Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-41227 | |
Entity Registrant Name | CERBERUS CYBER SENTINEL CORPORATION | |
Entity Central Index Key | 0001777319 | |
Entity Tax Identification Number | 83-4210278 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 6900 E. Camelback Road | |
Entity Address, Address Line Two | Suite 240 | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85251 | |
City Area Code | (480) | |
Local Phone Number | 389-3444 | |
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | CISO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,253,545 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Current Assets: | |||
Cash and cash equivalents | $ 4,888,333 | $ 2,725,035 | |
Accounts receivable, net | 5,763,431 | 4,840,802 | |
Notes receivable, related party | 1,090,903 | ||
Inventory | 336,527 | 189,596 | |
Prepaid expenses and other current assets | 3,456,400 | 960,965 | |
Contract asset | 495,374 | ||
Total Current Assets | 14,940,065 | 9,807,301 | |
Property and equipment, net | 4,460,763 | 2,394,424 | |
Right of use asset, net | 316,698 | 277,578 | |
Intangible assets, net | 7,650,150 | 6,540,269 | |
Goodwill | 74,094,780 | [1] | 16,792,535 |
Other assets | 17,068 | ||
Total Assets | 101,479,524 | 35,812,107 | |
Current Liabilities: | |||
Accounts payable and accrued expenses | 6,700,021 | 2,709,066 | |
Deferred revenue | 3,074,173 | 52,824 | |
Settlement liability | 470,000 | ||
Lease liability | 163,233 | 196,472 | |
Loans payable | 7,235,352 | 213,199 | |
Convertible notes payable | 1,050,000 | 1,500,000 | |
Total Current Liabilities | 18,222,779 | 5,141,561 | |
Long-term Liabilities: | |||
Loans payable, net of current portion | 4,465,244 | 5,284,301 | |
Lease liability, net of current portion | 167,462 | 88,040 | |
Convertible notes payable, net of current portion | 1,500,000 | ||
Total Liabilities | 24,355,485 | 10,513,902 | |
Commitments and Contingencies | |||
Stockholders’ Equity: | |||
Common stock, $.00001 par value; 300,000,000 shares authorized; 145,945,679 and 125,852,971 shares issued and outstanding on September 30, 2022 and December 31, 2021, respectively | 1,459 | 1,258 | |
Preferred stock, $.00001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding on September 30, 2022 and December 31, 2021 | |||
Additional paid-in capital | 147,215,998 | 69,309,369 | |
Accumulated translation adjustment | (2,207,256) | ||
Accumulated deficit | (67,886,162) | (44,012,422) | |
Total Stockholders’ Equity | 77,124,039 | 25,298,205 | |
Total Liabilities and Stockholders’ Equity | $ 101,479,524 | $ 35,812,107 | |
[1]As of September 30, 2022, we had not obtained a third-party valuation for the acquisitions of CUATROi and NLT Secure. As such, the purchase price allocation disclosed in this Quarterly Report for CUATROi and NLT Secure may change, and, therefore, goodwill from the acquisitions may change. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 145,945,679 | 125,852,971 |
Common stock, shares outstanding | 145,945,679 | 125,852,971 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 11,253,032 | $ 3,745,008 | $ 31,810,387 | $ 9,254,583 |
Cost of revenue: | ||||
Total cost of revenue | 10,329,509 | 3,291,262 | 30,072,655 | 7,475,241 |
Total gross profit | 923,523 | 453,746 | 1,737,732 | 1,779,342 |
Operating expenses: | ||||
Professional fees | 624,391 | 293,408 | 2,192,600 | 695,023 |
Advertising and marketing | 245,495 | 254,026 | 641,340 | 471,721 |
Selling, general and administrative | 6,684,747 | 2,125,984 | 15,856,705 | 5,296,623 |
Stock based compensation | 1,791,724 | 938,726 | 6,761,283 | 2,236,142 |
Total operating expenses | 9,346,357 | 3,612,144 | 25,451,928 | 8,699,509 |
Loss from operations | (8,422,834) | (3,158,398) | (23,714,196) | (6,920,167) |
Other income (expense): | ||||
Other income | 29,968 | 169 | 134,447 | 2,553 |
Interest expense, net | (108,233) | (75,470) | (293,991) | (209,806) |
PPP loan forgiveness | 980,800 | 980,800 | ||
Total other income (expense) | (78,265) | 905,499 | (159,544) | 773,547 |
Net loss | (8,501,099) | (2,252,899) | (23,873,740) | (6,146,620) |
Foreign currency translation adjustment | (908,987) | (2,207,256) | ||
Comprehensive loss | $ (9,410,086) | $ (2,252,899) | $ (26,080,996) | $ (6,146,620) |
Net loss per common share - basic and diluted | $ (0.06) | $ (0.02) | $ (0.17) | $ (0.05) |
Weighted average shares outstanding - basic | 142,295,780 | 117,729,971 | 136,764,168 | 117,081,360 |
Security Managed Services [Member] | ||||
Revenue: | ||||
Total revenue | $ 10,061,304 | $ 3,099,753 | $ 28,489,698 | $ 6,979,146 |
Cost of revenue: | ||||
Total cost of revenue | 4,310,378 | 650,955 | 10,678,728 | 1,326,788 |
Professional Services [Member] | ||||
Revenue: | ||||
Total revenue | 1,191,728 | 645,255 | 3,320,689 | 2,275,437 |
Cost of revenue: | ||||
Total cost of revenue | 182,413 | 234,326 | 455,902 | 350,388 |
Cost Of Payroll [Member] | ||||
Cost of revenue: | ||||
Total cost of revenue | 4,978,768 | 2,093,072 | 14,132,602 | 5,052,684 |
Stock based Compensation [Member] | ||||
Cost of revenue: | ||||
Total cost of revenue | $ 857,950 | $ 312,909 | $ 4,805,423 | $ 745,381 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 1,161 | $ 12,607,074 | $ (4,866,772) | $ 7,741,463 | ||
Beginning balance, shares at Dec. 31, 2020 | 116,104,971 | |||||
Stock based compensation - stock options | 1,729,888 | 1,729,888 | ||||
Stock based compensation - common stock | $ 2 | 2 | ||||
Stock based compensation - common stock, shares | 232,900 | |||||
Stock issued for cash | $ 16 | 3,249,984 | 3,250,000 | |||
Stock issued for cash, shares | 1,625,000 | |||||
Stock issued for VelocIT acquisition | $ 23 | 13,603,924 | 13,603,947 | |||
Stock issued for VelocIT acquisition, shares | 2,310,100 | |||||
Foreign currency translation | ||||||
Net loss | (6,146,620) | (6,146,620) | ||||
Replacement options issued in VelocIT acquisition | 6,861,203 | 6,861,203 | ||||
Ending balance, value at Sep. 30, 2021 | $ 1,202 | 38,052,073 | (11,013,392) | 27,039,883 | ||
Ending balance, shares at Sep. 30, 2021 | 120,272,971 | |||||
Beginning balance, value at Dec. 31, 2020 | $ 1,161 | 12,607,074 | (4,866,772) | 7,741,463 | ||
Beginning balance, shares at Dec. 31, 2020 | 116,104,971 | |||||
Ending balance, value at Dec. 31, 2021 | $ 1,258 | 69,309,369 | (44,012,422) | 25,298,205 | ||
Ending balance, shares at Dec. 31, 2021 | 125,852,971 | |||||
Stock based compensation - stock options | 10,432,048 | 10,432,048 | ||||
Stock based compensation - common stock | $ 7 | 1,592,977 | 1,592,984 | |||
Stock based compensation - common stock, shares | 736,819 | |||||
Stock issued for cash | $ 3 | 1,040,962 | 1,040,965 | |||
Stock issued for cash, shares | 304,608 | |||||
Exercise of options | $ 25 | 1,359,239 | $ 1,359,264 | |||
Exercise of options, shares | 2,459,809 | 2,459,809 | ||||
Stock issued for cash in public offering | $ 21 | 9,521,777 | $ 9,521,798 | |||
Stock issued for cash in public offering, shares | 2,060,000 | |||||
Stock issued for True Digital acquisition | $ 82 | 34,726,298 | 34,726,380 | |||
Stock issued for True Digital acquisition, shares | 8,229,000 | |||||
Stock issued for VelocIT acquisition | $ 3 | (3) | ||||
Stock issued for VelocIT acquisition, shares | 256,678 | |||||
Stock issued for Red74 acquisition | ||||||
Stock issued for Red74 acquisition, shares | 34,000 | |||||
Stock issued for Creatrix acquisition | $ 6 | 3,629,994 | 3,630,000 | |||
Stock issued for Creatrix acquisition, shares | 600,000 | |||||
Stock issued for CyberViking acquisition | $ 5 | 1,836,315 | 1,836,320 | |||
Stock issued for CyberViking acquisition, shares | 499,000 | |||||
Stock issued for CUATROi acquisition | $ 22 | 6,847,452 | 6,847,474 | |||
Stock issued for CUATROi acquisition, shares | 2,166,922 | |||||
Stock issued for NLT acquisition | $ 27 | 6,919,570 | 6,919,597 | |||
Stock issued for NLT acquisition, shares | 2,745,872 | |||||
Foreign currency translation | (2,207,256) | (2,207,256) | ||||
Net loss | (23,873,740) | (23,873,740) | ||||
Ending balance, value at Sep. 30, 2022 | $ 1,459 | $ 147,215,998 | $ (2,207,256) | $ (67,886,162) | $ 77,124,039 | |
Ending balance, shares at Sep. 30, 2022 | 145,945,679 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (23,873,740) | $ (6,146,620) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation - stock options | 10,432,048 | 2,981,523 |
Loss on write-off of accounts receivable | 55,528 | |
Issuance of common stock for services | 1,134,658 | 313,395 |
Non-cash interest expense | 60,651 | 54,792 |
Depreciation and amortization | 2,138,493 | 131,403 |
Right of use amortization | 184,167 | 75,842 |
Gain on disposal of property and equipment | 12,000 | |
Forgiveness of PPP Loan | (980,800) | |
Gain on termination of operating lease | (22,289) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 887,816 | (355,946) |
Inventory | (106,246) | |
Contract assets | (330,067) | |
Prepaids and other current assets | (1,952,488) | (305,532) |
Accounts payable and accrued expenses | 3,003,623 | (66,311) |
Lease liability | (154,816) | (69,586) |
Settlement liability | (470,000) | |
Deferred revenue | 1,205,893 | |
Net cash used in operating activities | (7,850,297) | (4,312,312) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (510,973) | |
Cash (paid)/acquired in acquisitions, net | (5,533,244) | 662,176 |
Net cash (used in)/provided by investing activities | (6,044,217) | 662,176 |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 10,562,763 | 3,250,000 |
Proceeds from stock option exercise | 1,359,264 | |
Proceeds from loan payable | 5,000,000 | |
Proceeds from convertible note payable | 1,000,000 | |
Proceeds from line of credit | 86,585 | 221,346 |
Payment on line of credit | (369,829) | (224,346) |
Payment on loans payable | (1,575,510) | (2,004,528) |
Payment on notes payable, related party | (59,787) | |
Payment of debt issuance cost | (25,000) | |
Net cash provided by financing activities | 16,038,273 | 1,182,685 |
Effect of exchange rates on cash and cash equivalents | 19,539 | |
Net increase in cash and cash equivalents | 2,163,298 | (2,467,451) |
Cash and cash equivalents - beginning of the period | 2,725,035 | 5,197,030 |
Cash and cash equivalents - end of the period | 4,888,333 | 2,729,579 |
Cash paid for: | ||
Interest | 224,813 | 91,490 |
Income taxes | ||
Non-cash investing and financing activities: | ||
Right of use asset and lease liability recorded upon adoption of ASC 842 | 476,986 | 330,512 |
Forgiveness of PPP Loan | 980,800 | |
Common stock issued in VelocIT acquisition | 13,603,947 | |
Common stock issued in RED 74 acquisition | ||
Common stock issued in True Digital acquisition | 34,726,380 | |
Common stock issued in Creatrix acquisition | 3,630,000 | |
Common stock issued in CyberViking acquisition | 1,836,320 | |
Common stock issued in CUATROi acquisition | 6,847,474 | |
Common stock issued in NLT Secure acquisition | $ 6,919,597 |
ORGANIZATION AND BACKGROUND
ORGANIZATION AND BACKGROUND | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BACKGROUND | NOTE 1 – ORGANIZATION AND BACKGROUND Description of the Business We are a cybersecurity and compliance company comprised of highly trained and seasoned security professionals who work with clients to enhance or create a better cyber posture in their organization. We provide a full range of cybersecurity consulting and related services, encompassing all three pillars of compliance, cybersecurity, and culture. Our services include secured managed services, compliance services, security operations center (“SOC”) services, virtual Chief Information Security Officer (“vCISO”) services, incident response, certified forensics, technical assessments, and cybersecurity training. On January 5, 2022, we entered into a stock purchase agreement (the “True Digital Stock Purchase Agreement”) with certain stockholders of True Digital and an agreement and plan of merger (the “True Digital Merger Agreement”) with True Digital and certain of its other stockholders. On January 19, 2022, the transactions contemplated by the True Digital Stock Purchase Agreement and the True Digital Merger Agreement were consummated, with True Digital becoming a wholly owned subsidiary of our company. On January 18, 2022, we completed a $ 10,300,000 2,060,000 144,200 On June 1, 2022, we entered into a stock purchase agreement with the stockholders of Creatrix, pursuant to which we acquired all of the issued and outstanding capital stock of Creatrix, with Creatrix becoming a wholly owned subsidiary of our company. Creatrix offers recognized expertise in identity management as well as systems integration and software engineering, and specializes in biometrics, vetting, credentialing, and case management. On July 1, 2022, we entered into a stock purchase agreement with CyberViking and its interest holders, pursuant to which we acquired all of the issued and outstanding units of CyberViking, with CyberViking becoming a wholly owned subsidiary of our company. CyberViking specializes in application security services, incident response, and threat hunting as well as the creation and management of security operation centers. On August 25, 2022, we entered into a stock purchase agreement with CUATROi and its partners, pursuant to which we acquired all of the issued and outstanding units of CUATROi, with CUATROi becoming a wholly owned subsidiary of our company. CUATROi is a cloud, managed services provider & cybersecurity company with offices in South America. On September 1, 2022, we entered into a stock purchase agreement with NLT Secure and its interest holders, pursuant to which we acquired all of the issued and outstanding units of NLT Secure, with NLT Secure becoming a wholly owned subsidiary of our company. NLT Secure provides a broad range of security solutions and managed services to organizations throughout South America. Basis of Presentation Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include our accounts and the accounts of our subsidiaries. All intercompany accounts and transactions have been eliminated. Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2022. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, 2021. Reclassifications Certain reclassifications have been made to the financial statements for the nine months ended September 30, 2021 to conform to the financial statements presentation for the nine months ended September 30, 2022. These reclassifications had no effect on net loss or cash flows as previously reported. Use of Estimates GAAP requires management to make estimates and assumptions that affect the reported amounts in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results could materially differ. We believe the critical accounting policies discussed below affects our more significant judgments and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements. Significant estimates include the allowance for doubtful accounts, the carrying value of intangible assets and goodwill, deferred tax asset and valuation allowance, the estimated fair value of assets acquired, liabilities assumed and stock issued in business combinations, and assumptions used in the Black-Scholes option pricing model, such as expected volatility, risk-free interest rate, share price, and expected dividend rate. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Our revenue is derived from two major types of services to clients: security managed services and professional services. With respect to security managed services, we provide culture education and enablement, tools and technology provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services, including, but not limited to, antivirus and patch management. With respect to professional services, we provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Our revenue is categorized and disaggregated as reflected in our statement of operations as follows: Security Managed Services Security managed services revenue primarily consists of compliance, security managed services, SOC managed services, and vCISO. We considered these services to be a single performance obligation, and revenue is recognized as services and materials are provided to the customer. Professional Services Professional services revenue primarily consists of technical assessments, incident response and forensics, training, and other cybersecurity services. We considered these services to be a single performance obligation, and revenue is recognized in the period in which the performance obligations are satisfied. Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. We periodically assess our accounts and other receivables for collectability on a specific identification basis. We provide for allowances for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of September 30, 2022 and December 31, 2021, our allowance for doubtful accounts was $ 308,560 77,811 Inventory Inventory consists of software licenses and computer equipment for sale to customers. Inventory is measured using the first-in, first-out method and stated at lower of cost or net realizable value as of September 30, 2022 and December 31, 2021. The value of inventories is reduced for excess and obsolete inventories. We monitor inventory to identify events that would require impairment due to obsolete inventory and adjust the value of inventory when required. We recorded no inventory impairment losses for the nine months ended September 30, 2022 and 2021. Fair Value Measurements As defined in ASC (“Accounting Standards Codification”) 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. For dilutive securities, all outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options and shares issuable upon conversion thereof have been excluded from our computation of net loss per common share for the nine months ended September 30, 2022 and 2021. The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE September 30, 2022 September 30, 2021 Stock options 34,856,288 27,680,040 Warrant 144,200 - Convertible debt 430,718 1,500,000 Total 35,431,206 29,180,040 Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license. We generally invoice customers in advance or in milestone-based installments. Deferred revenue of $ 52,824 3,074,173 D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE September 30, 2022 December 31, 2021 Security managed services $ 2,038,072 $ 52,824 Professional services 1,036,101 - Total deferred revenue $ 3,074,173 $ 52,824 Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We utilize ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. Recently Issued Accounting Standards In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force). The ASU requires issuers to account for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the ASU, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years. Early adoption is permitted. We adopted the standard on January 1, 2022, and management noted that there is no material impact to the unaudited condensed consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in business combinations to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that adopting this standard will have on the unaudited condensed consolidated financial statements. All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to us. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 3 – ACQUISITIONS True Digital Security, Inc. On January 5, 2022, we entered into the True Digital Stock Purchase Agreement with certain stockholders of True Digital and the True Digital Merger Agreement with True Digital and certain of its other stockholders. On January 19, 2022, the transactions contemplated by the True Digital Stock Purchase Agreement and the True Digital Merger Agreement were consummated, with True Digital becoming a wholly owned subsidiary of our company (the “True Digital Acquisition”). True Digital’s outstanding common stock was exchanged for $ 6,153,000 8,229,000 The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration $ 40,879,380 Tangible assets acquired: Cash 485,232 Accounts receivable 1,404,386 Contract assets 131,342 Prepaid expenses and other current assets 196,825 Property and equipment 906,006 Other assets 17,505 Total tangible assets 3,141,296 Intangible assets acquired: Tradename - trademarks 1,744,200 Intellectual property 1,137,000 Non-competes 124,900 Total intangible assets 3,006,100 Assumed liabilities: Accounts payable and accrued expenses 1,283,003 Deferred revenue 1,956,600 Line of credit 283,244 Loans payable 181,741 Loans payable - shareholder 543,581 Total assumed liabilities 4,248,169 Net assets acquired 1,899,227 Goodwill (a) $ 38,980,153 (a) Goodwill and intangibles are not deductible for tax purposes. Creatrix, Inc. On June 1, 2022, we entered into a stock purchase agreement with the stockholders of Creatrix, pursuant to which Creatrix became our wholly owned subsidiary. We anticipate that this will expand our professional services offerings and capabilities. Creatrix offers recognized expertise in identity management as wells as systems integration and software engineering and specializes in biometrics, vetting, credentialing, and case management. The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 3,630,000 Tangible assets acquired: Cash 3,572 Accounts receivable 125,908 Contract assets 33,965 Prepaid expenses and other current assets 3,597 Total tangible assets 167,042 Assumed liabilities: Accounts payable and accrued expenses 48,001 Loans payable 56,687 Total assumed liabilities 104,688 Net assets acquired 62,354 Goodwill (a) $ 3,567,646 (a) Goodwill is not deductible for tax purposes. CyberViking, LLC. On July 1, 2022, we entered into a stock purchase agreement with CyberViking and its interest holders, pursuant to which we acquired all of the issued and outstanding units of CyberViking, with CyberViking becoming a wholly owned subsidiary of our company. We anticipate that this will expand our professional services offerings and capabilities. CyberViking specializes in application security services, incident response, and threat hunting as well as the creation and management of security operation centers. We did not acquire assets nor assume liabilities in our purchase of CyberViking, as a result the $ 1,836,320 CUATROi. On August 25, 2022, we entered into a stock purchase agreement with CUATROi and its partners, pursuant to which CUATROi became our wholly owned subsidiary. We anticipate that this will expand our professional services offerings and capabilities. CUATROi is a cloud, managed services provider & cybersecurity company with offices in South America. The aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill. During the measurement period, which will not exceed one year from closing, we will continue to obtain information to assist us in finalizing the acquisition date fair values. Any qualifying changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts allocated to goodwill. The following table summarizes the preliminary estimated acquisition date fair values of the assets acquired and liabilities assumed: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,847,474 Tangible assets acquired: Cash 77,804 Accounts receivable 478,210 Prepaid expenses and other current assets 51,464 Property and equipment 434,816 Total tangible assets 1,042,294 Assumed liabilities: Accounts payable and accrued expenses 242,830 Loans payable 850,199 Total assumed liabilities 1,093,029 Net liabilities assumed 50,735 Goodwill (a) $ 6,898,209 (a) Goodwill and intangibles are not deductible for tax purposes. NLT Secure On September 1, 2022, we entered into a stock purchase agreement with NLT Secure and its interest holders, pursuant to which we acquired all of the issued and outstanding units of NLT Secure with them becoming a wholly owned subsidiary of our company. We anticipate that this will expand our professional services offerings and capabilities. NLT Secure provides a broad range of security solutions and managed services to organizations throughout South America. The aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimate fair values as of the acquisition date, with the excess recorded to goodwill. During the measurement period, which will not exceed one year from closing, we will continue to obtain information to assist us in finalizing the acquisition date fair values. Any qualifying changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts allocated to goodwill. The following table summarizes the preliminary estimated acquisition date fair values of the assets acquired and liabilities assumed: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,919,597 Tangible assets acquired: Cash 48,858 Accounts receivable 66,972 Prepaid expenses and other current assets 154,300 Property and equipment 1,071,401 Total tangible assets 1,341,531 Assumed liabilities: Accounts payable and accrued expenses 791,228 Loans payable 1,778,591 Total assumed liabilities 2,569,819 Net liabilities assumed 1,228,288 Goodwill (a) $ 8,147,885 (a) Goodwill and intangibles are not deductible for tax purposes. Pro forma financial information is not presented because the acquisitions were not material to our financial statements, individually or in the aggregate. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, 2022 December 31, 2021 Prepaid expenses $ 1,363,761 $ 441,259 Deferred cost of sales 1,090,066 12,239 Prepaid taxes 347,189 231,014 Prepaid insurance 333,635 46,751 Deferred interest 321,749 229,702 Total prepaid expenses and other current assets $ 3,456,400 $ 960,965 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2022 December 31, 2021 Computer equipment $ 1,068,918 $ 495,235 Building 2,111,698 1,047,020 Leasehold improvements 85,800 109,626 Vehicles 87,323 63,052 Furniture and fixtures 140,008 33,358 Software 1,591,450 748,599 Property and equipment gross 5,085,197 2,496,890 Less: accumulated depreciation (624,434 ) (102,466 ) Property and equipment, net $ 4,460,763 $ 2,394,424 Total depreciation expense was $ 186,738 6,989 519,121 15,837 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 6 – INTANGIBLE ASSETS AND GOODWILL The following table summarizes the changes in goodwill during the nine months ended September 30, 2022: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2021 $ 16,792,535 Acquisition of goodwill 59,430,213 Foreign currency translation adjustment (2,127,968 ) Ending balance, September 30, 2022 (1) $ 74,094,780 (1) As of September 30, 2022, we had not obtained a third-party valuation for the acquisitions of CUATROi and NLT Secure. As such, the purchase price allocation disclosed in this Quarterly Report for CUATROi and NLT Secure may change, and, therefore, goodwill from the acquisitions may change. The following table summarizes the identifiable intangible assets as of September 30, 2022 and December 31, 2021: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life September 30, 2022 December 31, 2021 Tradenames – trademarks 1 5 $ 4,649,220 $ 3,010,100 Customer base 5 10 1,522,131 1,650,000 Non-compete agreements 2 5 759,850 675,500 Intellectual property/technology 5 10 2,605,406 1,528,000 Identifiable intangible assets 9,536,607 6,863,600 Less: accumulated amortization (1,886,457 ) (323,331 ) Total $ 7,650,150 $ 6,540,269 The weighted average remaining useful life of identifiable amortizable intangible assets remaining is 4.23 During the third quarter of 2022, as the result of rebranding and expected future marketing of our products and services, we made the decision to phase out certain indefinite-lived tradenames from acquired subsidiaries. We believe the phase-out and integration of the rebranding and marketing will be completed no later than June 30, 2024, and expect to recognize $ 1,211,800 Amortization of identifiable intangible assets for the three months ended September 30, 2022 and 2021 was $ 797,703 40,506 1,615,170 110,495 The below table summarizes the future amortization expense for the remainder of 2022 and the next four years thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2022 (remainder of) $ 667,397 2023 2,341,057 2024 1,623,017 2025 1,434,081 2026 1,334,585 Thereafter 250,013 Finite-lived intangible assets, net $ 7,650,150 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES September 30, 2022 December 31, 2021 Accounts payable $ 4,309,601 $ 1,700,260 Accrued payroll 1,040,353 482,588 Accrued expenses 1,016,663 513,718 Accrued commissions 320,904 - Accrued interest – related party 12,500 12,500 Total accounts payable and accrued expenses $ 6,700,021 $ 2,709,066 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 8 – RELATED PARTY TRANSACTIONS Independent Consulting Agreement with Stephen Scott In August 2020, we entered into an Independent Consulting Agreement with Stephen Scott, a Director of our company, with respect to advisory and consulting services relating to our strategic and business development, and sales and marketing. Mr. Scott receives a consulting fee of $ 11,500 34,500 103,500 Managed Services Agreement with Hensley Beverage Company – Related Party In July 2021, we entered into a 1-year Managed Services Agreement with Hensley Beverage Company to provide secured managed services. We also may be engaged by Hensley Beverage Company from time to time to provide other related services outside the scope of the Managed Services Agreement. While the agreement provides for a term through December 31, 2021, the agreement will continue until terminated by either party. For the three and nine months ended September 30, 2022, we received $ 206,818 579,826 39,615 Note Receivable – Related Party Arkavia provided cash infusions to a related party to fund a wholly owned subsidiary, Arkavia Peru, for start-up and operational costs. The subsidiary is incorporated and as such, the assets, liabilities and operation results of Arkavia Peru are included in the condensed consolidated financial statements. At September 30, 2022, no |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | Note 9 – STOCKHOLDERS’ EQUITY On June 14, 2022, our Board of Directors approved and recommended that our stockholders approve (a) an amended and restated certificate of incorporation to, among other things, (i) increase our authorized shares of common stock from 250,000,000 300,000,000 50,000,000 0.00001 25,000,000 60,000,000 61.96% Options We granted stock options vesting solely upon the continued service of the recipient. We recognize the accounting grant date fair value of equity-based awards as compensation expense over the required service period of each award. The following table summarizes stock option activity: SCHEDULE OF STOCK OPTIONS ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 31,372,148 $ 1.84 - $ - Granted 13,745,513 3.40 - - Exercised (2,459,809 ) 0.55 - - Expired or cancelled (7,801,564 ) 3.12 - - Outstanding at September 30, 2022 34,856,288 2.30 5.74 39,981,362 Exercisable at September 30, 2022 18,189,900 $ 1.05 3.55 $ 35,988,384 Total compensation expense related to the options was $ 2,252,716 1,251,635 10,432,048 2,981,523 49,608,286 3.12 Warrant Activity Summary The following table summarizes warrant activity: SCHEDULE OF STOCK WARRANT ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 - $ - - $ - Granted 144,200 5.00 4.26 - Exercised - - - - Expired or cancelled - - - - Outstanding at September 30, 2022 144,200 5.00 4.26 - Exercisable at September 30, 2022 144,200 $ 5.00 4.26 $ - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Maxim Settlement Agreement On October 27, 2020, we entered into an advisory agreement (the “Advisory Agreement”) with Maxim Group LLC (“Maxim”), pursuant to which the parties agreed to certain compensation obligations in the form of our common stock, cash and future rights. Certain disputes arose between the parties regarding the duties and obligations pursuant to the Advisory Agreement, resulting in the parties entering into a settlement and release agreement on January 13, 2022. As a result, we recorded a settlement liability at December 31, 2021 of $ 470,000 400,000 470,000 Legal Claims There are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any of our directors, officers or affiliates, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us. Indirect Taxes We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the business of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generated based on regulations currently being applied to similar, but not directly comparable industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals. As of September 30, 2022 and December 31, 2021, our accrual for estimated indirect tax liabilities was $ 216,906 99,088 |
LOANS PAYABLE AND LINES OF CRED
LOANS PAYABLE AND LINES OF CREDIT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE AND LINES OF CREDIT | NOTE 11 – LOANS PAYABLE AND LINES OF CREDIT Loans Payable Loans payable was as follows: SCHEDULE OF LOAN PAYABLE Interest Rate Maturities September 30, 2022 December 31, 2021 Term loans (US dollar denominated) 5.00 6.00 % 2023 2027 $ 5,639,096 $ 478,712 Term loans (Chilean peso denominated) 3.48 19.20 % 2022 2031 6,061,500 5,018,788 11,700,596 5,497,500 Less current portion (7,235,352 ) (213,199 ) Long term loans payable $ 4,465,244 $ 5,284,301 In June 2022, we entered into bridge loans, secured by substantially all of our assets, in the principal amount of $ 5,000,000 4.00% December 14, 2022 51,111 60,000 Various subsidiaries in the United States are borrowers under certain term loans. These term loans require monthly principal and interest payments. These term loans are secured by various assets owned by our subsidiaries. We recorded aggregate interest expense of these term loans of $ 13,985 65,972 Our Chilean subsidiary, Arkavia, is the borrower under certain term loans denominated in Chilean Pesos. These term loans require monthly principal and interest payments. These term loans are secured by various assets owned by our subsidiaries. We recorded aggregate interest expense on these term loans of $ 40,711 102,596 Debt Assumed through Acquisition As part of the True Digital Acquisition, we assumed $ 1,008,566 3.25% We assumed $ 2,716,167 3.48% 19.20% Convertible Notes Payable In October 2021, we issued a convertible note in the principal amount of $ 1,500,000 5.00% January 27, 2022 5.00 December 31, 2023 1,500,000 In June 2022, we entered into an unsecured convertible note in the principal amount of $ 1,000,000 5.00% June 2023 7.65 The outstanding principal of this note can be redeemed at any time by us or at maturity at 105% 1,000,000 Future minimum payments under the above line of credit and loans payable due as of September 30, 2022 were as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT 2022 (remainder of) $ 5,815,709 2023 4,341,115 2024 1,231,461 2025 1,007,017 2026 601,371 Thereafter 1,253,923 Total future minimum payments 14,250,596 Less: current (8,285,352 ) Long term debt, net of current portion $ 5,965,244 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
LEASES | NOTE 12 – LEASES All of our leases are classified as operating leases. With the adoption of Topic 842, operating lease agreements are required to be recognized on the condensed consolidated balance sheet as Right of Use (“ROU”) assets and corresponding lease liabilities. On January 19, 2022, we recognized additional ROU assets and lease liabilities of $ 226,942 ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that we will exercise that option. When measuring lease liabilities for leases that were classified as operating leases, we discounted lease payments using our estimated incremental borrowing rate at January 1, 2022. The weighted average incremental borrowing rate applied was 6.00% 2.45 Operating leases are included in the unaudited condensed consolidated balance sheets as follows: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Classification September 30, 2022 December 31, 2021 Lease assets Operating lease cost ROU assets Assets $ 316,698 $ 277,578 Total lease assets $ 316,698 $ 277,578 Lease liabilities Operating lease liabilities, current Current liabilities $ 163,233 $ 196,472 Operating lease liabilities, non-current Liabilities 167,462 88,040 Total lease liabilities $ 330,695 $ 284,512 The components of lease costs, which are included in income from operations in our unaudited condensed consolidated statements of operations, were as follows: SCHEDULE OF LEASE COST 2022 2021 Nine Months Ended September 30, 2022 2021 Leases costs Operating lease costs $ 277,842 $ 54,376 Total lease costs $ 277,842 $ 54,376 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the nine months ended September 30, 2022 were as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2022 (remainder of) $ 61,394 2023 120,268 2024 106,639 2025 64,332 Total future minimum lease payments 352,633 Amount representing interest (21,938 ) Present value of net future minimum lease payments $ 330,695 |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 13 – GEOGRAPHIC INFORMATION Revenue by geography is based on the customer’s billing address and was as follows: SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS 2022 2021 2022 2021 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 U.S. $ 9,000,560 $ 3,745,008 $ 26,764,895 $ 9,254,583 Chile 2,148,503 - 4,941,523 - All other countries 103,969 - 103,969 - Revenue $ 11,253,032 $ 3,745,008 $ 31,810,387 $ 9,254,583 No other international country represented more than 10% of revenue in any period presented. Property and equipment, net by geography was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS September 30, 2022 December 31, 2021 U.S. $ 1,164,643 $ 95,069 Chile 3,294,765 2,299,355 All other countries 1,355 - Property and equipment net $ 4,460,763 $ 2,394,424 No other international country represented more than 10% of property and equipment, net in any period presented. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS On October 21, 2022, we entered into an amendment on our convertible note with an outstanding balance of $ 1,500,000 December 31, 2023 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Revenue | Revenue Our revenue is derived from two major types of services to clients: security managed services and professional services. With respect to security managed services, we provide culture education and enablement, tools and technology provisioning, data and privacy monitoring, regulations and compliance monitoring, remote infrastructure administration, and cybersecurity services, including, but not limited to, antivirus and patch management. With respect to professional services, we provide cybersecurity consulting, compliance auditing, vulnerability assessment and penetration testing, and disaster recovery and data backup solutions. Our revenue is categorized and disaggregated as reflected in our statement of operations as follows: Security Managed Services Security managed services revenue primarily consists of compliance, security managed services, SOC managed services, and vCISO. We considered these services to be a single performance obligation, and revenue is recognized as services and materials are provided to the customer. Professional Services Professional services revenue primarily consists of technical assessments, incident response and forensics, training, and other cybersecurity services. We considered these services to be a single performance obligation, and revenue is recognized in the period in which the performance obligations are satisfied. |
Accounts Receivable | Accounts Receivable Accounts receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. We periodically assess our accounts and other receivables for collectability on a specific identification basis. We provide for allowances for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. We write off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. As of September 30, 2022 and December 31, 2021, our allowance for doubtful accounts was $ 308,560 77,811 |
Inventory | Inventory Inventory consists of software licenses and computer equipment for sale to customers. Inventory is measured using the first-in, first-out method and stated at lower of cost or net realizable value as of September 30, 2022 and December 31, 2021. The value of inventories is reduced for excess and obsolete inventories. We monitor inventory to identify events that would require impairment due to obsolete inventory and adjust the value of inventory when required. We recorded no inventory impairment losses for the nine months ended September 30, 2022 and 2021. |
Fair Value Measurements | Fair Value Measurements As defined in ASC (“Accounting Standards Codification”) 820, Fair Value Measurements and Disclosures Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. |
Net Loss per Common Share | Net Loss per Common Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. For dilutive securities, all outstanding options are considered potentially outstanding common stock. The dilutive effect, if any, of stock options is calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the options and shares issuable upon conversion thereof have been excluded from our computation of net loss per common share for the nine months ended September 30, 2022 and 2021. The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE September 30, 2022 September 30, 2021 Stock options 34,856,288 27,680,040 Warrant 144,200 - Convertible debt 430,718 1,500,000 Total 35,431,206 29,180,040 |
Deferred Revenue | Deferred Revenue Deferred revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license. We generally invoice customers in advance or in milestone-based installments. Deferred revenue of $ 52,824 3,074,173 D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE September 30, 2022 December 31, 2021 Security managed services $ 2,038,072 $ 52,824 Professional services 1,036,101 - Total deferred revenue $ 3,074,173 $ 52,824 |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, including tax loss and credit carry forwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We utilize ASC 740, Income Taxes For uncertain tax positions that meet a “more likely than not” threshold, we recognize the benefit of uncertain tax positions in the unaudited condensed consolidated financial statements. Our practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when a determination is made that such expense is likely. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force). The ASU requires issuers to account for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the ASU, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years. Early adoption is permitted. We adopted the standard on January 1, 2022, and management noted that there is no material impact to the unaudited condensed consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in business combinations to be recognized in accordance with ASC Topic 606 as if the acquirer had originated the contracts. The ASU is applied prospectively and is effective for us for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that adopting this standard will have on the unaudited condensed consolidated financial statements. All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to us. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE | The following tables summarize the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive due to our net loss position even though the exercise price could be less than the average market price of the common shares: SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE September 30, 2022 September 30, 2021 Stock options 34,856,288 27,680,040 Warrant 144,200 - Convertible debt 430,718 1,500,000 Total 35,431,206 29,180,040 |
SCHEDULE OF DEFERRED REVENUE | D eferred revenue consisted of the following: SCHEDULE OF DEFERRED REVENUE September 30, 2022 December 31, 2021 Security managed services $ 2,038,072 $ 52,824 Professional services 1,036,101 - Total deferred revenue $ 3,074,173 $ 52,824 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
True Digital Security, Inc. [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the allocation of the purchase price to the fair values of the assets acquired and the liabilities assumed as of the transaction date: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration $ 40,879,380 Tangible assets acquired: Cash 485,232 Accounts receivable 1,404,386 Contract assets 131,342 Prepaid expenses and other current assets 196,825 Property and equipment 906,006 Other assets 17,505 Total tangible assets 3,141,296 Intangible assets acquired: Tradename - trademarks 1,744,200 Intellectual property 1,137,000 Non-competes 124,900 Total intangible assets 3,006,100 Assumed liabilities: Accounts payable and accrued expenses 1,283,003 Deferred revenue 1,956,600 Line of credit 283,244 Loans payable 181,741 Loans payable - shareholder 543,581 Total assumed liabilities 4,248,169 Net assets acquired 1,899,227 Goodwill (a) $ 38,980,153 (a) Goodwill and intangibles are not deductible for tax purposes. |
Creatrix, Inc. [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 3,630,000 Tangible assets acquired: Cash 3,572 Accounts receivable 125,908 Contract assets 33,965 Prepaid expenses and other current assets 3,597 Total tangible assets 167,042 Assumed liabilities: Accounts payable and accrued expenses 48,001 Loans payable 56,687 Total assumed liabilities 104,688 Net assets acquired 62,354 Goodwill (a) $ 3,567,646 (a) Goodwill is not deductible for tax purposes. |
C U A T R Oi [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the preliminary estimated acquisition date fair values of the assets acquired and liabilities assumed: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,847,474 Tangible assets acquired: Cash 77,804 Accounts receivable 478,210 Prepaid expenses and other current assets 51,464 Property and equipment 434,816 Total tangible assets 1,042,294 Assumed liabilities: Accounts payable and accrued expenses 242,830 Loans payable 850,199 Total assumed liabilities 1,093,029 Net liabilities assumed 50,735 Goodwill (a) $ 6,898,209 (a) Goodwill and intangibles are not deductible for tax purposes. |
N L T Secure [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES | The following table summarizes the preliminary estimated acquisition date fair values of the assets acquired and liabilities assumed: SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES Consideration paid $ 6,919,597 Tangible assets acquired: Cash 48,858 Accounts receivable 66,972 Prepaid expenses and other current assets 154,300 Property and equipment 1,071,401 Total tangible assets 1,341,531 Assumed liabilities: Accounts payable and accrued expenses 791,228 Loans payable 1,778,591 Total assumed liabilities 2,569,819 Net liabilities assumed 1,228,288 Goodwill (a) $ 8,147,885 (a) Goodwill and intangibles are not deductible for tax purposes. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, 2022 December 31, 2021 Prepaid expenses $ 1,363,761 $ 441,259 Deferred cost of sales 1,090,066 12,239 Prepaid taxes 347,189 231,014 Prepaid insurance 333,635 46,751 Deferred interest 321,749 229,702 Total prepaid expenses and other current assets $ 3,456,400 $ 960,965 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2022 December 31, 2021 Computer equipment $ 1,068,918 $ 495,235 Building 2,111,698 1,047,020 Leasehold improvements 85,800 109,626 Vehicles 87,323 63,052 Furniture and fixtures 140,008 33,358 Software 1,591,450 748,599 Property and equipment gross 5,085,197 2,496,890 Less: accumulated depreciation (624,434 ) (102,466 ) Property and equipment, net $ 4,460,763 $ 2,394,424 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN GOODWILL | The following table summarizes the changes in goodwill during the nine months ended September 30, 2022: SCHEDULE OF CHANGES IN GOODWILL Balance December 31, 2021 $ 16,792,535 Acquisition of goodwill 59,430,213 Foreign currency translation adjustment (2,127,968 ) Ending balance, September 30, 2022 (1) $ 74,094,780 (1) As of September 30, 2022, we had not obtained a third-party valuation for the acquisitions of CUATROi and NLT Secure. As such, the purchase price allocation disclosed in this Quarterly Report for CUATROi and NLT Secure may change, and, therefore, goodwill from the acquisitions may change. |
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS | The following table summarizes the identifiable intangible assets as of September 30, 2022 and December 31, 2021: SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS Useful life September 30, 2022 December 31, 2021 Tradenames – trademarks 1 5 $ 4,649,220 $ 3,010,100 Customer base 5 10 1,522,131 1,650,000 Non-compete agreements 2 5 759,850 675,500 Intellectual property/technology 5 10 2,605,406 1,528,000 Identifiable intangible assets 9,536,607 6,863,600 Less: accumulated amortization (1,886,457 ) (323,331 ) Total $ 7,650,150 $ 6,540,269 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | The below table summarizes the future amortization expense for the remainder of 2022 and the next four years thereafter: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 2022 (remainder of) $ 667,397 2023 2,341,057 2024 1,623,017 2025 1,434,081 2026 1,334,585 Thereafter 250,013 Finite-lived intangible assets, net $ 7,650,150 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following amounts: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES September 30, 2022 December 31, 2021 Accounts payable $ 4,309,601 $ 1,700,260 Accrued payroll 1,040,353 482,588 Accrued expenses 1,016,663 513,718 Accrued commissions 320,904 - Accrued interest – related party 12,500 12,500 Total accounts payable and accrued expenses $ 6,700,021 $ 2,709,066 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
SCHEDULE OF STOCK OPTIONS ACTIVITY | The following table summarizes stock option activity: SCHEDULE OF STOCK OPTIONS ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 31,372,148 $ 1.84 - $ - Granted 13,745,513 3.40 - - Exercised (2,459,809 ) 0.55 - - Expired or cancelled (7,801,564 ) 3.12 - - Outstanding at September 30, 2022 34,856,288 2.30 5.74 39,981,362 Exercisable at September 30, 2022 18,189,900 $ 1.05 3.55 $ 35,988,384 |
SCHEDULE OF STOCK WARRANT ACTIVITY | The following table summarizes warrant activity: SCHEDULE OF STOCK WARRANT ACTIVITY Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2022 - $ - - $ - Granted 144,200 5.00 4.26 - Exercised - - - - Expired or cancelled - - - - Outstanding at September 30, 2022 144,200 5.00 4.26 - Exercisable at September 30, 2022 144,200 $ 5.00 4.26 $ - |
LOANS PAYABLE AND LINES OF CR_2
LOANS PAYABLE AND LINES OF CREDIT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LOAN PAYABLE | Loans payable was as follows: SCHEDULE OF LOAN PAYABLE Interest Rate Maturities September 30, 2022 December 31, 2021 Term loans (US dollar denominated) 5.00 6.00 % 2023 2027 $ 5,639,096 $ 478,712 Term loans (Chilean peso denominated) 3.48 19.20 % 2022 2031 6,061,500 5,018,788 11,700,596 5,497,500 Less current portion (7,235,352 ) (213,199 ) Long term loans payable $ 4,465,244 $ 5,284,301 |
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT | Future minimum payments under the above line of credit and loans payable due as of September 30, 2022 were as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT 2022 (remainder of) $ 5,815,709 2023 4,341,115 2024 1,231,461 2025 1,007,017 2026 601,371 Thereafter 1,253,923 Total future minimum payments 14,250,596 Less: current (8,285,352 ) Long term debt, net of current portion $ 5,965,244 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION | Operating leases are included in the unaudited condensed consolidated balance sheets as follows: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION Classification September 30, 2022 December 31, 2021 Lease assets Operating lease cost ROU assets Assets $ 316,698 $ 277,578 Total lease assets $ 316,698 $ 277,578 Lease liabilities Operating lease liabilities, current Current liabilities $ 163,233 $ 196,472 Operating lease liabilities, non-current Liabilities 167,462 88,040 Total lease liabilities $ 330,695 $ 284,512 |
SCHEDULE OF LEASE COST | The components of lease costs, which are included in income from operations in our unaudited condensed consolidated statements of operations, were as follows: SCHEDULE OF LEASE COST 2022 2021 Nine Months Ended September 30, 2022 2021 Leases costs Operating lease costs $ 277,842 $ 54,376 Total lease costs $ 277,842 $ 54,376 |
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES | Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the nine months ended September 30, 2022 were as follows: SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES Fiscal Year Operating Leases 2022 (remainder of) $ 61,394 2023 120,268 2024 106,639 2025 64,332 Total future minimum lease payments 352,633 Amount representing interest (21,938 ) Present value of net future minimum lease payments $ 330,695 |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS | Revenue by geography is based on the customer’s billing address and was as follows: SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS 2022 2021 2022 2021 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 U.S. $ 9,000,560 $ 3,745,008 $ 26,764,895 $ 9,254,583 Chile 2,148,503 - 4,941,523 - All other countries 103,969 - 103,969 - Revenue $ 11,253,032 $ 3,745,008 $ 31,810,387 $ 9,254,583 |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS | Property and equipment, net by geography was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS September 30, 2022 December 31, 2021 U.S. $ 1,164,643 $ 95,069 Chile 3,294,765 2,299,355 All other countries 1,355 - Property and equipment net $ 4,460,763 $ 2,394,424 No other international country represented more than 10% of property and equipment, net in any period presented. |
ORGANIZATION AND BACKGROUND (De
ORGANIZATION AND BACKGROUND (Details Narrative) - USD ($) | 9 Months Ended | ||
Jan. 18, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued, value | $ 1,040,965 | $ 3,250,000 | |
IPO [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued, shares | 10,300,000 | ||
Number of shares issued, value | $ 2,060,000 | ||
IPO [Member] | Underwriter [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Warrants granted | 144,200 |
SUMMARY OF SECURITIES EXCLUDED
SUMMARY OF SECURITIES EXCLUDED FROM DILUTED PER SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 35,431,206 | 29,180,040 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 34,856,288 | 27,680,040 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 144,200 | |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the diluted per share calculation | 430,718 | 1,500,000 |
SCHEDULE OF DEFERRED REVENUE (D
SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Product Information [Line Items] | ||
Total deferred revenue | $ 3,074,173 | $ 52,824 |
Security Managed Services [Member] | ||
Product Information [Line Items] | ||
Total deferred revenue | 2,038,072 | 52,824 |
Professional Services [Member] | ||
Product Information [Line Items] | ||
Total deferred revenue | $ 1,036,101 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Allowances for doubtful accounts | $ 308,560 | $ 77,811 |
Deferred revenue | 52,824 | |
Deferred revenue related to customer payments | $ 3,074,173 |
SUMMARY OF SIGNIFICANT FAIR VAL
SUMMARY OF SIGNIFICANT FAIR VALUE ASSETS ACQUIRED AND LIABILITIES (Details) - USD ($) | Sep. 02, 2022 | Aug. 25, 2022 | Jun. 02, 2022 | Jan. 05, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | ||
Business Acquisition [Line Items] | ||||||||
Total intangible assets | $ 9,536,607 | $ 6,863,600 | ||||||
Goodwill (a) | 74,094,780 | [1] | $ 16,792,535 | |||||
True Digital Security, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 40,879,380 | |||||||
Cash | 485,232 | |||||||
Accounts receivable | 1,404,386 | |||||||
Contract assets | 131,342 | |||||||
Prepaid expenses and other current assets | 196,825 | |||||||
Property and equipment | 906,006 | |||||||
Other assets | 17,505 | |||||||
Total tangible assets | 3,141,296 | |||||||
Total intangible assets | 3,006,100 | |||||||
Accounts payable and accrued expenses | 1,283,003 | |||||||
Deferred revenue | 1,956,600 | |||||||
Line of credit | 283,244 | |||||||
Loans payable | 181,741 | |||||||
Loans payable - shareholder | 543,581 | |||||||
Total assumed liabilities | 4,248,169 | |||||||
Net liabilities assumed | 1,899,227 | |||||||
Goodwill (a) | [2] | 38,980,153 | ||||||
True Digital Security, Inc. [Member] | Intellectual Property/Technology [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total intangible assets | 1,137,000 | |||||||
True Digital Security, Inc. [Member] | Noncompete Agreements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total intangible assets | 124,900 | |||||||
Techville [Member] | Trade Names [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Total intangible assets | $ 1,744,200 | |||||||
Creatrix, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 6,919,597 | $ 6,847,474 | $ 3,630,000 | |||||
Cash | 3,572 | |||||||
Accounts receivable | 125,908 | |||||||
Contract assets | 33,965 | |||||||
Prepaid expenses and other current assets | 3,597 | |||||||
Total tangible assets | 167,042 | |||||||
Accounts payable and accrued expenses | 48,001 | |||||||
Loans payable | 56,687 | |||||||
Total assumed liabilities | 104,688 | |||||||
Net liabilities assumed | 62,354 | |||||||
Goodwill (a) | [3] | $ 3,567,646 | ||||||
C U A T R Oi [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash | 77,804 | |||||||
Accounts receivable | 478,210 | |||||||
Prepaid expenses and other current assets | 51,464 | |||||||
Property and equipment | 434,816 | |||||||
Total tangible assets | 1,042,294 | |||||||
Accounts payable and accrued expenses | 242,830 | |||||||
Loans payable | 850,199 | $ 2,716,167 | ||||||
Total assumed liabilities | 1,093,029 | |||||||
Net liabilities assumed | 50,735 | |||||||
Goodwill (a) | [4] | $ 6,898,209 | ||||||
N L T Secure [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash | 48,858 | |||||||
Accounts receivable | 66,972 | |||||||
Prepaid expenses and other current assets | 154,300 | |||||||
Property and equipment | 1,071,401 | |||||||
Total tangible assets | 1,341,531 | |||||||
Accounts payable and accrued expenses | 791,228 | |||||||
Loans payable | 1,778,591 | |||||||
Total assumed liabilities | 2,569,819 | |||||||
Net liabilities assumed | 1,228,288 | |||||||
Goodwill (a) | [5] | $ 8,147,885 | ||||||
[1]As of September 30, 2022, we had not obtained a third-party valuation for the acquisitions of CUATROi and NLT Secure. As such, the purchase price allocation disclosed in this Quarterly Report for CUATROi and NLT Secure may change, and, therefore, goodwill from the acquisitions may change.[2]Goodwill and intangibles are not deductible for tax purposes.[3]Goodwill is not deductible for tax purposes.[4]Goodwill and intangibles are not deductible for tax purposes.[5]Goodwill and intangibles are not deductible for tax purposes. |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | 9 Months Ended | |
Jan. 19, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Stock issued for True Digital acquisition | $ 34,726,380 | |
Liabilities assumed, assets | $ 1,836,320 | |
True Digital Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Stock issued for True Digital acquisition | $ 6,153,000 | |
Stock issued for True Digital acquisition, shares | 8,229,000 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 1,363,761 | $ 441,259 |
Deferred cost of sales | 1,090,066 | 12,239 |
Prepaid taxes | 347,189 | 231,014 |
Prepaid insurance | 333,635 | 46,751 |
Deferred interest | 321,749 | 229,702 |
Total prepaid expenses and other current assets | $ 3,456,400 | $ 960,965 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 5,085,197 | $ 2,496,890 |
Less: accumulated depreciation | (624,434) | (102,466) |
Property and equipment, net | 4,460,763 | 2,394,424 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,068,918 | 495,235 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 2,111,698 | 1,047,020 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 85,800 | 109,626 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 87,323 | 63,052 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 140,008 | 33,358 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,591,450 | $ 748,599 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 186,738 | $ 6,989 | $ 519,121 | $ 15,837 |
SCHEDULE OF CHANGES IN GOODWILL
SCHEDULE OF CHANGES IN GOODWILL (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning balance | $ 16,792,535 | |
Acquisition of goodwill | 59,430,213 | |
Foreign currency translation adjustment | (2,127,968) | |
Goodwill, ending balance | $ 74,094,780 | [1] |
[1]As of September 30, 2022, we had not obtained a third-party valuation for the acquisitions of CUATROi and NLT Secure. As such, the purchase price allocation disclosed in this Quarterly Report for CUATROi and NLT Secure may change, and, therefore, goodwill from the acquisitions may change. |
SUMMARY OF IDENTIFIABLE INTANGI
SUMMARY OF IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 4 years 2 months 23 days | |
Identifiable intangible assets | $ 9,536,607 | $ 6,863,600 |
Less: accumulated amortization | (1,886,457) | (323,331) |
Total | 7,650,150 | 6,540,269 |
Tala Tek L L C [Member] | Tradenames - Trademarks 1 [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 4,649,220 | 3,010,100 |
Tala Tek L L C [Member] | Tradenames - Trademarks 1 [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 1 year | |
Tala Tek L L C [Member] | Tradenames - Trademarks 1 [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Tala Tek L L C [Member] | Customerbase [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 1,522,131 | 1,650,000 |
Tala Tek L L C [Member] | Customerbase [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Tala Tek L L C [Member] | Customerbase [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | |
Tala Tek L L C [Member] | Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 759,850 | 675,500 |
Tala Tek L L C [Member] | Noncompete Agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 2 years | |
Tala Tek L L C [Member] | Noncompete Agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Tala Tek L L C [Member] | Intellectual Property/Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 2,605,406 | $ 1,528,000 |
Tala Tek L L C [Member] | Intellectual Property/Technology [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Tala Tek L L C [Member] | Intellectual Property/Technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (remainder of) | $ 667,397 |
2023 | 2,341,057 |
2024 | 1,623,017 |
2025 | 1,434,081 |
2026 | 1,334,585 |
Thereafter | 250,013 |
Finite-lived intangible assets, net | $ 7,650,150 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Weighted average remaining useful life | 4 years 2 months 23 days | |||
Excluding amortization | $ 1,211,800 | |||
Amortization of identifiable intangible assets | $ 797,703 | $ 40,506 | $ 1,615,170 | $ 110,495 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 4,309,601 | $ 1,700,260 |
Accrued payroll | 1,040,353 | 482,588 |
Accrued expenses | 1,016,663 | 513,718 |
Accrued commissions | 320,904 | |
Accrued interest – related party | 12,500 | 12,500 |
Total accounts payable and accrued expenses | $ 6,700,021 | $ 2,709,066 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | |||||
Consulting fees | $ 624,391 | $ 293,408 | $ 2,192,600 | $ 695,023 | |
Note Receivable - Related Party | 0 | 0 | |||
Independent Consulting Agreement [Member] | Stephen Scott [Member] | |||||
Related Party Transaction [Line Items] | |||||
Consulting fees | $ 11,500 | 34,500 | 103,500 | ||
1- Year Managed Services Agreement [Member] | Hensley Beverage Company [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash received from related parties | 206,818 | 579,826 | |||
Outstanding receivable related parties | $ 39,615 | $ 39,615 |
SCHEDULE OF STOCK OPTIONS ACTIV
SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Equity [Abstract] | |
Shares, Outstanding beginning | shares | 31,372,148 |
Weighted Average Exercise Price Outstanding, beginning | $ / shares | $ 1.84 |
Shares, Granted | shares | 13,745,513 |
Weighted Average Exercise Price, Granted | $ / shares | $ 3.40 |
Shares, Exercised | shares | (2,459,809) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 0.55 |
Shares, Expired or cancelled | shares | (7,801,564) |
Weighted Average Exercise Price, Expired or cancelled | $ / shares | $ 3.12 |
Shares, Outstanding ending | shares | 34,856,288 |
Weighted Average Exercise Price Outstanding, ending | $ / shares | $ 2.30 |
Weighted average remaining contractual life Outstanding, ending | 5 years 8 months 26 days |
Aggregate intrinsic value outstanding ending | $ | $ 39,981,362 |
Exercisable ending balance, shares | shares | 18,189,900 |
weighted average exercise price, exercisable ending | $ / shares | $ 1.05 |
Weighted average remaining contractual life, exercisable ending | 3 years 6 months 18 days |
Aggregate intrinsic value exercisable ending | $ | $ 35,988,384 |
SCHEDULE OF STOCK WARRANT ACTIV
SCHEDULE OF STOCK WARRANT ACTIVITY (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Number of warrants outstanding, beginning balance | shares | |
Weighted average exercise price, outstanding beginning balance | $ / shares | |
Aggregate intrinsic value outstanding, beginning | $ | |
Number of warrants, granted | shares | 144,200 |
Weighted average exercise price, granted | $ / shares | $ 5 |
Weighted average remaining contractual life, granted | 4 years 3 months 3 days |
Number of warrants, exercised | shares | |
Weighted average exercise price, exercised | $ / shares | |
Number of warrants, expired or cancelled | shares | |
Weighted average exercise price, expired or cancelled | $ / shares | |
Number of warrants outstanding, ending balance | shares | 144,200 |
Weighted average exercise price, outstanding ending balance | $ / shares | $ 5 |
Weighted average remaining contractual life, outstanding ending | 4 years 3 months 3 days |
Aggregate intrinsic value outstanding, ending | $ | |
Number of warrants exercisable, ending balance | shares | 144,200 |
Weighted average exercise price, exercisable ending | $ / shares | $ 5 |
Weighted average remaining contractual life, exercisable ending | 4 years 3 months 3 days |
Aggregate intrinsic value exercisable, ending | $ |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 27, 2022 | Jun. 14, 2022 | Jun. 13, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 | 250,000,000 | 300,000,000 | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Stock based compensation | $ 2,252,716 | $ 1,251,635 | $ 10,432,048 | $ 2,981,523 | ||||
Unrecognized stock-based compensation expense | $ 49,608,286 | $ 49,608,286 | ||||||
Unrecognized stock-based compensation expense, recognition period | 3 years 1 month 13 days | |||||||
Stockholders [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Ownership percentage | 61.96% | |||||||
2019 Equity Incentive Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares authorized for issuance | 60,000,000 | 25,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Settlement liabilities | $ 470,000 | |
Deferred tax liabilities | 216,906 | 99,088 |
Maxim Settlement Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Settlement liabilities | $ 470,000 | |
Number of shares issued, shares | 400,000 | |
Repayment of debt | $ 470,000 |
SCHEDULE OF LOAN PAYABLE (Detai
SCHEDULE OF LOAN PAYABLE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | ||
Loans payable | $ 11,700,596 | $ 5,497,500 |
Less current portion | (7,235,352) | (213,199) |
Long term loans payable | 4,465,244 | 5,284,301 |
Term Loans 1 [Member] | ||
Short-Term Debt [Line Items] | ||
Loans payable | $ 5,639,096 | 478,712 |
Term Loans 1 [Member] | Minimum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 5% | |
Line of credit maturity description | 2023 | |
Term Loans 1 [Member] | Maximum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 6% | |
Line of credit maturity description | 2027 | |
Term Loans 2 [Member] | ||
Short-Term Debt [Line Items] | ||
Loans payable | $ 6,061,500 | $ 5,018,788 |
Term Loans 2 [Member] | Minimum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 3.48% | |
Line of credit maturity description | 2022 | |
Term Loans 2 [Member] | Maximum [Member] | ||
Short-Term Debt [Line Items] | ||
Line of credit facility interest rate percentage | 19.20% | |
Line of credit maturity description | 2031 |
SCHEDULE OF FUTURE MINIMUM PAYM
SCHEDULE OF FUTURE MINIMUM PAYMENTS FOR LONG TERM DEBT (Details) - Line of Credit & Loans Payable [Member] | Sep. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
2022 (remainder of) | $ 5,815,709 |
2023 | 4,341,115 |
2024 | 1,231,461 |
2025 | 1,007,017 |
2026 | 601,371 |
Thereafter | 1,253,923 |
Total future minimum payments | 14,250,596 |
Less: current | (8,285,352) |
Long term debt, net of current portion | $ 5,965,244 |
LOANS PAYABLE AND LINES OF CR_3
LOANS PAYABLE AND LINES OF CREDIT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Oct. 21, 2022 | Oct. 31, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 25, 2022 | |
Line of Credit Facility [Line Items] | |||||||||
Interest expense | $ 108,233 | $ 75,470 | $ 293,991 | $ 209,806 | |||||
Extended Maturity [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument maturity date | Dec. 31, 2023 | ||||||||
True Digital Acquisition [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 3.25% | 3.25% | |||||||
Debt assumed | $ 1,008,566 | $ 1,008,566 | |||||||
C U A T R Oi [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt assumed | $ 2,716,167 | $ 2,716,167 | $ 850,199 | ||||||
C U A T R Oi [Member] | Minimum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 3.48% | 3.48% | |||||||
C U A T R Oi [Member] | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 19.20% | 19.20% | |||||||
Term Loans 1 [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest expense | $ 13,985 | $ 65,972 | |||||||
Term Loans 2 [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest expense | 40,711 | 102,596 | |||||||
Convertible Note Payable [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument face amount | $ 1,500,000 | ||||||||
Debt instrument interest rate stated percentage | 5% | ||||||||
Debt instrument maturity date | Jan. 27, 2022 | ||||||||
Debt instrument convertible conversion price | $ 5 | ||||||||
Convertible notes payable | 1,500,000 | 1,500,000 | |||||||
Unsecured Convertible Note Payable [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument face amount | $ 1,000,000 | $ 1,000,000 | |||||||
Debt instrument interest rate stated percentage | 5% | 5% | |||||||
Debt instrument convertible conversion price | $ 7.65 | $ 7.65 | |||||||
Debt instrument maturity date, description | June 2023 | ||||||||
Debt instrument redemption, description | The outstanding principal of this note can be redeemed at any time by us or at maturity at 105% | ||||||||
Accrued interest | 1,000,000 | 1,000,000 | |||||||
Bridge Loan [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument face amount | $ 5,000,000 | $ 5,000,000 | |||||||
Debt instrument interest rate stated percentage | 4% | 4% | |||||||
Debt instrument maturity date | Dec. 14, 2022 | ||||||||
Interest expense | $ 51,111 | $ 60,000 |
SCHEDULE OF LEASE COST AND OTHE
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENT LEASE INFORMATION (Details) - USD ($) | Sep. 30, 2022 | Jan. 19, 2022 | Dec. 31, 2021 |
Leases | |||
Operating lease cost ROU assets | $ 316,698 | $ 226,942 | $ 277,578 |
Total lease assets | 316,698 | 277,578 | |
Operating lease liabilities, current | 163,233 | $ 226,942 | 196,472 |
Operating lease liabilities, non-current | 167,462 | 88,040 | |
Total lease liabilities | $ 330,695 | $ 284,512 |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Operating lease costs | $ 277,842 | $ 54,376 |
Total lease costs | $ 277,842 | $ 54,376 |
SCHEDULE OF FUTURE MINIMUM UNDE
SCHEDULE OF FUTURE MINIMUM UNDER NON-CANCELLABLE LEASES FOR OPERATING LEASES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
2022 (remainder of) | $ 61,394 | |
2023 | 120,268 | |
2024 | 106,639 | |
2025 | 64,332 | |
Total future minimum lease payments | 352,633 | |
Amount representing interest | (21,938) | |
Total lease liabilities | $ 330,695 | $ 284,512 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Sep. 30, 2022 | Jan. 19, 2022 | Dec. 31, 2021 |
Leases | |||
Operating lease right-of-use assets | $ 316,698 | $ 226,942 | $ 277,578 |
Operating lease liabilities | $ 163,233 | $ 226,942 | $ 196,472 |
Weighted average discount rate | 6% | ||
Weighted average remaining lease term | 2 years 5 months 12 days |
SCHEDULE OF REVENUE BY GEOGRAPH
SCHEDULE OF REVENUE BY GEOGRAPHY IS BASED ON CUSTOMERS BILLING ADDRESS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 11,253,032 | $ 3,745,008 | $ 31,810,387 | $ 9,254,583 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 9,000,560 | 3,745,008 | 26,764,895 | 9,254,583 |
CHILE | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 2,148,503 | 4,941,523 | ||
All Others Countries [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 103,969 | $ 103,969 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT, NET BY GEOGRAPHIC AREAS (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | $ 4,460,763 | $ 2,394,424 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | 1,164,643 | 95,069 |
CHILE | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | 3,294,765 | 2,299,355 |
All Others Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment net | $ 1,355 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Oct. 21, 2022 USD ($) |
Extended Maturity [Member] | |
Subsequent Event [Line Items] | |
Debt instrument maturity date | Dec. 31, 2023 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Convertible notes outstanding balance | $ 1,500,000 |
Subsequent Event [Member] | Extended Maturity [Member] | |
Subsequent Event [Line Items] | |
Debt instrument maturity date | Dec. 31, 2023 |