Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
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 | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,094,882 | |
Entity Central Index Key | 0001833908 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
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, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 345,949 | $ 4,391,816 |
Accounts receivable | 96,899 | 5,578 |
Prepaid expenses and other assets | 485,400 | 926,170 |
Total current assets | 928,248 | 5,323,564 |
Property and equipment, net | 3,659,587 | 4,031,904 |
Intangible assets, net | 668,240 | 712,247 |
Operating lease right-of-use asset, net | 83,032 | 95,765 |
Assets held for sale and other assets | 1,155,330 | 1,209,525 |
Total assets | 6,494,437 | 11,373,005 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,600,537 | 2,264,582 |
Lease liability | 85,140 | 98,175 |
Total current liabilities | 2,685,677 | 2,362,757 |
Total liabilities | 2,685,677 | 2,362,757 |
Stockholders' Equity | ||
Common stock, $0.0001 par value, 80,000,000 shares authorized, 16,037,664 and 16,037,664 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 1,623 | 1,620 |
Additional paid-in capital | 38,059,036 | 37,967,926 |
Accumulated deficit | (32,251,902) | (26,959,301) |
Common stock held in treasury at cost, $0.0001 par 137,650 and 137,650 shares, respectively | (1,999,997) | (1,999,997) |
Total stockholders' equity | 3,808,760 | 9,010,248 |
Total liabilities and stockholders' equity | $ 6,494,437 | $ 11,373,005 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheet | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 16,094,882 | 16,069,347 |
Common stock, shares outstanding | 16,094,882 | 16,069,347 |
Common stock held in treasury at cost, shares | 137,650 | 137,650 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Condensed Consolidated Statement of Operations | ||
Revenues | $ 63,303 | $ 17,450 |
Operating expenses | ||
Compensation and benefits | 1,786,629 | 883,211 |
Other general and administrative | 3,154,981 | 1,251,859 |
Depreciation and amortization | 416,323 | 247,315 |
Total operating expenses | 5,357,933 | 2,382,385 |
Operating loss | (5,294,630) | (2,364,935) |
Other income (expense) | ||
Other income | 2,059 | 13,018 |
Interest expense | (30) | (356,914) |
Total other income (expense) | 2,029 | (343,896) |
Net loss before provision for income taxes | (5,292,601) | (2,708,831) |
Net loss | $ (5,292,601) | $ (2,708,831) |
Loss per share, basic | $ (0.33) | $ (0.61) |
Loss per share, diluted | $ (0.33) | $ (0.61) |
Weighted average shares outstanding, basic | 16,087,730 | 4,459,082 |
Weighted average shares outstanding, diluted | 16,087,730 | 4,459,082 |
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 | Common Stock Held in Treasury | Total |
Beginning balance at Dec. 31, 2020 | $ 2,500,000 | $ 444 | $ 2,076,151 | $ (8,014,859) | $ (3,438,264) | |
Beginning 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 | 46,684 | 46,684 | ||||
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 | ||||
Beginning balance at Dec. 31, 2020 | $ 2,500,000 | $ 444 | 2,076,151 | (8,014,859) | (3,438,264) | |
Beginning balance (in shares) at Dec. 31, 2020 | 2,500,000 | 4,441,582 | ||||
Ending balance at Dec. 31, 2021 | $ 1,620 | 37,967,926 | (26,959,301) | $ (1,999,997) | 9,010,248 | |
Ending balance (in shares) at Dec. 31, 2021 | 16,069,347 | |||||
Share based compensation | 68,038 | 68,038 | ||||
Exercise of options | $ 3 | 23,072 | 23,075 | |||
Exercise of options (in shares) | 25,535 | |||||
Net loss | (5,292,601) | (5,292,601) | ||||
Ending balance at Mar. 31, 2022 | $ 1,623 | $ 38,059,036 | $ (32,251,902) | $ (1,999,997) | $ 3,808,760 | |
Ending balance (in shares) at Mar. 31, 2022 | 16,094,882 |
Consolidated Statements of Cash
Consolidated Statements of Cashflows - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | ||
Net loss | $ (5,292,601) | $ (2,708,831) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 416,323 | 247,315 |
Share based compensation expense | 68,038 | 46,684 |
Shares issued with debt | 250,000 | |
Amortization of operating lease right-of-use asset | 12,734 | 13,675 |
Changes in assets and liabilities: | ||
Accounts receivable | (91,321) | (17,450) |
Prepaid expenses and other assets | 440,770 | 793 |
Other assets | 54,195 | |
Accounts payable | 335,955 | 172,802 |
Lease liability | (13,035) | (13,976) |
Interest payable, related parties | 106,122 | |
Net cash used in operating activities | (4,068,942) | (1,902,866) |
Investing activities | ||
Capital expenditures | (7,791) | |
Net cash used in investing activities | (7,791) | |
Financing activities | ||
Proceeds from related party debt | 1,998,345 | |
Proceeds from exercise of options | 23,075 | |
Net cash provided by financing activities | 23,075 | 1,998,345 |
Net change in cash and cash equivalents | (4,045,867) | 87,688 |
Cash and cash equivalents at the beginning of the period | 4,391,816 | 8,335 |
Cash and cash equivalents at the end of the period | 345,949 | $ 96,023 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | $ 30 |
BUSINESS DESCRIPTION BACKGROUND
BUSINESS DESCRIPTION BACKGROUND | 3 Months Ended |
Mar. 31, 2022 | |
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 (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. became qualified to do business in Florida. On January 31, 2020, Lectrefy, Inc. 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. 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. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2 BASIS OF PRESENTATION The accompanying interim consolidated financial statements have been prepared based upon U.S. Securities and Exchange Commission rules that permit reduced disclosure for interim periods. Therefore, they do not include all information and footnote disclosures necessary for a complete presentation of the Company’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. The Company filed audited consolidated financial statements as of and for the fiscal years ended December 31, 2021, 2020 and 2019, which included all information and notes necessary for such complete presentation in conjunction with its 2021 Annual Report on Form 10-K. The results of operations for the interim period ended March 31, 2022 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021, which are contained in the Company’s 2021 Annual Report on Form 10-K. For further discussion refer to Note 2 – “Significant Accounting Policies” to the consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. |
GOING CONCERN AND MANAGEMENT'S
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | 3 Months Ended |
Mar. 31, 2022 | |
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 the date of this Quarterly Report, the Company has 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. During 2021, the Company completed its IPO yielding net proceeds to the Company of approximately $15.7 million from the sale of Common Stock and warrants and approximately $16.0 million from the exercise of warrants. The capital raised 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, 2022 | |
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 (the “Audit Committee”) of the Company’s Board of Directors (the “Board”) 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). On May 16, 2022, the Company filed interim consolidated financial statements restated to correct the accounting errors and conform to current period presentation in an amended Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2021. The interim consolidated financial statements for the quarter ended March 31, 2021, included in this Quarterly Report reflect all such restatements. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
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 - RELATED PARTIES
DEBT - RELATED PARTIES | 3 Months Ended |
Mar. 31, 2022 | |
DEBT - RELATED PARTIES | |
DEBT - RELATED PARTIES | NOTE 6 DEBT – RELATED PARTIES During the three months ended March 31, 2021, the Company accrued interest expense of $356,914 on debt payable to related parties. All borrowings from related parties were paid in full upon completion of the Company’s IPO in May 2021. Debt payable to related parties immediately prior to the IPO included the following notes and loans: 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. 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. The Company entered into a $2,000,000 bridge loan agreement with a related party. The terms of the bridge loan included repayment of principal on or before June 30, 2021, and an annual interest rate of 18%. During the year ended December 31, 2021, the Company entered into bridge loans totaling $800,000 with related party investors. Terms of the bridge loans with related parties 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 472,510 shares of Common Stock. Management valued these issuances of shares at $750,000 and recorded that amount in interest expense. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022, and December 31, 2021, cash balances in excess of FDIC requirements were $95,949 and $4,141,816 , respectively. Litigation, Claims, and Assessments The Company is in legal proceedings, claims and assessments. Such matters are subject to many uncertainties, and outcomes are not predictable. On December 2, 2021, the Company and certain of its present and former officers and directors were named as defendants in a putative class action lawsuit styled Steppacher v. Alfi, Inc., et al. styled Kleinschmidt v. Alfi, Inc., et al. The complaints in both actions allege that the Company and other named defendants violated Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to allegedly false and misleading statements included in the registration statement and prospectus supplements issued in connection with the Company’s IPO (the “Offering Documents”) in May 2021, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, by allegedly making false and materially misleading statements and failing to disclose material adverse facts in the Company’s public filings with the Securities and Exchange Commission (the “SEC”). Both complaints assert that the putative plaintiff class includes: (i) persons or entities, other than the defendants, who purchased or acquired the Common Stock or warrants to purchase the Common Stock pursuant and/or traceable to the Offering Documents; and (ii) persons or entities, other than the defendants, who purchased or acquired the Company’s securities between May 4, 2021, and November 15, 2021 (both dates inclusive). The plaintiffs seek unspecified compensatory damages, including interest, and costs and expenses, including attorney’s and expert fees. On February 3, 2022, the court consolidated the two actions under the caption Steppacher, Jr., et al. v. Alfi, Inc. et al. Rodriguez, et al. v. Alfi, Inc., et al. During February and March 2022, two former employees filed breach of contract claims against the Company. The Company is currently unable to estimate the costs and timing of arbitration of these claims. Other Matters As The Company’s former Chief Executive Officer and former Chief Financial Officer have made claims that the Company indemnify and advance the legal fees and expenses incurred by them in connection with the Investigation (see Note 11) and the putative class action litigations and the SEC investigation, each referred to above. With respect to the advancement of fees and expenses incurred in connection with the Investigation prior to December 31, 2021, the amount of such fees and expenses that is subject to advancement is approximately $147,000. The former officers have also demanded advancement of fees and expenses of additional amounts of approximately $339,000 for the period January 1, 2022 through March 31, 2022. Additional amounts may be subject to claims for advancement and indemnification, but the Company is unable to estimate the amount of additional fees and expenses that may be subject to advancement or indemnification. |
STOCKHOLDERS 'EQUITY
STOCKHOLDERS 'EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 8 STOCKHOLDERS’ EQUITY Common shares issued before the IPO were recorded at estimated fair value. In May 2021, the Company completed its IPO of its Common Stock. The Common Stock is listed on the Nasdaq Capital Market under the symbol “ALF”. In 2018, the Company created the 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 converted to Common Stock at a ratio of 1.260023:1 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 was made to investor ($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 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 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 effected. 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 year ended December 31, 2021, the Company arranged two bridge loans with related party investors. The Company issued 472,510 shares of Common Stock in exchange for bridge loan funding necessary to procure ongoing business operations. Management valued these issuances of shares at $750,000 and recorded that amount in interest expense. During the year ended December 31, 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. 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 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. On May 3, 2021, pursuant to the underwriting agreement for the IPO, we 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. Warrants Issued and Exercised Warrants to purchase 4,477,612 shares of Common Stock were issued in connection with the Company’s May 2021 IPO. As of December 31, 2021, warrant holders have exercised warrants to purchase 3,508,227 shares of Common Stock providing Alfi with $16,034,189 in additional funding. As of December 31, 2021, there were warrants to purchase 969,385 shares of Common Stock outstanding. No warrants to purchase shares of Common Stock were issued or exercised Share Buy-Back On June 23, 2021, Alfi announced a $2.0 million buy-back of its Common Stock. The buyback was completed on July 9, 2021, with Alfi acquiring 137,650 shares of Common Stock, for an aggregate price of $1,999,997, which are recorded as treasury stock. 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 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 grants is not to exceed 1,575,029 shares. During the three months ended March 31, 2022 and 2021, respectively, the Company granted -0- and 197,668 Common Stock options under the 2018 Plan. On March 31, 2022 and 2021, total Common Stock options issued outstanding During the three months ended March 31, 2022, two employees exercised stock options and received 23,072 restricted shares of Common Stock. 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. Potentially dilutive securities excluded from the computation of basic net loss per share as of are as follows: Mar 31, 2022 Mar 31, 2021 Convertible Series (“Seed”) Preferred stock — 3,150,058 Warrants 969,385 — Employee stock options 429,939 433,927 Total potentially dilutive securities 1,399,324 3,583,985 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 9 PROPERTY AND EQUIPMENT Property and equipment, net of accumulated depreciation, consists of the following: Mar 31, 2022 Dec 31, 2021 Tablets $ 5,314,005 $ 5,314,005 Office furniture and fixtures 349,672 349,672 Property and equipment, gross 5,663,677 5,663,677 Less accumulated depreciation (2,004,090) (1,631,773) Property and equipment, net $ 3,659,587 $ 4,031,904 The Company incurred depreciation expense of $372,317 and $203,308 for the three-month periods ended March 31, 2022, and 2021, respectively. Property and equipment includes approximately 27,000 Lenovo tablet hardware devices including over 9,000 tablets placed 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, 2022 | |
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 amortization 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, 2022 Dec 31, 2021 Capitalized software $ 832,045 $ 832,045 Patents 144,239 144,239 Intangible assets, gross 976,284 976,284 Less accumulated amortization (308,044) (264,037) Intangible assets, net $ 668,240 $ 712,247 The Company incurred amortization expense of $44,006 and $44,006 for the three-month periods ended March 31, 2022 and 2021, respectively. Future amortization of intangible assets as of March 31, 2022, is as follows: 2022 $ 132,019 2023 176,025 2024 176,025 2025 92,820 2026 9,616 Thereafter 81,735 $ 668,240 |
CHANGES IN MANAGEMENT
CHANGES IN MANAGEMENT | 3 Months Ended |
Mar. 31, 2022 | |
CHANGES IN MANAGEMENT | |
CHANGES IN MANAGEMENT | NOTE 11 CHANGES IN MANAGEMENT Replacement of Executive Officers, Board Members, and Independent Accountants As previously disclosed in the Company’s filings with the SEC on October 22, 2021, the Board placed each of Paul Pereira, the Company’s then President and Chief Executive Officer, Dennis McIntosh, the Company’s then Chief Financial Officer and Treasurer, and Charles Pereira, the Company’s then Chief Technology Officer, on paid administrative leave and authorized an Investigation into certain corporate transactions and other matters. Also as previously disclosed, since placing the former executives on leave, the Board has appointed: (i) James Lee as Chairman of the Board, replacing Mr. P. Pereira in such role; (ii) new management personnel, including Peter Bordes as Interim Chief Executive Officer, Louis Almerini as Interim Chief Financial Officer and David Gardner as Chief Technology Officer; (iii) two new independent directors to the Board, Allen Capsuto and Patrick Dolan; and (iv) Mr. Capsuto as Chair of the Audit Committee and Mr. Dolan as a member of the Compensation Committee and the Nominating and Corporate Governance Committee. Furthermore, Mr. P. Pereira resigned as a director and from all positions he held with the Company, Mr. McIntosh resigned from all positions he held with the Company, and Mr. C. Pereira’s employment with the Company was terminated. Findings of the Investigation The Investigation was conducted by a special committee of the Board (the “Special Committee”) consisting of Mr. Capsuto, the Audit Committee Chair, who was appointed to the Special Committee on November 8, 2021. The Special Committee retained outside legal counsel to assist in conducting the Investigation, and such counsel retained additional advisors to provide forensic accounting services, computer forensics and e-discovery services and other legal services. The Investigation found, among other things, that the Company’s former senior management caused the Company to enter into certain transactions and certain agreements that were not approved by the Board, some of which included the unauthorized issuance of shares of Common Stock, as follows: ● The Company’s former senior management caused the Company to purchase a condominium in Miami Beach, Florida for a purchase price of approximately $1.1 million without the Board’s knowledge or approval. After the conclusion of the Investigation, the Company sold the condominium for a price of $1.1 million on April 15, 2022. Net proceeds after commissions and other expenses of the sale were $990,000. ● The Company’s former senior management caused the Company to enter into an agreement to sponsor a sports tournament for two years , for a $640,000 sponsorship fee, which the Company paid $320,000 in cash and $320,000 through the issuance of 31,683 shares of Common Stock, without the Board’s knowledge or approval. The Company has since obtained, in connection with the Company’s termination of the sponsorship agreement, the return of the 31,683 shares of Common Stock. In addition, of the $320,000 in cash paid by the Company, $295,000 was converted to a charitable contribution and the remaining $25,000 was retained by the tournament organizer. ● The Company’s former senior management caused the Company to enter into agreements with three vendors: (i) an investor relations firm to provide investor relations and strategic consulting services and capital introductions; (ii) a consultant to provide financial and business advice; and (iii) a start-up call center to provide customer service, sales, and onboarding services. Pursuant to these agreements, cash payments totaling approximately $1,200,000 were made to these vendors and 300,000 shares of Common Stock were issued to them without the Board’s knowledge or approval. These findings and other conduct by the Company’s former senior management were previously disclosed in the Company’s Current Report on Form 8-K filed on February 23, 2022. The Investigation found the Company’s internal control over financial reporting to be deficient with respect to: (i) the disbursement process for third-party vendors; (ii) the review and approval process for significant vendor contracts; (iii) the use of Company credit cards by executives; (iv) the supervision and approval of travel and entertainment expenses incurred by executives; (v) the segregation of duties in connection with the payment and recording of invoices and related bank reconciliations; (vi) the lack of a sufficient accounting manual; and (vii) guidelines for the capitalization of fixed assets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 SUBSEQUENT EVENTS Litigation, Claims, and Assessments On April 27, 2022, Ryan Dodgson filed a Verified Shareholder Derivative Complaint on behalf of the Company styled Ryan Dodgson, derivatively on behalf of Alfi, Inc., Plaintiff, v. Paul Pereira, Dennis McIntosh, Charles Pereira, Peter Bordes, John M. Cook, II, Justin Elkouri, Allison Ficken, Jim Lee, Richard Mowser, and Frank Smith, Defendants, and Alfi, Inc., Nominal Defendant Credit and Security Agreement – Related Party On April 12, 2022, the Company entered into a Credit and Security Agreement (the “Credit Agreement”) with a related party lender. Pursuant to the agreement, the Company may borrow up to $2,500,000 for up to one year. Through May 10, 2022, the lender has funded to the Company $1,000,000 under the Credit Agreement. Prior to the maturity date, the Company may borrow an additional $1.5 million under the Credit Agreement, in the lender’s sole discretion and subject to the Company requesting such additional funds from the lender in accordance with the Credit Agreement, the accuracy of the Company’s representations in the Credit Agreement and related documents, and that no default under the Credit Agreement has occurred and is continuing. The line of credit note matures on the earlier of (i) the date upon which the Company consummates a debt or equity financing in an amount equal to or greater than $4,000,000 or (ii) April 12, 2023. Borrowings under the Credit Agreement are collateralized by a security interest in the Company’s assets. Interest on the unpaid principal amount accrues an annual rate of 6% through October 12, 2022 and an annual rate of 9% thereafter, except that in event of default additional penalty interest at an annual rate of 3% will accrue on borrowings through October 12, 2022. In connection with the Credit Agreement, the Company issued a warrant to the lender pursuant to which the lender may purchase up to 1,250,000 shares of the Common Stock at a price of $1.51 per share. The warrant can be exercised commencing on the three-month anniversary of the Credit Agreement (i.e., on July 12, 2022) and expires on April 12, 2025. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
Summary of potentially dilutive securities excluded from the computation of basic net income (loss) per share | Mar 31, 2022 Mar 31, 2021 Convertible Series (“Seed”) Preferred stock — 3,150,058 Warrants 969,385 — Employee stock options 429,939 433,927 Total potentially dilutive securities 1,399,324 3,583,985 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
summary of property plant and equipment balances | Mar 31, 2022 Dec 31, 2021 Tablets $ 5,314,005 $ 5,314,005 Office furniture and fixtures 349,672 349,672 Property and equipment, gross 5,663,677 5,663,677 Less accumulated depreciation (2,004,090) (1,631,773) Property and equipment, net $ 3,659,587 $ 4,031,904 |
INTANGIBLE ASSETS - INTELLECT_2
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY | |
Summary of intangible assets, net of accumulated amortization | Mar 31, 2022 Dec 31, 2021 Capitalized software $ 832,045 $ 832,045 Patents 144,239 144,239 Intangible assets, gross 976,284 976,284 Less accumulated amortization (308,044) (264,037) Intangible assets, net $ 668,240 $ 712,247 |
Summary of future amortization of intangible assets | 2022 $ 132,019 2023 176,025 2024 176,025 2025 92,820 2026 9,616 Thereafter 81,735 $ 668,240 |
GOING CONCERN AND MANAGEMENT'_2
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | |
Proceeds from Initial Public Offering | $ 15,700,000 |
Proceeds from warrants exercised | $ 16,034,189 |
DEBT - RELATED PARTIES - Additi
DEBT - RELATED PARTIES - Additional advances by related parties (Details) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||
Jan. 31, 2021USD ($) | Mar. 31, 2022USD ($)itemagreement | Mar. 31, 2021USD ($) | May 05, 2021USD ($) | Jun. 30, 2021shares | Dec. 31, 2021USD ($) | |
Related Party Transaction [Line Items] | ||||||
Number of promissory note agreements | agreement | 6 | |||||
Annual interest rate | 18.00% | |||||
Proceeds from related party debt payable | $ 1,998,345 | |||||
Shares issued for cash (in shares) | shares | 472,510 | |||||
Interest Expense, Related Party | $ 356,914 | |||||
Purchase of tablet devices | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity | $ 950,000 | |||||
Number of Lenovo tablet hardware devices purchased | item | 7,600 | |||||
Related party notes payable transaction | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity | $ 2,500,000 | |||||
Annual interest rate | 5.00% | |||||
Proceeds from related party debt payable | $ 2,500,000 | |||||
Bridge loan with related party investors | ||||||
Related Party Transaction [Line Items] | ||||||
Annual interest rate | 18.00% | |||||
Bridge loan | $ 2,000,000 | |||||
Valuation of shares | $ 750,000 | |||||
Bridge loan one | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding advances on purchased tablet devices from related party | $ 800,000 | |||||
Outstanding principal associated with bridge loan from related party investor | $ 800,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Mar. 31, 2022USD ($)employeeshares | Dec. 31, 2021USD ($) | Mar. 31, 2021shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash balances in excess of FDIC requirements | $ 95,949 | $ 4,141,816 | |
Number of former employees filed breach of contract claims | employee | 2 | ||
Subject To Advancement | $ 147,000 | ||
Demanded advancement | $ 339,000 | ||
Employee Equity (Stock) Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock employee grant reserved | shares | 1,575,029 | ||
Common stock options granted | shares | 429,939 | 433,927 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | |||
May 31, 2021shares | Mar. 31, 2022USD ($)shares | Jun. 30, 2021shares | Dec. 31, 2018shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2021shares | Mar. 31, 2021 | Dec. 31, 2020shares | |
Class of Stock [Line Items] | ||||||||
Shares issued for cash (in shares) | 472,510 | |||||||
Preferred Series Seed stock | ||||||||
Class of Stock [Line Items] | ||||||||
Series Seed preferred stock, shares authorized | 2,500,000 | |||||||
Shares issued for cash (in shares) | 2,500,000 | |||||||
Proceeds from issuance of preferred stock | $ | $ 2,500,000 | |||||||
Series Seed preferred stock, shares issued | 0 | 0 | 2,500,000 | |||||
Preferred stock, shares outstanding | 0 | 0 | 2,500,000 | |||||
Conversion ratio | 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 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares issued for cash (in shares) | 3,150,058 | |||||||
Shares issued upon conversion | 3,150,058 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
STOCKHOLDERS' EQUITY | |
Dividends on common stock paid | $ 0 |
Dividend payments on preferred stock | $ 0 |
STOCKHOLDERS' EQUITY - Common s
STOCKHOLDERS' EQUITY - Common stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | Dec. 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 | ||||
Shares issued for cash (in shares) | 472,510 | |||||
Number of shares issued to vendors | 300,000 | |||||
Value of shares issued during the period to investors valued as stock-based compensation expense | $ 250,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Shares issued for cash (in shares) | 3,150,058 | |||||
Issuance of common shares in exchange for services (in shares) | 31,501 | |||||
Number of shares issued to vendors | 300,000 | |||||
Value of shares issued to vendors | $ 476,180 | |||||
Issuance of common shares in exchange for services | $ 25,000 | |||||
Common Stock | Bridge loan with related party investors | ||||||
Class of Stock [Line Items] | ||||||
Shares issued with debt (in shares) | 472,510 | 1,260,023 | ||||
Value of shares issued during the period to investors valued as stock-based compensation expense | $ 750,000 | $ 2,000,000 |
STOCKHOLDERS' EQUITY - Initial
STOCKHOLDERS' EQUITY - Initial public offering (Details) - USD ($) $ / shares in Units, $ in Millions | May 06, 2021 | Dec. 31, 2021 | May 03, 2021 |
Class of Stock [Line Items] | |||
Proceeds from Initial Public Offering | $ 15.7 | ||
Warrants term | 5 years | ||
IPO proceeds allocated to Common Stock | $ 11 | ||
IPO proceeds allocated to warrants | $ 4.7 | ||
Warrants exercise price | $ 4.57 | ||
Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Warrants issued | 559,701 | ||
Price per share | $ 4.15 | ||
Proceeds from Initial Public Offering | $ 17.8 | ||
Net proceeds | $ 15.7 | ||
IPO | |||
Class of Stock [Line Items] | |||
Shares issued | 4,291,045 | ||
IPO | Underwriters Warrants | |||
Class of Stock [Line Items] | |||
Warrants issued | 186,567 | ||
Warrants exercise price | $ 5.19 |
STOCKHOLDERS' EQUITY - Warrants
STOCKHOLDERS' EQUITY - Warrants Issued and Exercised (Details) - USD ($) | May 06, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
STOCKHOLDERS' EQUITY | |||
Proceeds from warrants exercised | $ 16,034,189 | ||
Issued | 4,477,612 | 0 | |
Exercise of warrants (in shares) | 0 | 3,508,227 | |
Warrants outstanding | 969,385 | 969,385 |
STOCKHOLDERS' EQUITY - Share Bu
STOCKHOLDERS' EQUITY - Share Buy-Back (Details) - USD ($) | Jul. 09, 2021 | Jun. 23, 2021 |
STOCKHOLDERS' EQUITY | ||
Buy-back of Common Stock announced | $ 2,000,000 | |
Number of shares repurchased | 137,650 | |
Aggregate price on share repurchases | $ 1,999,997 |
STOCKHOLDERS' EQUITY - Employee
STOCKHOLDERS' EQUITY - Employee Equity (Stock) Incentive Plan (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)employee$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of units issued | $ | $ 23,075 | |
Employee Equity (Stock) Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock employee grant reserved | 1,575,029 | |
Number of shares granted | 0 | 197,668 |
Common stock options issued | 429,939 | 433,927 |
Common stock options outstanding | 429,939 | 433,927 |
Weighted average strike price per option | $ / shares | $ 2.37 | $ 1.52 |
Stock based compensation expense - Employee stock option | $ | $ 68,038 | $ 46,684 |
Number of Employees exercised stock options | employee | 2 | |
Number of units issued | $ | $ 23,072 |
STOCKHOLDERS' EQUITY - Potentia
STOCKHOLDERS' EQUITY - Potentially Dilutive Securities Excluded From Computation Of Basic Net loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,399,324 | 3,583,985 |
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 | |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 969,385 | |
Employee stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 429,939 | 433,927 |
PROPERTY AND EQUIPMENT - Net of
PROPERTY AND EQUIPMENT - Net of accumulated depreciation (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,663,677 | $ 5,663,677 |
Less accumulated depreciation | (2,004,090) | (1,631,773) |
Property and equipment, net | 3,659,587 | 4,031,904 |
Tablets | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,314,005 | 5,314,005 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 349,672 | $ 349,672 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)item | Mar. 31, 2021USD ($) | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ | $ 372,317 | $ 203,308 |
Number of lenovo tablet hardware devices | 27,000 | |
Number of tablets placed with rideshare and other businesses | 9,000 |
INTANGIBLE ASSETS - INTELLECT_3
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY (Details) - USD ($) | Jul. 01, 2020 | Mar. 31, 2022 | Mar. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 44,006 | $ 44,006 | |
Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 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 |
INTANGIBLE ASSETS - INTELLECT_4
INTANGIBLE ASSETS - INTELLECTUAL PROPERTY - summary of intangible asset (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 976,284 | $ 976,284 |
Less accumulated amortization | (308,044) | (264,037) |
Intangible assets, net | 668,240 | 712,247 |
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, 2022 | Dec. 31, 2021 |
Future amortization of intangible assets | ||
2022 | $ 132,019 | |
2023 | 176,025 | |
2024 | 176,025 | |
2025 | 92,820 | |
2026 | 9,616 | |
Thereafter | 81,735 | |
Total | $ 668,240 | $ 712,247 |
CHANGES IN MANAGEMENT (Details)
CHANGES IN MANAGEMENT (Details) | Apr. 15, 2022USD ($) | Mar. 31, 2022USD ($)directoritemshares |
Number of new independent directors to the Board | director | 2 | |
Purchase price of condominium | $ 1,100,000 | |
Term for sponsorship of sports tournament | 2 years | |
Sponsorship fee | $ 640,000 | |
Sponsorship fee paid in cash | $ 320,000 | |
Sponsorship fee paid through issuance of shares | shares | 320,000 | |
Cash paid converted to charitable contribution | $ 295,000 | |
Amount retained by tournament organizer | $ 25,000 | |
Number of vendors | item | 3 | |
Cash payments made to vendors | $ 1,200,000 | |
Number of shares issued to vendors | shares | 300,000 | |
Common Stock | ||
Issuance of shares | shares | 31,683 | |
Number of shares returned upon termination of sponsorship agreement | shares | 31,683 | |
Subsequent event | ||
Sale price of condominium | $ 1,100,000 | |
Net proceeds from sale of condominium after commissions and other expenses | $ 990,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Oct. 13, 2022 | Oct. 12, 2022 | Apr. 12, 2022 | May 06, 2021 |
Subsequent Event [Line Items] | ||||
Exercise price of warrants | $ 4.57 | |||
Warrants, exercisable term | 5 years | |||
Subsequent event | Line of Credit [Member] | Related party lender | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | $ 2,500,000 | |||
Term of debt | 1 year | |||
Proceeds from debt | $ 1,000,000 | |||
Available borrowing capacity | 1,500,000 | |||
Minimum equity financing for maturity of line of credit | $ 4,000,000 | |||
Interest rate per annum | 9.00% | 6.00% | ||
Additional penalty interest rate in the event of default | 3.00% | |||
Warrants issued | 1,250,000 | |||
Exercise price of warrants | $ 1.51 | |||
Warrants, exercisable term | 3 months |