0001262463-19-000150.txt : 20190515 0001262463-19-000150.hdr.sgml : 20190515 20190515160713 ACCESSION NUMBER: 0001262463-19-000150 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 52 CONFORMED PERIOD OF REPORT: 20190331 FILED AS OF DATE: 20190515 DATE AS OF CHANGE: 20190515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPYR, Inc. CENTRAL INDEX KEY: 0000829325 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING & DRINKING PLACES [5810] IRS NUMBER: 752636283 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-20111 FILM NUMBER: 19828093 BUSINESS ADDRESS: STREET 1: 4643 S ULSTER ST. SUITE 1510 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 303-991-8000 MAIL ADDRESS: STREET 1: 4643 S ULSTER ST. SUITE 1510 CITY: DENVER STATE: CO ZIP: 80237 FORMER COMPANY: FORMER CONFORMED NAME: EAT AT JOES LTD DATE OF NAME CHANGE: 19961125 FORMER COMPANY: FORMER CONFORMED NAME: CONCEPTUALISTICS INC DATE OF NAME CHANGE: 19961122 10-Q 1 spyr10q33119.htm FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2019

 

or

 

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from __________ to __________

 

Commission file number 33-20111

 

SPYR, INC.
(Exact name of registrant as specified in its charter)

 

Nevada   75-2636283
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)

 

4643 S. Ulster St., Suite 1510, Denver, CO 80237

(Address of principal executive offices)

 

(303) 991-8000

(Registrant's telephone number)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and" smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   Accelerated filer
Non-accelerated filer   Smaller reporting company
Emerging growth company      

  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of May 15, 2019, there were 200,055,131 shares of the Registrant's common stock outstanding.

 

 1 

 

TABLE OF CONTENTS

 

 

Part 1 Financial Information 3
     
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operation 17
Item 3. Quantitative And Qualitative Disclosures About Market Risk 22
Item 4. Controls And Procedures 22
     
Part II Other Information 23
     
Item 1. Legal Proceedings 23
Item 1a. Risk Factors 23
Item 2. Unregistered Sale Of Equity Securities And Use Of Proceeds 23
Item 3. Defaults Of Senior Securities 23
Item 4. Mine Safety Disclosures 23
Item 5. Other Information 23
Item 6. Exhibits 24

 

 

 2 

 

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

 

SPYR, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
       
    March 31,
2019
    December 31,
2018
 
         (Restated) 
ASSETS          
Current Assets:          
   Cash and cash equivalents  $26,000   $24,000 
   Accounts receivable, net   24,000    62,000 
   Prepaid expenses   19,000    21,000 
   Trading securities, at market value   2,000    4,000 
          Total Current Assets   71,000    111,000 
           
   Property and equipment, net   85,000    94,000 
   Capitalized gaming assets and licensing rights, net   121,000    122,000 
   Intangible assets, net   8,000    9,000 
   Operating lease right-of-use asset   105,000    110,000 
   Other assets   6,000    6,000 
TOTAL ASSETS  $396,000   $452,000 
           
LIABILITIES AND STOCKHOLDERS' (DEFICIT)          
LIABILITIES          
Current Liabilities:          
   Accounts payable and accrued liabilities  $1,126,000   $1,145,000 
   Related party short-term advances   534,000    320,000 
  Related party line of credit   1,084,000    1,068,000 
   Convertible note payable, net   491,000    432,000 
   Operating lease liability – Current Portion   32,000    39,000 
   Current liabilities of discontinued operations   22,000    22,000 
          Total Current Liabilities   3,289,000    3,026,000 
           
   Operating lease liability   92,000    92,000 
         Total Liabilities   3,381,000    3,118,000 
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ (DEFICIT)          
   Preferred stock, $0.0001 par value, 10,000,000 shares authorized          
      107,636 Class A shares issued and outstanding          
        as of March 31, 2019 and December 31, 2018   11    11 
     20,000 Class E shares issued and outstanding          
        as of March 31, 2019 and December 31, 2018   2    2 
   Common Stock, $0.0001 par value, 750,000,000 shares authorized          
        199,555,131 and 198,305,131 shares issued and outstanding          
        as of March 31, 2019 and December 31, 2018   19,955    19,830 
   Additional paid-in capital   53,396,032    53,265,157 
   Accumulated deficit   (56,401,000)   (55,951,000)
          Total Stockholders’ (Deficit)   (2,985,000)   (2,666,000)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT)  $396,000   $452,000 
           
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

  

 3 

 

SPYR, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
       
   For the Three Months Ended    
March 31,
   2019  2018
     
Game Revenues  $25,000   $6,000 
Related Party Service Revenues   52,000    —   
          Total Revenues   77,000    6,000 
           
Expenses          
   Labor and related expenses   326,000    886,000 
   Rent   38,000    49,000 
   Depreciation and amortization   11,000    29,000 
   Professional fees   50,000    2,556,000 
   Research and development   17,000    299,000 
   Other general and administrative   80,000    105,000 
          Total Operating Expenses   522,000    3,924,000 
          Operating Loss   (445,000)   (3,918,000)
           
Other Expense          
   Interest Expense   (3,000)   (20,000)
   Unrealized loss on trading securities   (2,000)   (11,000)
          Total Other Expense   (5,000)   (31,000)
           
Loss from continuing operations   (450,000)   (3,949,000)
           
Loss on discontinued operations   —      (2,000)
           
Net Loss  $(450,000)  $(3,951,000)
           
Per Share Amounts          
   Loss from continuing operations          
      Basic and Diluted loss per share  $—     $(0.02)
           
   Loss on discontinued operations          
      Basic and Diluted loss per share  $—     $—   
           
   Net Loss          
      Basic and Diluted loss per share  $—     $(0.02)
           
Weighted Average Common Shares          
      Basic and Diluted   199,110,687    186,355,488 
   Diluted   199,110,687    186,355,488 
           
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 4 

 

SPYR, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2019
(Unaudited)
                            
   Preferred Stock        Additional      
   Class A  Class E  Common Stock  Paid-in  Accumulated   
   Shares  Amount  Shares  Amount  Shares  Amount  Capital  Deficit  Total
Balance at December 31, 2018   107,636   $11    20,000   $2    198,305,131   $19,830   $53,265,157   $(55,951,000)  $(2,666,000)
Fair value of common stock issued for employee compensation   —      —      —      —      1,250,000    125    130,875    —      131,000 
Net loss   —      —      —      —      —      —      —      (450,000)   (450,000)
Balance at March 31, 2019   107,636   $11    20,000   $2    199,555,131   $19,955   $53,396,032   $(56,401,000)  $(2,985,000)

 

 

SPYR, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2018
(Unaudited)
   Preferred Stock        Additional      
   Class A  Class E  Common Stock  Paid-in  Accumulated   
   Shares  Amount  Shares  Amount  Shares  Amount  Capital  Deficit  Total
Balance at December 31, 2017   107,636   $11    20,000   $2    181,128,950   $18,112   $46,561,875   $(47,209,000)  $(629,000)
Common stock issued to related party for cash   —      —      —      —      500,000    50    49,950    —      50,000 
Common stock issued for cash   —      —      —      —      4,200,000    420    554,580    —      555,000 
Fair value of common stock issued for employee compensation   —      —      —      —      1,250,000    125    624,875    —      625,000 
Fair value of common stock, options and warrants issued for services   —      —      —      —      4,441,942    444    1,711,556    —      1,712,000 
Vesting of options and warrants granted for services   —      —      —      —      —      —      674,000    —      674,000 
Net loss   —      —      —      —      —      —      —      (3,951,000)   (3,951,000)
Balance at March 31, 2018   107,636   $11    20,000   $2    191,520,892   $19,151   $50,176,836   $(51,160,000)  $(964,000)
                                              
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 5 

 

SPYR, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
       
   For the Three Months Ended March 31,
   2019  2018
      (Restated)
Cash Flows From Operating Activities:          
Net loss for the period  $(450,000)  $(3,951,000)
Adjustments to reconcile net loss to net cash used in operating activities:          
     Loss on discontinued operations   —      2,000 
     Depreciation and amortization   11,000    29,000 
     Common stock issued for employee compensation   131,000    625,000 
     Common stock, options and warrants issued for services   —      1,712,000 
     Vesting of options and warrants granted for services   —      674,000 
     Amortization of debt discount on convertible notes payable   53,000    —   
     Unrealized loss on trading securities   2,000    11,000 
Changes in operating assets and liabilities:          
     Decrease in accounts receivables   38,000    1,000 
     Decrease in prepaid expenses   2,000    16,000 
     Increase (decrease) in accounts payable and accrued liabilities   (19,000)   53,000 
     Decrease in operating lease liability   (2,000)   (2,000)
     Increase in accrued interest on short-term advances - related party   5,000    —   
     Increase in accrued interest on line of credit - related party   16,000    14,000 
     Increase in accrued interest on convertible notes payable   6,000    —   
Net Cash Used in Operating Activities from Continuing Operations   (207,000)   (816,000)
Net Cash Used in Operating Activities from Discontinued Operations   —      (2,000)
Net Cash Used in Operating Activities   (207,000)   (818,000)
           
Cash Flows From Investing Activities:          
Net Cash Used in Investing Activities   —      —   
           
Cash Flows From Financing Activities:          
     Proceeds from sale of common stock   —      605,000 
     Proceeds from short-term advances - related party   209,000    5,000 
     Proceeds from line of credit - related party   —      200,000 
Net Cash Provided by Financing Activities   209,000    810,000 
           
Net Increase (Decrease) in Cash   2,000    (8,000)
Cash and cash equivalents at beginning of period   24,000    86,000 
Cash and cash equivalents at end of period  $26,000   $78,000 
           
Supplemental Disclosure of Interest and Income Taxes Paid:          
    Interest paid during the period  $—     $—   
   Income taxes paid during the period  $—     $—   
           
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 6 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Interim Financial Statements

 

The accompanying condensed consolidated financial statements 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, 2018 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2018 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.

 

Organization

 

The Company was incorporated as Conceptualistics, Inc. on January 6, 1988 in Delaware. Subsequent to its incorporation, the Company changed its name to Eat at Joe’s, Ltd. In February 2015, the Company changed its name to SPYR, Inc. and adopted a new ticker symbol “SPYR” effective March 12, 2015.

 

Nature of Business

 

The primary focus of SPYR, Inc. (the “Company”) is to act as a holding company and develop a portfolio of profitable subsidiaries, not limited by any particular industry or business.

 

Through our wholly owned subsidiaries, SPYR APPS, LLC we operate our mobile games and applications business. The focus of the SPYR APPS subsidiary is the development and publication of electronic games that are downloaded for free by users of mobile devices such as cellular telephones and tablets, including those using Apple’s iOS and Google’s Android mobile operating systems.

 

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 assets and liabilities of EAJ as well as the results of its operations were presented in these financial statements as discontinued operations.

 

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 7), 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, 2019, the Company recorded a net loss from continuing operations of $450,000 and utilized cash in continuing operations of $207,000. As of March 31, 2019, our cash balance was $26,000 and we had trading securities of $2,000. These issues raise substantial doubt about the Company’s ability to continue as a going concern.

 

 

 7 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

The Company plans to expand its mobile games and application development and publishing activities, such as Pocket Starships and Steven Universe: Tap Together, through acquisition and/or development of its own intellectual property and publishing agreements with developers.

 

Historically, we have financed our operations primarily through private sales of our trading securities, through sales of our common stock, and through related party loans. If our sales goals for our products do not materialize as planned, we believe that the Company can reduce its operating and product development costs that would allow us to maintain sufficient cash levels to continue operations. However, 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 the next twelve months. However, management cannot make any assurances that such financing will be secured.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions used by management affected impairment analysis for trading securities, fixed assets, intangible assets, capitalized licensing rights, amounts of potential liabilities, 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, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,588,310, Options – 12,449,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2019.

 

The basic and fully diluted shares for the three months ended March 31, 2018 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 253,678, Options – 13,740,000, Warrants – 3,600,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2018.

 

Capitalized Gaming Assets and Licensing Rights

 

During the three months ended March 31, 2019 and 2018, the Company recorded amortization expense of $1,000 and $18,000, respectively. As of March 31, 2019 and December 31, 2018, the accumulated amortization was $3,000 and $2,000, respectively and the unamortized capitalized gaming assets and licensing rights amounted to $121,000 and $122,000 respectively.

 

Software Development Costs

 

Costs incurred for software development are expensed as incurred. During the three months ended March 31, 2019 and 2018, the Company incurred $17,000 and $299,000 in software development costs paid to independent gaming software developers.

 

Revenue Recognition

 

We account for revenue in accordance with ASC 606.

 

We determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

 

 

 8 

 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

Recent Accounting Standards

 

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company adopted ASU 2016-02 on January 1, 2019. Pursuant to this new standard, the Company recorded an operating right-of use asset and operating lease liability in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018.

 

In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The amendments in ASU 2018-07 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2019, and it did not have any impact on the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

 

NOTE 2 – PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following:

    March 31,
2019
  December 31,
2018
         
Equipment   $ 28,000     $ 28,000  
Furniture & fixtures     112,000       112,000  
Leasehold improvements     107,000       107,000  
      247,000       247,000  
Less: accumulated depreciation and amortization     (162,000 )     (153,000 )
   Property and Equipment, Net   $ 85,000     $ 94,000  

 

Depreciation expense for the three months ended March 31, 2019 and 2018 was $9,000 and $11,000, respectively.

 

 9 

 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

NOTE 3 - RELATED PARTY TRANSACTIONS

 

During 2017, the Company obtained a revolving line of credit from Berkshire Capital Management Co., Inc. Berkshire is controlled by Joseph Fiore, majority shareholder and former chairman of the board of directors of the Company. 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. Repayment on the loan is due July 1, 2019. As of March 31, 2019, the Company has borrowed $1,000,000 and accrued interest of $84,000.

 

During the three months ended March 2018, the Company issued 500,000 shares of restricted common stock to the father of an executive officer of the Company for cash of $50,000.

 

During 2018 the Company received $313,000 in the form of short-term advances from Berkshire Capital Management Co., Inc. The short-term advances are due upon demand. During the three months ended March 31, 2019, the Company received an additional $209,000 in short-term advances. As of March 31, 2019, the Company has received a total of $522,000 in short-term advances and accrued interest of $12,000.

 

During the three months ended March 31, 2019, the Company, received $52,000 in revenue for professional services rendered to a related Limited Liability Company whose mangers are also officers of SPYR, Inc. and whose majority owner is Berkshire Capital Management Co., Inc.

 

NOTE 4 – CONVERTIBLE NOTES

 

On April 20, 2018, (modified May 22, 2018) the Company issued a $165,000 (originally $158,000) convertible note with original issue discount (OID) of $15,000 and bearing interest at 8% per annum. The amended maturity date of the note is June 1, 2019 and was convertible on or after October 17, 2018 into the Company’s restricted common stock at $0.20 per share at the holder’s request. The OID is recorded as a discount to the debt agreement. The Company has determined the note to contain a beneficial conversion feature valued as $104,000 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 3-year warrants to purchase 200,000 shares of the company’s restricted common stock at an exercise price of $0.375 per share, 200,000 shares of the company’s restricted common stock at an exercise price of $0.50 per share, and 100,000 shares of the company’s restricted common stock at an exercise price of $0.625 per share. The warrants were valued at $126,000 using the Black-Scholes pricing model and were recorded as a discount to the debt agreement. The noteholder was also issued 116,000 shares of the company’s restricted common stock valued at $34,000 based upon the closing price of the Company stock on the date of the modified agreement and recorded as a discount to the debt agreement. During the year ended December 31, 2018 the Company has accrued interest for this note in the amount of $9,000. During the three months ended March 31, 2019 the Company has accrued interest for this note in the amount of $4,000. At March 31, 2019, the principal balance together with total accrued interest is recorded on the Company’s consolidated balance sheet net of discounts at $169,000. On May 10, 2019, the Company amended the note to extend the due dates to June 1, 2019, provide for a partial conversion of $25,000 of the outstanding principal balance into common shares of the Company at a conversion price of $0.10 per share for a total of 250,000 shares, and waive any prior alleged or actual defaults under the note.

 

 

 10 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

On May 22, 2018, the Company issued a $275,000 convertible note with original issue discount (OID) of $25,000 and bearing a one-time interest charge at 8%. The amended maturity date of the note is June 1, 2019 and is convertible into the Company’s restricted common stock at $0.25 per share at the holder’s request. The OID is recorded as a discount to the debt agreement. The Company has determined the note to contain a beneficial conversion feature valued as $40,000 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 5-year warrants to purchase 500,000 shares of the company’s restricted common stock at an exercise price of $2.00 per share. The warrants were valued at $45,000 using the Black-Scholes pricing model and were recorded as a discount to the debt agreement. The noteholder was also issued 200,000 shares of the company’s restricted common stock valued at $58,000 based upon the closing price of the Company stock on the date of the agreement and recorded as a discount to the debt agreement. At March 31, 2019, the principal balance together with total accrued interest of $22,000 and liquidated damages of $25,000 is recorded on the Company’s consolidated balance sheet net of discounts at $322,000. On May 10, 2019, the Company amended the note to extend the due dates to June 1, 2019, provide for a partial conversion of $25,000 of the outstanding principal balance into common shares of the Company at a conversion price of $0.10 per share for a total of 250,000 shares, and waive any prior alleged or actual defaults under the note.

 

The following table summarized the Company's convertible notes payable as of March 31, 2019 and December 31, 2018:

  

    March 31,
2019
  December 31,
2018
Beginning Balance   $ 432,000     $ —    
Proceeds from the issuance of convertible notes, net of issuance discounts     —         137,000  
Repayments     —         —    
Conversion of notes payable into common stock     —         —    
Amortization of discounts     53,000       241,000  
Liquidated damages     —         25,000  
Accrued Interest     6,000       29,000  
Ending Balance   $ 491,000     $ 432,000  
                 
Convertible notes, short term   $ 440,000     $ 440,000  
                 
Debt discounts   $ 9,000     $ 62,000  

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leases approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015 and expiring on December 31, 2020. Under the lease, the Company pays annual base rent on an escalating scale ranging from $143,000 to $152,000. The Company adopted ASC 842 for this lease using a modified retrospective transition approach as of the beginning of the January 2018. As a result of the adoption, prior periods have been restated to include the recorded operating right-of-use asset and operating lease liability in the accompanying condensed consolidated balance sheets as December 31, 2018 and the decrease in operating lease liability in the accompanying condensed consolidated statements of cash flows for the three months ended March 31, 2018.

 

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. A material legal proceeding that is currently pending is as follows:

 

 

 11 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

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. 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 alleges 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 alleges that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleges 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 seeks 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.

 

The Company vehemently denies any wrongdoing. The allegations demonstrate a fundamental misunderstanding of existing precedent and a mischaracterization of the facts and transactions at issue, which were not violative of any securities laws, rules or regulations. Based upon available information at this very early stage of litigation, management believes that the Company will obtain a favorable ruling. Accordingly, Management believes the likelihood of material loss resulting from this lawsuit to be remote.

 

On November 2, 2018, counsel for Defendants filed a joint motion to dismiss the SEC’s suit in its entirety, primarily on the basis that the SEC’s complaint fails to allege facts sufficient to state viable causes of action. All three defendants assert that the SEC has failed to satisfy its heightened pleadings requirement for stating viable claims for market manipulation. All three Defendants also sought dismissal based upon the expiration of the applicable statute of limitations and based upon the SEC’s alleged failure to file suit within the statutory deadline for doing so as codified under the Dodd-Frank Act of 2010. This failure, Defendants argue, deprives the SEC of jurisdiction to pursue its claims against all Defendants. In addition to the foregoing, the Company further moved for dismissal of the alleged Section 7(a) Investment Company Act violation based upon the SEC’s failure to establish that the Company fit the statutory definition of an Investment Company, as that term is defined under the Investment Company Act; i.e., the Company met one of the statutory exceptions to what is and is not an Investment Company for purposes of having to register as such under the Act. The Company cannot accurately estimate when it expects a decision on its motion to dismiss, as it has been fully briefed and pending for more than four months, but expects a ruling within the next several months.

 

The Company is being represented by Alex Spiro, Esq., a partner with the firm of Quinn Emmanuel, Urquhart & Sullivan, LLP and Marc S. Gottlieb, Esq., a partner with the firm of Ortoli Rosenstadt LLP.

 

NOTE 6 – EQUITY TRANSACTIONS

 

Common Stock:

 

Three Months Ended March 31, 2018

 

During the three months ended March 31, 2018, the Company issued 500,000 shares of restricted common stock to the father of an executive officer of the Company for cash of $50,000.

 

During the three months ended March 31, 2018, the Company issued an aggregate of 4,200,000 shares of restricted common stock to third parties for cash of $555,000.

 

 

 12 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

During the three months ended March 31, 2018, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $625,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $625,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock.

 

During the three months ended March 31, 2018, the Company issued an aggregate of 4,441,942 shares of restricted common stock to consultants with a total fair value of $1,712,000. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $1,712,000 upon issuance. The shares issued were valued at the date earned under the respective agreements based upon closing market price of the Company’s common stock.

 

Three Months Ended March 31, 2019

 

During the three months ended March 31, 2019, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $131,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $131,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock.

 

Options:

 

The following table summarizes common stock options activity:

 

        Weighted
        Average
        Exercise
    Options   Price
  December 31, 2018       12,449,900     $ 1.64  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, March 31, 2019       12,449,900     $ 1.64  
  Exercisable, March 31, 2019       12,449,900     $ 1.64  

 

The weighted average exercise prices, remaining lives for options granted, and exercisable as of March 31, 2019 were as follows:

                     
    Outstanding Options       Exercisable Options
Options           Weighted       Weighted
Exercise Price       Life   Average Exercise       Average Exercise
Per Share   Shares   (Years)   Price   Shares   Price
$0.50   8,000,000   1.42   $0.50   8,000,000   $0.50
$1.00   1,449,900   0.57 – 2.86   $1.00   1,449,900   $1.00
$5.00   3,000,000   0.75   $5.00   3,000,000   $5.00
    12,449,900       $1.64   12,449,900   $1.64

 

At March 31, 2019, the Company’s closing stock price was $0.07 per share. As all outstanding options had an exercise price greater than $0.07 per share, there was no intrinsic value of the options outstanding at March 31, 2019.

 

 13 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

Warrants:

 

The following table summarizes common stock warrants activity:

 

        Weighted
        Average
        Exercise
    Warrants   Price
  Outstanding, December 31, 2018       9,000,000     $ 0.46  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, March 31, 2019       9,000,000     $ 0.46  
  Exercisable, March 31, 2019       9,000,000     $ 0.46  

 

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of March 31, 2019, were as follows:

 

    Outstanding and Exercisable Warrants  
Warrants          
Exercise Price       Life  
Per Share   Shares   (Years)  
$0.01   600,000   1.76  
$0.15   1,200,000   1.79  
$0.25   1,000,000   4.28  
$0.375   200,000   2.06  
$0.40   1,200,000   1.79  
$0.50   3,000,000   0.65 – 4.35  
$0.625   100,000   2.06  
$0.75   1,250,000   2.23 – 4.35  
$1.00   250,000   2.16  
$2.00   200,000   4.15  
    9,000,000      

 

At March 31, 2019, the Company’s closing stock price was $0.07 per share. The Company had 600,000 warrants outstanding with exercise prices less than $0.07 with an intrinsic value of $36,000 at March 31, 2019.

 

Shares Reserved:

 

At March 31, 2019, the Company has reserved 30,000,000 shares of common stock in connection with 2 convertible notes with detachable warrants and 3,500,000 shares of common stock in connection with the court approves settlement agreement for a total of 33,500,000 reserved shares of common stock.

 

 

 14 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

NOTE 7 – 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 following table summarizes the assets and liabilities of our discontinued restaurant segment's discontinued operations as of March 31, 2019 and December 31, 2018:

 

    March 31,
2019
  December 31,
2018
Assets:                
Total Assets   $ —       $ —    
                 
Liabilities:                
   Accounts payable and accrued liabilities   $ 22,000     $ 22,000  
Total Liabilities   $ 22,000     $ 22,000  

 

The following table summarizes the results of operations of our discontinued restaurant for the three months ended March 31, 2019 and 2018 and is included in the consolidated statements of operations as discontinued operations:

 

    For the Three Months Ended March 31,
    2019   2018
         
Revenues   $ —       $ —    
Cost of sales     —         —    
          Gross Margin     —         —    
Expenses                
   Labor and related expenses     —         —    
   Rent     —         1,000  
   Depreciation and amortization     —         —    
   Professional fees     —         —    
   Other general and administrative     —         1,000  
          Total Operating Expenses     —         2,000  
          Operating Income (Loss)     —         (2,000 )
Other Income (Expense)                
   Loss on disposal of assets     —         —    
Income (Loss) on discontinued operations   $ —       $ (2,000 )

 

 

 15 

 

SPYR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

 

NOTE 8 – SUBSEQUENT EVENTS

 

Subsequent to March 31, 2019, the Company received $145,000 in the form of short-term advances from Berkshire Capital Management Co., Inc. The short-term advances are due upon demand.

 

On May 10, 2019, the Company amended two convertible promissory notes to extend the due dates to June 1, 2019, provide for a partial conversion of $50,000 ($25,000 per note) of the outstanding principal balances into common shares of the Company at a conversion price of $0.10 per share for a total of 500,000 shares (250,000 per note), and waive any prior alleged or actual defaults under the notes.

 

 

 

 

 

 

 

 

 

 16 

 

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and supplementary data referred to in this Form 10-Q.

 

This discussion contains forward-looking statements that involve risks and uncertainties. Such statements, which include statements concerning revenue sources and concentration, selling, general and administrative expenses and capital resources, are subject to risks and uncertainties, including, but not limited to, those discussed elsewhere in this Form 10-Q that could cause actual results to differ materially from those projected. Unless otherwise expressly indicated, the information set forth in this Form 10-Q is as of March 31, 2019, and we undertake no duty to update this information.

 

Plan of Operations

 

Through our wholly owned subsidiary SPYR APPS, LLC, d/b/a SPYR GAMES we develop, publish and co-publish mobile games, and then generate revenue through those games by way of advertising and in-app purchases. Our primary focus is on the development and expansion of our mobile games and applications. We anticipate we will need to hire additional employees during 2019 to help with the development and marketing of existing and future games and applications.

 

During the past two years we have invested in the Company’s future by working closely with the development team at Spectacle Games to optimize game play and expand the availability of our game Pocket Starships to more users through new and existing game portals, social networking sites and app stores throughout the world. During 2017, we signed an agreement with CBS Consumer Products that will allow the incorporation of intellectual property (IP) from various Star Trek television series into future Pocket Starships updates and expansions. In Pocket Starships, players can build and pilot several ships and forge alliances on their quest for galactic domination. Players can perform or initiate various activities ranging from fighting pirates to participating in Faction Alerts. With the future release of an expansion, those playing Pocket Starships will be able to explore new sectors and engage in exciting battles with the Borg and will be able to staff their ships with their favorite Star Trek characters from the Star Trek TV series franchise – including Star Trek: The Next Generation, Star Trek: Deep Space Nine, and Star Trek: Voyager, through a trading card expansion. As of March 31, 2019, the company has not met certain development milestones and is in default under the licensing agreement with CBS. The Company is seeking an extension of time to meet these milestones and cure the default.

 

In addition, working together with third-party developers, we have developed. Steven Universe: Tap Together, a new tapper game featuring characters and storylines from Steven Universe, a popular animated television series on Cartoon Network. Steven Universe: Tap Together was launched globally on the Google Play Store on August 2, 2018 and on the IOS App Store on August 9, 2018.

 

Management’s plan for the next 12 months is to build upon this foundation and focus our efforts on marketing and optimizing user acquisition and retention. We will also continue to utilize the services of game developers for further development, enhancement and maintenance of the games as needed to meet the needs of the users and maximize revenue into the future. In addition to our plans for Pocket Starships and the Steven Universe: Tap Together, we will continue to seek additional games and apps to publish as we strive to broaden our range of products and increase revenues and operating cash flows. We expect these marketing, development and expansion plans will be financed through existing cash, operating cash flows from game revenues and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities. The Company may also decide to expand and/or diversify, through acquisition or otherwise, in other related or unrelated business areas if opportunities present themselves.

 

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2019 TO 2018

 

The consolidated results of continuing operations for the three months ended March 31, 2019 and 2018 are as follows:

 

 

 

 

 

 17 

 

 

   Digital Media  Corporate  Consolidated
          
Three Months Ended March 31, 2019               
Revenues  $25,000    52,000   $77,000 
Labor and related expenses   (50,000)   (276,000)   (326,000)
Rent   (1,000)   (37,000)   (38,000)
Depreciation and amortization   (2,000)   (9,000)   (11,000)
Professional fees   —      (50,000)   (50,000)
Research and development   (17,000)   —      (17,000)
Other general and administrative   (18,000)   (62,000)   (80,000)
Operating loss   (63,000)   (382,000)   (445,000)
                
Other income (expense)   (9,000)   4,000    (5,000)
Loss from continuing operations  $(72,000)  $(378,000)  $(450,000)

 

Three Months Ended March 31, 2018         
Revenues  $6,000   $—     $6,000 
Labor and related expenses   (81,000)   (805,000)   (886,000)
Rent   (13,000)   (36,000)   (49,000)
Depreciation and amortization   (18,000)   (11,000)   (29,000)
Professional fees   (103,000)   (2,453,000)   (2,556,000)
Research and development   (299,000)   —      (299,000)
Other general and administrative   (46,000)   (59,000)   (105,000)
Operating loss   (554,000)   (3,364,000)   (3,918,000)
                
Other expense   (6,000)   (25,000)   (31,000)
Loss from continuing operations  $(560,000)  $(3,389,000)   (3,949,000)

 

Results of Operations

 

For the three months ended March 31, 2019 the Company had a loss from continuing operations of $450,000 compared to a loss from continuing operations of approximately $3,949,000 for the three months ended March 31, 2018. This change is due primarily to decreases in labor and related expenses of $560,000, rent of $11,000, depreciation and amortization of $18,000, professional fees of $2,506,000, research and development of $282,000 and other general and administrative costs $25,000 during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. Other items contributing to the change included increases in revenue of $71,000.

 

More detailed explanation of the three months ended March 31, 2019 and 2018 changes are included in the following discussions.

 

Total Revenues - For the three months ended March 31, 2019 and 2018, the Company had total revenue of $77,000 and $6,000, respectively, for an increase of $71,000. This change is due to the launch of our new game Steven Universe: Tap Together on August 2, 2018 which contributed to game revenues of $25,000 for the three months ended March 31, 2019 compared to game revenues $6,000 for the three months ended March 31, 2018. Additionally, during the three months ended March 31, 2019, the Company, received $52,000 in revenue for professional services rendered to a related Limited Liability Company whose mangers are also officers of SPYR, Inc. and whose majority owner is Berkshire Capital Management Co., Inc. Management plans to expand its mobile application and game development and monetization efforts and believes through continued promotion and user acquisition of Steven Universe: Tap Together, anticipated updates to Pocket Starships with Star Trek IP, and the acquisition of a new games during 2019 will bring increased revenues in the coming year.

 

 18 

 

Labor and related expenses include the costs of salaries, wages, leased employees, contract labor, and the fair value of common stock and options granted to employees for services. For the three months ended March 31, 2019 the company had total labor and related expenses of $326,000 with $127,000 being settled in cash and $131,000 being paid in restricted stock recorded at fair value, and accrued salaries of $68,000. For the three months ended March 31, 2018 the company had total labor and related expenses of $886,000 with $196,000 being settled in cash and $631,000 being paid in restricted stock and vesting of options recorded at fair value, and accrued salaries of $59,000. The cost of labor is expected to increase in conjunction with expansion of the digital media operations.

 

The cost of rent decreased $11,000 from $49,000 for the three months ended March 31, 2018 to $38,000 for the three months ended March 31, 2019. The Company leases approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015 and expiring on December 31, 2020. Under the lease, the Company pays annual base rent on an escalating scale ranging from $142,000 to $152,000. From July 2017 through March 31, 2018 we leased office space in Berlin, Germany for EUR 3,570 ($4,100) per month. The Berlin office was used by leased employees hired by the Company for the operation of our Pocket Starships game. From October 17, 2016 to February 28, 2019 the Company leased shared office space for one employee in Redmond, Washington on a month to month basis at costs escalating from $225 to $325 per month per desk.

 

Depreciation and amortization expenses decreased by approximately $18,000 for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. Depreciation and amortization expenses are attributable to depreciation of the $247,000 of property and equipment and amortization of gaming assets and capitalized licensing rights in service during respective periods.

 

Professional fees decreased $2,506,000 from $2,556,000 for the three months ended March 31, 2018 to $50,000 for the three months ended March 31, 2019. Professional fees during the three months ended March 31, 2019 included $44,000 legal, accounting and other professional service needs and $6,000 for public relations. Professional fees during the three months ended March 31, 2018 included $137,000 in legal, accounting and other professional service needs, $29,000 for public relations, and $9,000 in consulting services related to our digital media operations. The remaining amount is due to the granting of 4,441,942 shares of restricted common stock, 420,000 option and 1,900,000 warrants to purchase restricted common stock issued to third parties for consulting services, public relations and other professional fees with a total fair value of $2,381,000.

 

Research and development costs during the three months ended March 31, 2019 included $17,000 in connection with fees paid to game developers for the development of its current and soon to be released games, compared to research and development costs of $299,000 during the three months ended March 31, 2018.

 

Other general and administrative expenses decreased $25,000 for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The decrease can be attributed primarily to reductions in travel costs $22,000 and game operating of $8,000 and various other general and administrative cost reductions of $6,000 offset by increases in insurance costs of $11,000.

 

The Company had interest expense on a related party line of credit, related party short-term advances, convertible notes payable and accrued expenses of $90,000 offset by the reversal of $87,000 contingent default on convertible notes payable for net interest expense of $3,000 for the three months ended March 31, 2019. The company had interest expense on a related party line of credit and accrued expenses of $20,000 for the three months ended March 31, 2018.

 

The Company had unrealized losses on trading securities of $2,000 for the three months ended March 31, 2019 compared to unrealized losses of $11,000 for the three months ended March 31, 2018. Unrealized gains and losses are the result of fluctuations in the quoted market price of the underlying securities at the respective reporting dates.

 

LIQUIDITY AND CAPITAL RESOURCES

 

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.

 

The Company has generated a net loss from continuing operations for the three months ended March 31, 2019 of $450,000. As of March 31, 2019, the Company had current assets of $71,000, which included cash and cash equivalents of $26,000, accounts receivable of $24,000, prepaid expenses of $19,000 and trading securities of $2,000.

 

 19 

 

During the three months ended March 31, 2019, the Company has met its capital requirements through a combination of collection of receivables and related party short-term advances of $209,000.

 

The Company currently does not have sufficient cash and liquidity to meet its anticipated working capital for the next twelve months. The Company expects future development and expansion will be financed through cash flows from operations and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities. If our sales goals for our products do not materialize as planned, we believe that the Company can reduce its operating and product development costs that would allow us to maintain sufficient cash levels to continue operations. However, 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. There can be no assurance that we will be able to obtain such financing on acceptable terms, or at all.

 

The Company may also decide to expand and/or diversify, through acquisition or otherwise, in other related or unrelated business areas if opportunities present themselves.

 

Operating Activities - For the three months ended March 31, 2019, the Company used cash in operating activities from continuing operations of $207,000. For the three months ended March 31, 2018, the Company used cash in operating activities of $816,000. Operating activities consist of corporate overhead and development of our mobile games and applications. Decreases are due to increased revenues combined with decreases operating expenses. See the above results of operations discussion for more details.

 

Financing Activities - During the three months ended March 31, 2019, the Company borrowed $209,000 from related party short-term advances. During the three months ended March 31, 2018, the Company sold 4,700,000 shares of restricted common stock to third parties and one related party for $605,000, borrowed $5,000 from related party short-term advances and borrowed $200,000 from a related party line of credit.

 

Government Regulations - The Company is subject to all pertinent Federal, State, and Local laws governing its business. Each subsidiary is subject to licensing and regulation by a number of authorities in its State or municipality. These may include health, safety, and fire regulations. The Company's operations are also subject to Federal and State minimum wage laws governing such matters as working conditions, overtime and tip credits.

 

Critical Accounting Policies - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 1 to the quarterly and annual Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements.

 

Revenue Recognition

 

We determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

 

Game Revenues

 

Through our wholly owned subsidiary SPYR APPS, LLC, d/b/a SPYR GAMES, we develop, publish and co-publish mobile games, and then generate revenue through those games by way of advertising and in-app purchases. The Company’s dedicated mobile gaming applications can be downloaded through the app stores maintained by Apple and Google. The Company’s cross platform gaming application, which can be played on personal computers, Facebook and mobile devices, can be downloaded from the internet and Facebook as well as through the app stores maintained by Apple, Google and Amazon.

 

We operate our games as live services that allow players to play for free. Within these games players can purchase virtual items to enhance their game-playing experience. Our identified performance obligation is to display the virtual items within the game. Payment is required at time of purchase and the purchase price is a fixed amount.

 20 

 

Players can purchase our virtual items through various widely accepted payment methods offered in the games, including Apple iTunes accounts, Google Play accounts, Facebook local currency payments, PayPal and credit cards. Payments from players for virtual items are non-refundable and relate to non-cancellable contracts that specify our obligations.

 

For revenue earned through app stores, players utilize the app store’s local currency-based payments program to purchase virtual items in our games. For all payment transactions on these app store platforms, the app store remits to us 70% of the price we request to be charged to the player for each transaction, which represents the transaction price. We recognize revenue net of the amounts retained by the app stores for platform and payment processing fees.

 

Service Revenues

 

Our professional services arrangements are either fixed-fee billing or time-and-material billing arrangements. In fixed-fee billing arrangements, we agree to a predetermined fee for a predetermined set of professional services. We set the fee based upon our estimate of the time and costs necessary to complete the engagements. Under time-and-materials billing arrangements, the fee is based on the number of hours worked at the agreed upon billing rates. We recognized service revenue upon completion of the service and billing of the client.

 

Stock-Based Compensation

 

The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (FASB) whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.

 

The fair value of the Company's stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods.

 

The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant and is recognized as expense over the period which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete.

 

Loss Contingencies

 

The Company is subject to various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates current information available to us to determine whether such accruals should be adjusted.

 

Recent Accounting Pronouncements

 

See Note 1 of the consolidated financial statements for discussion of recent accounting pronouncements.

 

 21 

 

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4.CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Management of the Company is responsible for maintaining disclosure controls and procedures that are designed to ensure that financial information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the timeframes specified in the Securities and Exchange Commission’s rules and forms, consistent with Items 307 and 308 of Regulation S-K.

 

In addition, the disclosure controls and procedures must ensure that such financial information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.

 

As of March 31, 2019, an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) was carried out under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer, and other persons carrying out similar functions for the Company. In making this assessment, Management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (Revised 2013) in Internal Control over Financial Reporting - Guidance for Smaller Public Companies. Based on the evaluation of the Company’s disclosure controls and procedures, Management concluded that during the period covered by this report, such disclosure controls and procedures were not effective, due to certain identified material weaknesses. These identified material weaknesses include, (i) insufficient accounting staff, (ii) inadequate segregation of duties, (iii) limited checks and balances in processing cash and other transactions, and (iv) the lack of independent directors and independent audit committee.

 

The Company is committed to improving its disclosure controls and procedures and the remediation of identified control weaknesses. As capital becomes available, Management plans to increase the accounting and financial reporting staff, add independent directors to the Board of Directors and establish an independent audit committee. We cannot provide assurance that these procedures will be successful in identifying material errors that may exist in the financial statements, nor can we make assurances that additional material weaknesses in its internal control over financial reporting will not be identified in the future.

 

The Company continues to employ and refine a structure in which critical accounting policies, issues and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, the Company evaluates and assesses its internal controls and procedures regarding its financial reporting as necessary and on an on-going basis.

 

Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of the prevention or detection of misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Changes in Internal Controls Over Financial Reporting

 

The Company has no reportable changes to its internal controls over financial reporting for the period covered by this report.

 

The Company will continually enhance and test its internal controls over financial reporting on a continuing basis. Additionally, the Company’s management, under the control of its Chief Executive Officer and Chief Financial Officer, will increase its review of its disclosure controls and procedures on an ongoing basis. Finally, the Company plans to designate, in conjunction with its Chief Financial Officer, individuals responsible for identifying reportable developments and the process for resolving compliance issues related to them. The Company believes these actions will focus necessary attention and resources in its internal accounting functions.

 

 22 

 

PART II - OTHER INFORMATION

 

ITEM 1.LEGAL PROCEEDINGS

 

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. 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 alleges 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 alleges that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleges 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 seeks 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.

 

The Company vehemently denies any wrongdoing. The allegations demonstrate a fundamental misunderstanding of existing precedent and a mischaracterization of the facts and transactions at issue, which were not violative of any securities laws, rules or regulations. The Company will answer these allegations in court.

 

On November 2, 2018, counsel for Defendants filed a joint motion to dismiss the SEC’s suit in its entirety, primarily on the basis that the SEC’s complaint fails to allege facts sufficient to state viable causes of action. All three defendants assert that the SEC has failed to satisfy its heightened pleadings requirement for stating viable claims for market manipulation. All three Defendants also sought dismissal based upon the expiration of the applicable statute of limitations and based upon the SEC’s alleged failure to file suit within the statutory deadline for doing so as codified under the Dodd-Frank Act of 2010. This failure, Defendants argue, deprives the SEC of jurisdiction to pursue its claims against all Defendants. In addition to the foregoing, the Company further moved for dismissal of the alleged Section 7(a) Investment Company Act violation based upon the SEC’s failure to establish that the Company fit the statutory definition of an Investment Company, as that term is defined under the Investment Company Act; i.e., the Company met one of the statutory exceptions to what is and is not an Investment Company for purposes of having to register as such under the Act. The Company cannot accurately estimate when it expects a decision on its motion to dismiss, as it has been fully briefed and pending for more than four months, but expects a ruling within the next several months.

 

The Company is being represented by Alex Spiro, Esq., a partner with the firm of Quinn Emmanuel, Urquhart & Sullivan, LLP and Marc S. Gottlieb, Esq., a partner with the firm of Ortoli Rosenstadt LLP.

 

ITEM 1A.RISK FACTORS

 

Not applicable to smaller reporting companies.

 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On February 1, 2019, the Company issued 1,250,000 restricted common shares as part of the base salary pursuant to employment contracts with two officers of the Company. The Company relied upon the Section 4(a)(2) exemption from registration provided by Rule 506(b) of Regulation D.

 

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.MINE SAFETY DISCLOSURES

 

Not applicable

 

ITEM 5.OTHER INFORMATION

 

None.

 

 23 

 

ITEM 6.EXHIBITS

 

The following exhibits are included as part of this report:

 

Exhibit

Number

Exhibit Description
3.1 Articles of Incorporation (1)
3.2 By-laws (1)
3.3 Amended Articles of Incorporation(1)
10.2 Registration Rights Agreement(1)
14 Code of Ethics (1)
21 Subsidiaries of the Company(1)
31** Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*** Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS** XBRL Instance Document
101.SCH** XBRL Taxonomy Extension Schema Document
101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF** XBRL Taxonomy Extension Definition Linkbase Document
101.LAB** XBRL Taxonomy Extension Label Linkbase Document
101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document

 

**       Filed herewith

***       Furnished Herewith

(1)       Incorporated by reference.

 

 

 24 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: May 15, 2019

 

  SPYR, INC.
     
By: /S/ James R. Thompson
    James R. Thompson
    President & Chief Executive Officer
    (Principal Executive Officer)
     
  By: /S/ Barry D. Loveless
    Barry D. Loveless
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 

 

 25 

 

EX-31 2 ex31.htm EXHIBIT 31

EXHIBIT 31.1

 

RULE 13a-14(a)/15d-14(a) CERTIFICATION

 

I, James R. Thompson, certify that:

 

1.       I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2019 of SPYR, Inc.;

 

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.       The registrant’s other certifying officer(s) and I are responsible for establishing for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 15, 2019

 

  /S/ James R. Thompson
  James R. Thompson
  Chief Executive Officer
  (Principal Executive Officer)

  

 

EXHIBIT 31.2

 

RULE 13a-14(a)/15d-14(a) CERTIFICATION

 

I, Barry D. Loveless, certify that:

 

1.       I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2019 of SPYR, Inc.;

 

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.       The registrant’s other certifying officer(s) and I are responsible for establishing for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5.       The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 15, 2019

 

  /s/ Barry D. Loveless
  Barry D. Loveless, Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

  

 

EX-32 3 ex32.htm EXHIBIT 32

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of SPYR (the “Company”) on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, James R. Thompson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.       The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.       The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

May 15, 2019

  /S/ James R. Thompson
  James R. Thompson
  Chief Executive Officer
  (Principal Executive Officer)

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

  

 

 

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of SPYR, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Barry D. Loveless, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.       The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.       The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

May 15, 2019

  /S/ Barry D. Loveless
  Barry D. Loveless
  Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

  

 

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Restaurant Segment [Member] Restatement [Axis] Restated [Member] Exercise Price Per Share $0.375 [Member] Exercise Price Per Share $0.625 [Member] Exercise Price Per Share $0.75 [Member] Exercise Price Per Share $1.00 [Member] Short-term Debt, Type [Axis] Convertible Notes Payable [Member] Related Party [Axis] Berkshire Capital Management Co., Inc. - A Company Controlled By Joseph Fiore, Majority Shareholder And Former Chairman Of The Board Of Directors [Member] Revolving Line Of Credit [Member] Convertible Note Dated April 20, 2018 [Member] Exercise Price Per Share $0.375 [Member] Exercise Price Per Share $0.625 [Member] Convertible Note Dated May 22, 2018 [Member] Restricted Common Stock [Member] Exercise Price Per Share $0.25 [Member] Convertible Note Dated May 22, 2018 [Member] Class of Stock [Axis] Class E Preferred Stock [Member] Class A Preferred Stock [Member] Equity Components [Axis] Common Stock [Member] Additional Paid-in Capital [Member] Accumulated Deficit [Member] Exercise Price Per Share $0.15 [Member] Antidilutive Securities [Axis] Class A Preferred Stock [Member] Class E Preferred Stock [Member] Stock Options [Member] Property, Plant and Equipment, Type [Axis] Property And Equipment [Member] Father Of An Executive Officer [Member] Short-Term Advances [Member] A Related Limited Liablity Company - A Company Related To Officers Of The Company And Majority Owner Is Berkshire Capital Management Co, Inc [Member] Other Commitments [Axis] Operating Lease Dated May 21, 2015 [Member] Title of Individual [Axis] Third Parties [Member] Employees [Member] Supplier [Axis] Consultant [Member] Subsequent Event Type [Axis] Subsequent Event [Member] Two Convertible Promissory Notes [Member] Document And Entity Information Entity Registrant Name Entity Central Index Key Document Type Document Period End Date Amendment Flag Current Fiscal Year End Date Is Entity a Well-known Seasoned Issuer? Is Entity a Voluntary Filer? Is Entity a Shell Company Is Entity's Reporting Status Current? Is Entity Emerging Growth Company? Elected Not To Use the Extended Transition Period Entity Filer Category Entity Small Business Entity Public Float Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement [Table] Statement [Line Items] ASSETS Current Assets: Cash and cash equivalents Accounts receivable, net Prepaid expenses Trading securities, at market value Total Current Assets Property and equipment, net Capitalized gaming assets and licensing rights, net Intangible assets, net Operating lease right-of-use asset Other assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' (DEFICIT) LIABILITIES Current Liabilities: Accounts payable and accrued liabilities Related party short-term advances Related party line of credit Convertible note payable, net Operating lease liability - Current Portion Current liabilities of discontinued operations Total Current Liabilities Operating lease liability Total Liabilities COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' (DEFICIT) Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018 Common Stock, $0.0001 par value, 750,000,000 shares authorized 199,555,131 and 198,305,131 shares issued and outstanding as of March 31, 2019 and December 31, 2018 Additional paid-in capital Accumulated deficit Total Stockholders' (Deficit) TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) Preferred stock, par value per share Preferred stock, shares authorized Preferred stock, shares issued Preferred stock, shares outstanding Common stock, par value per share Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Game Revenues Related party service revenues Total Revenues Expenses Labor and related expenses Rent Depreciation and amortization Professional fees Research and development Other general and administrative Total Operating Expenses Operating Loss Other Expense Interest Expense Unrealized loss on trading securities Total Other Expense Loss from continuing operations Loss on discontinued operations Net Loss Per Share Amounts Loss from continuing operations Basic and Diluted earnings per share Loss on discontinued operations Basic and Diluted earnings per share Net Loss Basic and Diluted earnings per share Weighted Average Common Shares Basic and Diluted Diluted Balance preferred stock, shares Balance common stock, shares Balance, value Common stock issued to related party for cash, shares Common stock issued to related party for cash, value Common stock issued for cash, shares Common stock issued for cash, value Fair value of common stock issued for employee compensation, shares Fair value of common stock issued for employee compensation, value Fair value of common stock and warrant issued for services, shares Fair value of common stock and warrant issued for services, value Vesting of options and warrants granted for services Net loss Balance preferred stock , shares Balance common stock, shares Balance, value Cash Flows From Operating Activities: Net loss for the period Adjustments to reconcile net loss to net cash used in operating activities: Common stock issued for employee compensation Common stock, options and warrants issued for services Vesting of options and warrants granted for services Amortization of debt discount on convertible notes payable Changes in operating assets and liabilities: Decrease in accounts receivables Decrease in prepaid expenses Increase (decrease) in accounts payable and accrued liabilities Decrease in operating lease liability Increase in accrued interest on short-term advances - related party Increase in accrued interest on line of credit - related party Increase in accrued interest on convertible notes payable Net Cash Used in Operating Activities from Continuing Operations Net Cash Used in Operating Activities from Discontinued Operations Net Cash Used in Operating Activities Cash Flows From Investing Activities: Net Cash Used in Investing Activities Cash Flows From Financing Activities: Proceeds from sale of common stock Proceeds from short-term advances - related party Proceeds from line of credit - related party Net Cash Provided by Financing Activities Net Increase (Decrease) in Cash Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental Disclosure of Interest and Income Taxes Paid: Interest paid during the year Income taxes paid during the year Organization And Summary Of Significant Accounting Policies Organization and Summary of Significant Accounting Policies Property, Plant and Equipment [Abstract] Property and Equipment Debt Disclosure [Abstract] Related Party Transactions Convertible Notes Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Equity [Abstract] Equity Transactions Discontinued Operations and Disposal Groups [Abstract] Discontinued Operations Accounting Policies [Abstract] Subsequent Events Organization And Summary Of Significant Accounting Policies Interim Financial Statements Organization Nature of Business Principles of Consolidation Going Concern Use of Estimates Earnings (Loss) Per Share Capitalized Gaming Assets and Licensing Rights Software Development Costs Revenue Recognition Recent Accounting Standards Schedule of Property and Equipment Convertible Notes Summary of Convertible Notes Payable Equity Transactions Summary of Common Stock Options Activity Schedule of Weighted Average Excerise Price Range of Options Summary of Common Stock Warrants Activity Schedule of Weighted Average Excerise Price Range of Warrants Discontinued Operations Summary of Assets and Liabilities and Results of Operations of Discontinued Operations Property And Equipment Equipment Furniture and fixtures Leasehold improvements Property and Equipment, Gross Less: accumulated depreciation and amortization Property and Equipment, Net Schedule of Short-term Debt [Table] Short-term Debt [Line Items] Beginning Balance Proceeds from the issuance of convertible notes, net of issuance discounts Repayments Conversion of notes payable into common stock Amortization of discounts Liquidated damages Accrued Interest Ending Balance Convertible notes, short term Debt discounts Commitments And Contingencies Year Ended December 31, 2019 2020 2021 2022 2023 Thereafter Total Five Year Minimum Lease Payments Equity Transactions Summary Of Common Stock Options Activity Options December 31, 2018 Granted Exercised Forfeited Outstanding, March 31, 2019 Exercisable, March 31, 2019 Weighted Average Exercise Price December 31, 2018 Granted Exercised Forfeited Outstanding, March 31, 2019 Exercisable, March 31, 2019 Share-based Payment Arrangement, Option, Exercise Price Range [Table] Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] Statistical Measurement [Axis] Outstanding Options, Shares Outstanding Options, Life (Years) Outstanding Options, Weighted Average Exercise Price Exercisable Options, Shares Exercisable Options, Weighted Average Exercise Price Schedule of Share-based Compensation Arrangements by Share-based Payment Award [Table] Share-based Compensation Arrangement by Share-based Payment Award [Line Items] Warrants Outstanding, December 31, 2018 Granted Exercised Forfeited Outstanding, March 31, 2019 Exercisable, March 31, 2019 Weighted Average Exercise Price Outstanding, December 31, 2018 Granted Exercised Forfeited Outstanding, March 31, 2019 Exercisable, March 31, 2019 Outstanding and Exercisable Warrants, Shares Outstanding and Exercisable Warrants, Life (Years) Warrants Exercise Price, Per Share Disposal Groups, Including Discontinued Operations [Table] Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] Assets: Total Assets Liabilities: Accounts payable and accrued liabilities Total Liabilities Revenues Cost of sales Gross Margin Labor and related expenses Depreciation and amortization Other general and administrative Total Operating Expenses Operating Income (Loss) Other Income (Expense) Loss on disposal of assets Income (Loss) on discontinued operations Antidilutive shares excluded from computation of basic earnings per share Capitalized licensing rights, amortization Capitalized licensing rights, accumulated amortization Unamortized capitalized licensing rights Property, Plant and Equipment [Table] Property, Plant and Equipment [Line Items] Depreciation expense Line of credit borrowing capacity Line of credit interest rate Line of credit collateral security Line of credit due date Proceeds from line of credit Accrued interest Stock issued for cash, shares Stock issued for cash, value Debt instrument description Related Party Service Revenues Debt instrument face amount Original issue discount Debt instrument interest rate Debt maturity date Debt instrument conversion terms Debt instrument beneficial conversion feature Award terms No of stock or warrants granted Exercise price of warrants Fair value of warrants Convertible notes payable Stock issued during the period in connection with debt, shares Stock issued during the period in connection with debt, value Value of principal portion of debt converted into shares Debt conversion price per share No of shares of common stock issued in conversion of debt Other Commitments [Table] Other Commitments [Line Items] Lease commitment terms Lease expiration date Annual base rent AgreementAxis [Axis] Litigation Case [Axis] Stock issued to employees for services, shares Stock issued to employees for services, value Share based compensation Stock issued to consultants for services, shares Stock issued to consultants for services, value Share price Warrants outstanding Intrinsic value of warrants Description of shares reserved with court approves settlement Shares reserved in conncetion with 2 convertible notes with detachable warrants Subsequent Event [Table] Subsequent Event [Line Items] Share based compensation other than option exercisable non vested Share based compensation other than option exercisable weighted average exercise price Share based compensation other than option exercised in period Share based compensation other than option exercised in period grant date fair value ExercisePriceRangeDollarZeroPoinFiveZeroMember ExercisePriceRangeDollarOnePoinZeroZeroMember ExercisePriceRangeDollarZeroPointThreeSevenFiveZeroMember ExercisePriceRangeDollarZeroPointSixTwoFiveZeroMember ConvertibleNotesPayableDatedMayTwentyTwoTwoThousandEighteenOneMember AntidilutivePreferredClassAMember AntidilutivePreferredClassEMember Share-based Payment Arrangement, Option [Member] Assets, Current Liabilities, Current Stockholders' Equity Attributable to Parent Liabilities and Equity Revenues [Default Label] Operating Income (Loss) [Default Label] Nonoperating Income (Expense) Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share Earnings Per Share, Basic and Diluted VestingOfOptionsAndWarrantsGrantedForServices Net Cash Provided by (Used in) Operating Activities, Continuing Operations Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, Period Increase (Decrease) Property, Plant and Equipment, Gross Convertible Notes Payable Operating Leases, Future Minimum Payments Due Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number Property Plant And Equipment Amortization Rate Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value Schedule Of Prepaid Expense [Line Items] Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value Stock Option Plan [Member] Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities, Current Disposal Group, Including Discontinued Operation, Operating Expense Depreciation and Amortization, Discontinued Operations Disposal Group, Including Discontinued Operation, General and Administrative Expense EX-101.PRE 9 spyr-20190331_pre.xml XBRL PRESENTATION FILE XML 10 R1.htm IDEA: XBRL DOCUMENT v3.19.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2019
May 15, 2019
Document And Entity Information    
Entity Registrant Name SPYR, Inc.  
Entity Central Index Key 0000829325  
Document Type 10-Q  
Document Period End Date Mar. 31, 2019  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Is Entity's Reporting Status Current? Yes  
Is Entity Emerging Growth Company? false  
Elected Not To Use the Extended Transition Period true  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Common Stock, Shares Outstanding   200,055,131
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2019  
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.19.1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2019
Dec. 31, 2018
Current Assets:    
Cash and cash equivalents $ 26,000 $ 24,000
Accounts receivable, net 24,000  
Prepaid expenses 19,000  
Trading securities, at market value 2,000  
Total Current Assets 71,000  
Property and equipment, net 85,000 94,000
Capitalized gaming assets and licensing rights, net 121,000  
Intangible assets, net 8,000  
Operating lease right-of-use asset 105,000  
Other assets 6,000  
TOTAL ASSETS 396,000  
Current Liabilities:    
Accounts payable and accrued liabilities 1,126,000  
Related party short-term advances 534,000  
Related party line of credit 1,084,000  
Convertible note payable, net 491,000 432,000
Operating lease liability - Current Portion 32,000  
Current liabilities of discontinued operations 22,000  
Total Current Liabilities 3,289,000  
Operating lease liability 92,000  
Total Liabilities 3,381,000  
STOCKHOLDERS' (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018 13  
Common Stock, $0.0001 par value, 750,000,000 shares authorized 199,555,131 and 198,305,131 shares issued and outstanding as of March 31, 2019 and December 31, 2018 19,955  
Additional paid-in capital 53,396,032  
Accumulated deficit (56,401,000)  
Total Stockholders' (Deficit) (2,985,000) (2,666,000)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) 396,000  
Restated [Member]    
Current Assets:    
Cash and cash equivalents   24,000
Accounts receivable, net   62,000
Prepaid expenses   21,000
Trading securities, at market value   4,000
Total Current Assets   111,000
Property and equipment, net   94,000
Capitalized gaming assets and licensing rights, net   122,000
Intangible assets, net   9,000
Operating lease right-of-use asset   110,000
Other assets   6,000
TOTAL ASSETS   452,000
Current Liabilities:    
Accounts payable and accrued liabilities   1,145,000
Related party short-term advances   320,000
Related party line of credit   1,068,000
Convertible note payable, net   432,000
Operating lease liability - Current Portion   39,000
Current liabilities of discontinued operations   22,000
Total Current Liabilities   3,026,000
Operating lease liability   92,000
Total Liabilities   3,118,000
STOCKHOLDERS' (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018   13
Common Stock, $0.0001 par value, 750,000,000 shares authorized 199,555,131 and 198,305,131 shares issued and outstanding as of March 31, 2019 and December 31, 2018   19,830
Additional paid-in capital   53,265,157
Accumulated deficit   (55,951,000)
Total Stockholders' (Deficit)   (2,666,000)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)   452,000
Class A Preferred Stock [Member]    
STOCKHOLDERS' (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018 11  
Total Stockholders' (Deficit) 11 11
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) 11  
Class A Preferred Stock [Member] | Restated [Member]    
STOCKHOLDERS' (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018   11
Total Stockholders' (Deficit)   11
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)   11
Class E Preferred Stock [Member]    
STOCKHOLDERS' (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018 2  
Total Stockholders' (Deficit) 2 2
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 2  
Class E Preferred Stock [Member] | Restated [Member]    
STOCKHOLDERS' (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of March 31, 2019 and December 31, 2018; 20,000 Class E shares issued and outstanding as of March 31, 2019 and December 31, 2018   2
Total Stockholders' (Deficit)   2
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)   $ 2
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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Mar. 31, 2019
Dec. 31, 2018
Preferred stock, par value per share $ 0.0001  
Preferred stock, shares authorized 10,000,000  
Common stock, par value per share $ 0.0001  
Common stock, shares authorized 750,000,000  
Common stock, shares issued 199,555,131  
Common stock, shares outstanding 199,555,131  
Restated [Member]    
Preferred stock, par value per share   $ 0.0001
Preferred stock, shares authorized   10,000,000
Common stock, par value per share   $ 0.0001
Common stock, shares authorized   750,000,000
Common stock, shares issued   198,305,131
Common stock, shares outstanding   198,305,131
Class A Preferred Stock [Member]    
Preferred stock, par value per share $ 0.0001  
Preferred stock, shares authorized 10,000,000  
Preferred stock, shares issued 107,636  
Preferred stock, shares outstanding 107,636 107,636
Class A Preferred Stock [Member] | Restated [Member]    
Preferred stock, par value per share   $ 0.0001
Preferred stock, shares authorized   10,000,000
Preferred stock, shares issued   107,636
Preferred stock, shares outstanding   107,636
Class E Preferred Stock [Member]    
Preferred stock, par value per share $ 0.0001  
Preferred stock, shares authorized 10,000,000  
Preferred stock, shares issued 20,000  
Preferred stock, shares outstanding 20,000 20,000
Class E Preferred Stock [Member] | Restated [Member]    
Preferred stock, par value per share   $ 0.0001
Preferred stock, shares authorized   10,000,000
Preferred stock, shares issued   20,000
Preferred stock, shares outstanding   20,000
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Condensed Consolidated Statements Of Operations (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Game Revenues $ 25,000 $ 6,000
Related party service revenues 52,000
Total Revenues 77,000 6,000
Expenses    
Labor and related expenses 326,000 886,000
Rent 38,000 49,000
Depreciation and amortization 11,000 29,000
Professional fees 50,000 2,556,000
Research and development 17,000 299,000
Other general and administrative 80,000 105,000
Total Operating Expenses 522,000 3,924,000
Operating Loss (445,000) (3,918,000)
Other Expense    
Interest Expense 3,000 20,000
Unrealized loss on trading securities 2,000 11,000
Total Other Expense (5,000) (31,000)
Loss from continuing operations (450,000) (3,949,000)
Loss on discontinued operations (2,000)
Net Loss $ (450,000) $ (3,951,000)
Loss from continuing operations    
Basic and Diluted earnings per share $ (0.02)
Loss on discontinued operations    
Basic and Diluted earnings per share
Net Loss    
Basic and Diluted earnings per share $ (0.02)
Weighted Average Common Shares    
Basic and Diluted 199,110,687 186,355,488
Diluted 199,110,687 186,355,488
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Condensed Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) - USD ($)
Class A Preferred Stock [Member]
Class E Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
Balance preferred stock, shares at Dec. 31, 2017 107,636 20,000        
Balance common stock, shares at Dec. 31, 2017     181,128,950      
Balance, value at Dec. 31, 2017 $ 11 $ 2 $ 18,112 $ 46,561,875 $ (47,209,000) $ (629,000)
Common stock issued to related party for cash, shares 500,000      
Common stock issued to related party for cash, value $ 50 49,950 50,000
Common stock issued for cash, shares 4,200,000      
Common stock issued for cash, value $ 420 554,580 555,000
Fair value of common stock issued for employee compensation, shares 1,250,000      
Fair value of common stock issued for employee compensation, value $ 125 624,875 625,000
Fair value of common stock and warrant issued for services, shares 4,441,942      
Fair value of common stock and warrant issued for services, value $ 444 1,711,556 1,712,000
Vesting of options and warrants granted for services 674,000 674,000
Net loss (3,951,000) (3,951,000)
Balance preferred stock , shares at Mar. 31, 2018 107,636 20,000        
Balance common stock, shares at Mar. 31, 2018     191,520,892      
Balance, value at Mar. 31, 2018 $ 11 $ 2 $ 19,151 50,176,836 (51,160,000) (964,000)
Balance preferred stock, shares at Dec. 31, 2018 107,636 20,000        
Balance common stock, shares at Dec. 31, 2018     198,305,131      
Balance, value at Dec. 31, 2018 $ 11 $ 2 $ 19,830 53,265,157 (55,951,000) (2,666,000)
Fair value of common stock issued for employee compensation, shares 1,250,000      
Fair value of common stock issued for employee compensation, value $ 125 130,875 131,000
Net loss (450,000) $ (450,000)
Balance preferred stock , shares at Mar. 31, 2019 107,636 20,000        
Balance common stock, shares at Mar. 31, 2019     199,555,131     199,555,131
Balance, value at Mar. 31, 2019 $ 11 $ 2 $ 19,955 $ 53,396,032 $ (56,401,000) $ (2,985,000)
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Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($)
3 Months Ended 12 Months Ended 15 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Mar. 31, 2019
Cash Flows From Operating Activities:        
Net loss for the period $ (450,000) $ (3,951,000)    
Adjustments to reconcile net loss to net cash used in operating activities:        
Loss on discontinued operations (2,000)    
Depreciation and amortization 11,000 29,000    
Common stock issued for employee compensation 131,000      
Common stock, options and warrants issued for services      
Vesting of options and warrants granted for services      
Amortization of debt discount on convertible notes payable 53,000      
Unrealized loss on trading securities 2,000 11,000    
Changes in operating assets and liabilities:        
Decrease in accounts receivables (38,000)      
Decrease in prepaid expenses (2,000)      
Increase (decrease) in accounts payable and accrued liabilities (19,000)      
Decrease in operating lease liability (2,000)      
Increase in accrued interest on short-term advances - related party 5,000      
Increase in accrued interest on line of credit - related party 16,000      
Increase in accrued interest on convertible notes payable 6,000      
Net Cash Used in Operating Activities from Continuing Operations (207,000)      
Net Cash Used in Operating Activities from Discontinued Operations      
Net Cash Used in Operating Activities (207,000)      
Cash Flows From Investing Activities:        
Net Cash Used in Investing Activities      
Cash Flows From Financing Activities:        
Proceeds from sale of common stock      
Proceeds from short-term advances - related party 209,000      
Proceeds from line of credit - related party      
Net Cash Provided by Financing Activities 209,000      
Net Increase (Decrease) in Cash 2,000      
Cash and cash equivalents at beginning of period 24,000      
Cash and cash equivalents at end of period 26,000   $ 24,000 $ 26,000
Supplemental Disclosure of Interest and Income Taxes Paid:        
Interest paid during the year      
Income taxes paid during the year      
Restated [Member]        
Adjustments to reconcile net loss to net cash used in operating activities:        
Common stock issued for employee compensation   625,000    
Common stock, options and warrants issued for services   1,712,000    
Vesting of options and warrants granted for services   674,000    
Amortization of debt discount on convertible notes payable      
Changes in operating assets and liabilities:        
Decrease in accounts receivables   (1,000)    
Decrease in prepaid expenses   (16,000)    
Increase (decrease) in accounts payable and accrued liabilities   53,000    
Decrease in operating lease liability   (2,000)    
Increase in accrued interest on short-term advances - related party      
Increase in accrued interest on line of credit - related party   14,000    
Increase in accrued interest on convertible notes payable      
Net Cash Used in Operating Activities from Continuing Operations   (816,000)    
Net Cash Used in Operating Activities from Discontinued Operations   (2,000)    
Net Cash Used in Operating Activities   (818,000)    
Cash Flows From Investing Activities:        
Net Cash Used in Investing Activities      
Cash Flows From Financing Activities:        
Proceeds from sale of common stock   605,000    
Proceeds from short-term advances - related party   5,000    
Proceeds from line of credit - related party   200,000    
Net Cash Provided by Financing Activities   810,000    
Net Increase (Decrease) in Cash   (8,000)    
Cash and cash equivalents at beginning of period $ 24,000 86,000 86,000 $ 86,000
Cash and cash equivalents at end of period   78,000 $ 24,000  
Supplemental Disclosure of Interest and Income Taxes Paid:        
Interest paid during the year      
Income taxes paid during the year      
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.19.1
Organization And Summary Of Significant Accounting Policies
3 Months Ended
Mar. 31, 2019
Organization And Summary Of Significant Accounting Policies  
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 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, 2018 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2018 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.

 

Organization

 

The Company was incorporated as Conceptualistics, Inc. on January 6, 1988 in Delaware. Subsequent to its incorporation, the Company changed its name to Eat at Joe’s, Ltd. In February 2015, the Company changed its name to SPYR, Inc. and adopted a new ticker symbol “SPYR” effective March 12, 2015.

 

Nature of Business

 

The primary focus of SPYR, Inc. (the “Company”) is to act as a holding company and develop a portfolio of profitable subsidiaries, not limited by any particular industry or business.

 

Through our wholly owned subsidiaries, SPYR APPS, LLC we operate our mobile games and applications business. The focus of the SPYR APPS subsidiary is the development and publication of electronic games that are downloaded for free by users of mobile devices such as cellular telephones and tablets, including those using Apple’s iOS and Google’s Android mobile operating systems.

 

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 assets and liabilities of EAJ as well as the results of its operations were presented in these financial statements as discontinued operations.

 

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 7), 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, 2019, the Company recorded a net loss from continuing operations of $450,000 and utilized cash in continuing operations of $207,000. As of March 31, 2019, our cash balance was $26,000 and we had trading securities of $2,000. These issues raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company plans to expand its mobile games and application development and publishing activities, such as Pocket Starships and Steven Universe: Tap Together, through acquisition and/or development of its own intellectual property and publishing agreements with developers.

 

Historically, we have financed our operations primarily through private sales of our trading securities, through sales of our common stock, and through related party loans. If our sales goals for our products do not materialize as planned, we believe that the Company can reduce its operating and product development costs that would allow us to maintain sufficient cash levels to continue operations. However, 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 the next twelve months. However, management cannot make any assurances that such financing will be secured.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions used by management affected impairment analysis for trading securities, fixed assets, intangible assets, capitalized licensing rights, amounts of potential liabilities, 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, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,588,310, Options – 12,449,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2019.

 

The basic and fully diluted shares for the three months ended March 31, 2018 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 253,678, Options – 13,740,000, Warrants – 3,600,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2018.

 

Capitalized Gaming Assets and Licensing Rights 

 

During the three months ended March 31, 2019 and 2018, the Company recorded amortization expense of $1,000 and $18,000, respectively. As of March 31, 2019 and December 31, 2018, the accumulated amortization was $3,000 and $2,000, respectively and the unamortized capitalized gaming assets and licensing rights amounted to $121,000 and $122,000 respectively.

Software Development Costs

 

Costs incurred for software development are expensed as incurred. During the three months ended March 31, 2019 and 2018, the Company incurred $17,000 and $299,000 in software development costs paid to independent gaming software developers.

 

Revenue Recognition

 

We account for revenue in accordance with ASC 606

 

We determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

 

Recent Accounting Standards

 

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company adopted ASU 2016-02 on January 1, 2019. Pursuant to this new standard, the Company recorded an operating right-of use asset and operating lease liability in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018.

 

In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The amendments in ASU 2018-07 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2019, and it did not have any impact on the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.19.1
Property And Equipment
3 Months Ended
Mar. 31, 2019
Property, Plant and Equipment [Abstract]  
Property and Equipment

NOTE 2 – PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following:

    March 31,
2019
  December 31,
2018
         
Equipment   $ 28,000     $ 28,000  
Furniture & fixtures     112,000       112,000  
Leasehold improvements     107,000       107,000  
      247,000       247,000  
Less: accumulated depreciation and amortization     (162,000 )     (153,000 )
   Property and Equipment, Net   $ 85,000     $ 94,000  

 

Depreciation expense for the three months ended March 31, 2019 and 2018 was $9,000 and $11,000, respectively.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.19.1
Related Party Transactions
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Related Party Transactions

NOTE 3 - RELATED PARTY TRANSACTIONS

 

During 2017, the Company obtained a revolving line of credit from Berkshire Capital Management Co., Inc. Berkshire is controlled by Joseph Fiore, majority shareholder and former chairman of the board of directors of the Company. 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. Repayment on the loan is due July 1, 2019. As of March 31, 2019, the Company has borrowed $1,000,000 and accrued interest of $84,000.

 

During the three months ended March 2018, the Company issued 500,000 shares of restricted common stock to the father of an executive officer of the Company for cash of $50,000.

 

During 2018 the Company received $313,000 in the form of short-term advances from Berkshire Capital Management Co., Inc. The short-term advances are due upon demand. During the three months ended March 31, 2019, the Company received an additional $209,000 in short-term advances. As of March 31, 2019, the Company has received a total of $522,000 in short-term advances and accrued interest of $12,000.

 

During the three months ended March 31, 2019, the Company, received $52,000 in revenue for professional services rendered to a related Limited Liability Company whose mangers are also officers of SPYR, Inc. and whose majority owner is Berkshire Capital Management Co., Inc.

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Notes
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Convertible Notes

NOTE 4 – CONVERTIBLE NOTES

 

On April 20, 2018, (modified May 22, 2018) the Company issued a $165,000 (originally $158,000) convertible note with original issue discount (OID) of $15,000 and bearing interest at 8% per annum. The amended maturity date of the note is June 1, 2019 and was convertible on or after October 17, 2018 into the Company’s restricted common stock at $0.20 per share at the holder’s request. The OID is recorded as a discount to the debt agreement. The Company has determined the note to contain a beneficial conversion feature valued as $104,000 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 3-year warrants to purchase 200,000 shares of the company’s restricted common stock at an exercise price of $0.375 per share, 200,000 shares of the company’s restricted common stock at an exercise price of $0.50 per share, and 100,000 shares of the company’s restricted common stock at an exercise price of $0.625 per share. The warrants were valued at $126,000 using the Black-Scholes pricing model and were recorded as a discount to the debt agreement. The noteholder was also issued 116,000 shares of the company’s restricted common stock valued at $34,000 based upon the closing price of the Company stock on the date of the modified agreement and recorded as a discount to the debt agreement. During the year ended December 31, 2018 the Company has accrued interest for this note in the amount of $9,000. During the three months ended March 31, 2019 the Company has accrued interest for this note in the amount of $4,000. At March 31, 2019, the principal balance together with total accrued interest is recorded on the Company’s consolidated balance sheet net of discounts at $169,000. On May 10, 2019, the Company amended the note to extend the due dates to June 1, 2019, provide for a partial conversion of $25,000 of the outstanding principal balance into common shares of the Company at a conversion price of $0.10 per share for a total of 250,000 shares, and waive any prior alleged or actual defaults under the note.

 

On May 22, 2018, the Company issued a $275,000 convertible note with original issue discount (OID) of $25,000 and bearing a one-time interest charge at 8%. The amended maturity date of the note is June 1, 2019 and is convertible into the Company’s restricted common stock at $0.25 per share at the holder’s request. The OID is recorded as a discount to the debt agreement. The Company has determined the note to contain a beneficial conversion feature valued as $40,000 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 5-year warrants to purchase 500,000 shares of the company’s restricted common stock at an exercise price of $2.00 per share. The warrants were valued at $45,000 using the Black-Scholes pricing model and were recorded as a discount to the debt agreement. The noteholder was also issued 200,000 shares of the company’s restricted common stock valued at $58,000 based upon the closing price of the Company stock on the date of the agreement and recorded as a discount to the debt agreement. At March 31, 2019, the principal balance together with total accrued interest of $22,000 and liquidated damages of $25,000 is recorded on the Company’s consolidated balance sheet net of discounts at $322,000. On May 10, 2019, the Company amended the note to extend the due dates to June 1, 2019, provide for a partial conversion of $25,000 of the outstanding principal balance into common shares of the Company at a conversion price of $0.10 per share for a total of 250,000 shares, and waive any prior alleged or actual defaults under the note.

 

The following table summarized the Company's convertible notes payable as of March 31, 2019 and December 31, 2018:

  

    March 31,
2019
  December 31,
2018
Beginning Balance   $ 432,000     $ —    
Proceeds from the issuance of convertible notes, net of issuance discounts     —         137,000  
Repayments     —         —    
Conversion of notes payable into common stock     —         —    
Amortization of discounts     53,000       241,000  
Liquidated damages     —         25,000  
Accrued Interest     6,000       29,000  
Ending Balance   $ 491,000     $ 432,000  
                 
Convertible notes, short term   $ 440,000     $ 440,000  
                 
Debt discounts   $ 9,000     $ 62,000  
XML 20 R11.htm IDEA: XBRL DOCUMENT v3.19.1
Commitments And Contingencies
3 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leases approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015 and expiring on December 31, 2020. Under the lease, the Company pays annual base rent on an escalating scale ranging from $143,000 to $152,000. The Company adopted ASC 842 for this lease using a modified retrospective transition approach as of the beginning of the January 2018. As a result of the adoption, prior periods have been restated to include the recorded operating right-of-use asset and operating lease liability in the accompanying condensed consolidated balance sheets as December 31, 2018 and the decrease in operating lease liability in the accompanying condensed consolidated statements of cash flows for the three months ended March 31, 2018.

 

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. A material legal proceeding that is currently pending is as follows:

 

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. 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 alleges 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 alleges that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleges 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 seeks 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.

 

The Company vehemently denies any wrongdoing. The allegations demonstrate a fundamental misunderstanding of existing precedent and a mischaracterization of the facts and transactions at issue, which were not violative of any securities laws, rules or regulations. Based upon available information at this very early stage of litigation, management believes that the Company will obtain a favorable ruling. Accordingly, Management believes the likelihood of material loss resulting from this lawsuit to be remote.

 

On November 2, 2018, counsel for Defendants filed a joint motion to dismiss the SEC’s suit in its entirety, primarily on the basis that the SEC’s complaint fails to allege facts sufficient to state viable causes of action. All three defendants assert that the SEC has failed to satisfy its heightened pleadings requirement for stating viable claims for market manipulation. All three Defendants also sought dismissal based upon the expiration of the applicable statute of limitations and based upon the SEC’s alleged failure to file suit within the statutory deadline for doing so as codified under the Dodd-Frank Act of 2010. This failure, Defendants argue, deprives the SEC of jurisdiction to pursue its claims against all Defendants. In addition to the foregoing, the Company further moved for dismissal of the alleged Section 7(a) Investment Company Act violation based upon the SEC’s failure to establish that the Company fit the statutory definition of an Investment Company, as that term is defined under the Investment Company Act; i.e., the Company met one of the statutory exceptions to what is and is not an Investment Company for purposes of having to register as such under the Act. The Company cannot accurately estimate when it expects a decision on its motion to dismiss, as it has been fully briefed and pending for more than four months, but expects a ruling within the next several months.

 

The Company is being represented by Alex Spiro, Esq., a partner with the firm of Quinn Emmanuel, Urquhart & Sullivan, LLP and Marc S. Gottlieb, Esq., a partner with the firm of Ortoli Rosenstadt LLP.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Equity Transactions

NOTE 6 – EQUITY TRANSACTIONS

 

Common Stock:

 

Three Months Ended March 31, 2018

 

During the three months ended March 31, 2018, the Company issued 500,000 shares of restricted common stock to the father of an executive officer of the Company for cash of $50,000.

 

During the three months ended March 31, 2018, the Company issued an aggregate of 4,200,000 shares of restricted common stock to third parties for cash of $555,000.

 

During the three months ended March 31, 2018, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $625,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $625,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock.

 

During the three months ended March 31, 2018, the Company issued an aggregate of 4,441,942 shares of restricted common stock to consultants with a total fair value of $1,712,000. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $1,712,000 upon issuance. The shares issued were valued at the date earned under the respective agreements based upon closing market price of the Company’s common stock.

 

Three Months Ended March 31, 2019

 

During the three months ended March 31, 2019, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $131,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $131,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock.

 

Options:

 

The following table summarizes common stock options activity:

 

        Weighted
        Average
        Exercise
    Options   Price
  December 31, 2018       12,449,900     $ 1.64  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, March 31, 2019       12,449,900     $ 1.64  
  Exercisable, March 31, 2019       12,449,900     $ 1.64  

 

The weighted average exercise prices, remaining lives for options granted, and exercisable as of March 31, 2019 were as follows:

                     
    Outstanding Options       Exercisable Options
Options           Weighted       Weighted
Exercise Price       Life   Average Exercise       Average Exercise
Per Share   Shares   (Years)   Price   Shares   Price
$0.50   8,000,000   1.42   $0.50   8,000,000   $0.50
$1.00   1,449,900   0.57 – 2.86   $1.00   1,449,900   $1.00
$5.00   3,000,000   0.75   $5.00   3,000,000   $5.00
    12,449,900       $1.64   12,449,900   $1.64

 

At March 31, 2019, the Company’s closing stock price was $0.07 per share. As all outstanding options had an exercise price greater than $0.07 per share, there was no intrinsic value of the options outstanding at March 31, 2019.

 

Warrants:

 

The following table summarizes common stock warrants activity:

 

        Weighted
        Average
        Exercise
    Warrants   Price
  Outstanding, December 31, 2018       9,000,000     $ 0.46  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, March 31, 2019       9,000,000     $ 0.46  
  Exercisable, March 31, 2019       9,000,000     $ 0.46  

 

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of March 31, 2019, were as follows:

 

    Outstanding and Exercisable Warrants  
Warrants          
Exercise Price       Life  
Per Share   Shares   (Years)  
$0.01   600,000   1.76  
$0.15   1,200,000   1.79  
$0.25   1,000,000   4.28  
$0.375   200,000   2.06  
$0.40   1,200,000   1.79  
$0.50   3,000,000   0.65 – 4.35  
$0.625   100,000   2.06  
$0.75   1,250,000   2.23 – 4.35  
$1.00   250,000   2.16  
$2.00   200,000   4.15  
    9,000,000      

 

At March 31, 2019, the Company’s closing stock price was $0.07 per share. The Company had 600,000 warrants outstanding with exercise prices less than $0.07 with an intrinsic value of $36,000 at March 31, 2019.

 

Shares Reserved:

 

At March 31, 2019, the Company has reserved 30,000,000 shares of common stock in connection with 2 convertible notes with detachable warrants and 3,500,000 shares of common stock in connection with the court approves settlement agreement for a total of 33,500,000 reserved shares of common stock.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.19.1
Discontinued Operations
3 Months Ended
Mar. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

NOTE 7 – 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 following table summarizes the assets and liabilities of our discontinued restaurant segment's discontinued operations as of March 31, 2019 and December 31, 2018:

 

    March 31,
2019
  December 31,
2018
Assets:                
Total Assets   $ —       $ —    
                 
Liabilities:                
   Accounts payable and accrued liabilities   $ 22,000     $ 22,000  
Total Liabilities   $ 22,000     $ 22,000  

 

The following table summarizes the results of operations of our discontinued restaurant for the three months ended March 31, 2019 and 2018 and is included in the consolidated statements of operations as discontinued operations:

 

    For the Three Months Ended March 31,
    2019   2018
         
Revenues   $ —       $ —    
Cost of sales     —         —    
          Gross Margin     —         —    
Expenses                
   Labor and related expenses     —         —    
   Rent     —         1,000  
   Depreciation and amortization     —         —    
   Professional fees     —         —    
   Other general and administrative     —         1,000  
          Total Operating Expenses     —         2,000  
          Operating Income (Loss)     —         (2,000 )
Other Income (Expense)                
   Loss on disposal of assets     —         —    
Income (Loss) on discontinued operations   $ —       $ (2,000 )
XML 23 R14.htm IDEA: XBRL DOCUMENT v3.19.1
Subsequent Events
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Subsequent Events

NOTE 8 – SUBSEQUENT EVENTS

 

Subsequent to March 31, 2019, the Company received $145,000 in the form of short-term advances from Berkshire Capital Management Co., Inc. The short-term advances are due upon demand.

 

On May 10, 2019, the Company amended two convertible promissory notes to extend the due dates to June 1, 2019, provide for a partial conversion of $50,000 ($25,000 per note) of the outstanding principal balances into common shares of the Company at a conversion price of $0.10 per share for a total of 500,000 shares (250,000 per note), and waive any prior alleged or actual defaults under the notes.

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.19.1
Organization And Summary Of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2019
Disclosure Organization And Summary Of Significant Accounting Policies Policies Abstract  
Interim Financial Statements

Interim Financial Statements

 

The accompanying condensed consolidated financial statements 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, 2018 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2018 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.

Organization

Organization

 

The Company was incorporated as Conceptualistics, Inc. on January 6, 1988 in Delaware. Subsequent to its incorporation, the Company changed its name to Eat at Joe’s, Ltd. In February 2015, the Company changed its name to SPYR, Inc. and adopted a new ticker symbol “SPYR” effective March 12, 2015.

Nature of Business

Nature of Business

 

The primary focus of SPYR, Inc. (the “Company”) is to act as a holding company and develop a portfolio of profitable subsidiaries, not limited by any particular industry or business.

 

Through our wholly owned subsidiaries, SPYR APPS, LLC we operate our mobile games and applications business. The focus of the SPYR APPS subsidiary is the development and publication of electronic games that are downloaded for free by users of mobile devices such as cellular telephones and tablets, including those using Apple’s iOS and Google’s Android mobile operating systems.

 

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 assets and liabilities of EAJ as well as the results of its operations were presented in these financial statements as discontinued operations.

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 7), 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, 2019, the Company recorded a net loss from continuing operations of $450,000 and utilized cash in continuing operations of $207,000. As of March 31, 2019, our cash balance was $26,000 and we had trading securities of $2,000. These issues raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company plans to expand its mobile games and application development and publishing activities, such as Pocket Starships and Steven Universe: Tap Together, through acquisition and/or development of its own intellectual property and publishing agreements with developers.

 

Historically, we have financed our operations primarily through private sales of our trading securities, through sales of our common stock, and through related party loans. If our sales goals for our products do not materialize as planned, we believe that the Company can reduce its operating and product development costs that would allow us to maintain sufficient cash levels to continue operations. However, 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 the next twelve months. However, management cannot make any assurances that such financing will be secured.

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, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,588,310, Options – 12,449,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2019.

 

The basic and fully diluted shares for the three months ended March 31, 2018 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 253,678, Options – 13,740,000, Warrants – 3,600,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended March 31, 2018.

Capitalized Gaming Assets and Licensing Rights

Capitalized Gaming Assets and Licensing Rights 

 

During the three months ended March 31, 2019 and 2018, the Company recorded amortization expense of $1,000 and $18,000, respectively. As of March 31, 2019 and December 31, 2018, the accumulated amortization was $3,000 and $2,000, respectively and the unamortized capitalized gaming assets and licensing rights amounted to $121,000 and $122,000 respectively.

Software Development Costs

Software Development Costs

 

Costs incurred for software development are expensed as incurred. During the three months ended March 31, 2019 and 2018, the Company incurred $17,000 and $299,000 in software development costs paid to independent gaming software developers.

Revenue Recognition

Revenue Recognition

 

We account for revenue in accordance with ASC 606

We determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

Recent Accounting Standards

Recent Accounting Standards

 

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company adopted ASU 2016-02 on January 1, 2019. Pursuant to this new standard, the Company recorded an operating right-of use asset and operating lease liability in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018.

 

In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The amendments in ASU 2018-07 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2019, and it did not have any impact on the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.19.1
Property And Equipment (Tables)
3 Months Ended
Mar. 31, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

Property and equipment consisted of the following:

    March 31,
2019
  December 31,
2018
         
Equipment   $ 28,000     $ 28,000  
Furniture & fixtures     112,000       112,000  
Leasehold improvements     107,000       107,000  
      247,000       247,000  
Less: accumulated depreciation and amortization     (162,000 )     (153,000 )
   Property and Equipment, Net   $ 85,000     $ 94,000  
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Notes (Tables)
3 Months Ended
Mar. 31, 2019
Disclosure Convertible Notes Narrative Details Abstract  
Summary of Convertible Notes Payable

The following table summarized the Company's convertible notes payable as of March 31, 2019 and December 31, 2018:

  

    March 31,
2019
  December 31,
2018
Beginning Balance   $ 432,000     $ —    
Proceeds from the issuance of convertible notes, net of issuance discounts     —         137,000  
Repayments     —         —    
Conversion of notes payable into common stock     —         —    
Amortization of discounts     53,000       241,000  
Liquidated damages     —         25,000  
Accrued Interest     6,000       29,000  
Ending Balance   $ 491,000     $ 432,000  
                 
Convertible notes, short term   $ 440,000     $ 440,000  
                 
Debt discounts   $ 9,000     $ 62,000  
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Tables)
3 Months Ended
Mar. 31, 2019
Disclosure Common Stock Transactions Tables Abstract  
Summary of Common Stock Options Activity

The following table summarizes common stock options activity:

 

        Weighted
        Average
        Exercise
    Options   Price
  December 31, 2018       12,449,900     $ 1.64  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, March 31, 2019       12,449,900     $ 1.64  
  Exercisable, March 31, 2019       12,449,900     $ 1.64  
Schedule of Weighted Average Excerise Price Range of Options

The weighted average exercise prices, remaining lives for options granted, and exercisable as of March 31, 2019 were as follows:

 

                     
    Outstanding Options       Exercisable Options
Options           Weighted       Weighted
Exercise Price       Life   Average Exercise       Average Exercise
Per Share   Shares   (Years)   Price   Shares   Price
$0.50   8,000,000   1.42   $0.50   8,000,000   $0.50
$1.00   1,449,900   0.57 – 2.86   $1.00   1,449,900   $1.00
$5.00   3,000,000   0.75   $5.00   3,000,000   $5.00
    12,449,900       $1.64   12,449,900   $1.64
Summary of Common Stock Warrants Activity

The following table summarizes common stock warrants activity:

 

        Weighted
        Average
        Exercise
    Warrants   Price
  Outstanding, December 31, 2018       9,000,000     $ 0.46  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, March 31, 2019       9,000,000     $ 0.46  
  Exercisable, March 31, 2019       9,000,000     $ 0.46  
Schedule of Weighted Average Excerise Price Range of Warrants

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of March 31, 2019, were as follows:

 

    Outstanding and Exercisable Warrants  
Warrants          
Exercise Price       Life  
Per Share   Shares   (Years)  
$0.01   600,000   1.76  
$0.15   1,200,000   1.79  
$0.25   1,000,000   4.28  
$0.375   200,000   2.06  
$0.40   1,200,000   1.79  
$0.50   3,000,000   0.65 – 4.35  
$0.625   100,000   2.06  
$0.75   1,250,000   2.23 – 4.35  
$1.00   250,000   2.16  
$2.00   200,000   4.15  
    9,000,000      
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.19.1
Discontinued Operations (Tables)
3 Months Ended
Mar. 31, 2019
Disclosure Discontinued Operations Tables Abstract  
Summary of Assets and Liabilities and Results of Operations of Discontinued Operations

The following table summarizes the assets and liabilities of our discontinued restaurant segment's discontinued operations as of March 31, 2019 and December 31, 2018:

 

    March 31,
2019
  December 31,
2018
Assets:                
Total Assets   $ —       $ —    
                 
Liabilities:                
   Accounts payable and accrued liabilities   $ 22,000     $ 22,000  
Total Liabilities   $ 22,000     $ 22,000  

 

The following table summarizes the results of operations of our discontinued restaurant for the three months ended March 31, 2019 and 2018 and is included in the consolidated statements of operations as discontinued operations:

 

    For the Three Months Ended March 31,
    2019   2018
         
Revenues   $ —       $ —    
Cost of sales     —         —    
          Gross Margin     —         —    
Expenses                
   Labor and related expenses     —         —    
   Rent     —         1,000  
   Depreciation and amortization     —         —    
   Professional fees     —         —    
   Other general and administrative     —         1,000  
          Total Operating Expenses     —         2,000  
          Operating Income (Loss)     —         (2,000 )
Other Income (Expense)                
   Loss on disposal of assets     —         —    
Income (Loss) on discontinued operations   $ —       $ (2,000 )
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.19.1
Property And Equipment (Details) - USD ($)
Mar. 31, 2019
Dec. 31, 2018
Property And Equipment    
Equipment $ 28,000 $ 28,000
Furniture and fixtures 112,000 112,000
Leasehold improvements 107,000 107,000
Property and Equipment, Gross 247,000 247,000
Less: accumulated depreciation and amortization 162,000 153,000
Property and Equipment, Net $ 85,000 $ 94,000
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Notes (Details) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Short-term Debt [Line Items]    
Beginning Balance $ 432,000  
Proceeds from the issuance of convertible notes, net of issuance discounts  
Repayments  
Conversion of notes payable into common stock  
Amortization of discounts 53,000  
Liquidated damages  
Accrued Interest 6,000  
Ending Balance 491,000 $ 432,000
Convertible notes, short term 440,000  
Debt discounts 9,000  
Convertible Notes Payable [Member]    
Short-term Debt [Line Items]    
Beginning Balance $ 432,000
Proceeds from the issuance of convertible notes, net of issuance discounts   137,000
Repayments  
Conversion of notes payable into common stock  
Amortization of discounts   241,000
Liquidated damages   25,000
Accrued Interest   29,000
Ending Balance   432,000
Convertible notes, short term   440,000
Debt discounts   $ 62,000
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.19.1
Commitments And Contingencies (Details)
Dec. 31, 2018
USD ($)
Year Ended December 31,  
2019 $ 150,000
2020 152,000
2021
2022
2023
Thereafter
Total Five Year Minimum Lease Payments $ 302,000
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Summary Of Common Stock Options Activity) (Details)
3 Months Ended
Mar. 31, 2019
$ / shares
shares
Options  
December 31, 2018 | shares 12,449,900
Granted | shares
Exercised | shares
Forfeited | shares
Outstanding, March 31, 2019 | shares 12,449,900
Exercisable, March 31, 2019 | shares 12,449,900
Weighted Average Exercise Price  
December 31, 2018 | $ / shares $ 1.64
Granted | $ / shares
Exercised | $ / shares
Forfeited | $ / shares
Outstanding, March 31, 2019 | $ / shares 1.64
Exercisable, March 31, 2019 | $ / shares $ 1.64
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Schedule Of Weighted Average Excerise Price Range Of Options) (Details)
3 Months Ended
Mar. 31, 2019
$ / shares
shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Shares | shares 12,449,900
Outstanding Options, Weighted Average Exercise Price | $ / shares $ 1.64
Exercisable Options, Shares | shares 12,449,900
Exercisable Options, Weighted Average Exercise Price | $ / shares $ 1.64
Stock Options [Member] | Exercise Price Per Share $0.50 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Shares | shares 8,000,000
Outstanding Options, Life (Years) 1 year 5 months 1 day
Outstanding Options, Weighted Average Exercise Price | $ / shares $ 0.50
Exercisable Options, Shares | shares 8,000,000
Exercisable Options, Weighted Average Exercise Price | $ / shares $ 0.50
Stock Options [Member] | Exercise Price Per Share $1.00 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Shares | shares 1,449,900
Outstanding Options, Weighted Average Exercise Price | $ / shares $ 1.00
Exercisable Options, Shares | shares 1,449,900
Exercisable Options, Weighted Average Exercise Price | $ / shares $ 1.00
Stock Options [Member] | Exercise Price Per Share $1.00 [Member] | Minimum [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Life (Years) 6 months 25 days
Stock Options [Member] | Exercise Price Per Share $1.00 [Member] | Maximum [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Life (Years) 2 years 10 months 10 days
Stock Options [Member] | Exercise Price Per Share $5.00 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Shares | shares 3,000,000
Outstanding Options, Life (Years) 9 months
Outstanding Options, Weighted Average Exercise Price | $ / shares $ 5.00
Exercisable Options, Shares | shares 3,000,000
Exercisable Options, Weighted Average Exercise Price | $ / shares $ 5.00
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Summary Of Common Stock Warrants Activity) (Details) - Warrants [Member]
3 Months Ended
Mar. 31, 2019
$ / shares
shares
Warrants  
Outstanding, December 31, 2018 | shares 9,000,000
Granted | shares
Exercised | shares
Forfeited | shares
Outstanding, March 31, 2019 | shares 9,000,000
Exercisable, March 31, 2019 | shares 9,000,000
Weighted Average Exercise Price  
Outstanding, December 31, 2018 | $ / shares $ 0.46
Granted | $ / shares
Exercised | $ / shares
Forfeited | $ / shares
Outstanding, March 31, 2019 | $ / shares 0.46
Exercisable, March 31, 2019 | $ / shares $ 0.46
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Schedule Of Weighted Average Excerise Price Range Of Warrants) (Details)
3 Months Ended
Mar. 31, 2019
$ / shares
shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 12,449,900
Warrants [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 9,000,000
Warrants [Member] | Exercise Price Per Share $0.01 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 600,000
Outstanding and Exercisable Warrants, Life (Years) 1 year 9 months 4 days
Warrants Exercise Price, Per Share | $ / shares $ 0.01
Warrants [Member] | Exercise Price Per Share $0.15 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 1,200,000
Outstanding and Exercisable Warrants, Life (Years) 1 year 9 months 14 days
Warrants Exercise Price, Per Share | $ / shares $ 0.15
Warrants [Member] | Exercise Price Per Share $0.25 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 1,000,000
Outstanding and Exercisable Warrants, Life (Years) 4 years 3 months 11 days
Warrants Exercise Price, Per Share | $ / shares $ 0.25
Warrants [Member] | Exercise Price Per Share $0.375 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 200,000
Outstanding and Exercisable Warrants, Life (Years) 2 years 22 days
Warrants Exercise Price, Per Share | $ / shares $ 0.375
Warrants [Member] | Exercise Price Per Share $0.40 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 1,200,000
Outstanding and Exercisable Warrants, Life (Years) 1 year 9 months 14 days
Warrants Exercise Price, Per Share | $ / shares $ 0.40
Warrants [Member] | Exercise Price Per Share $0.50 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 3,000,000
Warrants Exercise Price, Per Share | $ / shares $ 0.50
Warrants [Member] | Exercise Price Per Share $0.50 [Member] | Minimum [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Life (Years) 7 months 24 days
Warrants [Member] | Exercise Price Per Share $0.50 [Member] | Maximum [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Life (Years) 4 years 4 months 6 days
Warrants [Member] | Exercise Price Per Share $0.625 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 100,000
Outstanding and Exercisable Warrants, Life (Years) 2 years 22 days
Warrants Exercise Price, Per Share | $ / shares $ 0.625
Warrants [Member] | Exercise Price Per Share $0.75 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 1,250,000
Warrants Exercise Price, Per Share | $ / shares $ 0.75
Warrants [Member] | Exercise Price Per Share $0.75 [Member] | Minimum [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Life (Years) 2 years 2 months 23 days
Warrants [Member] | Exercise Price Per Share $0.75 [Member] | Maximum [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Life (Years) 4 years 4 months 6 days
Warrants [Member] | Exercise Price Per Share $1.00 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 250,000
Outstanding and Exercisable Warrants, Life (Years) 2 years 1 month 28 days
Warrants Exercise Price, Per Share | $ / shares $ 1.00
Warrants [Member] | Exercise Price Per Share $2.00 [Member]  
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 200,000
Outstanding and Exercisable Warrants, Life (Years) 4 years 1 month 24 days
Warrants Exercise Price, Per Share | $ / shares $ 2.00
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.19.1
Discontinued Operations (Details) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Assets:      
Total Assets $ 396,000    
Liabilities:      
Total Liabilities 3,381,000    
Expenses      
Rent 38,000 $ 49,000  
Professional fees 50,000 2,556,000  
Total Operating Expenses 522,000 3,924,000  
Other Income (Expense)      
Income (Loss) on discontinued operations (450,000) (3,949,000)  
Discontinued Operations - Restaurant Segment [Member]      
Assets:      
Total Assets  
Liabilities:      
Accounts payable and accrued liabilities 22,000   22,000
Total Liabilities 22,000   $ 22,000
Revenues  
Cost of sales  
Gross Margin  
Expenses      
Labor and related expenses  
Rent 1,000  
Depreciation and amortization  
Professional fees  
Other general and administrative 1,000  
Total Operating Expenses 2,000  
Operating Income (Loss) (2,000)  
Other Income (Expense)      
Loss on disposal of assets  
Income (Loss) on discontinued operations $ (2,000)  
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.19.1
Organization And Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Capitalized Gaming Asset And Licensing Rights [Member]      
Capitalized licensing rights, amortization $ 1,000 $ 18,000  
Capitalized licensing rights, accumulated amortization 3,000   $ 2,000
Unamortized capitalized licensing rights $ 121,000   $ 122,000
Class A Preferred Stock [Member]      
Antidilutive shares excluded from computation of basic earnings per share 26,909,028 26,909,028  
Class E Preferred Stock [Member]      
Antidilutive shares excluded from computation of basic earnings per share 1,588,310 253,678  
Stock Options [Member]      
Antidilutive shares excluded from computation of basic earnings per share 12,449,900 13,740,000  
Warrants [Member]      
Antidilutive shares excluded from computation of basic earnings per share 9,000,000 3,600,000  
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.19.1
Property And Equipment (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Property And Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Depreciation expense $ 9,000 $ 11,000
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.19.1
Related Party Transactions (Narrative) (Details) - USD ($)
3 Months Ended 12 Months Ended 15 Months Ended 27 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Dec. 31, 2017
Mar. 31, 2019
Mar. 31, 2019
Short-term Debt [Line Items]            
Proceeds from line of credit          
Stock issued for cash, value   $ 555,000        
Proceeds from short-term advances - related party 209,000          
Related Party Service Revenues 52,000        
Berkshire Capital Management Co., Inc. - A Company Controlled By Joseph Fiore, Majority Shareholder And Former Chairman Of The Board Of Directors [Member] | Revolving Line Of Credit [Member]            
Short-term Debt [Line Items]            
Line of credit borrowing capacity       $ 1,000,000    
Line of credit interest rate       6.00%    
Line of credit collateral security       The loan is secured by a first lien on all the assets of the Company and its wholly owned subsidiary SPYR APPS, LLC.    
Line of credit due date       Jul. 01, 2019    
Proceeds from line of credit           $ 1,000,000
Accrued interest 84,000       $ 84,000 84,000
Berkshire Capital Management Co., Inc. - A Company Controlled By Joseph Fiore, Majority Shareholder And Former Chairman Of The Board Of Directors [Member] | Short-Term Advances [Member]            
Short-term Debt [Line Items]            
Accrued interest 12,000       12,000 $ 12,000
Proceeds from short-term advances - related party 209,000   $ 313,000   $ 522,000  
Debt instrument description     Short-term advances are due upon demand.      
Father Of An Executive Officer [Member] | Restricted Common Stock [Member]            
Short-term Debt [Line Items]            
Stock issued for cash, shares   500,000        
Stock issued for cash, value   $ 50,000        
A Related Limited Liablity Company - A Company Related To Officers Of The Company And Majority Owner Is Berkshire Capital Management Co, Inc [Member]            
Short-term Debt [Line Items]            
Related Party Service Revenues $ 52,000          
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Notes (Narrative) (Details) - USD ($)
3 Months Ended
May 10, 2019
Mar. 31, 2019
May 22, 2018
Apr. 20, 2018
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Short-term Debt [Line Items]              
Original issue discount   $ 9,000     $ 9,000    
Convertible notes payable   $ 491,000     491,000   $ 432,000
Stock issued during the period in connection with debt, value           $ 50,000  
Liquidated damages            
Common Stock [Member]              
Short-term Debt [Line Items]              
Stock issued during the period in connection with debt, shares           500,000  
Stock issued during the period in connection with debt, value           $ 50  
Warrants [Member]              
Short-term Debt [Line Items]              
Award terms         The Company had 600,000 warrants outstanding with exercise prices less than $0.07 with an intrinsic value of $36,000 at March 31, 2019.    
No of stock or warrants granted            
Warrants [Member] | Exercise Price Per Share $2.00 [Member]              
Short-term Debt [Line Items]              
Exercise price of warrants   $ 2.00     $ 2.00    
Convertible Note Dated April 20, 2018 [Member]              
Short-term Debt [Line Items]              
Debt instrument face amount       $ 158,000      
Original issue discount       $ 15,000      
Debt instrument interest rate       8.00%      
Debt maturity date       Jun. 01, 2019      
Debt instrument conversion terms       Convertible on or after October 17, 2018 into the Company's restricted common stock at $0.20 per share at the holde's request.      
Debt instrument beneficial conversion feature       $ 104,000      
Accrued interest   $ 4,000     $ 4,000   $ 9,000
Convertible notes payable   169,000     169,000    
Convertible Note Dated April 20, 2018 [Member] | Subsequent Event [Member] | Common Stock [Member]              
Short-term Debt [Line Items]              
Value of principal portion of debt converted into shares $ 25,000            
Debt conversion price per share $ 0.10            
No of shares of common stock issued in conversion of debt 250,000            
Convertible Note Dated April 20, 2018 [Member] | Warrants [Member]              
Short-term Debt [Line Items]              
Award terms       The noteholder was also granted detachable 3-year warrants to purchase 200,000 shares of the company’s restricted common stock at an exercise price of $0.375 per share, 200,000 shares of the company’s restricted common stock at an exercise price of $0.50 per share, and 100,000 shares of the company’s restricted common stock at an exercise price of $0.625 per share.      
Fair value of warrants       $ 126,000      
Convertible Note Dated April 20, 2018 [Member] | Warrants [Member] | Exercise Price Per Share $0.375 [Member]              
Short-term Debt [Line Items]              
No of stock or warrants granted       200,000      
Exercise price of warrants       $ 0.375      
Convertible Note Dated April 20, 2018 [Member] | Warrants [Member] | Exercise Price Per Share $0.50 [Member]              
Short-term Debt [Line Items]              
No of stock or warrants granted       200,000      
Exercise price of warrants       $ 0.50      
Convertible Note Dated April 20, 2018 [Member] | Warrants [Member] | Exercise Price Per Share $0.625 [Member]              
Short-term Debt [Line Items]              
No of stock or warrants granted       100,000      
Exercise price of warrants       $ 0.625      
Convertible Note Dated April 20, 2018 [Member] | Restricted Common Stock [Member]              
Short-term Debt [Line Items]              
Stock issued during the period in connection with debt, shares       116,000      
Stock issued during the period in connection with debt, value       $ 34,000      
Convertible Note Dated May 22, 2018 [Member]              
Short-term Debt [Line Items]              
Debt instrument face amount     $ 165,000        
Convertible Note Dated May 22, 2018 [Member]              
Short-term Debt [Line Items]              
Debt instrument face amount     275,000        
Original issue discount     $ 25,000        
Debt instrument interest rate     8.00%        
Debt maturity date     Jun. 01, 2019        
Debt instrument conversion terms     Convertible into the Company’s restricted common stock at $0.25 per share at the holder’s request.        
Debt instrument beneficial conversion feature     $ 40,000        
Accrued interest   22,000     22,000    
Convertible notes payable   322,000     $ 322,000    
Liquidated damages   $ 25,000          
Convertible Note Dated May 22, 2018 [Member] | Subsequent Event [Member] | Common Stock [Member]              
Short-term Debt [Line Items]              
Value of principal portion of debt converted into shares $ 25,000            
Debt conversion price per share $ 0.10            
No of shares of common stock issued in conversion of debt 250,000            
Convertible Note Dated May 22, 2018 [Member] | Warrants [Member]              
Short-term Debt [Line Items]              
Award terms     The noteholder was also granted detachable 5-year warrants to purchase 500,000 shares of the company’s restricted common stock at an exercise price of $2.00 per share.        
Fair value of warrants     $ 45,000        
Convertible Note Dated May 22, 2018 [Member] | Warrants [Member] | Exercise Price Per Share $2.00 [Member]              
Short-term Debt [Line Items]              
No of stock or warrants granted     500,000        
Exercise price of warrants     $ 2.00        
Convertible Note Dated May 22, 2018 [Member] | Restricted Common Stock [Member]              
Short-term Debt [Line Items]              
Stock issued during the period in connection with debt, shares     200,000        
Stock issued during the period in connection with debt, value     $ 58,000        
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.19.1
Commitments And Contingencies (Narrative) (Details) - Operating Lease Dated May 21, 2015 [Member]
May 21, 2015
USD ($)
Other Commitments [Line Items]  
Lease commitment terms The Company leases approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015
Lease expiration date Dec. 31, 2020
Minimum [Member]  
Other Commitments [Line Items]  
Annual base rent $ 143,000
Maximum [Member]  
Other Commitments [Line Items]  
Annual base rent $ 152,000
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Common Stock Issued During Three Months Ended March 31, 2018) (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Stock issued for cash, value   $ 555,000
Stock issued to employees for services, value $ 131,000 625,000
Share based compensation $ 131,000  
Restricted Common Stock [Member] | Consultant [Member]    
Share based compensation   $ 1,712,000
Stock issued to consultants for services, shares   4,441,942
Stock issued to consultants for services, value   $ 1,712,000
Restricted Common Stock [Member] | Third Parties [Member]    
Stock issued for cash, shares   4,200,000
Stock issued for cash, value   $ 555,000
Restricted Common Stock [Member] | Employees [Member]    
Stock issued to employees for services, shares 1,250,000 1,250,000
Stock issued to employees for services, value $ 131,000 $ 625,000
Share based compensation $ 131,000 $ 625,000
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Common Stock Issued During Three Months Ended March 31, 2019) (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Stock issued to employees for services, value $ 131,000 $ 625,000
Share based compensation $ 131,000  
Restricted Common Stock [Member] | Employees [Member]    
Stock issued to employees for services, shares 1,250,000 1,250,000
Stock issued to employees for services, value $ 131,000 $ 625,000
Share based compensation $ 131,000 $ 625,000
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Options) (Narrative) (Details) - Stock Options [Member]
3 Months Ended
Mar. 31, 2019
$ / shares
Share price $ 0.07
Award terms As all outstanding options had an exercise price greater than $0.07 per share, there was no intrinsic value of the options outstanding at March 31, 2019.
XML 45 R36.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Warrants) (Narrative) (Details) - Warrants [Member]
3 Months Ended
Mar. 31, 2019
USD ($)
$ / shares
shares
Share price | $ / shares $ 0.07
Award terms The Company had 600,000 warrants outstanding with exercise prices less than $0.07 with an intrinsic value of $36,000 at March 31, 2019.
Warrants outstanding | shares 600,000
Intrinsic value of warrants | $ $ 36,000
XML 46 R37.htm IDEA: XBRL DOCUMENT v3.19.1
Equity Transactions (Shares Reserved) (Narrative) (Details)
3 Months Ended
Mar. 31, 2019
shares
Shares reserved in conncetion with 2 convertible notes with detachable warrants 30,000,000
Warrants [Member]  
Description of shares reserved with court approves settlement The Company has reserved 30,000,000 shares of common stock in connection with 2 convertible notes with detachable warrants and 3,500,000 shares of common stock in connection with the court approves settlement agreement for a total of 33,500,000 reserved shares of common stock.
XML 47 R38.htm IDEA: XBRL DOCUMENT v3.19.1
Subsequent Events (Narrative) (Details) - USD ($)
2 Months Ended 3 Months Ended 12 Months Ended 15 Months Ended
May 10, 2019
May 14, 2019
Mar. 31, 2019
Dec. 31, 2018
Mar. 31, 2019
Subsequent Event [Line Items]          
Proceeds from short-term advances - related party     $ 209,000    
Berkshire Capital Management Co., Inc. - A Company Controlled By Joseph Fiore, Majority Shareholder And Former Chairman Of The Board Of Directors [Member] | Short-Term Advances [Member]          
Subsequent Event [Line Items]          
Proceeds from short-term advances - related party     $ 209,000 $ 313,000 $ 522,000
Debt instrument description       Short-term advances are due upon demand.  
Subsequent Event [Member] | Two Convertible Promissory Notes [Member] | Common Stock [Member]          
Subsequent Event [Line Items]          
Value of principal portion of debt converted into shares $ 50,000        
Debt conversion price per share $ 0.10        
No of shares of common stock issued in conversion of debt 500,000        
Subsequent Event [Member] | Berkshire Capital Management Co., Inc. - A Company Controlled By Joseph Fiore, Majority Shareholder And Former Chairman Of The Board Of Directors [Member] | Short-Term Advances [Member]          
Subsequent Event [Line Items]          
Proceeds from short-term advances - related party   $ 145,000      
Debt instrument description   The short-term advances are due upon demand.      
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