Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-53851 | |
Entity Registrant Name | Mobivity Holdings Corp. | |
Entity Incorporation, State Country Code | NV | |
Tax Identification Number (TIN) | 26-3439095 | |
Entity Address, Address Line One | 3133 West Frye Road | |
Entity Address, Address Line Two | # 215 | |
Entity Address, City or Town | Chandler | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85226 | |
City Area Code | 877 | |
Local Phone Number | 282-7660 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,410,695 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001447380 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 1,027,208 | $ 3,282,820 |
Accounts receivable, net of allowance for doubtful accounts of $31,432 and $33,848, respectively | 1,365,755 | 305,693 |
Contracts receivable, current | 943,904 | 943,904 |
Right to use lease assets | 218,161 | 47,038 |
Other current assets | 342,355 | 272,736 |
Total current assets | 3,897,383 | 4,852,191 |
Goodwill | 496,352 | 496,352 |
Right to use lease assets | 1,132,317 | 10,444 |
Intangible assets, net | 1,275,418 | 1,368,329 |
Contracts receivable, long term | 1,179,880 | 1,415,856 |
Other assets | 314,705 | 25,230 |
TOTAL ASSETS | 8,296,055 | 8,168,402 |
Current liabilities | ||
Accounts payable | 2,243,811 | 1,935,411 |
Accrued interest | 31,541 | 47,316 |
Accrued and deferred personnel compensation | 473,921 | 224,881 |
Deferred revenue and customer deposits | 640,181 | 606,597 |
Related party notes payable | 80,000 | |
Notes payable, net - current maturities | 432,237 | 561,676 |
Operating lease liability | 125,670 | 58,173 |
Other current liabilities | 530,174 | 566,303 |
Total current liabilities | 4,477,535 | 4,080,357 |
Non-current liabilities | ||
Related party notes payable, net - long term | 500,000 | |
Notes payable, net - long term | 990,759 | 1,499,001 |
Operating lease liability | 1,365,431 | 13,296 |
Other long term liabilities | 692,945 | 831,535 |
Total non-current liabilities | 3,549,135 | 2,343,832 |
Total liabilities | 8,026,670 | 6,424,189 |
Stockholders' equity (deficit) | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 55,410,695 and 55,410,695, shares issued and outstanding | 55,411 | 55,411 |
Equity payable | 100,862 | 100,862 |
Additional paid-in capital | 101,415,512 | 101,186,889 |
Accumulated other comprehensive income (loss) | (33,124) | (23,446) |
Accumulated deficit | (101,269,276) | (99,575,503) |
Total stockholders' equity (deficit) | 269,385 | 1,744,213 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 8,296,055 | $ 8,168,402 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 31,432 | $ 33,848 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 55,410,695 | 55,410,695 |
Common stock, shares outstanding | 55,410,695 | 55,410,695 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Revenues | $ 2,457,590 | $ 4,549,992 |
Cost of revenues | 1,041,795 | 1,584,402 |
Gross profit | 1,415,795 | 2,965,590 |
Operating expenses | ||
General and administrative | 1,289,370 | 1,246,794 |
Sales and marketing | 896,750 | 807,999 |
Engineering, research, and development | 723,950 | 1,677,442 |
Impairment of intangible assets | 8,286 | |
Depreciation and amortization | 158,227 | 173,937 |
Total operating expenses | 3,076,583 | 3,906,172 |
Loss from operations | (1,660,788) | (940,582) |
Other income/(expense) | ||
Interest income | 5 | 837 |
Interest expense | (32,516) | (77,189) |
Foreign currency gain (loss) | (474) | 1,155 |
Total other income/(expense) | (32,985) | (75,197) |
Loss before income taxes | (1,693,773) | (1,015,779) |
Net loss per share | (1,693,773) | (1,015,779) |
Other comprehensive loss, net of income tax | ||
Foreign currency translation adjustments | (9,678) | (13,081) |
Comprehensive loss | $ (1,703,451) | $ (1,028,860) |
Net loss per share: | ||
Basic and Diluted | $ (0.03) | $ (0.02) |
Weighted average number of shares: | ||
Basic and Diluted | 55,410,695 | 51,435,084 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Equity Payable [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 51,381 | $ 100,862 | $ 94,781,738 | $ 8,780 | $ (96,657,106) | $ (1,714,345) |
Beginning balance, shares at Dec. 31, 2019 | 51,380,969 | |||||
Issuance of common stock for warrants conversion | $ 235 | 234,265 | 234,500 | |||
Issuance of common stock for warrants conversion, Shares | 234,500 | |||||
Stock based compensation | 199,213 | 199,213 | ||||
Foreign currency translation adjustment | (13,081) | (13,081) | ||||
Net 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 | |||||
Beginning balance, value at Dec. 31, 2019 | $ 51,381 | 100,862 | 94,781,738 | 8,780 | (96,657,106) | $ (1,714,345) |
Beginning balance, shares at Dec. 31, 2019 | 51,380,969 | |||||
Issuance of common stock for options exercised, Shares | 15,000 | |||||
Ending balance, value at Dec. 31, 2020 | $ 55,411 | 100,862 | 101,186,889 | (23,446) | (99,575,503) | $ 1,744,213 |
Ending balance, shares at Dec. 31, 2020 | 55,410,695 | |||||
Stock based compensation | 228,623 | 228,623 | ||||
Foreign currency translation adjustment | (9,678) | (9,678) | ||||
Net loss | (1,693,773) | (1,693,773) | ||||
Ending balance, value at Mar. 31, 2021 | $ 55,411 | $ 100,862 | $ 101,415,512 | $ (33,124) | $ (101,269,276) | $ 269,385 |
Ending balance, shares at Mar. 31, 2021 | 55,410,695 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES | ||
Net loss | $ (1,693,773) | $ (1,015,779) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 11,297 | 43,607 |
Stock-based compensation | 228,623 | 199,213 |
Intangible asset impairment | 8,286 | |
Depreciation and amortization expense | 141,591 | 173,937 |
Increase (decrease) in cash resulting from changes in: | ||
Accounts receivable | (1,071,359) | (402,641) |
Contracts receivable, current | (164,387) | |
Other current assets | (70,901) | 76,665 |
Operating lease assets/liabilities | 16,636 | (11,730) |
Contracts receivable, long-term | 235,976 | (356,330) |
Other assets | (108,652) | (429) |
Accounts payable | 308,399 | 367,565 |
Accrued interest | (15,775) | 51,041 |
Accrued and deferred personnel compensation | 248,828 | 159,357 |
Other liabilities - non-current | (138,589) | |
Other liabilities - current | (36,130) | (36,368) |
Deferred revenue and customer deposits | 33,584 | 576,371 |
Net cash used in operating activities | (1,901,959) | (339,908) |
INVESTING ACTIVITIES | ||
Purchases of equipment | (75,852) | (4,907) |
Capitalized software development costs | (50,588) | (15,592) |
Net cash used in investing activities | (126,440) | (20,499) |
FINANCING ACTIVITIES | ||
Payments on notes payable | (141,058) | (122,743) |
Payments on related party notes payable | (80,000) | |
Proceeds from related party notes payable | 202,596 | |
Proceeds from conversion of common stock warrants | 234,500 | |
Net cash provided by (used in) financing activities | (221,058) | 314,353 |
Effect of foreign currency translation on cash flow | (6,155) | (19,328) |
Net change in cash | (2,255,612) | (65,382) |
Cash at beginning of period | 3,282,820 | 273,599 |
Cash at end of period | 1,027,208 | 208,217 |
Cash paid during period for: | ||
Interest | 29,541 | $ 26,096 |
Non-cash investing and financing activities: | ||
Fixed assets contributed by lessor | 110,000 | |
Initial non asset and lease liability | $ 1,458,527 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Nature of Operations and Basis of Presentation [Abstract] | |
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, 2020 filed with the SEC on March 30, 2021. 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, 2021, and for the three months ended March 31, 2021 and 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year ending December 31 , 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
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, 2021, and December 31, 2020, we recorded an allowance for doubtful accounts of $31,432 and $33,848 , 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 (“ASC 830-10”) . Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within shareholders’ equity. Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the unaudited Condensed Consolidated Statements of Income and Comprehensive Income. 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, 2021 and 2020, two customers accounted for 64% and 81% of our revenues, respectively. Comprehensive Income (Loss) Comprehensive 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 loss in the consolidated financial statements in the period in which they are recognized. Net loss and other comprehensive 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 loss. For the three months ended March 31, 2021 and 2020, the comprehensive loss was $1,703,451 and $1,028,860 , 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, 2021 and 2020, we had securities outstanding which could potentially dilute basic earnings per share in the future. Those were excluded from the computation of diluted net loss per share when 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 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. |
Goodwill and Purchased Intangib
Goodwill and Purchased Intangibles | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Purchased Intangibles [Abstract] | |
Goodwill and Purchased Intangibles | 3. Goodwill and Purchased Intangibles Goodwill The carrying value of goodwill at March 31, 2021 and December 31, 2020 was $496,352 . The following table presents details of our purchased intangible assets as of March 31, 2021 and December 31, 2020: Intangible assets Balance at December 31, 2020 Additions Impairments Amortization Fx and Other Balance at March 31, 2021 Patents and trademarks $ 71,029 $ — $ (8,286) $ (1,481) $ 1 $ 61,263 Customer and merchant relationships 642,385 — — (24,213) — 618,172 Trade name 41,444 — — (2,270) — 39,174 Acquired technology 128,491 — — (4,075) — 124,416 Non-compete agreements 45,071 — — (3,965) — 41,106 $ 928,420 $ — $ (8,286) $ (36,004) $ 1 $ 884,131 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 $36,004 and $37,677 for the three months ended March 31, 2021 and 2020, respectively. The estimated future amortization expense of our intangible assets as of March 31, 2021 is as follows: Year ending December 31, Amount 2021 $ 111,085 2022 148,114 2023 145,606 2024 109,009 2025 101,261 Thereafter 269,056 Total $ 884,131 |
Software Development Costs
Software Development Costs | 3 Months Ended |
Mar. 31, 2021 | |
Software Development Costs [Abstract] | |
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, 2021 and December 31, 2020: Balance at December 31, 2020 Additions Amortization Balance at March 31, 2021 Software Development Costs $ 439,908 $ 50,588 $ (99,209) $ 391,287 $ 439,908 $ 50,588 $ (99,209) $ 391,287 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 $99,209 and $130,212 for the three months ended March 31, 2021 and 2020, respectively. The estimated future amortization expense of software development costs as of March 31, 2021 is as follows: Year ending December 31, Amount 2021 $ 265,402 2022 119,555 2023 6,330 2024 — 2025 — Thereafter — Total $ 391,287 |
Operating Lease Assets
Operating Lease Assets | 3 Months Ended |
Mar. 31, 2021 | |
Operating Lease Assets [Abstract] | |
Operating Lease Assets | 5. Operating Lease Assets The Company entered into a lease agreement on February 1, 2021 for 8,898 square feet, for its office facilities in Chandler, AZ through January 2027. Monthly rental payments, excluding common area maintenance charges, are $25,953 to $28,733 . The first twelve months of the lease includes a 50% abatement period and a deposit for $110,000 was required. As of March 31, 2021, we have an operating lease asset balance for this lease of $1,317,604 and an operating lease liability balance for this lease of $1,448,956 recorded in accordance with ASC 842. The lessor contributed $110,000 towards the purchase of office furniture as part of the lease agreement. The following are additional details related to leases recorded on our balance sheet as of March 31, 2021: Leases Classification Balance at March 31, 2021 Assets Current Operating lease assets Operating lease assets $ 218,161 Noncurrent Operating lease assets Noncurrent operating lease assets $ 1,132,317 Total lease assets $ 1,350,478 Liabilities Current Operating lease liabilities Operating lease liabilities $ 125,670 Noncurrent Operating lease liabilities Noncurrent operating lease liabilities $ 1,365,431 Total lease liabilities $ 1,491,101 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 2021 $ 147,125 2022 318,055 2023 324,221 2024 330,894 2025 337,568 Thereafter 372,974 Total future lease payments 1,830,837 Less: imputed interest (339,736) Total $ 1,491,101 Weighted Average Remaining Lease Term (years) Operating leases 5.6 Weighted Average Discount Rate Operating leases 6.75% |
Notes Payable and Interest Expe
Notes Payable and Interest Expense | 3 Months Ended |
Mar. 31, 2021 | |
Notes Payable and Interest Expense [Abstract] | |
Notes Payable and Interest Expense | 6. Notes Payable and Interest Expense The following table presents details of our notes payable as of March 31, 2021 and December 31, 2020: Facility Maturity Interest Rate Balance at March 31, 2021 Balance at December 31, 2020 BDC Term Loan October 15, 2021 23.5% $ 131,821 $ 160,088 ACOA Note February 1, 2024 — 101,641 111,430 Wintrust Bank November 14, 2021 Prime + 1.5% 266,667 366,667 TD Bank December 31, 2022 — 31,764 31,390 Chase Bank April 10, 2022 1% 891,103 891,102 Related Party Note various 15% 500,000 580,000 Total Debt 1,922,996 2,140,677 Less current portion (432,237) (641,676) Long-term debt, net of current portion $ 1,490,759 $ 1,499,001 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 would have matured, and the commitments would have terminated 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 CAD in addition to the monthly payment of accrued interest. These payments will increase to $10,000 CAD on November 15, 2019, $12,000 CAD on September 15, 2020, $14,000 CAD on March 15, 2021, and $16,000 CAD on September 15, 2021 in addition to the monthly interest. During the three months ended March 31, 2021 we repaid $30,004 USD of principal. 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 February 1, 2024 . The monthly principal payment amount of $3,000 CAD increased to $3,500 CAD beginning on November 1, 2019, $4,000 CAD on August 1, 2021, $4,500 CAD on August 1, 2022, and $2,215 CAD during the remaining term of the agreement. Payments from April-December of 2020 were voluntarily deferred by ACOA due to COVID-19. During the three months ended March 31, 2021 we repaid $11,054 USD of principal. 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 August 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 calculate covenants under a borrowing base methodology. The Company had defaulted under the March 31, 2020 and June 30, 2020 covenants which were waived upon execution of the amendment and the Company has not committed any defaults under loan agreement subsequent to the amendment. During the three months ended March 31, 2021 we repaid $100,000 of principal. Chase Loan 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 ten months after the 24 week usage period, for which no interest or principal payments are due. Forgiveness of the loan may be obtained by meeting certain SBA requirements. TD Bank Loan 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. Related Party Notes During February 2018, we conducted a private placement of Unsecured Promissory Notes (individually, a “ Note ” and collectively, the “ Notes ”) in the aggregate principal amount of $1,080,000 to certain investors, officers and directors of the Company. Each Note bears interest on the unpaid balance at the rate of fifteen percent ( 15% ) per annum and the principal and accrued interest is due and payable no later than December 1, 2020. We may prepay any of the Notes without notice, subject to a two percent ( 2% ) pre-payment penalty. The Note offer was conducted by our management and there were no commissions paid by us in connection with the solicitation. 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. On November 18, 2020, we issued two additional unsecured Notes in the principle aggregate amount of $500,000 , which becomes due two years after the date of issuance. Th ese Note s bear interest on the unpaid balance at the rate of fifteen percent ( 15% ) per annum. The Company may prepay th ese Note s without notice, subject to a two percent ( 2% ) pre-payment penalty. On December 31, 2020 $1,200,000 of these Notes and the accrued interest of $192,208 was settled into equity . W e recorded a loss on settlement of debt of $668,260 for the year ended December 31, 2020. On January 25, 2021, we repaid $65,000 for an unsecured Note. On January 27, 2021, we repaid the remaining $15,000 of the unsecured Note and accrued interest of $34,379 . As of March 31, 2021, we have a principal balance remaining of $500,000 and accrued interest of $27,708 outstanding. Interest Expense Interest expense was $32,516 and $77,189 during the three months ended March 31 2021 and 2020, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Common Stock 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. On September 17, 2020, the Company issued 15,000 shares of common stock in exchange for cash in conjunction with a stock option exercise. The shares were exercised at the strike price of $0.48 per share. In December of 2020, the Company commenced a private placement of its common stock with warrant exercises for one unit of our common stock at an exercise price of $1.25 per share to receive a new warrant to purchase to one share of our common stock at an exercise price of $2.00 per share. As of December 31, 2020, the Company had sold 2,666,459 units of its common stock for gross proceeds of $3,333,074 . In addition, the Company issued 1,113,767 units of its common stock associated with the settlement of $1,200,000 of principal, $192,208 of accrued interest, and a loss on settlement of $668,260 (See Note 6). During 2020, the Company recorded stock-based compensation expense of $260,003 related to restricted stock units for members of our board of directors. As of December 31, 2020 we had an equity payable balance of $100,862 . 2021 On March 31, 202 1 , the Company recorded stock-based compensation expense of $65,002 related to restricted stock units for members of our board of directors. In addition, we also recorded $3,694 of stock-based compensation expense related to restricted stock units as employee compensation. As of March 31, 202 1 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, 2020 and for the three months ended March 31, 2021: Options Outstanding at December 31, 2019 5,781,884 Granted 1,545,000 Exercised (15,000) Forfeit/canceled (814,068) Expired (490,264) Outstanding at December 31, 2020 6,007,552 Granted 67,500 Exercised — Forfeit/canceled (70,156) Expired (89,836) Outstanding at March 31, 2021 5,915,060 The weighted average exercise price of stock options granted during the period was $1.80 and the related weighted average grant date fair value was $1.16 per share. 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 $0.43 was $6,472 . On April 6, 2020, the Company granted four employees a total of 700,000 options to purchase shares of the Company common stock at the closing price as of April 6, 2020 of $0.70 per share. 500,000 option shares will vest 25% on the first anniversary of the grant, then equally in 36 monthly installments thereafter and are exercisable until April 6, 2030. 200,000 option shares will vest ratably over forty-eight (48) months and are exercisable until April 6, 2030. The total estimated value using the Black-Scholes Model, based on a volatility rate of 78.21% and an option fair value of $0.47 was $326,752 . On November 5, 2020, the Company granted one employee a total of 20,000 options to purchase shares of the Company common stock at the closing price as of November 5, 2020 of $0.96 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 5, 2030. The total estimated value using the Black-Scholes Model, based on a volatility rate of 77.36% and an option fair value of $0.63 was $12,689 . On December 7, 2020, the Company granted one employee a total of 600,000 options to purchase shares of the Company common stock at the closing price as of December 7, 2020 of $1.55 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 December 7, 2030. The total estimated value using the Black-Scholes Model, based on a volatility rate of 77.35% and an option fair value of $1.03 was $615,495 . On December 17, 2020, the Company granted six employees a total of 210,000 options to purchase shares of the Company common stock at the closing price as of December 17, 2020 of $1.83 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 December 17, 2030. The total estimated value using the Black-Scholes Model, based on a volatility rate of 77.41% and an option fair value of $1.21 was $254,373 . 2021 On March 2 6 , 202 1 , the Company granted five employee s a total of 67,500 options to purchase shares of the Company common stock at the closing price as of March 2 6 , 202 1 of $1.80 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 2 6 , 203 1 . The total estimated value using the Black-Scholes Model, based on a volatility rate of 73.97% and an option fair value of $1.16 was $78,492 . 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, 2021 and 2020 were as follows: Three Months Ended March 31, 2021 2020 General and administrative $ 84,130 $ 78,549 Sales and marketing 32,745 13,677 Engineering, research, and development 43,052 41,987 $ 159,927 $ 134,213 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, 2021 and 2020. Three Months Ended March 31, 2021 2020 Risk-free interest rate 1.01 % 0.58 % Expected life (years) 6.00 6.00 Expected dividend yield — % — % Expected volatility 73.97 % 77.57 % 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 2021 and 2020 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, 2020 and for the three months ended March 31, 2021: Shares Outstanding at December 31, 2019 1,152,248 Awarded 284,480 Released — Canceled/forfeited/expired — Outstanding at December 31, 2020 1,436,728 Awarded 536,112 Released — Canceled/forfeited/expired — Outstanding at March 31, 2021 1,972,840 Expected to vest at March 31, 2021 1,972,840 Vested at March 31, 2021 1,472,840 Unvested at March 31, 2021 — Unrecognized expense at March 31, 2021 $ — 2020 On March 24, 2020, the Company issued to four independent directors a total of 100,000 restricted stock units. These restricted stock units were issued for the $65,000 of board compensation earned for the first quarter of 2020. 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) March 24, 2023, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company. On August 7, 2020, the Company granted four independent directors a total of 81,252 restricted stock units. The units were valued at $65,000 or $0.80 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) August 7, 2023, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company. On November 5, 2020, the Company granted four independent directors a total of 67,708 restricted stock units. The units were valued at $65,000 or $0.96 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) November 5, 2023, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company. On December 17, 2020, the Company granted four independent directors a total of 35,520 restricted stock units. The units were valued at $65,000 or $1.83 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) December 17, 2023, (B) a change in control of the Company, and (C) the termination of the director’s service with the Company. In the twelve months ended December 31, 2020, the company recorded $260,003 in restricted stock units as board compensation. 2021 On March 2 6 , 202 1 , the Company issued to four independent directors a total of 36,112 restricted stock units. These restricted stock units were issued for the $65,000 of board compensation earned for the first quarter of 202 1 . The units were valued at $65,00 2 or $1.80 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) March 2 6 , 202 4 , (B) a change in control of the Company, and (C) the termination of the director’s service with the Company. On March 26, 2021, the Company granted to one employee 1,000,000 restricted shares of the Company’s Common Stock at the closing price as of March 26, 2021 of $1.80 per share. The restricted stock will vest as follows (a) 50% of the restricted shares will vest ratably over forty-eight (48) months ; (b) 15% of the restricted shares will vest upon the Company achieving $25,000,000 in annualized recurring revenues as reported by totaling all contracted revenues for the trailing twelve months following the end of a reporting quarter; (c) the final 35% of the restricted shares will vest upon the Company achieving $50,000,000 in annualized recurring revenues as reported by totaling all contracted revenues for the trailing twelve months following the end of a reporting quarter. Vesting is dependent on the employee’s continued employment with the Company. All of the 1,000,000 restricted shares will include a single trigger accelerated vesting should the Company undergo a change of control after August 1, 2021. If the Company undergoes a change of control prior to August 1, 2021, 300,000 of the restricted shares would be eligible for single trigger accelerated vesting. In the three months ended March 31, 202 1 , the company recorded $65,002 in restricted stock units as board compensation and $3,694 as employee compensation. 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, 2021 and 2020 was as follows: Three Months Ended March 31, 2021 2020 General and administrative $ 65,002 $ 65,000 Sales and marketing $ 3,694 $ — $ 68,696 $ 65,000 As of March 31, 2021, there was no unearned restricted stock unit compensation. Warrants 2020 On March 2, 2020 one warrant holder exercised their common stock purchase warrant for 234,500 shares at the exercise price of $1.00 per share, resulting in additional capital of $234,500 . In December 2020, warrant holders exercised warrants to purchase common stock at $1.25 per share. At the commencement of the December warrant exercise, there were warrants outstanding that entitled their holders to purchase 2,691,459 shares of our common stock at exercise prices of $1.25 per share. Pursuant to the offer, warrant holders exercised warrants to purchase 2,666,459 shares of our common stock, resulting in additional capital of $3,333,074 . As part of the exercise, 2,666,459 new warrants were issued to purchase common stock at $2.00 per share within three years. 2021 As of March 31, 2021, we have outstanding warrants to purchase 25,000 shares of Common Stock at $1.25 per share in addition to warrants to purchase 2,666,459 shares of common stock at $2.00 per share. These warrants expire in 2021 and 2023, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements [Abstract] | |
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, 2021 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) $ — $ — $ 1,275,418 $ — The following table presents assets that are measured and recognized at fair value as of December 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) $ — $ — $ 1,368,329 $ — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
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 8,898 square feet, for its office facilities in Chandler, AZ through January 2027. Monthly rental payments, excluding common area maintenance charges, are $25,953 to $28,733 . The first twelve months of the lease includes a 50% abatement period. As of March 31, 2021, we have an operating lease asset balance for this lease of $1,317,604 and an operating lease liability balance for this lease of $1,448,956 recorded in accordance with ASC 842 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 $3,371 per month, excluding common area maintenance charges. As of March 31, 2021, we have an operating lease asset balance for this lease of $32,874 and an operating lease liability balance for this lease of $42,145 recorded in accordance with ASC 842. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Unsecured Promissory Note Investments 2020 During February 2018, we conducted a private placement of Unsecured Promissory Notes (individually, a “ Note ” and collectively, the “ Notes ”) in the aggregate principal amount of $1,080,000 to certain investors, officers and directors of the Company. Each Note bears interest on the unpaid balance at the rate of fifteen percent ( 15% ) per annum and the principal and accrued interest is due and payable no later than December 1, 2020. We may prepay any of the Notes without notice, subject to a two percent ( 2% ) pre-payment penalty. The Note offer was conducted by our management and there were no commissions paid by us in connection with the solicitation. 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. On November 18, 2020, we issued two additional unsecured Notes in the principle aggregate amount of $500,000 , which becomes due two years after the date of issuance. Th ese Note s bear interest on the unpaid balance at the rate of fifteen percent ( 15% ) per annum. The Company may prepay th ese Note s without notice, subject to a two percent ( 2% ) pre-payment penalty. On December 31, 2020 $1,200,000 of these Notes and the accrued interest of $192,208 was settled into equity . W e recorded a loss on settlement of debt of $668,260 for the year ended December 31, 2020. 2021 On January 25, 2021, we repaid $65,000 for an unsecured Note. On January 27, 2021, we repaid the remaining $15,000 of the unsecured Note and accrued interest of $34,379 . As of March 31, 2021, we have a principal balance remaining of $500,000 and accrued interest of $27,708 outstanding. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events None |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant 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, 2021, and December 31, 2020, we recorded an allowance for doubtful accounts of $31,432 and $33,848 , 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 (“ASC 830-10”) . Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within shareholders’ equity. Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the unaudited Condensed Consolidated Statements of Income and Comprehensive Income. |
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, 2021 and 2020, two customers accounted for 64% and 81% of our revenues, respectively. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive 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 loss in the consolidated financial statements in the period in which they are recognized. Net loss and other comprehensive 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 loss. For the three months ended March 31, 2021 and 2020, the comprehensive loss was $1,703,451 and $1,028,860 , 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, 2021 and 2020, we had securities outstanding which could potentially dilute basic earnings per share in the future. Those were excluded from the computation of diluted net loss per share when 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 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. |
Goodwill and Purchased Intang_2
Goodwill and Purchased Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Purchased Intangibles [Abstract] | |
Intangible Assets | Balance at December 31, 2020 Additions Impairments Amortization Fx and Other Balance at March 31, 2021 Patents and trademarks $ 71,029 $ — $ (8,286) $ (1,481) $ 1 $ 61,263 Customer and merchant relationships 642,385 — — (24,213) — 618,172 Trade name 41,444 — — (2,270) — 39,174 Acquired technology 128,491 — — (4,075) — 124,416 Non-compete agreements 45,071 — — (3,965) — 41,106 $ 928,420 $ — $ (8,286) $ (36,004) $ 1 $ 884,131 |
Future Amortization Intangible Assets | Year ending December 31, Amount 2021 $ 111,085 2022 148,114 2023 145,606 2024 109,009 2025 101,261 Thereafter 269,056 Total $ 884,131 |
Software Development Costs (Tab
Software Development Costs (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Software Development Costs [Abstract] | |
Software Development Costs | Balance at December 31, 2020 Additions Amortization Balance at March 31, 2021 Software Development Costs $ 439,908 $ 50,588 $ (99,209) $ 391,287 $ 439,908 $ 50,588 $ (99,209) $ 391,287 |
Future Amortization of Software | Year ending December 31, Amount 2021 $ 265,402 2022 119,555 2023 6,330 2024 — 2025 — Thereafter — Total $ 391,287 |
Operating Lease Assets (Tables)
Operating Lease Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Operating Lease Assets [Abstract] | |
Additional Details Related to Leases on Balance Sheet | Leases Classification Balance at March 31, 2021 Assets Current Operating lease assets Operating lease assets $ 218,161 Noncurrent Operating lease assets Noncurrent operating lease assets $ 1,132,317 Total lease assets $ 1,350,478 Liabilities Current Operating lease liabilities Operating lease liabilities $ 125,670 Noncurrent Operating lease liabilities Noncurrent operating lease liabilities $ 1,365,431 Total lease liabilities $ 1,491,101 |
Schedule of Minimum Lease Payments Including Weighted-Average Remaining Lease Term and Discount Rates | 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 2021 $ 147,125 2022 318,055 2023 324,221 2024 330,894 2025 337,568 Thereafter 372,974 Total future lease payments 1,830,837 Less: imputed interest (339,736) Total $ 1,491,101 Weighted Average Remaining Lease Term (years) Operating leases 5.6 Weighted Average Discount Rate Operating leases 6.75% |
Notes Payable and Interest Ex_2
Notes Payable and Interest Expense (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Notes Payable and Interest Expense [Abstract] | |
Schedule of Notes Payable | Facility Maturity Interest Rate Balance at March 31, 2021 Balance at December 31, 2020 BDC Term Loan October 15, 2021 23.5% $ 131,821 $ 160,088 ACOA Note February 1, 2024 — 101,641 111,430 Wintrust Bank November 14, 2021 Prime + 1.5% 266,667 366,667 TD Bank December 31, 2022 — 31,764 31,390 Chase Bank April 10, 2022 1% 891,103 891,102 Related Party Note various 15% 500,000 580,000 Total Debt 1,922,996 2,140,677 Less current portion (432,237) (641,676) Long-term debt, net of current portion $ 1,490,759 $ 1,499,001 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Option Activity | Options Outstanding at December 31, 2019 5,781,884 Granted 1,545,000 Exercised (15,000) Forfeit/canceled (814,068) Expired (490,264) Outstanding at December 31, 2020 6,007,552 Granted 67,500 Exercised — Forfeit/canceled (70,156) Expired (89,836) Outstanding at March 31, 2021 5,915,060 |
Valuation Assumptions | Three Months Ended March 31, 2021 2020 Risk-free interest rate 1.01 % 0.58 % Expected life (years) 6.00 6.00 Expected dividend yield — % — % Expected volatility 73.97 % 77.57 % |
Restricted Stock Unit Activity | Shares Outstanding at December 31, 2019 1,152,248 Awarded 284,480 Released — Canceled/forfeited/expired — Outstanding at December 31, 2020 1,436,728 Awarded 536,112 Released — Canceled/forfeited/expired — Outstanding at March 31, 2021 1,972,840 Expected to vest at March 31, 2021 1,972,840 Vested at March 31, 2021 1,472,840 Unvested at March 31, 2021 — Unrecognized expense at March 31, 2021 $ — |
Stock Options and Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-Based Compensation Expense | Three Months Ended March 31, 2021 2020 General and administrative $ 84,130 $ 78,549 Sales and marketing 32,745 13,677 Engineering, research, and development 43,052 41,987 $ 159,927 $ 134,213 |
Restricted Stock Units RSU [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-Based Compensation Expense | Three Months Ended March 31, 2021 2020 General and administrative $ 65,002 $ 65,000 Sales and marketing $ 3,694 $ — $ 68,696 $ 65,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents assets that are measured and recognized at fair value as of March 31, 2021 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) $ — $ — $ 1,275,418 $ — The following table presents assets that are measured and recognized at fair value as of December 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) $ — $ — $ 1,368,329 $ — |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) | 3 Months Ended | ||
Mar. 31, 2021USD ($)customer | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Product Information [Line Items] | |||
Accounts receivable, allowance for doubtful accounts | $ 31,432 | $ 33,848 | |
Comprehensive loss | $ 1,703,451 | $ 1,028,860 | |
Sales Revenue Net [Member] | |||
Product Information [Line Items] | |||
Number of significant customers | customer | 2 | ||
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||
Product Information [Line Items] | |||
Customer concentration risk | 64.00% | 81.00% |
Goodwill and Purchased Intang_3
Goodwill and Purchased Intangibles (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 496,352 | $ 496,352 | |
Amortization expense | $ 36,004 | $ 37,677 | |
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 |
Goodwill and Purchased Intang_4
Goodwill and Purchased Intangibles (Intangible Assets) (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | $ 928,420 |
Impairments | (8,286) |
Amortization | (36,004) |
Fx and Other | 1 |
Balance at end of period | 884,131 |
Patents and Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 71,029 |
Impairments | (8,286) |
Amortization | (1,481) |
Fx and Other | 1 |
Balance at end of period | 61,263 |
Customer and Merchant Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 642,385 |
Amortization | (24,213) |
Balance at end of period | 618,172 |
Trade Name [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 41,444 |
Amortization | (2,270) |
Balance at end of period | 39,174 |
Acquired technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 128,491 |
Amortization | (4,075) |
Balance at end of period | 124,416 |
Non-compete Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 45,071 |
Amortization | (3,965) |
Balance at end of period | $ 41,106 |
Goodwill and Purchased Intang_5
Goodwill and Purchased Intangibles (Future Amortization Intangible Assets) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and Purchased Intangibles [Abstract] | ||
2021 | $ 111,085 | |
2022 | 148,114 | |
2023 | 145,606 | |
2024 | 109,009 | |
2025 | 101,261 | |
Thereafter | 269,056 | |
Total | $ 884,131 | $ 928,420 |
Software Development Costs (Nar
Software Development Costs (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 36,004 | $ 37,677 | |
Software Development Costs [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 99,209 | $ 130,212 | |
Estimated useful lives | 2 years |
Software Development Costs (Sof
Software Development Costs (Software Development Costs) (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | $ 439,908 |
Additions | 50,588 |
Amortization | (99,209) |
Balance at end of period | 391,287 |
Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning of period | 439,908 |
Additions | 50,588 |
Amortization | (99,209) |
Balance at end of period | $ 391,287 |
Software Development Costs (Fut
Software Development Costs (Future Amortization of Software) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
2021 | $ 111,085 | |
2022 | 148,114 | |
2023 | 145,606 | |
2024 | 109,009 | |
2025 | 101,261 | |
Thereafter | 269,056 | |
Total | 884,131 | $ 928,420 |
Software Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2021 | 265,402 | |
2022 | 119,555 | |
2023 | 6,330 | |
Total | $ 391,287 |
Operating Lease Assets (Narrati
Operating Lease Assets (Narrative) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)ft² | Jan. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Right to use lease assets | $ 1,350,478 | |
Operating lease liability | 1,491,101 | |
Fixed assets contributed by lessor | $ 110,000 | |
Lease Starting February 2021 [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Area of office | ft² | 8,898 | |
Deposit assets | $ 110,000 | |
Right to use lease assets | 1,317,604 | |
Operating lease liability | 1,448,956 | |
Fixed assets contributed by lessor | 110,000 | |
Lease Starting February 2021 [Member] | Forecast [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Lease abatement percentage | 50.00% | |
Minimum [Member] | Lease Starting February 2021 [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Monthly rental expense | 25,953 | |
Maximum [Member] | Lease Starting February 2021 [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Monthly rental expense | $ 28,733 |
Operating Lease Assets (Additio
Operating Lease Assets (Additional Details Related to Leases on Balance Sheet) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Operating Lease Assets [Abstract] | ||
Operating lease assets | $ 218,161 | $ 47,038 |
Noncurrent operating lease assets | 1,132,317 | 10,444 |
Total lease assets | 1,350,478 | |
Operating lease liabilities | 125,670 | 58,173 |
Noncurrent operating lease liabilities | 1,365,431 | $ 13,296 |
Total lease liabilities | $ 1,491,101 |
Operating Lease Assets (Schedul
Operating Lease Assets (Schedule of Minimum Lease Payments Including Weighted-Average Remaining Lease Term and Discount Rates) (Details) | Mar. 31, 2021USD ($) |
Operating Lease | |
2021 | $ 147,125 |
2022 | 318,055 |
2023 | 324,221 |
2024 | 330,894 |
2025 | 337,568 |
Thereafter | 372,974 |
Total future lease payments | 1,830,837 |
Less: imputed interest | (339,736) |
Total | $ 1,491,101 |
Weighted Average Remaining Lease Term (years) Operating leases | 5 years 7 months 6 days |
Weighted Average Discount Rate Operating leases | 6.75% |
Notes Payable and Interest Ex_3
Notes Payable and Interest Expense (Narrative) (Details) | Jan. 27, 2021USD ($) | Jan. 25, 2021USD ($) | Dec. 31, 2020USD ($) | Nov. 18, 2020USD ($)loan | Nov. 14, 2018USD ($) | Mar. 31, 2021CAD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Apr. 22, 2020CAD ($) | Apr. 10, 2020USD ($) | Feb. 26, 2020USD ($) | Feb. 28, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Accrued interest | $ 47,316 | $ 31,541 | $ 47,316 | ||||||||||
Interest expense | $ 32,516 | $ 77,189 | |||||||||||
BDC Term Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date | Oct. 15, 2021 | Oct. 15, 2021 | |||||||||||
Repayment of promissory note | $ 30,004 | ||||||||||||
Debt instrument interest rate | 23.50% | ||||||||||||
BDC Term Loan [Member] | August 15, 2019 to November 14, 2019 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 8,500 | ||||||||||||
BDC Term Loan [Member] | November 15, 2019 to September 14, 2020 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | 10,000 | ||||||||||||
BDC Term Loan [Member] | September 15, 2020 to March 14, 2021 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | 12,000 | ||||||||||||
BDC Term Loan [Member] | March 15, 2021 to September 14, 2021 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | 14,000 | ||||||||||||
BDC Term Loan [Member] | September 15, 2021 to October 15, 2021 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 16,000 | ||||||||||||
ACOA Note [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date | Feb. 1, 2024 | Feb. 1, 2024 | |||||||||||
Repayment of promissory note | $ 11,054 | ||||||||||||
ACOA Note [Member] | November 6, 2018 to October 31, 2021 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 3,000 | ||||||||||||
ACOA Note [Member] | November 1, 2019 to July 31, 2021 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | 3,500 | ||||||||||||
ACOA Note [Member] | August 1, 2021 to July 31, 2022 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | 4,000 | ||||||||||||
ACOA Note [Member] | August 1, 2022 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | 4,500 | ||||||||||||
ACOA Note [Member] | Remaining Term [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 2,215 | ||||||||||||
Wintrust Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 33,333 | ||||||||||||
Repayment of promissory note | $ 100,000 | ||||||||||||
Proceeds from loan refinance | 1,000,000 | ||||||||||||
Debt instrument principal amount | $ 1,000,000 | ||||||||||||
Debt instrument term | 3 years | 3 years | |||||||||||
Interest-only term | 6 months | 6 months | |||||||||||
Wintrust Loan [Member] | Prime Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on interest rate | 1.50% | 1.50% | |||||||||||
Chase Loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date | Apr. 10, 2022 | Apr. 10, 2022 | |||||||||||
Debt instrument principal amount | $ 891,103 | ||||||||||||
Debt instrument term | 2 years | 2 years | |||||||||||
Deferral period | 10 months | 10 months | |||||||||||
Usage period | 168 days | 168 days | |||||||||||
Debt instrument interest rate | 1.00% | ||||||||||||
Chase Loan [Member] | 24 Week Usage Period [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 0 | ||||||||||||
TD Bank [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date | Dec. 31, 2022 | Dec. 31, 2022 | |||||||||||
Debt instrument principal amount | $ 40,000 | ||||||||||||
Debt instrument interest rate | 0.00% | ||||||||||||
Percent of loan forgiven | 25.00% | 25.00% | |||||||||||
Percent of loan repaid requirement for forgiveness | 75.00% | 75.00% | |||||||||||
TD Bank [Member] | April 22, 2020 to January 1, 2023 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal payment | $ 0 | ||||||||||||
Unsecured Promissory Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayment of promissory note | $ 65,000 | ||||||||||||
Related party note | 500,000 | ||||||||||||
Accrued interest | $ 27,708 | ||||||||||||
Loss on settlement of debt | $ 668,260 | ||||||||||||
Unsecured Promissory Notes [Member] | Principal [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayment of promissory note | $ 15,000 | ||||||||||||
Debt instrument conversion amount | 1,200,000 | ||||||||||||
Unsecured Promissory Notes [Member] | Accrued Interest [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayment of promissory note | $ 34,379 | ||||||||||||
Debt instrument conversion amount | $ 192,208 | ||||||||||||
Unsecured Promissory Notes 1 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument principal amount | $ 1,080,000 | ||||||||||||
Debt instrument interest rate | 15.00% | ||||||||||||
Debt instrument pre-payment penalty | 2.00% | 2.00% | |||||||||||
Unsecured Promissory Notes 2 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument principal amount | $ 200,000 | ||||||||||||
Debt instrument term | 2 years | 2 years | |||||||||||
Debt instrument interest rate | 15.00% | ||||||||||||
Debt instrument pre-payment penalty | 2.00% | 2.00% | |||||||||||
Unsecured Promissory Notes 3 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of notes issued | loan | 2 | ||||||||||||
Debt instrument principal amount | $ 500,000 | ||||||||||||
Debt instrument interest rate | 15.00% | ||||||||||||
Debt instrument pre-payment penalty | 2.00% | 2.00% |
Notes Payable and Interest Ex_4
Notes Payable and Interest Expense (Schedule of Notes Payable) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Total Debt | $ 1,922,996 | $ 2,140,677 |
Less current portion | (432,237) | (641,676) |
Long-term debt, net of current portion | $ 1,490,759 | 1,499,001 |
BDC Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Maturity | Oct. 15, 2021 | |
Interest Rate | 23.50% | |
Total Debt | $ 131,821 | 160,088 |
ACOA Note [Member] | ||
Debt Instrument [Line Items] | ||
Maturity | Feb. 1, 2024 | |
Total Debt | $ 101,641 | 111,430 |
Wintrust Bank [Member] | ||
Debt Instrument [Line Items] | ||
Maturity | Nov. 14, 2021 | |
Interest rate description | Prime + 1.5% | |
Basis spread on interest rate | 1.50% | |
Total Debt | $ 266,667 | 366,667 |
TD Bank [Member] | ||
Debt Instrument [Line Items] | ||
Maturity | Dec. 31, 2022 | |
Interest Rate | 0.00% | |
Total Debt | $ 31,764 | 31,390 |
Chase Loan [Member] | ||
Debt Instrument [Line Items] | ||
Maturity | Apr. 10, 2022 | |
Interest Rate | 1.00% | |
Total Debt | $ 891,103 | 891,102 |
Related Party Note [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate | 15.00% | |
Total Debt | $ 500,000 | $ 580,000 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 26, 2021USD ($)employee$ / sharesshares | Mar. 02, 2021USD ($)employee$ / sharesshares | Dec. 17, 2020USD ($)employee$ / sharesshares | Dec. 07, 2020USD ($)employee$ / sharesshares | Nov. 05, 2020USD ($)employee$ / sharesshares | Sep. 17, 2020USD ($)$ / shares | Aug. 07, 2020USD ($)employee$ / sharesshares | Apr. 06, 2020USD ($)employee$ / sharesshares | Mar. 24, 2020USD ($)employee$ / sharesshares | Dec. 31, 2020USD ($)item$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)item$ / sharesshares | Mar. 31, 2020 | Dec. 31, 2020USD ($)$ / sharesshares | Mar. 02, 2020$ / sharesshares |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Warrants to purchase of common stock | shares | 234,500 | |||||||||||||||
Warrant exercise price | $ / shares | $ 2 | $ 2 | $ 2 | $ 1 | ||||||||||||
Issuance of common stock for options exercised | $ 15,000 | |||||||||||||||
Strike price per share | $ / shares | $ 0.48 | $ 1.25 | $ 1.25 | $ 1.25 | ||||||||||||
Ratio of converted warrant units | item | 1 | 1 | ||||||||||||||
Issuance of common stock for debt settlement, shares | shares | 1,113,767 | |||||||||||||||
Loss on conversion | $ 668,260 | |||||||||||||||
Restricted stock expense | $ 260,003 | |||||||||||||||
Equity payable | $ 100,862 | $ 100,862 | $ 100,862 | $ 100,862 | $ 100,862 | |||||||||||
Number of employees, awards granted | employee | 5 | 6 | 1 | 1 | 4 | 1 | ||||||||||
Options granted | shares | 67,500 | 210,000 | 600,000 | 20,000 | 700,000 | 15,000 | 67,500 | 1,545,000 | ||||||||
Weighted average exercise price of stock options granted | $ / shares | $ 1.80 | |||||||||||||||
Weighted average grant date fair value of options granted | $ / shares | $ 1.80 | $ 1.83 | $ 1.55 | $ 0.96 | $ 0.70 | $ 0.65 | $ 1.16 | |||||||||
Volatility rate | 73.97% | 77.41% | 77.35% | 77.36% | 78.21% | 77.56% | 73.97% | 77.57% | ||||||||
Call option value, price per share | $ / shares | $ 1.16 | $ 1.21 | $ 1.03 | $ 0.63 | $ 0.47 | $ 0.43 | ||||||||||
Call option value | $ 78,492 | $ 254,373 | $ 615,495 | $ 12,689 | $ 326,752 | $ 6,472 | ||||||||||
Units issued | shares | 536,112 | 284,480 | ||||||||||||||
Shares issued | shares | 2,666,459 | |||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 3,333,074 | |||||||||||||||
Share-based Payment Arrangement, Tranche One, Forty-Eight Months [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Options granted | shares | 500,000 | |||||||||||||||
Vesting rate | 25.00% | |||||||||||||||
Share-based Payment Arrangement, Tranche Two Forty-Eight Months [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Options granted | shares | 200,000 | |||||||||||||||
Twelve Months [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Vesting rate | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||||
Thirty-Six Months [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Vesting period | 36 months | 36 months | 36 months | 36 months | 36 months | 36 months | ||||||||||
Forty-Eight Months [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Vesting period | 48 months | |||||||||||||||
Board of Directors [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Restricted stock expense | 65,002 | |||||||||||||||
Value of units | $ 65,002 | |||||||||||||||
Employees [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Restricted stock expense | $ 3,694 | |||||||||||||||
Value of units | $ 3,694 | |||||||||||||||
Warrant Issuance [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Warrants to purchase of common stock | shares | 234,500 | 2,666,459 | 2,666,459 | 2,666,459 | ||||||||||||
Warrant exercise price | $ / shares | $ 1.25 | $ 1 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | ||||||||||
Warrants outstanding | shares | 25,000 | 2,691,459 | 25,000 | 2,691,459 | 2,691,459 | |||||||||||
Number of employees, awards granted | employee | 1 | |||||||||||||||
Adjustment to APIC | $ 234,500 | |||||||||||||||
New Warrant [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Warrant exercise price | $ / shares | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | |||||||||||
Warrants outstanding | shares | 2,666,459 | 2,666,459 | 2,666,459 | 2,666,459 | 2,666,459 | |||||||||||
Additional capital | $ 3,333,074 | $ 3,333,074 | $ 3,333,074 | |||||||||||||
Restricted Stock Units RSU [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Number of employees, awards granted | employee | 4 | 4 | 4 | 4 | ||||||||||||
Units issued | shares | 35,520 | 67,708 | 81,252 | 100,000 | ||||||||||||
Value of units | $ 65,000 | $ 65,000 | $ 65,000 | $ 65,000 | $ 260,003 | |||||||||||
Value of units, per share | $ / shares | $ 1.83 | $ 0.96 | $ 0.80 | $ 0.65 | ||||||||||||
Unearned compensation | $ 0 | $ 0 | ||||||||||||||
Restricted Stock Units RSU [Member] | Board of Directors [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Number of employees, awards granted | employee | 4 | |||||||||||||||
Units issued | shares | 36,112 | |||||||||||||||
Value of units | $ 65,000 | |||||||||||||||
Value of units, per share | $ / shares | $ 1.80 | |||||||||||||||
Restricted Stock Units RSU [Member] | Employees [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Number of employees, awards granted | employee | 1 | |||||||||||||||
Value of units | $ 1,000,000 | |||||||||||||||
Value of units, per share | $ / shares | $ 1.80 | |||||||||||||||
Restricted Stock Units RSU [Member] | Employees [Member] | Forty-Eight Months [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Vesting rate | 50.00% | |||||||||||||||
Vesting period | 48 months | |||||||||||||||
Restricted Stock Units RSU [Member] | Employees [Member] | Revenue Based Vesting, Tranche One [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Vesting rate | 15.00% | |||||||||||||||
Vesting period | 12 months | |||||||||||||||
Revenue threshold for vesting measurement | $ 25,000,000 | |||||||||||||||
Restricted Stock Units RSU [Member] | Employees [Member] | Revenue Based Vesting, Tranche Two [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Vesting rate | 35.00% | |||||||||||||||
Vesting period | 12 months | |||||||||||||||
Revenue threshold for vesting measurement | $ 50,000,000 | |||||||||||||||
Restricted Stock Units RSU [Member] | Employees [Member] | Change In Control Of Company [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Units issued | shares | 300,000 | |||||||||||||||
Principal [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Issuance of common stock for debt settlement | 1,200,000 | |||||||||||||||
Accrued Interest [Member] | ||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||
Issuance of common stock for debt settlement | $ 192,208 |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Option Activity) (Details) - shares | Mar. 26, 2021 | Dec. 17, 2020 | Dec. 07, 2020 | Nov. 05, 2020 | Apr. 06, 2020 | Mar. 24, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Stockholders' Equity [Abstract] | ||||||||
Outstanding at Beginning of Period | 6,007,552 | 5,781,884 | ||||||
Granted | 67,500 | 210,000 | 600,000 | 20,000 | 700,000 | 15,000 | 67,500 | 1,545,000 |
Exercised | (15,000) | |||||||
Forfeit/canceled | (70,156) | (814,068) | ||||||
Expired | (89,836) | (490,264) | ||||||
Outstanding at End of Period | 5,915,060 | 6,007,552 |
Stockholders' Equity (Stock Bas
Stockholders' Equity (Stock Based Compensation Expense - Stock Options and Warrants) (Details) - Stock Options and Warrants [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 159,927 | $ 134,213 |
General and Administrative [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 84,130 | 78,549 |
Sales and Marketing [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 32,745 | 13,677 |
Engineering, Research and Development [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 43,052 | $ 41,987 |
Stockholders' Equity (Valuation
Stockholders' Equity (Valuation Assumptions) (Details) | Mar. 26, 2021 | Dec. 17, 2020 | Dec. 07, 2020 | Nov. 05, 2020 | Apr. 06, 2020 | Mar. 24, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Stockholders' Equity [Abstract] | ||||||||
Risk-free interest rate | 1.01% | 0.58% | ||||||
Expected life (years) | 6 years | 6 years | ||||||
Expected volatility | 73.97% | 77.41% | 77.35% | 77.36% | 78.21% | 77.56% | 73.97% | 77.57% |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock Unit Activity) (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Stockholders' Equity [Abstract] | ||
Outstanding at Beginning of Period | 1,436,728 | 1,152,248 |
Awarded, Shares | 536,112 | 284,480 |
Outstanding at End of Period | 1,972,840 | 1,436,728 |
Vested at end | 1,472,840 |
Stockholders' Equity (Stock B_2
Stockholders' Equity (Stock Based Compensation Expense - Restricted Stock) (Details) - Restricted Stock Units RSU [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 68,696 | $ 65,000 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 65,002 | $ 65,000 |
Sales and Marketing [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 3,694 |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments (Details) - Fair Value Measurements Recurring [Member] - Fair Value Inputs Level 3 [Member] - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | $ 496,352 | $ 496,352 |
Intangible Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangibles, net | $ 1,275,418 | $ 1,368,329 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)ft² | Jan. 31, 2022 | |
Commitments And Contingencies [Line Items] | ||
Operating lease asset | $ 1,350,478 | |
Operating lease liability | $ 1,491,101 | |
Lease Starting February 2021 [Member] | ||
Commitments And Contingencies [Line Items] | ||
Area of property | ft² | 8,898 | |
Operating lease asset | $ 1,317,604 | |
Operating lease liability | 1,448,956 | |
Lease Starting February 2021 [Member] | Minimum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Monthly rental expense | 25,953 | |
Lease Starting February 2021 [Member] | Maximum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Monthly rental expense | $ 28,733 | |
Lease Ending January 2027 [Member] | ||
Commitments And Contingencies [Line Items] | ||
Area of property | ft² | 8,898 | |
Operating lease asset | $ 1,317,604 | |
Operating lease liability | $ 1,448,956 | |
Lease abatement percentage | 50.00% | |
Lease Ending January 2027 [Member] | Minimum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Monthly rental expense | $ 25,953 | |
Lease Ending January 2027 [Member] | Maximum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Monthly rental expense | 28,733 | |
Lease Ending April 2022 [Member] | ||
Commitments And Contingencies [Line Items] | ||
Operating lease asset | 32,874 | |
Operating lease liability | $ 42,145 | |
Lease Ending April 2022 [Member] | Minimum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Area of property | ft² | 3,248 | |
Monthly rental expense | $ 2,665 | |
Lease Ending April 2022 [Member] | Maximum [Member] | ||
Commitments And Contingencies [Line Items] | ||
Monthly rental expense | $ 3,371 | |
Forecast [Member] | Lease Starting February 2021 [Member] | ||
Commitments And Contingencies [Line Items] | ||
Lease abatement percentage | 50.00% |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | Jan. 27, 2021 | Jan. 25, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||||
Accrued interest | $ 47,316 | $ 31,541 | $ 47,316 | ||
Unsecured Promissory Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument conversion amount | 1,200,000 | ||||
Repayment of promissory note | $ 65,000 | ||||
Related party note | 500,000 | ||||
Accrued interest | 27,708 | ||||
Principal [Member] | Unsecured Promissory Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument conversion amount | 192,208 | ||||
Repayment of promissory note | $ 15,000 | ||||
Accrued Interest [Member] | Unsecured Promissory Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument conversion amount | 668,260 | ||||
Repayment of promissory note | 34,379 | ||||
Unsecured Promissory Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Repayment of promissory note | $ 65,000 | ||||
Related party note | 500,000 | ||||
Accrued interest | $ 27,708 | ||||
Loss on conversion of debt | $ (668,260) | ||||
Unsecured Promissory Notes [Member] | Principal [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument conversion amount | 1,200,000 | ||||
Repayment of promissory note | 15,000 | ||||
Unsecured Promissory Notes [Member] | Accrued Interest [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument conversion amount | $ 192,208 | ||||
Repayment of promissory note | $ 34,379 | ||||
Unsecured Promissory Notes 1 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument pre-payment penalty | 2.00% | ||||
Unsecured Promissory Notes 2 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument term | 2 years | ||||
Debt instrument pre-payment penalty | 2.00% | ||||
Unsecured Promissory Notes 3 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument pre-payment penalty | 2.00% |
Uncategorized Items - mfon-2021
Label | Element | Value |
Unsecured Promissory Notes1 [Member] | ||
Related Party Transaction, Amounts of Transaction | us-gaap_RelatedPartyTransactionAmountsOfTransaction | $ 1,080,000 |
Debt Instrument, Prepayment Penalty, Interest Rate | mfon_DebtInstrumentPrepaymentPenaltyInterestRate | 2.00% |
Related Party Transaction, Rate | us-gaap_RelatedPartyTransactionRate | 15.00% |
Unsecured Promissory Notes2 [Member] | ||
Related Party Transaction, Amounts of Transaction | us-gaap_RelatedPartyTransactionAmountsOfTransaction | $ 200,000 |
Debt Instrument, Prepayment Penalty, Interest Rate | mfon_DebtInstrumentPrepaymentPenaltyInterestRate | 2.00% |
Related Party Transaction, Rate | us-gaap_RelatedPartyTransactionRate | 15.00% |
Unsecured Promissory Notes3 [Member] | ||
Related Party Transaction, Amounts of Transaction | us-gaap_RelatedPartyTransactionAmountsOfTransaction | $ 500,000 |
Debt Instrument, Prepayment Penalty, Interest Rate | mfon_DebtInstrumentPrepaymentPenaltyInterestRate | 2.00% |
Related Party Transaction, Rate | us-gaap_RelatedPartyTransactionRate | 15.00% |