Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | SPYR, INC. | |
Entity Central Index Key | 0000829325 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 223,228,552 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 33-20111 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 75-2636283 | |
Entity Address Address Line 1 | 8547 E Arapahoe Rd STE J527 | |
Entity Address City Or Town | Greenwood Village | |
Entity Address State Or Province | CO | |
Entity Address Postal Zip Code | 80112 | |
City Area Code | 303 | |
Local Phone Number | 991-8000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 34,000 | $ 510,000 |
Other receivables | 0 | 4,000 |
Prepaid expenses | 45,000 | 49,000 |
Inventory | 61,000 | 0 |
Trading securities, at market value | 2,000 | 1,000 |
Current assets of discontinued operations | 13,000 | 13,000 |
Total Current Assets | 155,000 | 577,000 |
Property and equipment, net | 22,000 | 31,000 |
Intangible assets, net | 2,000 | 3,000 |
Operating lease right-of-use asset | 0 | 28,000 |
Other assets | 13,000 | 13,000 |
Non-current assets of discontinued operations | 0 | 75,000 |
TOTAL ASSETS | 192,000 | 727,000 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 1,285,000 | 1,561,000 |
Related party short-term advances | 0 | 1,184,000 |
Related party line of credit | 0 | 1,204,000 |
Related party notes payable, current portion | 505,000 | 0 |
Short-term notes payable | 86,000 | 0 |
SBA PPP Note Payable, current portion | 72,000 | 51,000 |
Operating lease liability - current portion | 0 | 54,000 |
Current liabilities of discontinued operations | 791,000 | 767,000 |
Total Current Liabilities | 2,739,000 | 4,821,000 |
Related party notes payable | 2,459,000 | 0 |
SBA PPP Note Payable | 73,000 | 20,000 |
Long-term convertible notes payable, net | 126,000 | 64,000 |
Derivative liability | 1,333,000 | 1,382,000 |
Total Liabilities | 6,730,000 | 6,287,000 |
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock, $0.0001 par value, 750,000,000 shares authorized 219,666,722 and 210,137,631 shares issued and outstanding as of June 31, 2021 and December 31, 2020 | 21,967 | 21,014 |
Additional paid-in capital | 56,526,020 | 55,391,973 |
Accumulated deficit | (63,086,000) | (60,973,000) |
Total Stockholders' Equity (Deficit) | (6,538,000) | (5,560,000) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 192,000 | 727,000 |
Preferred Class A [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized | 11 | 11 |
Preferred Class E [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized | $ 2 | $ 2 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 219,666,722 | 210,137,631 |
Common stock, shares outstanding | 219,666,722 | 210,137,631 |
Preferred Class A [Member] | ||
Preferred stock, shares issued | 107,636 | 107,636 |
Preferred stock, shares outstanding | 107,636 | 107,636 |
Preferred Class E [Member] | ||
Preferred stock, shares issued | 20,000 | 20,000 |
Preferred stock, shares outstanding | 20,000 | 20,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||
Revenues | $ 1,000 | $ 0 | $ 1,000 | $ 0 |
Related party service revenues | 0 | 0 | 0 | 185,000 |
Total Revenues | 1,000 | 0 | 1,000 | 185,000 |
Cost of goods sold | (2,000) | 0 | (2,000) | 0 |
Gross profit (loss) | (1,000) | 0 | (1,000) | 185,000 |
Expenses | ||||
Labor and related expenses | 286,000 | 151,000 | 775,000 | 328,000 |
Rent | 20,000 | 28,000 | 48,000 | 65,000 |
Depreciation and amortization | 4,000 | 9,000 | 7,000 | 19,000 |
Professional fees | 134,000 | 11,000 | 563,000 | 53,000 |
Research and development | 5,000 | 0 | 9,000 | 0 |
Other general and administrative | 55,000 | 55,000 | 101,000 | 117,000 |
Total Operating Expenses | 504,000 | 254,000 | 1,503,000 | 582,000 |
Operating Loss | (505,000) | (254,000) | (1,504,000) | (397,000) |
Other Income (Expense) | ||||
Interest Expense | (242,000) | (44,000) | (344,000) | (89,000) |
Gain on disposition of assets | 0 | 1,000 | 5,000 | 1,000 |
SBA EIDL grant | 0 | 3,000 | 0 | 3,000 |
Change in value of derivative liability | (68,000) | 0 | (172,000) | 0 |
Unrealized gain on trading securities | 0 | 2,000 | 1,000 | 1,000 |
Total Other Expense | (310,000) | (38,000) | (510,000) | (84,000) |
Loss from continuing operations | (815,000) | (292,000) | (2,014,000) | (481,000) |
Loss from discontinued operations | (87,000) | (25,000) | (99,000) | (63,000) |
Net Loss | $ (902,000) | $ (317,000) | $ (2,113,000) | $ (544,000) |
Loss from continuing operations | ||||
Basic and Diluted earnings per share | $ 0 | $ 0 | $ (0.01) | $ 0 |
Loss from discontinued operations | ||||
Basic and Diluted earnings per shares | 0 | 0 | 0 | 0 |
Net Loss | ||||
Basic and Diluted earnings per share | $ 0 | $ 0 | $ (0.01) | $ 0 |
Weighted Average Common Shares | ||||
Basic and Diluted | 215,562,829 | 202,130,131 | 214,416,874 | 201,910,351 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Total | Series A, Preferred Stock | Series E, Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 107,636 | 20,000 | 200,880,131 | |||
Balance, amount at Dec. 31, 2019 | $ (4,386,000) | $ 11 | $ 2 | $ 20,088 | $ 53,509,899 | $ (57,916,000) |
Fair value of common stock issued for employee compensation, shares | 1,250,000 | |||||
Fair value of common stock issued for employee compensation, amount | 25,000 | 0 | 0 | $ 125 | 24,875 | 0 |
Net loss | (227,000) | $ 0 | $ 0 | (227,000) | ||
Balance, shares at Mar. 31, 2020 | 107,636 | 20,000 | 202,130,131 | |||
Balance, amount at Mar. 31, 2020 | (4,588,000) | $ 11 | $ 2 | $ 20,213 | 53,534,774 | (58,143,000) |
Balance, shares at Dec. 31, 2019 | 107,636 | 20,000 | 200,880,131 | |||
Balance, amount at Dec. 31, 2019 | (4,386,000) | $ 11 | $ 2 | $ 20,088 | 53,509,899 | (57,916,000) |
Net loss | (544,000) | |||||
Balance, shares at Jun. 30, 2020 | 107,636 | 20,000 | 202,130,131 | |||
Balance, amount at Jun. 30, 2020 | (4,905,000) | $ 11 | $ 2 | $ 20,213 | 53,534,774 | (58,460,000) |
Balance, shares at Mar. 31, 2020 | 107,636 | 20,000 | 202,130,131 | |||
Balance, amount at Mar. 31, 2020 | (4,588,000) | $ 11 | $ 2 | $ 20,213 | 53,534,774 | (58,143,000) |
Net loss | (317,000) | (317,000) | ||||
Balance, shares at Jun. 30, 2020 | 107,636 | 20,000 | 202,130,131 | |||
Balance, amount at Jun. 30, 2020 | (4,905,000) | $ 11 | $ 2 | $ 20,213 | 53,534,774 | (58,460,000) |
Balance, shares at Dec. 31, 2020 | 107,636 | 20,000 | 210,137,631 | |||
Balance, amount at Dec. 31, 2020 | (5,560,000) | $ 11 | $ 2 | $ 21,014 | 55,391,973 | (60,973,000) |
Net loss | (1,211,000) | 0 | 0 | $ 0 | 0 | (1,211,000) |
Fair value of restricted common stock and options issued for employee and director compensation, shares | 1,400,000 | |||||
Fair value of restricted common stock and options issued for employee and director compensation, amount | 215,000 | 0 | 0 | $ 140 | 214,860 | 0 |
Fair value of S-8 registered common stock issued for services, shares | 3,000,000 | |||||
Fair value of S-8 registered common stock issued for services, amount | 371,000 | $ 0 | $ 0 | $ 300 | 370,700 | 0 |
Balance, shares at Mar. 31, 2021 | 107,636 | 20,000 | 214,537,631 | |||
Balance, amount at Mar. 31, 2021 | (6,185,000) | $ 11 | $ 2 | $ 21,454 | 55,977,533 | (62,184,000) |
Balance, shares at Dec. 31, 2020 | 107,636 | 20,000 | 210,137,631 | |||
Balance, amount at Dec. 31, 2020 | (5,560,000) | $ 11 | $ 2 | $ 21,014 | 55,391,973 | (60,973,000) |
Net loss | (2,113,000) | |||||
Balance, shares at Jun. 30, 2021 | 107,636 | 20,000 | 219,666,722 | |||
Balance, amount at Jun. 30, 2021 | (6,538,000) | $ 11 | $ 2 | $ 21,967 | 56,526,020 | (63,086,000) |
Balance, shares at Mar. 31, 2021 | 107,636 | 20,000 | 214,537,631 | |||
Balance, amount at Mar. 31, 2021 | (6,185,000) | $ 11 | $ 2 | $ 21,454 | 55,977,533 | (62,184,000) |
Net loss | (902,000) | 0 | 0 | $ 0 | 0 | (902,000) |
Fair value of restricted common stock and options issued for employee and director compensation, shares | 150,000 | |||||
Fair value of restricted common stock and options issued for employee and director compensation, amount | 24,000 | 0 | 0 | $ 15 | 23,985 | 0 |
Fair value of S-8 registered common stock issued for services, shares | 1,242,854 | |||||
Fair value of S-8 registered common stock issued for services, amount | 100,000 | $ 0 | $ 0 | $ 124 | 99,876 | 0 |
Fair value of common stock issued for conversion of notes payable, shares | 3,736,237 | |||||
Fair value of common stock issued for conversion of notes payable, amount | 425,000 | $ 374 | 424,626 | 0 | ||
Balance, shares at Jun. 30, 2021 | 107,636 | 20,000 | 219,666,722 | |||
Balance, amount at Jun. 30, 2021 | $ (6,538,000) | $ 11 | $ 2 | $ 21,967 | $ 56,526,020 | $ (63,086,000) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (2,113,000) | $ (544,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on discontinued operations | 99,000 | 63,000 |
Depreciation and amortization | 7,000 | 19,000 |
Common stock issued for employee compensation | 239,000 | 25,000 |
Common stock issued for services | 471,000 | 0 |
Amortization of debt discounts on convertible notes payable | 226,000 | 0 |
Gain on disposition of assets | (5,000) | 0 |
SBA EIDL grant | 0 | (3,000) |
Change in Value of derivative liability | 172,000 | 0 |
Unrealized loss on trading securities | (1,000) | (1,000) |
Changes in operating assets and liabilities: | ||
Decrease in receivable from related parties | 0 | 50,000 |
Decrease in other receivables | 4,000 | 0 |
Decrease in prepaid expenses | 4,000 | 13,000 |
Increase in inventory | (61,000) | 0 |
Increase (Decrease) in accounts payable and accrued liabilities | (276,000) | 223,000 |
Increase (Decrease) in operating lease right-of-use liability | (26,000) | 20,000 |
Increase in accrued interest on notes payable - related party | 75,000 | 68,000 |
Increase in accrued interest on notes payable | 2,000 | 0 |
Increase in accrued interest on convertible notes | 40,000 | 20,000 |
Net cash used in operating activities from continuing operations | (1,143,000) | (47,000) |
Net cash used in by operating activities from discontinued operations | 0 | (24,000) |
Net cash used in Operating Activities | (1,143,000) | (71,000) |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | 0 | (5,000) |
Sale of property and equipment | 8,000 | 5,000 |
Net cash provided by Investing Activities | 8,000 | 0 |
Cash Flows From Financing Activities: | ||
Proceeds from related party notes payable | 501,000 | |
Proceeds from long-term notes payable | 85,000 | |
Proceeds from SBA EIDL grant | 3,000 | |
Proceeds from SBA PPP note payable | 73,000 | 71,000 |
Net cash provided by Financing Activities | 659,000 | 74,000 |
Net increase (decrease) in Cash | (476,000) | 3,000 |
Cash and cash equivalents at beginning of period | 510,000 | 10,000 |
Cash and cash equivalents at end of period | 34,000 | 13,000 |
Supplemental Disclosure of Interest and Income Taxes Paid: | ||
Interest paid during the period | $ 1,000 | |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Common stock issued for debt conversion | $ 425,000 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements The accompanying condensed consolidated financial statements of SPYR, Inc. and subsidiaries (the “Company”) are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Principles of Consolidation The consolidated financial statements include the accounts of SPYR, Inc. and its wholly owned subsidiaries, Applied Magix, a Nevada corporation, SPYR APPS, LLC, a Nevada Limited Liability Company (discontinued operations, see Note 9), E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 9), and Branded Foods Concepts, Inc., a Nevada corporation (dissolution pending). Intercompany accounts and transactions have been eliminated. Reclassifications Certain reclassifications have been made in the 2020 financial statements to conform with the 2021 presentation related to the discontinued operations of SPYR APPS, LLC. See Note 9 Discontinued Operations for additional information. Going Concern The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business, however, the issues described below raise substantial doubt about the Company’s ability to do so. As shown in the accompanying financial statements, for the Six months ended June 30, 2021, the Company recorded a net loss of $2,113,000 and utilized cash in operations of 1,143,000. As of June 30, 2021, our cash balance was $34,000, and we had trading securities valued at $2,000. These issues raise substantial doubt about the Company’s ability to continue as a going concern. The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and implementation of our Applied Magix business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so. Historically, we have financed our operations primarily through sales of our common stock and debt financing. The Company will continue to seek additional capital through the sale of its common stock, debt financing and through expansion of its existing and new products. If our financing goals for our products do not materialize as planned and if we are not able to achieve profitable operations at some point in the future, we may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion, marketing, and product development plans. The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements and expansion of its operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2021. However, management cannot make any assurances that such financing will be secured. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions used by management affected impairment analysis for trading securities, fixed assets, intangible assets, capitalized licensing rights, amounts of potential liabilities, derivative liabilities, and valuation of issuance of equity securities. Actual results could differ from those estimates. Earnings (Loss) Per Share The basic and fully diluted shares for the three months ended June 30, 2021 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,385,042, Options – 5,379,900, Warrants – 7,200,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2021. The basic and fully diluted shares for the three months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2020. The basic and fully diluted shares for the six months ended June 30, 2021 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,385,042, Options – 5,379,900, Warrants – 7,200,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2021. The basic and fully diluted shares for the six months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2020. Product Research and Development Costs Costs incurred for product research and development are expensed as incurred. During the six months ended June 30, 2021 and 2020, the Company incurred $9,000 and $0 in product development costs paid to independent third parties. Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers We adopted this new revenue recognition standard along with is related amendments on January 1, 2018 and have updated our accounting policy for revenue recognition. As expected, at our current level of revenue, the adoption of this new standard did not impact our financial position or results of operations or operating cash flows. We determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. Through our wholly owned subsidiary Applied Magix we are a registered Apple® developer, and reseller of Apple ecosystem compatible products and accessories with an emphasis on the smart home market. The Company’s products are available for sale through its website at https://appliedmagix.com/shop/ Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Inventory The Company's inventory consisting of Apple HomeKit products for resale by the Company, is recorded at the lower of cost (first-in, first-out) or net realizable value. The Company writes down its inventory balances for estimates of excess and obsolete amounts. The Company reduces inventory on hand to its net realizable value on an item-by-item basis when the expected realizable value of a specific inventory item falls below its original cost. Management regularly reviews the Company’s investment in inventories for such declines in value. The write-downs are recognized as a component of cost of sales. During the six months ended June 30, 2021 and 2020, the Company recognized inventory write downs of approximately $1,000. As of June 30, 2021, the inventory was valued at $61,000. Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested, and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Company's stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods. The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant and is recognized as expense over the period which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Derivative Financial Instruments The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes Option Pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of June 30, 2021, the Company's only derivative financial instruments were embedded conversion features associated with long-term convertible notes payable which contain certain provisions that allow for a variable number of shares on conversion. Concentration of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts, or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of this financial institution. Advertising Costs Advertising, marketing, and promotional costs are expensed as incurred and included in general and administrative expenses. Advertising, marketing, and promotional expense was $18,000 and $0 for the six months ended June 30, 2021, and 2020, respectively and was reflected as part of Other General and Administrative Expenses on the accompanying condensed consolidated statements of operations. Recent Accounting Standards In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 2 - RELATED PARTY TRANSACTIONS | NOTE 2 - RELATED PARTY TRANSACTIONS On September 5, 2017, the Company obtained a revolving line of credit (LOC) from Berkshire Capital Management Co., Inc. which is controlled by the Company’s former chairman of the board. The line of credit allows the Company to borrow up to $1,000,000 with interest at 6% per annum. The loan is secured by a first lien on all the assets of the Company and its wholly owned subsidiary SPYR APPS®, LLC. The loan was fully drawn as of February 2018, at which time the Company had borrowed $1,000,000. During 2018 and 2019, the Company has received an additional $1,062,000 in the form of short-term advances (Advances) from Berkshire Capital Management Co., Inc. The last advance occurred on September 30, 2019; at which time the Company had borrowed $1,062,000. No further advances are expected from Berkshire Capital Management Co., Inc. The Company has accrued interest on these short-term advances at 6% per annum. On June 17, 2021, the Company and Berkshire entered into a debt consolidation agreement to consolidate the LOC and Advances into a single balloon note with interest at 6% per annum and an extended due date of December 31, 2025, thereby replacing and otherwise cancelling the LOC and Advances. The June 17, 2021 consolidated balance due was approximately $2,454,000. As of June 30, 2021, the consolidated balance due with accrued interest was approximately $2,459,000. During the three months ended March 31, 2020, the Company, received $185,000 in revenue for professional services rendered to Berkshire Capital Management Co., Inc. Subsequent to March 31, 2020, the Company has not and does not anticipate that it will provide any further professional services to related parties. On May 17, 2021, the Company entered into an agreement to borrow funds from the 481149 Irrevocable Trust, a related party, that controls all of the currently outstanding preferred stock of the Company and the trustee of which is a member of the Company’s board of directors. Pursuant to the agreement, the Company borrowed approximately $501,000 with interest at 6% per annum, due andpayable in full on May 17, 2022. As of June 30, 2021, the balance due with accrued interest was approximately $505,000. |
SHORT TERM NOTES
SHORT TERM NOTES | 6 Months Ended |
Jun. 30, 2021 | |
SHORT TERM NOTES | |
NOTE 3 - SHORT TERM NOTES | NOTE 3 – SHORT TERM NOTES On May 17, 2021, the Company entered into an agreement to borrow funds from a third party pursuant to which, the Company borrowed $85,000 with interest at 8% per annum, due and payable in full on or before November 27, 2021. As of June 30, 2021, the balance due with accrued interest was approximately $86,000. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 5 - CONVERTIBLE NOTES | NOTE 5 – CONVERTIBLE NOTES On September 30, 2020, the Company entered into a Stock Purchase Agreement with a third-party investor. By virtue of the Stock Purchase Agreement, in two separate closings, the Company agreed to sell, in each closing, an 8% $500,000 Convertible Promissory Note and Warrant to purchase one million common shares. Each Convertible Promissory Note bears 8% interest and matures five year after issuance. Amounts due under the Convertible Promissory Note are convertible into the Registrant’s common stock at the lower of $0.25 per share or 70% of the average of the three lowest Variable Weighted Average Price (“VWAP”) for the Registrant’s common stock for the twenty trading days prior to an election to convert. The Warrants are exercisable for five-years at an exercise price of 0.25 per share or, subject to the Registrant filing a registration statement including the shares of common stock that may be issued upon exercise of the Warrant, in a cashless exercise. The first closing occurred October 5, 2020 upon the receipt by the Company of a check for $500,000. The Company received two payments in the amount of $250,000 each on November 20, 2020 and November 24, 2020 in connection with the second closing. Total proceeds from the issuance of these convertible notes payable was $1,000,000. The Company determined that the conversion features of these notes represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. The conversion features were valued at $1,514,000 at the time of closing and the Company recognized a derivative liability of $1,514,000 with corresponding debt discounts of $1,000,000 and a loss on issuance of long-term convertible notes payable of $514,000. During May and June of 2021, the Company received conversion notices received from the lender requesting the conversion of approximately $204,000 ($160,000 principal and $44,000 interest) of the notes to 3,736,237 shares of the company’s common stock. The company recorded amortization of debt discounts, recognized as interest expense, in the amount of $234,000 and accrued interest of $40,000 during the six months ended June 30, 2021. On June 30, 2021, the principal balance together with accrued interest is recorded on the Company’s condensed consolidated balance sheet net of discounts at $126,000. The following table summarized the Company's convertible notes payable as of June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Beginning Balance $ 64,000 $ 550,000 Proceeds from the issuance of convertible notes, net of issuance discounts - - Repayments - (47,000 ) Conversion of notes payable into common stock (204,000 ) (548,000 ) Amortization of discounts 226,000 50,000 Liquidated damages - (53,000 ) Debt settlement costs - 96,000 Accrued Interest 40,000 16,000 Convertible notes payable, net $ 126,000 $ 64,000 Convertible notes, long-term $ 796,000 $ 1,000,000 Accrued interest and damages, long-term 54,000 14,000 Debt discounts, long-term (724,000 ) (950,000 ) Long-term convertible notes payable, net $ 126,000 $ 64,000 |
SMALL BUSINESS ADMINISTRATION D
SMALL BUSINESS ADMINISTRATION DEBT | 6 Months Ended |
Jun. 30, 2021 | |
SMALL BUSINESS ADMINISTRATION DEBT | |
NOTE 4 - SMALL BUSINESS ADMINISTRATION DEBT | NOTE 4 – SMALL BUSINESS ADMINISTRATION DEBT On May 12, 2020, the Company received a Paycheck Protection Program loan from the U.S. Small Business Administration (SBA) in the approximate amount of $71,000. The loan agreement provides for six months principal and interest deferral. The interest rate is 1%. Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. On February 2, 2021, the Company submitted its application to the SBA for forgiveness, which is pending as of the date of this filing. Any amount not forgiven must be repaid in equal monthly payments of principal and interest beginning in October 2021. As of June 30, 2021, the balance due on this note with accrued interest was approximately $72,000. On January 21, 2021, the Company received a second Paycheck Protection Program loan from the U.S. Small Business Administration in the approximate amount of $73,000. The interest rate is 1%. Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. Any amount not forgiven must be repaid in equal monthly payments of principal and interest beginning in May 2022. As of June 30, 2021, the balance due on this note was approximately $73,000. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 6 Months Ended |
Jun. 30, 2021 | |
DERIVATIVE LIABILITY | |
NOTE 6 - DERIVATIVE LIABILITY | NOTE 6 - DERIVATIVE LIABILITY The Company determined that the conversion features of the long-term convertible notes payable represented embedded derivatives since the notes are convertible into a variable number of shares upon conversion. Accordingly, the notes are not considered to be conventional debt and the embedded conversion feature is bifurcated from the debt host and accounted for as a derivative liability. Accordingly, the fair value of these derivative instruments is recorded as liabilities on the balance sheet with the corresponding amount recorded as a discount to each note and any excess of the fair value of the derivative component over the face amount of the note recorded as an expense on the date of issuance. Discounts are amortized from the date of issuance to the maturity dates of the notes. Fair value of derivative liabilities is evaluated at the end of each reporting period with any change in value reported in other income or expenses on the statements of operations for the period. The following table represents the Company's derivative liability activity for the six months ended June 30, 2021: Six Months Ended June 30, 2021 Derivative liability balance, December 31, 2020 $ 1,382,000 Conversion into common stock during the period (221,000 ) Change in derivative liability during the period 172,000 Derivative liability balance, June 30, 2021 $ 1,333,000 The table below represents the average assumptions used in valuing the derivative liability on June 30, 2021: Six Months Ended June 30, 2021 Expected life in years 4.27 – 4.39 Stock price volatility 192.63% - 195.65% Risk free interest rate 0.46 % Expected dividends - Forfeiture rate - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 7 - COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTINGENCIES Equity Line of Credit The Company entered into a five-year Equity Line of Credit pursuant to an Equity Purchase Agreement with Brown Stone Capital, LP, dated September 30, 2020. Pursuant to the agreement, Brown Stone agreed to invest up to $14,000,000 to purchase the Company’s Common Stock, par value $0.0001 per share. The purchase price of the common shares is the lesser of the Fixed price or Market price. The Fixed price is $0.50 per share in years 1 and 2, after the effectiveness of a registration statement, and $1.00 per share in years 3, 4 and 5 after the effectiveness of this registration statement. The Market price is 70% of the three lowest Variable Weighted Average Price (“VWAP”) for the Company’s common stock during the 10-trading day period immediately prior to the conversion date. In addition, the Company and Brown Stone entered into a Registration Rights Agreement, whereby the Company agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, and applicable state securities laws, with respect to the shares of Common Stock issuable for Brown Stone’s investment pursuant to the Equity Purchase Agreement. As of June 30, 2021, no shares have been registered or sold pursuant to this agreement. Operating Leases The Company leased approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015. Under the lease, the Company paid annual base rent on an escalating scale ranging from $143,000 to $152,000. In addition to the minimum basic rent, rent expense also includes approximately $1,000 per month for other items charged by the landlord in connection with rent. On May 1, 2020 and July 29, 2020, the Company entered into amended lease agreements with its landlord. Under the terms of the amendments, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through August 31, 2020 and extend the term of the lease by five months. The lease term date, which was December 31, 2020, was changed to May 31, 2021. On April 1, 2021, the Company entered into a lease termination and payment agreement with the landlord, pursuant to which the Company vacated and surrendered the premises to the landlord and the Company will pay approximately $67,000 over 18 months commencing April 1, 2021. As of June 30, 2021, the company had approximately $56,000 in unpaid rent which was reported as part of accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet as of June 30, 2021. Effective March 1, 2021, the Company’s wholly owned subsidiary Applied Magix, entered into a 6-month lease for 2 workspace offices located at 1230 Rosecrans Ave, Manhattan Beach California. The lease automatically renews on a continuing basis for an additional 6 months unless cancelled in writing 60 days prior the lease termination date. Under the lease, the Company pays monthly rent of $1,400. Rent expense for the six months ended June 30, 2021 and 2020 was $48,000 and $65,000, respectively. Legal Proceedings We are involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. Information about material legal proceedings follows: Settlements On June 18, 2018, the Company was named as a defendant in a case filed in the United States District Court for the Southern District of New York: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management Co., Inc., and Eat at Joe’s, Ltd. n/k/a SPYR, Inc.(“Defendants”). Joseph A. Fiore was the Chairman of our Board of Directors and is a significant shareholder. Mr. Fiore resigned from his positions as Chairman of the Board and as a Director of the Company effective August 1, 2018. The suit alleged that Mr. Fiore, during 2013 and 2014, while he was the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors, engaged in improper conduct on behalf of the defendants named in the case related to the Company’s sales of securities in Plandai Biotechnology, Inc. The Commission alleged that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleged that from 2013 to 2014, the Company’s primary business was investing and that it failed to register as an investment company, resulting in an alleged violation of Section 7(a) of the Investment Company Act of 1940. The suit sought to disgorge Joseph A. Fiore, Berkshire Capital Management Co., Inc., and the Company of alleged profits on the sale of the securities and civil fines related to the Company’s failure to register as an investment company with the Commission. Pursuant to a settlement agreement among the parties, on April 14, 2020, final judgment was entered in the case: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management, Inc. and Eat at Joes, Inc., n/k/a SPYR, Inc. On April 23, 2020, Joseph Fiore/Berkshire Capital Management, Inc. satisfied the Company’s joint and several liability obligation by paying to the Commission the agreed upon sum of Two Million Dollars pursuant to a settlement agreement between Joseph Fiore/Berkshire Capital Management, Inc. and the Company, which settlement agreement was entered into on April 15, 2020. The Company had until April 14, 2021 to satisfy its remaining financial obligation to the Commission, an agreed upon civil penalty of Five Hundred Thousand Dollars ($500,000). On May 17, 2021, the Company borrowed approximately $501,000 from a related party to pay its principal settlement liability with the Securities and Exchange Commission and has done so (See Note 2 – Related Party Transactions). As of June 30, 2021,the $500,000 together with accrued interest of approximately $1,000 has been paid to the Securities and Exchange Commission in settlement of this obligation. In electing to settle with the Commission, the Company neither admitted nor denied liability to any of the Commission’s allegations in its complaint, and in consideration for the Commission discontinuing its action, the Company, along with the two other defendants Joseph Fiore and Berkshire Capital Management agreed to be jointly and severally liable for disgorgement of profits and prejudgment interest in the amount of two million dollars, and to each be solely liable to pay a civil penalty in the amount of five hundred thousand dollars. [1] [1] In addition, an injunction was entered against the Company enjoined it from violating the antifraud, market manipulation, beneficial ownership reporting, and other provisions of the federal securities laws charged in the SEC’s complaint. Judgments On or about January 24, 2019, SPYR APPS, LLC entered into an agreement with one of its vendors, Shatter Storm Studios, to whom it owed $84,250 for artwork related to the Steven Universe game. Pursuant to the terms of that agreement, SPYR APPS, LLC needed to make payment in the amount of $85,000 to cover the principal owed and attorneys’ fees together plus 6% interest in that amount by December 1, 2019. Should SPYR APPS, LLC not make the required payment on or before December 1, 2019, it consented to entry of judgment in favor of Shatter Storm Studios for the amount owed. SPYR APPS, LLC did not make the payment and on January 27, 2020 Shatter Storm Studios initiated Case No. 1:200cv-00217 in the U.S. District Court for the District of Colorado seeking entry of the consent judgment against SPYR APPS, LLC. The judgment was not contested by SPYR APPS, LLC and judgment in the amount of $85,000 plus post judgment interest at the rate of 6% was entered on March 17, 2020. The balance due as of June 30, 2021 and December 31, 2020 was approximately $97,000 and $95,000, respectively and is reported as part of current liabilities of discontinued operations. Covid-19 On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, the Company is anticipating potential reductions in revenue, labor and supply shortages, difficulty meeting debt covenants, delays in collecting accounts receivable and paying liabilities and changes in the fair value of assets and liabilities. Our necessity for fund raising activities make it reasonably possible that we are vulnerable to the risk of a near-term severe impact. Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including potential credit losses on receivables and investments; impairment losses related to intangible assets and other long-lived assets; and contingent obligations. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
EQUITY TRANSACTIONS | |
NOTE 8 - EQUITY TRANSACTIONS | NOTE 8 – EQUITY TRANSACTIONS Common Stock: Six Months Ended June 30, 2021 During the six months ended June 30, 2021, the Company issued an aggregate of 1,550,000 shares of restricted common stock to employees and directors with a total fair value of $239,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $239,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock. During the six months ended June 30, 2021, the Company issued an aggregate of 3,000,000 shares of registered common stock to third party service providers with a total fair value of $371,000. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $371,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock. During the six months ended June 30, 2021, the Company issued an aggregate of 1,242,854 shares of restricted common stock to third party service providers with a total fair value of $100,000. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $100,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock. During the year ended December 31, 2020, the Company issued an aggregate of 3,736,237 shares of common stock with a total fair value of $425,000 in conversion of notes. As a result, the Company reduced the balance due on the notes and accrued interest by $204,000 and reduced the value of the derivative liability by $221,000 upon issuance. Six Months Ended June 30, 2020 During the six months ended June 30, 2020, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $25,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $25,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock. Options: The following table summarizes common stock options activity: Weighted Average Exercise Options Price December 31, 2020 5,799,900 $ 0.88 Granted - - Exercised - - Expired (420,000 ) 1.00 Outstanding, June 30, 2021 5,379,900 $ 0.87 Exercisable, June 30, 2021 5,379,900 $ 0.87 The weighted average exercise prices, remaining lives for options granted, and exercisable as of June 30, 2021 were as follows: Outstanding Options Exercisable Options Options Weighted Weighted Exercise Price Life Average Exercise Average Exercise Per Share Shares (Years) Price Shares Price $0.25 1,000,000 0.31 $0.25 1,000,000 $0.25 $0.50 1,300,000 0.81 $0.50 1,300,000 $0.50 $1.00 1,679,900 0.61 – 1.31 $1.00 1,679,900 $1.00 $1.50 1,400,000 1.81 $1.50 1,400,000 $1.50 5,379,900 $0.87 5,379,900 $0.87 On June 30, 2021, the Company’s closing stock price was $0.077 per share. As all outstanding options had an exercise price greater than $0.077 per share, there was no intrinsic value of the options outstanding as of June 30, 2021. Warrants: The following table summarizes common stock warrants activity: Weighted Average Exercise Warrants Price Outstanding, December 31, 2020 11,100,000 $ 0.39 Granted - - Exercised - - Expired (3,900,000 ) 0.17 Outstanding, June 30, 2021 7,200,000 $ 0.40 Exercisable, June 30, 2021 7,200,000 $ 0.40 The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of June 30, 2021, were as follows: Outstanding and Exercisable Warrants Warrants Exercise Price Life Per Share Shares (Years) $0.25 4,000,000 1.89 – 4.41 $0.50 2,200,000 1.72 – 2.03 $0.75 1,000,000 2.03 7,200,000 On June 30, 2021, the Company’s closing stock price was $0.077 per share. As all outstanding warrants had an exercise price greater than $0.077 per share, there was no intrinsic value of the warrants outstanding as of June 30, 2021. Shares Reserved: On June 30, 2021, the Company has reserved 80,000,000 shares of common stock in connection with convertible notes with detachable warrants, 100,000,000 shares of common stock in connection with shares underlying an equity line of credit and 3,500,000 shares of common stock underlying warrants issued in connection with the court approved settlement agreement for a total of 183,500,000 reserved shares of common stock. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2021 | |
DISCONTINUED OPERATIONS | |
NOTE 9 - DISCONTINUED OPERATIONS | NOTE 9 – DISCONTINUED OPERATIONS Restaurant Through our other wholly owned subsidiary, E.A.J.: PHL Airport, Inc., we owned and operated the restaurant “Eat at Joe’s®,” which was located in the Philadelphia International Airport since 1997. Our lease in the Philadelphia Airport expired in April 2017. Concurrent with expiration of the lease the restaurant closed. Pursuant to current accounting guidelines, the restaurant segment is reported as discontinued operations. The assets and liabilities of our discontinued restaurant operations as of June 30, 2021 and December 31, 2020 consisted of $0 assets and $22,000 in accounts payable and accrued liabilities. There were no operations for our discontinued restaurant during the six months ended June 30, 2021 and 2020. Digital Media Historically, through our wholly owned subsidiary, SPYR APPS ® The assets and liabilities of our discontinued digital media operations as of June 30, 2021 and December 31, 2020 were as follows: June 30, 2021 December 31, 2020 Assets: Accounts receivable, net $ 13,000 $ 13,000 Capitalized gaming assets and licensing rights, net - 75,000 Total Assets $ 13,000 $ 88,000 Liabilities: Accounts payable and accrued liabilities $ 769,000 $ 745,000 Total Liabilities $ 769,000 $ 745,000 The results of operations of our discontinued digital media operations for the six months ended June 30, 2021 and 2020, included in the consolidated statements of operations as discontinued operations, consisted of the following: Six months ended Six months ended June 30, June 30, 2021 2020 Revenues: $ - $ 3,000 Expenses Labor and related expenses - 8,000 Other general and administrative - 37,000 Total operating expenses - 45,000 Operating loss - (42,000 ) Other income (expense) Interest expense (24,000 ) (21,000 ) Write down of assets (75,000 ) - Loss on discontinued operations $ (99,000 ) $ (63,000 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 10 - SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Subsequent to June 30, 2021, the Company’s common shares were up-listed to and began trading on the OTCQB Venture Market under the ticker symbol “SPYR”. Subsequent to June 30, 2021, the Company received conversion notices received from a lender requesting the conversion of approximately $115,000 of the notes to 3,561,830 shares of the company’s common stock. Subsequent to June 30, 2021, the Company amended it convertible notes payable to adjust the conversion price to the lower of $0.25 per share or 50% of the average of the three lowest Variable Weighted Average Price (“VWAP”) for the Company’s common stock for the twenty trading days prior to an election to convert and to remove the Company’s obligation to pay 8% interest on the outstanding principal amounts due under the notes. Subsequent to June 30, 2021, the Company entered into agreements to borrow funds from a third party pursuant to which, the Company borrowed $73,000 with interest at 8% per annum, due and payable in full on or before February 11, 2021. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Cash and Cash Equivalents | The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. |
Inventory | The Company's inventory consisting of Apple HomeKit products for resale by the Company, is recorded at the lower of cost (first-in, first-out) or net realizable value. The Company writes down its inventory balances for estimates of excess and obsolete amounts. The Company reduces inventory on hand to its net realizable value on an item-by-item basis when the expected realizable value of a specific inventory item falls below its original cost. Management regularly reviews the Company’s investment in inventories for such declines in value. The write-downs are recognized as a component of cost of sales. During the six months ended June 30, 2021 and 2020, the Company recognized inventory write downs of approximately $1,000. As of June 30, 2021, the inventory was valued at $61,000. |
Stock-Based Compensation | The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested, and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Company's stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods. The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant and is recognized as expense over the period which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. |
Derivative Financial Instruments | The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes Option Pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of June 30, 2021, the Company's only derivative financial instruments were embedded conversion features associated with long-term convertible notes payable which contain certain provisions that allow for a variable number of shares on conversion. |
Concentration of Credit Risk | The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts, or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of this financial institution. |
Advertising Costs | Advertising, marketing, and promotional costs are expensed as incurred and included in general and administrative expenses. Advertising, marketing, and promotional expense was $18,000 and $0 for the six months ended June 30, 2021, and 2020, respectively and was reflected as part of Other General and Administrative Expenses on the accompanying condensed consolidated statements of operations. |
Recent Accounting Standards | In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments – Credit Losses Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |
Interim Financial Statements | The accompanying condensed consolidated financial statements of SPYR, Inc. and subsidiaries (the “Company”) are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Principles of Consolidation | The consolidated financial statements include the accounts of SPYR, Inc. and its wholly owned subsidiaries, Applied Magix, a Nevada corporation, SPYR APPS, LLC, a Nevada Limited Liability Company (discontinued operations, see Note 9), E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 9), and Branded Foods Concepts, Inc., a Nevada corporation (dissolution pending). Intercompany accounts and transactions have been eliminated. |
Reclassifications | Certain reclassifications have been made in the 2020 financial statements to conform with the 2021 presentation related to the discontinued operations of SPYR APPS, LLC. See Note 9 Discontinued Operations for additional information. |
Going Concern | The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business, however, the issues described below raise substantial doubt about the Company’s ability to do so. As shown in the accompanying financial statements, for the Six months ended June 30, 2021, the Company recorded a net loss of $2,113,000 and utilized cash in operations of 1,143,000. As of June 30, 2021, our cash balance was $34,000, and we had trading securities valued at $2,000. These issues raise substantial doubt about the Company’s ability to continue as a going concern. The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and implementation of our Applied Magix business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so. Historically, we have financed our operations primarily through sales of our common stock and debt financing. The Company will continue to seek additional capital through the sale of its common stock, debt financing and through expansion of its existing and new products. If our financing goals for our products do not materialize as planned and if we are not able to achieve profitable operations at some point in the future, we may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion, marketing, and product development plans. The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements and expansion of its operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2021. However, management cannot make any assurances that such financing will be secured. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions used by management affected impairment analysis for trading securities, fixed assets, intangible assets, capitalized licensing rights, amounts of potential liabilities, derivative liabilities, and valuation of issuance of equity securities. Actual results could differ from those estimates. |
Earnings (Loss) Per Share | The basic and fully diluted shares for the three months ended June 30, 2021 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,385,042, Options – 5,379,900, Warrants – 7,200,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2021. The basic and fully diluted shares for the three months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2020. The basic and fully diluted shares for the six months ended June 30, 2021 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,385,042, Options – 5,379,900, Warrants – 7,200,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2021. The basic and fully diluted shares for the six months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2020. |
Product Research and Development Costs | Costs incurred for product research and development are expensed as incurred. During the six months ended June 30, 2021 and 2020, the Company incurred $9,000 and $0 in product development costs paid to independent third parties. |
Revenue Recognition | In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers We adopted this new revenue recognition standard along with is related amendments on January 1, 2018 and have updated our accounting policy for revenue recognition. As expected, at our current level of revenue, the adoption of this new standard did not impact our financial position or results of operations or operating cash flows. We determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. Through our wholly owned subsidiary Applied Magix we are a registered Apple® developer, and reseller of Apple ecosystem compatible products and accessories with an emphasis on the smart home market. The Company’s products are available for sale through its website at https://appliedmagix.com/shop/ |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
Summary of Convertible Notes Payable | June 30, 2021 December 31, 2020 Beginning Balance $ 64,000 $ 550,000 Proceeds from the issuance of convertible notes, net of issuance discounts - - Repayments - (47,000 ) Conversion of notes payable into common stock (204,000 ) (548,000 ) Amortization of discounts 226,000 50,000 Liquidated damages - (53,000 ) Debt settlement costs - 96,000 Accrued Interest 40,000 16,000 Convertible notes payable, net $ 126,000 $ 64,000 Convertible notes, long-term $ 796,000 $ 1,000,000 Accrued interest and damages, long-term 54,000 14,000 Debt discounts, long-term (724,000 ) (950,000 ) Long-term convertible notes payable, net $ 126,000 $ 64,000 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
DERIVATIVE LIABILITY | |
Schedule of Derivative Liability Activity | Six Months Ended June 30, 2021 Derivative liability balance, December 31, 2020 $ 1,382,000 Conversion into common stock during the period (221,000 ) Change in derivative liability during the period 172,000 Derivative liability balance, June 30, 2021 $ 1,333,000 |
Summary of Average Assumptions Used in Valuing the Derivative Liability | Six Months Ended June 30, 2021 Expected life in years 4.27 – 4.39 Stock price volatility 192.63% - 195.65% Risk free interest rate 0.46 % Expected dividends - Forfeiture rate - |
EQUITY TRANSACTIONS (Tables)
EQUITY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
EQUITY TRANSACTIONS | |
Summary of Common Stock Options Activity | Weighted Average Exercise Options Price December 31, 2020 5,799,900 $ 0.88 Granted - - Exercised - - Expired (420,000 ) 1.00 Outstanding, June 30, 2021 5,379,900 $ 0.87 Exercisable, June 30, 2021 5,379,900 $ 0.87 |
Schedule of Weighted Average Excerise Price Range | Outstanding Options Exercisable Options Options Weighted Weighted Exercise Price Life Average Exercise Average Exercise Per Share Shares (Years) Price Shares Price $0.25 1,000,000 0.31 $0.25 1,000,000 $0.25 $0.50 1,300,000 0.81 $0.50 1,300,000 $0.50 $1.00 1,679,900 0.61 – 1.31 $1.00 1,679,900 $1.00 $1.50 1,400,000 1.81 $1.50 1,400,000 $1.50 5,379,900 $0.87 5,379,900 $0.87 |
Summary of Common Stock Warrants Activity | Weighted Average Exercise Warrants Price Outstanding, December 31, 2020 11,100,000 $ 0.39 Granted - - Exercised - - Expired (3,900,000 ) 0.17 Outstanding, June 30, 2021 7,200,000 $ 0.40 Exercisable, June 30, 2021 7,200,000 $ 0.40 |
Schedule of Warrants Weighted Average Excerise Price Range | Outstanding and Exercisable Warrants Warrants Exercise Price Life Per Share Shares (Years) $0.25 4,000,000 1.89 – 4.41 $0.50 2,200,000 1.72 – 2.03 $0.75 1,000,000 2.03 7,200,000 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
DISCONTINUED OPERATIONS | |
Summary of Assets and Liabilities of Discontinued Operations | June 30, 2021 December 31, 2020 Assets: Accounts receivable, net $ 13,000 $ 13,000 Capitalized gaming assets and licensing rights, net - 75,000 Total Assets $ 13,000 $ 88,000 Liabilities: Accounts payable and accrued liabilities $ 769,000 $ 745,000 Total Liabilities $ 769,000 $ 745,000 |
Summary of Results of Operations of Discontinued Operations | Six months ended Six months ended June 30, June 30, 2021 2020 Revenues: $ - $ 3,000 Expenses Labor and related expenses - 8,000 Other general and administrative - 37,000 Total operating expenses - 45,000 Operating loss - (42,000 ) Other income (expense) Interest expense (24,000 ) (21,000 ) Write down of assets (75,000 ) - Loss on discontinued operations $ (99,000 ) $ (63,000 ) |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Inventory | $ 61,000 | $ 61,000 | |||||
Inventory write down | 1,000 | $ 1,000 | |||||
Advertising, marketing, and promotional expense | 18,000 | 0 | |||||
Net loss | (902,000) | $ (1,211,000) | $ (317,000) | $ (227,000) | (2,113,000) | (544,000) | |
Net cash used in Operating Activities | (1,143,000) | (71,000) | |||||
Cash | 34,000 | 34,000 | |||||
Trading securities | 2,000 | 2,000 | $ 1,000 | ||||
Research and development | $ 5,000 | $ 0 | $ 9,000 | $ 0 | |||
Stock Options [Member] | |||||||
Antidilutive shares excluded from computation of basic earnings per share | 5,379,900 | 8,999,900 | 5,379,900 | 8,999,900 | |||
Warrants [Member] | |||||||
Antidilutive shares excluded from computation of basic earnings per share | 7,200,000 | 9,000,000 | 7,200,000 | 9,000,000 | |||
Class A Preferred Stock [Member] | |||||||
Antidilutive shares excluded from computation of basic earnings per share | 26,909,028 | 26,909,028 | 26,909,028 | 26,909,028 | |||
Class E Preferred Stock [Member] | |||||||
Antidilutive shares excluded from computation of basic earnings per share | 1,385,042 | 1,852,538 | 1,385,042 | 1,852,538 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Feb. 28, 2018 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 17, 2021 | Dec. 31, 2020 | |
Related party notes payable | $ 2,459,000 | $ 2,459,000 | $ 2,454,000 | |||||||
Related Party Service Revenues | 0 | $ 185,000 | $ 0 | 0 | $ 185,000 | |||||
Related party notes payable, current portion | $ 505,000 | 505,000 | $ 0 | |||||||
May 17, 2021 [Member] | ||||||||||
Borrowed from related party to pay settlement liability | $ 501,000 | |||||||||
Interest rate | 6.00% | 6.00% | ||||||||
Due date | payable in full on May 17, 2022 | |||||||||
Revolving Line Of Credit Dated September 05, 2017 [Member] | Berkshire Capital Management Co., Inc. - A Company Controlled By The Company Former Chairman Of The Board [Member] | ||||||||||
Line of credit borrowing capacity | $ 1,000,000 | $ 1,000,000 | ||||||||
Line of credit interest rate | 6.00% | |||||||||
Line of credit collateral security | The loan is secured by a first lien on all the assets of the Company and its wholly owned subsidiary SPYR APPS®, LLC | |||||||||
Proceeds from line of credit | $ 1,000,000 | |||||||||
Short-Term Advances [Member] | Berkshire Capital Management Co., Inc. - A Company Controlled By The Company Former Chairman Of The Board [Member] | ||||||||||
Proceeds from short-term advances - related party | $ 1,062,000 | $ 1,062,000 |
SHORT TERM NOTES (Details Narra
SHORT TERM NOTES (Details Narrative) - USD ($) | Jun. 30, 2021 | May 17, 2021 |
Accrued interest | $ 40,000 | |
Short Term Notes [Member] | ||
Interest rates | 8.00% | |
Short term borrowings | $ 85,000 | |
Accrued interest | $ 86,000 |
SMALL BUSINESS ADMINISTRATION_2
SMALL BUSINESS ADMINISTRATION DEBT (Details Narrative) - Notes Payable To U.S. Small Business Administration [Member] - USD ($) | Jan. 21, 2021 | May 12, 2020 | Jun. 30, 2021 |
Debt instrument face amount | $ 73,000 | $ 71,000 | |
Debt instrument interest rate | 1.00% | 1.00% | |
Debt instrument description | Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. Any amount not forgiven must be repaid in equal monthly payments of principal and interest beginning in May 2022 | Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. | |
Notes payable | $ 73,000 | ||
Debt instrument outstanding with principal and interest portion | $ 72,000 |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) | 2 Months Ended | 6 Months Ended | 12 Months Ended |
Nov. 24, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Conversion of notes payable into common stock | $ (425,000) | ||
Amortization of discounts | $ 234,000 | ||
Convertible notes payable, net | $ 250,000 | ||
Convertible Notes Payable [Member] | |||
Beginning Balance | 64,000 | 550,000 | |
Proceeds from the issuance of convertible notes, net of issuance discounts | 0 | 0 | |
Repayments | 0 | (47,000) | |
Conversion of notes payable into common stock | (204,000) | (548,000) | |
Amortization of discounts | 226,000 | 50,000 | |
Liquidated damages | 0 | (53,000) | |
Debt settlement costs | 0 | 96,000 | |
Accrued Interest | 40,000 | 16,000 | |
Convertible notes payable, net | 126,000 | 64,000 | |
Convertible notes, long-term | 796,000 | 1,000,000 | |
Accrued interest and damages, long-term | 54,000 | 14,000 | |
Debt discounts, long-term | (724,000) | (950,000) | |
Long-term convertible notes payable, net | $ 126,000 | $ 64,000 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) - USD ($) | 2 Months Ended | 6 Months Ended | 12 Months Ended | ||
Nov. 24, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Nov. 20, 2020 | Oct. 05, 2020 | |
Amortization of debt discounts | $ 234,000 | ||||
Convertible notes payable | $ 250,000 | $ 250,000 | $ 500,000 | ||
Net discount | 126,000 | ||||
Long-term convertible notes payable | 514,000 | ||||
Accrued interest | 40,000 | ||||
Debt conversion converted instrument shares issued1 | 3,736,237 | ||||
May and June of 2021 [Member] | |||||
Accrued interest | 44,000 | ||||
Debt instrument face amount | 160,000 | ||||
Conversion amount | $ 204,000 | ||||
Debt conversion converted instrument shares issued1 | 3,736,237 | ||||
Exercise Price Per Share $0.25 [Member] | Warrants [Member] | |||||
Exercise price of warrants | $ 0.25 | ||||
Convertible Note Dated September 30,2020 [Member] | Stock Purchase Agreement With Third-Party Investor [Member] | |||||
Debt instrument face amount | $ 500,000 | ||||
Debt instrument interest rate | 8.00% | ||||
Proceeds from issuance of convertible notes | $ 1,000,000 | ||||
Derivative liability | $ 1,514,000 | ||||
Debt discount | $ 1,000,000 | ||||
Convertible Note Dated September 30,2020 [Member] | Stock Purchase Agreement With Third-Party Investor [Member] | Exercise Price Per Share $0.25 [Member] | |||||
Exercise price of warrants | $ 0.25 |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Change in derivative liability during the period | $ 68,000 | $ 0 | $ 172,000 | $ 0 |
Derivative Liabilities [Member] | ||||
Derivative Liability Balance, December 31, 2020 | 1,382,000 | |||
Conversion into common stock during the period | (221,000) | |||
Change in derivative liability during the period | 172,000 | |||
Derivative Liability Balance, March 31, 2021 | $ 1,333,000 | $ 1,333,000 |
DERIVATIVE LIABILITY (Details 1
DERIVATIVE LIABILITY (Details 1) - Derivative Liabilities [Member] | 6 Months Ended |
Jun. 30, 2021 | |
Risk free interest rate | 0.46% |
Minimum [Member] | |
Expected life in years | 4 years 3 months 7 days |
Stock price volatility | 192.63% |
Maximum [Member] | |
Expected life in years | 4 years 4 months 20 days |
Stock price volatility | 195.65% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Mar. 01, 2021 | Sep. 30, 2020 | Apr. 23, 2020 | May 21, 2015 | May 17, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Mar. 17, 2020 | Jan. 24, 2019 |
Rent expense | $ 48,000 | $ 65,000 | ||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||||||
Accounts payable and accrued liabilities | $ 1,285,000 | $ 1,561,000 | ||||||||
Joseph Fiore/Berkshire Capital Management, Inc [Member] | ||||||||||
Borrowed from related party to pay settlement liability | $ 501,000 | |||||||||
Litigation settlement costs | $ 500,000 | 500,000 | ||||||||
Accounts payable and accrued liabilities | 1,000 | |||||||||
Operating Lease Dated May 21, 2015 [Member] | ||||||||||
Monthly rent | $ 1,000 | |||||||||
Lease expiration date | May 31, 2021 | |||||||||
Unpaid rent | 56,000 | |||||||||
Amount paid on lease termination | $ 67,000 | |||||||||
Lease commitment terms | The Company leased approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015 | |||||||||
Operating Lease Dated May 21, 2015 [Member] | Minimum [Member] | ||||||||||
Annual base rent | $ 143,000 | |||||||||
Operating Lease Dated May 21, 2015 [Member] | Maximum [Member] | ||||||||||
Annual base rent | $ 152,000 | |||||||||
Operating Lease Dated March 01, 2021 [Member] | ||||||||||
Annual base rent | $ 1,400 | |||||||||
Monthly rent | $ 1,000 | |||||||||
Equity Purchase Agreement With Brown Stone Capital, LP [Member] | ||||||||||
Agreement description of price per share | The Fixed price is $0.50 per share in years 1 and 2, after the effectiveness of a registration statement, and $1.00 per share in years 3, 4 and 5 after the effectiveness of this registration statement | |||||||||
Line of credit investment to equity purchase | $ 14,000,000 | |||||||||
Common stock, par value | $ 0.0001 | |||||||||
Percentage of market price of three lowest Variable Weighted Average Price common stock during the 10-trading day period | 70.00% | |||||||||
Number of shares registered or sold | 0 | |||||||||
January 24, 2019, SPYR APPS, LLC [Member] | ||||||||||
Accounts payable and accrued liabilities | $ 97,000 | $ 95,000 | ||||||||
Principal owed and attorneys' fees | $ 85,000 | $ 84,250 | ||||||||
Interest Rate | 6.00% | 6.00% |
EQUITY TRANSACTIONS (Details)
EQUITY TRANSACTIONS (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
EQUITY TRANSACTIONS | |
Outstanding, beginning balance | shares | 5,799,900 |
Granted | shares | 0 |
Exercised | shares | 0 |
Expired | shares | (420,000) |
Outstanding, ending balance | shares | 5,379,900 |
Exercisable, ending balance | shares | 5,379,900 |
Outstanding, beginning balance | $ / shares | $ 0.88 |
Granted | $ / shares | 0 |
Exercised | $ / shares | 0 |
Expired | $ / shares | 1 |
Outstanding, ending balance | $ / shares | 0.87 |
Exercisable, ending balance | $ / shares | $ 0.87 |
EQUITY TRANSACTIONS (Details 1)
EQUITY TRANSACTIONS (Details 1) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Outstanding Options, Shares | shares | 7,200,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 0.87 |
Exercisable Options, Shares | shares | 5,379,900 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 0.87 |
Exercise Price Per Share $1.00 [Member] | Stock Options [Member] | |
Outstanding Options, Shares | shares | 1,679,900 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 1 |
Exercisable Options, Shares | shares | 1,679,900 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 1 |
Exercise Price Per Share $1.00 [Member] | Stock Options [Member] | Minimum [Member] | |
Outstanding Options, Life (Years) | 7 months 9 days |
Exercise Price Per Share $1.00 [Member] | Stock Options [Member] | Maximum [Member] | |
Outstanding Options, Life (Years) | 1 year 3 months 21 days |
Exercise Price Per Share $0.25 [Member] | Stock Options [Member] | |
Outstanding Options, Shares | shares | 1,000,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 0.25 |
Exercisable Options, Shares | shares | 1,000,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 0.25 |
Outstanding Options, Life (Years) | 3 months 21 days |
Exercise Price Per Share $0.50 [Member] | Stock Options [Member] | |
Outstanding Options, Shares | shares | 1,300,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 0.50 |
Exercisable Options, Shares | shares | 1,300,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 0.50 |
Outstanding Options, Life (Years) | 9 months 21 days |
Exercise Price Per Share $1.50 [Member] | Stock Options [Member] | |
Outstanding Options, Shares | shares | 1,400,000 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 1.50 |
Exercisable Options, Shares | shares | 1,400,000 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 1.50 |
Outstanding Options, Life (Years) | 1 year 9 months 21 days |
EQUITY TRANSACTIONS (Details 2)
EQUITY TRANSACTIONS (Details 2) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Weighted Average Exercise Price, Granted | $ 0 |
Weighted Average Exercise Price, Exercised | 0 |
Weighted Average Exercise Price, Expired | 1 |
Weighted Average Exercise Price, ending balance | 0.87 |
Exercisable, June 30, 2021 | $ 0.87 |
Warrants [Member] | |
Outstanding, beginning balance | shares | 11,100,000 |
Granted | shares | 0 |
Exercised | shares | 0 |
Expired | shares | (3,900,000) |
Outstanding, end balance | shares | 7,200,000 |
Exercisable, end balance | shares | 7,200,000 |
Weighted Average Exercise Price, begining balance | $ 0.39 |
Weighted Average Exercise Price, Granted | 0 |
Weighted Average Exercise Price, Exercised | 0 |
Weighted Average Exercise Price, Expired | 0.17 |
Weighted Average Exercise Price, ending balance | 0.40 |
Exercisable, June 30, 2021 | $ 0.40 |
EQUITY TRANSACTIONS (Details 3)
EQUITY TRANSACTIONS (Details 3) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Outstanding and Exercisable Warrants, Shares | 7,200,000 |
Warrants [Member] | |
Outstanding and Exercisable Warrants, Shares | 7,200,000 |
Exercise Price Per Share $0.25 [Member] | Warrants [Member] | |
Outstanding and Exercisable Warrants, Shares | 4,000,000 |
Warrants Exercise Price, Per Share | $ / shares | $ 0.25 |
Exercise Price Per Share $0.25 [Member] | Warrants [Member] | Minimum [Member] | |
Outstanding and Exercisable Warrants, Life (Years) | 1 year 10 months 20 days |
Exercise Price Per Share $0.25 [Member] | Warrants [Member] | Maximum [Member] | |
Outstanding and Exercisable Warrants, Life (Years) | 4 years 4 months 28 days |
Exercise Price Per Share $0.50 [Member] | Warrants [Member] | |
Outstanding and Exercisable Warrants, Shares | 2,200,000 |
Warrants Exercise Price, Per Share | $ / shares | $ 0.50 |
Exercise Price Per Share $0.50 [Member] | Warrants [Member] | Minimum [Member] | |
Outstanding and Exercisable Warrants, Life (Years) | 1 year 8 months 19 days |
Exercise Price Per Share $0.50 [Member] | Warrants [Member] | Maximum [Member] | |
Outstanding and Exercisable Warrants, Life (Years) | 2 years 10 days |
Exercise Price Per Share $0.75 [Member] | Warrants [Member] | |
Outstanding and Exercisable Warrants, Shares | 1,000,000 |
Warrants Exercise Price, Per Share | $ / shares | $ 0.75 |
Outstanding and Exercisable Warrants, Life (Years) | 2 years 10 days |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Common stock reserved in connection with convertible notes | 183,500,000 | 183,500,000 | |||
Debt conversion converted instrument shares issued1 | 3,736,237 | ||||
Debt conversion converted instrument amount | $ 425,000 | ||||
Stock issued during period, fair value | $ 100,000 | $ 371,000 | |||
Accrued interest reduced | $ 40,000 | $ 40,000 | |||
Common Stocks [Member] | |||||
Common stock reserved in connection with convertible notes | 3,500,000 | 3,500,000 | |||
Derivative liability | 221,000 | ||||
Accrued interest reduced | $ 204,000 | ||||
Restricted Stock [Member] | Employees and Directors [Member] | |||||
Stock issued during period | 1,550,000 | 1,250,000 | |||
Stock issued during period, fair value | $ 239,000 | $ 25,000 | |||
Stock issuance cost | $ 239,000 | $ 25,000 | |||
Restricted Stock 1 [Member] | Third Party [Member] | |||||
Stock issued during period | 3,000,000 | ||||
Stock issued during period, fair value | $ 371,000 | ||||
Stock issuance cost | $ 371,000 | ||||
Restricted Stock 2 [Member] | Third Party [Member] | |||||
Stock issued during period | 1,242,854 | ||||
Stock issued during period, fair value | $ 100,000 | ||||
Stock issuance cost | $ 100,000 | ||||
Stock Options [Member] | |||||
Closing stock price | $ 0.077 | $ 0.077 | |||
Outstanding options exercise price | $ 0.077 | ||||
Intrinsic value | $ 0 | $ 0 | |||
Warrants [Member] | |||||
Common stock reserved in connection with convertible notes | 80,000,000 | 80,000,000 | |||
Closing stock price | $ 0.077 | $ 0.077 | |||
Outstanding options exercise price | $ 0.077 | ||||
Intrinsic value | $ 0 | $ 0 | |||
Line of Credit [Member] | |||||
Common stock reserved in connection with convertible notes | 100,000,000 | 100,000,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Accounts receivable, net | $ 13,000 | $ 13,000 |
Capitalized gaming assets and licensing rights, net | 0 | 75,000 |
Total Assets | 13,000 | 88,000 |
Liabilities: | ||
Accounts payable and accrued liabilities | 769,000 | 745,000 |
Total Liabilities | $ 769,000 | $ 745,000 |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Income (Expense) | ||||
Loss on discontinued operations | $ 87,000 | $ 25,000 | $ 99,000 | $ 63,000 |
Discontinued Operations [Member] | ||||
Revenues: | 0 | 3,000 | ||
Expenses | ||||
Labor and related expenses | 0 | 8,000 | ||
Other general and administrative | 0 | 37,000 | ||
Total Operating Expenses | 0 | 45,000 | ||
Operating Loss | 0 | (42,000) | ||
Other Income (Expense) | ||||
Interest Expense | (24,000) | (21,000) | ||
Write down of assets | (75,000) | |||
Loss on discontinued operations | $ 99,000 | $ 63,000 |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts payable and accrued liabilities | $ 769,000 | $ 745,000 |
Discontinued Operations [Member] | ||
Accounts payable and accrued liabilities | $ 0 | $ 22,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
Jul. 31, 2021USD ($)$ / sharesshares | |
Conversion converted amount | $ 115,000 |
Notes conversion converted into cmmon stock shares | shares | 3,561,830 |
Convertible notes payable conversion price per share | $ / shares | $ 0.25 |
Lowest variable weighted average price ("VWAP") for common stock, percentage | 50 |
Outstanding principal amounts, interest percentage rate | 8 |
Borrow funds from third party | $ 73,000 |
Borrow funds from third party percentage rate | 8 |