Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | C-BOND SYSTEMS, INC. | |
Trading Symbol | N/A | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 328,734,898 | |
Amendment Flag | false | |
Entity Central Index Key | 0001421636 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-53029 | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 26-1315585 | |
Entity Address, Address Line One | 6035 South Loop East | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77033 | |
Local Phone Number | 649-5658 | |
City Area Code | 832 | |
Title of 12(b) Security | N/A | |
Security Exchange Name | NONE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash | $ 152,567 | $ 519,898 |
Accounts receivable, net | 255,853 | 173,248 |
Inventory | 84,218 | 82,931 |
Prepaid expenses and other current assets | 92,287 | 151,746 |
Contract assets | 82,805 | |
Due from related party | 3,750 | |
Total Current Assets | 584,925 | 1,014,378 |
OTHER ASSETS: | ||
Property and equipment, net | 104,670 | 135,022 |
Right of use asset, net | 403,551 | 251,172 |
Intangible asset, net | 292,543 | 330,421 |
Goodwill | 350,491 | 350,491 |
Security deposit | 6,482 | 6,482 |
Total Other Assets | 1,157,737 | 1,073,588 |
TOTAL ASSETS | 1,742,662 | 2,087,966 |
CURRENT LIABILITIES: | ||
Convertible notes payable, net | 740,000 | 171,875 |
Notes payable, net | 1,528,084 | 488,414 |
Accounts payable | 820,753 | 831,648 |
Accrued expenses | 558,807 | 436,733 |
Accrued interest payable - related party | 6,247 | |
Accrued compensation | 436,950 | 691,602 |
Contract liabilities | 63,888 | 10,426 |
Lease liability | 114,770 | 44,927 |
Total Current Liabilities | 4,269,499 | 2,675,625 |
LONG-TERM LIABILITIES: | ||
Notes payable, less current portion | 13,014 | 539,440 |
Note payable - related party | 250,000 | |
Lease liability, less current portion | 289,441 | 206,319 |
Total Long-term Liabilities | 552,455 | 745,759 |
Total Liabilities | 4,821,954 | 3,421,384 |
Commitments and Contingencies (See Note 10) | ||
Series B convertible preferred stock: $0.10 par value, 100,000 shares designated; 1,000 and 722 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively ($1,032,156 redemption and liquidation value at September 30, 2022) | 1,032,156 | 738,611 |
Series C convertible preferred stock: $0.10 par value, 100,000 shares designated; 17,540 and 18,680 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively ($2,729,898 redemption and liquidation value at September 30, 2022) | 1,819,932 | 1,907,012 |
SHAREHOLDERS’ DEFICIT: | ||
Preferred stock: $0.10 par value, 2,000,000 shares authorized; 100,000 Series B and 100,000 Series C designated | ||
Common stock: $0.001 par value, 4,998,000,000 shares authorized; 325,734,898 and 282,216,632 issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 325,735 | 282,217 |
Additional paid-in capital | 54,990,166 | 53,064,616 |
Accumulated deficit | (61,404,921) | (57,515,129) |
Total C-Bond Systems, Inc. shareholders’ deficit | (6,089,020) | (4,168,296) |
Noncontrolling interest | 157,640 | 189,255 |
Total Shareholders’ Deficit | (5,931,380) | (3,979,041) |
Total Liabilities and Shareholders’ Deficit | $ 1,742,662 | $ 2,087,966 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in Dollars per share) | $ 0.1 | $ 0.1 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Common stock , par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock , shares authorized | 4,998,000,000 | 4,998,000,000 |
Common stock , shares issued | 325,734,898 | 282,216,632 |
Common stock , shares outstanding | 325,734,898 | 282,216,632 |
Series B Convertible Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.1 | $ 0.1 |
Preferred stock, shares designated | 100,000 | 100,000 |
Preferred stock, shares issued | 1,000 | 722 |
Preferred stock, shares outstanding | 1,000 | 722 |
Share redemption and liquidation value (in Dollars) | $ 1,032,156 | |
Preferred stock, shares designated | 100,000 | 100,000 |
Series C Convertible Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.1 | $ 0.1 |
Preferred stock, shares designated | 100,000 | 100,000 |
Preferred stock, shares issued | 17,540 | 18,680 |
Preferred stock, shares outstanding | 17,540 | 18,680 |
Share redemption and liquidation value (in Dollars) | $ 2,729,898 | |
Preferred stock, shares designated | 100,000 | 100,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
SALES | $ 573,649 | $ 674,518 | $ 1,624,725 | $ 963,838 |
COST OF SALES (excluding depreciation expense) | 246,346 | 248,607 | 705,680 | 304,158 |
GROSS PROFIT | 327,303 | 425,911 | 919,045 | 659,680 |
OPERATING EXPENSES: | ||||
Compensation and related benefits (including stock-based compensation of $4,445 and $89,254 for the three months ended September 30, 2022, and 2021, and $1,025,571 and $4,042,926 for the nine months ended September 30, 2022 and 2021, respectively) | 412,642 | 464,230 | 2,253,374 | 5,395,161 |
Research and development | (2,404) | |||
Professional fees | 217,123 | 260,447 | 663,387 | 777,393 |
General and administrative expenses | 198,362 | 162,111 | 588,366 | 417,634 |
Total Operating Expenses | 828,127 | 886,788 | 3,505,127 | 6,587,784 |
LOSS FROM OPERATIONS | (500,824) | (460,877) | (2,586,082) | (5,928,104) |
OTHER INCOME (EXPENSES): | ||||
Loss on debt extinguishment, net | (231,395) | |||
Other income | 67,778 | |||
Interest expense | (440,552) | (29,900) | (1,051,437) | (73,449) |
Interest expense - related party | (5,014) | (6,247) | ||
Total Other Income (Expenses) | (445,566) | (29,900) | (1,289,079) | (5,671) |
NET LOSS | (946,390) | (490,777) | (3,875,161) | (5,933,775) |
Net loss (income) of subsidiary attributable to noncontrolling interest | 8,529 | (34,151) | 31,615 | (34,151) |
NET LOSS ATTRIBUTABLE TO C-BOND SYSTEMS, INC. | (937,861) | (524,928) | (3,843,546) | (5,967,926) |
Preferred stock dividend and deemed dividend | (14,619) | (1,521,736) | (46,246) | (4,388,790) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (952,480) | $ (2,046,664) | $ (3,889,792) | $ (10,356,716) |
NET LOSS PER COMMON SHARE: | ||||
Basic and diluted (in Dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.04) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted (in Shares) | 319,825,057 | 265,771,901 | 299,609,959 | 245,453,077 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Stock-based compensation | $ 4,445 | $ 89,254 | $ 1,025,571 | $ 4,042,926 |
Net loss per common share diluted | $ 0 | $ (0.01) | $ (0.01) | $ (0.04) |
Weighted average common shares outstanding diluted | 319,825,057 | 265,771,901 | 299,609,959 | 245,453,077 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders’ Deficit (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Balance at Dec. 31, 2020 | $ 228,347 | $ 42,573,272 | $ (45,968,839) | $ (3,167,220) | |
Balance (in Shares) at Dec. 31, 2020 | 228,346,974 | ||||
Common stock issued for compensation | $ 2,700 | (2,700) | |||
Common stock issued for compensation (in Shares) | 2,700,000 | ||||
Common stock issued for accrued compensation | $ 945 | 54,796 | 55,741 | ||
Common stock issued for accrued compensation (in Shares) | 944,767 | ||||
Common stock issued for cashless warrant exercise | $ 1,008 | (1,008) | |||
Common stock issued for cashless warrant exercise (in Shares) | 1,008,000 | ||||
Common stock issued for professional fees | $ 1,550 | 112,550 | 114,100 | ||
Common stock issued for professional fees (in Shares) | 1,550,000 | ||||
Preferred stock dividends and deemed dividend | 2,845,238 | (2,855,576) | (10,338) | ||
Accretion of stock-based compensation | 108,554 | 108,554 | |||
Accretion of stock-based professional fees | 5,000 | 5,000 | |||
Beneficial conversion charge for issuance of Series B preferred shares for accrued compensation recorded as stock-based compensation | 3,778,810 | 3,778,810 | |||
Net loss | (4,863,973) | (4,863,973) | |||
Balance at Mar. 31, 2021 | $ 234,550 | 49,474,512 | (53,688,388) | (3,979,326) | |
Balance (in Shares) at Mar. 31, 2021 | 234,549,741 | ||||
Balance at Dec. 31, 2020 | $ 228,347 | 42,573,272 | (45,968,839) | (3,167,220) | |
Balance (in Shares) at Dec. 31, 2020 | 228,346,974 | ||||
Net loss | (5,933,775) | ||||
Balance at Sep. 30, 2021 | $ 274,049 | 52,130,242 | (56,325,555) | 70,182 | (3,851,082) |
Balance (in Shares) at Sep. 30, 2021 | 274,048,481 | ||||
Balance at Mar. 31, 2021 | $ 234,550 | 49,474,512 | (53,688,388) | (3,979,326) | |
Balance (in Shares) at Mar. 31, 2021 | 234,549,741 | ||||
Common stock issued for accounts payable | $ 3,801 | 114,037 | 117,838 | ||
Common stock issued for accounts payable (in Shares) | 3,801,224 | ||||
Common stock issued for professional fees | $ 2,700 | 138,300 | 141,000 | ||
Common stock issued for professional fees (in Shares) | 2,700,000 | ||||
Preferred stock dividends and deemed dividend | (11,478) | (11,478) | |||
Accretion of stock-based compensation | 51,192 | 51,192 | |||
Net loss | (579,025) | (579,025) | |||
Balance at Jun. 30, 2021 | $ 241,051 | 49,778,041 | (54,278,891) | (4,259,799) | |
Balance (in Shares) at Jun. 30, 2021 | 241,050,965 | ||||
Common stock issued for compensation | $ 1,977 | 22,436 | 24,413 | ||
Common stock issued for compensation (in Shares) | 1,976,500 | ||||
Common stock issued for acquisition | $ 28,021 | 666,900 | 694,921 | ||
Common stock issued for acquisition (in Shares) | 28,021,016 | ||||
Initial noncontrolling in acquired business | 36,031 | 36,031 | |||
Common stock issued for professional fees | $ 3,000 | 88,500 | 91,500 | ||
Common stock issued for professional fees (in Shares) | 3,000,000 | ||||
Preferred stock dividends and deemed dividend | 1,509,523 | (1,521,736) | (12,213) | ||
Accretion of stock-based compensation | 64,842 | 64,842 | |||
Net loss | (524,928) | 34,151 | (490,777) | ||
Balance at Sep. 30, 2021 | $ 274,049 | 52,130,242 | (56,325,555) | 70,182 | (3,851,082) |
Balance (in Shares) at Sep. 30, 2021 | 274,048,481 | ||||
Balance at Dec. 31, 2021 | $ 282,217 | 53,064,616 | (57,515,129) | 189,255 | (3,979,041) |
Balance (in Shares) at Dec. 31, 2021 | 282,216,632 | ||||
Common stock issued for accounts payable | $ 90 | 2,084 | 2,174 | ||
Common stock issued for accounts payable (in Shares) | 90,859 | ||||
Common stock issued for compensation | $ 500 | 13,750 | 14,250 | ||
Common stock issued for compensation (in Shares) | 500,000 | ||||
Common stock issued for conversion of Series C preferred stock | $ 1,543 | 10,457 | 12,000 | ||
Common stock issued for conversion of Series C preferred stock (in Shares) | 1,543,151 | ||||
Common stock issued in connection with convertible debt | $ 824 | 12,139 | 12,963 | ||
Common stock issued in connection with convertible debt (in Shares) | 823,529 | ||||
Preferred stock dividends and deemed dividend | (14,005) | (14,005) | |||
Accretion of stock-based compensation | 42,702 | 42,702 | |||
Beneficial conversion charge for issuance of Series B preferred shares for accrued compensation recorded as stock-based compensation | 957,556 | 957,556 | |||
Net loss | (1,906,399) | (13,020) | (1,919,419) | ||
Balance at Mar. 31, 2022 | $ 285,174 | 54,103,304 | (59,435,533) | 176,235 | (4,870,820) |
Balance (in Shares) at Mar. 31, 2022 | 285,174,171 | ||||
Balance at Dec. 31, 2021 | $ 282,217 | 53,064,616 | (57,515,129) | 189,255 | (3,979,041) |
Balance (in Shares) at Dec. 31, 2021 | 282,216,632 | ||||
Net loss | (3,875,161) | ||||
Balance at Sep. 30, 2022 | $ 325,735 | 54,990,166 | (61,404,921) | 157,640 | (5,931,380) |
Balance (in Shares) at Sep. 30, 2022 | 325,734,898 | ||||
Balance at Mar. 31, 2022 | $ 285,174 | 54,103,304 | (59,435,533) | 176,235 | (4,870,820) |
Balance (in Shares) at Mar. 31, 2022 | 285,174,171 | ||||
Common stock issued for professional fees | $ 7,000 | 95,000 | 102,000 | ||
Common stock issued for professional fees (in Shares) | 7,000,000 | ||||
Common stock issued for conversion of Series C preferred stock | $ 13,185 | 88,815 | 102,000 | ||
Common stock issued for conversion of Series C preferred stock (in Shares) | 13,184,548 | ||||
Common stock issued in connection with debt | $ 1,750 | 30,986 | 32,736 | ||
Common stock issued in connection with debt (in Shares) | 1,750,000 | ||||
Preferred stock dividends and deemed dividend | 3,702 | (17,622) | (13,920) | ||
Accretion of stock-based compensation | 6,618 | 6,618 | |||
Relative fair value of warrants issued in connection with debt | 325,785 | 325,785 | |||
Beneficial conversion feature adjustment | 469,899 | 469,899 | |||
Beneficial conversion feature buyback related to debt extinguishment | (160,993) | (160,993) | |||
Net loss | (999,286) | (10,066) | (1,009,352) | ||
Balance at Jun. 30, 2022 | $ 307,109 | 54,963,116 | (60,452,441) | 166,169 | (5,016,047) |
Balance (in Shares) at Jun. 30, 2022 | 307,108,719 | ||||
Common stock issued for compensation | $ 3,000 | (3,000) | |||
Common stock issued for compensation (in Shares) | 3,000,000 | ||||
Common stock issued for professional fees | $ 7,954 | 83,296 | 91,250 | ||
Common stock issued for professional fees (in Shares) | 7,954,545 | ||||
Common stock issued in connection with debt | $ 7,672 | 57,260 | 64,932 | ||
Common stock issued in connection with debt (in Shares) | 7,671,634 | ||||
Preferred stock dividends and deemed dividend | 733 | (14,619) | (13,886) | ||
Accretion of stock-based compensation | 4,445 | 4,445 | |||
Beneficial conversion feature adjustment | (115,684) | (115,684) | |||
Net loss | (937,861) | (8,529) | (946,390) | ||
Balance at Sep. 30, 2022 | $ 325,735 | $ 54,990,166 | $ (61,404,921) | $ 157,640 | $ (5,931,380) |
Balance (in Shares) at Sep. 30, 2022 | 325,734,898 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,875,161) | $ (5,933,775) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 68,230 | 33,878 |
Amortization of debt discount to interest expense | 910,907 | |
Stock-based compensation | 1,025,571 | 4,042,926 |
Stock-based professional fees | 228,946 | 359,829 |
Bad debt expense | 7,716 | 35,000 |
Non-cash loss on debt extinguishment | 231,395 | |
Lease costs | 586 | (444) |
Change in operating assets and liabilities: | ||
Accounts receivable | (86,571) | (234,445) |
Accounts receivable - related party | (1,200) | |
Inventory | (1,287) | (24,814) |
Prepaid expenses and other assets | 23,763 | (6,647) |
Contract assets | 82,805 | (2,456) |
Due from related party | (24,179) | |
Accounts payable | (8,721) | 155,241 |
Accrued expenses | 122,074 | 83,231 |
Accrued interest payable - related party | 6,247 | |
Customer deposit | (110,000) | |
Accrued compensation | 26,927 | 317,001 |
Contract liabilities | 53,462 | 22,179 |
NET CASH USED IN OPERATING ACTIVITIES | (1,183,111) | (1,288,675) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash received from acquisition | 288,902 | |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 288,902 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of series C preferred stock | 550,000 | |
Proceeds from note payable - related party | 250,000 | |
Proceeds from note payable | 641,260 | 500,000 |
Repayment of notes payable | (75,480) | (5,297) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 815,780 | 1,044,703 |
NET (DECREASE) INCREASE IN CASH | (367,331) | 44,930 |
CASH, beginning of period | 519,898 | 323,407 |
CASH, end of period | 152,567 | 368,337 |
Cash paid for: | ||
Interest | 15,287 | 2,648 |
Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued as prepaid for services | 193,250 | 98,800 |
Common stock issued for accrued compensation | 40,626 | |
Series B preferred stock issued for accrued compensation | 278,654 | 295,000 |
Common stock issued for accounts payable | 2,174 | 117,838 |
Preferred stock dividend accrued | 41,811 | 34,029 |
Deemed dividend related to ratchet provision | 4,435 | |
Deemed dividend related to beneficial conversion feature of Series C preferred shares | 2,845,238 | |
Increase in debt discount and paid-in capital for shares issued with convertible debt | 110,631 | |
Increase in debt discount and paid-in capital for warrants issued with convertible debt | 325,785 | |
Conversion of series C preferred stock to common stock | 114,000 | |
Increase in right of use and lease liability | 184,375 | |
Assets acquired: | ||
Cash | 288,902 | |
Accounts receivable, net | 40,587 | |
Inventory | 68,019 | |
Prepaid expenses | 6,091 | |
Property and equipment | 140,210 | |
Right of use assets | 253,433 | |
Total assets acquired | 797,242 | |
Less: liabilities assumed: | ||
Accounts payable | 65,728 | |
Accrued expenses | 92,914 | |
Notes payable | 95,013 | |
Customer deposit | 110,000 | |
Lease liabilities | 253,433 | |
Noncontrolling interest | 36,031 | |
Total liabilities assumed | 653,119 | |
Net liabilities assumed | (144,123) | |
Fair value of shares for acquisition | 694,921 | |
Increase in intangible assets - non-cash | $ 550,798 |
Nature of Organization
Nature of Organization | 9 Months Ended |
Sep. 30, 2022 | |
Nature of Organization [Abstract] | |
NATURE OF ORGANIZATION | NOTE 1 – NATURE OF ORGANIZATION Nature of Organization C-Bond Systems, Inc., together with its subsidiaries (the “Company”), is a materials development company and sole owner, developer, and manufacturer of the patented C-Bond technology. The Company is engaged in the implementation of proprietary nanotechnology applications and processes to enhance properties of strength, functionality, and sustainability of brittle material systems. The Company’s primary focus is in the multi-billion-dollar glass and window film industry with target markets in the United States and internationally. Additionally, the Company has expanded its product line to include disinfection products. The Company operates in two divisions: C-Bond Transportation Solutions and Patriot Glass Solutions. C-Bond Transportation Solutions sells a windshield strengthening, water repellent solution called C-Bond nanoShield™ as well as disinfection products. Patriot Glass Solutions sells multi-purpose glass strengthening primer and window film mounting solutions, including C-Bond BRS, a ballistic-resistant film system, and C-Bond Secure, a forced entry system. On June 30, 2021, the Company entered into a Share Exchange Agreement and Plan of Reorganization (the “Exchange Agreement”) with (i) Mobile Tint LLC, a Texas limited liability company doing business as A1 Glass Coating (“Mobile”), (ii) the sole member of Mobile (the “Mobile Shareholder”), and (iii) Michael Wanke as the Representative of the Mobile Shareholder. Pursuant to the Exchange Agreement, the Company agreed to acquire 80% of Mobile’s units, representing 80% of Mobile’s issued and outstanding capital stock (the “Mobile Shares”). On July 22, 2021, the Company closed the Exchange Agreement and acquired 80% of the Mobile Shares. The Mobile Shares were exchanged for 28,021,016 restricted shares of the Company’s common stock in an amount equal to $800,000, divided by the average of the closing prices of the Company’s common stock during the 30-day period immediately prior to the closing. Two years after closing, the Company has the option to acquire the remaining 20% of Mobile’s issued and outstanding membership interests in exchange for a number of shares of the Company’s common stock equal to 300% of Mobile’s average EBIT value, divided by the price of the Company’s common stock as defined in the Exchange Agreement (the “Additional Closing”). Mobile provides quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Mobile also carries products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS and C-Bond Secure products. As part of the transaction, Mobile’s owner-operator, Mr. Wanke, joined the Company as President of its Patriot Glass Solutions division. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Company’s unaudited condensed consolidated financial statements include the financial statements of its wholly owned subsidiary, C-Bond Systems, LLC, and its 80% owned subsidiary, Mobile since acquiring 80% of Mobile on July 22, 2021. All significant intercompany accounts and transactions have been eliminated in consolidation. 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 financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in consolidated financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the consolidated financial statements for the year ended December 31, 2021 of the Company which were included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022. Going Concern These unaudited 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 unaudited condensed consolidated financial statements, the Company had a net loss of $3,875,161 and $5,933,775 for the nine months ended September 30, 2022 and 2021, respectively. The net cash used in operations was $1,183,111 and $1,288,675 for the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company had an accumulated deficit, shareholders’ deficit, and working capital deficit of $61,404,921, $5,931,380 and $3,684,574, respectively, on September 30, 2022. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from sales of common shares and preferred shares, and from the issuance of promissory notes and convertible promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates during the nine months ended September 30, 2022 and 2021 include estimates for allowance for doubtful accounts on accounts receivable, the estimates for obsolete or slow moving inventory, estimates used in the calculation of progress towards completion on uncompleted jobs, purchase price allocation of acquired businesses, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the estimate of the fair value lease liability and related right of use asset, the valuation of redeemable and mandatorily redeemable preferred stock, the value of beneficial conversion features and deemed dividends, and the fair value of non-cash equity transactions. Fair Value of Financial Instruments and Fair Value Measurements The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, accounts receivable, contract assets and liabilities, notes payable, convertible note payable, accounts payable, accrued expenses, accrued compensation, and lease liabilities approximate their fair market value based on the short-term maturity of these instruments. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 820. ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. Cash and Cash Equivalents For purposes of 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. The Company had no cash equivalents as of September 30, 2022 and December 31, 2021. Accounts Receivable The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. Inventory Inventory, consisting of raw materials and finished goods, are stated at the lower of cost and net realizable value utilizing the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates and included in cost of sales. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from one to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. Any goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets may have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets are being amortized over a useful life of 5 years. Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Derivative Financial Instruments The Company had certain financial instruments that were embedded derivatives. The Company evaluated all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10-05-4, Derivatives and Hedging Contracts in Entity’s Own Equity Warranty Liability The Company provides limited warranties on its products for product defects for periods ranging from 12 months to the life of the product. Warranty costs may include the cost of product replacement, refunds, labor costs and other costs. Allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product warranty claim rates and expected costs to repair or to replace the products under warranty. The Company currently establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior 12 months’ sales activities. If actual return rates and/or repair and replacement costs differ significantly from the Company’s estimates, adjustments to recognize additional cost of sales may be required in future periods. Historically the warranty accrual and the expense amounts have been immaterial. The warranty liability is included in accrued expenses on the accompanying unaudited condensed consolidated balance sheets and amounted $26,733 and $26,733 on September 30, 2022 and December 31, 2021, respectively. For the nine months ended September 30, 2022 and 2021, warranty costs amounted to $0. Beneficial Conversion Feature Convertible debt includes conversion terms that are considered in the money compared to the market price of the stock on the date of the related agreement. The Company calculates the beneficial conversion feature and records a debt discount with the amount being amortized to interest expense over the term of the note. Revenue Recognition The Company follows ASC Topic 606, Revenue from Contracts with Customers The Company sells its products which include standard warranties primarily to distributors and authorized dealers. Product sales are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances. The warranty does not represent a separate performance obligation. Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output or input methods depending on the type of contract terms including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these to be the best available measure of progress on these contracts. We use the same method for similar types of contracts. The asset, “contract assets” represents revenues recognized in excess of amounts billed. The liability, “contract liabilities,” represents billings in excess of revenues recognized. Cost of Sales Cost of sales includes inventory costs, packaging costs and warranty expenses. Cost of revenues from fixed-price contracts for the distribution and installation of window film solutions include all direct material, sub-contractor, labor and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. Shipping and Handling Costs Shipping and handling costs incurred for product shipped to customers are included in general and administrative expenses and amounted to $8,784 and $11,946 for the nine months ended September 30, 2022 and 2021, respectively. Shipping and handling costs charged to customers are included in sales. Research and Development Research and development costs incurred in the development of the Company’s products are expensed as incurred and includes costs such as labor, materials, and other allocated costs incurred. For the nine months ended September 30, 2022 and 2021, research and development costs (recovery) incurred in the development of the Company’s products were $0 and $(2,404), respectively, and are included in operating expenses on the accompanying unaudited condensed consolidated statements of operations. Advertising Costs The Company may participate in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. For the nine months ended September 30, 2022 and 2021, advertising costs charged to operations were $66,124 and $33,306, respectively and are included in general and administrative expenses on the accompanying unaudited condensed consolidated statements of operations. These advertising expenses do not include cooperative advertising and sales incentives which shall been deducted from sales. Federal and State Income Taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation Improvements to Employee Share-Based Payment Loss Per Common Share ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per common share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilutive securities and non-vested forfeitable shares. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares or resulted in the issuance of common shares that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to members by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares, common share equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of stock options and non-vested forfeitable shares (using the treasury stock method) and shares issuable upon conversion of preferred shares and convertible notes payable (using the as-if converted method). These common share equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted common shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: September 30, 2022 2021 Stock options 8,445,698 8,445,698 Warrants 34,000,000 1,000,000 Series B preferred stock 163,834,286 114,598,413 Series C preferred stock 278,412,698 298,412,698 Convertible debt 916,666,667 - Non-vested, forfeitable common shares 16,970,120 14,270,120 1,418,329,469 436,726,929 Segment Reporting During the nine months ended September 30, 2022 and from July 22, 2021 (date of acquisition of Mobile Tint) to September 30, 2021, the Company operated in two reportable business segments which consisted of (1) the manufacture and sale of a windshield strengthening water repellent solution as well as disinfection products, and the sale of multi-purpose glass strengthening primer and window film mounting solutions, including ballistic-resistant film systems and a forced entry system, and (2) the distribution and installation of window film solutions. The Company’s reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations and locations. Leases The Company accounts for leases in accordance with ASC 842. The lease standard requires certain leases to be reported on the condensed consolidated balance sheets as right-of-use assets and lease liabilities. The Company elected the practical expedients permitted under the transition guidance of this standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. The Company does not reassess whether any contracts entered into prior to adoption are leases or contain leases. The Company categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow the Company to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. The Company does not have any finance leases as of September 30, 2022 and December 31, 2021. The Company’s leases generally have terms that range from three to four years for property and equipment and five years for property. The Company elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease. Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on the Company’s current borrowing rate. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that the Company will exercise the option, the Company considers these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. Noncontrolling Interest The Company accounts for noncontrolling interest in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders’ deficit on the consolidated balance sheets and the consolidated net loss attributable to its noncontrolling interest be clearly identified and presented on the face of the consolidated statements of operations. Risk and Uncertainties In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The Company was materially affected by the COVID-19 outbreak to date and the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. The Company saw a material decrease in sales from its international customers as a result of the unprecedented public health crisis from the COVID-19 pandemic and a decrease in domestic sales due to a decrease in business spending on discretionary items. As a result, during 2021 and 2020, the Company’s international customers delayed the ordering of products and delayed or defaulted on payment of balances due to the Company. The lack of collection of accounts receivable balances, which the Company believes was attributable to COVID-19, had a material impact on the cash flows of the Company. The Company cannot estimate the duration of the pandemic and the future impact on its business. A severe or prolonged economic downturn could result in a variety of risks to the Company’s business, including weakened demand for its products and a decreased ability to raise additional capital when needed on acceptable terms, if at all. Currently, the Company is unable to estimate the impact of this event on its operations. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 3 – ACCOUNTS RECEIVABLE On September 30, 2022 and December 31, 2021, accounts receivable consisted of the following: September 30, December 31, Accounts receivable $ 291,375 $ 204,804 Less: allowance for doubtful accounts (35,522 ) (31,556 ) Accounts receivable, net $ 255,853 $ 173,248 For the nine months ended September 30, 2022 and 2021, bad debt expense amounted to $7,716 and $35,000, respectively. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory [Abstract] | |
INVENTORY | NOTE 4 – INVENTORY On September 30, 2022 and December 31, 2021, inventory consisted of the following: September 30, December 31, Raw materials $ 2,424 $ 7,141 Finished goods 81,794 120,790 Inventory 84,218 127,931 Less: allowance for obsolete or slow-moving inventory - (45,000 ) Inventory, net $ 84,218 $ 82,931 For the nine months ended September 30, 2022 and 2021, the Company did not record any loss for obsolete or slow-moving inventory. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT On September 30, 2022 and December 31, 2021, property and equipment consisted of the following: Useful Life September 30, December 31, Machinery and equipment 5 – 7 years $ 124,133 $ 124,133 Furniture and office equipment 3 – 7 years 32,306 32,306 Vehicles 1 – 5 years 63,009 63,009 Leasehold improvements 3 – 5 years 45,296 45,296 264,744 264,744 Less: accumulated depreciation (160,074 ) (129,722 ) Property and equipment, net $ 104,670 $ 135,022 For the nine months ended September 30, 2022 and 2021, depreciation and amortization expense is included in general and administrative expenses and amounted to $30,352 and $13,223, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets and Goodwill [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 6 – INTANGIBLE ASSETS AND GOODWILL On September 30, 2022 and December 31, 2021, intangible assets, which were acquired from Mobile in 2021, consisted of the following: Useful life September 30, December 31, Customer relations 5 years $ 212,516 $ 212,516 Non-compete 5 years 40,000 40,000 Trade name - 100,000 100,000 352,516 352,516 Less: accumulated amortization (59,973 ) (22,095 ) Intangible assets, net $ 292,543 $ 330,421 Useful life September 30, December 31, Goodwill - $ 350,491 $ 350,491 For the nine months ended September 30, 2022 and 2021, amortization of intangible assets amounted to $37,878 and $20,655, respectively. On September 30, 2022, accumulated amortization amounted to $50,473 and $9,500 for the customer relations and non-compete, respectively. Amortization of intangible assets with identifiable useful lives that is attributable to future periods is as follows: Twelve months ending September 30: Amount 2023 $ 50,503 2024 50,503 2025 50,503 2026 41,034 Total $ 192,543 |
Convertible Note Payable
Convertible Note Payable | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Note Payable [Abstract] | |
CONVERTIBLE NOTE PAYABLE | NOTE 7 – CONVERTIBLE NOTE PAYABLE Mercer Convertible Debt On October 15, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with Mercer Street Global Opportunity Fund, LLC (the “Investor”), pursuant to which the Company issued and sold to Investor a 10% Original Issue Discount Senior Convertible Promissory Note in the principal amount of $825,000 (the “Initial Note”) and five-year warrants to purchase up to 16,500,000 shares of the Company’s common stock at an exercise price of $0.05 per share, an amount equal to 50% of the conversion shares to be issued (the “Initial Warrants”). The Company received net proceeds of $680,000, which is net of original issue discounts of $75,000, placement fees of $60,000, and legal fees of $10,000. The transactions contemplated under the SPA closed on October 18, 2021. Pursuant to the SPA, the Investor agreed to purchase an additional $825,000 10% Original Issue Discount Senior Convertible Promissory Note (the “Second Note,” and together with the Initial Note, the “Notes”), and a five-year warrant (the “Second Warrant,” and together with the Initial Warrant, the “Warrants”) to purchase, in the aggregate, shares of the Company’s common stock at an exercise price of $0.05 per share from the Company in an amount equal to 50% of the conversion shares to be issued upon the same terms as the Initial Note and Initial Warrant (subject to there being no event of default under the Initial Note or other customary closing conditions), within three trading days of a registration statement registering the shares of the Company’s common stock issuable under the Notes (the “Conversion Shares”) and upon exercise of the Warrants (the “Warrant Shares”) being declared effective by the SEC. The Note matures 12 months after issuance, bears interest at a rate of 4% per annum, and was initially convertible beginning on the six-month anniversary of the original issue date into the Company’s common stock at a fixed conversion price of $0.025 per share, subject to adjustment for stock splits, stock combinations, dilutive issuances, and similar events, as described in the Note. If the average Closing Price during any 10 consecutive Trading Day period beginning and ending during the 60 Day Effectiveness Period (the “Average Closing Price”) was below the Conversion Price than the conversion price would have been reduced to such Average Closing Price but in no event less than $0.0175. The “60 Day Effectiveness Period” means the 60 calendar days beginning on the day the Registration Statement filed in connection with the Registration Rights Agreement covering the respective Tranche is first declared effective by the SEC. The Note may be prepaid at any time for the first 90 days at face value plus accrued interest. From day 91 through day 180, the Note may be prepaid in an amount equal to 110% of the principal amount plus accrued interest. From day 181 through the day immediately preceding the maturity date, the Note may be prepaid in an amount equal to 120% of the principal amount plus accrued interest. The Note and Warrants contain conversion limitations providing that a holder thereof may not convert the Notes or exercise the Warrants to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61 st In connection with the SPA, the Company entered into a Registration Rights Agreement dated October 15, 2021 (the “Registration Rights Agreement”), with the Investor pursuant to which it is obligated to file a registration statement with the SEC within 45 days after the date of the agreement to register the resale by the Investor of the conversion shares and warrant shares, and use all commercially reasonable efforts to have the registration statement declared effective by the SEC within 60 days after the registration statement is filed. Upon the occurrence of an event of default under the Notes, the Investor has the right to be prepaid at 125% of the outstanding principal balance and accrued interest, and interest accrues at 18% per annum. Events of default included, among other things, (i) any default in the payment of (A) principal and interest payment under this Note or any other Indebtedness, or (B) Late Fees, liquidated damages and other amounts owing to the Holder of this Note, as and when the same shall become due and payable (whether on a Conversion Date, or the Maturity Date, or by acceleration or otherwise), which default, solely in the case of a default under clause (B) above, is not cured within five Trading Days; (ii) the Company or any Subsidiary shall be subject to a Bankruptcy Event; (iii) the SEC suspends the Common Stock from trading or the Company’s Common Stock is not listed or quoted for trading on a Trading Market which failure is not cured, if possible to cure, within the earlier to occur of 10 Trading Days after notice of such failure is sent by the Holder or by any other Holder to the Company or the transfer of shares of Common Stock through the Depository Trust Company System is no longer available or is subject to a “chill” by the Depository Trust Company or any successor; (iv) the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction); (v) the Company incurs any Indebtedness other than Permitted Indebtedness; (vi) the Company restates any financial statements included in its reports or registration statements filed pursuant to the Securities Act or the Exchange Act for any date or period from two years prior to the Original Issue Date of this Note and until this Note is or the Warrants issued to the Holder are no longer outstanding, if following first public announcement or disclosure that a restatement will occur the VWAP on the next Trading Day is 20% less than the VWAP on the prior Trading Day. For the purposes of this clause the next Trading Day if an announcement is made before 4:00 pm New York, NY time is either the day of the announcement or the following Trading Day. The Company filed a Report on Form 8-K announcing the restatement of its financial statements for the year ended December 31, 2020. Following the first public announcement or disclosure that a restatement occurred, the VWAP on the next Trading Day was not 20% less than the VWAP on the prior Trading Day and accordingly, the default provisions were not triggered. The Company has also granted the investor a 12-month (or until the Notes are no longer outstanding) right to participate in specified future financings, up to a level of 30%. In connection with the SPA, on October 18, 2021, the Company issued 668,151 shares of its common stock to the placement agent as fee for the capital raise. The 668,151 shares of common stock issued were recorded as a debt discount of $14,064 based on the relative fair value method to be amortized over the life of the Note. The 16,500,000 Initial Warrants were valued at $347,142 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note. The original issue discounts of $75,000, placement fees of $60,000, and legal fees of $10,000, aggregating $145,000, was recorded as a debt discount to be amortized into interest expense over the twelve-month term of the note. Additionally, the Initial Note was convertible into common shares at an initial conversion price of is $0.025 which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. Since warrants and common shares were issued with the Initial Note, the proceeds were allocated to the instrument based on relative fair value. The Initial Warrants did not contain any features requiring liability treatment and therefore were classified as equity. The value allocated to the Initial Warrants and common shares issued was $347,142 and $14,064, respectively, and $318,794 was allocated to the beneficial conversion feature. Since the intrinsic value of the beneficial conversion feature, warrants and common shares was greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the beneficial conversion feature, warrants and common shares issued was limited to the amount of the proceeds allocated to the convertible instrument. Accordingly, the Company recorded an aggregate non-cash debt discount of $680,000 with the credit to additional paid in capital. This debt discount was amortized to interest expense over the term of the Convertible Note through the date Exchange Agreement discussed below. On April 20, 2022, the Company and the Investor entered into an Exchange Agreement (the “Exchange Agreement”). The original SPA remains in effect. Per the terms of the Exchange Agreement, the Parties agreed to exchange (i) the Initial Note for a new Convertible Promissory Note (the “New Note”) and (ii) the Initial Warrant for a new five-year warrant to purchase, in the aggregate, 33,000,000 shares of the Company’s common stock at an exercise price of $0.025 per share (the “New Warrant” and together with the New Note, the “New Securities”), according to the terms and conditions of the Exchange Agreement. On April 20, 2022, pursuant to the terms of the Exchange Agreement, the Investor surrendered the Prior Securities in exchange for the New Securities. Other than the surrender of the Prior Securities, no consideration of any kind whatsoever was given by the Investor to the Company in connection with the Exchange Agreement. The terms of the New Securities are the same as the Prior Securities except for the pricing of the shares issuable under the New Note and the shares issuable upon exercise of the New Warrant. The New Securities are composed of the New Note, which is a 10% Original Issue Discount Senior Convertible Promissory Note in the principal amount of $825,000, and the New Warrant. The New Note matures on October 15, 2022, bears interest at a rate of 4% per annum, and is initially convertible into the Company’s common stock at a fixed conversion price of $0.0125 per share, subject to adjustment for stock splits, stock combinations, dilutive issuances, and similar events, as described in the New Note. If the average Closing Price during any 10 consecutive Trading Day period beginning and ending during the 60 Day Effectiveness Period (the “Average Closing Price”) is below the Conversion Price than the conversion price will be reduced to such Average Closing Price but in no event less than $0.00875. In accordance with ASC 470-50, Debt Modifications and Extinguishments, the Company performed an assessment of whether the Exchange Agreement transaction was deemed to be new debt, a modification of existing debt, or an extinguishment of existing debt. The Company evaluated the April 20, 2022 Exchange Agreement for debt modification and concluded that the debt qualified for debt extinguishment. On April 20, 2022, the Company agreed to reduce the conversion price from $0.025 per share to $0.0125 per share, and to cancel the Initial Warrant to purchase 16,500,000 shares of common exercisable at $0.05 per shares, and to issue a New Warrant to purchase 33,000,000 shares exercisable at $0.025 per share. All other terms of the convertible note and warrants remain unchanged, and therefore did not change the cash flows of the note. The New Warrants did not contain any features requiring liability treatment and therefore were classified as equity. The Company determined the transaction was considered a debt extinguishment because of the change in conversion price was substantial. Upon extinguishment, the Company had $395,313 of unamortized initial debt discount recorded which it wrote off, and the Company recorded a buyback of $160,993 which represents the reversal of calculated beneficial conversion feature on the initial debt upon settlement, for an aggregate net loss on debt extinguishment of $234,320. The Company recorded a new debt discount in connection with the New Note which was calculated based on the relative fair value of the New Warrants of $325,785. Additionally, the New Note is convertible into common shares at an initial conversion price of $0.0125 which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. The value allocated to the New Warrants was $325,785, and $354,215 was allocated to the beneficial conversion feature. Since the intrinsic value of the beneficial conversion feature and warrants was greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the beneficial conversion feature and warrants issued was limited to the amount of the proceeds allocated to the convertible instrument. Accordingly, the Company recorded an aggregate non-cash debt discount of $680,000 with the credit to additional paid in capital. This debt discount will be amortized to interest expense over the remaining term of the Convertible Note. The Company uses the Binomial Valuation Model to determine the fair value of its stock warrants which requires the Company to make several key judgments including: ● the value of the Company’s common stock; ● the expected life of issued stock warrants; ● the expected volatility of the Company’s stock price; ● the expected dividend yield to be realized over the life of the stock warrants; and ● the risk-free interest rate over the expected life of the stock warrants. The Company’s computation of the expected life of issued stock warrants was based on the simplified method as the Company does not have adequate exercise experience to determine the expected term. The interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The computation of volatility was based on the historical volatility of the Company’s common stock. On October 18, 2021 and April 20, 2022 (the Exchange Agreement date), the fair value of the stock warrants were estimated at issuance using the Binomial Valuation Model with the following assumptions: 2022 2021 Dividend rate — —% Term (in years) 4 years 5 years Volatility 246.6% to 329.6% 348.5% Risk—free interest rate 2.79% to 3.12% 1.16% At any time this Note or any amounts accrued and payable thereunder remain outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any common stock or common stock equivalents entitling any Person to acquire shares of the Company’s common stock at an effective price per share that is lower than the conversion price then in effect (such lower price, the “Base Conversion Price” and each such issuance or announcement a “Dilutive Issuance”), then the conversion price shall be immediately reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such common stock or common stock equivalents are issued. On June 23, 2022, the Company issued common stock equivalents with an initial conversion price of $0.011 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the New April 2022 Note was reduced to $0.011 per share and the exercise price of the New April 2022 Warrant was lowered to $0.011. As a result of the June 23, 2022 down-round provisions, the Company calculated the difference between the warrants fair value on June 23, 2022, the date the down-round feature was triggered using the then current exercise price of $0.025 and the new exercise price of $0.011. On June 23, 2022, the Company recorded a deemed dividend of $3,702 which represents the fair value transferred to the warrant holders from the down round feature being triggered. No additional beneficial conversion feature amount was recorded based on the June 23, 2022 valuation as the ratcheted beneficial conversion feature value was lower than the original amount. Additionally, on September 6, 2022, the Company issued common stock equivalents with an initial conversion price of $0.009 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the New April 2022 Note was reduced to $0.009 per share and the exercise price of the New April 2022 Warrant was lowered to $0.009. As a result of the September 6, 2022 down-round provisions, the Company calculated the difference between the warrants fair value on September 6, 2022, the date the down-round feature was triggered using the then current exercise price of $0.011 and the new exercise price of $0.009. On September 6, 2022, the Company recorded a deemed dividend of $733 which represents the fair value transferred to the warrant holders from the down round feature being triggered. No additional beneficial conversion feature amount was recorded based on the September 6, 2022 valuation as the ratcheted beneficial conversion feature value was lower than the original amount. Pursuant to the provisions of ASC 815-40 – Derivatives and Hedging – Contracts in an Entity’s Own Stock For the nine months ended September 30, 2022 and 2021, amortization of debt discounts related to the convertible notes payable amounted to $852,812 and $0, respectively, which has been included in interest expense on the accompanying unaudited condensed consolidated statements of operations. On September 30, 2022 and December 31, 2021, accrued interest payable under the convertible note amounted to $31,734 and $7,052, respectively, and is included in accrued expenses on the accompanying unaudited condensed consolidated balance sheets. On September 30, 2022 and December 31, 2021, convertible note payable consisted of the following: September 30, December 31, Convertible note payable $ 825,000 $ 825,000 Less: unamortized debt discount (85,000 ) (653,125 ) Convertible note payable, net 740,000 171,875 Less: current portion of convertible note payable (740,000 ) (171,875 ) Convertible note payable – long-term $ - $ - |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 8 – NOTES PAYABLE On September 30, 2022 and December 31, 2021, notes payable consisted of the following: September 30, December 31, Notes payable $ 1,716,051 $ 978,925 Note payable – PPP note 18,823 48,929 Total notes payable 1,734,874 1,027,854 Less: unamortized debt discount (193,776 ) - Note payable, net 1,541,098 1,027,854 Less: current portion of notes payable, net of discount (1,528,084 ) (488,414 ) Notes payable – long-term $ 13,014 $ 539,440 Notes Payable On November 14, 2018, the Company entered into a Revolving Credit Facility Loan and Security Agreement (“Loan Agreement”) and a Secured Promissory Note (the “Note”) with BOCO Investments, LLC (the “Lender”). Subject to and in accordance with the terms and conditions of the Loan Agreement and the Note, the Lender agreed to lend to the Company up to $400,000 (the “Maximum Loan Amount”) against the issuance and delivery by the Company of the Note for use as working capital and to assist in inventory acquisition. In 2018, the Lender loaned $400,000 to the Company, the Maximum Loan Amount. The Company should have repaid all principal, interest and other amounts outstanding on or before November 14, 2020. The Company’s obligations under the Loan Agreement and the Note are secured by a first-priority security interest in substantially all the Company’s assets (the “Collateral”). The outstanding principal advanced to Company pursuant to the Loan Agreement initially bore interest at the rate of 12% per annum, compounded annually. Upon the occurrence of an Event of Default under the Loan Agreement and Note, all amounts then outstanding (including principal and interest) shall bear interest at the rate of 18% per annum, compounded annually until the Event of Default is cured. Additionally, at or prior to December 31, 2018, the Company should have achieved an accounts receivable balance plus inventory equal to the unpaid principal balance of the Note (the “Minimum Asset Amount”). In the event that the Company’s accounts receivable balance plus inventory balance is less than paid principal balance of the Note as of December 31, 2018 , Commencing on January 10, 2019 and on or before the 10 th On May 10, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) and a Secured Promissory Note (the “Promissory Note”) in the amount of $500,000 with a lender. The Promissory Note shall accrue interest at 8% per annum, compounded annually, and all outstanding principal and accrued interest is due and payable of May 10, 2023. The Company’s obligations under the Loan Agreement and the Promissory Note are secured by a second priority security interest in substantially all of the Company’s assets (the “Collateral”). The Loan Agreement and Promissory Note contain customary representations, warranties, and covenants, including certain restrictions on the Company’s ability to incur additional debt or create liens on its property. The Loan Agreement and the Promissory Note also provide for certain events of default, including, among other things, payment defaults, breaches of representations and warranties and bankruptcy or insolvency proceedings, the occurrence of which, after any applicable cure period, would permit Lender, among other things, to accelerate payment of all amounts outstanding under the Loan Agreement and the Promissory Note, as applicable, and to exercise its remedies with respect to the Collateral. Upon the occurrence of an Event of Default under the Loan Agreement and Promissory Note, all amounts then outstanding (including principal and interest) shall bear interest at the rate of 18% per annum, compounded annually until the Event of Default is cured. On September 30, 2022 and December 31, 2021, accrued interest payable under this Promissory Note amounted to $55,781 and $25,863, respectively, and is included in accrued expenses on the accompanying unaudited condensed consolidated balance sheets. On September 30, 2022 and December 31, 2021, principal amount due under this Promissory Note amounted to $500,000. On July 22, 2021, in connection with the acquisition of Mobile Tint, the Company assumed vehicle and equipment loans in the amount of $95,013. These loans bear interest at rates ranging from 6.79% to 8.24% and are payable monthly through April 2025. On September 30, 2022 and December 31, 2021, notes payable related to these vehicle and equipment loans amounted to $48,479 and $78,925, respectively. On March 14, 2022, the Company entered into an Original Issue Discount Promissory Note and Security Agreement (the “March 2022 Note”) in the principal amount of $197,500 with Mercer Street Global Opportunity Fund, LLC (the “Investor”). The March 2022 Note was funded on March 14, 2022 and the Company received net proceeds of $175,000 which is net of an original issue discount and investor legal fees of $22,500. The original issue discount was recorded as a debt discount to be amortized over the life of the March 2022 note. The March 2022 Note matures 12 months after issuance and bears interest at a rate of 3% per annum. At any time, the Company may prepay all or any portion of the principal amount of the March 2022 Note and any accrued and unpaid interest without penalty. The March 2022 Note also creates a lien on and grants a priority security interest in all the Company’s assets. In connection with the March 2022 Note, the Company issued 823,529 shares of its common stock to the placement agent as fee for the capital raise. The 823,529 shares of common stock issued were recorded as a debt discount of $12,963 based on the relative fair value method to be amortized over the life of the March 2022 Note. For the nine months ended September 30, 2022, amortization of debt discount related to the March 2022 Note amounted to $19,209 which has been included in interest expense on the accompanying unaudited condensed consolidated statements of operations. On September 30, 2022, the principal balance due on the March 2022 Note amounted to $197,500 and accrued interest payable amounted to $3,263. GS Capital Debt On June 23, 2022, the Company entered into entered into a Securities Purchase Agreement (“Agreement”) with GS Capital Partners, LLC (“GS Capital”), pursuant to which a Promissory Note (the “GS Capital Note”) was made to GS Capital in the aggregate principal amount of $195,000. The Note was purchased for $176,000, reflecting an original issuance discount of $19,000, and was funded on June 24, 2022 (less legal and other administrative fees). The Company received net proceeds of $148,420. The Company further issued GS Capital a total of 1,750,000 commitment shares (“Commitment Shares”) as additional consideration for the purchase of the Note (See Note 9). Additionally, the GS Capital Note is convertible upon an event of default into common shares at an initial effective conversion price which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. Principal and interest payments shall be made in 10 installments of $21,060 each beginning on the 90th-day anniversary following the issue date and continuing thereafter each 30 days for nine months. The GS Capital Note matures 12 months after issuance and bears interest at a rate of 8% per annum. GS Capital shall have the right at any time following an Event of Default to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this Note at a conversion price of $0.011, subject to adjustment as defined in the GS Capital Note. The Company did not calculate a beneficial conversion feature since the GS Capital Note is contingently convertible upon default on the GS Capital Note. As of September 30, 2022, the Company is not in default on this note. In the event that following the Issue Date the closing trading price of the Company’s common stock is then being traded is below $0.011 per share for more than ten consecutive trading days, then the conversion price shall be equal to $0.004 per share. The GS Capital Note contains conversion limitations providing that a holder thereof may not convert the Note to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice. Events of default include, amongst other items, failure to pay principal or interest, bankruptcy, delisting of the Company’s stock, financial statement restatements, or if the Company effectuates a reverse split. Upon the occurrence of any event of default, the GS Capital Note shall become immediately and automatically due and payable and the Company shall pay to GS Capital, in full satisfaction of its obligations hereunder, an amount equal to: (a) the then outstanding principal amount of this note plus plus On July 26, 2022, the Company closed a Securities Purchase Agreement (“July 2022 Agreement”) with GS Capital, pursuant to which a Promissory Note (“July 2022 Note”) was made to GS Capital in the aggregate principal amount of $195,000. The July 2022 Note was purchased for $176,000, reflecting an original issuance discount of $19,000, and was funded on July 28, 2022 (less legal and other administrative fees). The Company received net proceeds of $158,920. The Company further issued GS Capital a total of 2,600,000 commitment shares (“July 2022 Commitment Shares”) as additional consideration for the purchase of the July 2022 Note. In addition, the Company issued 998,008 of its common stock to the placement agent as fee for the capital raise, respectively. The July Commitment Shares and the placement agent shares were recorded as a debt discount of $34,606 based on the relative fair value method to be amortized over the life of the Note. Additionally, the July 2022 Note is convertible upon an event of default into common shares at an initial effective conversion price which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. Principal and interest payments shall be made in 10 installments of $21,060 each beginning on the 90th-day anniversary following the issue date and continuing thereafter each 30 days for nine months. The July 2022 Note matures 12 months after issuance and bears interest at a rate of 8% per annum. GS Capital shall have the right at any time following an Event of Default to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the July 2022 Note at a conversion price of $0.011, subject to adjustment as defined in the Note. The Company did not calculate a beneficial conversion feature since the GS Capital July 2022 Note is contingently convertible upon a default on the July 2022 Note. As of September 30, 2022, the Company is not in default on this note. In the event that following the Issue Date the closing trading price of the Company’s common stock is then being traded is below $0.011 per share for more than ten consecutive trading days, then the conversion price shall be equal to $0.004 per share. The July 2022 Note contains conversion limitations providing that a holder thereof may not convert the Note to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice. On September 30, 2022, the principal balance due on the GS Capital July 2022 Note amounted to $195,000 and accrued interest payable amounted to $2,864. On September 6, 2022, the Company closed a Securities Purchase Agreement (“September 2022 Agreement”) with GS Capital, pursuant to which a Promissory Note (“September 2022 Note”) was made to GS Capital in the aggregate principal amount of $195,000. The September 2022 Note was purchased for $176,000, reflecting an original issuance discount of $19,000, and was funded on September 6, 2022 (less legal and other administrative fees). The Company received net proceeds of $158,920. The Company further issued GS Capital a total of 3,300,000 commitment shares (“September 2022 Commitment Shares”) as additional consideration for the purchase of the September 2022 Note. In addition, the Company issued 773,626 of its common stock to the placement agent as fee for the capital raise, respectively. The September Commitment Shares and the placement agent shares were recorded as a debt discount of $30,326 based on the relative fair value method to be amortized over the life of the Note. Additionally, the September 2022 Note is convertible into common shares upon an event of default at an initial effective conversion price which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. Principal and interest payments shall be made in 9 installments of $23,400 each beginning on the 120th-day anniversary following the issue date and continuing thereafter each 30 days for eight months. The September 2022 Note matures 12 months after issuance and bears interest at a rate of 8% per annum. GS Capital shall have the right at any time following an Event of Default to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the September 2022 Note at a conversion price of $0.009, subject to adjustment as defined in the Note. The Company did not calculate a beneficial conversion feature since the GS Capital July 2022 Note is contingently convertible upon a default on the September 2022 Note. As of September 30, 2022, the Company is not in default on this note. In the event that following the Issue Date the closing trading price of the Company’s common stock is then being traded is below $0.009 per share for more than ten consecutive trading days, then the conversion price shall be equal to $0.0032 per share. The September 2022 Note contains conversion limitations providing that a holder thereof may not convert the Note to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice. On September 30, 2022, the principal balance due on the GS Capital September 2022 Note amounted to $195,000 and accrued interest payable amounted to $1,068. For the nine months ended September 30, 2022 and 2021, amortization of debt discounts related to notes payable amounted to $38,885 and $0, respectively, which has been included in interest expense on the accompanying unaudited condensed consolidated statements of operations. PPP Loan On April 28, 2020, the Company entered into a Paycheck Protection Program Promissory Note (the “PPP Note”) with respect to a loan of $156,200 (the “PPP Loan”) from Comerica Bank. The PPP Loan was obtained pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES act”) administered by the U.S. Small Business Administration (“SBA”). The PPP Loan matures on April 28, 2022 and bears interest at a rate of 1.00% per annum. The PPP Loan is payable in 18 equal monthly payments of approximately $8,900 commencing November 1, 2020. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Company may apply to have the loan forgiven pursuant to the terms of the PPP if certain criteria are met. The Company applied for forgiveness of its PPP Loan, and on November 4, 2021, the Company was notified that the Small Business Administration forgave $95,000 of the principal loan amount and $1,442 of interest. As of November 4, 2021, the remaining principal balance of the loan was $61,200 and the remaining accrued interest balance was $935. During the nine months ended September 30, 2022, the Company repaid PPP Loan principal of $30,107. On September 30, 2022 and December 31, 2021, the principal amount due under the PPP Loan amounted to $18,823 and $48,929, respectively. As of September 30, 2022 and December 31, 2021, accrued interest payable amounted to $122 and $1,031, respectively. On September 30, 2022, future annual maturities of notes payable are as follows: September 30, Amount 2023 $ 1,721,860 2024 8,534 2025 4,480 Total notes payable on September 30, 2022 $ 1,734,874 |
Shareholders' Deficit
Shareholders' Deficit | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' DEFICIT | NOTE 9 – SHAREHOLDERS’ DEFICIT Preferred Stock Series B Preferred Stock On December 12, 2019, the Company filed an Amendment to its Articles of Incorporation to designate a series of preferred stock, the Series B Convertible Preferred Stock (the “Series B”), with the Secretary of State of the State of Colorado. The Certificate of Designations established 100,000 shares of the Series B, par value $0.10, having such designations, preferences, and rights as determined by the Company’s Board of Directors in its sole discretion, in accordance with the Company’s Articles of Incorporation and Amended and Restated Bylaws. The Certificate of Designations became effective with the State of Colorado upon filing. The Series B ranks senior with respect to dividends and right of liquidation with the Company’s common stock and junior to all existing and future indebtedness of the Company. The Series B has a stated value per share of $1,000, subject to adjustment as provided in the Certificate of Designations (the “Stated Value”), and a dividend rate of 2% per annum of the Stated Value. The Series B is subject to redemption (at Stated Value, plus any accrued, but unpaid dividends (the “Liquidation Value”) by the Company no later than three years after a Deemed Liquidation Event and at the Company’s option after one year from the issuance date of the Series B, subject to a ten-day notice (to allow holder conversion). A “Deemed Liquidation Event” will mean: (a) a merger or consolidation in which the Company is a constituent party or a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of the surviving or resulting corporation or, if the surviving or resulting corporation is a wholly-owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company. The Series B is convertible into common stock at the option of a holder or if the closing price of the common stock exceeds 400% of the Conversion Price for a period of twenty consecutive trading days, at the option of the Company. Conversion Price means a price per share of the common stock equal to 100% of the lowest daily volume weighted average price of the common stock during the two years preceding or subsequent two years following the Issuance Date, subject to adjustment as otherwise provided in the Certificate of Designations (the “Conversion Price”). In the event of a conversion of any Series B, the Company shall issue to the holder a number of shares of common stock equal to the sum of the Stated Value plus accrued but unpaid dividends multiplied by the number of shares of Series B Preferred Stock being converted divided by the Conversion Price. Upon liquidation of the Company after payment or provision for payment of liabilities of the Company and after payment or provision for any liquidation preference payable to the holders of any preferred stock ranking senior to the Series B but prior to any distribution to the holders of Common Stock or preferred stock ranking junior upon liquidation to the Series B, the holders of Series B will be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount with respect to each share of Series B equal to the Liquidation Value. The Series B has voting rights per Series B Share equal to the Liquidation Value per share, divided by the Conversion Price, multiplied by fifty (50). Subject to applicable Colorado law, the holders of Series B will have functional voting control in situations requiring shareholder vote. These Series B preferred share issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the consolidated balance sheet was appropriate. As per the terms of the Series B preferred stock agreements, Series B preferred stock is redeemable for cash and other assets on the occurrence of a deemed liquidation event. A deemed liquidation event includes a change of control which is not in the Company’s control. As such, since Series B preferred stock is redeemable upon the occurrence of an event that is not within the Company’s control, the Series B preferred stock is classified as temporary equity. The Company concluded that the Series B Preferred Stock represented an equity host and, therefore, the redemption feature of the Series B Preferred Stock was not considered to be clearly and closely related to the associated equity host instrument. However, the redemption features did not meet the net settlement criteria of a derivative and, therefore, were not considered embedded derivatives that required bifurcation. The Company also concluded that the conversion rights under the Series B Preferred Stock were clearly and closely related to the equity host instrument. Accordingly, the conversion rights feature on the Series B Preferred Stock were not considered an embedded derivative that required bifurcation. The conversion feature of the Series B Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. On December 12, 2019, the Board of Directors of the Company agreed to satisfy $108,000 of accrued compensation owed to its directors and executive officers (collectively, the “Management”) through a Liability Reduction Plan (the “Plan”). Under this Plan, Management agreed to accept 108 shares of the Company’s Series B convertible preferred stock in settlement of accrued compensation. On December 21, 2020, the Board of Directors of the Company agreed to satisfy $318,970 of accrued compensation owed to its directors and executive officers (collectively, the “Management”) through a Liability Reduction Plan (the “Plan”). Under this Plan, Management agreed to accept 319 shares of the Company’s Series B convertible preferred stock in settlement of accrued compensation. On January 18, 2021, the Board of Directors of the Company agreed to satisfy $295,000 of accrued compensation owed to its executive officers and former executive officer (collectively, the “Management”) through a Liability Reduction Plan (the “Plan”). Under this Plan, Management agreed to accept 295 shares of the Company’s Series B convertible preferred stock in settlement of accrued compensation. The conversion feature of the Series B Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series B Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from the date of issuance, the Company immediately recorded non-cash stock-based compensation of $3,778,810 related to the beneficial conversion feature arising from the issuance of Series B Preferred Stock. On January 6, 2022, the Board of Directors of the Company agreed to satisfy $278,654 of accrued compensation owed to its executive officers (collectively, the “Management”) as of December 31, 2021 and included in accrued compensation on the accompanying unaudited condensed consolidated balance sheet. Management agreed to accept 278 shares of the Company’s Series B convertible preferred stock in settlement of this accrued compensation. The conversion feature of the Series B Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series B Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from the date of issuance, the Company immediately recorded non-cash stock-based compensation of $957,556 related to the beneficial conversion feature arising from the issuance of Series B Preferred Stock. 158 Series B Preferred Stock vested on May 1, 2021 and 842 shall vest of May 1, 2023. By mutual agreement between the parties, the vesting date of previously granted Series B Preferred stock was extended through May 2023. During the nine months ended September 30, 2022 and 2021, the Company accrued dividends of $14,892 and $10,525, respectively, which was included in Series B convertible preferred stock on the accompanying unaudited condensed consolidated balance sheets. As of September 30, 2022, the net Series B Preferred Stock balance was $1,032,156, which includes stated value of $1,000,623 and accrued dividends payable of $31,533. As of December 31, 2021, the net Series B Preferred Stock balance was $738,611, which includes stated value of $721,970 and accrued dividends payable of $16,641. The net Series B Preferred Stock balance is included on the accompanying unaudited condensed consolidated balance sheets. Series C Preferred Stock On August 20, 2020, the Company filed an Amendment to its Articles of Incorporation to designate a series of preferred stock, the Series C Convertible Preferred Stock (the “Series C”), with the Secretary of State of the State of Colorado. The Certificate of Designations established 100,000 shares of the Series C, par value $0.10, having such designations, preferences, and rights as determined by the Company’s Board of Directors in its sole discretion, in accordance with the Company’s Articles of Incorporation and Amended and Restated Bylaws. The Certificate of Designations became effective with the State of Colorado upon filing. The Series C ranks senior with respect to dividends and right of liquidation with the Company’s common stock and junior to all existing and future indebtedness of the Company. The Series C has a stated value per share of $100, subject to adjustment as provided in the Certificate of Designations (the “Stated Value”), and a dividend rate of 2% per annum of the Stated Value. The Company has no option to redeem the Series C Preferred Stock. If the Company determines to liquidate, dissolve or wind-up its business and affairs, or effect any Deemed Liquidation Event as defined below, each of which has been approved by the holders of a majority of the shares of Series C Preferred Stock then outstanding, the Company will redeem all of the shares of Series C Preferred Stock outstanding immediately prior to such mandatory redemption event at a price per share of Series C Preferred Stock equal to the aggregate Series C Liquidation Value, which is 150% of the sum of the Stated Value plus accrued and unpaid dividends, for the shares of Series C Preferred Stock being redeemed. The Company will deliver ten-day advance written notice prior to the consummation of any mandatory redemption event via email or overnight courier (“Notice of Mandatory Redemption”) to each Holder whose shares are to be redeemed. The Series C is subject to redemption at liquidation Value noted above by the Company. Upon receipt by any Holder of a Notice of Mandatory Redemption, if Holder does not choose to convert, such Holder will promptly submit to the Company such Holder’s Series C Preferred Stock certificates on the Redemption Payment Date. Upon receipt of such Holder’s Series C Preferred Stock certificates, the Company will pay the applicable redemption price to such Holder in cash. A “Deemed Liquidation Event” will mean: (a) a merger or consolidation in which the Company is a constituent party or a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of the surviving or resulting corporation or, if the surviving or resulting corporation is a wholly-owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company. Since the Company has determined that a deemed liquidation event is not probable, the Series C is stated at the Stated Value plus accrued and unpaid dividends rather than redemption value, which is liquidation value. The Series C is convertible at the option of a holder at any time following the issuance date. In the event of a conversion of any Series C Preferred Stock, the Company shall issue to such Holder a number of Conversion Shares equal to (x) the sum of (1) the Stated Value per share of Series C Preferred Stock plus (2) any accrued but unpaid dividends thereon multiplied by (y) the number of shares of Series C Preferred Stock held by such Holder and subject to the Holder Conversion Notice, divided by (z) the Conversion Price with respect to such Series C Preferred Stock. Conversion Price means a price per share of the common stock equal to the lowest daily volume weighted average price of the common stock for any trading day during the two years preceding the date of delivery of the conversion notice, subject to adjustment as otherwise provided in the Series C Certificate of Designation. Upon liquidation of the Company after payment or provision for payment of liabilities of the Company and after payment or provision for any liquidation preference payable to the holders of any preferred stock ranking senior to the Series C but prior to any distribution to the holders of Common Stock or preferred stock ranking junior upon liquidation to the Series C, the holders of Series C will be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount with respect to each share of Series C equal to the Liquidation Value. Through April 28, 2021, each share of Series C Preferred Stock was entitled to vote on all matters requiring shareholder vote. Each share of Series C Preferred Stock was entitled to the number of votes per share based on the calculation of the number of conversion shares of Series C Preferred Stock is then convertible. On April 28, 2021, the Company filed an Amended and Restated Certificate of Designations of Preferences, Rights, and Limitations of Series C Convertible Preferred Stock (the “Amended Certificate”). The Amended Certificate changed the voting rights of the Series C Preferred Stock on any matters requiring shareholder approval or any matters on which the common shareholders are permitted to vote. Series C Preferred Stock shall have no right to vote on any matters requiring shareholder approval or any matters on which the common shareholders (or other preferred stock of the Company which may vote with the common shareholders) are permitted to vote. With respect to any voting rights of the Series C Preferred Stock set forth herein, the Series C Preferred Stock shall vote as a class, each share of Series C Preferred Stock shall have one vote on any such matter, and any such approval may be given via a written consent in lieu of a meeting of the Holders of the Series C Preferred Stock. Any reference herein to a determination, decision or election being made by the “Majority Holders” shall mean the determination, decision or election as made by Holders holding a majority of the issued and outstanding shares of Series C Preferred Stock at such time. It also adjusts the conversion feature of the Series C Preferred Stock so that any Holder of Series C Preferred Stock cannot convert any portion of the Series C in excess of that number of Series C Preferred Stock that upon conversion would result in beneficial ownership by the Holder of more than 4.99% of the outstanding shares of common stock of the Company. These Series C preferred stock issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the holder, were evaluated to determine whether temporary or permanent equity classification on the consolidated balance sheet was appropriate. As per the terms of the Series C preferred stock agreements, Series C preferred stock is redeemable for cash and other assets on the occurrence of a deemed liquidation event. A deemed liquidation event includes a change of control which is not in the Company’s control. As such, since Series C preferred stock is redeemable upon the occurrence of an event that is not within the Company’s control, the Series C preferred stock is classified as temporary equity. The Company concluded that the Series C Preferred Stock represented an equity host and, therefore, the redemption feature of the Series C Preferred Stock was not considered to be clearly and closely related to the associated equity host instrument. However, the redemption features did not meet the net settlement criteria of a derivative and, therefore, were not considered embedded derivatives that required bifurcation. The Company also concluded that the conversion rights under the Series C Preferred Stock were clearly and closely related to the equity host instrument. Accordingly, the conversion rights feature on the Series C Preferred Stock were not considered an embedded derivative that required bifurcation. The conversion feature of the Series C Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. During August and September 2020, the Company entered into subscription agreements with an accredited investor whereby the investor agreed to purchase an aggregate of purchase 6,300 shares of the Company’s Series C Convertible Preferred Stock for $630,000, or $100.00 per share (the “Stated Value”), which were used to pay off various discounted convertible instruments and redeem Series A preferred stock. During the three months ended December 31, 2020, the Company entered into subscription agreements with an accredited investor whereby the investor agreed to purchase an aggregate of purchase 7,000 shares of the Company’s Series C Convertible Preferred Stock for $700,000, or $100.00 per share (the “Stated Value”), which were used from working capital purposes. On February 24, 2021, the Company entered into a subscription agreement with an accredited investor whereby the investor agreed to purchase 2,500 shares of the Company’s Series C Convertible Preferred Stock for $250,000, or $100.00 per share, the stated value, which was used for working capital purposes. The conversion feature of the Series C Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series C Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from the date of issuance, the Company immediately recorded a non-cash deemed dividend of $2,845,238 related to the beneficial conversion feature arising from the issuance of Series C Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share. On August 25, 2021, the Company entered into a subscription agreement with an accredited investor whereby the investor agreed to purchase 3,000 shares of the Company’s Series C Convertible Preferred Stock for $300,000, or $100.00 per share, the stated value, which was used for working capital purposes. The conversion feature of the Series C Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series C Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from the date of issuance, the Company immediately recorded a non-cash deemed dividend of $1,509,523 related to the beneficial conversion feature arising from the issuance of Series C Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share. On December 7, 2021, the Company issued 1,500,000 shares of its common stock upon conversion of 120 shares of Series C Preferred Stock with a stated value of $12,000. On January 12, 2022, the Company issued 1,543,151 shares its common stock upon the conversion of 120 shares of Series C preferred with a stated redemption value of $12,000. The conversion price was based on contractual terms of the related Series C preferred shares. On April 20, 2022, the Company issued 13,184,548 shares its common stock upon the conversion of 1,020 shares of Series C preferred with a stated redemption value of $102,000. The conversion price was based on contractual terms of the related Series C preferred shares. During the nine months ended September 30, 2022 and 2021, the Company accrued dividends of $26,920 and $23,504, respectively, which was included in Series C convertible preferred stock on the accompanying unaudited condensed consolidated balance sheets. As of September 30, 2022, the net Series C Preferred Stock balance was $1,819,932, which includes stated value of $1,754,000 and accrued dividends payable of $65,932. As of December 31, 2021, the net Series C Preferred Stock balance was $1,907,012, which includes stated liquidation value of $1,868,000 and accrued dividends payable of $39,012. The net Series C Preferred Stock balance is included on the accompanying unaudited condensed consolidated balance sheets. Common Stock Issuance of Common Stock for Services Issuance of Common Stock for Professional Fees 2021 On January 6, 2021, the Company issued 100,000 shares of its common stock for business development services rendered. These shares were valued at $10,000, or $0.10 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with the issuance of these shares, during the nine months ended September 30, 2021, the Company recorded stock-based professional fees of $10,000. On February 1, 2021, the Company issued an aggregate of 700,000 shares of its common stock for business development, advisory and consulting services rendered and to be rendered. These shares were valued at $54,600, or $0.078 per common share, based on the quoted closing price of the Company’s common stock on the measurement date and will be amortized into stock-based consulting fees over the term of the agreement or vesting period ranging from immediately to one year. In connection with the issuance of these shares, during the nine months ended September 30, 2021, the Company recorded stock-based professional fees of $41,600 and prepaid expenses of $13,000 which was amortized into stock-based professional fees over the remaining term of the agreement or vesting period. On March 8, 2021, the Company issued an aggregate of 750,000 shares of its common stock for business development and consulting services rendered and to be rendered. These shares were valued at $49,500, or $0.066 per common share, based on the quoted closing price of the Company’s common stock on the measurement date, and will be amortized into stock-based consulting fees over the term of the agreement or vesting period. In connection with the issuance of these shares, during the nine months ended September 30, 2021, the Company recorded stock-based professional fees of $49,500. On April 7, 2021, the Company issued 2,500,000 shares of its common stock for investor relations services to be rendered. These shares were valued at $135,000, or $0.054 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with these shares, the Company recorded stock-based professional fees of $135,000. On June 3, 2021, the Company issued 200,000 shares of its common stock for technology services rendered. These shares were valued at $6,000, or $0.03 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with the issuance of these shares, the Company recorded stock-based professional fees of $6,000. On July 7, 2021, the Company issued 2,500,000 shares of its common stock for investor relations services to be rendered. These shares were valued at $72,500, or $0.029 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with these shares, the Company recorded stock-based professional fees of $72,500. On August 23, 2021, the Company issued 500,000 shares of its common stock for business development and consulting services rendered and to be rendered. These shares were valued at $19,000, or $0.038 per common share, based on the quoted closing price of the Company’s common stock on the measurement date, and will be amortized into stock-based consulting fees over the term of the agreement or vesting period. In connection with the issuance of these shares, as of September 30, 2021, the Company recorded stock-based professional fees of $1,979 and prepaid expenses of $17,021 which will be amortized into stock-based professional fees over the term of the agreement or vesting period of 1.00 year. 2022 On June 7, 2022, the Company issued an aggregate of 4,000,000 shares of its common stock for business development and consulting services rendered and to be rendered. These shares were valued at $48,000, or $0.012 per common share, based on the quoted closing price of the Company’s common stock on the measurement date, and will be amortized into stock-based consulting fees over the term of the agreement. In connection with the issuance of these shares, during the nine months ended September 30, 2022, the Company recorded stock-based professional fees of $15,000 and prepaid expenses of $33,000 which will be amortized into stock-based professional fees over the remaining term of the agreement. On June 24, 2022, the Company issued an aggregate of 3,000,000 shares of its common stock for business development and consulting services rendered and to be rendered. These shares were valued at $54,000, or $0.018 per common share, based on the quoted closing price of the Company’s common stock on the measurement date, and will be amortized into stock-based consulting fees over the term of the agreement. In connection with the issuance of these shares, during the nine months ended September 30, 2022, the Company recorded stock-based professional fees of $54,000. On July 1, 2022, the Company granted a restricted stock award of 2,500,000 common shares of the Company to a consultant of the Company for business development and consulting services rendered, which shares were valued at $31,250, or $0.0125 per common share, based on the quoted closing price of the Company’s common stock on the measurement date, and will be amortized into stock-based consulting fees over the term of the agreement. In connection with the issuance of these shares, during the nine months ended September 30, 2022, the Company recorded stock-based professional fees of $15,625 and prepaid expenses of $15,625 as of September 30, 2022, which will be amortized into stock-based professional fees over the remaining term of the agreement. On July 15, 2022, the Company granted a restricted stock award of 5,454,545 common shares of the Company to a consultant of the Company for government relations services to be rendered, which shares were valued at $60,000, or $0.011 per common share, based on the quoted closing price of the Company’s common stock on the measurement date, and will be amortized into stock-based consulting fees over the term of the agreement. In connection with the issuance of these shares, during the nine months ended September 30, 2022, the Company recorded stock-based professional fees of $25,000 and prepaid expenses of $35,000 as of September 30, 2022, which will be amortized into stock-based professional fees over the remaining term of the agreement. During the nine months ended September 30, 2022, the Company recorded stock-based professional fees of $119,321 in connection with the amortization of prepaid expenses of $119,321 related to common shares previously issued. During the nine months ended September 30, 2021, the Company recorded stock-based professional fees of $43,250 in connection with the amortization to prepaid expenses of $38,250 and accretion of stock-based professional fees of $5,000 related to common shares previously issued. Issuance of Common Stock for Stock-Based Compensation 2021 On February 1, 2021, the Company issued 200,000 shares of its common stock to an individual who agreed to act as the Company’s national sales manager for services to be rendered. These shares were valued at $15,600, or $0.078 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. These shares were to vest on May 1, 2022. On May 17, 2021, this individual resigned, and these shares have been forfeited. On March 8, 2021, the Company granted restricted stock awards for an aggregate of 2,500,000 common shares of the Company to an employee and an officer of the Company for services to be rendered. which were valued at $165,000, or $0.066 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. These shares were to vest on May 1, 2022. On May 17, 2021, this individual resigned, and these shares have been forfeited. On July 22, 2021, pursuant to the Share Exchange Agreement and Plan of Reorganization (See Note 3), the Company issued 976,500 shares of its common stock to employees of Mobile Tint LLC as a bonus. These shares were valued at $24,413, or $0.025 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with these shares, the Company recorded stock-based compensation of $24,413. On September 17, 2021, the Company granted a restricted stock award for 1,000,000 common shares of the Company to an employee for services to be rendered through May 1, 2022 which were valued at $30,600, or $0.031 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. These shares will vest on May 1, 2022. In connection with these shares, the Company shall record stock-based compensation over the vesting period. 2022 On March 24, 2022, the Company granted restricted stock awards of 500,000 vested common shares of the Company to an employee of the Company for services rendered. The awards were valued at $14,250, or $0.0285 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. On July 12, 2022, the Company granted a restricted stock award of 1,000,000 common shares of the Company to an employee of the Company. The shares will vest on May 1, 2023. These shares were valued on the date of grant at $11,000, or $0.011 per common share based on the quoted closing price of the Company’s common stock on the measurement date. In connection with these shares, the Company shall record stock-based compensation over the vesting period. On August 12, 2022, the Company granted a restricted stock award of 2,000,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company may be involved in litigation related to claims arising out of its operations in the normal course of business. As of September 30, 2022, other than discussed below, the Company is not involved in any other pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows. On January 20, 2022, we received an Order Directing Examination and Designating Officers to Take Testimony (a “Formal Order”) from the SEC. The Formal Order authorizes that an examination be made to determine whether a stop order should be issued under Section 8(d) of the Securities Act of 1933 with respect to the Company’s Registration Statement on Form S-1, and any supplements and amendments thereto. The Formal Order indicates that the Form S-1 may be deficient in that it may contain untrue statements of material fact or omit to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading concerning, among other things, the Company’s revenue and financial condition. On April 15, 2022, the Company filed an amendment to its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The restatement had the cumulative effect of decreasing the Company’s reported revenue for Fiscal 2020 by $102,569 and decreasing the Company’s bad debt expense for the same period by $102,569. There was no effect on Company’s reported net loss for Fiscal 2020 or on the financial condition of the Company on December 31, 2020. The Company received a subpoena from the SEC on April 25, 2022, requesting all documents and communications concerning the review of C-Bond’s revenue recognition practices for fiscal year 2020. The Company has provided the requested information and its Chief Executive Officer provided his testimony regarding this Formal Order in October 2022. On March 8, 2021, a former officer of the Company resigned. Both parties alleged certain claims against the other, including certain compensation claims, and are in discussion regarding resolution. Neither party has filed litigation. The Company intends to vigorously defend itself against any possible claims and assert any relevant claims against the former executive and believes it will prevail. In July 2021, a former employee of the Company filed a small claims case for approximately $16,000 in Harris County, TX, and the Company filed its response in August 2021. There has been no further communication from the Court. The Company intends to vigorously defend itself against the claim made and believes it will prevail. As of September 30, 2022 and December 31, 2021, the Company has accrued compensation of $18,250 to this former employee, which is included in accrued compensation on the accompanying unaudited condensed consolidated balance sheets. Employment Agreements On October 18, 2017, the Company entered into an employment agreement with Mr. Scott Silverman, pursuant to which he serves as the Chief Executive Officer of the Company for an initial term of three years that extends for successive one-year renewal terms unless either party gives 30-days’ advance notice of non-renewal. As consideration for these services, the employment agreement provides Mr. Silverman with the following compensation and benefits: ● An annual base salary of $300,000, with a 10% increase on each anniversary date contingent upon achieving certain performance objectives as set by the Board. Until the Company raises $1,000,000 in debt or equity financing after entering into this agreement, Mr. Silverman will receive ½ of the base salary on a monthly basis with the other ½ being deferred. Upon the financing being raised, Mr. Silverman will receive the deferred portion of his compensation and his base salary will be paid in full moving forward. ● After the first $500,000 of equity investments is raised by the Company, after entering into this employment agreement, Mr. Silverman will receive a capital raise success bonus of 5% of all equity capital raised from investors/lenders introduced by him to the Company. ● Annual cash performance bonus opportunity as determined by the Board. ● An option to acquire 3,000,000 common shares of the Company, with a strike price of $0.31 per unit. These options vested pro rata on a monthly basis for the term of the employment agreement. On each anniversary, Mr. Silverman will be eligible to be granted a minimum of 500,000 stock options of the Company at a strike price of $0.85 per common unit contingent upon the achievement of certain performance objectives. ● Certain other employee benefits and perquisites, including reimbursement of necessary and reasonable travel and participation in retirement and welfare benefits. The receipt of $1,240,000 in connection with the April 25, 2018 financing triggered the right of the employee to receive the deferred salary and the 5% bonus provision disclosed above. Mr. Silverman’s employment agreement provides that, in the event that his employment is terminated by the Company without “cause” (as defined in his employment agreement), or if Mr. Silverman resigned for “good reasons” (as defined in his new employment agreement), subject to a complete release of claims, he will be entitled to (i) retain all stock options previously granted; and (ii) receive any benefits then owed or accrued along with one year of base salary and any unreimbursed expenses incurred by him. All amounts shall be paid on the termination date. In the event that Mr. Silverman’s employment is terminated by the Company for “cause” (as defined in his employment agreement), or if Mr. Silverman resigned without “good reasons” (as defined in his employment agreement), subject to a complete release of claims, he will be entitled to receive any unpaid base salary and benefits then owed or accrued and any unreimbursed expenses incurred by him. Additionally, if a change of control (as defined in his employment agreement) occurs during the term of this agreement, all unvested stock options will vest in full and if the valuation of the Company in the change of control transaction is greater than $0.85 per common share, then Mr. Silverman shall be paid a bonus equal to two times his minimum base salary and minimum target bonus. Pursuant to the employment agreement, Mr. Silverman will be subject to a confidentiality covenant, a two-year post-termination non-competition covenant and a two-year post-termination non-solicitation covenant. On June 30, 2020, the Company amended the employment agreement of Mr. Silverman to provide for successive one-year extensions until either the executive or the Board of Directors of the Company gives notice to terminate the employment agreement per its terms. This employment agreement amendment also includes an allowance of up to $10,000 per year to cover uncovered medical/dental expenses for Mr. Silverman and his family. On January 18, 2021, the Company’s board of directors approved a bonus to officers and an employee of the Company in the aggregate amount of $330,000 which deferred and recorded as accrued compensation on the bonus approval date. On July 21, 2021, the Company entered into the Employment Agreement with Mr. Wanke, the President of Mobile, to serve as the President of C-Bond’s Safety Solutions Group. Under the three-year Employment Agreement, Mr. Wanke will receive a base salary of $240,000 per year, which may be increased from time to time with the approval of the board of directors. In addition, Mr. Wanke may receive an annual bonus as determined by the board of directors. It is understood that although Mr. Wanke’s base salary will be paid by Mobile, 50% of the base salary will be allocated to the expenses of Mobile, and the other 50% of the base salary will be allocated to the expenses of the Company. The term of this Agreement (the “Initial Term”) shall begin as of July 21, 2021 (the “Effective Date”) and shall end on the earlier of (i) the third anniversary of the Effective Date and (ii) the time of the termination of the Executive’s employment in accordance with the Employment Agreement. This Initial Term and any Renewal Term (as defined below) shall automatically be extended for one or more additional terms of one (1) year each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Executive provide notice to the other Party of their desire to not so renew the Initial Term or Renewal Term (as applicable) at least thirty (30) days prior to the expiration of the then-current Initial Term or Renewal Term, as applicable. All unvested shares of stock and stock options shall expire upon such termination, if any. The Executive shall be eligible for an annual bonus payment in an amount to be determined by the Board of Directors of the Company (the “Bonus”). The Bonus shall be determined and payable based on the achievement of certain performance objectives of the Company as established by the Board and communicated to and agreed to by the Executive in writing as soon as practicable after commencement of the year in respect of which the Bonus is paid. The Bonus, if earned, is payable in cash and/or restricted stock at the discretion of the Board. It is understood between the Parties that the target bonus for each year shall be up to 50% of the Base Salary. On December 8, 2021, the Company’s board of directors approved a bonus to certain officers in the aggregate amount of $309,615 which is equal to 50% of their annual compensation. This bonus will be paid 10% in cash ($30,962) which was paid in December 2021 and 90% in equity amounting $278,653 which as of December 31, 2021 had been accrued and as of December 31, 2021, was included in accrued compensation on the accompanying unaudited consolidated balance sheet. On January 6, 2022, the Board of Directors of the Company agreed to satisfy $278,653 of the bonus owed to its executive officers (collectively, the “Management”). Management agreed to accept 278 shares of the Company’s Series B convertible preferred stock in settlement of this accrued compensation. Licensing agreement Pursuant to an agreement dated April 8, 2016, between the Company and Rice University, Rice University has granted a non-exclusive license to the Company, in nanotube-based surface treatment for strengthening glass and related materials under Rice’s intellectual property rights, to use, make, distribute, offer and sell the licensed products specified in the agreement. In consideration for which, the Company had to pay a one-time non-refundable license fee of $10,000 and royalty payments of 5% of net sales of the licensed products during the term of the agreement and a sell-off period of 180 days from termination, In addition, the Company is required to pay for the maintenance of the patents, This agreement will continue until the expiration of the last to expire of the licensed property rights, unless terminated earlier in accordance with the terms of the agreement. There have been no royalty payments paid or due through September 30, 2022. Anti-dilution rights related to C-Bond Systems, LLC Prior to the Merger, C-Bond Systems, LLC entered into certain contracts, described below, which provided certain anti-dilution protection to the counterparties to those contracts. The Company believes that these contracts do not apply to any future issuances of equity by C-Bond Systems, Inc. In 2013, pursuant to a subscription agreement, the Company’s subsidiary. C-Bond Systems, LLC issued 2,425,300 common shares. To the extent that during the term of the agreement C-Bond Systems, LLC issues any “down-round” or subsequent investments based upon an enterprise value of less than $2,000,000 (“Dilutive Transaction”) (other than an issuance pursuant to an option agreement with an employee or otherwise to compensate an employee, or incident to an acquisition of assets by C-Bond Systems, LLC in which common units were issued to the seller of such assets) contemporaneously with the Dilutive Transaction, the contract obligated C-Bond Systems, LLC to issue the investor additional common units in C-Bond Systems, LLC in an amount which would provide them with the ownership percentage interest which they would have held in C-Bond Systems, LLC represented by the common units purchased by them on this date. In 2015, pursuant to a subscription agreement, C-Bond Systems, LLC issued 3,880,480 common shares to an entity at $0.77 per common share. This agreement entitled the subscriber to anti-dilution protection to the extent that C-Bond Systems, LLC issued any equity in a “down-round” based upon a value of less than $0.77 per common unit of C-Bond Systems, LLC (other than an issuance pursuant to an option agreement with an employee or consultant or otherwise to compensate an employee or consultant, or incident to an acquisition of assets by C-Bond Systems, LLC in which common units are issued to the seller of such assets (“Dilutive Transaction”)). Contemporaneously with the Dilutive Transaction, the contract obligated C-Bond Systems, LLC to issue the Subscriber additional common units in C-Bond Systems, LLC in an amount which would provide the investor with the ownership percentage interest in C-Bond Systems, LLC on a fully diluted basis which Subscriber held immediately prior to the Dilutive Transaction. In 2016, pursuant to a subscription agreement, C-Bond Systems, LLC issued 1,175,902 common shares to an entity at $0.85 per common share. This agreement entitled this investor to customary broad-based weighted average anti-dilution protection to the extent that after the date of this subscription agreement C-Bond Systems, LLC issued any equity in a “down round” based upon a value of less than $0.85 per common share, including the issuance of options with an exercise price per share of less than $0.85 to compensate employees or consultants (“Dilutive Transaction”), subject to exclusions for issuances of common shares or options in connection with strategic partnerships, equity kickers to lenders or vendors, mergers or acquisitions. The agreement obligated C-Bond Systems, LLC to give to this investor written notice (an “Issuance Notice”) of any proposed issuance by C-Bond Systems, LLC of any C-Bond Systems, LLC common units, or other form of equity interest (excluding issuances of C-Bond Systems, LLC options or other equity to compensate employees or consultants and the issuance of shares in connection with strategic partnerships, equity kickers to lenders or vendors, mergers or acquisitions) at least ten business days prior to the proposed issuance date. This contract entitled the investor to purchase their pro rata portion of such shares or other equity interest of C-Bond Systems, LLC at the price and on the other terms and conditions specified in the issuance notice. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 11 – CONCENTRATIONS Concentrations Of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash deposits. The Company places its cash in banks at levels that, at times, may exceed federally insured limits. On September 30, 2022, the Company did not have any cash in excess of FDIC limits of $250,000. The Company has not experienced any losses in such accounts through September 30, 2022. Geographic Concentrations of Sales During the nine months ended September 30, 2022 and 2021, all sales were in the United States. Customer Concentrations For the nine months ended September 30, 2022, one customer accounted for 10% of total sales. For the nine months ended September 30, 2021, three customers accounted for approximately 47.4% of total sales (12.6%, 11.3%, and 23.5%, respectively). On September 30, 2022, three customers accounted for 41.1% (10.3%, 19.3% and 11.5%, respectively) of the total accounts receivable balance. Vendor concentrations Generally, the Company purchases substantially all of its inventory from five suppliers. The loss of these suppliers may have a material adverse effect on the Company’s consolidated results of operations and financial condition. However, the Company believes that, if necessary, alternate vendors could supply similar products in adequate quantities to avoid material disruptions to operations. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 12 – SEGMENT REPORTING During the nine months ended September 30, 2022 and from July 22, 2021 (date of acquisition of Mobile Tint) to September 30, 2021, the Company operated in two reportable business segments - (1) the manufacture and sale of a windshield strengthening water repellent solution as well as a disinfection product, and the sale of multi-purpose glass strengthening primer and window film mounting solutions, including ballistic-resistant film systems and a forced entry system (the “C-Bond Segment”), and (2) the distribution and installation of window film solutions (the “Mobile Tint Segment”). The Company’s reportable segments were strategic business units that offered different products. They were managed separately based on the fundamental differences in their operations and locations. Information with respect to these reportable business segments for the three and nine months ended September 30, 2022 and 2021 was as follows: For the Three Months Ended For the Nine Months Ended 2022 2021 2022 2021 Revenues: C-Bond $ 113,280 $ 80,878 $ 291,254 $ 370,198 Mobile Tint 460,369 593,640 1,333,471 593,640 573,649 674,518 1,624,725 963,838 Depreciation and amortization: C-Bond 1,948 2,472 6,380 7,417 Mobile Tint 20,616 26,461 61,850 26,461 22,564 28,933 68,230 33,878 Interest expense: C-Bond - - - 1,372 Mobile Tint 4,581 1,253 13,237 1,253 Other (a) 440,985 28,647 1,044,447 70,824 445,566 29,900 1,057,684 73,449 Net (loss): C-Bond (260,986 ) (325,016 ) (789,601 ) (1,304,798 ) Mobile Tint (42,648 ) 170,753 (158,076 ) 170,753 Other (a) (642,756 ) (336,514 ) (2,927,484 ) (4,799,730 ) $ (946,390 ) $ (490,777 ) $ (3,875,161 ) $ (5,933,775 ) September 30, December 31, Identifiable long-lived tangible assets on September 30, 2022 and December 31, 2021 by segment C-Bond $ 2,414 $ 8,794 Mobile Tint 102,256 126,228 $ 104,670 $ 135,022 (a) The Company does not allocate any general and administrative expense of its holding company activities to its reportable segments, because these activities are managed at the corporate level. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | NOTE 13 – REVENUE RECOGNITION In connection with the Company’s C-Bond segment, the revenue that the Company recognizes arises from purchase requests the Company receives from its customers. The Company’s performance obligations under purchase orders or by a verbal order correspond to each shipment of product that the Company makes to its customer under the purchase order or verbal order. As a result, each purchase order or verbal order generally contains more than one performance obligation based on the number of products ordered, the quantity of product to be shipped and the mode of shipment requested by the customer. Control of the Company’s products transfers to its customers when the customer is able to direct the use of, and obtain substantially all of the benefits from, the Company’s products, which generally occurs at the later of when the customer obtains title to the product or when the customer assumes risk of loss of the product. The transfer of control generally occurs at a point of shipment from the Company’s warehouse. Once this occurs, the Company has satisfied its performance obligation and the Company recognizes revenue. In connection with the Company’s C-Bond segment, when the Company receives a purchase order or verbal order from a customer, the Company is obligated to provide the product during a mutually agreed upon time period. Depending on the terms of the purchase order or verbal order, either the Company or the customer arranges delivery of the product to the customer’s intended destination. In situations where the Company has agreed to arrange delivery of the product to the customer’s intended destination and control of the product transfers upon loading of the Company’s product onto transportation equipment, the Company has elected to account for any freight income associated with the delivery of these products as freight revenue, since this activity fulfills the Company’s obligation to transfer the product to the customer. In connection with the Company’s Mobile Tint segment, the revenue that the Company recognizes arises from purchase requests the Company receives from its customers. The Company’s performance obligations under purchase order or a signed proposal correspond to each job for the distribution and installation of window film solutions. As a result, each purchase order or signed proposal generally may contain more than one performance obligation based on the specific job. Control of the Company’s products transfers to its customers when the customer is able to direct the use of, and obtain substantially all of the benefits from, the Company’s products, which generally occurs when the job or a specific portion of the job is completed. Once this occurs, the Company has satisfied its performance obligation and the Company recognizes revenue. Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output of input methods including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these methods to be the best available measure of progress on these contracts. Transaction Price The Company agrees with its customers on the selling price of each transaction. This transaction price is generally based on the product, market conditions, including supply and demand balances, labor costs, and freight. In the Company’s C-Bond contracts with customers, the Company allocates the entire transaction price to the sale of product to the customer, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Returns of the Company’s product by its customers are permitted only when the product is not to specification and were not material for the nine months ended September 30, 2022 and 2021. Any sales tax, value added tax, and other tax the Company collects concurrently with its revenue-producing activities are excluded from revenue. Revenue Disaggregation The Company tracks its revenue by product. The following table summarizes our revenue by product for the nine months ended September 30, 2022 and 2021: For the Nine Months Ended 2022 2021 C-Bond Secure multi-purpose and BRS ballistic resistant glass protection systems $ 45,756 $ 184,845 C-Bond Nanoshield solution sales 265,106 159,017 Disinfection products 10,880 7,130 C-Bond installation and other services 40 12,143 Window tint installation and sales recognized over time 1,299,419 593,640 Freight and delivery 3,524 7,063 Total $ 1,624,725 $ 963,838 |
Operating Lease Right-Of-Use (_
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Operating Lease Right-of-Use (“Rou”) Assets and Operating Lease Liabilities [Abstract] | |
OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSETS AND OPERATING LEASE LIABILITIES | NOTE 14 – OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSETS AND OPERATING LEASE LIABILITIES In October 2019, the Company entered into an 18-month lease agreement for the lease of office and warehouse space under a non-cancelable operating lease through May 31, 2021. From the lease commencement date of December 1, 2019 until November 30, 2020, monthly rent shall be $4,444 and from December 1, 2020 to May 31, 2021, monthly rent shall be $4,577 per month. On May 12, 2021 and effective June 1, 2021, the Company entered into an amendment to the lease which extended the lease for one year until May 31, 2022 at a monthly base rent of $5,283. On May 4, 2022 and effective June 1, 2022, the Company entered into an amendment to the lease which extended the lease for three years until May 31, 2025 at a monthly base rent as follows: Rental Period Amount per Month June 1, 2022 – May 31, 2023 $ 5,441 June 1, 2023 – May 31, 2024 $ 5,604 June 1, 2024 – May 31, 2025 $ 5,772 In connection with the Exchange Agreement, the Company was named as guarantor (“Guarantor”) of a Commercial Lease Agreement dated July 21, 2021, by and between landlord MDW Management, LLC, a company owned by Mr. Wanke and his wife and tenant Mobile Tint, LLC d/b/a A-1 Glass (the “Lease”). The term of the Lease is 60 months, at a minimum monthly rent of $5,600 (not including tax), with two five-year options for the tenant to renew. The Company’s obligation as Guarantor of the Lease will terminate upon the occurrence of earlier of the following: (i) the date of Guarantor’s acquisition of 100% of the ownership interests of Mobile; (ii) the date that Guarantor beneficially owns less than an eighty percent (80%) ownership interest in Mobile; or (iii) two (2) years from and after the effective date of the guaranty. In September 2021, the Company entered into a 48-month lease agreement for the lease of office equipment under a non-cancelable operating lease through September 2025. The monthly base rent is $365 per month. In February 2022, the Company entered into a 36-month lease agreement for the lease of a vehicle under a non-cancelable operating lease through January 2025. The monthly base rent is $788 per month. In adopting ASC Topic 842, Leases (Topic 842) on January 1, 2019, the Company had elected the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs (see Note 2). In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. Upon signing of new leases for property and equipment, the Company analyzed the new leases and determined it is required to record a lease liability and a right of use asset on its consolidated balance sheets, at fair value. During the nine months ended September 30, 2022 and 2021, in connection with its property operating leases, the Company recorded rent expense of $127,700 and $79,429, respectively, which is expensed during the period and included in operating expenses on the accompanying unaudited condensed consolidated statements of operations. The significant assumption used to determine the present value of the lease liabilities in February 2022, September 2021 and July 2021 was discount rates ranging from 4% and 12% which was based on the Company’s estimated average incremental borrowing rate. On September 30, 2022 and December 31, 2021, right-of-use asset (“ROU”) is summarized as follows: September 30, December 31, Office leases and office equipment right of use assets $ 480,293 $ 269,590 Less: accumulated amortization (76,742 ) (18,418 ) Balance of ROU assets $ 403,551 $ 251,172 On September 30, 2022 and December 31, 2021, operating lease liabilities related to the ROU assets are summarized as follows: September 30, 2022 December 31, Lease liabilities related to office leases right of use assets $ 404,211 $ 251,246 Less: current portion of lease liabilities (114,770 ) (44,927 ) Lease liabilities – long-term $ 289,441 $ 206,319 On September 30, 2022, future minimum base lease payments due under non-cancelable operating leases are as follows: Twelve months ended September 30, Amount 2023 $ 146,977 2024 148,955 2025 120,908 2026 56,000 Total minimum non-cancelable operating lease payments 472,840 Less: discount to fair value (68,629 ) Total lease liability on September 30, 2022 $ 404,211 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS Due From Related Party In December 2021, the Company advanced $3,750 to a company partially owned by officers of the Company. The advance is non-interest bearing, payable on demand, and as of December 31, 2021 is reflected as due from related party on the accompanying condensed consolidated balance sheets. In June 2022, this advance was deemed uncollectible and the balance was written off to bad debt expense. Note Payable - Related Party On May 2, 2022, the Company entered into a Promissory Note (the “May 2022 Note”) in the principal amount of $250,000 with the Company’s chief executive officer. The May 2022 Note was funded in May 2022 and the Company received net proceeds of $250,000. The May 2022 Note bears interest at a rate of 6% per annum and all outstanding principal and accrued and unpaid interest is due on May 2, 2024. At any time, the Company may prepay all or any portion of the principal amount of the May 2022 Note and any accrued and unpaid interest without penalty. For the nine months ended September 30, 2022, interest expense – related party amounted to $6,247. On September 30, 2022, principal amount due and accrued interest payable - related party amounted to $250,000 and $6,247, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS On October 3, 2022, the Company issued 3,000,000 shares of its common stock for investor relations services to be rendered. These shares were valued at $24,300, or $0.0081 per common share, based on the quoted closing price of the Company’s common stock on the measurement date. In connection with these shares, the Company shall record stock-based professional fees of $24,300 over the contract term of six months. On November 8, 2022, the Company entered into a Promissory Note (the “November 2022 Note”) with a private investor (the “Private Investor”) in the principal amount of $200,000 and received net proceeds of $200,000. The November 2022 Note bears interest at a rate of 8% per annum and all outstanding principal and accrued and unpaid interest is due on November 8, 2024. At any time, the Company may prepay all or any portion of the principal amount of the November 2022 Note and any accrued and unpaid interest without penalty. As security for payment of the principal and interest on the November 2022 Note, the Company and the Private Investor previously entered into that certain Loan and Security Agreement dated May 10, 2021, which is incorporated into the November 2022 Note. On November 9, 2022, the Company closed a Securities Purchase Agreement dated November 4, 2022, with 1800 DIAGONAL LENDING LLC, a Virginia limited liability company, (“Diagonal”), pursuant to which a Promissory Note (“Diagonal Note”) dated November 4, 2022, was made to Diagonal in the aggregate principal amount of $104,250. The Note was funded on November 9, 2022 in the amount of $100,000. The Diagonal Note bears interest at a rate of 12% per annum (22% upon the occurrence of an event of a default) and all outstanding principal and accrued and unpaid interest is due on May 4, 2024. The Company has the right to prepay the Diagonal Note (principal and accrued interest) at any time during the first six months the note is outstanding at the rate of 115% during the first 30 days after issuance, 120% during the 31 st th st th |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company’s unaudited condensed consolidated financial statements include the financial statements of its wholly owned subsidiary, C-Bond Systems, LLC, and its 80% owned subsidiary, Mobile since acquiring 80% of Mobile on July 22, 2021. All significant intercompany accounts and transactions have been eliminated in consolidation. 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 financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in consolidated financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the consolidated financial statements for the year ended December 31, 2021 of the Company which were included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022. |
Going Concern | Going Concern These unaudited 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 unaudited condensed consolidated financial statements, the Company had a net loss of $3,875,161 and $5,933,775 for the nine months ended September 30, 2022 and 2021, respectively. The net cash used in operations was $1,183,111 and $1,288,675 for the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company had an accumulated deficit, shareholders’ deficit, and working capital deficit of $61,404,921, $5,931,380 and $3,684,574, respectively, on September 30, 2022. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from sales of common shares and preferred shares, and from the issuance of promissory notes and convertible promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates during the nine months ended September 30, 2022 and 2021 include estimates for allowance for doubtful accounts on accounts receivable, the estimates for obsolete or slow moving inventory, estimates used in the calculation of progress towards completion on uncompleted jobs, purchase price allocation of acquired businesses, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the estimate of the fair value lease liability and related right of use asset, the valuation of redeemable and mandatorily redeemable preferred stock, the value of beneficial conversion features and deemed dividends, and the fair value of non-cash equity transactions. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, accounts receivable, contract assets and liabilities, notes payable, convertible note payable, accounts payable, accrued expenses, accrued compensation, and lease liabilities approximate their fair market value based on the short-term maturity of these instruments. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 820. ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of 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. The Company had no cash equivalents as of September 30, 2022 and December 31, 2021. |
Accounts Receivable | Accounts Receivable The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. |
Inventory | Inventory Inventory, consisting of raw materials and finished goods, are stated at the lower of cost and net realizable value utilizing the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates and included in cost of sales. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from one to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. Any goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets may have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets are being amortized over a useful life of 5 years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Derivative Financial Instruments | Derivative Financial Instruments The Company had certain financial instruments that were embedded derivatives. The Company evaluated all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10-05-4, Derivatives and Hedging Contracts in Entity’s Own Equity |
Warranty Liability | Warranty Liability The Company provides limited warranties on its products for product defects for periods ranging from 12 months to the life of the product. Warranty costs may include the cost of product replacement, refunds, labor costs and other costs. Allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product warranty claim rates and expected costs to repair or to replace the products under warranty. The Company currently establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior 12 months’ sales activities. If actual return rates and/or repair and replacement costs differ significantly from the Company’s estimates, adjustments to recognize additional cost of sales may be required in future periods. Historically the warranty accrual and the expense amounts have been immaterial. The warranty liability is included in accrued expenses on the accompanying unaudited condensed consolidated balance sheets and amounted $26,733 and $26,733 on September 30, 2022 and December 31, 2021, respectively. For the nine months ended September 30, 2022 and 2021, warranty costs amounted to $0. |
Beneficial Conversion Feature | Beneficial Conversion Feature Convertible debt includes conversion terms that are considered in the money compared to the market price of the stock on the date of the related agreement. The Company calculates the beneficial conversion feature and records a debt discount with the amount being amortized to interest expense over the term of the note. |
Revenue Recognition | Revenue Recognition The Company follows ASC Topic 606, Revenue from Contracts with Customers The Company sells its products which include standard warranties primarily to distributors and authorized dealers. Product sales are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances. The warranty does not represent a separate performance obligation. Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output or input methods depending on the type of contract terms including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these to be the best available measure of progress on these contracts. We use the same method for similar types of contracts. The asset, “contract assets” represents revenues recognized in excess of amounts billed. The liability, “contract liabilities,” represents billings in excess of revenues recognized. |
Cost of Sales | Cost of Sales Cost of sales includes inventory costs, packaging costs and warranty expenses. Cost of revenues from fixed-price contracts for the distribution and installation of window film solutions include all direct material, sub-contractor, labor and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs incurred for product shipped to customers are included in general and administrative expenses and amounted to $8,784 and $11,946 for the nine months ended September 30, 2022 and 2021, respectively. Shipping and handling costs charged to customers are included in sales. |
Research and Development | Research and Development Research and development costs incurred in the development of the Company’s products are expensed as incurred and includes costs such as labor, materials, and other allocated costs incurred. For the nine months ended September 30, 2022 and 2021, research and development costs (recovery) incurred in the development of the Company’s products were $0 and $(2,404), respectively, and are included in operating expenses on the accompanying unaudited condensed consolidated statements of operations. |
Advertising Costs | Advertising Costs The Company may participate in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. For the nine months ended September 30, 2022 and 2021, advertising costs charged to operations were $66,124 and $33,306, respectively and are included in general and administrative expenses on the accompanying unaudited condensed consolidated statements of operations. These advertising expenses do not include cooperative advertising and sales incentives which shall been deducted from sales. |
Federal and State Income Taxes | Federal and State Income Taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation Improvements to Employee Share-Based Payment |
Loss Per Common Share | Loss Per Common Share ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per common share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilutive securities and non-vested forfeitable shares. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares or resulted in the issuance of common shares that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to members by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares, common share equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of stock options and non-vested forfeitable shares (using the treasury stock method) and shares issuable upon conversion of preferred shares and convertible notes payable (using the as-if converted method). These common share equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted common shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: September 30, 2022 2021 Stock options 8,445,698 8,445,698 Warrants 34,000,000 1,000,000 Series B preferred stock 163,834,286 114,598,413 Series C preferred stock 278,412,698 298,412,698 Convertible debt 916,666,667 - Non-vested, forfeitable common shares 16,970,120 14,270,120 1,418,329,469 436,726,929 |
Segment Reporting | Segment Reporting During the nine months ended September 30, 2022 and from July 22, 2021 (date of acquisition of Mobile Tint) to September 30, 2021, the Company operated in two reportable business segments which consisted of (1) the manufacture and sale of a windshield strengthening water repellent solution as well as disinfection products, and the sale of multi-purpose glass strengthening primer and window film mounting solutions, including ballistic-resistant film systems and a forced entry system, and (2) the distribution and installation of window film solutions. The Company’s reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations and locations. |
Leases | Leases The Company accounts for leases in accordance with ASC 842. The lease standard requires certain leases to be reported on the condensed consolidated balance sheets as right-of-use assets and lease liabilities. The Company elected the practical expedients permitted under the transition guidance of this standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. The Company does not reassess whether any contracts entered into prior to adoption are leases or contain leases. The Company categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow the Company to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. The Company does not have any finance leases as of September 30, 2022 and December 31, 2021. The Company’s leases generally have terms that range from three to four years for property and equipment and five years for property. The Company elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease. Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on the Company’s current borrowing rate. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that the Company will exercise the option, the Company considers these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. |
Noncontrolling Interest | Noncontrolling Interest The Company accounts for noncontrolling interest in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders’ deficit on the consolidated balance sheets and the consolidated net loss attributable to its noncontrolling interest be clearly identified and presented on the face of the consolidated statements of operations. |
Risk and Uncertainties | Risk and Uncertainties In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The Company was materially affected by the COVID-19 outbreak to date and the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. The Company saw a material decrease in sales from its international customers as a result of the unprecedented public health crisis from the COVID-19 pandemic and a decrease in domestic sales due to a decrease in business spending on discretionary items. As a result, during 2021 and 2020, the Company’s international customers delayed the ordering of products and delayed or defaulted on payment of balances due to the Company. The lack of collection of accounts receivable balances, which the Company believes was attributable to COVID-19, had a material impact on the cash flows of the Company. The Company cannot estimate the duration of the pandemic and the future impact on its business. A severe or prolonged economic downturn could result in a variety of risks to the Company’s business, including weakened demand for its products and a decreased ability to raise additional capital when needed on acceptable terms, if at all. Currently, the Company is unable to estimate the impact of this event on its operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of diluted common shares outstanding | September 30, 2022 2021 Stock options 8,445,698 8,445,698 Warrants 34,000,000 1,000,000 Series B preferred stock 163,834,286 114,598,413 Series C preferred stock 278,412,698 298,412,698 Convertible debt 916,666,667 - Non-vested, forfeitable common shares 16,970,120 14,270,120 1,418,329,469 436,726,929 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | September 30, December 31, Accounts receivable $ 291,375 $ 204,804 Less: allowance for doubtful accounts (35,522 ) (31,556 ) Accounts receivable, net $ 255,853 $ 173,248 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory [Abstract] | |
Schedule of inventory consisted | September 30, December 31, Raw materials $ 2,424 $ 7,141 Finished goods 81,794 120,790 Inventory 84,218 127,931 Less: allowance for obsolete or slow-moving inventory - (45,000 ) Inventory, net $ 84,218 $ 82,931 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Useful Life September 30, December 31, Machinery and equipment 5 – 7 years $ 124,133 $ 124,133 Furniture and office equipment 3 – 7 years 32,306 32,306 Vehicles 1 – 5 years 63,009 63,009 Leasehold improvements 3 – 5 years 45,296 45,296 264,744 264,744 Less: accumulated depreciation (160,074 ) (129,722 ) Property and equipment, net $ 104,670 $ 135,022 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible asset | Useful life September 30, December 31, Customer relations 5 years $ 212,516 $ 212,516 Non-compete 5 years 40,000 40,000 Trade name - 100,000 100,000 352,516 352,516 Less: accumulated amortization (59,973 ) (22,095 ) Intangible assets, net $ 292,543 $ 330,421 Useful life September 30, December 31, Goodwill - $ 350,491 $ 350,491 |
Schedule of amortization of intangible assets | Twelve months ending September 30: Amount 2023 $ 50,503 2024 50,503 2025 50,503 2026 41,034 Total $ 192,543 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Note Payable [Abstract] | |
Schedule of fair value of the stock warrants was estimated at issuance using the binomial valuation model | 2022 2021 Dividend rate — —% Term (in years) 4 years 5 years Volatility 246.6% to 329.6% 348.5% Risk—free interest rate 2.79% to 3.12% 1.16% |
Schedule of convertible notes payable | September 30, December 31, Convertible note payable $ 825,000 $ 825,000 Less: unamortized debt discount (85,000 ) (653,125 ) Convertible note payable, net 740,000 171,875 Less: current portion of convertible note payable (740,000 ) (171,875 ) Convertible note payable – long-term $ - $ - |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable Disclosure [Abstract] | |
Schedule of notes payable | September 30, December 31, Notes payable $ 1,716,051 $ 978,925 Note payable – PPP note 18,823 48,929 Total notes payable 1,734,874 1,027,854 Less: unamortized debt discount (193,776 ) - Note payable, net 1,541,098 1,027,854 Less: current portion of notes payable, net of discount (1,528,084 ) (488,414 ) Notes payable – long-term $ 13,014 $ 539,440 |
Schedule of future annual maturities of notes payable | September 30, Amount 2023 $ 1,721,860 2024 8,534 2025 4,480 Total notes payable on September 30, 2022 $ 1,734,874 |
Shareholders' Deficit (Tables)
Shareholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of activity related to non-vested shares | Number of Weighted Non-vested, December 31, 2021 14,270,120 $ 0.14 Granted 3,500,000 0.014 Forfeited - - Shares vested (800,000 ) (0.037 ) Non-vested, September 30, 2022 16,970,120 $ 0.119 |
Schedule of stock option activities | Number of Weighted Weighted Aggregate Balance Outstanding, December 31, 2021 8,445,698 $ 0.40 Exercised - - - - Balance Outstanding, September 30, 2022 8,445,698 $ 0.40 3.69 $ 0 Exercisable, September 30, 2022 8,445,698 $ 0.40 3.69 $ 0 |
Schedule of warrant activities | Number of Weighted Weighted Aggregate Balance Outstanding December 31, 2021 17,500,000 $ 0.05 4.67 $ - Granted 33,000,000 0.025 - - Cancelled (16,500,000 ) 0.05 - - Balance Outstanding September 30, 2022 34,000,000 $ 0.011 3.99 $ - Exercisable, September 30, 2022 34,000,000 $ 0.011 3.99 $ - |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of reportable business segments | For the Three Months Ended For the Nine Months Ended 2022 2021 2022 2021 Revenues: C-Bond $ 113,280 $ 80,878 $ 291,254 $ 370,198 Mobile Tint 460,369 593,640 1,333,471 593,640 573,649 674,518 1,624,725 963,838 Depreciation and amortization: C-Bond 1,948 2,472 6,380 7,417 Mobile Tint 20,616 26,461 61,850 26,461 22,564 28,933 68,230 33,878 Interest expense: C-Bond - - - 1,372 Mobile Tint 4,581 1,253 13,237 1,253 Other (a) 440,985 28,647 1,044,447 70,824 445,566 29,900 1,057,684 73,449 Net (loss): C-Bond (260,986 ) (325,016 ) (789,601 ) (1,304,798 ) Mobile Tint (42,648 ) 170,753 (158,076 ) 170,753 Other (a) (642,756 ) (336,514 ) (2,927,484 ) (4,799,730 ) $ (946,390 ) $ (490,777 ) $ (3,875,161 ) $ (5,933,775 ) (a) The Company does not allocate any general and administrative expense of its holding company activities to its reportable segments, because these activities are managed at the corporate level. |
Schedule of identifiable long-lived tangible assets | September 30, December 31, Identifiable long-lived tangible assets on September 30, 2022 and December 31, 2021 by segment C-Bond $ 2,414 $ 8,794 Mobile Tint 102,256 126,228 $ 104,670 $ 135,022 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of revenue by product | For the Nine Months Ended 2022 2021 C-Bond Secure multi-purpose and BRS ballistic resistant glass protection systems $ 45,756 $ 184,845 C-Bond Nanoshield solution sales 265,106 159,017 Disinfection products 10,880 7,130 C-Bond installation and other services 40 12,143 Window tint installation and sales recognized over time 1,299,419 593,640 Freight and delivery 3,524 7,063 Total $ 1,624,725 $ 963,838 |
Operating Lease Right-Of-Use _2
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Operating Lease Right-of-Use (“Rou”) Assets and Operating Lease Liabilities [Abstract] | |
Schedule of rental period amount per month | Rental Period Amount per Month June 1, 2022 – May 31, 2023 $ 5,441 June 1, 2023 – May 31, 2024 $ 5,604 June 1, 2024 – May 31, 2025 $ 5,772 |
Schedule of right-of-use asset | September 30, December 31, Office leases and office equipment right of use assets $ 480,293 $ 269,590 Less: accumulated amortization (76,742 ) (18,418 ) Balance of ROU assets $ 403,551 $ 251,172 |
Schedule of operating lease liabilities related to the ROU assets | September 30, 2022 December 31, Lease liabilities related to office leases right of use assets $ 404,211 $ 251,246 Less: current portion of lease liabilities (114,770 ) (44,927 ) Lease liabilities – long-term $ 289,441 $ 206,319 |
Schedule of future minimum base lease payments due under non-cancelable operating leases | Twelve months ended September 30, Amount 2023 $ 146,977 2024 148,955 2025 120,908 2026 56,000 Total minimum non-cancelable operating lease payments 472,840 Less: discount to fair value (68,629 ) Total lease liability on September 30, 2022 $ 404,211 |
Nature of Organization (Details
Nature of Organization (Details) - USD ($) | 1 Months Ended | |
Jul. 22, 2021 | Jun. 30, 2021 | |
Nature of Organization [Abstract] | ||
Controlling interest, percentage | 80% | 80% |
Issued and outstanding capital stock | 80% | |
Restricted shares (in Shares) | 28,021,016 | |
Dividend average (in Dollars) | $ 800,000 | |
Issued and outstanding interest | 20% | |
Common stock percent | 300% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jul. 22, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Consolidated financial statements percentage | 80% | ||||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (946,390) | $ (1,009,352) | $ (1,919,419) | $ (490,777) | $ (579,025) | $ (4,863,973) | $ (3,875,161) | $ (5,933,775) | |||
Accumulated deficit | (61,404,921) | (61,404,921) | $ (57,515,129) | ||||||||
Shareholders’ deficit | (5,931,380) | $ (5,016,047) | $ (4,870,820) | (3,851,082) | $ (4,259,799) | $ (3,979,326) | $ (5,931,380) | (3,851,082) | (3,979,041) | $ (3,167,220) | |
Estimated useful live life | |||||||||||
Accrued expenses | 26,733 | $ 26,733 | $ 26,733 | ||||||||
Warranty costs | 0 | 0 | |||||||||
General and administrative expenses | 8,784 | 11,946 | |||||||||
Research and development costs | 0 | (2,404) | |||||||||
Advertising costs | $ 66,124 | 33,306 | |||||||||
Minimum [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Estimated useful live life | 1 year | ||||||||||
Maximum [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Estimated useful live life | 5 years | ||||||||||
C-Bond Systems, LLC [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Consolidated financial statements percentage | 80% | ||||||||||
Goodwill and Intangible Assets [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Useful life | 5 years | ||||||||||
Property, Plant and Equipment [Member] | Minimum [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Useful life | 3 years | ||||||||||
Property, Plant and Equipment [Member] | Maximum [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Useful life | 4 years | ||||||||||
Property [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Useful life | 5 years | ||||||||||
Going Concern [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 3,875,161 | 5,933,775 | |||||||||
Cash | 1,183,111 | $ 1,288,675 | 1,183,111 | $ 1,288,675 | |||||||
Accumulated deficit | 61,404,921 | 61,404,921 | |||||||||
Shareholders’ deficit | 5,931,380 | 5,931,380 | |||||||||
Working capital deficit | $ 3,684,574 | $ 3,684,574 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of diluted common shares outstanding - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 1,418,329,469 | 436,726,929 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 34,000,000 | 1,000,000 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 8,445,698 | 8,445,698 |
Non-vested, forfeitable common shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 16,970,120 | 14,270,120 |
Series B Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 163,834,286 | 114,598,413 |
Series C Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 278,412,698 | 298,412,698 |
Convertible debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 916,666,667 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts Receivable [Abstract] | ||
Bad debt expense | $ 7,716 | $ 35,000 |
Accounts Receivable (Details) -
Accounts Receivable (Details) - Schedule of accounts receivable - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Accounts Receivable Abstract | ||
Accounts receivable | $ 291,375 | $ 204,804 |
Less: allowance for doubtful accounts | (35,522) | (31,556) |
Accounts receivable, net | $ 255,853 | $ 173,248 |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of inventory consisted - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Inventory Consisted Abstract | ||
Raw materials | $ 2,424 | $ 7,141 |
Finished goods | 81,794 | 120,790 |
Inventory | 84,218 | 127,931 |
Less: allowance for obsolete or slow-moving inventory | (45,000) | |
Inventory, net | $ 84,218 | $ 82,931 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 30,352 | $ 13,223 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 264,744 | $ 264,744 |
Less: accumulated depreciation | (160,074) | (129,722) |
Property and equipment, net | 104,670 | 135,022 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 124,133 | 124,133 |
Machinery and equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Machinery and equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Furniture and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 32,306 | 32,306 |
Furniture and office equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Furniture and office equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 63,009 | 63,009 |
Vehicles [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 1 year | |
Vehicles [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 45,296 | $ 45,296 |
Leasehold improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Leasehold improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Intangible Assets and Goodwill (Details) [Line Items] | ||
Amortization of intangible assets | $ 37,878 | $ 20,655 |
Customer Relations [Member] | ||
Intangible Assets and Goodwill (Details) [Line Items] | ||
Accumulated amortization | 50,473 | |
Non-Compete [Member] | ||
Intangible Assets and Goodwill (Details) [Line Items] | ||
Accumulated amortization | $ 9,500 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details) - Schedule of intangible asset - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Intangible Asset Abstract | ||
Customer relations, useful life | 5 years | |
Customer relations | $ 212,516 | $ 212,516 |
Non-compete, useful life | 5 years | |
Non-compete | $ 40,000 | 40,000 |
Trade name, useful life | ||
Trade name | $ 100,000 | 100,000 |
Total | 352,516 | 352,516 |
Less: accumulated amortization | (59,973) | (22,095) |
Intangible assets, net | $ 292,543 | 330,421 |
Goodwill, useful life | ||
Goodwill | $ 350,491 | $ 350,491 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details) - Schedule of amortization of intangible assets | Sep. 30, 2022 USD ($) |
Schedule Of Amortization Of Intangible Assets Abstract | |
2023 | $ 50,503 |
2024 | 50,503 |
2025 | 50,503 |
2026 | 41,034 |
Total | $ 192,543 |
Convertible Note Payable (Detai
Convertible Note Payable (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||
Sep. 06, 2022 | Apr. 20, 2022 | Oct. 15, 2021 | Oct. 18, 2021 | Sep. 30, 2022 | Jul. 26, 2022 | Jun. 23, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Convertible Note Payable (Details) [Line Items] | |||||||||
Securities purchase agreement description | In connection with the SPA, on October 18, 2021, the Company issued 668,151 shares of its common stock to the placement agent as fee for the capital raise. The 668,151 shares of common stock issued were recorded as a debt discount of $14,064 based on the relative fair value method to be amortized over the life of the Note. The 16,500,000 Initial Warrants were valued at $347,142 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note. The original issue discounts of $75,000, placement fees of $60,000, and legal fees of $10,000, aggregating $145,000, was recorded as a debt discount to be amortized into interest expense over the twelve-month term of the note. | ||||||||
Conversion price, per share (in Dollars per share) | $ 0.0125 | $ 0.011 | |||||||
Future financings percentage | 30% | ||||||||
Initial conversion price (in Dollars per share) | $ 0.025 | ||||||||
Initial warrants | $ 347,142 | ||||||||
Common shares issued value | 14,064 | ||||||||
Beneficial conversion feature | 318,794 | ||||||||
Aggregate non-cash debt discount | $ 680,000 | ||||||||
Exchange agreement description | On April 20, 2022, the Company and the Investor entered into an Exchange Agreement (the “Exchange Agreement”). The original SPA remains in effect. Per the terms of the Exchange Agreement, the Parties agreed to exchange (i) the Initial Note for a new Convertible Promissory Note (the “New Note”) and (ii) the Initial Warrant for a new five-year warrant to purchase, in the aggregate, 33,000,000 shares of the Company’s common stock at an exercise price of $0.025 per share (the “New Warrant” and together with the New Note, the “New Securities”), according to the terms and conditions of the Exchange Agreement. On April 20, 2022, pursuant to the terms of the Exchange Agreement, the Investor surrendered the Prior Securities in exchange for the New Securities. Other than the surrender of the Prior Securities, no consideration of any kind whatsoever was given by the Investor to the Company in connection with the Exchange Agreement. The terms of the New Securities are the same as the Prior Securities except for the pricing of the shares issuable under the New Note and the shares issuable upon exercise of the New Warrant. The New Securities are composed of the New Note, which is a 10% Original Issue Discount Senior Convertible Promissory Note in the principal amount of $825,000, and the New Warrant. | ||||||||
Maturity date | Oct. 15, 2022 | ||||||||
Interest rate per annum | 4% | ||||||||
Conversion price per share (in Dollars per share) | $ 0.00875 | ||||||||
Deemed dividend | $ 733 | ||||||||
Convertible notes payable | $ 852,812 | $ 0 | |||||||
accrued interest payable | 31,734 | $ 7,052 | |||||||
Mercer Convertible Debt [Member] | |||||||||
Convertible Note Payable (Details) [Line Items] | |||||||||
Securities purchase agreement description | On October 15, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with Mercer Street Global Opportunity Fund, LLC (the “Investor”), pursuant to which the Company issued and sold to Investor a 10% Original Issue Discount Senior Convertible Promissory Note in the principal amount of $825,000 (the “Initial Note”) and five-year warrants to purchase up to 16,500,000 shares of the Company’s common stock at an exercise price of $0.05 per share, an amount equal to 50% of the conversion shares to be issued (the “Initial Warrants”). The Company received net proceeds of $680,000, which is net of original issue discounts of $75,000, placement fees of $60,000, and legal fees of $10,000. | ||||||||
Additional purchase | $ 825,000 | ||||||||
Original issue discount rate | 10% | ||||||||
Exercise price per share (in Dollars per share) | $ 0.05 | ||||||||
Conversion shares to be issued | 50% | ||||||||
Interest rate bears | 4% | ||||||||
Conversion price, per share (in Dollars per share) | $ 0.025 | ||||||||
Average closing price per share (in Dollars per share) | $ 0.0175 | ||||||||
Principal amount percentage | 110% | ||||||||
Principal amount plus accrued interest | 120% | ||||||||
Excess outstanding shares percentage | 4.99% | ||||||||
Limitation exceeds | 9.99% | ||||||||
Convertible note payables, description | Upon the occurrence of an event of default under the Notes, the Investor has the right to be prepaid at 125% of the outstanding principal balance and accrued interest, and interest accrues at 18% per annum. Events of default included, among other things, (i)any default in the payment of (A) principal and interest payment under this Note or any other Indebtedness, or (B) Late Fees, liquidated damages and other amounts owing to the Holder of this Note, as and when the same shall become due and payable (whether on a Conversion Date, or the Maturity Date, or by acceleration or otherwise), which default, solely in the case of a default under clause (B) above, is not cured within five Trading Days; (ii)the Company or any Subsidiary shall be subject to a Bankruptcy Event; (iii)the SEC suspends the Common Stock from trading or the Company’s Common Stock is not listed or quoted for trading on a Trading Market which failure is not cured, if possible to cure, within the earlier to occur of 10 Trading Days after notice of such failure is sent by the Holder or by any other Holder to the Company or the transfer of shares of Common Stock through the Depository Trust Company System is no longer available or is subject to a “chill” by the Depository Trust Company or any successor; (iv)the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction); (v)the Company incurs any Indebtedness other than Permitted Indebtedness; (vi)the Company restates any financial statements included in its reports or registration statements filed pursuant to the Securities Act or the Exchange Act for any date or period from two years prior to the Original Issue Date of this Note and until this Note is or the Warrants issued to the Holder are no longer outstanding, if following first public announcement or disclosure that a restatement will occur the VWAP on the next Trading Day is 20% less than the VWAP on the prior Trading Day. For the purposes of this clause the next Trading Day if an announcement is made before 4:00 pm New York, NY time is either the day of the announcement or the following Trading Day. The Company filed a Report on Form 8-K announcing the restatement of its financial statements for the year ended December 31, 2020. Following the first public announcement or disclosure that a restatement occurred, the VWAP on the next Trading Day was not 20% less than the VWAP on the prior Trading Day and accordingly, the default provisions were not triggered. | ||||||||
Beneficial conversion feature | $ 354,215 | ||||||||
New warrant purchase description | On April 20, 2022, the Company agreed to reduce the conversion price from $0.025 per share to $0.0125 per share, and to cancel the Initial Warrant to purchase 16,500,000 shares of common exercisable at $0.05 per shares, and to issue a New Warrant to purchase 33,000,000 shares exercisable at $0.025 per share. All other terms of the convertible note and warrants remain unchanged, and therefore did not change the cash flows of the note. The New Warrants did not contain any features requiring liability treatment and therefore were classified as equity. | ||||||||
unamortized initial debt discount | 395,313 | ||||||||
Beneficial conversion feature | 160,993 | ||||||||
Net loss on debt extinguishment | 234,320 | ||||||||
New warrants | $ 325,785 | ||||||||
Initial conversion price (in Dollars per share) | $ 0.0125 | ||||||||
New warrants | $ 325,785 | ||||||||
Non-cash debt discount | $ 680,000 | ||||||||
Conversion price description | As a result, the conversion price of the New April 2022 Note was reduced to $0.011 per share and the exercise price of the New April 2022 Warrant was lowered to $0.011. As a result of the June 23, 2022 down-round provisions, the Company calculated the difference between the warrants fair value on June 23, 2022, the date the down-round feature was triggered using the then current exercise price of $0.025 and the new exercise price of $0.011. On June 23, 2022, the Company recorded a deemed dividend of $3,702 which represents the fair value transferred to the warrant holders from the down round feature being triggered. No additional beneficial conversion feature amount was recorded based on the June 23, 2022 valuation as the ratcheted beneficial conversion feature value was lower than the original amount. Additionally, on September 6, 2022, the Company issued common stock equivalents with an initial conversion price of $0.009 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the New April 2022 Note was reduced to $0.009 per share and the exercise price of the New April 2022 Warrant was lowered to $0.009. As a result of the September 6, 2022 down-round provisions, the Company calculated the difference between the warrants fair value on September 6, 2022, the date the down-round feature was triggered using the then current exercise price of $0.011 and the new exercise price of $0.009. |
Convertible Note Payable (Det_2
Convertible Note Payable (Details) - Schedule of fair value of the stock warrants was estimated at issuance using the binomial valuation model | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Convertible Note Payable (Details) - Schedule of fair value of the stock warrants was estimated at issuance using the binomial valuation model [Line Items] | ||
Dividend rate | ||
Term (in years) | 4 years | 5 years |
Volatility | 348.50% | |
Risk—free interest rate | 1.16% | |
Minimum [Member] | ||
Convertible Note Payable (Details) - Schedule of fair value of the stock warrants was estimated at issuance using the binomial valuation model [Line Items] | ||
Volatility | 246.60% | |
Risk—free interest rate | 2.79% | |
Maximum [Member] | ||
Convertible Note Payable (Details) - Schedule of fair value of the stock warrants was estimated at issuance using the binomial valuation model [Line Items] | ||
Volatility | 329.60% | |
Risk—free interest rate | 3.12% |
Convertible Note Payable (Det_3
Convertible Note Payable (Details) - Schedule of convertible notes payable - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Convertible Notes Payable Abstract | ||
Convertible note payable | $ 825,000 | $ 825,000 |
Less: unamortized debt discount | (85,000) | (653,125) |
Convertible note payable, net | 740,000 | 171,875 |
Less: current portion of convertible note payable | (740,000) | (171,875) |
Convertible note payable – long-term |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 06, 2022 | Jul. 26, 2022 | Jun. 23, 2022 | Mar. 14, 2022 | Nov. 04, 2021 | May 10, 2021 | Nov. 14, 2018 | Jul. 31, 2022 | Jul. 22, 2021 | Apr. 28, 2020 | Dec. 31, 2018 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2018 | Nov. 01, 2020 | |
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Maximum loan amount | $ 400,000 | |||||||||||||||||
Bear interest percentage | 8% | 8% | 18% | 18% | ||||||||||||||
Loan agreement, description | In the event that the Company’s accounts receivable balance plus inventory balance is less than paid principal balance of the Note as of December 31, 2018, the Company shall have 45 days (through and until February 15, 2019) to cure such violation and an establish accounts receivable plus inventory equal to the unpaid principal balance of the Note. Commencing March 31, 2019 and at all times thereafter through the remainder of the commitment period and for so long thereafter as there is any amount still due and owing under the Note, the Company must maintain an accounts receivable balances plus inventory such that the outstanding principal borrowed by Company under the Loan Agreement and Note is less than or equal to eighty five percent (85%) of accounts receivable plus fifty percent (50%) of inventory, all as measured at the same point in time. | |||||||||||||||||
Note balance | $ 400,000 | $ 400,000 | ||||||||||||||||
Principal amount of loan | 500,000 | 500,000 | $ 500,000 | |||||||||||||||
Secured promissory note amount | $ 500,000 | |||||||||||||||||
Annual accrue interest | 8% | |||||||||||||||||
Interest rate percentage | 18% | |||||||||||||||||
Capital lease amount | $ 95,013 | |||||||||||||||||
Notes payable vehicles and equipment loans | 48,479 | 48,479 | $ 78,925 | |||||||||||||||
Principal amount | $ 195,000 | |||||||||||||||||
Original issuance discount | $ 19,000 | $ 19,000 | $ 19,000 | |||||||||||||||
Shares issued (in Shares) | 773,626 | 998,008 | ||||||||||||||||
Debt discount | $ 34,606 | 910,907 | ||||||||||||||||
Accrued interest payable | 2,864 | 2,864 | ||||||||||||||||
Aggregate principal amount | $ 195,000 | 195,000 | $ 195,000 | $ 195,000 | ||||||||||||||
Purchase of promissory notes | $ 176,000 | 176,000 | 176,000 | |||||||||||||||
Net proceeds of company | $ 158,920 | $ 158,920 | $ 148,420 | |||||||||||||||
Issuance of commitment shares (in Shares) | 3,300,000 | 2,600,000 | 1,750,000 | 325,734,898 | 325,734,898 | 282,216,632 | ||||||||||||
Principal and interest payments | $ 21,060 | $ 21,060 | ||||||||||||||||
Conversion price description | GS Capital shall have the right at any time following an Event of Default to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this Note at a conversion price of $0.011, subject to adjustment as defined in the GS Capital Note. The Company did not calculate a beneficial conversion feature since the GS Capital Note is contingently convertible upon default on the GS Capital Note. As of September 30, 2022, the Company is not in default on this note. In the event that following the Issue Date the closing trading price of the Company’s common stock is then being traded is below $0.011 per share for more than ten consecutive trading days, then the conversion price shall be equal to $0.004 per share. The GS Capital Note contains conversion limitations providing that a holder thereof may not convert the Note to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice. Events of default include, amongst other items, failure to pay principal or interest, bankruptcy, delisting of the Company’s stock, financial statement restatements, or if the Company effectuates a reverse split. Upon the occurrence of any event of default, the GS Capital Note shall become immediately and automatically due and payable and the Company shall pay to GS Capital, in full satisfaction of its obligations hereunder, an amount equal to: (a) the then outstanding principal amount of this note plus (b) accrued and unpaid interest on the unpaid principal amount of this note to the date of payment (the “mandatory prepayment date”) plus (y) default interest, if any, multiplied by 120%. In September 2022, the Company paid $14,928 of principal balance. On September 30, 2022, the principal balance due on the GS Capital Note amounted to $180,072 and accrued interest payable amounted to $4,258.On July 26, 2022, the Company closed a Securities Purchase Agreement (“July 2022 Agreement”) with GS Capital, pursuant to which a Promissory Note (“July 2022 Note”) was made to GS Capital in the aggregate principal amount of $195,000. The July 2022 Note was purchased for $176,000, reflecting an original issuance discount of $19,000, and was funded on July 28, 2022 (less legal and other administrative fees). The Company received net proceeds of $158,920. The Company further issued GS Capital a total of 2,600,000 commitment shares (“July 2022 Commitment Shares”) as additional consideration for the purchase of the July 2022 Note. In addition, the Company issued 998,008 of its common stock to the placement agent as fee for the capital raise, respectively. The July Commitment Shares and the placement agent shares were recorded as a debt discount of $34,606 based on the relative fair value method to be amortized over the life of the Note. Additionally, the July 2022 Note is convertible upon an event of default into common shares at an initial effective conversion price which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. Principal and interest payments shall be made in 10 installments of $21,060 each beginning on the 90th-day anniversary following the issue date and continuing thereafter each 30 days for nine months. The July 2022 Note matures 12 months after issuance and bears interest at a rate of 8% per annum. GS Capital shall have the right at any time following an Event of Default to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the July 2022 Note at a conversion price of $0.011, subject to adjustment as defined in the Note. The Company did not calculate a beneficial conversion feature since the GS Capital July 2022 Note is contingently convertible upon a default on the July 2022 Note. As of September 30, 2022, the Company is not in default on this note. | |||||||||||||||||
Debt discounts costs | $ 34,606 | $ 38,885 | 0 | |||||||||||||||
Conversion price per share (in Dollars per share) | $ 0.011 | $ 0.0125 | $ 0.0125 | |||||||||||||||
Conversion of stock description | In the event that following the Issue Date the closing trading price of the Company’s common stock is then being traded is below $0.011 per share for more than ten consecutive trading days, then the conversion price shall be equal to $0.004 per share. The July 2022 Note contains conversion limitations providing that a holder thereof may not convert the Note to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice. | |||||||||||||||||
Commitment Shares conversion description | The September Commitment Shares and the placement agent shares were recorded as a debt discount of $30,326 based on the relative fair value method to be amortized over the life of the Note. Additionally, the September 2022 Note is convertible into common shares upon an event of default at an initial effective conversion price which was lower than the fair value of common shares based on the quoted closing price of the Company’s common stock on the measurement date. Principal and interest payments shall be made in 9 installments of $23,400 each beginning on the 120th-day anniversary following the issue date and continuing thereafter each 30 days for eight months. The September 2022 Note matures 12 months after issuance and bears interest at a rate of 8% per annum. GS Capital shall have the right at any time following an Event of Default to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the September 2022 Note at a conversion price of $0.009, subject to adjustment as defined in the Note. The Company did not calculate a beneficial conversion feature since the GS Capital July 2022 Note is contingently convertible upon a default on the September 2022 Note. As of September 30, 2022, the Company is not in default on this note. In the event that following the Issue Date the closing trading price of the Company’s common stock is then being traded is below $0.009 per share for more than ten consecutive trading days, then the conversion price shall be equal to $0.0032 per share. The September 2022 Note contains conversion limitations providing that a holder thereof may not convert the Note to the extent (but only to the extent) that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice. On September 30, 2022, the principal balance due on the GS Capital September 2022 Note amounted to $195,000 and accrued interest payable amounted to $1,068. | |||||||||||||||||
Interest amount | $ 445,566 | $ 29,900 | $ 1,057,684 | $ 73,449 | ||||||||||||||
Minimum [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Interest rate percentage | 6.79% | |||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Interest rate percentage | 8.24% | |||||||||||||||||
Promissory Note [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Accrued expenses | 55,781 | 55,781 | $ 25,863 | |||||||||||||||
PPP Note [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Principal amount of loan | $ 61,200 | |||||||||||||||||
Accrued expenses | 935 | 122 | 122 | 1,031 | ||||||||||||||
Interest rate percentage | 1% | |||||||||||||||||
Principal amount | 30,107 | 30,107 | ||||||||||||||||
Principal balance due | 18,823 | 48,929 | ||||||||||||||||
Loan payable | $ 156,200 | |||||||||||||||||
Maturity date | Apr. 28, 2022 | |||||||||||||||||
Payments of loan | $ 8,900 | |||||||||||||||||
Administration forgave of principal loan amount | 95,000 | |||||||||||||||||
Interest amount | $ 1,442 | |||||||||||||||||
Notes Payable [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Principal amount of loan | 400,000 | 400,000 | 400,000 | |||||||||||||||
Accrued expenses | 274,093 | 274,093 | $ 220,241 | |||||||||||||||
March 2022 Note [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Principal amount | $ 197,500 | |||||||||||||||||
Net proceeds of company | 175,000 | |||||||||||||||||
Original issuance discount | $ 22,500 | |||||||||||||||||
Maturity term | 12 months | |||||||||||||||||
Bears interest rate | 3% | |||||||||||||||||
Shares issued (in Shares) | 823,529 | |||||||||||||||||
Issuance of common stock (in Shares) | 823,529 | |||||||||||||||||
Debt discount | $ 12,963 | |||||||||||||||||
Interest expense | 19,209 | |||||||||||||||||
Principal balance due | 197,500 | |||||||||||||||||
Accrued interest payable | $ 3,263 | $ 3,263 | ||||||||||||||||
Revolving Credit Facility Loan and Security Agreement [Member] | ||||||||||||||||||
Notes Payable (Details) [Line Items] | ||||||||||||||||||
Lender loaned amount | $ 400,000 | |||||||||||||||||
Bear interest percentage | 12% |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of notes payable - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Notes Payable Abstract | ||
Notes payable | $ 1,716,051 | $ 978,925 |
Note payable – PPP note | 18,823 | 48,929 |
Total notes payable | 1,734,874 | 1,027,854 |
Less: unamortized debt discount | (193,776) | |
Note payable, net | 1,541,098 | 1,027,854 |
Less: current portion of notes payable, net of discount | (1,528,084) | (488,414) |
Notes payable – long-term | $ 13,014 | $ 539,440 |
Notes Payable (Details) - Sch_2
Notes Payable (Details) - Schedule of future annual maturities of notes payable | Sep. 30, 2022 USD ($) |
Schedule Of Future Annual Maturities Of Notes Payable Abstract | |
2023 | $ 1,721,860 |
2024 | 8,534 |
2025 | 4,480 |
Total notes payable on September 30, 2022 | $ 1,734,874 |
Shareholders' Deficit (Details)
Shareholders' Deficit (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
May 01, 2023 | Aug. 12, 2022 | Jul. 15, 2022 | Jul. 12, 2022 | Jul. 02, 2022 | Jan. 12, 2022 | Jan. 06, 2022 | Dec. 07, 2021 | Oct. 15, 2021 | Jul. 07, 2021 | Jun. 07, 2021 | Jun. 03, 2021 | May 04, 2021 | May 01, 2021 | Apr. 07, 2021 | Mar. 08, 2021 | Feb. 01, 2021 | Jan. 18, 2021 | Jan. 07, 2021 | Jan. 06, 2021 | Dec. 12, 2019 | Aug. 31, 2022 | Jul. 31, 2022 | Jun. 24, 2022 | Apr. 20, 2022 | Mar. 24, 2022 | Oct. 17, 2021 | Aug. 25, 2021 | Aug. 23, 2021 | Jul. 22, 2021 | Apr. 28, 2021 | Mar. 19, 2021 | Feb. 24, 2021 | Aug. 20, 2020 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 06, 2022 | Jul. 26, 2022 | Dec. 31, 2019 | |
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | $ 957,556 | ||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend payable | $ 31,533 | $ 16,641 | |||||||||||||||||||||||||||||||||||||||||||
Preferred stock, par value description | During the three months ended December 31, 2020, the Company entered into subscription agreements with an accredited investor whereby the investor agreed to purchase an aggregate of purchase 7,000 shares of the Company’s Series C Convertible Preferred Stock for $700,000, or $100.00 per share (the “Stated Value”), which were used from working capital purposes. | ||||||||||||||||||||||||||||||||||||||||||||
Share issued (in Shares) | 773,626 | 998,008 | |||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 24,000 | $ 11,000 | $ 14,250 | $ 30,600 | $ 24,413 | ||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.012 | $ 0.011 | $ 0.031 | $ 0.0285 | $ 0.031 | $ 0.025 | |||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 217,123 | $ 260,447 | 663,387 | $ 777,393 | |||||||||||||||||||||||||||||||||||||||||
Prepaid expenses | 119,321 | $ 119,321 | |||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 3,801,224 | 1,008,000 | 2,600,000 | 823,529 | 1,750,000 | 3,300,000 | |||||||||||||||||||||||||||||||||||||||
Vesting period | 1 year | ||||||||||||||||||||||||||||||||||||||||||||
Restricted stock award granted shares (in Shares) | 2,000,000 | 1,000,000 | 500,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 119,321 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 43,250 | ||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses | 38,250 | ||||||||||||||||||||||||||||||||||||||||||||
Accretion of stock-based professional fees | 5,000 | ||||||||||||||||||||||||||||||||||||||||||||
Vested date | May 01, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 24,413 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense on granted | $ 53,764 | 224,588 | 53,764 | 224,588 | |||||||||||||||||||||||||||||||||||||||||
Unrecognized compensation expense | $ 30,556 | ||||||||||||||||||||||||||||||||||||||||||||
Acquired percentage | 80% | ||||||||||||||||||||||||||||||||||||||||||||
Average closing price | $ 800,000 | ||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ 117,838 | ||||||||||||||||||||||||||||||||||||||||||||
Shares of common stock issued (in Shares) | 998,008 | 823,529 | 1,750,000 | 773,626 | |||||||||||||||||||||||||||||||||||||||||
Debt Discount | $ 12,963 | $ 32,736 | $ 30,326 | ||||||||||||||||||||||||||||||||||||||||||
Aggregate of common stock issued (in Shares) | 3,598,008 | 4,073,626 | |||||||||||||||||||||||||||||||||||||||||||
Debt discount | $ 34,606 | $ 910,907 | |||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||||||||||||
Total unrecognized compensation expense related to unvested stock options | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||||||||||||
Warrant purchase, description | in connection with a Securities Purchase Agreements with an accredited investor (See Note 7), the Company issued warrants to purchase an aggregate amount up to 16,500,000 shares of the Company’s common stock (the “Initial Warrants”). The Initial Warrants were exercisable at any time on or after the date of the issuance and entitled this investor to purchase shares of the Company’s common stock for a period of five years from the initial date the Initial Warrants become exercisable. Under the terms of the Initial Warrants, the holder was entitled to exercise the Initial Warrants to purchase up to 16,500,000 shares of the Company’s common stock at an initial exercise price of $0.05, subject to adjustment as detailed in the Warrants. In connection with the issuance of these warrants, on the initial measurement date, the relative fair value of the Initial Warrants of $347,142 was recorded as a debt discount and an increase in paid-in capital (See Note 7). On April 20, 2022, in connection with an Exchange Agreement, the 16,500,000 Initial Warrants were cancelled and a new warrant to purchase up to 33,000,000 shares of the Company’s common stock at an initial exercise price of $0.025, subject to adjustment as detailed in the Warrants was issued (See Note 7). | ||||||||||||||||||||||||||||||||||||||||||||
2018 Long-Term Incentive Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stock option, description | The aggregate number of shares of common stock and number of shares of the Company’s common stock that may be subject to incentive stock options granted under the 2018 Plan is 50,000,000 shares, of which 11,445,698 shares have been issued or granted under incentive stock options and 29,451,070 shares of restricted stock have been issued as of September 30, 2022. | ||||||||||||||||||||||||||||||||||||||||||||
Aggregate shares of common stock (in Shares) | 25,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Description of options to acquire common stock | The exercise price of options granted under our 2018 Plan must at least be equal to the fair market value of the Company’s common stock on the date of grant and the term of an option may not exceed ten years, except that with respect to an incentive stock option granted to any employee who owns more than 10% of the voting power of all classes of the Company’s outstanding stock as of the grant date the term must not exceed five years and the exercise price must equal at least 110% of the fair market value on the grant date. | ||||||||||||||||||||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 1,008,000 | ||||||||||||||||||||||||||||||||||||||||||||
Cashless exercise of warrants (in Shares) | 1,050,000 | ||||||||||||||||||||||||||||||||||||||||||||
Cashless exercise warrants (in Shares) | 1,050,000 | ||||||||||||||||||||||||||||||||||||||||||||
Business Development Services [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Restricted common shares (in Shares) | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 31,250 | $ 48,000 | $ 49,500 | $ 54,600 | $ 10,000 | $ 54,000 | $ 19,000 | ||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.0125 | $ 0.012 | $ 0.066 | $ 0.078 | $ 0.1 | $ 0.018 | $ 0.038 | ||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 15,625 | $ 54,000 | $ 1,979 | 10,000 | |||||||||||||||||||||||||||||||||||||||||
Aggregate shares of common stock (in Shares) | 4,000,000 | 750,000 | 700,000 | 3,000,000 | |||||||||||||||||||||||||||||||||||||||||
Prepaid expenses | $ 15,625 | $ 17,021 | $ 13,000 | 13,000 | |||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 500,000 | ||||||||||||||||||||||||||||||||||||||||||||
Restricted stock award granted shares (in Shares) | 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||
Investor Relations Services [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 72,500 | $ 135,000 | |||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.029 | $ 0.054 | |||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 72,500 | $ 135,000 | |||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 2,500,000 | 2,500,000 | |||||||||||||||||||||||||||||||||||||||||||
Technology Service [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 6,000 | ||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.03 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 6,000 | ||||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 200,000 | ||||||||||||||||||||||||||||||||||||||||||||
Consulting Services [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 15,000 | ||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses | 33,000 | 33,000 | |||||||||||||||||||||||||||||||||||||||||||
Government Relations Services [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 60,000 | ||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.011 | ||||||||||||||||||||||||||||||||||||||||||||
Restricted stock award granted shares (in Shares) | 5,454,545 | ||||||||||||||||||||||||||||||||||||||||||||
Consulting Services One [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||
Prepaid expenses | 35,000 | 35,000 | |||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Designations established share (in Shares) | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock value (in Shares) | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||
Stated value | 1,000 | $ 1,000 | |||||||||||||||||||||||||||||||||||||||||||
Preferred Stock dividend rate | 2% | ||||||||||||||||||||||||||||||||||||||||||||
Stock option, description | The Series B is convertible into common stock at the option of a holder or if the closing price of the common stock exceeds 400% of the Conversion Price for a period of twenty consecutive trading days, at the option of the Company. Conversion Price means a price per share of the common stock equal to 100% of the lowest daily volume weighted average price of the common stock during the two years preceding or subsequent two years following the Issuance Date, subject to adjustment as otherwise provided in the Certificate of Designations (the “Conversion Price”). | ||||||||||||||||||||||||||||||||||||||||||||
Accrued compensation | $ 278,654 | $ 295,000 | $ 318,970 | $ 108,000 | |||||||||||||||||||||||||||||||||||||||||
Accrued compensation shares (in Shares) | 278 | 295 | 319 | 108 | |||||||||||||||||||||||||||||||||||||||||
Stock based compensation | $ 3,778,810 | ||||||||||||||||||||||||||||||||||||||||||||
Vested shares (in Shares) | 158 | ||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend payable | $ 14,892 | 10,525 | |||||||||||||||||||||||||||||||||||||||||||
Preferred stock balance | 1,032,156 | 1,032,156 | 738,611 | ||||||||||||||||||||||||||||||||||||||||||
Stated value | $ 1,000,623 | $ 1,000,623 | 721,970 | ||||||||||||||||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Designations established share (in Shares) | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock value (in Shares) | 0.1 | 630,000 | 630,000 | ||||||||||||||||||||||||||||||||||||||||||
Stated value | $ 100 | $ 100 | 1,868,000 | ||||||||||||||||||||||||||||||||||||||||||
Preferred Stock dividend rate | 2% | ||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend payable | $ 1,509,523 | $ 2,845,238 | $ 65,932 | 39,012 | |||||||||||||||||||||||||||||||||||||||||
Preferred stock balance | $ 1,819,932 | $ 1,819,932 | $ 1,907,012 | ||||||||||||||||||||||||||||||||||||||||||
Stated value | $ 12,000 | $ 12,000 | $ 102,000 | ||||||||||||||||||||||||||||||||||||||||||
Percentage of stated value | 150% | 150% | |||||||||||||||||||||||||||||||||||||||||||
Outstanding shares percent | 4.99% | ||||||||||||||||||||||||||||||||||||||||||||
Aggregate shares purchase (in Shares) | 6,300 | ||||||||||||||||||||||||||||||||||||||||||||
Preferred stock stated value (in Dollars per share) | $ 100 | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of shares (in Shares) | 3,000 | 2,500 | |||||||||||||||||||||||||||||||||||||||||||
Share issued (in Shares) | 1,543,151 | 1,500,000 | 13,184,548 | ||||||||||||||||||||||||||||||||||||||||||
Common shares converted (in Shares) | 120 | 120 | 1,020 | ||||||||||||||||||||||||||||||||||||||||||
Stated redemption value | $ 12,000 | $ 102,000 | |||||||||||||||||||||||||||||||||||||||||||
Stated value | $ 1,754,000 | $ 1,754,000 | |||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 120 | 1,020 | |||||||||||||||||||||||||||||||||||||||||||
Company issued (in Shares) | 1,543,151 | 13,184,548 | |||||||||||||||||||||||||||||||||||||||||||
Common Class C [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Aggregate shares purchase (in Shares) | 6,300 | ||||||||||||||||||||||||||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stated value | $ 300,000 | $ 250,000 | |||||||||||||||||||||||||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stated value | $ 100 | $ 100 | |||||||||||||||||||||||||||||||||||||||||||
Preferred Stock Dividends [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend payable | $ 26,920 | 23,504 | |||||||||||||||||||||||||||||||||||||||||||
Forecast [Member] | Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Vested shares (in Shares) | 842 | ||||||||||||||||||||||||||||||||||||||||||||
Sales Manager [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.078 | ||||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 200,000 | ||||||||||||||||||||||||||||||||||||||||||||
Value of issued shares of common stock | $ 15,600 | ||||||||||||||||||||||||||||||||||||||||||||
Officer [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Restricted common shares (in Shares) | 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 165,000 | ||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.066 | ||||||||||||||||||||||||||||||||||||||||||||
MobileTintLLC[Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 976,500 | ||||||||||||||||||||||||||||||||||||||||||||
Shares Issued for Accounts Payable [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ 2,174 | ||||||||||||||||||||||||||||||||||||||||||||
Company issued (in Shares) | 90,859 | ||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.024 | ||||||||||||||||||||||||||||||||||||||||||||
Advisory and Consulting Services [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | 41,600 | ||||||||||||||||||||||||||||||||||||||||||||
Consulting Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based professional fees | $ 49,500 | ||||||||||||||||||||||||||||||||||||||||||||
General Release Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Accrued compensation | $ 40,625 | ||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.059 | ||||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 944,767 | ||||||||||||||||||||||||||||||||||||||||||||
Value of issued shares of common stock | $ 55,741 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ 15,116 | ||||||||||||||||||||||||||||||||||||||||||||
Exchange Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit (Details) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||
Value of restricted stock common shares | $ 694,921 | ||||||||||||||||||||||||||||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.0248 | ||||||||||||||||||||||||||||||||||||||||||||
Issued shares of common stock (in Shares) | 28,021,016 | ||||||||||||||||||||||||||||||||||||||||||||
Warrant purchase, description | On April 20, 2022, in connection with an Exchange Agreement (See Note 7), the Company issued warrants to purchase an aggregate amount up to 33,000,000 shares of the Company’s common stock (the “New Warrants”). The New Warrants are exercisable at any time on or after the date of the issuance and entitled this investor to purchase shares of the Company’s common stock for a period of five years from the initial date the warrants become exercisable. Under the terms of the New Warrants, the holder is entitled to exercise the Warrants to purchase up to 33,000,000 shares of the Company’s common stock at an initial exercise price of $0.025, subject to adjustment as detailed in the New Warrants. In connection with the issuance of the New Warrants, on the initial measurement date, the relative fair value of the warrants of $325,785 was recorded as a debt discount and an increase in paid-in capital (See Note 7). On June 23, 2022, the Company issued common stock equivalents with an initial conversion price of $0.011 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the New April 2022 Note was reduced to $0.011 per share and the exercise price of the New April 2022 Warrant was lowered to $0.011. As a result of the June 23, 2022 down-round provisions, the Company calculated the difference between the warrants fair value on June 23, 2022, the date the down-round feature was triggered using the then current exercise price of $0.025 and the new exercise price of $0.011. On June 23, 2022, the Company recorded a deemed dividend of $3,702 which represents the fair value transferred to the warrant holders from the down round feature being triggered. Additionally, on September 6, 2022, the Company issued common stock equivalents with an initial conversion price of $0.009 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the New April 2022 Note was reduced to $0.009 per share and the exercise price of the New April 2022 Warrant was lowered to $0.009. As a result of the September 6, 2022 down-round provisions, the Company calculated the difference between the warrants fair value on September 6, 2022, the date the down-round feature was triggered using the then current exercise price of $0.011 and the new exercise price of $0.009. On September 6, 2022, the Company recorded a deemed dividend of $733 which represents the fair value transferred to the warrant holders from the down round feature being triggered. No additional beneficial conversion feature amount was recorded based on the September 6, 2022 valuation as the ratcheted beneficial conversion feature value was lower than the original amount. |
Shareholders' Deficit (Detail_2
Shareholders' Deficit (Details) - Schedule of activity related to non-vested shares | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Schedule Of Activity Related To Non Vested Shares Abstract | |
Number of Non-Vested Shares, beginning balance | shares | 14,270,120 |
Weighted Average Grant Date Fair Value, beginning balance | $ / shares | $ 0.14 |
Number of Non-Vested Shares, Granted | shares | 3,500,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 0.014 |
Number of Non-vested Shares, Forfeited | shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Number of Non-Vested Shares, Shares vested | shares | (800,000) |
Weighted Average Grant Date Fair Value, Shares vested | $ / shares | $ (0.037) |
Number of Non-Vested Shares, ending balance | shares | 16,970,120 |
Weighted Average Grant Date Fair Value, ending balance | $ / shares | $ 0.119 |
Shareholders' Deficit (Detail_3
Shareholders' Deficit (Details) - Schedule of stock option activities - Stock options [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Shareholders' Deficit (Details) - Schedule of stock option activities [Line Items] | |
Number of Options, Balance Outstanding, Beginning | shares | 8,445,698 |
Weighted Average Exercise Price, Balance Outstanding, Beginning | $ / shares | $ 0.4 |
Number of Options, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Remaining Contractual Term (Years), Exercised | |
Aggregate Intrinsic Value, Exercised | $ | |
Number of Options, Balance Outstanding, Ending | shares | 8,445,698 |
Weighted Average Exercise Price, Balance Outstanding, Ending | $ / shares | $ 0.4 |
Weighted Average Remaining Contractual Term (Years), Balance Outstanding, Ending | 3 years 8 months 8 days |
Aggregate Intrinsic Value, Balance Outstanding, Ending | $ | $ 0 |
Number of Options, Exercisable | shares | 8,445,698 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.4 |
Weighted Average Remaining Contractual Term (Years), Exercisable, | 3 years 8 months 8 days |
Aggregate Intrinsic Value, Exercisable | $ | $ 0 |
Shareholders' Deficit (Detail_4
Shareholders' Deficit (Details) - Schedule of warrant activities - Warrant [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Shareholders' Deficit (Details) - Schedule of warrant activities [Line Items] | |
Number of Warrants, Balance Outstanding, Beginning (in Shares) | shares | 17,500,000 |
Weighted Average Exercise Price, Balance Outstanding, Beginning | $ 0.05 |
Weighted Average Remaining Contractual Term (Years), Balance Outstanding, Beginning | 4 years 8 months 1 day |
Aggregate Intrinsic Value, Balance Outstanding, Beginning (in Dollars) | $ | |
Number of Warrants, Granted (in Shares) | shares | 33,000,000 |
Weighted Average Exercise Price, Granted | $ 0.025 |
Weighted Average Remaining Contractual Term (Years), Granted | |
Aggregate Intrinsic Value, Granted (in Dollars) | $ | |
Number of Warrants, Cancelled (in Shares) | shares | (16,500,000) |
Weighted Average Exercise Price, Cancelled | $ 0.05 |
Weighted Average Remaining Contractual Term (Years), Cancelled | |
Aggregate Intrinsic Value, Cancelled (in Dollars) | $ | |
Number of Warrants, Balance Outstanding, Ending (in Shares) | shares | 34,000,000 |
Weighted Average Exercise Price, Balance Outstanding, Ending | $ 0.011 |
Weighted Average Remaining Contractual Term (Years), Balance Outstanding, Ending | 3 years 11 months 26 days |
Aggregate Intrinsic Value, Balance Outstanding, Ending (in Dollars) | $ | |
Number of Warrants, Exercisable (in Shares) | shares | 34,000,000 |
Weighted Average Exercise Price, Exercisable | $ 0.011 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 3 years 11 months 26 days |
Aggregate Intrinsic Value, Exercisable (in Dollars) | $ |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||||||||||||
Jan. 06, 2022 | Dec. 08, 2021 | Jul. 21, 2021 | Jan. 18, 2021 | Apr. 25, 2018 | Oct. 18, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 | Sep. 30, 2022 | Sep. 30, 2020 | Aug. 12, 2022 | Jul. 12, 2022 | Mar. 24, 2022 | Dec. 31, 2021 | Oct. 17, 2021 | Jul. 31, 2021 | Jul. 22, 2021 | May 04, 2021 | |
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||
Reported revenue | $ 102,569 | ||||||||||||||||||
Bad debt expenses | $ 102,569 | ||||||||||||||||||
Company filed claims | $ 16,000 | ||||||||||||||||||
Accrued compensation | $ 18,250 | $ 18,250 | |||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.012 | $ 0.011 | $ 0.0285 | $ 0.031 | $ 0.025 | $ 0.031 | |||||||||||||
Bonus to officers and an employee | $ 330,000 | ||||||||||||||||||
Annual base salary | $ 240,000 | ||||||||||||||||||
Base salary percentage | 50% | ||||||||||||||||||
Base salary bonus, percentage | 50% | ||||||||||||||||||
Aggregate amount | $ 309,615 | ||||||||||||||||||
Annual compensation, percentage | 50% | ||||||||||||||||||
Other commitments, description | This bonus will be paid 10% in cash ($30,962) which was paid in December 2021 and 90% in equity amounting $278,653 which as of December 31, 2021 had been accrued and as of December 31, 2021, was included in accrued compensation on the accompanying unaudited consolidated balance sheet. | ||||||||||||||||||
Bonus owed to its executive officers | $ 278,653 | ||||||||||||||||||
Convertible preferred stock (in Shares) | 278 | ||||||||||||||||||
Exercise price per share (in Dollars per share) | $ 0.85 | ||||||||||||||||||
Employment Agreements [Member] | Mr. Scott Silverman [Member] | |||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||
Description of employment agreement | As consideration for these services, the employment agreement provides Mr. Silverman with the following compensation and benefits: ● An annual base salary of $300,000, with a 10% increase on each anniversary date contingent upon achieving certain performance objectives as set by the Board. Until the Company raises $1,000,000 in debt or equity financing after entering into this agreement, Mr. Silverman will receive ½ of the base salary on a monthly basis with the other ½ being deferred. Upon the financing being raised, Mr. Silverman will receive the deferred portion of his compensation and his base salary will be paid in full moving forward. ● After the first $500,000 of equity investments is raised by the Company, after entering into this employment agreement, Mr. Silverman will receive a capital raise success bonus of 5% of all equity capital raised from investors/lenders introduced by him to the Company. ● Annual cash performance bonus opportunity as determined by the Board. ● An option to acquire 3,000,000 common shares of the Company, with a strike price of $0.31 per unit. These options vested pro rata on a monthly basis for the term of the employment agreement. On each anniversary, Mr. Silverman will be eligible to be granted a minimum of 500,000 stock options of the Company at a strike price of $0.85 per common unit contingent upon the achievement of certain performance objectives. ● Certain other employee benefits and perquisites, including reimbursement of necessary and reasonable travel and participation in retirement and welfare benefits. | ||||||||||||||||||
Financing received | $ 1,240,000 | ||||||||||||||||||
Percentage of bonus provision | 5% | ||||||||||||||||||
Term of base salary | 1 year | ||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.85 | ||||||||||||||||||
Allowance amount | $ 10,000 | ||||||||||||||||||
Licensing Agreement [Member] | |||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||
Non-refundable license fee | $ 10,000 | ||||||||||||||||||
Percentage of royalty payments on net sales | 5% | ||||||||||||||||||
Subscription Agreements [Member] | |||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.85 | $ 0.77 | |||||||||||||||||
Anti-dilution rights on common stock sales (in Shares) | 1,175,902 | 3,880,480 | 2,425,300 | ||||||||||||||||
Subsequent investments based upon enterprise value | $ 2,000,000 | ||||||||||||||||||
Subscription Agreements [Member] | Minimum [Member] | |||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.85 | ||||||||||||||||||
Subscription Agreements [Member] | C-Bond Systems, LLC [Member] | |||||||||||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||||||||||
Common shares per share (in Dollars per share) | $ 0.77 |
Concentrations (Details)
Concentrations (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) | Sep. 30, 2021 | |
Concentrations (Details) [Line Items] | ||
Cash in FDIC (in Dollars) | $ 250,000 | |
Number of customers | 1 | 3 |
Customer Accounted Sales Percentage | 10% | |
Number of suppliers | 5 | |
Total Assets [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 47.40% | |
Accounts Receivable [Member] | ||
Concentrations (Details) [Line Items] | ||
Number of customers | 3 | |
Concentration risk percentage | 41.10% | |
Customer one [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 10.30% | 12.60% |
Customer two [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 19.30% | 11.30% |
Customer three [Member] | ||
Concentrations (Details) [Line Items] | ||
Concentration risk percentage | 11.50% | 23.50% |
Segment Reporting (Details)
Segment Reporting (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Number of reportable business segment | 2 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of reportable business segments - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenues: | |||||
Revenues | $ 573,649 | $ 674,518 | $ 1,624,725 | $ 963,838 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 22,564 | 28,933 | 68,230 | 33,878 | |
Interest expense: | |||||
Interest expense | 445,566 | 29,900 | 1,057,684 | 73,449 | |
Net (loss): | |||||
Net (loss) | (946,390) | (490,777) | (3,875,161) | (5,933,775) | |
C-Bond [Member] | |||||
Revenues: | |||||
Revenues | 113,280 | 80,878 | 291,254 | 370,198 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 1,948 | 2,472 | 6,380 | 7,417 | |
Interest expense: | |||||
Interest expense | 1,372 | ||||
Net (loss): | |||||
Net (loss) | (260,986) | (325,016) | (789,601) | (1,304,798) | |
Mobile Tint [Member] | |||||
Revenues: | |||||
Revenues | 460,369 | 593,640 | 1,333,471 | 593,640 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 20,616 | 26,461 | 61,850 | 26,461 | |
Interest expense: | |||||
Interest expense | 4,581 | 1,253 | 13,237 | 1,253 | |
Net (loss): | |||||
Net (loss) | (42,648) | 170,753 | (158,076) | 170,753 | |
Other [Member] | |||||
Interest expense: | |||||
Interest expense | [1] | 440,985 | 28,647 | 1,044,447 | 70,824 |
Net (loss): | |||||
Net (loss) | [1] | $ (642,756) | $ (336,514) | $ (2,927,484) | $ (4,799,730) |
[1] The Company does not allocate any general and administrative expense of its holding company activities to its reportable segments, because these activities are managed at the corporate level. |
Segment Reporting (Details) -_2
Segment Reporting (Details) - Schedule of identifiable long-lived tangible assets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting (Details) - Schedule of identifiable long-lived tangible assets [Line Items] | ||
Identifiable long-lived tangible assets | $ 104,670 | $ 135,022 |
C-Bond [Member] | ||
Segment Reporting (Details) - Schedule of identifiable long-lived tangible assets [Line Items] | ||
Identifiable long-lived tangible assets | 2,414 | 8,794 |
Mobile Tint [Member] | ||
Segment Reporting (Details) - Schedule of identifiable long-lived tangible assets [Line Items] | ||
Identifiable long-lived tangible assets | $ 102,256 | $ 126,228 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of revenue by product - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from External Customer [Line Items] | ||
Total | $ 1,624,725 | $ 963,838 |
C-Bond Secure multi-purpose and BRS ballistic resistant glass protection systems [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 45,756 | 184,845 |
C-Bond Nanoshield solution sales [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 265,106 | 159,017 |
Disinfection products [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 10,880 | 7,130 |
C-Bond installation and other services [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 40 | 12,143 |
Window tint installation and sales recognized over time [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | 1,299,419 | 593,640 |
Freight and delivery [Member] | ||
Revenue from External Customer [Line Items] | ||
Total | $ 3,524 | $ 7,063 |
Operating Lease Right-Of-Use _3
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||
May 12, 2021 | Sep. 30, 2022 | Jul. 31, 2022 | Feb. 28, 2022 | Sep. 30, 2021 | Oct. 31, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) [Line Items] | ||||||||
Lease agreement, description | In October 2019, the Company entered into an 18-month lease agreement for the lease of office and warehouse space under a non-cancelable operating lease through May 31, 2021. From the lease commencement date of December 1, 2019 until November 30, 2020, monthly rent shall be $4,444 and from December 1, 2020 to May 31, 2021, monthly rent shall be $4,577 per month. | |||||||
Monthly rent | $ 5,283 | |||||||
Lease term | 60 months | |||||||
Rent payable per month | $ 788 | $ 365 | $ 5,600 | |||||
Lease description | The Company’s obligation as Guarantor of the Lease will terminate upon the occurrence of earlier of the following: (i) the date of Guarantor’s acquisition of 100% of the ownership interests of Mobile; (ii) the date that Guarantor beneficially owns less than an eighty percent (80%) ownership interest in Mobile; or (iii) two (2) years from and after the effective date of the guaranty. | |||||||
Lease agreement, description | In February 2022, the Company entered into a 36-month lease agreement for the lease of a vehicle under a non-cancelable operating lease through January 2025. | In September 2021, the Company entered into a 48-month lease agreement for the lease of office equipment under a non-cancelable operating lease through September 2025. | ||||||
Rental expenses | $ 127,700 | $ 79,429 | ||||||
Minimum [Member] | ||||||||
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) [Line Items] | ||||||||
Discount rates | 4% | |||||||
Maximum [Member] | ||||||||
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) [Line Items] | ||||||||
Discount rates | 12% |
Operating Lease Right-Of-Use _4
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of rental period amount per month | Jun. 30, 2022 USD ($) |
June 1, 2022 – May 31, 2023 [Member] | |
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of rental period amount per month [Line Items] | |
Rental Period | $ 5,441 |
June 1, 2023 – May 31, 2024 [Member] | |
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of rental period amount per month [Line Items] | |
Rental Period | 5,604 |
June 1, 2024 – May 31, 2025 [Member] | |
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of rental period amount per month [Line Items] | |
Rental Period | $ 5,772 |
Operating Lease Right-Of-Use _5
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of right-of-use asset - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Right Of Use Asset Abstract | ||
Office leases and office equipment right of use assets | $ 480,293 | $ 269,590 |
Less: accumulated amortization | (76,742) | (18,418) |
Balance of ROU assets | $ 403,551 | $ 251,172 |
Operating Lease Right-Of-Use _6
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of operating lease liabilities related to the ROU assets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Operating Lease Liabilities Related To The Rou Assets Abstract | ||
Lease liabilities related to office leases right of use assets | $ 404,211 | $ 251,246 |
Less: current portion of lease liabilities | (114,770) | (44,927) |
Lease liabilities – long-term | $ 289,441 | $ 206,319 |
Operating Lease Right-Of-Use _7
Operating Lease Right-Of-Use (“Rou”) Assets and Operating Lease Liabilities (Details) - Schedule of future minimum base lease payments due under non-cancelable operating leases | Sep. 30, 2022 USD ($) |
Schedule Of Future Minimum Base Lease Payments Due Under Non Cancelable Operating Leases Abstract | |
2023 | $ 146,977 |
2024 | 148,955 |
2025 | 120,908 |
2026 | 56,000 |
Total minimum non-cancelable operating lease payments | 472,840 |
Less: discount to fair value | (68,629) |
Total lease liability on September 30, 2022 | $ 404,211 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | ||
May 02, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |||
Recognized sales | $ 3,750 | ||
Principal amount | $ 250,000 | ||
Net proceeds | $ 250,000 | ||
Bears interest rate | 6% | ||
Due date | May 02, 2024 | ||
Related Party Tax Expense, Due to Affiliates, Deferred | $ 6,247 | ||
Principal due amount | 250,000 | ||
Accrued interest payable | $ 6,247 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 9 Months Ended | |||||||||
Nov. 09, 2022 | Nov. 08, 2022 | Sep. 06, 2022 | Jul. 26, 2022 | Jun. 23, 2022 | Sep. 30, 2022 | Nov. 30, 2022 | Nov. 04, 2022 | Oct. 03, 2022 | Dec. 31, 2021 | |
Subsequent Events (Details) [Line Items] | ||||||||||
Shares issued (in Shares) | 773,626 | 998,008 | ||||||||
Principal amount | $ 1,528,084 | $ 488,414 | ||||||||
Net proceeds | $ 176,000 | $ 176,000 | $ 176,000 | |||||||
Note fundede amount | $ 100,000 | |||||||||
Outstanding principal percentage | 22% | |||||||||
Subsequent events, description | The Company has the right to prepay the Diagonal Note (principal and accrued interest) at any time during the first six months the note is outstanding at the rate of 115% during the first 30 days after issuance, 120% during the 31st to 60th day after issuance, and 125% during the 61st to the 180th day after issuance. | |||||||||
Shares were valued | $ 65 | |||||||||
Restricted stock award of common shares (in Shares) | 4.99 | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||
Shares issued (in Shares) | 3,000,000 | |||||||||
Shares valued amount | $ 24,300 | |||||||||
Common share per shares | $ 0.0081 | |||||||||
Principal amount | $ 200,000 | $ 104,250 | ||||||||
Net proceeds | $ 200,000 | |||||||||
Interest rate | 8% | |||||||||
Bears interest rate | 12% |