|
Delaware
|
| |
7373
|
| |
82-1808844
|
|
|
(State or other jurisdiction of incorporation or organization)
|
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Marc J. Adesso, Esq.
Waller Lansden Dortch & Davis, LLP 511 Union Street, Suite 2700 Nashville, Tennessee 37219 Telephone: (615) 850-8063 Facsimile: (615) 244-6804 |
| |
Steven D. Uslaner, Esq.
Mark F. Coldwell, Esq. Littman Krooks LLP 655 Third Avenue, 20th Floor New York, New York 10017 Telephone: (212) 490-2020 Facsimile: (212) 490-2990 |
|
|
Large accelerated filer ☐
|
| | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | |
Smaller reporting company ☒
Emerging growth company ☒
|
|
|
Title of Securities Being Registered
|
| |
Proposed
Maximum Aggregate Offering Price(1) |
| |
Amount of
Registration Fee(9) |
| ||||||
|
Common Stock, par value $0.00001 per share(2) (3)
|
| | |
$
|
17,250,000(4)
|
| | | |
$
|
1,881.98
|
| |
|
Representatives’ Warrants to Purchase Common Stock(4)
|
| | | | N/A | | | | | | N/A | | |
|
Common Stock, underlying Representatives’ Warrants(5)
|
| | |
$
|
937,239
|
| | | |
$
|
102.25
|
| |
| Total | | | | $ | 18,187,239 | | | | | $ | 1,984.23 | | |
| | |
Page
|
| |||
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| | | | 38 | | | |
| | | | 38 | | | |
| | | | 39 | | | |
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| | | | 48 | | | |
| | | | 60 | | | |
| | | | 69 | | | |
| | | | 76 | | | |
| | | | 79 | | | |
| | | | 81 | | | |
| | | | 87 | | | |
| | | | 89 | | | |
| | | | 94 | | | |
| | | | 94 | | | |
| | | | 94 | | | |
| | | | F-1 | | | |
| | | | A-1 | | |
| | |
As of September 30, 2020
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
|
| ||||||
Cash | | | | $ | 8,356,834 | | | | | $ | 21,877,122 | | |
Stockholders' Equity: | | | | | | | | | | | | | |
Preferred stock, $0.00001 par value; 5,000,000 shares authorized;
No shares issued and outstanding on an actual and pro forma basis as of September 30, 2020 |
| | | | — | | | | | | — | | |
Common stock, $0.00001 par value; 95,000,000 shares authorized;
7,661,300 and 9,730,266 shares issued and outstanding on an actual and pro forma basis as of September 30, 2020, respectively |
| | | | 77 | | | | | | 98 | | |
Additional paid-in capital
|
| | | | 21,723,133 | | | | | | 35,243,400 | | |
Accumulated deficit
|
| | | | (14,131,335) | | | | | | (14,131,335) | | |
Total Stockholders' Equity
|
| | | $ | 7,591,875 | | | | | $ | 21,112,163 | | |
Total Capitalization
|
| | | $ | 7,591,875 | | | | | $ | 21,112,163 | | |
|
Assumed public offering price per share
|
| | | $ | 7.25 | | |
|
Historical net tangible book value per share as of September 30, 2020
|
| | | $ | 0.81 | | |
|
Increase in pro forma net tangible book value per share
|
| | | $ | 1.22 | | |
|
Pro forma net tangible book value per share as of September 30, 2020
|
| | | $ | 2.03 | | |
|
Dilution per share to new investors in this offering
|
| | | $ | 5.22 | | |
| | |
For the Three Months
Ended September 30, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net Revenues
|
| | | $ | 280,401 | | | | | $ | 55,872 | | |
Operating Expenses: | | | | | | | | | | | | | |
Technology
|
| | | | 545,639 | | | | | | 315,824 | | |
General and administrative
|
| | | | 1,167,861 | | | | | | 703,238 | | |
Total Operating Expenses
|
| | | | 1,713,500 | | | | | | 1,019,062 | | |
Loss From Operations
|
| | | | (1,433,099) | | | | | | (963,190) | | |
Other (Expense) Income: | | | | | | | | | | | | | |
Interest expense
|
| | | | (389,319) | | | | | | (362,179) | | |
Interest expense — related parties
|
| | | | (200,821) | | | | | | (29,551) | | |
Amortization of beneficial conversion feature
|
| | | | (1,984,322) | | | | | | — | | |
Gain on settlement of notes and other payables
|
| | | | 139,333 | | | | | | — | | |
Gain on forgiveness of accounts payable — supplier
|
| | | | — | | | | | | — | | |
Loss on extinguishment of convertible note payable
|
| | | | (297,272) | | | | | | — | | |
Other income
|
| | | | 1,000 | | | | | | 12 | | |
Total Other Expense
|
| | | | (2,731,401) | | | | | | (391,718) | | |
Net Loss
|
| | | | (4,164,500) | | | | | | (1,354,908) | | |
Deemed dividend related to warrant down round
adjustment |
| | | | (1,682,000) | | | | | | — | | |
Net Loss Attributable to Common Shareholders
|
| | | $ | (5,846,500) | | | | | $ | (1,354,908) | | |
| | |
For the Nine Months
Ended September 30, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net Revenues
|
| | | $ | 1,753,851 | | | | | $ | 161,828 | | |
Operating Expenses: | | | | | | | | | | | | | |
Technology
|
| | | | 1,577,197 | | | | | | 1,070,561 | | |
General and administrative
|
| | | | 2,489,867 | | | | | | 1,494,609 | | |
Total Operating Expenses
|
| | | | 4,067,064 | | | | | | 2,565,170 | | |
Loss From Operations
|
| | | | (2,313,213) | | | | | | (2,403,342) | | |
Other (Expense) Income: | | | | | | | | | | | | | |
Interest expense
|
| | | | (1,118,614) | | | | | | (522,278) | | |
Interest expense – related parties
|
| | | | (403,372) | | | | | | (29,666) | | |
Amortization of beneficial conversion feature
|
| | | | (1,984,322) | | | | | | — | | |
Gain on settlement of notes and other payables
|
| | | | 139,333 | | | | | | — | | |
Gain on forgiveness of accounts payable – supplier
|
| | | | 236,248 | | | | | | — | | |
| | |
For the Nine Months
Ended September 30, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Loss on extinguishment of convertible note payable
|
| | | | (297,272) | | | | | | — | | |
Other income
|
| | | | 13,294 | | | | | | 256 | | |
Total Other Expense
|
| | | | (3,414,705) | | | | | | (551,688) | | |
Net Loss
|
| | | | (5,727,918) | | | | | | (2,955,030) | | |
Deemed dividend related to warrant down round
adjustment |
| | | | (1,682,000) | | | | | | — | | |
Net Loss Attributable to Common Shareholders
|
| | | $ | (7,409,918) | | | | | $ | (2,955,030) | | |
|
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net Revenues
|
| | | $ | 177,635 | | | | | $ | 106,422 | | |
Operating Expenses: | | | | | | | | | | | | | |
Technology
|
| | | | 1,486,056 | | | | | | 2,058,660 | | |
General and administrative
|
| | | | 2,007,362 | | | | | | 1,820,942 | | |
Total Operating Expenses
|
| | | | 3,493,418 | | | | | | 3,879,602 | | |
Loss From Operations
|
| | | | (3,315,783) | | | | | | (3,773,180) | | |
Other Income (Expense): | | | | | | | | | | | | | |
Gain on forgiveness of accounts payable — supplier
|
| | | | — | | | | | | 66,804 | | |
Interest expense
|
| | | | (819,482) | | | | | | (51,129) | | |
Other income
|
| | | | 2,392 | | | | | | 28,408 | | |
Total Other (Expense) Income
|
| | | | (817,090) | | | | | | 44,083 | | |
Net Loss
|
| | | $ | (4,132,873) | | | | | $ | (3,729,097) | | |
| | |
September 30,
2020 |
| |
December 31,
2019 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
Cash
|
| | | $ | 8,356,834 | | | | | $ | 33,785 | | |
Working capital (deficiency)
|
| | | $ | 6,485,909 | | | | | $ | (5,413,735) | | |
Name
|
| |
Age
|
| |
Position(s)
|
|
Executive Officers | | | | | | | |
Paul Roberts | | |
42
|
| | Interim Chief Executive Officer, Chief Strategy Officer, President and Chairman | |
Joshua Weiss | | |
36
|
| | Chief Financial Officer | |
Christopher Andrews | | |
46
|
| | Chief Digital Officer | |
Pavel Medvedev | | |
44
|
| | Chief Technology Officer | |
Christopher Francia | | |
34
|
| | Chief Product Officer | |
Non-Employee Directors | | | | | | | |
Peter A. Bordes, Jr. | | |
52
|
| | Director | |
Grainne Coen(1)(2)(3) | | |
47
|
| | Director | |
Elisabeth DeMarse(2)(4) | | |
66
|
| | Director | |
Jeannie Mun(1)(2)(3)(4) | | |
43
|
| | Director | |
Christopher H. “Toby” Smith(1)(3)(4) | | |
80
|
| | Director | |
Name and Principal Position
|
| |
Fiscal Year
|
| |
Salary
|
| |
Stock
Awards(1) |
| |
Option and
Warrant Awards(1) |
| |
All Other
Compensation(7) |
| |
Total
|
| ||||||||||||||||||
Peter Anthony Bordes, Jr.
|
| | | | 2019 | | | | | $ | 75,000 | | | | | $ | — | | | | | $ | 479(3) | | | | | $ | 14,658 | | | | | $ | 90,137 | | |
Former Chief Executive Officer(2)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Paul Roberts
|
| | | | 2019 | | | | | $ | 155,760 | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | 155,760 | | |
Interim Chief Executive Officer(2)
|
| | | | 2018 | | | | | $ | 110,250 | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | 110,250 | | |
Pavel Medvedev
|
| | | | 2019 | | | | | $ | 230,460 | | | | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | 230,460 | | |
Chief Technology Officer(4)
|
| | | | 2018 | | | | | $ | 141,667 | | | | | $ | 412,500(5) | | | | | $ | 103,633(6) | | | | | | — | | | | | $ | 657,800 | | |
| | |
Option Awards
|
| |||||||||||||||||||||
Name
|
| |
Number of
securities underlying unexercised option exercisable (#) |
| |
Number of
securities underlying unexercised option unexercisable (#) |
| |
Option
exercise price ($) |
| |
Option
expiration date |
| ||||||||||||
Paul Roberts
|
| | | | 18,750 | | | | | | 14,584 | | | | | | 2.97 | | | | | | 9/15/2021 | | |
Peter Anthony Bordes, Jr.
|
| | | | 2,967 | | | | | | — | | | | | | 33.75 | | | | | | 10/2/2029 | | |
| | |
Warrant Awards
|
| |||||||||||||||||||||
Name
|
| |
Number of
securities underlying unexercised warrant exercisable (#) |
| |
Number of
securities underlying unexercised warrant unexercisable (#) |
| |
Warrant
exercise price ($) |
| |
Warrant
expiration date |
| ||||||||||||
Pavel Medvedev
|
| | | | 27,778 | | | | | | — | | | | | | 4.95 | | | | | | 4/16/2023 | | |
Name of Beneficial Owner
|
| |
Number of
Shares |
| |
Percentage
|
| ||||||
Executive Officers and Directors | | | | | | | | | | | | | |
Paul Roberts(1)
|
| | | | 2,207,032 | | | | | | 28.37% | | |
Christopher Andrews(2)
|
| | | | 471,637 | | | | | | 5.87% | | |
Pavel Medvedev(3)
|
| | | | 111,112 | | | | | | 1.44% | | |
Christopher Francia(4)
|
| | | | 84,639 | | | | | | 1.10% | | |
Joshua Weiss(5)
|
| | | | 13,062 | | | | | | * | | |
Peter Anthony Bordes, Jr.(6)
|
| | | | 767,160 | | | | | | 9.34% | | |
Grainne Coen
|
| | | | — | | | | | | * | | |
Jeannie Mun
|
| | | | — | | | | | | * | | |
Elisabeth DeMarse
|
| | | | — | | | | | | * | | |
Christopher H. “Toby” Smith(7)
|
| | | | 35,196 | | | | | | * | | |
All directors and executive officers as a group(8)
|
| | | | 3,689,838 | | | | | | 42.43% | | |
Name of Underwriter
|
| |
Number of
Shares |
| |||
Maxim Group LLC
|
| | | | | | |
Joseph Gunnar & Co. LLC
|
| | | | | |
| | |
Per Share
|
| |
Total Without
Over-Allotment Option |
| |
Total With Full
Over-Allotment Option |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page
|
| |||
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-6 | | | |
| | | | F-8 | | | |
| | | | F-25 | | | |
| | | | F-26 | | | |
| | | | F-27 | | | |
| | | | F-28 | | | |
| | | | F-29 | | | |
| | | | F-31 | | |
| | |
September 30,
2020 |
| |
December 31,
2019 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
Assets | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 8,356,834 | | | | | $ | 33,785 | | |
Accounts receivable, net
|
| | | | 797,422 | | | | | | 38,704 | | |
Prepaid expenses and other current assets
|
| | | | 117,085 | | | | | | 28,072 | | |
Total Current Assets
|
| | | | 9,271,341 | | | | | | 100,561 | | |
Intangible assets, net
|
| | | | 1,357,726 | | | | | | 83,333 | | |
Property and equipment, net
|
| | | | 8,088 | | | | | | 4,549 | | |
Deferred offering costs
|
| | | | 10,000 | | | | | | 285,196 | | |
Total Assets
|
| | | $ | 10,647,155 | | | | | $ | 473,639 | | |
Liabilities and Stockholders’ Equity (Deficiency) | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | |
Accounts payable – suppliers
|
| | | $ | 319,484 | | | | | $ | 785,180 | | |
Accounts payable – trade
|
| | | | 1,531,084 | | | | | | 867,554 | | |
Accrued expenses and other current liabilities
|
| | | | 766,621 | | | | | | 478,674 | | |
Accrued interest
|
| | | | 3,001 | | | | | | 117,912 | | |
Accrued interest – related parties
|
| | | | — | | | | | | 4,204 | | |
Due to related party
|
| | | | 29,000 | | | | | | 29,000 | | |
Notes payable, current portion
|
| | | | 136,242 | | | | | | 113,967 | | |
Convertible notes payable, current portion, net of discount of $0 and $630,994 as of September 30, 2020 and December 31, 2019, respectively
|
| | | | — | | | | | | 2,569,006 | | |
Convertible notes payable – related parties, current portion, net of discount
of $0 and $281,701 as of September 30, 2020 and December 31, 2019, respectively |
| | | | — | | | | | | 548,799 | | |
Total Current Liabilities
|
| | | | 2,785,432 | | | | | | 5,514,296 | | |
Notes payable, non-current portion
|
| | | | 269,848 | | | | | | — | | |
Total Liabilities
|
| | | | 3,055,280 | | | | | | 5,514,296 | | |
Commitments and contingencies (Note 8)
|
| | | | | | | | | | | | |
Stockholders’ Equity (Deficiency): | | | | | | | | | | | | | |
Preferred stock, $0.00001 par value; 5,000,000 shares authorized; No shares
issued and outstanding as of September 30, 2020 and December 31, 2019 |
| | | | — | | | | | | — | | |
Common stock, $0.00001 par value; 95,000,000 shares authorized; 7,661,300 and 3,601,521 shares issued and outstanding as of September 30, 2020 and December 31, 2019
|
| | | | 77 | | | | | | 36 | | |
Additional paid-in capital
|
| | | | 21,723,133 | | | | | | 3,362,724 | | |
Accumulated deficit
|
| | | | (14,131,335) | | | | | | (8,403,417) | | |
Total Stockholders’ Equity (Deficiency)
|
| | | | 7,591,875 | | | | | | (5,040,657) | | |
Total Liabilities and Stockholders’ Equity (Deficiency)
|
| | | $ | 10,647,155 | | | | | $ | 473,639 | | |
| | |
For the Three Months Ended
September 30, |
| |
For the Nine Months Ended
September 30, |
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
| ||||||||||||
Net Revenues
|
| | | $ | 280,401 | | | | | $ | 55,872 | | | | | $ | 1,753,851 | | | | | $ | 161,828 | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Technology
|
| | | | 545,639 | | | | | | 315,824 | | | | | | 1,577,197 | | | | | | 1,070,561 | | |
General and administrative
|
| | | | 1,167,861 | | | | | | 703,238 | | | | | | 2,489,867 | | | | | | 1,494,609 | | |
Total Operating Expenses
|
| | | | 1,713,500 | | | | | | 1,019,062 | | | | | | 4,067,064 | | | | | | 2,565,170 | | |
Loss From Operations
|
| | | | (1,433,099) | | | | | | (963,190) | | | | | | (2,313,213) | | | | | | (2,403,342) | | |
Other (Expense) Income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (389,319) | | | | | | (362,179) | | | | | | (1,118,614) | | | | | | (522,278) | | |
Interest expense – related parties
|
| | | | (200,821) | | | | | | (29,551) | | | | | | (403,372) | | | | | | (29,666) | | |
Amortization of beneficial conversion
feature |
| | | | (1,984,322) | | | | | | — | | | | | | (1,984,322) | | | | | | — | | |
Gain on settlement of notes and other
payables |
| | | | 139,333 | | | | | | — | | | | | | 139,333 | | | | | | — | | |
Gain on forgiveness of accounts payable – supplier
|
| | | | — | | | | | | — | | | | | | 236,248 | | | | | | — | | |
Loss on extinguishment of convertible note payable
|
| | | | (297,272) | | | | | | — | | | | | | (297,272) | | | | | | — | | |
Other income
|
| | | | 1,000 | | | | | | 12 | | | | | | 13,294 | | | | | | 256 | | |
Total Other Expense
|
| | | | (2,731,401) | | | | | | (391,718) | | | | | | (3,414,705) | | | | | | (551,688) | | |
Net Loss
|
| | | | (4,164,500) | | | | | | (1,354,908) | | | | | | (5,727,918) | | | | | | (2,955,030) | | |
Deemed dividend related to warrant down
round adjustment |
| | | | (1,682,000) | | | | | | — | | | | | | (1,682,000) | | | | | | — | | |
Net Loss Attributable to Common Shareholders
|
| | | $ | (5,846,500) | | | | | $ | (1,354,908) | | | | | $ | (7,409,918) | | | | | $ | (2,955,030) | | |
Net Loss Per Share – Basic and Diluted
|
| | | $ | (1.03) | | | | | $ | (0.38) | | | | | $ | (1.72) | | | | | $ | (0.82) | | |
Weighted Average Common Shares Outstanding – Basic and Diluted
|
| | | | 5,676,561 | | | | | | 3,599,300 | | | | | | 4,300,905 | | | | | | 3,599,909 | | |
| | |
For the Nine Months Ended September 30, 2020
|
| |||||||||||||||||||||||||||
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
|
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance – January 1, 2020
|
| | | | 3,601,521 | | | | | $ | 36 | | | | | $ | 3,362,724 | | | | | $ | (8,403,417) | | | | | $ | (5,040,657) | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options
|
| | | | — | | | | | | — | | | | | | 5,394 | | | | | | — | | | | | | 5,394 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (58,098) | | | | | | (58,098) | | |
Balance – March 31, 2020
|
| | | | 3,601,521 | | | | | | 36 | | | | | | 3,368,118 | | | | | | (8,461,515) | | | | | | (5,093,361) | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options
|
| | | | — | | | | | | — | | | | | | 5,423 | | | | | | — | | | | | | 5,423 | | |
Common stock
|
| | | | 1,112 | | | | | | — | | | | | | 3,000 | | | | | | — | | | | | | 3,000 | | |
Forgiveness of accrued expenses by related party
|
| | | | — | | | | | | — | | | | | | 33,738 | | | | | | — | | | | | | 33,738 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,505,320) | | | | | | (1,505,320) | | |
Balance – June 30, 2020
|
| | | | 3,602,633 | | | | | | 36 | | | | | | 3,410,279 | | | | | | (9,966,835) | | | | | | (6,556,520) | | |
Issuance of common stock and warrants
in initial public offering, net of issuance costs(1) |
| | | | 2,500,000 | | | | | | 25 | | | | | | 10,605,720 | | | | | | — | | | | | | 10,605,745 | | |
Conversion of notes payable and accrued
interest into common stock and warrants |
| | | | 1,461,090 | | | | | | 15 | | | | | | 7,304,815 | | | | | | — | | | | | | 7,304,830 | | |
Conversion of notes payable and accrued
interest into common stock |
| | | | 94,223 | | | | | | 1 | | | | | | 388,143 | | | | | | — | | | | | | 388,144 | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options
|
| | | | — | | | | | | — | | | | | | 5,176 | | | | | | — | | | | | | 5,176 | | |
Common stock
|
| | | | 3,334 | | | | | | — | | | | | | 9,000 | | | | | | — | | | | | | 9,000 | | |
Effect of reverse stock-split
|
| | | | 20 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (4,164,500) | | | | | | (4,164,500) | | |
Balance – September 30, 2020
|
| | | | 7,661,300 | | | | | $ | 77 | | | | | $ | 21,723,133 | | | | | $ | (14,131,335) | | | | | $ | 7,591,875 | | |
| | |
For the Nine Months Ended September 30, 2019
|
| |||||||||||||||||||||||||||
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
|
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance – January 1, 2019
|
| | | | 3,599,300 | | | | | $ | 36 | | | | | $ | 2,717,538 | | | | | $ | (4,270,544) | | | | | $ | (1,552,970) | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options
|
| | | | — | | | | | | — | | | | | | 5,502 | | | | | | — | | | | | | 5,502 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (464,944) | | | | | | (464,944) | | |
Balance – March 31, 2019
|
| | | | 3,599,300 | | | | | | 36 | | | | | | 2,723,040 | | | | | | (4,735,488) | | | | | | (2,012,412) | | |
Issuance of investor and placement agent
warrants in connection with issuance of convertible notes payable, net of issuance costs(1) |
| | | | — | | | | | | — | | | | | | 437,901 | | | | | | — | | | | | | 437,901 | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options
|
| | | | — | | | | | | — | | | | | | 5,258 | | | | | | — | | | | | | 5,258 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,135,178) | | | | | | (1,135,178) | | |
Balance – June 30, 2019
|
| | | | 3,599,300 | | | | | | 36 | | | | | | 3,166,199 | | | | | | (5,870,666) | | | | | | (2,704,431) | | |
Issuance of investor and placement agent
warrants in connection with issuance of convertible notes payable, net of issuance costs(2) |
| | | | — | | | | | | — | | | | | | 1,387,483 | | | | | | — | | | | | | 1,387,483 | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 2,223 | | | | | | — | | | | | | 30,800 | | | | | | — | | | | | | 30,800 | | |
Options
|
| | | | — | | | | | | — | | | | | | 5,134 | | | | | | — | | | | | | 5,134 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,354,908) | | | | | | (1,354,908) | | |
Balance – September 30, 2019
|
| | | | 3,601,523 | | | | | $ | 36 | | | | | $ | 4,589,616 | | | | | $ | (7,225,574) | | | | | $ | (2,635,922) | | |
| | |
For the Nine Months Ended
September 30, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash Flows From Operating Activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (5,727,918) | | | | | $ | (2,955,030) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 227,355 | | | | | | 4,303 | | |
Bad debt expense
|
| | | | 3,734 | | | | | | (10,670) | | |
Gain on forgiveness of accounts payable – supplier
|
| | | | (236,248) | | | | | | — | | |
Allowance for other asset
|
| | | | — | | | | | | 200,000 | | |
Stock-based compensation:
|
| | | | | | | | | | | | |
Stock options
|
| | | | 15,993 | | | | | | 15,894 | | |
Common stock
|
| | | | 62,484 | | | | | | 30,800 | | |
Amortization of debt discount and debt issuance costs
|
| | | | 915,994 | | | | | | 444,928 | | |
Amortization of debt discount and debt issuance costs – related parties
|
| | | | 357,201 | | | | | | 27,541 | | |
Amortization of beneficial conversion feature
|
| | | | 1,984,322 | | | | | | — | | |
Loss on extinguishment of convertible note payable
|
| | | | 297,272 | | | | | | — | | |
Gain on settlement of notes and other payables
|
| | | | (139,333) | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (762,452) | | | | | | 288,830 | | |
Prepaid expenses and other current assets
|
| | | | (89,013) | | | | | | (36,967) | | |
Other asset
|
| | | | — | | | | | | (200,000) | | |
Accounts payable – suppliers
|
| | | | (193,334) | | | | | | (180,514) | | |
Accounts payable – trade
|
| | | | 68,002 | | | | | | 403,470 | | |
Accrued expenses and other current liabilities
|
| | | | 492,372 | | | | | | 13,304 | | |
Accrued interest
|
| | | | 195,596 | | | | | | — | | |
Accrued interest – related parties
|
| | | | 53,026 | | | | | | — | | |
Net Cash Used In Operating Activities
|
| | | | (2,474,947) | | | | | | (1,954,111) | | |
Cash Flows From Investing Activities: | | | | | | | | | | | | | |
Purchase of intangible assets
|
| | | | (855,019) | | | | | | (70,000) | | |
Purchase of property and equipment
|
| | | | (5,287) | | | | | | (2,449) | | |
Advances to related party
|
| | | | — | | | | | | (75,000) | | |
Repayment of related party advances
|
| | | | — | | | | | | 75,000 | | |
Net Cash Used In Investing Activities
|
| | | | (860,306) | | | | | | (72,449) | | |
Cash Flows From Financing Activities: | | | | | | | | | | | | | |
Proceeds from sale of common stock and warrants in initial public offering, net(1)
|
| | | | 11,503,488 | | | | | | — | | |
Payment of initial public offering issuance costs
|
| | | | (841,376) | | | | | | — | | |
Proceeds from issuance of convertible notes payable and investor warrants(2)
|
| | | | — | | | | | | 2,127,401 | | |
Advances from related party
|
| | | | — | | | | | | 29,250 | | |
| | |
For the Nine Months Ended
September 30, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Repayment of advance from related party
|
| | | | — | | | | | | (45,000) | | |
Proceeds from issuance of notes payable
|
| | | | 656,190 | | | | | | — | | |
Repayment of notes payable
|
| | | | (95,000) | | | | | | (90,427) | | |
Proceeds from issuance of notes payable – related parties
|
| | | | 585,000 | | | | | | — | | |
Repayment of note payable – related party
|
| | | | (150,000) | | | | | | — | | |
Net Cash Provided By Financing Activities
|
| | | | 11,658,302 | | | | | | 2,021,224 | | |
Net Increase (Decrease) In Cash
|
| | | | 8,323,049 | | | | | | (5,336) | | |
Cash – Beginning of the Period
|
| | |
|
33,785
|
| | | |
|
7,518
|
| |
Cash – End of the Period
|
| | | $ | 8,356,834 | | | | | $ | 2,182 | | |
|
| Supplemental Disclosures of Cash Flow Information: | | | | | | | | | | | | | |
|
Cash paid during the period for:
|
| | | | | | | | | | | | |
|
Interest
|
| | | $ | 574 | | | | | $ | 7,346 | | |
|
Income taxes
|
| | | $ | — | | | | | $ | — | | |
|
Non-cash investing and financing activities:
|
| | | | | | | | | | | | |
|
Conversion of notes payable and accrued interest into common stock
|
| | | $ | 16 | | | | | $ | — | | |
|
Original issue discount in connection with convertible notes payable
|
| | | $ | 285,000 | | | | | $ | 235,000 | | |
|
Original issue discount in connection with convertible notes payable – related
party |
| | | $ | 75,500 | | | | | $ | 15,000 | | |
|
Issuance of investor and placement agent warrants in connection with issuance of convertible notes payable
|
| | | $ | — | | | | | $ | 2,874,870 | | |
|
Accrual of intangible assets
|
| | | $ | 644,981 | | | | | $ | 30,000 | | |
|
Accrual of deferred offering costs
|
| | | $ | — | | | | | $ | 211,684 | | |
|
Reduction of additional paid-in capital for initial public offering issuance costs that were previously paid
|
| | | $ | (56,367) | | | | | $ | — | | |
|
Reversal of previously accrued deferred offering costs
|
| | | $ | (218,829) | | | | | $ | — | | |
|
Forgiveness of related party liability
|
| | | $ | 33,738 | | | | | $ | — | | |
| | |
For the Nine Months Ended
September 30, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Stock options
|
| | | | 96,721 | | | | | | 54,333 | | |
Warrants(1)
|
| | | | 7,229,272 | | | | | | 843,889 | | |
Convertible notes(2)
|
| | | | — | | | | | | 20,072 | | |
| | | | | 7,325,993 | | | | | | 918,294 | | |
| | |
September 30,
2020 |
| |
December 31,
2019 |
| ||||||
Acquired data
|
| | | $ | 1,500,000 | | | | | $ | — | | |
Acquired software
|
| | | | 100,000 | | | | | | 100,000 | | |
| | | | | 1,600,000 | | | | | | 100,000 | | |
Less: accumulated amortization
|
| | | | (242,274) | | | | | | (16,667) | | |
Intangible assets, net
|
| | | $ | 1,357,726 | | | | | $ | 83,333 | | |
For the Years Ending December 31,
|
| |
Total
|
| |||
2020
|
| | | $ | 87,500 | | |
2021
|
| | | | 333,333 | | |
2022
|
| | | | 300,000 | | |
2023
|
| | | | 300,000 | | |
2024
|
| | | | 300,000 | | |
Thereafter
|
| | | | 36,893 | | |
| | | | $ | 1,357,726 | | |
|
| | |
September 30,
2020 |
| |
December 31,
2019 |
| ||||||
Accrued bonuses
|
| | | $ | 400,000 | | | | | $ | — | | |
Accrued payroll taxes
|
| | | | 6,074 | | | | | | 163,746 | | |
Accrued supplier expenses
|
| | | | 100,506 | | | | | | 39,026 | | |
Accrued legal and professional fees
|
| | | | 62,976 | | | | | | 172,801 | | |
Accrued commissions
|
| | | | 82,187 | | | | | | — | | |
Credit card payable
|
| | | | 16,396 | | | | | | 30,113 | | |
Accrued director fees
|
| | | | 12,936 | | | | | | — | | |
Accrued programming expenses
|
| | | | 1,750 | | | | | | 36,993 | | |
Accrued issuable equity
|
| | | | 50,484 | | | | | | — | | |
Deferred revenue
|
| | | | 15,000 | | | | | | 15,000 | | |
Other
|
| | | | 18,312 | | | | | | 20,995 | | |
Total accrued expenses and other current liabilities
|
| | | $ | 766,621 | | | | | $ | 478,674 | | |
| | |
For the Three Months Ended
September 30, |
| |
For the Nine Months Ended
September 30, |
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
| |||||||||
Expected term (years)
|
| | | | 3.86 | | | | | | n/a | | | | | | 3.86 | | | |
5.00
|
|
Expected volatility
|
| | | | 61.2% | | | | | | n/a | | | | | | 61.2% | | | |
55.8%-56.1%
|
|
Risk free interest rate
|
| | | | 0.24% | | | | | | n/a | | | | | | 0.24% | | | |
1.75%-2.32%
|
|
Expected dividends
|
| | | | 0.00% | | | | | | n/a | | | | | | 0.00% | | | |
0.00%
|
|
| | |
Number of
Warrants |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Life In Years |
| |
Intrinsic
Value |
| ||||||||||||
Outstanding, January 1, 2020
|
| | | | 1,138,557 | | | | | $ | 4.95 | | | | | | | | | | | | | | |
Issued
|
| | | | 4,854,718 | | | | | | 5.30 | | | | | | | | | | | | | | |
Warrant adjustment(1)
|
| | | | — | | | | | | (0.89) | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Expired
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding, September 30, 2020(2)
|
| | | | 5,993,275 | | | | | $ | 5.23 | | | | | | 4.5 | | | | | $ | — | | |
Exercisable, September 30, 2020
|
| | | | 5,452,953 | | | | | $ | 5.28 | | | | | | 4.6 | | | | | $ | — | | |
|
Warrants Outstanding
|
| |
Warrants Exercisable
|
| |||||||||||||||
|
Exercise
Price |
| |
Outstanding
Number of Warrants |
| |
Weighted
Average Remaining Life In Years |
| |
Exercisable
Number of Warrants |
| |||||||||
|
$4.20
|
| | | | 1,235,997 | | | | | | 3.6 | | | | | | 857,141 | | |
|
$4.95
|
| | | | 177,223 | | | | | | 2.5 | | | | | | 177,223 | | |
|
$5.50
|
| | | | 4,455,055 | | | | | | 4.8 | | | | | | 4,418,589 | | |
|
$6.25
|
| | | | 125,000 | | | | | | — | | | | | | — | | |
| | | | | | 5,993,275 | | | | | | 4.6 | | | | | | 5,452,953 | | |
| | |
For the Three
Months Ended September 30, |
| |
For the Nine
Months Ended September 30, |
| ||||||||||||||||||
Customer
|
| |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
| ||||||||||||
Customer A
|
| | | | N/A | | | | | | 46.36% | | | | | | N/A | | | | | | 64.01% | | |
Customer F
|
| | | | N/A | | | | | | N/A | | | | | | 30.28% | | | | | | N/A | | |
Customer G
|
| | | | N/A | | | | | | N/A | | | | | | 43.86% | | | | | | N/A | | |
Customer H
|
| | | | 94.13% | | | | | | N/A | | | | | | 23.43% | | | | | | N/A | | |
Customer I
|
| | | | * | | | | | | 40.32% | | | | | | * | | | | | | 16.50% | | |
Customer J
|
| | | | 21.40% | | | | | | N/A | | | | | | * | | | | | | N/A | | |
Total
|
| | | | 115.53% | | | | | | 86.68% | | | | | | 97.57% | | | | | | 80.51% | | |
Customer
|
| |
September 30,
2020 |
| |
December 31,
2019 |
| ||||||
Customer D
|
| | | | N/A | | | | | | 13.73% | | |
Customer E
|
| | | | N/A | | | | | | 12.23% | | |
Customer F
|
| | | | 20.99% | | | | | | N/A | | |
Customer G
|
| | | | 34.38% | | | | | | N/A | | |
Customer H
|
| | | | 32.82% | | | | | | N/A | | |
Total
|
| | | | 88.19% | | | | | | 25.96% | | |
| | |
For the Three
Months Ended September 30, |
| |
For the Nine
Months Ended September 30, |
| ||||||||||||||||||
Supplier
|
| |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
| ||||||||||||
Supplier A
|
| | | | 18.22% | | | | | | N/A | | | | | | 33.09% | | | | | | N/A | | |
Supplier B
|
| | | | 15.67% | | | | | | N/A | | | | | | 16.12% | | | | | | N/A | | |
Supplier C
|
| | | | N/A | | | | | | 74.08% | | | | | | N/A | | | | | | 81.09% | | |
Supplier D
|
| | | | * | | | | | | 12.60% | | | | | | 12.81% | | | | | | * | | |
Supplier E
|
| | | | 15.74% | | | | | | N/A | | | | | | * | | | | | | N/A | | |
Total
|
| | | | 49.63% | | | | | | 86.68% | | | | | | 62.02% | | | | | | 81.09% | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Assets | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 33,785 | | | | | $ | 7,518 | | |
Accounts receivable, net
|
| | | | 38,704 | | | | | | 372,630 | | |
Prepaid expenses and other current assets
|
| | | | 28,072 | | | | | | — | | |
Total Current Assets
|
| | | | 100,561 | | | | | | 380,148 | | |
Property and equipment, net
|
| | | | 4,549 | | | | | | — | | |
Intangible assets, net
|
| | | | 83,333 | | | | | | — | | |
Deferred offering costs
|
| | | | 285,196 | | | | | | — | | |
Total Assets
|
| | | $ | 473,639 | | | | | $ | 380,148 | | |
Liabilities and Stockholders’ Deficiency | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | |
Accounts payable – suppliers
|
| | | $ | 785,180 | | | | | $ | 961,414 | | |
Accounts payable – trade
|
| | | | 867,554 | | | | | | 265,846 | | |
Accrued expenses and other current liabilities
|
| | | | 585,790 | | | | | | 393,167 | | |
Deferred revenue
|
| | | | 15,000 | | | | | | 15,000 | | |
Due to related party
|
| | | | 29,000 | | | | | | 45,000 | | |
Notes payable
|
| | | | 113,967 | | | | | | 204,394 | | |
Convertible notes payable, current portion, net of discount of $912,695 and $16,703 as of December 31, 2019 and December 31, 2018, respectively
|
| | | | 3,117,805 | | | | | | 3,297 | | |
Total Current Liabilities
|
| | | | 5,514,296 | | | | | | 1,888,118 | | |
Convertible notes payable, non-current portion
|
| | | | — | | | | | | 45,000 | | |
Total Liabilities
|
| | | | 5,514,296 | | | | | | 1,933,118 | | |
Commitments and contingencies (Note 10)
|
| | | | | | | | | | | | |
Stockholders’ Deficiency: | | | | | | | | | | | | | |
Preferred stock, $0.00001 par value; 5,000,000 shares authorized;
|
| | | | | | | | | | | | |
No shares issued and outstanding
|
| | | | — | | | | | | — | | |
Common stock, $0.00001 par value; 95,000,000 shares authorized;
|
| | | | | | | | | | | | |
3,601,521 and 3,599,300 shares issued and outstanding
|
| | | | 36 | | | | | | 36 | | |
Additional paid-in capital
|
| | | | 3,362,724 | | | | | | 2,717,538 | | |
Accumulated deficit
|
| | | | (8,403,417) | | | | | | (4,270,544) | | |
Total Stockholders’ Deficiency
|
| | | | (5,040,657) | | | | | | (1,552,970) | | |
Total Liabilities and Stockholders’ Deficiency
|
| | | $ | 473,639 | | | | | $ | 380,148 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net Revenues
|
| | | $ | 177,635 | | | | | $ | 106,422 | | |
Operating Expenses: | | | | | | | | | | | | | |
Technology
|
| | | | 1,486,056 | | | | | | 2,058,660 | | |
General and administrative
|
| | | | 2,007,362 | | | | | | 1,820,942 | | |
Total Operating Expenses
|
| | | | 3,493,418 | | | | | | 3,879,602 | | |
Loss From Operations
|
| | | | (3,315,783) | | | | | | (3,773,180) | | |
Other Income (Expense): | | | | | | | | | | | | | |
Gain on forgiveness of accounts payable - supplier
|
| | | | — | | | | | | 66,804 | | |
Interest expense
|
| | | | (819,482) | | | | | | (51,129) | | |
Other income
|
| | | | 2,392 | | | | | | 28,408 | | |
Total Other (Expense) Income
|
| | | | (817,090) | | | | | | 44,083 | | |
Net Loss
|
| | | $ | (4,132,873) | | | | | $ | (3,729,097) | | |
Net Loss Per Share – Basic and Diluted
|
| | | $ | (1.15) | | | | | $ | (1.05) | | |
Weighted Average Common Shares Outstanding – Basic and Diluted
|
| | | | 3,600,316 | | | | | | 3,542,206 | | |
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
|
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance – January 1, 2018
|
| | | | 3,405,491 | | | | | $ | 34 | | | | | $ | (44,810) | | | | | $ | (541,447) | | | | | $ | (586,223) | | |
Shares issued for cash
|
| | | | 151,994 | | | | | | 2 | | | | | | 752,366 | | | | | | — | | | | | | 752,368 | | |
Shares issued upon conversion of notes payable and accrued interest
|
| | | | 27,370 | | | | | | — | | | | | | 135,481 | | | | | | — | | | | | | 135,481 | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 14,445 | | | | | | — | | | | | | 71,500 | | | | | | — | | | | | | 71,500 | | |
Options
|
| | | | — | | | | | | — | | | | | | 32,300 | | | | | | — | | | | | | 32,300 | | |
Warrants
|
| | | | — | | | | | | — | | | | | | 661,020 | | | | | | — | | | | | | 661,020 | | |
Beneficial conversion feature of convertible
note payable |
| | | | — | | | | | | — | | | | | | 17,931 | | | | | | — | | | | | | 17,931 | | |
Contribution of capital – related party share transfer
|
| | | | — | | | | | | — | | | | | | 1,091,750 | | | | | | — | | | | | | 1,091,750 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (3,729,097) | | | | | | (3,729,097) | | |
Balance – December 31, 2018
|
| | | | 3,599,300 | | | | | $ | 36 | | | | | $ | 2,717,538 | | | | | $ | (4,270,544) | | | | | $ | (1,552,970) | | |
Issuance of investor and placement agent
warrants in connection with issuance of convertible notes payable, net of issuance costs(1) |
| | | | — | | | | | | — | | | | | | 617,911 | | | | | | — | | | | | | 617,911 | | |
Stock-based compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 2,221 | | | | | | — | | | | | | 6,000 | | | | | | — | | | | | | 6,000 | | |
Options
|
| | | | — | | | | | | — | | | | | | 21,275 | | | | | | — | | | | | | 21,275 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (4,132,873) | | | | | | (4,132,873) | | |
Balance – December 31, 2019
|
| | | | 3,601,521 | | | | | $ | 36 | | | | | $ | 3,362,724 | | | | | $ | (8,403,417) | | | | | $ | (5,040,657) | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash Flows From Operating Activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (4,132,873) | | | | | $ | (3,729,097) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 17,131 | | | | | | — | | |
Bad debt expense
|
| | | | 285 | | | | | | 88,393 | | |
Non-cash interest expense
|
| | | | — | | | | | | 1,228 | | |
Gain on forgiveness of accounts payable – supplier
|
| | | | — | | | | | | (66,804) | | |
Allowance for other asset
|
| | | | 200,000 | | | | | | — | | |
Stock-based compensation
|
| | | | 27,275 | | | | | | 764,820 | | |
Contribution of capital – related party share transfer
|
| | | | — | | | | | | 1,091,750 | | |
Amortization of debt discount and debt issuance costs
|
| | | | 700,945 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | 333,641 | | | | | | (221,612) | | |
Prepaid expenses and other current assets
|
| | | | (28,072) | | | | | | — | | |
Other asset
|
| | | | (200,000) | | | | | | — | | |
Accounts payable – suppliers
|
| | | | (176,234) | | | | | | 299,933 | | |
Accounts payable – trade
|
| | | | 601,708 | | | | | | 265,846 | | |
Accrued expenses and other current liabilities
|
| | | | (36,206) | | | | | | 297,196 | | |
Deferred revenue
|
| | | | — | | | | | | 15,000 | | |
Net Cash Used In Operating Activities
|
| | | | (2,692,400) | | | | | | (1,193,347) | | |
Cash Flows From Investing Activities: | | | | | | | | | | | | | |
Purchase of intangible assets
|
| | | | (100,000) | | | | | | — | | |
Purchase of property and equipment
|
| | | | (5,013) | | | | | | — | | |
Advances to related party
|
| | | | (75,000) | | | | | | — | | |
Repayment of related party advances
|
| | | | 75,000 | | | | | | — | | |
Net Cash Used In Investing Activities
|
| | | | (105,013) | | | | | | — | | |
Cash Flows From Financing Activities: | | | | | | | | | | | | | |
Proceeds from sale of common stock
|
| | | | — | | | | | | 752,368 | | |
Proceeds from related party
|
| | | | — | | | | | | 45,000 | | |
Advances from related parties
|
| | | | 29,905 | | | | | | — | | |
Repayment of advances from related party
|
| | | | (45,905) | | | | | | — | | |
Proceeds from issuance of convertible notes payable and investor warrants(1)
|
| | | | 2,986,474 | | | | | | 190,000 | | |
Proceeds from issuance of notes payable
|
| | | | — | | | | | | 278,700 | | |
Repayment of notes payable
|
| | | | (90,427) | | | | | | (74,306) | | |
Payment of deferred offering costs
|
| | | | (56,367) | | | | | | — | | |
Net Cash Provided By Financing Activities
|
| | | | 2,823,680 | | | | | | 1,191,762 | | |
Net Increase (Decrease) In Cash
|
| | | | 26,267 | | | | | | (1,585) | | |
Cash – Beginning of the Year
|
| | |
|
7,518
|
| | | |
|
9,103
|
| |
Cash – End of the Year
|
| | | $ | 33,785 | | | | | $ | 7,518 | | |
| Supplemental Disclosures of Cash Flow Information: | | | | | | | | | | | | | |
|
Cash paid during the period for:
|
| | | | | | | | | | | | |
|
Interest
|
| | | $ | 7,346 | | | | | $ | 25,001 | | |
|
Income taxes
|
| | | $ | — | | | | | $ | — | | |
|
Non-cash investing and financing activities:
|
| | | | | | | | | | | | |
|
Shares issued upon conversion of notes payable and accrued interest
|
| | | $ | — | | | | | $ | 135,481 | | |
|
Beneficial conversion feature of convertible note payable
|
| | | $ | — | | | | | $ | 17,931 | | |
|
Original issue discount in connection with convertible notes payable
|
| | | $ | 360,500 | | | | | $ | — | | |
|
Issuance of investor and placement agent warrants in connection with issuance of convertible notes payable
|
| | | $ | 617,911 | | | | | $ | — | | |
|
Accrual of deferred offering costs
|
| | | $ | 228,829 | | | | | $ | — | | |
|
Equity issuance costs – placement agent warrants
|
| | | $ | 24,033 | | | | | $ | — | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Stock options
|
| | | | 93,967 | | | | | | 58,223 | | |
Warrants
|
| | | | 1,138,556 | | | | | | 177,223 | | |
Convertible notes(1)
|
| | | | 20,072 | | | | | | 17,902 | | |
| | | | | 1,252,595 | | | | | | 253,348 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Accrued payroll
|
| | | $ | — | | | | | $ | 142,843 | | |
Accrued payroll taxes
|
| | | | 163,746 | | | | | | 90,547 | | |
Accrued supplier expenses
|
| | | | 39,026 | | | | | | 75,233 | | |
Accrued legal and professional fees
|
| | | | 172,801 | | | | | | 21,338 | | |
Accrued rent
|
| | | | — | | | | | | 18,280 | | |
Accrued commissions
|
| | | | — | | | | | | 9,889 | | |
Accrued interest
|
| | | | 122,117 | | | | | | 21,210 | | |
Credit card payable
|
| | | | 30,113 | | | | | | — | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Accrued programming expenses
|
| | | | 36,993 | | | | | | — | | |
Other
|
| | | | 20,994 | | | | | | 13,827 | | |
Total accrued expenses and other current liabilities
|
| | | $ | 585,790 | | | | | $ | 393,167 | | |
|
| | |
For the Years
Ended December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Deferred tax benefit: | | | | | | | | | | | | | |
Federal
|
| | | $ | (718,716) | | | | | $ | (553,356) | | |
State and local
|
| | | | (444,920) | | | | | | (385,189) | | |
| | | | | (1,163,636) | | | | | | (938,545) | | |
Change in valuation allowance
|
| | | | 1,163,636 | | | | | | 938,545 | | |
Provision for income taxes
|
| | | $ | — | | | | | $ | — | | |
| | |
For the Years
Ended December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Tax expense at the federal statutory rate
|
| | | | 21.0% | | | | | | 21.0% | | |
State taxes, net of federal benefit
|
| | | | 13.0% | | | | | | 13.0% | | |
Permanent differences
|
| | | | (5.8)% | | | | | | (10.0)% | | |
Prior period adjustment
|
| | | | 0.0% | | | | | | 1.1% | | |
Change in valuation allowance
|
| | | | (28.2)% | | | | | | (25.1)% | | |
Effective income tax rate
|
| | | | 0.0% | | | | | | 0.0% | | |
|
| | |
As of December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net operating loss carryforwards
|
| | | $ | 1,884,942 | | | | | $ | 812,900 | | |
Stock-based compensation expense
|
| | | | 287,800 | | | | | | 235,729 | | |
Other reserve
|
| | | | 68,000 | | | | | | — | | |
Accrued compensation
|
| | | | — | | | | | | 28,477 | | |
Deferred tax assets
|
| | | | 2,240,742 | | | | | | 1,077,106 | | |
Valuation allowance
|
| | | | (2,240,742) | | | | | | (1,077,106) | | |
Deferred tax assets, net
|
| | | $ | — | | | | | $ | — | | |
| | |
For the Year Ended December 31, 2019
|
| |||||||||||||||
| | |
Issuance
|
| |
Amortization
|
| |
Balance
|
| |||||||||
Convertible Notes Payable — Senior Offering: | | | | | | | | | | | | | | | | | | | |
Principal
|
| | | $ | 2,750,000 | | | | | $ | — | | | | | $ | 2,750,000 | | |
Less: | | | | | | | | | | | | | | | | | | | |
Original issue discount
|
| | | | (250,000) | | | | | | 144,581 | | | | | | (105,419) | | |
Debt issuance costs
|
| | | | (393,832) | | | | | | 227,762 | | | | | | (166,070) | | |
Debt discount
|
| | | | (416,667) | | | | | | 240,968 | | | | | | (175,699) | | |
Total
|
| | | $ | 1,689,501 | | | | | $ | 613,311 | | | | | $ | 2,302,812 | | |
| | |
For the Year Ended December 31, 2019
|
| |||||||||||||||
| | |
Issuance
|
| |
Amortization
|
| |
Balance
|
| |||||||||
Convertible Notes Payable — Subordinated Offering: | | | | | | | | | | | | | | | | | | | |
Principal
|
| | | $ | 1,215,500 | | | | | $ | — | | | | | $ | 1,215,500 | | |
Less: | | | | | | | | | | | | | | | | | | | |
Original issue discount
|
| | | | (110,500) | | | | | | 14,611 | | | | | | (95,889) | | |
Debt issuance costs
|
| | | | (241,772) | | | | | | 31,969 | | | | | | (209,803) | | |
Debt discount
|
| | | | (184,167) | | | | | | 24,352 | | | | | | (159,815) | | |
Total
|
| | | $ | 679,061 | | | | | $ | 70,932 | | | | | $ | 749,993 | | |
| | |
For the Years Ended
December 31, |
| ||||||
| | |
2019
|
| |
2018
|
| |||
Expected term (years)
|
| |
6.08
|
| | | | n/a | | |
Expected volatility
|
| |
55.8%
|
| | | | n/a | | |
Risk free interest rate
|
| |
1.48% – 1.81%
|
| | | | n/a | | |
Expected dividends
|
| |
0.00%
|
| | | | n/a | | |
| | |
Number of
Options |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Term (Years) |
| |
Intrinsic
Value |
| ||||||||||||
Outstanding at January 1, 2018
|
| | | | 112,667 | | | | | $ | 2.97 | | | | | | | | | | | | | | |
Granted
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Forfeited
|
| | | | (54,445) | | | | | | 2.97 | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding at December 31, 2018
|
| | | | 58,222 | | | | | | 2.97 | | | | | | | | | | | | | | |
Granted
|
| | | | 39,634 | | | | | | 33.75 | | | | | | | | | | | | | | |
Forfeited
|
| | | | (3,889) | | | | | | 2.97 | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding at December 31, 2019
|
| | | | 93,967 | | | | | $ | 15.93 | | | | | | 5.2 | | | | | $ | — | | |
Exercisable at December 31, 2019
|
| | | | 30,558 | | | | | $ | 2.97 | | | | | | 1.7 | | | | | $ | — | | |
Options Outstanding
|
| |
Options Exercisable
|
| |||||||||||||||
Exercise
Price |
| |
Outstanding
Number of Options |
| |
Weighted
Average Remaining Life In Years |
| |
Exercisable
Number of Options |
| |||||||||
$2.97
|
| | | | 54,334 | | | | | | 1.7 | | | | | | 30,558 | | |
$33.75
|
| | | | 39,634 | | | | | | — | | | | | | — | | |
| | | | | 93,968 | | | | | | 1.7 | | | | | | 30,558 | | |
| | |
For the Years Ended
December 31, |
| |||
| | |
2019
|
| |
2018
|
|
Expected term (years)
|
| |
5.00
|
| |
5.00
|
|
Expected volatility
|
| |
55.8%-56.1%
|
| |
100.0%-102.0%
|
|
Risk free interest rate
|
| |
1.59%-2.32%
|
| |
2.56%-2.96%
|
|
Expected dividends
|
| |
0.00%
|
| |
0.00%
|
|
| | |
Number of
Warrants |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Life In Years |
| |
Intrinsic
Value |
| ||||||||||||
Outstanding at January 1, 2018
|
| | | | — | | | | | $ | — | | | | | | | | | | | | | | |
Issued
|
| | | | 177,223 | | | | | | 4.95 | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Expired
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding, December 31, 2018
|
| | | | 177,223 | | | | | | 4.95 | | | | | | | | | | | | | | |
Granted
|
| | | | 961,334 | | | | | | 4.95 | | | | | | | | | | | | | | |
Exercised
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Expired
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Outstanding, December 31, 2019
|
| | | | 1,138,557 | | | | | $ | 4.95 | | | | | | 4.3 | | | | | $ | — | | |
Exercisable, December 31, 2019
|
| | | | 177,223 | | | | | $ | 4.95 | | | | | | 3.3 | | | | | $ | — | | |
| | |
For the Years Ended
December 31, |
| |||||||||
Customer
|
| |
2019
|
| |
2018
|
| ||||||
Customer A
|
| | | | 58.32% | | | | | | 85.17% | | |
Customer B
|
| | | | 16.23% | | | | | | * | | |
Total
|
| | | | 74.55% | | | | | | 85.17% | | |
| | |
As of
December 31, |
| | | | |||||||||
Customer
|
| |
2019
|
| |
2018
|
| | | | ||||||
Customer D
|
| | | | 13.73% | | | | | | * | | | | | |
Customer E
|
| | | | 12.23% | | | | | | * | | | | | |
Customer A
|
| | | | * | | | | | | 57.25% | | | | | |
Customer C
|
| | | | * | | | | | | 11.07% | | | | | |
Total
|
| | | | 25.96% | | | | | | 68.32% | | | | | |
| | |
For the Years Ended
December 31, |
| |||||||||
Supplier
|
| |
2019
|
| |
2018
|
| ||||||
Supplier A
|
| | | | 78.85% | | | | | | 56.05% | | |
| | |
Monthly
Revenue Threshold |
| |
Below Threshold
|
| |
Above Threshold
|
| | | | |||||||||||||||||||||
Type
|
| |
Customer
|
| |
Kubient
|
| |
Customer
|
| |
Kubient
|
| | | | ||||||||||||||||||
Programmatic/display
|
| | | $ | 300,000 | | | | | | 90% | | | | | | 10%(A) | | | | | | 50% | | | | | | 50% | | | | | |
Video
|
| | | $ | 30,000 | | | | | | 100% | | | | | | 0% | | | | | | 50% | | | | | | 50% | | | | | |
Direct deals
|
| | | $ | — | | | | | | 100% | | | | | | 0% | | | | | | 50% | | | | | | 50% | | | | | |
Native
|
| | | $ | 100,000 | | | | | | 100% | | | | | | 0% | | | | | | 50% | | | | | | 50% | | | | | |
Data/newsletter
|
| | | $ | — | | | | | | 0% | | | | | | 0% | | | | | | 50% | | | | | | 50% | | | | | |
Podcasts
|
| | | $ | — | | | | | | 0% | | | | | | 0% | | | | | | 50% | | | | | | 50% | | | | | |
Other
|
| | | $ | — | | | | | | 0% | | | | | | 0% | | | | | | 50% | | | | | | 50% | | | | | |
|
SEC Registration Fees
|
| | | $ | 1,984.23 | | |
|
FINRA Fees
|
| | | | 3,228.09 | | |
|
Printing and Engraving Expenses
|
| | | | 12,000 | | |
|
Legal Fees and Expenses
|
| | | | 150,000 | | |
|
Accounting Fees and Expenses
|
| | | | 50,000 | | |
|
Transfer Agent Fees
|
| | | | 2,500 | | |
|
Miscellaneous
|
| | | | 10,000 | | |
|
Total
|
| | | $ | 229,712.32 | | |
Exhibit
Number |
| |
Exhibit Descriptions
|
| |
Incorporated by References
|
| |
Filed
Herewith |
| ||||||
| | | | | |
Form
|
| |
Filing Dates
|
| |
Exhibit
Number |
| | | |
10.14 | | | Master Services Agreement with Sphere Digital, LLC dated June 1, 2018 | | | S-1 | | | 7/2/2020 | | | 10.14 | | | | |
10.15 | | | Master Services Agreement with The Associated Press dated February 5, 2020 | | | S-1 | | | 7/2/2020 | | | 10.15 | | | | |
10.16 | | | Form of Warrant Agency Agreement including Form of Unit Warrant | | | S-1A | | | 7/30/2020 | | | 10.16 | | | | |
21.1 | | | Subsidiary of the Registrant | | | DRS | | | 7/2/2020 | | | 21.1 | | | | |
23.1 | | | Consent of Marcum LLP | | | | | | | | | | | | x | |
23.2 | | | Consent of Waller Lansden Dortch & Davis, LLP (included in Exhibit 5.1) | | | | | | | | | | | | x | |
24.1 | | | Power of Attorney (included on the signature page of this registration statement) | | | | | | | | | | | | x | |
| | | | KUBIENT, INC. | | |||
| | | | By: | | |
/s/ Paul Roberts
Paul Roberts
Interim Chief Executive Officer |
|
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Paul Roberts
Paul Roberts
|
| |
Interim Chief Executive Officer, Chief Strategy Officer, President and Chairman
(principal executive officer) |
| |
December 21, 2020
|
|
|
/s/ Joshua Weiss
Joshua Weiss
|
| |
Chief Financial Officer
(principal financial and accounting officer) |
| |
December 21, 2020
|
|
|
/s/ Peter A. Bordes, Jr.
Peter A. Bordes, Jr.
|
| | Director | | |
December 21, 2020
|
|
|
/s/ Grainne Coen
Grainne Coen
|
| | Director | | |
December 21, 2020
|
|
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/s/ Elisabeth DeMarse
Elisabeth DeMarse
|
| | Director | | |
December 21, 2020
|
|
|
/s/ Jeannie Mun
Jeannie Mun
|
| | Director | | |
December 21, 2020
|
|
|
/s/Christopher H. Smith
Christopher H. Smith
|
| | Director | | |
December 21, 2020
|
|