Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 14, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Loop Media, Inc. | ||
Entity Central Index Key | 0001643988 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-55591 | ||
Entity Incorporation, State Code | NV | ||
Entity Well-known Season Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 120,933,177 | ||
Entity Public Float | $ 295,582,987 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 838,161 | $ 1,011,445 |
Accounts receivable, net of allowance of $62,154 and $0 | 669,679 | 673,971 |
Inventory | 90,300 | 28,395 |
Prepaid expenses and other current assets | 64,765 | 13,697 |
Prepaid income tax | 21,689 | 118,283 |
License content assets - current | 1,723,569 | |
Operating lease right-of-use assets - current | 148,536 | 155,868 |
Note receivable - current | 10,215 | 10,215 |
Total current assets | 3,566,914 | 2,011,874 |
Non-current assets | ||
Deposits | 15,649 | 19,831 |
License content assets - non current | 371,041 | |
Equipment, net | 24,146 | 28,027 |
Operating lease right-of-use assets | 198,539 | 347,076 |
Intangible assets, net | 3,169,266 | 1,128,555 |
Note receivable | 96,498 | 102,318 |
Equity method investments | 1,613,479 | |
Goodwill | 583,086 | 583,086 |
Total non-current assets | 6,071,704 | 2,208,893 |
Total assets | 9,638,618 | 4,220,767 |
Current liabilities | ||
Accounts payable and accrued liabilities | 964,276 | 1,044,795 |
Payable on acquisition | 250,125 | 250,125 |
License content liabilities - current | 1,251,500 | |
Loans Payable | 1,000,000 | |
Note Payable - current | 314,829 | |
Deferred Income | 128,622 | 116,440 |
Convertible debt related party - current, net of unamortized discount of $601,979 and $0 as of December 31, 2020 and 2019, respectively | 279,705 | |
Convertible debt - current, net of unamortized discount of $6,196 and $0 as of December 31, 2020 and 2019, respectively | 393,943 | |
Lease liability - current | 145,271 | 147,458 |
Total current liabilities | 3,728,271 | 2,558,818 |
Non-current liabilities | ||
Convertible debt - related party, net of unamortized discount of $1,876,783 and $2,360,898 as of December 31, 2020 and December 31, 2019, respectively | 1,223,768 | 639,102 |
Convertible debt, net of unamortized discount of $11,883 and $24,291 as of December 31, 2020 and December 31, 2019, respectively | 160,165 | 588,852 |
Note payable - non-current | 258,671 | |
License content liabilities - non current | 385,000 | |
Lease liability | 208,625 | 360,369 |
Total non-current liabilities | 2,236,229 | 1,588,323 |
Total liabilities | 5,964,500 | 4,147,141 |
Commitments and contingencies (Note 14) | ||
STOCKHOLDERS' EQUITY | ||
Common Stock, $0.0001 par value, 316,666,667 and 126,666,667 shares authorized, 118,128,008 and 101,882,647 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | 11,813 | 10,188 |
Common stock subscribed and not yet issued | 485,144 | 150,144 |
Additional paid in capital | 44,721,282 | 26,038,546 |
Accumulated deficit | (41,544,144) | (26,125,252) |
Total stockholders' equity | 3,674,118 | 73,626 |
Total liabilities and stockholders' equity | 9,638,618 | 4,220,767 |
Series A Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | 3 | |
Total stockholders' equity | 3 | |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | 20 | |
Total stockholders' equity | $ 20 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, net of allowance | $ 62,154 | $ 0 |
Convertible debt related party - current, net of unamortized discount | 601,979 | 0 |
Convertible debt - current, net of unamortized discount | 6,196 | 0 |
Convertible debt - related party, net of unamortized discount | 1,876,783 | 2,360,898 |
Convertible debt, net of unamortized discount | $ 11,883 | $ 24,291 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 666,667 | 666,667 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 316,666,667 | 126,666,667 |
Common stock, issued | 118,128,008 | 101,882,647 |
Common stock, outstanding | 118,128,008 | 101,882,647 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 666,667 | 666,667 |
Preferred stock, issued | 30,667 | 0 |
Preferred stock, outstanding | 30,667 | 0 |
Liquidation preference | $ 0.10 | |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 3,333,334 | 3,333,334 |
Preferred stock, issued | 200,000 | 0 |
Preferred stock, outstanding | 200,000 | 0 |
Liquidation preference | $ 1 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 2,794,081 | $ 3,381,121 |
Cost of revenue | 1,109,379 | 913,843 |
Gross Profit | 1,684,702 | 2,467,278 |
Operating expenses | ||
Selling, general and administrative | 9,700,994 | 6,112,338 |
Impairment of intangibles | 2,390,799 | 6,350,000 |
Total operating expenses | 12,091,793 | 12,462,338 |
Loss from operations | (10,407,091) | (9,995,060) |
Other income (expense) | ||
Interest income | 6,552 | 5,235 |
Interest expense | (1,135,603) | (964,081) |
Gain on settlement of obligation | 13,900 | 192,557 |
Loss on settlement of obligation | (15,000) | (493,601) |
Loss on extinguishment of debt | (258,417) | |
Inducement expense | (3,793,406) | |
Other income | 10,000 | 3,225 |
Total other income (expense) | (4,913,557) | (1,515,082) |
Income tax expense | 98,244 | 1,600 |
Net loss | (15,418,892) | (11,511,742) |
Deemed dividend | (3,800,000) | |
Net loss attributable to common stockholders | $ (19,218,892) | $ (11,511,742) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.17) | $ (0.11) |
Weighted average number of common shares outstanding (in shares) | 112,699,040 | 106,009,013 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock at $0.0001 par [Member] | Stock Payable - Class A [Member] | Stock Payable - Class B [Member] | Additional Paid in Capita [Member]l | Accumulated Deficit [Member] | Common Class A [Member] | Common Class B [Member] | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Total |
Balance at beginning at Dec. 31, 2018 | $ 92,000 | $ 1,890,000 | $ 15,191,173 | $ (14,613,510) | $ 5,091 | $ 976 | $ 2,565,730 | |||
Balance at beginning (in shares) at Dec. 31, 2018 | 50,907,418 | 9,755,304 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Shares issued for cash | 546,349 | $ 137 | $ 5 | 546,491 | ||||||
Shares issued for cash (in shares) | 1,377,333 | 45,127 | ||||||||
Shares to be issued | 150,144 | $ 150,144 | ||||||||
Issuance of common stock subscribed | (92,000) | 91,986 | $ 14 | |||||||
Issuance of common stock subscribed (in shares) | 138,387 | |||||||||
Shares issued for consulting fees | $ (1,890,000) | $ 1,889,720 | $ 280 | |||||||
Shares issued for consulting fees (in shares) | 2,800,000 | |||||||||
Shares issued for settlement with former employees (in shares) | 1,240,773 | 187 | 1,240,960 | |||||||
Shares issued in conjunction with reverse merger | $ 1,866,667 | |||||||||
Shares issued for debt settlement | $ 24,996 | $ 4 | $ 25,000 | |||||||
Shares issued for debt settlement (in shares) | 37,605 | |||||||||
Warrants excercised | 25,231 | $ 1,802 | 27,033 | |||||||
Warrants excercised (in shares) | 18,021,472 | |||||||||
Shares issued for asset purchases | 6,348,307 | $ 1,533 | $ 160 | 6,350,000 | ||||||
Shares issued for asset purchases (in shares) | 15,333,333 | 1,600,000 | ||||||||
Beneficial conversion feature of convertible debt | 140,248 | 140,248 | ||||||||
Stock-based compensation | 55,796 | 55,796 | ||||||||
Warrants issued to consultant | 483,967 | 483,967 | ||||||||
Class A and B common shares merged into one class | $ 10,188 | $ (6,775) | $ (3,413) | |||||||
Class A and B common shares merged into one class (in shares) | 101,882,647 | (67,756,472) | (34,126,175) | |||||||
Net loss | (11,511,742) | (11,511,742) | ||||||||
Balance at ending at Dec. 31, 2019 | $ 10,188 | 150,144 | 26,038,546 | (26,125,252) | 73,626 | |||||
Balance at ending (in shares) at Dec. 31, 2019 | 101,882,647 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Shares issued for cash | $ 393 | 3,959,607 | $ 9,600,000 | $ 3,960,000 | ||||||
Shares issued for cash (in shares) | 3,933,333 | 200,000 | 3,933,333 | |||||||
Cash received for common stock subscribed | 350,000 | $ 350,000 | ||||||||
Issuance of common stock subscribed | $ 4 | (15,000) | 14,996 | |||||||
Issuance of common stock subscribed (in shares) | 40,000 | |||||||||
Shares issued for consulting fees | $ 400 | 1,499,600 | $ 1,500,000 | |||||||
Shares issued for consulting fees (in shares) | 4,000,000 | 4,000,000 | ||||||||
Shares issued in conjunction with reverse merger | $ 517 | (264,497) | $ 3 | $ (263,977) | ||||||
Shares issued in conjunction with reverse merger (in shares) | 5,168,931 | 30,667 | ||||||||
Shares issued for cash | 4,799,990 | $ 10 | 4,800,000 | |||||||
Shares issued for cash (in shares) | 100,000 | |||||||||
Shares issued for debt settlement | $ 10 | 194,793 | 194,803 | |||||||
Shares issued for debt settlement (in shares) | 97,891 | |||||||||
Shares issued in conjunction with debt settlement | 4,799,990 | $ 10 | 4,800,000 | |||||||
Shares issued in conjunction with debt settlement (in shares) | 100,000 | |||||||||
Shares issued for asset purchases | $ 137 | 2,671,096 | 2,671,233 | |||||||
Shares issued for asset purchases (in shares) | 1,369,863 | |||||||||
Warrants issued for settlement of debt to related party | 185,563 | 185,563 | ||||||||
Beneficial conversion feature of convertible debt | 750,000 | 750,000 | ||||||||
Deemed Dividend | (3,800,000) | (3,800,000) | ||||||||
Stock-based compensation | 450,286 | 450,286 | ||||||||
Warrants issued to consultant | 492,000 | 492,000 | ||||||||
Shares issued for license content assets | $ 118 | 2,065,878 | 2,065,996 | |||||||
Shares issued for license content asset (in shares) | 1,180,880 | |||||||||
Shares issued for equity investment in unconsolidated entity | $ 46 | 863,434 | 863,480 | |||||||
Shares issued for equity investment in unconsolidated entity (in shares) | 454,463 | |||||||||
Net loss | (15,418,892) | (15,418,892) | ||||||||
Balance at ending at Dec. 31, 2020 | $ 11,813 | $ 485,144 | $ 44,721,282 | $ (41,544,144) | $ 3 | $ 20 | $ 3,674,118 | |||
Balance at ending (in shares) at Dec. 31, 2020 | 118,128,008 | 30,667 | 200,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (15,418,892) | $ (11,511,742) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 893,139 | 221,214 |
Amortization of debt discount | 638,349 | 629,315 |
Amortization of right-of-use assets | 135,044 | 227,871 |
Bad debt expense | 62,154 | |
Gain on settlement of obligations | (13,900) | (192,557) |
Loss on extinguishment of debt | 258,417 | |
Loss on settlement of obligations | 15,000 | 493,601 |
Stock-based compensation | 2,442,286 | 1,296,756 |
Loss on Impairment of intangibles | 2,390,799 | 6,350,000 |
Inducement expense | 3,793,406 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (57,861) | (54,863) |
Prepaid income tax | 96,594 | (118,283) |
Inventory | (61,905) | (15,823) |
Prepaid expenses | (46,886) | 109,332 |
Accounts payable and accrued liabilities | 158,930 | 372,567 |
Income tax payable | (800) | |
License contract asset | (839,000) | |
Operating lease liabilities | (133,107) | (222,988) |
Deferred income | 12,183 | (38,528) |
CASH USED IN OPERATING ACTIVITIES | (5,933,667) | (2,196,511) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment | (7,847) | (25,773) |
Cash paid on equity investment | (750,000) | |
Repayment of note receivable | 5,820 | 5,595 |
CASH USED IN INVESTING ACTIVITIES | (752,027) | (20,178) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of Class A Shares | 516,491 | |
Cash paid on acquisition | (2,149,875) | |
Proceeds from issuance of Class B Shares | 30,000 | |
Proceeds from issuance of common stock | 3,960,000 | |
Proceeds from issuance of preferred stock | 1,000,000 | |
Proceeds from loans | 573,500 | 1,000,000 |
Proceeds from stock payable | 350,000 | 15,000 |
Proceeds from issuance of convertible debt | 750,000 | 326,143 |
Repayment of stockholder loans | (40,956) | (348,286) |
Share issuance costs | (80,134) | |
CASH PROVIDED FOR (USED IN) FINANCING ACTIVITIES | 6,512,410 | (610,527) |
Change in cash and cash equivalents | (173,284) | (2,827,216) |
Cash, beginning of the year | 1,011,445 | 3,838,661 |
Cash, end of the year | 838,161 | 1,011,445 |
Supplemental Disclosures | ||
Cash paid for taxes | 120,679 | |
Cash paid for interest | 287,035 | 50,000 |
Non-Cash Transactions | ||
Intangible asset acquired with shares | 2,671,233 | 6,350,000 |
Right-of-use assets upon adoption of ASC 842 | 444,112 | |
Addition of new leases accounted for under ASC 842 | 286,703 | |
Assumption of office lease by related party | 20,825 | |
Beneficial conversion feature as debt discount | 750,000 | 29,967 |
Stock payable for settlement of obligations | 135,144 | |
Shares issued for debt settlement | 25,000 | |
Warrants exercised for settlement of obligations | 27,032 | |
Common stock issued for license content assets | 2,260,799 | |
Common stock issued for shares subscribed | (15,000) | $ 1,982,000 |
Assumption of debt with related party as part of reverse merger | 183,842 | |
Warrants issued to extinguish debt with related party | (185,563) | |
Common shares issued in connection with reverse merger | 517 | |
Preferred stock issued in connection with reverse merger | 3 | |
Deemed dividend | (3,800,000) | |
Preferred shares issued for debt settlement | 1,006,597 | |
Accrued interest rolled into convertible note | 232,235 | |
Common stock issued for equity investment in unconsolidated entity | $ 863,480 |
BUSINESS
BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | NOTE 1 – BUSINESS Loop Media Inc. (the “Company”; formerly Interlink Plus, Inc.) is a Nevada corporation. The Company was incorporated under the laws of the State of Nevada on May 11, 2015. On February 5, 2020, the Company and the Company’s wholly owned subsidiary, Loop Media Acquisition, Inc. (“Merger Sub”), a Delaware corporation, closed the Agreement and Plan of Merger (the “Merger Agreement”) with Loop Media, Inc. (“Loop”), a Delaware corporation. Pursuant to the Merger Agreement, Merger Sub merged with and into Loop with Loop as surviving entity and becoming a wholly-owned subsidiary of the Company (the “Merger”). Pursuant to the Merger Agreement, the Company acquired 100% of the outstanding shares of Loop in exchange for 152,823,970 shares of the Company’s common stock at an exchange ratio of 1:1. Loop was incorporated on May 18, 2016 under the laws of the State of Delaware. In connection with the Merger, on February 6, 2020, the Company entered into a Purchase Agreement (the “Asset Purchase Agreement”) with Zixiao Chen (“Buyer”) for the purchase of assets relating to the Company’s two major business segments: travel agency assistance services and convention services (together, the “Business”). In consideration for the assets of the Business, Buyer transferred to the Company 2,000,000 shares of its common stock and agreed to assume and discharge any and all liabilities relating to the Business accruing up to the effective time of the Asset Purchase Agreement. The shares were retired and restored to the status of authorized and unissued shares. In 2019 Loop owned 100% of the capital stock of two companies that make up ScreenPlay. ScreenPlay was a combination of ScreenPlay, Inc. (“SPI”), a state of Washington corporation incorporated in 1991, and SPE, Inc. (“SPE”), a state of Washington corporation incorporated in 2008. ScreenPlay provided customized audiovisual environments that supported integrated brand strategies for clients in the retail, hospitality, and business services markets, and for online content providers. On January 24, 2020 the Company merged SPE with and into the Company. The certificate of merger was issued by the State of Washington on January 24, 2020 and the certificate of ownership and merger was issued by the State of Delaware on January 24, 2020. For accounting purposes, Loop was the surviving entity. The transaction was accounted for as a recapitalization of Loop pursuant to which Loop was treated as the accounting acquirer, surviving and continuing entity although the Company is the legal acquirer. The Company did not recognize goodwill or any intangible assets in connection with the Merger. Accordingly, the Company’s historical financial statements are those of Loop and its wholly-owned subsidiary, ScreenPlay, immediately following the consummation of this reverse merger transaction. On June 8, 2020, a 1 for 1.5 reverse stock split of the Company’s common stock became effective. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively adjusted for the effects of the reverse split for all periods presented. Going concern and management’s plans As of December 31, 2020, the Company had cash of $838,161 and an accumulated deficit of $41,544,144. During the year ended December 31, 2020, the Company used net cash in operating activities of $5,933,667. The Company has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of these consolidated financial statements. The Company’s primary source of operating funds since inception has been cash proceeds from debt and equity financing transactions. The ability of the Company to continue as a going concern is dependent upon its ability to generate sufficient revenue and its ability to raise additional funds by way of its debt and equity financing efforts. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. The ability of the Company to continue as a going concern is dependent on management’s further implementation of the Company’s on-going and strategic plans, which include continuing to raise funds through equity and/or debt raises. Should the Company be unable to raise adequate funds, certain aspects of the on-going and strategic plans may require modification. Management is in the process of identifying sources of capital via strategic partnerships, debt refinancing and equity investments through one or more private placements. COVID-19 The continuing spread of COVID-19 around the world is affecting the United States and global economies and has affected our operations and those of third parties on which we rely, including disruptions in staffing, order fulfillment and demand for product. In addition, the COVID-19 pandemic has and may continue to affect our revenue significantly. Additionally, while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. The continuing impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company experienced a 17% decline in revenues for the fiscal year ended December 31, 2020 as compared to the year ended December 31, 2019, which was related to business closures of key customers. During fiscal 2020, we implemented certain mitigation measures such as temporary salary reductions, staff reductions and other cost cutting activities. As COVID-19 continues to evolve, the extent to which the coronavirus impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. The Company continues to monitor the pandemic and, the extent to which the continued spread of the virus adversely affects our customer base and therefore revenue. As the COVID-19 pandemic is complex and rapidly evolving, the Company’s plans as described above may change. At this point, the Company cannot reasonably estimate the duration and severity of this pandemic, which could have a material adverse impact on the business, results of operations, financial position, and cash flows. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Screenplay. These consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”). All inter-company transactions and balances have been eliminated on consolidation. Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of stock-based compensation, the fair value of other equity and debt instruments, fair value of intangible assets, recoverability of license content assets, and useful lives of assets. Business combinations The Company accounts for business acquisitions under Accounting Standards Codification (“ASC”) 805, Business Combinations. Cash Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. The Company has not experienced any loses on such accounts. At December 31, 2020 and 2019, the Company had no cash equivalents. As of December 31, 2020, and 2019, approximately $490,775 and $489,774 of cash exceeded the FDIC insurance limits, respectively. Accounts receivable Accounts receivable represent amounts due from customers. The Company assesses the collectability of receivables on an ongoing basis. A provision for the impairment of receivables involves significant management judgement and includes the review of individual receivables based on individual customers, current economic trends and analysis of historical bad debts. As of December 31, 2020 and 2019, the Company had recorded an allowance for doubtful accounts of $62,154 and $0, respectively. Concentration of credit risk The Company grants credit in the normal course of business to its customers. Periodically, the Company reviews past due accounts and makes decisions about future credit on a customer by customer basis. Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. The Company’s concentration of credit risk was not significant as of December 31, 2020 and 2019. Inventory Inventories are valued at the lower of cost or net realizable value. The Company purchases inventory from a vendor and all inventory purchased is deemed finished goods. Cost is determined using the first-in-first-out basis for finished goods. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to net realizable value, if lower. As of December 31, 2020 and 2019, the Company has recorded no valuation allowance. Prepaid expenses Expenditures paid in one accounting period which will not be consumed until a future period such as insurance premiums and annual subscription fees are accounted for on the balance sheet as a prepaid expense. When the asset is eventually consumed, it is charged to expense. License Content Asset On January 1, 2020, the Company adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials Equity method investments The Company accounts for investments in unconsolidated entities under the equity method of accounting if it could exercise significant influence over the operating and financial policies of an entity but does not have a controlling financial interest. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments are reported under the line-item captioned equity method investment income in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity method investments in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Variable interest entities (“VIE”) Variable interests are contractual, ownership or other monetary interests in an entity that change with fluctuations in the fair value of the entity’s net assets exclusive of variable interests. A VIE can arise from items such as lease agreements, loan arrangements, guarantees or service contracts. An entity is a VIE if (a) the entity lacks sufficient equity or (b) the entity’s equity holders lack power or the obligation and right as equity holders to absorb the entity’s expected losses or to receive its expected residual returns. If an entity is determined to be a VIE, the entity must be consolidated by the primary beneficiary. The primary beneficiary is the holder of the variable interests that has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and has the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE. Therefore, the Company must identify which activities most significantly impact the VIE’s economic performance and determine whether it, or another party, has the power to direct those activities. As of December 31, 2020, and 2019, the Company had no investments that qualify as VIE. Goodwill and other intangible assets Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill and other intangible assets determined to have an indefinite useful life are not amortized but are subject to impairment tests. The Company conducts its annual impairment tests as of December 31 of each year or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. When evaluating goodwill and indefinite-lived intangible assets for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit or the intangible asset is more-likely-than-not greater than the carrying amount. Significant factors considered in this assessment include, but are not limited to, macro-economic conditions, market and industry conditions, cost considerations, the competitive environment, overall financial performance, and results of past impairment tests. If, based on a review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value is greater than the carrying value, the Company may bypass a quantitative test for impairment. In performing the quantitative test for impairment of goodwill, the Company compares the fair value of each reporting unit with it carrying amount, including goodwill, in order to identify a potential impairment. Measurement of the fair value of a reporting unit is based on a fair value measure using the sum of the discounted estimated future cash flows. Estimates of forecasted cash flows involve measurement uncertainty, and it is therefore possible that reductions in the carrying value of goodwill may be required in the future because of changes in management’s future cash flow estimates. When the fair value of a reporting unit is less than it carrying amount, goodwill of the reporting unit is considered to be impaired. Effective January 1, 2020, the Company adopted the guidance in Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment The Company measures impairment of indefinite-lived intangible assets, which consist of brand name, based on projected discounted cash flows. The Company also re-evaluates the useful life of the brand name to determine whether events and circumstances continue to support an indefinite useful life. For the year ended December 31, 2020, the Company recorded an impairment of $130,000 on brand name. There was no impairment in the carrying amount of the indefinite-lived intangibles assets for the year ended December 31, 2019. Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. The capitalization policy for the company is to capitalize property and equipment purchases greater than $3,000. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings. See below for estimated useful lives: Equipment 5 years Software 3 years Operating leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term. Long-lived assets The Company evaluates the recoverability of long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner that an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if their carrying amount is not recoverable through the undiscounted cash flows. The impairment loss is based on the difference between the carrying amount and estimated fair value as determined by discounted future cash flows. The Company’s finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two to nine years. There was $2,290,799 impairment recorded (see Note 6) for the year ended December 31, 2020. For the year ended December 31, 2019, the Company recorded an impairment of $6,350,000 for the intellectual property it acquired in 2019. Fair value measurement The company determines the fair value of its assets and liabilities using a hierarchy established by the accounting guidance that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology is one or more unobservable inputs which are significant to the fair value measurement. The carrying amount of the Company’s financial instruments, including cash, accounts receivable, deposits, short-term portion of notes receivable and notes payable, and current liabilities approximate fair value due to their short-term nature. The Company does not have financial assets or liabilities that are required under the U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use fair value measurement option for any assets or liabilities for which fair value measurement is not presently required. The Company records assets and liabilities at fair value on nonrecurring basis as required by the U.S. GAAP. Assets recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis include items such as property and equipment, operating lease assets, goodwill, and other intangible assets, which are measured at fair value if determined to be impaired. Convertible debt and beneficial conversion features The Company evaluates embedded conversion features within convertible debt under ASC 815, Derivatives and Hedging Debt with Conversion and Other Options Advertising costs The Company expenses all advertising costs as incurred. Advertising and marketing costs for the year ended December 31, 2020 and 2019 were $379,487 and $44,977, respectively. Revenue recognition ASU No. 2014-09, Revenue from Contracts with Customers The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under Topic 606 in a manner that reasonably reflects the delivery of the Company’s products and services to customers in return for expected consideration and includes the following elements: ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation of the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. Performance obligations and significant judgments The Company’s revenue streams can be categorized into the following performance obligations and recognition patterns: ◌ Delivery of streaming services including content encoding and hosting. The Company recognizes revenue over the term of the service based on bandwidth usage. ◌ Delivery of subscription content services in customized formats. The Company recognizes revenue over the term of the service. ◌ Delivery of hardware for ongoing subscription content delivery through software: The Company recognizes revenue at the point of hardware delivery. Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, the Company does not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. Disaggregation of revenue The Company’s revenues are disaggregated into the following revenue streams. The content and streaming services revenue including content encoding and hosting are recognized over the term of the service based on bandwidth usage. The content subscription services revenue in customized formats is recognized over the term of the service. The hardware for ongoing subscription content delivery is recognized at the point of the hardware delivery. The following table represents revenue by category for the years ended December 31, 2020 and 2019: December 31, December 31, 2020 2019 Content and streaming services $ 1,402,018 $ 1,693,921 Content subscription services 1,225,005 1,498,663 Hardware for ongoing subscription content 167,058 188,537 Total revenue $ 2,794,081 $ 3,381,121 Customer acquisition costs The Company records commission expense associated with subscription revenue. Commissions are included in operating expenses. The Company has elected the practical expedient that allows the Company to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. Cost of revenue Cost of revenue represents the cost of the delivered hardware and related bundled software and is recognized at the time of sale. For ongoing licensing and hosting fees, cost of sales is recognized over time based on usage patterns. Deferred income The Company bills subscription services in advance of when the service period is performed. The deferred income recorded at December 31, 2020 and 2019, represents the Company’s accounting for the timing difference between when the subscription fees are received and when the performance obligation is satisfied. Net loss per share The Company accounts for net loss per share in accordance with ASC subtopic 260-10, Earnings Per Share Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator. The following securities are excluded from the calculation of weighted average diluted shares at December 31, 2020 and 2019, respectively, because their inclusion would have been anti-dilutive. December 31, December 31, 2020 2019 Options to purchase common stock 8,312,306 5,812,307 Warrants to purchase common stock 8,585,558 5,550,709 Series A preferred stock 3,066,700 — Series B preferred stock 20,000,000 — Convertible debentures 7,079,622 6,513,444 Total common stock equivalent 47,044,186 17,876,460 Cost of revenue Cost of revenue represents the cost of delivered hardware and bundled software and is recognized at the time of sale. For ongoing licensing and hosting fees, cost of sales is recognized over time based on usage patterns. Shipping and handling costs A shipping and handling fee is charged to customers and recorded as revenue at the time of sale. The associated cost of shipping and handling is recorded as a cost of revenue at the time of service. Income taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. Stock-based compensation Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. Recently adopted accounting pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangements that is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment— Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials Accounting standards issued but not yet effective In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued 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) |
ACQUISITIONS AND EQUITY INVESTM
ACQUISITIONS AND EQUITY INVESTMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
ACQUISITIONS AND EQUITY INVESTMENTS | NOTE 3. ACQUISITIONS AND EQUITY INVESTMENTS Asset purchase from Spkr Inc. On October 13, 2020, the Company acquired from Spkr Inc., a Delaware corporation, assets that included technology (Spkr.com website, internet domain name and a mobile application available in the Apple Inc. IOS Store as Spkr: Curated Podcast Radio), trade names and customers. The Spkr Inc. provides short-form feeds of podcasts and other curated audio, providing content organized into different channels, personalized audio feed built from a listener’s chosen content as well as an always-on, continuously updating, living playlist. The purchase price for the acquired assets consisted of consideration of 1,369,863 shares of the Company’s common stock, par value $0.0001 per share, valued at $2,671,233. The cost of the single asset acquisition is $2,671,233 (see Note 8). Equity investment in EON Media Group On December 1, 2020, the Company acquired from Ithaca EMG Holdco LLC (Ithaca) 1,350 ordinary shares and 1,084 preference shares issued by EON Media Group Pte. Ltd (EON Media Group). The transaction resulted in Company acquiring a 20% equity interest in EON Media Group, a privately held company incorporated in Republic of Singapore. As a result of transaction, Ithaca became a stockholder of the Company and its executives will serve as advisors providing input on strategic focus and growth initiatives. EON Media Group is an entertainment company focused on producing syndicated content and providing specialist entertainment advisory and agency services for music festival, brands, and artists. The purchase price consideration for the acquired shares consisted of $750,000 in cash and 454,463 shares of the Company’s common stock, par value $0.0001 per share, valued at $863,480. The carrying value of the investment as of December 31, 2020 was $1,613,479; and was $1,649,643 higher than its interest in the investee’s underlying net assets. This basis difference of $1,649,643 relates to goodwill recognized upon acquisition of the Company’s interest in Eon Media Group. This goodwill is not amortized. No dividends or material income were recorded for one month ended December 31, 2020. Company did not have any acquisitions or investments during the year ended December 31, 2019. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4 – INVENTORY The Company’s inventory consisted of the following on December 31, 2020 and 2019: December 31, December 31, 2020 2019 Computers $ 6,195 $ 8,623 Hasp keys 0 2,240 Loop player 84,105 17,532 Total inventory $ 90,300 $ 28,395 Finished goods are $90,300 and $28,395 as of December 31, 2020 and 2019, respectively. Inventories were valued at the lower of cost or net realizable value. Cost is determined using the first-in-first-out basis for finished goods. Differences between lower of cost or net realizable value were not significant. The Company recorded $0 for inventory obsolescence as of December 31, 2020 and 2019, respectively. |
NOTE RECEIVABLE
NOTE RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
NOTE RECEIVABLE | NOTE 5 – NOTE RECEIVABLE On December 23, 2014, SPI entered a promissory note receivable whereby it advanced $137,860 to Lodestar Entertainment, LLC. This note bears interest at 4% per annum and is collected in monthly installments of $851, including both interest and principal and has a maturity date of July 1, 2034. Interest earned for the years ended December 31, 2020 and 2019 was $4,805 and $4,802, respectively. December 31, December 31, 2020 2019 Current portion $ 10,215 $ 10,215 Long-term portion 96,498 102,318 Total note receivable $ 106,713 $ 112,533 |
LICENSE CONTENT ASSETS
LICENSE CONTENT ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
LICENSE CONTENT ASSETS | NOTE 6 – LICENSE CONTENT ASSETS License Content Assets To stream video content to the users, the Company generally secures intellectual property rights to such content by obtaining licenses from, and paying royalties or other consideration to, rights holders or their agents. The licensing arrangements can be for a fixed fee, variable fee, or combination of both. The licensing arrangements specify the period when the content is available for streaming. The license content assets are two years in duration and include prepayments to distributors for customer subscription revenues, per play usage fees, and ad supported fees. As of December 31, 2020, license content assets were $1,723,569 recorded as License content asset, net – current and $371,041 recorded as License content asset, net – noncurrent. Payments for content, including additions to content assets and the changes in related liabilities of $839,000, were classified within Net cash provided by operating activities on the consolidated statements of cash flows. As of December 31, 2020, the corresponding liability was included in License content liabilities – current for $1,251,500 and License content liabilities – noncurrent for $385,000. The Company issued common shares capitalized as License content asset and the Company subsequently deemed the equity portion of the consideration paid was not recoverable and not recoupable and therefore impaired the License content asset for the value of the capitalized shares for $2,260,799 as of December 31, 2020. The Company recorded amortization expense of $380,890 and $0 for the years ended December 31, 2020 and 2019, respectively, in cost of revenue, in the consolidated statements of operations, related to capitalized license content assets. The Company recorded licensed content asset of $2,094,610, net of $2,260,799 impairment expense, and net of $380,890 amortization expense. The amortization expense for the next two years for capitalized license content assets as of December 31, 2020 is $1,237,750 in 2021, and $856,860 in 2022. License Content Liabilities At December 31, 2020, the Company had $1,636,500 of obligations comprised of $1,251,500 in License content liability – current and $385,000 in License content liability – noncurrent on the Consolidated Balance Sheets. The expected timing of payments for these content obligations is $1,251,500 payable in 2021 and $385,000 payable in 2022. Certain contracts provide for recoupment of payments on minimum obligations during the term of the contracts. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 – PROPERTY AND EQUIPMENT The Company's property and equipment consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Equipment $ 464,456 $ 456,610 Software 53,450 53,450 517,906 510,060 Less: accumulated depreciation (493,760 ) (482,033 ) Total, equipment net $ 24,146 $ 28,027 Depreciation expense charged to operations amounted to $11,727 and $9,769 respectively, for the years ended December 31, 2020 and 2019. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS As of December 31, 2020, and 2019, the balance of goodwill was $583,086 and $583,086, respectively. The Company’s other intangible assets, each definite lived assets, consisted of the following as of December 31, 2020 and 2019: December 31, December 31, Useful life 2020 2019 Software acquired as intellectual property not applicable $ $ — $ 6,350,000 Screenplay brand not applicable 130,000 130,000 Customer relationships nine years 1,012,000 1,012,000 Content library two years 198,000 198,000 Technology two years 2,671,233 — Total intangible assets, gross 4,011,233 7,690,000 Less: Impairment of intangible assets (130,000 ) (6,350,000 ) Less: accumulated amortization (711,967 ) (211,445 ) Total intangible accumulated amortization (841,967 ) (6,561,445 ) Total intangible assets, net $ 3,169,266 $ 1,128,555 In October 2020, the Company acquired from Spkr Inc. assets that consisted of single asset acquisition of $2,671,233 in technology (see Note 3) with a useful life of 2 years. During 2019, the Company acquired intellectual property valued at $6,350,000 in exchange for issuance of Class B common shares. As of December 31, 2019, the Company fully impaired the intellectual property and recognized a loss on impairment of $6,350,000. Amortization expense charged to operations amounted to $500,523 and $211,444, respectively, for the years ended December 31, 2020 and 2019. Screenplay brand name was impaired $130,000 for the year ended December 31, 2020. Annual amortization expense for the next five years is estimated to be $1,448,061, $1,158,982, $112,444, $112,444, and $112,444, respectively. The weighted average life of the intangible assets subject to amortization was 3.1 and 7.3 years on December 31, 2020 and 2019, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 9 – LEASES Operating leases The Company has operating leases for office space and office equipment. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes. Lease liability is summarized below: As of December 31, As of December 31, Short term portion $ 145,271 $ 147,458 Long term portion 208,625 360,369 Total lease liability $ 353,896 $ 507,827 Maturity analysis under these lease agreements are as follows: 2021 $ 180,419 2022 185,834 2023 37,584 Total undiscounted cash flows 403,837 Less: 10% Present value discount (49,941 ) Lease liability $ 353,896 Lease expense for the year ended December 31, 2020 and 2019 was comprised of the following: December 31, December 31, Operating lease expense $ 178,294 $ 237,206 Short-term lease expense 6,108 17,656 $ 184,402 $ 254,862 Operating lease expense is included in selling, general and administration expenses in the consolidated statement of operations. For the year ended December 31, 2020, cash payments against lease liabilities totaled $175,792, accretion on lease liability of $43,250 and non-cash transactions totaled $20,825 to recognize assumption of lease by a related party. For the year ended December 31, 2019, cash payments against lease liabilities totaled $263,694, accretion on lease liability of $40,706 and non-cash transactions of $444,112 to bring on leases as part of the adoption of ASC 842 and an added lease during the period valued at $75,274. Weighted-average remaining lease term and discount rate for operating leases are as follows: Weighted-average remaining lease term 2.18 years Weighted-average discount rate 10% |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Accounts payable $ 683,846 $ 357,982 Interest payable 59,818 94,069 Accrued liabilities 193,500 566,696 Payroll liabilities 27,113 26,048 Total accounts payable and accrued expenses $ 964,277 $ 1,044,795 |
LOANS PAYABLE
LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 11 – LOANS PAYABLE On December 18, 2019, the Company entered into a loan agreement with a related party for $1,000,000. The loan provided an interest rate of 5% compounded annually and calculated on a 360-day basis. The principal and accrued unpaid interest were due on June 30, 2020. The loan was secured by a secondary interest in all assets of both Loop and ScreenPlay. On February 5, 2020, the Company issued 200,000 shares of Series B convertible preferred stock for (i) $1,000,000 in cash (Note 13) and (ii) the exchange of the $1,000,000 loan mentioned above to the Company plus accrued interest of $6,597. The fair value of the common stock into which the Series B convertible preferred stock is convertible was $9,600,000 on the date of issuance. The Company applied the guidance in ASC 470-20. The Company recognized an inducement expense equal to the excess of the allocated fair value of the Series B Convertible preferred stock and the carrying value of the loan payable as of the date the inducement offers were accepted. The excess of the fair value of the Series B Convertible preferred stock over the carrying value of the loan payable was $3,793,406 which amount was included as an inducement expense in the statement of operations for the year ended December 31, 2020. |
NOTE PAYABLE
NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
NOTE PAYABLE | NOTE 12 – NOTE PAYABLE Payroll protection program and economic injury disaster loan grant The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020 and provided for, among other things, the Payroll Protection Program (“PPP”). The CARES Act temporarily added the PPP Loan program to the U.S. Small Business Administration’s (“SBA”) 7(a) Loan Program and provides for the forgiveness of up to the full amount of qualifying loan plus accrued interest guaranteed under the program. Loop applied for and received on April 27, 2020, through a bank, $573,500 under this program. The loan agreement was effective on April 24, 2020. The loan provides for an annual interest rate of 1% and a term of two years from the effective date of April 24, 2020. Payments of principal and interest are deferred for the period up to the earlier of determination of the forgiveness amount by the SBA or ten months after the end of its 24-week cover period which would require payments to begin August 24, 2021. The Company the current portion of this loan is $314,829, assuming payments will begin on August 24, 2021. Principal payments due are $314,829 and $258,671 in 2021 and 2022, respectively. The program further provides that the payment of certain qualified expenses from the proceeds received can be eligible for loan forgiveness. The qualified payments must consist of at least 60% for payroll costs and the remaining amount up to a maximum of 40% can be used for certain non-payroll related costs such as mortgage interest, rent and utilities. The bank that issued the loan will determine how much of the loan will be forgiven based upon the information provided by the Company along with evidence of such costs. The $573,500 has been accounted for as a liability on Loop’s balance sheet as of December 31, 2020. Any amount that is forgiven will reduce the loan amount and will be recognized as a gain from extinguishment of debt. Any amount that is not forgiven will remain on the balance sheet along with the applicable amount of accrued interest as a liability. The remaining balance will be repaid with interest over the remaining term of the loan. The Company has applied for forgiveness of all the loan proceeds but has not yet received a determination. The CARES Act also if businesses affected by the pandemic would be eligible to apply for a loan under the Economic Injury Disaster Loan (“EIDL”) Program of the SBA. However, a business can only apply for a loan under PPP or EIDL, but not both. Loop applied for an EIDL loan as well but accepted the PPP Loan and therefore was no longer eligible to borrow under the EIDL Program. However, as part of the EIDL loan application process, Loop was able to request a $10,000 grant from the EIDL Program. The grant does not have to be repaid because of not getting the EIDL. However, the $10,000 grant will be reduced against the amount of the PPP loan qualifying to be forgiven. |
CONVERTIBLE DEBENTURES PAYABLE
CONVERTIBLE DEBENTURES PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Debt Instruments [Abstract] | |
CONVERTIBLE DEBENTURES PAYABLE | NOTE 13 – CONVERTIBLE DEBENTURES PAYABLE Convertible debentures payable are presented in two sections, debentures to related parties and debentures to non-related parties. The conversion prices mentioned below have been adjusted for the reverse stock split. A description of the debentures to related parties follows: As of December 31, Convertible debentures to related parties 2020 2019 Unsecured convertible debentures issued to related parties, amended October 23, 2020, interest at 10% per annum, unpaid interest accrued at 18% per annum through October 23, 2020 amounting to $179,803 was paid by making a cash payment of $97,979 and increasing the principal amount of the convertible debenture by $81,824 on the date of this agreement, beginning November 1, 2020, monthly payments of unpaid interest accrued at 12.5% per annum will be paid in arrears through March 31, 2021, beginning April 1, 2021, the Company will pay equal monthly installments of principal and interest at 10% per annum through December 1, 2023, the above mentioned loan amendment has been accounted for as a loan modification and associated transactions will be accounted for prospectively. $ 3,000,000 $ 3,000,000 Accrued interest rolled into the related party debenture above 232,235 — Convertible debenture issued to related party, as part of a private placement offering to participate in a convertible debenture and warranty purchase agreement for up to $3,000,000 dated December 1, 2020, due December 1, 2022, cash interest at 4% per annum and payment in kind (PIK) interest at 6% payable in the Company’s common stock, all interest is determined on a 360 day basis, cash interest is payable in arrears twelve months from the issue date on November 30, 2021, then six months in arrears on June 1, 2022, then six months in arrears is payable in shares of common stock as determined below on June 1, 2021, December 1, 2021, June 1, 2022 and December 1, 2022, secured by the existing and future assets of the Company, subordinate to the secured debenture below 750,000 — Total convertible debentures payable to related parties 3,982,235 3,000,000 Debt discount associated with convertible debentures to related parties (2,478,762 ) (2,360,898 ) Total convertible debentures payable to related parties, net 1,503,473 639,102 Less current portion of convertible debentures payable to related parties, net (279,705 ) — Long-term portion of convertible debentures payable to related parties, net $ 1,223,768 $ 639,102 Convertible debentures – related party $3,000,000, December 12, 2018 Prior terms On December 12, 2018, the Company issued $3,000,000 in convertible debentures, which have a maturity date of December 1, 2023 (the “Maturity Date”). The debentures accrue interest monthly at a rate of 10% per annum, simple interest. Accrued unpaid interest became payable monthly beginning February 1, 2019 through May 1, 2020. Any accrued unpaid interest outstanding on May 1, 2020 could be converted into shares or added to the face amount of the loan. Beginning June 1, 2020 through January 1, 2021 the Company will make monthly installments of interest only payments. Beginning January 1, 2021, the Company will make monthly installments of principal and interest through December 1, 2023. At the option of the holders, the debentures are convertible at any time prior to the Maturity Date in whole or in parts into common shares of the Company at a price of $0.60 per common share. The convertible debentures also provide that should the Company receive not less than $6,000,000 from the sale of its securities, it must either, at the discretion of the holders, make a $750,000 principal payment plus the balance of any accrued unpaid interest or convert that amount into the Company’s common stock. If the Company receives not less than $12,000,000 from the sale of its securities, the entire outstanding principal balance plus any accrued and unpaid interest must be either paid or converted in common stock. The Company was not able to make the payments required under the terms of the convertible debentures and the holders filed suit on July 11, 2019. The convertible note holders and the Company entered into a settlement agreement on October 31, 2019, and the lawsuit was dismissed as of October 31, 2019. Pursuant to the settlement agreement the payment terms for the convertible debentures were amended to provide that the Company would be released from any liability for accrued unpaid interest and other convertible debentures costs from the date of the convertible debentures to the date of the settlement agreement. The Company was relieved of $192,557 of accrued interest as of October 31, 2019 and recorded a gain on settlement of obligations during the year ended December 31, 2019. In addition, the settlement agreement further provided for interest to be accrued from November 1, 2019 through April 2020 and at the sole discretion of the note holder to be paid either by common stock of the Company or added to the balance of the loan. The note holders elected to add the accrued interest to the balance of the loan. It further provided that beginning June 1, 2020, monthly payments of unpaid accrued interest will be made through December 2020 and beginning January 1, 2021, the Company will pay equal monthly installments of principal and interest through December 1, 2023 and any unpaid principal and interest outstanding will be immediately due and payable on December 1, 2023. Also, as part of the settlement agreement, the Company (i) issued 45,127 shares of Class B common stock to the convertible note holders for $30,000 cash; and (ii) issued 37,605 shares of Class B common stock valued at $25,000 to the convertible note holders for the forgiveness of $5,221 in liabilities owed by the Company, which resulted in a loss on settlement of obligations of $19,779 during the year ended December 31, 2019. Additionally, the settlement agreement provided that the Company would merge the Class A common stock and Class B common stock into one class of common stock. On December 5, 2019, the Company merged Class A and Class B common stock. On October 31, 2019, as part of the above-mentioned settlement agreement, the Company issued 18,021,472 shares of Class B common stock upon the exercise of warrants, with an exercise price of $0.001 per share, for a total value of $27,032. The exercise price was applied against the balance of accrued interest on the convertible debentures. The allocation of the $3,000,000 in gross proceeds from issuance of convertible debentures based on the relative fair values resulted in an allocation of $2,387,687 to the warrants and $612,313 to the convertible debentures. The relative fair value of the warrants above was determined on the date of grant using the Black Scholes option-pricing model with the following parameters: (1) risk free interest rate of 2.08%; (2) expected life in years of 10.0; (3) expected stock volatility of 45.49%; and (4) expected dividend yield of 0%. In addition, because the effective conversion rate based on the $612,313 allocated to the convertible debentures was $0.08 per share which was less than the fair value of the Company’s stock price on the date of issuance, a beneficial conversion feature was present at the issuance date. The beneficial conversion feature totaled $612,313 and was recorded as a debt discount. The Company also recorded the allocated fair value of the warrants $2,387,687 as additional debt discount. The total initial unamortized debt discount was $3,000,000 and is amortized to interest expense using effective interest method over the life of the convertible debentures. For the years ended December 31, 2020 and 2019, the amortized debt discount recorded as interest expense was $601,314 and $599,671, respectively. Second Amendment of terms During 2020, the Company did not make all of the payments due under the convertible loan agreement with the related party and entered into a second amendment of this convertible loan on October 23, 2020. The second amendment provides for payment to be made for the unpaid interest accrued at 18% per annum (default rate) through October 22, 2020 amounting to $179,803 by making a cash payment of $97,979 and increasing the principal amount of the convertible note by $81,824. The second amendment further provides that beginning November 1, 2020, monthly payments of unpaid interest accrued at 12.5% per annum will be paid in arrears through March 31, 2021, beginning April 1, 2021, the Company will pay equal monthly installments of principal and interest computed at 10% per annum through December 1, 2023. The Company accounted for this amendment to the note under ASC 470-50-40-10 as a debt modification due to the present value of the cash flows under the new amendment terms is less than 10% different from the present value of the remaining cash flows of the current terms and recognized no gain or loss on modification on December 31, 2020. Convertible debentures, related party - $750,000, December 1, 2020 On December 1, 2020, the Company offered , in a private placement, the aggregate offering amount of up to $3,000,000 of Senior Secured Promissory Debentures, with a minimum subscription amount of $250,000 and common stock warrants with an aggregate exercise price of $750,000 and aggregate exercisable warrant shares of 272,727 shares. The only Senior Secured Promissory Note entered under this offering in 2020 was to a related party in the amount of $750,000. The note accrues cash interest at 4% per annum and payment in kind (PIK) interest at 6% payable in the Company’s common stock, determined on a 360-day basis. The note, as amended, provided that the cash interest for the period from the issue date to November 30, 2021 is payable on November 30, 2021 instead of being paid in advance. Cash interest is payable six months in arrears on June 1, 2022, then six months in arrears on December 1, 2022. The lender is allowing the Company to defer payment of the advanced interest to a future date not exceeding November 30, 2021. The accrued PIK interest is payable in shares of common stock in an amount equal to the amount of PIK Interest accrued as of such date, divided by the VWAP of common stock during each trading day during the ten-trading day period ending one trading day prior to the PIK Interest Payment due dates of June 1, 2021, December 1, 2021, June 1, 2022, and December 1, 2022. The Senior Secured Promissory Debentures define VWAP as the average of the daily dollar volume-weighted average sale price for the Company’s common stock on the Pink Open Market or other market operated by OTC Markets Group, Inc. on any trading day, as reported by Bloomberg Financial Markets. At the option of the Senior Secured Promissory Note holders, the debentures are convertible at the earlier of a change of control event, a Qualified IPO, both of which are defined in the Promissory Note Agreement or the maturity date of December 1, 2022. If the conversion takes place at the maturity date, the note will be converted in whole or in parts (which cannot be less than 50% of the amount due under the note) into an number of shares equal to the amount due divided by the average of the VWAP of common stock during each trading day during the thirty trading day period ending one trading day prior to the maturity date. If the conversion takes place at the change of control date, the note will be converted into an number of shares equal to the amount due divided by the average of the VWAP of common stock during each trading day during the ten trading day period ending one trading day prior to the change of control effective date. In the event of a Qualified IPO, but subject to the closing of such Qualified IPO, the amount due shall convert in full on the closing date of such Qualified IPO into several shares equal to the amount due on such closing date divided by the applicable IPO conversion price, as defined in the Promissory Note Agreement. The allocation of the $750,000 in gross proceeds from issuance of Senior Secured Promissory Debentures based on the relative fair values resulted in an allocation of $36,949 to the warrants and $713,051 to the Promissory Debenture. The relative fair value of the warrants above was determined on the date of grant using the Black Scholes option-pricing model with the following parameters: (1) risk free interest rate of 0.22%; (2) expected life in years of 3.0; (3) expected stock volatility of 61.43%; and (4) expected dividend yield of 0%. In addition, because the effective conversion rate was indeterminate as of the date of the Promissory Note issuance, a beneficial conversion feature was present at the issuance date. The beneficial conversion feature totaled $713,051 and was recorded as a debt discount. The Company also recorded the allocated fair value of the warrants $36,949 as additional debt discount. The total initial unamortized debt discount was $750,000 and is amortized to interest expense using effective interest method over the life of the convertible debentures. For the year ended December 31, 2020, the amortized debt discount recorded as interest expenses was $30,822. As of December 31, Convertible debentures to non-related parties 2020 2019 Convertible debenture issued to a founder and former officer of the Company in conjunction with redemption of 20,000,000 shares of common stock, interest at 10% per annum, amended terms as of October 22, 2020 provide that the unpaid interest accrued through May 31, 2020 of $43,011 plus principal of $29,324 and interest of $11,490 that were due under the original agreement (described below) beginning June 1, 2020 to October 1, 2020 was paid on October 22, 2020. The November 1, 2020 payment was deferred until December 1, 2020. Since the convertible debenture was not converted into the Company’s common stock by November 30, 2020, the terms of the original debenture resumed on December 1, 2020. This $287,000 convertible debenture is secured by 5,000,000 shares of the Company’s common stock which are owned by the Company’s President $ 246,044 $ 287,000 Secured (1) convertible debenture, interest at 11% per annum,, accrued monthly and the outstanding principal and unpaid accrued interest was due January 8, 2021 convertible debentures payable 326,143 326,143 Total convertible debentures payable to non-related parties 572,187 613,143 Debt discount associated with convertible debentures to non-related parties (18,079 ) (24,291 ) Total convertible debentures payable to non-related parties, net 554,108 588,852 Less current portion of convertible debentures payable to related parties, net (393,943 ) — Long-term portion of convertible debentures payable to related parties, net $ 160,165 $ 588,852 (1) Secured by primary interest in all assets of the Company Convertible debentures, non related party - $287,000, December 1, 2018 Original terms On December 1, 2018, the Company entered into a redemption agreement with one of its former officers to repurchase 20,000,000 shares of Class A common stock. The terms of this agreement required that the Company issue a convertible debenture to this stockholder in the amount of $287,000 and pay the amount of accrued expenses owed to him of $134,000 in four quarterly payments beginning October 1, 2019. The first two quarterly payments totaled $67,000 were paid in January 2020 but the remaining $67,000 has not been paid. The convertible debenture originally provided for interest at 10% per annum, interest to accrue through September 1, 2019, beginning October 1, 2019 monthly payments of unpaid accrued interest will be made through May 1, 2020, beginning June 1, 2020, the Company will pay equal monthly installments of principal and interest through December 1, 2023. At the option of the debenture holder, the debenture is convertible at any time prior to December 1, 2023 in whole or in parts into common stock of the Company at a price of $0.60 per common share. As the effective conversion rate based on the principal $287,000 was $0.60 per share which was less than the Company’s stock price on the date of issuance, a beneficial conversion feature was present at the issuance date. The beneficial conversion feature totaled $30,996 and was recorded as a debt discount. The discount is amortized to interest expense using effective interest method over the life of the convertible debentures. For the years ended December 31, 2020 and 2019, the amortized debt discount recorded as interest expenses was $6,213 and $6,196, respectively. First Amendment of terms The Company did not make all the payments due under the convertible loan agreement entered with a founder and former officer of the Company and entered into a second agreement to modify the payment terms on October 22, 2020. At the date of this amendment, the Company owed unpaid accrued interest through May 31, 2020 amounting to $43,011 and unpaid principal and interest payments from June 1, 2020 to October 1, 2020 in the amount of $40,814 for a total of $83,825. To remove the default, the Company amended the terms of the convertible note on October 22, 2020 to provide for the unpaid interest accrued through May 31, 2020 plus the unpaid principal and interest payments from June 1, 2020 to October 1, 2020 amounting to $83,825 to be paid on the date of this agreement. In addition, the amendment required that the Company pay on October 22, 2020, $28,587 of the outstanding balance of accrued expenses due to the founder and former officer for a total payment of $112,412. The amendment further provides that the remaining balance of the $67,000 owed amounted to $38,412 will be paid on March 31, 2021. Additionally, the amendment provided that the November 1, 2020 payment was deferred to December 1, 2020. Since the convertible note was not converted into the Company’s common stock, the terms of the original note resumed on December 1, 2020. The Company accounted for this amendment to the note under ASC 470-50-40-10 as a debt modification due to the present value of the cash flows under the new amendment terms is as least 10% different from the present value of the remaining cash flows of the current terms and recognized no gain or loss on modification on December 31, 2020. Convertible debentures, non related party - $326,143, July 12, 2019 Original terms On July 12, 2019, the Company entered into a loan agreement with a lender for a loan amount up to $200,000. The loan provided an interest rate of 11% accrued monthly with principal and accrued unpaid interest due on January 8, 2021. The loan required the Company to pay a loan fee of 2% ($4,000) upon execution. The loan provides for a prepayment penalty of 4% of the amount prepaid plus all interest accrued to the date of the prepayment. The loan was secured by a primary interest in all assets of both Loop and ScreenPlay. Amendment 1 By August 20, 2019, the amount borrowed under the $200,000 loan agreement amounted to $252,473 and the loan agreement was amended to provide for an increase in the maximum loan amount to $400,000. In addition, the loan was restructured as a convertible debenture. At the option of the debenture holder, the debenture is convertible at any time prior to the maturity date in whole or in parts into Class A common shares of the Company. The conversion price was deemed to be the lesser of $0.60 per common share or the offering price paid by unaffiliated investors for one share of the common stock, no par value, of a company that at that time was a merger target of the Company, under a planned private offering of such securities by the then-current merger target in connection with the then-proposed merger transaction with the Company. The proposed merger with that merger target failed to close so the conversion price was deemed to be $0.60 per common share. The Company evaluated the embedded conversion feature in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging – Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the embedded conversion feature did not meet the definition of a liability and therefore did not account for it as a separate derivative liability. The embedded conversion feature was fair valued at $146,678 using the Black Scholes Method and recorded as loss on extinguishment of debt and offset to additional paid-in capital. The Company also charged the additional loan fees of $6,473 to loss on extinguishment of debt. The Company evaluated the embedded conversion feature as the effective conversion rate based on the principal $252,473 was $0.60 per share which was less than the fair value of the Company’s stock price on the date of issuance and determined that a beneficial conversion feature was present at the issuance date. The beneficial conversion feature totaled $29,967 and was recorded as a debt discount and offset to additional paid-in capital. The amendment also provided that at the lender’s request, the Company will issue one share of its Class A common stock for every dollar loaned. The total amount borrowed under this loan as of December 31, 2019 is $326,143, the Company recorded the obligation to issue 326,143 Class A common shares with a value of $135,144 as Class A common stock subscribed but not yet issued and debt discount. After considering the 1 to 1.5 shares reverse stock split, the number of shares to be issued would be 217,429. Amendment 2 – November 26, 2019 The Company subsequently identified Interlink Plus, Inc. (Interlink) as a new merger target. On November 26, 2019, the $400,000 convertible loan agreement was amended again to change the conversion price to the lesser of $0.375 per common share or the offering price paid by unaffiliated investors for one share of Interlink common stock. As of November 26, 2019, the amortized debt discount recorded as interest expense was $23,448, and upon execution of Amendment 2, the Company wrote off the remaining unamortized debt discount of $141,663 as loss on extinguishment of debt. Upon execution of Amendment 2, a new embedded conversion feature was re-calculated as $110,281 which was charged to additional-paid-in-capital. The difference between the embedded conversion feature calculated in Amendment 1 of $146,678 and the recalculated amount of $110,281 or $36,397 was offset against loss on extinguishment of debt. Effective January 8, 2021, the lender elected to convert the outstanding loan amount of $326,143 plus accrued interest of $50,213 for a total of $376,356 into shares of the Company’s common stock. Amendment 2 of the Loan Agreement provided that the conversion share price would be $0.25 per share. After considering the effect of the reverse stock split in 2020, the conversion share price was adjusted to $0.375 per share. The lender will receive 1,003,617 shares in 2021 from this conversion. As noted above, Amendment 1 also provided at the lender’s request, the Company will issue one share of its common stock for every dollar loaned. On January 8, 2021, the lender also requested that the shares represented by the loan amount of $326,143 be issued in the amount of 217,429 shares which will also result in the reduction of common stock subscribed but not yet issued in the amount of $135,144. Maturity analysis under total convertible debentures, net are as follows: 2021 $ 1,281,822 2022 2,002,096 2023 1,270,503 Convertible debentures payable, related and non related party 4,554,421 Less: Debt discount on convertible debentures payable (2,496,840 ) Total convertible debentures payable, related and non related party, net $ 2,057,581 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such loss contingencies that are included in the financial statements as of December 31, 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS Related parties are natural persons or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over the party making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences. The Company has borrowed funds for business operations from certain stockholders through convertible debt agreements and has remaining balances, including accrued interest amounting to $3,988,693 and $3,050,137 as of December 31, 2020 and 2019, respectively. The Company incurred interest expense for these convertible debentures in the amounts of $416,845 and $297,534 for the years ended December 31, 2020 and 2019, respectively. See Note 13 for related party debentures discussion. As part of the reverse merger with Interlink Plus, Inc. on February 5, 2020, the Company assumed a $180,000 debt to Interlink’s controlling stockholder to whom the Company was also indebted in the amount of $1,000,000. The $180,000 debt plus accrued interest of $5,563 was retired as a part of the issuance of 2,666,667 warrants to purchase the Company’s common stock. The warrants were recorded at their fair value (see Note 17). Because the transaction was a related party, any gain or loss is recorded and reported as a change to additional paid in capital (the effects of the transaction do not affect the Consolidated Statements of Operations). The Company incurred interest expense for these debentures in the amounts of $6,721 and $1,597 for the years ended December 31, 2020 and 2019, respectively. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 16 –STOCKHOLDERS’ EQUITY (DEFICIT) Convertible Preferred Stock The Company is authorized to issue 666,667 shares of its $0.0001 par value preferred stock. As of December 31, 2020, and 2019, the Company had 30,667 and 0 shares of Series A convertible preferred stock issued and outstanding, respectively. As of December 31, 2020, and 2019, the Company had 200,000 and 0 shares of Series B convertible preferred stock issued and outstanding, respectively. The Series A convertible preferred stock has a liquidation preference of $0.10 per share, has super voting rights of 100 votes per share, and each share of Series A may be converted into 100 shares of common stock. On January 31, 2020, the Company filed a certificate of designation with the Nevada Secretary of State and designated 3,333,334 shares of Series B Convertible Preferred Stock. The terms of the Series B Convertible Preferred Stock are substantially similar to those of the Series A Convertible Preferred Stock, except that in the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series B Convertible Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its stockholders, an amount equal to $1.00 per share of Series B Convertible Preferred Stock before any payment shall be made or any assets distributed to the holders of common stock or Series A Convertible Preferred Stock. The Series B Convertible Preferred Stock is convertible at any time at the discretion of the holder thereof into shares of common stock at a conversion rate of one hundred (100) shares of common stock for every- one (1) share of Series B Convertible Preferred Stock. Furthermore, the holders of Series B Convertible Preferred Stock have the right to cast one hundred (100) votes for each one (1) share of Series B Convertible Preferred Stock held of record on all matters submitted to a vote of holders of the common stock, including the election of directors, and all other matters as required by law. The Company evaluated the features of the Convertible Preferred Stock under ASC 480, and classified them as permanent equity because the Convertible Preferred stock is not mandatorily or contingently redeemable at the stockholder’s option and the liquidation preference that exists does not fall within the guidance of SEC Accounting Series Release No. 268 – Presentation in Financial Statements of “Redeemable Preferred Stocks” Change in Number of Authorized and Outstanding Shares On June 8, 2020, a 1 for 1.5 reverse stock split of the Company’s common stock became effective. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively adjusted for the effects of the reverse split for all periods presented. Common stock The Company is authorized to issue 316,666,667 shares of its $0.0001 par value common stock. As of December 31, 2020, and 2019, there were 118,128,008 and 101,882,647, respectively, shares of common stock issued and outstanding. Year ended December 31, 2019 During the year ended December 31, 2019, the Company issued an aggregate of 2,800,000 shares of Class B common stock with a value of $1,890,000 which was reserved for issuance as a common stock subscribed at December 31, 2018. These were awarded for consulting services received during the year ended December 31, 2018. During the year ended December 31, 2019, the Company issued an aggregate of 37,605 shares of Class A common stock in satisfaction of common stock subscribed of $25,000. During the year ended December 31, 2019, the Company issued 1,866,667 shares of Class B common stock with a value of $1,240,960 in connection with a settlement with former employees upon the termination of their employment contracts. During the year ended December 31, 2019, the Company as part of settlement agreement (see Note 13) issued 37,605 shares of Class B common stock valued at $25,000 to the debenture holders for the forgiveness of $5,221 in liabilities owed by the Company, which resulted in a loss on settlement of obligations of $19,779. During the year ended December 31, 2019, the Company issued an aggregate of 340,782 shares of Class A common stock in satisfaction of $67,000 of common stock subscribed and additional proceeds of $89,990. During the year ended December 31, 2019, the Company issued an aggregate of 1,377,333 shares of Class A common shares and as part of a settlement agreement (see Note 13), issued 45,127 shares of Class B common shares to investors for proceeds of $546,490. During the year ended December 31, 2019, the Company had Class A common stock subscribed with a value of $150,144. During the year ended December 31, 2019, the Company issued 15,333,333 shares of Class A common stock and shares of 1,600,000 Class B common stock with a value of $6,350,000 for the purchase of certain intangible assets. During the year ended December 31, 2019, the Company issued 18,021,472 shares of Class B common stock upon the exercise of warrants, with an exercise price of $0.001 per share, for a total value of $27,032. In lieu of cash, the exercise price of these warrants were satisfied by the forgiveness of certain liabilities owed by the Company to the investor. Year ended December 31, 2020 During the year ended December 31, 2020, the Company issued an aggregate of 3,933,333 shares of its common stock for proceeds of $3,960,000. During the year ended December 31, 2020, the Company issued 40,000 shares of its common stock in satisfaction of a common stock subscription of $15,000. During the year ended December 31, 2020, the Company issued 4,000,000 shares of its common stock for consulting services valued at $1,500,000 to a related party. During the year ended December 31, 2020, the Company issued 5,168,931 shares of its common stock and 30,667 shares of Series A convertible preferred stock as part of the merger with Interlink. The Company also assumed debt to a related party of $180,000 and accrued interest of $3,842 and charged $80,134 of legal expenses related to reverse merger charged to additional paid in capital. During the year ended December 31, 2020, the Company issued 100,000 shares of its Series B convertible preferred stock at a fair value of $4,800,000 at date of issuance in exchange for loan and accrued interest forgiveness of $1,006,594 and the balance was recorded as inducement expense of 3,793,406. The Company applied the guidance in ASC 470-20. During the year ended December 31, 2020, the Company issued 100,000 shares of its Series B convertible preferred stock at a fair value of $4,800,000 at date of issuance, in exchange for $1,000,000 cash and the balance was recorded as a deemed dividend of $3,800,000. The Company applied the guidance in ASC 470-20. During the year ended December 31, 2020, the Company issued 1,369,863 shares of its common stock with a value of $2,671,096 for the purchase certain intangible assets. During the year ended December 31, 2020, the Company issued 454,463 shares of its common stock with a value of $863,480 for the purchase of 20% ownership in another company. During the year ended December 31, 2020, the Company had common stock subscribed with proceeds received of $350,000. During the year ended December 31, 2020, the Company issued 1,278,771 shares of its common stock, valued at $2,260,799 capitalized as license content assets. Subsequently the Company recognized impairment expense of $2,260,799 for non-recoverable license content assets. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 17 – STOCK OPTIONS AND WARRANTS Options The Company’s Equity Incentive Compensation Plan (the plan), adopted January 29, 2020 by the board of directors, allows a maximum of 26,500,000 shares to be reserved for issuance under the plan and 6,666,667 shares reserved under the Company’s former plan. As of December 31, 2020 the plan was not effective as the Company had not obtained shareholder approval. Stock options cannot be exercised until shareholder approval is obtained. Options granted under the plan may be designated as incentive stock options or non-qualified stock options. The plan also provides the options may not have a term lasting more than ten years and the exercise price may not be less than the fair market value of the common stock subject to the option on the grant date. In addition, to the extent that the aggregate fair market value (determined at the time of grant) of common stock with respect to which incentive stock options are exercisable for the first time by any option holder during any calendar year exceeds $100,000, the options or portions thereof which exceed such limit shall be treated as non-qualified stock options. Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from using the Company’s historical stock prices. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The following table summarizes the stock option activity for the years ended December 31, 2020 and 2019: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2018 6,173,418 $ 0.71 9.31 $ — Grants — — — — Exercised — — — — Expired (361,111 ) — — — Forfeited — — — — Outstanding at December 31, 2019 5,812,307 $ 0.70 8.41 $ — Grants 2,500,000 $ 0.89 9.46 $ 5,800,000 Exercised — — — — Expired — — — — Forfeited — — — — Outstanding at December 31, 2020 8,312,307 $ 0.76 8.03 $ 20,397,450 Exercisable at December 31, 2020 6,564,307 $ 0.72 7.64 $ 16,342,090 The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s stock price of $3.21 as of December 31, 2020 and $0.38 as of December 31, 2019, which would have been received by the option holders had those option holders exercised their options as of that date. The following table presents information related to stock options on December 31, 2020: Options outstanding Weighted Options average exercisable Exercise Number of remaining life number of price options in years options 0.86 1,148,372 5.66 1,148,372 0.66 4,663,935 7.84 4,663,935 0.89 2,500,000 9.46 752,000 Total 8,312,307 8.03 6,564,307 Stock-based compensation The Company recognizes compensation expense for all stock options granted using the fair value-based method of accounting. During the year ended December 31, 2020, the Company issued 2,500,000 options valued at $0.3645 per option. No options were granted during 2019. The Company calculated the fair value of options issued using the Black-Scholes option pricing model, with the following assumptions: As of December 31, Weighted average fair value of options granted $0.36 Expected life 5.15 – 5.75 years Risk-free interest rate 0.33 - 0.44% Expected volatility 44.69 – 45.32% Expected dividends yield 0% Forfeiture rate 0% The stock-based compensation expense related to option grants was $450,286 and $55,796, for the years ended December 31, 2020 and 2019, respectively. Warrants The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock: Warrants outstanding Warrants exercisable Exercise Number Weighted Weighted Number Weighted $ 0.86 3,850,709 6.95 $ 0.86 3,850,709 6.95 0.38 2,000,000 5.93 0.38 2,000,000 5.93 0.75 2,666,667 9.2 0.75 2,666,667 9.2 2.75 68,182 2.92 2.75 68,182 2.92 The following table summarizes the warrant activity for the years ended December 31, 2020 and 2019: Weighted average exercise Number of price per shares share Outstanding at December 31, 2018 21,572,181 $ 0.15 Issued 2,000,000 0.38 Exercised (18,021,472 ) — Expired — — Outstanding at December 31, 2019 5,550,709 $ 0.68 Issued 3,034,849 0.81 Exercised — — Expired — — Outstanding at December 31, 2020 8,585,558 $ 0.73 During the year ended December 31, 2019, the Company issued 2,000,000 warrants with a relative fair value of $483,967 to settle $46,000 of liabilities owed to a consultant. This resulted in a loss on settlement of obligations of $437,967. The Company recognizes compensation expense for all for warrants granted using the fair value-based method of accounting. During the year ended December 31, 2020, the Company assumed a related party note of $180,000 and associated accrued interest of $3,842 as part of the reverse merger with Interlink. After the assumption of the debt and accrued interest during 2020, the Company issued 2,666,667 warrants valued at $702,219 to retire the $180,000 debt and $5,563 of accrued liabilities. During the year ended 2020, the Company issued 300,000 warrants to a company for consulting services performed and recorded $492,000 in consulting expense and 68,182 warrants to a related party in conjunction with a senior secured convertible note in the amount of $750,000 and recorded the allocated fair value of the warrants of $36,949 as additional debt discount. The Company calculated the fair value of warrants issued using the Black-Scholes option pricing model, with the following assumptions: As of December 31, Weighted average fair value of warrants granted $0.4057 Expected life 3 - 10 years Risk-free interest rate 0.22% - 0.82% Expected volatility 48.46% - 61.43% Expected dividends yield 0% Forfeiture rate 0% |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 18 - INCOME TAX Income tax expense (benefit) consist of the following for the years ended December 31, 2020 and 2019 consist of the following: U.S. federal 2020 2019 Current $ 98,372 $ — Deferred (2,015,381 ) (2,063,921 ) State and local Current (128 ) 1,600 Deferred (670,220 ) (746,995 ) Total (2,587,356 ) (2,809,316 ) Change in valuation allowance 2,685,600 2,810,916 Income tax provision $ 98,244 $ 1,600 The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective rate for the years ended December 31, 2020 and 2019 is as follows: 2020 2019 U.S. federal statutory rate 21.00 % 21.00 % State income taxes, net of federal benefit 6.19 % 6.98 % Other permanent items -8.16 % -2.36 % Change in valuation allowance -17.53 % -24.42 % Other -2.14 % -0.62 % Effective rate -0.64 % 0.58 % As of December 31, 2020, and 2019, the Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: Deferred tax assets: 2020 2019 Net Operating Loss Carryover $ 3,893,134 $ 2,448,321 State Net Operating Loss 1,292,097 813,492 Allowance for doubtful accounts 17,393 — Stock-based compensation — 877,478 Fixed assets book/ tax basis difference 105,980 (1,576 ) Impairment 1,776,959 1,776,959 Operating right-of-use assets 1,909 — Accrued expenses 20,752 (138,719 ) Amortization of debt discount 357,290 (660,900 ) Research credit 7,799 4,259 Intangible book/tax basis difference 445,870 861,776 Total deferred tax asset, net 7,919,183 5,981,090 Less: reserve for allowance (7,919,183 ) (5,981,090 ) Total Deferred tax asset, net of valuation allowance $ — $ — Deferred tax liabilities: Total deferred tax liabilities, net — — Less: reserve for allowance — — Total Deferred tax liability, net of valuation allowance $ — $ — The Company files income tax returns in the U.S. federal and various state jurisdictions. As of December 31, 2020, and 2019, the Company has federal net operating loss carryforwards of $18.5 As of December 31, 2020 and 2019, the Company has state net operating loss carryforwards of $18.5 As of December 31, 2020, the federal and state tax returns for the years from 2015 through 2020 remain open to examination by the Internal Revenue Service and various state authorities. ASC 740, “Income Taxes” requires that a valuation allowance is established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be recognized. A review of all available positive and negative evidence needs to be considered, including the Section 382 limitation, the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. After consideration of all the information available, management believes that uncertainty exists with respect to the future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of December 31, 2020, and 2019. As of December 31, 2020, and 2019, the Company has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements. The Company’s policy is to classify assessments, if any, for tax-related interest as income tax expenses. No interest or penalties were recorded during the years ended December 31, 2020, and 2019. The Company does not expect its unrecognized tax benefit position to change during the next twelve months. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 – SUBSEQUENT EVENTS Senior secured convertible promissory debentures Per Note 13 on December 1, 2020, the Company offered, in a private placement, the aggregate offering amount of up to $3,000,000 of Senior Secured Promissory Debentures, with a minimum subscription amount of $250,000 and common stock warrants with an aggregate exercise price of $750,000 and aggregate exercisable warrant shares of 272,727 shares. The Company entered into a senior secured promissory debenture agreement with a trust under this offering on January 12, 2021 in the amount of $350,000. The trust received 87,500 warrants to purchase the Company’s common stock in conjunction with the promissory debenture. The warrants were valued with a relative fair value of $49,875 and have Convertible debentures, non related party On January 8, 2021 (the maturity date), the Per Note 13, Share purchase agreement The Company entered into a Share Purchase Agreement dated August 1, 2020 for the private offer to a limited number of accredited investors of up to $6,500,000 worth of restricted shares of common stock of the Company at an issue price of $1.25 per share. The Shares are subject to restriction on resales until that date that is 365 days following the relevant closing date for any individual investor. As of April 14, 2021, the Company had raised an aggregate of $5,530,000 and issued 4,424,000 shares under the Share Purchase Agreement. Equity incentive compensation plan In March 2021, the Company awarded 16,045,216 Compensation expense recognition is the service inception date which begins in the service period. Per ASC 718, the service inception date cannot occur prior to the grant date unless certain conditions are met, the Company determined that none of the option awards meet these provisions so the service inception date is March 1, 2021 for terminated employee awarded options and March 5, 2021 for all other employee and non-employee awarded options. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Screenplay. These consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”). All inter-company transactions and balances have been eliminated on consolidation. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of stock-based compensation, the fair value of other equity and debt instruments, fair value of intangible assets, recoverability of license content assets, and useful lives of assets. |
Business combinations | Business combinations The Company accounts for business acquisitions under Accounting Standards Codification (“ASC”) 805, Business Combinations. |
Cash | Cash Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. The Company has not experienced any loses on such accounts. At December 31, 2020 and 2019, the Company had no cash equivalents. As of December 31, 2020, and 2019, approximately $490,775 and $489,774 of cash exceeded the FDIC insurance limits, respectively. |
Accounts receivable | Accounts receivable Accounts receivable represent amounts due from customers. The Company assesses the collectability of receivables on an ongoing basis. A provision for the impairment of receivables involves significant management judgement and includes the review of individual receivables based on individual customers, current economic trends and analysis of historical bad debts. As of December 31, 2020 and 2019, the Company had recorded an allowance for doubtful accounts of $62,154 and $0, respectively. |
Concentration of credit risk | Concentration of credit risk The Company grants credit in the normal course of business to its customers. Periodically, the Company reviews past due accounts and makes decisions about future credit on a customer by customer basis. Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. The Company’s concentration of credit risk was not significant as of December 31, 2020 and 2019. |
Inventory | Inventory Inventories are valued at the lower of cost or net realizable value. The Company purchases inventory from a vendor and all inventory purchased is deemed finished goods. Cost is determined using the first-in-first-out basis for finished goods. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to net realizable value, if lower. As of December 31, 2020 and 2019, the Company has recorded no valuation allowance. |
Prepaid expenses | Prepaid expenses Expenditures paid in one accounting period which will not be consumed until a future period such as insurance premiums and annual subscription fees are accounted for on the balance sheet as a prepaid expense. When the asset is eventually consumed, it is charged to expense. |
License Content Asset | License Content Asset On January 1, 2020, the Company adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials |
Equity method investments | Equity method investments The Company accounts for investments in unconsolidated entities under the equity method of accounting if it could exercise significant influence over the operating and financial policies of an entity but does not have a controlling financial interest. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments are reported under the line-item captioned equity method investment income in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity method investments in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. |
Variable interest entities (""VIE'") | Variable interest entities (“VIE”) Variable interests are contractual, ownership or other monetary interests in an entity that change with fluctuations in the fair value of the entity’s net assets exclusive of variable interests. A VIE can arise from items such as lease agreements, loan arrangements, guarantees or service contracts. An entity is a VIE if (a) the entity lacks sufficient equity or (b) the entity’s equity holders lack power or the obligation and right as equity holders to absorb the entity’s expected losses or to receive its expected residual returns. If an entity is determined to be a VIE, the entity must be consolidated by the primary beneficiary. The primary beneficiary is the holder of the variable interests that has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and has the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE. Therefore, the Company must identify which activities most significantly impact the VIE’s economic performance and determine whether it, or another party, has the power to direct those activities. As of December 31, 2020, and 2019, the Company had no investments that qualify as VIE. |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill and other intangible assets determined to have an indefinite useful life are not amortized but are subject to impairment tests. The Company conducts its annual impairment tests as of December 31 of each year or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. When evaluating goodwill and indefinite-lived intangible assets for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit or the intangible asset is more-likely-than-not greater than the carrying amount. Significant factors considered in this assessment include, but are not limited to, macro-economic conditions, market and industry conditions, cost considerations, the competitive environment, overall financial performance, and results of past impairment tests. If, based on a review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value is greater than the carrying value, the Company may bypass a quantitative test for impairment. In performing the quantitative test for impairment of goodwill, the Company compares the fair value of each reporting unit with it carrying amount, including goodwill, in order to identify a potential impairment. Measurement of the fair value of a reporting unit is based on a fair value measure using the sum of the discounted estimated future cash flows. Estimates of forecasted cash flows involve measurement uncertainty, and it is therefore possible that reductions in the carrying value of goodwill may be required in the future because of changes in management’s future cash flow estimates. When the fair value of a reporting unit is less than it carrying amount, goodwill of the reporting unit is considered to be impaired. Effective January 1, 2020, the Company adopted the guidance in Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment The Company measures impairment of indefinite-lived intangible assets, which consist of brand name, based on projected discounted cash flows. The Company also re-evaluates the useful life of the brand name to determine whether events and circumstances continue to support an indefinite useful life. For the year ended December 31, 2020, the Company recorded an impairment of $130,000 on brand name. There was no impairment in the carrying amount of the indefinite-lived intangibles assets for the year ended December 31, 2019. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. The capitalization policy for the company is to capitalize property and equipment purchases greater than $3,000. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings. See below for estimated useful lives: Equipment 5 years Software 3 years |
Operating leases | Operating leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term. |
Long-lived assets | Long-lived assets The Company evaluates the recoverability of long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner that an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if their carrying amount is not recoverable through the undiscounted cash flows. The impairment loss is based on the difference between the carrying amount and estimated fair value as determined by discounted future cash flows. The Company’s finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two to nine years. There was $2,290,799 impairment recorded (see Note 6) for the year ended December 31, 2020. For the year ended December 31, 2019, the Company recorded an impairment of $6,350,000 for the intellectual property it acquired in 2019. |
Fair value measurement | Fair value measurement The company determines the fair value of its assets and liabilities using a hierarchy established by the accounting guidance that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology is one or more unobservable inputs which are significant to the fair value measurement. The carrying amount of the Company’s financial instruments, including cash, accounts receivable, deposits, short-term portion of notes receivable and notes payable, and current liabilities approximate fair value due to their short-term nature. The Company does not have financial assets or liabilities that are required under the U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use fair value measurement option for any assets or liabilities for which fair value measurement is not presently required. The Company records assets and liabilities at fair value on nonrecurring basis as required by the U.S. GAAP. Assets recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis include items such as property and equipment, operating lease assets, goodwill, and other intangible assets, which are measured at fair value if determined to be impaired. |
Convertible debt and beneficial conversion features | Convertible debt and beneficial conversion features The Company evaluates embedded conversion features within convertible debt under ASC 815, Derivatives and Hedging Debt with Conversion and Other Options |
Advertising costs | Advertising costs The Company expenses all advertising costs as incurred. Advertising and marketing costs for the year ended December 31, 2020 and 2019 were $379,487 and $44,977, respectively. |
Revenue recognition | Revenue recognition ASU No. 2014-09, Revenue from Contracts with Customers The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under Topic 606 in a manner that reasonably reflects the delivery of the Company’s products and services to customers in return for expected consideration and includes the following elements: ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation of the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. Performance obligations and significant judgments The Company’s revenue streams can be categorized into the following performance obligations and recognition patterns: o Delivery of streaming services including content encoding and hosting. The Company recognizes revenue over the term of the service based on bandwidth usage. o Delivery of subscription content services in customized formats. The Company recognizes revenue over the term of the service. o Delivery of hardware for ongoing subscription content delivery through software: The Company recognizes revenue at the point of hardware delivery. Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, the Company does not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. Disaggregation of revenue The Company’s revenues are disaggregated into the following revenue streams. The content and streaming services revenue including content encoding and hosting are recognized over the term of the service based on bandwidth usage. The content subscription services revenue in customized formats is recognized over the term of the service. The hardware for ongoing subscription content delivery is recognized at the point of the hardware delivery. The following table represents revenue by category for the years ended December 31, 2020 and 2019: December 31, December 31, 2020 2019 Content and streaming services $ 1,402,018 $ 1,693,921 Content subscription services 1,225,005 1,498,663 Hardware for ongoing subscription content 167,058 188,537 Total revenue $ 2,794,081 $ 3,381,121 Customer acquisition costs The Company records commission expense associated with subscription revenue. Commissions are included in operating expenses. The Company has elected the practical expedient that allows the Company to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. |
Cost of revenue | Cost of revenue Cost of revenue represents the cost of the delivered hardware and related bundled software and is recognized at the time of sale. For ongoing licensing and hosting fees, cost of sales is recognized over time based on usage patterns. |
Deferred income | Deferred income The Company bills subscription services in advance of when the service period is performed. The deferred income recorded at December 31, 2020 and 2019, represents the Company’s accounting for the timing difference between when the subscription fees are received and when the performance obligation is satisfied. |
Net loss per share | Net loss per share The Company accounts for net loss per share in accordance with ASC subtopic 260-10, Earnings Per Share Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator. The following securities are excluded from the calculation of weighted average diluted shares at December 31, 2020 and 2019, respectively, because their inclusion would have been anti-dilutive. December 31, December 31, 2020 2019 Options to purchase common stock 8,312,306 5,812,307 Warrants to purchase common stock 8,585,558 5,550,709 Series A preferred stock 3,066,700 — Series B preferred stock 20,000,000 — Convertible debentures 7,079,622 6,513,444 Total common stock equivalent 47,044,186 17,876,460 |
Shipping and handling costs | Shipping and handling costs A shipping and handling fee is charged to customers and recorded as revenue at the time of sale. The associated cost of shipping and handling is recorded as a cost of revenue at the time of service. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. |
Stock-based compensation | Stock-based compensation Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangements that is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment— Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials |
Accounting standards issued but not yet effective | Accounting standards issued but not yet effective In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued 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) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | See below for estimated useful lives: Equipment 5 years Software 3 years |
Schedule of revenue by category | The following table represents revenue by category for the years ended December 31, 2020 and 2019: December 31, December 31, 2020 2019 Content and streaming services $ 1,402,018 $ 1,693,921 Content subscription services 1,225,005 1,498,663 Hardware for ongoing subscription content 167,058 188,537 Total revenue $ 2,794,081 $ 3,381,121 |
Schedule of weighted average diluted shares | The following securities are excluded from the calculation of weighted average diluted shares at December 31, 2020 and 2019, respectively, because their inclusion would have been anti-dilutive. December 31, December 31, 2020 2019 Options to purchase common stock 8,312,306 5,812,307 Warrants to purchase common stock 8,585,558 5,550,709 Series A preferred stock 3,066,700 — Series B preferred stock 20,000,000 — Convertible debentures 7,079,622 6,513,444 Total common stock equivalent 47,044,186 17,876,460 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | The Company's inventory consisted of the following on December 31, 2020 and 2019: December 31, December 31, 2020 2019 Computers $ 6,195 $ 8,623 Hasp keys 0 2,240 Loop player 84,105 17,532 Total inventory $ 90,300 $ 28,395 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of note receivable | Interest earned for the years ended December 31, 2020 and 2019 was $4,805 and $4,802, respectively. December 31, December 31, 2020 2019 Current portion $ 10,215 $ 10,215 Long-term portion 96,498 102,318 Total note receivable $ 106,713 $ 112,533 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of property and equipment | The Company's property and equipment consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Equipment $ 464,456 $ 456,610 Software 53,450 53,450 517,906 510,060 Less: accumulated depreciation (493,760 ) (482,033 ) Total, equipment net $ 24,146 $ 28,027 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of other intangible assets | The Company’s other intangible assets, each definite lived assets, consisted of the following as of December 31, 2020 and 2019: December 31, December 31, Useful life 2020 2019 Software acquired as intellectual property not applicable $ $ — $ 6,350,000 Screenplay brand not applicable 130,000 130,000 Customer relationships nine years 1,012,000 1,012,000 Content library two years 198,000 198,000 Technology two years 2,671,233 — Total intangible assets, gross 4,011,233 7,690,000 Less: Impairment of intangible assets (130,000 ) (6,350,000 ) Less: accumulated amortization (711,967 ) (211,445 ) Total intangible accumulated amortization (841,967 ) (6,561,445 ) Total intangible assets, net $ 3,169,266 $ 1,128,555 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease liability | Lease liability is summarized below: As of December 31, As of December 31, Short term portion $ 145,271 $ 147,458 Long term portion 208,625 360,369 Total lease liability $ 353,896 $ 507,827 |
Schedule of maturity analysis | Maturity analysis under these lease agreements are as follows: 2021 $ 180,419 2022 185,834 2023 37,584 Total undiscounted cash flows 403,837 Less: 10% Present value discount (49,941 ) Lease liability $ 353,896 |
Schedule of lease expense | Lease expense for the year ended December 31, 2020 and 2019 was comprised of the following: December 31, December 31, Operating lease expense $ 178,294 $ 237,206 Short-term lease expense 6,108 17,656 $ 184,402 $ 254,862 |
Schedule of weighted-average remaining lease term and discount rate | Weighted-average remaining lease term and discount rate for operating leases are as follows: Weighted-average remaining lease term 2.18 years Weighted-average discount rate 10 % |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Accounts payable $ 683,846 $ 357,982 Interest payable 59,818 94,069 Accrued liabilities 193,500 566,696 Payroll liabilities 27,113 26,048 Total accounts payable and accrued expenses $ 964,277 $ 1,044,795 |
CONVERTIBLE DEBENTURES PAYABLE
CONVERTIBLE DEBENTURES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Instruments [Abstract] | |
Schedule of convertible debentures to related parties | A description of the debentures to related parties follows: As of December 31, Convertible debentures to related parties 2020 2019 Unsecured convertible debentures issued to related parties, amended October 23, 2020, interest at 10% per annum, unpaid interest accrued at 18% per annum through October 23, 2020 amounting to $179,803 was paid by making a cash payment of $97,979 and increasing the principal amount of the convertible debenture by $81,824 on the date of this agreement, beginning November 1, 2020, monthly payments of unpaid interest accrued at 12.5% per annum will be paid in arrears through March 31, 2021, beginning April 1, 2021, the Company will pay equal monthly installments of principal and interest at 10% per annum through December 1, 2023, the above mentioned loan amendment has been accounted for as a loan modification and associated transactions will be accounted for prospectively. $ 3,000,000 $ 3,000,000 Accrued interest rolled into the related party debenture above 232,235 — Convertible debenture issued to related party, as part of a private placement offering to participate in a convertible debenture and warranty purchase agreement for up to $3,000,000 dated December 1, 2020, due December 1, 2022, cash interest at 4% per annum and payment in kind (PIK) interest at 6% payable in the Company’s common stock, all interest is determined on a 360 day basis, cash interest is payable in arrears twelve months from the issue date on November 30, 2021, then six months in arrears on June 1, 2022, then six months in arrears is payable in shares of common stock as determined below on June 1, 2021, December 1, 2021, June 1, 2022 and December 1, 2022, secured by the existing and future assets of the Company, subordinate to the secured debenture below 750,000 — Total convertible debentures payable to related parties 3,982,235 3,000,000 Debt discount associated with convertible debentures to related parties (2,478,762 ) (2,360,898 ) Total convertible debentures payable to related parties, net 1,503,473 639,102 Less current portion of convertible debentures payable to related parties, net (279,705 ) — Long-term portion of convertible debentures payable to related parties, net $ 1,223,768 $ 639,102 |
Schedule of convertible debentures to non-related parties | December 31, Convertible debentures to non-related parties 2020 2019 Convertible debenture issued to a founder and former officer of the Company in conjunction with redemption of 20,000,000 shares of common stock, interest at 10% per annum, amended terms as of October 22, 2020 provide that the unpaid interest accrued through May 31, 2020 of $43,011 plus principal of $29,324 and interest of $11,490 that were due under the original agreement (described below) beginning June 1, 2020 to October 1, 2020 was paid on October 22, 2020. The November 1, 2020 payment was deferred until December 1, 2020. Since the convertible debenture was not converted into the Company’s common stock by November 30, 2020, the terms of the original debenture resumed on December 1, 2020. This $287,000 convertible debenture is secured by 5,000,000 shares of the Company’s common stock which are owned by the Company’s President $ 246,044 $ 287,000 Secured (1) convertible debenture, interest at 11% per annum,, accrued monthly and the outstanding principal and unpaid accrued interest was due January 8, 2021 convertible debentures payable 326,143 326,143 Total convertible debentures payable to non-related parties 572,187 613,143 Debt discount associated with convertible debentures to non-related parties (18,079 ) (24,291 ) Total convertible debentures payable to non-related parties, net 554,108 588,852 Less current portion of convertible debentures payable to related parties, net (393,943 ) — Long-term portion of convertible debentures payable to related parties, net $ 160,165 $ 588,852 |
Schedule of maturity analysis under total convertible debentures | Maturity analysis under total convertible debentures, net are as follows: 2021 $ 1,281,822 2022 2,002,096 2023 1,270,503 Convertible debentures payable, related and non related party 4,554,421 Less: Debt discount on convertible debentures payable (2,496,840 ) Total convertible debentures payable, related and non related party, net $ 2,057,581 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
Schedule of stock option activity | The following table summarizes the stock option activity for the years ended December 31, 2020 and 2019: Weighted Weighted Average Average Remaining Aggregate Exercise Contractural Intrinsic Options Price Term Value Outstanding at December 31, 2018 6,173,418 $ 0.71 $ 9.31 $ — Grants — — — — Exercised — — — — Expired (361,111 ) — — — Forfeited — — — — Outstanding at December 31, 2019 5,812,307 $ 0.70 $ 8.41 $ — Grants 2,500,000 0.89 9.46 5,800,000 Exercised — — — — Expired — — — — Forfeited — — — — Outstanding at December 31, 2020 8,312,307 $ 0.76 $ 8.03 20,397,450 Exercisable at December 31, 2020 6,564,307 $ 0.72 $ 7.64 $ 16,385,783 |
Schedule of related to stock options | The following table presents information related to stock options on December 31, 2020: Options outstanding Weighted Options average exercisable Exercise Number of remaining life number of price options in years options 0.86 1,148,372 5.66 1,148,372 0.66 4,663,935 7.84 4,663,935 0.89 2,500,000 9.46 752,000 Total 8,312,307 7.91 6,564,307 |
Schedule of fair value of options | The Company calculated the fair value of options issued using the Black-Scholes option pricing model, with the following assumptions: December 31, 2020 Weighted average fair value of options granted $0.36 Expected life 5.15 – 5.75 years Risk-free interest rate 0.33 - 0.44% Expected volatility 44.69 – 45.32% Expected dividends yield 0% Forfeiture rate 0% |
Schedule of warrants outstanding and related prices | The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company's common stock: Warrants outstanding Warrants exercisable Exercise prices Weighted Weighted average average remaining Weighted remaining contractual average contractual Number life exercise Number life outstanding (years) price exercisable (years) $ 0.86 3,850,709 6.95 $ 0.86 3,850,709 6.95 0.38 2,000,000 5.93 0.38 2,000,000 5.93 0.75 2,666,667 9.2 0.75 2,666,667 9.2 2.75 68,182 9.92 2.75 68,182 9.92 |
Schedule of warrant activity | The following table summarizes the warrant activity for the years ended December 31, 2020 and 2019: Weighted average exercise Number of price per shares share Outstanding at December 31, 2018 21,572,181 $ 0.15 Issued 2,000,000 0.38 Exercised (18,021,472 ) — Expired — — Outstanding at December 31, 2019 5,550,709 $ 0.68 Issued 3,034,849 0.81 Exercised — — Expired — — Outstanding at December 31, 2020 8,585,558 $ 0.73 |
Schedule of fair value of warrants issued | The Company calculated the fair value of warrants issued using the Black-Scholes option pricing model, with the following assumptions: As of December 31, 2020 Weighted average fair value of warrants granted $0.4057 Expected life 3 - 10 years Risk-free interest rate 0.22% - 0.82% Expected volatility 48.46% - 61.43% Expected dividends yield 0% Forfeiture rate 0% |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefit) | Income tax expense (benefit) consist of the following for the years ended December 31, 2020 and 2019 consist of the following: U.S. federal 2020 2019 Current $ 98,372 $ — Deferred (2,015,381 ) (2,063,921 ) State and local Current (128 ) 1,600 Deferred (670,220 ) (746,995 ) Total (2,587,356 ) (2,809,316 ) Change in valuation allowance 2,685,600 2,810,916 Income tax provision $ 98,244 $ 1,600 |
Schedule of the reconciliation between U.S. statutory federal income tax rate | The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective rate for the years ended December 31, 2020 and 2019 is as follows: 2020 2019 U.S. federal statutory rate 21.00 % 21.00 % State income taxes, net of federal benefit 6.19 % 6.98 % Other permanent items -8.16 % -2.36 % Change in valuation allowance -17.53 % -24.42 % Other -2.14 % -0.62 % Effective rate -0.64 % 0.58 % |
Schedule of deferred tax assets liabilities | As of December 31, 2020, and 2019, the Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: Deferred tax assets: 2020 2019 Net Operating Loss Carryover $ 3,893,134 $ 2,448,321 State Net Operating Loss 1,292,097 813,492 Allowance for doubtful accounts 17,393 — Stock-based compensation — 877,478 Fixed assets book/ tax basis difference 105,980 (1,576 ) Impairment 1,776,959 1,776,959 Operating right-of-use assets 1,909 — Accrued expenses 20,752 (138,719 ) Amortization of debt discount 357,290 (660,900 ) Research credit 7,799 4,259 Intangible book/tax basis difference 445,870 861,776 Total deferred tax asset, net 7,919,183 5,981,090 Less: reserve for allowance (7,919,183 ) (5,981,090 ) Total Deferred tax asset, net of valuation allowance $ — $ — Deferred tax liabilities: Total deferred tax liabilities, net — — Less: reserve for allowance — — Total Deferred tax liability, net of valuation allowance $ — $ — |
BUSINESS (Details Narrative)
BUSINESS (Details Narrative) | Jun. 08, 2020 | Jun. 08, 2020 | Feb. 06, 2020Number | May 18, 2016 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Reverse stock split | 1 for 1.5 reverse stock split | 1 for 1.5 reverse stock split of the Company’s common stock became effective. | ||||
Cash | $ 838,161 | $ 1,011,445 | ||||
Accumulated deficit | (41,544,144) | (26,125,252) | ||||
Net cash in operating activities | $ (5,933,667) | $ (2,196,511) | ||||
Loop Media, Inc. [Member] | Merger Agreement [Member] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Equity interest issued | exchange for 152,823,970 shares of the Company’s common stock at an exchange ratio of 1:1. | |||||
Loop Media, Inc. [Member] | ScreenPlay [Member] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Zixiao Chen [Member] | Purchase Agreement [Member] | ||||||
Equity interest issued | Buyer transferred to the Company 2,000,000 shares of its common stock and agreed to assume and discharge any and all liabilities relating to the Business accruing up to the effective time of the Asset Purchase Agreement. | |||||
Number of operating segments | Number | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Software [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenue | $ 2,794,081 | $ 3,381,121 |
Content and Streaming Services [Member] | ||
Total revenue | 1,402,018 | 1,693,921 |
Content Subscription Services [Member] | ||
Total revenue | 1,225,005 | 1,498,663 |
Hardware for Ongoing Subscription Content [Member] | ||
Total revenue | $ 167,058 | $ 188,537 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total common stock equivalent | 47,044,186 | 17,876,460 |
Series A Convertible Preferred Stock [Member] | ||
Total common stock equivalent | 3,066,700 | |
Series B Convertible Preferred Stock [Member] | ||
Total common stock equivalent | 20,000,000 | |
Options To Purchase Common Stock [Member] | ||
Total common stock equivalent | 8,312,306 | 5,812,307 |
Warrant [Member] | ||
Total common stock equivalent | 8,585,558 | 5,550,709 |
Convertible Debentures [Member] | ||
Total common stock equivalent | 7,079,622 | 6,513,444 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Jan. 02, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
FDIC insurance Limit | $ 490,775 | $ 489,774 | |
Allowance for doubtful accounts | 62,154 | 0 | |
Asset impairment charges | 130,000 | ||
Impairment of intangible assets, finite-lived | 2,390,799 | 6,350,000 | |
Advertising costs | 379,487 | 44,977 | |
Intangible asset - gross | 4,011,233 | 7,690,000 | |
Intellectual Property [Member] | |||
Impairment of intangible assets, finite-lived | 2,290,799 | 6,350,000 | |
Content Library [Member] | |||
Impairment of intangible assets, finite-lived | $ 2,260,799 | ||
Intangible asset - gross | 2,094,610 | 198,000 | $ 198,000 |
Amortization | $ 380,890 | ||
Minimum [Member] | |||
Capitalize property and equipment purchases | $ 3,000 | ||
Finite-lived intangible asset, useful life | 2 years | ||
Maximum [Member] | |||
Finite-lived intangible asset, useful life | 9 years | ||
Spkr Inc. [Member] | |||
Asset impairment charges | $ 667,808 | ||
Brand Names [Member] | |||
Asset impairment charges | $ 130,000 | ||
Trade Accounts Receivable [Member] | Two Customer Concentration Risk [Member] | |||
Concentration risk, percentage | 10.00% |
ACQUISITIONS AND EQUITY INVES_2
ACQUISITIONS AND EQUITY INVESTMENTS (Details Narrative) - USD ($) | Oct. 13, 2020 | Dec. 31, 2020 |
Spkr Inc. [Member] | ||
Business acquisition, number of shares issued | 1,369,863 | |
Business acquisition, share price (in dollars per share) | $ 0.0001 | |
Business acquisition, equity Interests issued | $ 2,671,233 | |
Cost of assets acquired | 667,808 | |
Intangible assets acquired | $ 2,671,233 | |
Ithaca EMG Holdco LLC [Member] | Preferred Stock [Member] | ||
Business acquisition, number of shares issued | 1,350 | |
EON Media Group Pte. Ltd [Member] | ||
Business acquisition, number of shares issued | 454,463 | |
Business acquisition, share price (in dollars per share) | $ 0.0001 | |
Business acquisition, equity Interests issued | $ 863,480 | |
Percentage of voting interests acquired | 20.00% | |
Cash payments to acquire businesses | $ 750,000 | |
Carrying value of investment | 1,613,479 | |
Goodwill recoginized | $ 1,649,643 | |
EON Media Group Pte. Ltd [Member] | Common Stock [Member] | ||
Business acquisition, number of shares issued | 1,084 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total inventory | $ 90,300 | $ 28,395 |
Computers [Member] | ||
Total inventory | 6,195 | 8,623 |
Hasp Keys [Member] | ||
Total inventory | 0 | 2,240 |
Loop Player [Member] | ||
Total inventory | $ 84,105 | $ 17,532 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 90,300 | $ 28,395 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Current portion | $ 10,215 | $ 10,215 |
Long-term portion | 96,498 | 102,318 |
Total note receivable | $ 106,713 | $ 112,533 |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) - USD ($) | Dec. 23, 2014 | Dec. 31, 2020 | Dec. 31, 2019 |
Interest | $ 4,805 | $ 4,802 | |
Promissory Note [Member] | Lodestar Entertainment, LLC [member] | |||
Advanced receivable | $ 137,860 | ||
Bears interest | 4.00% | ||
Monthly installments | $ 851 | ||
Maturity date | Jul. 1, 2034 |
LICENSE CONTENT ASSETS (Details
LICENSE CONTENT ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
License content asset - current | $ 1,723,569 | |
License content asset - non current | 371,041 | |
Payments for license contract asset | 839,000 | |
License content liability - current | 1,251,500 | |
License content liability - non current | 385,000 | |
Amortization expense | 893,139 | $ 221,214 |
Deposits | 15,649 | 19,831 |
Impairment of license asset | 130,000 | |
License content liability | 1,636,500 | |
License Content Asset [Member] | ||
License content asset - non current | 2,094,610 | |
Amortization expense | 380,890 | $ 0 |
Amortization expense, 2021 | 1,237,750 | |
Amortization expense, 2022 | 856,860 | |
Impairment of license asset | $ 2,260,799 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Gross equipment | $ 517,906 | $ 510,060 |
Less: accumulated depreciation | (493,760) | (482,033) |
Total, equipment net | 24,146 | 28,027 |
Equipment [Member] | ||
Gross equipment | 464,456 | 456,610 |
Software [Member] | ||
Gross equipment | $ 53,450 | $ 53,450 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 11,727 | $ 9,769 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2020 | |
Total intangible assets, gross | $ 4,011,233 | $ 7,690,000 | ||
Less: Impairment of intangible assets acquired in 2019 | (130,000) | (6,350,000) | ||
Less: accumulated amortization | (711,967) | (211,445) | ||
Total intangible accumulated amortization | (841,967) | (6,561,445) | ||
Total intangble assets, net | $ 3,169,266 | $ 1,128,555 | ||
Useful life | 3 years 4 months 24 days | 7 years 3 months 18 days | ||
Screenplay Brand [Member] | ||||
Total intangible assets, gross | $ 130,000 | $ 130,000 | ||
Customer Relationships [Member] | ||||
Total intangible assets, gross | $ 1,012,000 | 1,012,000 | ||
Useful life | 2 years | 9 years | ||
Content Library [Member] | ||||
Total intangible assets, gross | $ 198,000 | 198,000 | $ 2,094,610 | |
Useful life | 2 years | |||
Technology [Member] | ||||
Total intangible assets, gross | $ 2,671,233 | |||
Useful life | 2 years | |||
Software Acquired As Intellectual Property [Member] | ||||
Total intangible assets, gross | $ 6,350,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill balance | $ 583,086 | $ 583,086 | |
Useful life | 3 years 4 months 24 days | 7 years 3 months 18 days | |
Amortization expense | $ 500,523 | $ 211,444 | |
Asset impairment charges | 130,000 | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Rolling Twelve Months | 1,448,061 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Two | 1,158,982 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Three | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Four | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Five | $ 112,444 | ||
Technology [Member] | |||
Acquired assets | $ 2,671,233 | ||
Useful life | 2 years | ||
Customer Relationships [Member] | |||
Useful life | 2 years | 9 years | |
Intellectual Property [Member] | |||
Loss on impairment | 6,350,000 | ||
Intellectual Property [Member] | Common Class B [Member] | |||
Acquired assets | $ 6,350,000 |
LEASES (Details)
LEASES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Short term portion | $ 145,271 | $ 147,458 |
Long term portion | 208,625 | 360,369 |
Total lease liability | $ 353,896 | $ 507,827 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2021 | $ 180,419 | |
2022 | 185,834 | |
2023 | 37,584 | |
Total undiscounted cash flows | 403,837 | |
Less: 10% Present value discount | (49,376) | |
Lease liability | $ 353,896 | $ 507,827 |
LEASES (Details 2)
LEASES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Operating lease expense | $ 178,294 | $ 237,206 |
Short-term lease expense | 6,108 | 17,656 |
Lease expense | $ 184,402 | $ 254,862 |
LEASES (Details 3)
LEASES (Details 3) | Dec. 31, 2020 |
Lease Details 3Abstract | |
Weighted-average remaining lease term | 2 years 2 months 5 days |
Weighted-average discount rate | 10.00% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Details Narrative Abstract | ||
cash payments against lease liabilities | $ 175,792 | $ 263,694 |
accretion on lease liability | 43,250 | 40,706 |
non-cash transactions | $ 20,825 | $ 444,112 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Payable And Accrued Expenses | ||
Accounts payable | $ 683,846 | $ 357,982 |
Interest payable | 59,818 | 94,069 |
Accrued liabilities | 193,500 | 566,696 |
Payroll liabilities | 27,113 | 26,048 |
Total accounts payable and accrued expenses | $ 964,276 | $ 1,044,795 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | Feb. 05, 2020 | Dec. 18, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Loans payable | $ 1,000,000 | |||
Shares issued | 118,128,008 | 101,882,647 | ||
Cash | $ 1,000,000 | |||
Exchange value | 1,000,000 | |||
Accrued interest payable | $ 6,597 | |||
Series B Convertible Preferred Stock [Member] | ||||
Shares issued | 200,000 | |||
Convertible issuance value | $ 9,600,000 | |||
Related Party [Member] | ||||
Loans payable | $ 1,000,000 | $ 3,793,406 | ||
Loan interest rate | 5.00% |
NOTE PAYABLE (Details Narrative
NOTE PAYABLE (Details Narrative) - Payroll Protection Program (PPP) [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Economic Injury Disaster Loan (EIDL) [Member] | |
Amount of grant loan | $ 10,000 |
U.S. Small Business Administration's (SBA) [Member] | |
Loan forgivenes amount | $ 573,500 |
Annual interest rate | 1.00% |
Current loan portion | $ 314,829 |
Payment Terms | Begin in August 2021 |
Loan term | 2 years |
Due in 2021 | $ 314,829 |
Due in 2022 | $ 258,671 |
CONVERTIBLE DEBENTURES PAYABL_2
CONVERTIBLE DEBENTURES PAYABLE (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total convertible debentures payable to related parties | $ 3,982,235 | $ 3,000,000 |
Debt discount associated with convertible debentures to related parties | (2,478,762) | (2,360,898) |
Total convertible debentures payable to related parties, net | 1,503,473 | 639,102 |
Less current portion of convertible debentures payable to related parties, net | (279,705) | |
Long-term portion of convertible debentures payable to related parties, net | 1,223,768 | 639,102 |
Convertible Debentures Due on December 1, 2023 [Member] | ||
Total convertible debentures payable to related parties | 3,000,000 | 3,000,000 |
Accrued Interest - Related Party [Member] | ||
Total convertible debentures payable to related parties | 232,235 | |
Convertible Debentures Due on due December 1, 2022 [Member] | ||
Total convertible debentures payable to related parties | $ 750,000 |
CONVERTIBLE DEBENTURES PAYABL_3
CONVERTIBLE DEBENTURES PAYABLE (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total convertible debentures payable to non-related parties | $ 572,187 | $ 613,143 |
Debt discount associated with convertible debentures to non-related parties | (18,079) | (24,291) |
Total convertible debentures payable to non-related parties, net | 554,108 | 588,852 |
Less current portion of convertible debentures payable to related parties, net | (393,943) | |
Long-term portion of convertible debentures payable to related parties, net | 160,165 | 588,852 |
Convertible Debentures Two [Member] | ||
Total convertible debentures payable to non-related parties | 246,044 | 287,000 |
Convertible Debentures Three [Member] | ||
Total convertible debentures payable to non-related parties | $ 326,143 | $ 326,143 |
CONVERTIBLE DEBENTURES PAYABL_4
CONVERTIBLE DEBENTURES PAYABLE (Details 2) | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 1,281,822 |
2022 | 2,002,096 |
2023 | 1,270,503 |
Convertible debentures payable, related and non related party | 4,554,421 |
Less: Debt discount on convertible debentures payable | (2,496,840) |
Total convertible debentures payable, related and non related party, net | $ 2,057,581 |
CONVERTIBLE DEBENTURES PAYABL_5
CONVERTIBLE DEBENTURES PAYABLE (Details Narrative) - USD ($) | Mar. 31, 2021 | Jan. 31, 2021 | Jan. 08, 2021 | Dec. 01, 2020 | Oct. 22, 2020 | Jun. 08, 2020 | Jun. 08, 2020 | Jan. 31, 2020 | Nov. 26, 2019 | Oct. 31, 2019 | Aug. 20, 2019 | Jul. 12, 2019 | May 31, 2020 | Oct. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 12, 2021 |
Number of shares issued | 3,933,333 | |||||||||||||||||
Value of shares issued | $ 3,960,000 | $ 546,491 | ||||||||||||||||
Exercise price (in dollars per share) | $ 0.73 | $ 0.68 | $ 0.15 | |||||||||||||||
Gross proceeds from issuance of convertible debentures | $ 750,000 | $ 326,143 | ||||||||||||||||
Relative fair value of convertible debentures | 2,387,687 | |||||||||||||||||
Allocation to convertible debentures | $ 612,313 | |||||||||||||||||
Expected life in years | 10 years | |||||||||||||||||
Beneficial conversion feature | $ 750,000 | 29,967 | ||||||||||||||||
Additional debt discount | 36,949 | |||||||||||||||||
Unamortized debt discount | 750,000 | |||||||||||||||||
Interest expenses | 30,822 | |||||||||||||||||
Loss on extinguishment of debt | 13,900 | 192,557 | ||||||||||||||||
Description of reverse stock split | 1 for 1.5 reverse stock split | 1 for 1.5 reverse stock split of the Company’s common stock became effective. | ||||||||||||||||
Accrued interest | $ 3,842 | |||||||||||||||||
Risk Free Interest Rate [Member] | ||||||||||||||||||
Measurement input of warrant | 2.08 | |||||||||||||||||
Expected Stock Volatility [Member] | ||||||||||||||||||
Measurement input of warrant | 45.49 | |||||||||||||||||
Expected Dividend Yield [Member] | ||||||||||||||||||
Measurement input of warrant | 0 | |||||||||||||||||
Loan Agreement [Member] | ||||||||||||||||||
Maturity date | Jan. 8, 2021 | |||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||
Beneficial conversion feature | $ 146,678 | |||||||||||||||||
Conversion rate (in dollars per share) | $ 0.60 | |||||||||||||||||
Loan amount | $ 200,000 | $ 326,143 | ||||||||||||||||
Loan fee upon execution | $ 4,000 | |||||||||||||||||
Loan fee percentage | 2.00% | |||||||||||||||||
Prepayment penalty percentage | 4.00% | |||||||||||||||||
Conversion price deemed (in dollars per share) | $ 0.60 | |||||||||||||||||
Loss on extinguishment of debt | $ 6,473 | |||||||||||||||||
Loan Agreement - Amendment 1 [Member] | ||||||||||||||||||
Description of amendment of loan agreement | The amount borrowed under the $200,000 loan agreement amounted to $252,473 and the loan agreement was amended to provide for an increase in the maximum loan amount to $400,000. | |||||||||||||||||
Loan Agreement - Amendment 2 [Member] | ||||||||||||||||||
Convertible debentures amount | $ 400,000 | |||||||||||||||||
Beneficial conversion feature | 110,281 | |||||||||||||||||
Interest expenses | $ 23,448 | |||||||||||||||||
Conversion rate (in dollars per share) | $ 0.375 | |||||||||||||||||
Loss on extinguishment of debt | $ 141,663 | |||||||||||||||||
Description of embedded conversion feature | The difference between the embedded conversion feature calculated in Amendment 1 of $146,678 and the recalculated amount of $110,281 or $36,397 was offset against loss on extinguishment of debt. | |||||||||||||||||
Loan Agreement - Amendment 2 [Member] | Subsequent Event [Member] | ||||||||||||||||||
Number of shares issued | 1,003,617 | 217,429 | ||||||||||||||||
Value of shares issued | $ 135,144 | |||||||||||||||||
Conversion rate (in dollars per share) | $ 0.25 | |||||||||||||||||
Loan amount | $ 376,356 | |||||||||||||||||
Outstanding loan amount | 326,143 | |||||||||||||||||
Accrued interest | $ 50,213 | |||||||||||||||||
Common Class B [Member] | ||||||||||||||||||
Number of shares issued | 45,127 | |||||||||||||||||
Value of shares issued | $ 5 | |||||||||||||||||
Common Class B [Member] | Settlement Agreement [Member] | ||||||||||||||||||
Number of shares issued | 18,021,472 | |||||||||||||||||
Value of shares issued | $ 27,032 | |||||||||||||||||
Exercise price (in dollars per share) | $ 0.001 | |||||||||||||||||
Common Class A [Member] | ||||||||||||||||||
Number of shares issued | 1,377,333 | |||||||||||||||||
Value of shares issued | $ 137 | |||||||||||||||||
Common Class A [Member] | Loan Agreement [Member] | ||||||||||||||||||
Number of shares issued | 326,143 | |||||||||||||||||
Value of shares issued | $ 135,144 | |||||||||||||||||
Description of reverse stock split | After considering the 1 to 1.5 shares reverse stock split, the number of shares to be issued would be 217,429. | |||||||||||||||||
Convertible Debentures Due on December 1, 2023 [Member] | ||||||||||||||||||
Convertible debentures amount | 179,803 | $ 3,000,000 | ||||||||||||||||
Maturity date | Dec. 1, 2023 | |||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||
Convertible debentures term | The debentures are convertible at any time prior to the Maturity Date in whole or in parts into common shares of the Company at a price of $0.60 per common share. | |||||||||||||||||
Description of recieve amount from sale of securities | The convertible debentures also provide that should the Company receive not less than $6,000,000 from the sale of its securities, it must either, at the discretion of the holders, make a $750,000 principal payment plus the balance of any accrued unpaid interest or convert that amount into the Company’s common stock. If the Company receives not less than $12,000,000 from the sale of its securities, the entire outstanding principal balance plus any accrued and unpaid interest must be either paid or converted in common stock. | |||||||||||||||||
Accrued interest amount | $ 192,557 | |||||||||||||||||
Interest expenses | $ 601,314 | $ 599,671 | ||||||||||||||||
Unpaid interest accrued percentage | 18.00% | |||||||||||||||||
Cash payment of debt | $ 97,979 | |||||||||||||||||
Increasing the principal amount | $ 81,824 | |||||||||||||||||
Description of monthly installments | Monthly payments of unpaid interest accrued at 12.5% per annum will be paid in arrears through March 31, 2021, beginning April 1, 2021, the Company will pay equal monthly installments of principal and interest at 10% per annum through December 1, 2023 | |||||||||||||||||
Convertible Debentures - Non Related Party [Member] | Common Class A [Member] | Redemption Agreement [Member] | Former Officers [Member] | ||||||||||||||||||
Convertible debentures amount | $ 287,000 | |||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||
Convertible debentures term | The debenture is convertible at any time prior to December 1, 2023 in whole or in parts into common stock of the Company at a price of $0.60 per common share. | |||||||||||||||||
Number of shares issued | 5,000,000 | |||||||||||||||||
Beneficial conversion feature | $ 30,996 | |||||||||||||||||
Interest expenses | $ 6,213 | $ 6,196 | ||||||||||||||||
Number of shares repurchase | 20,000,000 | |||||||||||||||||
Accrued expenses | $ 134,000 | |||||||||||||||||
Payment of accrued expenses | $ 67,000 | |||||||||||||||||
Remaining amount of accrued expenses | $ 67,000 | |||||||||||||||||
Conversion rate (in dollars per share) | $ 0.60 | |||||||||||||||||
Convertible Debentures - First Amendment [Member] | Former Officers [Member] | ||||||||||||||||||
Convertible debentures amount | $ 29,324 | |||||||||||||||||
Accrued interest amount | 11,490 | |||||||||||||||||
Accrued expenses | $ 112,412 | |||||||||||||||||
Unpaid accrued interest | 43,011 | |||||||||||||||||
Unpaid principal and interest payments | 40,814 | $ 83,825 | ||||||||||||||||
Total of convertible loan | $ 83,825 | |||||||||||||||||
Outstanding balance of accrued expenses | $ 28,587 | |||||||||||||||||
Convertible Debentures - First Amendment [Member] | Former Officers [Member] | Subsequent Event [Member] | ||||||||||||||||||
Accrued expenses | $ 38,412 | |||||||||||||||||
Remaining amount of accrued expenses | $ 67,000 | |||||||||||||||||
Convertible Debentures Due on due December 1, 2022 [Member] | ||||||||||||||||||
Convertible debenture and warranty purchase agreement amount | $ 3,000,000 | |||||||||||||||||
Percentage of cash interest | 4.00% | |||||||||||||||||
Percentage of payment in kind interest | 6.00% | |||||||||||||||||
Secured Convertible Debenture [Member] | ||||||||||||||||||
Interest rate | 11.00% | |||||||||||||||||
Senior Secured Convertible Promissory Debentures [Member] | Private Placement [Member] | ||||||||||||||||||
Minimum subscription amount | $ 250,000 | |||||||||||||||||
Aggregate exercise price | $ 750,000 | |||||||||||||||||
Senior Secured Convertible Promissory Debentures [Member] | Subsequent Event [Member] | ||||||||||||||||||
Exercise price (in dollars per share) | $ 2.75 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Feb. 05, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Interlink Plus, Inc. [Member] | |||
Related party interest expense | $ 6,721 | $ 1,597 | |
Description of transaction | The Company assumed a $180,000 debt to Interlink’s controlling stockholder to whom the Company was also indebted in the amount of $1,000,000. The $180,000 debt plus accrued interest of $5,563 was retired as a part of the issuance of 2,666,667 warrants to purchase the Company’s common stock. | ||
Convertible Debt [Member] | |||
Related party amounts of transaction | 3,988,693 | 3,050,137 | |
Related party interest expense | $ 416,845 | $ 297,534 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) - USD ($) | Jun. 08, 2020 | Jun. 08, 2020 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 05, 2020 | Jan. 31, 2020 | Dec. 31, 2018 |
Preferred stock, shares authorized | 666,667 | 666,667 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Reverse stock split | 1 for 1.5 reverse stock split | 1 for 1.5 reverse stock split of the Company’s common stock became effective. | ||||||
Common stock, shares authorized | 316,666,667 | 126,666,667 | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Common stock, shares issues | 118,128,008 | 101,882,647 | ||||||
Common stock, shares outstanding | 118,128,008 | 101,882,647 | ||||||
Number of shares issued | 3,933,333 | |||||||
Number of shares issued, value | $ 3,960,000 | $ 546,491 | ||||||
Inducement expense | 3,793,406 | |||||||
Loss on settlement of obligations | $ 13,900 | 192,557 | ||||||
Number of shares issued in satisfaction | 40,000 | |||||||
Number of shares issued in satisfaction , value | $ 15,000 | |||||||
Proceeds from issuance of common stock | 3,960,000 | |||||||
Common stock, shares subscribed | $ (485,144) | $ (150,144) | ||||||
Number of shares issued for the purchase of certain intangible assets | 1,369,863 | |||||||
Number of shares issued for the purchase of certain intangible assets, value | $ 2,671,096 | |||||||
Exercise price of warrants | $ 0.73 | $ 0.68 | $ 0.15 | |||||
Number of shares issued for services | 4,000,000 | |||||||
Number of shares issued for services, value | $ 1,500,000 | |||||||
Accrued interest | 3,842 | |||||||
Proceeds from issuance of convertible preferred stock | 1,000,000 | |||||||
Deemed dividend | $ 3,800,000 | |||||||
Number of shares issued | 97,891 | |||||||
Number of shares issued, value | $ 194,803 | |||||||
Settlement amount | 15,000 | |||||||
Loss from settlement of obligations | $ (15,000) | $ (493,601) | ||||||
Content Library [Member] | ||||||||
Number of shares issued for services | 1,278,771 | |||||||
Number of shares issued for services, value | $ 2,260,799 | |||||||
Business Acquisition Other [Member] | ||||||||
Number of shares issued | 454,463 | |||||||
Number of shares issued, value | $ 863,480 | |||||||
Percentage of voting interests acquired | 20.00% | |||||||
Warrant [Member] | ||||||||
Loss from settlement of obligations | $ 437,967 | |||||||
Former Employees [Member] | ||||||||
Number of shares issued | 1,866,667 | |||||||
Number of shares issued, value | $ 1,240,960 | |||||||
Interlink Plus, Inc. [Member] | ||||||||
Number of shares issued | 5,168,931 | |||||||
Debt to a related party | $ 180,000 | |||||||
Related party interest expense | 6,721 | $ 1,597 | ||||||
Legal expenses | 80,134 | |||||||
Accrued interest | $ 3,842 | |||||||
Series A Convertible Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 666,667 | 666,667 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, shares issues | 30,667 | 0 | ||||||
Preferred stock, shares outstanding | 30,667 | 0 | ||||||
Preferred stock, liquidation preference (in dollars per share) | $ 0.10 | |||||||
Preferred Stock, voting rights | Voting rights of 100 votes per share | |||||||
Preferred stock, conversion basis | Each share of Series A may be converted into 100 shares of common stock. | |||||||
Series B Convertible Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 3,333,334 | 3,333,334 | 3,333,334 | |||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, shares issues | 200,000 | 0 | ||||||
Preferred stock, shares outstanding | 200,000 | 0 | ||||||
Preferred stock, liquidation preference (in dollars per share) | $ 1 | |||||||
Preferred Stock, voting rights | The holders of Series B Convertible Preferred Stock have the right to cast one hundred (100) votes for each one (1) share of Series B Convertible Preferred Stock held of record on all matters submitted to a vote of holders of the common stock, including the election of directors, and all other matters as required by law. | |||||||
Preferred stock, conversion basis | The Series B Convertible Preferred Stock is convertible at any time at the discretion of the holder thereof into shares of common stock at a conversion rate of one hundred (100) shares of common stock for every- one (1) share of Series B Convertible Preferred Stock. | |||||||
Distribution per share (in dollars per share) | $ 1 | $ 1 | ||||||
Common stock, shares issues | 200,000 | |||||||
Number of shares issued | 200,000 | |||||||
Number of shares issued, value | $ 9,600,000 | |||||||
Debt instrument, forgiveness | $ 1,006,594 | |||||||
Series B Convertible Preferred Stock [Member] | Stock Issued For Cash [Member] | ||||||||
Number of shares issued | 100,000 | |||||||
Number of shares issued, value | $ 4,800,000 | |||||||
Debt instrument, forgiveness | 1,006,594 | |||||||
Inducement expense | $ 3,793,406 | |||||||
Series B Convertible Preferred Stock [Member] | Stock Issued For Loan Forgiveness [Member] | ||||||||
Number of shares issued | 100,000 | |||||||
Number of shares issued, value | $ 4,800,000 | |||||||
Proceeds from issuance of convertible preferred stock | 1,000,000 | |||||||
Deemed dividend | 3,800,000 | |||||||
Common Class B [Member] | ||||||||
Number of shares issued | 45,127 | |||||||
Number of shares issued, value | $ 5 | |||||||
Number of shares issued for the purchase of certain intangible assets | 1,600,000 | |||||||
Number of shares issued for the purchase of certain intangible assets, value | $ 6,350,000 | |||||||
Number of shares issued for services | 2,800,000 | |||||||
Number of shares issued for services, value | $ 280 | |||||||
Common Class B [Member] | Deemed Dividend [Member] | ||||||||
Fair value of preferred stock exceeded | 1,000,000 | |||||||
Proceeds from issuance of convertible preferred stock | $ 3,800,000 | |||||||
Common Class B [Member] | Warrant [Member] | ||||||||
Number of shares issued | 18,021,472 | |||||||
Number of shares issued, value | $ 27,032 | |||||||
Exercise price of warrants | $ 0.001 | |||||||
Common Class B [Member] | Settlement Agreement [Member] | ||||||||
Number of shares issued | 18,021,472 | |||||||
Number of shares issued, value | $ 27,032 | |||||||
Exercise price of warrants | $ 0.001 | |||||||
Common Class B [Member] | Debenture Holders [Member] | Settlement Agreement [Member] | ||||||||
Number of shares issued | 45,127 | |||||||
Number of shares issued, value | $ 30,000 | |||||||
Common Class B [Member] | Debenture Holders [Member] | Settlement Agreement [Member] | Forgiveness [Member] | ||||||||
Number of shares issued | 37,605 | |||||||
Number of shares issued, value | $ 25,000 | |||||||
Debt instrument, forgiveness | 5,221 | |||||||
Loss on settlement of obligations | $ 19,779 | |||||||
Common Class B [Member] | Investor [Member] | ||||||||
Number of shares issued | 45,127 | |||||||
Common Class A [Member] | ||||||||
Number of shares issued | 1,377,333 | |||||||
Number of shares issued, value | $ 137 | |||||||
Number of shares issued in satisfaction | 340,782 | |||||||
Number of shares issued in satisfaction , value | $ 67,000 | |||||||
Proceeds from issuance of common stock | 89,990 | |||||||
Common stock, shares subscribed | $ (150,144) | |||||||
Number of shares issued for the purchase of certain intangible assets | 15,333,333 | |||||||
Common Class A [Member] | Investor [Member] | ||||||||
Number of shares issued | 1,377,333 | |||||||
Number of shares issued, value | $ 546,490 | |||||||
Convertible Preferred Stock [Member] | Interlink Plus, Inc. [Member] | ||||||||
Number of shares issued | 30,667 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at the beginning | 5,812,307 | 6,173,418 |
Grants | 2,500,000 | |
Exercised | ||
Expired | (361,111) | |
Forfeited | ||
Outstanding at the end | 8,312,307 | 5,812,307 |
Exercisable | 6,564,307 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at the beginning | $ 0.70 | $ 0.71 |
Grants | 0.89 | |
Exercised | ||
Expired | ||
Forfeited | ||
Outstanding at the end | 0.76 | $ 0.70 |
Exercisable | $ 0.72 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding at the beginning | 8 years 4 months 28 days | 9 years 3 months 22 days |
Grants | 9 years 5 months 16 days | |
Outstanding at the end | 8 years 11 days | 8 years 4 months 28 days |
Exercisable | 7 years 7 months 21 days | |
Outstanding at December 31, 2018 | ||
Grants | 5,800,000 | |
Exercised | ||
Expired | ||
Forfeited | ||
Outstanding at December 31, 2019 | 20,397,450 | |
Exercisable at December 31, 2020 | $ 16,385,783 |
STOCK OPTIONS AND WARRANTS (D_2
STOCK OPTIONS AND WARRANTS (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Exercise price | $ 0.76 | $ 0.70 | $ 0.71 |
Number of options | 8,312,307 | 5,812,307 | 6,173,418 |
Weighted average remaining life in years remaining life in years | 8 years 4 months 28 days | 9 years 3 months 22 days | |
Options exercisable number of options | 6,564,307 | ||
Stock Options Exercise price 0.86 [Member] | |||
Exercise price | $ 0.86 | ||
Number of options | 1,148,372 | ||
Weighted average remaining life in years remaining life in years | 5 years 7 months 28 days | ||
Options exercisable number of options | 1,148,372 | ||
Stock Options Exercise price 0.66 [Member] | |||
Exercise price | $ 0.66 | ||
Number of options | 4,663,935 | ||
Weighted average remaining life in years remaining life in years | 7 years 10 months 3 days | ||
Options exercisable number of options | 4,663,935 | ||
Stock Options Exercise price 0.89 [Member] | |||
Exercise price | $ 0.89 | ||
Number of options | 2,500,000 | ||
Weighted average remaining life in years remaining life in years | 9 years 5 months 16 days | ||
Options exercisable number of options | 752,000 |
STOCK OPTIONS AND WARRANTS (D_3
STOCK OPTIONS AND WARRANTS (Details 2) | 12 Months Ended |
Dec. 31, 2020$ / shares | |
Weighted average fair value of options granted | $ 0.36 |
Expected dividends yield | 0.00% |
Forfeiture rate | 0.00% |
Minimum [Member] | |
Expected life | 5 years 1 month 24 days |
Risk-free interest rate | 0.33% |
Expected volatility | 44.69% |
Maximum [Member] | |
Expected life | 5 years 9 months |
Risk-free interest rate | 0.44% |
Expected volatility | 45.32% |
STOCK OPTIONS AND WARRANTS (D_4
STOCK OPTIONS AND WARRANTS (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Exercise price (in dollars per share) | $ 0.73 | $ 0.68 | $ 0.15 |
Number outstanding | $ 8,585,558 | $ 5,550,709 | $ 21,572,181 |
Weighted average remaining contractual life (years) | 10 years | ||
Warrant Exercise price 0.86 [Member] | |||
Exercise price (in dollars per share) | $ 0.86 | ||
Number outstanding | $ 3,850,709 | ||
Weighted average remaining contractual life (years) | 6 years 11 months 12 days | ||
Weighted average exercise price | $ 0.86 | ||
Number exercisable | 3,850,709 | ||
Weighted average remaining contractual life (years) | 6 years 11 months 12 days | ||
Warrant Exercise price 0.38 [Member] | |||
Exercise price (in dollars per share) | $ 0.38 | ||
Number outstanding | $ 2,000,000 | ||
Weighted average remaining contractual life (years) | 5 years 11 months 5 days | ||
Weighted average exercise price | $ 0.38 | ||
Number exercisable | 2,000,000 | ||
Weighted average remaining contractual life (years) | 5 years 11 months 5 days | ||
Warrant Exercise price 0.75 [Member] | |||
Exercise price (in dollars per share) | $ 0.75 | ||
Number outstanding | $ 2,666,667 | ||
Weighted average remaining contractual life (years) | 9 years 2 months 12 days | ||
Weighted average exercise price | $ 0.75 | ||
Number exercisable | 2,666,667 | ||
Weighted average remaining contractual life (years) | 9 years 2 months 12 days | ||
Warrant Exercise price 2.75 [Member] | |||
Exercise price (in dollars per share) | $ 2.75 | ||
Number outstanding | $ 68,182 | ||
Weighted average remaining contractual life (years) | 9 years 11 months 1 day | ||
Weighted average exercise price | $ 2.75 | ||
Number exercisable | 68,182 | ||
Weighted average remaining contractual life (years) | 9 years 11 months 1 day |
STOCK OPTIONS AND WARRANTS (D_5
STOCK OPTIONS AND WARRANTS (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of shares | ||
Outstanding at beginning | $ 5,550,709 | $ 21,572,181 |
Issued | 3,034,849 | 2,000,000 |
Exercised | (18,021,472) | |
Outstanding at ending | $ 8,585,558 | $ 5,550,709 |
Weighted average exercise price per share | ||
Outstanding at beginning | $ 0.68 | $ 0.15 |
Issued | 0.81 | 0.38 |
Outstanding at ending | $ 0.73 | $ 0.68 |
STOCK OPTIONS AND WARRANTS (D_6
STOCK OPTIONS AND WARRANTS (Details 5) | Dec. 31, 2020$ / shares |
Warrant term | 10 years |
Risk Free Interest Rate [Member] | |
Warrants outstanding, measurement input | 2.08 |
Expected Stock Volatility [Member] | |
Warrants outstanding, measurement input | 45.49 |
Expected Dividend Yield [Member] | |
Warrants outstanding, measurement input | 0 |
Warrant [Member] | |
Weighted average fair value of warrants granted | $ 0.4057 |
Warrant [Member] | Expected Dividend Yield [Member] | |
Warrants outstanding, measurement input | 0 |
Warrant [Member] | Forfeiture Rate [Member] | |
Warrants outstanding, measurement input | 0 |
Warrant [Member] | Minimum [Member] | |
Warrant term | 3 years |
Warrant [Member] | Minimum [Member] | Risk Free Interest Rate [Member] | |
Warrants outstanding, measurement input | 0.22 |
Warrant [Member] | Minimum [Member] | Expected Stock Volatility [Member] | |
Warrants outstanding, measurement input | 48.46 |
Warrant [Member] | Maximum [Member] | |
Warrant term | 10 years |
Warrant [Member] | Maximum [Member] | Risk Free Interest Rate [Member] | |
Warrants outstanding, measurement input | 0.82 |
Warrant [Member] | Maximum [Member] | Expected Stock Volatility [Member] | |
Warrants outstanding, measurement input | 61.63 |
STOCK OPTIONS AND WARRANTS (D_7
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation expense | $ 450,286 | $ 55,796 |
Liabilities owed | 5,964,500 | 4,147,141 |
Loss on settlement of obligations | (15,000) | $ (493,601) |
Related party note | 180,000 | |
Accrued interest | $ 3,842 | |
Description of assumption of debt and accrued interest | the Company issued 2,666,667 warrants valued at $702,219 to retire the $180,000 debt and $5,563 of accrued liabilities. | |
Additional debt discount | $ 36,949 | |
Senior Secured Convertible Promissory Debentures [Member] | ||
Number of warrants issued | 68,182 | |
Value of warrants issued | $ 750,000 | |
Warrant [Member] | ||
Number of warrants issued | 2,000,000 | |
Relative fair value of warrant | $ 483,967 | |
Loss on settlement of obligations | $ 437,967 | |
Warrant [Member] | Consultant [Member] | ||
Number of warrants issued | 300,000 | |
Liabilities owed | $ 46,000 | |
Value of warrants issued | $ 492,000 | |
Stock Options [Member] | ||
Stock price (in dollars per share) | $ 3.21 | $ 0.38 |
Number of options issued | 2,500,000 | |
Price per option (in dollars per share) | $ 0.3645 | |
Stock-based compensation expense | $ 134,253 | $ 0 |
Number of options exceeds | $ 100,000 | |
2020 Equity Incentive Compensation Plan [Member] | ||
Number of share to be reserved for issuance | 26,500,000 | |
Former Plan [Member] | ||
Number of share to be reserved for issuance | 6,666,667 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
U.S. federal | ||
Current | $ 98,372 | |
Deferred | (2,015,381) | (2,063,921) |
State and local | ||
Current | (128) | 1,600 |
Deferred | (670,220) | (746,995) |
Total | (2,587,356) | (2,809,316) |
Change in valuation allowance | 2,685,600 | 2,810,916 |
Income tax provision | $ 98,244 | $ 1,600 |
INCOME TAX (Details 1)
INCOME TAX (Details 1) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | 21.00% | 21.00% |
State income taxes, net of federal benefit | 6.19% | 6.98% |
Other permanent items | (8.16%) | (2.36%) |
Change in valuation allowance | (17.53%) | (24.42%) |
Other | (2.14%) | (0.62%) |
Effective rate | (0.64%) | 0.58% |
INCOME TAX (Details 2)
INCOME TAX (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net Operating Loss Carryover | $ 3,893,134 | $ 2,448,321 |
State Net Operating Loss | 1,292,097 | 813,492 |
Allowance for doubtful accounts | 17,393 | |
Stock-based compensation | 877,478 | |
Fixed assets book/ tax basis difference | 105,980 | (1,576) |
Impairment | 1,776,959 | 1,776,959 |
Operating right-of-use assets | 1,909 | |
Accrued expenses | 20,752 | |
Accrued expenses | (138,719) | |
Amortization of debt discount | 357,290 | (660,900) |
Research credit | 7,799 | 4,259 |
Intangible book/tax basis difference | 445,870 | 861,776 |
Total deferred tax asset, net | 7,919,183 | 5,981,090 |
Less: reserve for allowance | (7,919,183) | (5,981,090) |
Total Deferred tax asset, net of valuation allowance | 0 | 0 |
Deferred tax liabilities: | ||
Total Deferred tax liability, net of valuation allowance | $ 0 | $ 0 |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Federal [Member] | ||
Net operating loss carryforwards | $ 18,700,000 | $ 11,600,000 |
State [Member] | ||
Net operating loss carryforwards | $ 18,500,000 | $ 11,600,000 |
NOL carryforwards expiration date | Dec. 31, 2037 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Mar. 24, 2021 | Mar. 05, 2021 | Mar. 02, 2021 | Jan. 12, 2021 | Jan. 08, 2021 | Dec. 01, 2020 | Aug. 01, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Exercise price (in dollars per share) | $ 0.73 | $ 0.68 | $ 0.15 | ||||||||
Accrued interest | $ 59,818 | $ 94,069 | |||||||||
Share Purchase Agreement [Member] | Restricted Common Stock [Member] | Accredited Investors [Member] | |||||||||||
Aggregate offering amount | $ 6,500,000 | ||||||||||
Restriction perion on resale of shares | 365 days | ||||||||||
Shares to be issued for loan conversion | 1.25 | ||||||||||
Senior Secured Convertible Promissory Debentures [Member] | Private Placement [Member] | |||||||||||
Debt face amount | $ 3,000,000 | ||||||||||
Minimum subscription amount | 250,000 | ||||||||||
Aggregate exercise price | $ 750,000 | ||||||||||
Number of aggregate exercisable warrant shares | 272,727 | ||||||||||
Senior Secured Convertible Promissory Debentures [Member] | Private Placement [Member] | Common Stock Warrant [Member] | |||||||||||
Aggregate exercise price | $ 750,000 | ||||||||||
Senior Secured Convertible Promissory Debentures [Member] | Private Placement [Member] | Warrant [Member] | |||||||||||
Number of aggregate exercisable warrant shares | 272,727 | ||||||||||
Subsequent Event [Member] | 2020 Equity Incentive Compensation Plan [Member] | |||||||||||
Exercise price (in dollars per share) | $ 1.10 | ||||||||||
Options awarded | 16,045,216 | ||||||||||
Excess of common shares issued under plan | 6,545,216 | ||||||||||
Fair value of options awarded | $ 33,305,242 | $ 477,929 | |||||||||
Subsequent Event [Member] | Share Purchase Agreement [Member] | |||||||||||
Raised aggregate amount | $ 5,530,000 | ||||||||||
Number of shares issued | 4,424,000 | ||||||||||
Subsequent Event [Member] | Senior Secured Convertible Promissory Debentures [Member] | |||||||||||
Debt face amount | $ 350,000 | ||||||||||
Number of warrants issued to purchase common stock | 87,500 | ||||||||||
Relative fair value of warrants | $ 49,875 | ||||||||||
Exercise price (in dollars per share) | $ 2.75 | ||||||||||
Share price (in dollars per share) | $ 0.25 | ||||||||||
Loan amount | $ 326,143 | ||||||||||
Accrued interest | 50,213 | ||||||||||
Total loan amount to be converted | $ 376,356 | ||||||||||
Shares to be issued for loan conversion | 1,003,617 | ||||||||||
Value of loan conversion | $ 3,111,213 | ||||||||||
Subsequent Event [Member] | Senior Secured Convertible Promissory Debentures [Member] | Loan Agreement - Amendment 1 [Member] | |||||||||||
Shares to be issued per agreement | 217,429 | ||||||||||
Reduction of common stock subscribed but not yet issued | $ 135,144 | ||||||||||
Subsequent Event [Member] | Senior Secured Convertible Promissory Debentures [Member] | Loan Agreement - Amendment 2 [Member] | |||||||||||
Share price (in dollars per share) | $ .0375 |