Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 29, 2020 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | MOBIVITY HOLDINGS CORP. | |
Entity Central Index Key | 0001447380 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 51,615,469 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity File Number | 000-53851 | |
Tax Identification Number (TIN) | 26-3439095 | |
Entity Incorporation, State Country Code | NV | |
Entity Interactive Data Current | Yes | |
Entity Address, Address Line One | 55 North Arizona Place | |
Entity Address, Address Line Two | #310 Chandler | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85225 | |
City Area Code | 877 | |
Local Phone Number | 282-7660 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 208,217 | $ 273,599 |
Accounts receivable, net of allowance for doubtful accounts of $104,581 and $88,071, respectively | 973,307 | 614,726 |
Contracts receivable, current | 943,904 | 526,948 |
Right to use lease assets | 178,015 | 0 |
Other current assets | 525,027 | 601,749 |
Total current assets | 2,828,470 | 2,017,022 |
Goodwill | 496,352 | 496,352 |
Right to use lease assets | 33,069 | 260,645 |
Intangible assets, net | 1,609,853 | 1,762,211 |
Contracts receivable, long term | 2,123,784 | 1,260,371 |
Other assets | 66,646 | 67,787 |
TOTAL ASSETS | 7,158,174 | 5,864,388 |
Current liabilities | ||
Accounts payable | 3,623,957 | 3,256,888 |
Accrued interest | 86,385 | 35,292 |
Accrued and deferred personnel compensation | 403,918 | 244,953 |
Deferred revenue and customer deposits | 1,016,680 | 440,309 |
Related party notes payable | 143,296 | 140,700 |
Notes payable, net - current maturities | 540,410 | 540,576 |
Operating lease liability | 205,042 | 258,343 |
Other current liabilities | 524,666 | 308,465 |
Total current liabilities | 6,544,354 | 5,225,526 |
Non-current liabilities | ||
Related party notes payable, net - long term | 1,200,000 | 1,000,000 |
Notes payable, net - long term | 438,767 | 567,529 |
Operating lease liability | 37,244 | 45,460 |
Other long term liabilities | 1,247,301 | 740,218 |
Total non-current liabilities | 2,923,312 | 2,353,207 |
Total liabilities | 9,467,666 | 7,578,733 |
Stockholders' equity | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 51,615,469 and 51,380,969, shares issued and outstanding | 51,616 | 51,381 |
Equity payable | 100,862 | 100,862 |
Additional paid-in capital | 95,215,216 | 94,781,738 |
Accumulated other comprehensive income | (4,301) | 8,780 |
Accumulated deficit | (97,672,885) | (96,657,106) |
Total stockholders' deficit | (2,309,492) | (1,714,345) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 7,158,174 | $ 5,864,388 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 104,581 | $ 88,071 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 51,615,469 | 51,380,969 |
Common stock, shares outstanding | 51,615,469 | 51,380,969 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Revenues | $ 4,549,992 | $ 2,416,617 |
Cost of revenues | 1,584,402 | 1,171,909 |
Gross profit | 2,965,590 | 1,244,708 |
Operating expenses | ||
General and administrative | 1,246,794 | 1,323,935 |
Sales and marketing | 807,999 | 838,567 |
Engineering, research, and development | 1,677,442 | 577,733 |
Depreciation and amortization | 173,937 | 284,094 |
Total operating expenses | 3,906,172 | 3,024,329 |
Income (loss) from operations | (940,582) | (1,779,621) |
Other income/(expense) | ||
Interest income | 837 | 17 |
Interest expense | (77,189) | (41,905) |
Foreign currency gain (loss) | 1,155 | (138) |
Total other income/(expense) | (75,197) | (42,026) |
Income (loss) before income taxes | (1,015,779) | (1,821,647) |
Income tax expense | 0 | 0 |
Net Income (loss) | (1,015,779) | (1,821,647) |
Other comprehensive income (loss), net of income tax | ||
Foreign currency translation adjustments | (13,081) | (28,449) |
Comprehensive income (loss) | $ (1,028,860) | $ (1,850,096) |
Net income (loss) per share: | ||
Basic | $ (0.02) | $ (0.04) |
Diluted | $ (0.02) | $ (0.04) |
Weighted average number of shares: | ||
Basic | 51,435,084 | 45,998,053 |
Diluted | 51,435,084 | 45,998,053 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Equity Payable | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Beginning balance, value at Dec. 31, 2018 | $ 45,998 | $ 100,862 | $ 88,008,473 | $ 4,759 | $ (87,835,132) | $ 324,960 |
Beginning balance, Shares at Dec. 31, 2018 | 45,998,053 | |||||
Issuance of common stock for cash | $ 2,800 | 2,797,200 | 2,800,000 | |||
Issuance of common stock for cash, Shares | 2,800,000 | |||||
Issuance of common stock for debt conversion | $ 2,583 | 2,812,795 | 2,815,378 | |||
Issuance of common stock for debt conversion, Shares | 2,582,916 | |||||
Stock based compensation | 1,163,270 | 1,163,270 | ||||
Foreign currency translation adjustment | 4,021 | 4,021 | ||||
Net income (loss) | (8,821,974) | (8,821,974) | ||||
Ending balance, value at Dec. 31, 2019 | $ 51,381 | 100,862 | 94,781,738 | 8,780 | (96,657,106) | (1,714,345) |
Ending balance, shares at Dec. 31, 2019 | 51,380,969 | |||||
Issuance of common stock for warrant conversion | $ 235 | 234,265 | $ 234,500 | |||
Issuance of common stock for warrant conversion, Shares | 234,500 | |||||
Issuance of common stock for debt conversion, Shares | 2,582,916 | |||||
Stock based compensation | 199,213 | $ 199,213 | ||||
Foreign currency translation adjustment | (13,081) | (13,081) | ||||
Net income (loss) | (1,015,779) | (1,015,779) | ||||
Ending balance, value at Mar. 31, 2020 | $ 51,616 | $ 100,862 | $ 95,215,216 | $ (4,301) | $ (97,672,885) | $ (2,309,492) |
Ending balance, shares at Mar. 31, 2020 | 51,615,469 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES | ||
Net loss | $ (1,015,779) | $ (1,821,647) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 43,607 | (1,982) |
Stock-based compensation | 199,213 | 180,749 |
Depreciation and amortization expense | 173,937 | 167,649 |
Adjustments due to ASC 606 | (520,717) | 60,583 |
Increase (decrease) in cash resulting from changes in: | ||
Accounts receivable | (402,641) | (469,345) |
Other current assets | 76,665 | 24,108 |
Other assets | (429) | 0 |
Accounts payable | 367,565 | 555,953 |
Accrued interest | 51,041 | 0 |
Accrued and deferred personnel compensation | 159,357 | (111,488) |
Right to use leases | (11,730) | 62,753 |
Other liabilities - current | (36,368) | (29,960) |
Deferred revenue and customer deposits | 576,371 | (213,406) |
Net cash used in operating activities | (339,908) | (1,596,033) |
INVESTING ACTIVITIES | ||
Purchases of equipment | (4,907) | 0 |
Capitalized software development costs | (15,592) | (139,570) |
Net cash used in investing activities | (20,499) | (139,570) |
FINANCING ACTIVITIES | ||
Payments on notes payable | (122,743) | (6,792) |
Proceeds from related party notes payable, net of repayments | 202,596 | 1,500,000 |
Proceeds from conversion of common stock warrants | 234,500 | 0 |
Net cash provided by financing activities | 314,353 | 1,493,208 |
Effect of foreign currency translation on cash flow | (19,328) | (28,449) |
Net change in cash | (65,382) | (270,844) |
Cash at beginning of period | 273,599 | 554,255 |
Cash at end of period | 208,217 | 283,411 |
Supplemental disclosures: | ||
Cash paid during period for: Interest | 26,096 | 41,906 |
Non-cash investing and financing activities: | ||
Lease adoption | $ 0 | $ 538,740 |
1. Nature of Operations and Bas
1. Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. Nature of Operations and Basis of Presentation | 1. Nature of Operations and Basis of Presentation Mobivity Holdings Corp. (the “Company” or “we”) is in the business of developing and operating proprietary platforms over which brands and enterprises can conduct national and localized, data-driven mobile marketing campaigns. Our proprietary platforms, consisting of software available to phones, tablets, PCs, and Point of Sale (“POS”) systems, allow resellers, brands and enterprises to market their products and services to consumers through text messages sent directly to consumers via mobile phones, mobile smartphone applications, and dynamically printed receipt content. On November 14, 2018, we completed the acquisition of certain operating assets relating to Belly, Inc.’s proprietary digital customer loyalty platform, including client contracts, accounts receivable and intellectual property. We generate revenue by charging the resellers, brands and enterprises a per-message transactional fee, through fixed or variable software licensing fees, or via advertising fees. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 30, 2020. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of our condensed consolidated financial statements as of March 31, 2020, and for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 30, 2020 are not necessarily indicative of the operating results for the full year ending December 31, 2020. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
2. Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates used are those related to stock-based compensation, asset impairments, the valuation and useful lives of depreciable tangible and certain intangible assets, the fair value of common stock used in acquisitions of businesses, the fair value of assets and liabilities acquired in acquisitions of businesses, and the valuation allowance of deferred tax assets. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. Accounts Receivable, Allowance for Doubtful Accounts and Concentrations Accounts receivable are carried at their estimated collectible amounts. We grant unsecured credit to substantially all of our customers. Ongoing credit evaluations are performed, and potential credit losses are charged to operations at the time the account receivable is estimated to be uncollectible. Since we cannot necessarily predict future changes in the financial stability of our customers, we cannot guarantee that our reserves will continue to be adequate. As of March 31, 2020, and December 31, 2019, we recorded an allowance for doubtful accounts of $104,581 and $88,071, respectively. Goodwill and Intangible Assets Goodwill is tested for impairment at a minimum on an annual basis. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. Intangible assets consist of patents and trademarks, purchased customer contracts, purchased customer and merchant relationships, purchased trade names, purchased technology, non-compete agreements, and software development costs. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from one to twenty years. No significant residual value is estimated for intangible assets. Software Development Costs Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed (“ASC Subtopic 985-20”). Software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses technical design documentation and integration documentation, or the completed and tested product design and working model. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. Technological feasibility is evaluated on a project-by-project basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that are considered ‘research and development’ that are not capitalized are immediately charged to engineering, research, and development expense. Capitalized costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Amortization Expense - Development” based on the straight-line method over a twenty-four month period. The Company evaluates the future recoverability of capitalized software development costs on an annual basis. For products that have been released in prior years, the primary evaluation criterion is ongoing relations with the customer. Impairment of Long-Lived Assets We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate. Foreign Currency Translation The Company translates the financial statements of its foreign subsidiary from the local (functional) currency into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters . Revenue Recognition and Concentrations Our Recurrency platform is a hosted solution. We generate revenue from licensing our software to clients in our software as a service model, per-message and per-minute transactional fees, and customized professional services. We recognize license/subscription fees over the period of the contract, service fees as the services are performed, and per-message or per-minute transaction revenue when the transaction takes place. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting. Some customers are billed on a month-to-month basis with no contractual term and are collected by credit card. Revenue is recognized at the time that the services are rendered, and the selling price is fixed with a set range of plans. Cash received in advance of the performance of services is recorded as deferred revenue. Accounting Standards Update (“ASU “) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 (“ASC 606”), is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition guidance. The Company adopted this standard effective January 1, 2018, applying the modified retrospective method. Upon adoption, the Company discontinued revenue deferral under the sell-through model and commenced recording revenue upon delivery to distributors, net of estimated returns. Generally, the new standard results in earlier recognition of revenues. We determine revenue recognition under ASC 606 through the following steps: · identification of the contract, or contracts, with a customer; · identification of the performance obligations in the contract; · identification of the transaction price; · allocation of the transaction price to the performance obligations in the contract; and · recognition of revenue when, or as, we satisfy a performance obligation. During the three months ended March 31, 2020 and 2019, two customers accounted for 81% and 78% of our revenues, respectively. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. We are required to record all components of comprehensive income (loss) in the consolidated financial statements in the period in which they are recognized. Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on investments, are reported, net of their related tax effect, to arrive at comprehensive income (loss). For the three months ended March 31, 2020 and 2019, the comprehensive loss was $1,028,860 and $1,850,096, respectively. Net Loss Per Common Share Basic net loss per share excludes any dilutive effects of options, shares subject to repurchase and warrants. Diluted net loss per share includes the impact of potentially dilutive securities. During the three months ended March 31, 2020 and 2019, we had securities outstanding which could potentially dilute basic earnings per share in the future but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive. Reclassifications Certain amounts from prior periods have been reclassified to conform to the current period presentation. Recent Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”. Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company adopted this standard as of January 1, 2019. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes the second step of the two-step goodwill impairment test. Under ASU 2017-04, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019; early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard as of January 1, 2020. |
3. Goodwill and Purchased Intan
3. Goodwill and Purchased Intangibles | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
3. Goodwill and Purchased Intangibles | 3. Goodwill and Purchased Intangibles Goodwill The carrying value of goodwill at March 31, 2020 and December 31, 2019 was $496,352. The following table presents details of our purchased intangible assets as of March 31, 2020 and December 31, 2019: Intangible assets Balance at Additions Impairments Amortization Fx and Other Balance at Patents and trademarks $ 69,853 $ - $ - $ (3,104) $ (56) $ 66,693 Customer and merchant relationships 739,236 - - (24,213) - 715,023 Trade name 50,732 - - (2,320) (5) 48,407 Acquired technology 144,792 - - (4,075) - 140,717 Non-compete agreements 60,931 - - (3,965) - 56,966 $ 1,065,544 $ - $ - $ (37,677) $ (61) $ 1,027,806 The intangible assets are being amortized on a straight-line basis over their estimated useful lives of one to twenty years. Amortization expense for intangible assets was $37,677 and $37,769 for the three months ended March 31, 2020 and 2019, respectively. The estimated future amortization expense of our intangible assets as of March 31, 2020 is as follows: Year ending December 31, Amount 2020 $ 113,030 2021 148,014 2022 147,868 2023 145,360 2024 108,764 Thereafter 364,770 Total $ 1,027,806 |
4. Software Development Costs
4. Software Development Costs | 3 Months Ended |
Mar. 31, 2020 | |
Research and Development [Abstract] | |
4. Software Development Costs | 4. Software Development Costs The Company has capitalized certain costs for software developed or obtained for internal use during the application development stage as it relates to specific contracts. The amounts capitalized include external direct costs of services used in developing internal-use software and for payroll and payroll-related costs of employees directly associated with the development activities The following table presents details of our software development costs as of March 31, 2020 and December 31, 2019: Balance at Additions Amortization Balance at Software Development Costs $ 696,667 $ 15,592 $ (130,212) $ 582,047 $ 696,667 $ 15,592 $ (130,212) $ 582,047 Software development costs are being amortized on a straight-line basis over their estimated useful life of two years. Amortization expense for software development costs was $130,212 and $111,399 for the three months ended March 31, 2020 and 2019, respectively. The estimated future amortization expense of software development costs as of March 31, 2020 is as follows: Year ending December 31, Amount 2020 $ 354,826 2021 224,892 2022 2,329 2023 - 2024 - Thereafter - Total $ 582,047 |
5. Operating Lease Assets
5. Operating Lease Assets | 3 Months Ended |
Mar. 31, 2020 | |
Response Rate Increase | |
5. Operating Lease Assets | 5. Operating Lease Assets Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases." The following are additional details related to leases recorded on our balance sheet as of March 31, 2020: Leases Classification Balance at Assets Current Operating lease assets Operating lease assets $ 178,015 Noncurrent Operating lease assets Noncurrent operating lease assets $ 33,069 Total lease assets $ 211,084 Liabilities Current Operating lease liabilities Operating lease liabilities $ 205,042 Noncurrent Operating lease liabilities Noncurrent operating lease liabilities $ 37,244 Total lease liabilities $ 242,286 The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases, a reconciliation to operating lease liabilities reported on the Condensed Consolidated Balance Sheet, our weighted-average remaining lease term and weighted average discount rate: Year ending December 31, Amount 2020 $ 204,729 2021 35,748 2022 11,916 2023 - 2024 - Thereafter - Total future lease payments 252,393 Less: imputed interest (10,107) Total $ 242,286 Weighted Average Remaining Lease Term (years) Operating leases 1 Weighted Average Discount Rate 6.75 % |
6. Notes Payable and Interest E
6. Notes Payable and Interest Expense | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
6. Notes Payable and Interest Expense | 6. Notes Payable and Interest Expense The following table presents details of our notes payable as of March 31, 2020 and December 31, 2019: Facility Maturity Interest Rate Balance at Balance at BDC Term Loan October 15, 2021 25% $ 205,330 $ 224,307 ACOA Note May 1, 2023 - 107,179 117,131 Wintrust Bank November 1, 2021 Prime + 1.5% 666,667 766,667 Related Party Note various 15% 1,343,297 1,140,700 Total Debt 2,322,473 2,248,805 Less current portion (683,706) (681,276) Long-term debt, net of current portion $ 1,638,767 $ 1,567,529 BDC Term Loan On January 8, 2016, Livelenz, a wholly-owned subsidiary of the Company (“Livelenz”), entered into an amendment of their original loan agreement dated August 26, 2011 with the Business Development Bank of Canada (“BDC”). Under this agreement the loan will mature, and the commitments will terminate on September 15, 2019. On July 26, 2019, Livelenz, entered into an amendment of their original loan agreement dated August 26, 2011 with the Business Development Bank of Canada (“BDC”). Under this agreement the loan will mature, and the commitments will terminate on October 15, 2021. In accordance with the amendment, the Company will commence monthly payments beginning on August 15, 2019 of principal in the amount of $8,500 in addition to the monthly payment of accrued interest. These payments will increase to $10,000 on November 15, 2019, $12,000 on May 15, 2020, $14,000 on November 15, 2020 and $16,000 on May 15, 2021 in addition to the monthly interest. ACOA Note On November 6, 2017, Livelenz (a wholly-owned subsidiary of the Company), entered into an amendment of the original agreement dated December 2, 2014 with the Atlantic Canada Opportunities Agency (“ACOA”). Under this agreement the note will mature, and the commitments will terminate on May 1, 2023. The monthly principal payment amount of $3,000 increased to $3,500 beginning on November 1, 2019, $4,000 on November 1, 2020, $4,500 on November 1, 2021 and $2,215 during the remaining term of the agreement. Wintrust Loan On November 14, 2018, the Company entered into a Loan and Security Agreement with Wintrust Bank. The Loan and Security Agreement provides for a single-term loan to us in the original principal amount of $1,000,000. Interest accrues on the unpaid principal amount at the rate of prime plus 1.5%. The loan is a three-year loan and is interest-only payable for the first six months of the loan. Commencing on May 1, 2019, the Company will commence monthly payments of principal in the amount of $33,333 in addition to the monthly payment of accrued interest. The loan is secured by all of our assets other than our intellectual property. We used the proceeds of the loan to re-finance a loan in the principal amount of $1,000,000 we assumed as part of the acquisition of the Belly assets. On April 7, 2020, the Company entered into an amendment of their original loan agreement dated November 14, 2018 with Wintrust Bank. Under this agreement the covenant calculation was amended to include certain non-cash items to be included in the available amounts for the fixed charge coverage ratio. Related Party Notes During February 2018, we conducted a private placement of Unsecured Promissory Notes (individually, a “ Note Notes During the year ended December 31, 2019 we issued unsecured notes in the principle aggregate amount of $3,500,000, which become due two years after the date of issuance. These notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay any of the Notes without notice, subject to a two percent (2%) pre-payment penalty. On July 2, 2019, a total of $2,500,000 of principal under the above-mentioned notes and the accrued interest of $82,916 was converted into equity and we recorded a loss on conversion of debt of $232,462 for the year ended December 31, 2019. On February 26, 2020, we issued an unsecured note in the principle aggregate amount of $200,000, which becomes due two years after the date of issuance. This note bears interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay this note without notice, subject to a two percent (2%) pre-payment penalty. As of March 31, 2020, we have unpaid reimbursable expenses to an officer of the company in the amount of $63,296. As of March 31, 2020, we have a principal balance of $1,280,000 and accrued interest of $79,075 outstanding. Interest Expense Interest expense was $77,189 and $41,905 during the three months ended March 31, 2020 and 2019, respectively. |
7. Stockholders' Equity
7. Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
7. Stockholders' Equity | 7. Stockholders’ Equity Common Stock 2019 In July 2019, the Company commenced a private placement of its common stock units, with each unit consisting of one share of our common stock and a warrant to purchase to one-half share of our common stock at an exercise price of $1.25 per share at an offering price of $1.00 per unit. The Company sold 2,800,000 units of its common stock for gross proceeds of $2,800,000. In addition, the Company issued 2,582,916 units of its common stock associated with the conversion of $2,500,000 of principal, $82,916 of accrued interest, and a loss on conversion of $232,462 (See Note 6). 2020 On March 2, 2020, the Company issued 234,500 shares of common stock in exchange for cash in conjunction with a warrant exercise. The shares were exercised at the strike price of $1.00 per share. As of March 31, 2020 and December 31, 2019 we had an equity payable balance of $100,862. Stock-based Plans Stock Option Activity The following table summarizes stock option activity for the year ended December 31, 2019 and for the three months ended March 31 2020: Options Outstanding at December 31, 2018 4,987,426 Granted 2,592,500 Exercised - Forfeit/canceled (923,389) Expired (874,653) Outstanding at December 31, 2019 5,781,884 Granted 15,000 Exercised - Forfeit/canceled (28,447) Expired (131,667) Outstanding at March 31, 2020 5,636,770 The weighted average exercise price of stock options granted during the period was $0.65 and the related weighted average grant date fair value was $0.43 per share. 2019 On January 7, 2019, the Company granted one employee a total of 10,000 options to purchase shares of the Company common stock at the closing price as of January 7, 2019 of $1.17 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until January 7, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 90.82% and an option fair value of $.88 was $8,821. On January 21, 2019, the Company granted one employee a total of 15,000 options to purchase shares of the Company common stock at the closing price as of January 21, 2019 of $1.17 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until January 21, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 90.75% and an option fair value of $.88 was $13,239. On February 12, 2019, the Company granted one employee a total of 150,000 options to purchase shares of the Company common stock at the closing price as of February 12, 2019 of $1.00 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until February 12, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 90.79% and an option fair value of $.75 was $113,046. On February 18, 2019, the Company granted one employee a total of 15,000 options to purchase shares of the Company common stock at the closing price as of February 18, 2019 of $1.05 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until February 18, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 90.88% and an option fair value of $.84 was $12,537. On February 25, 2019, the Company granted one employee a total of 50,000 options to purchase shares of the Company common stock at the closing price as of February 25, 2019 of $1.00 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until February 25, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 90.88% and an option fair value of $.75 was $37,697. On March 11, 2019, the Company granted one employee a total of 50,000 options to purchase shares of the Company common stock at the closing price as of March 11, 2019 of $1.00 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until March 11, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 90.90% and an option fair value of $.75 was $37,688. On May 17, 2019, the Company granted three employees a total of 1,775,000 options to purchase shares of the Company common stock at the closing price as of May 17, 2019 of $1.04 per share. The Option Shares will vest ratably over forty-eight (48) months and are exercisable until May 17, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 80.17% and an option fair value of $.72 was $1,283,178. On August 21, 2019, the Company granted four employees a total of 140,000 options to purchase shares of the Company common stock at the closing price as of August 21, 2019 of $0.95 per share. The Option Shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter and are exercisable until August 21, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 80.17% and an option fair value of $.65 was $91,537. On October 21, 2019, the Company granted one employee 150,000 options to purchase shares of the Company common stock at the closing price as of October 21, 2019 of $0.98 per share. The Option Shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter and are exercisable until October 21, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 74.18% and an option fair value of $.64 was $96,165. On November 19, 2019, the Company granted twelve employees a total of 237,500 options to purchase shares of the Company common stock at the closing price as of November 19, 2019 of $0.88 per share. The Option Shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter and are exercisable until November 19, 2029. The total estimated value using the Black-Scholes Model, based on a volatility rate of 78.70% and an option fair value of $.60 was $142,409. 2020 On March 24, 2020, the Company granted one employee a total of 15,000 options to purchase shares of the Company common stock at the closing price as of March 24, 2020 of $0.65 per share. The Option Shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter and are exercisable until March 24, 2030. The total estimated value using the Black-Scholes Model, based on a volatility rate of 77.56% and an option fair value of $.43 was $6,472. Stock-Based Compensation Expense from Stock Options and Warrants The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 General and administrative $ 78,549 $ 54,232 Sales and marketing 13,677 39,914 Engineering, research, and development 41,987 21,602 $ 134,213 $ 115,748 Valuation Assumptions The fair value of each stock option award was calculated on the date of grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 2019 Risk-free interest rate 0.58 % 2.53 % Expected life (years) 6.00 6.00 Expected dividend yield - % - % Expected volatility 77.57 % 90.83 % The risk-free interest rate assumption is based upon published interest rates appropriate for the expected life of our employee stock options. The expected life of the stock options represents the weighted-average period that the stock options are expected to remain outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based awards. The dividend yield assumption is based on our history of not paying dividends and no future expectations of dividend payouts. The expected volatility in 2020 and 2019 is based on the historical publicly traded price of our common stock. Restricted stock units The following table summarizes restricted stock unit activity under our stock-based plans for the year ended December 31, 2019 and for the three months ended March 31, 2020: Shares Outstanding at December 31, 2018 662,800 Awarded 489,448 Released - Canceled/forfeited/expired - Outstanding at December 31, 2019 1,152,248 Awarded 100,000 Released - Canceled/forfeited/expired - Outstanding at March 31, 2020 1,252,248 Expected to vest at March 31, 2020 1,252,248 Vested at March 31, 2020 1,252,248 Unvested at March 31, 2020 - Unrecognized expense at March 31, 2020 $ - 2019 On January 1, 2019, the Company issued to four independent directors a total of 222,224 restricted stock units. These restricted stock units were issued for the $260,000 of board compensation earned in 2018. The units were valued at $260,000 or $1.17 per share, based on the closing stock price on the date of grant. All units vested immediately. The shares of Common Stock associated with the Restricted Stock Unit evidenced by this Agreement will be issued to the director upon the earliest to occur of (A) a change in control of the Company, and (B) the termination of the director’s service with the Company. On March 31, 2019, the Company granted four independent directors a total of 72,224 restricted stock units. The units were valued at $65,001 or $0.90 per share, based on the closing stock price on the date of grant. All units vested immediately. The shares of Common Stock associated with the Restricted Stock Unit evidenced by this Agreement will be issued to the director upon the earliest to occur of (A) a change in control of the Company, and (B) the termination of the director’s service with the Company. On December 31, 2019, the Company granted four independent directors a total of 195,000 restricted stock units. The units were valued at $195,000 or $1.00 per share, based on the closing stock price on the date of grant. All units vested immediately. The shares of Common Stock associated with the Restricted Stock Unit evidenced by this Agreement will be issued to the director upon the earliest to occur of (A) a change in control of the Company, and (B) the termination of the director’s service with the Company. On March 24, 2020, the Company granted four independent directors a total of 100,000 restricted stock units. The units were valued at $65,000 or $0.65 per share, based on the closing stock price on the date of grant. All units vested immediately. The shares of Common Stock associated with the Restricted Stock Unit evidenced by this Agreement will be issued to the director upon the earliest to occur of (A) a change in control of the Company, and (B) the termination of the director’s service with the Company. Stock Based Compensation from Restricted Stock The impact on our results of operations of recording stock-based compensation expense for restricted stock units for the three months ended March 31, 2020 and 2019 was as follows: Three Months Ended March 31, 2020 2019 General and administrative $ 65,000 $ 65,002 $ 65,000 $ 65,002 As of March 31, 2020, there was no unearned restricted stock unit compensation. Warrants Issued to Investors and Placement Agents At March 31, 2020, we have outstanding warrants to purchase 2,691,459 at $1.25 per share. These warrants expire in 2021. |
8. Fair Value Measurements
8. Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
8. Fair Value Measurements | 8. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires us to develop our own assumptions. This hierarchy requires companies to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value. The following table presents assets that are measured and recognized at fair value as of March 31, 2020 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Goodwill (non-recurring) $ - $ - $ 496,352 $ - Intangibles, net (non-recurring) $ - $ - $ 1,609,853 $ - The following table presents assets that are measured and recognized at fair value as of December 31, 2019 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Goodwill (non-recurring) $ - $ - $ 496,352 $ - Intangibles, net (non-recurring) $ - $ - $ 1,762,211 $ - |
9. Commitments and Contingencie
9. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
9. Commitments and Contingencies | 9. Commitments and Contingencies Litigation As of the date of this report, there are no pending legal proceedings to which we or our properties are subject, except for routine litigation incurred in the normal course of business. Operating Lease As described in Note 5, the Company has a lease agreement for 10,395 square feet, for its office facilities in Chandler, AZ through December 2020. Monthly rental payments, including common area maintenance charges, are $19,707, to $20,140. As of March 31, 2020, we have an operating lease asset balance for this lease of $149,816 and an operating lease liability balance for this lease of $173,303 recorded in accordance with ASC 840. The Company also has a lease through April 2022 for 3,248 square feet of office space located in Halifax, Nova Scotia, at a monthly rental expense of $2,665 to $2,979 per month, excluding common area maintenance charges. As of March 31, 2020, we have an operating lease asset balance for this lease of $61,268 and an operating lease liability balance for this lease of $68,983 recorded in accordance with ASC 840. |
10. Related Party Transactions
10. Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
10. Related Party Transactions | 10. Related Party Transactions Unsecured Promissory Note Investments in 2019 During the year ended December 31, 2019, we issued to one of our directors, unsecured notes in the principal aggregate amount of $3,500,000, which are due and payable two years after issuance. These notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay any of the Notes without notice, subject to a two percent (2%) pre-payment penalty. We conducted the private placement of our securities in July 2019. The note holder participated in the private placement by converting principal of $2,500,000 and accrued interest under the notes totaling $82,916, into 2,582,916 units of our securities. As of March 31, 2020, we have $1,000,000 as a remaining balance of these notes and accrued interest of $51,875. Unsecured Promissory Note Investments in 2020 On February 26, 2020, we issued to one of our directors, unsecured notes in the principal aggregate amount of $200,000, which are due and payable two years after issuance. This notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay any of the Notes without notice, subject to a two percent (2%) pre-payment penalty. As of March 31, 2020, we have $200,000 as a remaining balance of these notes and accrued interest of $2,833. |
11. Subsequent Events
11. Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
11. Subsequent Events | 11. Subsequent Events On April 10, 2020, we entered into a commitment loan with Chase Bank, N.A. under the CARES act and SBA Paycheck Protection Program, in the principal aggregate amount of $891,103, which is due and payable two years after issuance. This note bears interest on the unpaid balance at the rate of one percent (1%) per annum. The note contains a deferral period of six months, for which no interest or principal payments are due. Forgiveness of the loan may be obtained by meeting certain SBA requirements. On April 22, 2020, we entered into a commitment loan with TD Bank under the Canadian Emergency Business Account (“CEBA”), in the principal aggregate amount of $40,000 CAD, which is due and payable on December 31, 2022. This note bears interest on the unpaid balance at the rate of zero percent (0%) per annum during the initial term. Under this note no interest or principal payments are due until January 1, 2023. Under the conditions of the loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%) is repaid prior to the initial term date. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates used are those related to stock-based compensation, asset impairments, the valuation and useful lives of depreciable tangible and certain intangible assets, the fair value of common stock used in acquisitions of businesses, the fair value of assets and liabilities acquired in acquisitions of businesses, and the valuation allowance of deferred tax assets. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. |
Accounts Receivable, Allowance for Doubtful Accounts and Concentrations | Accounts Receivable, Allowance for Doubtful Accounts and Concentrations Accounts receivable are carried at their estimated collectible amounts. We grant unsecured credit to substantially all of our customers. Ongoing credit evaluations are performed, and potential credit losses are charged to operations at the time the account receivable is estimated to be uncollectible. Since we cannot necessarily predict future changes in the financial stability of our customers, we cannot guarantee that our reserves will continue to be adequate. As of March 31, 2020, and December 31, 2019, we recorded an allowance for doubtful accounts of $104,581 and $88,071, respectively. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is tested for impairment at a minimum on an annual basis. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit's carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. Intangible assets consist of patents and trademarks, purchased customer contracts, purchased customer and merchant relationships, purchased trade names, purchased technology, non-compete agreements, and software development costs. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from one to twenty years. No significant residual value is estimated for intangible assets. |
Software Development Costs | Software Development Costs Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed (“ASC Subtopic 985-20”). Software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses technical design documentation and integration documentation, or the completed and tested product design and working model. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. Technological feasibility is evaluated on a project-by-project basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that are considered ‘research and development’ that are not capitalized are immediately charged to engineering, research, and development expense. Capitalized costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Amortization Expense - Development” based on the straight-line method over a twenty-four month period. The Company evaluates the future recoverability of capitalized software development costs on an annual basis. For products that have been released in prior years, the primary evaluation criterion is ongoing relations with the customer. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate. |
Foreign Currency Translation | Foreign Currency Translation The Company translates the financial statements of its foreign subsidiary from the local (functional) currency into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters . |
Revenue Recognition and Concentrations | Revenue Recognition and Concentrations Our Recurrency platform is a hosted solution. We generate revenue from licensing our software to clients in our software as a service model, per-message and per-minute transactional fees, and customized professional services. We recognize license/subscription fees over the period of the contract, service fees as the services are performed, and per-message or per-minute transaction revenue when the transaction takes place. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting. Some customers are billed on a month-to-month basis with no contractual term and are collected by credit card. Revenue is recognized at the time that the services are rendered, and the selling price is fixed with a set range of plans. Cash received in advance of the performance of services is recorded as deferred revenue. Accounting Standards Update (“ASU “) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 (“ASC 606”), is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition guidance. The Company adopted this standard effective January 1, 2018, applying the modified retrospective method. Upon adoption, the Company discontinued revenue deferral under the sell-through model and commenced recording revenue upon delivery to distributors, net of estimated returns. Generally, the new standard results in earlier recognition of revenues. We determine revenue recognition under ASC 606 through the following steps: · identification of the contract, or contracts, with a customer; · identification of the performance obligations in the contract; · identification of the transaction price; · allocation of the transaction price to the performance obligations in the contract; and · recognition of revenue when, or as, we satisfy a performance obligation. During the three months ended March 31, 2020 and 2019, two customers accounted for 81% and 78% of our revenues, respectively. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. We are required to record all components of comprehensive income (loss) in the consolidated financial statements in the period in which they are recognized. Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on investments, are reported, net of their related tax effect, to arrive at comprehensive income (loss). For the three months ended March 31, 2020 and 2019, the comprehensive loss was $1,028,860 and $1,850,096, respectively. |
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per share excludes any dilutive effects of options, shares subject to repurchase and warrants. Diluted net loss per share includes the impact of potentially dilutive securities. During the three months ended March 31, 2020 and 2019, we had securities outstanding which could potentially dilute basic earnings per share in the future but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive. |
Reclassifications | Reclassifications Certain amounts from prior periods have been reclassified to conform to the current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”. Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company adopted this standard as of January 1, 2019. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes the second step of the two-step goodwill impairment test. Under ASU 2017-04, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019; early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard as of January 1, 2020. |
3. Goodwill and Purchased Int_2
3. Goodwill and Purchased Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | The following table presents details of our purchased intangible assets as of March 31, 2020 and December 31, 2019: Intangible assets Balance at Additions Impairments Amortization Fx and Other Balance at Patents and trademarks $ 69,853 $ - $ - $ (3,104) $ (56) $ 66,693 Customer and merchant relationships 739,236 - - (24,213) - 715,023 Trade name 50,732 - - (2,320) (5) 48,407 Acquired technology 144,792 - - (4,075) - 140,717 Non-compete agreements 60,931 - - (3,965) - 56,966 $ 1,065,544 $ - $ - $ (37,677) $ (61) $ 1,027,806 |
Future Amortization Intangible Assets | The estimated future amortization expense of our intangible assets as of March 31, 2020 is as follows: Year ending December 31, Amount 2020 $ 113,030 2021 148,014 2022 147,868 2023 145,360 2024 108,764 Thereafter 364,770 Total $ 1,027,806 |
4. Software Development Costs (
4. Software Development Costs (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Research and Development [Abstract] | |
Software Development Costs | The following table presents details of our software development costs as of March 31, 2020 and December 31, 2019: Balance at Additions Amortization Balance at Software Development Costs $ 696,667 $ 15,592 $ (130,212) $ 582,047 $ 696,667 $ 15,592 $ (130,212) $ 582,047 |
Future Amortization Software | The estimated future amortization expense of software development costs as of March 31, 2020 is as follows: Year ending December 31, Amount 2020 $ 354,826 2021 224,892 2022 2,329 2023 - 2024 - Thereafter - Total $ 582,047 |
5. Operating Lease Assets (Tabl
5. Operating Lease Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Response Rate Increase | |
Additional details related to leases on Balance Sheet | The following are additional details related to leases recorded on our balance sheet as of March 31, 2020: Leases Classification Balance at Assets Current Operating lease assets Operating lease assets $ 178,015 Noncurrent Operating lease assets Noncurrent operating lease assets $ 33,069 Total lease assets $ 211,084 Liabilities Current Operating lease liabilities Operating lease liabilities $ 205,042 Noncurrent Operating lease liabilities Noncurrent operating lease liabilities $ 37,244 Total lease liabilities $ 242,286 |
Schedule of Minimum Lease Payments | The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases, a reconciliation to operating lease liabilities reported on the Condensed Consolidated Balance Sheet, our weighted-average remaining lease term and weighted average discount rate: Year ending December 31, Amount 2020 $ 204,729 2021 35,748 2022 11,916 2023 - 2024 - Thereafter - Total future lease payments 252,393 Less: imputed interest (10,107) Total $ 242,286 Weighted Average Remaining Lease Term (years) Operating leases 1 Weighted Average Discount Rate 6.75 % |
6. Notes Payable and Interest_2
6. Notes Payable and Interest Expense (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | The following table presents details of our notes payable as of March 31, 2020 and December 31, 2019: Facility Maturity Interest Rate Balance at Balance at BDC Term Loan October 15, 2021 25% $ 205,330 $ 224,307 ACOA Note May 1, 2023 - 107,179 117,131 Wintrust Bank November 1, 2021 Prime + 1.5% 666,667 766,667 Related Party Note various 15% 1,343,297 1,140,700 Total Debt 2,322,473 2,248,805 Less current portion (683,706) (681,276) Long-term debt, net of current portion $ 1,638,767 $ 1,567,529 |
7. Stockholders' Equity (Tables
7. Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2019 and for the three months ended March 31 2020: Options Outstanding at December 31, 2018 4,987,426 Granted 2,592,500 Exercised - Forfeit/canceled (923,389) Expired (874,653) Outstanding at December 31, 2019 5,781,884 Granted 15,000 Exercised - Forfeit/canceled (28,447) Expired (131,667) Outstanding at March 31, 2020 5,636,770 |
Stock-Based Compensation Expense | The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 General and administrative $ 78,549 $ 54,232 Sales and marketing 13,677 39,914 Engineering, research, and development 41,987 21,602 $ 134,213 $ 115,748 |
Valuation Assumptions | The following weighted average assumptions were used for the three months ended March 31, 2020 and 2019. Three Months Ended March 31, 2020 2019 Risk-free interest rate 0.58 % 2.53 % Expected life (years) 6.00 6.00 Expected dividend yield - % - % Expected volatility 77.57 % 90.83 % |
Restricted Stock Unit Activity | The following table summarizes restricted stock unit activity under our stock-based plans for the year ended December 31, 2019 and for the three months ended March 31, 2020: Shares Outstanding at December 31, 2018 662,800 Awarded 489,448 Released - Canceled/forfeited/expired - Outstanding at December 31, 2019 1,152,248 Awarded 100,000 Released - Canceled/forfeited/expired - Outstanding at March 31, 2020 1,252,248 Expected to vest at March 31, 2020 1,252,248 Vested at March 31, 2020 1,252,248 Unvested at March 31, 2020 - Unrecognized expense at March 31, 2020 $ - |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-Based Compensation Expense | The impact on our results of operations of recording stock-based compensation expense for restricted stock units for the three months ended March 31, 2020 and 2019 was as follows: Three Months Ended March 31, 2020 2019 General and administrative $ 65,000 $ 65,002 $ 65,000 $ 65,002 |
8. Fair Value Measurements (Tab
8. Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Assets And Liabilities Measured At Fair Value On A Recurring And Non-Recurring Basis | The following table presents assets that are measured and recognized at fair value as of March 31, 2020 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Goodwill (non-recurring) $ - $ - $ 496,352 $ - Intangibles, net (non-recurring) $ - $ - $ 1,609,853 $ - The following table presents assets that are measured and recognized at fair value as of December 31, 2019 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Goodwill (non-recurring) $ - $ - $ 496,352 $ - Intangibles, net (non-recurring) $ - $ - $ 1,762,211 $ - |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Details) | 3 Months Ended | ||
Mar. 31, 2020USD ($)customer | Mar. 31, 2019USD ($)customer | Dec. 31, 2019USD ($) | |
Product Information [Line Items] | |||
Allowance for doubtful accounts | $ 104,581 | $ 88,071 | |
Comprehensive loss | $ (1,028,860) | $ (1,850,096) | |
Sales Revenue Net [Member] | |||
Product Information [Line Items] | |||
Number of significant customers | customer | 2 | 2 | |
Customer concentration risk | 81.00% | 78.00% |
3. Goodwill and Purchased Int_3
3. Goodwill and Purchased Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 496,352 | $ 496,352 | |
Amortization expense | $ 37,677 | $ 37,769 | |
Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 1 year | ||
Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 20 years |
3. Goodwill and Purchased Int_4
3. Goodwill and Purchased Intangibles (Intangible Assets) (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at Beginning of Period | $ 1,065,544 |
Additions | 0 |
Impairments | 0 |
Amortization | (37,677) |
FX and Other | (61) |
Balance at End of Period | 1,027,806 |
Patents And Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at Beginning of Period | 69,853 |
Additions | 0 |
Impairments | 0 |
Amortization | (3,104) |
FX and Other | (56) |
Balance at End of Period | 66,693 |
Customer And Merchant Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at Beginning of Period | 739,236 |
Additions | 0 |
Impairments | 0 |
Amortization | (24,213) |
FX and Other | 0 |
Balance at End of Period | 715,023 |
Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at Beginning of Period | 50,732 |
Additions | 0 |
Impairments | 0 |
Amortization | (2,320) |
FX and Other | (5) |
Balance at End of Period | 48,407 |
Acquired technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at Beginning of Period | 144,792 |
Additions | 0 |
Impairments | 0 |
Amortization | (4,075) |
FX and Other | 0 |
Balance at End of Period | 140,717 |
Noncompete Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at Beginning of Period | 60,931 |
Additions | 0 |
Impairments | 0 |
Amortization | (3,965) |
FX and Other | 0 |
Balance at End of Period | $ 56,966 |
3. Goodwill and Purchased Int_5
3. Goodwill and Purchased Intangible Assets: (Future Amortization Intangible Assets) (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 113,030 | |
2021 | 148,014 | |
2022 | 147,868 | |
2023 | 145,360 | |
2024 | 108,764 | |
Thereafter | 364,770 | |
Total | $ 1,027,806 | $ 1,065,544 |
4. Software Development Costs_2
4. Software Development Costs (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 37,677 | $ 37,769 |
Computer Software Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 130,212 | $ 111,399 |
Estimated useful lives | 2 years | 2 years |
4. Software Development Costs_
4. Software Development Costs: (Software Development Costs) (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | $ 696,667 |
Additions | 15,592 |
Amortization | (130,212) |
Balance at end of period | 582,047 |
Computer Software Intangible Asset [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 696,667 |
Additions | 15,592 |
Amortization | (130,212) |
Balance at end of period | $ 582,047 |
4. Software Development Costs_3
4. Software Development Costs: (Future Amortization Software) (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
2020 | $ 113,030 | |
2021 | 148,014 | |
2022 | 147,868 | |
2023 | 145,360 | |
2024 | 108,764 | |
Thereafter | 364,770 | |
Total | 1,027,806 | $ 1,065,544 |
Computer Software Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2020 | 354,826 | |
2021 | 224,892 | |
2022 | 2,329 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total | $ 582,047 |
5. Operating Lease Assets_ (Add
5. Operating Lease Assets: (Additional details related to leases of Balance Sheet) (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current | ||
Operating lease assets | $ 178,015 | $ 0 |
Noncurrent | ||
Operating lease assets | 33,069 | 260,645 |
Current | ||
Operating lease liabilities | 205,042 | 258,343 |
Noncurrent | ||
Operating lease liabilities | 37,244 | $ 45,460 |
Operating Lease | ||
Current | ||
Operating lease assets | 178,015 | |
Noncurrent | ||
Operating lease assets | 33,069 | |
Total lease assets | 211,084 | |
Current | ||
Operating lease liabilities | 205,042 | |
Noncurrent | ||
Operating lease liabilities | 37,244 | |
Total lease liabilities | $ 242,286 |
5. Operating Lease Assets _ (Sc
5. Operating Lease Assets : (Schedule of Minimum Lease Payments) (Details) | Mar. 31, 2020USD ($) |
Operating Lease | |
2020 | $ 204,729 |
2021 | 35,748 |
2022 | 11,916 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total future lease payments | 252,393 |
Less: imputed interest | (10,107) |
Total | $ 242,286 |
Weighted Average Remaining Lease Term (years) Operating leases | 1 year |
Weighted Average Discount Rate Operating leases | 6.75% |
6. Notes Payable and Interest_3
6. Notes Payable and Interest Expense (Details) - USD ($) | May 01, 2023 | Nov. 01, 2021 | May 15, 2021 | Nov. 15, 2020 | Nov. 01, 2020 | May 15, 2020 | Nov. 15, 2019 | Nov. 01, 2019 | Aug. 15, 2019 | May 01, 2019 | Nov. 14, 2018 | Nov. 06, 2017 | Feb. 26, 2020 | Feb. 28, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||||||||||||||
Interest expense | $ 77,189 | $ 41,905 | |||||||||||||||
Acoa Note [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Maturity date | May 1, 2023 | ||||||||||||||||
Principal payment | $ 2,215 | $ 4,500 | $ 4,000 | $ 3,500 | $ 3,000 | ||||||||||||
Bdc Term Loan [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Maturity date | Oct. 15, 2021 | ||||||||||||||||
Stated rate | 25.00% | 25.00% | |||||||||||||||
Principal payment | $ 16,000 | $ 14,000 | $ 12,000 | $ 10,000 | $ 8,500 | ||||||||||||
Wintrust Loan [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Borrowing under Facility | $ 1,000,000 | ||||||||||||||||
Proceeds from loan re-finance | $ 1,000,000 | ||||||||||||||||
Principal payment | $ 33,333 | ||||||||||||||||
Wintrust Loan [Member] | Prime Rate [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Basis spread on interest rate | 1.50% | ||||||||||||||||
Unsecured Promissory Notes [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Basis spread on interest rate | 1.50% | ||||||||||||||||
Debt, principal amount | $ 1,080,000 | $ 3,500,000 | |||||||||||||||
Stated rate | 15.00% | 15.00% | |||||||||||||||
Prepayment penalty, interest rate | 2.00% | 2.00% | 2.00% | ||||||||||||||
Related Party Note | 1,000,000 | ||||||||||||||||
Accrued interest | 51,875 | ||||||||||||||||
Loss on conversion of debt | $ 232,462 | ||||||||||||||||
Unsecured Promissory Notes [Member] | Principal | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 2,500,000 | ||||||||||||||||
Unsecured Promissory Notes [Member] | Accrued interest | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 82,916 | ||||||||||||||||
Unsecured Promissory Notes [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Basis spread on interest rate | 1.50% | ||||||||||||||||
Debt, principal amount | $ 200,000 | $ 3,500,000 | |||||||||||||||
Stated rate | 15.00% | 15.00% | |||||||||||||||
Prepayment penalty, interest rate | 2.00% | ||||||||||||||||
Related Party Note | 200,000 | $ 1,000,000 | |||||||||||||||
Accrued interest | 2,833 | 51,875 | |||||||||||||||
Loss on conversion of debt | $ 232,462 | ||||||||||||||||
Unsecured Promissory Notes [Member] | Principal | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 2,500,000 | ||||||||||||||||
Unsecured Promissory Notes [Member] | Accrued interest | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 82,916 | ||||||||||||||||
Officer [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Unpaid reimbursable expenses | 63,296 | ||||||||||||||||
Related Party Note [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Related Party Note | 1,280,000 | ||||||||||||||||
Accrued interest | 79,075 | ||||||||||||||||
Interest expense | $ 77,189 | $ 41,905 |
6. Notes Payable and Interest_4
6. Notes Payable and Interest Expense: (Schedule of Notes Payable) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total Debt | $ 2,322,473 | $ 2,248,805 |
Less current portion | (683,706) | (681,276) |
Long-term debt, net of current portion | $ 1,638,767 | $ 1,567,529 |
Bdc Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | Oct. 15, 2021 | |
Interest Rate | 25.00% | 25.00% |
Total Debt | $ 205,330 | $ 224,307 |
Acoa Note [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | May 1, 2023 | |
Total Debt | $ 107,179 | $ 117,131 |
Wintrust Bank [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | Nov. 1, 2021 | |
Interest Rate | 1.50% | 1.50% |
Total Debt | $ 666,667 | $ 766,667 |
Related Party Note [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate | 15.00% | 15.00% |
Total Debt | $ 1,343,297 | $ 1,140,700 |
7. Stockholders' Equity (Detail
7. Stockholders' Equity (Details) | Mar. 11, 2019USD ($)employeeitem$ / sharesshares | Feb. 12, 2019USD ($)employeeitem$ / sharesshares | Jan. 07, 2019USD ($)employeeitem$ / sharesshares | Jan. 02, 2019USD ($)$ / sharesshares | Mar. 24, 2020USD ($)employeeitem$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Nov. 19, 2019USD ($)employeeitem$ / sharesshares | Oct. 21, 2019USD ($)employeeitem$ / sharesshares | Aug. 21, 2019USD ($)employeeitem$ / sharesshares | May 17, 2019USD ($)employeeitem$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 24, 2019USD ($)$ / sharesshares | Feb. 25, 2019USD ($)employeeitem$ / sharesshares | Feb. 18, 2019USD ($)employeeitem$ / sharesshares | Jan. 21, 2019USD ($)employeeitem$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | Mar. 31, 2019 | Dec. 31, 2019USD ($) | Mar. 02, 2020$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Equity payable | $ | $ 100,862 | $ 100,862 | $ 100,862 | ||||||||||||||||
Volatility rate | 77.57% | 90.83% | |||||||||||||||||
Common stock issued in private placement | shares | 2,800,000 | ||||||||||||||||||
Proceeds from Issuance of Private Placement | $ | $ 2,800,000 | ||||||||||||||||||
Warrants exercise price | $ / shares | $ 1.25 | ||||||||||||||||||
Issuance of common stock for debt conversion, Amount | $ | $ 2,815,378 | ||||||||||||||||||
Issuance of common stock for debt conversion, Shares | shares | 2,582,916 | ||||||||||||||||||
Warrant Issuance [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Warrants outstanding, per share | $ / shares | $ 1.25 | $ 1 | |||||||||||||||||
Warrants to purchase of common stock | shares | 2,691,459 | 234,500 | |||||||||||||||||
Employee Stock Option [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Number of employees, options granted | employee | 1 | 1 | 1 | 1 | 12 | 1 | 4 | 3 | 1 | 1 | 1 | ||||||||
Options granted | shares | 50,000 | 150,000 | 10,000 | 15,000 | 237,500 | 150,000 | 140,000 | 775,000 | 50,000 | 15,000 | 15,000 | 15,000 | |||||||
Weighted average grant date fair value | $ / shares | $ 1 | $ 1 | $ 1.17 | $ 0.65 | $ 0.88 | $ 0.98 | $ 0.95 | $ 1.04 | $ 1 | $ 1.05 | $ 1.17 | ||||||||
Monthly installments in which options vest, after initial vesting Anniversary | item | 48 | 48 | 48 | 36 | 36 | 36 | 36 | 48 | 48 | 48 | 48 | ||||||||
Volatility rate | 90.90% | 90.79% | 90.82% | 77.56% | 78.70% | 74.18% | 80.17% | 80.17% | 90.88% | 90.88% | 90.75% | ||||||||
Call option value, price per share | $ / shares | $ 0.75 | $ 0.75 | $ 0.88 | $ 0.43 | $ 0.60 | $ 0.64 | $ 0.65 | $ 0.72 | $ 0.75 | $ 0.84 | $ 0.88 | ||||||||
Call option value | $ | $ 37,688 | $ 113,046 | $ 8,821 | $ 6,472 | $ 142,409 | $ 96,165 | $ 91,537 | $ 1,283,178 | $ 37,697 | $ 12,537 | $ 13,239 | ||||||||
Weighted average grant date fair value | $ / shares | $ 0.43 | ||||||||||||||||||
Weighted average exercise price | $ / shares | $ 0.65 | ||||||||||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Units issued | shares | 222,224 | 195,000 | 72,224 | 100,000 | |||||||||||||||
Value of units | $ | $ 260,000 | $ 195,000 | $ 65,001 | $ 65,000 | |||||||||||||||
Value of units, per share | $ / shares | $ 1.17 | $ 1 | $ 0.90 | $ 0.65 | |||||||||||||||
Principal | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Issuance of common stock for debt conversion, Amount | $ | $ 2,500,000 | ||||||||||||||||||
Accrued Interest | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Issuance of common stock for debt conversion, Amount | $ | $ 82,916 |
7. Stockholders' Equity_ Stock
7. Stockholders' Equity: Stock Option Activitiy (Details) - Employee Stock Option [Member] - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Outstanding at Beginning of Period | 5,781,884 | 4,987,426 |
Granted | 15,000 | 2,592,500 |
Exercised | 0 | 0 |
Forfeit/canceled | (28,447) | (923,389) |
Expired | (131,667) | (874,653) |
Outstanding at End of Period | 5,636,770 | 5,781,884 |
7. Stockholders' Equity_ Stoc_2
7. Stockholders' Equity: Stock Based Compensation Expense - Stock Option (Details) - Employee Stock Option [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 134,213 | $ 115,748 |
General And Administrative Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 78,549 | 54,232 |
Cost Of Sales [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 13,677 | 39,914 |
Research And Development Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 41,987 | $ 21,602 |
7. Stockholders' Equity_ Valuat
7. Stockholders' Equity: Valuation Assumptions (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 0.58% | 2.53% |
Expected life (years) | 6 years | 6 years |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 77.57% | 90.83% |
7. Stockholders' Equity_ Restri
7. Stockholders' Equity: Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at Beginning of Period | 1,152,248 | 662,800 |
Awarded | 100,000 | 489,448 |
Released | 0 | 0 |
Canceled/forfeited/expired | 0 | 0 |
Outstanding at End of Period | 1,252,248 | 1,152,248 |
Expected to vest at end | 1,252,248 | |
Vested at end | 1,252,248 | |
Unvested at end | 0 | |
Unrecognized expense at end | $ 0 |
7. Stockholders' Equity_ Stoc_3
7. Stockholders' Equity: Stock Based Compensation Expense - Restricted Stock (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 65,000 | $ 65,002 |
General And Administrative Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 65,000 | $ 65,002 |
8. Fair Value Measurements (Det
8. Fair Value Measurements (Details) - Fair Value Measurements Nonrecurring [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Inputs Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | $ 0 | $ 0 |
Intangibles, net | 0 | 0 |
Fair Value Inputs Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | 0 | 0 |
Intangibles, net | 0 | 0 |
Fair Value Inputs Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | 496,352 | 496,352 |
Intangibles, net | 1,609,853 | 1,762,211 |
Goodwill [Member] | Change During Period Fair Value Disclosure [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain (Loss) from fair value measurement | 0 | 0 |
Intangible Assets [Member] | Change During Period Fair Value Disclosure [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain (Loss) from fair value measurement | $ 0 | $ 0 |
9. Commitments and Contingenc_2
9. Commitments and Contingencies (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | |
Commitments And Contigencies [Line Items] | ||
Operating lease asset | $ 33,069 | $ 260,645 |
A [Z] | ||
Commitments And Contigencies [Line Items] | ||
Common area maintenance charges | $ 20,140 | |
Lease area of office | ft² | 10,395 | |
Operating lease asset | $ 149,816 | |
Operating lease liability | $ 173,303 | |
CA-NS | ||
Commitments And Contigencies [Line Items] | ||
Lease area of office | ft² | 3,248 | |
Monthly rental expense | $ 2,979 | |
Operating lease asset | 61,268 | |
Operating lease liability | $ 68,983 |
10. Related Party Transactions
10. Related Party Transactions (Details) - Unsecured Promissory Notes [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Feb. 26, 2020 | Feb. 28, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Debt, principal amount | $ 1,080,000 | $ 3,500,000 | |||
Stated rate | 15.00% | 15.00% | |||
Prepayment penalty, interest rate | 2.00% | 2.00% | 2.00% | ||
Related Party Note | $ 1,000,000 | ||||
Accrued interest | 51,875 | ||||
Loss on conversion of debt | $ 232,462 | ||||
Debt Conversion, Converted Instrument, Shares Issued | 2,582,916 | ||||
Principal | |||||
Related Party Transaction [Line Items] | |||||
Debt Conversion, Converted Instrument, Amount | $ 2,500,000 | ||||
Accrued interest | |||||
Related Party Transaction [Line Items] | |||||
Debt Conversion, Converted Instrument, Amount | 82,916 | ||||
Debt, principal amount | $ 200,000 | $ 3,500,000 | |||
Stated rate | 15.00% | 15.00% | |||
Prepayment penalty, interest rate | 2.00% | ||||
Related Party Note | $ 1,000,000 | 200,000 | |||
Accrued interest | 51,875 | $ 2,833 | |||
Loss on conversion of debt | $ 232,462 | ||||
Principal | |||||
Related Party Transaction [Line Items] | |||||
Debt Conversion, Converted Instrument, Amount | $ 2,500,000 | ||||
Accrued interest | |||||
Related Party Transaction [Line Items] | |||||
Debt Conversion, Converted Instrument, Amount | $ 82,916 |
11. Subsequent Events (Details
11. Subsequent Events (Details Narrative) - Subsequent Event [Member] | 1 Months Ended | |
Apr. 22, 2020CAD ($) | Apr. 10, 2020USD ($) | |
Chase Bank [Member] | ||
Debt, principal amount | $ 891,103 | |
Stated rate | 1.00% | |
TD Bank [Member] | ||
Debt, principal amount | $ 40,000 | |
Stated rate | 0.00% | |
Due date | Dec. 31, 2022 | |
Loan Description | The loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%) is repaid prior to the initial term date. |