Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38834 | |
Entity Registrant Name | Verb Technology Company, Inc. | |
Entity Central Index Key | 0001566610 | |
Entity Tax Identification Number | 90-1118043 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 782 S. Auto Mall Drive | |
Entity Address, City or Town | American Fork | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84003 | |
City Area Code | (855) | |
Local Phone Number | 250-2300 | |
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 | 70,470,415 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | VERB | |
Security Exchange Name | NASDAQ | |
Common Stock Purchase Warrants [Member] | ||
Title of 12(b) Security | Common Stock Purchase Warrants | |
Trading Symbol | VERBW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 3,658,000 | $ 1,815,000 |
Accounts receivable, net of allowance of $512,000 and $361,000, respectively | 1,488,000 | 919,000 |
Inventory, net of allowance of $51,000 and $51,000, respectively | 5,000 | 34,000 |
Prepaid expenses and other current assets | 905,000 | 900,000 |
Total current assets | 6,056,000 | 3,668,000 |
Right-of-use assets | 2,305,000 | 2,730,000 |
Property and equipment, net of accumulated depreciation of $462,000 and $339,000, respectively | 3,078,000 | 862,000 |
Intangible assets, net of amortization of $3,390,000 and $2,310,000, respectively | 4,370,000 | 5,153,000 |
Goodwill | 19,763,000 | 20,060,000 |
Other assets | 317,000 | 69,000 |
Total assets | 35,889,000 | 32,542,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 7,282,000 | 5,097,000 |
Accrued officers’ salary | 1,113,000 | 822,000 |
Accrued interest (including $0 and $102,000 payable to related parties) | 8,000 | 114,000 |
Advance on future receipts, net of discount of $515,000 and $67,000, respectively | 1,853,000 | 110,000 |
Notes payable - related party | 40,000 | 1,077,000 |
Deferred incentive compensation, current | 521,000 | 521,000 |
Operating lease liability, current | 582,000 | 596,000 |
Deferred revenue and customer deposits | 902,000 | 272,000 |
Derivative liability | 5,839,000 | 8,266,000 |
Total current liabilities | 18,140,000 | 16,875,000 |
Long Term liabilities: | ||
Notes payable | 150,000 | 1,458,000 |
Note payable - related party, non-current | 725,000 | |
Deferred incentive compensation to officers | 521,000 | |
Operating lease liability, non-current | 2,464,000 | 2,943,000 |
Total liabilities | 21,479,000 | 21,797,000 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized: Series A Convertible Preferred Stock, 6,000 shares authorized; 0 and 2,006 issued and outstanding as of September 30, 2021 and December 31, 2020 | ||
Class A units, 100 issued and authorized as of September 30, 2021 and December 31, 2020 | ||
Class B units, 2,642,159 shares authorized, 0 and 2,642,159 issued and outstanding as of September 30, 2021 and December 31, 2020 | 3,065,000 | |
Common stock, $0.0001 par value, 200,000,000 shares authorized, 70,169,666 and 47,795,009 shares issued and outstanding as of September 30, 2021 and December 31, 2020 | 7,000 | 5,000 |
Additional paid-in capital | 124,906,000 | 89,216,000 |
Accumulated deficit | (110,503,000) | (81,541,000) |
Total stockholders’ equity | 14,410,000 | 10,745,000 |
Total liabilities and stockholders’ equity | $ 35,889,000 | $ 32,542,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss | $ 512,000 | $ 361,000 |
Inventory allowance | 51,000 | 51,000 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 462,000 | 339,000 |
Amortization of Intangible Assets | 3,390,000 | 2,310,000 |
Accrued interest, related parties | 0 | 102,000 |
Net of discount on future receipts | $ 515,000 | $ 67,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Class A units, shares authorized | 100 | 100 |
Class A units, shares issued | 100 | 100 |
Class B units, shares authorized | 2,642,159 | 2,642,159 |
Class B units, shares issued | 0 | 2,642,159 |
Class B units, shares outstanding | 0 | 2,642,159 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 70,169,666 | 47,795,009 |
Common stock, shares outstanding | 70,169,666 | 47,795,009 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 0 | 2,006 |
Preferred stock, shares outstanding | 0 | 2,006 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Total revenue | $ 2,900,000 | $ 2,860,000 | $ 7,818,000 | $ 7,866,000 |
Cost of revenue | ||||
Total cost of revenue | 1,086,000 | 1,305,000 | 3,420,000 | 3,503,000 |
Gross margin | 1,814,000 | 1,555,000 | 4,398,000 | 4,363,000 |
Operating Expenses: | ||||
Research and development | 3,513,000 | 2,407,000 | 9,610,000 | 5,308,000 |
Depreciation and amortization | 400,000 | 388,000 | 1,214,000 | 1,108,000 |
General and administrative | 6,130,000 | 6,655,000 | 20,018,000 | 14,187,000 |
Total operating expenses | 10,043,000 | 9,450,000 | 30,842,000 | 20,603,000 |
Loss from operations | (8,229,000) | (7,895,000) | (26,444,000) | (16,240,000) |
Other income (expense), net | ||||
Other income (expense), net | 8,000 | (2,000) | 85,000 | 1,000 |
Financing costs | (248,000) | (248,000) | ||
Interest expense - amortization of debt discount | (497,000) | (110,000) | (1,537,000) | (384,000) |
Change in fair value of derivative liability | (141,000) | 975,000 | (2,086,000) | 4,295,000 |
Gain on extinguishment of notes payable | 82,000 | 1,399,000 | ||
Debt extinguishment, net | (287,000) | |||
Interest expense | (28,000) | (40,000) | (92,000) | (114,000) |
Total other income (expense), net | (576,000) | 575,000 | (2,518,000) | 3,550,000 |
Net loss | (8,805,000) | (7,320,000) | (28,962,000) | (12,690,000) |
Deemed dividends to Series A stockholders | (348,000) | (348,000) | (3,951,000) | |
Net loss to common stockholders | $ (9,153,000) | $ (7,320,000) | $ (29,310,000) | $ (16,641,000) |
Net loss per share to common stockholders - basic and diluted | $ (0.14) | $ (0.18) | $ (0.48) | $ (0.51) |
Weighted average number of common shares outstanding - basic and diluted | 66,760,177 | 41,216,642 | 60,705,062 | 32,375,054 |
Saa S Recurring Subscription Revenue [Member] | ||||
Revenue | ||||
Total revenue | $ 1,846,000 | $ 1,478,000 | $ 4,908,000 | $ 3,809,000 |
Cost of revenue | ||||
Total cost of revenue | 542,000 | 349,000 | 1,651,000 | 843,000 |
Other Digital [Member] | ||||
Revenue | ||||
Total revenue | 510,000 | 360,000 | 1,059,000 | 1,166,000 |
Total Digital Revenue [Member] | ||||
Revenue | ||||
Total revenue | 2,356,000 | 1,838,000 | 5,967,000 | 4,975,000 |
Design Printing And Fulfillment [Member] | ||||
Revenue | ||||
Total revenue | 461,000 | 836,000 | 1,553,000 | 2,277,000 |
Cost of revenue | ||||
Total cost of revenue | 471,000 | 768,000 | 1,520,000 | 2,106,000 |
Shipping and Handling [Member] | ||||
Revenue | ||||
Total revenue | 83,000 | 186,000 | 298,000 | 614,000 |
Cost of revenue | ||||
Total cost of revenue | 73,000 | 188,000 | 249,000 | 554,000 |
Total Non-digital Revenue [Member] | ||||
Revenue | ||||
Total revenue | $ 544,000 | $ 1,022,000 | $ 1,851,000 | $ 2,891,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member]Common Class A [Member] | Common Stock [Member]Common Class B [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 2,000 | $ 68,028,000 | $ (56,585,000) | $ 11,445,000 | |||
Beginning balance, shares at Dec. 31, 2019 | 4,396 | 24,496,197 | |||||
Sale of common stock from private placement | $ 1,000 | 4,443,000 | 4,444,000 | ||||
Sale of common stock from private placement, shares | 4,237,833 | ||||||
Sale of common stock from public offering | $ 2,000 | 12,335,000 | 12,337,000 | ||||
Beginning balance, shares | 12,545,453 | ||||||
Issuance of common stock from warrant exercise | 2,165,000 | 2,165,000 | |||||
Beginning balance, shares | 1,965,594 | ||||||
Conversion of Series A Preferred to common stock | |||||||
Beginning balance, shares | (1,990) | 1,405,274 | |||||
Fair value of common shares issued for services | 1,126,000 | 1,126,000 | |||||
Beginning balance, shares | 962,583 | ||||||
Fair value of vested restricted stock awards | 2,211,000 | 2,211,000 | |||||
Beginning balance, shares | 1,050,856 | ||||||
Fair value of vested stock options and warrants | 1,463,000 | 1,463,000 | |||||
Extinguishment of derivative liability | 159,000 | 159,000 | |||||
Fair value of warrants issued to Series A Preferred stockholders | (3,951,000) | (3,951,000) | |||||
Class A units issued upon incorporation of Verb Acquisition Co. | |||||||
Beginning balance, shares | 100 | ||||||
Fair value of Class B Units issued for the acquisition of Ascend Certification | $ 3,065,000 | 3,065,000 | |||||
Beginning balance, shares | 2,642,159 | ||||||
Net loss | (12,690,000) | (12,690,000) | |||||
Ending balance, value at Sep. 30, 2020 | $ 3,065,000 | $ 5,000 | 87,979,000 | (69,275,000) | 21,774,000 | ||
Beginning balance, shares at Sep. 30, 2020 | 2,406 | 100 | 2,642,159 | 46,663,790 | |||
Beginning balance, value at Jun. 30, 2020 | $ 3,000 | 71,399,000 | (61,955,000) | 9,447,000 | |||
Beginning balance, shares at Jun. 30, 2020 | 3,246 | 30,267,063 | |||||
Sale of common stock from public offering | $ 2,000 | 12,335,000 | 12,337,000 | ||||
Beginning balance, shares | 12,545,453 | ||||||
Issuance of common stock from warrant exercise | 2,165,000 | 2,165,000 | |||||
Beginning balance, shares | 1,965,594 | ||||||
Conversion of Series A Preferred to common stock | |||||||
Beginning balance, shares | 663,341 | ||||||
Fair value of common shares issued for services | 230,000 | 230,000 | |||||
Beginning balance, shares | 193,533 | ||||||
Fair value of vested restricted stock awards | 1,002,000 | 1,002,000 | |||||
Beginning balance, shares | 1,028,806 | ||||||
Fair value of vested stock options and warrants | 689,000 | 689,000 | |||||
Extinguishment of derivative liability | 159,000 | 159,000 | |||||
Class A units issued upon incorporation of Verb Acquisition Co. | |||||||
Fair value of Class B Units issued for the acquisition of Ascend Certification | 3,065,000 | 3,065,000 | |||||
Net loss | (7,320,000) | (7,320,000) | |||||
Ending balance, value at Sep. 30, 2020 | $ 3,065,000 | $ 5,000 | 87,979,000 | (69,275,000) | 21,774,000 | ||
Beginning balance, shares at Sep. 30, 2020 | 2,406 | 100 | 2,642,159 | 46,663,790 | |||
Beginning balance, value at Dec. 31, 2020 | $ 3,065,000 | $ 5,000 | 89,216,000 | (81,541,000) | 10,745,000 | ||
Beginning balance, shares at Dec. 31, 2020 | 2,006 | 100 | 2,642,159 | 47,795,009 | |||
Sale of common stock from public offering | $ 2,000 | 18,849,000 | 18,851,000 | ||||
Beginning balance, shares | 11,915,000 | ||||||
Issuance of common stock from warrant exercise | 2,784,000 | 2,784,000 | |||||
Beginning balance, shares | 2,254,411 | ||||||
Issuance of common stock from option exercise | 569,000 | $ 569,000 | |||||
Issuance of common stock from option exercise, shares | 509,465 | 575,730 | |||||
Fair value of common shares issued to settle note payable – related party | 200,000 | $ 200,000 | |||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 194,175 | ||||||
Fair value of common shares issued to settle lawsuit | 678,000 | 678,000 | |||||
Fair value of common shares issued to settle lawsuit, shares | 600,000 | ||||||
Conversion of Series A Preferred to common stock | 348,000 | 348,000 | |||||
Beginning balance, shares | (2,006) | 1,978,728 | |||||
Fair value of warrants issued to Series A preferred stockholders – deemed dividend | (348,000) | (348,000) | |||||
Fair value of common shares issued for services | 1,926,000 | 1,926,000 | |||||
Beginning balance, shares | 1,198,610 | ||||||
Fair value of common shares issued to settle accounts payable | 19,000 | 19,000 | |||||
[custom:FairValueOfCommonSharesIssuedToSettleAccountsPayableByShares] | 10,500 | ||||||
Fair value of vested restricted stock awards | 1,285,000 | 1,285,000 | |||||
Beginning balance, shares | 889,212 | ||||||
Fair value of vested stock options and warrants | 1,234,000 | 1,234,000 | |||||
Extinguishment of derivative liability | 4,513,000 | 4,513,000 | |||||
Fair value of common shares issued to settle accrued expenses | 281,000 | 281,000 | |||||
Fair value of common shares issued to settle accrued expenses, shares | 182,397 | ||||||
Fair value of warrants issued to officer to modify note payable | 287,000 | 287,000 | |||||
Conversion of Class B Units to common shares | $ (3,065,000) | 3,065,000 | |||||
Conversion of Class B Units to common shares, shares | (2,642,159) | 2,642,159 | |||||
Net loss | (28,962,000) | (28,962,000) | |||||
Ending balance, value at Sep. 30, 2021 | $ 7,000 | 124,906,000 | (110,503,000) | 14,410,000 | |||
Beginning balance, shares at Sep. 30, 2021 | 100 | 70,169,666 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 6,000 | 115,179,000 | (101,698,000) | 13,487,000 | |||
Beginning balance, shares at Jun. 30, 2021 | 1,706 | 100 | 63,795,968 | ||||
Sale of common stock from public offering | $ 1,000 | 4,721,000 | 4,722,000 | ||||
Beginning balance, shares | 2,540,000 | ||||||
Issuance of common stock from warrant exercise | 1,681,000 | 1,681,000 | |||||
Beginning balance, shares | 1,217,811 | ||||||
Issuance of common stock from option exercise | 192,000 | 192,000 | |||||
Issuance of common stock from option exercise, shares | 176,735 | ||||||
Conversion of Series A Preferred to common stock | 348,000 | 348,000 | |||||
Beginning balance, shares | (1,706) | 1,706,000 | |||||
Fair value of warrants issued to Series A preferred stockholders – deemed dividend | (348,000) | (348,000) | |||||
Fair value of common shares issued for services | 157,000 | 157,000 | |||||
Beginning balance, shares | 81,143 | ||||||
Fair value of common shares issued to settle accounts payable | 19,000 | 19,000 | |||||
[custom:FairValueOfCommonSharesIssuedToSettleAccountsPayableByShares] | 10,500 | ||||||
Fair value of vested restricted stock awards | 380,000 | 380,000 | |||||
Beginning balance, shares | 641,509 | ||||||
Fair value of vested stock options and warrants | 364,000 | 364,000 | |||||
Extinguishment of derivative liability | 2,213,000 | 2,213,000 | |||||
Net loss | (8,805,000) | (8,805,000) | |||||
Ending balance, value at Sep. 30, 2021 | $ 7,000 | $ 124,906,000 | $ (110,503,000) | $ 14,410,000 | |||
Beginning balance, shares at Sep. 30, 2021 | 100 | 70,169,666 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Activities: | ||
Net loss | $ (28,962,000) | $ (12,690,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Fair value of common shares issued for services and vested stock options and warrants | 4,652,000 | 4,796,000 |
Financing cost | 248,000 | |
Amortization of debt discount | 1,537,000 | 384,000 |
Change in fair value of derivative liability | 2,086,000 | (4,295,000) |
Debt extinguishment costs, net | (1,112,000) | |
Depreciation and amortization | 1,214,000 | 1,108,000 |
Amortization of right-of-use assets | 424,000 | 407,000 |
Allowance for inventory | 28,000 | |
Disposal of property and equipment | (6,000) | |
Allowance for doubtful accounts | 151,000 | (14,000) |
Effect of changes in assets and liabilities: | ||
Accounts receivable | (721,000) | 152,000 |
Prepaid expenses and other assets | (330,000) | (175,000) |
Inventory | 29,000 | 63,000 |
Deferred incentive compensation | (521,000) | |
Accounts payable, accrued expenses, and accrued interest | 3,198,000 | 646,000 |
Operating lease liability | (493,000) | (286,000) |
Deferred revenue and customer deposits | 631,000 | (162,000) |
Net cash used in operating activities | (18,223,000) | (9,790,000) |
Investing Activities: | ||
Proceeds from the sale of property and equipment | 11,000 | |
Cash acquired upon acquisition of subsidiary | 229,000 | |
Capitalized software development costs | (2,329,000) | |
Purchase of property and equipment | (26,000) | (317,000) |
Net cash used in investing activities | (2,344,000) | (88,000) |
Financing Activities: | ||
Proceeds from sale of common stock | 18,851,000 | 16,781,000 |
Proceeds from notes payable | 1,367,000 | |
Advances on future receipts | 7,368,000 | 728,000 |
Proceeds from warrant exercise | 2,784,000 | 2,165,000 |
Proceeds from option exercise | 569,000 | |
Payment of advances of future receipts | (7,162,000) | (1,424,000) |
Net cash provided by financing activities | 22,410,000 | 19,617,000 |
Net change in cash | 1,843,000 | 9,739,000 |
Cash - beginning of period | 1,815,000 | 983,000 |
Cash - end of period | 3,658,000 | 10,722,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 112,000 | 100,000 |
Cash paid for income taxes | 1,000 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of note payable upon acquisition of subsidiary | 1,885,000 | |
Fair value of common stock issued for subscription agreement | 340,000 | |
Fair value of restricted awards returned | 485,000 | |
Fair value of derivative liability extinguished | 4,513,000 | |
Fair value of class B units issued upon acquisition of subsidiary | 3,065,000 | |
Fair value of common shares issued to settle accounts payable | 19,000 | |
Fair value of common shares issued to settle accrued expenses | 281,000 | |
Reclassification of Class B upon conversion to common stock | 3,065,000 | |
Fair value of common stock issued to settle notes payable – related party | 200,000 | |
Fair value of common stock received in exchange for employee’s payroll taxes | 130,000 | |
Fair value of common stock issued for future services | 164,000 | |
Discount recognized from advances on future receipts | 2,484,000 | |
Fair value of derivative liability from issuance of warrants to Series A stockholders considered as a deemed dividend | 3,951,000 | |
Fair value of debt forgiveness | 1,400,000 | |
Assets acquired from the acquisition of subsidiary | 449,000 | |
Liabilities assumed from the acquisition of subsidiary | 743,000 | |
Fair value of warrants issued to Series A preferred stockholders - deemed dividend | 348,000 | |
Fair value of common stock issued to settle lawsuit | $ 678,000 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Organization References in this document to the “Company,” “Verb,” “we,” “us,” or “our” are intended to mean Verb Technology Company, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. Cutaia Media Group, LLC (“CMG”) was organized as a limited liability company under the laws of the State of Nevada on December 12, 2012. On May 19, 2014, CMG merged into bBooth, Inc. and bBooth, Inc., thereafter, changed its name to bBooth (USA), Inc., effective as of October 16, 2014. On October 16, 2014, bBoothUSA was acquired by Global System Designs, Inc. (“GSD”), pursuant to a Share Exchange Agreement entered into with GSD (the “Share Exchange Agreement”). GSD was incorporated in the State of Nevada on November 27, 2012. The acquisition was accounted for as a reverse merger transaction. In connection with the closing of the transactions contemplated by the Share Exchange Agreement, GSD’s management was replaced by bBoothUSA’s management, and GSD changed its name to bBooth, Inc. On April 21, 2017, we changed our corporate name from bBooth, Inc. to nFüsz, Inc. The name change was effected through a parent/subsidiary short-form merger of nFüsz, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. On February 1, 2019, we changed our corporate name from nFüsz, Inc. to Verb Technology Company, Inc. The name change was effected through a parent/subsidiary short-form merger of Verb Technology Company, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. On February 4, 2019, we implemented a 1-for-15 reverse stock split 0.0001 On April 12, 2019, we acquired Sound Concepts Inc. (“Sound Concepts”). The acquisition was intended to augment and diversify Verb’s internet and Software-as-a-Service (“SaaS”) business (see Note 3). On September 4, 2020, Verb Acquisition Co., LLC (“Verb Acquisition”), a subsidiary of the Company, acquired Ascend Certification, LLC, dba SoloFire (“SoloFire”) The acquisition was intended to augment and diversify Verb’s internet and SaaS business (see Note 3). Nature of Business We are a SaaS applications platform developer. Our platform is comprised of a suite of interactive video-based sales enablement business software products marketed on a subscription basis. Our applications, available in both mobile and desktop versions, are offered as a fully integrated suite, as well as on a standalone basis, and include verbCRM, our Customer Relationship Management (“CRM”) application, verbLEARN, our Learning Management System application, verbLIVE, our Live Stream eCommerce application, verbPULSE, our business/augmented intelligence notification and sales coach application, and verbTEAMS, our self-onboarding video-based CRM and content management application for small business and solopreneurs, with seamless synchronization with Salesforce, that also comes bundled with verbLIVE, and more recently, we introduced verbMAIL, our interactive video-based sales communication tool integrated into Microsoft Outlook. We provide certain non-digital services to some of our enterprise clients such as printing and fulfillment services. We design and print welcome kits and starter kits for their marketing needs and provide fulfillment services, which consist of managing the preparation, handling and shipping of our client’s custom-branded merchandise they use for marketing purposes at conferences and other events, and product sample packs that verbCRM users order through the app for automated delivery and tracking to their customers and prospects. We use the term “client” and “customer” interchangeably. COVID-19 As of the date of this filing, there continue to be widespread concerns regarding the ongoing impacts and disruptions caused by the COVID-19 pandemic in the regions in which the Company operates. Our sales team reported a higher level of interest in our digital products and services during the three and nine months ended September 30, 2021 compared to the same period in 2020. However, our non-digital services have been negatively impacted during the three and nine months ended September 30, 2021 compared to the same period in 2020. Although the impacts of the COVID-19 pandemic have not been material to date, a prolonged downturn in economic conditions could have a material adverse effect on our customers and demand for our services. The Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. As of September 30, 2021, we continue to actively communicate with and listen to our customers to ensure we are responding to their needs in the current environment with innovative solutions that will not only be beneficial now but also over the long-term. We monitor developments related to COVID-19 and remain flexible in our response to the challenges presented by the pandemic. To mitigate the adverse impact COVID-19 may have on our business and operations, we implemented a number of measures in the year ended December 31, 2020 to protect the health and safety of our employees, as well as to strengthen our financial position. These efforts include eliminating, reducing, or deferring non-essential expenditures, as well as complying with local and state government recommendations to protect our workforce. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 31, 2021 (the “2020 Annual Report”). The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (including normal recurring adjustments) necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc., Verb Direct, LLC, and Verb Acquisition Co., LLC. Intercompany accounts have been eliminated in the consolidation. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the nine months ended September 30, 2021, the Company incurred a net loss of $ 28,962,000 and used cash in operations of $ 18,223,000 . These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. In addition, our independent registered public accounting firm, in their report on our audited financial statements for the year ended December 31, 2020, raised substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. 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 at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services is recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Condensed Consolidated Statements. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales is generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. Returns from customers in the past and during the three and nine months ended September 30, 2021 and 2020 are immaterial. A description of our principal revenue generating activities is as follows: 1. Digital Revenue which is divided into two main categories: a. SaaS recurring digital revenue based on contract-based subscriptions to our verb app products and platform services which include verbCRM, verbLEARN, verbLIVE, verbTEAMS, and verbPULSE. The revenue is recognized over the subscription period. b. Non-SaaS, non-recurring digital revenue, which is revenue generated by the use of our app products and in-app purchases, such as sampling and other services obtained through the app. The revenue for samples is recognized upon completion and shipment, while the design fees are recognized when the service has been rendered and the app is delivered to the customer. 2. Non-digital revenue, which is revenue we generate from non-app, non-digital sources through ancillary services we provide as an accommodation to our clients and customers. These services, which we now outsource to a strategic partner as part of a cost reduction plan we instituted in 2020, include: a. Design, printing services, and fulfillment. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. b. Shipping services. The revenue is recognized when the corresponding products or fulfillment are shipped. Revenues during the three and nine months ended September 30, 2021 and 2020 were all generated from the United States of America. Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of revenue upon sale of products to our customers. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company considered certain internal sales commissions as incremental costs of obtaining the contract with a customer. Internal sales commissions for subscription offerings where the Company expect the benefit of those costs to continue throughout the subscription are capitalized and amortized ratably over the period of benefit, which generally ranges over a period of one year. Total capitalized costs to obtain a contract are not significant and are included in prepaid expenses and other current assets and other assets on our consolidated balance sheets. Deferred Revenue and Customer Deposits - Contract Liabilities Contract liabilities represents consideration received from customers under a revenue contract, but the Company has not yet delivered or completed its performance obligation to the customer. Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $ 250,000 The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. As of September 30, 2021, we had two vendors that account for 20 % and 16 % of our purchases individually and 36 % in aggregate. In addition, we had one vendor that accounted for 40 % of accounts payable individually and in aggregate as of September 30, 2021. As of September 30, 2021, we had one customer that accounted for 10 During the three and nine months ended September 30, 2021 and 2020, we had no customer that accounted for 10% of our revenues individually and in the aggregate. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of September 30, 2021, and 2020, the Company had total outstanding options of 5,528,405 and 5,099,038 , respectively, stock warrants of 11,008,302 and 13,351,245 , respectively, outstanding restricted stock awards of 2,109,999 and 2,908,530 , respectively, and 0 and 2,642,159 common shares issuable from our Class B Units, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive. Capitalized software development costs The Company capitalizes internal and external costs directly associated with developing internal-use software, and hosting arrangements that include an internal-use software license, during the application development stage of its projects. The Company’s internal-use software is reported at cost less accumulated depreciation. Depreciation begins once the project has been completed and ready for its intended use. The Company will depreciate the asset on a straight-line basis over a period of three years 2,329,000 0 Depreciation expense related to capitalized software development costs will be recorded in Cost of revenue on the consolidated statements of operations. There has been no Goodwill In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing is performed annually at December 31 (its fiscal year end). Recoverability of goodwill is determined by comparing the fair value of Company’s reporting unit to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. As of September 30, 2021 and December 31, 2020, management determined there were no indications of impairment. The Company will perform their next impairment analysis in December 2021. Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. As of September 30, 2021, and December 31, 2020, there was no impairment of intangible assets. The Company will perform their next impairment analysis in December 2021. Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. Segments The Company has acquired two operating subsidiaries, Verb Direct and Ascend Certification (dba “SoloFire”) (see Note 3) with various revenue channels. Operations of these two subsidiaries are integrated since they have a similar customer base and the Company has a single sales team, marketing department, customer service department, operations department, finance and accounting department to support its operations. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that the Company has only one reporting unit or segment. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As a small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. In August 2020, FASB issued ASU No. 2020-06 (“ASU 2020-06”) “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Other recent accounting pronouncements issued by FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | 3. ACQUISITIONS The Company made the following acquisitions in order to augment and diversify its internet and SaaS business: a. ACQUISITION OF VERB DIRECT On April 12, 2019, Verb completed the acquisition of Verb Direct (formerly Sound Concepts, Inc.). As a result of this acquisition, the Company recorded goodwill of $ 16,337,000 6,340,000 4,700,000 five years 1,200,000 amortized on an accelerated basis five years 440,000 tested for impairment on an annual basis b. ACQUISITION OF ASCEND CERTIFICATION On September 4, 2020, Verb Acquisition Co., LLC (“Verb Acquisition”), a subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Ascend Certification, LLC, dba SoloFire (“SoloFire”), the sellers party thereto (collectively, the “Sellers”), and Steve Deverall, solely in his capacity as the seller representative, under which Sellers sold their entire interest in SoloFire, representing all of the outstanding limited liability company membership interests of SoloFire, to Verb Acquisition for a base purchase price of $ 5,700,000 750,000 4,950,000 1,885,000 2,642,159 2,642,159 3,065,000 4,950,000 0.14 The acquisition was intended to augment and diversify Verb’s SaaS business. Key factors that contributed to the recorded goodwill and intangible assets in the aggregate of $ 4,845,000 Verb is required to allocate the purchase price to the acquired tangible assets, identifiable intangible assets, and assumed liabilities based on their fair values. Pursuant to current accounting guidelines, the Company had one year to finalize the purchase price allocation. As a result, in September 2021, management finalized the purchase price allocation. The following table summarizes the fair value of the assets assumed and liabilities acquired and the purchase price allocation on the date of acquisition: SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED Assets Acquired: Cash $ 229,000 Accounts receivable 207,000 $ 436,000 Liabilities Assumed: Current liabilities (241,000 ) Long-term liabilities (90,000 ) (331,000 ) Intangible assets 1,419,000 Goodwill 3,426,000 Purchase Price $ 4,950,000 The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and is not expected to be deductible for tax purposes. Goodwill is not amortized but will be tested for impairment on an annual basis. The intangible assets, which consist of developed technology of $ 1,400,000 five years 17,000 three years 2,000 During the nine months ended September 30, 2021 and 2020, the Company recorded amortization expense of $ 180,000 and $ 33,000 , respectively, related to the intangibles discussed above. The following table summarizes the amortization expense for both Verb Direct and Ascend to be recorded in future periods for intangible assets that are subject to amortization and excludes intangible assets with infinite life (i.e., domain names) of $ 442,000 : SCHEDULE OF AMORTIZATION EXPENSE FOR FUTURE PERIODS FOR INTANGIBLE ASSETS Year ending Amortization 2021 remaining (remaining 3 months) $ 416,000 2022 1,466,000 2023 1,464,000 2024 395,000 2025 and thereafter 186,000 Total amortization $ 3,927,000 The following unaudited pro forma statement of operations present the Company’s pro forma results of operations for the three and nine months ended September 30, 2020, to give effect to the acquisition of SoloFire as if it had occurred on January 1, 2020. SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 (Proforma, (Proforma, SaaS recurring subscription revenue $ 1,661,000 $ 4,511,000 Other digital 360,000 1,166,000 Welcome kits and fulfilment 836,000 2,277,000 Shipping 186,000 614,000 Total revenue 3,043,000 8,568,000 Cost of revenue 1,344,000 3,661,000 Gross margin 1,699,000 4,907,000 Operating expenses (9,771,000 ) (21,615,000 ) Other income, net 574,000 3,550,000 Net loss (7,498,000 ) (13,158,000 ) Deemed dividends to Series A stockholders - (3,951,000 ) Net loss attributed to common stockholders $ (7,498,000 ) $ (17,109,000 ) Pursuant to the provisions of ASC 805, the following results of operations of Verb Acquisition subsequent to the acquisition date included in the consolidated statement of operations for the reporting period: SCHEDULE OF RESULTS OF OPERATION OF SUBSIDIARY Three Months Ended September 30, 2020 Nine Months September 30, 2020 Revenue $ 276,000 $ 795,000 Cost of revenue (65,000 ) (184,000 ) Operating expenses (897,000 ) (1,474,000 ) Other income/ (expense) - - Net loss $ (686,000 ) $ (863,000 ) |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of September 30, 2021 and December 31, 2020. SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2021 December 31, 2020 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 49,000 39,000 Leasehold improvement 1,058,000 1,058,000 Software development 2,329,000 - Total property and equipment 3,540,000 1,201,000 Accumulated depreciation (462,000 ) (339,000 ) Total property and equipment, net $ 3,078,000 $ 862,000 During the nine months ended September 30, 2021, the Company began developing MARKETPLACE the next generation of interactive livestream ecommerce and capitalized $ 2,329,000 3,900,000 26,000 16,000 and accumulated depreciation of $ 11,000 for cash proceeds of $ 11,000 . As a result, the Company recognized a gain of $ 5,000 that was reported as part of other income. Depreciation expense amounted to $ 134,000 and $ 130,000 for the nine months ended September 30, 2021 and 2020, respectively. |
RIGHT-OF-USE ASSETS AND OPERATI
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Right-of-use Assets And Operating Lease Liabilities | |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 5. RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES The Company leases certain warehouse, corporate office space and equipment under an operating lease agreement. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets pursuant to ASC 842, Leases. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF LEASE COST Period Ended September 30, 2021 Period Ended September 30, 2020 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 524,000 $ 524,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 593,000 $ 383,000 Weighted average remaining lease term – operating leases (in years) 4.15 4.70 Average discount rate – operating leases 4.0 % 4.0 % SCHEDULE OF OPERATING LEASES September 30, 2021 December 31, 2020 Operating leases Right-of-use assets $ 2,305,000 $ 2,730,000 Short-term operating lease liabilities $ 582,000 $ 596,000 Long-term operating lease liabilities 2,464,000 2,943,000 Total operating lease liabilities $ 3,046,000 $ 3,539,000 SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES Year ending Operating Leases 2021 (remaining 3 months) $ 184,000 2022 751,000 2023 773,000 2024 472,000 2025 and thereafter 1,189,000 Total lease payments 3,369,000 Less: Imputed interest/present value discount (323,000 ) Present value of lease liabilities $ 3,046,000 |
ADVANCE OF FUTURE RECEIPTS
ADVANCE OF FUTURE RECEIPTS | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
ADVANCE OF FUTURE RECEIPTS | 6. ADVANCE OF FUTURE RECEIPTS The Company has the following advances on future receipts as of September 30, 2021: SCHEDULE OF ADVANCES ON FUTURE RECEIPTS Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2021 Balance at December 31, 2020 Note June 30, 2020 February 25, 2021 28 % $ 506,000 $ - $ 89,000 Note B June 30, 2020 February 25, 2021 28 % 506,000 - 88,000 Note C January 13, 2021 September 10, 2021 28 % 844,000 - - Note D January 13, 2021 September 10, 2021 28 % 844,000 - - Note E January 22, 2021 July 1, 2021 28 % 2,040,000 - - Note F February 18, 2021 March 3, 2021 August 3, 2021 August 15, 2021 3 % 1,696,000 - - Note G June 30, 2021 December 31, 2021 7 % 1,210,000 618,000 Note H June 30, 2021 March 1, 2022 28 % 2,720,000 1,750,000 - Total $ 10,366,000 2,368,000 177,000 Debt discount (515,000 ) (67,000 ) Net $ 1,853,000 $ 110,000 Note A and B On June 30, 2020, the Company received two secured advances from an unaffiliated third party totaling $ 728,000 1,012,000 Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $ 6,000 28% 1,012,000 284,000 During the nine months ended September 30, 2021, the Company paid the entire balance due of $ 177,000 67,000 Note C and D On January 13, 2021, the Company received two secured advances from the same unaffiliated third party (see Note 1 and 2) totaling $ 1,213,000 1,688,000 Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $ 11,000 28% 1,688,000 475,000 During the nine months ended September 30, 2021, the Company paid the entire balance due of $ 1,688,000 475,000 Note E On January 22, 2021, the Company received proceeds from a secured advance from an unaffiliated third party totaling $ 1,440,000 for the purchase of future receipts/revenues of $ 2,040,000 . Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $ 13,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. The Company may pay off the note for $1,725,000 if paid within 30 days of funding; for $1,860,000 if paid between 31 and 60 days of funding; or for $484,000 if paid within 61 to 90 days of funding. These advances are secured by the Company’s tangible and intangible assets. As a result, the Company recorded a liability of $ 2,040,000 to account for the future receipts sold and a debt discount of $ 600,000 to account for the difference between the future receipts sold and the cash received. The debt discount is being amortized over the term of the agreement. During the nine months ended September 30, 2021, the Company paid the entire balance of $ 2,040,000 600,000 Note F In February and March of 2021, the Company received secured advances from an unaffiliated third party totaling $ 1,637,000 1,696,000 283,000 3% 1,696,000 59,000 During the nine months ended September 30, 2021, the Company paid the entire balance of $ 1,696,000 59,000 Note G On June 30, 2021, the Company received secured advances from an unaffiliated third party totaling $ 1,118,000 for the purchase of future receipts/revenues of $ 1,210,000 . Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $197,000 from the Company’s operating account each month. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of 7% based on the face value of the notes and the proceeds received. As a result, the Company recorded a liability of $ 1,210,000 to account for the future receipts sold and a debt discount of $ 92,000 to account for the difference between the future receipts sold and the cash received. The debt discount is being amortized over the term of the agreement. During the nine months ended September 30, 2021, the Company paid $ 592,000 50,000 618,000 42,000 Note H On June 30, 2021, the Company received secured advances from an unaffiliated third party totaling $ 1,960,000 2,720,000 Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $15,200 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of 28% 2,720,000 760,000 During the nine months ended September 30, 2021, the Company paid $ 970,000 287,000 1,750,000 473,000 |
NOTES PAYABLE _ RELATED PARTIES
NOTES PAYABLE – RELATED PARTIES | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable Related Parties | |
NOTES PAYABLE – RELATED PARTIES | 7. NOTES PAYABLE – RELATED PARTIES The Company had the following related party notes payable as of September 30, 2021 and December 31, 2020: SCHEDULE OF NOTES PAYABLE TO RELATED PARTIES Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2023 12.0 % $ 1,249,000 $ 725,000 $ 725,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 - 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 40,000 240,000 Total notes payable – related parties 765,000 1,077,000 Non-current (725,000 ) - Current $ 40,000 $ 1,077,000 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and matured on February 8, 2021 , as amended. A total of 30% of the original note balance or $ 375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $ 825,000 is not convertible. During the year ended December 31, 2020, the Company made payments of $ 100,000 . On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $ 725,000 . In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years 138,889 287,000 287,000 As of September 30, 2021, the outstanding balance of the note amounted to $ 725,000 (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $ 112,000 , representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017 . As of December 31, 2020, the outstanding principal balance of the note amounted to $ 112,000 On September 24, 2021 the Company settled the entire note payable and all corresponding accrued interest and accounts payable related to the former board member for $ 140,000 , which resulted in a gain of $ 82,000 (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 As of September 30, 2021, and December 31, 2020, the outstanding balance of the note amounted to $ 40,000 240,000 Total interest expense for notes payable to related parties was $ 88,000 106,000 112,000 100,000 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable | |
NOTES PAYABLE | 8. NOTES PAYABLE The Company had the following notes payable as of September 30, 2021: SCHEDULE OF NOTES PAYABLE Note Issuance Date Maturity Date Interest Balance at Balance at Note A April 17, 2020 April 17, 2022 1.00 % $ - $ 1,218,000 Note B May 15, 2020 May 15, 2050 3.75 % 150,000 150,000 Note C May 1, 2020 May 1, 2022 3.75 % - 90,000 Total notes payable 150,000 1,458,000 Non-current (150,000 ) (1,458,000 ) Current $ - $ - (A) On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 The PPP loan was payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. As of December 31, 2020, the outstanding balance of the PPP loan was $ 1,218,000 On January 4, 2021 the entire PPP loan and accrued interest, totaling $ 1,226,000 , was forgiven and accounted as a gain on debt extinguishment. (B) On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan program in the amount of $ 150,000 . The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75% per annum. Installment payments, including principal and interest, begin on May 15, 2021 . As part of the loan, the Company also received an advance of $ 10,000 10,000 (C) As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ 90,000 it obtained in May 2020 under the same PPP (see discussion “A”). On May 17, 2021 the entire note and accrued interest, totaling $ 91,000 |
DEFERRED INCENTIVE COMPENSATION
DEFERRED INCENTIVE COMPENSATION TO OFFICERS | 9 Months Ended |
Sep. 30, 2021 | |
Compensation Related Costs [Abstract] | |
DEFERRED INCENTIVE COMPENSATION TO OFFICERS | 9. DEFERRED INCENTIVE COMPENSATION TO OFFICERS SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 215,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 161,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 63,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 82,000 163,000 Total 521,000 1,042,000 Non-current - (521,000 ) Current $ 521,000 $ 521,000 (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $ 430,000 125,000 50% 50% During the nine months ended September 30, 2021, the Company paid $ 278,000 278,000 (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $ 324,000 163,000 50% 50% During the nine months ended September 30, 2021, the Company paid $ 243,000 243,000 |
CONVERTIBLE SERIES A PREFERRED
CONVERTIBLE SERIES A PREFERRED STOCK AND WARRANT OFFERING | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Series Preferred Stock And Warrant Offering | |
CONVERTIBLE SERIES A PREFERRED STOCK AND WARRANT OFFERING | 10. CONVERTIBLE SERIES A PREFERRED STOCK AND WARRANT OFFERING On August 14, 2019, we entered into the Securities Purchase Agreement (“SPA”) with the Preferred Purchasers, pursuant to which we agreed to issue and sell to the Preferred Purchasers up to an aggregate of 6,000 3.87 5,030 3,245,162 4,688,000 342,000 On September 16, 2019, we filed a registration statement on Form S-3 with the SEC to register the shares of Common Stock underlying the August Warrants. The registration statement was declared effective on September 19, 2019. We have agreed to keep such registration statement continuously effective for a period of 24 months. We are also prevented from issuing shares of Common Stock upon exercise of the August Warrants, which, when aggregated with any shares of Common Stock issued on or after the issuance date and prior to such exercise date, (i) in connection with the exercise of any August Warrants issued pursuant to the SPA, and (ii) in connection with the exercise of any warrants issued to any registered broker-dealer as a fee in connection with the issuance of the securities pursuant to the SPA, would exceed 4,459,725 19.99 19.99 The August Warrants have an initial exercise price of $ 1.88 During the nine months ended September 30, 2021, the entire 2,006 1,978,728 155,087 348,000 348,000 no |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | 11. DERIVATIVE LIABILITY Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments that do not have fixed settlement provisions are deemed to be derivative instruments. In prior years, the Company granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the fundamental transaction clause of these warrants is accounted for as a derivative liability in accordance with ASC 815 and are being re-measured every reporting period with the change in value reported in the statement of operations. The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS September 30, 2021 Upon Extinguishment in 2021 December 31, 2020 Stock Price $ 1.92 $ 2.47 $ 1.65 Exercise Price $ 1.41 $ 1.18 $ 1.41 Expected Life 2.42 3.32 3.17 Volatility 122 % 144 % 107 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.35 % 0.33 % 0.23 % Total Fair Value $ 5,839,000 $ 4,513,000 $ 8,266,000 The expected life of the note and warrants was based on the remaining contractual term of the instruments. The Company uses the historical volatility of its Common Stock to estimate the future volatility for its Common Stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. The risk-free interest rate was based on rates established by the Federal Reserve Bank. As of December 31, 2020, the outstanding fair value of the derivative liability amounted to $ 8,266,000 During the nine months ended September 30, 2021, the Company recorded a charge of $ 2,086,000 to account for the changes in the fair value of these derivative liabilities. In addition, 1,829,190 of the Series A warrants that were accounted as a derivative liability were exercised to common stock and 33,334 warrants that were accounted as a derivative liability were forfeited as part of a legal settlement (see Note 17). As a result, the Company computed the fair value of the corresponding derivate liabilities one last time that amounted to $ 4,513,000 and pursuant to current accounting guidelines, the extinguishment was accounted as part of equity. At September 30, 2021, the fair value of the derivative liability amounted to $ 5,839,000 . The details of derivative liability transactions for the nine months ended September 30, 2021 and 2020 are as follows: SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS September 30, 2021 September 30, 2020 Beginning balance $ 8,266,000 $ 5,048,000 Fair value upon issuance of notes payable and/or warrants - 3,951,000 Change in fair value 2,086,000 (4,295,000 ) Extinguishment (4,513,000 ) (159,000 ) Ending balance $ 5,839,000 $ 4,545,000 |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
COMMON STOCK | 12. COMMON STOCK The Company’s Common Stock activity for the nine months ended September 30, 2021 was as follows: Common Stock Shares Issued as Part of the Company’s Public Offering On March 15, 2021, the Company completed a registered direct offering with institutional investors for the purchase and sale of 9,375,000 1.60 14,129,000 14,129,000 144,000 Shares Issued as Part of the Company’s At-The Market Issuances In August 2021, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) (“ATM”) with Truist Securities, Inc. (the “Sales Agent”), pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-252167). The ATM offering is a follow-on offering of securities utilized by the Company in order to raise capital over a period of time. In an ATM offering, the Company sells newly issued shares into the trading market through a designated sales agent at prevailing market prices. During the nine months ended September 30, 2021, the Company received net proceeds of $ 4,722,000 . The Company terminated the Sales Agreement in October 2021. Shares Issued for Services During the nine months ended September 30, 2021, the Company issued 1,198,610 2,057,000 104,790 131,000 104,790 131,000 1,926,000 Shares Issued for Debt During the nine months ended September 30, 2021, the Company issued 182,397 281,000 Shares Issued for Accounts Payable During the nine months ended, the Company converted an aggregate of $ 19,000 10,500 Shares Issued from Conversion of Note Payable – Related Party During the nine months ended, the Company issued 194,175 200,000 1.03 Shares Issued for Settlement of Litigation During the nine months ended September 30, 2021, the Company issued 600,000 678,000 585,000 93,000 |
RESTRICTED STOCK AWARDS
RESTRICTED STOCK AWARDS | 9 Months Ended |
Sep. 30, 2021 | |
Restricted Stock Awards | |
RESTRICTED STOCK AWARDS | 13. RESTRICTED STOCK AWARDS On December 20, 2019, the Company approved and adopted the Verb Technology Company, Inc. 2019 Omnibus Incentive Plan (the “Plan”). A summary of restricted stock unit activity for the nine months ended September 30, 2021 is presented below. SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY Weighted- Average Grant Date Shares Fair Value Fair Value Non-vested at December 31, 2020 2,185,946 $ 1,943,000 $ 1.17 Granted 813,265 1,374,000 1.69 Vested/deemed vested (889,212 ) (1,285,000 ) 1.09 Forfeited - - - Non-vested at September 30, 2021 2,109,999 $ 2,032,000 $ 1.41 On January 4, 2021, the Company granted an additional 813,265 1,374,000 The total fair value of restricted stock units that vested or deemed vested for the nine months ended September 30, 2021 was $ 1,285,000 and is included in general and administrative expenses in the accompanying condensed consolidated statements of operations. In addition, during the nine months ended September 30, 2021, the Company issued 889,212 shares of its restricted stock based upon its vesting. As of September 30, 2021 the amount of unvested compensation related to issuances of restricted stock units was $ 2,032,000 which will be recognized as an expense in future periods as the shares vest. When calculating basic net loss per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net loss per share, these shares are included in weighted average common shares outstanding as of their grant date. |
STOCK OPTIONS
STOCK OPTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | 14. STOCK OPTIONS On December 20, 2019, the Company adopted its 2019 Omnibus Incentive Plan (the “Plan”). At its discretion, the Company grants share option awards to certain employees and non-employees under the Plan and accounts for it in accordance with ASC 718, Compensation – Stock Compensation. A summary of option activity for the nine months ended September 30, 2021 is presented below. SCHEDULE OF STOCK OPTION ACTIVITY Weighted- Weighted- Average Average Remaining Exercise Contractual Options Price Life (Years) Outstanding at December 31, 2020 6,031,775 $ 1.55 2.68 Granted 2,150,833 1.69 - Forfeited (2,078,473 ) 2.52 - Exercised (575,730 ) 1.28 - Outstanding at September 30, 2021 5,528,405 $ 1.70 2.26 Vested September 30, 2021 2,685,732 $ 2.22 Exercisable at September 30, 2021 2,013,888 $ 2.01 At September 30, 2021, the intrinsic value of the outstanding options was $ 1,939,000 During the nine months ended September 30, 2021, the Company granted stock options to employees to purchase a total of 2,150,833 shares of Common Stock for services rendered. The options have an average exercise price of $ 1.69 per share, expire in five years, vesting one and four years from grant date. The total fair value of these options at grant date was approximately $ 3,563,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the nine months ended September 30, 2021 amounted to $ 1,234,000 . As of September 30, 2021, the total unrecognized stock-based compensation expense was $ 2,940,000 , which is expected to be recognized as part of operating expense through September 2025. In addition, a total of 575,730 shares of stock options were exercised. As a result of the exercise of the option, the Company issued 509,465 shares of common stock and received cash of $ 569,000 . The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD Nine Months Ended September 30, 2021 2020 Risk-free interest rate 0.10 0.92 % 0.17 0.39 % Average expected term 5 1 5 Expected volatility 232.84 240.03 % 270.10 270.57 % Expected dividend yield - - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s Common Stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. |
STOCK WARRANTS
STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
Stock Warrants | |
STOCK WARRANTS | 15. STOCK WARRANTS The Company had the following warrants outstanding as of September 30, 2021, all of which are exercisable: SCHEDULE OF WARRANTS OUTSTANDING Weighted- Weighted- Average Average Remaining Exercise Contractual Warrants Price Life (Years) Outstanding at December 31, 2020 13,351,251 $ 2.48 3.38 Granted 138,889 2.61 - Forfeited (196,449 ) 6.38 - Exercised (2,285,389 ) 1.25 - Outstanding at September 30, 2021, all vested 11,008,302 $ 2.67 2.63 At September 30, 2021 the intrinsic value of the outstanding warrants was $ 2,996,000 During the nine ended September 30, 2021, the Company granted 138,889 warrants with a fair value of $ 287,000 to an officer as part of a note payable modification (see Note 7). During the nine months ended September 30, 2021, a total of 2,285,389 warrants were exercised into a cash and cashless basis, which resulted in the issuance of 2,254,411 shares of Common Stock at a weighted average exercise price of $ 1.25 . The Company received cash of $ 2,784,000 upon exercise of the warrants. |
ISSUANCE OF CLASS A and B UNITS
ISSUANCE OF CLASS A and B UNITS | 9 Months Ended |
Sep. 30, 2021 | |
Issuance Of Class And B Units | |
ISSUANCE OF CLASS A and B UNITS | 16. ISSUANCE OF CLASS A and B UNITS a. Class A Units – During the year ended December 31, 2020, the Company created a separate class of equity instrument called Class A Units. Concurrently, the Company formed a wholly owned subsidiary, Verb Acquisition, and issued 100 1. Class A units are a standalone financial instrument; 2. Priority on distributions; 3. Ability to remove the manager; 4. Drag-along rights; 5. Power to dissolve Verb Acquisition provided that a majority of the Class B Units also approve the dissolution; 6. Ability to appoint a liquidator to wind up the affairs of Verb Acquisition; 7. Entitled to distributions; 8. Approve board appointments; and 9. Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class B Units also approve the amendment. There were 100 b. Class B Units – During the year ended December 31, 2020, the Company created a separate class of an equity instrument called Class B Units. Concurrently, our wholly owned subsidiary, Verb Acquisition, issued 2,642,159 1. Class B units are a standalone financial instrument; 2. Exchangeable for shares of the Company’s Common Stock at a conversion rate of 1 to 1; 3. Power to dissolve Verb Acquisition, provided that a majority of the Class A Units also approve the dissolution; 4. Entitled to profit distributions; 5. Approve board appointments made by the Class A Units; and 6. Approve any amendments to Verb Acquisition’s operating agreement, provided that a majority of the Class A Units also approve the amendment. As the Class B Units are exchangeable for the Company’s Common Stock, for valuation purposes, the Company determined to use the trading price of the Company’s Common Stock at the date of the acquisition of SoloFire which amounted to $ 3,065,000 2,642,159 During the period ended September 30, 2021, pursuant to the terms of the Class B shares, all holders of the Company’s Class B shares converted their shares to common stock. As a result of these conversions, the Company reclassified the recorded fair value of the Class B shares of $ 3,065,000 2,642,159 2,642,159 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Litigation a. Former Employee The Company is currently in a dispute with a former employee of its predecessor bBooth, Inc. who has interposed a breach of contract claim in which he alleges that he is entitled to approximately $ 300,000 in unpaid bonus compensation from 2015. This former employee filed his complaint in the Superior Court of California for the County of Los Angeles on November 20, 2019, styled Meyerson v. Verb Technology Company, Inc., et al b. Legal Malpractice Action The Company is currently in a dispute with Baker Hostetler LLP (“BH”) relating to corporate legal services provided by BH to the Company. The Company filed its complaint in the Superior Court of California for the County of Los Angeles on May 17, 2021, styled Verb Technology Company, Inc. v. Baker Hostetler LLP, et al. 915,000 The Company believes it has adequately reserved for all litigation within its financial statements. Board of Directors The Company has committed an aggregate of $ 475,000 Total board fees expensed during the nine months ended September 30, 2021 was $ 356,000 119,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS The Company has evaluated subsequent events through November 10, 2021, the date these financial statements are available to be issued. The Company believes there were no material events or transactions discovered during this evaluation that requires recognition or disclosure in the financial statements other than the items discussed below. Issuance of Common Stock Subsequent to September 30, 2021, the Company issued 33,499 shares of Common Stock with average fair market value of $ 2.06 per share to vendors for services rendered. Subsequent to September 30, 2021, a total of 167,250 options were exercised into 167,250 shares of Common Stock at an average exercise price of $ 1.42 . The Company received cash of $ 232,000 upon exercise of the options. Grant of Stock Options Subsequent to September 30, 2021, the Company granted stock options to employees to purchase a total of 62,500 shares of Common Stock for services to be rendered. The options have an average exercise price of $ 2.00 per share, expire in five years , and vest over a period of 4 years from grant date. The total fair value of these options at the grant date was $ 124,000 using the Black-Scholes option pricing model. Shares Issued as Part of the Company’s At-The Market Issuances Subsequent to September 30, 2021, the Company received $ 185,000 Advance on Future Receipts Subsequent to September 30, 2021, the Company received advances from unaffiliated third parties totaling $ 4,815,000 5,928,000 19,000 353,000 5,228,000 5,452,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 31, 2021 (the “2020 Annual Report”). The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (including normal recurring adjustments) necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Verb Technology Company, Inc., Verb Direct, LLC, and Verb Acquisition Co., LLC. Intercompany accounts have been eliminated in the consolidation. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the nine months ended September 30, 2021, the Company incurred a net loss of $ 28,962,000 and used cash in operations of $ 18,223,000 . These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. In addition, our independent registered public accounting firm, in their report on our audited financial statements for the year ended December 31, 2020, raised substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. |
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 at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of reserves for allowance of doubtful accounts, inventory, assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Amounts could materially change in the future. |
Revenue Recognition | Revenue Recognition The Company derives its revenue primarily from providing application services through the SaaS application, digital marketing and sales support services, from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. The subscription revenue from the application services is recognized over the life of the estimated subscription period. The Company also charges certain customers setup or installation fees for the creation and development of websites and phone application. These fees are accounted as part of deferred revenue and amortized over the estimated life of the agreement. Amounts related to shipping and handling that are billed to customers are reflected as part of revenue, and the related costs are reflected in cost of revenue in the accompanying Condensed Consolidated Statements. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Pursuant to ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The products sold by us are distinctly individual. The products are offered for sale solely as finished goods, and there are no performance obligations required post-shipment for customers to derive the expected value from them. Other than promotional activities, which can vary from time to time but nevertheless are entirely within the Company’s control, contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. The control of products we sell transfers to our customers upon shipment from our facilities, and our performance obligations are satisfied at that time. Shipping and handling activities are performed before the customer obtains control of the goods and, therefore, represent a fulfillment activity rather than promised goods to the customer. Payment for sales is generally made by check, credit card, or wire transfer. Historically, we have not experienced any significant payment delays from customers. We allow returns within 30 days of purchase from end-users. Our customers may return purchased products to us under certain circumstances. Returns from customers in the past and during the three and nine months ended September 30, 2021 and 2020 are immaterial. A description of our principal revenue generating activities is as follows: 1. Digital Revenue which is divided into two main categories: a. SaaS recurring digital revenue based on contract-based subscriptions to our verb app products and platform services which include verbCRM, verbLEARN, verbLIVE, verbTEAMS, and verbPULSE. The revenue is recognized over the subscription period. b. Non-SaaS, non-recurring digital revenue, which is revenue generated by the use of our app products and in-app purchases, such as sampling and other services obtained through the app. The revenue for samples is recognized upon completion and shipment, while the design fees are recognized when the service has been rendered and the app is delivered to the customer. 2. Non-digital revenue, which is revenue we generate from non-app, non-digital sources through ancillary services we provide as an accommodation to our clients and customers. These services, which we now outsource to a strategic partner as part of a cost reduction plan we instituted in 2020, include: a. Design, printing services, and fulfillment. The revenue is recognized upon completion and shipment of products or fulfillment to the customer. b. Shipping services. The revenue is recognized when the corresponding products or fulfillment are shipped. Revenues during the three and nine months ended September 30, 2021 and 2020 were all generated from the United States of America. |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of the salaries of certain employees, purchase price of consumer products, digital content costs, packaging supplies, and customer shipping and handling expenses. Shipping costs to receive products from our suppliers are included in our inventory and recognized as cost of revenue upon sale of products to our customers. |
Assets Recognized from the Costs to Obtain a Contract with a Customer | Assets Recognized from the Costs to Obtain a Contract with a Customer The Company considered certain internal sales commissions as incremental costs of obtaining the contract with a customer. Internal sales commissions for subscription offerings where the Company expect the benefit of those costs to continue throughout the subscription are capitalized and amortized ratably over the period of benefit, which generally ranges over a period of one year. Total capitalized costs to obtain a contract are not significant and are included in prepaid expenses and other current assets and other assets on our consolidated balance sheets. |
Deferred Revenue and Customer Deposits - Contract Liabilities | Deferred Revenue and Customer Deposits - Contract Liabilities Contract liabilities represents consideration received from customers under a revenue contract, but the Company has not yet delivered or completed its performance obligation to the customer. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $ 250,000 The Company extends limited credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company’s concentration of credit risk includes its concentrations from key customers and vendors. As of September 30, 2021, we had two vendors that account for 20 % and 16 % of our purchases individually and 36 % in aggregate. In addition, we had one vendor that accounted for 40 % of accounts payable individually and in aggregate as of September 30, 2021. As of September 30, 2021, we had one customer that accounted for 10 During the three and nine months ended September 30, 2021 and 2020, we had no customer that accounted for 10% of our revenues individually and in the aggregate. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of Common Stock that were outstanding during the period. Dilutive potential shares of Common Stock consist of incremental shares of Common Stock issuable upon exercise of stock options. No dilutive potential shares of Common Stock were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of September 30, 2021, and 2020, the Company had total outstanding options of 5,528,405 and 5,099,038 , respectively, stock warrants of 11,008,302 and 13,351,245 , respectively, outstanding restricted stock awards of 2,109,999 and 2,908,530 , respectively, and 0 and 2,642,159 common shares issuable from our Class B Units, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive. |
Capitalized software development costs | Capitalized software development costs The Company capitalizes internal and external costs directly associated with developing internal-use software, and hosting arrangements that include an internal-use software license, during the application development stage of its projects. The Company’s internal-use software is reported at cost less accumulated depreciation. Depreciation begins once the project has been completed and ready for its intended use. The Company will depreciate the asset on a straight-line basis over a period of three years 2,329,000 0 Depreciation expense related to capitalized software development costs will be recorded in Cost of revenue on the consolidated statements of operations. There has been no |
Goodwill | Goodwill In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic No. 350, Intangibles-Goodwill and Other, the Company reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing is performed annually at December 31 (its fiscal year end). Recoverability of goodwill is determined by comparing the fair value of Company’s reporting unit to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. As of September 30, 2021 and December 31, 2020, management determined there were no indications of impairment. The Company will perform their next impairment analysis in December 2021. |
Intangible Assets with Finite Useful Lives | Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of five years. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. As of September 30, 2021, and December 31, 2020, there was no impairment of intangible assets. The Company will perform their next impairment analysis in December 2021. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities. |
Segments | Segments The Company has acquired two operating subsidiaries, Verb Direct and Ascend Certification (dba “SoloFire”) (see Note 3) with various revenue channels. Operations of these two subsidiaries are integrated since they have a similar customer base and the Company has a single sales team, marketing department, customer service department, operations department, finance and accounting department to support its operations. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that the Company has only one reporting unit or segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As a small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. Management is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. In August 2020, FASB issued ASU No. 2020-06 (“ASU 2020-06”) “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Other recent accounting pronouncements issued by FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED | SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED Assets Acquired: Cash $ 229,000 Accounts receivable 207,000 $ 436,000 Liabilities Assumed: Current liabilities (241,000 ) Long-term liabilities (90,000 ) (331,000 ) Intangible assets 1,419,000 Goodwill 3,426,000 Purchase Price $ 4,950,000 |
SCHEDULE OF AMORTIZATION EXPENSE FOR FUTURE PERIODS FOR INTANGIBLE ASSETS | SCHEDULE OF AMORTIZATION EXPENSE FOR FUTURE PERIODS FOR INTANGIBLE ASSETS Year ending Amortization 2021 remaining (remaining 3 months) $ 416,000 2022 1,466,000 2023 1,464,000 2024 395,000 2025 and thereafter 186,000 Total amortization $ 3,927,000 |
SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS | The following unaudited pro forma statement of operations present the Company’s pro forma results of operations for the three and nine months ended September 30, 2020, to give effect to the acquisition of SoloFire as if it had occurred on January 1, 2020. SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 (Proforma, (Proforma, SaaS recurring subscription revenue $ 1,661,000 $ 4,511,000 Other digital 360,000 1,166,000 Welcome kits and fulfilment 836,000 2,277,000 Shipping 186,000 614,000 Total revenue 3,043,000 8,568,000 Cost of revenue 1,344,000 3,661,000 Gross margin 1,699,000 4,907,000 Operating expenses (9,771,000 ) (21,615,000 ) Other income, net 574,000 3,550,000 Net loss (7,498,000 ) (13,158,000 ) Deemed dividends to Series A stockholders - (3,951,000 ) Net loss attributed to common stockholders $ (7,498,000 ) $ (17,109,000 ) |
SCHEDULE OF RESULTS OF OPERATION OF SUBSIDIARY | Pursuant to the provisions of ASC 805, the following results of operations of Verb Acquisition subsequent to the acquisition date included in the consolidated statement of operations for the reporting period: SCHEDULE OF RESULTS OF OPERATION OF SUBSIDIARY Three Months Ended September 30, 2020 Nine Months September 30, 2020 Revenue $ 276,000 $ 795,000 Cost of revenue (65,000 ) (184,000 ) Operating expenses (897,000 ) (1,474,000 ) Other income/ (expense) - - Net loss $ (686,000 ) $ (863,000 ) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following as of September 30, 2021 and December 31, 2020. SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2021 December 31, 2020 Computers $ 29,000 $ 29,000 Furniture and fixture 75,000 75,000 Machinery and equipment 49,000 39,000 Leasehold improvement 1,058,000 1,058,000 Software development 2,329,000 - Total property and equipment 3,540,000 1,201,000 Accumulated depreciation (462,000 ) (339,000 ) Total property and equipment, net $ 3,078,000 $ 862,000 |
RIGHT-OF-USE ASSETS AND OPERA_2
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Right-of-use Assets And Operating Lease Liabilities | |
SCHEDULE OF LEASE COST | The components of lease expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF LEASE COST Period Ended September 30, 2021 Period Ended September 30, 2020 Lease cost Operating lease cost (included in general and administration in the Company’s statement of operations) $ 524,000 $ 524,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 593,000 $ 383,000 Weighted average remaining lease term – operating leases (in years) 4.15 4.70 Average discount rate – operating leases 4.0 % 4.0 % |
SCHEDULE OF OPERATING LEASES | SCHEDULE OF OPERATING LEASES September 30, 2021 December 31, 2020 Operating leases Right-of-use assets $ 2,305,000 $ 2,730,000 Short-term operating lease liabilities $ 582,000 $ 596,000 Long-term operating lease liabilities 2,464,000 2,943,000 Total operating lease liabilities $ 3,046,000 $ 3,539,000 |
SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES | SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES Year ending Operating Leases 2021 (remaining 3 months) $ 184,000 2022 751,000 2023 773,000 2024 472,000 2025 and thereafter 1,189,000 Total lease payments 3,369,000 Less: Imputed interest/present value discount (323,000 ) Present value of lease liabilities $ 3,046,000 |
ADVANCE OF FUTURE RECEIPTS (Tab
ADVANCE OF FUTURE RECEIPTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF ADVANCES ON FUTURE RECEIPTS | The Company has the following advances on future receipts as of September 30, 2021: SCHEDULE OF ADVANCES ON FUTURE RECEIPTS Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2021 Balance at December 31, 2020 Note June 30, 2020 February 25, 2021 28 % $ 506,000 $ - $ 89,000 Note B June 30, 2020 February 25, 2021 28 % 506,000 - 88,000 Note C January 13, 2021 September 10, 2021 28 % 844,000 - - Note D January 13, 2021 September 10, 2021 28 % 844,000 - - Note E January 22, 2021 July 1, 2021 28 % 2,040,000 - - Note F February 18, 2021 March 3, 2021 August 3, 2021 August 15, 2021 3 % 1,696,000 - - Note G June 30, 2021 December 31, 2021 7 % 1,210,000 618,000 Note H June 30, 2021 March 1, 2022 28 % 2,720,000 1,750,000 - Total $ 10,366,000 2,368,000 177,000 Debt discount (515,000 ) (67,000 ) Net $ 1,853,000 $ 110,000 |
NOTES PAYABLE _ RELATED PARTI_2
NOTES PAYABLE – RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable Related Parties | |
SCHEDULE OF NOTES PAYABLE TO RELATED PARTIES | The Company had the following related party notes payable as of September 30, 2021 and December 31, 2020: SCHEDULE OF NOTES PAYABLE TO RELATED PARTIES Note Issuance Date Maturity Date Interest Rate Original Balance at Balance at Note 1 (A) December 1, 2015 February 8, 2023 12.0 % $ 1,249,000 $ 725,000 $ 725,000 Note 2 (B) December 1, 2015 April 1, 2017 12.0 % 112,000 - 112,000 Note 3 (C) April 4, 2016 June 4, 2021 12.0 % 343,000 40,000 240,000 Total notes payable – related parties 765,000 1,077,000 Non-current (725,000 ) - Current $ 40,000 $ 1,077,000 (A) On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of 12% per annum, secured by the Company’s assets, and matured on February 8, 2021 , as amended. A total of 30% of the original note balance or $ 375,000 was convertible to common stock and was converted in 2018 while the remaining note balance of $ 825,000 is not convertible. During the year ended December 31, 2020, the Company made payments of $ 100,000 . On February 25, 2021 the Company extended the note to February 8, 2023 with no changes to the other terms of the note agreement. As of December 31, 2020, the outstanding balance of the note amounted to $ 725,000 . In February 2021, the Mr. Cutaia and Company amended the note payable and extended the maturity date from February 8, 2021 to February 8, 2023 or an extension of two years 138,889 287,000 287,000 As of September 30, 2021, the outstanding balance of the note amounted to $ 725,000 (B) On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $ 112,000 , representing unpaid consulting fees as of November 30, 2015. The note is unsecured, bears interest rate of 12% per annum, and matured in April 2017 . As of December 31, 2020, the outstanding principal balance of the note amounted to $ 112,000 On September 24, 2021 the Company settled the entire note payable and all corresponding accrued interest and accounts payable related to the former board member for $ 140,000 , which resulted in a gain of $ 82,000 (C) On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 As of September 30, 2021, and December 31, 2020, the outstanding balance of the note amounted to $ 40,000 240,000 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable | |
SCHEDULE OF NOTES PAYABLE | The Company had the following notes payable as of September 30, 2021: SCHEDULE OF NOTES PAYABLE Note Issuance Date Maturity Date Interest Balance at Balance at Note A April 17, 2020 April 17, 2022 1.00 % $ - $ 1,218,000 Note B May 15, 2020 May 15, 2050 3.75 % 150,000 150,000 Note C May 1, 2020 May 1, 2022 3.75 % - 90,000 Total notes payable 150,000 1,458,000 Non-current (150,000 ) (1,458,000 ) Current $ - $ - (A) On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 The PPP loan was payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. As of December 31, 2020, the outstanding balance of the PPP loan was $ 1,218,000 On January 4, 2021 the entire PPP loan and accrued interest, totaling $ 1,226,000 , was forgiven and accounted as a gain on debt extinguishment. (B) On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan program in the amount of $ 150,000 . The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75% per annum. Installment payments, including principal and interest, begin on May 15, 2021 . As part of the loan, the Company also received an advance of $ 10,000 10,000 (C) As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ 90,000 it obtained in May 2020 under the same PPP (see discussion “A”). On May 17, 2021 the entire note and accrued interest, totaling $ 91,000 |
DEFERRED INCENTIVE COMPENSATI_2
DEFERRED INCENTIVE COMPENSATION TO OFFICERS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Compensation Related Costs [Abstract] | |
SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS | SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS Note Date Payment Date Balance at Balance at Rory Cutaia (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 $ 215,000 $ 430,000 Rory Cutaia (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 161,000 324,000 Jeff Clayborne (A) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 63,000 125,000 Jeff Clayborne (B) December 23, 2019 50% on January 10, 2021 and 50% on January 10, 2022 82,000 163,000 Total 521,000 1,042,000 Non-current - (521,000 ) Current $ 521,000 $ 521,000 (A) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer Annual Incentive Compensation of $ 430,000 125,000 50% 50% During the nine months ended September 30, 2021, the Company paid $ 278,000 278,000 (B) On December 23, 2019, the Company awarded Rory Cutaia, Chief Executive Officer and Jeff Clayborne, Chief Financial Officer received a bonus for the successful Up-Listing to Nasdaq and Acquisition of Verb Direct during fiscal 2019, totaling $ 324,000 163,000 50% 50% During the nine months ended September 30, 2021, the Company paid $ 243,000 243,000 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS | The derivative liabilities were valued using a Binomial pricing model with the following average assumptions: SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS September 30, 2021 Upon Extinguishment in 2021 December 31, 2020 Stock Price $ 1.92 $ 2.47 $ 1.65 Exercise Price $ 1.41 $ 1.18 $ 1.41 Expected Life 2.42 3.32 3.17 Volatility 122 % 144 % 107 % Dividend Yield 0 % 0 % 0 % Risk-Free Interest Rate 0.35 % 0.33 % 0.23 % Total Fair Value $ 5,839,000 $ 4,513,000 $ 8,266,000 |
SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS | At September 30, 2021, the fair value of the derivative liability amounted to $ 5,839,000 . The details of derivative liability transactions for the nine months ended September 30, 2021 and 2020 are as follows: SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS September 30, 2021 September 30, 2020 Beginning balance $ 8,266,000 $ 5,048,000 Fair value upon issuance of notes payable and/or warrants - 3,951,000 Change in fair value 2,086,000 (4,295,000 ) Extinguishment (4,513,000 ) (159,000 ) Ending balance $ 5,839,000 $ 4,545,000 |
RESTRICTED STOCK AWARDS (Tables
RESTRICTED STOCK AWARDS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restricted Stock Awards | |
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY | A summary of restricted stock unit activity for the nine months ended September 30, 2021 is presented below. SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY Weighted- Average Grant Date Shares Fair Value Fair Value Non-vested at December 31, 2020 2,185,946 $ 1,943,000 $ 1.17 Granted 813,265 1,374,000 1.69 Vested/deemed vested (889,212 ) (1,285,000 ) 1.09 Forfeited - - - Non-vested at September 30, 2021 2,109,999 $ 2,032,000 $ 1.41 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of option activity for the nine months ended September 30, 2021 is presented below. SCHEDULE OF STOCK OPTION ACTIVITY Weighted- Weighted- Average Average Remaining Exercise Contractual Options Price Life (Years) Outstanding at December 31, 2020 6,031,775 $ 1.55 2.68 Granted 2,150,833 1.69 - Forfeited (2,078,473 ) 2.52 - Exercised (575,730 ) 1.28 - Outstanding at September 30, 2021 5,528,405 $ 1.70 2.26 Vested September 30, 2021 2,685,732 $ 2.22 Exercisable at September 30, 2021 2,013,888 $ 2.01 |
SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD | The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD Nine Months Ended September 30, 2021 2020 Risk-free interest rate 0.10 0.92 % 0.17 0.39 % Average expected term 5 1 5 Expected volatility 232.84 240.03 % 270.10 270.57 % Expected dividend yield - - |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stock Warrants | |
SCHEDULE OF WARRANTS OUTSTANDING | The Company had the following warrants outstanding as of September 30, 2021, all of which are exercisable: SCHEDULE OF WARRANTS OUTSTANDING Weighted- Weighted- Average Average Remaining Exercise Contractual Warrants Price Life (Years) Outstanding at December 31, 2020 13,351,251 $ 2.48 3.38 Granted 138,889 2.61 - Forfeited (196,449 ) 6.38 - Exercised (2,285,389 ) 1.25 - Outstanding at September 30, 2021, all vested 11,008,302 $ 2.67 2.63 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - $ / shares | Feb. 04, 2019 | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | |||
Reverse stock split | 1-for-15 reverse stock split | ||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Product Information [Line Items] | ||||
Net Income (Loss) Attributable to Parent | $ 8,805,000 | $ 7,320,000 | $ 28,962,000 | $ 12,690,000 |
Net Cash Provided by (Used in) Operating Activities | 18,223,000 | 9,790,000 | ||
Cash FDIC insured amount | 250,000 | 250,000 | ||
Capitalized software development costs | 3,513,000 | 2,407,000 | $ 9,610,000 | 5,308,000 |
Software and Software Development Costs [Member] | ||||
Product Information [Line Items] | ||||
Estimated useful life | 3 years | |||
Capitalized software development costs | 2,329,000 | 0 | $ 2,329,000 | 0 |
Amortization expense | $ 0 | $ 0 | $ 0 | $ 0 |
Share-based Payment Arrangement, Option [Member] | ||||
Product Information [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,528,405 | 5,099,038 | ||
Warrant [Member] | ||||
Product Information [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,008,302 | 13,351,245 | ||
Restricted Stock [Member] | ||||
Product Information [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,109,999 | 2,908,530 | ||
Common Class Bunits [Member] | ||||
Product Information [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 2,642,159 | ||
Vendor One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration Risk, Percentage | 20.00% | |||
Vendor Two [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration Risk, Percentage | 16.00% | |||
Vendors [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration Risk, Percentage | 36.00% | |||
Vendor One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration Risk, Percentage | 40.00% | |||
Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration Risk, Percentage | 10.00% |
SCHEDULE OF FAIR VALUE OF ASSET
SCHEDULE OF FAIR VALUE OF ASSETS ASSUMED AND LIABILITIES ACQUIRED (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||
Goodwill (provisional) | $ 19,763,000 | $ 20,060,000 |
Ascend Certification [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 229,000 | |
Accounts receivable | 207,000 | |
Total assets acquired | 436,000 | |
Current liabilities | (241,000) | |
Long-term liabilities | (90,000) | |
Total liabilities assumed | (331,000) | |
Intangible assets (provisional) | 1,419,000 | |
Goodwill (provisional) | 3,426,000 | |
Purchase Price | $ 4,950,000 |
SCHEDULE OF AMORTIZATION EXPENS
SCHEDULE OF AMORTIZATION EXPENSE FOR FUTURE PERIODS FOR INTANGIBLE ASSETS (Details) | Sep. 30, 2021USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
2021 remaining (remaining 3 months) | $ 416,000 |
2022 | 1,466,000 |
2023 | 1,464,000 |
2024 | 395,000 |
2025 and thereafter | 186,000 |
Total amortization | $ 3,927,000 |
SCHEDULE OF PRO FORMA STATEMENT
SCHEDULE OF PRO FORMA STATEMENTS OF OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Total revenue | $ 3,043,000 | $ 8,568,000 |
Cost of revenue | 1,344,000 | 3,661,000 |
Gross margin | 1,699,000 | 4,907,000 |
Operating expenses | 9,771,000 | 21,615,000 |
Other income, net | 574,000 | 3,550,000 |
Net loss | (7,498,000) | (13,158,000) |
Deemed dividends to Series A stockholders | (3,951,000) | |
Net loss attributed to common stockholders | (7,498,000) | (17,109,000) |
Saa S Recurring Subscription Revenue [Member] | ||
Total revenue | 1,661,000 | 4,511,000 |
Other Digital Revenue [Member] | ||
Total revenue | 360,000 | 1,166,000 |
Welcome Kit And Fulfillment [Member] | ||
Total revenue | 836,000 | 2,277,000 |
Shipping and Handling [Member] | ||
Total revenue | $ 186,000 | $ 614,000 |
SCHEDULE OF RESULTS OF OPERATIO
SCHEDULE OF RESULTS OF OPERATION OF SUBSIDIARY (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 276,000 | $ 795,000 |
Cost of revenue | (65,000) | (184,000) |
Operating expenses | (897,000) | (1,474,000) |
Other income/ (expense) | ||
Net loss | $ (686,000) | $ (863,000) |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | Sep. 04, 2020 | Apr. 12, 2019 | Apr. 12, 2019 | Sep. 04, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||
Amortization expense | $ 3,390,000 | $ 2,310,000 | |||||
Third Party Lender [Member] | Sound Concepts, Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Indefinite-lived Intangible Assets Acquired | $ 16,337,000 | ||||||
Finite-lived Intangible Assets Acquired | 6,340,000 | ||||||
Third Party Lender [Member] | Sound Concepts, Inc [Member] | Developed Technology Rights [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization expense | $ 4,700,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||||
Third Party Lender [Member] | Sound Concepts, Inc [Member] | Customer Relationships [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization expense | $ 1,200,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||||
Third Party Lender [Member] | Sound Concepts, Inc [Member] | Internet Domain Names [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization expense | $ 440,000 | ||||||
Finite-Lived Intangible Assets, Amortization Method | amortized on an accelerated basis | ||||||
Share Exchange Agreement [Table] | Ascend Certification [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization expense | 180,000 | $ 33,000 | |||||
Business Combination, Consideration Transferred | $ 5,700,000 | ||||||
Business combination post closing adjustments | 750,000 | ||||||
Adjusted purchase price | 4,950,000 | ||||||
Provisional goodwill and intangible assets | 4,845,000 | $ 4,845,000 | |||||
Share Exchange Agreement [Table] | Ascend Certification [Member] | Promissory Note [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Debt Instrument, Face Amount | 1,885,000 | $ 1,885,000 | |||||
Share Exchange Agreement [Table] | Ascend Certification [Member] | Promissory Note [Member] | Class B Units Stock [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Consideration Transferred | $ 4,950,000 | ||||||
Stock Issued During Period, Shares, Acquisitions | 2,642,159 | ||||||
Conversion of Stock, Shares Issued | 2,642,159 | ||||||
Stock Issued During Period, Value, Acquisitions | $ 3,065,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.14% | 0.14% | |||||
Share Exchange Agreement [Table] | Developed Technology Rights [Member] | Ascend Certification [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization expense | 1,400,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||||
Share Exchange Agreement [Table] | Customer Relationships [Member] | Ascend Certification [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization expense | $ 17,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||
Share Exchange Agreement [Table] | Internet Domain Names [Member] | Ascend Certification [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Indefinite-lived Intangible Assets Acquired | $ 442,000 | ||||||
Amortization expense | $ 2,000 | ||||||
Finite-Lived Intangible Assets, Amortization Method | tested for impairment on an annual basis |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,540,000 | $ 1,201,000 |
Accumulated depreciation | (462,000) | (339,000) |
Total property and equipment, net | 3,078,000 | 862,000 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 29,000 | 29,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 75,000 | 75,000 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 49,000 | 39,000 |
Leaseholds and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,058,000 | 1,058,000 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,329,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Capitalized development cost | $ 2,329,000 | ||
Additional development cost | 3,900,000 | ||
Purchase of machinery and equipment | 26,000 | $ 317,000 | |
Property, Plant and Equipment, Gross | 3,540,000 | $ 1,201,000 | |
Depreciation | 134,000 | $ 130,000 | |
Machinery And Equipment One [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 16,000 | ||
Accumulated Depreciation, Depletion and Amortization, Sale or Disposal of Property, Plant and Equipment | 11,000 | ||
Proceeds from Sale of Machinery and Equipment | 11,000 | ||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | $ 5,000 |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Right-of-use Assets And Operating Lease Liabilities | ||
Operating Lease, Cost | $ 524,000 | $ 524,000 |
Cash paid for amounts included in the measurement of lease liabilities | $ 593,000 | $ 383,000 |
Weighted average remaining lease term - operating leases (in years) | 4 years 1 month 24 days | 4 years 8 months 12 days |
Average discount rate - operating leases | 4.00% | 4.00% |
SCHEDULE OF OPERATING LEASES (D
SCHEDULE OF OPERATING LEASES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Right-of-use Assets And Operating Lease Liabilities | ||
Right-of-use assets | $ 2,305,000 | $ 2,730,000 |
Short-term operating lease liabilities | 582,000 | 596,000 |
Long-term operating lease liabilities | 2,464,000 | 2,943,000 |
Total operating lease liabilities | $ 3,046,000 | $ 3,539,000 |
SCHEDULE OF PRESENT VALUE OF LE
SCHEDULE OF PRESENT VALUE OF LEASE LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Right-of-use Assets And Operating Lease Liabilities | ||
2021 (remaining 3 months) | $ 184,000 | |
2022 | 751,000 | |
2023 | 773,000 | |
2024 | 472,000 | |
2025 and thereafter | 1,189,000 | |
Total lease payments | 3,369,000 | |
Less: Imputed interest/present value discount | (323,000) | |
Present value of lease liabilities | $ 3,046,000 | $ 3,539,000 |
SCHEDULE OF ADVANCES ON FUTURE
SCHEDULE OF ADVANCES ON FUTURE RECEIPTS (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | ||
Short-term Debt [Line Items] | |||
Original Borrowing | $ 10,366,000 | ||
Total | 2,368,000 | $ 177,000 | |
Debt discount | (515,000) | (67,000) | |
Net | $ 1,853,000 | 110,000 | |
Note A [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2023 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Note A [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 89,000 | ||
Note B [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Note B [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2020 | ||
Maturity Date | Feb. 25, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 506,000 | ||
Total | 88,000 | ||
Note C [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Note C [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jan. 13, 2021 | ||
Maturity Date | Sep. 10, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 844,000 | ||
Total | |||
Note D [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jan. 13, 2021 | ||
Maturity Date | Sep. 10, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 844,000 | ||
Total | |||
Note E [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jan. 22, 2021 | ||
Maturity Date | Jul. 1, 2021 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 2,040,000 | ||
Total | |||
Note F [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Interest Rate | 3.00% | ||
Original Borrowing | $ 1,696,000 | ||
Total | |||
Note F [Member] | Advance on Future Receipts [Member] | Minimum [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Feb. 18, 2021 | ||
Maturity Date | Aug. 3, 2021 | ||
Note F [Member] | Advance on Future Receipts [Member] | Maximum [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Mar. 3, 2021 | ||
Maturity Date | Aug. 15, 2021 | ||
Note G [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2021 | ||
Maturity Date | Dec. 31, 2021 | ||
Interest Rate | 7.00% | ||
Original Borrowing | $ 1,210,000 | ||
Total | $ 618,000 | ||
Note H [Member] | Advance on Future Receipts [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | Jun. 30, 2021 | ||
Maturity Date | Mar. 1, 2022 | ||
Interest Rate | 28.00% | ||
Original Borrowing | $ 2,720,000 | ||
Total | $ 1,750,000 | ||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of | ||
[2] | On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $ | ||
[3] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
ADVANCE OF FUTURE RECEIPTS (Det
ADVANCE OF FUTURE RECEIPTS (Details Narrative) - USD ($) | Jun. 30, 2021 | Mar. 02, 2021 | Feb. 18, 2021 | Jan. 13, 2021 | Jun. 30, 2020 | Jan. 22, 2020 | Jan. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 04, 2021 | Dec. 31, 2020 |
Short-term Debt [Line Items] | |||||||||||
Debt discount | $ 515,000 | $ 67,000 | |||||||||
Payments of debt | 7,162,000 | $ 1,424,000 | |||||||||
Debt instrument face amount | 10,366,000 | ||||||||||
Outstanding balance of debt | 2,368,000 | $ 177,000 | |||||||||
Unaffiliated Third-Party [Member] | Two Secured Advances [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 728,000 | ||||||||||
Purchase of future receipts | $ 1,012,000 | ||||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $6,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the average interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. As a result, the Company recorded a liability of $1,012,000 to account for the future receipts sold and a debt discount of $284,000 to account for the difference between the future receipts sold and the cash received. | ||||||||||
Principal payment | $ 6,000 | ||||||||||
Interest rate | 28.00% | ||||||||||
Advance future receipts sold | $ 1,012,000 | ||||||||||
Debt discount | $ 284,000 | ||||||||||
Payments of debt | 177,000 | ||||||||||
Amortization of debt discount | 67,000 | ||||||||||
Unaffiliated Third-Party [Member] | Note E [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 1,440,000 | ||||||||||
Purchase of future receipts | 2,040,000 | ||||||||||
Principal payment | $ 13,000 | ||||||||||
Interest rate | 28.00% | ||||||||||
Advance future receipts sold | $ 2,040,000 | ||||||||||
Debt discount | $ 600,000 | ||||||||||
Payments of debt | 2,040,000 | ||||||||||
Amortization of debt discount | 600,000 | ||||||||||
Unaffiliated Third-Party [Member] | Secured Advances [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $ | ||||||||||
Unaffiliated Third-Party [Member] [Default Label] | Two Secured Advances [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 1,213,000 | ||||||||||
Purchase of future receipts | $ 1,688,000 | ||||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $11,000 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the average interest was imputed at a rate of 28% based on the face value of the note and proceeds received. The Company may pay off either note for $744,000 if paid within 30 days of funding; for $775,000 if paid between 31 and 60 days of funding; or for $806,000 if paid within 61 to 90 days of funding. | ||||||||||
Principal payment | $ 11,000 | ||||||||||
Interest rate | 28.00% | ||||||||||
Advance future receipts sold | $ 1,688,000 | ||||||||||
Debt discount | $ 475,000 | ||||||||||
Unaffiliated Third-Party [Member] [Default Label] | Note Three And Four [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Payments of debt | 1,688,000 | ||||||||||
Amortization of debt discount | 475,000 | ||||||||||
Unaffiliated Third-Party [Member] [Default Label] | Secured Advances [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 1,637,000 | ||||||||||
Unaffiliated Third-Party [Member] [Default Label] | Note F [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 1,637,000 | ||||||||||
Purchase of future receipts | $ 1,696,000 | 1,696,000 | |||||||||
Principal payment | $ 283,000 | $ 283,000 | |||||||||
Interest rate | 3.00% | 3.00% | |||||||||
Advance future receipts sold | $ 1,696,000 | $ 1,696,000 | |||||||||
Debt discount | $ 59,000 | $ 59,000 | |||||||||
Payments of debt | 1,696,000 | ||||||||||
Amortization of debt discount | $ 59,000 | ||||||||||
Unaffiliated Third-Party [Member] [Default Label] | Note G [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 1,118,000 | ||||||||||
Purchase of future receipts | $ 1,210,000 | ||||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an average of $197,000 from the Company’s operating account each month. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of | ||||||||||
Interest rate | 7.00% | ||||||||||
Advance future receipts sold | $ 1,210,000 | ||||||||||
Debt discount | 92,000 | ||||||||||
Amortization of debt discount | 50,000 | ||||||||||
Debt instrument face amount | 592,000 | ||||||||||
Outstanding balance of debt | 618,000 | ||||||||||
Unamortized debt discount | 42,000 | ||||||||||
Unaffiliated Third-Party [Member] [Default Label] | Note H [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt principal amount | $ 1,960,000 | ||||||||||
Purchase of future receipts | $ 2,720,000 | ||||||||||
Agreement terms | Pursuant to the terms of the agreement the unaffiliated third-party will auto withdraw an aggregate of $15,200 from the Company’s operating account each banking day. The term of the agreement extends until the advances are paid in full. The notes did not bear any interest, however, the interest was imputed at a rate of 28% based on the face value of the note and the proceeds received. The Company may pay off the note for $2,200,000 if paid within 45 days of funding and for $2,380,000 if paid between 46 and 60 days of funding. | ||||||||||
Interest rate | 28.00% | ||||||||||
Advance future receipts sold | $ 2,720,000 | ||||||||||
Debt discount | $ 760,000 | ||||||||||
Amortization of debt discount | 287,000 | ||||||||||
Debt instrument face amount | 970,000 | ||||||||||
Outstanding balance of debt | 1,750,000 | ||||||||||
Unamortized debt discount | $ 473,000 |
SCHEDULE OF NOTES PAYABLE TO RE
SCHEDULE OF NOTES PAYABLE TO RELATED PARTIES (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | ||
Short-term Debt [Line Items] | |||
Original Borrowing | $ 10,366,000 | ||
Notes payable - related parties, net | 765,000 | $ 1,077,000 | |
Non-current | (725,000) | ||
Current | $ 40,000 | 1,077,000 | |
Note A [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [1] | Dec. 1, 2015 | |
Maturity Date | [1] | Feb. 8, 2023 | |
Interest Rate | [1] | 12.00% | |
Original Borrowing | [1] | $ 1,249,000 | |
Notes payable - related parties, net | [1] | $ 725,000 | 725,000 |
Note B [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [2] | Dec. 1, 2015 | |
Maturity Date | [2] | Apr. 1, 2017 | |
Interest Rate | [2] | 12.00% | |
Original Borrowing | [2] | $ 112,000 | |
Notes payable - related parties, net | [2] | 112,000 | |
Note C [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [3] | Apr. 4, 2016 | |
Maturity Date | [3] | Jun. 4, 2021 | |
Interest Rate | [3] | 12.00% | |
Original Borrowing | [3] | $ 343,000 | |
Notes payable - related parties, net | [3] | $ 40,000 | $ 240,000 |
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of | ||
[2] | On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $ | ||
[3] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
SCHEDULE OF NOTES PAYABLE TO _2
SCHEDULE OF NOTES PAYABLE TO RELATED PARTIES (Details) (Parenthetical) - USD ($) | Sep. 24, 2021 | May 19, 2021 | Apr. 04, 2016 | Dec. 01, 2015 | Feb. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 200,000 | |||||||||||
Gain (Loss) on Extinguishment of Debt | (287,000) | |||||||||||
Notes payable - related parties, net | $ 765,000 | $ 765,000 | $ 1,077,000 | |||||||||
Note A [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | [1] | 12.00% | 12.00% | |||||||||
Notes payable - related parties, net | [1] | $ 725,000 | $ 725,000 | 725,000 | ||||||||
Note A [Member] | Mr. Rory J. Cutaia [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | 12.00% | |||||||||||
Note A [Member] | Mr.Cutaia [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Maturity date description | February 8, 2021 | February 8, 2023 or an extension of two years | ||||||||||
Percentage of debt conversion | 30.00% | |||||||||||
Conversion into common stock value issued | $ 375,000 | |||||||||||
Outstanding balance | $ 725,000 | $ 725,000 | 725,000 | $ 825,000 | ||||||||
Repayments of Related Party Debt | 100,000 | |||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 138,889 | |||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 287,000 | |||||||||||
Gain (Loss) on Extinguishment of Debt | $ 287,000 | |||||||||||
Note B [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | [2] | 12.00% | 12.00% | |||||||||
Notes payable - related parties, net | [2] | 112,000 | ||||||||||
Note B [Member] | Mr.Cutaia [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | 12.00% | |||||||||||
Maturity date description | April 2017 | |||||||||||
Notes payable - related parties, net | $ 112,000 | |||||||||||
Debt principal amount | 112,000 | |||||||||||
Note B [Member] | Mr.Cutaia [Member] | Former Board [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Accounts Payable, Related Parties, Current | $ 140,000 | |||||||||||
Gain on settlement of notes | $ 82,000 | |||||||||||
Note C [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | [3] | 12.00% | 12.00% | |||||||||
Notes payable - related parties, net | [3] | $ 40,000 | $ 40,000 | 240,000 | ||||||||
Note C [Member] | Mr.Cutaia [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | 12.00% | |||||||||||
Maturity date description | June 4, 2021 | |||||||||||
Percentage of debt conversion | 30.00% | |||||||||||
Conversion into common stock value issued | $ 200,000 | $ 103,000 | ||||||||||
Outstanding balance | $ 343,000 | |||||||||||
Notes payable - related parties, net | $ 40,000 | $ 40,000 | $ 240,000 | |||||||||
Remaining debt amount | $ 240,000 | |||||||||||
Conversion into common stock shares issued | 194,175 | |||||||||||
Conversion price per share | $ 1.03 | |||||||||||
[1] | On December 1, 2015, the Company issued a convertible note payable to Mr. Rory J. Cutaia, the Company’s majority stockholder and Chief Executive Officer, to consolidate all loans and advances made by Mr. Cutaia to the Company as of that date. The note bears interest at a rate of | |||||||||||
[2] | On December 1, 2015, the Company issued a note payable to a former member of the Company’s board of directors, in the amount of $ | |||||||||||
[3] | On April 4, 2016, the Company issued a convertible note to Mr. Cutaia, in the amount of $ 343,000 30% 103,000 240,000 12% June 4, 2021 200,000 194,175 1.03 |
NOTES PAYABLE _ RELATED PARTI_3
NOTES PAYABLE – RELATED PARTIES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | |||
Interest payable | $ 8,000 | $ 114,000 | |
Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Interest expense, related parties | 88,000 | $ 106,000 | |
Interest payable | $ 112,000 | $ 100,000 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | ||
Short-term Debt [Line Items] | |||
Total notes payable | $ 150,000 | $ 1,458,000 | |
Non-current | (150,000) | (1,458,000) | |
Current | |||
Note A [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [1] | Apr. 17, 2020 | |
Maturity Date | [1] | Apr. 17, 2022 | |
Interest Rate | [1] | 1.00% | |
Total notes payable | [1] | 1,218,000 | |
Note B [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [2] | May 15, 2020 | |
Maturity Date | [2] | May 15, 2050 | |
Interest Rate | [2] | 3.75% | |
Total notes payable | [2] | $ 150,000 | 150,000 |
Note C [Member] | |||
Short-term Debt [Line Items] | |||
Issuance Date | [3] | May 1, 2020 | |
Maturity Date | [3] | May 1, 2022 | |
Interest Rate | [3] | 3.75% | |
Total notes payable | [3] | $ 90,000 | |
[1] | On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 | ||
[2] | On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan program in the amount of $ | ||
[3] | As a result of the acquisition of SoloFire in September 2020, the Company assumed SoloFire’s PPP loan of $ |
SCHEDULE OF NOTES PAYABLE (De_2
SCHEDULE OF NOTES PAYABLE (Details) (Parenthetical) - USD ($) | May 17, 2021 | Jan. 04, 2021 | May 15, 2020 | Apr. 17, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | |||||||||||
Gain (loss) on extinguishment of debt | $ (287,000) | ||||||||||
Repayment of debt | 7,162,000 | 1,424,000 | |||||||||
Proceeds from Issuance of Debt | $ 7,368,000 | $ 728,000 | |||||||||
Note A [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | [1] | 1.00% | 1.00% | ||||||||
Debt Instrument, Maturity Date | [1] | Apr. 17, 2022 | |||||||||
Note A [Member] | Paycheck Protection Program [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Loan received | $ 1,218,000 | $ 1,218,000 | |||||||||
Gain (loss) on extinguishment of debt | $ 91,000 | $ 1,226,000 | |||||||||
Note B [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | [2] | 3.75% | 3.75% | ||||||||
Debt Instrument, Maturity Date | [2] | May 15, 2050 | |||||||||
Note B [Member] | Economic Injury Disaster Loan Program [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Unsecured Debt | $ 150,000 | ||||||||||
Debt Instrument, Term | 30 years | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | ||||||||||
Debt Instrument, Maturity Date | May 15, 2021 | ||||||||||
Note B [Member] | Economic Injury Disaster Loan Program [Member] | Other Income [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Advance received from unsecured loan | $ 10,000 | ||||||||||
Repayment of debt | $ 10,000 | ||||||||||
Paycheck Protection Program [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Proceeds from Issuance of Debt | $ 90,000 | ||||||||||
[1] | On April 17, 2020, the Company received loan proceeds in the amount of $ 1,218,000 | ||||||||||
[2] | On May 15, 2020, the Company executed an unsecured loan with the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan program in the amount of $ |
SCHEDULE OF DEFERRED INCENTIVE
SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS (Details) - USD ($) | Dec. 23, 2019 | Sep. 30, 2021 | Dec. 31, 2020 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Total | $ 521,000 | $ 1,042,000 | |
Non-current | 521,000 | ||
Non-current | (521,000) | ||
Current | $ 521,000 | 521,000 | |
Rory Cutaia [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | Dec. 23, 2019 | ||
Payment Date | 50% on January 10, 2021 and 50% on January 10, 2022 | ||
Total | $ 215,000 | 430,000 | |
Rory Cutaia One [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | Dec. 23, 2019 | ||
Payment Date | 50% on January 10, 2021 and 50% on January 10, 2022 | ||
Total | $ 161,000 | 324,000 | |
Jeff Clayborne [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | Dec. 23, 2019 | ||
Payment Date | 50% on January 10, 2021 and 50% on January 10, 2022 | ||
Total | $ 63,000 | 125,000 | |
Jeff Clayborne [Member] | January 10, 2021 [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Annual incentive compensation, percentage | 50.00% | ||
Jeff Clayborne [Member] | January 10, 2022 [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Annual incentive compensation, percentage | 50.00% | ||
Jeff Clayborne One [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Date | Dec. 23, 2019 | ||
Payment Date | 50% on January 10, 2021 and 50% on January 10, 2022 | ||
Total | $ 82,000 | $ 163,000 |
SCHEDULE OF DEFERRED INCENTIV_2
SCHEDULE OF DEFERRED INCENTIVE COMPENSATION TO OFFICERS (Details) (Parenthetical) - USD ($) | Dec. 23, 2019 | Sep. 30, 2021 |
Rory Cutaia [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 430,000 | |
Rory Cutaia [Member] | Deferred Bonus [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 324,000 | |
Rory Cutaia [Member] | January 10, 2021 [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Rory Cutaia [Member] | January 10, 2022 [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Jeff Clayborne [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 125,000 | |
Jeff Clayborne [Member] | Deferred Bonus [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 163,000 | |
Jeff Clayborne [Member] | January 10, 2021 [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Jeff Clayborne [Member] | January 10, 2021 [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Jeff Clayborne [Member] | January 10, 2022 [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Jeff Clayborne [Member] | January 10, 2022 [Member] | Nasdaq Up-Listing Award [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation, percentage | 50.00% | |
Rory Cutaia and Jeff Clayborne [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | $ 278,000 | |
Payments for deferred incentive compensation to officers | 278,000 | |
Rory Cutaia and Jeff Clayborne [Member] [Default Label] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Annual incentive compensation | 243,000 | |
Payments for deferred incentive compensation to officers | $ 243,000 |
CONVERTIBLE SERIES A PREFERRE_2
CONVERTIBLE SERIES A PREFERRED STOCK AND WARRANT OFFERING (Details Narrative) - USD ($) | Aug. 14, 2019 | Sep. 30, 2021 | Sep. 30, 2020 |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,285,389 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 138,889 | ||
Conversion of Stock, Amount Converted | $ 348,000 | ||
Dividend Income, Operating | $ 348,000 | ||
Series A Preferred Stock and Warrants [Member] | |||
Proceeds from Issuance of Preferred Stock, Preference Stock, and Warrants | $ 4,688,000 | ||
Direct costs of issuance | $ 342,000 | ||
Preferred Stock [Member] | |||
Conversion of Stock, Shares Converted | 2,006 | ||
Common Stock [Member] | |||
Stock Issued During Period, Shares, New Issues | 4,237,833 | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,254,411 | ||
Conversion of Stock, Shares Converted | 1,978,728 | ||
Securities Purchase Agreement [Member] | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,870,000 | ||
Securities Purchase Agreement [Member] | Series A Preferred Stock and Warrants [Member] | |||
Number of common stock to be issued causing ineligibility to issue common stock | 4,459,725 | ||
Shareholders' approval percentage for mandatory conversion | 1999.00% | ||
Conversion price per share [Default Label] | $ 1.88 | ||
Securities Purchase Agreement [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 3,245,162 | ||
Series A Preferred Stock [Member] | |||
Stock Issued During Period, Shares, New Issues | 5,030 | ||
Preferred Stock, Shares Issued | 0 | ||
Preferred Stock, Shares Outstanding | 0 | ||
Series A Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||
Stock Issued During Period, Shares, New Issues | 6,000 | ||
Convertible Common Stock [Member] | |||
Stock Issued During Period, Shares, New Issues | 155,087 |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITY USING BINOMIAL PRICING MODEL ASSUMPTIONS (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)$ / shares | Dec. 31, 2020USD ($)$ / shares | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair Value | $ | $ 5,839,000 | $ 8,266,000 |
Upon Extinguishment in [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair Value | $ | $ 4,513,000 | |
Measurement Input, Share Price [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 1.92 | 1.65 |
Measurement Input, Share Price [Member] | Upon Extinguishment in [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 2.47 | |
Measurement Input, Exercise Price [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 1.41 | 1.41 |
Measurement Input, Exercise Price [Member] | Upon Extinguishment in [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 1.18 | |
Measurement Input, Expected Term [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value assumptions, measurement input, term | 2 years 5 months 1 day | 3 years 2 months 1 day |
Measurement Input, Expected Term [Member] | Upon Extinguishment in [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value assumptions, measurement input, term | 3 years 3 months 25 days | |
Measurement Input, Price Volatility [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 122 | 107 |
Measurement Input, Price Volatility [Member] | Upon Extinguishment in [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 144 | |
Measurement Input, Expected Dividend Rate [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0 | 0 |
Measurement Input, Expected Dividend Rate [Member] | Upon Extinguishment in [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0 | |
Measurement Input, Risk Free Interest Rate [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0.35 | 0.23 |
Measurement Input, Risk Free Interest Rate [Member] | Upon Extinguishment in [Member] [Default Label] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability, measurement input | 0.33 |
SCHEDULE OF DERIVATIVE LIABIL_2
SCHEDULE OF DERIVATIVE LIABILITY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Beginning balance | $ 8,266,000 | $ 5,048,000 | ||
Fair value upon issuance of notes payable and/or warrants | 3,951,000 | |||
Change in fair value | $ 141,000 | $ (975,000) | 2,086,000 | (4,295,000) |
Extinguishment | (4,513,000) | (159,000) | ||
Ending balance | $ 5,839,000 | $ 4,545,000 | $ 5,839,000 | $ 4,545,000 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative liability | $ 5,839,000 | $ 4,545,000 | $ 5,839,000 | $ 4,545,000 | $ 8,266,000 | $ 5,048,000 |
Change in fair value | $ 141,000 | $ (975,000) | $ 2,086,000 | $ (4,295,000) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures | 196,449 | |||||
Series A Warrants [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Change in fair value | $ 4,513,000 | |||||
Stock Issued During Period, Shares, Other | 1,829,190 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures | 33,334 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) | Sep. 24, 2021 | Mar. 15, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Value of shares issued for services | $ 157,000 | $ 230,000 | $ 1,926,000 | $ 1,126,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,150,833 | ||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 200,000 | ||||||
General and Administrative Expense | $ 6,130,000 | $ 6,655,000 | $ 20,018,000 | $ 14,187,000 | |||
Notes Payable [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 194,175 | ||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 200,000 | ||||||
Debt Instrument, Convertible, Conversion Price | $ 1.03 | $ 1.03 | |||||
Accounts Payable [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 104,790 | ||||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 131,000 | ||||||
Debt conversion amount | $ 19,000 | ||||||
Conversion of accounts payable into common stock shares | 10,500 | ||||||
Accrued Payroll [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock Issued During Period, Shares, Acquisitions | 182,397 | ||||||
Stock Issued During Period, Value, Acquisitions | $ 281,000 | ||||||
Truist Securities, Inc [Member] | Sales Agreement [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds sold of common stock | $ 4,722,000 | ||||||
EMA Financial, LLC [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
[custom:SharesIssuedForSettlementOfLitigation] | 600,000 | ||||||
[custom:SharesIssuedForSettlementOfLitigationValue-0] | $ 678,000 | $ 678,000 | |||||
[custom:AccruedSettlementAmount-0] | $ 585,000 | 585,000 | |||||
General and Administrative Expense | 93,000 | ||||||
Vendors [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Value of shares issued for services | $ 144,000 | ||||||
Employees and Vendors [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Value of shares issued for services | $ 2,057,000 | ||||||
Stock Issued During Period, Shares, Issued for Services | 1,198,610 | ||||||
Common Stock [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale and issuance of common stock | 2,540,000 | 12,545,453 | 11,915,000 | 12,545,453 | |||
Value of shares issued for services | |||||||
Stock Issued During Period, Shares, Issued for Services | 81,143 | 193,533 | 1,198,610 | 962,583 | |||
Conversion of accounts payable into common stock shares | 1,978,728 | ||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 194,175 | ||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | |||||||
IPO [Member] | Common Stock [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Sale and issuance of common stock | 9,375,000 | ||||||
Common per-share price | $ 1.60 | ||||||
Proceeds sold of common stock | $ 14,129,000 |
SUMMARY OF RESTRICTED STOCK AWA
SUMMARY OF RESTRICTED STOCK AWARD ACTIVITY (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Restricted Stock Awards | |
Number of Non-vested Shares, Outstanding Beginning | shares | 2,185,946 |
Fair Value, Outstanding Beginning | $ | $ 1,943,000 |
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares | $ 1.17 |
Shares, Granted | shares | 813,265 |
Fair Value, Granted | $ | $ 1,374,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 1.69 |
Number of Shares, Vested/deemed vested | shares | (889,212) |
Fair Value, Vested/deemed vested | $ | $ (1,285,000) |
Weighted Average Grant Date Fair Value, Vested/deemed vested | $ / shares | $ 1.09 |
Shares, Forfeited | shares | |
Fair Value, Forfeited | $ | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Number of Non-vested Shares, Outstanding Ending | shares | 2,109,999 |
Fair Value, Outstanding Ending | $ | $ 2,032,000 |
Weighted Average Grant Date Fair Value, Outstanding Ending | $ / shares | $ 1.41 |
RESTRICTED STOCK AWARDS (Detail
RESTRICTED STOCK AWARDS (Details Narrative) - USD ($) | Jan. 04, 2021 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted of restricted stock awards | 813,265 | |
Fair value of granted restricted stock | $ 1,374,000 | |
Number of share vested and returned | 1,285,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 889,212 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Nonvested | $ 2,032,000 | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted of restricted stock awards | 813,265 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of options outstanding beginning balance | shares | 6,031,775 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 1.55 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 8 months 4 days |
Number of options outstanding beginning balance | shares | 2,150,833 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 1.69 |
Number of options outstanding beginning balance | shares | (2,078,473) |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 2.52 |
Number of options outstanding beginning balance | shares | (575,730) |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 1.28 |
Number of options outstanding beginning balance | shares | 5,528,405 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 1.70 |
Weighted average exercise price outstanding ending balance | 2 years 3 months 3 days |
Number of options outstanding beginning balance | shares | 2,685,732 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 2.22 |
Number of options outstanding beginning balance | shares | 2,013,888 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 2.01 |
SCHEDULE OF FAIR VALUE ASSUMPTI
SCHEDULE OF FAIR VALUE ASSUMPTIONS USING BLACK-SCHOLES METHOD (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.10% | 0.17% |
Risk-free interest rate, maximum | 0.92% | 0.39% |
Average expected term (years) | 5 years | |
Expected volatility minimum | 232.84% | 270.10% |
Expected volatility maximum | 240.03% | 270.57% |
Expected dividend yield | ||
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average expected term (years) | 1 year | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average expected term (years) | 5 years |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
[custom:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue-0] | $ 1,939,000 | $ 1,939,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,150,833 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.69 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 575,730 | ||
Proceeds from Stock Options Exercised | $ 569,000 | ||
Common Stock [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 176,735 | 509,465 | |
Employees [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,150,833 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.69 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 3,563,000 | ||
Stock or Unit Option Plan Expense | 1,234,000 | ||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 2,940,000 | $ 2,940,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Description | expected to be recognized as part of operating expense through September 2025. |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Stock Warrants | |
Number of Shares, Warrants Outstanding Beginning | shares | 13,351,251 |
Weighted-Average Exercise Price, Outstanding Beginning | $ / shares | $ 2.48 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning | 3 years 4 months 17 days |
Number of Shares, Warrants Outstanding Beginning | shares | 138,889 |
Weighted-Average Exercise Price, Outstanding Beginning | $ / shares | $ 2.61 |
Number of Shares, Warrants Outstanding Beginning | shares | (196,449) |
Weighted-Average Exercise Price, Outstanding Beginning | $ / shares | $ 6.38 |
Number of Shares, Warrants Outstanding Beginning | shares | (2,285,389) |
Weighted-Average Exercise Price, Outstanding Beginning | $ / shares | $ 1.25 |
Number of Shares, Warrants Outstanding Beginning | shares | 11,008,302 |
Weighted-Average Exercise Price, Outstanding Beginning | $ / shares | $ 2.67 |
Weighted Average Remaining Contractual Life (Years), Outstanding Ending | 2 years 7 months 17 days |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Intrinsic value of warrants outstanding | $ 2,996,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 138,889 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,285,389 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.25 | |
Proceeds from Warrant Exercises | $ 2,784,000 | $ 2,165,000 |
Common Stock [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,254,411 | |
Officer [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 138,889 | |
Fair Value Adjustment of Warrants | $ 287,000 |
ISSUANCE OF CLASS A and B UNI_2
ISSUANCE OF CLASS A and B UNITS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Class B units, shares issued | 0 | 2,642,159 |
Class B units, shares outstanding | 0 | 2,642,159 |
Common Stock [Member] | ||
Conversion of Stock, Shares Converted | 1,978,728 | |
Class A Units Stock [Member] | ||
Common shares issued and outstanding | 100 | 100 |
Class A Units Stock [Member] | SoloFire [Member] | ||
Stock issued during period for acquisition | 100 | |
Class B Units Stock [Member] | ||
Rclassification of fair value of stock | $ 3,065,000 | |
Class B Units Stock [Member] | Common Stock [Member] | ||
Stock issued during period for acquisition | 2,642,159 | |
Conversion of Stock, Shares Converted | 2,642,159 | |
Class B Units Stock [Member] | SoloFire [Member] | ||
Stock issued during period for acquisition | 2,642,159 | |
Stock Issued During Period, Value, Acquisitions | $ 3,065,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Oct. 05, 2021 | Sep. 30, 2021 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 300,000 | |
Legal fees | $ 915,000 | |
Board fees expensed | 356,000 | |
Board fees to be recognized | 119,000 | |
Five Board Members [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Aggregate board fees | $ 475,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Nov. 08, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Subsequent Event [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 575,730 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 1.28 | ||
Proceeds from Stock Options Exercised | $ 569,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,150,833 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.69 | ||
Proceeds from issuance of stock | $ 18,851,000 | $ 16,781,000 | |
Employees [Member] | |||
Subsequent Event [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2,150,833 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.69 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 3,563,000 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 167,250 | ||
Stock Issued During Period, Shares, New Issues | 167,250 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 1.42 | ||
Proceeds from Stock Options Exercised | $ 232,000 | ||
Proceeds from issuance of stock | 185,000 | ||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | |||
Subsequent Event [Line Items] | |||
Advances from unaffiliated third parties | 4,815,000 | ||
Purchase of future receipts/revenues | 5,928,000 | ||
Payments to related party debt | 19,000 | ||
Monthly payment | 353,000 | ||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | Paid within 30 Days [Member] | |||
Subsequent Event [Line Items] | |||
Advances from unaffiliated third parties | 5,228,000 | ||
Subsequent Event [Member] | Unaffiliated Third Parties [Member] | Paid within 61 to 90 Days [Member] | |||
Subsequent Event [Line Items] | |||
Advances from unaffiliated third parties | $ 5,452,000 | ||
Subsequent Event [Member] | Vendors [Member] | |||
Subsequent Event [Line Items] | |||
Stock Issued During Period, Shares, Issued for Services | 33,499 | ||
Sale of Stock, Price Per Share | $ 2.06 | ||
Subsequent Event [Member] | Employees [Member] | |||
Subsequent Event [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 62,500 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 2 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 5 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 124,000 |