Cover
Cover | 3 Months Ended |
Mar. 31, 2023 | |
Cover [Abstract] | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | various edits |
Entity Registrant Name | Mobiquity Technologies, Inc. |
Entity Central Index Key | 0001084267 |
Entity Tax Identification Number | 11-3427886 |
Entity Incorporation, State or Country Code | NY |
Entity Address, Address Line One | 35 Torrington Lane |
Entity Address, City or Town | Shoreham |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 11786 |
City Area Code | (516) |
Local Phone Number | 246-9422 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash | $ 2,182,330 | $ 220,854 |
Accounts receivable, net | 158,485 | 340,935 |
Prepaid and other current assets | 11,700 | 59,200 |
Total Current Assets | 2,352,515 | 620,989 |
Property and equipment, net | 13,410 | 15,437 |
Goodwill | 1,352,865 | 1,352,865 |
Intangible assets, net | 496,100 | 646,284 |
Capitalized software development costs | 501,075 | 0 |
Total Assets | 4,715,965 | 2,635,575 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,427,823 | 2,067,244 |
Accrued interest - related party | 235,563 | 235,563 |
Contract liabilities | 187,916 | 193,598 |
Debt, current portion, net of debt discount | 664,029 | 0 |
Total Current Liabilities | 2,515,331 | 2,496,405 |
Long Term Liabilities | ||
Debt, less current portion | 0 | 150,000 |
Total Long-Term Liabilities | 0 | 150,000 |
Total Liabilities | 2,515,331 | 2,646,405 |
Stockholders' Equity | ||
Common stock; $0.0001 par value, 100,000,000 shares authorized, 17,051,893 and 9,311,639 shares issued and outstanding | 1,706 | 931 |
Treasury stock $0.0001 par value 37,500 shares outstanding at December 31, 2022 and December 31, 2021 | (1,350,000) | (1,350,000) |
Additional paid in capital | 215,772,945 | 211,845,452 |
Accumulated deficit | (212,224,026) | (210,507,222) |
Total Stockholders' Equity (Deficit) | 2,200,634 | (10,830) |
Total Liabilities and Stockholders' Equity | 4,715,965 | 2,635,575 |
A A And A A A Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred Stock, Value, Issued | 3 | 3 |
Preferred stock Series C [Member] | ||
Stockholders' Equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Preferred Stock Series E [Member] | ||
Stockholders' Equity | ||
Preferred Stock, Value, Issued | $ 6 | $ 6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 17,051,893 | 9,311,639 |
Common stock outstanding | 17,051,893 | 9,311,639 |
Treasury Stock par value | $ 0.0001 | $ 0.0001 |
Treasury Stock shares outstanding | 37,500 | 37,500 |
A A And A A A Preferred Stock [Member] | ||
Preferred Stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock shares authorized | 2,750,000 | 2,750,000 |
Preferred Stock shares issued | 31,413 | 31,413 |
Preferred stock shares outstanding | 31,413 | 31,413 |
Preferred stock Series C [Member] | ||
Preferred Stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock shares authorized | 1,500 | 1,500 |
Preferred Stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Preferred Stock Series E [Member] | ||
Preferred Stock par value | $ 80 | $ 80 |
Preferred Stock shares authorized | 70,000 | 70,000 |
Preferred Stock shares issued | 61,688 | 61,688 |
Preferred stock shares outstanding | 61,688 | 61,688 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 132,224 | $ 542,169 |
Cost of revenues | 62,808 | 306,127 |
Gross profit | 69,416 | 236,042 |
General and administrative expenses | 1,425,747 | 2,077,724 |
Loss from operations | (1,356,331) | (1,841,682) |
Other income (expense) | ||
Interest expense | (361,237) | (120,697) |
Interest income | 764 | 0 |
Loss on debt extinguishment, net | 0 | (477,665) |
Total other income - net | (360,473) | (598,362) |
Net loss | $ (1,716,804) | $ (2,440,044) |
Loss per share - basic | $ (0.10) | $ (0.37) |
Loss per share - diluted | $ (0.10) | $ (0.37) |
Weighted average number of shares outstanding - basic | 17,052,505 | 6,529,566 |
Weighted average number of shares outstanding - diluted | 17,052,505 | 6,529,566 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Series A A A Preferred Stock [Member] | Series E Preferred Stocks [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Common [Member] | Retained Earnings [Member] | Total |
December 31, 2021 (restated) at Dec. 31, 2021 | $ 3 | $ 6 | $ 650 | $ 206,712,907 | $ (1,350,000) | $ (202,444,894) | $ 2,918,672 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 31,413 | 61,688 | 6,460,751 | 37,500 | |||
Stock issued for services | $ 5 | 84,495 | 84,500 | ||||
Stock issued for services, shares | 50,000 | ||||||
Stock based compensation | 34,416 | 34,416 | |||||
Conversion of convertible debt to common stock and warrants | $ 145 | 2,680,020 | 2,680,165 | ||||
Conversion of convertible debt to common stock and warrants, shares | 1,443,333 | ||||||
Net Loss | (2,440,044) | (2,440,044) | |||||
Balance, at March 31, 2022 (restated) at Mar. 31, 2022 | $ 3 | $ 6 | $ 800 | 209,511,838 | $ (1,350,000) | (204,884,938) | 3,277,709 |
Shares, Outstanding, Ending Balance at Mar. 31, 2022 | 31,413 | 61,688 | 7,954,084 | 37,500 | |||
December 31, 2021 (restated) at Dec. 31, 2022 | $ 3 | $ 6 | $ 931 | 211,845,452 | $ (1,350,000) | (210,507,222) | (10,830) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2022 | 31,413 | 61,688 | 9,311,639 | 37,500 | |||
Incentive common stock shares and warrants issued with debt | $ 53 | 708,411 | 708,464 | ||||
Incentive common stock shares and warrants issued with debt, shares | 522,727 | ||||||
Common stock and pre-funded warrants issued under public offering, net of issuance costs | $ 378 | 3,207,122 | 3,207,500 | ||||
Common stock and pre-funded warrants issued under public offering, net of issuance costs, shares | 3,777,634 | ||||||
Common stock issued under cashless warrant exercises and exercise of pre-funded warrants | $ 344 | (344) | |||||
Common stock issued under cashless warrant exercises and exercise of pre-funded warrants, shares | 3,439,893 | ||||||
Stock based compensation | 12,304 | 12,304 | |||||
Net Loss | (1,716,804) | (1,716,804) | |||||
Balance, at March 31, 2022 (restated) at Mar. 31, 2023 | $ 3 | $ 6 | $ 1,706 | $ 215,772,945 | $ (1,350,000) | $ (212,224,026) | $ 2,200,634 |
Shares, Outstanding, Ending Balance at Mar. 31, 2023 | 31,413 | 61,688 | 17,051,893 | 37,500 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (1,716,804) | $ (2,440,044) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,027 | 2,341 |
Amortization of intangibles | 150,184 | 150,184 |
Amortization of debt discounts | 360,993 | 0 |
Stock-based compensation | 12,304 | 34,416 |
Provision for doubtful accounts | 19,843 | 0 |
Loss on debt extinguishment - related party | 0 | 477,665 |
Stock issued for services | 0 | 84,500 |
Changes in operating assets and liabilities | ||
Accounts receivable | 162,607 | 167,988 |
Prepaid expenses and other assets | 47,500 | 0 |
Accounts payable and accrued expenses | (639,421) | (629,276) |
Contract liabilities | (5,682) | 0 |
Net cash used in operating activities | (1,606,449) | (2,152,226) |
Investing Activities | ||
Purchase of property and equipment | 0 | (4,146) |
Increase in software development costs | (501,075) | 0 |
Net cash used in investing activities | (501,075) | (4,146) |
Financing Activities | ||
Proceeds from the issuance of debt, net of discounts and debt issuance costs | 1,011,500 | 0 |
Issuance of common stock and pre-funded warrants, net of issuance costs | 3,207,500 | 0 |
Repayment on notes payable | (150,000) | (134,164) |
Net cash provided by financing activities | 4,069,000 | (134,164) |
Net change in cash | 1,961,476 | (2,290,536) |
Cash - beginning of period | 220,854 | 5,385,245 |
Cash - end of period | 2,182,330 | 3,094,709 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 245 | 118,398 |
Cash paid for taxes | 294 | 300 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of incentive shares with debt recorded as debt discount | 122,426 | 0 |
Warrants issued with debt recorded as debt discount | 586,038 | 0 |
Common stock issued under cashless warrant exercises | 344 | 0 |
Conversion of convertible debt to common stock | $ 0 | $ 2,229,300 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Mobiquity Technologies, Inc. (“Mobiquity,” “we,” “our” or “the Company”), and its operating subsidiaries, is a next generation location data intelligence company. The Company provides precise unique, at-scale location data and insights on consumer’s real-world behavior and trends for use in marketing and research. We provide one of the most accurate and scaled solutions for mobile data collection and analysis, utilizing multiple geo-location technologies. The Company is seeking to implement several new revenue streams from its data collection and analysis, including, but not limited to, Advertising, Data Licensing, Footfall Reporting, Attribution Reporting, Real Estate Planning, Financial Forecasting and Custom Research. We also are a developer of advertising and marketing technology focused on the creation, automation, and maintenance of an advertising technology operating system (or ATOS). The ATOS platform blends artificial intelligence (or AI) and machine learning (ML) based optimization technology for automatic ad serving that manages and runs digital advertising campaigns. Mobiquity Technologies, Inc. was incorporated in the State of New York and has the following subsidiaries: Mobiquity Networks, Inc. Mobiquity Networks, Inc. is a wholly owned subsidiary of Mobiquity Technologies, Inc., commencing operations in January 2011 and incorporated in the State of New York. Mobiquity Networks started and developed as a mobile advertising technology company focused on driving foot-traffic throughout its indoor network and has evolved and grown into a next generation data intelligence company. Mobiquity Networks, Inc. operates our data intelligence platform business. Advangelists, LLC Advangelists LLC is a wholly owned subsidiary of Mobiquity Technologies, Inc., acquired through a merger transaction in December 2018, incorporated in the State of Delaware, and operates our ATOS platform business. Liquidity, Going Concern and Management’s Plans These condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, for the three months ended March 31. 2023, the Company is reporting the following: · Net loss of $ 1,716,804 · Net cash used in operations of $ 1,606,449 Additionally, at March 31, 2023, the Company is reporting the following: · Accumulated deficit of $ 212,224,026 · Stockholders’ equity of $ 2,200,634 · Working capital deficit of $ 162,816 We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company has cash on hand of $ 2,182,330 The Company has incurred significant losses since its inception in 1998 and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. There can be no assurance that profitable operations will ever be achieved, or if achieved, could be sustained on a continuing basis. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the three months ended March 31, 2023, and our current capital structure including equity-based instruments and our obligations and debts. Without sufficient revenues from operations, if the Company does not obtain additional capital, the Company will be required to reduce the scope of its business development activities or cease operations. The Company may explore obtaining additional capital financing and the Company is closely monitoring its cash balances, cash needs, and expense levels. These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these condensed consolidated financial statements are issued. These condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Management’s strategic plans include the following: · Execution of business plan focused on technology growth and improvement, · Seek out equity and/or debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders and investors will continue to advance capital to the Company or that the new business operations will be profitable. · Continuing to explore and execute prospective partnering or distribution opportunities, · Identifying unique market opportunities that represent potential positive short-term cash flow. Coronavirus (“COVID-19”) Pandemic During the year ended December 31, 2022, the Company’s financial results and operations were adversely impacted by the COVID-19 pandemic. The Company is a data location company with a specialty to drive traffic to retail stores. In the prior two (2) years, the Company suffered from the effects of the pandemic due to lack of traffic to retail stores related to mandated stay-at-home restrictions and the Company drastically curtailed its operations. The extent to which the Company’s future financial results could be impacted by the COVID-19 pandemic depends on future developments that are highly uncertain and cannot be predicted at this time. The pandemic also had an effect on the Company’s ability to attain new customers or retain existing customers, and to collect on its outstanding accounts receivable, resulting in an increase of its allowance for doubtful accounts in fiscal 2022, and the quarter ended March 31, 2023, of approximately $ 324,000 20,000 These estimates may change, as new events occur, and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. During the three months ended March 31, 2023, the Company’s financial results and operations were not materially adversely impacted by the COVID-19 pandemic. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (U.S. GAAP) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2023, and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2023, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023. Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented. Principles of Consolidation These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Business Segments and Concentrations The Company uses the “management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company manages its business as a single reporting segment. Customers in the United States accounted for 100% of our revenues. We do not have any property or equipment outside of the United States. Use of Estimates Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including stock-based compensation and deferred tax asset valuation allowance, and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material. Risks and Uncertainties The Company operates in an industry that is subject to intense competition and changes in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks and the potential of overall business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and net earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s service offerings. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Fair Value of Financial Instruments The Company accounts for financial instruments at fair value, which as is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value: · Level 1—Valuation based on unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access; · Level 2—Valuation based on observable quoted prices for similar assets and liabilities in active markets; and · Level 3—Valuation based on unobservable inputs that are supported by little or no market activity, which require management’s best estimate of what market participants would use as fair value. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include accounts receivable, accounts payable and accrued expenses, and contract liabilities. On March 31, 2023, and December 31, 2022, the carrying amounts of these financial instruments approximated their fair values due to the short-term nature of these instruments. The fair value of the Company’s debt approximates its carrying value based on current financing rates available to the Company and its short-term nature. The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2, or Level 3 instruments. Cash and Cash Equivalents and Concentrations of Risk For purposes of presentation in the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. On March 31, 2023, and December 31, 2022, the Company did not have any cash equivalents. The Company is exposed to credit risk on its cash in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Company (FDIC), which is $250,000. As of March 31, 2023, and December 31, 2022, the Company had not experienced any losses on cash balances in excess of the FDIC insured limits. Any loss incurred or a lack of access to funds could have a significant impact on the Company’s consolidated financial condition, results of operations, and cash flows. At March 31, 2023, the Company exceeded FDIC insured limits by approximately $ 1,925,000 no For the three months ended March 31, 2023, and year ended December 31, 2022, sales of our products to two and four customers generated approximately 55 52 Accounts Receivable Accounts receivable represent customer obligations under normal trade terms and are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral. Four and six of our customers combined accounted for approximately 53 42 The Company had net accounts receivable of $ 158,485 340,935 Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for doubtful accounts. The Company provides its allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made. The allowance for doubtful accounts was approximately $ 1,111,000 1,091,000 Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations. Impairment of Long-lived Assets Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of Accounting Standards Codification (ASC) 360-10-35-15 Impairment or Disposal of Long-Lived Assets. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in current results of operations. Goodwill The Company’s goodwill represents the excess of the consideration transferred for the acquisition of Advangelists, LLC in December 2018 over the fair value of the underlying identifiable net assets acquired. Goodwill is not amortized but instead, it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge in an amount equal to the excess of the reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill as of December 31st of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available, (ii) engage in business activities, and (iii) whether a segment manager regularly reviews the component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has one reporting unit as of March 31, 2023 and December 31, 2022. No Intangible Assets The majority of the Company’s intangible assets consist of customer relationship and the ATOS platform technology obtained through its acquisition of Advangelists LLC. The Company amortizes its identifiable definite-lived intangible assets over an estimated useful life of 5 Software Development Costs In accordance with ASC 985-20, Costs of Software to Be Sold, Leased, or Marketed 501,075 No Derivative Financial Instruments The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, (ASC 480), Distinguishing Liabilities from Equity Derivatives and Hedging In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Terms of financial instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required to be accounted for separately from the host contract under ASC 815 and ASU 2020-06 and recorded on the balance sheet at fair value. Derivative liabilities are remeasured to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations. The Company generally incorporates a binomial model to determine fair value. Upon conversion of a debt instrument where an embedded conversion option has been bifurcated and accounted for separately as a derivative liability, the Company records the resulting shares issued at fair value, derecognizes all related debt principal, derivative liability, and debt discount, and recognizes a net gain or loss on debt extinguishment. Equity instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. As of March 31, 2023 and December 31, 2022, the Company had no Debt Issuance Costs and Debt Discounts Debt discounts, debt issuance costs paid to lenders or third parties, and other original issue discounts on debt, are recorded as debt discount or debt issuance costs and amortized to interest expense in the condensed consolidated statements of operations, over the term of the underlying debt instrument, using the effective interest method, with the unamortized portion reported net with related principal outstanding on the condensed consolidated balance sheet. For the quarter ended March 31, 2023, the Company recorded $ 360,993 773,471 Revenue Recognition The Company’s revenues are generated from internet advertising, the Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers Identify the contract with a customer. A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Identify the performance obligations in the contract. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services (performance obligations), the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. Currently, the Company does not have any contracts that contain multiple performance obligations. Determine the transaction price. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts as of March 31, 2023 and December 31, 2022 contained a significant financing component. Allocate the transaction price to performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. Recognize revenue when or as the Company satisfies a performance obligation. The Company satisfies performance obligations at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised service to a customer. Under both managed services arrangements or self-service arrangements, the Company’s promised services under the contracts include identification, bidding and purchasing of advertisement opportunities. The Company also generally has discretion in establishing the pricing of the ads. Since the Company is controlling the promise to deliver the contracted services, the Company is considered the principal in all arrangements for revenue recognition purposes. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 90 days. Contract Liabilities Contract liabilities represent deposits made by customers before the satisfaction of performance obligations and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized. As of March 31, 2023 and December 31, 2022, there were $ 187,916 193,598 Revenues All revenues recognized were derived from internet advertising for the quarter ended March 31, 2023, and the year ended December 31, 2022. Advertising Advertising costs are expensed as incurred. Advertising costs are included as a component of general and administrative expenses in the consolidated statements of operations. The Company incurred $ 259 no Stock-Based Compensation The Company accounts for our stock-based compensation, including stock options and common stock warrants, under ASC 718 Compensation – Stock Compensation, In connection with certain financing, consulting and collaboration arrangements, the Company may issue warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The fair value of stock-based compensation is generally determined using the Black-Scholes valuation model as of the date of the grant or the date at which the performance of the services is completed (measurement date). When determining fair value of stock-based compensation, the Company considers the following assumptions in the Black-Scholes model: · Exercise price, · Expected dividends, · Expected volatility, · Risk-free interest rate; and · Expected life of option Income Taxes The Company accounts for income tax using the asset and liability method prescribed by ASC 740, Income Taxes . The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740. Using that guidance, tax positions initially need to be recognized in the condensed consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of March 31, 2023 and December 31, 2022, the Company did not identify any uncertain tax positions that qualify for either recognition or disclosure in the condensed consolidated financial statements. The Company recognizes interest and penalties, if any, related to recognized uncertain income tax positions, in other expense. No interest and penalties related to uncertain income tax positions were recorded for the three months ended March 31, 2023 and 2022. Open tax years subject to examination by the Internal Revenue Service generally remain open for three years from the filing date. Tax years subject to examination by the state jurisdictions generally remain open for up to four years from the filing date. Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Reclassifications Certain reclassifications were made to the 2022 condensed consolidated financial statements to conform to 2023 presentation. Recent Issued Accounting Pronouncements We consider the applicability and impact of all new accounting pronouncements on our consolidated financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as issued by the Financial Accounting Standards Board (FASB) through the date these condensed consolidated financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective, that when adopted, will have a material impact on the condensed consolidated financial statements of the Company. Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: Recently Adopted Accounting Pronouncements Financial Instrument – Credit Losses: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Accounting for Contract Assets and Contract Liabilities from Contracts with Customers: Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 3 – INTANGIBLE ASSETS Definite-Lived Intangible Asset The definite-lived intangible asset is a customer relationship asset also acquired through the Advangelists, LLC acquisition. The customer relationship intangible asset is being amortized over its estimated useful life of five years. The Company periodically evaluates the reasonableness of the useful lives of these assets. These assets are also reviewed for impairment or obsolescence when events or circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Schedule of intangible assets Useful Lives March 31, 2023 December 31, 2022 Customer relationship 5 $ 3,003,676 $ 3,003,676 Less accumulated amortization (2,507,576 ) (2,357,392 ) Net carrying value $ 496,100 $ 646,284 During each of the three months ended March 31, 2023 and 2022, the Company recognized $ 150,184 Future amortization of the customer relationship asset, for years ending December 31, is as follows: Schedule of future accumulated amortization 2023 $ 450,552 2024 45,548 Total $ 496,100 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 4 – DEBT Following is a summary of debt outstanding at March 31, 2023 and December 31, 2022: Summary of long term debt March 31, December 31, Small Business Administration Loan (a) $ – $ 150,000 Note payable (b) 1,437,500 – Total debt 1,437,500 150,000 Less: unamortized debt discounts (773,471 ) – Current portion of debt, net of debt discounts 664,029 – Long-term portion of debt $ – $ 150,000 (a) In June 2020, the Company received an Economic Injury Disaster Loan of $ 150,000 3.7 731 13,594 163,885 (b) On December 30, 2022, the Company and Walleye Opportunities Master Fund Ltd, a Cayman Islands company (the “Investor”), entered into a Securities Purchase Agreement (the “Agreement”) for the Investor to purchase from the Company (i) a senior secured 20% original issue discount (OID) nine-month promissory note in an aggregate gross principal amount of $ 1,437,500 287,500 1,150,000 2,613,636 0.44 December 30, 2027 In conjunction with the Agreement, the Company issued 522,727 138,500 1,011,500 164,000 The Investor Note will only become convertible into common stock upon the occurrence of an Event of Default under and as defined in the Investor Note on terms set forth in the Investor Note. This Investor Note matures and is payable on or before September 30, 2023, and it provides that the Investor may demand prepayment after March 31, 2023 and before the maturity date, provided that the purchasers of securities in a future public offering by the Company, as defined in the Agreement, who hold the purchased Company securities at the time the prepayment demand, unanimously consent to the prepayment. The Company granted a security interest in all of its assets to the Investor as collateral for its obligations under the Investor Note pursuant to a Security Agreement. In addition, the Company’s subsidiaries guaranteed the obligations of the Company under the Investor Note pursuant to a Subsidiary Guarantee and granted a first lien security interest in all of their assets to the Investor as additional collateral pursuant to the Security Agreement. All securities sold in the above-described transaction contain certain piggy-back registration rights after the completion of our February 2023 offering (see Note 5). The aforementioned Investor Warrant was deemed to be an equity-classified derivative instrument with a fair value of $ 1,526,363 318,863 1,150,000 586,040 122,426 287,500 138,500 1,134,466 360,993 773,471 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY The Company’s authorized capital stock consists of 105,000,000 shares, comprised of 100,000,000 0.0001 Of the 5,000,000 shares of preferred stock authorized, the Board of Directors has designated the following: · 1,500,000 none · 1,250,000 31,413 · 1,250 · 1,500 none · 2 · 70,000 61,688 Rights Under Preferred Stock The Company’s classes of preferred stock include the following provisions: Optional Conversion Rights · Series AA preferred stock – one share convertible into 50 · Series AAA preferred stock – one share convertible into 100 · Series C preferred stock – one share convertible into 100,000 · Series E preferred stock – one share at a rate of Stated Value, as defined, divided by $ 0.08 Redemption Rights Series E preferred stock is redeemable at any time upon 30 days written notice by the Company and the holders, at a rate of 100% of the Stated Value, as defined. Warrant Coverage Series C preferred stock carries 100% warrant coverage upon preferred stock conversion, warrants exercisable through September 20, 2023 at an exercise price of $ 0.12 No further voting, dividend or liquidation preference rights February 2023 Public Offering On February 13, 2023, the Company entered into an underwriting agreement (the Underwriting Agreement) with Spartan Capital Securities, LLC (the Underwriter) relating to a public offering of 3,777,634 4,286,883 3,207,500 12,096,776 0.465 Each pre-funded warrant is exercisable at any time, until fully exercised, to purchase one share of common stock at an exercise price of $ 0.0001 0.465 36,290,322 Pursuant to the terms of the Underwriter agreement, and as partial consideration to the Underwriter – Spartan Capital Securities, LLC, the Company issued Spartan warrants for the purchase of 403,226 0.5115 1,814,517 242,500 Between the closing of the February 2023 Offering and March 31, 2023, one or more investors holding pre-funded warrants converted their pre-funded warrants into 3,036,667 806,451 403,226 1,250,216 11,290,325 Subsequent to March 31, 2023, the remaining 1,250,216 shares of pre-funded warrants were exercised, resulting in the issuance of 1,250,216 shares of common stock in April 2023. Also, subsequent to March 31, 2023, an additional 8,870,969 shares of the Series 2023 Warrants were exercised under the alternative cashless exercise provision, resulting in the issuance of 4,435,485 Shares Issued for Services During the quarter ended March 31, 2022, the Company issued 50,000 84,500 No Shares issued upon conversion of debt: During the quarter ended March 31, 2022, Dr. Gene Salkind, his wife, and a trust converted an aggregate of $ 2,052,500 1,368,333 684,166 491,915 The Company also converted $ 150,000 75,000 14,250 No |
STOCK OPTION PLANS AND WARRANTS
STOCK OPTION PLANS AND WARRANTS | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTION PLANS AND WARRANTS | NOTE 6 – STOCK OPTION PLANS AND WARRANTS Stock Options During Fiscal 2005, the Company established, and the stockholders approved, an Employee Benefit and Consulting Services Compensation Plan (the “2005 Plan”) for the granting of up to 5,000 non-statutory and incentive stock options and stock awards to directors, officers, consultants and key employees of the Company. On June 9, 2005, the Board of Directors amended the Plan to increase the number of stock options and awards to be granted under the Plan to 10,000 shares. During Fiscal 2009, the Company established a plan of long-term stock-based compensation incentives for selected Eligible Participants of the Company covering 10,000 shares. This plan was adopted by the Board of Directors and approved by stockholders in October 2009 (the “2009 Plan”). In September 2013, the Company’s stockholders approved an increase in the number of shares covered by the 2009 Plan to 25,000 shares. In the first quarter of 2016, the Board approved, and stockholders ratified a 2016 Employee Benefit and Consulting Services Compensation Plan covering 25,000 shares (the “2016 Plan”) and approved moving all options which exceeded the 2009 Plan limits to the 2016 Plan. In December 2018, the Board of Directors adopted and in February 2019 the stockholders ratified the 2018 Employee Benefit and Consulting Services Compensation Plan covering 75,000 shares (the “2018 Plan”). On April 2, 2019, the Board approved the “2019 Plan” identical to the 2018 Plan, except that the 2019 Plan covers 150,000 shares. The 2019 Plan required stockholder approval by April 2, 2020, to be able to grant incentive stock options under the 2019 Plan. On October 13, 2021, the Board approved the “2021 Plan” identical to the 2018 Plan, except that the 2019 Plan covers 1,100,000 post-split shares. The 2021 Plan required stockholder approval by October 13, 2022, to be able to grant incentive stock options under the 2021 Plan. The 2005 Plan, 2009 Plan, 2016 Plan, 2018 Plan, 2019 Plan and 2021 Plan are collectively referred to as the “Plans.” In March of 2022, Anne S. Provost was elected to the board of directors and was granted 25,000 4.57 In April of 2022, Dean Julia was granted 12,500 1.55 In March of 2023, Nate Knight was granted 25,000 0.22 All stock options under the Plans are granted at or above the fair market value of the common stock at the grant date. Employee and non-employee stock options vest over varying periods and generally expire either 5 or 10 years from the grant date. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. For option grants, the Company will take into consideration payments subject to Stock Compensation. Schedule of assumptions used Quarter Ended 2023 2022 Expected volatility 165.43 79.95 Expected dividend yield – – Risk-free interest rate 3.73 2.14 Expected term (in years) 5 10 Schedule of options outstanding Share Weighted Weighted Aggregate Intrinsic Outstanding, January 1, 2023 1,162,722 $ 16.22 7.44 $ – Granted 25,000 $ 0.22 4.98 – Exercised – – – – Cancelled & expired (48,375 ) – – – Outstanding, March 31, 2023 1,139,347 $ 15.69 7.46 $ – Options exercisable, March 31, 2023 1,131,124 $ 15.63 7.45 $ – The weighted-average grant-date fair value of options granted during the three months ended March 31, 2023 was $ 0.22 The aggregate intrinsic value of options outstanding and options exercisable on March 31, 2023, is calculated as the difference between the exercise price of the underlying options and the market price of the Company's common stock for the shares that had exercise prices lower than the $ 0.18 12,304 34,416 As of March 31, 2023, the unamortized compensation cost related to unvested stock option awards is $ 5,688 Warrants During the three months ended March 31, 2023, the Company issued a total of 19,400,521 2,613,636 16,786,885 4,286,883 February 14, 2028 The weighted average assumptions made in calculating the fair value of warrants granted during the three months ended March 31, 2023, and 2022 are as follows: Schedule of warrant assumptions Quarters Ended March 31, 2023 2022 Expected volatility 172.63 75.87 Expected dividend yield – – Risk-free interest rate 3.85 2.03 Expected term (in years) 5.00 6.25 Schedule of warrants outstanding Share Weighted Weighted Aggregate Intrinsic Outstanding, January 1, 2023 4,683,800 $ 13.01 4.73 $ – Granted 19,400,521 $ 0.24 2.83 $ 212,537 Exercised* (3,843,118 ) $ 0.47 – $ – Outstanding, March 31, 2023 20,241,203 $ 3.34 4.74 $ 212,537 Warrants exercisable, March 31, 2023 17,627,567 $ 4.09 4.77 $ 212,537 * Includes 3,036,667 of pre-funded warrants with a purchase price of $0.47, paid upon grant of warrants issued in the February 2023 Offering. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 7: EARNINGS (LOSS) PER SHARE Pursuant to ASC 260, Earnings Per Share, Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares may consist of common stock issuable for stock options and warrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutive in the future. In the event of a net loss, diluted loss per share is the same as basic loss per share since the effect of the potential common stock equivalents upon conversion would be anti-dilutive. The following potentially dilutive equity securities outstanding as of March 31, 2023, and December 31, 2022, are as follows: Schedule of anti dilutive securities March 31, 2023 December 31, 2022 Convertible notes payable and accrued interest – 58,891 Stock options 1,139,347 1,162,721 Warrants 20,241,203 4,682,551 Total common stock equivalents 21,380,550 5,904,163 |
LITIGATION
LITIGATION | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | NOTE 8 – LITIGATION The Company may be involved in lawsuits in the normal course of business. Management cannot predict the outcome of the lawsuits or estimate the amount of any loss that may result. Accordingly, no provision for any contingent liabilities that may result has been made in the financial statements. Management believes that losses resulting from these matters, if any, would not have a material adverse effect on the financial position or results of operations of the Company. See further discussion at Note 10. |
NASDAQ LISTING REQUIREMENTS
NASDAQ LISTING REQUIREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Nasdaq Listing Requirements | |
NASDAQ LISTING REQUIREMENTS | NOTE 9 – NASDAQ LISTING REQUIREMENTS Our common stock and 2021 Warrants are listed on the NasdaqCM. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply with the applicable listing standards. On January 13, 2023, we received a letter from The Nasdaq Stock Market stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock was below $1.00 per share for 30 consecutive business days. Pursuant to Nasdaq’s Listing Rules, the Company has a 180-day grace period, until July 12, 2023, during which the Company may regain compliance if the bid price of its common stock closes at $1.00 per share or more for a minimum of ten consecutive business days. If we do not regain compliance with the bid price requirement, we may be eligible for an additional 180-calendar day compliance period so long as we satisfy the criteria for initial listing on the NasdaqCM and the continued listing requirement for market value of publicly held shares and we provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. A reverse stock split requires the approval of our shareholders, and we cannot assure that we will receive the requisite shareholder vote to allow us to effectuate a stock split. In the event we are not eligible for the second grace period, the Nasdaq staff will provide written notice that our Common Stock is subject to delisting; however, we may request a hearing before the Nasdaq Hearings Panel, which request, if timely made, would stay any further suspension or delisting action by the Nasdaq pending the conclusion of the hearing process and expiration of any extension that may be granted by the Hearings Panel. On January 4, 2023, we received a deficiency notification from the Listing Qualifications Department of The NasdaqCM notifying the Company of its noncompliance with the NasdaqCM Listing Rule 5620(a) to hold an annual meeting of shareholders within no later than one year after the end of the Company’s fiscal year end. Under NasdaqCM Rules the Company now has 45 calendar days to submit a plan to regain compliance and can grant up to 180 calendar days from the fiscal year end, or until June 29, 2023, to regain compliance. On December 14, 2022, we received a deficiency letter from the Listing Qualifications Department of The NasdaqCM notifying the Company of its noncompliance with the NasdaqCM Listing Rule 5550(b)(1) for the NasdaqCM, which requires that a listed company’s stockholders’ equity be at least $2.5 million. In accordance with NasdaqCM rules, the Company has 45 calendar days from the date of the notification to submit a plan to regain compliance with NasdaqCM Listing Rule 5550(b)(1). The Company intends to submit a compliance plan within 45 days of the date of the notification and will evaluate available options to resolve the deficiency and regain compliance. If the Company’s compliance plan is accepted, the Company may be granted up to 180 calendar days from December 14, 2022, to evidence compliance. In order to maintain the listing of its common stock on The NasdaqCM, the Company must demonstrate compliance with Listing Rule 5550(b)(1) which requires the Company to maintain: (1) Stockholders’ equity of at least $2.5 million; or (2) Market Value of Listed Securities of at least $35 million. The Company’s plan of compliance outlined a plan for compliance with the stockholders’ equity standard requirement by completing the recently completed February 2023 Offering. (see Note 5). As the net proceeds of the recently completed offering was approximately $3,207,500, which is lower than the amount anticipated, the Company will likely need to raise additional capital and to amend its plan of compliance. The Company intends to regain compliance with each of the applicable continued listing requirements of The NasdaqCM prior to the end of the compliance periods set forth in the Hearings Panel decision. However, until Nasdaq has reached a final determination that the Company has regained compliance with all of the applicable continued listing requirements, there can be no assurances regarding the continued listing of the Company’s common stock and 2021 Warrants on Nasdaq. If our common stock and 2021 Warrants cease to be listed for trading on the NasdaqCM, we would expect that our Common Stock and 2021 Warrants would be traded on one of the three tiered marketplaces of the OTC Markets Group. If Nasdaq were to delist our common stock and 2021 Warrants, it would be more difficult for our stockholders to dispose of our common stock or 2021 Warrants and more difficult to obtain accurate price quotations on our common stock or 2021 Warrants. The delisting of the Company’s common stock and 2021 Warrants from Nasdaq would have a material adverse effect on the Company’s access to capital markets, and any limitation on market liquidity or reduction in the price of its common stock as a result of that delisting would adversely affect the Company’s ability to raise capital on terms acceptable to the Company, if at all. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS In April 2023, the Compensation Committee of the Company’s Board of Directors approved the following transactions: Equity Transactions · Grant of 100,000 shares of restricted common stock to Gene Salkind, Chairman of the Board, for services previously rendered, based on a per share value of $0.167. Such shares are restricted from transfer until February 13, 2024. · Grant of 50,000 shares of restricted common stock each to the Company’s CEO and another member of the Board of Directors for services as directors of the Company. Such shares are restricted from transfer until February 13, 2024. · Grant of 30,000 shares of common stock to Mr. Salkind as payment for accrued and unpaid interest of approximately $5,000 based on a per share value of $0.167. · Grant of 71,856 shares of restricted common stock to the Company’s legal counsel as payment for accrued and unpaid services valued at $12,000 and $0.167 per share. Such shares are restricted from transfer until February 13, 2024. · Issuance of 1,562,133 shares of restricted common stock at a per share value of $0.17 as payment and full settlement of outstanding accounts payable with a total carrying amount of $265,563. · Grant of 25,000 stock options to a member of the Board of Directors in April 2023 with a term of five years and exercise price of $0.22 per share. The effects on the Company’s consolidated financial statements included an increase in stockholders’ equity of $282,573. Subsequent to March 31, 2023, the remaining 1,250,216 shares of pre-funded warrants were exercised, resulting in the issuance of 1,250,216 shares of common stock in April 2023. Also, subsequent to March 31, 2023, an additional 8,870,969 shares of the Series 2023 Warrants were exercised under the alternative cashless exercise provision, resulting in the issuance of 4,435,485 shares of common stock in April 2023. Litigation Michael Trepeta, a former Co-CEO and director of the Company, filed a lawsuit against the Company and its subsidiary, Mobiquity Networks in April 2023 in the New York State Supreme Court, Nassau County. The claims stem from a Separation Agreement and Release that Mr. Trepeta and the Company entered into six years ago in April 2017 which terminated Mr. Trepeta’s employment agreement and discontinued his employment and directorship with the Company, among other things, by mutual agreement. Mr. Trepeta also gave the Company a release in the Separation Agreement and Release. Mr. Trepeta has claimed that the Company fraudulently induced him to enter into the Separation Agreement and Release; that the Company breached Mr. Trepeta’s employment agreement; and that the Company breached its covenant of good faith and fair dealing and its fiduciary duty. Mr. Trepeta is claiming not less than $2.5 Million in damages. Based on the Company’s initial internal review of the situation, the Company believes the claims lack merit and it intends to vigorously defend same. Due to uncertainties inherent in litigation, the Company cannot predict the outcome of this matter at this time. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (U.S. GAAP) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2023, and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2023, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023. Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented. |
Principles of Consolidation | Principles of Consolidation These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. |
Business Segments and Concentrations | Business Segments and Concentrations The Company uses the “management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company manages its business as a single reporting segment. Customers in the United States accounted for 100% of our revenues. We do not have any property or equipment outside of the United States. |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including stock-based compensation and deferred tax asset valuation allowance, and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material. |
Risks and Uncertainties | Risks and Uncertainties The Company operates in an industry that is subject to intense competition and changes in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks and the potential of overall business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and net earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s service offerings. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for financial instruments at fair value, which as is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value: · Level 1—Valuation based on unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access; · Level 2—Valuation based on observable quoted prices for similar assets and liabilities in active markets; and · Level 3—Valuation based on unobservable inputs that are supported by little or no market activity, which require management’s best estimate of what market participants would use as fair value. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include accounts receivable, accounts payable and accrued expenses, and contract liabilities. On March 31, 2023, and December 31, 2022, the carrying amounts of these financial instruments approximated their fair values due to the short-term nature of these instruments. The fair value of the Company’s debt approximates its carrying value based on current financing rates available to the Company and its short-term nature. The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2, or Level 3 instruments. |
Cash and Cash Equivalents and Concentrations of Risk | Cash and Cash Equivalents and Concentrations of Risk For purposes of presentation in the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. On March 31, 2023, and December 31, 2022, the Company did not have any cash equivalents. The Company is exposed to credit risk on its cash in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Company (FDIC), which is $250,000. As of March 31, 2023, and December 31, 2022, the Company had not experienced any losses on cash balances in excess of the FDIC insured limits. Any loss incurred or a lack of access to funds could have a significant impact on the Company’s consolidated financial condition, results of operations, and cash flows. At March 31, 2023, the Company exceeded FDIC insured limits by approximately $ 1,925,000 no For the three months ended March 31, 2023, and year ended December 31, 2022, sales of our products to two and four customers generated approximately 55 52 |
Accounts Receivable | Accounts Receivable Accounts receivable represent customer obligations under normal trade terms and are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral. Four and six of our customers combined accounted for approximately 53 42 The Company had net accounts receivable of $ 158,485 340,935 Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for doubtful accounts. The Company provides its allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made. The allowance for doubtful accounts was approximately $ 1,111,000 1,091,000 Bad debt expense (recovery) is recorded as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of Accounting Standards Codification (ASC) 360-10-35-15 Impairment or Disposal of Long-Lived Assets. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. No |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets. Expenditures for repairs and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in current results of operations. |
Goodwill | Goodwill The Company’s goodwill represents the excess of the consideration transferred for the acquisition of Advangelists, LLC in December 2018 over the fair value of the underlying identifiable net assets acquired. Goodwill is not amortized but instead, it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge in an amount equal to the excess of the reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill as of December 31st of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available, (ii) engage in business activities, and (iii) whether a segment manager regularly reviews the component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has one reporting unit as of March 31, 2023 and December 31, 2022. No |
Intangible Assets | Intangible Assets The majority of the Company’s intangible assets consist of customer relationship and the ATOS platform technology obtained through its acquisition of Advangelists LLC. The Company amortizes its identifiable definite-lived intangible assets over an estimated useful life of 5 |
Software Development Costs | Software Development Costs In accordance with ASC 985-20, Costs of Software to Be Sold, Leased, or Marketed 501,075 No |
Derivative Financial Instruments | Derivative Financial Instruments The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, (ASC 480), Distinguishing Liabilities from Equity Derivatives and Hedging In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Terms of financial instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required to be accounted for separately from the host contract under ASC 815 and ASU 2020-06 and recorded on the balance sheet at fair value. Derivative liabilities are remeasured to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations. The Company generally incorporates a binomial model to determine fair value. Upon conversion of a debt instrument where an embedded conversion option has been bifurcated and accounted for separately as a derivative liability, the Company records the resulting shares issued at fair value, derecognizes all related debt principal, derivative liability, and debt discount, and recognizes a net gain or loss on debt extinguishment. Equity instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. As of March 31, 2023 and December 31, 2022, the Company had no |
Debt Issuance Costs and Debt Discounts | Debt Issuance Costs and Debt Discounts Debt discounts, debt issuance costs paid to lenders or third parties, and other original issue discounts on debt, are recorded as debt discount or debt issuance costs and amortized to interest expense in the condensed consolidated statements of operations, over the term of the underlying debt instrument, using the effective interest method, with the unamortized portion reported net with related principal outstanding on the condensed consolidated balance sheet. For the quarter ended March 31, 2023, the Company recorded $ 360,993 773,471 |
Revenue Recognition | Revenue Recognition The Company’s revenues are generated from internet advertising, the Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers Identify the contract with a customer. A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Identify the performance obligations in the contract. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services (performance obligations), the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. Currently, the Company does not have any contracts that contain multiple performance obligations. Determine the transaction price. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts as of March 31, 2023 and December 31, 2022 contained a significant financing component. Allocate the transaction price to performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. Recognize revenue when or as the Company satisfies a performance obligation. The Company satisfies performance obligations at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised service to a customer. Under both managed services arrangements or self-service arrangements, the Company’s promised services under the contracts include identification, bidding and purchasing of advertisement opportunities. The Company also generally has discretion in establishing the pricing of the ads. Since the Company is controlling the promise to deliver the contracted services, the Company is considered the principal in all arrangements for revenue recognition purposes. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 90 days. Contract Liabilities Contract liabilities represent deposits made by customers before the satisfaction of performance obligations and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized. As of March 31, 2023 and December 31, 2022, there were $ 187,916 193,598 Revenues All revenues recognized were derived from internet advertising for the quarter ended March 31, 2023, and the year ended December 31, 2022. |
Advertising | Advertising Advertising costs are expensed as incurred. Advertising costs are included as a component of general and administrative expenses in the consolidated statements of operations. The Company incurred $ 259 no |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for our stock-based compensation, including stock options and common stock warrants, under ASC 718 Compensation – Stock Compensation, In connection with certain financing, consulting and collaboration arrangements, the Company may issue warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The fair value of stock-based compensation is generally determined using the Black-Scholes valuation model as of the date of the grant or the date at which the performance of the services is completed (measurement date). When determining fair value of stock-based compensation, the Company considers the following assumptions in the Black-Scholes model: · Exercise price, · Expected dividends, · Expected volatility, · Risk-free interest rate; and · Expected life of option |
Income Taxes | Income Taxes The Company accounts for income tax using the asset and liability method prescribed by ASC 740, Income Taxes . The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740. Using that guidance, tax positions initially need to be recognized in the condensed consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of March 31, 2023 and December 31, 2022, the Company did not identify any uncertain tax positions that qualify for either recognition or disclosure in the condensed consolidated financial statements. The Company recognizes interest and penalties, if any, related to recognized uncertain income tax positions, in other expense. No interest and penalties related to uncertain income tax positions were recorded for the three months ended March 31, 2023 and 2022. Open tax years subject to examination by the Internal Revenue Service generally remain open for three years from the filing date. Tax years subject to examination by the state jurisdictions generally remain open for up to four years from the filing date. |
Related Parties | Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. |
Reclassifications | Reclassifications Certain reclassifications were made to the 2022 condensed consolidated financial statements to conform to 2023 presentation. |
Recent Issued Accounting Pronouncements | Recent Issued Accounting Pronouncements We consider the applicability and impact of all new accounting pronouncements on our consolidated financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as issued by the Financial Accounting Standards Board (FASB) through the date these condensed consolidated financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective, that when adopted, will have a material impact on the condensed consolidated financial statements of the Company. Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Instrument – Credit Losses: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Accounting for Contract Assets and Contract Liabilities from Contracts with Customers: Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets Useful Lives March 31, 2023 December 31, 2022 Customer relationship 5 $ 3,003,676 $ 3,003,676 Less accumulated amortization (2,507,576 ) (2,357,392 ) Net carrying value $ 496,100 $ 646,284 |
Schedule of future accumulated amortization | Schedule of future accumulated amortization 2023 $ 450,552 2024 45,548 Total $ 496,100 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of long term debt | Summary of long term debt March 31, December 31, Small Business Administration Loan (a) $ – $ 150,000 Note payable (b) 1,437,500 – Total debt 1,437,500 150,000 Less: unamortized debt discounts (773,471 ) – Current portion of debt, net of debt discounts 664,029 – Long-term portion of debt $ – $ 150,000 |
STOCK OPTION PLANS AND WARRAN_2
STOCK OPTION PLANS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of assumptions used | Schedule of assumptions used Quarter Ended 2023 2022 Expected volatility 165.43 79.95 Expected dividend yield – – Risk-free interest rate 3.73 2.14 Expected term (in years) 5 10 |
Schedule of options outstanding | Schedule of options outstanding Share Weighted Weighted Aggregate Intrinsic Outstanding, January 1, 2023 1,162,722 $ 16.22 7.44 $ – Granted 25,000 $ 0.22 4.98 – Exercised – – – – Cancelled & expired (48,375 ) – – – Outstanding, March 31, 2023 1,139,347 $ 15.69 7.46 $ – Options exercisable, March 31, 2023 1,131,124 $ 15.63 7.45 $ – |
Schedule of warrant assumptions | Schedule of warrant assumptions Quarters Ended March 31, 2023 2022 Expected volatility 172.63 75.87 Expected dividend yield – – Risk-free interest rate 3.85 2.03 Expected term (in years) 5.00 6.25 |
Schedule of warrants outstanding | Schedule of warrants outstanding Share Weighted Weighted Aggregate Intrinsic Outstanding, January 1, 2023 4,683,800 $ 13.01 4.73 $ – Granted 19,400,521 $ 0.24 2.83 $ 212,537 Exercised* (3,843,118 ) $ 0.47 – $ – Outstanding, March 31, 2023 20,241,203 $ 3.34 4.74 $ 212,537 Warrants exercisable, March 31, 2023 17,627,567 $ 4.09 4.77 $ 212,537 * Includes 3,036,667 of pre-funded warrants with a purchase price of $0.47, paid upon grant of warrants issued in the February 2023 Offering. |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of anti dilutive securities | Schedule of anti dilutive securities March 31, 2023 December 31, 2022 Convertible notes payable and accrued interest – 58,891 Stock options 1,139,347 1,162,721 Warrants 20,241,203 4,682,551 Total common stock equivalents 21,380,550 5,904,163 |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Net loss | $ 1,716,804 | $ 2,440,044 | ||
Net cash used in operations | 1,606,449 | 2,152,226 | ||
Accumulated deficit | 212,224,026 | $ 210,507,222 | ||
Total Stockholders' Equity | 2,200,634 | $ 3,277,709 | (10,830) | $ 2,918,672 |
Working Capital | 162,816 | |||
Cash on hand | 2,182,330 | |||
Increase in allowance for doubtful accounts | 20,000 | $ 324,000 | ||
Liquidity Going Concern And Managements Plans [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Net cash used in operations | $ 1,606,449 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Product Information [Line Items] | |||
FDIC insured limits | $ 1,925,000 | $ 0 | |
Net accounts receivable | 158,485 | 340,935 | |
Accounts Receivable, Allowance for Credit Loss | 1,111,000 | 1,091,000 | |
Impairments | 0 | 0 | |
Impairment of goodwill | 0 | 0 | |
Capitalized software development costs | 501,075 | 0 | |
Amortization on software development costs | 0 | ||
Derivative liabilities | 0 | 0 | |
Amortization of debt discounts | 360,993 | $ 0 | |
Unamortized debt discounts | 773,471 | 0 | |
Contract liabilities | 187,916 | 193,598 | |
Advertising Expense | 259 | $ 0 | |
Debt [Member] | |||
Product Information [Line Items] | |||
Amortization of debt discounts | 360,993 | ||
Unamortized debt discounts | $ 773,471 | ||
Customer Relationships [Member] | |||
Product Information [Line Items] | |||
Useful life | 5 years | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 55% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 53% | 52% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Six Customers [Member] | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 42% |
INTANGIBLE ASSETS (Details - In
INTANGIBLE ASSETS (Details - Intangible assets) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (2,507,576) | $ (2,357,392) |
Intangible assets, net | $ 496,100 | 646,284 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Intangible asset, gross | $ 3,003,676 | $ 3,003,676 |
INTANGIBLE ASSETS (Details - Ac
INTANGIBLE ASSETS (Details - Accumulated amortization schedule) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 450,552 | |
2024 | 45,548 | |
Total | $ 496,100 | $ 646,284 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 150,184 | $ 150,184 |
DEBT (Details - long term debt
DEBT (Details - long term debt outstanding) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Less: unamortized debt discounts | $ (773,471) | $ 0 |
Current portion of debt, net of debt discounts | 664,029 | 0 |
Long-term portion of debt | 0 | 150,000 |
Small Business Administration [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | 0 | 150,000 |
Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | 1,437,500 | 0 |
Total Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | $ 1,437,500 | $ 150,000 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Jan. 05, 2023 | Dec. 30, 2022 | Jun. 30, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||
Shares issued | 0 | |||||
Issuance of incentive shares with debt recorded as debt discount | $ 122,426 | $ 0 | ||||
Amortization of debt discounts | 360,993 | $ 0 | ||||
Unamortized debt discounts | 773,471 | $ 0 | ||||
Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from loans | $ 164,000 | $ 150,000 | ||||
Interest rate | 3.70% | |||||
Principal | $ 731 | |||||
Interest | $ 731 | |||||
Accrued and unpaid interest | $ 13,594 | |||||
Payment for loan | $ 163,885 | |||||
Principal amount | 1,437,500 | |||||
Subscription amount | $ 1,150,000 | |||||
Warrant purchased | 2,613,636 | |||||
Exercise price | $ 0.44 | |||||
Expiration date | Dec. 30, 2027 | |||||
Shares issued | 522,727 | |||||
Issuance fees | $ 138,500 | |||||
Proceeds from debt | 1,011,500 | |||||
Derivative instrument | 1,526,363 | |||||
Fair value on market price | 318,863 | |||||
Proceeds from note payable | 1,150,000 | |||||
Fair value on warrants | 586,040 | |||||
Issuance of incentive shares with debt recorded as debt discount | 122,426 | |||||
Debt issuance costs | 138,500 | |||||
Amortization of debt discounts | 360,993 | |||||
Unamortized debt discounts | 773,471 | |||||
Debt [Member] | O I D Promissory Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | 1,134,466 | |||||
Debt [Member] | Investor [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 287,500 | $ 287,500 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | ||||
Feb. 13, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 31, 2020 | |
Class of Stock [Line Items] | |||||
Common shares authorized | 100,000,000 | 100,000,000 | |||
Common stock par value | $ 0.0001 | $ 0.0001 | |||
Preferred units description | No further voting, dividend or liquidation preference rights | ||||
share price | $ 0.18 | ||||
Shares issued | 0 | ||||
Stock issued for services, shares | $ 84,500 | ||||
Number of share converted, value | $ 2,052,500 | ||||
Number of share converted | 75,000 | ||||
Warrants purchase | 684,166 | ||||
Gain on debt extinguishment | $ 14,250 | $ 491,915 | |||
Number of share converted, value | $ 150,000 | ||||
Shares Issued Services [Member] | |||||
Class of Stock [Line Items] | |||||
Number of share converted | 1,368,333 | ||||
Stock Issued For Services [Member] | |||||
Class of Stock [Line Items] | |||||
Stock issued for services, shares | 0 | 50,000 | |||
Stock issued for services, shares | $ 84,500 | ||||
Prefunded Warrant [Member] | |||||
Class of Stock [Line Items] | |||||
Number opf shares issued | 4,286,883 | ||||
Warrant exercise price | $ 0.0001 | ||||
Series 2023 Warrants [Member] | |||||
Class of Stock [Line Items] | |||||
Warrant exercise price | $ 0.465 | ||||
Warrants issued, shares | 36,290,322 | ||||
February 2023 Public Offering [Member] | |||||
Class of Stock [Line Items] | |||||
Proceeds from public offering | $ 3,207,500 | ||||
Shares issued | 4,435,485 | ||||
February 2023 Public Offering [Member] | Series 2023 Warrants [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants to purchase common stock | 12,096,776 | 3,036,667 | |||
share price | $ 0.465 | ||||
[custom:WarrantPurchased] | 1,814,517 | ||||
Warrant exercise | 806,451 | ||||
Shares issued | 403,226 | ||||
February 2023 Public Offering [Member] | Series 2023 Warrants [Member] | Minimum [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants outstanding | 1,250,216 | ||||
February 2023 Public Offering [Member] | Series 2023 Warrants [Member] | Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants outstanding | 11,290,325 | ||||
Underwriting Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
[custom:UnderwriterFees] | $ 242,500 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Number opf shares issued | 522,727 | ||||
Stock issued for services, shares | 50,000 | ||||
Stock issued for services, shares | $ 5 | ||||
Common Stock [Member] | February 2023 Public Offering [Member] | Prefunded Warrant [Member] | |||||
Class of Stock [Line Items] | |||||
Number opf shares issued | 4,286,883 | ||||
Common Stock [Member] | Underwriting Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
Exercise price | $ 0.5115 | ||||
Payments of Stock Issuance Costs | $ 403,226 | ||||
Common Stock [Member] | Underwriting Agreement [Member] | Spartan Capital Securities L L C [Member] | February 2023 Public Offering [Member] | |||||
Class of Stock [Line Items] | |||||
Number opf shares issued | 3,777,634 | ||||
Preferred stock Series AA [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares authorized | 1,500,000 | ||||
Preferred stock, shares outstanding | 0 | ||||
Convertible preferred shares | 50 | ||||
Preferred stock Series AAA [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares authorized | 1,250,000 | ||||
Preferred stock, shares outstanding | 31,413 | ||||
Convertible preferred shares | 100 | ||||
Preferred stock Series AAAA [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares authorized | 1,250 | ||||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares authorized | 1,500 | ||||
Preferred stock, shares outstanding | 0 | ||||
Convertible preferred shares | 100,000 | ||||
Exercise price | $ 0.12 | ||||
Series B Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares authorized | 2 | ||||
Series E Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred shares authorized | 70,000 | ||||
Preferred stock, shares outstanding | 61,688 | ||||
Convertible preferred per share | $ 0.08 |
STOCK OPTION PLANS (Details - A
STOCK OPTION PLANS (Details - Assumptions) - Equity Option [Member] | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 165.43% | 79.95% |
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 3.73% | 2.14% |
Expected term (in years) | 5 years | 10 years |
STOCK OPTION PLANS (Details - O
STOCK OPTION PLANS (Details - Options outstanding) - Equity Option [Member] | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Shares outstanding - beginning | shares | 1,162,722 |
Weighted average exercise price - beginning | $ / shares | $ 16.22 |
Weighted average contractural term | 7 years 5 months 8 days |
Aggregate intrinsic value - beginning | $ | $ 0 |
Shares granted | shares | 25,000 |
Weighted average exercise price - shares granted | $ / shares | $ 0.22 |
Weighted average contractural term -granted | 4 years 11 months 23 days |
Aggregate intrinsic value - granted | $ | $ 0 |
Shares Exercised | shares | 0 |
Weighted average exercise price - shares exercised | $ / shares | $ 0 |
Aggregate intrinsic value - exercised | $ | $ 0 |
Shares cancelled and expired | shares | (48,375) |
Weighted average exercise price - shares Cancelled | $ / shares | $ 0 |
Aggregate intrinsic value - Cancelled & Expired | $ | $ 0 |
Shares outstanding - ending | shares | 1,139,347 |
Weighted average exercise price - ending | $ / shares | $ 15.69 |
Weighted average contractural term | 7 years 5 months 15 days |
Aggregate intrinsic value - ending | $ | $ 0 |
Shares exercisable | shares | 1,131,124 |
Weighted average exercise price - exercisable | $ / shares | $ 15.63 |
Weighted average contractural term - exercisable | 7 years 5 months 12 days |
Aggregate intrinsic value - exercisable | $ | $ 0 |
STOCK OPTION PLANS (Details - W
STOCK OPTION PLANS (Details - Warrant assumptions) - Warrant [Member] | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 172.63% | 75.87% |
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 3.85% | 2.03% |
Expected term (in years) | 5 years | 6 years 3 months |
STOCK OPTION PLANS (Details -_2
STOCK OPTION PLANS (Details - Warrants outstanding) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Warrants outstanding - beginning | shares | 4,683,800 |
Weighted average exercise price - beginning | $ 13.01 |
Weighted average contractural term | 4 years 8 months 23 days |
Aggregate intrinsic value - beginning | $ | $ 0 |
Warrants granted | shares | 19,400,521 |
Weighted average exercise price - shares granted | $ 0.24 |
Weighted average contractural term - granted | 2 years 9 months 29 days |
Aggregate intrinsic value - granted | $ 212,537 |
Warrants exercised | shares | (3,843,118) |
Weighted average exercise price - shares exercised | $ 0.47 |
Aggregate intrinsic value - Exercised | $ | $ 0 |
Warrants outstanding - ending | shares | 20,241,203 |
Weighted average exercise price - ending | $ 3.34 |
Weighted average contractural term | 4 years 8 months 26 days |
Aggregate intrinsic value - ending | $ | $ 212,537 |
Warrants exercisable | shares | 17,627,567 |
Weighted average exercise price - exercisable | $ 4.09 |
Weighted average contractural term - exercisable | 4 years 9 months 7 days |
Aggregate intrinsic value - exercisable | $ | $ 212,537 |
STOCK OPTION PLANS AND WARRAN_3
STOCK OPTION PLANS AND WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | ||
Apr. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Weighted-average grant-date fair value | $ 0.22 | ||
Common stock closing price | $ 0.18 | ||
Unamortized compensation cost | $ 5,688 | ||
Prefunded Warrant [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants issued, shares | 4,286,883 | ||
Expiration date | Feb. 14, 2028 | ||
IPO [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants issued, shares | 16,786,885 | ||
Options And Warrants [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 12,304 | $ 34,416 | |
Warrant [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants issued, shares | 19,400,521 | ||
Warrant [Member] | O I D Promissory Note [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants issued, shares | 2,613,636 | ||
Plan 2021 [Member] | Anne S Provost [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
shares granted | 25,000 | ||
Exercise price | $ 4.57 | ||
Plan 2021 [Member] | Dean Julia [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
shares granted | 12,500 | ||
Exercise price | $ 1.55 | ||
Plan 2021 [Member] | Nate Knight [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
shares granted | 25,000 | ||
Exercise price | $ 0.22 |
EARNING (LOSS) PER SHARE (Detai
EARNING (LOSS) PER SHARE (Details - Potentially dilutive equity securities) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 21,380,550 | 5,904,163 |
Convertible Notes Payable And Accrued Interest [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 0 | 58,891 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 1,139,347 | 1,162,721 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 20,241,203 | 4,682,551 |