v3.22.2.2
Cover - shares
 3 Months Ended
Mar. 31, 2022
May 16, 2022
Cover [Abstract]    
Document Type 10-Q/A  
Amendment Flag true  
Amendment Description SPYR, Inc., referred to in this report as �SPYR,� the �Company,� �we,� �us,� and �our,� is filing this Amendment No. 1 on Form 10-Q/A (the �Amendment�) to its Quarterly Report on Form 10-Q for the three months ended March 31, 2022, originally filed on May 19, 2022 (the �Original Report�). This Amendment amends and restates Items 7 and 8 Part I and Item 15 of Part II of the Original Report. In Item 8, this Amendment includes our restated consolidated balance sheet, consolidated statement of operations and consolidated statement of cash flows for the year ended December 31, 2021 to correct the errors discussed below.   Management identified multiple errors in its financial statements which related to the following the corrections have the effect of:   1.Stock-based compensation accounting for shares issued and to be issued for services rendered to the Company during the three months ended March 31, 2022;   2.Stock-based compensation accounting for shares to certain consultants that were cancelled.   3.A write down of accounts receivable related to the Company�s discontinued operations, and classifying cash accounts as discontinued operations   4.Certain vendor invoices not recognized in the correct accounting period.   5.The fair value estimate as of March 31, 2022 of the derivative liability related to the Company�s convertible note agreements.   This Amendment amends and restates Item 1 and 2 of Part I, which includes our revised discussion of operating results to reflect the impact of the corrections discussed above.   In addition, the Exhibits index in Item 6 of Part II of the Original Report is hereby amended and restated in its entirety, and new certifications of the Company�s principal executive officer and principal financial officer required under Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, dated as of the filing of this Amendment, are filed and furnished, as applicable, as exhibits to this Amendment.  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2022  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2022  
Current Fiscal Year End Date --12-31  
Entity File Number 33-20111  
Entity Registrant Name SPYR, INC  
Entity Central Index Key 0000829325  
Entity Tax Identification Number 75-2636283  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 6700 Woodlands Parkway  
Entity Address, Address Line Two Ste. 230  
Entity Address, Address Line Three #331  
Entity Address, City or Town The Woodlands  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 77382  
City Area Code (303)  
Local Phone Number 991-8000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   290,252,374
v3.22.2.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Current Assets:    
Cash and Cash Equivalents $ 182,000 $ 32,000
Prepaid Expenses 46,000 47,000
Current Assets of Discontinued Operations 2,000 3,000
Total Current Assets 230,000 82,000
Other Assets:    
Property and Equipment, net 13,000 16,000
Other Assets 1,000 1,000
TOTAL ASSETS 244,000 99,000
Current Liabilities:    
Accounts Payable and Accrued Liabilities 1,655,000 1,825,000
Related Party Notes Payable, current portion 528,000 524,000
Notes Payable, current portion 38,000
Short-Term Convertible Notes Payable 209,000 206,000
Current Liabilities of Discontinued Operations 815,000 815,000
Total Current Liabilities 3,207,000 3,408,000
Other Liabilities:    
Notes Payable 2,572,000 2,534,000
Long-Term Convertible Notes Payable, net of discount 274,000 286,000
Derivative Liability 2,900,000 1,907,000
Total Liabilities 8,953,000 8,135,000
Stockholders� Deficit:    
Common Stock, $0.0001 par value, 750,000,000 shares authorized; 265,030,082 and 245,050,988 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 26,503 24,505
Common stock to be issued 895,500 425,097
Additional Paid-In Capital 59,456,984 58,448,385
Accumulated Deficit (69,088,000) (66,934,000)
Total Stockholder�s Deficit (8,709,000) (8,036,000)
TOTAL LIABILITIES AND STOCKHOLDER�S DEFICIT 244,000 99,000
Preferred Class A [Member]    
Stockholders� Deficit:    
Preferred stock, value 11 11
Preferred Class E [Member]    
Stockholders� Deficit:    
Preferred stock, value $ 2 $ 2
v3.22.2.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
Mar. 31, 2022
Dec. 31, 2021
Common stock, par value per share $ 0.0001 $ 0.0001
Common stock, shares authorized 750,000,000 750,000,000
Common stock, shares issued 265,030,082 245,050,988
Common stock, shares outstanding 265,030,082 245,050,988
Preferred Class A [Member]    
Preferred stock, par value per share $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 107,636 107,636
Preferred stock, shares outstanding 107,636 107,636
Preferred Class E [Member]    
Preferred stock, par value per share $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 20,000 20,000
Preferred stock, shares outstanding 20,000 20,000
v3.22.2.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Income Statement [Abstract]    
Revenues $ 1,000
Cost of Goods Sold
Gross Profit 1,000
Expenses:    
Labor and Related Expenses 563,000 489,000
Rent 6,000 28,000
Depreciation and Amortization 3,000 3,000
Professional Fees 730,000 429,000
Research and Development 4,000
Other General and Administrative 46,000
Total Operating Expenses 1,302,000 999,000
Operating Loss (1,301,000) (999,000)
Other Income (Expenses)    
Interest Expense (1,054,000) (102,000)
Amortization of Debt Discounts (33,000)
Loss on Conversion of Debt (32,000)
Loss on Settlement (30,000)
Loss on Issuance of Common Stock (16,000)
Gain on Disposition of Assets 5,000
Settlement Expense (98,000)
Change in Value of Derivative Liability 412,000 (104,000)
Unrealized Gain on Trading Securities 1,000
Total Other Income (Expenses) (851,000) (200,000)
Loss from Continuing Operations (2,152,000) (1,199,000)
Loss from Discontinued Operations (2,000) (12,000)
Net Loss $ (2,154,000) $ (1,211,000)
Basic and diluted loss per common share $ (0.01) $ (0.01)
Weighted average common shares outstanding 258,555,370 213,258,187
v3.22.2.2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)
Preferred Stock Class A [Member]
Preferred Stock Class E [Member]
Common Stock [Member]
Common Stock To Be Issued [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2020 $ 11 $ 2 $ 21,014 $ 55,391,973 $ (60,973,000) $ (5,560,000)
Beginning balance, shares at Dec. 31, 2020 107,636 20,000 210,137,631        
Fair Value of S-8 Registered Common Stock Issued for Services $ 300 370,700 371,000
Fair Value of S-8 Registered Common Stock Issued for Services, Shares     3,000,000        
Fair Value of Restricted Common Stock and Options Issued for Employee and Director Compensation $ 140 214,860 215,000
Fair Value of Restricted Common Stock and Options Issued for Employee and Director Compensation, shares     1,400,000        
Net Loss   (1,211,000) (1,211,000)
Ending balance, value at Mar. 31, 2021 $ 11 $ 2 $ 21,454 55,977,533 (62,184,000) (6,185,000)
Ending balance, shares at Mar. 31, 2021 107,636 20,000 214,537,631        
Beginning balance, value at Dec. 31, 2021 $ 11 $ 2 $ 24,505 425,097 58,448,385 (66,934,000) (8,036,000)
Beginning balance, shares at Dec. 31, 2021 107,636 20,000 245,050,988        
Fair Value of Common Stock Issued for Employee Compensation $ 102 (47,097) 46,995
Fair Value of Common Stock Issued for Employee Compensation, Shares     1,015,019        
Fair Value of S-8 Registered Common Stock Issued for Services $ 870 430,445 431,315
Fair Value of S-8 Registered Common Stock Issued for Services, Shares     8,700,000        
Fair Value of Common Stock Issued for Settlement $ 502 281,474 281,976
Fair Value of Common Stock Issued for Settlementt, Shares     5,015,994        
Fair Value of Common Stock Issued for Conversion of Notes Payable $ 336 53,359 53,695
Fair Value of Common Stock Issued for Conversion of Notes Payable, Shares     3,361,289        
Fair Value of Restricted Common Stock Issued for Services $ 189 29,811 30,000
Fair Value of Restricted Common Stock Issued for Services, Shares     1,886,792        
Fair Value of Restricted Common Stock and Options Issued for Employee and Director Compensation 517,500 517,500
Fair Value of Restricted Common Stock and Options Issued for Employee and Director Compensation, shares            
Reclassification of Derivative Liability to Additional Paid in Capital 166,514 166,514
Net Loss (2,154,000) (2,154,000)
Ending balance, value at Mar. 31, 2022 $ 11 $ 2 $ 26,503 $ 895,500 $ 59,456,984 $ (69,088,000) $ (8,709,000)
Ending balance, shares at Mar. 31, 2022 107,636 20,000 265,030,082        
v3.22.2.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Cash Flows From Operating Activities:    
Net Loss $ (2,154,000) $ (1,211,000)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:    
Loss on Discontinued Operations 1,000 12,000
Depreciation and Amortization 3,000 3,000
Common Stock Issued for Employee Compensation 518,000 215,000
Common Stock Issued for Services 461,000 371,000
Common Stock Issued for Settlement 98,000
Amortization of Debt Discounts on Convertible Notes Payable 1,072,000 34,000
Unrealized Gain on Trading securities (1,000)
Gain on Disposition of Assets (5,000)
Loss on Conversion of Debt Modification 32,000
Change in Value of Derivative Liability (412,000) 104,000
Changes in Operating Assets and Liabilities:    
Increase in Other Receivables 4,000
(Increase) Decrease in Prepaid Expenses 1,000 (29,000)
Increase in inventory (25,000)
Decrease in Operating Lease Right-of-Use Liability (16,000)
Increase in Accounts Payable and Accrued Liabilities 13,000 119,000
Increase in Accrued Interest on Short-Term Advances 18,000
Increase in Accrued Interest on SBA PPP Notes Payable 1,000
Increase in Accrued Interest on Notes Payable 41,000
Increase in Accrued Interest on Notes Payable Related Party 4,000
Increase in Accrued Interest on Line of Credit 18,000
Increase in Accrued Interest and Liquidated Damages on Convertible Notes 20,000
Net Cash Used in Operating Activities from Continuing Operations (322,000) (369,000)
Net Cash Used in Operating Activities from Discontinued Operations
Net Cash Used in Operating Activities (322,000) (369,000)
Cash Flows From Investing Activities:    
Sale of Property and Equipment 8,000
Net Cash Provided by Investing Activities 8,000
Cash Flows From Financing Activities:    
Proceeds from Long-Term Convertible Notes 510,000
Repayment of Notes Payable, current portion (38,000)
Proceeds from SBA PPP Note Payable 73,000
Net Cash Provided by Financing Activities 472,000 73,000
Net Change in Cash 150,000 (288,000)
Cash and Cash Equivalents at Beginning of Period 32,000 510,000
Cash and Cash Equivalents at End of Period 182,000 222,000
Supplemental Disclosure of Interest and Income Taxes Paid:    
Interest Paid during the Period
Income Taxes Paid during the Period
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Debt Discounts on Long-Term Convertible Notes Payable 510,000
Common Stock Issued for Debt Conversion 22,000
Extinguishment of derivative liability from conversion of notes payable $ 167,000
v3.22.2.2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
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, 2021 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2021 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, SPYR APPS, LLC, a Nevada Limited Liability Company, E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 6), and Branded Foods Concepts, Inc., a Nevada corporation. Intercompany accounts and transactions have been eliminated.

 

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 three months ended March 31, 2022, the Company recorded a net loss from continuing operations of $2,152,000 and have current liabilities of $3,207,000. As of March 31, 2022, our cash balance was $182,000. 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 software development costs and implementation of our 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 2022. However, management cannot make any assurances that such financing will be secured.

 

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 receivables 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 long-lived assets; and contingent obligations.

 

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, 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 March 31, 2022 are the same because the inclusion of the potential shares (Class A � 26,909,028, Class E � 1,385,042, Options � 4,379,900, Warrants � 5,800,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2022.

 

The basic and fully diluted shares for the three months ended March 31, 2021 are the same because the inclusion of the potential shares (Class A � 26,909,028, Class E � 570,190, Options � 5,379,900, Warrants � 8,700,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2021.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation or amortization. Depreciation is recorded at the time property and equipment is placed in service using the straight-line method over the estimated useful lives of the related assets, which range from three to ten years. Leasehold improvements are amortized over the shorter of the expected useful lives of the related assets or the lease term. The estimated economic useful lives of the related assets as follows:

 

     
Furniture and fixtures   2-7 years 
Computer equipment   1-3 years 
Vehicles   5 years 

 

Maintenance and repairs are charged to operations; betterments are capitalized. The cost of property sold or otherwise disposed of and the accumulated depreciation and amortization thereon are eliminated from the property and related accumulated depreciation and amortization accounts, and any resulting gain or loss is credited or charged to operations.

 

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.

 

Recent Accounting Standards

 

The 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.

 

Restatement

 

In 2022, the Company identified errors in account balances in the Form 10Q filed for the period ended March 31, 2022. The following accounts were deemed to contain errors: cash, trading securities, at market value, current assets of discontinued operations, other assets, accounts payable, note payable, derivative liability, common stock, common stock to be issued, additional paid in capital, operating expenses, gain on forgiveness of debt and loss on change in derivative liabilities. The errors primarily resulted from incorrect recognition of stock-based compensation previously awarded, certain share awards not yet issued and not recognized during the period ended March 31, 2022, incorrect estimates used in the fair value of derivative liability and certain adjustments to discontinued operations.

 

The tables below summarize previously reported amounts and the restated presentation of the balance sheet, statement of operations and statement of cash flows for the affected period:

 

                
   March 31, 2022 
   As Reported   Adjustments   As Restated 
ASSETS               
Current Assets:               
Cash and Cash Equivalents  $184,000   $(2,000)   182,000 
Prepaid Expenses   46,000    -    46,000 
Trading Securities, at Market Value   1,000    (1,000)   - 
Current Assets of Discontinued Operations   14,000    (12,000)   2,000 
Total Current Assets   245,000    (15,000)   230,000 
                
Other Assets:               
Property and Equipment, net   13,000    -    13,000 
Other Assets   84,000    (83,000)   1,000 
TOTAL ASSETS  $342,000   $(98,000)  $244,000 
                
LIABILITIES & STOCKHOLDERS� DEFICIT               
Current Liabilities:               
Accounts Payable and Accrued Liabilities  $1,872,000   $(217,000)   1,655,000 
Related Notes Payable, current portion   528,000    -    528,000 
Short-Term Convertible Notes Payable   210,000    (1,000)   209,000 
SBA PPP Note Payable, current portion   72,000    (72,000)   - 
Current Liabilities of Discontinued Operations   803,000    12,000    815,000 
Total Current Liabilities   3,485,000    (278,000)   3,207,000 
                
Other Liabilities:               
Notes Payable   2,572,000    -    2,572,000 
Long-Term Convertible Notes Payable, net   839,000    (565,000)   274,000 
Derivative Liability   380,000    2,520,000    2,900,000 
Total Liabilities   7,276,000    1,677,000    8,953,000 
                
Stockholders� Deficit:               
Preferred Stock, Class A, $0.0001 par value, 10,000,000 shares authorized; 107,636 shares issued and outstanding as of March 31, 2022   11    -    11 
Preferred Stock, Class E, $0.0001 par value, 10,000,000 shares authorized; 20,000 shares issued and outstanding as of March 31, 2022   2    -    2 
Common Stock, $0.0001 par value, 750,000,000 shares authorized; 265,030,082 and outstanding as of March 31, 2022   28,114    (1,611)   26,503 
Common stock to be issued   1,089    894,411    895,500 
Additional Paid-In Capital   60,060,421    (603,437)   59,456,984 
Accumulated Deficit   (67,022,521)   (2,065,479)   (69,088,000)
Total Stockholder�s Deficit   (6,934,000)   (1,775,000)   (8,709,000)
TOTAL LIABILITIES AND STOCKHOLDER�S DEFICIT  $342,000   $(98,000)  $244,000 

 

                
   For the Three Months Ended
March 31, 2022		 
   As Reported   Adjustment   As Restated 
Revenues  $1,000   $-   $1,000 
Cost of Goods Sold   -    -    - 
Gross Profit   1,000    -    1,000 
                
Expenses:               
Labor and Related Expenses   1,259,000    (696,000)   563,000 
Rent   6,000    -    6,000 
Depreciation and Amortization   2,000    1,000    3,000 
Professional Fees   891,000    (161,000)   730,000 
Other General and Administrative   40,000    (40,000)   - 
Total Operating Expenses   2,198,000    (896,000)   1,302,000 
                
Operating Loss   (2,197,000)   896,000    (1,301,000)
                
Other Income (Expenses)               
Interest Expense   (49,000)   (1,005,000)   (1,054,000)
Other Income   38,000    (38,000)   - 
Amortization of Debt Discounts   (43,000)   10,000    (33,000)
Loss on Conversion of Debt   (54,000)   22,000    (32,000)
Loss on Settlement   -    (30,000)   (30,000)
Loss on Issuance of Common Stock   -    (16,000)   (16,000)
Settlement Expense   (282,000)   184,000    (98,000)
Change in Value of Derivative   2,075,000    (1,663,000)   412,000 
Total Other Income (Expenses)   1,685,000    (2,536,000)   (851,000)
                
Loss from Continuing Operations   (512,000)   (1,640,000)   (2,152,000)
Loss from Discontinued Operations   (2,000)   -    (2,000)
Net Loss  $(514,000)  $(1,640,000)  $(2,154,000)
                
Basic and diluted loss per common share  $(0.00)  $(0.01)  $(0.01)
                
Weighted average common shares outstanding   270,939,479    12,384,109    258,555,370 

 

                
   For the Three Months Ended
March 31, 2022		 
   As Reported   Adjustment   As Restated 
Cash Flows From Operating Activities:               
Net Loss  $(514,000)  $(1,640,000)  $(2,154,000)
                
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:               
Loss on Discontinued Operations   2,000    (1,000)   1,000 
Reclassifications of Derivative Liabilities to Additional Paid-In Capital   167,000    (167,000)   - 
Depreciation and Amortization   3,000    -    3,000 
Common Stock Issued and to be issued for Director and Employee Compensation   1,214,000    (696,000)   518,000 
Common Stock Issued and to be issued for Services   569,000    (108,000)   461,000 
Common Stock Issued for Settlement   282,000    (184,000)   98,000 
Common Stock Issued for Conversion of Debt   54,000    (22,000)   32,000 
Amortization of Debt Discounts on Convertible Notes Payable   43,000    1,029,000    1,072,000 
Change in Value of Derivative Liability   (2,241,000)   1,829,000    (412,000)
                
Changes in Operating Assets and Liabilities:               
(Increase) Decrease in Prepaid Expenses   1,000    -    1,000 
Increase in Accounts Payable and Accrued Liabilities   56,000    (43,000)   13,000 
Increase in Accrued Interest on Notes Payable Related Party   42,000    (38,000)   4,000 
Increase in Accrued Interest on Notes Payable   4,000    37,000    41,000 
Net Cash Used in Operating Activities from Continuing Operations   (321,000)   (1,000)   (322,000)
Net Cash Provided by Operating Activities from Discontinued Operations   -    -    - 
Net Cash Used in Operating Activities   (321,000)   (1,000)   (322,000)
                
Cash Flows From Financing Activities:               
Proceeds from Long-Term Convertible Notes   510,000    -    510,000 
Funds lent as asset consideration   (40,000)   40,000    - 
Repayment of Notes Payables, current portion   -    (38,000)   (38,000)
Net Cash Provided by Financing Activities from Continuing Operations   470,000    2,000    472,000 
Net Cash Provided by Financing Activities from Discontinued Operations   -    -    - 
Net Cash Provided by Financing Activities   470,000    2,000    472,000 
                
Net Change in Cash   149,000    1,000    150,000 
Cash and Cash Equivalents at Beginning of Period   35,000    (3,000)   32,000 
Cash and Cash Equivalents at End of Period  $184,000   $(2,000)  $182,000 

 
v3.22.2.2
NOTES PAYABLE AND RELATED PARTY NOTES PAYABLE
 3 Months Ended
Mar. 31, 2022
Related Party Transactions [Abstract]  
NOTES PAYABLE AND RELATED PARTY NOTES PAYABLE

NOTE 2 � NOTES PAYABLE AND RELATED PARTY NOTES PAYABLE

 

On September 5, 2017, the Company obtained a revolving line of credit 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 and accrued interest of approximately $16,000. Repayment on the loan is due December 31, 2021. This note is currently in default.

 

During 2018 and 2019, the Company has received an additional $1,062,000 in the form of short-term 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. The short-term advances are due upon demand. As of December 31, 2020, the Company has borrowed $1,062,000 and accrued interest of approximately $122,000.

 

On June 17, 2021, the Company consolidated all prior notes payable with Berkshire Capital Management, resulting in a single consolidated note payable of $2,454,000. As of consolidation, $118,000 of interest has accrued, resulting in a net payable at March 31, 2022 of $2,572,000. As of March 31, 2022 there is outstanding $118,000 in interest and $2,454,000 in principal outstanding.

 

On December 16, 2021, the Company issued a promissory note to Grupo Rueda in the amount of $38,000 with 8% interest per annum and matures on December 16, 2022, in exchange for settlement of accounts payable on behalf of the Company. As of December 31, 2021, the notes payable was recorded as notes payable, current portion on the balance sheet. During the three months ended March 31,2022, the Company repaid $38,000 on the note payable. As of March 31, 2022, the balance of the note was $0.

 

Related Party

 

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 whose trustee is the Chief Executive Officer of the Company and a member of the board of directors. Pursuant to the agreement, the Company borrowed approximately $501,000 with interest at 6% per annum due and payable on May 17, 2022. As of March 31, 2022, accrued interest is approximately $27,000 and the principal balance $501,000.

 
v3.22.2.2
SHORT TERM CONVERTIBLE NOTES PAYABLE
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
SHORT TERM CONVERTIBLE NOTES PAYABLE

NOTE 3 � SHORT TERM CONVERTIBLE NOTES PAYABLE

 

On May 27, 2021, the Company issued a promissory note to Ares Capital, Inc. in the amount of $85,000 with 8% interest due and payable upon demand. On December 2, 2021, the note was amended to provide the holder with conversion rights consisting of a conversion price calculated by a 50% discount to the average of the lowest three (3) VWAP�s for the Company�s Common Stock during the twenty (20) Trading Day period ending on the latest complete trading day prior to the Conversion Date.

 

On August 11, 2021, the Company issued a promissory note to Ares Capital, Inc. in the amount of $33,333 with 8% interest due and payable upon demand. On December 2, 2021, the note was amended to provide the holder with conversion rights consisting of a conversion price calculated by a 50% discount to the average of the lowest three (3) VWAP�s for the Company�s Common Stock during the twenty (20) Trading Day period ending on the latest complete trading day prior to the Conversion Date.

 

On August 12, 2021, the Company issued a promissory note to Ares Capital, Inc. in the amount of $40,000 with 8% interest due and payable upon demand. On December 2, 2021, the note was amended to provide the holder with conversion rights consisting of a conversion price calculated by a 50% discount to the average of the lowest three (3) VWAP�s for the Company�s Common Stock during the twenty (20) Trading Day period ending on the latest complete trading day prior to the Conversion Date.

 

On September 9, 2021, the Company issued a promissory note to Ares Capital, Inc. in the amount of $40,000 with 8% interest due and payable upon demand. On December 2, 2021, the note was amended to provide the holder with conversion rights consisting of a conversion price calculated by a 50% discount to the average of the lowest three (3) VWAP�s for the Company�s Common Stock during the twenty (20) Trading Day period ending on the latest complete trading day prior to the Conversion Date.

 

On March 17, 2022, Ares Capital, Inc. converted $21,000 of principal and $1,000 of interest from the May 27, 2021 convertible note into 1,498,289 common shares. As of March 31, 2022, there is approximately $12,000 in interest and $198,000 in principal outstanding.

 
v3.22.2.2
CONVERTIBLE NOTES PAYABLE
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES PAYABLE

NOTE 4 � CONVERTIBLE NOTES PAYABLE

 

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. On July 29, 2021, a convertible note holder converted $100,000 of principal debt and $15,000 of interest at a conversion rate of $0.0324 a share, into 3,561,830 Common Stock shares. On August 6, 2021, the company entered into an Amendment of the existing convertible debt, of which resulted in the conversion rates changing to 50% of the average of the lowest VWAP, and the interest on the loan was eliminated., as well as, a $455,000 increase in the Derivative Liability portion of the convertible debt, from $1,382,000 to $1,761,000. The company recorded amortization of debt discounts, recognized as interest expense, in the amount of $330,000 and accrued interest of $47,000 during the nine months ended September 30, 2021. As of March 31, 2022, the balance of accrued interest is $61,000 and outstanding principal is $407,000.

 

On November 2, 2021, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $50,000 with 8% interest due on November 2, 2026. The note is convertible into Company common stock at a fixed price of $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(x)) for a Trading Day (as defined below) on the Trading Market during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(n) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $2,000 and principal of $50,000.

 

On November 3, 2021, the Company issued a convertible promissory note to Ares Capital, Inc, in the amount $45,000 with 8% interest due on November 2, 2026. The note is convertible into Company common stock at a fixed price of $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(x)) for a Trading Day (as defined below) on the Trading Market during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(n) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $1,000 and principal of $23,000

 

On December 3, 2021, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $70,000 with 8% interest due December 3, 2026. The note converts into Company common stock at the lesser price of (1) $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(w)) for a Trading Day (as defined below) on the Trading Market (as defined below) during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(m) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $2,000 and principal of $70,000

 

On December 27, 2021, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $50,000 with 8% interests due December 27, 2026. The note converts into Company common stock at the lesser price of (1) $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(w)) for a Trading Day (as defined below) on the Trading Market (as defined below) during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(m) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $1,000 and principal of $50,000

 

On January 10, 2022, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $200,000 with 8% interests due January 10, 2027. The note converts into Company common stock at the lesser price of (1) $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(w)) for a Trading Day (as defined below) on the Trading Market (as defined below) during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(m) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $4,000 and principal of $200,000

 

On January 19, 2022, Mehdi Safavi converted $32,000 of debt into 1,863,000 common shares.

 

On February 3, 2022, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $50,000 with 8% interests due February 3, 2027. The note converts into Company common stock at the lesser price of (1) $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(w)) for a Trading Day (as defined below) on the Trading Market (as defined below) during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(m) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $1,000 and principal of $50,000

 

On February 11, 2022, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $50,000 with 8% interests due February 11, 2027. The note converts into Company common stock at the lesser price of (1) $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(w)) for a Trading Day (as defined below) on the Trading Market (as defined below) during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(m) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $1,000 and principal of $50,000

 

On March 24, 2022, the Company issued a convertible promissory note to Brown Stone Capital, LP in the amount of $210,000 with 8% interests due March 24, 2027. The note converts into Company common stock at the lesser price of (1) $0.25 (the �Base Conversion Price) and (2) 50% of the average of the three lowest VWAP (as defined below) for the Common Stock (or any replacement security pursuant to Section 1(w)) for a Trading Day (as defined below) on the Trading Market (as defined below) during the 20 Trading Day period immediately prior to the Conversion Date (as defined below), provided that if the VWAP is determined pursuant to Section 1(m) then 50% of such VWAP as so determined. As of March 31, 2022, there is outstanding approximate accrued interest of $1,000 and principal of $210,000.

 

The following table summarized the Company�s convertible notes payable as of March 31, 2022 and December 31, 2021:

 

          
   March 31,
2022		   December 31,
2021		 
Beginning Balance  $492,000   $64,000 
Proceeds from the issuance of convertible notes   510,000    413,000 
Repayments   -    - 
Conversion of notes payable into common stock   (52,000)   (559,000)
Amortization of Debt Discounts   33,000    553,000 
Liquidated damages   -    351,000 
New debt discount   (510,000)   (43,000)
Debt settlement costs   -    - 
Accrued Interest   10,000    63,000 
Convertible notes payable, net  $483,000   $492,000 
Principal balance  $198,000   $198,000 
Accrued interest and damages, short term   11,000    8,000 
Debt discounts, short term   -    - 
Short-term convertible notes payable, net  $209,000   $206,000 
Convertible notes, long-term principal  $286,000    670,000 
Accrued interest and damages, long-term   21,000    56,000 
Debt discounts, long-term   (33,000)   (440,000)
Long-term convertible notes payable, net  $274,000   $286,000 

 
v3.22.2.2
PROPERTY AND EQUIPMENT
 3 Months Ended
Mar. 31, 2022
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 5 � PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following:

 

          
   March 31,
2022		   December 31,
2021		 
Equipment  $16,000   $16,000 
Furniture & fixtures   17,000    17,000 
Vehicles   10,000    10,000 
Property and Equipment, Gross   43,000    43,000 
Less: accumulated depreciation   (30,000)   (27,000)
Property and Equipment, Net  $13,000   $16,000 

 

Depreciation and amortization expense for the three months ended March 31, 2022 and 2021 was $3,000 and $10,000, respectively.

 

The Company sold certain office equipment for $8,000 which resulted in a gain on disposition of assets of $5,000 for the year ended December 31, 2021.

 
v3.22.2.2
INTANGIBLE ASSETS AND OTHER ASSETS
 3 Months Ended
Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS AND OTHER ASSETS

NOTE 6 � INTANGIBLE ASSETS AND OTHER ASSETS

 

Intangible assets at March 31, 2022 and December 31, 2021 consisted of the following:

 

              
   Useful
Life (yr)		   March 31,
2022		   December 31,
2021		 
Domain Names  7   $21,000   $21,000 
Less: accumulated amortization       (21,000)   (21,000)
       $-   $- 

 

At March 31, 2022 and December 31, 2021 other assets consisted of $1,000. Other assets generally consist of security deposits for the Premier Workspaces.

 
v3.22.2.2
DERIVATIVE LIABILITY
 3 Months Ended
Mar. 31, 2022
Disclosure Derivative Liability Abstract  
DERIVATIVE LIABILITY

NOTE 7 � 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 three months ended March 31, 2022:

 

     
   Quarter Ended
March 31,		 
   2022 
Derivative liability balance, December 31, 2021  $1,907,000 
Fair value on the date of issuance of new derivatives   1,572,000 
Reclassification to Additional Paid-In Capital   (167,000)
Change in derivative liability during the period   (412,000)
Derivative liability balance, March 31, 2022  $2,900,000 

 

The table below represents the average assumptions used in valuing the derivative liability at March 31, 2022:

 

    
   Quarter Ended
March 31,		 
   2022 
Expected life in years  0.50 � 4.98 
Stock price volatility  187.11% � 203.78%
Risk free interest rate  1.06% � 2.45%
Expected dividends  - 
Forfeiture rate  - 

 
v3.22.2.2
DISCONTINUED OPERATIONS
 3 Months Ended
Mar. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

NOTE 8 � 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 March 31, 2022 and December 31, 2021 there were 0 assets and $22,000 in accounts payable and accrued liabilities.

 

The results of operations of our discontinued restaurant for the three months ended March 31, 2022 and 2021, included in the consolidated statements of operations as discontinued operations, consisted of no operations for the three months ended March 31, 2022 and 2021.

 

Digital Media

 

Historically, through our wholly owned subsidiary, SPYR APPS�, LLC, we engaged in the development, publication and co-publication of mobile electronic games, seeking to generate revenue through those games by way of advertising and in-app purchases. As of December 31, 2020, all of our games have been removed from the game stores and the Company decided not to continue this line of business. Pursuant to current accounting guidelines, the assets and liabilities of SPYR APPS LLC as well as the results of its operations were presented in these financial statements as discontinued operations.

 

The assets and liabilities of our discontinued digital media operations as of March 31, 2022 and December 31, 2021 were as follows:

 

          
   March 31,
2022		   December 31,
2021		 
Assets:          
Accounts receivable, net  $2,000   $3,000 
Total Assets  $2,000   $3,000 
Liabilities:          
Accounts payable and accrued liabilities  $815,000   $815,000 
Total Liabilities  $815,000   $815,000 

 

The results of operations of our discontinued digital media operations for the three months ended March 31, 2022 and 2021, included in the consolidated statements of operations as discontinued operations, consisted of the following:

 

          
   Quarter   Quarter 
   ended   ended 
   March 31,   March 31, 
   2022   2021 
Revenues:  $-   $- 
Expenses          
Other general and administrative   2,000    - 
Total operating expenses   2,000    - 
Operating loss   (2,000)   - 
Other income (expense)          
Interest expense   -    (11,000)
Loss on discontinued operations  $(2,000)  $(11,000 

 

SPYR APPS, LLC

 

On February 2, 2022, the Company filed Articles of dissolution with the Nevada Secretary of State dissolving SPYR APPS, LLC.

 
v3.22.2.2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 3 Months Ended
Mar. 31, 2022
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 9 � ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 

As of March 31, 2022 and December 31, 2021, the Company had accounts payable and accrued liabilities of $1,655,000 and $1,825,000 respectively. As of March 31, 2022, of the outstanding $1,655,000 consists of $234,000 outstanding and owed to vendors and other professional service providers, and $1,421,000 outstanding as accrued wages and salaries. As of December 31, 2021, $1,825,000 was outstanding consisting of $221,000 outstanding and owed to vendors and other professional service providers, and $1,604,000 outstanding as accrued wages and salaries.

 
v3.22.2.2
DEBT DISCOUNTS
 3 Months Ended
Mar. 31, 2022
Debt Discounts  
DEBT DISCOUNTS

NOTE 10 � DEBT DISCOUNTS

 

As of March 31, 2022 and December 31, 2021, the Company had debt discounts of $906,000 and $397,000 respectively. For the three months ended March 31, 2022, there was $33,000 in amortization of debt discounts. For the year ended December 31, 2021, there was $132,000 in amortization of debt discounts. As of March 31, 2022 and December 31, 2021, there were outstanding long term convertible notes payable of $1,180,000 and $683,000 respectively, these numbers are netted against their respective debt discounts and are represented as $274,000 and $286,000 as of March 31, 2022 and December 31, 2021, respectively.

 
v3.22.2.2
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 11 � 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 March 31, 2022, no shares have been sold pursuant to this agreement. On April 26, 2022, the Registrant and Ares amended the Registration Rights Agreement previously disclosed on Form 8-K filed September 23, 2001. The transaction documents were amended to reflect Ares� waiver of the requirement that the Registrant file a registration statement concerning the equity purchase agreement within thirty days of September 20, 2021.

 

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 November 1, 2021, the company was delinquent in its monthly payments and has not made payments to date pursuant to the settlement agreement had approximately $42,000 in unpaid rent which was reported as part of accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet as of March 31, 2022.

 

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., case number 7:18-cv-05474-KMK filed in the U.S. District Court for the Southern District of New York.

 

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 has 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). The $500,000 liability is reported as part of accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets as of December 31, 2020 and December 31, 2019 and was recorded as litigation settlement costs on the consolidated statements of operations for the year ended December 31, 2019.

 

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.

 

On March 15, 2022, the Company and Collier Investments, LLC entered into a Warrant Cancellation Agreement. On May 22, 2018, the Company issued a five year warrant to Collier to purchase 200,000 shares of common stock, adjustable in price and amount for dilutive issuances. The Company and Collier agreed to cancel the warrant in exchange for the Company issuing Collier 2,000,000 shares of common stock.

 

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 March 31, 2022 and December 31, 2021 was approximately $100,000, respectively, which includes accrued interest and attorneys� fees, has been reported as part of current liabilities of discontinued operations.

 

Employment Agreements

 

Pursuant to employment agreements entered in December 2014 and October 2015, the Company agreed to compensate three officers with an initial base salary in the aggregate of $450,000 per year with rolling five-year terms until terminated. In addition, as part of the employment agreements, the Company also agreed to grant these officers an aggregate of 1.55 million shares of restricted common stock at the beginning of each employment year. On September 17, 2021, Barry D. Loveless resigned as Chief Financial Officer. On December 31, 2021, the Company and James R. Thompson and Jennifer D. Duettra agreed to terminate their positions as Chief Executive Officer, President, General Counsel and Vice-President and Assistant General Counsel, respectively.

 

Pursuant to employment agreements entered in October 2020, the Company agreed to compensate the two former owners of Applied Magix with an initial base salary in the aggregate of $300,000 for one year. In addition, as part of the employment agreements, the Company also agreed to grant these officers an aggregate of 2 million shares of restricted common stock as a signing bonus and 5 million options to purchase shares of restricted common stock.

 

On December 31, 2021, the Company terminated its employment agreements with James R. Thompson and Jennifer D. Duettra.

 

Pursuant to termination agreements, the Company is liable for unpaid wages and benefits to Ms. Duettra and Mr. Thompson of $162,458.13 and $3,600, and $910,991.80 and $2,300.02 respectively. The Company also owes Mr. Thompson contractual expense reimbursements in the amount of $52,527.82.

 

In settlement of constructive termination under Ms. Duettra and Mr. Thompson�s employment agreements, the Company agreed to issue 2,500,000 and 5,000,000 shares of restricted common stock, respectively, and continue payments of medical, dental and vision insurance for each until June 30, 2022.

 

On February 7, 2022, the Company entered into settlement agreements with Harald Zink, Richard Kelly Clark, and Misty Seals to settle accrued wages. The Company settled $94,193.75 in accrued wages payable to Mr. Zink by the issuance of 1,546,695 common shares. The Company settled $42,383.42 in accrued wages payable to Ms. Seals by the issuance of 695,951 common shares. The Company settled $94,193.75 in accrued wages payable to Mr. Clark by the issuance of 1,788,367 common shares.

 
v3.22.2.2
EQUITY TRANSACTIONS
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
EQUITY TRANSACTIONS

NOTE 12 � EQUITY TRANSACTIONS

 

Common Stock:

 

Three Months Ended March 31, 2021

 

During the three months ended March 31, 2021, the Company issued an aggregate of 1,400,000 shares of restricted common stock to employees with a total fair value of $215,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $215,000 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. The Company also issued 3,000,000 for outside consulting with a fair value of $371,000.

 

Three Months Ended March 31, 2022

 

During the three months ended March 31, 2022, the Company issued 1,015,019 shares of restricted common stock to Richard Kelly Clark for $47,097 in compensation from the previous year, recorded as common stock to be issued as of December 31, 2021.

 

The Company also issued 8,700,000 common shares for outside consulting with a fair value of $431,000.

 

The Company also issued 5,015,994 common shares for settlements to Collier Investments, and separately with Richard Kelly Clark, Harald Zink, and Misty Seals with an aggregate fair market value of $282,000. The Company recognized a loss on the issuances of $16,000.

 

The company also issued 3,361,289 common shares in conversion of $54,000 in notes payable.

 

The Company also has the obligation to issue 9,000,000 shares in director compensation, and 1,886,792 common shares for consulting services that has not been issued as of the date of this filing. The fair value of these issuances are $518,000 and $30,000 respectively.

 

Options:

 

The following table summarizes common stock options activity:

 

          
   Options   Weighted Average Exercise Price 
December 31, 2021   4,379,900   $0.88 
Granted   �    � 
Exercised   �    � 
Expired   �    � 
Outstanding, March 31, 2022   4,379,900   $0.88 
Exercisable, March 31, 2022   4,379,900   $0.88 

 

The weighted average exercise prices, remaining lives for options granted, and exercisable as of March 31, 2022 were as follows:

 

                       
    Outstanding Options   Exercisable Options 
Options Exercise
Price Per Share		   Shares   Life
(Years)		   Weighted Average
Exercise Price		   Shares   Weighted Average
Exercise Price		 
$0.50    8,000,000   0.42   $0.50    8,000,000   $0.50 
$1.00    1,149,900   0.07 � 1.85   $1.00    1,149,900   $1.00 
      9,149,900       $0.56    9,149,900   $0.56 

 

At March 31, 2022, the Company�s closing stock price was $0.03 per share. As all outstanding options had an exercise price greater than $0.03 per share, there was no intrinsic value of the options outstanding at March 31, 2022.

 

Warrants:

 

The following table summarizes common stock warrants activity:

 

          
   Warrants   Weighted Average Exercise Price 
Outstanding, December 31, 2021   7,200,000   $0.39 
Granted   �    � 
Exercised   �    � 
Expired   1,200,000      
Cancelled   200,000    � 
Outstanding, March 31, 2022   5,800,000   $0.33 
Exercisable, March 31, 2022   5,800,000   $0.33 

 

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of March 31, 2022, were as follows:

 

            
    Outstanding and Exercisable Warrants 
Warrants Exercise
Price Per Share		   Shares   Life
(Years)		 
$0.25    3,500,000    3.65 
$0.50    2,300,000    1.28 
      5,800,000      

 

Shares Reserved:

 

At March 31, 2022, the Company has no reserved shares of common stock in connection with convertible notes or warrants.

 
v3.22.2.2
SUBSEQUENT EVENTS
 3 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 13 � SUBSEQUENT EVENTS

 

On April 21, 2022, the Company entered into a securities purchase agreement and convertible promissory note with Brown Stone Capital, LP in the amount of $175,000. The note carries 8% interest and matures on April 21, 2027.

 

Subsequent to March 31, 2022, a total of 9,109,084 shares of common stock were issued pursuant to conversion of $154,294 of principal and $6,218 of accrued interest on the ARES short term convertible notes, and issued 3,720,939 shares of common stock pursuant to the conversion of $50,000 of principal and $2,093 of accrued interest under long term convertible notes.

 

The Company entered into a consulting agreement with a third party vendor and issued 5,000,000 registered common shares on Form S-8, which have been accrued as of the date of this filing, but not issued. The value of the shares is $0.0396 per share as at May 5, 2022.

 

On May 10, 2022, the Company entered into a convertible promissory note in the principal amount of $75,000, with 10% interest per annum, with a maturity date of August 10, 2022. The note has a $25,000 original issuance discount.

 

On June 28, 2022, the Company entered into a securities purchase agreement and convertible promissory note with 1800 Diagonal Lending, LLC in the amount of $104,250. The note carries 8% interest and matures July 1, 2023.

On August 2, 2022, the Company entered into a securities purchase agreement and convertible promissory note with Amir Mehdi Safavi in the amount of $150,000. The note carries 8% interest and matures August 2, 2027.

On August 4, 2022, the Company entered into a securities purchase agreement and convertible promissory note with 1800 Diagonal Lending, LLC in the amount of $64,000. The note carriers 8% interest and matures August 4, 2023.

 

On May 24, 2022, the Company entered into a material debitive agreement (�MDA�) not made in the ordinary course of business. The parties to the MDA are the Company and JanOne, Inc., a Nevada corporation (�JanOne�). There was no material relationship between the Company and JanOne other than in respect of the material definitive agreement.

 

Pursuant to the terms of the MDA, JanOne agreed to sell, and the Company agreed to buy and assume, all legal right, title, and interest to all of the assets, and none of the liabilities, of JanOne�s wholly owned subsidiary, GeoTraq, Inc. (�GeoTraq�), including but not limited to, all accounts receivable, inventory, 13,500 work in process inventory chipsets, 170 completed IOT tracker modules, equipment, machinery, tools, rights under existing warranties, indemnities and insurance benefits, books, records all goodwill and all intellectual property, including an issued patent associated with GeoTraq.

 

The aggregate consideration for the asset purchase consisted of the Company�s issuance of 30,000,000 shares of unregistered restricted common stock to JanOne, and a convertible promissory note (�Note�) in the amount of $12,600,000. The Note accrues interest at 8% per annum, which is agreed to be paid in issuances of restricted common stock quarterly while the Note is outstanding, subject to a beneficial ownership limitation of 9.99% after giving effect to the issuance of restricted common stock. The maturity date is May 24, 2027. There is no prepayment penalty. The shares were issued on June 16, 2022.
v3.22.2.2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Interim 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, 2021 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2021 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

Principles of Consolidation

 

The consolidated financial statements include the accounts of SPYR, Inc. and its wholly-owned subsidiaries, SPYR APPS, LLC, a Nevada Limited Liability Company, E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 6), and Branded Foods Concepts, Inc., a Nevada corporation. Intercompany accounts and transactions have been eliminated.

 
Going Concern

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 three months ended March 31, 2022, the Company recorded a net loss from continuing operations of $2,152,000 and have current liabilities of $3,207,000. As of March 31, 2022, our cash balance was $182,000. 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 software development costs and implementation of our 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 2022. However, management cannot make any assurances that such financing will be secured.

 
Covid-19

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 receivables 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 long-lived assets; and contingent obligations.

 
Use of Estimates

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, and valuation of issuance of equity securities. Actual results could differ from those estimates.

 
Earnings (Loss) Per Share

Earnings (Loss) Per Share

 

The basic and fully diluted shares for the three months ended March 31, 2022 are the same because the inclusion of the potential shares (Class A � 26,909,028, Class E � 1,385,042, Options � 4,379,900, Warrants � 5,800,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2022.

 

The basic and fully diluted shares for the three months ended March 31, 2021 are the same because the inclusion of the potential shares (Class A � 26,909,028, Class E � 570,190, Options � 5,379,900, Warrants � 8,700,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2021.

 
Property and Equipment

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation or amortization. Depreciation is recorded at the time property and equipment is placed in service using the straight-line method over the estimated useful lives of the related assets, which range from three to ten years. Leasehold improvements are amortized over the shorter of the expected useful lives of the related assets or the lease term. The estimated economic useful lives of the related assets as follows:

 

     
Furniture and fixtures   2-7 years 
Computer equipment   1-3 years 
Vehicles   5 years 

 

Maintenance and repairs are charged to operations; betterments are capitalized. The cost of property sold or otherwise disposed of and the accumulated depreciation and amortization thereon are eliminated from the property and related accumulated depreciation and amortization accounts, and any resulting gain or loss is credited or charged to operations.

 
Concentration of Credit Risk

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.

 
Recent Accounting Standards

Recent Accounting Standards

 

The 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.

 
Restatement

Restatement

 

In 2022, the Company identified errors in account balances in the Form 10Q filed for the period ended March 31, 2022. The following accounts were deemed to contain errors: cash, trading securities, at market value, current assets of discontinued operations, other assets, accounts payable, note payable, derivative liability, common stock, common stock to be issued, additional paid in capital, operating expenses, gain on forgiveness of debt and loss on change in derivative liabilities. The errors primarily resulted from incorrect recognition of stock-based compensation previously awarded, certain share awards not yet issued and not recognized during the period ended March 31, 2022, incorrect estimates used in the fair value of derivative liability and certain adjustments to discontinued operations.

 

The tables below summarize previously reported amounts and the restated presentation of the balance sheet, statement of operations and statement of cash flows for the affected period:

 

                
   March 31, 2022 
   As Reported   Adjustments   As Restated 
ASSETS               
Current Assets:               
Cash and Cash Equivalents  $184,000   $(2,000)   182,000 
Prepaid Expenses   46,000    -    46,000 
Trading Securities, at Market Value   1,000    (1,000)   - 
Current Assets of Discontinued Operations   14,000    (12,000)   2,000 
Total Current Assets   245,000    (15,000)   230,000 
                
Other Assets:               
Property and Equipment, net   13,000    -    13,000 
Other Assets   84,000    (83,000)   1,000 
TOTAL ASSETS  $342,000   $(98,000)  $244,000 
                
LIABILITIES & STOCKHOLDERS� DEFICIT               
Current Liabilities:               
Accounts Payable and Accrued Liabilities  $1,872,000   $(217,000)   1,655,000 
Related Notes Payable, current portion   528,000    -    528,000 
Short-Term Convertible Notes Payable   210,000    (1,000)   209,000 
SBA PPP Note Payable, current portion   72,000    (72,000)   - 
Current Liabilities of Discontinued Operations   803,000    12,000    815,000 
Total Current Liabilities   3,485,000    (278,000)   3,207,000 
                
Other Liabilities:               
Notes Payable   2,572,000    -    2,572,000 
Long-Term Convertible Notes Payable, net   839,000    (565,000)   274,000 
Derivative Liability   380,000    2,520,000    2,900,000 
Total Liabilities   7,276,000    1,677,000    8,953,000 
                
Stockholders� Deficit:               
Preferred Stock, Class A, $0.0001 par value, 10,000,000 shares authorized; 107,636 shares issued and outstanding as of March 31, 2022   11    -    11 
Preferred Stock, Class E, $0.0001 par value, 10,000,000 shares authorized; 20,000 shares issued and outstanding as of March 31, 2022   2    -    2 
Common Stock, $0.0001 par value, 750,000,000 shares authorized; 265,030,082 and outstanding as of March 31, 2022   28,114    (1,611)   26,503 
Common stock to be issued   1,089    894,411    895,500 
Additional Paid-In Capital   60,060,421    (603,437)   59,456,984 
Accumulated Deficit   (67,022,521)   (2,065,479)   (69,088,000)
Total Stockholder�s Deficit   (6,934,000)   (1,775,000)   (8,709,000)
TOTAL LIABILITIES AND STOCKHOLDER�S DEFICIT  $342,000   $(98,000)  $244,000 

 

                
   For the Three Months Ended
March 31, 2022		 
   As Reported   Adjustment   As Restated 
Revenues  $1,000   $-   $1,000 
Cost of Goods Sold   -    -    - 
Gross Profit   1,000    -    1,000 
                
Expenses:               
Labor and Related Expenses   1,259,000    (696,000)   563,000 
Rent   6,000    -    6,000 
Depreciation and Amortization   2,000    1,000    3,000 
Professional Fees   891,000    (161,000)   730,000 
Other General and Administrative   40,000    (40,000)   - 
Total Operating Expenses   2,198,000    (896,000)   1,302,000 
                
Operating Loss   (2,197,000)   896,000    (1,301,000)
                
Other Income (Expenses)               
Interest Expense   (49,000)   (1,005,000)   (1,054,000)
Other Income   38,000    (38,000)   - 
Amortization of Debt Discounts   (43,000)   10,000    (33,000)
Loss on Conversion of Debt   (54,000)   22,000    (32,000)
Loss on Settlement   -    (30,000)   (30,000)
Loss on Issuance of Common Stock   -    (16,000)   (16,000)
Settlement Expense   (282,000)   184,000    (98,000)
Change in Value of Derivative   2,075,000    (1,663,000)   412,000 
Total Other Income (Expenses)   1,685,000    (2,536,000)   (851,000)
                
Loss from Continuing Operations   (512,000)   (1,640,000)   (2,152,000)
Loss from Discontinued Operations   (2,000)   -    (2,000)
Net Loss  $(514,000)  $(1,640,000)  $(2,154,000)
                
Basic and diluted loss per common share  $(0.00)  $(0.01)  $(0.01)
                
Weighted average common shares outstanding   270,939,479    12,384,109    258,555,370 

 

                
   For the Three Months Ended
March 31, 2022		 
   As Reported   Adjustment   As Restated 
Cash Flows From Operating Activities:               
Net Loss  $(514,000)  $(1,640,000)  $(2,154,000)
                
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:               
Loss on Discontinued Operations   2,000    (1,000)   1,000 
Reclassifications of Derivative Liabilities to Additional Paid-In Capital   167,000    (167,000)   - 
Depreciation and Amortization   3,000    -    3,000 
Common Stock Issued and to be issued for Director and Employee Compensation   1,214,000    (696,000)   518,000 
Common Stock Issued and to be issued for Services   569,000    (108,000)   461,000 
Common Stock Issued for Settlement   282,000    (184,000)   98,000 
Common Stock Issued for Conversion of Debt   54,000    (22,000)   32,000 
Amortization of Debt Discounts on Convertible Notes Payable   43,000    1,029,000    1,072,000 
Change in Value of Derivative Liability   (2,241,000)   1,829,000    (412,000)
                
Changes in Operating Assets and Liabilities:               
(Increase) Decrease in Prepaid Expenses   1,000    -    1,000 
Increase in Accounts Payable and Accrued Liabilities   56,000    (43,000)   13,000 
Increase in Accrued Interest on Notes Payable Related Party   42,000    (38,000)   4,000 
Increase in Accrued Interest on Notes Payable   4,000    37,000    41,000 
Net Cash Used in Operating Activities from Continuing Operations   (321,000)   (1,000)   (322,000)
Net Cash Provided by Operating Activities from Discontinued Operations   -    -    - 
Net Cash Used in Operating Activities   (321,000)   (1,000)   (322,000)
                
Cash Flows From Financing Activities:               
Proceeds from Long-Term Convertible Notes   510,000    -    510,000 
Funds lent as asset consideration   (40,000)   40,000    - 
Repayment of Notes Payables, current portion   -    (38,000)   (38,000)
Net Cash Provided by Financing Activities from Continuing Operations   470,000    2,000    472,000 
Net Cash Provided by Financing Activities from Discontinued Operations   -    -    - 
Net Cash Provided by Financing Activities   470,000    2,000    472,000 
                
Net Change in Cash   149,000    1,000    150,000 
Cash and Cash Equivalents at Beginning of Period   35,000    (3,000)   32,000 
Cash and Cash Equivalents at End of Period  $184,000   $(2,000)  $182,000 

 
v3.22.2.2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 3 Months Ended
Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Estimated Economic Useful Lives of Assets
     
Furniture and fixtures   2-7 years 
Computer equipment   1-3 years 
Vehicles   5 years 
Schedule of restated presentation
                
   March 31, 2022 
   As Reported   Adjustments   As Restated 
ASSETS               
Current Assets:               
Cash and Cash Equivalents  $184,000   $(2,000)   182,000 
Prepaid Expenses   46,000    -    46,000 
Trading Securities, at Market Value   1,000    (1,000)   - 
Current Assets of Discontinued Operations   14,000    (12,000)   2,000 
Total Current Assets   245,000    (15,000)   230,000 
                
Other Assets:               
Property and Equipment, net   13,000    -    13,000 
Other Assets   84,000    (83,000)   1,000 
TOTAL ASSETS  $342,000   $(98,000)  $244,000 
                
LIABILITIES & STOCKHOLDERS� DEFICIT               
Current Liabilities:               
Accounts Payable and Accrued Liabilities  $1,872,000   $(217,000)   1,655,000 
Related Notes Payable, current portion   528,000    -    528,000 
Short-Term Convertible Notes Payable   210,000    (1,000)   209,000 
SBA PPP Note Payable, current portion   72,000    (72,000)   - 
Current Liabilities of Discontinued Operations   803,000    12,000    815,000 
Total Current Liabilities   3,485,000    (278,000)   3,207,000 
                
Other Liabilities:               
Notes Payable   2,572,000    -    2,572,000 
Long-Term Convertible Notes Payable, net   839,000    (565,000)   274,000 
Derivative Liability   380,000    2,520,000    2,900,000 
Total Liabilities   7,276,000    1,677,000    8,953,000 
                
Stockholders� Deficit:               
Preferred Stock, Class A, $0.0001 par value, 10,000,000 shares authorized; 107,636 shares issued and outstanding as of March 31, 2022   11    -    11 
Preferred Stock, Class E, $0.0001 par value, 10,000,000 shares authorized; 20,000 shares issued and outstanding as of March 31, 2022   2    -    2 
Common Stock, $0.0001 par value, 750,000,000 shares authorized; 265,030,082 and outstanding as of March 31, 2022   28,114    (1,611)   26,503 
Common stock to be issued   1,089    894,411    895,500 
Additional Paid-In Capital   60,060,421    (603,437)   59,456,984 
Accumulated Deficit   (67,022,521)   (2,065,479)   (69,088,000)
Total Stockholder�s Deficit   (6,934,000)   (1,775,000)   (8,709,000)
TOTAL LIABILITIES AND STOCKHOLDER�S DEFICIT  $342,000   $(98,000)  $244,000 

 

                
   For the Three Months Ended
March 31, 2022		 
   As Reported   Adjustment   As Restated 
Revenues  $1,000   $-   $1,000 
Cost of Goods Sold   -    -    - 
Gross Profit   1,000    -    1,000 
                
Expenses:               
Labor and Related Expenses   1,259,000    (696,000)   563,000 
Rent   6,000    -    6,000 
Depreciation and Amortization   2,000    1,000    3,000 
Professional Fees   891,000    (161,000)   730,000 
Other General and Administrative   40,000    (40,000)   - 
Total Operating Expenses   2,198,000    (896,000)   1,302,000 
                
Operating Loss   (2,197,000)   896,000    (1,301,000)
                
Other Income (Expenses)               
Interest Expense   (49,000)   (1,005,000)   (1,054,000)
Other Income   38,000    (38,000)   - 
Amortization of Debt Discounts   (43,000)   10,000    (33,000)
Loss on Conversion of Debt   (54,000)   22,000    (32,000)
Loss on Settlement   -    (30,000)   (30,000)
Loss on Issuance of Common Stock   -    (16,000)   (16,000)
Settlement Expense   (282,000)   184,000    (98,000)
Change in Value of Derivative   2,075,000    (1,663,000)   412,000 
Total Other Income (Expenses)   1,685,000    (2,536,000)   (851,000)
                
Loss from Continuing Operations   (512,000)   (1,640,000)   (2,152,000)
Loss from Discontinued Operations   (2,000)   -    (2,000)
Net Loss  $(514,000)  $(1,640,000)  $(2,154,000)
                
Basic and diluted loss per common share  $(0.00)  $(0.01)  $(0.01)
                
Weighted average common shares outstanding   270,939,479    12,384,109    258,555,370 

 

                
   For the Three Months Ended
March 31, 2022		 
   As Reported   Adjustment   As Restated 
Cash Flows From Operating Activities:               
Net Loss  $(514,000)  $(1,640,000)  $(2,154,000)
                
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:               
Loss on Discontinued Operations   2,000    (1,000)   1,000 
Reclassifications of Derivative Liabilities to Additional Paid-In Capital   167,000    (167,000)   - 
Depreciation and Amortization   3,000    -    3,000 
Common Stock Issued and to be issued for Director and Employee Compensation   1,214,000    (696,000)   518,000 
Common Stock Issued and to be issued for Services   569,000    (108,000)   461,000 
Common Stock Issued for Settlement   282,000    (184,000)   98,000 
Common Stock Issued for Conversion of Debt   54,000    (22,000)   32,000 
Amortization of Debt Discounts on Convertible Notes Payable   43,000    1,029,000    1,072,000 
Change in Value of Derivative Liability   (2,241,000)   1,829,000    (412,000)
                
Changes in Operating Assets and Liabilities:               
(Increase) Decrease in Prepaid Expenses   1,000    -    1,000 
Increase in Accounts Payable and Accrued Liabilities   56,000