0001262463-20-000325.txt : 20200814 0001262463-20-000325.hdr.sgml : 20200814 20200814160700 ACCESSION NUMBER: 0001262463-20-000325 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 49 CONFORMED PERIOD OF REPORT: 20200630 FILED AS OF DATE: 20200814 DATE AS OF CHANGE: 20200814 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: 201105034 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 spyr6302020.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: June 30, 2020

 

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 August 14, 2020, there were 202,130,131 shares of the Registrant's common stock.

 

 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 16
Item 3. Quantitative And Qualitative Disclosures About Market Risk 23
Item 4. Controls And Procedures 23
     
Part Ii Other Information 24
     
Item 1. Legal Proceedings 24
Item 1a. Risk Factors 25
Item 2. Unregistered Sale Of Equity Securities And Use Of Proceeds 25
Item 3. Defaults Of Senior Securities 25
Item 4. Mine Safety Disclosures 25
Item 5. Other Information 25
Item 6. Exhibits 26
 2 
 

 PART I - FINANCIAL INFORMATION

 

ITEM 1.FINANCIAL STATEMENTS
SPYR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
       
    

June 30,

2020

    

December 31,

2019

 
ASSETS          
Current Assets:          
Cash and cash equivalents  $13,000   $10,000 
Accounts receivable, net   14,000    77,000 
Prepaid expenses   2,000    15,000 
Trading securities, at market value   2,000    1,000 
Total Current Assets   31,000    103,000 
           
Property and equipment, net   41,000    59,000 
Capitalized gaming assets and licensing rights, net   100,000    100,000 
Intangible assets, net   5,000    6,000 
Operating lease right-of-use asset   45,000    80,000 
Other assets   13,000    13,000 
TOTAL ASSETS  $235,000   $361,000 
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
LIABILITIES          
Current Liabilities:          
Accounts payable and accrued liabilities  $2,083,000   $1,834,000 
Related party short-term advances   1,149,000    1,115,000 
Related party line of credit   1,168,000    1,134,000 
Convertible notes payable, net   570,000    550,000 
SBA PPP Note Payable, current portion   28,000    —   
Operating lease liability - current portion   23,000    92,000 
Current liabilities of discontinued operations   22,000    22,000 
Total Current Liabilities   5,043,000    4,747,000 
           
SBA PPP Note Payable   43,000    —   
Operating lease liability   54,000    —   
Total Liabilities   5,140,000    4,747,000 
           
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ EQUITY (DEFICIT)          
Preferred stock, $0.0001 par value, 10,000,000 shares authorized          
107,636 Class A shares issued and outstanding as of          
 June 30, 2020 and December 31, 2019   11    11 
20,000 Class E shares issued and outstanding as of          
  June 30, 2020 and December 31, 2019   2    2 
Common stock, $0.0001 par value, 750,000,000 shares authorized          
202,130,131 and 200,880,131 shares issued and outstanding as of          
   June 30, 2020 and December 31, 2019   20,213    20,088 
Additional paid-in capital   53,534,774    53,509,899 
Accumulated deficit   (58,460,000)   (57,916,000)
Total Stockholders’ Equity (Deficit)   (4,905,000)   (4,386,000)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  $235,000   $361,000 
           
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 3 
 

SPYR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
             
   For the Three Months Ended June 30,  For the Six Months Ended June 30,
   2020  2019  2020  2019
             
Revenues  $—     $9,000   $3,000   $34,000 
Related party service revenues   —      —      185,000    52,000 
          Gross Margin   —      9,000    188,000    86,000 
                     
Expenses                    
Labor and related expenses   151,000    195,000    336,000    521,000 
Rent   28,000    36,000    65,000    74,000 
Depreciation and amortization   9,000    11,000    19,000    22,000 
Professional fees   11,000    16,000    53,000    66,000 
Research and development   —      9,000    —      26,000 
Other general and administrative   69,000    84,000    154,000    164,000 
Total Operating Expenses   268,000    351,000    627,000    873,000 
Operating Loss   (268,000)   (342,000)   (439,000)   (787,000)
                     
Other Expense                    
Interest Expense   (55,000)   (187,000)   (110,000)   (190,000)
Gain on disposition of assets   1,000    —      1,000    —   
SBA EIDL grant   3,000    —      3,000    —   
Unrealized gain (loss) on trading securities   2,000    —      1,000    (2,000)
Total Other Expense   (49,000)   (187,000)   (105,000)   (192,000)
                     
Net Loss   (317,000)   (529,000)   (544,000)   (979,000)
                     
Per Share Amounts                    
Net Loss                    
Basic and Diluted earnings per share  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted Average Common Shares                    
Basic and Diluted   202,130,131    199,697,988    201,910,351    199,405,960 
                     
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 4 
 

 

SPYR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Six Months Ended June 30, 2020
(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, 2019   107,636   $11    20,000   $2    200,880,131   $20,088   $53,509,899   $(57,916,000)  $(4,386,000)
Fair value of common stock issued for employee compensation   —      —      —      —      1,250,000    125    24,875    —      25,000 
Net loss   —      —      —      —      —      —      —      (227,000)   (227,000)
Balance at March 31, 2020   107,636    11    20,000    2    202,130,131    20,213    53,534,774    (58,143,000)   (4,588,000)
Net loss   —      —      —      —      —      —      —      (317,000)   (317,000)
Balance at June 30, 2020   107,636   $11    20,000   $2    202,130,131   $20,213   $53,534,774   $(58,460,000)  $(4,905,000)
                                              
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

SPYR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Six Months Ended June 30, 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)
Fair value of common stock issued for conversion of notes payable   —      —      —      —      500,000    50    49,950    —      50,000 
Net loss   —      —      —      —      —      —      —      (529,000)   (529,000)
Balance at June 30, 2019   107,636   $11    20,000   $2    200,055,131   $20,005   $53,445,982   $(56,930,000)  $(3,464,000)
                                              
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 5 
 

 

SPYR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
       
   For the Six Months Ended June 30,
   2020  2019
       
Cash Flows From Operating Activities:          
Net loss  $(544,000)  $(979,000)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   19,000    22,000 
Common stock issued for employee compensation   25,000    131,000 
Amortization of debt discounts on convertible notes payable   —      62,000 
SBA EIDL grant   (3,000)     
Unrealized (gain) loss on trading securities   (1,000)   2,000 
Changes in operating assets and liabilities:          
Decrease in accounts receivables   63,000    38,000 
Decrease in prepaid expenses   13,000    3,000 
(Increase) Decrease in operating lease right-of-use asset   20,000    (4,000)
Increase in accounts payable and accrued liabilities   249,000    39,000 
Increase in accrued interest on short-term advances - related party   34,000    16,000 
Increase in accrued interest on line of credit - related party   34,000    33,000 
Increase in accrued interest and liquidated damages on convertible notes   20,000    147,000 
Net Cash Used in Operating Activities   (71,000)   (490,000)
           
Cash Flows From Investing Activities:          
Purchase of property and equipment   (5,000)   —   
Sale of property and equipment   5,000    —   
Net Cash Used in Investing Activities   —      —   
           
Cash Flows From Financing Activities:          
Proceeds from short-term advances - related party   —      489,000 
Proceeds from SBA EIDL grant   3,000    —   
Proceeds from SBA PPP note payable   71,000    —   
Net Cash Provided by Financing Activities   74,000    489,000 
           
Net increase (decrease) in Cash   3,000    (1,000)
Cash and cash equivalents at beginning of period   10,000    24,000 
Cash and cash equivalents at end of period  $13,000   $23,000 
           
Supplemental Disclosure of Interest and Income Taxes Paid:          
Interest paid during the period  $1,000   $—   
Income taxes paid during the period  $—     $—   
           
Supplemental Disclosure of Non-cash Investing and Financing Activities:          
Partial conversion of notes payable to common stock  $—     $50,000 
           
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 6 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Interim Financial Statements

 

The accompanying condensed consolidated financial statements of SPYR, Inc. and subsidiaries (the “Company”) are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of SPYR, Inc. and its wholly-owned subsidiaries, SPYR APPS, LLC, a Nevada Limited Liability Company, E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 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 six months ended June 30, 2020, the Company recorded a net loss from continuing operations of $544,000 and have current liabilities of $5,043,000. As of June 30, 2020, our cash balance was $13,000. These issues raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and software development costs and implementation of our business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so.

 

Historically, we have financed our operations primarily through sales of our common stock and debt financing. The Company will continue to seek additional capital through the sale of its common stock, debt financing and through expansion of its existing and new products. If our financing goals for our products do not materialize as planned and if we are not able to achieve profitable operations at some point in the future, we may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion, marketing, and product development plans.

 

The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements and expansion of its operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2020. However, management cannot make any assurances that such financing will be secured.

 7 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

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 June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2020.

 

The basic and fully diluted shares for the three months ended June 30, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,107,420, 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 June 30, 2019.

 

The basic and fully diluted shares for the six months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2020.

 

The basic and fully diluted shares for the six months ended June 30, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,107,420, Options – 12,449,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2019.

 

Capitalized Gaming Assets and Licensing Rights

 

As of June 30, 2020, the Company’s capitalized gaming assets consist of Battlewack: Idle Lords which requires additional development before it can be released. As such, the Company does not expect amortization expense related to capitalized gaming assets and licensing rights until existing or future gaming assets, through development or acquisition, are placed into service.

 

Software Development Costs

 

Costs incurred for software development are expensed as incurred. During the six months ended June 30, 2020 and 2019, the Company incurred $0 and $26,000 in software development costs paid to independent gaming software developers.

 

Accounts Receivable

 

The following is a summary of receivables at June 30, 2020 and December 31, 2019:

 

  

June 30,

2020

 

December 31,

2019

       
Game revenue due from in app purchases,          
net of app store fees and allowance for doubtful accounts  $14,000   $27,000 
Game revenue due from in app advertising   —      —   
Related party professional service revenues   —      50,000 
Other Receivables   —      —   
     Total Accounts Receivable  $14,000   $77,000 

 

Accounts receivable are carried at their estimated collectible amounts and are not subject to any interest or finance charges.

 

 8 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

Allowance for Doubtful Accounts

 

The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company's historical payment experience. An allowance for doubtful accounts is established as losses are estimated to have occurred through a provision for bad debts charged to earnings. This evaluation is inherently subjective and requires estimates that are susceptible to significant revisions as more information becomes available.

 

As of June 30, 2020, management has recorded an allowance for doubtful accounts in the amount of approximately $12,000.

 

Concentration of Credit Risk

 

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions.

 

The Company grants credit to its game revenue and service revenue customers. The Company typically does not require collateral from customers. Credit risk is limited due to the financial strength of the customers comprising the Company’s customer. The Company monitors exposure of credit losses and maintains allowances for anticipated losses considered necessary under the circumstances (See “Allowance for Doubtful Accounts” above).

 

Major Customers

 

The Company had two related party customers who comprised 0% and 98% of net revenue during the six months ended June 30, 2020, and 60% and 0% of net revenue during the six months ended June 30, 2019. The loss of these customers would adversely impact the business of the Company.

 

    Net Revenue %    Gross Accounts Receivable 
    

Six Months Ended

June 30,

    

Six Months Ended

June 30,

    

As of

June 30,

    

As of

December 31,

 
    2020    2019    2020    2019 
Customer A   0%   60%  $—     $—   
Customer B   98%   0%   —      50,000 
Total   98%   60%  $—     $50,000 

 

Recent Accounting Standards

 

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

 

NOTE 2 - 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 December 31, 2020. As of June 30, 2020, the Company has borrowed $1,000,000 and accrued interest of $168,000.

 9 
 

 SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

During 2018 and 2019 the Company received $1,062,000 in the form of short-term advances from Berkshire Capital Management Co., Inc. The short-term advances are due upon demand. Interest on the short-term advances has been accrued at 6% per annum through June 30, 2020 in the amount of $87,000 for a total balance due as of June 30, 2020 of $1,149,000.

 

During the six months ended June 30, 2019, the Company, received $52,000 in revenue for professional services rendered to a related Company whose directors are also officers of SPYR, Inc. and whose majority shareholder is Berkshire Capital Management Co., Inc.

 

During the six months ended June 30, 2020, the Company, received $185,000 in revenue for professional services rendered to Berkshire Capital Management Co., Inc.

 

NOTE 3 – 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 was 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 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 was 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. On May 10, 2019, the Company amended the note to extend the due date 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 note is in default for late payment. The Company has accrued approximately $134,000 in interest and liquidated damages for this note through June 30, 2020. At June 30, 2020 and December 31, 2019, the principal balance together with total accrued interest and liquidated damages is recorded on the Company’s consolidated balance sheet net of discounts at $274,000 and $254,000, respectively.

 

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 was December 31, 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 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 was 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. On May 10, 2019, the Company amended the note to extend the due date to September 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 October 11, 2019, the Company amended the note to extend the due date to December 31, 2019, provide for a partial conversion of $50,000 of the outstanding principal balance into common shares of the Company at a conversion price of $0.10 per share for a total of 500,000 shares, and waive any prior alleged or actual defaults under the note. The Company has accrued approximately $96,000 in interest and liquidated damages for this note through June 30, 2020. At June 30, 2020 and December 31, 2019, the principal balance together with total accrued interest and liquidated damages is recorded on the Company’s consolidated balance sheet net of discounts at $296,000 and $296,000, respectively.

 

 10 
 

 SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

The following table summarized the Company's convertible notes payable as of June 30, 2020 and December 31, 2019:

 

  

June 30,

2020

 

December 31,

2019

Beginning Balance  $550,000   $432,000 
Proceeds from the issuance of convertible notes, net of issuance discounts   —      —   
Repayments   —      —   
Conversion of notes payable into common stock   —      (100,000)
Amortization of discounts   —      62,000 
Liquidated damages   7,000    134,000 
Accrued Interest   13,000    22,000 
Convertible notes payable, net  $570,000   $550,000 
           
Convertible notes, short term  $340,000   $340,000 
Accrued interest and damages  $230,000   $210,000 
Debt discounts  $—     $—   
           

 

NOTE 4 - LONG TERM-DEBT

 

On May 12, 2020 the Company received a Paycheck Protection Program loan from the U.S. Small Business Administration in the approximate amount of $71,000. The loan agreement provides for six months principal and interest deferral. The interest rate is 1%. Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. Any amount not forgiven must be repaid in eighteen monthly consecutive principal and interest payments beginning December 2020. As of June 30, 2020, the balance due on this note was approximately $71,000.

 

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. On May 1, 2020, the Company entered into an amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through June 30, 2020 and extend the term of the lease by three months. On July 29, 2020, the Company entered into another amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period July 1, 2020 through August 31, 2020 and extend the term of the lease by two months. As a result of these amendments, the lease term date, which was December 31, 2020, is now May 31, 2021. In addition, the due date of certain other rent adjustments due April 8, 2020 was deferred. The rent adjustments of approximately $5,000 were due 50% on June 1, 2020 and 50% on July 1, 2020.

 

Legal Proceedings

 

We are involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. Information about material legal proceedings follows:

 

 

 

 

 11 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

Settlements

 

On June 18, 2018 the Company was named as a defendant in a case filed in the United States District Court for the Southern District of New York: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management Co., Inc., and Eat at Joe’s, Ltd. n/k/a SPYR, Inc.(“Defendants”). Joseph A. Fiore was the Chairman of our Board of Directors and is a significant shareholder. Mr. Fiore resigned from his positions as Chairman of the Board and as a Director of the Company effective August 1, 2018. The suit alleged that Mr. Fiore, during 2013 and 2014, while he was the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors, engaged in improper conduct on behalf of the defendants named in the case related to the Company’s sales of securities in Plandai Biotechnology, Inc. The Commission alleged that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleged that from 2013 to 2014, the Company’s primary business was investing and that it failed to register as an investment company, resulting in an alleged violation of Section 7(a) of the Investment Company Act of 1940. The suit sought to disgorge Joseph A. Fiore, Berkshire Capital Management Co., Inc., and the Company of alleged profits on the sale of the securities and civil fines related to the Company’s failure to register as an investment company with the Commission.

 

Pursuant to a settlement agreement among the parties, on April 14, 2020, final judgment was entered in the case: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management, Inc. and Eat at Joes, Inc., n/k/a SPYR, Inc., case number 7:18-cv-05474-KMK filed in the U.S. District Court for the Southern District of New York.

 

On April 23, 2020, Joseph Fiore/Berkshire Capital Management, Inc. satisfied the Company’s joint and several liability obligation by paying to the Commission the agreed upon sum of Two Million Dollars pursuant to a settlement agreement between Joseph Fiore/Berkshire Capital Management, Inc. and the Company, which settlement agreement was entered into on April 15, 2020. The Company has until April 14, 2021 to satisfy its remaining financial obligation to the Commission, an agreed upon civil penalty of Five Hundred Thousand Dollars ($500,000). The $500,000 liability is reported as part of accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 and was recorded as litigation settlement costs on the consolidated statements of operations on the Company’s form 10K for the year ended December 31, 2019.

 

In electing to settle with the Commission, the Company neither admitted nor denied liability to any of the Commission’s allegations in its complaint, and in consideration for the Commission discontinuing its action, the Company, along with the two other defendants Joseph Fiore and Berkshire Capital Management agreed to be jointly and severally liable for disgorgement of profits and prejudgment interest in the amount of two million dollars, and to each be solely liable to pay a civil penalty in the amount of five hundred thousand dollars.[1]

 

Judgments

 

On or about January 24, 2019, SPYR APPS, LLC entered into an agreement with one of its vendors, Shatter Storm Studios, to whom it owed $84,250 for artwork related to the Steven Universe game. Pursuant to the terms of that agreement, SPYR APPS, LLC needed to make payment in the amount of $85,000 to cover the principal owed and attorneys’ fees together plus 6% interest in that amount by December 1, 2019. Should SPYR APPS, LLC not make the required payment on or before December 1, 2019, it consented to entry of judgment in favor of Shatter Storm Studios for the amount owed. SPYR APPS, LLC did not make the payment and on January 27, 2020 Shatter Storm Studios initiated Case No. 1:200cv-00217 in the U.S. District Court for the District of Colorado seeking entry of the consent judgment against SPYR APPS, LLC. The judgment was not contested by SPYR APPS, LLC and judgment in the amount of $85,000 plus post judgment interest at the rate of 6% was entered on March 17, 2020. The $85,000 plus accrued interest and attorneys’ fees has been reported as part of accounts payable and accrued liabilities. The balance due as of June 30, 2020 and December 31, 2019 was approximately $91,000 and $90,000, respectively.

 

 


[1] In addition, an injunction was entered against the Company enjoined it from violating the antifraud, market manipulation, beneficial ownership reporting, and other provisions of the federal securities laws charged in the SEC’s complaint.

 

 12 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

Covid-19

 

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, the Company is anticipating potential reductions in revenue, labor and supply shortages, difficulty meeting debt covenants, delays in collecting accounts receivable and paying liabilities and changes in the fair value of assets and liabilities. Our concentrations due to major customers and the necessity for fund raising activities make it reasonably possible that we are vulnerable to the risk of a near-term severe impact.

Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including potential credit losses on receivables and investments; impairment losses related to capitalized gaming assets and other long-lived assets; and contingent obligations.

 

NOTE 6 – EQUITY TRANSACTIONS

 

Common Stock:

 

Six Months Ended June 30, 2019

 

During the six months ended June 30, 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.

 

Six Months Ended June 30, 2020

 

During the six months ended June 30, 2020, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $25,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $25,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company’s common stock.

 

Options:

 

The following table summarizes common stock options activity:

      Weighted
      Average
      Exercise
   Options  Price
 December 31, 2019    9,299,900   $0.57 
 Granted    —      —   
 Exercised    —      —   
 Expired    (300,000)   1.00 
 Outstanding, June 30, 2020    8,999,900   $0.56 
 Exercisable, June 30, 2020    8,999,900   $0.56 

 

 

 

 

 

 13 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

The weighted average exercise prices, remaining lives for options granted, and exercisable as of June 30, 2020 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   0.17   $0.50   8,000,000   $0.50
$1.00   999,900   0.07 – 1.61   $1.00   999,900   $1.00
    8,999,900       $0.56   8,999,900   $0.56

 

At June 30, 2020, the Company’s closing stock price was $0.05 per share. As all outstanding options had an exercise price greater than $0.05 per share, there was no intrinsic value of the options outstanding at June 30, 2020.

 

Warrants:

 

The following table summarizes common stock warrants activity:

 

      Weighted
      Average
      Exercise
   Warrants  Price
 Outstanding, December 31, 2019    9,000,000   $0.46 
 Granted    —      —   
 Exercised    —      —   
 Forfeited    —      —   
 Outstanding, June 30, 2020    9,000,000   $0.46 
 Exercisable, June 30, 2020    9,000,000   $0.46 

 

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of June 30, 2020, were as follows:

 

      Outstanding and Exercisable Warrants 
 Warrants           
 Exercise Price         Life 
 Per Share    Shares    (Years) 
$0.01    600,000    0.50 
$0.15    1,200,000    0.53 
$0.25    1,000,000    3.03 
$0.375    200,000    0.81 
$0.40    1,200,000    0.53 
$0.50    3,000,000    0.33 – 3.03 
$0.625    100,000    0.81 
$0.75    1,250,000    0.91 – 3.03 
$1.00    250,000    0.91 
$2.00    200,000    2.89 
      9,000,000      

 

At June 30, 2020, the Company’s closing stock price was $0.05 per share. The Company had 600,000 warrants outstanding with exercise prices less than $0.01 with an intrinsic value of $24,000 at June 30, 2020.

 

 

 

 14 
 

SPYR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

Shares Reserved:

 

At June 30, 2020, 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 approved settlement agreement for a total of 33,500,000 reserved shares of common stock.

 

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 assets and liabilities of our discontinued restaurant segment's discontinued operations as of June 30, 2020 and December 31, 2019 consisted of $0 assets and $22,000 in accounts payable and accrued liabilities.

 

There were no operations for our discontinued restaurant segment during the six months ended June 30, 2020 and 2019.

 

NOTE 8 – SUBSEQUENT EVENTS

 

On July 23, 2020, the Company amended the related party revolving line of credit from Berkshire Capital Management Co., Inc. to extend the due date to December 31, 2020.

 

On May 1, 2020, the Company entered into an amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through June 30, 2020 and extend the term of the lease by three months. On July 29, 2020, the Company entered into another amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period July 1, 2020 through August 31, 2020 and extend the term of the lease by two months. As a result of these amendments, the lease term date, which was December 31, 2020, is now May 31, 2021.

 

 

 15 
 
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 June 30, 2020, 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.

 

During the past several 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. 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.

 

In addition, working together with the development team at Reset Studios LLC, we 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. As of December 31, 2019, the Cartoon Network license was terminated and the game was removed from the stores.

 

Management’s plan for the next 12 months is to seek and obtain additional capital from outside investors for operations and expansion, including but not necessarily limited to refining and better monetizing Pocket Starships and seeking out and pursuing acquisition opportunities within and without the gaming space. 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 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, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so.

 

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2020 TO 2019

 

The consolidated results of continuing operations for the three months ended June 30, 2020 and 2019 are as follows:

  

 16 
 

 

   Digital Media  Corporate  Consolidated
          
Three Months Ended June 30, 2020               
Revenues  $—     $—     $—   
Related party service revenues   —      —      —   
Labor and related expenses   —      (151,000)   (151,000)
Rent   —      (28,000)   (28,000)
Depreciation and amortization   —      (9,000)   (9,000)
Professional fees   —      (11,000)   (11,000)
Research and development   —      —      —   
Other general and administrative   (14,000)   (55,000)   (69,000)
Operating loss   (14,000)   (254,000)   (268,000)
                
Interest Expense   (11,000)   (44,000)   (55,000)
Gain on disposition of assets   —      1,000    1,000 
SBA EIDL grant   —      3,000    3,000 
Unrealized gain (loss) on trading securities   —      2,000    2,000 
Other expense   (11,000)   (38,000)   (49,000)
Loss from continuing operations  $(25,000)  $(292,000)  $(317,000)

 

 

   Digital Media  Corporate  Consolidated
Three Months Ended June 30, 2019               
Revenues  $9,000   $—     $9,000 
Related party service revenues   —      —      —   
Labor and related expenses   (48,000)   (147,000)   (195,000)
Rent   —      (36,000)   (36,000)
Depreciation and amortization   (2,000)   (9,000)   (11,000)
Professional fees   —      (16,000)   (16,000)
Research and Development   (9,000)   —      (9,000)
Other general and administrative   (17,000)   (67,000)   (84,000)
Operating loss   (67,000)   (275,000)   (342,000)
                
Interest Expense   (10,000)   (177,000)   (187,000)
Unrealized loss on trading securities   —      —      —   
Other expense   (10,000)   (177,000)   (187,000)
Loss from continuing operations  $(77,000)  $(452,000)  $(529,000)

 

 17 
 

Results of Operations

 

For the three months ended June 30, 2020 the Company had a loss from continuing operations of $317,000 compared to a loss from continuing operations of $529,000 for the three months ended June 30, 2019. This change is due primarily to decreases in revenue of $9,000, labor and related expenses of $44,000, rent of $8,000, depreciation and amortization of $2,000, professional fees of $5,000, research and development of $9,000, other general and administrative costs of $15,000, and interest expense of $132,000 during the three months ended June 30, 2020 compared to the three months ended June 30, 2019. Other items contributing to the change included increases in gain on disposition of assets of $1,000, SBA EIDL grant of $3,000 and unrealized gain on trading securities of $2,000.

 

More detailed explanation of the three months ended June 30, 2020 and 2019 changes are included in the following discussions.

 

Total Revenues - For the three months ended June 30, 2020 and 2019, the Company had total revenue of $0 and $9,000, respectively, for a decrease of $9,000. This change is due to reduced games revenue.

 

The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and software development costs and implementation of our business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so.

 

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 June 30, 2020 the company had total labor and related expenses of $151,000 with $51,000 being settled in cash and $100,000 in accrued salaries. For the three months ended June 30, 2019 the company had total labor and related expenses of $195,000 with $125,000 being settled in cash and $70,000 in accrued salaries. The cost of labor is expected to increase in conjunction with expansion of operations.

 

The cost of rent decreased $8,000 from $36,000 for the three months ended June 30, 2019 to $28,000 for the three months ended June 30, 2020. 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. On May 1, 2020 and July 29, 2020, the Company entered into amended lease agreements with its landlord. Under the terms of the amendments, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through August 31, 2020 and extend the term of the lease by five months. The lease term date, which was December 31, 2020, is now May 31, 2021. In addition, the due date of certain other rent adjustments due April 8, 2020 was deferred. The rent adjustments of approximately $5,000 were due 50% on June 1, 2020 and 50% on July 1, 2020.

 

Depreciation and amortization expenses decreased by approximately $2,000 for the three months ended June 30, 2020 compared to the three months ended June 30, 2019. Depreciation and amortization expenses are attributable to depreciation of the $225,000 of property and equipment and amortization of gaming assets and capitalized licensing rights in service during respective periods.

 

Professional fees decreased $5,000 from $16,000 for the three months ended June 30, 2019 to $11,000 for the three months ended June 30, 2020. Professional fees during the three months ended June 30, 2020 included $11,000 legal, accounting and other professional service needs. Professional fees during the three months ended June 30, 2019 included $15,000 in legal, accounting and other professional service needs and $1,000 for public relations.

 

Research and development costs during the three months ended June 30, 2019 included $9,000 in connection with fees paid to game developers for the development of its games, compared to research and development costs of $0 during the three months ended June 30, 2020.

 

Other general and administrative expenses decreased $15,000 for the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

 

The Company had interest expense on a related party line of credit, related party short-term advances, convertible notes payable and accrued expenses of $55,000 for the three months ended June 30, 2020. The company had interest expense on a related party line of credit, related party short-term advances, convertible notes payable and accrued expenses of $187,000 for the three months ended June 30, 2019.

 

The Company sold certain office equipment for $5,000 which resulted in a gain on disposition of assets of $1,000 for the three months ended June 30, 2020.

 

The Company received a $3,000 Economic Injury Disaster Loan (EIDL) grant from the U.S. Small Business Administration during the for the three months ended June 30, 2020.

 

 18 
 

The Company had unrealized gains on trading securities of $2,000 for the three months ended June 30, 2020 compared to unrealized gains of $0 for the three months ended June 30, 2019. Unrealized gains and losses are the result of fluctuations in the quoted market price of the underlying securities at the respective reporting dates.

 

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2020 TO 2019

 

The consolidated results of continuing operations for the six months ended June 30, 2020 and 2019 are as follows:

 

   Digital Media  Corporate  Consolidated
          
Six Months Ended June 30, 2020               
Revenues  $3,000   $—     $3,000 
Related party service revenues   —      185,000    185,000 
Labor and related expenses   (8,000)   (328,000)   (336,000)
Rent   —      (65,000)   (65,000)
Depreciation and amortization   —      (19,000)   (19,000)
Professional fees   —      (53,000)   (53,000)
Research and development   —      —      —   
Other general and administrative   (37,000)   (117,000)   (154,000)
Operating loss   (42,000)   (397,000)   (439,000)
                
Interest Expense   (21,000)   (89,000)   (110,000)
Gain on disposition of assets   —      1,000    1,000 
SBA EIDL grant   —      3,000    3,000 
Unrealized gain (loss) on trading securities   —      1,000    1,000 
Other expense   (21,000)   (84,000)   (105,000)
Loss from continuing operations  $(63,000)  $(481,000)  $(544,000)

 

   Digital Media  Corporate  Consolidated
Six Months Ended June 30, 2019               
Revenues  $34,000   $—     $34,000 
Related party service revenues   —      52,000    52,000 
Labor and related expenses   (98,000)   (423,000)   (521,000)
Rent   (1,000)   (73,000)   (74,000)
Depreciation and amortization   (4,000)   (18,000)   (22,000)
Professional fees   —      (66,000)   (66,000)
Research and Development   (26,000)   —      (26,000)
Other general and administrative   (35,000)   (129,000)   (164,000)
Operating loss   (130,000)   (657,000)   (787,000)
                
Interest Expense   (19,000)   (171,000)   (190,000)
Unrealized loss on trading securities   —      (2,000)   (2,000)
Other expense   (19,000)   (173,000)   (192,000)
Loss from continuing operations  $(149,000)  $(830,000)  $(979,000)

 

 

 

 19 
 

Results of Operations

 

For the six months ended June 30, 2020 the Company had a loss from continuing operations of $544,000 compared to a loss from continuing operations of $979,000 for the six months ended June 30, 2019. This change is due primarily to increases in revenue of $102,000 and decreases in labor and related expenses of $185,000, rent of $9,000, depreciation and amortization of $3,000, professional fees of $13,000, research and development of $26,000, other general and administrative costs of $10,000 and interest of $80,000 during the six months ended June 30, 2020 compared to the six months ended June 30, 2019. Other items contributing to the change included increases in gain on disposition of assets of $1,000, SBA EIDL grant of $3,000 and unrealized gain on trading securities of $3,000.

 

More detailed explanation of the six months ended June 30, 2020 and 2019 changes are included in the following discussions.

 

Total Revenues - For the six months ended June 30, 2020 and 2019, the Company had total revenue of $188,000 and $86,000, respectively, for an increase of $102,000. This change is primarily due to increased related party service revenues, partially offset by reduced games revenues.

 

Related Party Service Revenues - During the six months ended June 30, 2020 and 2019, the Company received $185,000 and $52,000, respectively, in revenue for professional services rendered to related parties. During 2020, the Company received $185,000 in revenue for professional services rendered to Berkshire Capital Management Co., Inc, a company controlled by Joseph Fiore, majority shareholder and former chairman of the board of directors of the Company. During 2019, the Company, received $52,000 in revenue for professional services rendered to a related Limited Liability Company whose managers are also officers of SPYR, Inc. and whose majority owner is Berkshire Capital Management Co., Inc.

 

Games Revenues – During the six months ended June 30, 2020 and 2019, the Company received $3,000 and $34,000, respectively in revenue from games.

 

The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and software development costs and implementation of our business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so.

 

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 six months ended June 30, 2020 the company had total labor and related expenses of $336,000 with $125,000 being settled in cash and $186,000 in accrued salaries and $25,000 being paid in restricted stock recorded at fair value. For the six months ended June 30, 2019 the company had total labor and related expenses of $521,000 with $252,000 being settled in cash, $138,000 in accrued salaries and $131,000 being paid in restricted stock and vesting of options recorded at fair value. The cost of labor is expected to increase in conjunction with expansion of the digital media operations.

 

The cost of rent decreased $9,000 from $74,000 for the six months ended June 30, 2019 to $65,000 for the six months ended June 30, 2020. 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. On May 1, 2020 and July 29, 2020, the Company entered into amended lease agreements with its landlord. Under the terms of the amendments, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through August 31, 2020 and extend the term of the lease by five months. The lease term date, which was December 31, 2020, is now May 31, 2021. In addition, the due date of certain other rent adjustments due April 8, 2020 was deferred. The rent adjustments of approximately $5,000 were due 50% on June 1, 2020 and 50% on July 1, 2020.

 

Depreciation and amortization expenses decreased by approximately $3,000 for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. Depreciation and amortization expenses are attributable to depreciation of the $225,000 of property and equipment and amortization of gaming assets and capitalized licensing rights in service during respective periods.

 

Professional fees decreased $13,000 from $66,000 for the six months ended June 30, 2019 to $53,000 for the six months ended June 30, 2020. Professional fees during the six months ended June 30, 2020 included $52,000 legal, accounting and other professional service needs and $1,000 for public relations. Professional fees during the six months ended June 30, 2019 included $59,000 in legal, accounting and other professional service needs and $7,000 for public relations.

 20 
 

Research and development costs during the six months ended June 30, 2019 included $26,000 in connection with fees paid to game developers for the development of its games, compared to research and development costs of $0 during the six months ended June 30, 2020.

 

Other general and administrative expenses decreased $10,000 for the six months ended June 30, 2020 compared to the six months ended June 30, 2019.

 

The Company had interest expense on a related party line of credit, related party short-term advances, convertible notes payable and accrued expenses of $110,000 for the six months ended June 30, 2020. The company had interest expense on a related party line of credit, related party short-term advances, convertible notes payable and accrued expenses of $190,000 for the six months ended June 30, 2019. In addition, pursuant to an amended convertible note whereby the note holder agreed to waive any prior alleged or actual defaults under the note, the Company recorded a reversal of previously reported default interest and penalties of $87,000 during the six months ended June 30, 2019.

 

The Company sold certain office equipment for $5,000 which resulted in a gain on disposition of assets of $1,000 for the six months ended June 30, 2020.

 

The Company received a $3,000 Economic Injury Disaster Loan (EIDL) grant from the U.S. Small Business Administration during the for the six months ended June 30, 2020.

 

The Company had unrealized gains on trading securities of $1,000 for the six months ended June 30, 2020 compared to unrealized losses of $2,000 for the six months ended June 30, 2019. 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 six months ended June 30, 2020 of $544,000. As of June 30, 2020, the Company had current assets of $31,000, which included cash and cash equivalents of $13,000, accounts receivable of $14,000, prepaid expenses of $2,000 and trading securities of $2,000.

 

During the six months ended June 30, 2020, the Company has met its capital requirements through collection of revenues and accounts receivable, from the proceeds of SBA PPP note payable and SBA EIDL grant, and from the sale of certain office equipment.

 

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 six months ended June 30, 2020, the Company used cash in operating activities of $71,000. For the six months ended June 30, 2019, the Company used cash in operating activities of $490,000. Operating activities consist of corporate overhead and development of our mobile games and applications. Decreases are due to a combination of increased revenues and decreases in operating expenses. See the above results of operations discussion for more details.

 

Investing Activities - During the six months ended June 30, 2020, the Company purchased property and equipment for $5,000 and sold property and equipment for $5,000. The Company had no investing activities during the six months ended June 30, 2019.

 

 21 
 

Financing Activities - During the six months ended June 30, 2020, the Company borrowed $71,000 from the U.S. Small Business Administration pursuant to the Paycheck Protection Program and received a $3,000 Economic Injury Disaster Loan (EIDL) grant from the U.S. Small Business Administration.

 

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 as 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 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.

 

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 recognize service revenue upon completion of the service.

 

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.

 

 22 
 

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.

 

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 June 30, 2020, 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.

 

 23 
 

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.

  

PART II - OTHER INFORMATION

 

ITEM 1.LEGAL PROCEEDINGS

 

Settlements

 

On June 18, 2018 the Company was named as a defendant in a case filed in the United States District Court for the Southern District of New York: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management Co., Inc., and Eat at Joe’s, Ltd. n/k/a SPYR, Inc.(“Defendants”). Joseph A. Fiore was the Chairman of our Board of Directors and is a significant shareholder. Mr. Fiore resigned from his positions as Chairman of the Board and as a Director of the Company effective August 1, 2018. The suit alleged that Mr. Fiore, during 2013 and 2014, while he was the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors, engaged in improper conduct on behalf of the defendants named in the case related to the Company’s sales of securities in Plandai Biotechnology, Inc. The Commission alleged that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleged that from 2013 to 2014, the Company’s primary business was investing and that it failed to register as an investment company, resulting in an alleged violation of Section 7(a) of the Investment Company Act of 1940. The suit sought to disgorge Joseph A. Fiore, Berkshire Capital Management Co., Inc., and the Company of alleged profits on the sale of the securities and civil fines related to the Company’s failure to register as an investment company with the Commission.

 

Pursuant to a settlement agreement among the parties, on April 14, 2020, final judgment was entered in the case: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management, Inc. and Eat at Joes, Inc., n/k/a SPYR, Inc., case number 7:18-cv-05474-KMK filed in the U.S. District Court for the Southern District of New York.

 

On April 23, 2020, Joseph Fiore/Berkshire Capital Management, Inc. satisfied the Company’s joint and several liability obligation by paying to the Commission the agreed upon sum of Two Million Dollars pursuant to a settlement agreement between Joseph Fiore/Berkshire Capital Management, Inc. and the Company, which settlement agreement was entered into on April 15, 2020. The Company has until April 14, 2021 to satisfy its remaining financial obligation to the Commission, an agreed upon civil penalty of Five Hundred Thousand Dollars ($500,000). The $500,000 liability is reported as part of accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 and was recorded as litigation settlement costs on the consolidated statements of operations on the Company’s form 10K for the year ended December 31, 2019.

 

 24 
 

In electing to settle with the Commission, the Company neither admitted nor denied liability to any of the Commission’s allegations in its complaint, and in consideration for the Commission discontinuing its action, the Company, along with the two other defendants Joseph Fiore and Berkshire Capital Management agreed to be jointly and severally liable for disgorgement of profits and prejudgment interest in the amount of two million dollars, and to each be solely liable to pay a civil penalty in the amount of five hundred thousand dollars.[2]

 

Judgments

 

On or about January 24, 2019, SPYR APPS, LLC entered into an agreement with one of its vendors, Shatter Storm Studios, to whom it owed $84,250 for artwork related to the Steven Universe game. Pursuant to the terms of that agreement, SPYR APPS, LLC needed to make payment in the amount of $85,000 to cover the principal owed and attorneys’ fees together plus 6% interest in that amount by December 1, 2019. Should SPYR APPS, LLC not make the required payment on or before December 1, 2019, it consented to entry of judgment in favor of Shatter Storm Studios for the amount owed. SPYR APPS, LLC did not make the payment and on January 27, 2020 Shatter Storm Studios initiated Case No. 1:200cv-00217 in the U.S. District Court for the District of Colorado seeking entry of the consent judgment against SPYR APPS, LLC. The judgment was not contested by SPYR APPS, LLC and judgment in the amount of $85,000 plus post judgment interest at the rate of 6% was entered on March 17, 2020. The $85,000 plus accrued interest and attorneys’ fees has been reported as part of accounts payable and accrued liabilities. The balance due as of June 30, 2020 and December 31, 2019 was approximately $91,000 and $90,000, respectively.

 

ITEM 1A.RISK FACTORS

 

Not applicable to smaller reporting companies.

 

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

 

None.

 

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.MINE SAFETY DISCLOSURES

 

Not applicable

 

ITEM 5.OTHER INFORMATION

 

None.

  

 

 

 


[2] In addition, an injunction was entered against the Company enjoined it from violating the antifraud, market manipulation, beneficial ownership reporting, and other provisions of the federal securities laws charged in the SEC’s complaint.

 

 25 
 

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.

 

 26 
 

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: August 14, 2020

  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)

 

 

 

 

 

 27 

 

EX-31 2 ex31.htm CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

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 June 30, 2020 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.

 

August 14, 2020

 

  /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 June 30, 2020 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.

 

August 14, 2020

 

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

  

 

EX-32 3 ex32.htm CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

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 June 30, 2020 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.

 

August 14, 2020

  /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 June 30, 2020 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.

 

August 14, 2020

  /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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licensing rights, net Intangible assets, net Operating lease right-of-use asset Other assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) LIABILITIES Current Liabilities: Accounts payable and accrued liabilities Related party short-term advances Related party line of credit Convertible notes payable, net SBA PPP Note Payable, current portion Operating lease liability - current portion Current liabilities of discontinued operations Total Current Liabilities SBA PPP Note Payable Operating lease liability Total Liabilities COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of June 30, 2020 and December 31, 2019, 20,000 Class E shares issued and outstanding as of June 30, 2020 and December 31, 2019 Common stock, $0.0001 par value, 750,000,000 shares authorized 202,130,131 and 200,880,131 shares issued and outstanding as of June 30, 2020 and December 31, 2019 Additional paid-in capital Accumulated deficit Total Stockholders' Equity (Deficit) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (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 Income Statement [Abstract] Revenues Related party service revenues Gross Margin 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 Gain on disposition of assets SBA EIDL grant Unrealized gain (loss) on trading securities Total Other Expense Net Loss Per Share Amounts Net Loss Basic and Diluted earnings per share Weighted Average Common Shares Basic and Diluted Balance preferred stock, shares Balance common stock, shares Balance, 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 issued for conversion of notes payable, shares Fair value of common stock issued for conversion of notes payable, value Net loss Balance preferred stock , shares Balance common stock, shares Balance, value Statement of Cash Flows [Abstract] Cash Flows From Operating Activities: Adjustments to reconcile net loss to net cash used in operating activities: Common stock issued for employee compensation Amortization of debt discount on convertible notes payable Unrealized (gain) loss on trading securities Changes in operating assets and liabilities: Decrease in accounts receivables Decrease in prepaid expenses (Increase) Decrease in operating lease right-of-use asset Increase in accounts payable and accrued liabilities Increase in accrued interest on short-term advances - related party Increase in accrued interest on line of credit - related party Increase in accrued interest and liquidated damages on convertible notes Net Cash Used in Operating Activities Cash Flows From Investing Activities: Purchase of property and equipment Sale of property and equipment Net Cash Used in Investing Activities Cash Flows From Financing Activities: Proceeds from short-term advances - related party Proceeds from SBA EIDL grant Proceeds from SBA PPP note payable Net Cash Provided by Financing Activities Net increase (decrease) in Cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash at beginning of period Cash, cash equivalents, and restricted cash at end of period Supplemental Disclosure of Interest and Income Taxes Paid: Interest paid during the year Income taxes paid during the year Supplemental Disclosure of Non-cash Investing and Financing Activities: Partial conversion of notes payable to common stock Organization And Summary Of Significant Accounting Policies Organization and Summary of Significant Accounting Policies Debt Disclosure [Abstract] Related Party Transactions Convertible Notes Long Term Debt Long Term - Debt 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 Principles of Consolidation Going Concern Use of Estimates Earnings (Loss) Per Share Capitalized Gaming Assets and Licensing Rights Software Development Costs Account Receivable Allowance for Doubtful Accounts Concentration of Credit Risk Recent Accounting Standards Organziation And Summary Of Significiant Accounting Policies Summary of Accounts Receivables Summary of Concentration of Credit Risk Convertible Notes Summary of Convertible Notes Payable Equity Transactions Summary of Common Stock Options Activity Schedule of Weighted Average Excerise Price Range Summary of Common Stock Warrants Activity Schedule of Warrants Weighted Average Excerise Price Range Schedule of Accounts, Notes, Loans and Financing Receivable [Table] Accounts, Notes, Loans and Financing Receivable [Line Items] Related Party Transaction [Axis] Total Accounts Receivable Concentration Risk [Table] Concentration Risk [Line Items] Concentration risk percentage Gross Accounts Receivable 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 Convertible notes payable, net Convertible notes, short term Accrued interest and damages Debt discounts Equity Transactions Summary Of Common Stock Options Activity Options December 31, 2019 Granted Exercised Expired Outstanding, June 30, 2020 Exercisable, June 30, 2020 Weighted Average Exercise Price December 31, 2019 Granted Exercised Expired Outstanding, June 30, 2020 Exercisable, June 30, 2020 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, 2019 Granted Exercised Forfeited Outstanding, June 30, 2020 Exercisable, June 30, 2020 Weighted Average Exercise Price Outstanding, December 31, 2019 Granted Exercised Forfeited Outstanding, June 30, 2020 Exercisable, June 20, 2020 Outstanding and Exercisable Warrants, Shares Outstanding and Exercisable Warrants, Life (Years) Warrants Exercise Price, Per Share Finite-Lived Intangible Assets by Major Class [Axis] Antidilutive shares excluded from computation of basic earnings per share Allowance for doubtful accounts 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 Interest rate 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 Notes payable Other Commitments [Table] Other Commitments [Line Items] AgreementAxis [Axis] Lease commitment terms Lease expiration date Annual base rent Other rent adjustments Settlement agreement terms Litigation settlement costs Agreement description Principal owed and attorneys' fees Interest Rate Stock issued to employees for services, shares Stock issued to employees for services, value Share based compensation Options exercise price per share Share price Warrants outstanding Intrinsic value of warrants Shares reserved in conncetion with 2 convertible notes with detachable warrants Description of shares reserved with court approves settlement Assets Accounts payable and accrued liabilities Debt instrument extended maturity date Share based compensation other than option exercised in period Share based compensation other than option exercisable non vested Share based compensation other than option exercised in period grant date fair value Share based compensation other than option exercisable weighted average exercise price ExercisePriceRangeDollarZeroPoinFiveZeroMember ExercisePriceRangeDollarOnePoinZeroZeroMember Share-based Payment Arrangement, Option [Member] ExercisePriceRangeDollarZeroPointThreeSevenFiveZeroMember ExercisePriceRangeDollarZeroPointSixTwoFiveZeroMember ConvertibleNotesPayableDatedMayTwentyTwoTwoThousandEighteenMember Assets, Current Assets [Default Label] Liabilities, Current Liabilities Stockholders' Equity Attributable to Parent Liabilities and Equity Revenues [Default Label] Operating Expenses Operating Income (Loss) Nonoperating Income (Expense) Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Debt Conversion, Converted Instrument, Amount Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 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 Arrangements by Share-based Payment Award, Options, Expirations 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, 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 Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities, Current EX-101.PRE 9 spyr-20200630_pre.xml XBRL PRESENTATION FILE XML 10 R1.htm IDEA: XBRL DOCUMENT v3.20.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2020
Aug. 14, 2020
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Current Fiscal Year End Date --12-31  
Entity File Number 33-20111  
Entity Registrant Name SPYR, Inc.  
Entity Central Index Key 0000829325  
Entity Tax Identification Number 75-2636283  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 4643 S. Ulster St.  
Entity Address, Address Line Two Suite 1510  
Entity Address, City or Town Denver  
Entity Address, State or Province CO  
Entity Address, Country US  
Entity Address, Postal Zip Code 80237  
City Area Code 303  
Local Phone Number 991-8000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   202,130,131
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2020  
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Current Assets:    
Cash and cash equivalents $ 13,000 $ 10,000
Accounts receivable, net 14,000 77,000
Prepaid expenses 2,000 15,000
Trading securities, at market value 2,000 1,000
Total Current Assets 31,000 103,000
Property and equipment, net 41,000 59,000
Capitalized gaming assets and licensing rights, net 100,000 100,000
Intangible assets, net 5,000 6,000
Operating lease right-of-use asset 45,000 80,000
Other assets 13,000 13,000
TOTAL ASSETS 235,000 361,000
Current Liabilities:    
Accounts payable and accrued liabilities 2,083,000 1,834,000
Related party short-term advances 1,149,000 1,115,000
Related party line of credit 1,168,000 1,134,000
Convertible notes payable, net 570,000 550,000
SBA PPP Note Payable, current portion 28,000
Operating lease liability - current portion 23,000 92,000
Current liabilities of discontinued operations 22,000 22,000
Total Current Liabilities 5,043,000 4,747,000
SBA PPP Note Payable 43,000
Operating lease liability 54,000
Total Liabilities 5,140,000 4,747,000
STOCKHOLDERS' EQUITY (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of June 30, 2020 and December 31, 2019, 20,000 Class E shares issued and outstanding as of June 30, 2020 and December 31, 2019 13 13
Common stock, $0.0001 par value, 750,000,000 shares authorized 202,130,131 and 200,880,131 shares issued and outstanding as of June 30, 2020 and December 31, 2019 20,213 20,088
Additional paid-in capital 53,534,774 53,509,899
Accumulated deficit (58,460,000) (57,916,000)
Total Stockholders' Equity (Deficit) (4,905,000) (4,386,000)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 235,000 361,000
Preferred Class A [Member]    
STOCKHOLDERS' EQUITY (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of June 30, 2020 and December 31, 2019, 20,000 Class E shares issued and outstanding as of June 30, 2020 and December 31, 2019 11 11
Total Stockholders' Equity (Deficit) 11 11
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 11 11
Preferred Class E [Member]    
STOCKHOLDERS' EQUITY (DEFICIT)    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized 107,636 Class A shares issued and outstanding as of June 30, 2020 and December 31, 2019, 20,000 Class E shares issued and outstanding as of June 30, 2020 and December 31, 2019 2 2
Total Stockholders' Equity (Deficit) 2 2
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 2 $ 2
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Preferred stock, par value per share $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Common stock, par value per share $ 0.0001 $ 0.0001
Common stock, shares authorized 750,000,000 750,000,000
Common stock, shares issued 202,130,131 200,880,131
Common stock, shares outstanding 202,130,131 200,880,131
Preferred Class A [Member]    
Preferred stock, par value per share $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 107,636 107,636
Preferred stock, shares outstanding 107,636 107,636
Preferred Class E [Member]    
Preferred stock, par value per share $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 20,000 20,000
Preferred stock, shares outstanding 20,000 20,000
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Revenues $ 9,000 $ 3,000 $ 34,000
Related party service revenues 185,000 52,000
Gross Margin 9,000 188,000 86,000
Expenses        
Labor and related expenses 151,000 195,000 336,000 521,000
Rent 28,000 36,000 65,000 74,000
Depreciation and amortization 9,000 11,000 19,000 22,000
Professional fees 11,000 16,000 53,000 66,000
Research and development 9,000 26,000
Other general and administrative 69,000 84,000 154,000 164,000
Total Operating Expenses 268,000 351,000 627,000 873,000
Operating Loss (268,000) (342,000) (439,000) (787,000)
Other Expense        
Interest Expense 55,000 187,000 110,000 190,000
Gain on disposition of assets 1,000 1,000
SBA EIDL grant (3,000) (3,000)
Unrealized gain (loss) on trading securities 2,000 1,000 (2,000)
Total Other Expense (49,000) (187,000) (105,000) (192,000)
Net Loss $ (317,000) $ (529,000) $ (544,000) $ (979,000)
Net Loss        
Basic and Diluted earnings per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted Average Common Shares        
Basic and Diluted 202,130,131 199,697,988 201,910,351 199,405,960
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statements Of Changes In Stockholders' Equity (Deficit) (Unaudited) - USD ($)
Preferred Class A [Member]
Preferred Class E [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
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      
Balance, value at Mar. 31, 2019 $ 11 $ 2 $ 19,955 53,396,032 (56,401,000) (2,985,000)
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)
Net loss           (979,000)
Balance preferred stock , shares at Jun. 30, 2019 107,636 20,000        
Balance common stock, shares at Jun. 30, 2019     200,055,131      
Balance, value at Jun. 30, 2019 $ 11 $ 2 $ 20,005 53,445,982 (56,930,000) (3,464,000)
Balance preferred stock, shares at Mar. 31, 2019 107,636 20,000        
Balance common stock, shares at Mar. 31, 2019     199,555,131      
Balance, value at Mar. 31, 2019 $ 11 $ 2 $ 19,955 53,396,032 (56,401,000) (2,985,000)
Fair value of common stock issued for conversion of notes payable, shares     500,000      
Fair value of common stock issued for conversion of notes payable, value     $ 50 49,950   50,000
Net loss         (529,000) (529,000)
Balance preferred stock , shares at Jun. 30, 2019 107,636 20,000        
Balance common stock, shares at Jun. 30, 2019     200,055,131      
Balance, value at Jun. 30, 2019 $ 11 $ 2 $ 20,005 53,445,982 (56,930,000) $ (3,464,000)
Balance preferred stock, shares at Dec. 31, 2019 107,636 20,000        
Balance common stock, shares at Dec. 31, 2019     200,880,131     200,880,131
Balance, value at Dec. 31, 2019 $ 11 $ 2 $ 20,088 53,509,899 (57,916,000) $ (4,386,000)
Fair value of common stock issued for employee compensation, shares     1,250,000      
Fair value of common stock issued for employee compensation, value     $ 125 24,875 25,000
Net loss         (227,000) (227,000)
Balance preferred stock , shares at Mar. 31, 2020 107,636 20,000        
Balance common stock, shares at Mar. 31, 2020     202,130,131      
Balance, value at Mar. 31, 2020 $ 11 $ 2 $ 20,213 53,534,774 (58,143,000) $ (4,588,000)
Balance preferred stock, shares at Dec. 31, 2019 107,636 20,000        
Balance common stock, shares at Dec. 31, 2019     200,880,131     200,880,131
Balance, value at Dec. 31, 2019 $ 11 $ 2 $ 20,088 53,509,899 (57,916,000) $ (4,386,000)
Net loss           $ (544,000)
Balance preferred stock , shares at Jun. 30, 2020 107,636 20,000        
Balance common stock, shares at Jun. 30, 2020     202,130,131     202,130,131
Balance, value at Jun. 30, 2020 $ 11 $ 2 $ 20,213 53,534,774 (58,460,000) $ (4,905,000)
Balance preferred stock, shares at Mar. 31, 2020 107,636 20,000        
Balance common stock, shares at Mar. 31, 2020     202,130,131      
Balance, value at Mar. 31, 2020 $ 11 $ 2 $ 20,213 53,534,774 (58,143,000) (4,588,000)
Net loss         (317,000) $ (317,000)
Balance preferred stock , shares at Jun. 30, 2020 107,636 20,000        
Balance common stock, shares at Jun. 30, 2020     202,130,131     202,130,131
Balance, value at Jun. 30, 2020 $ 11 $ 2 $ 20,213 $ 53,534,774 $ (58,460,000) $ (4,905,000)
XML 15 R6.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statements Of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash Flows From Operating Activities:    
Net loss $ (544,000) $ (979,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 19,000 22,000
Common stock issued for employee compensation 25,000 131,000
Amortization of debt discount on convertible notes payable 62,000
SBA EIDL grant (3,000)
Unrealized (gain) loss on trading securities 1,000 (2,000)
Changes in operating assets and liabilities:    
Decrease in accounts receivables (63,000) (38,000)
Decrease in prepaid expenses (13,000) (3,000)
(Increase) Decrease in operating lease right-of-use asset 20,000 (4,000)
Increase in accounts payable and accrued liabilities 249,000 39,000
Increase in accrued interest on short-term advances - related party 34,000 16,000
Increase in accrued interest on line of credit - related party 34,000 33,000
Increase in accrued interest and liquidated damages on convertible notes 20,000 147,000
Net Cash Used in Operating Activities (71,000) (490,000)
Cash Flows From Investing Activities:    
Purchase of property and equipment 5,000
Sale of property and equipment 5,000
Net Cash Used in Investing Activities
Cash Flows From Financing Activities:    
Proceeds from short-term advances - related party 489,000
Proceeds from SBA EIDL grant 3,000
Proceeds from SBA PPP note payable 71,000
Net Cash Provided by Financing Activities 74,000 489,000
Net increase (decrease) in Cash, cash equivalents, and restricted cash 3,000 (1,000)
Cash, cash equivalents, and restricted cash at beginning of period 10,000 24,000
Cash, cash equivalents, and restricted cash at end of period 13,000 23,000
Supplemental Disclosure of Interest and Income Taxes Paid:    
Interest paid during the year 1,000
Income taxes paid during the year
Supplemental Disclosure of Non-cash Investing and Financing Activities:    
Partial conversion of notes payable to common stock $ 50,000
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Organization And Summary Of Significant Accounting Policies
6 Months Ended
Jun. 30, 2020
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 of SPYR, Inc. and subsidiaries (the “Company”) are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of SPYR, Inc. and its wholly-owned subsidiaries, SPYR APPS, LLC, a Nevada Limited Liability Company, E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 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 six months ended June 30, 2020, the Company recorded a net loss from continuing operations of $544,000 and have current liabilities of $5,043,000. As of June 30, 2020, our cash balance was $13,000. These issues raise substantial doubt about the Company's ability to continue as a going concern.

 

The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and software development costs and implementation of our business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so.

 

Historically, we have financed our operations primarily through sales of our common stock and debt financing. The Company will continue to seek additional capital through the sale of its common stock, debt financing and through expansion of its existing and new products. If our financing goals for our products do not materialize as planned and if we are not able to achieve profitable operations at some point in the future, we may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion, marketing, and product development plans.

 

The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements and expansion of its operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2020. 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 June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2020.

 

The basic and fully diluted shares for the three months ended June 30, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,107,420, 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 June 30, 2019.

 

The basic and fully diluted shares for the six months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2020.

 

The basic and fully diluted shares for the six months ended June 30, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,107,420, Options – 12,449,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2019.

 

Capitalized Gaming Assets and Licensing Rights

 

As of June 30, 2020, the Company's capitalized gaming assets consist of Battlewack: Idle Lords which requires additional development before it can be released. As such, the Company does not expect amortization expense related to capitalized gaming assets and licensing rights until existing or future gaming assets, through development or acquisition, are placed into service.

 

Software Development Costs

 

Costs incurred for software development are expensed as incurred. During the six months ended June 30, 2020 and 2019, the Company incurred $0 and $26,000 in software development costs paid to independent gaming software developers.

 

Accounts Receivable

 

The following is a summary of receivables at June 30, 2020 and December 31, 2019:

 

   

June 30,

2020

 

December 31,

2019

         
Game revenue due from in app purchases,                
net of app store fees and allowance for doubtful accounts   $ 14,000     $ 27,000  
Game revenue due from in app advertising     —         —    
Related party professional service revenues     —         50,000  
Other Receivables     —         —    
     Total Accounts Receivable   $ 14,000     $ 77,000  

 

Accounts receivable are carried at their estimated collectible amounts and are not subject to any interest or finance charges.

  

Allowance for Doubtful Accounts

 

The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company's historical payment experience. An allowance for doubtful accounts is established as losses are estimated to have occurred through a provision for bad debts charged to earnings. This evaluation is inherently subjective and requires estimates that are susceptible to significant revisions as more information becomes available.

 

As of June 30, 2020, management has recorded an allowance for doubtful accounts in the amount of approximately $12,000.

 

Concentration of Credit Risk

 

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions.

 

The Company grants credit to its game revenue and service revenue customers. The Company typically does not require collateral from customers. Credit risk is limited due to the financial strength of the customers comprising the Company's customer. The Company monitors exposure of credit losses and maintains allowances for anticipated losses considered necessary under the circumstances (See “Allowance for Doubtful Accounts” above).

 

Major Customers

 

The Company had two related party customers who comprised 0% and 98% of net revenue during the six months ended June 30, 2020, and 60% and 0% of net revenue during the six months ended June 30, 2019. The loss of these customers would adversely impact the business of the Company.

 

      Net Revenue %       Gross Accounts Receivable  
     

Six Months Ended

June 30,

     

Six Months Ended

June 30,

     

As of

June 30,

     

As of

December 31,

 
      2020       2019       2020       2019  
Customer A     0 %     60 %   $ —       $ —    
Customer B     98 %     0 %     —         50,000  
Total     98 %     60 %   $ —       $ 50,000  

 

Recent Accounting Standards

 

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

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Related Party Transactions

NOTE 2 - 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 December 31, 2020. As of June 30, 2020, the Company has borrowed $1,000,000 and accrued interest of $168,000.

 

During 2018 and 2019 the Company received $1,062,000 in the form of short-term advances from Berkshire Capital Management Co., Inc. The short-term advances are due upon demand. Interest on the short-term advances has been accrued at 6% per annum through June 30, 2020 in the amount of $87,000 for a total balance due as of June 30, 2020 of $1,149,000.

 

During the six months ended June 30, 2019, the Company, received $52,000 in revenue for professional services rendered to a related Company whose directors are also officers of SPYR, Inc. and whose majority shareholder is Berkshire Capital Management Co., Inc.

 

During the six months ended June 30, 2020, the Company, received $185,000 in revenue for professional services rendered to Berkshire Capital Management Co., Inc.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Convertible Notes
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Convertible Notes

NOTE 3 – 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 was 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 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 was 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. On May 10, 2019, the Company amended the note to extend the due date 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 note is in default for late payment. The Company has accrued approximately $134,000 in interest and liquidated damages for this note through June 30, 2020. At June 30, 2020 and December 31, 2019, the principal balance together with total accrued interest and liquidated damages is recorded on the Company's consolidated balance sheet net of discounts at $274,000 and $254,000, respectively.

 

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 was December 31, 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 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 was 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. On May 10, 2019, the Company amended the note to extend the due date to September 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 October 11, 2019, the Company amended the note to extend the due date to December 31, 2019, provide for a partial conversion of $50,000 of the outstanding principal balance into common shares of the Company at a conversion price of $0.10 per share for a total of 500,000 shares, and waive any prior alleged or actual defaults under the note. The Company has accrued approximately $96,000 in interest and liquidated damages for this note through June 30, 2020. At June 30, 2020 and December 31, 2019, the principal balance together with total accrued interest and liquidated damages is recorded on the Company's consolidated balance sheet net of discounts at $296,000 and $296,000, respectively.

  

The following table summarized the Company's convertible notes payable as of June 30, 2020 and December 31, 2019:

 

   

June 30,

2020

 

December 31,

2019

Beginning Balance   $ 550,000     $ 432,000  
Proceeds from the issuance of convertible notes, net of issuance discounts     —         —    
Repayments     —         —    
Conversion of notes payable into common stock     —         (100,000 )
Amortization of discounts     —         62,000  
Liquidated damages     7,000       134,000  
Accrued Interest     13,000       22,000  
Convertible notes payable, net   $ 570,000     $ 550,000  
                 
Convertible notes, short term   $ 340,000     $ 340,000  
Accrued interest and damages   $ 230,000     $ 210,000  
Debt discounts   $ —       $ —    
               
XML 19 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Long Term Debt
6 Months Ended
Jun. 30, 2020
Long Term Debt  
Long Term - Debt

NOTE 4 - LONG TERM-DEBT

 

On May 12, 2020 the Company received a Paycheck Protection Program loan from the U.S. Small Business Administration in the approximate amount of $71,000. The loan agreement provides for six months principal and interest deferral. The interest rate is 1%. Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. Any amount not forgiven must be repaid in eighteen monthly consecutive principal and interest payments beginning December 2020. As of June 30, 2020, the balance due on this note was approximately $71,000.

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments And Contingencies
6 Months Ended
Jun. 30, 2020
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. On May 1, 2020, the Company entered into an amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through June 30, 2020 and extend the term of the lease by three months. On July 29, 2020, the Company entered into another amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period July 1, 2020 through August 31, 2020 and extend the term of the lease by two months. As a result of these amendments, the lease term date, which was December 31, 2020, is now May 31, 2021. In addition, the due date of certain other rent adjustments due April 8, 2020 was deferred. The rent adjustments of approximately $5,000 were due 50% on June 1, 2020 and 50% on July 1, 2020.

 

Legal Proceedings

 

We are involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. Information about material legal proceedings follows:

  

Settlements

 

On June 18, 2018 the Company was named as a defendant in a case filed in the United States District Court for the Southern District of New York: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management Co., Inc., and Eat at Joe's, Ltd. n/k/a SPYR, Inc.(“Defendants”). Joseph A. Fiore was the Chairman of our Board of Directors and is a significant shareholder. Mr. Fiore resigned from his positions as Chairman of the Board and as a Director of the Company effective August 1, 2018. The suit alleged that Mr. Fiore, during 2013 and 2014, while he was the Company's Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors, engaged in improper conduct on behalf of the defendants named in the case related to the Company's sales of securities in Plandai Biotechnology, Inc. The Commission alleged that Mr. Fiore and the Company unlawfully benefited through the sales of those securities. The Commission also alleged that from 2013 to 2014, the Company's primary business was investing and that it failed to register as an investment company, resulting in an alleged violation of Section 7(a) of the Investment Company Act of 1940. The suit sought to disgorge Joseph A. Fiore, Berkshire Capital Management Co., Inc., and the Company of alleged profits on the sale of the securities and civil fines related to the Company's failure to register as an investment company with the Commission.

 

Pursuant to a settlement agreement among the parties, on April 14, 2020, final judgment was entered in the case: Securities and Exchange Commission vs. Joseph A. Fiore, Berkshire Capital Management, Inc. and Eat at Joes, Inc., n/k/a SPYR, Inc., case number 7:18-cv-05474-KMK filed in the U.S. District Court for the Southern District of New York.

 

On April 23, 2020, Joseph Fiore/Berkshire Capital Management, Inc. satisfied the Company's joint and several liability obligation by paying to the Commission the agreed upon sum of Two Million Dollars pursuant to a settlement agreement between Joseph Fiore/Berkshire Capital Management, Inc. and the Company, which settlement agreement was entered into on April 15, 2020. The Company has until April 14, 2021 to satisfy its remaining financial obligation to the Commission, an agreed upon civil penalty of Five Hundred Thousand Dollars ($500,000). The $500,000 liability is reported as part of accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 and was recorded as litigation settlement costs on the consolidated statements of operations on the Company's form 10K for the year ended December 31, 2019.

 

In electing to settle with the Commission, the Company neither admitted nor denied liability to any of the Commission's allegations in its complaint, and in consideration for the Commission discontinuing its action, the Company, along with the two other defendants Joseph Fiore and Berkshire Capital Management agreed to be jointly and severally liable for disgorgement of profits and prejudgment interest in the amount of two million dollars, and to each be solely liable to pay a civil penalty in the amount of five hundred thousand dollars.[1]

 

Judgments

 

On or about January 24, 2019, SPYR APPS, LLC entered into an agreement with one of its vendors, Shatter Storm Studios, to whom it owed $84,250 for artwork related to the Steven Universe game. Pursuant to the terms of that agreement, SPYR APPS, LLC needed to make payment in the amount of $85,000 to cover the principal owed and attorneys' fees together plus 6% interest in that amount by December 1, 2019. Should SPYR APPS, LLC not make the required payment on or before December 1, 2019, it consented to entry of judgment in favor of Shatter Storm Studios for the amount owed. SPYR APPS, LLC did not make the payment and on January 27, 2020 Shatter Storm Studios initiated Case No. 1:200cv-00217 in the U.S. District Court for the District of Colorado seeking entry of the consent judgment against SPYR APPS, LLC. The judgment was not contested by SPYR APPS, LLC and judgment in the amount of $85,000 plus post judgment interest at the rate of 6% was entered on March 17, 2020. The $85,000 plus accrued interest and attorneys' fees has been reported as part of accounts payable and accrued liabilities. The balance due as of June 30, 2020 and December 31, 2019 was approximately $91,000 and $90,000, respectively.

 

[1] In addition, an injunction was entered against the Company enjoined it from violating the antifraud, market manipulation, beneficial ownership reporting, and other provisions of the federal securities laws charged in the SEC's complaint.

Covid-19

 

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, the Company is anticipating potential reductions in revenue, labor and supply shortages, difficulty meeting debt covenants, delays in collecting accounts receivable and paying liabilities and changes in the fair value of assets and liabilities. Our concentrations due to major customers and the necessity for fund raising activities make it reasonably possible that we are vulnerable to the risk of a near-term severe impact.

Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including potential credit losses on receivables and investments; impairment losses related to capitalized gaming assets and other long-lived assets; and contingent obligations.

 

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Equity Transactions

NOTE 6 – EQUITY TRANSACTIONS

 

Common Stock:

 

Six Months Ended June 30, 2019

 

During the six months ended June 30, 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.

 

Six Months Ended June 30, 2020

 

During the six months ended June 30, 2020, the Company issued an aggregate of 1,250,000 shares of restricted common stock to employees with a total fair value of $25,000 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $25,000 upon issuance. The shares issued were valued at the date earned under the respective agreement based upon closing market price of the Company's common stock.

 

Options:

 

The following table summarizes common stock options activity:

        Weighted
        Average
        Exercise
    Options   Price
  December 31, 2019       9,299,900     $ 0.57  
  Granted       —         —    
  Exercised       —         —    
  Expired       (300,000 )     1.00  
  Outstanding, June 30, 2020       8,999,900     $ 0.56  
  Exercisable, June 30, 2020       8,999,900     $ 0.56  

 

 

The weighted average exercise prices, remaining lives for options granted, and exercisable as of June 30, 2020 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   0.17   $0.50   8,000,000   $0.50
$1.00   999,900   0.07 – 1.61   $1.00   999,900   $1.00
    8,999,900       $0.56   8,999,900   $0.56

 

At June 30, 2020, the Company's closing stock price was $0.05 per share. As all outstanding options had an exercise price greater than $0.05 per share, there was no intrinsic value of the options outstanding at June 30, 2020.

 

Warrants:

 

The following table summarizes common stock warrants activity:

 

        Weighted
        Average
        Exercise
    Warrants   Price
  Outstanding, December 31, 2019       9,000,000     $ 0.46  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, June 30, 2020       9,000,000     $ 0.46  
  Exercisable, June 30, 2020       9,000,000     $ 0.46  

 

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of June 30, 2020, were as follows:

 

          Outstanding and Exercisable Warrants  
  Warrants                  
  Exercise Price               Life  
  Per Share       Shares       (Years)  
$ 0.01       600,000       0.50  
$ 0.15       1,200,000       0.53  
$ 0.25       1,000,000       3.03  
$ 0.375       200,000       0.81  
$ 0.40       1,200,000       0.53  
$ 0.50       3,000,000       0.33 – 3.03  
$ 0.625       100,000       0.81  
$ 0.75       1,250,000       0.91 – 3.03  
$ 1.00       250,000       0.91  
$ 2.00       200,000       2.89  
          9,000,000          

 

At June 30, 2020, the Company's closing stock price was $0.05 per share. The Company had 600,000 warrants outstanding with exercise prices less than $0.01 with an intrinsic value of $24,000 at June 30, 2020.

  

Shares Reserved:

 

At June 30, 2020, 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 approved settlement agreement for a total of 33,500,000 reserved shares of common stock.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Discontinued Operations
6 Months Ended
Jun. 30, 2020
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 assets and liabilities of our discontinued restaurant segment's discontinued operations as of June 30, 2020 and December 31, 2019 consisted of $0 assets and $22,000 in accounts payable and accrued liabilities.

 

There were no operations for our discontinued restaurant segment during the six months ended June 30, 2020 and 2019.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Subsequent Events

NOTE 8 – SUBSEQUENT EVENTS

 

On July 23, 2020, the Company amended the related party revolving line of credit from Berkshire Capital Management Co., Inc. to extend the due date to December 31, 2020.

 

On May 1, 2020, the Company entered into an amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through June 30, 2020 and extend the term of the lease by three months. On July 29, 2020, the Company entered into another amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period July 1, 2020 through August 31, 2020 and extend the term of the lease by two months. As a result of these amendments, the lease term date, which was December 31, 2020, is now May 31, 2021.

 

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Organization And Summary Of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2020
Disclosure Organization And Summary Of Significant Accounting Policies Policies Abstract  
Interim Financial Statements

Interim Financial Statements

 

The accompanying condensed consolidated financial statements of SPYR, Inc. and subsidiaries (the “Company”) are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.

Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of SPYR, Inc. and its wholly-owned subsidiaries, SPYR APPS, LLC, a Nevada Limited Liability Company, E.A.J.: PHL, Airport Inc., a Pennsylvania corporation (discontinued operations, see Note 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 six months ended June 30, 2020, the Company recorded a net loss from continuing operations of $544,000 and have current liabilities of $5,043,000. As of June 30, 2020, our cash balance was $13,000. These issues raise substantial doubt about the Company's ability to continue as a going concern.

 

The Company intends to utilize cash on hand, shareholder loans and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities to conduct its ongoing business, and to also conduct strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and software development costs and implementation of our business plans generally. The Company also plans to diversify, through acquisition or otherwise, in other unrelated business areas and is exploring opportunities to do so.

 

Historically, we have financed our operations primarily through sales of our common stock and debt financing. The Company will continue to seek additional capital through the sale of its common stock, debt financing and through expansion of its existing and new products. If our financing goals for our products do not materialize as planned and if we are not able to achieve profitable operations at some point in the future, we may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion, marketing, and product development plans.

 

The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements and expansion of its operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2020. 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 June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the three months ended June 30, 2020.

 

The basic and fully diluted shares for the three months ended June 30, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,107,420, 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 June 30, 2019.

 

The basic and fully diluted shares for the six months ended June 30, 2020 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,852,538, Options – 8,999,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2020.

 

The basic and fully diluted shares for the six months ended June 30, 2019 are the same because the inclusion of the potential shares (Class A – 26,909,028, Class E – 1,107,420, Options – 12,449,900, Warrants – 9,000,000) would have had an anti-dilutive effect due to the Company generating a loss for the six months ended June 30, 2019.

 

Capitalized Gaming Assets and Licensing Rights

Capitalized Gaming Assets and Licensing Rights

 

As of June 30, 2020, the Company's capitalized gaming assets consist of Battlewack: Idle Lords which requires additional development before it can be released. As such, the Company does not expect amortization expense related to capitalized gaming assets and licensing rights until existing or future gaming assets, through development or acquisition, are placed into service.

 

Software Development Costs

Software Development Costs

 

Costs incurred for software development are expensed as incurred. During the six months ended June 30, 2020 and 2019, the Company incurred $0 and $26,000 in software development costs paid to independent gaming software developers.

Account Receivable

Accounts Receivable

 

The following is a summary of receivables at June 30, 2020 and December 31, 2019:

 

   

June 30,

2020

 

December 31,

2019

         
Game revenue due from in app purchases,                
net of app store fees and allowance for doubtful accounts   $ 14,000     $ 27,000  
Game revenue due from in app advertising     —         —    
Related party professional service revenues     —         50,000  
Other Receivables     —         —    
     Total Accounts Receivable   $ 14,000     $ 77,000  

 

Accounts receivable are carried at their estimated collectible amounts and are not subject to any interest or finance charges.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

 

The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company's historical payment experience. An allowance for doubtful accounts is established as losses are estimated to have occurred through a provision for bad debts charged to earnings. This evaluation is inherently subjective and requires estimates that are susceptible to significant revisions as more information becomes available.

 

As of June 30, 2020, management has recorded an allowance for doubtful accounts in the amount of approximately $12,000.

 

Concentration of Credit Risk

Concentration of Credit Risk

 

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of the financial institutions.

 

The Company grants credit to its game revenue and service revenue customers. The Company typically does not require collateral from customers. Credit risk is limited due to the financial strength of the customers comprising the Company's customer. The Company monitors exposure of credit losses and maintains allowances for anticipated losses considered necessary under the circumstances (See “Allowance for Doubtful Accounts” above).

 

Major Customers

 

The Company had two related party customers who comprised 0% and 98% of net revenue during the six months ended June 30, 2020, and 60% and 0% of net revenue during the six months ended June 30, 2019. The loss of these customers would adversely impact the business of the Company.

 

      Net Revenue %       Gross Accounts Receivable  
     

Six Months Ended

June 30,

     

Six Months Ended

June 30,

     

As of

June 30,

     

As of

December 31,

 
      2020       2019       2020       2019  
Customer A     0 %     60 %   $ —       $ —    
Customer B     98 %     0 %     —         50,000  
Total     98 %     60 %   $ —       $ 50,000  

 

Recent Accounting Standards

Recent Accounting Standards

 

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

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.20.2
Organziation And Summary Of Significiant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2020
Organziation And Summary Of Significiant Accounting Policies  
Summary of Accounts Receivables

The following is a summary of receivables at June 30, 2020 and December 31, 2019:

 

   

June 30,

2020

 

December 31,

2019

         
Game revenue due from in app purchases,                
net of app store fees and allowance for doubtful accounts   $ 14,000     $ 27,000  
Game revenue due from in app advertising     —         —    
Related party professional service revenues     —         50,000  
Other Receivables     —         —    
     Total Accounts Receivable   $ 14,000     $ 77,000  

 

Summary of Concentration of Credit Risk

The Company had two related party customers who comprised 0% and 98% of net revenue during the six months ended June 30, 2020, and 60% and 0% of net revenue during the six months ended June 30, 2019. The loss of these customers would adversely impact the business of the Company.

 

      Net Revenue %       Gross Accounts Receivable  
     

Six Months Ended

June 30,

     

Six Months Ended

June 30,

     

As of

June 30,

     

As of

December 31,

 
      2020       2019       2020       2019  
Customer A     0 %     60 %   $ —       $ —    
Customer B     98 %     0 %     —         50,000  
Total     98 %     60 %   $ —       $ 50,000  

 

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Convertible Notes (Tables)
6 Months Ended
Jun. 30, 2020
Disclosure Segment Reporting Details Abstract  
Summary of Convertible Notes Payable

The following table summarized the Company's convertible notes payable as of June 30, 2020 and December 31, 2019:

 

   

June 30,

2020

 

December 31,

2019

Beginning Balance   $ 550,000     $ 432,000  
Proceeds from the issuance of convertible notes, net of issuance discounts     —         —    
Repayments     —         —    
Conversion of notes payable into common stock     —         (100,000 )
Amortization of discounts     —         62,000  
Liquidated damages     7,000       134,000  
Accrued Interest     13,000       22,000  
Convertible notes payable, net   $ 570,000     $ 550,000  
                 
Convertible notes, short term   $ 340,000     $ 340,000  
Accrued interest and damages   $ 230,000     $ 210,000  
Debt discounts   $ —       $ —    
               
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Tables)
6 Months Ended
Jun. 30, 2020
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, 2019       9,299,900     $ 0.57  
  Granted       —         —    
  Exercised       —         —    
  Expired       (300,000 )     1.00  
  Outstanding, June 30, 2020       8,999,900     $ 0.56  
  Exercisable, June 30, 2020       8,999,900     $ 0.56  

 

Schedule of Weighted Average Excerise Price Range

The weighted average exercise prices, remaining lives for options granted, and exercisable as of June 30, 2020 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   0.17   $0.50   8,000,000   $0.50
$1.00   999,900   0.07 – 1.61   $1.00   999,900   $1.00
    8,999,900       $0.56   8,999,900   $0.56

 

Summary of Common Stock Warrants Activity

The following table summarizes common stock warrants activity:

 

        Weighted
        Average
        Exercise
    Warrants   Price
  Outstanding, December 31, 2019       9,000,000     $ 0.46  
  Granted       —         —    
  Exercised       —         —    
  Forfeited       —         —    
  Outstanding, June 30, 2020       9,000,000     $ 0.46  
  Exercisable, June 30, 2020       9,000,000     $ 0.46  

 

Schedule of Warrants Weighted Average Excerise Price Range

The weighted average exercise prices, remaining lives for warrants granted, and exercisable as of June 30, 2020, were as follows:

 

          Outstanding and Exercisable Warrants  
  Warrants                  
  Exercise Price               Life  
  Per Share       Shares       (Years)  
$ 0.01       600,000       0.50  
$ 0.15       1,200,000       0.53  
$ 0.25       1,000,000       3.03  
$ 0.375       200,000       0.81  
$ 0.40       1,200,000       0.53  
$ 0.50       3,000,000       0.33 – 3.03  
$ 0.625       100,000       0.81  
$ 0.75       1,250,000       0.91 – 3.03  
$ 1.00       250,000       0.91  
$ 2.00       200,000       2.89  
          9,000,000          

 

XML 28 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Organization And Summary Of Significant Accounting Policies (Summary Of Accounts Receivables) (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Accounts Receivable $ 14,000 $ 77,000
Related Party Professional Service Revenues [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Accounts Receivable 50,000
Game Revenue Due From In App Purchases net of app store fees and allowance for doubtful accounts[Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Accounts Receivable 14,000 27,000
Game Revenue Due From In App Advertising [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Accounts Receivable
Other Receivables [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Accounts Receivable
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Organization And Summary Of Significant Accounting Policies (Concentrations Of Credit Risk) (Details) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Customer A [Member]      
Concentration Risk [Line Items]      
Gross Accounts Receivable  
Customer B [Member]      
Concentration Risk [Line Items]      
Gross Accounts Receivable   50,000
Major Customers [Member]      
Concentration Risk [Line Items]      
Gross Accounts Receivable   $ 50,000
Net Revenue [Member] | Customer A [Member]      
Concentration Risk [Line Items]      
Concentration risk percentage 0.00% 60.00%  
Net Revenue [Member] | Customer B [Member]      
Concentration Risk [Line Items]      
Concentration risk percentage 98.00% 0.00%  
Net Revenue [Member] | Major Customers [Member]      
Concentration Risk [Line Items]      
Concentration risk percentage 98.00% 60.00%  
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Convertible Notes (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Short-term Debt [Line Items]    
Beginning Balance $ 550,000  
Convertible notes payable, net 570,000 $ 550,000
Convertible Notes Payable [Member]    
Short-term Debt [Line Items]    
Beginning Balance 550,000 432,000
Proceeds from the issuance of convertible notes, net of issuance discounts
Repayments
Conversion of notes payable into common stock (100,000)
Amortization of discounts 62,000
Liquidated damages 7,000 134,000
Accrued Interest 13,000 22,000
Convertible notes payable, net 570,000 550,000
Convertible notes, short term 340,000 340,000
Accrued interest and damages 230,000 210,000
Debt discounts
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Summary Of Common Stock Options Activity) (Details)
6 Months Ended
Jun. 30, 2020
$ / shares
shares
Options  
December 31, 2019 | shares 9,299,900
Granted | shares
Exercised | shares
Expired | shares 300,000
Outstanding, June 30, 2020 | shares 8,999,900
Exercisable, June 30, 2020 | shares 8,999,900
Weighted Average Exercise Price  
December 31, 2019 | $ / shares $ 0.57
Granted | $ / shares
Exercised | $ / shares
Expired | $ / shares 1.00
Outstanding, June 30, 2020 | $ / shares 0.56
Exercisable, June 30, 2020 | $ / shares $ 0.56
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Schedule Of Weighted Average Excerise Price Range) (Details)
6 Months Ended
Jun. 30, 2020
$ / shares
shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding Options, Shares | shares 8,999,900
Outstanding Options, Weighted Average Exercise Price | $ / shares $ 0.56
Exercisable Options, Shares | shares 8,999,900
Exercisable Options, Weighted Average Exercise Price | $ / shares $ 0.56
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) 2 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 999,900
Outstanding Options, Weighted Average Exercise Price | $ / shares $ 1.00
Exercisable Options, Shares | shares 999,900
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) 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) 1 year 7 months 10 days
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Summary Of Common Stock Warrants Activity) (Details) - Warrants [Member]
6 Months Ended
Jun. 30, 2020
$ / shares
shares
Warrants  
Outstanding, December 31, 2019 | shares 9,000,000
Granted | shares
Exercised | shares
Forfeited | shares
Exercisable, June 30, 2020 | shares 9,000,000
Weighted Average Exercise Price  
Outstanding, December 31, 2019 $ 0.46
Granted
Exercised
Forfeited
Outstanding, June 30, 2020 0.46
Exercisable, June 20, 2020 $ 0.46
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Schedule Of Warrants Weighted Average Excerise Price Range) (Details)
6 Months Ended
Jun. 30, 2020
$ / shares
shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Outstanding and Exercisable Warrants, Shares 8,999,900
Warrants Exercise Price, Per Share | $ / shares $ 0.01
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) 6 months
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) 6 months 11 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) 3 years 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) 9 months 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) 6 months 11 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) 3 months 29 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) 3 years 11 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) 9 months 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) 10 months 28 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) 3 years 11 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) 10 months 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) 2 years 10 months 20 days
Warrants Exercise Price, Per Share | $ / shares $ 2.00
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Organization And Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Allowance for doubtful accounts $ 12,000   $ 12,000  
Class A Preferred Stock [Member]        
Antidilutive shares excluded from computation of basic earnings per share 26,909,028 26,909,028 26,909,028 26,909,028
Class E Preferred Stock [Member]        
Antidilutive shares excluded from computation of basic earnings per share 1,852,538 1,107,420 1,852,538 1,107,420
Stock Options [Member]        
Antidilutive shares excluded from computation of basic earnings per share 8,999,900 12,449,900 8,999,900 12,449,900
Warrants [Member]        
Antidilutive shares excluded from computation of basic earnings per share 9,000,000 9,000,000 9,000,000 9,000,000
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended 24 Months Ended 30 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2017
Dec. 31, 2019
Jun. 30, 2020
Short-term Debt [Line Items]                
Proceeds from short-term advances - related party       $ 489,000      
Related Party Service Revenues   185,000 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 Dated September 05, 2017 [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           Dec. 31, 2020    
Proceeds from line of credit $ 1,000,000              
Accrued interest 168,000 168,000   168,000       $ 168,000
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 $ 87,000 $ 87,000   $ 87,000       $ 87,000
Interest rate 6.00% 6.00%   6.00%       6.00%
Proceeds from short-term advances - related party             $ 1,062,000 $ 1,149,000
Debt instrument description             Short-term advances are due upon demand.  
A Related 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       $ 185,000 $ 52,000      
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Convertible Notes (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Oct. 11, 2019
May 10, 2019
May 22, 2018
Apr. 20, 2018
Jun. 30, 2019
Jun. 30, 2020
Dec. 31, 2019
Short-term Debt [Line Items]              
Exercise price of warrants           $ 0.01  
Convertible notes payable           $ 570,000 $ 550,000
Stock issued during the period in connection with debt, value         $ 50,000    
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]              
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  
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   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           $ 134,000  
Convertible notes payable           274,000 254,000
Convertible Note Dated April 20, 2018 [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 Dec. 31, 2019 Sep. 01, 2019 Dec. 31, 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           96,000  
Convertible notes payable           $ 296,000 $ 296,000
Convertible Note Dated May 22, 2018 [Member] | Common Stock [Member]              
Short-term Debt [Line Items]              
Value of principal portion of debt converted into shares $ 50,000 $ 25,000          
Debt conversion price per share $ 0.10 $ 0.10          
No of shares of common stock issued in conversion of debt 500,000 250,000          
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 38 R29.htm IDEA: XBRL DOCUMENT v3.20.2
Long Term Debt (Narrative) (Details) - Notes Payable To U.S. Small Business Administration [Member] - USD ($)
May 12, 2020
Jun. 30, 2020
Debt instrument face amount $ 71,000  
Debt instrument interest rate 1.00%  
Debt instrument description The loan agreement provides for six months principal and interest deferral. The interest rate is 1%. Under the terms of the loan, up to 100% of the loan may be forgiven conditioned upon meeting certain requirements for the use of funds. Any amount not forgiven must be repaid in eighteen monthly consecutive principal and interest payments beginning December 2020.  
Notes payable   $ 71,000
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments And Contingencies (Narrative) (Details) - USD ($)
May 01, 2020
Apr. 23, 2020
Jan. 24, 2019
May 21, 2015
Jun. 30, 2020
Apr. 08, 2020
Mar. 17, 2020
Dec. 31, 2019
Other Commitments [Line Items]                
Accounts payable and accrued liabilities         $ 2,083,000     $ 1,834,000
January 24, 2019, SPYR APPS, LLC [Member]                
Other Commitments [Line Items]                
Agreement description     SPYR APPS, LLC entered into an agreement with one of its vendors, Shatter Storm Studios, to whom it owed $84,250 for artwork related to the Steven Universe game. Pursuant to the terms of that agreement, SPYR APPS, LLC needed to make payment in the amount of $85,000 to cover the principal owed and attorneys' fees together plus 6% interest in that amount by December 1, 2019. Should SPYR APPS, LLC not make the required payment on or before December 1, 2019, it consented to entry of judgment in favor of Shatter Storm Studios for the amount owed. SPYR APPS, LLC did not make the payment and on January 27, 2020 Shatter Storm Studios initiated Case No. 1:200cv-00217 in the U.S. District Court for the District of Colorado seeking entry of the consent judgment against SPYR APPS, LLC. The judgment is not being contested by SPYR APPS, LLC, but has not yet been entered. The $85,000 plus accrued interest and attorneys' fees has been reported as part of accounts payable and accrued liabilities. The balance due as of December 31, 2019 was approximately $90,000.          
Principal owed and attorneys' fees     $ 84,250       $ 85,000  
Interest Rate     6.00%       6.00%  
Accounts payable and accrued liabilities         $ 91,000     $ 90,000
Joseph Fiore/Berkshire Capital Management, Inc [Member]                
Other Commitments [Line Items]                
Settlement agreement terms   The Company's joint and several liability obligation by paying to the Commission the agreed upon sum of Two Million Dollars pursuant to a settlement agreement between Joseph Fiore/Berkshire Capital Management, Inc. and the Company, which settlement agreement was entered into on April 15, 2020. The Company has until April 14, 2021 to satisfy its remaining financial obligation to the Commission, an agreed upon civil penalty of Five Hundred Thousand Dollars ($500,000). The $500,000 liability is reported as part of accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 and was recorded as litigation settlement costs on the consolidated statements of operations on the Company's form 10K for the year ended December 31, 2019.            
Litigation settlement costs   $ 500,000            
Operating Lease Dated May 21, 2015 [Member]                
Other Commitments [Line Items]                
Lease commitment terms The rent adjustments of approximately $5,000 are due 50% on June 1, 2020 and 50% on July 1, 2020.     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        
Agreement description The Company entered into an amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period April 1, 2020 through June 30, 2020 and extend the term of the lease by three months. On July 29, 2020, the Company entered into another amended lease agreement with its landlord. Under the terms of the amendment, the landlord agreed to waive rent, certain rent adjustments and parking for the period July 1, 2020 through August 31, 2020 and extend the term of the lease by two months. As a result of these amendments, the lease term date, which was December 31, 2020, is now May 31, 2021. In addition, the due date of certain other rent adjustments due April 8, 2020 was deferred. The rent adjustments of approximately $5,000 were due 50% on June 1, 2020 and 50% on July 1, 2020.              
Operating Lease Dated May 21, 2015 [Member] | Minimum [Member]                
Other Commitments [Line Items]                
Annual base rent       $ 143,000        
Operating Lease Dated May 21, 2015 [Member] | Maximum [Member]                
Other Commitments [Line Items]                
Annual base rent       $ 152,000        
Operating Amended Lease Dated May 21, 2015 [Member]                
Other Commitments [Line Items]                
Other rent adjustments           $ 5,000    
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Common Stock Issued During Year Ended December 31, 2018 And 2019) (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Stock issued to employees for services, value $ 25,000 $ 131,000    
Share based compensation     $ 25,000 $ 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     $ 25,000 $ 131,000
Share based compensation     $ 25,000 $ 131,000
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Options) (Narrative) (Details)
Jun. 30, 2020
$ / shares
Stock Options [Member]  
Options exercise price per share $ 0.05
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.20.2
Equity Transactions (Warrants) (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2020
Jun. 30, 2020
Warrants outstanding   600,000
Intrinsic value of warrants   $ 24,000
Exercise price of warrants   $ 0.01
Shares reserved in conncetion with 2 convertible notes with detachable warrants   30,000,000
Warrants [Member]    
Description of shares reserved with court approves settlement 3,500,000 shares of common stock in connection with the court approved settlement agreement for a total of 33,500,000 reserved shares of common stock.  
Warrants [Member]    
Share price   $ 0.05
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.20.2
Discontinued Operations (Narrative) (Details) - Discontinued Operations [Member] - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Assets $ 0 $ 0
Accounts payable and accrued liabilities $ 22,000 $ 22,000
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events (Narrative) (Details)
1 Months Ended
Jul. 23, 2020
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] | Revolving Line Of Credit Dated September 05, 2017 [Member]  
Debt instrument extended maturity date The Company amended the related party revolving line of credit from Berkshire Capital Management Co., Inc. to extend the due date to December 31, 2020
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