Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Jun. 10, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q/A | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 001-40294 | |
Entity Registrant Name | Alfi, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-1107078 | |
Entity Address State Or Province | FL | |
Entity Address, Address Line One | 429 Lenox Avenue | |
Entity Address, City or Town | Miami Beach | |
Entity Address, Postal Zip Code | 33139 | |
City Area Code | 305 | |
Local Phone Number | 395-4520 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,664,627 | |
Entity Central Index Key | 0001833908 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | true | |
Amendment Description | Amendment No. 1 | |
Warrants | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $4.57 | |
Trading Symbol | ALFIW | |
Security Exchange Name | NASDAQ | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | ALF | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 96,023 | $ 8,335 |
Accounts receivable | 17,450 | |
Prepaid expenses and other | 793 | |
Total current assets | 113,473 | 9,128 |
Property and equipment, net | 310,778 | 506,294 |
Intangible assets, net | 844,264 | 888,271 |
Operating lease right-of-use asset, net | 135,357 | 149,032 |
Other assets | 7,940 | 7,940 |
Total assets | 1,411,812 | 1,560,665 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,173,677 | 1,000,876 |
Debt, related parties | 5,727,154 | 3,728,808 |
Lease liability | 138,670 | 152,646 |
Interest payable, related parties | 222,722 | 116,600 |
Total current liabilities | 7,262,223 | 4,998,930 |
Total liabilities | 7,262,223 | 4,998,930 |
Stockholders' Deficit | ||
Series Seed convertible preferred stock , $0.0001 par value, 2,500,000 shares authorized, issued, and outstanding at March 31, 2021 and December 31, 2020, respectively | 2,500,000 | 2,500,000 |
Common stock, $0.0001 par value, 80,000,000 shares authorized, 4,599,085 and 4,441,582 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 460 | 444 |
Additional paid-in capital | 2,372,819 | 2,076,150 |
Accumulated deficit | (10,723,690) | (8,014,859) |
Total stockholders' deficit | (5,850,411) | (3,438,265) |
Total liabilities and stockholders' deficit | $ 1,411,812 | $ 1,560,665 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Series Seed convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Series Seed convertible preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Series Seed convertible preferred stock, shares issued | 2,500,000 | 2,500,000 |
Series Seed preferred stock, shares outstanding | 2,500,000 | 2,500,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 4,599,085 | 4,441,582 |
Common stock, shares outstanding | 4,599,085 | 4,441,582 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Consolidated Statements of Operations | ||
Revenues | $ 17,450 | |
Operating expenses | ||
Compensation and benefits | 883,211 | $ 169,769 |
Other general and administrative | 1,251,859 | 430,589 |
Depreciation and amortization | 247,315 | 9,563 |
Total operating expenses | 2,382,385 | 609,921 |
Operating loss | (2,364,935) | (609,921) |
Other income (expense) | ||
Other income | 13,018 | 10,358 |
Interest expense | (356,914) | (16,392) |
Total other expense, net | (343,896) | (6,034) |
Net loss before provision for income taxes | (2,708,831) | (615,955) |
Net loss | $ (2,708,831) | $ (615,955) |
Loss per share, basic | $ (0.61) | $ (0.20) |
Loss per share, diluted | $ (0.61) | $ (0.20) |
Weighted average shares outstanding, basic | 4,459,082 | 3,150,058 |
Weighted average shares outstanding, diluted | 4,459,082 | 3,150,058 |
Consolidated Statement of Chang
Consolidated Statement of Changes to Stockholders' Equity (Deficit) - USD ($) | Series Seed Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2019 | $ 2,500,000 | $ 315 | $ (2,467,584) | $ 32,731 | |
Beginning balance (in shares) at Dec. 31, 2019 | 2,500,000 | 3,150,058 | |||
Net loss | (615,955) | (615,955) | |||
Ending balance at Mar. 31, 2020 | $ 2,500,000 | $ 315 | (3,083,539) | (583,224) | |
Ending balance (in shares) at Mar. 31, 2020 | 2,500,000 | 3,150,058 | |||
Beginning balance at Dec. 31, 2019 | $ 2,500,000 | $ 315 | (2,467,584) | 32,731 | |
Beginning balance (in shares) at Dec. 31, 2019 | 2,500,000 | 3,150,058 | |||
Ending balance at Dec. 31, 2020 | $ 2,500,000 | $ 444 | $ 2,076,150 | (8,014,859) | (3,438,265) |
Ending balance (in shares) at Dec. 31, 2020 | 2,500,000 | 4,441,582 | |||
Shares issued with debt | $ 16 | 249,984 | 250,000 | ||
Shares issued with debt (in shares) | 157,503 | ||||
Share based compensation | 46,685 | 46,685 | |||
Net loss | (2,708,831) | (2,708,831) | |||
Ending balance at Mar. 31, 2021 | $ 2,500,000 | $ 460 | $ 2,372,819 | $ (10,723,690) | $ (5,850,411) |
Ending balance (in shares) at Mar. 31, 2021 | 2,500,000 | 4,599,085 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net loss | $ (2,708,831) | $ (615,955) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 247,315 | 9,563 |
Shares issued with debt | 250,000 | |
Share based compensation | 46,684 | |
Amortization of operating lease right-of-use asset | 13,675 | 14,707 |
Changes in assets and liabilities: | ||
Accounts receivable | (17,450) | |
Prepaid expenses and other assets | 793 | (5,278) |
Other assets | 65 | |
Accounts payable and accrued expenses | 172,802 | 5,828 |
Lease liability | (13,976) | (14,463) |
Interest payable, related parties | 106,122 | 16,393 |
Net cash used in operating activities | (1,902,866) | (589,140) |
Investing activities | ||
Capital expenditures | (7,791) | (1,016,265) |
Acquisition of intangible assets | (181,169) | |
Net cash used in investing activities | (7,791) | (1,197,434) |
Financing activities | ||
Proceeds from related party note payable | 1,998,345 | 1,842,050 |
Net cash provided by financing activities | 1,998,345 | 1,842,050 |
Net change in cash and cash equivalents | 87,688 | 55,476 |
Cash and cash equivalents at the beginning of the period | 8,335 | 38,890 |
Cash and cash equivalents at the end of the period | $ 96,023 | $ 94,366 |
BUSINESS DESCRIPTION BACKGROUND
BUSINESS DESCRIPTION BACKGROUND | 3 Months Ended |
Mar. 31, 2021 | |
BUSINESS DESCRIPTION BACKGROUND | |
BUSINESS DESCRIPTION BACKGROUND | NOTE 1 BUSINESS DESCRIPTION BACKGROUND Alfi, Inc. is a C-corporation incorporated in Delaware that operates in the technology sector; specifically, Software as a Service (“SaaS”) in the Digital Out Of Home (“DOOH”) Smart Advertising segment. This segment includes artificial intelligence, machine & deep learning, edge computing, Big Data, telecommunications, and the Internet of Things (IoT). Alfi, Inc. includes its wholly owned subsidiary Alfi (N.I.) Ltd, the results of which are presented on a consolidated basis in the financial statements included in this Quarterly Report on form 10-Q/A (this “Quarterly Report”). Alfi (N.I.) Ltd is a registered business in Belfast, Ireland. Collectively, the consolidated entity is referred to as the “Company” or “Alfi” throughout this Quarterly Report. The Company's timeline of events relative to its current formation above began on April 4, 2018, when Lectrefy, Inc., a Florida corporation, was incorporated. On July 6, 2018, Lectrefy, Inc., a Delaware corporation, was incorporated. On July 11, 2018, Lectrefy, Inc., the Florida corporation, was merged into the newly created entity Lectrefy, Inc., the Delaware corporation. On July 25, 2018, Lectrefy, Inc., the Delaware corporation, became qualified to do business in Florida. On January 31, 2020, Lectrefy, Inc., the Delaware corporation, changed its name to Alfi, Inc. On September 18, 2018, Lectrefy, (N.I.) Ltd was organized in Belfast, Ireland. On February 4, 2020, Lectrefy, (N.I.) Ltd’s name was changed to Alfi (N.I.) Ltd. On February 13, 2020, Lectrefy Inc. the Delaware corporation, registered its name change to Alfi, Inc. in the State of Florida. Alfi seeks to provide solutions that bring transparency and accountability to the DOOH advertising marketplace. Alfi uses artificial intelligence and big data analytics to measure and disseminate audience presence and audience demographics. The Company’s computer vision technology is powered by proprietary artificial intelligence, to determine the relevant demographic and geospecific information of the audience in front of an Alfi-enabled device, such as a tablet or kiosk. Alfi can then deliver in real-time, the advertisements to that particular viewer based on the viewer’s demographic profile and/or geolocation. By delivering the advertisements most relevant to the audience in front of the device, Alfi connects its advertising customers to the viewers they seek to target. The Company’s initial focus is to place Alfi-enabled devices in malls, airports, rideshares and taxis. In addition, the Company has begun offering its software solution to other DOOH media operators as a SaaS product. The Company’s primary activities since inception have been research and development, managing collaborations, and raising capital. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES Consolidation The consolidated financial statements include the accounts of Alfi, Inc. and its wholly owned subsidiary, Alfi (N.I.) Ltd. Collectively, these entities make up the consolidated financial statements during the periods presented in this Quarterly Report. All significant intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Under Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (Topic 606) “Revenue from Contracts with Customers” (“Topic 606”), revenue from contracts with customers is measured based on the consideration specified in the contract with the customer . With respect to Alfi-enabled tablets placed in rideshares or devices placed into service by Alfi, Alfi will recognize revenue on a cost per thousand (“CPM”) basis or a related basis for both the content and advertisements delivered. Alfi contracts (also called insertion orders) for both the advertiser and the content provider specify the amounts to be paid to Alfi for displaying the advertisement or content. Content and advertisements are provided to Alfi by companies desiring to deliver content for viewer engagement. With respect to SaaS licenses, Alfi has entered into two license agreements with third parties to use Alfi-placed devices on customer property and share in advertising revenues. Under these agreements, the customer and Alfi work together to generate advertising revenue, and the devices have remote management access and data reporting that the Alfi platform provides. Alfi began to earn revenue from advertisers during the fourth quarter of 2021. Alfi will recognize the revenue from these contracts monthly, in accordance with Topic 606. Through March 31, 2021, the Company had distributed approximately 1,000 devices (tablets and kiosks) at no cost to rideshare, mall, and airport owners. It is the viewers of the Alfi-enabled device, rather than the rideshare, mall or airport owner that the Alfi-enabled device engages with and to whom the Company delivers advertising and content. The Company recognizes revenue when earned from rideshare sources, advertisers, and content providers. Each contract for placing a device in service with rideshare, mall, or airport owners generally does not trigger a payment from such party to the Company. The Company’s contract with a device host may provide that the Company pays a revenue sharing amount, or fee, based on the revenue the Company derives from that device. The Company will expense that fee in other general and administrative expenses. Removing a tablet from the vehicle or returning it to the Company would automatically cancel the opportunity for a rideshare to receive commissions. Accounts Receivable The Company records accounts receivable at its net realizable value. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less from the purchase date to be cash equivalents. Property and Equipment Property and equipment includes tablets recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of three years. Property and equipment also includes office equipment recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which for office equipment is three Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible Assets The Company’s intangible assets include capitalized software development and patent acquisition costs associated with creation of its technology. The Company places intangible assets into service upon the date in which they are available for use. Intangible assets are amortized over a 5 year useful life for capitalized software development costs and a 15 year useful life for patent acquisition costs. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. Fair values approximate carrying values for cash, accounts payable, notes payable, fixed assets, and amortizable intangible assets. Loss Per Share The Company computes basic net loss per share by dividing net loss per share available to stockholders of the Company’s common stock, $0.001 par value per share (the “Common Stock”), by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into the Common Stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of Common Stock during the period. Potentially dilutive securities excluded from the computation of basic net loss per share as of are as follows: March 31, March 31, 2021 2020 Convertible Series (“Seed”) Preferred stock 3,150,058 3,150,058 Warrants — — Employee stock options 433,927 59,064 Total potentially dilutive securities 3,583,985 3,209,122 Common Stock The Company issued 3,150,058 shares of Common Stock on April 4, 2018 to the Company’s founders. At March 31, 2021 and December 31, 2020, outstanding shares of Common Stock totaled 4,599,085 and 4,441,582, respectively. The Company paid no dividends on Common Stock issued through March 31, 2021. During May 2021, the Company issued 4,291,045 shares of Common Stock and 4,291,045 warrants to purchase shares of Common Stock at a price of $4.57 per share for cash in its initial public offering, which was completed on May 6, 2021 (“IPO”). The Company also issued 3,150,058 shares of Common Stock from conversion of all outstanding shares of the Company’s Series Seed Preferred Stock, $0.0001 par value per share (the “Series Seed Preferred Stock”), to shares of Common Stock. The Company accounts for common stock at fair value. Pursuant to the underwriting agreement for the IPO, the Company also issued to the underwriters warrants to purchase up to an aggregate of 186,567 shares of Common Stock (“Underwriter's Warrants”). The Underwriter’s Warrants may be exercised beginning on May 3, 2022 until May 3, 2026. The initial exercise price of each Underwriter’s Warrant is $5.19 per share. The Company accounts for Common Stock issued with debt, issued for services, and issued as share based compensation at fair value. Convertible Instruments Through March 31, 2021, the Company did not record or issue convertible notes with beneficial conversion features and did not record debt discounts related to beneficial conversion features. During 2020 and 2019, the Company issued Series Seed Preferred Stock, which was convertible into Common Stock on a 1:1.260023 basis at the option of the holder and is classified as stockholders’ equity on the balance sheet at March 31, 2021 and December 31, 2020. When converted into Common Stock by Series Seed Preferred Stock holders, its fair value approximates the existing carrying (book) value of the Series Seed Preferred Stock as stated. U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional. The Company has determined that the embedded conversion options should not be bifurcated from their host instruments and the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments (the beneficial conversion feature) based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Thus, no embedded derivatives were identified on the conversion option of Series Seed Preferred Stock at March 31, 2021 and December 31, 2020. In May 2021, 2,500,000 shares of Series Seed Preferred Stock converted into 3,150,058 shares of Common Stock. Common Stock Purchase Warrants The Company accounts for warrants to purchase its Common Stock in accordance with ASC 815. Proceeds from the issuance of warrants indexed to the Company’s own stock are classified in stockholders’ equity (deficit). Stock based compensation The Company maintains a stock equity incentive plan, the Alfi, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), under which it may grant non-qualified stock options, incentive stock options, stock appreciation rights, stock awards, performance and performance-based awards, or stock units to employees, non-employee directors and consultants. The Company measures compensation expense for stock-based grants at fair value. Compensation expense is recognized over the vesting period relevant to the award. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will be realized. The Company carries a 100% valuation reserve against deferred tax assets. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. The Company’s policy is to record tax-related interest as interest expense and tax-related penalties as general and administrative expenses in the statements of operations. The Company did not recognize any such penalties or interest during the periods presented under this Quarterly Report. Forward Stock Split On March 1, 2021, the Company enacted a forward stock split on a 1.260023:1.000000 basis. Share amounts reflected in this Quarterly Report are presented post-split, unless otherwise noted. |
GOING CONCERN AND MANAGEMENT'S
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | 3 Months Ended |
Mar. 31, 2021 | |
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | |
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | NOTE 3 GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS As of June 10, 2021 (the Original Filing date of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021), the Company had not yet generated substantial revenue from customers and business activity has mainly consisted of cash outflows associated with its business development activities. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of the consolidated financial statements. The Company’s primary source of operating funds since inception through April 2021 was cash proceeds from the private placements of preferred equity and debt securities. In May 2021, the Company completed its IPO yielding net proceeds to the Company of approximately $15.7 million from sale of Common Stock and warrants. The capital raise included funding for working capital to launch and expand operations in accordance with its business model. The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There is no assurance that such a plan will be successful. Accordingly, the accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
RESTATEMENTS OF PREVIOUSLY ISSU
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | |
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 4 RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS Prior Period Restatements On March 11, 2022, the Audit Committee of the Company’s Board of Directors and the Company’s management concluded that the previously issued audited financial statements for the years ended December 31, 2019 and 2020, included in the Company’s Registration Statement on Form S-1 (File No. 333-251959), and the Company’s previously issued interim financial statements included in the Company’s Quarterly Reports on Forms 10-Q for the quarters ended March 31, 2021 and June 30, 2021 (collectively, the “Prior Period Financial Statements”), should no longer be relied upon as a result of the accounting errors described below and should be restated. Similarly, any previously furnished or filed reports, press releases, earnings releases, investor presentations or other communications describing the Prior Period Financial Statements and related financial information should not be relied upon. In connection with the Company’s evaluation of the issues and findings identified in the Company’s previously disclosed internal independent investigation (the “Investigation”), the Company reviewed the Prior Period Financial Statements and identified the following accounting errors: (a) The Company incorrectly capitalized certain general and administrative expenses incurred during the years ended December 31, 2018, 2019, and 2020, and incorrectly included those costs in intangible assets in its balance sheets as of December 31, 2019 and 2020, March 31, 2021, and June 30, 2021. (b) The Company overstated the carrying value of tablets by incorrectly reporting them at cost with no allowance for depreciation, resulting in an overstatement of other assets (complimentary devices), net, in its balance sheets as of December 31, 2019 and 2020, March 31, 2021, and June 30, 2021. (c) The Company overstated total assets and total liabilities as of December 31, 2020, by incorrectly recording a note receivable (related parties) and a liability included in current portion of long-term debt (related parties). This note receivable represents a bridge loan provided to the Company by certain related parties that was executed in December 2020 but not fully funded until April 2021. (d) The Company did not recognize and report on its balance sheets as of December 31, 2019 and 2020, March 31, 2021, and June 30, 2021, an office lease in accordance with FASB Accounting Standards Update No. 2018-11, Leases (Topic 842). The accompanying financial statements have been restated to correct the accounting errors and conform to current period presentation. Impact of the Restatements The impact of the restatement on the consolidated balance sheet as of March 31, 2021 is presented below: As of March 31, 2021 As Previously Restatement Reported Adjustments As Restated Assets Current assets: Cash and cash equivalents $ 96,021 $ 2 $ 96,023 Accounts receivable 17,450 — 17,450 Total current assets 113,471 2 113,473 Property and equipment, net 116,368 194,410 310,778 Intangible assets, net 4,164,630 (3,320,366) 844,264 Other assets (complimentary devices), net 1,104,000 (1,104,000) — Operating lease right-of-use asset, net — 135,357 135,357 Other assets 7,940 — 7,940 Total assets $ 5,506,409 $ (4,094,597) $ 1,411,812 Liabilities and Stockholders' Deficit Current liabilities: Accounts payable and accrued expenses $ 1,092,024 $ 81,653 $ 1,173,677 Debt payable, related parties 5,808,808 (81,654) 5,727,154 Lease liability — 138,670 138,670 Interest payable, related parties 222,722 — 222,722 Total current liabilities 7,402,379 (140,156) 7,262,223 Total liabilities 7,402,379 (140,156) 7,262,223 Stockholders' Deficit Series Seed convertible preferred stock, $0.0001 par value, 2,500,000 shares authorized, issued, and outstanding 2,500,000 — 2,500,000 Common stock, $0.0001 par value, 80,000,000 shares authorized, 4,599,085 shares issued and outstanding 460 — 460 Additional paid-in capital 2,274,855 97,964 2,372,819 Accumulated deficit (6,671,285) (4,052,405) (10,723,690) Total stockholders' deficit (1,895,970) (3,954,441) (5,850,411) Total liabilities and stockholders' deficit $ 5,506,409 $ (4,094,597) $ 1,411,812 The impact of the restatement on the consolidated balance sheet as of December 31, 2020 is presented below: As of December 31, 2020 As Previously Restatement Reported Adjustments As Restated Assets Current assets: Cash and cash equivalents $ 8,335 $ — $ 8,335 Note receivable (related parties) 1,830,000 (1,830,000) — Prepaid expenses and other 793 — 793 Total current assets 1,839,128 (1,830,000) 9,128 Property and equipment, net 117,474 388,820 506,294 Intangible assets, net 4,384,188 (3,495,917) 888,271 Other assets (complimentary devices), net 1,104,000 (1,104,000) — Operating lease right-of-use asset, net — 149,032 149,032 Other assets 7,940 — 7,940 Total assets $ 7,452,730 $ (5,892,065) $ 1,560,665 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable $ 516,705 $ 484,171 $ 1,000,876 Debt payable, related parties 5,558,808 (1,830,000) 3,728,808 Derivative liability 229,712 (229,712) — Lease liability — 152,646 152,646 Interest payable, related parties 116,600 — 116,600 Total current liabilities 6,421,825 (1,422,895) 4,998,930 Total liabilities 6,421,825 (1,422,895) 4,998,930 Stockholders' Equity (deficit) Series Seed convertible preferred stock, $0.0001 par value, 2,500,000 shares authorized, issued , and outstanding 2,500,000 — 2,500,000 Common stock, $0.0001 par value, 15,000,000 shares authorized, 4,441,582 shares issued and outstanding 444 — 444 Additional paid-in capital 2,024,871 51,279 2,076,150 Accumulated deficit (3,494,410) (4,520,449) (8,014,859) Total stockholders' equity (deficit) 1,030,905 (4,469,170) (3,438,265) Total liabilities and stockholders' equity (deficit) $ 7,452,730 $ (5,892,065) $ 1,560,665 The impact of the restatements on the consolidated statement of operations for the quarter ended March 31, 2021 is presented below: For the Three Months Ended March 31, 2021 As Previously Restatement Reported Adjustments As Restated Revenues $ 17,450 $ — $ 17,450 Cost of sales, net 104,506 (104,506) — Gross margin (87,056) 87,056 — Operating expenses Compensation and benefits — 883,211 883,211 Other general and administrative 2,770,415 (1,518,556) 1,251,859 Depreciation and amortization 228,456 18,859 247,315 Total operating expenses 2,998,871 (616,486) 2,382,385 Operating loss — (2,364,935) (2,364,935) Other income (expense) Other income 15,965 (2,947) 13,018 Interest expense (106,913) (250,001) (356,914) Total other expense (90,948) (252,948) (343,896) Net loss before provision for income taxes (3,176,875) 450,594 (2,708,831) Provision for income taxes — — — Net loss $ (3,176,875) $ 450,594 $ (2,708,831) Loss per share, basic and diluted $ (0.71) $ 0.10 $ (0.61) Weighted average shares outstanding, basic and diluted 4,480,037 (20,955) 4,459,082 The impact of the restatements on the consolidated statement of operations for the quarter ended March 31, 2020 is presented below: For the Three Months Ended March 31, 2020 As Previously Restatement Reported Adjustments As Restated Revenues $ — $ — $ — Cost of sales, net — — Gross margin — — — Operating expenses Compensation and benefits — 169,769 169,769 Other general and administrative — 430,589 430,589 Depreciation and amortization 9,563 — 9,563 Total operating expenses 9,563 600,358 609,921 Operating loss — (609,921) (609,921) Other income (expense) Other income 9,152 1,206 10,358 Interest expense (16,392) — (16,392) Total other income (expense) (7,240) 1,206 (6,034) Net loss before provision for income taxes (16,803) (599,152) (615,955) Provision for income taxes Net loss $ (16,803) $ (599,152) $ (615,955) Loss per share, basic and diluted $ (0.01) $ (0.19) $ (0.20) Weighted average shares outstanding, basic and diluted 3,150,000 58 3,150,058 The impact of the restatements on the consolidated statement of cash flows for the quarter ended March 31, 2021 is presented below: For the Three Months Ended March 31, 2021 As Previously Restatement Reported Adjustments As Restated Operating activities Net loss $ (3,176,875) $ 468,044 $ (2,708,831) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 228,456 18,859 247,315 Shares issued with debt — 250,000 250,000 Share based compensation 299,113 (252,429) 46,684 Amortization of operating lease right-of-use asset — 13,675 13,675 Changes in assets and liabilities: Accounts receivable (17,450) — (17,450) Prepaid expenses and other assets 793 — 793 Accounts payable 575,319 (402,517) 172,802 Lease liability — (13,976) (13,976) Interest payable, related parties 106,122 — 106,122 Net cash used in operations (1,984,522) 81,656 (1,902,866) Investing activities Capital expenditures (7,792) 1 (7,791) Net cash used in investing activities (7,792) 1 (7,791) Financing activities Proceeds from related party debt payable 2,080,000 (81,655) 1,998,345 Net cash provided by financing activities 2,080,000 (81,655) 1,998,345 Net change in cash and cash equivalents 87,686 2 87,688 Cash and cash equivalents at the beginning of the period 8,335 — 8,335 Cash and cash equivalents at the end of the period $ 96,021 $ 2 $ 96,023 The impact of the restatements on the consolidated statement of cash flows for the quarter ended March 31, 2020 is presented below: For the Three Months Ended March 31, 2020 As Previously Restatement Reported Adjustments As Restated Operating activities Net loss $ (16,803) $ (599,152) $ (615,955) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 9,563 — 9,563 Amortization of operating lease right-of-use asset — 14,707 14,707 Changes in assets and liabilities: Prepaid expenses and other assets — (5,278) (5,278) Other assets - non-current — 65 65 Accounts payable 11,428 (5,600) 5,828 Lease liability — (14,463) (14,463) Interest payable, related parties 15,916 477 16,393 Net cash used in operations 20,104 (609,244) (589,140) Investing activities Capital expenditures — (1,016,265) (1,016,265) Acquisition of intangible assets, net (1,046,678) 865,509 (181,169) Net cash used in investing activities (1,046,678) (150,756) (1,197,434) Financing activities Proceeds from related party debt payable 1,082,050 760,000 1,842,050 Net cash provided by financing activities 1,082,050 760,000 1,842,050 Net change in cash and cash equivalents 55,476 — 55,476 Cash and cash equivalents at the beginning of the period 38,890 — 38,890 Cash and cash equivalents at the end of the period $ 94,366 $ — $ 94,366 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2021 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 5 FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company also follows a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable based on an entity’s own assumptions, as there is little, if any, related market activity (e.g., cash flow modeling inputs based on assumptions). The risk-free interest rate is the United States Treasury rate on the measurement date having a term equal to the remaining contractual life of the instrument. The volatility is a measure of the amount by which the comparable companies’ share price has fluctuated or is expected to fluctuate. Since the Common Stock was not publicly traded prior to the IPO, an average of the historical volatility of comparative companies was used. Level 3 financial assets and liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of fair value. The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management's assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. An increase or decrease in volatility or interest free rate, in isolation, can significantly increase or decrease the fair value of financial assets and liabilities. Changes in the values of the assets and liabilities are recorded as a component of other income (expense) on the accompanying consolidated statement of operations. Non-financial assets that are measured on a non-recurring basis include our intellectual property and property and equipment which are measured using fair value techniques whenever events or changes in circumstances indicate a condition of impairment exists. |
DEBT PAYABLE - RELATED PARTIES
DEBT PAYABLE - RELATED PARTIES | 3 Months Ended |
Mar. 31, 2021 | |
DEBT PAYABLE - RELATED PARTIES | |
DEBT PAYABLE - RELATED PARTIES | NOTE 6 DEBT PAYABLE – RELATED PARTIES During 2019 and 2020, the Company entered into six promissory note agreements with a related party pursuant to which the Company could borrow up to $2,500,000 at an annual interest rate of 5%. Borrowings pursuant to those agreements were $2,500,000 at March 31, 2021 and December 31, 2020. During the year ended December 31, 2020, a related party provided financing of approximately $950,000 for the Company’s purchase of 7,600 tablets. Payment was due to the related party upon the closing of the Company’s IPO. There was no stated interest rate or additional repayment terms. On December 30, 2020, the Company entered into a $2,000,000 bridge loan agreement with a related party. As of December 31, 2020, $251,654 had been funded on the bridge loan. The terms of the bridge loan included repayment of principal on or before June 30, 2021, and an annual interest rate of 18%. In addition to repayment of principal and interest under the bridge loan, the Company issued to the related party 1,260,023 shares of Common Stock. Management valued this issuance of shares at $2,000,000 and recorded that amount in interest expense. During the year ended December 31, 2020, the Company received a cash advance of $27,154 from a related party. The cash advances carried no specified repayment term, interest rate, or security interest. During the three-month period ended March 31, 2021, the Company entered into bridge loans totaling $250,000 with related party investors. Terms of the bridge loans with related party included repayment of principal on or before June 30, 2021, and an annual interest rate of 18%. In addition to repayment of principal and interest under the bridge loans, the Company issued 157,503 shares of Common Stock. Management valued these issuances of shares at $250,000 and recorded that amount in interest expense. Subsequent to March 31, 2021, in April 2021, the Company entered into bridge loans with related party and non-related party investors for an additional aggregate amount of $500,000, with an 18% interest rate. In addition to paying the interest and principal, the Company issued 315,007 Common Stock shares to the bridge loan lenders. Management valued these issuances of shares at $500,000 and recorded that amount in interest expense. All borrowings from related parties were paid in full upon completion of the Company’s IPO in May 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 COMMITMENTS AND CONTINGENCIES Concentration of Credit Risk Generally, the Company’s cash balances, which are deposited in non-interest-bearing accounts may exceed FDIC insurance limits from time to time. The financial stability of these institutions is periodically reviewed by senior management. At March 31, 2021 and December 31, 2020, cash balances in excess of FDIC requirements were $-0- and $-0-, respectively. Litigation, Claims, and Assessments The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 3 Months Ended |
Mar. 31, 2021 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 8 STOCKHOLDERS’ EQUITY (DEFICIT) Common shares issued before the IPO were recorded at estimated fair value. In May 2021, the Company completed its IPO of its Common Stock, creating liquidity and a visible fair market value for its Common Stock. The Common Stock is listed on the Nasdaq Capital Market under the symbol “ALF”. In 2018, the Company created a class of Series Seed Preferred Stock and 2,500,000 shares of Series Seed Preferred Stock were authorized. During 2018 and 2019, 2,500,000 shares of Series Seed Preferred Stock were issued to an investor in exchange for $2,500,000 cash consideration. Shares of Series Seed Preferred Stock convert to Common Stock at a ratio of 1:1.260023 at any time at the option of the holder. Holders of Series Seed Preferred Stock had preferential liquidation rights in the event of the Company’s dissolution. Shares of Series Seed Preferred Stock bore no interest or dividend payments to its holders. The Series Seed Preferred Stock had a buyout feature if not converted into Common Stock by the holder. Series Seed Preferred Stock could be bought out by the Company if full return of principal is made to the holder ($2,500,000), plus an additional 1x return of capital to the holder ($2,500,000). On December 31, 2020, 2,500,000 Series Seed Preferred Stock shares were issued and outstanding. In May 2021, 2,500,000 shares of Series Seed Preferred Stock were converted into 3,150,058 shares of Common Stock at a conversion ratio of 1:1.260023. Dividends Holders of preferred stock are not entitled to dividend payment but do have liquidation preference in the event of dissolution of the Company. Holders of Common Stock are not entitled to dividend payments but would receive such payments in the event dividend payments were made to stockholders. There was no dividend payment made on any class of stock (Common Stock or preferred stock) through March 31, 2021. Common Stock The Company is authorized to issue 80,000,000 shares of Common Stock, par value $0.0001. In 2018, 3,150,058 shares of Common Stock were issued to the three management members who are the Company’s founders, at par. In March 2021, a 1.260023 to 1 forward stock split was affected. Common Stock share numbers contained herein in this Quarterly Report are presented on a post-split basis unless specifically noted otherwise. During the year ended December 31, 2020, the Company issued 31,501 shares of Common Stock to an unaffiliated third party in exchange for services associated with investment relations and fundraising, and to support the development of revenue producing contracts. Management valued this issuance of shares at $25,000 and recorded that amount in other general and administrative expense. During the year ended December 31, 2020, the Company issued 1,260,023 shares of Common Stock to related party investors in exchange for bridge loan funding necessary to procure ongoing business operations. Management valued this issuance of shares at $2,000,000 and recorded that amount in interest expense. During the quarter ended March 31, 2021, the Company arranged bridge loans with related party investors. The Company issued 157,503 shares of Common Stock in exchange for bridge loan funding necessary to procure ongoing business operations. Management valued these issuances of shares at $250,000 and recorded that amount in interest expense. During April 2021, the Company entered into additional bridge loans with related party and non-related party investors. The Company issued 315,007 shares of Common Stock in exchange for this bridge loan financing. Management valued these issuances of shares at $500,000 and recorded that amount in interest expense. During April and May 2021, the Company also issued 300,000 shares of Common Stock in connection with certain vendor contracts. Management valued this issuance of shares at $476,180 and recorded that amount in other general and administrative expense. Employee Equity (Stock) Incentive Plan The Company has a stock equity incentive plan, the 2018 Plan, in which, at its sole discretion, it may award employees of the Company Common Stock or Common Stock options, among other awards, as an incentive for performance. Total shares of Common Stock reserved under the 2018 Plan for employee grants is not to exceed 1,575,029 shares. During the three months ended March 31, 2021 and 2020, respectively, the Company granted 197,668 and -0- Common Stock options under the 2018 Plan. At March 31, 2021 and December 31, 2020, total Common Stock options issued under the 2018 Plan were 433,927 and 236,259, respectively. At March 31, 2021, weighted average strike price per employee stock option was approximately $1.52 per share. Management recorded stock-based compensation expense associated with the issuance of employee stock options of $46,684 and $-0- for the three months ended March 31, 2021 and 2020, respectively. Stock option and warrant valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices for comparable entities. For warrants and stock options issued to non-employees, the Company accounts for the expected life based on the contractual life of the warrants and stock options. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. Initial Public Offering On May 3, 2021, the Company’s registration statement on Form S-1 (File No. 333-251959) was declared effective by the Securities and Exchange Commission (the “SEC”) and the Company completed its IPO on May 6, 2021. In connection with the IPO, the Company issued and sold 4,291,045 shares of Common Stock and warrants to purchase 4,291,045 shares of Common Stock (including 559,701 shares of Common Stock and warrants to purchase 559,701 shares of Common Stock pursuant to the full exercise of the underwriters' overallotment option), at the combined public offering price of $4.15 for aggregate gross proceeds of approximately $17.8 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by Alfi. Net IPO proceeds of approximately $15.7 million were allocated $11.0 million to Common Stock and $4.7 million to warrants. The warrants were exercisable immediately upon issuance and at any time up to the date that is five years from the date of issuance and have an exercise price of $4.57 per share. Pursuant to the underwriting agreement for the IPO, the Company also issued to the underwriters warrants to purchase up to an aggregate of 186,567 shares of Common Stock (“Underwriter’s Warrants”). The Underwriter’s Warrants may be exercised beginning on May 3, 2022 until May 3, 2026. The initial exercise price of each Underwriter’s Warrant is $5.19 per share. As of June 10, 2021 (the Original Filing date of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021), no warrants had been exercised and there were 4,477,612 warrants outstanding. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 9 PROPERTY AND EQUIPMENT Property and equipment, net of accumulated depreciation, consists of the following: Mar 31, 2021 Dec 31, 2020 Tablets $ 972,050 $ 972,050 Office furniture and fixtures 199,052 191,261 Property and equipment, gross 1,171,102 1,163,311 Less accumulated depreciation (860,324) (657,017) Property and equipment, net $ 310,778 $ 506,294 The Company incurred depreciation expense of $203,308 and $9,563 for the three months ended March 31, 2021 and 2020, respectively. Property and equipment includes Lenovo tablet hardware devices purchased during 2020 and held for placement with rideshare and other businesses. Tablets are provided to rideshare and other businesses at no charge, but remain the property of the Company and must be returned to the Company upon termination of the rideshare or other use agreement. The Company may pay a revenue share or commission to such third party for the placement of the Alfi-enabled device. |
INTANGIBLE ASSETS - INTELLECTUA
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY | 3 Months Ended |
Mar. 31, 2021 | |
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY | |
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY | NOTE 10 INTANGIBLE ASSETS – INTELLECTUAL PROPERTY Intellectual Property – Software Development and Patent Acquisition Costs The Company’s intellectual property includes capitalized software development and patent acquisition costs associated with creation of its technology (see Note 1). During the period between the Company’s formation in 2018 through June 2020, the Company created and developed the proprietary software that is the basis of its ability to deliver targeted digital advertising. The Company considers this software to be internal-use software, as it is used exclusively by the Company on devices it controls to deliver the advertising services it is engaged to provide. The Company determined that the application development phase for this software began in May 2018 and ended in June 2020, and its first release of production software was activated in a tablet in July 2020. On July 1, 2020 forward, the Company commenced depreciation of these intangible assets. The Company estimated a 5-year useful life for capitalized software development costs and a 15-year useful life for patent acquisition costs. Management selected a 5-year useful life for software development costs as an expectation of the length of time the Company expects its technology product set to produce future cash flows assuming that there are no significant software or version upgrades. All software development costs incurred beyond June 30, 2020 are being expensed. Intangible assets, net of accumulated amortization, consists of the following: Mar 31, 2021 Dec 31, 2020 Capitalized software $ 832,045 $ 832,045 Patents 144,239 144,239 Intangible assets, gross 976,284 976,284 Less accumulated amortization (132,020) (88,013) Intangible assets, net $ 844,264 $ 888,271 Amortization expense for the three months ended March 31, 2021 and 2020, was $44,006 and $-0-, respectively. Future amortization of intangible assets as of March 31, 2021, is as follows: 2021 $ 132,019 2022 176,025 2023 176,025 2024 176,025 2025 92,820 Thereafter 91,350 Total $ 844,264 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 11 SUBSEQUENT EVENTS The Company has disclosed events that have occurred after the balance sheet date of March 31, 2021 through June 10, 2021 (the Original Filing date of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021). See Note 6 Debt Payable Related Parties for discussion of additional bridge loan financing obtained in April 2021 and Note 8 Stockholders’ Equity (Deficit) for discussion of the Company’s May 2021 IPO. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Consolidation | Consolidation The consolidated financial statements include the accounts of Alfi, Inc. and its wholly owned subsidiary, Alfi (N.I.) Ltd. Collectively, these entities make up the consolidated financial statements during the periods presented in this Quarterly Report. All significant intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition Under Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 (Topic 606) “Revenue from Contracts with Customers” (“Topic 606”), revenue from contracts with customers is measured based on the consideration specified in the contract with the customer . With respect to Alfi-enabled tablets placed in rideshares or devices placed into service by Alfi, Alfi will recognize revenue on a cost per thousand (“CPM”) basis or a related basis for both the content and advertisements delivered. Alfi contracts (also called insertion orders) for both the advertiser and the content provider specify the amounts to be paid to Alfi for displaying the advertisement or content. Content and advertisements are provided to Alfi by companies desiring to deliver content for viewer engagement. With respect to SaaS licenses, Alfi has entered into two license agreements with third parties to use Alfi-placed devices on customer property and share in advertising revenues. Under these agreements, the customer and Alfi work together to generate advertising revenue, and the devices have remote management access and data reporting that the Alfi platform provides. Alfi began to earn revenue from advertisers during the fourth quarter of 2021. Alfi will recognize the revenue from these contracts monthly, in accordance with Topic 606. Through March 31, 2021, the Company had distributed approximately 1,000 devices (tablets and kiosks) at no cost to rideshare, mall, and airport owners. It is the viewers of the Alfi-enabled device, rather than the rideshare, mall or airport owner that the Alfi-enabled device engages with and to whom the Company delivers advertising and content. The Company recognizes revenue when earned from rideshare sources, advertisers, and content providers. Each contract for placing a device in service with rideshare, mall, or airport owners generally does not trigger a payment from such party to the Company. The Company’s contract with a device host may provide that the Company pays a revenue sharing amount, or fee, based on the revenue the Company derives from that device. The Company will expense that fee in other general and administrative expenses. Removing a tablet from the vehicle or returning it to the Company would automatically cancel the opportunity for a rideshare to receive commissions. |
Accounts Receivable | Accounts Receivable The Company records accounts receivable at its net realizable value. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less from the purchase date to be cash equivalents. |
Property and Equipment | Property and Equipment Property and equipment includes tablets recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives of three years. Property and equipment also includes office equipment recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which for office equipment is three Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Intangible Assets | Intangible Assets The Company’s intangible assets include capitalized software development and patent acquisition costs associated with creation of its technology. The Company places intangible assets into service upon the date in which they are available for use. Intangible assets are amortized over a 5 year useful life for capitalized software development costs and a 15 year useful life for patent acquisition costs. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. Fair values approximate carrying values for cash, accounts payable, notes payable, fixed assets, and amortizable intangible assets. |
Loss Per Share | Loss Per Share The Company computes basic net loss per share by dividing net loss per share available to stockholders of the Company’s common stock, $0.001 par value per share (the “Common Stock”), by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into the Common Stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of Common Stock during the period. Potentially dilutive securities excluded from the computation of basic net loss per share as of are as follows: March 31, March 31, 2021 2020 Convertible Series (“Seed”) Preferred stock 3,150,058 3,150,058 Warrants — — Employee stock options 433,927 59,064 Total potentially dilutive securities 3,583,985 3,209,122 |
Common Stock | Common Stock The Company issued 3,150,058 shares of Common Stock on April 4, 2018 to the Company’s founders. At March 31, 2021 and December 31, 2020, outstanding shares of Common Stock totaled 4,599,085 and 4,441,582, respectively. The Company paid no dividends on Common Stock issued through March 31, 2021. During May 2021, the Company issued 4,291,045 shares of Common Stock and 4,291,045 warrants to purchase shares of Common Stock at a price of $4.57 per share for cash in its initial public offering, which was completed on May 6, 2021 (“IPO”). The Company also issued 3,150,058 shares of Common Stock from conversion of all outstanding shares of the Company’s Series Seed Preferred Stock, $0.0001 par value per share (the “Series Seed Preferred Stock”), to shares of Common Stock. The Company accounts for common stock at fair value. Pursuant to the underwriting agreement for the IPO, the Company also issued to the underwriters warrants to purchase up to an aggregate of 186,567 shares of Common Stock (“Underwriter's Warrants”). The Underwriter’s Warrants may be exercised beginning on May 3, 2022 until May 3, 2026. The initial exercise price of each Underwriter’s Warrant is $5.19 per share. The Company accounts for Common Stock issued with debt, issued for services, and issued as share based compensation at fair value. |
Convertible Instruments | Convertible Instruments Through March 31, 2021, the Company did not record or issue convertible notes with beneficial conversion features and did not record debt discounts related to beneficial conversion features. During 2020 and 2019, the Company issued Series Seed Preferred Stock, which was convertible into Common Stock on a 1:1.260023 basis at the option of the holder and is classified as stockholders’ equity on the balance sheet at March 31, 2021 and December 31, 2020. When converted into Common Stock by Series Seed Preferred Stock holders, its fair value approximates the existing carrying (book) value of the Series Seed Preferred Stock as stated. U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional. The Company has determined that the embedded conversion options should not be bifurcated from their host instruments and the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments (the beneficial conversion feature) based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Thus, no embedded derivatives were identified on the conversion option of Series Seed Preferred Stock at March 31, 2021 and December 31, 2020. In May 2021, 2,500,000 shares of Series Seed Preferred Stock converted into 3,150,058 shares of Common Stock. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company accounts for warrants to purchase its Common Stock in accordance with ASC 815. Proceeds from the issuance of warrants indexed to the Company’s own stock are classified in stockholders’ equity (deficit). |
Stock based compensation | Stock based compensation The Company maintains a stock equity incentive plan, the Alfi, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), under which it may grant non-qualified stock options, incentive stock options, stock appreciation rights, stock awards, performance and performance-based awards, or stock units to employees, non-employee directors and consultants. The Company measures compensation expense for stock-based grants at fair value. Compensation expense is recognized over the vesting period relevant to the award. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will be realized. The Company carries a 100% valuation reserve against deferred tax assets. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. The Company’s policy is to record tax-related interest as interest expense and tax-related penalties as general and administrative expenses in the statements of operations. The Company did not recognize any such penalties or interest during the periods presented under this Quarterly Report. |
Forward Stock Split | Forward Stock Split On March 1, 2021, the Company enacted a forward stock split on a 1.260023:1.000000 basis. Share amounts reflected in this Quarterly Report are presented post-split, unless otherwise noted. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Summary of potentially dilutive securities excluded from the computation of basic net loss per share | March 31, March 31, 2021 2020 Convertible Series (“Seed”) Preferred stock 3,150,058 3,150,058 Warrants — — Employee stock options 433,927 59,064 Total potentially dilutive securities 3,583,985 3,209,122 |
RESTATEMENTS OF PREVIOUSLY IS_2
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | |
Summary of impact of the Restatements | The impact of the restatement on the consolidated balance sheet as of March 31, 2021 is presented below: As of March 31, 2021 As Previously Restatement Reported Adjustments As Restated Assets Current assets: Cash and cash equivalents $ 96,021 $ 2 $ 96,023 Accounts receivable 17,450 — 17,450 Total current assets 113,471 2 113,473 Property and equipment, net 116,368 194,410 310,778 Intangible assets, net 4,164,630 (3,320,366) 844,264 Other assets (complimentary devices), net 1,104,000 (1,104,000) — Operating lease right-of-use asset, net — 135,357 135,357 Other assets 7,940 — 7,940 Total assets $ 5,506,409 $ (4,094,597) $ 1,411,812 Liabilities and Stockholders' Deficit Current liabilities: Accounts payable and accrued expenses $ 1,092,024 $ 81,653 $ 1,173,677 Debt payable, related parties 5,808,808 (81,654) 5,727,154 Lease liability — 138,670 138,670 Interest payable, related parties 222,722 — 222,722 Total current liabilities 7,402,379 (140,156) 7,262,223 Total liabilities 7,402,379 (140,156) 7,262,223 Stockholders' Deficit Series Seed convertible preferred stock, $0.0001 par value, 2,500,000 shares authorized, issued, and outstanding 2,500,000 — 2,500,000 Common stock, $0.0001 par value, 80,000,000 shares authorized, 4,599,085 shares issued and outstanding 460 — 460 Additional paid-in capital 2,274,855 97,964 2,372,819 Accumulated deficit (6,671,285) (4,052,405) (10,723,690) Total stockholders' deficit (1,895,970) (3,954,441) (5,850,411) Total liabilities and stockholders' deficit $ 5,506,409 $ (4,094,597) $ 1,411,812 The impact of the restatement on the consolidated balance sheet as of December 31, 2020 is presented below: As of December 31, 2020 As Previously Restatement Reported Adjustments As Restated Assets Current assets: Cash and cash equivalents $ 8,335 $ — $ 8,335 Note receivable (related parties) 1,830,000 (1,830,000) — Prepaid expenses and other 793 — 793 Total current assets 1,839,128 (1,830,000) 9,128 Property and equipment, net 117,474 388,820 506,294 Intangible assets, net 4,384,188 (3,495,917) 888,271 Other assets (complimentary devices), net 1,104,000 (1,104,000) — Operating lease right-of-use asset, net — 149,032 149,032 Other assets 7,940 — 7,940 Total assets $ 7,452,730 $ (5,892,065) $ 1,560,665 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable $ 516,705 $ 484,171 $ 1,000,876 Debt payable, related parties 5,558,808 (1,830,000) 3,728,808 Derivative liability 229,712 (229,712) — Lease liability — 152,646 152,646 Interest payable, related parties 116,600 — 116,600 Total current liabilities 6,421,825 (1,422,895) 4,998,930 Total liabilities 6,421,825 (1,422,895) 4,998,930 Stockholders' Equity (deficit) Series Seed convertible preferred stock, $0.0001 par value, 2,500,000 shares authorized, issued , and outstanding 2,500,000 — 2,500,000 Common stock, $0.0001 par value, 15,000,000 shares authorized, 4,441,582 shares issued and outstanding 444 — 444 Additional paid-in capital 2,024,871 51,279 2,076,150 Accumulated deficit (3,494,410) (4,520,449) (8,014,859) Total stockholders' equity (deficit) 1,030,905 (4,469,170) (3,438,265) Total liabilities and stockholders' equity (deficit) $ 7,452,730 $ (5,892,065) $ 1,560,665 The impact of the restatements on the consolidated statement of operations for the quarter ended March 31, 2021 is presented below: For the Three Months Ended March 31, 2021 As Previously Restatement Reported Adjustments As Restated Revenues $ 17,450 $ — $ 17,450 Cost of sales, net 104,506 (104,506) — Gross margin (87,056) 87,056 — Operating expenses Compensation and benefits — 883,211 883,211 Other general and administrative 2,770,415 (1,518,556) 1,251,859 Depreciation and amortization 228,456 18,859 247,315 Total operating expenses 2,998,871 (616,486) 2,382,385 Operating loss — (2,364,935) (2,364,935) Other income (expense) Other income 15,965 (2,947) 13,018 Interest expense (106,913) (250,001) (356,914) Total other expense (90,948) (252,948) (343,896) Net loss before provision for income taxes (3,176,875) 450,594 (2,708,831) Provision for income taxes — — — Net loss $ (3,176,875) $ 450,594 $ (2,708,831) Loss per share, basic and diluted $ (0.71) $ 0.10 $ (0.61) Weighted average shares outstanding, basic and diluted 4,480,037 (20,955) 4,459,082 The impact of the restatements on the consolidated statement of operations for the quarter ended March 31, 2020 is presented below: For the Three Months Ended March 31, 2020 As Previously Restatement Reported Adjustments As Restated Revenues $ — $ — $ — Cost of sales, net — — Gross margin — — — Operating expenses Compensation and benefits — 169,769 169,769 Other general and administrative — 430,589 430,589 Depreciation and amortization 9,563 — 9,563 Total operating expenses 9,563 600,358 609,921 Operating loss — (609,921) (609,921) Other income (expense) Other income 9,152 1,206 10,358 Interest expense (16,392) — (16,392) Total other income (expense) (7,240) 1,206 (6,034) Net loss before provision for income taxes (16,803) (599,152) (615,955) Provision for income taxes Net loss $ (16,803) $ (599,152) $ (615,955) Loss per share, basic and diluted $ (0.01) $ (0.19) $ (0.20) Weighted average shares outstanding, basic and diluted 3,150,000 58 3,150,058 The impact of the restatements on the consolidated statement of cash flows for the quarter ended March 31, 2021 is presented below: For the Three Months Ended March 31, 2021 As Previously Restatement Reported Adjustments As Restated Operating activities Net loss $ (3,176,875) $ 468,044 $ (2,708,831) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 228,456 18,859 247,315 Shares issued with debt — 250,000 250,000 Share based compensation 299,113 (252,429) 46,684 Amortization of operating lease right-of-use asset — 13,675 13,675 Changes in assets and liabilities: Accounts receivable (17,450) — (17,450) Prepaid expenses and other assets 793 — 793 Accounts payable 575,319 (402,517) 172,802 Lease liability — (13,976) (13,976) Interest payable, related parties 106,122 — 106,122 Net cash used in operations (1,984,522) 81,656 (1,902,866) Investing activities Capital expenditures (7,792) 1 (7,791) Net cash used in investing activities (7,792) 1 (7,791) Financing activities Proceeds from related party debt payable 2,080,000 (81,655) 1,998,345 Net cash provided by financing activities 2,080,000 (81,655) 1,998,345 Net change in cash and cash equivalents 87,686 2 87,688 Cash and cash equivalents at the beginning of the period 8,335 — 8,335 Cash and cash equivalents at the end of the period $ 96,021 $ 2 $ 96,023 The impact of the restatements on the consolidated statement of cash flows for the quarter ended March 31, 2020 is presented below: For the Three Months Ended March 31, 2020 As Previously Restatement Reported Adjustments As Restated Operating activities Net loss $ (16,803) $ (599,152) $ (615,955) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 9,563 — 9,563 Amortization of operating lease right-of-use asset — 14,707 14,707 Changes in assets and liabilities: Prepaid expenses and other assets — (5,278) (5,278) Other assets - non-current — 65 65 Accounts payable 11,428 (5,600) 5,828 Lease liability — (14,463) (14,463) Interest payable, related parties 15,916 477 16,393 Net cash used in operations 20,104 (609,244) (589,140) Investing activities Capital expenditures — (1,016,265) (1,016,265) Acquisition of intangible assets, net (1,046,678) 865,509 (181,169) Net cash used in investing activities (1,046,678) (150,756) (1,197,434) Financing activities Proceeds from related party debt payable 1,082,050 760,000 1,842,050 Net cash provided by financing activities 1,082,050 760,000 1,842,050 Net change in cash and cash equivalents 55,476 — 55,476 Cash and cash equivalents at the beginning of the period 38,890 — 38,890 Cash and cash equivalents at the end of the period $ 94,366 $ — $ 94,366 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
summary of property plant and equipment balances | Mar 31, 2021 Dec 31, 2020 Tablets $ 972,050 $ 972,050 Office furniture and fixtures 199,052 191,261 Property and equipment, gross 1,171,102 1,163,311 Less accumulated depreciation (860,324) (657,017) Property and equipment, net $ 310,778 $ 506,294 |
INTANGIBLE ASSETS - INTELLECT_2
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY | |
Summary of intangible assets, net of accumulated amortization | Mar 31, 2021 Dec 31, 2020 Capitalized software $ 832,045 $ 832,045 Patents 144,239 144,239 Intangible assets, gross 976,284 976,284 Less accumulated amortization (132,020) (88,013) Intangible assets, net $ 844,264 $ 888,271 |
Summary of future amortization of intangible assets | Future amortization of intangible assets as of March 31, 2021, is as follows: 2021 $ 132,019 2022 176,025 2023 176,025 2024 176,025 2025 92,820 Thereafter 91,350 Total $ 844,264 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Revenue Recognition | |
Number of devices tablets and kiosks entity has distributed and activated into operations | 1,000 |
Cost to rideshare, mall, or airport owner | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Cash Equivalents (Details) | Mar. 31, 2021M |
Complimentary Devices | |
Number of Lenovo tablet hardware devices purchased | 3 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) | Jul. 01, 2020 | Mar. 31, 2021 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | 5 years |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 15 years |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Antidilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,583,985 | 3,209,122 |
Preferred Series Seed stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,150,058 | 3,150,058 |
Employee stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 433,927 | 59,064 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Common Stock (Details) - USD ($) | Apr. 04, 2018 | May 31, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2018 | Jun. 06, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||||
Number of shares issued during the period | 3,150,058 | 4,291,045 | 315,007 | 157,503 | |||
Common stock, shares outstanding | 4,599,085 | 4,441,582 | |||||
Shares issued for cash (in shares) | 3,150,058 | 4,291,045 | 315,007 | 157,503 | |||
Stock Issued During Period, Shares, Warrants Exercised | 4,291,045 | ||||||
Number of shares issued upon conversion of outstanding preferred stock | 3,150,058 | ||||||
Dividends on common stock | $ 0 | ||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued during the period | 3,150,058 | ||||||
Shares issued for cash (in shares) | 3,150,058 | ||||||
Underwriter's Warrants | |||||||
Class of Stock [Line Items] | |||||||
Warrants issued | 186,567 | ||||||
Warrants exercise price | $ 5.19 | ||||||
IPO | |||||||
Class of Stock [Line Items] | |||||||
Share Price | $ 4.57 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Convertible Instruments (Details) | 1 Months Ended | 12 Months Ended | |||
May 31, 2021shares | Dec. 31, 2020shares | Mar. 31, 2021USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||||
Embedded derivative | $ | $ 0 | ||||
Preferred Series Seed stock | |||||
Class of Stock [Line Items] | |||||
Conversion ratio | 1.260023 | 1.260023 | 1.260023 | 1.260023 | 1.260023 |
Number of preferred stock converted into common stock | 2,500,000 | 2,500,000 | |||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued upon conversion | 3,150,058 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES - Forward Stock Split (Details) | Mar. 01, 2021 |
SIGNIFICANT ACCOUNTING POLICIES | |
Forward stock split ratio | 1.260023 |
GOING CONCERN AND MANAGEMENT'_2
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details) $ in Millions | 1 Months Ended |
May 31, 2021USD ($) | |
Proceeds from Initial Public Offering | $ 15.7 |
RESTATEMENTS OF PREVIOUSLY IS_3
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Consolidated Balance Sheet (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||||
Cash and cash equivalents | $ 96,023 | $ 8,335 | $ 94,366 | $ 38,890 |
Prepaid expenses and other | 793 | |||
Accounts receivable | 17,450 | |||
Total current assets | 113,473 | 9,128 | ||
Property and equipment, net | 310,778 | 506,294 | ||
Intangible assets, net | 844,264 | 888,271 | ||
Operating lease right-of-use asset, net | 135,357 | 149,032 | ||
Other assets | 7,940 | 7,940 | ||
Total assets | 1,411,812 | 1,560,665 | ||
Current liabilities: | ||||
Accounts payable | 1,000,876 | |||
Accounts payable and accrued expenses | 1,173,677 | 1,000,876 | ||
Debt payable, related parties | 5,727,154 | 3,728,808 | ||
Lease liability | 138,670 | 152,646 | ||
Interest payable, related parties | 222,722 | 116,600 | ||
Total current liabilities | 7,262,223 | 4,998,930 | ||
Total liabilities | 7,262,223 | 4,998,930 | ||
Stockholders' Equity (deficit) | ||||
Series Seed convertible preferred stock, $0.0001 par value, 2,500,000 shares authorized, issued, and outstanding | 2,500,000 | 2,500,000 | ||
Common stock, $0.0001 par value, 15,000,000 shares authorized, 4,441,582 shares issued and outstanding | 460 | 444 | ||
Additional paid-in capital | 2,372,819 | 2,076,150 | ||
Accumulated deficit | (10,723,690) | (8,014,859) | ||
Total stockholders' deficit | (5,850,411) | (3,438,265) | $ (583,224) | $ 32,731 |
Total liabilities and stockholders' deficit | 1,411,812 | 1,560,665 | ||
As Previously Reported | ||||
Current assets: | ||||
Cash and cash equivalents | 96,021 | 8,335 | ||
Note receivable (related parties) | 1,830,000 | |||
Prepaid expenses and other | 793 | |||
Accounts receivable | 17,450 | |||
Total current assets | 113,471 | 1,839,128 | ||
Property and equipment, net | 116,368 | 117,474 | ||
Intangible assets, net | 4,164,630 | 4,384,188 | ||
Other assets (complimentary devices), net | 1,104,000 | 1,104,000 | ||
Other assets | 7,940 | 7,940 | ||
Total assets | 5,506,409 | 7,452,730 | ||
Current liabilities: | ||||
Accounts payable | 516,705 | |||
Accounts payable and accrued expenses | 1,092,024 | |||
Debt payable, related parties | 5,808,808 | 5,558,808 | ||
Derivative liability | 229,712 | |||
Interest payable, related parties | 222,722 | 116,600 | ||
Total current liabilities | 7,402,379 | 6,421,825 | ||
Total liabilities | 7,402,379 | 6,421,825 | ||
Stockholders' Equity (deficit) | ||||
Series Seed convertible preferred stock, $0.0001 par value, 2,500,000 shares authorized, issued, and outstanding | 2,500,000 | 2,500,000 | ||
Common stock, $0.0001 par value, 15,000,000 shares authorized, 4,441,582 shares issued and outstanding | 460 | 444 | ||
Additional paid-in capital | 2,274,855 | 2,024,871 | ||
Accumulated deficit | (6,671,285) | (3,494,410) | ||
Total stockholders' deficit | (1,895,970) | 1,030,905 | ||
Total liabilities and stockholders' deficit | 5,506,409 | 7,452,730 | ||
Restatement Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | 2 | |||
Note receivable (related parties) | (1,830,000) | |||
Total current assets | 2 | (1,830,000) | ||
Property and equipment, net | 194,410 | 388,820 | ||
Intangible assets, net | (3,320,366) | (3,495,917) | ||
Other assets (complimentary devices), net | (1,104,000) | (1,104,000) | ||
Operating lease right-of-use asset, net | 135,357 | 149,032 | ||
Total assets | (4,094,597) | (5,892,065) | ||
Current liabilities: | ||||
Accounts payable | 484,171 | |||
Accounts payable and accrued expenses | 81,653 | |||
Debt payable, related parties | (81,654) | (1,830,000) | ||
Derivative liability | (229,712) | |||
Lease liability | 138,670 | 152,646 | ||
Total current liabilities | (140,156) | (1,422,895) | ||
Total liabilities | (140,156) | (1,422,895) | ||
Stockholders' Equity (deficit) | ||||
Additional paid-in capital | 97,964 | 51,279 | ||
Accumulated deficit | (4,052,405) | (4,520,449) | ||
Total stockholders' deficit | (3,954,441) | (4,469,170) | ||
Total liabilities and stockholders' deficit | $ (4,094,597) | $ (5,892,065) |
RESTATEMENTS OF PREVIOUSLY IS_4
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Consolidated Balance Sheet (Parenthetical) (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Series Seed convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Series Seed convertible preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Series Seed convertible preferred stock, shares issued | 2,500,000 | 2,500,000 |
Series Seed preferred stock, shares outstanding | 2,500,000 | 2,500,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 4,599,085 | 4,441,582 |
Common stock, shares outstanding | 4,599,085 | 4,441,582 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 15,000,000 |
Common stock, shares issued | 4,599,085 | 4,441,582 |
Common stock, shares outstanding | 4,599,085 | 4,441,582 |
RESTATEMENTS OF PREVIOUSLY IS_5
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Consolidated statement of operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenues | $ 17,450 | |
Operating expenses | ||
Compensation and benefits | 883,211 | $ 169,769 |
Other general and administrative | 1,251,859 | 430,589 |
Depreciation and amortization expense | 247,315 | 9,563 |
Total operating expenses | 2,382,385 | 609,921 |
Operating loss | (2,364,935) | (609,921) |
Other income (expense) | ||
Other income | 13,018 | 10,358 |
Interest expense | (356,914) | (16,392) |
Total other expense, net | (343,896) | (6,034) |
Net loss before provision for income taxes | (2,708,831) | (615,955) |
Net loss | $ (2,708,831) | $ (615,955) |
Loss per share, basic | $ (0.61) | $ (0.20) |
Loss per share, diluted | $ (0.61) | $ (0.20) |
Weighted average shares outstanding, basic | 4,459,082 | 3,150,058 |
Weighted average shares outstanding, diluted | 4,459,082 | 3,150,058 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenues | $ 17,450 | |
Cost of sales, net | 104,506 | |
Gross margin | (87,056) | |
Operating expenses | ||
Other general and administrative | 2,770,415 | |
Depreciation and amortization expense | 228,456 | $ 9,563 |
Total operating expenses | 2,998,871 | 9,563 |
Other income (expense) | ||
Other income | 15,965 | 9,152 |
Interest expense | (106,913) | (16,392) |
Total other expense, net | (90,948) | (7,240) |
Net loss before provision for income taxes | (3,176,875) | (16,803) |
Net loss | $ (3,176,875) | $ (16,803) |
Loss per share, basic | $ (0.71) | $ (0.01) |
Loss per share, diluted | $ (0.71) | $ (0.01) |
Weighted average shares outstanding, basic | 4,480,037 | 3,150,000 |
Weighted average shares outstanding, diluted | 4,480,037 | 3,150,000 |
Restatement Adjustments | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Cost of sales, net | $ (104,506) | |
Gross margin | 87,056 | |
Operating expenses | ||
Compensation and benefits | 883,211 | $ 169,769 |
Other general and administrative | (1,518,556) | 430,589 |
Depreciation and amortization expense | 18,859 | |
Total operating expenses | (616,486) | 600,358 |
Operating loss | (2,364,935) | (609,921) |
Other income (expense) | ||
Other income | (2,947) | 1,206 |
Interest expense | (250,001) | |
Total other expense, net | (252,948) | 1,206 |
Net loss before provision for income taxes | 450,594 | (599,152) |
Net loss | $ 450,594 | $ (599,152) |
Loss per share, basic | $ 0.10 | $ (0.19) |
Loss per share, diluted | $ 0.10 | $ (0.19) |
Weighted average shares outstanding, basic | (20,955) | 58 |
Weighted average shares outstanding, diluted | (20,955) | 58 |
RESTATEMENTS OF PREVIOUSLY IS_6
RESTATEMENTS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Consolidated statement of cash flows (Details) - USD ($) | 3 Months Ended | 15 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | |
Operating activities | |||
Net loss | $ (2,708,831) | $ (615,955) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 247,315 | 9,563 | |
Stock issued with debt | 250,000 | $ 250,000 | |
Share based compensation | 46,684 | ||
Amortization of operating lease right-of-use asset | 13,675 | 14,707 | |
Changes in assets and liabilities: | |||
Accounts receivable | (17,450) | ||
Other assets (complimentary devices) | 65 | ||
Prepaid expenses and other assets | 793 | (5,278) | |
Accounts payable | 172,802 | 5,828 | |
Lease liability | (13,976) | (14,463) | |
Interest payable, related parties | 106,122 | 16,393 | |
Net cash used in operating activities | (1,902,866) | (589,140) | |
Investing activities | |||
Capital expenditures | (7,791) | (1,016,265) | |
Acquisition of intangible assets | (181,169) | ||
Net cash used in investing activities | (7,791) | (1,197,434) | |
Financing activities | |||
Proceeds from related party note payable | 1,998,345 | 1,842,050 | |
Net cash provided by financing activities | 1,998,345 | 1,842,050 | |
Net change in cash and cash equivalents | 87,688 | 55,476 | |
Cash and cash equivalents at the beginning of the period | 8,335 | 38,890 | 38,890 |
Cash and cash equivalents at the end of the period | 96,023 | 94,366 | 96,023 |
As Previously Reported | |||
Operating activities | |||
Net loss | (3,176,875) | (16,803) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 228,456 | 9,563 | |
Share based compensation | 299,113 | ||
Changes in assets and liabilities: | |||
Accounts receivable | (17,450) | ||
Prepaid expenses and other assets | 793 | ||
Accounts payable | 575,319 | 11,428 | |
Interest payable, related parties | 106,122 | 15,916 | |
Net cash used in operating activities | (1,984,522) | 20,104 | |
Investing activities | |||
Capital expenditures | (7,792) | ||
Acquisition of intangible assets | (1,046,678) | ||
Net cash used in investing activities | (7,792) | (1,046,678) | |
Financing activities | |||
Proceeds from related party note payable | 2,080,000 | 1,082,050 | |
Net cash provided by financing activities | 2,080,000 | 1,082,050 | |
Net change in cash and cash equivalents | 87,686 | 55,476 | |
Cash and cash equivalents at the beginning of the period | 8,335 | 38,890 | 38,890 |
Cash and cash equivalents at the end of the period | 96,021 | 94,366 | 96,021 |
Restatement Adjustments | |||
Operating activities | |||
Net loss | 468,044 | (599,152) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 18,859 | ||
Stock issued with debt | 250,000 | 250,000 | |
Share based compensation | (252,429) | ||
Amortization of operating lease right-of-use asset | 13,675 | 14,707 | |
Changes in assets and liabilities: | |||
Other assets (complimentary devices) | 65 | ||
Prepaid expenses and other assets | (5,278) | ||
Accounts payable | (402,517) | (5,600) | |
Lease liability | (13,976) | (14,463) | |
Interest payable, related parties | 477 | ||
Net cash used in operating activities | 81,656 | (609,244) | |
Investing activities | |||
Capital expenditures | 1 | (1,016,265) | |
Acquisition of intangible assets | 865,509 | ||
Net cash used in investing activities | 1 | (150,756) | |
Financing activities | |||
Proceeds from related party note payable | (81,655) | 760,000 | |
Net cash provided by financing activities | (81,655) | $ 760,000 | |
Net change in cash and cash equivalents | 2 | ||
Cash and cash equivalents at the beginning of the period | 0 | ||
Cash and cash equivalents at the end of the period | $ 2 | $ 2 |
DEBT PAYABLE - RELATED PARTIES
DEBT PAYABLE - RELATED PARTIES - Additional advances by related parties (Details) | Apr. 04, 2018shares | May 31, 2021shares | Apr. 30, 2021USD ($)shares | Mar. 31, 2021USD ($)Mshares | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)shares | Mar. 31, 2021USD ($)M | Dec. 31, 2020USD ($) | Dec. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | ||||||||||
Annual interest rate | 18.00% | 18.00% | ||||||||
Borrowings made | $ 1,998,345 | $ 1,842,050 | ||||||||
Number of Lenovo tablet hardware devices purchased | M | 3 | 3 | ||||||||
Number of shares issued during the period | shares | 3,150,058 | 4,291,045 | 315,007 | 157,503 | ||||||
Valuation of shares | $ 500,000 | |||||||||
Repayments to related party | $ 0 | |||||||||
Outstanding principal associated with bridge loan from related party investor | $ 500,000 | |||||||||
Purchase of tablet devices | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash consideration | 950,000 | |||||||||
Related party notes payable transaction | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Maximum borrowing capacity | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | |||||||
Annual interest rate | 5.00% | |||||||||
Borrowings made | $ 2,500,000 | |||||||||
Bridge loan | $ 2,000,000 | |||||||||
Bridge loan with related party investors | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Annual interest rate | 18.00% | |||||||||
Amount funded on the bridge loan | $ 251,654 | $ 251,654 | ||||||||
Number of shares issued during the period | shares | 1,260,023 | |||||||||
Valuation of shares | $ 250,000 | $ 2,000,000 | ||||||||
Bridge loan one | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Outstanding principal associated with bridge loan from related party investor | $ 250,000 | $ 250,000 | ||||||||
Affiliated entity | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash consideration | $ 27,154 | |||||||||
Number of Lenovo tablet hardware devices purchased | 7,600 | 7,600 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
COMMITMENTS AND CONTINGENCIES | ||
Cash uninsured | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details) | Apr. 04, 2018shares | May 31, 2021shares | Apr. 30, 2021shares | Mar. 31, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares |
Class of Stock [Line Items] | |||||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares authorized | 2,500,000 | 2,500,000 | |||||
Number of shares issued during the period | 3,150,058 | 4,291,045 | 315,007 | 157,503 | |||
Preferred stock, shares issued | 2,500,000 | 2,500,000 | |||||
Preferred stock, shares outstanding | 2,500,000 | 2,500,000 | |||||
Preferred Series Seed stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized | 2,500,000 | ||||||
Number of shares issued during the period | 2,500,000 | 2,500,000 | |||||
Proceeds from issuance of preferred stock | $ | $ 2,500,000 | $ 2,500,000 | |||||
Conversion ratio | 1.260023 | 1.260023 | 1.260023 | 1.260023 | 1.260023 | ||
Interest payments on preferred stock | $ | $ 0 | ||||||
Amount of return to investors for buying back | $ | $ 2,500,000 | ||||||
Number of preferred stock converted into common stock | 2,500,000 | 2,500,000 | |||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued during the period | 3,150,058 | ||||||
Shares issued upon conversion | 3,150,058 |
STOCKHOLDERS' EQUITY (DEFICIT_2
STOCKHOLDERS' EQUITY (DEFICIT) - Dividends (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Dividends on common stock paid | $ 0 |
STOCKHOLDERS' EQUITY (DEFICIT_3
STOCKHOLDERS' EQUITY (DEFICIT) - Common stock (Details) - USD ($) | Apr. 04, 2018 | May 31, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares authorized | 80,000,000 | 80,000,000 | ||||
Number of shares issued during the period | 3,150,058 | 4,291,045 | 315,007 | 157,503 | ||
Value of shares issued during the period to investors valued as stock-based compensation expense | $ 250,000 | |||||
Bridge loan with related party investors | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued during the period | 1,260,023 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued during the period | 3,150,058 | |||||
Issuance of common shares in exchange for services (in shares) | 31,501 | |||||
Issuance of common shares in exchange for services | $ 25,000 | |||||
Number of shares issued to vendors | 300,000 | 300,000 | ||||
Issuance of common shares as stock-based compensation expense | $ 476,180 | $ 476,180 | ||||
Common Stock | Bridge loan with related party investors | ||||||
Class of Stock [Line Items] | ||||||
Shares issued with debt (in shares) | 157,503 | 1,260,023 | ||||
Value of shares issued during the period to investors valued as stock-based compensation expense | $ 250,000 | $ 2,000,000 | ||||
Common Stock | Additional bridge loans with related party and non-related party investors | ||||||
Class of Stock [Line Items] | ||||||
Shares issued with debt (in shares) | 315,007 | |||||
Value of shares issued during the period to investors valued as stock-based compensation expense | $ 500,000 |
STOCKHOLDERS' EQUITY (DEFICIT_4
STOCKHOLDERS' EQUITY (DEFICIT) - Employee Equity (Stock) Incentive Plan (Details) - Employee Equity (Stock) Incentive Plan - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock employee grant reserved | 1,575,029 | ||
Number of shares granted | 197,668 | 0 | |
Common stock options issued | 433,927 | 236,259 | |
Weighted average strike price per option | $ 1.52 | ||
Stock based compensation expense - Employee stock option | $ 46,684 | $ 0 |
STOCKHOLDERS' EQUITY (DEFICIT_5
STOCKHOLDERS' EQUITY (DEFICIT) - Initial public offering (Details) - USD ($) $ / shares in Units, $ in Millions | May 03, 2021 | May 31, 2021 | Jun. 10, 2021 | Mar. 31, 2021 |
Class of Stock [Line Items] | ||||
Proceeds from Initial Public Offering | $ 15.7 | |||
Subsequent event | ||||
Class of Stock [Line Items] | ||||
Warrants term | 5 years | |||
Warrants exercise price | $ 4.57 | |||
Warrants outstanding | 4,477,612 | |||
Underwriter's Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants issued | 186,567 | |||
Warrants exercise price | $ 5.19 | |||
IPO | Subsequent event | ||||
Class of Stock [Line Items] | ||||
Shares issued | 4,291,045 | |||
Warrants issued | 4,291,045 | |||
Price per share | $ 4.15 | |||
Proceeds from Initial Public Offering | $ 17.8 | |||
Net proceeds | 15.7 | |||
IPO proceeds allocated to Common Stock | 11 | |||
IPO proceeds allocated to warrants | $ 4.7 | |||
Over-Allotment Option | Subsequent event | ||||
Class of Stock [Line Items] | ||||
Shares issued | 559,701 | |||
Warrants issued | 559,701 |
PROPERTY AND EQUIPMENT - Net of
PROPERTY AND EQUIPMENT - Net of accumulated depreciation (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,171,102 | $ 1,163,311 |
Less accumulated depreciation | (860,324) | (657,017) |
Property and equipment, net | 310,778 | 506,294 |
Tablets | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 972,050 | 972,050 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 199,052 | $ 191,261 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 203,308 | $ 9,563 |
INTANGIBLE ASSETS - INTELLECT_3
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY (Details) - USD ($) | Jul. 01, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 44,006 | $ 0 | |
Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 5 years | 5 years | |
Patent Acquisition Costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 15 years | ||
Production Costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 5 years | ||
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 15 years |
INTANGIBLE ASSETS - INTELLECT_4
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY - Net of accumulated amortization (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 976,284 | $ 976,284 |
Less accumulated amortization | (132,020) | (88,013) |
Intangible assets, net | 844,264 | 888,271 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 832,045 | 832,045 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 144,239 | $ 144,239 |
INTANGIBLE ASSETS - INTELLECT_5
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY - Future amortization of intangible assets (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Future amortization of intangible assets | ||
2021 | $ 132,019 | |
2022 | 176,025 | |
2023 | 176,025 | |
2024 | 176,025 | |
2025 | 92,820 | |
Thereafter | 91,350 | |
Intangible assets, net | $ 844,264 | $ 888,271 |