Additional paid-in capital | 14,388,280 | 14,101,460 |
Accumulated deficit | (20,796,066) | (18,662,785) |
Total stockholders' deficit | (6,376,258) | (4,530,592) |
Total liabilities and stockholders' deficit | $ 986,574 | $ 1,406,279 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,500,000 | 1,500,000 |
Common stock, shares issued | 370,497 | 354,588 |
Common stock, shares outstanding | 370,497 | 354,588 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | ||
Total revenues | $ 2,535,955 | $ 2,381,427 |
Cost of revenues: | ||
Total cost of revenues | 567,843 | 742,405 |
Gross profit | 1,968,112 | 1,639,022 |
Operating expenses: | ||
General and administrative | 2,131,385 | 2,106,851 |
Sales and marketing | 981,618 | 997,910 |
Depreciation | 7,701 | 9,040 |
Total operating expenses | 3,120,704 | 3,113,801 |
Loss from operations | (1,152,592) | (1,474,779) |
Other income (expense) | ||
Interest expense, net | (980,689) | (865,501) |
Net loss | $ (2,133,281) | $ (2,340,280) |
Basic and diluted net loss per share: | $ (5.76) | $ (6.60) |
Weighted average number of common shares outstanding - basic and diluted | 370,279 | 354,538 |
Sale of Software [Member] | ||
Revenues: | ||
Total revenues | $ 189,165 | $ 173,691 |
Cost of revenues: | ||
Total cost of revenues | 8,633 | 69,754 |
Software as a Service [Member] | ||
Revenues: | ||
Total revenues | 859,637 | 748,754 |
Cost of revenues: | ||
Total cost of revenues | 254,999 | 300,235 |
Software Maintenance Services [Member] | ||
Revenues: | ||
Total revenues | 1,011,278 | 995,170 |
Cost of revenues: | ||
Total cost of revenues | 87,280 | 100,205 |
Professional Services [Member] | ||
Revenues: | ||
Total revenues | 449,707 | 289,962 |
Cost of revenues: | ||
Total cost of revenues | 192,129 | 120,421 |
Third Party Services [Member] | ||
Revenues: | ||
Total revenues | 26,168 | 173,850 |
Cost of revenues: | ||
Total cost of revenues | $ 24,802 | $ 151,790 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 30,431 | $ 13,648,519 | $ (16,322,505) | $ (2,643,555) |
Balance, shares at Dec. 31, 2017 | 348,536 | |||
Stock Issued to Directors | 302 | 57,198 | 57,500 | |
Stock Issued to Directors, shares | $ 6,052 | |||
Stock Option Compensation | $ 249,025 | $ 249,025 | ||
Note Offer Warrants | 64,347 | 64,347 | ||
Beneficial Conversion of Convertible Notes | 82,371 | 82,371 | ||
Net loss | (2,340,280) | (2,340,280) | ||
Balance at Dec. 31, 2018 | $ 30,733 | 14,101,460 | (18,662,785) | (4,530,592) |
Balance, shares at Dec. 31, 2018 | 354,588 | |||
Stock Issued to Directors and Employee | $ 795 | 86,705 | 87,500 | |
Stock Issued to Directors and Employee, shares | 15,909 | |||
Stock Option Compensation | 200,115 | 200,115 | ||
Net loss | (2,133,281) | (2,133,281) | ||
Balance at Dec. 31, 2019 | $ 31,528 | $ 14,388,280 | $ (20,796,066) | $ (6,376,258) |
Balance, shares at Dec. 31, 2019 | 370,497 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (2,133,281) | $ (2,340,280) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,701 | 9,039 |
Bad debt expense | 28,307 | (7,223) |
Amortization of deferred financing costs | 183,851 | 232,609 |
Amortization of beneficial conversion option | 70,718 | 202,220 |
Amortization of right of use asset | 41,310 | |
Stock issued for services | 87,500 | 57,500 |
Stock options compensation | 200,115 | 249,025 |
Amortization of original issue discount on notes | 11,931 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (222,139) | 167,299 |
Prepaid expenses and other current assets | 24,099 | (45) |
Right of use asset | (138,549) | |
Accounts payable and accrued expenses | 62,896 | (97,034) |
Lease liability, current and long-term | 100,715 | |
Deferred compensation | (48,000) | (48,000) |
Accrued interest, current and long-term | 710,203 | 401,994 |
Deferred revenues | 30,454 | 15,489 |
Total adjustments | 1,151,112 | 1,182,873 |
Net cash used in operating activities | (982,169) | (1,157,407) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (5,489) | (3,410) |
Net cash used in investing activities | (5,489) | (3,410) |
Cash flows from financing activities: | ||
Payment of deferred financing costs | (130,841) | |
Proceeds from notes payable | 900,000 | |
Proceeds from notes payable - related parties | 350,000 | 400,000 |
Repayment of notes payable - related parties | (46,807) | (45,633) |
Net cash provided by financing activities | 303,193 | 1,123,526 |
Net decrease in cash | (684,465) | (37,291) |
Cash - beginning of period | 1,088,630 | 1,125,921 |
Cash - end of period | 404,165 | 1,088,630 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest and taxes | 7,706 | 34,852 |
Supplemental disclosure of non-cash financing activities: | ||
Discount on notes payable for beneficial conversion feature | 57,661 | |
Discount on notes payable - related parties for beneficial conversion feature | 24,710 | |
Discount on notes payable for warrants | 44,548 | |
Discount on notes payable - related parties for warrants | $ 19,799 |
Business Organization and Natur
Business Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization and Nature of Operations | 1. Business Organization and Nature of Operations Intellinetics, Inc., formerly known as GlobalWise Investments, Inc., (“Intellinetics”), is a Nevada corporation incorporated in 1997, with a single operating subsidiary, Intellinetics, Inc., an Ohio corporation (“Intellinetics Ohio”), together with Intellinetics, the (“Company,” “we,” “us,” and “our”). Intellinetics Ohio was incorporated in 1996, and on February 10, 2012, Intellinetics Ohio became the sole operating subsidiary of Intellinetics as a result of a reverse merger and recapitalization. The Company is a document solutions software development, sales and marketing company serving both the public and private sectors. The Company’s software platform allows customers to capture and manage all documents across operations such as scanned hard-copy documents and all digital documents including those from Microsoft Office 365, digital images, audio, video and emails. The Company’s solutions create value for customers by making it easy to connect business-critical documents to the processes they drive by making them easy to find, secure and compliant with its customers’ audit requirements. On March 2, 2020, Intellinetics acquired all of the issued and outstanding capital stock of Graphic Sciences, Inc. (the “GSI Acquisition”). Located in Madison Heights, Michigan, Graphic Sciences is a document management company that provides indexing and scanning services, as well as physical document storage and retrieval services. See Note 16 to the Consolidated Financial Statements, Subsequent Events, for more detail on the GSI Acquisition. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The Company has evaluated subsequent events through the issuance of this Form 10-K. |
Liquidity and Management's Plan
Liquidity and Management's Plans | 12 Months Ended |
Dec. 31, 2019 | |
Underwriting Expenses | |
Liquidity and Management's Plans | 3. Liquidity and Management’s Plans Through December 31, 2019, the Company had incurred an accumulated deficit since its inception of $20,796,066. At December 31, 2019, the Company had a cash balance of $404,165. From the Company’s inception, it has generated revenues from the sales and implementation of its internally generated software applications. The Company’s business plan is to increase our sales and market share by developing a targeted marketing approach to select vertical markets, enhance our direct selling results, continue to develop a network of select resellers through which we expect to sell our expanded software product portfolio. We expect that this marketing initiative will require us to continue our efforts towards direct marketing campaigns and leads management, reseller on-boarding, and to develop additional software integration and customization capabilities, all of which will require additional capital. The Company believes that, through the next 12 months, the capital requirements to cover the Company’s operating costs and fund growth may not be met from cash flows generated by operations. Given the current outbreak of and containment strategies for coronavirus (COVID-19) and given our history of operating losses, there is no assurance that the Company will be able to obtain additional capital or debt financing within that time. During 2018 and 2019, the Company has used, and been dependent upon, the proceeds from the issuance of convertible notes to sustain operations and execute its business plan. There is no assurance that the Company has, or in the future will be able to obtain, sufficient funds to continue to fund the Company’s operations. Given these conditions, the Company’s ability to continue as a going concern is contingent upon either sufficiently enhancing its operating cash flow, through increasing its revenues and successfully managing its cash requirements, or raising financing through the issuance of additional debt or equity, or some combination of both. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrants into established markets, the competitive environment in which the Company operates and its cash requirements. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Since inception, the Company’s operations have primarily been funded through a combination of gross profits, state business development loans, bank loans, convertible loans, and the sale of securities. Although management believes that the Company may have access to additional capital resources, there are currently no commitments or arrangements in effect that would provide for new financing and there is no assurance that the Company will be able to obtain sufficient additional funds on commercially acceptable terms, if at all. During the twelve months ended December 31, 2019, the Company raised $350,000 through the issuance of notes payable. During the twelve months ended December 31, 2018, the Company raised $1,169,159, net of financing costs of $130,841, through the issuance of convertible notes and warrants. The proceeds from the issuances were used to fund the Company’s working capital needs and debt repayment obligations. See also Note 16 for additional information about the Company’s acquisition and related subsequent events. The current level of cash and operating margins may not be enough to cover the existing fixed and variable obligations of the Company, so increased revenue performance and the addition of capital are critical to the Company’s success. The Company’s consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should it be unable to continue as a going concern. |
Corporate Actions
Corporate Actions | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Interest Expense | |
Corporate Actions | 4. Corporate Actions On February 10, 2012, Intellinetics Ohio was acquired by Intellinetics, when it was known as GlobalWise Investments, Inc., pursuant to a reverse merger, with Intellinetics Ohio surviving as a wholly owned subsidiary of Intellinetics. On September 1, 2014, the Company changed its name from GlobalWise Investments, Inc., to Intellinetics, Inc. and effected a one-for-seven (1-for-7) reverse stock split of the Company’s common stock. All share and per share amounts herein have been adjusted to reflect the reverse stock split. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 5. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses. Actual results could differ from estimated amounts. Significant estimates and assumptions include valuation allowances related to receivables, the recoverability of long-term assets, depreciable lives of property and equipment, the lease liability, estimates of fair value deferred taxes and related valuation allowances. The Company’s management monitors these risks and assesses its business and financial risks on a quarterly basis. Revenue Recognition Effective January 1, 2018, we adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”), using the full retrospective transition method. Adoption of the standard using the full retrospective method required us to restate certain previously reported results. In accordance with ASC 606, the Company follows a five-step model to assess each contract of a sale or service to a customer: identify the legally binding contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized when a performance obligation is satisfied and the customer obtains control of promised goods and services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods and services. In addition, ASC 606 requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We categorize revenue as software, software as a service, software maintenance services, professional services, and third party services. We earn the majority of our revenue from the sale of software as a service and the sale of software maintenance services. Specific revenue recognition policies apply to each category of revenue. a) Sale of software Revenues included in this classification typically include sales of licenses with professional services to new customers, additional software licenses to existing customers, and sales of software with or without services to the Company’s resellers (See section j) - Reseller Agreements, below. Our software licenses are functional intellectual property and typically provide customers with the right to use our software in perpetuity as it exists when made available to the customer. We recognize revenue from software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. b) Sale of software as a service Sale of software as a service (“SaaS”) consists of revenues from arrangements that provide customers the use of the Company’s software applications, as a service, typically billed on a monthly or annual basis. Advance billings of these services are not recorded to the extent that the term of the arrangement has not commenced and payment has not been received. Revenue on these services is recognized over the contract period. c) Sale of software maintenance services Software maintenance services revenues consist of revenues derived from arrangements that provide post-contract support (“PCS”), including software support and bug fixes, to the Company’s software license holders. Advance billings of PCS are not recorded to the extent that the term of the PCS has not commenced and payment has not been received. PCS are considered distinct services. However, these distinct services are considered a single performance obligation consisting of a series of services that are substantially the same and have the same pattern of transfer to the customer. These revenues are recognized over the term of the maintenance contract. d) Sale of professional services Professional services consist principally of revenues from consulting, advisory services, training and customer assistance with management and uploading of data into the Company’s applications. We recognize professional services revenue over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted), provided all other revenue recognition criteria are met. e) Sale of third party services Sale of third party services consist principally of third party software and/or equipment as a pass through of software and equipment purchased from third parties at the request of customers. We recognize revenue from third party services at a point in time upon delivery, provided all other revenue recognition criteria are met. In addition, we have considered our relationship with third party vendors as it relates to principal vs. agent considerations and have determined that we are in control of establishing the transaction price for the customer, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on our evaluation of the control model, we determined that we act as the principal rather than the agent within our revenue arrangements and as such, revenues are reported on a gross basis. f) Arrangements with multiple performance obligations In addition to selling software licenses, software as a service, software maintenance services, professional services, and third party services on a stand-alone basis, a portion of our contracts include multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each distinct performance obligation, on a relative basis using its standalone selling price. The Company determines the standalone selling price based on the price charged for the deliverable when sold separately. g) Contract balances When the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by deferred revenue until the performance obligation is satisfied. Contract assets represent arrangements in which the good or service has been delivered but payment is not yet due. Our contract assets consisted of unbilled receivables, which are included in prepaid expenses and other current assets. Our contract liabilities consisted of deferred (unearned) revenue, which is generally related to software as a service or software maintenance contracts. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The following table present changes in our contract assets and liabilities during the twelve months ended December 31, 2019 and 2018: Balance at Beginning Revenue Recognized Billings Balance at Twelve months ended December 31, 2019 Contract assets: Unbilled receivables $ 65,118 $ 156,876 $ (198,623 ) $ 23,371 Twelve months ended December 31, 2018 Contract assets: Unbilled receivables $ 89,847 $ 319,221 $ (343,950 ) $ 65,118 (a) Unbilled receivables were reflected within other current assets on the consolidated balance sheets. Balance at Billings Recognized Revenue Balance at Twelve months ended December 31, 2019 Contract liabilities: Deferred revenue $ 723,619 $ 2,637,191 $ (2,606,737 ) $ 754,073 Twelve months ended December 31, 2018 Contract liabilities: Deferred revenue $ 708,130 $ 2,370,975 $ (2,355,486 ) $ 723,619 h) Deferred revenue Amounts that have been invoiced are recognized in accounts receivable, deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet be recognized. Deferred revenues typically relate to maintenance and software-as-a-service agreements which have been paid for by customers prior to the performance of those services, and payments received for professional services and license arrangements and software-as-a-service performance obligations that have been deferred until fulfilled under our revenue recognition policy. Remaining performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 91% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. As of December 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations for software as a service and software maintenance contracts with a duration greater than one year was $69,381. This does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less. i) Rights of return and customer acceptance The Company does not generally offer variable consideration, financing components, rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, does not provide for or make estimates of rights of return and similar incentives. Our contracts with customers generally do not include customer acceptance clauses. j) Reseller agreements The Company executes certain sales contracts through resellers. The Company recognizes revenues relating to sales through resellers when all the recognition criteria have been met including passing of control. In addition, the Company assesses the credit-worthiness of each reseller, and if the reseller is undercapitalized or in financial difficulty, any revenues expected to emanate from such resellers are deferred and recognized only when cash is received and all other revenue recognition criteria are met. k) Contract costs The Company capitalizes the incremental costs of obtaining a contract with a customer. We have determined that certain sales commissions meet the requirement to be capitalized, and we amortize these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain contracts were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. l) Sales taxes Sales taxes charged to and collected from customers as part of the Company’s sales transactions are excluded from revenues, as well as the determination of transaction price for contracts with multiple performance obligations, and recorded as a liability to the applicable governmental taxing authority. m) Disaggregation of revenue The Company provides disaggregation of revenue based on product groupings in our consolidated statements of operations as it believes this best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Revenues from contracts are primarily within the United States. International revenues were not material to the consolidated financial statements for the twelve months ended December 31, 2019 and 2018. n) Significant financing component The Company’s customers typically do not pay in advance for goods or services to be transferred in excess of one year. As such, it is not necessary to determine if the Company benefits from the time value of money and should record a component of interest income related to the upfront payment due to the practical expedient of ASC 606-10-32-18. Concentrations of Credit Risk The Company maintains its cash with high credit quality financial institutions. At times, the Company’s cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The number of customers that comprise the Company’s customer base, along with the different industries, governmental entities and geographic regions, in which the Company’s customers operate, limits concentrations of credit risk with respect to accounts receivable. The Company does not generally require collateral or other security to support customer receivables; however, the Company may require its customers to provide retainers, up-front deposits or irrevocable letters-of-credit when considered necessary to mitigate credit risks. The Company has established an allowance for doubtful accounts based upon facts surrounding the credit risk of specific customers and past collections history. Credit losses have been within management’s expectations. At December 31, 2019 and 2018, the Company’s allowance for doubtful accounts was $35,733 and $7,427, respectively. Property and Equipment Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed over the estimated useful lives of the related assets on a straight-line basis. Furniture and fixtures, computer hardware and purchased software are depreciated over three to seven years. Leasehold improvements are amortized over the life of the lease or the asset, whichever is shorter, generally seven to ten years. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation and amortization of these assets are removed from the accounts and the resulting gains and losses are reflected in the results of operations. Impairment of Long-Lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 360, “Property, Plant, and Equipment.” The Company tests long-lived assets or asset groups, such as property and equipment, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. Stock-Based Compensation The Company accounts for stock-based payments to employees in accordance with ASC 718, “Compensation - Stock Compensation.” Stock-based payments to employees include grants of stock that are recognized in the consolidated statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 718, “Compensation - Stock Compensation,” which requires that such equity instruments are recorded at their fair values on the grant date. The grant date fair value of stock option awards is recognized in earnings as stock-based compensation cost over the requisite service period of the award using the straight-line attribution method. The Company estimates the fair value of the stock option awards using the Black-Scholes-Merton option pricing model. The exercise price of options is specified in the stock option agreements. The expected volatility is based on the historical volatility of the Company’s stock for the previous period equal to the expected term of the options. The expected term of options granted is based on the midpoint between the vesting date and the end of the contractual term. The risk-free interest rate is based upon a U.S. Treasury instrument with a life that is similar to the expected term of the options. The expected dividend yield is based upon the yield expected on date of grant to occur over the term of the option. Software Development Costs The Company designs, develops, tests, markets, licenses, and supports new software products and enhancements of current products. The Company continuously monitors its software products and enhancements to remain compatible with standard platforms and file formats. In accordance with ASC 985-20 “Costs of Software to be Sold, Leased or Otherwise Marketed,” the Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Once technological feasibility has been established, certain software development costs incurred during the application development stage are eligible for capitalization. Based on the Company’s software development process, technical feasibility is established upon completion of a working model. Technological feasibility is typically reached shortly before the release of such products. No such costs were capitalized during the periods presented in this report. In accordance with ASC 350-40, “Internal-Use Software,” the Company capitalizes purchase and implementation costs of internal use software. Once an application has reached development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon complete of all substantial testing. The Company also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. No such costs were capitalized during the periods presented in this report. For the twelve months ended December 31, 2019 and 2018, our expensed software development costs were $467,364 and $359,789, respectively. Recent Accounting Pronouncements Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASC 842”) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 was effective for the Company beginning in its first quarter of 2019. On January 1, 2019, the Company recorded a lease liability of $143,761 and a net right-of-use asset of $138,549 using the required modified retrospective approach. In adopting ASC 842, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which does not require the reassessment of the following: i) whether existing or expired arrangements are or contain a lease, ii) the lease classification of existing or expired leases, and iii) whether previous initial costs would qualify as capitalization under the new lease standard. Recently Issued Accounting Pronouncements Not Yet Effective Intangibles – Goodwill and Other – Internal-Use Software In August 2018, the FASB issued ASU 2018-15, which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASC 2018-15 is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Fair Value In August 2018, the FASB issued ASU 2018-13, which is guidance that changes the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) All other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future consolidated financial statements. Advertising The Company expenses the cost of advertising as incurred. Advertising expense for the twelve months ended December 31, 2019 and 2018 amounted to $4,255 and $21,402, respectively. Earnings (Loss) Per Share Basic earnings per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The Company has outstanding stock options which have not been included in the calculation of diluted net loss per share because to do so would be anti-dilutive. As such, the numerator and the denominator used in computing both basic and diluted net loss per share for each period are the same. Income Taxes The Company and its subsidiary file a consolidated federal income tax return. The provision for income taxes is computed by applying statutory rates to income before taxes. Deferred income taxes are recognized for the tax consequences in future years of temporary differences between the financial reporting and tax bases of assets and liabilities as of each period-end based on enacted tax laws and statutory rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. A 100% valuation allowance has been established on deferred tax assets at December 31, 2019 and 2018, due to the uncertainty of our ability to realize future taxable income. The Company accounts for uncertainty in income taxes in its financial statements as required under ASC 740, “Income Taxes.” The standard prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition accounting. Management determined there were no material uncertain positions taken by the Company in its tax returns. Segment Information The Company has one reportable segment . Statement of Cash Flows For purposes of reporting cash flows, cash includes cash on hand and demand deposits held by banks. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy included in U.S. GAAP gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable, and these valuations have the lowest priority. Management believes that the carrying values of cash and equivalents, accounts receivable, accounts payable, accrued expenses, and the 2019 Related Notes approximate fair value because of their short maturity. The table below reflects all notes payable at December 31, 2019 and 2018, respectively. December 31, 2019 December 31, 2018 Fair Value Fair Value 2016 Unrelated Notes (a) $ 942,256 (a) $ 1,000,261 2017 Unrelated Notes (a) 2,011,859 (a) 2,275,686 2018 Unrelated Notes (a) 1,028,792 (b) 900,000 Total $ 3,982,907 $ 4,175,947 December 31, 2019 December 31, 2018 Fair Value Fair Value The $250,000 Shealy Note $ - (c) $ 46,807 2016 Related Notes (a) 405,784 (a) 433,117 2017 Related Notes (a) 445,810 (a) 504,271 2018 Related Notes (a) 457,241 (b) 400,000 Total $ 1,308,835 $ 1,384,195 (a) The fair value was based upon Level 2 inputs. See Note 8 for additional information about the Company’s 2016, 2017, and 2018 Unrelated Notes. See Note 9 for additional information about the Company’s 2016, 2017, and 2018 Related Notes. (b) The fair value was based upon Level 2 inputs. The 2018 Unrelated and Related Notes were closed in September, 2018 between market participants, therefore, fair value approximated carrying value as of December 31, 2018 given the transaction proximity to December 31, 2018. See Note 8 for additional information about the Company’s 2018 Unrelated Notes. See Note 9 for additional information about the Company’s 2018 Related Notes. (c) The fair value was based upon Level 2 inputs. Short term maturity and interest rate approximates rate that the Company realized with issuance of new debt in September, 2018; therefore, carrying value approximated fair value. See Note 9 for additional information about the Company’s $250,000 Shealy Note. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 7. Property and Equipment Property and equipment are comprised of the following: December 31, 2019 December 31, 2018 Computer hardware and purchased software $ 259,959 $ 254,470 Leasehold improvements 221,666 221,666 Furniture and fixtures 82,056 82,056 563,681 558,192 Less: accumulated depreciation and amortization (556,762 ) (549,061 ) Property and equipment, net $ 6,919 $ 9,131 Total depreciation expense on the Company’s property and equipment for the twelve months ended December 31, 2019 and 2018 amounted to $7,701 and $9,040, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 8. Notes Payable The Company has evaluated the terms of its convertible notes payable in accordance with ASC 815 – 40, “Derivatives and Hedging - Contracts in Entity’s Own Stock” and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion feature did not meet the definition of a derivative and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared with the market price on the date of each note. If the conversion price was deemed to be less than the market value of the underlying common stock at the inception of the note, then the Company recognized a beneficial conversion feature resulting in a discount on the note payable, upon satisfaction of the contingency. The beneficial conversion features are amortized to interest expense over the life of the respective notes, starting from the date of recognition. The Company issued convertible promissory notes on December 30, 2016 in an aggregate amount of $315,000, and on January 6, 2017 and January 31, 2017 in an aggregate amount of $560,000 (collectively, the “2016 Unrelated Notes”), to unrelated accredited investors (the “2016 Note Investors”). Placement agent and escrow agent fees of $100,255 in the aggregate for those issuances, were paid out of the cash proceeds of those issuances. The 2016 Unrelated Notes bore interest at an annual rate of interest of 12% until maturity, with partial interest of 6% payable quarterly, and an original maturity date of December 31, 2018. The 2016 Note Investors had the right, in their sole discretion, to convert the 2016 Unrelated Notes into shares of Company common stock at a conversion rate of $0.65 per share. On September 17, 2018, the 2016 Unrelated Notes were amended to mature on December 31, 2020, and bear interest at an annual rate of interest of 10% until maturity, with partial interest of 5% payable quarterly. With the amendment, the 2016 Note Investors have the right, in their sole discretion, to convert the 2016 Unrelated Notes into shares of Company common stock at a conversion rate of $0.40 per share. The amendment was accounted for as a troubled debt restructuring with the future undiscounted cash flows being greater than the carrying value of the debt prior to extension. No gain was recorded on the amendment, and a new effective interest rate on the 2016 Unrelated Notes was established based on the carrying value of the debt and the revised future cash flows. If the 2016 Unrelated Notes have not been fully repaid by the Company by the maturity date or converted into shares at the election of the 2016 Note Investors prior to maturity, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2016 Unrelated Notes are repaid in full. Any interest not paid quarterly will also accrue interest at the annual rate of 7% instead of 5%. The Company used the proceeds of the 2016 Unrelated Notes for working capital, general corporate purposes, and debt repayment. The Company recognized an initial beneficial conversion feature in the amount of $369,677, plus a fair value adjustment of $56,661 under the troubled debt restructuring accounting. Interest expense recognized on the amortization of the beneficial conversion feature of the 2016 Unrelated Notes was $50,703 and $145,424 for the twelve months ended December 31, 2019 and 2018, respectively. On November 17 and November 30, 2017, the Company issued convertible promissory notes in an aggregate amount of $1,760,000 (“2017 Unrelated Notes”) to unrelated accredited investors (the “2017 Note Investors”). Placement agent and escrow agent fees of $174,810 were paid out of the cash proceeds. The 2017 Unrelated Notes had an original maturity date of November 30, 2019. On September 14, 2018, the 2017 Unrelated Notes were amended to mature on December 31, 2020. The amendment was accounted for as a troubled debt restructuring with the future undiscounted cash flows being greater than the carrying value of the debt prior to extension. No gain was recorded on the amendment, and a new effective interest rate on the 2017 Unrelated Notes was established based on the carrying value of the debt and the revised future cash flows. The 2017 Unrelated Notes bear interest at an annual rate of interest of 8% until maturity, with interest of 8% payable quarterly beginning July 1, 2018. The 2017 Note Investors have the right, in their sole discretion, to convert the 2017 Unrelated Notes into shares of Company common stock under certain circumstances at a conversion rate of $0.20 per share. If the 2017 Unrelated Notes have not been fully repaid by the Company by the maturity date or converted into shares of Company common stock at the election of the 2017 Note Investors prior to maturity, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2017 Unrelated notes are repaid in full. The Company used the proceeds of the 2017 Unrelated Notes for working capital, general corporate purposes, and debt repayment. On September 20 and September 26, 2018, the Company issued convertible promissory notes in an aggregate amount of $900,000 (“2018 Unrelated Notes”) to unrelated accredited investors (the “2018 Note Investors”). Placement agent and escrow agent fees of $106,740 were paid out of the cash proceeds. The 2018 Unrelated Notes mature on December 31, 2020, and bear interest at an annual rate of interest of 8% until maturity, with interest of 8% payable quarterly beginning January 2, 2019. The 2018 Note Investors have the right, in their sole discretion, to convert the 2018 Unrelated Notes into shares of Company common stock under certain circumstances at a conversion rate of $0.13 per share. If the 2018 Unrelated notes have not been fully repaid by the Company by the maturity date or converted into shares at the election of the 2018 Note Investors prior to maturity, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2018 Unrelated Notes are repaid in full. The Company is using the proceeds of the 2018 Unrelated Notes for working capital, general corporate purposes, and debt repayment. The table below reflects all notes payable at December 31, 2019 and 2018, respectively, with the exception of related party notes disclosed in Note 9 - Notes Payable - Related Parties. December 31, 2019 December 31, 2018 2016 Unrelated Notes, net of beneficial conversion feature of $50,703 and $101,405, respectively $ 824,297 $ 773,595 2017 Unrelated Notes 1,760,000 1,760,000 2018 Unrelated Notes 900,000 900,000 Total notes payable $ 3,484,297 $ 3,433,595 Less unamortized debt issuance costs (144,334 ) (288,669 ) Less current portion 3,339,963 - Long-term portion of notes payable $ - $ 3,144,926 Future minimum principal payments of these notes payable as described in this Note 8, with the exception of the related party notes in Note 9 - Notes Payable - Related Parties, are as follows: For the Twelve-Months Ending December 31, Amount 2020 $ 3,535,000 Total $ 3,535,000 As of December 31, 2019 and 2018, accrued interest for these notes payable with the exception of the related party notes in Note 9 - Notes Payable - Related Parties, was $918,307 and $379,339, respectively. As of December 31, 2019, unamortized deferred financing costs were $144,334, and was reflected within current liabilities on the consolidated balance sheets. As of December 31, 2018, unamortized deferred financing costs were $288,669, and was reflected within long-term liabilities on the consolidated balance sheets. With respect to all notes outstanding (other than the notes to related parties), for the twelve months ended December 31, 2019 and 2018, interest expense, including the amortization of deferred financing costs, accrued loan participation fees, original issue discounts, deferred interest and related fees, interest expense related to warrants issued for the conversion of convertible notes, and the embedded conversion feature was $735,474 and $666,458, respectively. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | 9. Notes Payable - Related Parties On March 27, 2012, the Company issued an unsecured promissory note in the amount of $238,000, bearing interest at an annual rate of 10%, payable to Ramon Shealy, a then-director of the Company, who subsequently resigned from the Company’s board of directors (“Board of Directors”) on December 17, 2012, for personal reasons. All principal and interest was initially due and payable on September 27, 2012, but was later extended to November 24, 2012. On April 16, 2012, the Company issued another promissory note payable to Mr. Shealy in the amount of $12,000, bearing interest at a rate of 10%. All principal and interest was initially due on July 15, 2012, but was later extended to November 24, 2012. On November 24, 2012, the two notes were cancelled and replaced with a $250,000 promissory note, under the same terms, with an initial maturity date of January 1, 2014 (the “Shealy Note”). On December 24, 2013, the maturity date of the $250,000 Shealy Note was extended to January 1, 2015. On March 13, 2013, the Company paid $100,000 of the principal amount of the $250,000 Shealy Note. On December 31, 2014, the Company and Mr. Shealy agreed to extend the repayment terms of the Shealy Note for the remaining total principal and interest in the amount of $193,453 so that the outstanding balance of the Shealy Note became payable in 60 monthly installments beginning January 31, 2015, with a maturity date of January 1, 2020. As of December 31, 2019 the Shealy Note was fully repaid. As of December 31, 2018, this Shealy Note had a principal balance of $46,807. On December 30, 2016, the Company issued convertible promissory notes in an aggregate amount of $375,000 (the “2016 Related Notes”) to accredited investors (the “2016 Related Note Investors”), including Robert Taglich and Michael Taglich (each holding more than 5% beneficial interest in the Company’s shares) and Robert Schroeder (a director of the Company). The 2016 Related Notes bore interest at an annual rate of interest of 12% until maturity, with partial interest of 6% payable quarterly, and an initial maturity date of December 31, 2018. The 2016 Related Note Investors had a right, in their sole discretion, to convert the 2016 Related Notes into shares of Company common stock at a conversion rate of $0.65 per share. On September 17, 2018, the 2016 Related Notes were amended to mature on December 31, 2020, and to bear interest at an annual rate of interest of 10% until maturity, with partial interest of 5% payable quarterly. With the amendment, the 2016 Related Note Investors have the right, in their sole discretion, to convert the 2016 Related Notes into shares at a conversion rate of $0.40 per share. The amendment was accounted for as a troubled debt restructuring with the future undiscounted cash flows being greater than the carrying value of the debt prior to extension. No gain was recorded on the amendment, and a new effective interest rate on the 2016 Related Notes was established based on the carrying value of the debt and the revised future cash flows. If the 2016 Related Notes have not been fully repaid by the Company by the maturity date or converted into shares at the election of the 2016 Related Note Investors prior to the maturity date, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2016 Related Notes are repaid in full. Any interest not paid quarterly will also accrue interest at the annual rate of 7% instead of 5%. The Company used the proceeds of the 2016 Related Notes for working capital, general corporate purposes, and debt repayment. The Company recognized an initial beneficial conversion feature in the amount of $144,231, plus a fair value adjustment of $24,710 under the troubled debt restructuring accounting. Interest expense recognized on the amortization of the beneficial conversion feature of the 2016 Related Notes was $20,015 and $56,796 for the twelve months ended December 31, 2019 and 2018, respectively. On September 21, 2017, the Company issued convertible promissory notes in an aggregate principal amount of $154,640 (the “2017 Bridge Notes”) to Robert Taglich and Michael Taglich (each holding more than a 5% beneficial interest in the Company’s shares). The 2017 Bridge Notes included an original issue discount of $4,640. Interest expense recognized on the amortization of the original discount was $889 for the twelve months ended December 31, 2017. The 2017 Bridge Notes bore interest at an annual rate of 8% beginning March 21, 2018 until maturity on September 21, 2018. The effective interest rate was 7% for the term of the 2017 Bridge Notes. Any interest not paid at maturity would accrue interest at the annual rate of 12% instead of 8%. The 2017 Bridge Note investors had the right, in their sole discretion, to convert the 2017 Bridge Notes into securities to be issued by the Company in a private placement of equity, equity equivalents, convertible debt or debt financing. In conjunction with the issue of the 2016 Bridge Notes, 150,000 warrants were issued to the 2017 Bridge Note investors. The warrants have an exercise price equal to $0.30 per share and contain a cashless exercise provision. All warrants are immediately exercisable and are exercisable for five years from issuance. The Company recognized debt issuance costs, recorded as a debt discount, on the issue of the warrants in the amount of $38,836. Interest expense recognized on the amortization of the debt discount was $38,836 for the twelve months ended December 31, 2017. On November 30, 2017, principal in the amount of $150,000 of the 2017 Bridge Notes was converted by the 2017 Bridge Note investors into the 2017 Related Notes, described below. On November 17, 2017, the Company issued convertible promissory notes in an aggregate amount of $390,000 (the “2017 Related Notes”) to accredited investors, including Robert Taglich and Michael Taglich (each holding more than a 5% beneficial interest in the Company’s shares) and James DeSocio (President, Chief Executive Officer and Director), in exchange for the conversion of $150,000 principal amount under the 2017 Bridge Notes and the receipt of $240,000 cash. The 2017 Related Notes were initially scheduled to mature on November 30, 2019. On September 14, 2018, the 2017 Related Notes were amended to mature on December 31, 2020. The amendment was accounted for as a troubled debt restructuring with the future undiscounted cash flows being greater than the carrying value of the debt prior to extension. No gain was recorded, and a new effective interest rate was established based on the carrying value of the debt and the revised future cash flows. The 2017 Related Notes bear interest at an annual rate of 8% until maturity, with interest payable quarterly beginning July 1, 2018. The 2017 Related Note investors have the right, in their sole discretion, to convert the 2017 Related Notes into shares of Company common stock under certain circumstances at a conversion rate of $0.20 per share. If the 2017 Related Notes have not been either fully repaid by the Company or converted into shares by the maturity date, then the 2017 Related Notes will accrue interest at the annual rate of 12% from the maturity date until the date they are repaid in full. The Company used the proceeds of the 2017 Related Notes for working capital, general corporate purposes, and debt repayment. On September 26, 2018, the Company issued convertible promissory notes in an aggregate amount of $400,000 (the “2018 Related Notes”) to accredited investors, including Robert Taglich and Michael Taglich (each holding more than a 5% beneficial interest in the Company’s shares). The 2018 Related Notes mature on December 31, 2020, and bear interest at an annual rate of 8% until maturity, with interest payable quarterly beginning January 2, 2019. The 2018 Related Note investors have the right, in their sole discretion, to convert the 2018 Related Notes into shares of Company common stock under certain circumstances at a conversion rate of $0.13 per share. If the 2018 Related Notes have not been either fully repaid by the Company or converted into shares by the maturity date, then the 2018 Related Notes will accrue interest at the annual rate of 12% from the maturity date until the date they are repaid in full. The Company used the proceeds of the 2018 Related Notes for working capital, general corporate purposes, and debt repayment. On November 15, 2019, the Company issued promissory notes in a maximum aggregate principal amount of $397,728 (the “2019 Related Notes”) to Robert Taglich and Michael Taglich (each holding more than 5% beneficial interest in the Company’s Shares). The notes included an original issue discount of $47,728. Interest expense recognized on the amortization of the original discount was $11,932, for the twelve months ended December 31, 2019. The notes bear no interest in addition to the original issue discount, which is 12% for the term of the notes, and mature on May 15, 2020. If the 2019 Related Notes have not been either fully repaid by the Company or converted into Company shares or other securities by the maturity date, then the 2019 Related Notes will accrue interest at the annual rate of 12% from the maturity date until the date they are repaid in full. The Company is using the proceeds of the 2019 Related Notes for working capital, general corporate purposes, and debt repayment. The table below reflects the notes payable to related parties at December 31, 2019 and 2018, respectively: December 31, 2019 December 31, 2018 The $250,000 Shealy Note $ - $ 46,807 2016 Related Notes, net of beneficial conversion feature of $20,015 and $40,030, respectively 354,985 334,970 2017 Related Notes 390,000 390,000 2018 Related Notes 400,000 400,000 2019 Related Notes 397,728 - Total notes payable - related party $ 1,542,713 $ 1,171,777 Unamortized original issue discount and debt issuance costs (75,313 ) (79,033 ) Less current portion (1,467,400 ) (46,807 ) Long-term portion of notes payable-related party $ - $ 1,045,937 Future minimum principal payments of these notes payable as described in this Note 9 are as follows: For the Twelve Months Ending December 31, Amount 2020 $ 1,562,728 TOTAL $ 1,562,728 As of December 31, 2019 and 2018, accrued interest for these notes payable – related parties amounted to $294,191 and $122,956, respectively, and on the consolidated balance sheets was reflected within current liabilities as of December 31, 2019 and within other long-term liabilities as of December 31, 2018. For the twelve months ended December 31, 2019 and 2018, interest expense in connection with notes payable – related parties was $245,215 and $199,043 respectively. |
Deferred Compensation
Deferred Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | |
Deferred Compensation | 10. Deferred Compensation Pursuant to the Company’s employment agreements with the founders, the founders have earned incentive compensation totaling $117,166 and $165,166 in cash, as of December 31, 2019 and 2018, respectively, which payment obligation has been deferred by the Company until it reasonably believes it has sufficient cash to make the payment. Following the retirement of founder A. Michael Chretien on December 8, 2017, the Company expects to make bi-weekly payments of $1,846 until the deferred compensation has been paid, which will comprise 61 full payments and one partial payment of $1,569. For the twelve months ended December 31, 2019 and 2018, the Company paid $48,000, which is reflected as a reduction in the deferred compensation liability. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Employment Agreements The Company has entered into employment agreements with three of its key executives. Under their respective agreements, the executives serve at will and are bound by typical confidentiality, non-solicitation and non-competition provisions. Deferred compensation for the founders of the Company, as disclosed in Note 10 above, is still outstanding as of December 31, 2019. Operating Leases On January 1, 2010, the Company entered into an agreement to lease 6,000 rentable square feet of office space in Columbus, Ohio. The lease commenced on January 1, 2010 and, pursuant to a lease extension dated August 9, 2016, the lease expires on December 31, 2021. Future minimum lease payments under this operating lease are as follows: For the Twelve Months Ending December 31, Amount 2020 $ 54,288 2021 55,656 $ 109,944 Lease costs charged to operations for the twelve months ended December 31, 2019 and 2018 amounted to $51,254 and $53,006, respectively. Additional information pertaining to the Company’s lease are as follows: For the Twelve Months Ending December 31, 2019: Operating cash flows from operating leases $ 44,247 Weighted average remaining lease term – operating leases 2 years Weighted average discount rate – operating leases 8.0 % |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 12. Stockholders’ Equity Description of Authorized Capital The Company is authorized to issue up to 25,000,000 shares of common stock with $0.001 par value. The holders of the Company’s common stock are entitled to one vote per share. The holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. However, the current policy of the Board of Directors is to retain earnings, if any, for the operation and expansion of the business. Upon liquidation, dissolution or winding-up of the Company, the holders of common stock are entitled to share ratably in all assets of the Company that are legally available for distribution. Issuance of Restricted Common Stock to Directors On January 7, 2019 and January 5, 2018, the Company issued 10,454 and 6,052 shares, respectively, of restricted common stock to directors of the Company as part of an annual compensation plan for directors. The grant of shares was not subject to vesting. Stock compensation of $87,500 and $57,500 was recorded on the issuance of the common stock for the twelve months ended December 31, 2019 and 2018, respectively. Issuance of Warrants Between December 30, 2016 and January 31, 2017, the Company issued convertible promissory notes, the 2016 Unrelated Notes and the 2016 Related Notes (collectively, the “2016 Notes”), in an aggregate amount of $1,250,000 to certain accredited investors, including related parties, in private placements. The Company retained Taglich Brothers, Inc. as the exclusive placement agent for the private placement offering of the 2016 Notes. In January 2017, in compensation for the placement agent’s services in the private placement offering of the 2016 Notes, the Company paid the placement agent a cash payment of $100,000, equal to 8% of the gross proceeds of the offering, along with warrants to purchase 153,846 shares of Company common stock, and the reimbursement for the placement agent’s reasonable out of pocket expenses, FINRA filing fees and related legal fees. The warrants issued to the placement agent contained an exercise price at $0.75 per share, are exercisable for a period of five years after issuance, contain customary cashless exercise provisions and anti-dilution protection and, pursuant to piggyback registration rights, the underlying shares were registered in the Company’s a Registration Statement on Form S-1 declared effective in February 2018. Of the warrants issued to the placement agent, 84,923 warrants were issued in conjunction with proceeds raised in December 2016, and underwriting expense of $65,243 was recorded for the issuance of these warrants, utilizing the Black-Scholes valuation model to value the warrants issued. The remaining 68,923 warrants were issued in conjunction with proceeds raised in January 2017, and underwriting expense of $52,951 was recorded for the issuance of these warrants, utilizing the Black-Scholes valuation model. The fair value of warrants issued was determined to be $0.77. On September 21, 2017, the Company issued warrants to purchase 150,000 shares of Company common stock to Robert Taglich and Michael Taglich (each holding more than a 5% beneficial interest in the Company’s shares) in connection with the 2017 Bridge Notes. The warrants are exercisable at an exercise price of $0.30 per share, contain a cashless exercise provision, antidilution protection and are exercisable for five years after issuance. A debt discount of $38,837 was recorded for the issuance of these warrants, utilizing the Black-Scholes valuation model. The 2017 Bridge Notes were converted into the 2017 Related Notes in November 2017. The fair value of warrants issued was determined to be $0.26 utilizing the Black-Scholes valuation model. Between November 17 and November 30, 2017, the Company issued convertible promissory notes, the 2017 Unrelated Notes and the 2017 Related Notes (collectively, the “2017 Notes”), in an aggregate amount of $2,150,000 to certain accredited investors, including related parties, in private placements. The Company retained Taglich Brothers, Inc. as the exclusive placement agent for the private placement offering of the 2017 Notes. In compensation for the placement agent’s services in the private placement offering of the 2017 Notes, the Company paid the placement agent a cash payment of 8% of the gross proceeds of the offering, along with warrants to purchase shares of Company common stock, and the reimbursement for the placement agent’s reasonable out of pocket expenses, FINRA filing fees and related legal fees. On November 17, 2017, the Company paid the placement agent cash in the amount of $172,000 and issued the placement agent warrants to purchase 354,000 shares at an exercise price at $0.25 per share, which are exercisable for a period of five years after issuance, contain customary cashless exercise provisions and anti-dilution protection and were entitled to piggyback registration rights that were exercised in connection with the Company’s Registration Statement on Form S-1 declared effective in February 2018. On November 30, 2017, the Company issued the placement agent warrants to purchase 506,000 shares at an exercise price at $0.25 per share, which are exercisable for a period of five years after issuance, contain customary cashless exercise provisions and anti-dilution protection and are entitled to registration rights that were exercised in connection with the Company’s Registration Statement on Form S-1 declared effective in February 2018. Debt issuance costs of $126,603 was recorded for the issuance of the November 17 and November 30, 2017 warrants, utilizing the Black-Scholes valuation model. The fair value of warrants issued was determined to be $0.17 and $0.13 for the November 17 and November 30 warrants, respectively. For the twelve months ended December 31, 2019 and 2018, interest expense of $88,356 and $149,890, respectively, was recorded as amortization of the debt issuance costs. Between September 20 and September 26, 2018, the Company issued convertible promissory notes, the 2018 Unrelated Notes and the 2018 Related Notes (collectively, the “2018 Notes”), in an aggregate amount of $1,300,000 to certain accredited investors, including related parties, in private placements. The Company retained Taglich Brothers, Inc. as the exclusive placement agent for the private placement offering of the 2018 Notes. In compensation, the Company paid the placement agent a cash payment of 8% of the gross proceeds of the offering, along with warrants to purchase shares of Company common stock, and reimbursement for the placement agent’s reasonable out of pocket expenses, FINRA filing fees and related legal fees. On September 20, 2018, the Company paid the placement agent cash in the amount of $40,000 and issued the placement agent warrants to purchase 307,692 shares at an exercise price at $0.13 per share, which are exercisable for a period of five years after issuance, contain customary cashless exercise provisions and anti-dilution protection and are entitled to limited piggyback registration rights. On September 26, 2018, the Company paid the placement agent cash in the amount of $64,000 and issued the placement agent warrants to purchase 492,308 shares at an exercise price at $0.18 per share, which are exercisable for a period of five years after issuance, contain customary cashless exercise provisions and anti-dilution protection and are entitled to limited piggyback registration rights. Debt issuance costs of $64,348 was recorded for the issuance of the September 20 and September 26, 2018 warrants, utilizing the Black-Scholes valuation model. The fair value of warrants issued was determined to be $0.10 and $0.07 for the September 20 and September 26 warrants, respectively. For the twelve months ended December 31, 2019 and 2018, interest expense of $86,750 and $21,688, respectively, was recorded as amortization of the debt issuance costs. The estimated values of warrants, as well as the assumptions that were used in calculating such values were based on estimates at the issuance date as follows: Placement Bridge Risk-free interest rate 1.93 % 1.89 % Weighted average expected term 5 years 5 years Expected volatility 123.07 % 130.80 % Expected dividend yield 0.00 % 0.00 % Placement Placement Risk-free interest rate 2.06 % 2.14 % Weighted average expected term 5 years 5 years Expected volatility 129.87 % 129.34 % Expected dividend yield 0.00 % 0.00 % Placement Placement Risk-free interest rate 2.96 % 2.96 % Weighted average expected term 5 years 5 years Expected volatility 122.52 % 122.92 % Expected dividend yield 0.00 % 0.00 % Shares Issued and Outstanding and Shares Reserved for Exercise of Warrants, Convertible Notes, and the 2015 Plan The Company had 370,497 Shares issued and outstanding, 134,532 Shares reserved for issuance upon the exercise of outstanding warrants, 561,756 Shares reserved for issuance upon the conversion of convertible debt, and 67,330 Shares reserved for issuance under the 2015 Plan, as of December 31, 2019. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 13. Stock-Based Compensation On April 30, 2015, the Company entered into a Non-qualified Stock Option Agreement with Sophie Pibouin, a director of the Company, in accordance with the 2015 Plan. The agreement granted options to purchase 128,000 shares prior to the expiration date of April 29, 2025 at an exercise price of $0.75. The options granted vested on a graded scale over a period of time through October 31, 2015. On January 1, 2016, the Company granted employees stock options to purchase 250,000 shares at an exercise price of $0.90 per share in accordance with the 2015 Plan. The options were fully vested as of January 1, 2019. The total fair value of $196,250 for these stock options was recognized by the Company over the applicable vesting period. On February 10, 2016, the Company granted employees stock options to purchase 210,000 shares at an exercise price of $0.96 per share in accordance with the 2015 Plan, with vesting continuing until 2020. The total fair value of $174,748 for these stock options is being recognized by the Company over the applicable vesting period. On December 6, 2016, the Company granted one employee stock options to purchase 100,000 shares at an exercise price of $0.76 per share in accordance with the 2015 Plan, with vesting continuing until 2020. The total fair value of $63,937 for these stock options is being recognized by the Company over the applicable vesting period. On September 25, 2017, the Company granted an employee stock options to purchase 750,000 shares at an exercise price of $0.30 per share and 500,000 shares at an exercise price of $0.38 per share, in accordance with the 2015 Plan. The options were fully vested as of September 25, 2019. The total fair value of $321,011 for these stock options was recognized by the Company over the applicable vesting period. On January 30, 2019, the Company entered into a Non-qualified Stock Option Agreement with an individual consultant to the Company, in accordance with the 2015 Plan. The agreement granted options to purchase 12,500 shares prior to the expiration date of December 31, 2025 at an exercise price of $0.90. The options granted were 100% vested as of the grant date. On March 11, 2019, the Company canceled previously granted stock options to employees in the following amounts: 150,000 shares at an exercise price of $0.90 per share; 160,000 shares at an exercise price of $0.96 per share; 100,000 shares at an exercise price of $0.76 per share; 750,000 shares at an exercise price of $0.30 per share; and 500,000 shares at an exercise price of $0.38 per share. On March 11, 2019, the Company replaced those canceled stock options exercisable for a total of 1,660,000 shares with virtually identical stock options at an exercise price of $0.13 per share in accordance with the 2015 Plan. The incremental fair value of $24,898 for these stock options is being recognized by the Company over the applicable vesting periods, which range by tranche from fully vested at issuance through vesting by December 2020. On March 11, 2019, the Company granted employees stock options to purchase 505,000 shares at an exercise price of $0.13 per share in accordance with the 2015 Plan, with vesting continuing until 2023. The total fair value of $44,591 for these stock options is being recognized by the Company over the applicable vesting period. The weighted average estimated values of director and employee stock option grants, as well as the weighted average assumptions that were used in calculating such values during the twelve months ended December 31, 2019 and 2018, were based on estimates at the date of grant as follows: April 30, January 1, February 10, 2015 Grant 2016 Grant 2016 Grant Risk-free interest rate 1.43 % 1.76 % 1.15 % Weighted average expected term 5 years 5 years 5 years Expected volatility 143.10 % 134.18 % 132.97 % Expected dividend yield 0.00 % 0.00 % 0.00 % December 6, September 25, 2016 Grant 2017 Grant Risk-free interest rate 1.84 % 1.85 % Weighted average expected term 5 years 5 years Expected volatility 123.82 % 130.79 % Expected dividend yield 0.00 % 0.00 % January 30, March 11, 2019 Grant 2019 Grant Risk-free interest rate 2.54 % 2.44 % Weighted average expected term 5 years 5 years Expected volatility 115.80 % 116.46 % Expected dividend yield 0.00 % 0.00 % A summary of stock option activity during the twelve months ended December 31, 2019 and 2018 is as follows: Weighted- Weighted- Average Shares Average Remaining Aggregate Under Exercise Contractual Intrinsic Option Price Life Value Outstanding at January 1, 2018 2,238,000 $ 0.55 9 years 79,200 Outstanding at December 31, 2018 2,238,000 $ 0.55 8 years $ 79,200 Exercisable at December 31, 2018 1,589,250 $ 0.57 8 years $ 79,200 Weighted- Weighted- Average Shares Average Remaining Aggregate Under Exercise Contractual Intrinsic Option Price Life Value Outstanding at January 1, 2019 2,238,000 $ 0.55 8 years 79,200 Granted 2,177,500 0.13 Forfeited and expired (2,072,500 ) 0.84 Outstanding at December 31, 2019 2,343,000 $ 0.13 9 years $ 19,200 Exercisable at December 31, 2019 1,773,000 $ 0.20 9 years $ 19,200 The weighted-average grant date fair value of options granted during the twelve months ended December 31, 2019 was $0.09. There were no grants during the twelve months ended December 31, 2018. As of December 31, 2019 and 2018, there was $56,012 and $185,754, respectively, of total unrecognized compensation costs related to stock options granted under our stock option agreements. The unrecognized compensation cost is expected to be recognized over a weighted-average period of two years. The total fair value of stock options that vested during the twelve months ended December 31, 2019 and 2018 was $108,035 and $249,025, respectively. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | 14. Concentrations Revenues from the Company’s services to a limited number of customers have accounted for a substantial percentage of the Company’s total revenues. For the twelve months ended December 31, 2019, the Company’s two largest customers, Loffler, Inc. (including their acquisition of Laser Systems, Inc. (“LSI”)), a reseller, and Franklin County Board of Developmental Disabilities, a direct client, accounted for approximately 6% and 6%, respectively, of the Company’s revenues for that period. For the twelve months ended December 31, 2018, the Company’s three largest customers, Tiburon, Inc., a Reseller, Mid-Ohio Strategic Technologies, a reseller, and LSI, accounted for approximately 11%, 10%, and 10%, respectively, of the Company’s revenues for that period. For the twelve months ended December 31, 2019 and 2018, government contracts represented approximately 41% and 30% of the Company’s net revenues, respectively. A significant portion of the Company’s sales to Resellers represent ultimate sales to government agencies. As of December 31, 2019, accounts receivable concentrations from the Company’s four largest customers were 25%, 25%, 16% and 12% of gross accounts receivable, respectively, and as of December 31, 2018, accounts receivable concentrations from the Company’s four largest customers were 22%, 16%, 14% and 14% of gross accounts receivable, respectively. Accounts receivable balances from the Company’s four largest customers at December 31, 2019 have been partially collected. |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | 15. Provision For Income Taxes For the twelve months ended December 31, 2019 and 2018, we have recognized the minimum amount of state income tax as required by the states that we are required to file taxes in. We are not currently subject to further federal or state tax since we have incurred losses since our inception. As of December 31, 2019, we had federal and state net operating loss carry forwards of approximately $18,430,000, which can be used to offset future federal income tax. The federal and state net operating loss carry forwards expire at various dates through 2039. Deferred tax assets resulting from the net operating losses are reduced by a valuation allowance, when, in our opinion, utilization is not reasonably assured. As of December 31, 2019, the deferred tax asset, primarily related to our net operating losses, was approximately $3,809,000. A 100 % valuation allowance has been established on deferred tax assets at December 31, 2019 and 2018, due to the uncertainty of our ability to realize future taxable income. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events Issuance of Restricted Common Stock to Directors On January 2, 2020, the Company issued 16,428 new Shares of restricted common stock to directors of the Company in accordance with the Company’s director compensation policy. Stock compensation of $57,500 will be recorded over the requisite service period of the twelve months ending December 31, 2020 on the issuance of the common stock. Reverse Stock Split Effective February 27, 2020, upon recommendation and authorization by the Board of Directors, stockholders holding a majority in interest of the issued and outstanding shares of Common Stock, acting by written consent, adopted an amendment to the Company’s Articles of Incorporation to (i) effectuate the Reverse Split at a ratio of one-for-fifty (1-for-50) and (ii) reduce the number of authorized shares of Common Stock of the Company as of the effective date of such amendment to 25,000,000 shares. On March 3, 2020, the Company filed the Reverse Split Amendment, which became effective on March 20, 2020. On March 1, 2020, upon recommendation and authorization by the Board of Directors, stockholders holding a majority in interest of the issued and outstanding shares of Common Stock of the Company, acting by written consent, adopted an amendment to the Company’s Articles of Incorporation to increase the authorized number of shares of Common Stock to 3,200,000 shares (representing 160,000,000 on a pre-split basis) from 1,500,000 shares (representing 75,000,000 on a pre-split basis), in order to facilitate the GSI Acquisition, the Offering, and the Note Conversion. On March 2, 2020, the Company filed the Shares Increase Amendment, which was effective immediately upon filing. The reverse stock split did not cause an adjustment to par value of the common stock. As a result of the reverse stock split, the Company also adjusted the share amounts for shares reserved for issuance upon the exercise of outstanding warrants, outstanding stock options, and shares reserved for the 2015 Plan. All disclosures of common shares and per share data in the accompanying financial statements related notes have been adjusted to reflect the reverse stock split for all periods presented. Note Conversion On March 2, 2020, the Company entered into amendments to all of its currently outstanding Convertible Promissory Notes, which were issued by the Company to various investors in 2016, 2017, and 2018. The Note Amendments permit the Company, in the event the Company offers its shares of Common Stock to investors in any private placement of securities, to convert all of the then-outstanding principal and accrued and unpaid interest payable with respect to the 2016-2018 Notes into shares of Common Stock upon the same terms as such private placement. Pursuant to the Note Amendments, on March 2, 2020, the Company converted all of the then-outstanding principal and accrued and unpaid interest payable with respect to the 2016-2018 Notes and $350,000 of the 2019 Related Notes into the aggregate amount of 1,433,739 shares of Common Stock at a conversion price of $4.00 per share. Taglich Brothers, Inc. acted as the exclusive placement agent for the Note Conversion, and earned fees in the form of 35,250 shares of Common Stock. Private Securities Offering On March 2, 2020, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain accredited investors, pursuant to which the Company issued and sold (i) 875,000 shares of the Company’s Common Stock, at a price of $4.00 per share, for aggregate gross proceeds of $3,500,000 and (ii) 2,000 units (“Units”), with each Unit consisting of $1,000 in 12% Subordinated Notes and 40 shares, for aggregate gross proceeds of $2,000,000 in Units and $5,500,000 for the combined private placement pursuant to the Securities Purchase Agreement . The principal amount of the Notes, together with any accrued and unpaid interest thereon, become due and payable on February 28, 2023. Interest on the Notes will accrue at the rate of 12% per annum, payable quarterly in cash, beginning on June 30, 2020 and the entire outstanding principal and accrued but unpaid interest due on the Notes is payable on the Maturity Date. Any accrued but unpaid quarterly installment of interest shall accrue interest at the rate of 14.0% per annum. Any overdue principal and accrued and unpaid interest at the Maturity Date shall accrue a mandatory default penalty of 20% of the outstanding principal balance and an interest rate of 14% per annum from the Maturity Date until paid in full. The Company retained Taglich Brothers, Inc. as the exclusive placement agent for the private placement offering of the Securities Purchase Agreement. In compensation, the Company paid the placement agent a cash payment of 8% of the gross proceeds of the offering, along with warrants to purchase shares of Company common stock, and reimbursement for the placement agent’s reasonable out of pocket expenses, FINRA filing fees and related legal fees. On March 2, 2020, the Company paid the placement agent cash in the amount of $440,000 and issued the placement agent warrants to purchase 95,500 shares at an exercise price at $4.00 per share, which are exercisable for a period of five years after issuance, contain customary cashless exercise provisions and anti-dilution protection and are entitled to limited piggyback registration rights. Acquisition of Graphic Sciences, Inc. On March 2, 2020, the Company acquired 100% of the Graphic Sciences capital stock, pursuant to a Stock Purchase Agreement, dated as of March 2, 2020 (the “Purchase Agreement”). Located in Madison Heights, Michigan, Graphic Sciences is a document management company that provides indexing and scanning services, as well as physical document storage and retrieval services. Multi-year state and local government contracts account for the majority of Graphic Sciences’ sales. Graphic Sciences provides services to the State of Michigan pursuant to the State of Michigan’s Standard Contract Terms, dated June 1, 2018 and expiring on May 30, 2023, unless earlier terminated in accordance with its terms (the “Michigan Contract”). Pursuant to the Michigan Contract, the various subdivisions, agencies, and municipalities within the State of Michigan may procure document management services from Graphic Sciences at a fixed price during the term of the Michigan Contract. The acquisition was consummated pursuant to a Stock Purchase Agreement, dated as of March 2, 2020 (the “Purchase Agreement”), by and among the Company, Graphic Sciences, and four individual sellers (“Sellers”). The initial purchase price for Graphic Sciences consisted of approximately $3.5 million in cash, on a cash-free, debt-free basis, and subject to a post-closing net working capital adjustment. The positive net working capital at the time of closing consisted of approximately $1.0 million in accounts receivable and other current assets and approximately $0.3 million in trade payables and other obligations relating to Graphic Sciences’ ongoing business and contracts. In addition to the initial purchase price, three annual potential earnout payments of up to an aggregate of $2.5 million will be payable to the Sellers over three years if certain gross profit levels are achieved. The Company retained Taglich Brothers, Inc. on an exclusive basis to render financial advisory and investment banking services to the Company in connection with the acquisition of Graphic Sciences, for a success fee of $300,000, plus reasonable expenses not exceeding $5,000. The Company incurred $84,982 of related acquisition costs in the twelve months ended December 31, 2019 which are reflected in general and administrative costs in the Consolidated Statement of Operations. The Company expects to report Graphic Sciences as a separate segment during fiscal year 2020. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting. As a result of limited access to Graphic Sciences information required to prepare initial accounting, together with the limited time since the acquisition date and the effort required to conform the financial statements to the Company’s practices and policies, the initial accounting for the business combination is incomplete at the time of this filing. As a result, the Company is unable to provide the amounts recognized as of the GSI Acquisition date for the major classes of assets acquired and liabilities assumed, pre-acquisition contingencies and goodwill. Also, the Company is unable to provide proforma revenues and earnings of the combined entity. This information will be included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. Impact of Coronavirus In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China. The COVID-19 pandemic has continued to spread and has already caused severe global disruptions. The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. For example, the impact of COVID-19 on any of our channel partners or customers may negatively affect our revenues. Additionally, if we are forced to scale back hours of operations or close our document services or storage facilities in response to the pandemic, we expect our business, financial condition and results of operations would be materially adversely affected. In addition, our growth strategy to expand our operations may be impeded. We may also be impacted by decreased customer demand and/or subscription terminations as a result of a reduction in customer spending or as a result of government-imposed restrictions on businesses, shelter-in place orders and temporary restaurant, retail and grocery store closures. If the pandemic continues to evolve into a severe worldwide health crisis, the disease could have a material adverse effect on our business, results of operations, financial condition and cash flows. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses. Actual results could differ from estimated amounts. Significant estimates and assumptions include valuation allowances related to receivables, the recoverability of long-term assets, depreciable lives of property and equipment, the lease liability, estimates of fair value deferred taxes and related valuation allowances. The Company’s management monitors these risks and assesses its business and financial risks on a quarterly basis. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, we adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”), using the full retrospective transition method. Adoption of the standard using the full retrospective method required us to restate certain previously reported results. In accordance with ASC 606, the Company follows a five-step model to assess each contract of a sale or service to a customer: identify the legally binding contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized when a performance obligation is satisfied and the customer obtains control of promised goods and services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods and services. In addition, ASC 606 requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We categorize revenue as software, software as a service, software maintenance services, professional services, and third party services. We earn the majority of our revenue from the sale of software as a service and the sale of software maintenance services. Specific revenue recognition policies apply to each category of revenue. a) Sale of software Revenues included in this classification typically include sales of licenses with professional services to new customers, additional software licenses to existing customers, and sales of software with or without services to the Company’s resellers (See section j) - Reseller Agreements, below. Our software licenses are functional intellectual property and typically provide customers with the right to use our software in perpetuity as it exists when made available to the customer. We recognize revenue from software licenses at a point in time upon delivery, provided all other revenue recognition criteria are met. b) Sale of software as a service Sale of software as a service (“SaaS”) consists of revenues from arrangements that provide customers the use of the Company’s software applications, as a service, typically billed on a monthly or annual basis. Advance billings of these services are not recorded to the extent that the term of the arrangement has not commenced and payment has not been received. Revenue on these services is recognized over the contract period. c) Sale of software maintenance services Software maintenance services revenues consist of revenues derived from arrangements that provide post-contract support (“PCS”), including software support and bug fixes, to the Company’s software license holders. Advance billings of PCS are not recorded to the extent that the term of the PCS has not commenced and payment has not been received. PCS are considered distinct services. However, these distinct services are considered a single performance obligation consisting of a series of services that are substantially the same and have the same pattern of transfer to the customer. These revenues are recognized over the term of the maintenance contract. d) Sale of professional services Professional services consist principally of revenues from consulting, advisory services, training and customer assistance with management and uploading of data into the Company’s applications. We recognize professional services revenue over time as the services are delivered using an input method (i.e., labor hours incurred as a percentage of total labor hours budgeted), provided all other revenue recognition criteria are met. e) Sale of third party services Sale of third party services consist principally of third party software and/or equipment as a pass through of software and equipment purchased from third parties at the request of customers. We recognize revenue from third party services at a point in time upon delivery, provided all other revenue recognition criteria are met. In addition, we have considered our relationship with third party vendors as it relates to principal vs. agent considerations and have determined that we are in control of establishing the transaction price for the customer, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on our evaluation of the control model, we determined that we act as the principal rather than the agent within our revenue arrangements and as such, revenues are reported on a gross basis. f) Arrangements with multiple performance obligations In addition to selling software licenses, software as a service, software maintenance services, professional services, and third party services on a stand-alone basis, a portion of our contracts include multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each distinct performance obligation, on a relative basis using its standalone selling price. The Company determines the standalone selling price based on the price charged for the deliverable when sold separately. g) Contract balances When the timing of our delivery of goods or services is different from the timing of payments made by customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Customers that prepay are represented by deferred revenue until the performance obligation is satisfied. Contract assets represent arrangements in which the good or service has been delivered but payment is not yet due. Our contract assets consisted of unbilled receivables, which are included in prepaid expenses and other current assets. Our contract liabilities consisted of deferred (unearned) revenue, which is generally related to software as a service or software maintenance contracts. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The following table present changes in our contract assets and liabilities during the twelve months ended December 31, 2019 and 2018: Balance at Beginning Revenue Recognized Billings Balance at Twelve months ended December 31, 2019 Contract assets: Unbilled receivables $ 65,118 $ 156,876 $ (198,623 ) $ 23,371 Twelve months ended December 31, 2018 Contract assets: Unbilled receivables $ 89,847 $ 319,221 $ (343,950 ) $ 65,118 (a) Unbilled receivables were reflected within other current assets on the consolidated balance sheets. Balance at Billings Recognized Revenue Balance at Twelve months ended December 31, 2019 Contract liabilities: Deferred revenue $ 723,619 $ 2,637,191 $ (2,606,737 ) $ 754,073 Twelve months ended December 31, 2018 Contract liabilities: Deferred revenue $ 708,130 $ 2,370,975 $ (2,355,486 ) $ 723,619 h) Deferred revenue Amounts that have been invoiced are recognized in accounts receivable, deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet be recognized. Deferred revenues typically relate to maintenance and software-as-a-service agreements which have been paid for by customers prior to the performance of those services, and payments received for professional services and license arrangements and software-as-a-service performance obligations that have been deferred until fulfilled under our revenue recognition policy. Remaining performance obligations represent the transaction price from contracts for which work has not been performed or goods and services have not been delivered. We expect to recognize revenue on approximately 91% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. As of December 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations for software as a service and software maintenance contracts with a duration greater than one year was $69,381. This does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less. i) Rights of return and customer acceptance The Company does not generally offer variable consideration, financing components, rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, does not provide for or make estimates of rights of return and similar incentives. Our contracts with customers generally do not include customer acceptance clauses. j) Reseller agreements The Company executes certain sales contracts through resellers. The Company recognizes revenues relating to sales through resellers when all the recognition criteria have been met including passing of control. In addition, the Company assesses the credit-worthiness of each reseller, and if the reseller is undercapitalized or in financial difficulty, any revenues expected to emanate from such resellers are deferred and recognized only when cash is received and all other revenue recognition criteria are met. k) Contract costs The Company capitalizes the incremental costs of obtaining a contract with a customer. We have determined that certain sales commissions meet the requirement to be capitalized, and we amortize these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain contracts were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. l) Sales taxes Sales taxes charged to and collected from customers as part of the Company’s sales transactions are excluded from revenues, as well as the determination of transaction price for contracts with multiple performance obligations, and recorded as a liability to the applicable governmental taxing authority. m) Disaggregation of revenue The Company provides disaggregation of revenue based on product groupings in our consolidated statements of operations as it believes this best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Revenues from contracts are primarily within the United States. International revenues were not material to the consolidated financial statements for the twelve months ended December 31, 2019 and 2018. n) Significant financing component The Company’s customers typically do not pay in advance for goods or services to be transferred in excess of one year. As such, it is not necessary to determine if the Company benefits from the time value of money and should record a component of interest income related to the upfront payment due to the practical expedient of ASC 606-10-32-18. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company maintains its cash with high credit quality financial institutions. At times, the Company’s cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit. The number of customers that comprise the Company’s customer base, along with the different industries, governmental entities and geographic regions, in which the Company’s customers operate, limits concentrations of credit risk with respect to accounts receivable. The Company does not generally require collateral or other security to support customer receivables; however, the Company may require its customers to provide retainers, up-front deposits or irrevocable letters-of-credit when considered necessary to mitigate credit risks. The Company has established an allowance for doubtful accounts based upon facts surrounding the credit risk of specific customers and past collections history. Credit losses have been within management’s expectations. At December 31, 2019 and 2018, the Company’s allowance for doubtful accounts was $35,733 and $7,427, respectively. |
Property and Equipment | Property and Equipment Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed over the estimated useful lives of the related assets on a straight-line basis. Furniture and fixtures, computer hardware and purchased software are depreciated over three to seven years. Leasehold improvements are amortized over the life of the lease or the asset, whichever is shorter, generally seven to ten years. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation and amortization of these assets are removed from the accounts and the resulting gains and losses are reflected in the results of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 360, “Property, Plant, and Equipment.” The Company tests long-lived assets or asset groups, such as property and equipment, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based payments to employees in accordance with ASC 718, “Compensation - Stock Compensation.” Stock-based payments to employees include grants of stock that are recognized in the consolidated statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 718, “Compensation - Stock Compensation,” which requires that such equity instruments are recorded at their fair values on the grant date. The grant date fair value of stock option awards is recognized in earnings as stock-based compensation cost over the requisite service period of the award using the straight-line attribution method. The Company estimates the fair value of the stock option awards using the Black-Scholes-Merton option pricing model. The exercise price of options is specified in the stock option agreements. The expected volatility is based on the historical volatility of the Company’s stock for the previous period equal to the expected term of the options. The expected term of options granted is based on the midpoint between the vesting date and the end of the contractual term. The risk-free interest rate is based upon a U.S. Treasury instrument with a life that is similar to the expected term of the options. The expected dividend yield is based upon the yield expected on date of grant to occur over the term of the option. |
Software Development Costs | Software Development Costs The Company designs, develops, tests, markets, licenses, and supports new software products and enhancements of current products. The Company continuously monitors its software products and enhancements to remain compatible with standard platforms and file formats. In accordance with ASC 985-20 “Costs of Software to be Sold, Leased or Otherwise Marketed,” the Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Once technological feasibility has been established, certain software development costs incurred during the application development stage are eligible for capitalization. Based on the Company’s software development process, technical feasibility is established upon completion of a working model. Technological feasibility is typically reached shortly before the release of such products. No such costs were capitalized during the periods presented in this report. In accordance with ASC 350-40, “Internal-Use Software,” the Company capitalizes purchase and implementation costs of internal use software. Once an application has reached development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon complete of all substantial testing. The Company also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. No such costs were capitalized during the periods presented in this report. For the twelve months ended December 31, 2019 and 2018, our expensed software development costs were $467,364 and $359,789, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASC 842”) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 was effective for the Company beginning in its first quarter of 2019. On January 1, 2019, the Company recorded a lease liability of $143,761 and a net right-of-use asset of $138,549 using the required modified retrospective approach. In adopting ASC 842, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which does not require the reassessment of the following: i) whether existing or expired arrangements are or contain a lease, ii) the lease classification of existing or expired leases, and iii) whether previous initial costs would qualify as capitalization under the new lease standard. Intangibles – Goodwill and Other – Internal-Use Software In August 2018, the FASB issued ASU 2018-15, which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASC 2018-15 is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Fair Value In August 2018, the FASB issued ASU 2018-13, which is guidance that changes the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) All other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future consolidated financial statements. |
Recently Issued Accounting Pronouncements Not Yet Effective | Recently Issued Accounting Pronouncements Not Yet Effective Intangibles – Goodwill and Other – Internal-Use Software In August 2018, the FASB issued ASU 2018-15, which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. ASC 2018-15 is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Fair Value In August 2018, the FASB issued ASU 2018-13, which is guidance that changes the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) All other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future consolidated financial statements. |
Advertising | Advertising The Company expenses the cost of advertising as incurred. Advertising expense for the twelve months ended December 31, 2019 and 2018 amounted to $4,255 and $21,402, respectively. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The Company has outstanding stock options which have not been included in the calculation of diluted net loss per share because to do so would be anti-dilutive. As such, the numerator and the denominator used in computing both basic and diluted net loss per share for each period are the same. |
Income Taxes | Income Taxes The Company and its subsidiary file a consolidated federal income tax return. The provision for income taxes is computed by applying statutory rates to income before taxes. Deferred income taxes are recognized for the tax consequences in future years of temporary differences between the financial reporting and tax bases of assets and liabilities as of each period-end based on enacted tax laws and statutory rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. A 100% valuation allowance has been established on deferred tax assets at December 31, 2019 and 2018, due to the uncertainty of our ability to realize future taxable income. The Company accounts for uncertainty in income taxes in its financial statements as required under ASC 740, “Income Taxes.” The standard prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition accounting. Management determined there were no material uncertain positions taken by the Company in its tax returns. |
Segment Information | Segment Information The Company has one reportable segment . |
Statement of Cash Flows | Statement of Cash Flows For purposes of reporting cash flows, cash includes cash on hand and demand deposits held by banks. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Contract Assets and Liabilities | The following table present changes in our contract assets and liabilities during the twelve months ended December 31, 2019 and 2018: Balance at Beginning Revenue Recognized Billings Balance at Twelve months ended December 31, 2019 Contract assets: Unbilled receivables $ 65,118 $ 156,876 $ (198,623 ) $ 23,371 Twelve months ended December 31, 2018 Contract assets: Unbilled receivables $ 89,847 $ 319,221 $ (343,950 ) $ 65,118 (a) Unbilled receivables were reflected within other current assets on the consolidated balance sheets. Balance at Billings Recognized Revenue Balance at Twelve months ended December 31, 2019 Contract liabilities: Deferred revenue $ 723,619 $ 2,637,191 $ (2,606,737 ) $ 754,073 Twelve months ended December 31, 2018 Contract liabilities: Deferred revenue $ 708,130 $ 2,370,975 $ (2,355,486 ) $ 723,619 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Notes Payable | The table below reflects all notes payable at December 31, 2019 and 2018, respectively. December 31, 2019 December 31, 2018 Fair Value Fair Value 2016 Unrelated Notes (a) $ 942,256 (a) $ 1,000,261 2017 Unrelated Notes (a) 2,011,859 (a) 2,275,686 2018 Unrelated Notes (a) 1,028,792 (b) 900,000 Total $ 3,982,907 $ 4,175,947 December 31, 2019 December 31, 2018 Fair Value Fair Value The $250,000 Shealy Note $ - (c) $ 46,807 2016 Related Notes (a) 405,784 (a) 433,117 2017 Related Notes (a) 445,810 (a) 504,271 2018 Related Notes (a) 457,241 (b) 400,000 Total $ 1,308,835 $ 1,384,195 (a) The fair value was based upon Level 2 inputs. See Note 8 for additional information about the Company’s 2016, 2017, and 2018 Unrelated Notes. See Note 9 for additional information about the Company’s 2016, 2017, and 2018 Related Notes. (b) The fair value was based upon Level 2 inputs. The 2018 Unrelated and Related Notes were closed in September, 2018 between market participants, therefore, fair value approximated carrying value as of December 31, 2018 given the transaction proximity to December 31, 2018. See Note 8 for additional information about the Company’s 2018 Unrelated Notes. See Note 9 for additional information about the Company’s 2018 Related Notes. (c) The fair value was based upon Level 2 inputs. Short term maturity and interest rate approximates rate that the Company realized with issuance of new debt in September, 2018; therefore, carrying value approximated fair value. See Note 9 for additional information about the Company’s $250,000 Shealy Note. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment are comprised of the following: December 31, 2019 December 31, 2018 Computer hardware and purchased software $ 259,959 $ 254,470 Leasehold improvements 221,666 221,666 Furniture and fixtures 82,056 82,056 563,681 558,192 Less: accumulated depreciation and amortization (556,762 ) (549,061 ) Property and equipment, net $ 6,919 $ 9,131 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The table below reflects all notes payable at December 31, 2019 and 2018, respectively, with the exception of related party notes disclosed in Note 9 - Notes Payable - Related Parties. December 31, 2019 December 31, 2018 2016 Unrelated Notes, net of beneficial conversion feature of $50,703 and $101,405, respectively $ 824,297 $ 773,595 2017 Unrelated Notes 1,760,000 1,760,000 2018 Unrelated Notes 900,000 900,000 Total notes payable $ 3,484,297 $ 3,433,595 Less unamortized debt issuance costs (144,334 ) (288,669 ) Less current portion 3,339,963 - Long-term portion of notes payable $ - $ 3,144,926 |
Schedule of Future Minimum Principal Payments of Notes Payable | Future minimum principal payments of these notes payable as described in this Note 8, with the exception of the related party notes in Note 9 - Notes Payable - Related Parties, are as follows: For the Twelve-Months Ending December 31, Amount 2020 $ 3,535,000 Total $ 3,535,000 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable Due to Related Parties | The table below reflects the notes payable to related parties at December 31, 2019 and 2018, respectively: December 31, 2019 December 31, 2018 The $250,000 Shealy Note $ - $ 46,807 2016 Related Notes, net of beneficial conversion feature of $20,015 and $40,030, respectively 354,985 334,970 2017 Related Notes 390,000 390,000 2018 Related Notes 400,000 400,000 2019 Related Notes 397,728 - Total notes payable - related party $ 1,542,713 $ 1,171,777 Unamortized original issue discount and debt issuance costs (75,313 ) (79,033 ) Less current portion (1,467,400 ) (46,807 ) Long-term portion of notes payable-related party $ - $ 1,045,937 |
Schedule of Future Minimum Principal Payments of Notes Payable Related Party | Future minimum principal payments of these notes payable as described in this Note 9 are as follows: For the Twelve Months Ending December 31, Amount 2020 $ 1,562,728 TOTAL $ 1,562,728 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Rental Payments for Operating Leases | Future minimum lease payments under this operating lease are as follows: For the Twelve Months Ending December 31, Amount 2020 $ 54,288 2021 55,656 $ 109,944 |
Schedule of Operating Lease Costs | Additional information pertaining to the Company’s lease are as follows: For the Twelve Months Ending December 31, 2019: Operating cash flows from operating leases $ 44,247 Weighted average remaining lease term – operating leases 2 years Weighted average discount rate – operating leases 8.0 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Estimated Values of Warrants Valuation Assumptions | The estimated values of warrants, as well as the assumptions that were used in calculating such values were based on estimates at the issuance date as follows: Placement Bridge Risk-free interest rate 1.93 % 1.89 % Weighted average expected term 5 years 5 years Expected volatility 123.07 % 130.80 % Expected dividend yield 0.00 % 0.00 % Placement Placement Risk-free interest rate 2.06 % 2.14 % Weighted average expected term 5 years 5 years Expected volatility 129.87 % 129.34 % Expected dividend yield 0.00 % 0.00 % Placement Placement Risk-free interest rate 2.96 % 2.96 % Weighted average expected term 5 years 5 years Expected volatility 122.52 % 122.92 % Expected dividend yield 0.00 % 0.00 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Estimated Values of Stock Option Grants Valuation Assumptions | The weighted average estimated values of director and employee stock option grants, as well as the weighted average assumptions that were used in calculating such values during the twelve months ended December 31, 2019 and 2018, were based on estimates at the date of grant as follows: April 30, January 1, February 10, 2015 Grant 2016 Grant 2016 Grant Risk-free interest rate 1.43 % 1.76 % 1.15 % Weighted average expected term 5 years 5 years 5 years Expected volatility 143.10 % 134.18 % 132.97 % Expected dividend yield 0.00 % 0.00 % 0.00 % December 6, September 25, 2016 Grant 2017 Grant Risk-free interest rate 1.84 % 1.85 % Weighted average expected term 5 years 5 years Expected volatility 123.82 % 130.79 % Expected dividend yield 0.00 % 0.00 % January 30, March 11, 2019 Grant 2019 Grant Risk-free interest rate 2.54 % 2.44 % Weighted average expected term 5 years 5 years Expected volatility 115.80 % 116.46 % Expected dividend yield 0.00 % 0.00 % |
Schedule of Stock Option Activity | A summary of stock option activity during the twelve months ended December 31, 2019 and 2018 is as follows: Weighted- Weighted- Average Shares Average Remaining Aggregate Under Exercise Contractual Intrinsic Option Price Life Value Outstanding at January 1, 2018 2,238,000 $ 0.55 9 years 79,200 Outstanding at December 31, 2018 2,238,000 $ 0.55 8 years $ 79,200 Exercisable at December 31, 2018 1,589,250 $ 0.57 8 years $ 79,200 Weighted- Weighted- Average Shares Average Remaining Aggregate Under Exercise Contractual Intrinsic Option Price Life Value Outstanding at January 1, 2019 2,238,000 $ 0.55 8 years 79,200 Granted 2,177,500 0.13 Forfeited and expired (2,072,500 ) 0.84 Outstanding at December 31, 2019 2,343,000 $ 0.13 9 years $ 19,200 Exercisable at December 31, 2019 1,773,000 $ 0.20 9 years $ 19,200 |
Liquidity and Management's Pl_2
Liquidity and Management's Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Underwriting Expenses | ||
Accumulated deficit | $ (20,796,066) | $ (18,662,785) |
Cash | 404,165 | 1,088,630 |
Issuance of notes payable | $ 350,000 | 400,000 |
Issuance of convertible notes and warrants | 1,169,159 | |
Financing costs | $ 130,841 |
Corporate Actions (Details Narr
Corporate Actions (Details Narrative) | Sep. 01, 2014 |
Deferred Interest Expense | |
Reverse stock split | (1-for-7) reverse stock split |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2019USD ($)Integer | Dec. 31, 2018USD ($) | Jan. 02, 2019USD ($) | |
Allowance for doubtful accounts receivable | $ 35,733 | $ 7,427 | |
Research and development expense | 467,364 | 359,789 | |
Operating lease, right-of-use asset | $ 97,239 | ||
Revenue performance obligations percentage | 91.00% | ||
Revenue performance obligations amount | $ 69,381 | ||
Advertising expense | $ 4,255 | $ 21,402 | |
Percentage of valuation allowance established on deferred tax assets | 100.00% | 100.00% | |
Number of operating segments | Integer | 1 | ||
ASU 2016-02 [Member] | |||
Operating lease, lease liability | $ 143,761 | ||
Operating lease, right-of-use asset | $ 138,549 | ||
Furniture and Fixtures [Member] | Minimum [Member] | |||
Property, plant and equipment, useful life | 3 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Property, plant and equipment, useful life | 7 years | ||
Computer Hardware and Purchased Software [Member] | Minimum [Member] | |||
Property, plant and equipment, useful life | 3 years | ||
Computer Hardware and Purchased Software [Member] | Maximum [Member] | |||
Property, plant and equipment, useful life | 7 years | ||
Leasehold Improvements [Member] | Minimum [Member] | |||
Property, plant and equipment, useful life | 7 years | ||
Leasehold Improvements [Member] | Maximum [Member] | |||
Property, plant and equipment, useful life | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Changes in Contract Assets and Liabilities (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | |||
Accounting Policies [Abstract] | ||||
Unbilled receivables, balance at beginning of period | $ 65,118 | [1] | $ 89,847 | |
Unbilled receivables, revenue recognized in advance of billings | 156,876 | 319,221 | ||
Unbilled receivables, billings | (198,623) | (343,950) | ||
Unbilled receivables, balance at end of period | [1] | 23,371 | 65,118 | |
Deferred revenue, balance at beginning of period | 723,619 | 708,130 | ||
Deferred revenue, billings | 2,637,191 | 2,370,975 | ||
Deferred revenue, recognized revenue | (2,606,737) | (2,355,486) | ||
Deferred revenue, balance at end of period | $ 754,073 | $ 723,619 | ||
[1] | Unbilled receivables were reflected within other current assets on the consolidated balance sheets. |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Notes Payable (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |||
2016 Unrelated Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | [1] | $ 942,256 | $ 1,000,261 | ||
2017 Unrelated Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | [1] | 2,011,859 | 2,275,686 | ||
2018 Unrelated Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | 1,028,792 | [1] | 900,000 | [2] | |
Unrelated Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | 3,982,907 | 4,175,947 | |||
Shealy Note [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | 46,807 | [3] | |||
2016 Related Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | [1] | 405,784 | 433,117 | ||
2017 Related Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | [1] | 445,810 | 504,271 | ||
2018 Related Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | 457,241 | [1] | 400,000 | [2] | |
Related Notes [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Notes Payable, Fair Value | $ 1,308,835 | $ 1,384,195 | |||
[1] | The fair value was based upon Level 2 inputs. See Note 8 for additional information about the Company's 2016, 2017, and 2018 Unrelated Notes. See Note 9 for additional information about the Company's 2016, 2017, and 2018 Related Notes. | ||||
[2] | The fair value was based upon Level 2 inputs. The 2018 Unrelated and Related Notes were closed in September, 2018 between market participants, therefore, fair value approximated carrying value as of December 31, 2018 given the transaction proximity to December 31, 2018. See Note 8 for additional information about the Company's 2018 Unrelated Notes. See Note 9 for additional information about the Company's 2018 Related Notes. | ||||
[3] | The fair value was based upon Level 2 inputs. Short term maturity and interest rate approximates rate that the Company realized with issuance of new debt in September, 2018; therefore, carrying value approximated fair value. See Note 9 for additional information about the Company's $250,000 Shealy Note. |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Notes Payable (Details) (Parenthetical) | Dec. 31, 2018USD ($) |
Shealy Note [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Notes payable | $ 250,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 7,701 | $ 9,040 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Computer hardware and purchased software | $ 259,959 | $ 254,470 |
Leasehold improvements | 221,666 | 221,666 |
Furniture and fixtures | 82,056 | 82,056 |
Property and equipment, gross | 563,681 | 558,192 |
Less: accumulated depreciation and amortization | (556,762) | (549,061) |
Property and equipment, net | $ 6,919 | $ 9,131 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Sep. 26, 2018 | Sep. 17, 2018 | Sep. 14, 2018 | Nov. 30, 2017 | Jan. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 30, 2016 |
Debt Instrument [Line Items] | ||||||||
Interest expense, debt | $ 735,474 | $ 666,458 | ||||||
Accrued interest | 918,307 | 379,339 | ||||||
Unamortized deferred finance costs, net | 144,334 | |||||||
Amortized deferred finance costs, net | 288,669 | |||||||
2016 Unrelated Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, convertible, beneficial conversion feature | $ 50,703 | 101,405 | ||||||
Convertible Promissory Notes [Member] | 2016 Unrelated Notes [Member] | 2016 Note Investors [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible promissory notes | $ 315,000 | |||||||
Debt instrument, interest percentage | 10.00% | 12.00% | ||||||
Debt instrument, maturity date | Dec. 31, 2020 | Dec. 31, 2018 | ||||||
Debt conversion price per share | $ 0.40 | $ 0.65 | ||||||
Debt instrument, interest rate description | If the 2016 Unrelated Notes have not been fully repaid by the Company by the maturity date or converted into shares at the election of the 2016 Note Investors prior to maturity, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2016 Unrelated Notes are repaid in full. | |||||||
Debt instrument, convertible, beneficial conversion feature | $ 369,677 | |||||||
Fair value adjustment under troubled debt restructuring accounting | 56,661 | |||||||
Interest expense, debt | $ 50,703 | $ 145,424 | ||||||
Convertible Promissory Notes [Member] | 2016 Unrelated Notes [Member] | 2016 Note Investors [Member] | Quarterly [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest percentage | 5.00% | 6.00% | ||||||
Convertible Promissory Notes [Member] | 2016 Unrelated Notes [Member] | 2016 Note Investors [Member] | January 6, 2017 and January 31, 2017 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible promissory notes | $ 560,000 | |||||||
Placement agent and escrow agent fees | $ 100,255 | |||||||
Convertible Promissory Notes [Member] | 2017 Unrelated Notes [Member] | 2017 Note Investors [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest percentage | 8.00% | |||||||
Debt instrument, maturity date | Dec. 31, 2020 | Nov. 30, 2019 | ||||||
Debt conversion price per share | $ 0.20 | |||||||
Debt instrument, interest rate description | If the 2017 Unrelated Notes have not been fully repaid by the Company by the maturity date or converted into shares of Company common stock at the election of the 2017 Note Investors prior to maturity, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2017 Unrelated notes are repaid in full. | |||||||
Convertible Promissory Notes [Member] | 2017 Unrelated Notes [Member] | 2017 Note Investors [Member] | Quarterly [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest percentage | 8.00% | |||||||
Convertible Promissory Notes [Member] | 2017 Unrelated Notes [Member] | 2017 Note Investors [Member] | November 17 and November 30, 2017 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible promissory notes | $ 1,760,000 | |||||||
Placement agent and escrow agent fees | $ 174,810 | |||||||
Convertible Promissory Notes [Member] | 2018 Unrelated Notes [Member] | 2018 Note Investors [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest percentage | 8.00% | |||||||
Debt instrument, maturity date | Dec. 31, 2020 | |||||||
Debt conversion price per share | $ 0.13 | |||||||
Debt instrument, interest rate description | If the 2018 Unrelated notes have not been fully repaid by the Company by the maturity date or converted into shares at the election of the 2018 Note Investors prior to maturity, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2018 Unrelated Notes are repaid in full. | |||||||
Convertible Promissory Notes [Member] | 2018 Unrelated Notes [Member] | 2018 Note Investors [Member] | Quarterly [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest percentage | 8.00% | |||||||
Convertible Promissory Notes [Member] | 2018 Unrelated Notes [Member] | 2018 Note Investors [Member] | September 20 and September 26, 2018 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible promissory notes | $ 900,000 | |||||||
Placement agent and escrow agent fees | $ 106,740 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total notes payable | $ 3,484,297 | $ 3,433,595 |
Less unamortized debt issuance costs | (144,334) | (288,669) |
Less current portion | 3,339,963 | |
Long-term portion of notes payable | 3,144,926 | |
2016 Unrelated Notes [Member] | ||
Total notes payable | 824,297 | 773,595 |
2017 Unrelated Notes [Member] | ||
Total notes payable | 1,760,000 | 1,760,000 |
2018 Unrelated Notes [Member] | ||
Total notes payable | $ 900,000 | $ 900,000 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
2016 Unrelated Notes [Member] | ||
Beneficial conversion feature | $ 50,703 | $ 101,405 |
Notes Payable - Schedule of Fut
Notes Payable - Schedule of Future Minimum Principal Payments of Notes Payable (Details) | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 3,535,000 |
Total | $ 3,535,000 |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) | Nov. 15, 2019USD ($) | Sep. 26, 2018USD ($)$ / shares | Sep. 17, 2018$ / shares | Sep. 14, 2018 | Nov. 30, 2017USD ($) | Nov. 17, 2017USD ($)$ / shares | Sep. 21, 2017USD ($)$ / sharesshares | Dec. 30, 2016USD ($)$ / shares | Dec. 31, 2014USD ($)Installment | Dec. 24, 2013 | Mar. 13, 2013USD ($) | Nov. 24, 2012USD ($) | Apr. 16, 2012USD ($) | Mar. 27, 2012USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Interest expense, debt | $ 735,474 | $ 666,458 | |||||||||||||||
Proceeds from notes payable | 900,000 | ||||||||||||||||
Accrued interest | 1,212,498 | ||||||||||||||||
Notes Payable - Related Parties [Member] | |||||||||||||||||
Notes payable, related parties | 1,542,713 | 1,171,777 | |||||||||||||||
Interest expense, debt | 245,215 | 199,043 | |||||||||||||||
Accrued interest | 294,191 | 122,956 | |||||||||||||||
Unsecured Promissory Note Payable [Member] | Mr. Ramon Shealy [Member] | |||||||||||||||||
Notes payable, related parties | $ 12,000 | $ 238,000 | |||||||||||||||
Long-term debt, interest rate | 10.00% | 10.00% | |||||||||||||||
Debt instrument, maturity date | Jul. 15, 2012 | Sep. 27, 2012 | |||||||||||||||
Unsecured Promissory Note Payable [Member] | Mr. Ramon Shealy [Member] | Extended Maturity [Member] | |||||||||||||||||
Debt instrument, maturity date | Nov. 24, 2012 | Nov. 24, 2012 | |||||||||||||||
Shealy Note [Member] | |||||||||||||||||
Notes payable, related parties | 46,807 | ||||||||||||||||
Shealy Note [Member] | Mr. Ramon Shealy [Member] | |||||||||||||||||
Notes payable, related parties | $ 193,453 | $ 250,000 | |||||||||||||||
Debt instrument, maturity date | Jan. 1, 2020 | Jan. 1, 2014 | |||||||||||||||
Repayments of debt | $ 100,000 | ||||||||||||||||
Number of installments | Installment | 60 | ||||||||||||||||
Shealy Note [Member] | Mr. Ramon Shealy [Member] | Extended Maturity [Member] | |||||||||||||||||
Debt instrument, maturity date | Jan. 1, 2015 | ||||||||||||||||
2016 Related Notes [Member] | |||||||||||||||||
Notes payable, related parties | 354,985 | 334,970 | |||||||||||||||
Debt instrument convertible, beneficial conversion feature | $ 20,015 | 40,030 | |||||||||||||||
2016 Related Notes [Member] | Robert Taglich, Michael Taglich and Robert Schroeder [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Long-term debt, interest rate | 10.00% | 12.00% | |||||||||||||||
Debt instrument, maturity date | Dec. 31, 2020 | Dec. 31, 2018 | |||||||||||||||
Convertible promissory notes | $ 375,000 | ||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.40 | $ 0.65 | |||||||||||||||
Debt instrument, interest rate description | If the 2016 Related Notes have not been fully repaid by the Company by the maturity date or converted into shares at the election of the 2016 Related Note Investors prior to the maturity date, then they will accrue interest at the annual rate of 12% from the maturity date until the date the 2016 Related Notes are repaid in full. | ||||||||||||||||
Debt instrument convertible, beneficial conversion feature | $ 144,231 | ||||||||||||||||
Fair value adjustment under troubled debt restructuring accounting | 24,710 | ||||||||||||||||
Interest expense, debt | $ 20,015 | 56,796 | |||||||||||||||
2016 Related Notes [Member] | Robert Taglich, Michael Taglich and Robert Schroeder [Member] | Convertible Promissory Notes [Member] | Quarterly [Member] | |||||||||||||||||
Long-term debt, interest rate | 5.00% | 6.00% | |||||||||||||||
2016 Related Notes [Member] | Robert Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2016 Related Notes [Member] | Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2017 Bridge Notes [Member] | |||||||||||||||||
Debt instrument principal converted amount | $ 150,000 | ||||||||||||||||
2017 Bridge Notes [Member] | Robert Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2017 Bridge Notes [Member] | Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2017 Bridge Notes [Member] | Robert Taglich And Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Long-term debt, interest rate | 8.00% | ||||||||||||||||
Debt instrument, maturity date | Sep. 21, 2018 | ||||||||||||||||
Convertible promissory notes | $ 154,640 | ||||||||||||||||
Debt instrument, interest rate description | Any interest not paid at maturity would accrue interest at the annual rate of 12% instead of 8%. | ||||||||||||||||
Interest expense, debt | $ 889 | ||||||||||||||||
Debt instrument, original issue discount | $ 4,640 | ||||||||||||||||
Debt instrument, interest rate, effective percentage | 7.00% | ||||||||||||||||
2017 Bridge Notes [Member] | Robert Taglich And Michael Taglich [Member] | Convertible Promissory Notes [Member] | Warrants [Member] | |||||||||||||||||
Interest expense, debt | $ 38,836 | ||||||||||||||||
Debt instrument, original issue discount | $ 38,836 | ||||||||||||||||
2016 Bridge Notes [Member] | Robert Taglich And Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Number of warrants issued in connection with note | shares | 150,000 | ||||||||||||||||
Warrant exercise price | $ / shares | $ 0.30 | ||||||||||||||||
Warrants exercisable term | 5 years | ||||||||||||||||
2017 Related Notes [Member] | |||||||||||||||||
Notes payable, related parties | $ 390,000 | 390,000 | |||||||||||||||
2017 Related Notes [Member] | Robert Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2017 Related Notes [Member] | Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2017 Related Notes [Member] | Robert Taglich, Michael Taglich And James DeSocio [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Long-term debt, interest rate | 8.00% | ||||||||||||||||
Debt instrument, maturity date | Nov. 30, 2019 | ||||||||||||||||
Convertible promissory notes | $ 390,000 | ||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.20 | ||||||||||||||||
Debt instrument, interest rate description | If the 2017 Related Notes have not been either fully repaid by the Company or converted into shares by the maturity date, then the 2017 Related Notes will accrue interest at the annual rate of 12% from the maturity date until the date they are repaid in full. | ||||||||||||||||
Debt instrument principal converted amount | $ 150,000 | ||||||||||||||||
Proceeds from notes payable | $ 240,000 | ||||||||||||||||
2017 Related Notes [Member] | Robert Taglich, Michael Taglich And James DeSocio [Member] | Extended Maturity [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2020 | ||||||||||||||||
2018 Related Notes [Member] | |||||||||||||||||
Notes payable, related parties | $ 400,000 | 400,000 | |||||||||||||||
2018 Related Notes [Member] | Robert Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2018 Related Notes [Member] | Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2018 Related Notes [Member] | Robert Taglich And Michael Taglich [Member] | Convertible Promissory Notes [Member] | |||||||||||||||||
Long-term debt, interest rate | 8.00% | ||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2020 | ||||||||||||||||
Convertible promissory notes | $ 400,000 | ||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.13 | ||||||||||||||||
Debt instrument, interest rate description | If the 2018 Related Notes have not been either fully repaid by the Company or converted into shares by the maturity date, then the 2018 Related Notes will accrue interest at the annual rate of 12% from the maturity date until the date they are repaid in full. | ||||||||||||||||
2019 Related Notes [Member] | |||||||||||||||||
Notes payable, related parties | $ 397,728 | ||||||||||||||||
2019 Related Notes [Member] | Robert Taglich [Member] | Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2019 Related Notes [Member] | Michael Taglich [Member] | Promissory Notes [Member] | |||||||||||||||||
Debt beneficial interest rate | 5.00% | ||||||||||||||||
2019 Related Notes [Member] | Robert Taglich And Michael Taglich [Member] | Promissory Notes [Member] | |||||||||||||||||
Long-term debt, interest rate | 12.00% | ||||||||||||||||
Debt instrument, maturity date | May 15, 2020 | ||||||||||||||||
Convertible promissory notes | $ 397,728 | ||||||||||||||||
Debt instrument, interest rate description | If the 2019 Related Notes have not been either fully repaid by the Company or converted into Company shares or other securities by the maturity date, then the 2019 Related Notes will accrue interest at the annual rate of 12% from the maturity date until the date they are repaid in full. | ||||||||||||||||
Interest expense, debt | $ 11,932 | ||||||||||||||||
Debt instrument, original issue discount | $ 47,728 |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable Due to Related Parties (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Unamortized original issue discount and debt issuance costs | $ (144,334) | $ (288,669) |
Less current portion | (1,467,400) | (46,807) |
Long-term portion of notes payable-related party | 1,045,937 | |
Notes Payable - Related Parties [Member] | ||
Total notes payable - related party | 1,542,713 | 1,171,777 |
Unamortized original issue discount and debt issuance costs | (75,313) | (79,033) |
Less current portion | (1,467,400) | (46,807) |
Long-term portion of notes payable-related party | 1,045,937 | |
Shealy Note [Member] | ||
Total notes payable - related party | 46,807 | |
2016 Related Notes [Member] | ||
Total notes payable - related party | 354,985 | 334,970 |
2017 Related Notes [Member] | ||
Total notes payable - related party | 390,000 | 390,000 |
2018 Related Notes [Member] | ||
Total notes payable - related party | 400,000 | 400,000 |
2019 Related Notes [Member] | ||
Total notes payable - related party | $ 397,728 |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable Due to Related Parties (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shealy Note [Member] | ||
Notes payable due to related parties | $ 250,000 | |
2016 Related Notes [Member] | ||
Beneficial conversion feature | $ 20,015 | $ 40,030 |
Notes Payable - Related Parti_6
Notes Payable - Related Parties - Schedule of Future Minimum Principal Payments of Notes Payable Related Party (Details) | Dec. 31, 2019USD ($) |
2020 | $ 3,535,000 |
Total | 3,535,000 |
Notes Payable - Related Parties [Member] | |
2020 | 1,562,728 |
Total | $ 1,562,728 |
Deferred Compensation (Details
Deferred Compensation (Details Narrative) | Dec. 08, 2017USD ($)Installment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Deferred compensation liability | $ 117,166 | $ 165,166 | |
Deferred compensation expense | 48,000 | 48,000 | |
A. Michael Chretien [Member] | |||
Deferred compensation arrangement, description | The Company expects to make bi-weekly payments of $1,846 until the deferred compensation has been paid, which will comprise 61 full payments and one partial payment of $1,569. | ||
Employment Agreements [Member] | Founders [Member] | |||
Deferred compensation liability | $ 117,166 | $ 165,166 | |
Bi-Weekly Payments [Member] | A. Michael Chretien [Member] | |||
Deferred compensation expense | $ 1,846 | ||
Number of payments | Installment | 61 | ||
One Partial Payment [Member] | A. Michael Chretien [Member] | |||
Deferred compensation expense | $ 1,569 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2010ft² | |
Commitments and Contingencies Disclosure [Abstract] | |||
Area of rental square feet of office space | ft² | 6,000 | ||
Lease commenced date | Jan. 1, 2010 | ||
Lease extension date | Aug. 9, 2016 | ||
Lease expiration date | Dec. 31, 2021 | ||
Operating lease costs | $ | $ 51,254 | $ 53,006 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Rental Payments for Operating Leases (Details) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 54,288 |
2021 | 55,656 |
Future lease payments under operating lease | $ 109,944 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Operating Lease Costs (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating cash flows from operating leases | $ 44,247 |
Weighted average remaining lease term - operating leases | 2 years |
Weighted average discount rate - operating leases | 8.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jan. 07, 2019 | Sep. 26, 2018 | Sep. 20, 2018 | Jan. 05, 2018 | Nov. 17, 2017 | Sep. 21, 2017 | Nov. 30, 2017 | Jan. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, shares authorized | 1,500,000 | 1,500,000 | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||||
Common stock voting rights | The holders of the Company's common stock are entitled to one vote per share. | |||||||||||
Interest expense, debt | $ 735,474 | $ 666,458 | ||||||||||
Common stock, shares issued | 370,497 | 354,588 | ||||||||||
Common stock, shares outstanding | 370,497 | 354,588 | ||||||||||
2015 Plan [Member] | ||||||||||||
Common stock, capital shares reserved for future issuance | 67,330 | |||||||||||
Exercise of Warrants [Member] | ||||||||||||
Common stock, capital shares reserved for future issuance | 134,532 | |||||||||||
Convertible Debt [Member] | ||||||||||||
Common stock, capital shares reserved for future issuance | 561,756 | |||||||||||
Accredited Investors [Member] | Private Placement [Member] | 2016 Notes [Member] | ||||||||||||
Convertible promissory note | $ 1,250,000 | $ 1,250,000 | ||||||||||
Accredited Investors [Member] | Private Placement [Member] | 2017 Notes [Member] | ||||||||||||
Convertible promissory note | $ 2,150,000 | |||||||||||
Accredited Investors [Member] | Private Placement [Member] | 2018 Notes [Member] | ||||||||||||
Convertible promissory note | $ 1,300,000 | |||||||||||
Percentage of placement agent commission on gross proceeds | 8.00% | |||||||||||
Directors [Member] | ||||||||||||
Shares issued for restricted common stock | 10,454 | 6,052 | ||||||||||
Stock compensation expenses | $ 87,500 | $ 57,500 | ||||||||||
Placement Agent [Member] | Warrants [Member] | ||||||||||||
Warrants issued to purchase common stock, shares | 68,923 | 68,923 | 84,923 | |||||||||
Underwriting expenses | $ 52,951 | $ 65,243 | ||||||||||
Fair value of warrant issued, per share | $ 0.77 | $ 0.77 | ||||||||||
Placement Agent [Member] | 2017 Notes [Member] | Warrant [Member] | ||||||||||||
Warrants issued to purchase common stock, shares | 354,000 | 506,000 | ||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.25 | $ 0.25 | ||||||||||
Warrant expiration term | 5 years | 5 years | ||||||||||
Fair value of warrant issued, per share | $ 0.17 | $ 0.13 | ||||||||||
Debt issuance cost | $ 126,603 | $ 126,603 | ||||||||||
Interest expense, debt | 88,356 | 149,890 | ||||||||||
Placement Agent [Member] | 2018 Notes [Member] | Warrant [Member] | ||||||||||||
Payment made to placement agent | $ 64,000 | $ 40,000 | ||||||||||
Warrants issued to purchase common stock, shares | 492,308 | 307,692 | ||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.18 | $ 0.13 | ||||||||||
Warrant expiration term | 5 years | 5 years | ||||||||||
Fair value of warrant issued, per share | $ 0.07 | $ 0.10 | ||||||||||
Debt issuance cost | $ 64,348 | $ 64,348 | ||||||||||
Interest expense, debt | $ 86,750 | $ 21,688 | ||||||||||
Placement Agent [Member] | Private Placement [Member] | 2016 Notes [Member] | Warrants [Member] | ||||||||||||
Warrants issued to purchase common stock, shares | 153,846 | 153,846 | ||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.75 | $ 0.75 | ||||||||||
Warrant expiration term | 5 years | 5 years | ||||||||||
Placement Agent [Member] | Private Placement [Member] | 2017 Notes [Member] | Warrant [Member] | ||||||||||||
Payment made to placement agent | $ 172,000 | |||||||||||
Placement Agent [Member] | Accredited Investors [Member] | Private Placement [Member] | 2016 Notes [Member] | ||||||||||||
Percentage of placement agent commission on gross proceeds | 8.00% | |||||||||||
Payment made to placement agent | $ 100,000 | |||||||||||
Placement Agent [Member] | Accredited Investors [Member] | Private Placement [Member] | 2017 Notes [Member] | ||||||||||||
Percentage of placement agent commission on gross proceeds | 8.00% | |||||||||||
Robert Taglich And Michael Taglich [Member] | 2017 Bridge Note [Member] | ||||||||||||
Warrants issued to purchase common stock, shares | 150,000 | |||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.30 | |||||||||||
Warrant expiration term | 5 years | |||||||||||
Fair value of warrant issued, per share | $ 0.26 | |||||||||||
Debt beneficial interest rate | 5.00% | |||||||||||
Debt discount | $ 38,837 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Estimated Values of Warrants Valuation Assumptions (Details) | Sep. 26, 2018 | Sep. 20, 2018 | Nov. 30, 2017 | Nov. 17, 2017 | Sep. 21, 2017 | Dec. 30, 2016 |
Risk Free Interest Rate [Member] | Bridge Noteholders [Member] | ||||||
Warrants, measurement input percentage | 1.89 | |||||
Weighted Average Expected Term [Member] | Bridge Noteholders [Member] | ||||||
Warrants, term | 5 years | |||||
Expected Volatility [Member] | Bridge Noteholders [Member] | ||||||
Warrants, measurement input percentage | 130.80 | |||||
Expected Dividend Yield [Member] | Bridge Noteholders [Member] | ||||||
Warrants, measurement input percentage | 0 | |||||
Placement Agent [Member] | Risk Free Interest Rate [Member] | ||||||
Warrants, measurement input percentage | 2.96 | 2.96 | 2.14 | 2.06 | 1.93 | |
Placement Agent [Member] | Weighted Average Expected Term [Member] | ||||||
Warrants, term | 5 years | 5 years | 5 years | 5 years | 5 years | |
Placement Agent [Member] | Expected Volatility [Member] | ||||||
Warrants, measurement input percentage | 122.92 | 122.52 | 129.34 | 129.87 | 123.07 | |
Placement Agent [Member] | Expected Dividend Yield [Member] | ||||||
Warrants, measurement input percentage | 0 | 0 | 0 | 0 | 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | Mar. 11, 2019 | Jan. 30, 2019 | Sep. 25, 2017 | Dec. 06, 2016 | Feb. 10, 2016 | Jan. 01, 2016 | Apr. 30, 2015 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based compensation options, outstanding, exercise price | $ 0.13 | $ 0.55 | $ 0.55 | |||||||
Share-based compensation options vested, fair value | $ 108,035 | $ 249,025 | ||||||||
Share-based compensation, options, grants in period, weighted average grant date fair value | $ 0.09 | |||||||||
Number of options, granted | 2,177,500 | |||||||||
Employee service share-based compensation, unrecognized, stock options | $ 56,012 | $ 185,754 | ||||||||
Employee service share-based compensation, unrecognized compensation not yet recognized, period | 2 years | |||||||||
2015 Equity Incentive Plan [Member] | ||||||||||
Share-based compensation granted options to purchase shares | 1,660,000 | |||||||||
Share-based compensation options, outstanding, exercise price | $ 0.13 | |||||||||
Employees stock options vesting period, description | Fully vested at issuance through vesting by December 2020 | |||||||||
Share-based compensation options vested, fair value | $ 24,898 | |||||||||
2015 Equity Incentive Plan [Member] | Employee Stock Option [Member] | ||||||||||
Share-based compensation granted options to purchase shares | 505,000 | 750,000 | 100,000 | 210,000 | 250,000 | |||||
Share-based compensation options, outstanding, exercise price | $ 0.13 | $ 0.30 | $ 0.76 | $ 0.96 | $ 0.90 | |||||
Employees stock options vesting period, description | Vesting continuing until 2023 | The options were fully vested as of September 25, 2019 | Vesting continuing until 2020 | Vesting continuing until 2020 | The options were fully vested as of January 1,2019 | |||||
Share-based compensation options vested, fair value | $ 44,591 | $ 321,011 | $ 63,937 | $ 174,748 | $ 196,250 | |||||
2015 Equity Incentive Plan [Member] | Employee Stock Option One [Member] | ||||||||||
Share-based compensation granted options to purchase shares | 500,000 | |||||||||
Share-based compensation options, outstanding, exercise price | $ 0.38 | |||||||||
Employees stock options vesting period, description | The options were fully vested as of September 25, 2019 | |||||||||
Employee One [Member] | ||||||||||
Number of shares canceled stock options | 150,000 | |||||||||
Number of shares canceled, exercise price | $ 0.90 | |||||||||
Employee Two [Member] | ||||||||||
Number of shares canceled stock options | 160,000 | |||||||||
Number of shares canceled, exercise price | $ 0.96 | |||||||||
Employee Three [Member] | ||||||||||
Number of shares canceled stock options | 100,000 | |||||||||
Number of shares canceled, exercise price | $ 0.76 | |||||||||
Employee Four [Member] | ||||||||||
Number of shares canceled stock options | 750,000 | |||||||||
Number of shares canceled, exercise price | $ 0.30 | |||||||||
Employee Five [Member] | ||||||||||
Number of shares canceled stock options | 500,000 | |||||||||
Number of shares canceled, exercise price | $ 0.38 | |||||||||
Non-qualified Stock Option Agreement [Member] | Sophie Pibouin [Member] | 2015 Equity Incentive Plan [Member] | ||||||||||
Share-based compensation granted options to purchase shares | 128,000 | |||||||||
Share-based compensation options expiration date | Apr. 29, 2025 | |||||||||
Share-based compensation options, outstanding, exercise price | $ 0.75 | |||||||||
Non-qualified Stock Option Agreement [Member] | Individual Consultant [Member] | 2015 Equity Incentive Plan [Member] | ||||||||||
Share-based compensation granted options to purchase shares | 12,500 | |||||||||
Share-based compensation options expiration date | Dec. 31, 2025 | |||||||||
Share-based compensation options, outstanding, exercise price | $ 0.90 | |||||||||
Share-based compensation options vested percentage | 100.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Estimated Values of Stock Option Grants Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
April 30, 2015 Grant [Member] | ||
Risk-free interest rate | 1.43% | 1.43% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 143.10% | 143.10% |
Expected dividend yield | 0.00% | 0.00% |
January 1 , 2016 Grant [Member] | ||
Risk-free interest rate | 1.76% | 1.76% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 134.18% | 134.18% |
Expected dividend yield | 0.00% | 0.00% |
February 10 , 2016 Grant [Member] | ||
Risk-free interest rate | 1.15% | 1.15% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 132.97% | 132.97% |
Expected dividend yield | 0.00% | 0.00% |
December 6 , 2016 Grant [Member] | ||
Risk-free interest rate | 1.84% | 1.84% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 123.82% | 123.82% |
Expected dividend yield | 0.00% | 0.00% |
September 25, 2017 Grant [Member] | ||
Risk-free interest rate | 1.85% | 1.85% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 130.79% | 130.79% |
Expected dividend yield | 0.00% | 0.00% |
January 30 , 2019 Grant [Member] | ||
Risk-free interest rate | 2.54% | 2.54% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 115.80% | 115.80% |
Expected dividend yield | 0.00% | 0.00% |
March 11 , 2019 Grant [Member] | ||
Risk-free interest rate | 2.44% | 2.44% |
Weighted average expected term | 5 years | 5 years |
Expected volatility | 116.46% | 116.46% |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Shares Under Option, Outstanding beginning balance | 2,238,000 | 2,238,000 |
Shares Under Option, Granted | 2,177,500 | |
Shares Under Option, Forfeited and expired | (2,072,500) | |
Shares Under Option, Outstanding ending balance | 2,343,000 | 2,238,000 |
Shares Under Option, Exercisable ending balance | 1,773,000 | 1,589,250 |
Weighted- Average Exercise Price, Outstanding beginning balance | $ 0.55 | $ 0.55 |
Weighted- Average Exercise Price, Granted | 0.13 | |
Weighted- Average Exercise Price, Forfeited and expired | 0.84 | |
Weighted- Average Exercise Price, Outstanding ending balance | 0.13 | 0.55 |
Weighted- Average Exercise Price, Exercisable ending balance | $ 0.20 | $ 0.57 |
Weighted Average Remaining Contractual Life Outstanding, beginning | 8 years | 9 years |
Weighted Average Remaining Contractual Life Outstanding, ending | 9 years | 8 years |
Weighted Average Remaining Contractual Life, Exercisable, ending | 9 years | 8 years |
Aggregate Intrinsic Value, Outstanding, beginning balance | $ 79,200 | $ 79,200 |
Aggregate Intrinsic Value, Outstanding ending balance | 19,200 | 79,200 |
Aggregate Intrinsic Value, Exercisable ending balance | $ 19,200 | $ 79,200 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Sales Revenue, Net [Member] | Government Contracts [Member] | ||
Concentration risk, percentage | 41.00% | 30.00% |
Sales Revenue, Net [Member] | Loffler Companies, Inc [Member] | ||
Concentration risk, percentage | 6.00% | |
Sales Revenue, Net [Member] | Franklin County Board of Developmental Disabilities [Member] | ||
Concentration risk, percentage | 6.00% | |
Sales Revenue, Net [Member] | Tiburon, Inc [Member] | ||
Concentration risk, percentage | 11.00% | |
Sales Revenue, Net [Member] | Mid Ohio Strategic Technologies [Member] | ||
Concentration risk, percentage | 10.00% | |
Sales Revenue, Net [Member] | Laser Systems, Inc. [Member] | ||
Concentration risk, percentage | 10.00% | |
Accounts Receivable [Member] | Customer One [Member] | ||
Concentration risk, percentage | 25.00% | 22.00% |
Accounts Receivable [Member] | Customer Two [Member] | ||
Concentration risk, percentage | 25.00% | 16.00% |
Accounts Receivable [Member] | Customer Three [Member] | ||
Concentration risk, percentage | 16.00% | 14.00% |
Accounts Receivable [Member] | Customer Four [Member] | ||
Concentration risk, percentage | 12.00% | 14.00% |
Provision for Income Taxes (Det
Provision for Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 18,430,000 | |
Operating loss carry forwards expiration period | 2039 | |
Deferred tax assets, operating loss carryforwards | $ 3,809,000 | |
Percentage on deferred tax assets, valuation allowance | 100.00% | 100.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 02, 2020 | Jan. 02, 2020 | Jan. 07, 2019 | Jan. 05, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2020 | Feb. 29, 2020 | Feb. 27, 2020 |
Common stock, shares authorized | 1,500,000 | 1,500,000 | |||||||
Graphic Sciences, Inc [Member] | |||||||||
Acquisition costs | $ 84,982 | ||||||||
Directors [Member] | |||||||||
Shares issued for restricted common stock | 10,454 | 6,052 | |||||||
Stock compensation | $ 87,500 | $ 57,500 | |||||||
Subsequent Event [Member] | Stock Purchase Agreement [Member] | Graphic Sciences, Inc [Member] | |||||||||
Debt instrument maturity date | May 30, 2023 | ||||||||
Acquistion purchase price | $ 3,500,000 | ||||||||
Accounts receivable and other current assets | 1,000,000 | ||||||||
Trade payables and other obligations | 300,000 | ||||||||
Potential earnout payments | 2,500,000 | ||||||||
Subsequent Event [Member] | Taglich Brothers, Inc.[Member] | |||||||||
Payment of private placement cash | $ 440,000 | ||||||||
Warrant to purchase of common stock | 95,500 | ||||||||
Warrant exercise price | $ 4 | ||||||||
Subsequent Event [Member] | Taglich Brothers, Inc.[Member] | Stock Purchase Agreement [Member] | |||||||||
Acquisition costs | $ 300,000 | ||||||||
Reassonable expenses | $ 5,000 | ||||||||
Subsequent Event [Member] | Graphic Sciences, Inc [Member] | |||||||||
Ownership percentage | 100.00% | ||||||||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | Taglich Brothers, Inc.[Member] | |||||||||
Number of common stock share earned fees | 35,250 | ||||||||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | 2016-2018 [Member] | |||||||||
Common stock at a conversion price, value | $ 350,000 | ||||||||
Common stock at a conversion price | 1,433,739 | ||||||||
Sale of stock price per share | $ 4 | ||||||||
Subsequent Event [Member] | Directors [Member] | |||||||||
Shares issued for restricted common stock | 16,428 | ||||||||
Stock compensation | $ 57,500 | ||||||||
Subsequent Event [Member] | Board of Directors [Member] | |||||||||
Common stock, shares authorized | 1,500,000 | 3,200,000 | 25,000,000 | ||||||
Subsequent Event [Member] | Board of Directors [Member] | Pre-split Basis [Member] | |||||||||
Common stock, shares authorized | 75,000,000 | 160,000,000 | |||||||
Subsequent Event [Member] | Accredited Investors [Member] | Securities Purchase Agreement [Member] | |||||||||
Sale of stock price per share | $ 4 | ||||||||
Number of sale of stock transaction | 875,000 | ||||||||
Proceeds from issuance of debt | $ 3,500,000 | ||||||||
Debt instrument maturity date | Feb. 28, 2023 | ||||||||
Debt instrument interest rate percentage | 12.00% | ||||||||
Default penalty percentage | 20.00% | ||||||||
Debt Instrument Interest Rate, Effective Percentage | 14.00% | ||||||||
Subsequent Event [Member] | Accredited Investors [Member] | Securities Purchase Agreement [Member] | Private Placement [Member] | |||||||||
Proceeds from issuance of debt | $ 5,500,000 | ||||||||
Subsequent Event [Member] | Accredited Investors [Member] | 12% Subordinated Notes [Member] | Securities Purchase Agreement [Member] | |||||||||
Proceeds from issuance of debt | 2,000,000 | ||||||||
Number of convertible units, value | $ 1,000 | ||||||||
Number of convertible units, shares | 40 | ||||||||
Number of stock issued during period, shares | 955,000 |