Cover
Cover | 9 Months Ended |
Sep. 30, 2022 | |
Cover [Abstract] | |
Document Type | S-1 |
Amendment Flag | false |
Entity Registrant Name | GROM SOCIAL ENTERPRISES, INC. |
Entity Central Index Key | 0001662574 |
Entity Tax Identification Number | 46-5542401 |
Entity Incorporation, State or Country Code | FL |
Entity Address, Address Line One | 2060 NW Boca Raton Blvd. |
Entity Address, Address Line Two | #6 |
Entity Address, City or Town | Boca Raton |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 33431 |
City Area Code | 561 |
Local Phone Number | 287-5776 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,311,495 | $ 6,530,161 |
Accounts receivable, net | 1,035,081 | 968,579 |
Inventory, net | 103,594 | 91,361 |
Prepaid expenses and other current assets | 792,161 | 457,578 |
Total current assets | 3,242,331 | 8,047,679 |
Operating lease right of use assets | 384,117 | 593,405 |
Property and equipment, net | 312,631 | 577,988 |
Goodwill | 21,907,599 | 22,376,025 |
Intangible assets, net | 5,406,737 | 5,073,074 |
Deferred tax assets, net | 411,681 | 465,632 |
Other assets | 1,438,117 | 721,160 |
Total assets | 33,103,213 | 37,854,963 |
Current liabilities: | ||
Accounts payable | 752,876 | 467,711 |
Accrued liabilities | 403,973 | 400,329 |
Dividend payable | 186,163 | 459,068 |
Advanced payments and deferred revenues | 615,316 | 404,428 |
Convertible notes, net -- current | 589,949 | 2,604,346 |
Loans payable -- current | 0 | 36,834 |
Related party payables | 50,000 | 50,000 |
Derivative liabilities | 48,988 | 0 |
Lease liabilities -- current | 201,592 | 333,020 |
Total current liabilities | 2,848,857 | 4,755,736 |
Convertible notes, net of loan discounts | 107,732 | 716,252 |
Lease liabilities | 160,828 | 284,848 |
Contingent purchase consideration | 5,586,493 | 5,586,493 |
Other noncurrent liabilities | 405,257 | 390,833 |
Total liabilities | 9,109,167 | 11,734,162 |
Commitments and contingencies (Note 17) | ||
Stockholders' Equity: | ||
Common stock, $0.001 par value. 500,000,000 shares authorized; 22,562,297 and 12,698,192 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 22,562 | 12,698 |
Additional paid-in capital | 97,156,458 | 89,851,309 |
Accumulated deficit | (75,450,170) | (66,404,190) |
Accumulated other comprehensive loss | (160,116) | (30,755) |
Total Grom Social Enterprises, Inc. stockholders' equity | 21,578,016 | 23,438,462 |
Noncontrolling interests | 2,416,030 | 2,682,339 |
Total stockholders' equity | 23,994,046 | 26,120,801 |
Total liabilities and equity | 33,103,213 | 37,854,963 |
Series A Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Series B Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Series C Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred Stock, Value, Issued | $ 9,282 | $ 9,400 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 25,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 22,562,297 | 12,698,192 |
Common stock, shares outstanding | 22,562,297 | 12,698,192 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 9,281,759 | 9,400,259 |
Preferred stock, shares outstanding | 9,281,759 | 9,400,259 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 1,484,958 | $ 1,514,692 | $ 3,855,665 | $ 4,778,527 |
Cost of goods sold | 912,010 | 917,124 | 2,776,418 | 2,931,088 |
Gross profit | 572,948 | 597,568 | 1,079,247 | 1,847,439 |
Operating expenses: | ||||
Depreciation and amortization | 59,586 | 116,359 | 188,199 | 368,323 |
Selling, general and administrative | 1,952,670 | 2,307,830 | 5,426,185 | 4,970,580 |
Professional fees | 259,142 | 326,800 | 963,149 | 839,831 |
Total operating expenses | 2,271,398 | 2,750,989 | 6,577,533 | 6,178,734 |
Loss from operations | (1,698,450) | (2,153,421) | (5,498,286) | (4,331,295) |
Other income (expense) | ||||
Interest expense, net | (366,840) | (492,783) | (3,312,370) | (2,236,545) |
Loss on settlement of debt | 0 | 0 | 0 | (947,179) |
Unrealized gain (loss) on change in fair value of derivative liabilities | (8,077) | 0 | 49,047 | 0 |
Other gains | 47,255 | 313,787 | 119,297 | 362,522 |
Total other income (expense) | (407,792) | (178,996) | (3,263,780) | (2,821,202) |
Loss before income taxes | (2,106,242) | (2,332,417) | (8,762,066) | (7,152,497) |
Provision for income taxes (benefit) | 0 | 0 | 0 | 0 |
Net loss | (2,106,242) | (2,332,417) | (8,762,066) | (7,152,497) |
Loss attributable to noncontrolling interest | (95,447) | (23,576) | (266,309) | (23,576) |
Net loss attributable to Grom Social Enterprises, Inc. stockholders | (2,010,795) | (2,308,841) | (8,495,757) | (7,128,921) |
Preferred stock dividend payable on Series C convertible preferred stock | (186,163) | 0 | (550,223) | 0 |
Net loss attributable to Grom Social Enterprises, Inc. common stockholders | (2,196,958) | (2,308,841) | (9,045,980) | (7,128,921) |
Comprehensive loss: | ||||
Foreign currency translation adjustment | (72,340) | (67,596) | (129,361) | (45,727) |
Comprehensive loss | (2,178,582) | (2,400,013) | (8,891,427) | (7,198,224) |
Comprehensive loss attributable to noncontrolling interests | (95,447) | (23,576) | (266,309) | (23,576) |
Comprehensive loss attributable to Grom Social Enterprises, Inc. common stockholders | $ (2,083,135) | $ (2,376,437) | $ (8,625,118) | $ (7,174,648) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Earnings Per Share, Basic | $ (0.10) | $ (0.21) | $ (0.50) | $ (0.91) |
Earnings Per Share, Diluted | $ (0.10) | $ (0.21) | $ (0.50) | $ (0.91) |
Weighted Average Number of Shares Outstanding, Basic | 21,514,289 | 11,118,290 | 18,143,662 | 7,808,344 |
Weighted Average Number of Shares Outstanding, Diluted | 21,514,289 | 11,118,290 | 18,143,662 | 7,808,344 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock Series A [Member] | Preferred Stock Series B [Member] | Preferred Stock Series C [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 5,626 | $ 5,886 | $ 64,417,218 | $ (55,791,914) | $ (39,334) | $ 8,597,482 | |||
Beginning balance, shares at Dec. 31, 2020 | 5,625,884 | 5,886,073 | |||||||
Net loss | (7,128,921) | (23,576) | (7,152,497) | ||||||
Change in foreign currency translation | (45,727) | (45,727) | |||||||
Issuance of common stock in connection with sales made under public offerings | $ 2,771 | 10,312,553 | 10,315,324 | ||||||
Issuance of common stock in connection with sales made under public offerings, shares | 2,771,084 | ||||||||
Recognition of beneficial conversion features related to convertible notes | 318,616 | 318,616 | |||||||
Issuance of common stock in exchange for consulting, professional and other services | $ 150 | 511,308 | 511,458 | ||||||
Issuance of common stock in exchange for consulting, professional and other services, shares | 150,393 | ||||||||
Issuance of common stock in connection with the issuance of convertible notes | $ 18 | 39,732 | 39,750 | ||||||
Issuance of common stock in connection with the issuance of convertible notes, shares | 17,746 | ||||||||
Issuance of common stock in connection with the acquisition of a business | $ 1,772 | 4,998,228 | 5,000,000 | ||||||
Issuance of common stock in connection with the acquisition of a business, shares | 1,771,883 | ||||||||
Stock based compensation expense related to stock options | 33,698 | 33,698 | |||||||
Ending balance, value at Sep. 30, 2021 | $ 9,400 | $ 12,326 | 88,490,096 | (62,920,855) | (85,061) | (23,576) | 25,482,330 | ||
Ending balance, shares at Sep. 30, 2021 | 9,400,259 | 12,325,736 | |||||||
Beginning balance, value at Jun. 30, 2021 | $ 9,315 | $ 9,560 | 79,454,922 | (60,611,994) | (17,465) | 18,844,338 | |||
Beginning balance, shares at Jun. 30, 2021 | 9,315,059 | 9,560,074 | |||||||
Net loss | (2,308,841) | (23,576) | (2,332,417) | ||||||
Change in foreign currency translation | (67,596) | (67,596) | |||||||
Issuance of common stock in connection with sales made under public offerings | $ 361 | 1,361,347 | 1,361,708 | ||||||
Issuance of common stock in connection with sales made under public offerings, shares | 361,445 | ||||||||
Issuance of common stock in exchange for consulting, professional and other services | $ 86 | 255,011 | 255,097 | ||||||
Issuance of common stock in exchange for consulting, professional and other services, shares | 86,522 | ||||||||
Issuance of common stock in connection with the issuance of convertible notes | $ 5 | 9,995 | 10,000 | ||||||
Issuance of common stock in connection with the issuance of convertible notes, shares | 4,464 | ||||||||
Issuance of common stock in connection with the acquisition of a business | $ 1,772 | 4,998,228 | 5,000,000 | ||||||
Issuance of common stock in connection with the acquisition of a business, shares | 1,771,883 | ||||||||
Stock based compensation expense related to stock options | 33,698 | 33,698 | |||||||
Ending balance, value at Sep. 30, 2021 | $ 9,400 | $ 12,326 | 88,490,096 | (62,920,855) | (85,061) | (23,576) | 25,482,330 | ||
Ending balance, shares at Sep. 30, 2021 | 9,400,259 | 12,325,736 | |||||||
Beginning balance, value at Dec. 31, 2021 | $ 9,400 | $ 12,698 | 89,851,309 | (66,404,190) | (30,755) | 2,682,339 | 26,120,801 | ||
Beginning balance, shares at Dec. 31, 2021 | 9,400,259 | 12,698,192 | |||||||
Net loss | (8,495,757) | (266,309) | (8,762,066) | ||||||
Change in foreign currency translation | (129,361) | (129,361) | |||||||
Recognition of beneficial conversion features related to convertible notes | 363,329 | 363,329 | |||||||
Issuance of common stock in exchange for consulting, professional and other services | $ 178 | 116,558 | 116,736 | ||||||
Issuance of common stock in exchange for consulting, professional and other services, shares | 178,490 | ||||||||
Stock based compensation expense related to stock options | 226,091 | 226,091 | |||||||
Ending balance, value at Sep. 30, 2022 | $ 9,282 | $ 22,562 | 97,156,458 | (75,450,170) | (160,116) | 2,416,030 | 23,994,046 | ||
Ending balance, shares at Sep. 30, 2022 | 9,281,759 | 22,562,297 | |||||||
Beginning balance, value at Jun. 30, 2022 | $ 9,361 | $ 19,780 | 95,661,982 | (73,253,212) | (87,776) | 2,511,477 | 24,861,612 | ||
Beginning balance, shares at Jun. 30, 2022 | 9,360,759 | 19,780,053 | |||||||
Net loss | (2,010,795) | (95,447) | (2,106,242) | ||||||
Change in foreign currency translation | (72,340) | (72,340) | |||||||
Issuance of common stock in exchange for consulting, professional and other services | $ 60 | 21,194 | 21,254 | ||||||
Issuance of common stock in exchange for consulting, professional and other services, shares | 60,000 | ||||||||
Stock based compensation expense related to stock options | 88,709 | 88,709 | |||||||
Ending balance, value at Sep. 30, 2022 | $ 9,282 | $ 22,562 | $ 97,156,458 | $ (75,450,170) | $ (160,116) | $ 2,416,030 | $ 23,994,046 | ||
Ending balance, shares at Sep. 30, 2022 | 9,281,759 | 22,562,297 |
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 of continuing operations: | ||
Net loss | $ (8,762,066) | $ (7,152,497) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 384,351 | 620,666 |
Amortization of debt discount | 2,181,869 | 1,623,921 |
Common stock issued in exchange for fees and services | 116,736 | 586,457 |
Deferred taxes | 0 | 29,412 |
Derivative expense | 1,052,350 | 0 |
Stock based compensation | 226,091 | 460,146 |
Amortization of rights-of-use assets | 289,766 | 223,262 |
Loss on disposal of property and equipment | 2,237 | 0 |
Unrealized gain on change in fair value of derivative liabilities | (49,047) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (74,769) | 115,873 |
Inventory | (31,643) | 33,979 |
Prepaid expenses and other current assets | (361,348) | (326,067) |
Other assets | (718,161) | 2,437 |
Accounts payable | 262,514 | (485,433) |
Accrued liabilities | 17,146 | (1,148,692) |
Advanced payments and deferred revenues | 243,191 | (409,525) |
Income taxes payable and other noncurrent liabilities | 13,748 | (11,489) |
Operating lease liability | (344,721) | (267,776) |
Related party payables | 0 | (51,247) |
Net cash used in operating activities | (5,432,002) | (5,373,687) |
Cash flows from investing activities: | ||
Cash consideration for acquisition of business | 0 | (400,000) |
Purchase of fixed assets | (84,300) | (25,789) |
Proceeds from sale of property and equipment | 13,085 | 0 |
Net cash used in financing activities | (71,215) | (425,789) |
Cash flows from financing activities: | ||
Proceeds from issuance of preferred stock, net of issuance costs | 0 | 1,050,000 |
Proceeds from issuance of common stock, net of issuance costs | 0 | 10,317,324 |
Proceeds from issuance of convertible notes | 1,444,000 | 4,516,700 |
Repayments of convertible notes | (109,997) | (1,058,307) |
Repayments of loans payable | (36,834) | (56,982) |
Net cash provided by financing activities | 223,100 | 14,768,735 |
Effect of exchange rates on cash and cash equivalents | 61,451 | (13,239) |
Net increase (decrease) in cash and cash equivalents | (5,218,666) | 8,956,020 |
Cash and cash equivalents at beginning of period | 6,530,161 | 146,708 |
Cash and cash equivalents at end of period | 1,311,495 | 9,102,728 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 31,020 | 74,299 |
Cash paid for income taxes | $ 0 | $ 0 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS Grom Social Enterprises, Inc. (the “Company”, “Grom” “we”, “us” or “our”), a Florida corporation f/k/a Illumination America, Inc. (“Illumination”), is a media, technology and entertainment company. The Company is focused on (i) delivering content to children under the age of 13 years in a safe secure platform that is compliant with the Children’s Online Privacy Protection Act (“COPPA”) and can be monitored by parents or guardians, (ii) creating, acquiring, and developing the commercial potential of kids & family entertainment properties and associated business opportunities, (iii) providing world class animation services, and (iv) offering protective web filtering solutions to block unwanted or inappropriate content. The Company operates its business through the following subsidiaries: · Grom Social, Inc. (“Grom Social”) was incorporated in the State of Florida on March 5, 2012. Grom Social operates the Company’s social media network designed for children under the age of 13 years. · TD Holdings Limited (“TD Holdings”) was incorporated in Hong Kong on September 15, 2005. TD Holdings operates through its two subsidiary companies: (i) Top Draw Animation Hong Kong Limited (“TDAHK”), a Hong Kong corporation, and (ii) Top Draw Animation, Inc. (“Top Draw” or “TDA”), a Philippines corporation. The group’s principal service-based activities are the production of animated films and televisions series. · Grom Educational Services, Inc. (“GES”) was incorporated in the State of Florida on January 17, 2017. GES operates the Company’s web filtering services provided to schools and government agencies. · Grom Nutritional Services, Inc. (“GNS”) was incorporated in the State of Florida on April 19, 2017. GNS intends to market and distribute nutritional supplements to children. GNS has been nonoperational since its inception. · Curiosity Ink Media, LLC (“Curiosity”) was incorporated in the State of Delaware on January 9, 2017. Curiosity creates, acquires and develops the commercial potential of kids & family entertainment properties and associated business opportunities. The Company owns 100% of each of Grom Social, TD Holdings, GES and GNS, and 80% of Curiosity. The Company is headquartered in Boca Raton, Florida with offices in Los Angeles, California; Salt Lake City, Utah; Norcross, Georgia; and Manila, Philippines. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | 2. GOING CONCERN The condensed consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business. Based on current operating levels, the Company will need to raise additional funds by selling additional equity or incurring debt. To date, the Company has funded its operations primarily through sales of its common stock in public markets and proceeds from the exercise of warrants to purchase common stock and the sale of convertible notes. Additionally, future capital requirements will depend on many factors, including the rate of revenue growth, the selling price of the Company’s products and services, the expansion of sales and marketing activities, the timing and extent of spending on content development efforts and the continuing market acceptance of the Company’s products and services. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months from the date of this report. Management of the Company intends to raise additional funds through the issuance of equity securities or debt. It is probable that management will continue to obtain new sources of financing that will enable the Company to meet its obligations for the twelve-month period. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. As a result, the substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Impact of COVID-19 On January 30, 2020, the World Health Organization announced a global health emergency because of the spread of a new strain of the novel coronavirus (“COVID-19”). On March 11, 2020, the World Health Organization declared the outbreak of COVID-19, a global pandemic. COVID-19 has and continues to significantly affect the United States and global economies. The Company has experienced significant disruptions to its business and operations due to circumstances related to COVID-19, and delays caused government-imposed quarantines, office closings and travel restrictions, which affect both the Company’s and its service providers. The Company has significant operations in Manila, Philippines, which was locked down by the government on March 12, 2020 due to concerns related to the spread of COVID-19. As a result of the Philippines government’s call to contain COVID-19, the Company’s animation studio, located in Manila, Philippines, which accounts for approximately 88% of the Company’s total revenues on a consolidated basis, was forced to close its offices for significant periods of time from March 2020 through December 2021. In response to the outbreak and business disruption, the Company has instituted employee safety protocols to contain the spread, including domestic and international travel restrictions, work-from-home practices, extensive cleaning protocols, social distancing and various temporary closures of its administrative offices and production studio. The Company has implemented a range of actions aimed at temporarily reducing costs and preserving liquidity. In January 2022, the Company started to recall artist and employees to return to the studio which is currently operating at 50% seat capacity. While restrictions have eased, the risk continues as new variants are being discovered. The full extent of potential impacts on the Company’s business, financing activities and the global economy will depend on future developments, which cannot be predicted due to the uncertain nature of the continued COVID-19 pandemic, government mandated shut downs, and its adverse effects, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. These effects could have a material adverse impact on the Company’s business, operations, financial condition and results of operations. Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted. For the three and nine months ended September 30, 2022, the condensed consolidated financial statements include the accounts of the Company and its operating subsidiaries Grom Social, TD Holdings, GES, GNS, and Curiosity. The Company recognizes noncontrolling interest related to its less-than-wholly-owned subsidiary, Curiosity, as equity in the consolidated financial statements separate from the parent entity’s equity. The net income (loss) attributable to noncontrolling interest is included in net income (loss) in the condensed consolidated statements of operations and comprehensive loss. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments, which includes intercompany balances and transactions are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto at December 31, 2021, as presented in the Company’s Annual Report on Form 10-K filed on April 15, 2022 with the SEC. Certain prior period statement of operations and statement of cash flows captions and balances have been reclassified to conform with the current year presentation, including the allocation of $79,810 and $252,343, respectively from depreciation and amortization and $95,899 and $303,214, respectively in certain fixed overhead costs from selling, general, and administrative expenses previously presented under operating expenses to cost of goods sold during the three and nine months ended September 30, 2021. In the statement of cash flow, the amortization of rights-of-use assets is presented as an adjustment to reconcile net loss to cash used in operating activities and changes to operating lease liabilities are presented as a change in operating assets and liabilities. These two reclassifications were previously presented as a net movement titled operating lease right-of-use assets under changes in operating assets and liabilities. The changes do not have any financial impact on the Company’s reported revenue, reported net loss, or cash flows from operations. Use of Estimates The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures 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 materially from those estimates. The results of operations for the three months and nine months ended September 30, 2022, are not necessarily indicative of the operating results for the full year. Update to Significant Accounting Policies The Company has changed its accounting policy related to Publishing Revenue, refer to Revenues – Publishing Revenue Other than noted above, there have been no other new or material changes to the significant accounting policies discussed in the Company’s audited financial statements in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with the SEC on April 15, 2022, that are of significance, or potential significance, to the Company. Recent Accounting Pronouncements – Issued, not yet Adopted There were no new accounting pronouncements issued in the three and nine months ended September 30, 2022, which could impact the Company. Recently Issued Accounting Pronouncements Adopted In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity s Own Equity (Subtopic 815-40): Issuer s Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | 3. REVENUES The Company’s main types of revenue contracts consist of the following categories, which are disaggregated from the condensed consolidated statements of operations. Animation Revenue Animation revenue is primarily generated from contracts with customers for preproduction and production services related to the development of animated movies and television series. Preproduction activities include producing storyboards, location design, model and props design, background color and color styling. Production focuses on library creation, digital asset management, background layout scene assembly, posing, animation and after effects. The Company provides services under fixed-price contracts. Under these fixed-price contracts, the Company agrees to perform a specified scope of work for a pre-determined price. To the extent actual costs vary from estimated costs, the Company’s profit may increase, decrease, or result in a loss. Web Filtering Revenue Web filtering revenue is subscription based and recognized on a pro-rata basis over the subscription period. Typically, a subscriber purchases computer hardware and a software and support service license for a period of use between one year to five years. The subscriber is billed in full at the time of the sale. The Company immediately recognizes revenue attributable to the computer hardware as it is non-refundable and control passes to the customer. The advanced billing component for software and service is initially recorded as deferred revenue and subsequently recognized as revenue on a straight-line basis over the subscription period. Produced and Licensed Content Revenue Produced and licensed content revenue is generated from the licensing of internally-produced films and episodic television programs. Each individual film or television series episode delivered represents a separate performance obligation, and revenues are recognized when the film or episode is made available to the licensee for exhibition. For license agreements containing multiple deliverables, revenues are allocated based on the relative standalone selling price of each film or episode of a television series, which is based on licenses for comparable films or series within the marketplace. Agreements to license programming are often long term, with collection terms ranging from one to five years. The advanced billing component for licensed content is initially recorded as deferred revenue and subsequently recognized as revenue upon completion of the performance obligation in accordance with the terms of licensing agreement. Publishing Revenue The Company has engaged the services of a third-party entity to manage the printing, publishing and distribution of the Company’s publishing content. In accordance with the terms agreed with the third party, the Company’s revenue is recognized as 50% of revenue from sales per title after the third-party vendor earns back the costs to develop, author, publish, market, promote and distribute each title, inclusive of any royalties owed to rights holders, following a six months period in market to allow for returns. Publishing revenues are eligible for recognition upon the completion of a six-month sales period to provide for any potential returns and notification from the third-party entity that it has earned back all of its related publishing costs. Other Revenue Other revenue corresponds to subscription and advertising revenue from the Grom Social mobile application. All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregated revenue listed above within the Sales caption in the condensed consolidated statements of operations: Schedule of disaggregated revenue Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Animation $ 1,419,153 $ 1,383,196 $ 3,493,732 $ 4,373,409 Web Filtering 63,234 130,928 358,950 403,676 Produced and Licensed Content – – – – Publishing 2,321 – 2,321 – Other 250 568 662 1,442 Total Sales $ 1,484,958 $ 1,514,692 $ 3,855,665 $ 4,778,527 The following table sets forth the components of the Company’s accounts receivable and advanced payments and deferred revenues at September 30, 2022, and December 31, 2021: Schedule of accounts receivable September 30, 2022 December 31, 2021 Billed accounts receivable $ 507,784 $ 822,536 Unbilled accounts receivable 563,570 187,751 Allowance for doubtful accounts (36,273 ) (41,708 ) Total accounts receivable, net $ 1,035,081 $ 968,579 Total advanced payments and deferred revenues $ 615,316 $ 404,428 During the three and nine months ended September 30, 2022, the Company had four customers that accounted for 81.8 71.4 81.7 76.5 As of September 30, 2022 and December 31, 2021, the Company had one and two customers, respectively that accounted for 18.9 61.3 Animation revenue contracts vary with movie contracts typically allowing for progress billings over the contract term while other episodic development activities are typically billable upon delivery of the performance obligation for an episode. These episodic activities typically create unbilled contract assets between episode delivery dates while movies can create contract assets or liabilities based on the progress of activities versus the arranged billing schedule. Revenues from web filtering contracts are all billed in advance and therefore represent contract liabilities until fully recognized on a ratable basis over the contract life. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 4. INVENTORY Inventory consists of costs incurred to produce animated content for third party customers. Costs incurred to produce the animated content to customers, which include direct production costs, production overhead and supplies are recognized as work-in-progress inventory. As animated content is completed in accordance with the terms stated by the customer, inventory is classified as finished products and subsequently recognized as cost of services as animated content is accepted by and available to the customer. Carrying amounts of animated content are recorded at the lower of cost or net realizable value. Cost is determined using a weighted average cost method for direct production costs, productions overhead and supplies used for completing animation projects. As of September 30, 2022 and December 31, 2021, the Company’s inventory totaled $ 103,594 91,361 90,394 77,501 13,200 13,860 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT The following table sets forth the components of the Company’s property and equipment at September 30, 2022 and December 31, 2021: Schedule of property and equipment September 30, 2022 December 31, 2021 Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers, software and office equipment $ 2,363,546 $ (2,219,765 ) $ 143,781 $ 2,698,172 $ (2,399,978 ) $ 298,194 Machinery and equipment 164,509 (153,903 ) 10,606 183,618 (162,647 ) 20,971 Vehicles 35,390 (30,533 ) 4,857 101,674 (76,497 ) 25,177 Furniture and fixtures 355,786 (334,478 ) 21,308 401,862 (365,075 ) 36,787 Leasehold improvements 1,010,155 (900,049 ) 110,106 1,086,518 (955,547 ) 130,971 Total fixed assets 3,929,386 (3,638,728 ) 290,658 4,471,844 (3,959,744 ) 512,100 Capital assets not subject to depreciation: Construction in progress 21,973 - 21,973 65,888 – 65,888 Total fixed assets $ 3,951,359 $ (3,638,728 ) $ 312,631 $ 4,537,732 $ (3,959,744 ) $ 577,988 For the three months ended September 30, 2022 and 2021, the Company recorded depreciation expense of $ 75,337 97,139 248,384 330,679 |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | 6. OTHER ASSETS The following table sets forth the components of the Company’s other assets at September 30, 2022 and December 31, 2021: Schedule Of Other Assets September 30, 2022 December 31, 2021 Capitalized website development costs 916,118 411,800 Prepublication costs 160,083 152,286 Produced and licensed content costs 296,441 76,701 Deposits 65,475 76,052 Other noncurrent assets - 4,321 Total other assets 1,438,117 721,160 For the three and nine months ended September 30, 2022, the Company recorded amortization expense of $ 704 1,203 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | 7. LEASES The Company has entered into operating leases primarily for office space. These leases have terms which range from two years to six years, and often include one or more options to renew or in the case of equipment rental, to purchase the equipment. In January 2022, the Company signed a new lease agreement to extend the term until March 2024 of the Company’s office space in Boca Raton, Florida. The total legally binding minimum lease payments for this agreement is approximately $ 94,898 Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized $ 384,117 201,592 160,828 Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company's operating ROU assets and related lease liabilities are as follows: Schedule of operating right-of-use assets Nine Months Ended Cash paid for operating lease liabilities $ 344,721 Weighted-average remaining lease term 1.0 Weighted-average discount rate 10 For the three months ended September 30, 2022 and 2021, the Company recorded rent expenses related to lease obligations of $ 109,829 90,993 330,462 272,980 The following table presents the future minimum payment obligations and aggregate present value of lease liabilities for operating leases as of September 30, 2022: Schedule of amortization of lease liabilities Remainder of 2022 $ 101,990 2023 114,411 2024 50,235 2025 40,291 2026 42,306 Thereafter 44,421 Total future lease payments 393,654 Less: Imputed interest (31,234 ) Present value of lease liabilities $ 362,420 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 8. BUSINESS COMBINATIONS Acquisition of Curiosity Ink Media, LLC On July 29, 2021, the Company entered into a membership interest purchase agreement (the “Purchase Agreement”) with Curiosity Ink Media LLC, a Delaware limited liability company (“Curiosity”) and the holders of all of Curiosity’s outstanding membership interests (the “Sellers”), for the purchase of 80 On August 19, 2021, pursuant to the terms of the Purchase Agreement, the Company consummated the Acquisition and acquired the Purchased Interests in consideration for the issuance to the Sellers of an aggregate of 1,771,883 2.82 Pursuant to the Purchase Agreement, the Company also paid $ 400,000 8 278,000 The Note is convertible into shares of common stock of the Company at a conversion price of $3.28 per share but may not be converted if, after giving effect to such conversion, the noteholder and its affiliates would beneficially own in excess of 9.99% of the Company’s outstanding common stock. The Note may be prepaid at any time, in whole or in part. The Note is subordinate to the Company’s senior indebtedness. The Sellers also have the ability to earn up to $17,500,000 (payable 50% in cash and 50% in stock) upon the achievement of certain performance milestones as of December 31, 2025. In addition to the tangible assets, goodwill totaling $ 14,271,969 Schedule Of Components Of Income Tax Expense Benefit Consideration Paid: Cash consideration $ 400,000 Common stock issued 5,421,962 Convertible notes 278,000 Contingent purchase consideration 5,586,493 Total consideration $ 11,686,455 The amounts in the table below represent the allocation of the purchase price. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date: Schedule of Recognized Identified Assets Acquired and Liabilities Assumed Cash and cash equivalents $ 26,408 Inventory 65,734 Produced and licensed content cost 187,920 Goodwill and intangible assets 14,271,969 Accounts payable (113,462 ) Noncontrolling interest (2,752,114 ) Total identifiable assets acquired, and liabilities assumed $ 11,686,455 During the quarter ended June 30, 2022, the Company finalized the purchase price allocation, during the permissible measurement period, and obtained new fair value information for certain identifiable intangible assets related to its acquisition of Curiosity. The revised purchase price allocation decreased goodwill by $ 468,426 468,426 15,944 Schedule of identifiable intangible assets Licensing agreements $ 341,728 Books and stories content 126,698 Total identifiable intangible assets $ 468,426 The Company’s results of operations include results of operations for Curiosity for the three and nine months ended September 30, 2022. No pro forma information is presented for the Company’s results of operations as if the acquisition of Curiosity had occurred on January 1, 2021 as results of its operations are not considered material to the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2021. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 9. GOODWILL AND INTANGIBLE ASSETS Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. At September 30, 2022 and December 31, 2021, the carrying amount of the Company’s goodwill was $ 21,907,599 22,376,025 The following table sets forth the components of the Company’s intangible assets at September 30, 2022 and December 31, 2021: Schedule of intangible assets Current Year Period Prior Year End Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net Book Value Intangible assets subject to amortization: Customer relationships 10.00 $ 1,526,282 $ (953,926 ) $ 572,356 $ 1,600,286 $ (876,457 ) $ (37,002 ) $ 686,827 Mobile software applications 2.00 – – – 282,500 (282,500 ) – – NetSpective web-filtering software 2.00 – – – 1,134,435 (1,134,435 ) – – Noncompete agreements 1.50 – – – 846,638 (846,638 ) – – Licensing agreement 19.60 341,728 (20,292 ) 321,436 – – – – Subtotal 1,868,010 (974,218 ) 893,792 3,863,859 (3,140,030 ) (37,002 ) 686,827 Intangible assets not subject to amortization: Trade names – 4,386,247 – 4,386,247 4,455,595 – (69,348 ) 4,386,247 Books and stories content – 126,698 – 126,698 – – – – Total intangible assets $ 6,380,955 $ (974,218 ) $ 5,406,737 $ 8,319,454 $ (3,140,030 ) $ (106,350 ) $ 5,073,074 For the three months ended September 30, 2022 and 2021, the Company recorded amortization expense of $ 42,505 99,729 134,764 290,187 The following table provides information regarding estimated remaining amortization expense for intangible assets subject to amortization for the remainder of 2022 and each of the following years ending December 31: Schedule of amortization Remainder of 2022 $ 42,505 2023 170,022 2024 170,022 2025 170,022 2026 93,708 Thereafter 247,513 Total remaining intangible assets subject to amortization $ 893,792 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | 10. ACCRUED LIABILITIES The following table sets forth the components of the Company’s accrued liabilities at September 30, 2022 and December 31, 2021: Accrued Liabilities September 30, 2022 December 31, 2021 Executive and employee compensation $ 187,211 $ 238,669 Interest on convertible notes and promissory notes 78,425 31,997 Other accrued expenses and liabilities 138,337 129,663 Total accrued liabilities $ 403,973 $ 400,329 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND PAYABLES | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND PAYABLES | 11. RELATED PARTY TRANSACTIONS AND PAYABLES Darren Marks’s Family The Company has engaged the family of Darren Marks, its Chief Executive Officer, to assist in the development of the Grom Social mobile application. These individuals create and produce original short form content focusing on social responsibility, anti-bullying, digital citizenship, unique blogs, and special events. Sarah Marks, the wife of Mr. Marks, and Zach Marks, Luke Marks, Jack Marks, Dawson Marks, Caroline Marks and Victoria Marks, each Mr. Marks’s children, are, or have been, employed by or independently contracted with the Company. For the three months ended September 30, 2022 and 2021, the Marks family was paid a total of $ 7,500 22,500 Effective January 1, 2021, the Company entered into a marketing agreement with Caroline Marks, daughter of Mr. Marks, for a period of 60 months in exchange for 52,084 shares of the Company’s common stock. On March 2, 2022, the Board of Directors of the Company approved the issuance the shares of common stock at a fair market value of $ 53,647 Compensation for services provided by the Marks family is expected to continue for the foreseeable future. Liabilities Due to Executive Officers and Directors On July 11, 2018, our director Dr. Thomas Rutherford loaned the Company $ 50,000 10 As of September 30, 2022 and December 31, 2021, the aggregate related party payables balance was $ 50,000 |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES | 12. CONVERTIBLE NOTES The following tables set forth the components of the Company’s convertible notes as of September 30, 2022 and December 31, 2021: Schedule of convertible debt September 30, 2022 December 31, 8% Unsecured Convertible Note (Curiosity) $ 278,000 $ 278,000 10% Senior Secured Convertible Note with Original Issuance Discount (L1 Capital Global Master Fund or “L1”) – 4,125,000 10% Senior Secured Convertible Note with Original Issuance Discount (L1 – Second Tranche) 100,000 – 12% Senior Convertible Notes with Original Issuance Discounts (OID Notes) 75,000 75,000 12% Senior Secured Convertible Notes (TDH Secured Notes) 237,604 330,039 12% Senior Secured Convertible Notes (Additional Secured Notes) 45,132 63,099 Loan discounts (38,055 ) (1,550,540 ) Total convertible notes, net 697,681 3,320,598 Less: current portion of convertible notes, net (589,949 ) (2,604,346 ) Convertible notes, net $ 107,732 $ 716,252 8% Unsecured Convertible Notes – Curiosity On July 29, 2021, the Company entered into a membership interest purchase agreement with Curiosity and the holders of all of Curiosity’s outstanding membership interests, for the purchase of 80% of Curiosity’s outstanding membership interests from the sellers. Pursuant to the purchase agreement, the Company issued 8% eighteen-month convertible promissory notes in the aggregate principal amount $ 278,000 3.28 As of September 30, 2022, the principal balance of the Curiosity note was $ 278,000 10% Senior Secured Convertible Note with Original Issuance Discount (L1) On September 14, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with L1 Capital Global Master Fund (“L1”) pursuant to which it issued (i) a 10% original issue discount senior secured convertible note in the principal amount of $ 4,400,000 5 813,278 4.20 3,960,000 1,500,000 277,777 The L1 Note is convertible by L1 into common stock of the Company at a price of $ 4.20 275,000 The Company estimated the fair value of the warrant at date of grant using the Black-Scholes option pricing model using the following inputs: (i) stock price on the date of grant of $ 2.70 5 0.79 299.8 1,200,434 On October 20, 2021, the Company and L1 entered into an amended and restated purchase agreement which increased the amount of the Second Tranche Financing from $ 1,500,000 6,000,000 1,041,194 In the event the principal amount of the L1 Note issued in the First Tranche Financing, when aggregated with the L1 Note to be issued in the Second Tranche Financing, exceeds 25% of the market capitalization of the Company’s common stock as reported by Bloomberg L.P, then the principal amount to be issued in the Second Tranche Financing will be limited to 25%, in the aggregate of both L1 Notes, unless waived in the sole discretion of the Purchaser. During the three months ended March 31, 2022, the Company issued an aggregate 5,757,365 4,125,000 0 10% Senior Secured Convertible Note with Original Issuance Discount (L1– Second Tranche) On January 20, 2022 (the “Second Tranche Closing”), the Company and L1 Capital closed on the Second Tranche of the offering, resulting in the issuance of (i) a $ 1,750,000 10 303,682 4.20 1,575,000 175,000 In connection with the Second Tranche Closing, the Company paid to EF Hutton a fee of $ 126,000 The Second Tranche Note is convertible into common stock of the Company at a rate of $4.20 per share (the “Conversion Price”) into 416,667 shares of common stock (the “Second Tranche Conversion Shares”) and, is repayable in equal monthly installments of $111,563 commencing on the date that the SEC declares a registration statement with respect to the resale of such shares effective, with all remaining amounts due on July 20, 2023. The Second Tranche Note is repayable by payment of cash, or, at the discretion of the Company and if the below listed “Equity Conditions” are met, by issuance of shares of the common stock at a price of 95% of the lowest daily VWAP during the ten-trading day period prior to the respective monthly redemption dates (with a floor of $1.92) multiplied by 102% of the amount due on such date. In the event that the ten-trading day VWAP drops below $1.92 the Company will have the right to pay in stock at such ten-trading day VWAP with any shortfall paid in cash. The Conversion Price may be adjusted in the event of dilutive issuances but in no event to less than $0.54 (the “Monthly Conversion Price”). The Company’s right to make monthly payments in stock in lieu of cash for the Second Tranche Note is conditioned on certain conditions (the “Equity Conditions”). The Equity Conditions required to be met each month in order to redeem the Second Tranche Note with stock in lieu of a monthly cash payment, among other conditions set forth therein, include without limitation, that a registration statement be in effect with respect to the resale of the shares issuable upon conversion or redemption of the Second Tranche Note (or, that an exemption under Rule 144 is available), that no default be in effect, that the average daily trading volume of the Company’s common stock would have to be at least $ 550,000 Other provisions of the Second Tranche Note, which is similar in terms to the First Tranche Note, include that the Second Tranche Note Conversion Price is subject to full anti-dilution price protections in the event of financings that are below the Conversion Price with a floor of $ 0.54 In the event of an Event of Default as defined in the notes, if the stock price is below the Conversion Price at the time of default and only for so long as a default is continuing, the Second Tranche Notes would be convertible at a rate of 80% of the lowest VWAP in the ten prior trading days, provided, that if the default is cured the default conversion rate elevates back to the normal Conversion Price As part of the Second Tranche Closing, the Company issued Second Tranche Warrants exercisable for five years from the date of issuance, at $ 4.20 The Second Tranche Note continues to be subject to (i) the repayment and performance guarantees by the subsidiaries of the Company pursuant to a subsidiary guaranty and, (ii) the Security Agreement pursuant to which the L1 Capital was granted a security interest in all of the assets of the Company and certain of its subsidiaries, each as entered into in connection with the First Tranche closing on September 14, 2021. During the nine months ended September 30, 2022, the Company issued an aggregate 3,055,556 shares of common stock and repaid $1,074,069 in cash to L1 upon the conversion of $1,650,000 of outstanding principal. As of September 30, 2022, the principal balance of these notes was $100,000 and remaining balance on the associated loan discounts was $7,685. 10% Secured Convertible Notes with Original Issuance Discounts (“OID Notes”) On August 6, 2020, the Company entered into debt exchange agreements with certain holders of these 10% convertible notes pursuant to which an aggregate of 647,954 411,223 On November 30, 2020, the Company entered into a debt exchange agreement with the remaining holder of these 10% convertible notes pursuant to which an aggregate of 158,000 111,250 46,750 On July 19, 2021, the Company repaid $ 6,329 As of September 30, 2022, the principal balance of these notes was $ 75,000 12% Senior Secured Convertible Notes (“TDH Secured Notes”) On March 16, 2020, the Company sold (the “TDH Secured Notes Offering”) an aggregate $ 3,000,000 March 16, 2024 The TDH Secured Notes are convertible at the option of the holders at 75% of the average sales price of the Company’s common stock over the 60 trading days immediately preceding conversion provided that the conversion price shall not be less than $3.20 per share. The Company’s obligations under the TDH Secured Notes, are secured by Grom Holdings’ shares of stock of TDH, and of its wholly owned subsidiary, TDAHK. The TDH Secured Notes rank equally and ratably on a pari passu basis with (i) the other TDH Secured Notes and (ii) the Original TDH Notes issued by the Company pursuant to TDH Share Sale Agreement. If the Company sells the animation studio located in Manila, Philippines, which is currently owned by TDH through TDAHK (the “Animation Studio”), for more than $12,000,000, and so long as any amount of principal is outstanding under the TDH Secured Notes, the Company will pay the TDH Secured Notes holders from the proceeds of the sale (i) all amounts of principal outstanding under the TDH Secured Notes, (ii) such amount of interest which would be due and payable assuming the TDH Secured Notes were held to maturity (minus any amounts of interest previously paid hereunder), and (iii) an additional 10% of the amount of principal outstanding under the TDH Secured Notes within five days of the closing of such sale. In connection with the issuance of the TDH Secured Notes, the Company issued to each TDH Secured Note holder shares of common stock equal to 20% of the principal amount of such holder’s TDH Secured Note, divided by $3.20. Accordingly, an aggregate of 187,500 420,000 On August 6, 2020, the Company entered into debt exchange agreements with certain holders of these 12% TDH Secured Notes pursuant to which an aggregate of 1,739,580 On November 30, 2020, the Company entered into a debt exchange agreement with another holder of these 12% TDH Secured Notes pursuant to which an aggregate of 158,000 shares of Series B Stock were issued to the noteholder for an aggregate of $99,633 of outstanding principal and accrued and unpaid interest. The Company recognized an extinguishment loss of $58,367 as a result of the exchange. On February 17, 2021, the Company entered into debt exchange agreements with certain holders of these 12% TDH Secured Notes pursuant to which an aggregate of 2,106,825 1,256,722 As of September 30, 2022, the principal balance of these notes was $ 237,604 25,521 12% Senior Secured Convertible Notes (Additional Secured Notes) On March 16, 2020, the Company issued to seven accredited investors (the “Additional Secured Note Lenders”) an aggregate of $ 1,060,000 12 Interest on the Additional Secured Notes accrues on the outstanding principal amount at the rate of 12% per annum. Principal and interest on the Additional Secured Notes are payable monthly, on an amortized basis over 48 months, with the last payment due on March 16, 2024 The Additional Secured Notes are convertible at the option of the holders at 75% of the average sales price of the Company’s common stock over the 60 trading days immediately preceding conversion provided that the conversion price shall not be less than $3.20 per share. In connection with the issuance of the Additional Secured Notes, the Company issued to each Additional Secured Note Lender shares of common stock equal to 20% of the principal amount of such holder’s Additional Secured Note, divided by $3.20. Accordingly, an aggregate of 66,250 148,000 On August 6, 2020, the Company entered into debt exchange agreements with certain holders of these 12% Additional Secured Notes pursuant to which an aggregate of 1,236,350 782,500 On February 17, 2021, the Company entered into debt exchange agreements with certain holders of these 12% Additional Secured Notes pursuant to which an aggregate of 288,350 182,500 As of September 30, 2022, the principal balance of these notes was $ 45,132 4,849 Future Minimum Principal Payments The remaining future principal repayments based upon the maturity dates of the Company’s borrowings for each of the next five years are as follows: Schedule of future debt maturity payments Remainder of 2022 $ 441,897 2023 217,793 2024 76,046 2025 and thereafter – Total $ 735,736 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Liability | |
DERIVATIVE LIABILITY | 13. DERIVATIVE LIABILITY On January 20, 2022, the Company closed a Second Tranche transaction with L1 Capital, as described within Note 12 (“Convertible Notes”). The terms of the transaction included a provision that in the event the stock price is below $0.54 (the “Conversion Price”) at the time for so long as stock price continues below the Conversion Price, the Second Tranche Notes would be convertible at a rate of 80% of the lowest VWAP in the ten prior trading days, provided, that if the stock prices elevate back to the normal Conversion Price. On May 9, 2022, stock price fell below $0.54 and the default provision was triggered. As a result of the May 9, 2022 triggering event, the Company recorded a derivative liability for $ 1,052,350 On June 28, 2022, L1 Capital converted $ 450,000 833,333 295,539 39,624 On July 11, 2022, L1 Capital converted $ 400,000 740,741 245,993 12,436 On July 25, 2022, L1 Capital converted $ 400,000 740,741 242,548 1,420 On August 11, 2022, L1 Capital converted $ 400,000 740,741 289,989 66,274 At September 30, 2022, the fair value of the derivative was remeasured using the remaining maximum shares to be delivered resulting in an unrealized gain on change of derivative transaction of $ 49,047 48,988 The fair value of derivative liability as of May 9, 2022 and September 30, 2022 was calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies: DERIVATIVE LIABILITY (Details - Assumptions) May 9, 2022 September 30, Stock price $ 0.57 $ 0.33 Strike price 0.54 0.54 Risk-free rate 2.12% 3.67% Annualized volatility 150% 107% Forecast horizon in years 1.20 0.80 Alternative Conversion Discount 20.0% 20.0% Maximum Shares to be Delivered 3,240,741 185,185 Changes in the unobservable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable input (probability of a down round event) used in the fair value measurement is the estimation of the likelihood of the occurrence of a change in the contractual terms of the financial instruments. A significant increase (decrease) in this likelihood or in the volatility assumptions would result in a higher (lower) fair value measurement. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 14. FAIR VALUE MEASUREMENTS Fair value is the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, non on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, include the Company’s own credit risk. The Company applied FASB Accounting Standards Codification (“ASC”) 820 – Fair Value Measurement · Level 1 – Unadjusted inputs based on quoted markets for identical assets or liabilities. · Level 2 – Observable inputs, either direct or indirect, not including Level 1 measurements, corroborated by market data or based upon quoted prices in non-active markets · Level 3 – Unobservable inputs that reflect management’s best assumptions of what market participants would use in valuing the asset or liability. Contingent Consideration The fair value of the Company’s contingent consideration payable was based on the Company’s evaluation as to the probability and amount of any earn-out that could have ultimately been payable. The Company utilizes a third-party valuation firm to assist in the calculation of the contingent consideration at the acquisition date. The Company evaluates the forecast of the acquired entity and the probability of earn-out provisions being achieved when it evaluates the contingent consideration recorded at initial acquisition date and at each subsequent reporting period. The fair value of contingent consideration is measured at each reporting period and adjusted as necessary. The Company evaluates the terms in contingent consideration arrangements provided to former owners of acquired companies who become employees of the Company to determine if such amounts are part of the purchase price of the acquired entity or compensation. Because the fair value measurements relating to the contingent consideration liabilities are subject to management judgment, measurement uncertainty is inherent in the valuation of the contingent consideration liabilities as of the reporting date. Derivative Liability The fair value of the derivative liabilities is classified as Level 3 within the Company’s fair value hierarchy. Please refer to Note 13 (“Derivative Liability”), for a further discussion of the measurement of fair value of the derivatives and their underlying assumptions. The fair value of the Company’s financial instruments carried at fair value at September 30, 2022 and December 31, 2021 are as follows: Schedule of financial instruments September 30, 2022 Total Level 1 Level 2 Level 3 Liabilities: Derivative Liabilities $ 48,988 $ – $ – $ 48,988 Contingent Purchase Consideration 5,586,493 – – 5,586,493 Total Liabilities $ 5,635,481 $ – $ – $ 5,635,481 December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Derivative Liabilities $ – $ – $ – $ – Contingent Purchase Consideration 5,586,493 – – 5,586,493 Total Liabilities $ 5,586,493 $ – $ – $ 5,586,493 The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities during the three and nine months ended September 30, 2022: Schedule of changes in the fair value financial liabilities Level 3 Financial Liabilities for the Three Months Ended September 30, 2022 Balance as of June 30, 2022 Realized (Gains) Losses Additions Settlements Unrealized (Gains) Losses Balance as of September 30, 2022 Liabilities: Derivative Liabilities $ 739,311 $ 80,130 $ – $ (778,530 ) $ 8,077 $ 48,988 Contingent Purchase Consideration 5,586,493 – – – – 5,586,493 Total Liabilities $ 6,325,804 $ 80,130 $ – $ (778,530 ) $ 8,077 $ 5,635,481 Level 3 Financial Liabilities for the Nine Months Ended September 30, 2022 Balance as of December 31, 2021 Realized (Gains) Losses Additions Settlements Unrealized (Gains) Losses Balance as of September 30, 2022 Liabilities: Derivative Liabilities $ – $ 119,754 $ 1,052,350 $ (1,074,069 ) $ (49,047 ) $ 48,988 Contingent Purchase Consideration 5,586,493 – – – – 5,586,493 Total Liabilities $ 5,586,493 $ 119,754 $ 1,052,350 $ (1,074,069 ) $ (49,047 ) $ 5,635,481 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 15. INCOME TAXES In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes. The Company’s interim effective tax rate, inclusive of discrete items, for the three and nine months ended September 30, 2022 and 2021 was 0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 16. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 25,000,000 0.001 Series A Preferred Stock As of September 30, 2022 and December 31, 2021, the Company had no Series B Preferred Stock On February 17, 2021, the Company entered into debt exchange agreements with holders of three of the Company’s convertible promissory notes in the aggregate amount of $ 1,700,905 2,564,175 On February 17, 2021, the Company entered into subscription agreements with two accredited investors, pursuant to which the Company sold the investors an aggregate of 300,000 300,000 On March 31, 2021, the Company entered into subscription agreements with two accredited investors, pursuant to which the Company sold the investors an aggregate of 650,000 650,000 On May 20, 2021, the Company entered into exchange agreements with all of the holders of Series B Stock (the “Series B Holders”), pursuant to which the Series B Holders agreed to exchange all of the issued and outstanding shares of Series B Stock for shares of the Company’s newly designated Series C Stock, on a one for one basis. As a result of the exchange, all 9,215,059 9,215,059 As of September 30, 2022 and December 31, 2021, the Company had no Series C Preferred Stock On May 20, 2021, the Company filed with the Secretary of State of the State of Florida a Certificate of Designation of Preferences, Rights and Limitations of Series C Stock designating 10,000,000 shares as Series C Preferred Stock (the “Series C Stock”). The Series C Stock ranks senior and prior to all other classes or series of the Company’s preferred stock and common stock. The holder may, at any time after the 6-month anniversary of the issuance of the shares of Series C Preferred Stock, convert such shares into common stock at a conversion rate of $1.92 per share. In addition, the Company may, at any time after the issuance of the shares, convert any or all of the outstanding shares of Series C Preferred Stock at a conversion rate of $1.92 per share. Each share of Series C Stock entitles the holder to 1.5625 votes for each share of Series C Stock. The consent of the holders of at least two-thirds of the shares of Series C Stock is required for the amendment to any of the terms of the Series C Stock, to create any additional class of stock unless the stock ranks junior to the Series C Stock, to make any distribution or dividend on any securities ranking junior to the Series C Stock, to merge or sell all or substantially all of the assets of the Company or acquire another business or effectuate any liquidation of the Company. Cumulative dividends accrue on each share of Series C Stock at the rate of 8% per annum of the stated value of $1.00 per share and are payable in arrears quarterly commencing 90 days from issuance. The dividend shall be payable in shares of common stock (a “PIK Dividend”) and are be due and payable on the date on which such PIK Dividend was declared. Upon a liquidation, dissolution or winding up of the Company, the holders of the Series C Stock are entitled to $1.00 per share plus all accrued and unpaid dividends. No distribution may be made to holders of shares of capital stock ranking junior to the Series C Stock upon a liquidation until Series C stockholders receive their liquidation preference. The holders of 66 2/3% of the then outstanding shares of Series C Stock, may elect to deem a merger, reorganization or consolidation of the Company into or with another corporation, not affiliated with said majority, or other similar transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of in exchange for property, rights or securities distributed to holders thereof by the acquiring person, firm or other entity, or the sale of all or substantially all of the assets of the Company. On May 20, 2021, the Company entered into exchange agreements with all of the holders of Series B Stock (the “Series B Holders”), pursuant to which the Series B Holders agreed to exchange all of the issued and outstanding shares of Series B Stock for shares of Series C Stock, on a one for one basis. As a result of the exchange, all 9,215,059 issued and outstanding shares of Series B Stock was exchanged for 9,215,059 shares of the Company’s Series C Stock, and all of the exchanged shares of Series B Stock were cancelled. On June 11, 2021, the Company entered into subscription agreements with an accredited investor, pursuant to which the Company sold the investor an aggregate of 100,000 100,000 On September 10, 2021, the Company entered into a debt exchange agreement with a holder of a 10% convertible note pursuant to which 85,250 85,250 On January 24, 2022, the Company issued 20,573 39,500 On July 29, 2022, the Company issued 41,146 79,000 As of September 30, 2022 and December 31, 2021, the Company had 9,281,759 9,400,259 For the three months and nine ended September 30, 2022, the Company declared cumulative dividends totaling $ 186,163 550,223 Common Stock The Company is authorized to issue 500,000,000 0.001 22,562,297 12,698,192 Reverse Stock Split On April 7, 2021, the board of directors of the Company approved, and on April 8, 2021, the Company’s shareholders approved, an increase to the range of the ratio for a reverse stock split to a ratio of no less than 1-for-2 and no more than 1-for-50. On May 6, 2021, the board fixed the ratio for a reverse stock split at 1-for-32 Registered Offering On June 21, 2021, the Company sold an aggregate of 2,409.639 units (“Units”), at a price to the public of $4.15 per Unit (the “Offering”), each Unit consisting of one share of the Company’s common stock and a warrant to purchase one share of common stock at an exercise price of $4.565 per share (the “Warrants”), pursuant to an underwriting agreement, dated as of June 16, 2021 (the “Underwriting Agreement”), between the Company and EF Hutton, division of Benchmark Investments, LLC, as representative (“EF Hutton”) of the several underwriters named in the Underwriting Agreement. In addition, pursuant to the Underwriting Agreement, the Company granted EF Hutton a 45-day option (the “Over-Allotment Option”) to purchase up to 361,445 additional Units, to cover over-allotments in connection with the Offering, which EF Hutton exercised with respect to Warrants exercisable for up to an additional 361,445 shares of common stock. The Company received gross proceeds of approximately $10,000,000 in the Offering, before deducting underwriting discounts and commissions and other offering expenses. On July 15, 2021, EF Hutton exercised in full the Over-Allotment Option with respect to all 361,445 1,500,000 Common Stock Issued as Compensation Employees, Officers and/or Directors During the three and nine months ended September 30, 2021, the Company issued 157,943 426,446 Common Stock Issued in Exchange for Consulting, Professional and Other Services During the three and nine months ended September 30, 2022, the Company issued 60,000 178,490 21,254 116,736 During the three and nine months ended September 30, 2021, the Company issued 86,522 150,943 255,097 511,458 Common Stock Issued in Connection with the Conversion of Convertible Note Principal and Accrued Interest During the three and nine months ended September 30, 2022, the Company issued 2,222,223 8,812,921 1,200,000 5,775,000 During the three and nine months ended September 30, 2021, the Company issued 383,405 665,392 Common Stock Issued in Connection with Series C Stock Dividends During the three and nine months ended September 30, 2022, the Company issued 458,875 810,975 187,216 833,739 Common Stock Issued in Connection with the Issuance of Convertible Promissory Notes During the three and nine months ended September 30, 2021, the Company issued 4,464 17,746 10,000 39,750 Common Stock Issued in the Acquisition of a Business During the three and nine months ended September 30, 2021, the Company issued 1,771,883 5,000,000 Stock Purchase Warrants Stock purchase warrants are accounted for as equity in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity The following table reflects all outstanding and exercisable warrants at September 30, 2022 and December 31, 2021. All warrants are exercisable for a period of three to five years from the date of issuance: Schedule of warrants Number of Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Yrs.) Balance January 1, 2021 229,628 $ 7.34 1.66 Warrants issued 4,273,733 4.18 Warrants exercised (249,480 ) – Warrants forfeited (6,711 ) – December 31, 2021 4,247,170 $ 4.40 1.75 Warrants issued 303,682 $ 4.20 Warrants exercised – – Warrants forfeited (154,687 ) – Balance September 30, 2022 4,396,162 $ 4.26 2.26 As of September 30, 2022, the outstanding stock purchase warrants had an aggregate intrinsic value of $ 0 Stock Options The following table represents all outstanding and exercisable stock options as of September 30, 2022. Schedule of options Year Issued Options Options Options Vested Weighted Average Exercise Price Weighted Average Remaining Life (Yrs.) 2013 241,730 (26,063 ) 215,667 215,667 $ 7.68 0.97 2018 1,875 – 1,875 1,875 24.96 0.58 2021 208,500 – 208,500 208,500 2.98 3.83 Total 452,105 (26,063 ) 426,042 426,042 $ 5.46 1.48 During the three and nine months ended September 30, 2022, the Company recorded $ 88,709 226,091 During the three and nine months ended September 30, 2021, the Company recorded $ 33,698 Stock-based compensation expense is reported in selling, general and administrative on the Company’s Condensed Consolidated Statement of Operations and Comprehensive Loss. As of September 30, 2022, there were $ 276,193 1.42 As of September 30, 2022, the outstanding stock options had an aggregate intrinsic value of $ 0 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company and its subsidiaries are subject to various pending and potential legal actions, arbitration proceedings, claims, investigations, examinations, regulatory proceedings, information gathering requests, subpoenas, inquiries and matters relating to compliance with laws and regulations (collectively, legal proceedings). Based on the Company’s current knowledge, and taking into consideration its legal expenses, the Company does not believe it is a party to, nor are any of its subsidiaries the subject of, any legal proceeding that would have a material adverse effect on the Company’s consolidated financial condition or liquidity. See also Note 7 (“Leases”). See also Note 8 (“Business Combination”) See also Note 15 (“Income Taxes”). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS In accordance with FASB ASC 855-10, Subsequent Events On October 6, 2022, L1 Capital converted $100,000 from its Second Tranche convertible notes for 185,186 shares and a cash settlement of $72,832. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted. For the three and nine months ended September 30, 2022, the condensed consolidated financial statements include the accounts of the Company and its operating subsidiaries Grom Social, TD Holdings, GES, GNS, and Curiosity. The Company recognizes noncontrolling interest related to its less-than-wholly-owned subsidiary, Curiosity, as equity in the consolidated financial statements separate from the parent entity’s equity. The net income (loss) attributable to noncontrolling interest is included in net income (loss) in the condensed consolidated statements of operations and comprehensive loss. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments, which includes intercompany balances and transactions are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto at December 31, 2021, as presented in the Company’s Annual Report on Form 10-K filed on April 15, 2022 with the SEC. Certain prior period statement of operations and statement of cash flows captions and balances have been reclassified to conform with the current year presentation, including the allocation of $79,810 and $252,343, respectively from depreciation and amortization and $95,899 and $303,214, respectively in certain fixed overhead costs from selling, general, and administrative expenses previously presented under operating expenses to cost of goods sold during the three and nine months ended September 30, 2021. In the statement of cash flow, the amortization of rights-of-use assets is presented as an adjustment to reconcile net loss to cash used in operating activities and changes to operating lease liabilities are presented as a change in operating assets and liabilities. These two reclassifications were previously presented as a net movement titled operating lease right-of-use assets under changes in operating assets and liabilities. The changes do not have any financial impact on the Company’s reported revenue, reported net loss, or cash flows from operations. |
Use of Estimates | Use of Estimates The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures 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 materially from those estimates. The results of operations for the three months and nine months ended September 30, 2022, are not necessarily indicative of the operating results for the full year. |
Update to Significant Accounting Policies | Update to Significant Accounting Policies The Company has changed its accounting policy related to Publishing Revenue, refer to Revenues – Publishing Revenue Other than noted above, there have been no other new or material changes to the significant accounting policies discussed in the Company’s audited financial statements in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with the SEC on April 15, 2022, that are of significance, or potential significance, to the Company. |
Recently Issued Accounting Pronouncements Adopted | Recently Issued Accounting Pronouncements Adopted In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity s Own Equity (Subtopic 815-40): Issuer s Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue | Schedule of disaggregated revenue Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Animation $ 1,419,153 $ 1,383,196 $ 3,493,732 $ 4,373,409 Web Filtering 63,234 130,928 358,950 403,676 Produced and Licensed Content – – – – Publishing 2,321 – 2,321 – Other 250 568 662 1,442 Total Sales $ 1,484,958 $ 1,514,692 $ 3,855,665 $ 4,778,527 |
Schedule of accounts receivable | Schedule of accounts receivable September 30, 2022 December 31, 2021 Billed accounts receivable $ 507,784 $ 822,536 Unbilled accounts receivable 563,570 187,751 Allowance for doubtful accounts (36,273 ) (41,708 ) Total accounts receivable, net $ 1,035,081 $ 968,579 Total advanced payments and deferred revenues $ 615,316 $ 404,428 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment September 30, 2022 December 31, 2021 Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers, software and office equipment $ 2,363,546 $ (2,219,765 ) $ 143,781 $ 2,698,172 $ (2,399,978 ) $ 298,194 Machinery and equipment 164,509 (153,903 ) 10,606 183,618 (162,647 ) 20,971 Vehicles 35,390 (30,533 ) 4,857 101,674 (76,497 ) 25,177 Furniture and fixtures 355,786 (334,478 ) 21,308 401,862 (365,075 ) 36,787 Leasehold improvements 1,010,155 (900,049 ) 110,106 1,086,518 (955,547 ) 130,971 Total fixed assets 3,929,386 (3,638,728 ) 290,658 4,471,844 (3,959,744 ) 512,100 Capital assets not subject to depreciation: Construction in progress 21,973 - 21,973 65,888 – 65,888 Total fixed assets $ 3,951,359 $ (3,638,728 ) $ 312,631 $ 4,537,732 $ (3,959,744 ) $ 577,988 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule Of Other Assets | Schedule Of Other Assets September 30, 2022 December 31, 2021 Capitalized website development costs 916,118 411,800 Prepublication costs 160,083 152,286 Produced and licensed content costs 296,441 76,701 Deposits 65,475 76,052 Other noncurrent assets - 4,321 Total other assets 1,438,117 721,160 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of operating right-of-use assets | Schedule of operating right-of-use assets Nine Months Ended Cash paid for operating lease liabilities $ 344,721 Weighted-average remaining lease term 1.0 Weighted-average discount rate 10 |
Schedule of amortization of lease liabilities | Schedule of amortization of lease liabilities Remainder of 2022 $ 101,990 2023 114,411 2024 50,235 2025 40,291 2026 42,306 Thereafter 44,421 Total future lease payments 393,654 Less: Imputed interest (31,234 ) Present value of lease liabilities $ 362,420 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule Of Components Of Income Tax Expense Benefit | Schedule Of Components Of Income Tax Expense Benefit Consideration Paid: Cash consideration $ 400,000 Common stock issued 5,421,962 Convertible notes 278,000 Contingent purchase consideration 5,586,493 Total consideration $ 11,686,455 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Schedule of Recognized Identified Assets Acquired and Liabilities Assumed Cash and cash equivalents $ 26,408 Inventory 65,734 Produced and licensed content cost 187,920 Goodwill and intangible assets 14,271,969 Accounts payable (113,462 ) Noncontrolling interest (2,752,114 ) Total identifiable assets acquired, and liabilities assumed $ 11,686,455 |
Schedule of identifiable intangible assets | Schedule of identifiable intangible assets Licensing agreements $ 341,728 Books and stories content 126,698 Total identifiable intangible assets $ 468,426 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets Current Year Period Prior Year End Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net Book Value Intangible assets subject to amortization: Customer relationships 10.00 $ 1,526,282 $ (953,926 ) $ 572,356 $ 1,600,286 $ (876,457 ) $ (37,002 ) $ 686,827 Mobile software applications 2.00 – – – 282,500 (282,500 ) – – NetSpective web-filtering software 2.00 – – – 1,134,435 (1,134,435 ) – – Noncompete agreements 1.50 – – – 846,638 (846,638 ) – – Licensing agreement 19.60 341,728 (20,292 ) 321,436 – – – – Subtotal 1,868,010 (974,218 ) 893,792 3,863,859 (3,140,030 ) (37,002 ) 686,827 Intangible assets not subject to amortization: Trade names – 4,386,247 – 4,386,247 4,455,595 – (69,348 ) 4,386,247 Books and stories content – 126,698 – 126,698 – – – – Total intangible assets $ 6,380,955 $ (974,218 ) $ 5,406,737 $ 8,319,454 $ (3,140,030 ) $ (106,350 ) $ 5,073,074 |
Schedule of amortization | Schedule of amortization Remainder of 2022 $ 42,505 2023 170,022 2024 170,022 2025 170,022 2026 93,708 Thereafter 247,513 Total remaining intangible assets subject to amortization $ 893,792 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities September 30, 2022 December 31, 2021 Executive and employee compensation $ 187,211 $ 238,669 Interest on convertible notes and promissory notes 78,425 31,997 Other accrued expenses and liabilities 138,337 129,663 Total accrued liabilities $ 403,973 $ 400,329 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt | Schedule of convertible debt September 30, 2022 December 31, 8% Unsecured Convertible Note (Curiosity) $ 278,000 $ 278,000 10% Senior Secured Convertible Note with Original Issuance Discount (L1 Capital Global Master Fund or “L1”) – 4,125,000 10% Senior Secured Convertible Note with Original Issuance Discount (L1 – Second Tranche) 100,000 – 12% Senior Convertible Notes with Original Issuance Discounts (OID Notes) 75,000 75,000 12% Senior Secured Convertible Notes (TDH Secured Notes) 237,604 330,039 12% Senior Secured Convertible Notes (Additional Secured Notes) 45,132 63,099 Loan discounts (38,055 ) (1,550,540 ) Total convertible notes, net 697,681 3,320,598 Less: current portion of convertible notes, net (589,949 ) (2,604,346 ) Convertible notes, net $ 107,732 $ 716,252 |
Schedule of future debt maturity payments | Schedule of future debt maturity payments Remainder of 2022 $ 441,897 2023 217,793 2024 76,046 2025 and thereafter – Total $ 735,736 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of financial instruments | |
Schedule of changes in the fair value financial liabilities | Schedule of changes in the fair value financial liabilities Level 3 Financial Liabilities for the Three Months Ended September 30, 2022 Balance as of June 30, 2022 Realized (Gains) Losses Additions Settlements Unrealized (Gains) Losses Balance as of September 30, 2022 Liabilities: Derivative Liabilities $ 739,311 $ 80,130 $ – $ (778,530 ) $ 8,077 $ 48,988 Contingent Purchase Consideration 5,586,493 – – – – 5,586,493 Total Liabilities $ 6,325,804 $ 80,130 $ – $ (778,530 ) $ 8,077 $ 5,635,481 Level 3 Financial Liabilities for the Nine Months Ended September 30, 2022 Balance as of December 31, 2021 Realized (Gains) Losses Additions Settlements Unrealized (Gains) Losses Balance as of September 30, 2022 Liabilities: Derivative Liabilities $ – $ 119,754 $ 1,052,350 $ (1,074,069 ) $ (49,047 ) $ 48,988 Contingent Purchase Consideration 5,586,493 – – – – 5,586,493 Total Liabilities $ 5,586,493 $ 119,754 $ 1,052,350 $ (1,074,069 ) $ (49,047 ) $ 5,635,481 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of warrants | Schedule of warrants Number of Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Yrs.) Balance January 1, 2021 229,628 $ 7.34 1.66 Warrants issued 4,273,733 4.18 Warrants exercised (249,480 ) – Warrants forfeited (6,711 ) – December 31, 2021 4,247,170 $ 4.40 1.75 Warrants issued 303,682 $ 4.20 Warrants exercised – – Warrants forfeited (154,687 ) – Balance September 30, 2022 4,396,162 $ 4.26 2.26 |
Schedule of options | Schedule of options Year Issued Options Options Options Vested Weighted Average Exercise Price Weighted Average Remaining Life (Yrs.) 2013 241,730 (26,063 ) 215,667 215,667 $ 7.68 0.97 2018 1,875 – 1,875 1,875 24.96 0.58 2021 208,500 – 208,500 208,500 2.98 3.83 Total 452,105 (26,063 ) 426,042 426,042 $ 5.46 1.48 |
REVENUES (Details - Revenue by
REVENUES (Details - Revenue by segment) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total Sales | $ 1,484,958 | $ 1,514,692 | $ 3,855,665 | $ 4,778,527 |
Animation [Member] | ||||
Total Sales | 1,419,153 | 1,383,196 | 3,493,732 | 4,373,409 |
Web Filtering [Member] | ||||
Total Sales | 63,234 | 130,928 | 358,950 | 403,676 |
Produced And Licensed Content [Member] | ||||
Total Sales | 0 | 0 | 0 | 0 |
Publishing [Member] | ||||
Total Sales | 2,321 | 0 | 2,321 | 0 |
Other Revenue [Member] | ||||
Total Sales | $ 250 | $ 568 | $ 662 | $ 1,442 |
REVENUES (Details - Accounts Re
REVENUES (Details - Accounts Receivable) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Billed accounts receivable | $ 507,784 | $ 822,536 |
Unbilled accounts receivable | 563,570 | 187,751 |
Allowance for doubtful accounts | (36,273) | (41,708) |
Total accounts receivable, net | 1,035,081 | 968,579 |
Total advanced payments and deferred revenues | $ 615,316 | $ 404,428 |
REVENUES (Details Narrative)
REVENUES (Details Narrative) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue Benchmark [Member] | Four Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration percentage | 81.80% | 81.70% | 71.40% | 76.50% | |
Accounts Receivable [Member] | One Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration percentage | 18.90% | 18.90% | |||
Accounts Receivable [Member] | Two Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration percentage | 61.30% | 61.30% |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventory, net | $ 103,594 | $ 91,361 |
Inventory work-in-progress | 90,394 | 77,501 |
Inventory finished goods | $ 13,200 | $ 13,860 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,951,359 | $ 4,537,732 |
Accumulated depreciation | (3,638,728) | (3,959,744) |
Property and equipment, net | 312,631 | 577,988 |
Computers Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,363,546 | 2,698,172 |
Accumulated depreciation | (2,219,765) | (2,399,978) |
Property and equipment, net | 143,781 | 298,194 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 164,509 | 183,618 |
Accumulated depreciation | (153,903) | (162,647) |
Property and equipment, net | 10,606 | 20,971 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 35,390 | 101,674 |
Accumulated depreciation | (30,533) | (76,497) |
Property and equipment, net | 4,857 | 25,177 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 355,786 | 401,862 |
Accumulated depreciation | (334,478) | (365,075) |
Property and equipment, net | 21,308 | 36,787 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,010,155 | 1,086,518 |
Accumulated depreciation | (900,049) | (955,547) |
Property and equipment, net | 110,106 | 130,971 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21,973 | 65,888 |
Accumulated depreciation | 0 | 0 |
Property and equipment, net | $ 21,973 | $ 65,888 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 75,337 | $ 97,139 | $ 248,384 | $ 330,679 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Capitalized website development costs | $ 916,118 | $ 411,800 |
Deposits | 65,475 | 76,052 |
Other noncurrent assets | $ 0 | $ 4,321 |
OTHER ASSETS (Details Narrative
OTHER ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Amortization | $ 704 | $ 1,203 |
LEASES (Details - Operating rig
LEASES (Details - Operating right-of-use assets and related lease liabilities) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Leases [Abstract] | |
Cash paid for operating lease liabilities | $ 344,721 |
Weighted-average remaining lease term (in years) | 1 year |
Weighted-average discount rate | 10% |
LEASES (Details - Future minimu
LEASES (Details - Future minimum payment obligations) | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
Remainder of 2022 | $ 101,990 |
2023 | 114,411 |
2024 | 50,235 |
2025 | 40,291 |
2026 | 42,306 |
Total future lease payments | 393,654 |
Less: Imputed interest | (31,234) |
Present value of lease liabilities | $ 362,420 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Lessee, Operating Lease, Liability, to be Paid | $ 393,654 | $ 393,654 | |||
Operating Lease, Right-of-Use Asset | 384,117 | 384,117 | $ 593,405 | ||
Operating Lease, Liability, Current | 201,592 | 201,592 | 333,020 | ||
Operating Lease, Liability, Noncurrent | 160,828 | 160,828 | $ 284,848 | ||
Operating Lease, Expense | 109,829 | $ 90,993 | 330,462 | $ 272,980 | |
Office Space Boca Raton Fl [Member] | |||||
Lessee, Operating Lease, Liability, to be Paid | $ 94,898 | $ 94,898 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - Curiosity Ink Media L L C [Member] | Aug. 19, 2021 USD ($) shares |
Business Acquisition [Line Items] | |
Payments to Acquire Businesses, Gross | $ 400,000 |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 5,421,962 |
Notes Issued | $ 278,000 |
Business Combination, Consideration Transferred | $ 11,686,455 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details 1) - Curiosity Ink Media L L C [Member] | Aug. 19, 2021 USD ($) |
Business Combination, Separately Recognized Transactions [Line Items] | |
Cash and cash equivalents | $ 26,408 |
Inventory | 65,734 |
Produced and licensed content cost | 187,920 |
Accounts payable | (113,462) |
Total identifiable assets acquired, and liabilities assumed | $ 11,686,455 |
BUSINESS COMBINATIONS (Detail_2
BUSINESS COMBINATIONS (Details 2) | Sep. 30, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identifiable intangible assets | $ 468,426 |
Licensing Agreements [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identifiable intangible assets | 341,728 |
Books And Stories Content [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identifiable intangible assets | $ 126,698 |
BUSINESS COMBINATIONS (Detail_3
BUSINESS COMBINATIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Aug. 19, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 21,907,599 | $ 21,907,599 | $ 22,376,025 | ||||
Amortization of Intangible Assets | $ 42,505 | $ 99,729 | $ 134,764 | $ 290,187 | |||
Purchase Agreement [Member] | Convertible Notes Payable [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Long-Term Debt, Gross | $ 278,000 | ||||||
Curiosity Ink Media [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Shares issued | 1,771,883 | ||||||
Shares issued | $ 2.82 | ||||||
Long-Term Debt, Gross | $ 400,000 | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 8% | ||||||
Goodwill | $ 14,271,969 | ||||||
Goodwill, Period Increase (Decrease) | $ 468,426 | ||||||
Increase (Decrease) in Intangible Assets, Current | 468,426 | ||||||
Amortization of Intangible Assets | $ 15,944 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details - Intangibles) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite intangible assets, gross | $ 1,868,010 | $ 3,863,859 |
Accumulated amortization | (974,218) | (3,140,030) |
Indefinite lived intangible asset | 893,792 | 686,827 |
Accumulated impairment | (37,002) | |
Accumulated impairment | 37,002 | |
Total intangible assets | 5,406,737 | 5,073,074 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible asset | 4,386,247 | 4,455,595 |
Accumulated impairment | (69,348) | |
Accumulated impairment | 69,348 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 4,386,247 | 4,386,247 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 10 years | |
Finite intangible assets, gross | $ 1,526,282 | 1,600,286 |
Accumulated amortization | (953,926) | (876,457) |
Indefinite lived intangible asset | $ 572,356 | 686,827 |
Accumulated impairment | (37,002) | |
Accumulated impairment | 37,002 | |
Mobile Software App [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 2 years | |
Finite intangible assets, gross | $ 0 | 282,500 |
Accumulated amortization | 0 | (282,500) |
Indefinite lived intangible asset | $ 0 | 0 |
Accumulated impairment | 0 | |
Accumulated impairment | 0 | |
Net Spective Webfiltering Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 2 years | |
Finite intangible assets, gross | $ 0 | 1,134,435 |
Accumulated amortization | 0 | (1,134,435) |
Indefinite lived intangible asset | $ 0 | 0 |
Accumulated impairment | 0 | |
Accumulated impairment | 0 | |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 1 year 6 months | |
Finite intangible assets, gross | $ 0 | 846,638 |
Accumulated amortization | 0 | (846,638) |
Indefinite lived intangible asset | $ 0 | 0 |
Accumulated impairment | 0 | |
Accumulated impairment | 0 | |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 19 years 7 months 6 days | |
Finite intangible assets, gross | $ 341,728 | 0 |
Accumulated amortization | (20,292) | 0 |
Indefinite lived intangible asset | $ 321,436 | 0 |
Accumulated impairment | 0 | |
Accumulated impairment | $ 0 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details - Amortization schedule) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 42,505 | |
2023 | 170,022 | |
2024 | 170,022 | |
2025 | 170,022 | |
2026 | 93,708 | |
Thereafter | 247,513 | |
Total remaining intangible assets subject to amortization | $ 893,792 | $ 686,827 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Carrying amount goodwill | $ 21,907,599 | $ 22,376,025 | |||
Amortization of Intangible Assets | $ 42,505 | $ 99,729 | $ 134,764 | $ 290,187 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Executive and employee compensation | $ 187,211 | $ 238,669 |
Interest on convertible notes and promissory notes | 78,425 | 31,997 |
Other accrued expenses and liabilities | 138,337 | 129,663 |
Total accrued liabilities | $ 403,973 | $ 400,329 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND PAYABLES (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jul. 11, 2018 |
Related Party Transaction [Line Items] | ||||
Accounts payable, related parties | $ 50,000 | $ 50,000 | ||
Darren Marks [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable, related parties | $ 7,500 | $ 22,500 | ||
Rutherford [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable, related parties | $ 50,000 | |||
Debt interest rate | 10% |
CONVERTIBLE NOTES (Details - Co
CONVERTIBLE NOTES (Details - Convertible debentures) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Convertible Debt, Current | $ (589,949) | $ (2,604,346) |
Convertible Debt, Noncurrent | 107,732 | 716,252 |
Unsecured Convertible Notes Curiosity [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | 278,000 | 278,000 |
Senior Secured L 1 Capital Global Master [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | 0 | 4,125,000 |
Convertible Debentures [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | 697,681 | 3,320,598 |
Debt Instrument, Unamortized Discount | (38,055) | (1,550,540) |
Convertible Debentures [Member] | Senior Secured Convertible Note With Original Issuance Discount L 1 [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | 100,000 | 0 |
Convertible Debentures [Member] | Secured Convertible Notes O I D [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | 75,000 | 75,000 |
Convertible Debentures [Member] | Senior Secured Convertible T D H Notes [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | 237,604 | 330,039 |
Convertible Debentures [Member] | Senior Secured Convertible Additional Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Convertible debt, gross | $ 45,132 | $ 63,099 |
CONVERTIBLE NOTES (Details - De
CONVERTIBLE NOTES (Details - Debt maturities) | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2022 | $ 441,897 |
2023 | 217,793 |
2024 | 76,046 |
2025 and thereafter | 0 |
Total | $ 735,736 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||||||||||
Oct. 20, 2021 | Sep. 14, 2021 | Aug. 06, 2020 | Jan. 20, 2022 | Nov. 30, 2020 | Feb. 17, 2021 | Mar. 31, 2022 | Mar. 16, 2020 | Aug. 06, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jul. 29, 2021 | Jul. 19, 2021 | Dec. 31, 2020 | Jan. 20, 2020 | |
Debt Instrument [Line Items] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.26 | $ 4.40 | $ 7.34 | |||||||||||||
Monthly installment | $ 275,000 | |||||||||||||||
Proceeds from Convertible Debt | $ 1,444,000 | $ 4,516,700 | ||||||||||||||
Original issue discount | $ 175,000 | |||||||||||||||
Debt Instrument, Face Amount | 550,000 | |||||||||||||||
Extinguishment loss | $ 46,750 | |||||||||||||||
Original Tdh Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 126,000 | |||||||||||||||
Second Tranche [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Conversion price | $ 4.20 | |||||||||||||||
First Tranche [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Conversion price | $ 0.54 | |||||||||||||||
Senior Ten Percentage Secured Convertible Note With Original Issuance Discount L 1 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 0 | |||||||||||||||
Number of securities called by each warrant | 303,682 | |||||||||||||||
Debt converted, shares issued | 5,757,365 | |||||||||||||||
Debt Conversion, Original Debt, Amount | $ 4,125,000 | |||||||||||||||
Senior Ten Percentage Secured Convertible Note With Original Issuance Discount L 1 [Member] | Warrant [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price | $ 2.70 | |||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.79% | |||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 299.80% | |||||||||||||||
Fair Value Adjustment of Warrants | $ 1,200,434 | |||||||||||||||
Senior Ten Percentage Secured Convertible Note With Original Issuance Discount L 1 [Member] | Second Tranche [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Proceeds from Convertible Debt | $ 1,750,000 | |||||||||||||||
Secured 10 Conv Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | 75,000 | $ 6,329 | ||||||||||||||
Debt interest rate | 10% | |||||||||||||||
Secured 10 Conv Notes [Member] | Series B Preferred Stock [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt converted, shares issued | 647,954 | 158,000 | ||||||||||||||
Debt converted, amount converted | $ 411,223 | $ 111,250 | ||||||||||||||
Secured 12 Conv Notes [Member] | Orginal T D H Secured Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 3,000,000 | |||||||||||||||
Secured 12 Conv Notes [Member] | T D H Secured Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | 237,604 | |||||||||||||||
Unamortized discount | 25,521 | |||||||||||||||
Secured 12 Conv Notes [Member] | T D H Secured Notes [Member] | Series B Preferred Stock [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt converted, shares issued | 2,106,825 | 1,739,580 | ||||||||||||||
Debt converted, amount converted | $ 1,256,722 | |||||||||||||||
Secured 12 Conv Notes [Member] | Additional Secured Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 1,060,000 | 45,132 | ||||||||||||||
Debt interest rate | 12% | |||||||||||||||
Debt maturity date | Mar. 16, 2024 | |||||||||||||||
Unamortized discount | 4,849 | |||||||||||||||
Secured 12 Conv Notes [Member] | Additional Secured Notes [Member] | Series B Preferred Stock [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt converted, shares issued | 1,236,350 | |||||||||||||||
Debt converted, amount converted | $ 782,500 | |||||||||||||||
Purchase Agreement [Member] | Unsecured Convertible Notes Curiosity [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 278,000 | $ 278,000 | ||||||||||||||
Conversion price | $ 3.28 | |||||||||||||||
Securities Purchase Agreement [Member] | Senior Ten Percentage Secured Convertible Note With Original Issuance Discount L 1 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 4,400,000 | |||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||||||||
Number of securities called by each warrant | 813,278 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.20 | $ 4.20 | ||||||||||||||
Price per share | $ 4.20 | |||||||||||||||
Securities Purchase Agreement [Member] | Senior Ten Percentage Secured Convertible Note With Original Issuance Discount L 1 [Member] | Warrant [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||||||||
Securities Purchase Agreement [Member] | Senior Ten Percentage Secured Convertible Note With Original Issuance Discount L 1 [Member] | Second Tranche Financing [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Convertible debt, gross | $ 1,500,000 | |||||||||||||||
Number of securities called by each warrant | 277,777 | |||||||||||||||
Proceeds from Convertible Debt | $ 6,000,000 | |||||||||||||||
Third Amendment [Member] | Secured 12 Conv Notes [Member] | Original Tdh Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt maturity date | Mar. 16, 2024 |
DERIVATIVE LIABILITY (Details -
DERIVATIVE LIABILITY (Details - Assumptions) | Sep. 30, 2022 | May 09, 2022 |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 0.33 | 0.57 |
Measurement Input Strike Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 0.54 | 0.54 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 3.67% | 2.12% |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 107% | 150% |
Measurement Input, Expected Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 0.80 | 1.20 |
Measurement Input, Discount Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 20.0% | 20.0% |
Maximum Shares To Be Delivered [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivatives, Determination of Fair Value | 185,185 | 3,240,741 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Aug. 11, 2022 | Jul. 25, 2022 | Jul. 11, 2022 | Jun. 28, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 09, 2022 | Dec. 31, 2021 | |
Offsetting Assets [Line Items] | ||||||||||
Unrealized Gain (Loss) on Derivatives | $ (8,077) | $ 0 | $ 49,047 | $ 0 | ||||||
Derivative Liability, Current | 48,988 | 48,988 | $ 0 | |||||||
Second Tranche With L 1 Capital [Member] | Convertible Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Derivative Liability | $ 1,052,350 | |||||||||
Debt Conversion, Converted Instrument, Amount | $ 400,000 | $ 400,000 | $ 400,000 | $ 450,000 | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 740,741 | 740,741 | 740,741 | 833,333 | ||||||
Derivative, Loss on Derivative | $ 66,274 | $ 1,420 | $ 12,436 | $ 39,624 | ||||||
Unrealized Gain (Loss) on Derivatives | 49,047 | |||||||||
Derivative Liability, Current | $ 48,988 | $ 48,988 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details - Fair Value Levels) - Fair Value, Recurring [Member] - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | $ 5,635,481 | $ 5,586,493 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 5,635,481 | 5,586,493 |
Derivative Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 48,988 | 0 |
Derivative Liabilities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Derivative Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Derivative Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 48,988 | 0 |
Contingent Purchase Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 5,586,493 | 5,586,493 |
Contingent Purchase Consideration [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Contingent Purchase Consideration [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 0 | 0 |
Contingent Purchase Consideration [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | $ 5,586,493 | $ 5,586,493 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details - Level 3) - Fair Value, Inputs, Level 3 [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs | $ 5,635,481 | $ 5,635,481 | $ 6,325,804 | $ 5,586,493 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings | 80,130 | 119,754 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Issues | 0 | 1,052,350 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Settlements | (778,530) | (1,074,069) | ||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss) | 8,077 | (49,047) | ||
Derivative Liabilities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs | 48,988 | 48,988 | 739,311 | 0 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings | 80,130 | 119,754 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Issues | 0 | 1,052,350 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Settlements | (778,530) | (1,074,069) | ||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss) | 8,077 | (49,047) | ||
Contingent Purchase Consideration [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs | 5,586,493 | 5,586,493 | $ 5,586,493 | $ 5,586,493 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings | 0 | 0 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Issues | 0 | 0 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Settlements | 0 | 0 | ||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss) | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0% | 0% |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Warrant activity) - $ / shares | Sep. 30, 2022 | Jan. 20, 2022 | Sep. 14, 2021 |
Equity [Abstract] | |||
Warrants outstanding, beginning balance | 4,247,170 | 229,628 | |
Weighted Average Exercise Price, Warrants outstanding, beginning balance | $ 4.40 | $ 7.34 | |
Warrants outstanding, ending balance | 4,396,162 | ||
Weighted Average Exercise Price, Warrants outstanding, ending balance | $ 4.26 |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details - Option Activity) - Equity Option [Member] | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options forfeited | (26,063) |
Options outstanding | 426,042 |
Vested options | 426,042 |
Weighted average exercise price | $ / shares | $ 5.46 |
Weighted average remaining life | 1 year 5 months 23 days |
Option 1 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options forfeited | (26,063) |
Options outstanding | 215,667 |
Vested options | 215,667 |
Weighted average exercise price | $ / shares | $ 7.68 |
Weighted average remaining life | 11 months 19 days |
Option 2 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options forfeited | 0 |
Options outstanding | 1,875 |
Vested options | 1,875 |
Weighted average exercise price | $ / shares | $ 24.96 |
Weighted average remaining life | 6 months 29 days |
Option 3 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Options forfeited | 0 |
Options outstanding | 208,500 |
Vested options | 208,500 |
Weighted average exercise price | $ / shares | $ 2.98 |
Weighted average remaining life | 3 years 9 months 29 days |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Jan. 24, 2022 | Sep. 10, 2021 | Jul. 15, 2021 | Jun. 11, 2021 | May 06, 2021 | Jul. 29, 2022 | Feb. 17, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Common stock, shares issued | 22,562,297 | 22,562,297 | 12,698,192 | ||||||||||
Common stock, shares outstanding | 22,562,297 | 22,562,297 | 12,698,192 | ||||||||||
Reverse stock split | 1-for-32 | ||||||||||||
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture | 157,943 | ||||||||||||
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | $ 426,446 | ||||||||||||
Stock issued for services, value | $ 21,254 | $ 255,097 | $ 116,736 | 511,458 | |||||||||
Stock Issued During Period, Value, New Issues | 1,361,708 | 10,315,324 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding | 0 | 0 | |||||||||||
Share-Based Payment Arrangement, Expense | 88,709 | $ 33,698 | 226,091 | $ 33,698 | |||||||||
Unrecognized stock-based compensation costs | 276,193 | $ 276,193 | |||||||||||
Weighted average recognized | 1 year 5 months 1 day | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | $ 0 | |||||||||||
Business Acquisition [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued new, shares | 1,771,883 | 1,771,883 | |||||||||||
Stock Issued During Period, Value, New Issues | $ 5,000,000 | $ 5,000,000 | |||||||||||
Over-Allotment Option [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued new, shares | 361,445 | ||||||||||||
Sale of Stock, Consideration Received on Transaction | $ 1,500,000 | ||||||||||||
Series C Preferred Converted [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Conversion of Stock, Shares Issued | 20,573 | 41,146 | |||||||||||
Conversion of Stock, Shares Converted | 39,500 | 79,000 | |||||||||||
Contractors [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued for services, shares | 60,000 | 86,522 | 178,490 | 150,943 | |||||||||
Stock issued for services, value | $ 21,254 | $ 255,097 | $ 116,736 | $ 511,458 | |||||||||
Series A Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||||
Series B Preferred Stock [Member] | Debt Exchange Agr [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Debt conversion, amount | $ 1,700,905 | ||||||||||||
Debt conversion, shares issued | 2,564,175 | ||||||||||||
Series B Preferred Stock [Member] | Subscription Agreement [Member] | Two Accredited Investors [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued new, shares | 300,000 | 650,000 | |||||||||||
Proceeds from issuance of equity | $ 300,000 | $ 650,000 | |||||||||||
Series C Preferred Stock [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 9,281,759 | 9,281,759 | 9,400,259 | ||||||||||
Preferred stock, shares outstanding | 9,281,759 | 9,281,759 | 9,400,259 | ||||||||||
Declared cumulative dividends | $ 186,163 | $ 550,223 | |||||||||||
Series C Preferred Stock [Member] | Convertible Note Of Ten Percentage [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Debt conversion, amount | $ 85,250 | ||||||||||||
Stock issued new, shares | 85,250 | ||||||||||||
Series C Preferred Stock [Member] | Subscription Agreement [Member] | Two Accredited Investors [Member] | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued new, shares | 100,000 | ||||||||||||
Proceeds from issuance of equity | $ 100,000 |