Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 19, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | FISION Corp | |
Entity Central Index Key | 0001487931 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Common Stock Shares Outstanding | 285,439,993 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 0 | $ 14,510 |
Accounts receivable, net | 2,739 | 9,906 |
Notes Receivable and Accrued Interest, net of allowance for doubtful accounts | 0 | 0 |
Prepaid Expenses | 7,696 | 533,064 |
Total Current Assets | 10,435 | 557,480 |
Property and equipment, net | 1,544 | 2,916 |
Other Assets: | ||
Goodwill | 13,800 | 13,800 |
Intellectual property/software code, net of accumulated amortization | 37,920 | 42,813 |
Deposits | 25,599 | 25,599 |
Total Assets | 89,298 | 642,608 |
Current Liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 2,374,953 | 2,155,065 |
Contract liability (customer deposits) | 0 | 62,500 |
Derivative liability | 2,533,208 | 4,156,621 |
Current portion of long-term debt: SBA-PPP loan | 88,600 | 0 |
Note payable and accrued interest - related party | 581,991 | 228,692 |
Notes payable, net of debt discount of $0 and $0 respectively | 1,127,250 | 1,028,845 |
Total Current Liabilities | 6,706,002 | 7,631,723 |
Long-Term Liabilities: | ||
Long-Term SBA-PPP loan | 88,600 | 0 |
Long-Term Convertible Notes Payable, net of debt discount of $439,885 and $853,261 respectively | 103,115 | 700,845 |
Total Long-Term Liabilities | 191,715 | 700,845 |
Total Liabilities | 6,897,717 | 8,332,567 |
Contingencies and Commitments (Note 6) | 0 | 0 |
Stockholders' Deficit: | ||
Preferred Stock, $0.0001 Par value, 20,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common Stock, $0.0001 Par value, 500,000,000 shares authorized 285,439,993 and 135,685,981 shares issued and outstanding, at June 30, 2020 and December 31, 2019 respectively | 28,544 | 13,569 |
Additional paid in capital | 25,231,710 | 24,108,264 |
Accumulated deficit | (32,068,673) | (31,811,792) |
Total Stockholders' Deficit | (6,808,419) | (7,689,959) |
Total Liabilities and Stockholders' Deficit | $ 89,298 | $ 642,608 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current Liabilities | ||
Notes payable, net of debt discount | $ 0 | $ 0 |
Long-Term Liabilities | ||
Long-Term convertible notes payable, net of debt discount | $ 439,885 | $ 853,261 |
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 285,439,993 | 135,685,981 |
Common stock, shares outstanding | 285,439,993 | 135,685,981 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement Abstract | ||||
REVENUE | $ 76,445 | $ 135,091 | $ 180,489 | $ 268,243 |
COST OF SALES | 22,988 | 30,198 | 51,721 | 51,175 |
GROSS MARGIN | 53,457 | 104,893 | 128,768 | 217,068 |
OPERATING EXPENSES | ||||
Sales and Marketing | 2,450 | 157,350 | 4,399 | 324,314 |
Development and Support | 87,899 | 144,801 | 196,293 | 293,439 |
General and Administrative | 118,235 | 1,217,084 | 940,913 | 1,540,480 |
TOTAL OPERATING EXPENSES | 208,584 | 1,519,235 | 1,141,605 | 2,158,233 |
OPERATING LOSS | (155,127) | (1,414,342) | (1,012,837) | (1,941,165) |
OTHER INCOME / (EXPENSES) | ||||
Interest expense and debt discount | (70,519) | (49,562) | (449,188) | (328,535) |
Amortization expense/amortization of debt discount | (50,904) | (921,389) | (104,074) | (1,141,800) |
Excess derivative expense | 0 | (753,967) | 0 | (753,967) |
Gain (loss) in fair value of derivatives | (46,998) | (142,336) | 1,349,700 | 86,002 |
Loss on extinguishment of debt / loss on settlement of debt | (11,887) | (129,154) | (40,482) | (321,241) |
Gain on extinguishment of derivative liabilities | 1,158,036 | 1,158,036 | ||
Bad debt expense | (12,065) | (416,026) | (24,129) | (416,026) |
Interest income on notes receivable | 12,065 | 102,523 | 24,129 | 92,939 |
TOTAL OTHER INCOME (EXPENSES) | (180,308) | (1,151,875) | 755,956 | (1,624,592) |
NET LOSS | $ (335,435) | $ (2,566,217) | $ (256,881) | $ (3,565,757) |
Net income (loss) per common share: | ||||
Basic and Diluted | $ 0 | $ (0.02) | $ 0 | $ (0.04) |
Weighted average common shares outstanding: | ||||
Basic and Diluted: | 273,676,683 | 115,854,553 | 233,796,266 | 94,658,831 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT (UNAUDITED) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Dec. 31, 2018 | 67,454,276 | |||
Balance, amount at Dec. 31, 2018 | $ (2,935,644) | $ 6,745 | $ 19,572,322 | $ (22,514,711) |
Common stock issued for cash, shares | 1,750,000 | |||
Stock issued for services, shares | 537,500 | |||
Common stock issued for cash, amount | 350,000 | $ 175 | 349,825 | 0 |
Stock issued for services, amount | 54,500 | 54 | 54,446 | 0 |
Warrants/Options granted for services | 148,199 | $ 0 | 148,199 | 0 |
Conversion of notes payable and accrued interest/expenses, shares | 8,622,087 | |||
Conversion of notes payable and accrued interest/expenses, amount | 742,390 | $ 862 | 741,528 | 0 |
Net loss | (999,541) | (999,541) | ||
Balance, shares at Mar. 31, 2019 | 78,363,863 | |||
Balance, amount at Mar. 31, 2019 | (2,640,096) | $ 7,836 | 20,866,320 | (23,514,252) |
Balance, shares at Dec. 31, 2018 | 67,454,276 | |||
Balance, amount at Dec. 31, 2018 | (2,935,644) | $ 6,745 | 19,572,322 | (22,514,711) |
Stock issued for services, amount | 2,086,000 | |||
Net loss | (3,565,757) | |||
Balance, shares at Jun. 30, 2019 | 118,653,245 | |||
Balance, amount at Jun. 30, 2019 | (2,595,303) | $ 11,865 | 23,473,301 | (26,080,469) |
Balance, shares at Dec. 31, 2018 | 67,454,276 | |||
Balance, amount at Dec. 31, 2018 | (2,935,644) | $ 6,745 | 19,572,322 | (22,514,711) |
Balance, shares at Dec. 31, 2019 | 135,685,981 | |||
Balance, amount at Dec. 31, 2019 | (7,689,959) | $ 13,569 | 24,108,264 | (31,811,792) |
Balance, shares at Mar. 31, 2019 | 78,363,863 | |||
Balance, amount at Mar. 31, 2019 | (2,640,096) | $ 7,836 | 20,866,320 | (23,514,252) |
Stock issued for services, shares | 35,245,098 | |||
Stock issued for services, amount | 2,031,500 | $ 3,525 | 2,027,975 | 0 |
Warrants/Options granted for services | 352,010 | $ 0 | 352,010 | 0 |
Conversion of notes payable and accrued interest/expenses, shares | 5,044,284 | |||
Conversion of notes payable and accrued interest/expenses, amount | 227,500 | $ 504 | 226,996 | 0 |
Net loss | (2,566,217) | (2,566,217) | ||
Balance, shares at Jun. 30, 2019 | 118,653,245 | |||
Balance, amount at Jun. 30, 2019 | (2,595,303) | $ 11,865 | 23,473,301 | (26,080,469) |
Balance, shares at Dec. 31, 2019 | 135,685,981 | |||
Balance, amount at Dec. 31, 2019 | (7,689,959) | $ 13,569 | 24,108,264 | (31,811,792) |
Stock issued for services, shares | 2,083,333 | |||
Stock issued for services, amount | 12,500 | $ 208 | 12,292 | |
Stock issued for true-up and penalty shares, shares | 9,625,000 | |||
Stock issued for true-up and penalty shares, amount | 48,703 | $ 963 | 47,740 | |
Warrants/Options granted for services | 324,392 | $ 0 | 324,392 | |
Conversion of notes payable and accrued interest/expenses, shares | 102,044,226 | |||
Conversion of notes payable and accrued interest/expenses, amount | 646,147 | $ 10,204 | 635,943 | |
Net loss | 78,554 | 78,554 | ||
Balance, shares at Mar. 31, 2020 | 249,438,540 | |||
Balance, amount at Mar. 31, 2020 | (6,579,663) | $ 24,944 | 25,128,631 | (31,733,238) |
Balance, shares at Dec. 31, 2019 | 135,685,981 | |||
Balance, amount at Dec. 31, 2019 | (7,689,959) | $ 13,569 | 24,108,264 | (31,811,792) |
Stock issued for services, amount | 39,500 | |||
Net loss | (256,881) | |||
Balance, shares at Jun. 30, 2020 | 285,439,993 | |||
Balance, amount at Jun. 30, 2020 | (6,808,419) | $ 28,544 | 25,231,710 | (32,068,673) |
Balance, shares at Mar. 31, 2020 | 249,438,540 | |||
Balance, amount at Mar. 31, 2020 | (6,579,663) | $ 24,944 | 25,128,631 | (31,733,238) |
Stock issued for services, shares | 7,604,167 | |||
Stock issued for services, amount | 27,000 | $ 760 | 26,240 | |
Conversion of notes payable and accrued interest/expenses, shares | 28,397,286 | |||
Conversion of notes payable and accrued interest/expenses, amount | 79,679 | $ 2,840 | 76,840 | |
Net loss | (335,435) | (335,435) | ||
Balance, shares at Jun. 30, 2020 | 285,439,993 | |||
Balance, amount at Jun. 30, 2020 | $ (6,808,419) | $ 28,544 | $ 25,231,710 | $ (32,068,673) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss for the Period | $ (256,881) | $ (3,565,757) |
Net cash used in operating activities: | ||
Common stock issued for services | 39,500 | 2,086,000 |
Amortization of pre-paid stock issued | 525,368 | 0 |
Depreciation and amortization | 6,265 | 6,453 |
True-up and penalty shares issued | 48,702 | 0 |
Stock warrants/stock options issued for services: | 324,392 | 500,209 |
Gain on fair value of derivative liabilities | (1,349,700) | (86,000) |
Excess derivative expense | 753,963 | |
Loss on extinguishment of debt/gain on settlement of debt | 35,589 | 305,127 |
Gain on extinguishment of derivative liability due to convertible note conversions | 0 | (1,158,036) |
Bad debt expense | 24,129 | 416,026 |
Amortization of debt discount | 104,074 | 1,141,800 |
Changes in Operating Assets and Liabilities (Increase) decrease in: | ||
Accounts receivable | 7,167 | 329 |
Deposits | 0 | (17,340) |
Change in interest receivable | (24,129) | (19,629) |
Prepaid expenses | 0 | (1,503,109) |
Accounts payable, accrued expenses and other current liabilities | 390,949 | 159,735 |
Change in customer advances | (62,500) | 10,292 |
Net Cash Used in Operating Activities | (187,075) | (969,938) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net Cash Used In Investing Activities | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments on note payable | (75,000) | (343,000) |
Proceeds from note payable | 75,000 | 850,000 |
Proceeds from SBA-PPP loan | 177,200 | 0 |
Proceeds from related party notes | 0 | 7,500 |
Repayments for related party notes and line of credit | (4,635) | (2,100) |
Proceeds from issuance of common stock | 0 | 350,000 |
Net Cash Used by Financing Activities | 172,565 | 862,400 |
Net (Decrease) Increase in Cash | (14,510) | (107,538) |
Cash at Beginning of Period | 14,510 | 121,900 |
Cash at End of Period | 0 | 14,362 |
Cash paid during period: | ||
Interest | 0 | 0 |
Noncash operating and financing activities: | ||
Accrued interest increasing notes payable | 0 | 12,078 |
Derivatives recorded as debt discount | 1,041,106 | |
Conversion of debt and accrued interest to common stock | 725,826 | 969,890 |
Prepaid stock issuance | 525,368 | 0 |
Common stock issued for services | 39,500 | |
Stock warrants/stock options issued for services | $ 324,392 | $ 0 |
ORGANIZATION AND SIGNIFICANT AC
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | FISION Corporation, (formerly DE 6 Acquisition, Inc.), a Delaware corporation (the “Company”) was incorporated on February 24, 2010, and was inactive until December 2015 when it merged with Fision Holdings, Inc., an operating business based in Minneapolis, Minnesota. As a result of this reverse merger, Fision Holdings, Inc. became a wholly-owned subsidiary of the Company. Fision Holdings, Inc. was incorporated under the laws of the State of Minnesota in 2010, and has developed and commercialized a proprietary cloud-based software platform which automates and integrates digital marketing assets and marketing communications to “bridge the gap” between marketing and sales of any enterprise. The Company generates its revenues primarily from software licensing contracts typically having terms of from one to three years and requiring monthly subscription fees based on the customer’s number of users and the locations where used. The Company’s business model provides it with a high percentage of recurring revenues. The terms “Fision,” “we,” “us,” and “our,” refer to FISION Corporation, a Delaware corporation and its wholly-owned operating subsidiary Fision Holdings, Inc., a Minnesota corporation (including our Volerro software services). Basis of Presentation The accompanying consolidated financial statements are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and note disclosures which are included in annual financial statements have been omitted pursuant to these rules and regulations. We believe the disclosures made in these interim unaudited financial statements are adequate to make the information not misleading. Although these interim financial statements for the six-month periods ended June 30, 2020 and 2019 are unaudited, in the opinion of our management, such statements include all adjustments, consisting of normal and recurring accruals, necessary to present fairly our financial position, results of operations and cash flows for the periods presented. The results for the 2020 interim period are not necessarily indicative of the results to be expected for the year ended December 31, 2020 or for any future period. These unaudited interim financial statements should be read and considered in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2019, included in our annual report on Form 10-K/A filed with the SEC on June 4, 2020. Principles of Consolidation These consolidated interim financial statements include the accounts of FISION Corporation, a Delaware corporation, and its wholly-owned Minnesota subsidiary Fision Holdings, Inc. All material intercompany transactions and balances have been eliminated in consolidation. Use of Estimates GAAP accounting principles require our management to make estimates and assumptions in the preparation of these interim financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates and assumptions. The most significant areas requiring management judgment and which are susceptible to possible later change include our revenue recognition, cost of revenue, allowance for doubtful accounts, valuations of property and equipment and intangible assets, stock-based compensation, fair value of financial instruments, derivative liabilities, research and development, impairment of long-lived assets, and the valuation allowance for income taxes. Cash and Cash Equivalents We consider all short-term highly liquid investments with a remaining maturity at the date of purchase of six months or less to be cash equivalents. At June 30, 2020 and December 31, 2019, we had no cash equivalents. Concentration of Credit Risk and Customers Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. During the year ended December 31, 2019 and the six months ended June 30, 2020, we may have had cash deposits in our bank that exceeded FDIC insurance limits. We maintain our bank accounts at high quality institutions and in demand accounts to mitigate this risk. Regarding our customers, we perform ongoing credit evaluations of them, and generally we do not require collateral from them to do business with us. For the six months ended June 30, 2020, three customers exceeded 10% of our revenues, including one for 12% of revenues, one for 21% of revenues, and one for 28% of revenues. We do not believe that we face any material customer concentration risks currently, although a significant reduction for any reason in the use of our software solutions by one or more of our major customers could harm our business materially. Revenue recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, originally effective for public business entities with annual reporting periods beginning after December 15, 2017. On August 12, 2015, the FASB issued an Accounting Standards Update (“ASU”), Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASC 606 for one year. ASC 606 provides accounting guidance related to revenue from contracts with customers. For public business entities, ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This new revenue recognition standard (new guidance) has a five-step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The Company adopted the application of ASC 606 and has evaluated the impact of ASC 606, and the application of ASC 606 did not have a material impact on its consolidated financial statements and disclosures, as the Company had already implemented the five-step process in determining revenue recognition from contracts with customers. Revenue is recognized in the period the services are provided over the contract period, normally one (1) to three (3) years. We invoice one-time startup and implementation costs, such as consolidating and uploading digital assets of the customer, upon completion of those services as one performance obligation and recorded as revenue when completed. Monthly services, such as internet access to software as a service (SaaS), hosting and weekly backups are invoiced monthly as another performance obligation and recorded as revenue over time. Company Recognizes Contract Liability for Its Performance Obligation Upon receipt of a prepayment from a customer, the Company recognizes a contract liability in the amount of the prepayment for its performance obligation to transfer goods and services in the future. When the Company transfers those goods and services and, therefore, satisfies its performance obligation to the customer, the Company will then recognize the revenue. Lease Accounting In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has adopted ASU 2016-02 on leases and has evaluated the impact of ASU 2016-02 on the Company’s financial statements and disclosures, and currently does not believe that its application will have a material impact on its consolidated financial statements. As of June 30, 2020 and December 31, 2019, the Company had no leases, and pays for a virtual office on a month-to-month basis. Loss Per Common Share Earnings per Share For the six months ended June 30, 2020 2019 Net loss $ (256,881 ) $ (3,565,757 ) Adjustments for diluted earnings: Income (Loss) per share: Basic and Diluted $ (0.00 ) $ (0.04 ) Weighted average shares outstanding: Basic and Diluted 233,796,266 94,658,831 For the six months ended June 30, 2020 and June 30, 2019, there were 631,434,278 and 54,866,313 respectively, potentially dilutive securities included in the calculation of weighted-average shares outstanding. Property and Equipment Property and equipment are capitalized and stated at cost, and any additions, renewals or betterments are also capitalized. Expenditures for maintenance and repairs are charged to earnings as incurred. If property or equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from our accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method with estimated lives as follows: Furniture and fixtures 5 years Computer and office equipment 5 years Stock-Based Compensation We record stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, which requires us to measure the cost for any stock-based employee compensation at fair value and recognize the expense over the related service period. We recognize the fair value of stock options, warrants and any other equity-based compensation issued to employees and non-employees as of the grant date. We use the Black Scholes model to measure the fair value of options and warrants. Recently Issued Accounting Pronouncements See above “Revenue Recognition” and “Lease Accounting” sections in this Note 1. Other recent accounting pronouncements issued by the FASB, the AICPA, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on our present or future consolidated financial statements. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2020 | |
GOING CONCERN | |
NOTE 2 - GOING CONCERN | Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Our ability to continue as a going concern is contingent upon our future ability to achieve and maintain profitable operations, and to raise substantial additional capital as required until we attain profitable operations. At June 30, 2020 we had a working capital deficiency of approximately $6,695,567 and an accumulated deficit of $32,068,673. In addition, the Company had a net loss for the six-month period of $256,881 and net cash used in operations of $187,075 for the six months ended June 30, 2020. These conditions raise substantial doubt about our ability to continue as a going concern for a period of 1 year from the issuance date of this report. These unaudited interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. We are in the process of raising funds to support activities to obtain increased revenues, and otherwise addressing our ability to continue as a going concern. Our management believes that if we succeed in raising substantial additional capital to implement increased funding for substantial marketing and sales support, we will be able to generate material increased revenues and continue as a going concern. Unless we can raise significant additional working capital, however, we most likely will not be able to continue our current business as a going concern. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS | FASB ASC Topic 820 requires disclosure of and defines fair value of financial instruments, and also establishes a three-level valuation hierarchy for these disclosures. The carrying amounts reported in a balance sheet for receivables and current liabilities qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between their origination and their expected realization and their current market rate of interest. The three levels of valuation hierarchy for fair value determinations are defined as follows: Level 1 Level 2 Level 3 The following table represents the Company’s assets and liabilities by level measured at fair value on a recurring basis at December 31, 2019 and June 30, 2020: Level 1 Level 2 Level 3 Derivative liability $ - $ - $ 2,533,208 The following assets and liabilities are measured on the consolidated balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions in their valuation. The following table provides a reconciliation of the beginning and ending balances of the liabilities: Fair Value December 31, 2019 Additions Change in fair Value Extinguishment Fair Value June 30, 2020 Derivative liability $ 4,156,621 $ -0- $ (1,349,700 ) $ (273,713 ) $ 2,533,208 All gains and losses on assets and liabilities measured at fair value on a recurring basis and classified as Level 3 within the fair value hierarchy are recognized in other income and expense in these financial statements. The significant unobservable inputs used in the fair value measurement of the liabilities described above are as follows; Exercise price $ .00165-$.0049 Expected Volatility 410 % Expected Term Due on demand to 36 mos. Risk free interest rate 0.16%-0.18 % Expected dividends - Derivative Instruments The Company accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2020 | |
NOTES PAYABLE | |
NOTE 4 - NOTES PAYABLE | At June 30, 2020, we were indebted under various Notes Payable with interest rates of 6% to 15% in the total amount of $2,429,441, including non-convertible Notes Payable of $581,991 due on demand, short-term convertible Notes mostly in default of $1,127,250, current portion of long term note of $88,600, and long-term convertible notes of $191,715 net of Debt Discount of $439,885. In April 2020, we obtained a Small Business Administration (“SBA”) long-term loan under the federal COVID-19 Payroll Protection Program (“PPP”) for $177,200, administered by Richfield/Bloomington Credit Union, having a term of 24 months and bearing interest of 1% per annum, with $358 accrued interest at June 30, 2020. The portion of the loan proceeds used for labor, utilities and office costs may be subject to loan forgiveness under the terms of the SBA/PPP program. The balance as of June 30, 2020 of $177,200 is included in the notes payable on the balance sheet. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 6 Months Ended |
Jun. 30, 2020 | |
NOTES RECEIVABLE | |
NOTE 5 - NOTES RECEIVABLE | Our notes receivable at June 30,2020 and December 31, 2019 consisted of the following: June 30, 2020 Dec. 31, 2019 Notes receivable $ 804,300 $ 804,300 Accrued interest 77,071 52,942 Total $ 881,371 $ 857,242 Less allowance for doubtful accounts (881,371 ) (857,242 ) Notes receivable, net $ - $ - While the failed Continuity Logic acquisition was pending, the Company made various bridge loans to Continuity for working capital purposes, of which a total balance of $881,371 is still outstanding as of June 30, 2020 and in default, however, the allowance for doubtful accounts is $881,371 resulting in no balance in net note receivable. These loans matured on August 31, 2019, bear interest at 6% per annum, and a portion of the Notes for these loans are secured by a first-priority perfected security interest on the accounts receivable of Continuity Logic, pursuant to a Security Agreement dated November 27, 2018. On February 4, 2019, the acquisition with Continuity Logic LLC was terminated. The termination of the acquisition does not change or affect the continuing obligation of Continuity Logic to satisfy the future payment of these loans to the Company. Further, during August 2019, the Company commenced a complaint against Continuity Logic LLC regarding the unpaid balance of the Notes Receivable. Accordingly, the Company created an allowance for doubtful accounts of $881,371 against the loans. Continuity Logic, LLC is not a related party to the Company. Further court action is ongoing, while the Company pursues aggressive collection activities, including our law firm contacting Continuity Logic LLC customers requesting all payments to be sent directly to the law firm, on our behalf. |
COMMITMENTS CONTINGENCIES
COMMITMENTS CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
COMMITMENTS CONTINGENCIES | |
NOTE 6 - COMMITMENTS & CONTINGENCIES | In 2019, we entered into a consulting contract with Capital Market Solutions LLC, a Delaware limited liability company (“CMS”), an affiliate, providing that for a term of one year, CMS will provide us with management, operational, and financial services in consideration for our payments to CMS of $50,000 monthly along with issuance to CMS of 30 million shares of our common stock which we valued at $1,797,000 based on the closing stock price on the date of the transaction, which was recorded as a pre-paid expense and amortized over one year. This consulting contract also provided for a five-year warrant providing CMS the right to purchase an additional 30 million shares of our common stock exercisable at $.20 per share, which warrant we valued at $1,297,570 utilizing a Black Scholes pricing model, utilizing volatility for the period, closing stock price, strike price, and the discount rate of a U.S. bond equivalent yield, with the warrant expense amortized as consulting expense on a straight-line basis over the term of the consulting agreement of one year. As of June 30, 2020, all terms of this CMS consulting agreement expired. COVID- 19 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
STOCKHOLDERS' EQUITY | |
NOTE 7 - STOCKHOLDERS' EQUITY | The Company is authorized to issue 500,000,000 shares of common stock and 20,000,000 shares of preferred stock, both having $.0001 par value per share. At June 30, 2020 there were 285,439,993 issued and outstanding shares of common stock and no issued and outstanding shares of preferred stock. During the six months ended June 30, 2020, we completed the following equity transactions: Stock issued for services Pursuant to independent director agreements, in February 2020 we issued 2,083,333 restricted common shares valued at $12,500 to John Bode, an independent director, for three months service as a director, and in June 2020 we issued him 2,604,167 restricted common shares valued at $12,500 for three months service as a director. In May 2020, we issued 5,000,000 restricted common shares valued at $14,500 to two accredited investors for advisory services to the Company. Stock issued for true-up and penalty shares In March 2020 we issued an aggregate of 9,625,000 restricted common shares valued at $48,703, based on terms of the March 2019 convertible promissory notes, to twelve accredited investors, which represented True-Up and Penalty shares owed to them pursuant to a 2018-2019 private placement of the Company in which they invested a total of $1,750,000. Stock issued for conversion of debt During the first two quarters of 2020 ended June 30, 2020, Noteholders who are accredited investors converted outstanding Notes to common stock as follows, with the conversion prices based on specific terms contained in the Notes: In January 2020, a Noteholder converted $37,000 of outstanding Notes into 4,933,333 shares; another Noteholder converted a $52,000 portion of an outstanding Note into 6,933,333 shares; and a third Noteholder converted $33,452 of outstanding Notes into 4,401,591 shares. In February 2020, two Noteholders converted a total of $26,472 of outstanding Notes into an aggregate of 9,662,622 shares. In March 2020, a Noteholder converted a $42,500 portion of an outstanding Note into 6,062,863 shares; another Noteholder converted a $23,000 portion of an outstanding Note into 6,965,743 shares; and a third Noteholder converted $5,048 of outstanding Notes into 4,589,091 shares. During January-March, 2020 the following debt conversions also took place: i) three Noteholders converted a total of $190,000 of outstanding Notes into an aggregate of 29,370,454 shares, which Note amounts were purchased by them in December 2019 from Capital Market Solutions LLC (CMS), an affiliate of the Company, in private transactions; ii) four Noteholders converted a total of $107,676 of outstanding Notes into an aggregate of 14,195,619 shares, which Notes were originally issued in February 2018; and iii) three Noteholders converted a total of $129,000 of outstanding Notes into an aggregate of 14,929,577 shares, which Notes were originally issued in March 2019. In April 2020, Noteholders who are accredited investors converted outstanding Notes to restricted common stock as follows: i) A Noteholder converted a $9,500 portion of an outstanding Note into 3,653,846 shares; ii) A Noteholder converted $10,042 of outstanding Notes into an aggregate of 7,172,857 shares; iii) A Noteholder converted $10,000 of outstanding Notes into an aggregate of 2,702,702 shares, and this Noteholder purchased a portion of a June 2019 Note from Ignition Capital LLC in April 2020 in a private transaction; and iv) A Noteholder converted $20,000 of outstanding Notes into 7,692,307 shares, which represented a portion of an outstanding Note purchased by this Noteholder from affiliate CMS in December 2019 in a private transaction. In June 2020, a Noteholder converted a $21,000 portion of an outstanding Note into 5,000,000 shares; and another Noteholder converted a $9,137 portion of an outstanding Note into 2,175,574 shares. |
RELATED PARTY
RELATED PARTY | 6 Months Ended |
Jun. 30, 2020 | |
RELATED PARTY | |
NOTE 8 - RELATED PARTY | During the six months ended June 30, we issued a total of 4,687,500 shares of our restricted common stock to our independent director, John Bode for director services. See Note Our Notes Payable as of June 30, 2020 include $154,490 owed to Michael Brown, a director and our former CEO, for unpaid past salary compensation and a $50,000 note, payable on demand with an interest rate of 6% per annum. In 2019, we entered into a consulting contract with affiliate CMS for a term of one year, whereby CMS provided us with management, operational, accounting and financial services in consideration for our payments to CMS of $50,000 monthly along with issuance to CMS of 30 million restricted shares of our common stock and a warrant to purchase an additional 30 million common shares. (See Note 6).This contract has expired. In May 2019, our largest and also a principal shareholder, Capital Market Solutions, LLC (CMS) entered into a Long Term Convertible Note with us in the principal amount of $250,000 for the conversion of existing short term notes, maturing in three years, bearing interest at 6% per annum payable each six months of its term, and being convertible into our common stock at the lesser of $.20 per share or the Volume Weighted Average Price (VWAP) per share during the 10-day period prior to conversion. The Convertible Note also includes three year warrants to purchase a number of shares equal to the principal amount of the note divided by the conversion price. The exercise price is equal to the conversion price. The Company recorded a derivative liability on the conversion feature in the note and associated warrant liability to the warrants issuable under the agreement. We valued the warrants at $463,174, under our Black Scholes model, to be recorded as a derivative liability for warrants, whereby the associated debt discount is being amortized on a straight-line basis over the term of the warrants, including a cashless exercise provision as defined under the terms of the Note, and CMS also received registration rights related to any future conversion(s) of this Note to equity. As of June 30, 2020, this $250,000 Long Term Convertible Note with CMS has been assigned to third parties and subsequently the entire balance has been converted into shares of common stock. CMS also has additional short-term nonconvertible notes for a total of $147,942, which are in default as of June 30, 2020. MGA Holdings owned and/or controlled by William Gerhauser has a nonconvertible note for $82,500, which is in default, as of June 30, 2020. Ignition Capital LLC, owned and/or controlled by William Gerhauser has two convertible notes for $148,778, whereby $98,778 matures on June 11, 2022 and $50,000 matures on September 23, 2022 respectively. Accrued interest for CMS, MGA Holdings and Ignition Capital is $48,280 as of June 30, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
SUBSEQUENT EVENTS | |
NOTE 9 - SUBSEQUENT EVENTS | As of the date of this interim report on Form 10-Q, the Company has not experienced any material events subsequent to June 30, 2020. |
ORGANIZATION AND SIGNIFICANT _2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The accompanying consolidated financial statements are unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and note disclosures which are included in annual financial statements have been omitted pursuant to these rules and regulations. We believe the disclosures made in these interim unaudited financial statements are adequate to make the information not misleading. Although these interim financial statements for the six-month periods ended June 30, 2020 and 2019 are unaudited, in the opinion of our management, such statements include all adjustments, consisting of normal and recurring accruals, necessary to present fairly our financial position, results of operations and cash flows for the periods presented. The results for the 2020 interim period are not necessarily indicative of the results to be expected for the year ended December 31, 2020 or for any future period. These unaudited interim financial statements should be read and considered in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2019, included in our annual report on Form 10-K/A filed with the SEC on June 4, 2020. |
Principles of Consolidation | These consolidated interim financial statements include the accounts of FISION Corporation, a Delaware corporation, and its wholly-owned Minnesota subsidiary Fision Holdings, Inc. All material intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | GAAP accounting principles require our management to make estimates and assumptions in the preparation of these interim financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates and assumptions. The most significant areas requiring management judgment and which are susceptible to possible later change include our revenue recognition, cost of revenue, allowance for doubtful accounts, valuations of property and equipment and intangible assets, stock-based compensation, fair value of financial instruments, derivative liabilities, research and development, impairment of long-lived assets, and the valuation allowance for income taxes. |
Cash and Cash Equivalents | We consider all short-term highly liquid investments with a remaining maturity at the date of purchase of six months or less to be cash equivalents. At June 30, 2020 and December 31, 2019, we had no cash equivalents. |
Concentration of Credit Risk and Customers | Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. During the year ended December 31, 2019 and the six months ended June 30, 2020, we may have had cash deposits in our bank that exceeded FDIC insurance limits. We maintain our bank accounts at high quality institutions and in demand accounts to mitigate this risk. Regarding our customers, we perform ongoing credit evaluations of them, and generally we do not require collateral from them to do business with us. For the six months ended June 30, 2020, three customers exceeded 10% of our revenues, including one for 12% of revenues, one for 21% of revenues, and one for 28% of revenues. We do not believe that we face any material customer concentration risks currently, although a significant reduction for any reason in the use of our software solutions by one or more of our major customers could harm our business materially. |
Revenue recognition | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, originally effective for public business entities with annual reporting periods beginning after December 15, 2017. On August 12, 2015, the FASB issued an Accounting Standards Update (“ASU”), Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASC 606 for one year. ASC 606 provides accounting guidance related to revenue from contracts with customers. For public business entities, ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This new revenue recognition standard (new guidance) has a five-step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The Company adopted the application of ASC 606 and has evaluated the impact of ASC 606, and the application of ASC 606 did not have a material impact on its consolidated financial statements and disclosures, as the Company had already implemented the five-step process in determining revenue recognition from contracts with customers. Revenue is recognized in the period the services are provided over the contract period, normally one (1) to three (3) years. We invoice one-time startup and implementation costs, such as consolidating and uploading digital assets of the customer, upon completion of those services as one performance obligation and recorded as revenue when completed. Monthly services, such as internet access to software as a service (SaaS), hosting and weekly backups are invoiced monthly as another performance obligation and recorded as revenue over time. Company Recognizes Contract Liability for Its Performance Obligation Upon receipt of a prepayment from a customer, the Company recognizes a contract liability in the amount of the prepayment for its performance obligation to transfer goods and services in the future. When the Company transfers those goods and services and, therefore, satisfies its performance obligation to the customer, the Company will then recognize the revenue. |
Lease Accounting | In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has adopted ASU 2016-02 on leases and has evaluated the impact of ASU 2016-02 on the Company’s financial statements and disclosures, and currently does not believe that its application will have a material impact on its consolidated financial statements. As of June 30, 2020 and December 31, 2019, the Company had no leases, and pays for a virtual office on a month-to-month basis. |
Loss Per Common Share | Earnings per Share For the six months ended June 30, 2020 2019 Net loss $ (256,881 ) $ (3,565,757 ) Adjustments for diluted earnings: Income (Loss) per share: Basic and Diluted $ (0.00 ) $ (0.04 ) Weighted average shares outstanding: Basic and Diluted 233,796,266 94,658,831 For the six months ended June 30, 2020 and June 30, 2019, there were 631,434,278 and 54,866,313 respectively, potentially dilutive securities included in the calculation of weighted-average shares outstanding. |
Property and Equipment | Property and equipment are capitalized and stated at cost, and any additions, renewals or betterments are also capitalized. Expenditures for maintenance and repairs are charged to earnings as incurred. If property or equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from our accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method with estimated lives as follows: Furniture and fixtures 5 years Computer and office equipment 5 years |
Stock-Based Compensation | We record stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, which requires us to measure the cost for any stock-based employee compensation at fair value and recognize the expense over the related service period. We recognize the fair value of stock options, warrants and any other equity-based compensation issued to employees and non-employees as of the grant date. We use the Black Scholes model to measure the fair value of options and warrants. |
Recently Issued Accounting Pronouncements | See above “Revenue Recognition” and “Lease Accounting” sections in this Note 1. Other recent accounting pronouncements issued by the FASB, the AICPA, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on our present or future consolidated financial statements. |
ORGANIZATION AND SIGNIFICANT _3
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of earnings per share basic and diluted | For the six months ended June 30, 2020 2019 Net loss $ (256,881 ) $ (3,565,757 ) Adjustments for diluted earnings: Income (Loss) per share: Basic and Diluted $ (0.00 ) $ (0.04 ) Weighted average shares outstanding: Basic and Diluted 233,796,266 94,658,831 |
Schedule of property and equipment, estimated lives | Furniture and fixtures 5 years Computer and office equipment 5 years |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Fair Value, Assets Measured on Recurring Basis | Level 1 Level 2 Level 3 Derivative liability $ - $ - $ 2,533,208 |
Fair value on recurring basis significant unobservable | Fair Value December 31, 2019 Additions Change in fair Value Extinguishment Fair Value June 30, 2020 Derivative liability $ 4,156,621 $ -0- $ (1,349,700 ) $ (273,713 ) $ 2,533,208 |
Schdule of fair value measurement of liabilities | Exercise price $ .00165-$.0049 Expected Volatility 410 % Expected Term Due on demand to 36 mos. Risk free interest rate 0.16%-0.18 % Expected dividends - |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
NOTES RECEIVABLE (Tables) | |
Schedule of notes receivable | June 30, 2020 Dec. 31, 2019 Notes receivable $ 804,300 $ 804,300 Accrued interest 77,071 52,942 Total $ 881,371 $ 857,242 Less allowance for doubtful accounts (881,371 ) (857,242 ) Notes receivable, net $ - $ - |
ORGANIZATION AND SIGNIFICANT _4
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | ||||||
Net Loss for the Period | $ (335,435) | $ 78,554 | $ (2,566,217) | $ (999,541) | $ (256,881) | $ (3,565,757) |
Income (Loss) per share: | ||||||
Basic and Diluted | $ 0 | $ (0.02) | $ 0 | $ (0.04) | ||
Weighted average shares outstanding: | ||||||
basic and diluted | 273,676,683 | 115,854,553 | 233,796,266 | 94,658,831 |
ORGANIZATION AND SIGNIFICANT _5
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 6 Months Ended |
Jun. 30, 2020 | |
Furniture and Fixtures [Member] | |
Property plant and equipment, useful life | 5 years |
Computer And Office Equipment [Member] | |
Property plant and equipment, useful life | 5 years |
ORGANIZATION AND SIGNIFICANT _6
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Anti-dilutive securities excluded from calculation | 631,434,278 | 54,866,313 |
Customer Three [Member] | ||
Concentration Risk, Percentage | 28.00% | |
Customer Two [Member] | ||
Concentration Risk, Percentage | 21.00% | |
Customer One [Member] | ||
Concentration Risk, Percentage | 12.00% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
GOING CONCERN | |||||||
Accumulated deficit | $ (32,068,673) | $ (32,068,673) | $ (31,811,792) | ||||
Working capital deficiency | (6,695,567) | (6,695,567) | |||||
Net Loss for the Period | $ (335,435) | $ 78,554 | $ (2,566,217) | $ (999,541) | (256,881) | $ (3,565,757) | |
Net cash used in operating activities | $ (187,075) | $ (969,938) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Level 1 [Member] | ||
Derivative Liability | $ 0 | $ 0 |
Level 2 [Member] | ||
Derivative Liability | 0 | 0 |
Level 3 [Member] | ||
Derivative Liability | $ 2,533,208 | $ 2,533,208 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Derivative liability, beginning | $ 4,156,621 |
Additions | 0 |
Change in fair value | (1,349,700) |
Extinguishment | (273,713) |
Derivative liability, ending | $ 2,533,208 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) | 6 Months Ended |
Jun. 30, 2020USD ($)$ / shares | |
Expected term | 36 months |
Expected dividends | $ | $ 0 |
Expected volatility | 410.00% |
Minimum [Member] | |
Risk free interest rate | 0.16% |
Exersice price | $ .00165 |
Maximum [Member] | |
Risk free interest rate | 0.18% |
Exersice price | $ .0049 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Note payables | $ 2,429,441 | |
Note payable and accrued interest - related party | 581,991 | $ 228,692 |
Notes payable | 1,127,250 | $ 1,028,845 |
Payroll Protection Program [Member] | ||
Note payables | $ 177,200 | |
Interest rate | 1.00% | |
Accrued interest | $ 358 | |
Maturity date | 24 months | |
Notes payable [Member] | ||
Debt discount | $ 439,885 | |
Short term non convertible notes payable | 88,600 | |
Note payable and accrued interest - related party | 581,991 | |
Long term convertible notes | 191,715 | |
Notes payable | $ 1,127,250 | |
Notes payable [Member] | Minimum [Member] | ||
Interest rate | 6.00% | |
Notes payable [Member] | Maximum [Member] | ||
Interest rate | 15.00% |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
NOTES RECEIVABLE (Tables) | ||
Note receivable | $ 804,300 | $ 804,300 |
Accrued interest | 77,071 | 52,942 |
Total | 881,371 | 857,242 |
Less allowance for doubtful accounts | (881,371) | (857,242) |
Note receivables, net | $ 0 | $ 0 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Allowances for doubtful accounts | $ (881,371) | $ (857,242) |
Total | 881,371 | $ 857,242 |
Continuity logic [Member] | Bridge Loan [Member] | ||
Allowances for doubtful accounts | $ (881,371) | |
Interest rate | 6.00% | |
Maturity date | Aug. 31, 2019 | |
Continuity logic [Member] | Bridge Loan [Member] | During August, 2019 [Member] | ||
Allowances for doubtful accounts | $ (881,371) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Issuance of shares for services, amount | $ 27,000 | $ 12,500 | $ 2,031,500 | $ 54,500 | $ 39,500 | $ 2,086,000 | |
Term of warrant | 36 months | ||||||
CMS [Member] | Consulting Contract [Member] | Restricted Stock [Member] | |||||||
Consideration for services, periodic payment | $ 50,000 | ||||||
Frequency of compensation | Monthly | ||||||
Issuance of shares for services, shares | 30,000,000 | ||||||
Issuance of shares for services, amount | $ 1,797,000 | ||||||
Term of warrant | 5 years | ||||||
Issuance of warrants to purchase additional stock | 30,000,000 | ||||||
Warrant exercise price | $ 0.20 | ||||||
Fair value of warrants | $ 1,297,570 | ||||||
Amortization period | 1 year |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
Jun. 30, 2020 | May 31, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Restricted shares issued | 5,000,000 | 9,625,000 | 264,167 | ||||||||||
Restricted shares issued, amount | $ 14,500 | $ 48,703 | $ 12,500 | ||||||||||
Private placement investement | $ 1,750,000 | ||||||||||||
Common stock, shares outstanding | 285,439,993 | 285,439,993 | 285,439,993 | 135,685,981 | |||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Issuance of shares for services, amount | $ 27,000 | $ 12,500 | $ 2,031,500 | $ 54,500 | $ 39,500 | $ 2,086,000 | |||||||
Director [Member] | |||||||||||||
Stock issued for services, shares | 2,604,167 | ||||||||||||
Issuance of shares for services, amount | $ 12,500 | ||||||||||||
Two Noteholders [Member] | |||||||||||||
Shares issued upon debt conversion | 7,172,857 | 6,965,743 | 9,662,622 | 6,933,333 | |||||||||
Debt conversion, converted instrument, amount | $ 10,042 | $ 23,000 | $ 26,472 | $ 52,000 | |||||||||
Noteholder One [Member] | |||||||||||||
Shares issued upon debt conversion | 3,653,846 | 6,062,863 | 4,933,333 | ||||||||||
Debt conversion, converted instrument, amount | $ 9,500 | $ 42,500 | $ 37,000 | ||||||||||
Four Noteholders [Member] | |||||||||||||
Shares issued upon debt conversion | 7,692,307 | 14,195,619 | |||||||||||
Debt conversion, converted instrument, amount | $ 20,000 | $ 107,676 | |||||||||||
John Bode [Member] | |||||||||||||
Stock issued for services, shares | 2,083,333 | ||||||||||||
Issuance of shares for services, amount | $ 12,500 | ||||||||||||
Six Noteholder [Member] | |||||||||||||
Shares issued upon debt conversion | 2,175,574 | ||||||||||||
Debt conversion, converted instrument, amount | $ 9,137 | ||||||||||||
Five Noteholder [Member] | |||||||||||||
Shares issued upon debt conversion | 5,000,000 | ||||||||||||
Debt conversion, converted instrument, amount | $ 21,000 | ||||||||||||
Three Noteholder [Member] | |||||||||||||
Shares issued upon debt conversion | 2,702,702 | 4,589,091 | 4,401,591 | 29,370,454 | 14,929,577 | ||||||||
Debt conversion, converted instrument, amount | $ 10,000 | $ 5,048 | $ 33,452 | $ 190,000 | $ 129,000 |
RELATED PARTY (Details Narrativ
RELATED PARTY (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended |
May 31, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Short term non convertible notes payable | $ 147,942 | ||
Accrued interest | 48,280 | ||
Notes payable | 1,127,250 | $ 1,028,845 | |
Derivative liability, notes and warrants | 2,533,208 | 4,156,621 | |
Capital MarketSolutions Llc [Member] | Long Term Convertible Note [Member] | |||
Derivative liability, notes and warrants | $ 463,174 | ||
Debt conversion, description | Convertible into our common stock at the lesser of $.20 per share or the Volume Weighted Average Price (VWAP) per share during the 10-day period prior to conversion | ||
Interest rate | 6.00% | ||
Proceeds from convertible debt | $ 250,000 | ||
Term of warrants | 3 years | ||
CMS [Member] | Consulting Contract [Member] | Restricted Stock [Member] | |||
Salary Compensation | $ 50,000 | ||
Long term convertible notes | 250,000 | ||
Frequency of compensation | Monthly | ||
Stock issued for services, shares | 30,000,000 | ||
Issuance of warrants to purchase additional stock | 30,000,000 | ||
Michael Brown [Member] | Short term note [Member] | |||
Related party loan | 154,490 | ||
Salary Compensation | $ 50,000 | ||
Interest rate | 6.00% | ||
William Gerhauser [Member] | |||
Short term non convertible notes payable | $ 82,500 | ||
Notes payable | $ 148,778 | ||
William Gerhauser [Member] | Second Convertible Note [Member] | |||
Maturity date | Sep. 23, 2022 | ||
Convertible notes | $ 50,000 | ||
William Gerhauser [Member] | First Convertible Note [Member] | |||
Maturity date | Jun. 11, 2022 | ||
Convertible notes | $ 98,778 |