Cover
Cover | 9 Months Ended |
Sep. 30, 2024 | |
Entity Addresses [Line Items] | |
Document Type | S-1 |
Amendment Flag | false |
Entity Registrant Name | DIGITAL BRANDS GROUP, INC. |
Entity Central Index Key | 0001668010 |
Entity Tax Identification Number | 46-1942864 |
Entity Incorporation, State or Country Code | DE |
Entity Address, Address Line One | 1400 Lavaca Street |
Entity Address, City or Town | Austin |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 78701 |
City Area Code | (209) |
Local Phone Number | 651-0172 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Document Creation Date | Jan. 24, 2025 |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | Digital Brands Group, Inc. |
Entity Address, Address Line Two | 1400 Lavaca Street |
Entity Address, City or Town | Austin |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 78701 |
City Area Code | (209) |
Local Phone Number | 651-0172 |
Contact Personnel Name | John Hilburn Davis IV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 289,346 | $ 20,773 | $ 1,275,616 |
Accounts receivable, net | 276,334 | 74,833 | |
Due from factor, net | 438,269 | 337,811 | 839,400 |
Inventory | 5,040,518 | 4,849,600 | 5,122,564 |
Prepaid expenses and other current assets | 353,307 | 276,670 | 766,901 |
Assets per discontinued operations, current | 241,544 | ||
Total current assets | 6,397,774 | 5,559,687 | 8,829,393 |
Property, equipment and software, net | 79,310 | 55,509 | 104,512 |
Goodwill | 8,973,501 | 8,973,501 | 8,973,501 |
Intangible assets, net | 7,324,579 | 9,982,217 | 12,906,238 |
Deposits | 152,711 | 75,431 | 193,926 |
Right of use asset | 365,246 | 689,688 | 102,349 |
Assets per discontinued operations | 2,628,136 | ||
Total assets | 23,293,121 | 25,336,033 | 33,738,055 |
Current liabilities: | |||
Accounts payable | 6,251,884 | 7,538,902 | 8,016,173 |
Accrued expenses and other liabilities | 5,236,437 | 4,758,492 | 3,936,920 |
Due to related parties | 426,921 | 400,012 | |
Contingent consideration liability | 12,098,475 | ||
Convertible note payable, net | 100,000 | 100,000 | 2,721,800 |
Accrued interest payable | 2,053,102 | 1,996,753 | 1,561,795 |
Loan payable, current | 2,743,508 | 2,325,842 | 1,829,629 |
Promissory note payable, net | 4,730,740 | 4,884,592 | 9,000,000 |
Right of use liability, current portion | 899,726 | 1,210,814 | 102,349 |
Liabilities per discontinued operations, current | 1,071,433 | ||
Total current liabilities | 22,442,318 | 23,215,407 | 40,893,791 |
Loan payable | 150,000 | 150,000 | 150,000 |
Right of use liability, non current portion | 313,723 | ||
Deferred tax liability | 368,034 | 368,034 | |
Liabilities per discontinued operations | 147,438 | ||
Total liabilities | 23,274,075 | 23,733,441 | 41,191,229 |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Common stock, $0.0001 par, 1,000,000,000 shares authorized, 75,397 and 22,287 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 7 | 2 | |
Additional paid-in capital | 121,748,939 | 115,597,037 | 96,294,141 |
Accumulated deficit | (121,729,902) | (113,994,449) | (103,747,316) |
Total stockholders’ equity | 19,046 | 1,602,592 | (7,453,174) |
Total liabilities and stockholders’ equity | 23,293,121 | 25,336,033 | 33,738,055 |
Undesignated Preferred Stock [Member] | |||
Stockholders’ equity: | |||
Preferred stock, value | |||
Series Convertible Preferred Stock [Member] | |||
Stockholders’ equity: | |||
Preferred stock, value | 1 | 1 | |
Series C Convertible Preferred Stock [Member] | |||
Stockholders’ equity: | |||
Preferred stock, value | 1 | 1 | |
Common Stock [Member] | |||
Stockholders’ equity: | |||
Common stock, $0.0001 par, 1,000,000,000 shares authorized, 75,397 and 22,287 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 2 | 0 | |
Series A Convertible Preferred Stock [Member] | |||
Stockholders’ equity: | |||
Preferred stock, value | 1 | 1 | |
Nonrelated Party [Member] | |||
Current assets: | |||
Accounts receivable, net | 74,833 | 583,368 | |
Related Party [Member] | |||
Current liabilities: | |||
Due to related parties | $ 426,921 | $ 400,012 | $ 555,217 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Allowance for credit losses | $ 41,854 | $ 19,394 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, share authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock, share issued | 75,397 | 22,287 | 3,575 |
Common stock, shares outstanding | 75,397 | 22,287 | 3,575 |
Undesignated Preferred Stock [Member] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 6,300 | 6,300 | 6,300 |
Preferred stock, shares issued | 6,300 | 6,300 | 6,300 |
Preferred stock, shares outstanding | 6,300 | 6,300 | 6,300 |
Series C Convertible Preferred Stock [Member] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 1,643 | 4,786 | |
Preferred stock, shares outstanding | 1,643 | 4,786 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||||||
Net revenues | $ 2,440,801 | $ 3,257,332 | $ 9,413,457 | $ 12,127,135 | $ 14,916,422 | $ 10,333,558 |
Cost of net revenues | 1,319,214 | 1,554,044 | 5,012,457 | 6,094,532 | 8,372,642 | 6,789,314 |
Gross profit | 1,121,587 | 1,703,288 | 4,401,000 | 6,032,603 | 6,543,780 | 3,544,244 |
Operating expenses: | ||||||
General and administrative | 2,429,040 | 3,735,527 | 6,347,460 | 12,115,590 | 14,299,389 | 14,067,681 |
Sales and marketing | 655,833 | 1,151,377 | 1,979,173 | 3,188,054 | 4,035,835 | 4,018,985 |
Distribution | 180,879 | 238,546 | 745,412 | 750,945 | 1,002,343 | 611,569 |
Impairment of intangible assets | 600,000 | 600,000 | ||||
Impairment | 5,503,095 | |||||
Change in fair value of contingent consideration | (10,698,475) | (10,698,475) | 564,303 | |||
Total operating expenses | 3,865,752 | 5,125,450 | 9,672,045 | 5,356,114 | 8,639,092 | 24,765,633 |
Income (loss) from operations | (2,744,165) | (3,422,162) | (5,271,045) | 676,489 | (2,095,312) | (21,221,389) |
Other income (expense): | ||||||
Interest expense | (742,557) | (1,956,080) | (2,487,172) | (4,907,567) | (5,517,118) | (8,961,410) |
Other non-operating income (expenses) | (54,515) | (57,752) | 22,765 | (734,501) | (704,166) | 3,068,080 |
Total other income (expense), net | (797,072) | (2,013,832) | (2,464,407) | (5,642,068) | (6,221,284) | (5,893,330) |
Income tax provision | (368,034) | |||||
Net loss from continuing operations | (3,541,237) | (5,435,994) | (7,735,452) | (4,965,579) | (8,684,630) | (27,114,719) |
(Loss) from discontinued operations, net of tax | (1,562,503) | (1,562,503) | (10,928,643) | |||
Net loss | $ (3,541,237) | $ (5,435,994) | $ (7,735,452) | $ (6,528,082) | $ (10,247,133) | $ (38,043,362) |
Weighted average common shares outstanding - basic | 43,436 | 7,470 | 41,225 | 5,674 | 8,488 | 617 |
Weighted average common shares outstanding - diluted | 43,436 | 7,470 | 41,225 | 5,674 | 8,488 | 617 |
Net loss from continuing per common share - basic | $ (1,023.16) | $ (61,659) | ||||
Net loss from continuing per common share - diluted | $ (1,023.16) | $ (61,659) | ||||
Net loss per common share - basic | $ (81.53) | $ (727.71) | $ (187.64) | $ (875.21) | ||
Net loss per common share - diluted | $ (81.53) | $ (727.71) | $ (187.64) | $ (875.21) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Series A Convertible Preferred Stock [Member] Preferred Stock [Member] | Series B Preferred Stock [Member] Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] Preferred Stock [Member] | Common Stock [Member] Previously Reported [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] Previously Reported [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | AOCI Attributable to Parent [Member] |
Balances at Dec. 31, 2021 | $ 58,614,173 | $ (65,703,954) | $ (7,089,781) | |||||||
Balance, shares at Dec. 31, 2021 | 104 | |||||||||
Issuance of common stock in public offering | 9,347,450 | 9,347,450 | ||||||||
Issuance of common stock in public offering (in shares) | 299 | |||||||||
Issuance of common stock and exercise of pre-funded warrants in public offering | 9,999,996 | 9,999,996 | ||||||||
Issuance of common stock and exercise of pre-funded warrants in public offering (in shares) | 1,455 | |||||||||
Offering costs | (2,921,646) | (2,921,646) | ||||||||
Common stock issued in connection with business combination | 1,000,000 | 1,000,000 | ||||||||
Common stock issued in connection with business combination (in shares) | 73 | |||||||||
Common stock issued pursuant to consulting agreement | 123,000 | 123,000 | ||||||||
Common stock issued pursuant to consulting agreement (in shares) | 1 | |||||||||
Warrant and common shares issued with notes | 1,368,741 | 1,368,741 | ||||||||
Warrant and common shares issued with notes (in shares) | 48 | |||||||||
Conversion of notes and derivative liability into common stock | 11,983,389 | 11,983,389 | ||||||||
Conversion of notes and derivative liability into common stock (in shares) | 1,596 | |||||||||
Conversion of venture debt into Series A convertible preferred stock | $ 1 | 6,299,999 | 6,300,000 | |||||||
Conversion of venture debt into Series A convertible preferred stock (in shares) | 6,300 | |||||||||
Stock-based compensation | 479,038 | 479,038 | ||||||||
Net loss | (38,043,362) | (38,043,362) | ||||||||
Balances at Dec. 31, 2022 | $ 1 | 96,294,141 | $ 96,294,141 | (103,747,316) | (7,453,174) | $ (103,747,316) | ||||
Balance, shares at Dec. 31, 2022 | 6,300 | 3,575 | 3,575 | |||||||
Offering costs | (536,927) | (536,927) | ||||||||
Stock-based compensation | 105,594 | 105,594 | ||||||||
Net loss | (6,136,349) | (6,136,349) | ||||||||
Shares issued for services | 499,338 | 499,338 | ||||||||
Shares issued for services, shares | 95 | |||||||||
Shares and warrants issued with notes | 658,494 | 658,494 | ||||||||
Shares and warrants issued with notes, shares | 88 | |||||||||
Issuance of common stock pursuant to private placement | 5,000,003 | 5,000,003 | ||||||||
Issuance of common stock pursuant to private placement, shares | 1,022 | |||||||||
Balances at Mar. 31, 2023 | $ 1 | 102,020,643 | (7,863,021) | (109,883,665) | ||||||
Balance, shares at Mar. 31, 2023 | 6,300 | 4,781 | ||||||||
Balances at Dec. 31, 2022 | $ 1 | 96,294,141 | 96,294,141 | (103,747,316) | (7,453,174) | (103,747,316) | ||||
Balance, shares at Dec. 31, 2022 | 6,300 | 3,575 | 3,575 | |||||||
Net loss | (6,528,082) | |||||||||
Balances at Sep. 30, 2023 | $ 1 | $ 1 | 115,496,741 | 5,221,344 | (110,275,398) | |||||
Balance, shares at Sep. 30, 2023 | 6,300 | 5,761 | 11,563 | |||||||
Balances at Dec. 31, 2022 | $ 1 | 96,294,141 | 96,294,141 | (103,747,316) | (7,453,174) | (103,747,316) | ||||
Balance, shares at Dec. 31, 2022 | 6,300 | 3,575 | 3,575 | |||||||
Stock-based compensation | 408,810 | 408,810 | ||||||||
Net loss | (10,247,133) | (10,247,133) | ||||||||
Common shares issued for cash | 4,463,076 | $ 4,463,076 | ||||||||
Common shares issued for cash, shares | 1,022 | 25,543 | ||||||||
Shares issued for services | 499,338 | $ 499,338 | ||||||||
Shares issued for services, shares | 95 | |||||||||
Shares and warrants issued with notes | 658,494 | 658,494 | ||||||||
Shares and warrants issued with notes, shares | 88 | |||||||||
Conversion of loan into common stock | $ 1 | 5,759,176 | 5,759,177 | |||||||
Conversion of loan into common stock, shares | 5,761 | |||||||||
Issuance of Series B preferred stock | 25,000 | 25,000 | ||||||||
Issuance of Series B preferred stock (in shares) | 1 | |||||||||
Issuance of common stock pursuant to disposition | 1,357,043 | 1,357,043 | ||||||||
Issuance of common stock pursuant to disposition, shares | 1,562 | |||||||||
Cancellation of Series B preferred stock | (25,000) | (25,000) | ||||||||
Cancellation of Series B preferred stock (in shares) | (1) | |||||||||
Common stock issued for services | 1,157,090 | 1,157,090 | ||||||||
Common stock issued for services (in shares) | 2,103 | |||||||||
Exercise of warrants | 1,167,566 | 1,167,566 | ||||||||
Exercise of warrants (in shares) | 2,476 | |||||||||
Issuance of common stock pursuant to private placement, net of offering cost | $ 2 | 3,832,303 | 3,832,305 | |||||||
Issuance of common stock pursuant to private placement, net of offering costs (in shares) | 10,278 | |||||||||
Conversion of preferred shares into common stock | ||||||||||
Conversion of preferred shares into common stock, shares | (975) | 1,088 | ||||||||
Balances at Dec. 31, 2023 | $ 1 | $ 1 | $ 2 | $ 2 | 115,597,037 | 115,597,037 | (113,994,449) | 1,602,592 | (113,994,449) | |
Balance, shares at Dec. 31, 2023 | 6,300 | 4,786 | 22,287 | 22,287 | ||||||
Balances at Mar. 31, 2023 | $ 1 | 102,020,643 | (7,863,021) | (109,883,665) | ||||||
Balance, shares at Mar. 31, 2023 | 6,300 | 4,781 | ||||||||
Stock-based compensation | 101,500 | 101,500 | ||||||||
Net loss | 5,044,261 | 5,044,261 | ||||||||
Issuance of Series B preferred stock | 25,000 | 25,000 | ||||||||
Issuance of common stock pursuant to disposition | 1,357,043 | 1,357,043 | ||||||||
Issuance of common stock pursuant to disposition, shares | 1,562 | |||||||||
Cancellation of notes and issuance of preferred stock | $ 1 | 5,759,177 | 5,759,177 | |||||||
Cancellation of notes and issuance of preferred stock, shares | 5,761 | |||||||||
Balances at Jun. 30, 2023 | $ 1 | $ 1 | 109,262,363 | 4,423,960 | (104,839,404) | |||||
Balance, shares at Jun. 30, 2023 | 6,300 | 5,761 | 6,343 | |||||||
Stock-based compensation | 101,417 | 101,417 | ||||||||
Net loss | (5,435,994) | (5,435,994) | ||||||||
Shares issued for services | 1,157,090 | 1,157,090 | ||||||||
Shares issued for services, shares | 2,103 | |||||||||
Cancellation of Series B preferred stock | (25,000) | (25,000) | ||||||||
Issuance of common stock pursuant to private placement, net of offering cost | 3,832,305 | 3,832,305 | ||||||||
Issuance of common stock pursuant to private placement, net of offering costs (in shares) | 640 | |||||||||
Exercise of Warrants | 1,167,566 | 1,167,566 | ||||||||
Exercise of warrants (in shares) | 2,476 | |||||||||
Balances at Sep. 30, 2023 | $ 1 | $ 1 | 115,496,741 | 5,221,344 | (110,275,398) | |||||
Balance, shares at Sep. 30, 2023 | 6,300 | 5,761 | 11,563 | |||||||
Balances at Dec. 31, 2023 | $ 1 | $ 1 | $ 2 | $ 2 | 115,597,037 | 115,597,037 | (113,994,449) | 1,602,592 | (113,994,449) | |
Balance, shares at Dec. 31, 2023 | 6,300 | 4,786 | 22,287 | 22,287 | ||||||
Stock-based compensation | 100,299 | 100,299 | ||||||||
Net loss | (683,735) | (683,735) | ||||||||
Common shares issued for cash | $ 1 | 1,736,205 | 1,736,206 | |||||||
Common shares issued for cash, shares | 8,898 | |||||||||
Shares issued for services | 224,265 | 224,265 | ||||||||
Shares issued for services, shares | 1,372 | |||||||||
Conversion of preferred shares into common stock | ||||||||||
Conversion of preferred shares into common stock, shares | (1,547) | 1,726 | ||||||||
Balances at Mar. 31, 2024 | $ 1 | $ 1 | $ 3 | 117,657,807 | 2,979,627 | (114,678,185) | ||||
Balance, shares at Mar. 31, 2024 | 6,300 | 3,239 | 34,283 | |||||||
Balances at Dec. 31, 2023 | $ 1 | $ 1 | $ 2 | $ 2 | $ 115,597,037 | 115,597,037 | $ (113,994,449) | 1,602,592 | (113,994,449) | |
Balance, shares at Dec. 31, 2023 | 6,300 | 4,786 | 22,287 | 22,287 | ||||||
Net loss | (7,735,452) | |||||||||
Shares issued for services | $ 312,634 | |||||||||
Shares issued for services, shares | 2,582 | |||||||||
Balances at Sep. 30, 2024 | $ 1 | $ 1 | $ 7 | 121,748,939 | 19,046 | (121,729,902) | ||||
Balance, shares at Sep. 30, 2024 | 6,300 | 1,344 | 75,397 | |||||||
Balances at Mar. 31, 2024 | $ 1 | $ 1 | $ 3 | 117,657,807 | 2,979,627 | (114,678,185) | ||||
Balance, shares at Mar. 31, 2024 | 6,300 | 3,239 | 34,283 | |||||||
Stock-based compensation | 67,901 | 67,901 | ||||||||
Net loss | (3,510,481) | (3,510,481) | ||||||||
Common shares issued for cash | $ 1 | 2,877,474 | 2,877,475 | |||||||
Common shares issued for cash, shares | 7,575 | |||||||||
Conversion of loan into common stock | 313,816 | 313,816 | ||||||||
Conversion of loan into common stock, shares | 2,120 | |||||||||
Conversion of preferred shares into common stock | ||||||||||
Conversion of preferred shares into common stock, shares | (1,495) | 1,668 | ||||||||
Balances at Jun. 30, 2024 | $ 1 | $ 1 | $ 4 | 120,916,999 | 2,728,339 | (118,188,666) | ||||
Balance, shares at Jun. 30, 2024 | 6,300 | 1,744 | 45,647 | |||||||
Stock-based compensation | 1,061 | 1,061 | ||||||||
Net loss | (3,541,237) | (3,541,237) | ||||||||
Common shares issued for cash | $ 3 | 742,510 | 742,513 | |||||||
Common shares issued for cash, shares | 28,094 | |||||||||
Shares issued for services | 88,369 | 88,369 | ||||||||
Shares issued for services, shares | 1,211 | |||||||||
Conversion of preferred shares into common stock | ||||||||||
Conversion of preferred shares into common stock, shares | (400) | 446 | ||||||||
Balances at Sep. 30, 2024 | $ 1 | $ 1 | $ 7 | $ 121,748,939 | $ 19,046 | $ (121,729,902) | ||||
Balance, shares at Sep. 30, 2024 | 6,300 | 1,344 | 75,397 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||||
Net loss | $ (7,735,452) | $ (6,528,082) | $ (10,247,133) | $ (38,043,362) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 2,057,638 | 2,485,166 | 3,249,194 | 1,653,819 |
Amortization of loan discount and fees | 2,220,549 | 1,956,355 | 3,937,007 | 6,506,384 |
Impairment of intangible assets | 600,000 | |||
Loss on extinguishment of debt | 689,100 | 716,517 | ||
Loss on disposition of business | 1,523,940 | 1,523,940 | ||
Stock-based compensation | 169,262 | 308,511 | 408,810 | 602,038 |
Shares issued for services | 312,634 | 1,656,417 | 1,656,428 | |
Change in credit reserve | (151,611) | 354,282 | 202,761 | (118,840) |
Change in fair value of contingent consideration | (10,698,475) | (10,698,475) | 564,303 | |
Discontinued operation | 7,666 | |||
Non-cash lease expense | 817,077 | |||
Deferred tax expense | 368,034 | |||
Deferred offering costs | 367,696 | |||
Fees incurred in connection with debt financings | 568,149 | |||
Change in fair value of warrant liability | (18,223) | |||
Change in fair value of derivative liability | (1,354,434) | |||
Impairment of goodwill and intangible assets | 5,503,095 | |||
Loss from discontinued operations, net of tax | 10,928,643 | |||
Forgiveness of Payroll Protection Program | (1,760,755) | |||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (201,501) | 153,479 | 497,771 | (452,030) |
Due from factor | 51,153 | 72,220 | 144,755 | 655,708 |
Inventory | (190,918) | 514,955 | 375,682 | 479,394 |
Prepaid expenses and other current assets | (76,637) | (366,615) | 551,259 | (445,798) |
Accounts payable | (1,287,018) | 182,242 | 1,900 | 892,120 |
Accrued expenses and other liabilities | 477,945 | 1,088,763 | 1,047,430 | 1,631,512 |
Deferred revenue | (183,782) | (183,782) | ||
Due to related parties | 26,909 | 298,943 | ||
Lease liabilities | (490,000) | |||
Accrued interest payable | 106,701 | 326,219 | 434,958 | 984,358 |
Assets and liabilities of discontinued operations | (210,426) | |||
Net cash used in operating activities | (3,293,269) | (6,457,639) | (6,012,942) | (10,767,706) |
Cash flows from investing activities: | ||||
Cash disposed | (18,192) | (7,247,303) | ||
Cash acquired (consideration) pursuant to business combination | (7,247,303) | |||
Purchase of property, equipment and software | (23,801) | (27,855) | (29,675) | (61,286) |
Deposits | (77,280) | 87,378 | 118,494 | (60,548) |
Net cash provided by (used in) investing activities | (101,081) | 41,331 | 88,819 | (7,369,137) |
Cash flows from financing activities: | ||||
Repayments from related party advances | (218,967) | (155,205) | ||
Advances from factor | 154,073 | 154,073 | (3,096) | |
Repayment of contingent consideration | (645,304) | |||
Proceeds from venture debt | 237,500 | |||
Issuance of loans and note payable | 790,977 | 5,799,989 | 5,479,611 | 3,280,360 |
Repayments of convertible notes and loan payable | (2,484,248) | (8,840,092) | (10,129,811) | (7,350,276) |
Issuance of convertible notes payable | 6,951,250 | |||
Issuance of common stock in public offering | 10,000,003 | 19,347,446 | ||
Exercise of warrants | 1,167,566 | |||
Offering costs | (1,854,622) | (2,921,216) | ||
Insurance for common stock for cash | 5,356,194 | 8,145,381 | ||
Proceeds from exercise of warrants | 1,167,566 | |||
Net cash provided by financing activities | 3,662,923 | 6,207,950 | 4,661,614 | 18,896,664 |
Net change in cash and cash equivalents | 268,573 | (208,357) | (1,262,509) | 759,820 |
Cash and cash equivalents at beginning of year | 20,773 | 1,283,282 | 1,283,282 | 523,462 |
Cash and cash equivalents at end of year | 20,773 | 1,283,282 | ||
Less: cash of discontinued operations | 7,666 | |||
Cash and cash equivalents at end of period | 289,346 | 1,067,259 | 20,773 | 1,275,616 |
Supplemental disclosure of cash flow information: | ||||
Cash paid for income taxes | ||||
Cash paid for interest | 1,684,248 | 1,176,305 | 711,815 | 734,869 |
Supplemental disclosure of non-cash investing and financing activities: | ||||
Conversion of notes into preferred stock | 5,759,177 | 5,759,177 | ||
Conversion of notes into common stock | 11,983,389 | |||
Right of use asset | 425,634 | 467,738 | 467,738 | 102,349 |
Shares issued for services and conversion of accounts payable | 313,816 | |||
Conversion of preferred shares into common stock | 19 | |||
Warrants issued in connection with note | 1,368,741 | |||
Derivative liability in connection with convertible note | 559,957 | |||
Conversion of related party notes and payables into preferred and common stock | 6,300,000 | |||
Conversion of venture debt into preferred stock | ||||
Cash and cash equivalents at beginning of period | $ 20,773 | $ 1,275,616 | $ 1,275,616 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
NATURE OF OPERATIONS | NATURE OF OPERATIONS Digital Brands Group, Inc. (the “Company” or “DBG”), was organized on September 17, 2012 under the laws of Delaware as a limited liability company under the name Denim.LA LLC. The Company converted to a Delaware corporation on January 30, 2013 and changed its name to Denim.LA, Inc. Effective December 31, 2020, the Company changed its name to Digital Brands Group, Inc. (DBG). The Company is a curated collection of lifestyle brands, including Bailey 44, DSTLD, Stateside and Avo, that offers a variety of apparel products through direct-to-consumer and wholesale distribution. On February 12, 2020, Denim.LA, Inc. entered into an Agreement and Plan of Merger with Bailey 44, LLC (“Bailey”), a Delaware limited liability company. On the acquisition date, Bailey 44, LLC became a wholly owned subsidiary of the Company. On May 18, 2021, the Company closed its acquisition of Harper & Jones, LLC (“H&J”) pursuant to its Membership Interest Stock Purchase Agreement with D. Jones Tailored Collection, Ltd. to purchase 100 On August 30, 2021, the Company closed its acquisition of Mosbest, LLC dba Stateside (“Stateside”) pursuant to its Membership Interest Purchase Agreement with Moise Emquies to purchase 100 On December 30, 2022, the Company closed its previously announced acquisition of Sunnyside, LLC dba Sundry (“Sundry”) pursuant to its Second Amended and Restated Membership Interest Purchase Agreement with Moise Emquies to purchase 100 On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby contemporaneously with the parties’ execution of the Settlement Agreement (i) the Company agreed to make an aggregate cash payment of $ 229,000 39,052 100 | NOTE 1: NATURE OF OPERATIONS Digital Brands Group, Inc. (the “Company” or “DBG”), was organized on September 17, 2012 under the laws of Delaware as a limited liability company under the name Denim.LA LLC. The Company converted to a Delaware corporation on January 30, 2013 and changed its name to Denim.LA, Inc. Effective December 31, 2020, the Company changed its name to Digital Brands Group, Inc. (DBG). On February 12, 2020, Denim.LA, Inc. entered into an Agreement and Plan of Merger with Bailey 44, LLC (“Bailey”), a Delaware limited liability company. On the acquisition date, Bailey 44 , LLC became a wholly owned subsidiary of the Company. See Note 4. On May 18, 2021, the Company closed its acquisition of Harper & Jones, LLC (“H&J”) pursuant to its Membership Interest Stock Purchase Agreement with D. Jones Tailored Collection, Ltd. to purchase 100 On August 30, 2021, the Company closed its acquisition of Mosbest, LLC dba Stateside (“Stateside”) pursuant to its Membership Interest Purchase Agreement with Moise Emquies to purchase 100 On December 30, 2022, the Company closed its previously announced acquisition of Sunnyside, LLC dba Sundry (“Sundry”) pursuant to its Second Amended and Restated Membership Interest Purchase Agreement with Moise Emquies to purchase 100 On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby contemporaneously with the parties’ execution of the Settlement Agreement (i) the Company agreed to make an aggregate cash payment of $ 229,000 39,052 100 Reverse Stock Split On October 21, 2022, the Board of Directors approved a one-for-100 On August 21, 2023, the Board of Directors approved a one-for-25 On December 2, 2024, the Board of Directors approved a one-for-50 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The reverse stock split became effective as of December 12, 2024. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. Correction of Error The Company incorrectly reported its previously reported statement of operations for the year ended December 31, 2022 in lieu of previously reported statement of operations which was presented to report discontinued operations of H&J. |
GOING CONCERN
GOING CONCERN | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Going Concern | ||
GOING CONCERN | NOTE 2: GOING CONCERN The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated profits since inception, has sustained net losses of $ 10,247,133 38,043,362 17,655,720 The Company’s ability to continue as a going concern for the next 12 months from the date the financial statements were available to be issued is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or to obtain additional capital financing. Through the date the financial statements were available to be issued, the Company has been primarily financed through the issuance of capital stock and debt. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on the business, financial condition and results of operations. No assurance can be given that the Company will be successful in these efforts. | |
GOING CONCERN | NOTE 2: GOING CONCERN The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated profits since inception, has sustained net losses of $ 7,735,453 6,528,082 16,044,544 The Company’s ability to continue as a going concern for the next 12 months from the date the financial statements were available to be issued is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or to obtain additional capital financing. Through the date the financial statements were available to be issued, the Company has been primarily financed through the issuance of capital stock and debt. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on the business, financial condition and results of operations. No assurance can be given that the Company will be successful in these efforts. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). Reverse Stock Split On August 21, 2023, the Board of Directors approved a one-for-25 On December 2, 2024, the Board of Directors approved a one-for-50 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The reverse stock split became effective as of December 12, 2024. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated balance sheet as of September 30, 2024, the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2024, and 2023 and of cash flows for the nine months ended September 30, 2024 and 2023 have been prepared by the Company, pursuant to the rules and regulations of the SEC for the interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated results for the interim periods presented and of the consolidated financial condition as of the date of the interim consolidated balance sheet. The results of operations are not necessarily indicative of the results expected for the year ended December 31, 2024. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s Annual Form 10-K filed with SEC on April 15, 2024. Principles of Consolidation These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Bailey, and Stateside from the dates of acquisition. All inter-company transactions and balances have been eliminated on consolidation. Discontinued Operations Certain prior year accounts have been reclassified to conform with current year presentation regarding income (loss) from discontinued operations. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, inventory, impairment of long-lived assets, contingent consideration and derivative liabilities. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Cash and Equivalents and Concentration of Credit Risk The Company considers all highly liquid securities with an original maturity of less than six months to be cash equivalents. As of September 30,2024, and December 31, 2023, the Company did not hold any cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits of $ 250,000 Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, due to related parties, related party note payable, and convertible debt. The carrying value of these assets and liabilities is representative of their fair market value, due to the short maturity of these instruments. Accounts Receivable and Expected Credit Loss We carry our accounts receivable at invoiced amounts less allowances for customer credit losses and other deductions to present the net amount expected to be collected on the financial asset. All receivables are expected to be collected within one year of the consolidated balance sheet. We do not accrue interest on the trade receivables. Management evaluates the ability to collect accounts receivable based on a combination of factors. Receivables are determined to be past due based on individual credit terms. An allowance for credit losses is maintained based on the length of time receivables are past due, historical collections, or the status of a customer’s financial position. Receivables are written off in the year deemed uncollectible after efforts to collect the receivables have proven unsuccessful. We do not have any off-balance sheet credit exposure related to our customers. We periodically review accounts receivable, estimate an allowance for bad debts, and simultaneously record the appropriate expense in the statement of operations. Such estimates are based on general economic conditions, the financial conditions of customers, and the amount and age of past due accounts. Past due accounts are written off against that allowance only after all collection attempts have been exhausted and the prospects for recovery are remote. Recoveries of accounts receivable previously written off are recorded as income when received. The Company provides credit to its customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. As of September 30, 2024, and December 31, 2023, the Company determined an allowance for credit losses of $ 51,552 41,854 Inventory Inventory is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method for DSTLD and first-in, first-out method for Bailey, Stateside and Sundry. The inventory balances as of September 30, 2024 and December 31, 2023 consist substantially of finished good products purchased or produced for resale, as well as any raw materials the Company purchased to modify the products and work in progress. Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, December 31, 2024 2023 Raw materials $ 722,963 $ 695,580 Work in process 608,432 585,387 Finished goods 3,709,123 3,568,633 Inventory $ 5,040,518 $ 4,849,600 Goodwill Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually for impairment and upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. Annual Impairment At December 31, 2023, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44, Stateside and Sundry may not be recoverable. The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets. Upon the quantitative analysis performed, the Company determined that the fair value of the intangible assets and reporting units were greater than the respective carrying values. As such, no impairment was recorded. The Company utilized the enterprise value approach in the impairment tests of each reporting unit in 2023. At September 30, 2024, management determined that indicators of impairment existed with regards to the Bailey44 reporting unit. The qualitative assessment was primarily due to reduced revenues of Bailey44 as compared to the Company’s projections, as well as the entity’ liabilities in excess of assets. As such, the Company recorded an impairment to intangible assets of $ 600,000 Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of September 30, 2024 and 2023, diluted net loss per share is the same as basic net loss per share for each year. Potentially dilutive items outstanding as of September 30, 2024 and 2023 are as follows: SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING September 30, 2024 2023 Series A convertible preferred stock 542 542 Series C convertible preferred stock 1,499 6,428 Common stock warrants 914 4,755 Stock options 31 31 Total potentially dilutive shares 2,986 11,756 The stock options and warrants above are out-of-the-money as of September 30, 2024 and 2023. Recent Accounting Pronouncements In January 2024, the Company adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. The following accounting pronouncements have been issued as of May 20, 2024 but are not yet effective and may affect the future financial reporting by the Company: ● ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Bailey, H&J, Stateside and Sundry from the dates of acquisition. All inter-company transactions and balances have been eliminated on consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Discontinued Operations Certain prior year accounts have been reclassified to conform with current year presentation regarding income (loss) from discontinued operations. H&J’s assets and liabilities as of December 31, 2022 have also been reclassified on the consolidated balance sheet. See Note 5. Cash and Equivalents and Concentration of Credit Risk The Company considers all highly liquid securities with an original maturity of less than three months to be cash equivalents. As of December 31, 2023 and 2022, the Company did not hold any cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits of $ 250,000 Fair Value of Financial Instruments FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, due from factor, prepaid expenses, accounts payable, accrued expenses, deferred revenue, due to related parties, related party note payable, accrued interest, loan payable and convertible debt. The carrying value of these assets and liabilities is representative of their fair market value, due to the short maturity of these instruments. The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Fair Value Measurements as of December 31, 2023 Using: Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration — — — — $ — $ — $ — $ — Fair Value Measurements as of December 31, 2022 Using: Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration — — 12,098,475 12,098,475 $ — $ — $ 12,098,475 $ 12,098,475 Contin ent Consideration The Company records a contingent consideration liability relating to stock price guarantees included in its acquisition and consulting agreements. The estimated fair value of the contingent consideration is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The Company estimates and records the acquisition date fair value of contingent consideration as part of purchase price consideration for acquisitions. Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration and recognizes any change in fair in the consolidated statement of operations. The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of future operating results, discount rates and probabilities assigned to various potential operating result scenarios. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and, therefore, materially affect the Company’s future financial results. The contingent consideration liability is to be settled with the issuance of shares of common stock once contingent provisions set forth in respective acquisition agreements have been achieved. Upon achievement of contingent provisions, respective liabilities are relieved and offset by increases to common stock and additional paid-in capital in the stockholders’ equity section of the Company’s consolidated balance sheets. The fair value of the contingent consideration liability related to the Company’s business combinations is valued using the Monte Carlo simulation model. The Monte Carlo simulation inputs include the stock price, volatility of common stock, timing of settlement and resale restrictions and limits. The fair value of the contingent consideration is then calculated based on guaranteed equity values at settlement as defined in the acquisition agreements. Changes in contingent consideration liability during the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF CHANGES IN ACQUISITION-RELATED CONTINGENT CONSIDERATION Contingent Consideration Liability Balance as of December 31, 2022 $ 12,098,475 Norwest Waiver - settlement of Bailey44 contingent consideration (10,698,475 ) H&J Settlement Agreement - settlement of H&J contingent consideration (1,400,000 ) Outstanding as of December 31, 2023 $ — Norwest Waiver On June 21, 2023, the Company, on the one hand, and Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP (together, the “Norwest Investors”), on the other hand, executed a Waiver and Amendment (the “Norwest Amendment”) whereby the Norwest Investors agreed to waive and terminate certain true up rights of the Norwest Investors under the Agreement and Plan of Merger, dated February 12, 2020 (the “Bailey Merger Agreement”), among the Company, Bailey 44, LLC, Norwest Venture Partners XI, LP, and Norwest Venture Partners XII, LP and Denim.LA Acquisition Corp. This transaction is known as the “Norwest Waiver”. As a result of the Norwest Waiver, the Company recorded a fair value of $ 0 10,698,475 H&J Settlement A reement On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby the Company transferred 100 229,000 39,052 1,400,000 The detail of contingent consideration by company is as follows: SCHEDULE OF CONTINGENT CONSIDERATION December 31, 2023 2022 Bailey $ — 10,698,475 Harper & Jones — 1,400,000 $ — $ 12,098,475 Derivative Liability In connection with the Company’s convertible notes, the Company recorded a derivative liability (see Note 7). The estimated fair value of the derivative liability is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The fair value of the derivative liability is valued using a multinomial lattice model. The multinomial lattice inputs include the underlying stock price, volatility of common stock and remaining term of the convertible note. Changes in derivative liability during the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF CHANGES IN DERIVATIVE LIABILITY Derivative Liability Outstanding as of December 31, 2021 $ 2,294,720 Initial fair value on issuance of convertible note 559,957 Conversion of underlying notes into common stock (1,500,243 ) Change in fair value (1,354,434 ) Outstanding as of December 31, 2022 — Initial fair value on issuance of convertible note — Change in fair value — Outstanding as of December 31, 2023 $ — During the year ended December 31, 2022, the Company utilized the following inputs for the fair value of the derivative liability: volatility of 70.9 96.7 2.71 3.74 .08 0.62 The change in fair value of the derivative liability is included in other non-operating income (expense), net in the consolidated statements of operations. Accounts Receivable and Expected Credit Loss We carry our accounts receivable at invoiced amounts less allowances for customer credit losses and other deductions to present the net amount expected to be collected on the financial asset. All receivables are expected to be collected within one year of the consolidated balance sheet. We do not accrue interest on the trade receivables. Management evaluates the ability to collect accounts receivable based on a combination of factors. Receivables are determined to be past due based on individual credit terms. An allowance for credit losses is maintained based on the length of time receivables are past due, historical collections, or the status of a customer’s financial position. Receivables are written off in the year deemed uncollectible after efforts to collect the receivables have proven unsuccessful. We do not have any off-balance sheet credit exposure related to our customers. We periodically review accounts receivable, estimate an allowance for bad debts, and simultaneously record the appropriate expense in the statement of operations. Such estimates are based on general economic conditions, the financial conditions of customers, and the amount and age of past due accounts. Past due accounts are written off against that allowance only after all collection attempts have been exhausted and the prospects for recovery are remote. Recoveries of accounts receivable previously written off are recorded as income when received. The Company provides credit to its customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. As of December 31, 2023, the Company determined an allowance for credit losses of $ 41,854 Inventory Inventory is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method for DSTLD and H&J and first-in, first-out method for Bailey, Stateside and Sundry. The inventory balances as of December 31, 2023 and 2022 consist substantially of finished good products purchased or produced for resale, as well as any raw materials the Company purchased to modify the products and work in progress. Inventory consisted of the following: SCHEDULE OF INVENTORY 2023 2022 December 31, 2023 2022 Raw materials $ 695,580 $ 1,611,134 Work in process 585,387 888,643 Finished goods 3,568,633 2,622,787 Inventory $ 4,849,600 $ 5,122,564 Property, Equipment, and Software Property, equipment, and software are recorded at cost. Depreciation/amortization is recorded for property, equipment, and software using the straight-line method over the estimated useful lives of assets. The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. The balances at December 31, 2023 and 2022 consist of software with three ( 3 3 10 Depreciation and amortization charges on property, equipment, and software are included in general and administrative expenses and amounted to $ 50,823 75,126 Business Combinations The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Intangible assets are established with business combinations and consist of brand names and customer relationships. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight- line method. The estimated useful lives of amortizable intangible assets are as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION Customer relationships 3 Impairment Long-Lived Assets The Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually for impairment and upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. The quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. It is our practice, at a minimum, to perform a qualitative or quantitative goodwill impairment test in the fourth quarter every year. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets established in connection with business combinations consist of the brand name. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Annual Impairment Tests At December 31, 2023, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44, Stateside and Sundry may not be recoverable. The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets. Upon the quantitative analysis performed, the Company determined that the fair value of the intangible assets and reporting units were greater than the respective carrying values. As such, no 3,158,123 At December 31, 2022, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44 and Harper & Jones may not be recoverable. The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets. As such, the Company compared the estimated fair value of the brand names with its carrying value and recorded an impairment loss of $ 3,667,000 11,872,332 The following is a summary of goodwill and intangible impairment recorded pertaining to each entity: SCHEDULE OF GOODWILL AND INTANGIBLE IMPAIRMENT Year Ended December 31, 2023 2022 Bailey brand name $ — $ 2,182,000 Harper & Jones brand name — 1,485,000 Total impairment of intangibles — 3,667,000 Bailey goodwill — 3,321,095 Harper & Jones goodwill — 8,551,237 Total impairment of goodwill — 11,872,332 Total impairment $ — $ 15,539,332 In determining the fair value of the respective reporting units, management estimated the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants at the measurement date. This includes reviewing market comparables such as revenue multipliers and assigning certain assets and liabilities to the reporting units, such as the respective working capital deficits of each entity and debt obligations that would need to be assumed by a market participant buyer in an orderly transaction. The Company calculated the carrying amounts of each reporting unit by utilizing the entities’ assets and liabilities at December 31, 2023, including the carrying value of the identifiable intangible assets and goodwill assigned to the respective reporting units. Convertible Instruments U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. Accounting for Preferred Stock ASC 480, Distinguishing Liabilities from Equity, includes standards for how an issuer of equity (including equity shares issued by consolidated entities) classifies and measures on its balance sheet certain financial instruments with characteristics of both liabilities and equity. Management is required to determine the presentation for the preferred stock as a result of the redemption and conversion provisions, among other provisions in the agreement. Specifically, management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely related to the host instrument, and whether the bifurcation of the conversion feature is required and whether the conversion feature should be accounted for as a derivative instrument. If the host instrument and conversion feature are determined to be clearly and closely related (both more akin to equity), derivative liability accounting under ASC 815, Derivatives and Hedging, is not required. Management determined that the host contract of the preferred stock is more akin to equity, and accordingly, liability accounting is not required by the Company. The Company has presented preferred stock within stockholders’ equity. Costs incurred directly for the issuance of the preferred stock are recorded as a reduction of gross proceeds received by the Company, resulting in a discount to the preferred stock. The discount is not amortized. Revenue Recognition In accordance with FASB ASC 606, Revenue from Contracts with Customers ● Identification of a contract with a customer; ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract, and ● Recognition of revenue when or as the performance obligations are satisfied Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, upon shipment of product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. The Company derives its revenue primarily from wholesale and e-commerce transactions. For both channels, revenue is recognized at the time the product is shipped to the customer, which is the point in time when control is transferred. The Company considers the sale of products as a single performance obligation. The Company provides the customer the right of return on the product and revenue is adjusted based on an estimate of the expected returns based on historical rates. The Company deducts discounts, sales tax, and estimated refunds to arrive at net revenue. Sales tax collected from clients is not considered revenue and is included in accrued expenses until remitted to the taxing authorities. Shipping and handling fees charged to customers are included in net revenues. All shipping and handling costs are accounted for as distribution expenses, and are therefore not evaluated as a separate performance obligation. Cost of Revenues Cost of revenues consists primarily of inventory sold and related freight-in. Cost of revenues includes direct labor pertaining to our inventory production activities and an allocation of overhead costs including rent and insurance. Cost of revenues also includes inventory write-offs and reserves. Shipping and Handling The Company recognizes shipping and handling billed to customers as a component of net revenues, and the cost of shipping and handling as distribution costs. Total shipping and handling billed to customers as a component of net revenues was approximately $ 128,000 72,000 $ 1,016,716 525,000 Advertising and Promotion Advertising and promotional costs are expensed as incurred. Advertising and promotional expense for the years ended December 31, 2023 and 2022 amounted to approximately $ 728,000 1,178,000 General and Administrative General and administrative expenses consist primarily of compensation and benefits costs, professional services and information technology. General and administrative expenses also include payment processing fees, design and warehousing fees. Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At December 31, 2023 and 2022, the Company did not have any derivative instruments that were designated as hedges. Stock Option and Warrant Valuation Stock option and warrant valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model. For warrants and stock options issued to non- employees, the Company accounts for the expected life based on the contractual life of the warrants and stock options. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of options grants. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The number of stock award forfeitures are recognized as incurred. Stock-Based Compensation The Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Stock-based compensation is recognized as an expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services. The Company measures employee stock-based awards at grant-date fair value and recognizes employee compensation expense on a straight- line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and expected stock price volatility. The Company used the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. Deferred Offering Costs The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed. As of December 31, 2020, the Company had capitalized $ 214,647 367,696 Segment Information In accordance with ASC 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business activities are managed and evaluated. As of December 31, 2023 our operating segments included: DSTLD, Bailey, Stateside and Sundry. Each operating segment currently reports to the Chief Executive Officer. Each of our brands serve or are expected to serve customers through our wholesale, in store and online channels, allowing us to execute on our omni-channel strategy. We have determined that each of our operating segments share similar economic and other qualitative characteristics, and therefore the results of our operating segments are aggregated into one one Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized. We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2023 and 2022, diluted net loss per share is the same as basic net loss per share for each year. Potentially dilutive items outstanding as of December 31, 2023 and 2022 are as follows: SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING December 31, 2023 2022 Convertible notes - 758 Series A convertible preferred stock 542 86 Series C convertible preferred stock 5,340 - Common stock warrants 23,604 3,535 Stock options 31 31 Total potentially dilutive shares 29,518 4,411 The stock options and warrants above are out-of-the-money as of December 31, 2023 and 2022. Leases On January 1, 2022, the Company adopted ASC 842, Leases The Company elected transitional practical expedients for existing leases which eliminated the require |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
BUSINESS COMBINATIONS | NOTE 4: BUSINESS COMBINATIONS 2022 Acquisition Sundry On December 30, 2022, the Company completed its previously announced acquisition (the “ Sundry Acquisition”) of all of the issued and outstanding membership interests of Sunnyside, LLC, a California limited liability company (“Sundry”), pursuant to that certain Second Amended and Restated Membership Interest Purchase Agreement (the “ Sundry Agreement”), dated October 13, 2022, by and among Moise Emquies, George Levy, Matthieu Leblan and Carol Ann Emquies (“ Sundry Sellers”), George Levy as the Sundry Sellers’ representative, the Company as Buyer, and Sundry. Pursuant to the Agreement, Sellers, as the holders of all of the outstanding membership interests of Sundry, exchanged all of such membership interests for (i) $ 7.5 5.5 1.0 8 1,818 1,000,000 The Company evaluated the acquisition of Sundry pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition. Total fair value of the purchase price consideration was determined as follows: SCHEDULE OF COMPONENTS OF PURCHASE PRICE CONSIDERATION Cash $ 7,500,000 Promissory notes payable 5,500,000 Common stock 1,000,000 Purchase price consideration $ 14,000,000 The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation: SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATION Purchase Price Allocation Cash and cash equivalents $ 252,697 Accounts receivable, net 63,956 Due from factor, net 387,884 Inventory 2,941,755 Prepaid expenses and other current assets 32,629 Property, equipment and software, net 48,985 Goodwill 3,711,322 Intangible assets 7,403,800 Accounts payable (615,706 ) Accrued expenses and other liabilities (227,321 ) Purchase price consideration $ 14,000,000 The customer relationships and will be amortized on a straight-line basis over their estimated useful lives of three years Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes. The results of Sundry have been included in the consolidated financial statements since the date of acquisition. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information presents the Company’s financial results as if the Sundry acquisition had occurred as of January 1, 2022. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results. The following unaudited pro forma financial information includes incremental property and equipment depreciation and intangible asset amortization as a result of the acquisitions. The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition: SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION Year Ended December 31, 2022 Net revenues $ 28,519,261 Net loss $ (42,001,415 ) Net loss per common share $ (2,722.78 ) Previous Acquisitions Bailey 44 On February 12, 2020, the Company acquired 100 20,754,717 4,500,000 15,500,000 DBG agreed that if at that date which is one year from the closing date of the IPO, the product of the number of shares of Parent Stock issued under the Merger multiplied by the sum of the closing price per share of the common stock of the Company on such date, plus Sold Parent Stock Gross Proceeds (as that term is defined in the Merger Agreement), does not exceed the sum of $ 11,000,000 As of December 31, 2023 and 2022, the Company has a contingent consideration liability of $ 0 10,698,475 Stateside On August 30, 2021, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Moise Emquies pursuant to which the Company acquired all of the issued and outstanding membership interests of MOSBEST, LLC, a California limited liability company (“Stateside” and such transaction, the “Stateside Acquisition”). Pursuant to the MIPA, Moise Emquies, as the holder of all of the outstanding membership interests of Stateside, exchanged all of such membership interests for $ 5.0 22,031 375,000 375,000 1,652 The Company evaluated the acquisition of Stateside pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition. Total fair value of the purchase price consideration was determined as follows: SCHEDULE OF FAIR VALUE OF PURCHASE PRICE CONSIDERATION Cash $ 5,000,000 Common stock 3,403,196 Purchase price consideration $ 8,403,196 The Company has made an allocation of the purchase price in regard to the acquisition related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the purchase price allocation: SCHEDULE OF ALLOCATION OF PURCHASE PRICE IN REGARD TO ACQUISITION Purchase Price Allocation Cash and cash equivalents 32,700 Accounts receivable, net 154,678 Due from factor, net 371,247 Inventory 603,625 Prepaid expenses and other current assets 7,970 Deposits 9,595 Property, equipment and software, net — Goodwill 2,104,056 Intangible assets 5,939,140 Accounts payable (374,443 ) Accrued expenses and other liabilities (445,372 ) Purchase price consideration $ 8,403,196 The customer relationships and will be amortized on a straight-line basis over their estimated useful lives of three years Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that do not qualify for separate recognition. The goodwill is not deductible for tax purposes. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 5: DISCONTINUED OPERATIONS On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby contemporaneously with the parties’ execution of the Settlement Agreement (i) the Company agreed to make an aggregate cash payment of $ 229,000 39,052 100 The H&J Settlement was accounted for a business disposition in accordance with ASC 810-40-40-3A. As of June 21, 2023, the Company no longer consolidated the assets, liabilities, revenues and expenses of H&J. The components of the disposition are as follows: SCHEDULE OF COMPONENTS OF DISPOSITION Cash payment due to H&J Seller $ (229,000 ) Common shares issued to H&J Seller* (1,357,043 ) Total fair value of consideration received (given) $ (1,586,043 ) Carrying amount of assets and liabilities Cash and cash equivalents 18,192 Accounts receivable, net 55,782 Prepaid expenses and other current assets 25,115 Goodwill 1,130,311 Intangible assets, net 1,246,915 Deposits 4,416 Accounts payable (40,028 ) Accrued expenses and other liabilities (734,068 ) Deferred revenue (18,347 ) Due to related parties (1,008 ) Contingent consideration (1,400,000 ) Loan payable (219,894 ) Note payable - related party (129,489 ) Total carrying amount of assets and liabilities (62,103 ) Loss on disposition of business $ (1,523,940 ) * Represents the fair value of 39,052 The net assets of the discontinued operations at December 31, 2022 were not materially different from the balances as of June 21, 2023. Through December 31, 2023, the Company has made payments to D. Jones totaling $ 200,000 29,000 The loss of disposition of business of $ 1,523,940 In accordance with the provisions of ASC 205-20, the Company has excluded the results of discontinued operations from its results of continuing operations in the accompanying consolidated statements of operations for the three and year ended December 31, 2023 and 2022. The results of the discontinued operations of HJ for the year ended December 31, 2023 and 2022 consist of the following: 2023 2022 Year Ended December 31, 2023 2022 Net revenues $ 1,405,482 $ 3,637,620 Cost of net revenues 565,621 1,241,594 Gross profit 839,861 2,396,026 Operating expenses: General and administrative 520,582 1,731,299 Sales and marketing 346,167 931,650 Total operating expenses 866,749 2,662,949 Loss from operations (26,889 ) (266,922 ) Other income (expense): Interest expense (11,675 ) (52,927 ) Loss on disposition of business (1,523,940 ) — Total other income (expense), net (1,535,615 ) (52,927 ) Income tax benefit (provision) — — Net loss from discontinued operations $ (1,562,503 ) $ (319,849 ) Weighted average common shares outstanding - basic and diluted 8,488 617 Net income (loss) from discontinued operations per common share - basic and diluted $ (184.08 ) $ (518.36 ) |
DUE FROM FACTOR
DUE FROM FACTOR | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Due From Factor | ||
DUE FROM FACTOR | NOTE 4: DUE FROM FACTOR Due to/from factor consist of the following: SCHEDULE OF DUE TO/ FROM FACTOR September 30, December 31, 2024 2023 Outstanding receivables: Without recourse $ 916,045 $ 808,233 With recourse 18,994 99,055 Matured funds and deposits 55,043 65,321 Advances (551,813 ) (483,187 ) Credits due customers — (151,611 ) Due from factor, net $ 438,269 $ 337,811 | NOTE 6: DUE FROM FACTOR The Company, via its subsidiaries, Bailey, Stateside and Sundry, assigns a portion of its trade accounts receivable to third- party factoring companies, who assumes the credit risk with respect to the collection of non-recourse accounts receivable. The Company may request advances on the net sales factored at any time before their maturity date. The factor charges a commission on the net sales factored for credit and collection services. For one factoring company, interest on advances is charged as of the last day of each month at a rate equal to the LIBOR rate plus 2.5 30,000 30,000 2.0 4.0 4.25 Advances are collateralized by a security interest in substantially all of the companies’ assets. Due to/from factor consist of the following: SCHEDULE OF DUE TO/ FROM FACTOR 2023 2022 December 31, 2023 2022 Outstanding receivables: Without recourse $ 808,233 $ 1,680,042 With recourse 99,055 65,411 Matured funds and deposits 65,321 81,055 Advances (483,187 ) (632,826 ) Credits due customers (151,611 ) (354,282 ) Due from factor, net $ 337,811 $ 839,400 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
GOODWILL AND INTANGIBLE ASSETS | NOTE 5: GOODWILL AND INTANGIBLE ASSETS The following is a summary of goodwill attributable to each business combination: SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION September 30, December 31 2024 2023 Bailey $ 3,158,123 $ 3,158,123 Stateside 2,104,056 2,104,056 Sundry 3,711,322 3,711,322 Goodwill $ 8,973,501 $ 8,973,501 The following table summarizes information relating to the Company’s identifiable intangible assets as of September 30, 2024: SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS Gross Accumulated Carrying Amount Amortization Value Amortized: Customer relationships $ 8,634,560 $ (6,551,861 ) $ 2,082,699 $ 8,634,560 $ (6,551,861 ) $ 2,082,699 Indefinite-lived: Brand name 5,241,880 — 5,241,880 $ 13,876,440 $ (6,551,861 ) $ 7,324,579 At September 30, 2024, management determined that indicators of impairment existed with regards to the Bailey44 reporting unit. The qualitative assessment was primarily due to reduced revenues of Bailey44 as compared to the Company’s projections, as well as the entity’ liabilities in excess of assets. As such, the Company recorded an impairment to the brand name intangible asset of $ 600,000 The Company recorded amortization expense of $ 618,543 719,547 2,057,637 2,478,824 | NOTE 7: GOODWILL AND INTANGIBLE ASSETS Goodwill The Company recorded goodwill from each of its business combinations. The following is a summary of goodwill by entity for the years ended December 31, 2023 and 2022: SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION 2023 2022 December 31, 2023 2022 Bailey $ 3,158,123 $ 3,158,123 Stateside 2,104,056 2,104,056 Sundry 3,711,322 3,711,322 Goodwill $ 8,973,501 $ 8,973,501 Refer to Note 3 for discussion on the goodwill impairment recorded in 2022. In connection with the H&J disposition, the Company derecognized $ 1,130,311 Intangible Assets The following table summarizes information relating to the Company’s identifiable intangible assets as of December 31, 2023 and 2022: SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS December 31, 2023 Gross Accumulated Carrying Amortized: Customer relationships $ 8,634,560 $ (4,494,223 ) $ 4,140,337 $ 8,634,560 $ (4,494,223 ) $ 4,140,337 Indefinite-lived: Brand name 5,841,880 — 5,841,880 $ 14,476,440 $ (4,494,223 ) $ 9,982,217 December 31, 2022 Gross Amount Accumulated Amortization Carrying Value Amortized: Customer relationships $ 9,734,560 (2,670,202 ) $ 7,064,358 9,734,560 (2,670,202 ) 7,064,358 Indefinite-lived: Brand name 5,841,880 — 5,841,880 $ 15,576,440 $ (2,670,202 ) $ 12,906,238 Refer to Note 3 for discussion on the intangible asset impairment recorded in 2022. The Company recorded amortization expense of $ 1,993,616 2,151,250 Future amortization expense at December 31, 2023 is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Year Ending December 31, 2024 2,474,177 2025 1,666,160 Carrying value $ 4,140,337 |
LIABILITIES AND DEBT
LIABILITIES AND DEBT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Liabilities And Debt | ||
LIABILITIES AND DEBT | NOTE 6: LIABILITIES AND DEBT Accrued Expenses and Other Liabilities The Company accrued expenses and other liabilities line in the consolidated balance sheets is comprised of the following as of September 30, 2024, and December 31, 2023: SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES September 30, December 31, 2024 2023 Accrued expenses $ 733,865 $ 617,374 Payroll related liabilities 4,224,259 3,895,640 Sales tax liability 178,960 145,545 Other liabilities 99,353 99,934 Accrued expenses and other liabilities, Total $ 5,236,437 $ 4,758,492 Convertible Debt As of September 30, 2024 and December 31, 2023 there was $ 100,000 Target Capital Convertible Promissory Note On April 30, 2024, the Company issued a convertible promissory note in the original principal amount of $ 250,000 April 30, 2025 50,000 300,000 1,000 141,000 Loan Payable — PPP and SBA Loan In April 2022, there was a partial forgiveness of Bailey’s first PPP Loan totaling $ 413,705 933,295 Merchant Advances Future Sales Receipts In 2022 and 2023, the Company obtained several merchant advances. These advances are, for the most part, secured by expected future sales transactions of the Company with expected payments on a weekly basis. The Company made total cash repayments, pertaining to principal and interest, of $ 1,547,182 The following is a summary of the merchant advances as of September 30, 2024, and December 31, 2023: SCHEDULE OF MERCHANT ADVANCES September 30, December 31, 2024 2023 Principal $ 2,347,564 $ 2,960,946 Less: unamortized debt discount (550,183 ) (1,966,881 ) Merchant cash advances, net $ 1,797,381 $ 994,065 The unamortized debt discount of $ 550,183 1,781,972 Other The Company has outstanding merchant advances with Shopify Capital. During the three months ending September 2024, the Company made repayments of $ 3,850 12,832 The Company also had outstanding merchant advances with Gynger, Inc. In May 2024, the Company converted the outstanding principal and accrued interest of $ 313,816 2,120 Promissory Note Payable As of September 30, 2024, and December 31, 2023, the outstanding principal on the note to the sellers of Bailey was $ 3,500,000 105,000 105,000 315,000 315,000 In March 2023, the Company and various purchasers executed a Securities Purchase Agreement (“March 2023 Notes”) whereby the investors purchased from the Company promissory notes in the aggregate principal amount of $ 2,458,750 608,750 1,850,000 September 30, 2023 7,500,000 50 50 7,500,000 100 20 1,247,232 608,750 In May 2024, the Company repaid $ 500,000 The following is a summary of promissory notes payable, net: SCHEDULE OF PROMISSORY NOTES PAYABLE, NET September 30, December 31, 2024 2023 Bailey Note $ 3,500,000 $ 3,500,000 March 2023 Notes – principal 1,230,740 1,730,740 Notes – principal 1,230,740 1,730,740 March 2023 Notes - unamortized debt discount - (346,148 ) Promissory note payable, net $ 4,730,740 $ 4,884,592 | NOTE 8: LIABILITIES AND DEBT Accrued Expenses and Other Liabilities The Company accrued expenses and other liabilities line in the consolidated balance sheets is comprised of the following as of December 31, 2023 and 2022: SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES 2023 2022 December 31, 2023 2022 Accrued expenses $ 617,374 $ 668,714 Reserve for returns — 307,725 Payroll related liabilities 3,895,640 2,618,870 Sales tax liability 145,545 262,765 Other liabilities 99,934 78,845 Accrued expenses and other liabilities $ 4,758,492 $ 3,936,920 Payroll related liabilities are primarily related in DBG and Bailey44 payroll taxes due to remit to federal and state authorities. The amounts are subject to further penalties and interest. As of December 31, 2023, accrued expenses included $ 535,000 4 Venture Debt As of December 31, 2021, the gross loan balance with Black Oak Capital (“Black Oak”) pertaining to its senior credit agreement was $ 6,001,755 237,500 12,500 On September 29, 2022, the Company and Black Oak executed a Securities Purchase Agreement (the “Black Oak SPA”) whereby the Company issued 6,300 1,000 6,251,755 48,245 269,870 For the year ended December 31, 2022, $ 12,500 0 0 573,455 Convertible Debt 2020 Regulation CF Offering As of December 31, 2023 and 2022, there was $ 100,000 Convertible Promissory Notes On April 8, 2022, the Company and various purchasers executed a Securities Purchase Agreement (“April Notes”) whereby the investors purchased from the Company convertible promissory notes in the aggregate principal amount of $ 3,068,750 613,750 2,313,750 755,000 3,068,750 In connection with the April Notes, the Company issued an aggregate of 252 6,100 98,241 On July 22 and July 28, 2022, the Company and various purchasers executed a Securities Purchase Agreement (“July Notes”) whereby the investors purchased from the Company convertible promissory notes in the aggregate principal amount of $ 1,875,000 375,000 1,450,000 In connection with the July 22 and July 28 notes, the Company issued an aggregate of 822 553 760.00 565.00 692,299 If the July Notes are not repaid in full by the maturity date or if any other event of default occurs, (1) the face value of the notes will be automatically increased to 120 20 The Company evaluated the terms of the conversion features of the July notes as noted above in accordance with ASC Topic No. 815 — 40, Derivatives and Hedging — Contracts in Entity’s Own Stock 559,957 In December 2022, the Company fully repaid the outstanding principal of $ 1,875,000 416,923 On December 29, 2022, the Company and various purchasers executed a Securities Purchase Agreement (“December Notes”) whereby the investors purchased from the Company convertible promissory notes in the aggregate principal amount of $ 4,000,000 800,000 3,000,000 120 20 In connection with the December Notes, the Company issued to the investors an aggregate of 9,390 213 1,200 428,200 1,378,200 In connection with the December Notes, the Company issued to the investors an aggregate of 9,390 213 1,200 428,200 In February 2023, the principal of $ 4,000,000 1,220,830 157,370 The following is a summary of the convertible notes for the years ended December 31, 2023 and 2022: SCHEDULE OF CONVERTIBLE NOTES Principal Unamortized Debt Discount Convertible Note Payable, Net Balance, December 31, 2022 $ 4,100,000 $ (1,378,200 ) $ 2,721,800 Repayments of notes (4,000,000 ) — (4,000,000 ) Amortization of debt discount — 1,220,830 1,220,830 Loss on extinguishment of debt — 157,370 157,370 Balance, December 31, 2023 $ 100,000 $ — $ 100,000 During the years ended December 31, 2023 and 2022, the Company amortized $ 1,220,830 6,506,384 no Loan Pa able — PPP and SBA Loan In April 2022, Bailey received notification of full forgiveness of its 2nd PPP Loan totaling $ 1,347,050 413,705 933,295 Merchant Advances Future Sales Receipts In 2022, the Company obtained several merchant advances. These advances are, for the most part, secured by expected future sales transactions of the Company with expected payments on a weekly basis. As of December 31, 2022, $ 896,334 2,452,923 4,518,512 The following is a summary of the merchant advances as of December 31, 2023 and 2022: SCHEDULE OF MERCHANT ADVANCES 2023 2022 December 31, 2023 2022 Principal $ 2,960,946 $ 896,334 Less: unamortized debt discount (1,966,881 ) — Merchant cash advances, net $ 994,065 $ 896,334 The unamortized debt discount of $ 1,966,881 1,247,403 In 2023, the Company refinanced two merchant advance agreements. The refinances were accounted for as a loss extinguishment under ASC 470-50-40, and accordingly the Company recognized a loss on extinguishment of $ 559,147 In connection with these advances, the Company granted 122 6,562.50 Other In 2023, the Company obtained merchant advances totaling $ 690,000 658,718 149,898 In 2023, the Company obtained merchant advances totaling $ 312,938 273,188 Promissor Note Pa able As of December 31, 2023 and 2022, the outstanding principal on the note to the sellers of Bailey was $ 3,500,000 The note incurs interest at 12 420,000 420,000 As noted in Note 4, the Company issued a promissory note in the principal amount of $ 5,500,000 8 259,177 5,761 1,000 5,500,000 259,177 In March 2023, the Company and various purchasers executed a Securities Purchase Agreement (“March 2023 Notes”) whereby the investors purchased from the Company promissory notes in the aggregate principal amount of $ 2,458,750 608,750 1,850,000 7,500,000 50 50 7,500,000 100 20 1,247,232 608,750 The parties are currently working on an extension to the Maturity Date and have acknowledged that the default provisions have not been triggered. It is expected that the March 2023 Notes will be fully repaid by the end of the second quarter of 2024. In connection with the amendments, the Company increased the principal owed on the March 2023 Notes to $ 519,222 The following is a summary of promissory notes payable, net: SCHEDULE OF PROMISSORY NOTES PAYABLE, NET 2023 2022 December 31, 2023 2022 Bailey Note $ 3,500,000 $ 3,500,000 Sundry Note — 5,500,000 March 2023 Notes - principal 1,730,740 — March 2023 Notes - unamortized debt discount (346,148 ) — Promissory note payable, net $ 4,884,592 $ 9,000,000 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Equity [Abstract] | ||
STOCKHOLDERS’ EQUITY (DEFICIT) | NOTE 7: STOCKHOLDERS’ DEFICIT Amendments to Certificate of Incorporation On August 21, 2023, the Board of Directors approved a one-for-25 Common Stock The Company had 1,000,000,000 0.0001 Common stockholders have voting rights of one 2024 Transactions During the nine months ended September 30, 2024, the Company issued 24,012 2,478,719 During the nine months ended September 30, 2024, the Company issued an aggregate of 2,582 shares of common stock pursuant to services and conversion of accounts payable totaling a fair value of $ 312,634 . During the nine months ended September 30, 3,442 3,841 As previously reported, the Company entered into a securities purchase agreement with an accredited investor (the “Investor”), pursuant to which the Company issued on September 5, 2023 those certain Series A warrants to purchase 10,278 10,278 On May 3, 2024, the Company entered into that certain inducement offer to exercise common stock purchase warrants with the Investor (the “Inducement Agreement”), pursuant to which (i) the Company agreed to lower the exercise price of the Existing Warrants to $ 156.50 per share and (ii) the Investor agreed to exercise the Existing Warrants into 20,555 shares of common stock (the “Exercise Shares”) by payment of the aggregate exercise price of $ 3,216,857.50 (gross proceeds before expenses, including but not limited to fees to H.C. Wainwright & Co., LLC (the “Placement Agent”), the exclusive placement agent in connection therewith). The closing occurred on May 7, 2024. Through September 30, 2024, the Company had exercised 7,575 of the 20,555 warrants at the amended exercise price of $ 156.50 per share. The Company received the entire gross proceeds of $ 3,216,857 in May 2024, which represents the exercise of the entire 20,555 warrants at the $ 156.50 exercise price. The Company received net proceeds of $ 2,877,475 after placement agent fees and expenses. The Company also exercised 12,980 In May 2024, the Company converted the outstanding principal and accrued interest of $ 313,816 2,120 Series A Convertible Preferred Stock On September 29, 2022, the Company filed the Certificate of Designation designating up to 6,800 shares out of the authorized but unissued shares of its preferred stock as Series A Convertible Preferred Stock. Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series A Preferred Stock (the “Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series A Preferred Stock. With respect to any vote with the class of Common Stock, each share of the Series A Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible. The Series A Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”); and (iv) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Each share of the Series A Preferred Stock shall be convertible, at any time and from time to time from and after September 29, 2022 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series A Preferred Stock ($ 1,000 9.30 As of September30, 2024 and December 31, 2023, there were 6,300 Series C Convertible Preferred Stock On June 21, 2023, the Company, on the one hand, and Moise Emquies, George Levy, Matthieu Leblan, Carol Ann Emquies, Jenny Murphy and Elodie Crichi (collectively, the “Sundry Investors”), on the other hand, executed a Securities Purchase Agreement (the “Sundry SPA”) whereby the Company issued 5,761 0.0001 1,000 1,000 0.717 On June 21, 2023, the Company filed the Certificate of Designation with the Secretary of State for the State of Delaware designating up to 5,761 Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series C Preferred Stock. The Series C Holders are entitled to vote as a class as expressly provided in the Certificate of Designation. The Series C Holders are also entitled to vote with the holders of shares of Common Stock, voting together as one class, on all matters in which the Series C Holders are permitted to vote with the class of shares of Common Stock. With respect to any vote with the class of Common Stock, each share of the Series C Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the ownership limitations specified in the Certificate of Designation) using the record date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the conversion price is calculated. The Series C Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to Junior Securities; (iii) on parity with Parity Securities; and (iv) junior to Senior Securities, in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Subject to any superior liquidation rights of the holders of any Senior Securities of the Company and the rights of the Company’s existing and future creditors, upon a Liquidation, each Holder shall be entitled to be paid out of the assets of the Company legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value (as defined in the Certificate of Designation) for each share of the Series C Preferred Stock held by such Holder and an amount equal to any accrued and unpaid dividends thereon, and thereafter the Series C Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. Each share of the Series C Preferred Stock shall be convertible, at any time and from time to time from and after June 21, 2023 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series C Preferred Stock ($ 1,000 0.717 The Company has the option to redeem any or all of the then outstanding Series C Preferred Stock at 112 In October 2023, 975 1,088 During the nine months ended September 30, 2024, 3,442 3,841 | NOTE 9: STOCKHOLDERS’ EQUITY (DEFICIT) Amendments to Certificate of Incorporation On October 13, 2022, the Company amended its Amended and Restated Certificate of Incorporation to increase to increase the number of authorized shares of the Company’s common stock from 200,000,000 1,000,000,000 1,010,000,000 On October 21, 2022, the Board of Directors approved a one-for-100 On August 21, 2023, the Board of Directors approved a one-for-25 Common Stock The Company had 1,000,000,000 0.0001 Common stockholders have voting rights of one vote per share 2023 Transactions On January 11, 2023, the Company, entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “January Private Placement”), an aggregate of 9,500 9,500 195.75 16,043 16,043 16,043 195.75 5 25,543 9,500 16,043 5.0 4.3 In January 2023, the Company issued 2,200 322,300 In March 2023, the Company issued an aggregate of 2,378 499,338 210.00 In June 2023, the Company issued 39,052 1,357,043 On August 31, 2023, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “August Private Placement”), an aggregate of 640 640 640 486.50 9,638 9,638 9,638 9,638 486.50 5 3.8 9,638 In connection with the August Private Placement, the Company entered into a warrant amendment (the “Warrant Amendment”) with certain investors to amend certain existing warrants to purchase up to 3,931 6,562.50 4,750.00 471.50 2,476 1,167,566 In September 2023, the Company issued 856 500,000 On September 10, 2023, the non-employee members of the board of directors adopted a 2023 Stock Purchase Plan (the “2023 Plan”) to enable the Company to attract, retain and motivate its employees. Under the 2023 Plan, qualified employees can purchase shares of the Company’s common stock at fair market value by either the delivery of cash or the delivery of a form of acceptable non-recourse promissory note. The aggregate number of common stock issuable under the 2023 Plan shall not exceed 1,300 Pursuant to the 2023 Plan, the Company issued an aggregate of 1,260 5 657,090 521.50 In October 2023, 975 1,088 2022 Transactions During the year ended December 31, 2022, the Company issued an aggregate of 1,596 In September 2022, the Company issued 1 123,000 As part of the Sundry acquisition (see Note 4), the Company issued 73 1,000,000 In connection with the December Notes, the Company issued 48 264,000 Series A Preferred Stock On August 31, 2022, the Company entered into a Subscription and Investment Representation Agreement with Hil Davis, its Chief Executive Officer, pursuant to which the Company agreed to issue 1 share of the Company’s Series A Preferred Stock to for $ 25,000 250,000,000 25,000 On September 13, 2023, the Company filed a certificate of cancellation (the “Series A Certificate of Cancellation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, cancelling the Series A Certificate of Designation relating to the Series A Preferred Stock. Series A Convertible Preferred Stock On September 29, 2022, the Company filed the Certificate of Designation designating up to 6,800 Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series A Preferred Stock (the “Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series A Preferred Stock. With respect to any vote with the class of Common Stock, each share of the Series A Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible. The Series A Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”); and (iv) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Each share of the Series A Preferred Stock shall be convertible, at any time and from time to time from and after September 29, 2022 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series A Preferred Stock ($ 1,000 9.30 As of December 31, 2023 and 2022, there were 6,300 Series B Preferred Stock On May 30, 2023, the Company entered into a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with John Hilburn Davis IV, its Chief Executive Officer pursuant to which the Company agreed to issue and sell 1 share of the Company’s Series B Preferred Stock, par value $ 0.0001 25,000 On May 30, 2023, the Company filed a certificate of designation (the “Certificate of Designation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, designating the rights, preferences, privileges and restrictions of the share of Series B Preferred Stock. The Certificate of Designation provides that the Series B Preferred Stock will have 250,000,000 0.0001 0.0001 The Series B Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series B Preferred Stock has no rights with respect to any distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily. The holder of the Series B Preferred Stock will not be entitled to receive dividends of any kind. The outstanding share of Series B Preferred Stock shall be redeemed in whole, but not in part, at any time (i) if such redemption is ordered by the Board of Directors in its sole discretion or (ii) automatically upon the effectiveness of the amendment to the Restated Certificate implementing a reverse stock split. Upon such redemption, the holder of the Series B Preferred Stock will receive consideration of $ 25,000 On September 13, 2023, the Company filed a certificate of cancellation (the “Series B Certificate of Cancellation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, cancelling the Series B Certificate of Designation, and thereby eliminating all Series B Preferred Stock. Series C Convertible Preferred Stock On June 21, 2023, the Company, on the one hand, and Moise Emquies, George Levy, Matthieu Leblan, Carol Ann Emquies, Jenny Murphy and Elodie Crichi (collectively, the “Sundry Investors”), on the other hand, executed a Securities Purchase Agreement (the “Sundry SPA”) whereby the Company issued 5,761 0.0001 1,000 1,000 0.717 five On June 21, 2023, the Company filed the Certificate of Designation with the Secretary of State for the State of Delaware designating up to 5,761 Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series C Preferred Stock. The Series C Holders are entitled to vote as a class as expressly provided in the Certificate of Designation. The Series C Holders are also entitled to vote with the holders of shares of Common Stock, voting together as one class, on all matters in which the Series C Holders are permitted to vote with the class of shares of Common Stock. With respect to any vote with the class of Common Stock, each share of the Series C Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the ownership limitations specified in the Certificate of Designation) using the record date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the conversion price is calculated. The Series C Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to Junior Securities; (iii) on parity with Parity Securities; and (iv) junior to Senior Securities, in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Subject to any superior liquidation rights of the holders of any Senior Securities of the Company and the rights of the Company’s existing and future creditors, upon a Liquidation, each Holder shall be entitled to be paid out of the assets of the Company legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value (as defined in the Certificate of Designation) for each share of the Series C Preferred Stock held by such Holder and an amount equal to any accrued and unpaid dividends thereon, and thereafter the Series C Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. Each share of the Series C Preferred Stock shall be convertible, at any time and from time to time from and after June 21, 2023 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series C Preferred Stock ($ 1,000 $ 0.717 five The Company has the option to redeem any or all of the then outstanding Series C Preferred Stock at 112 In October 2023, 975 1,088 2022 Underwritin A reements and Public Offerin On May 5, 2022, the Company entered into an underwriting agreement (the “Alexander Underwriting Agreement”) with Alexander Capital, L.P., acting as representative of the several underwriters named in the Alexander Underwriting Agreement (the “ Alexander Underwriters”), relating to the Company’s underwritten the offering pursuant to which the Company agreed to issue and sell 7478 1,250.00 1,150 45 1,122 The shares were sold in the Offering pursuant to a Registration Statement on Form S-1, as amended (File No. 333-264347) (the “Registration Statement”), a Registration Statement on Form S-1 pursuant to 462(b) of the Securities Act of 1933, as amended (File No. 333-264775), and a related prospectus filed with the Securities and Exchange Commission. The public offering closed on May 10, 2022 and the Company sold 7,478 9.3 8.1 0.7 0.5 On November 29, 2022, the Company, entered into a Securities Purchase Agreement with investors pursuant to which the Company agreed to issue and sell, in an offering (i) an aggregate of 168,000 3,360 3,360 275 (i) 33,004 33,004 33,004 33,004 275 0.0001 10 36,364 3,360 33,004 10.0 9.0 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | NOTE 8: RELATED PARTY TRANSACTIONS As of September 30, 2024 and December 31, 2023, amounts due to related parties were $ 426,921 400,012 | NOTE 10: RELATED PARTY TRANSACTIONS As of December 31, 2023 and 2022, the Company made net repayments for amounts due to related parties totaling $ 130,205 170,000 400,012 556,217 As of December 31, 2023 and 2022, due to related parties includes advances from the former officer, Mark Lynn, who also serves as a director, totaling $ 104,568 104,568 87,222 100,649 In October 2022, the Company received advances from a director, Trevor Pettennude, totaling $ 325,000 175,000 325,000 As of December 31, 2023, due to related parties includes advances from the Chief Executive Officer of $ 33,222 |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
SHARE-BASED PAYMENTS | NOTE 9: SHARE-BASED PAYMENTS Common Stock Warrants A summary of information related to common stock warrants for the nine months ended September 30, 2024 is as follows: SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS Common Weighted Stock Average Warrants Exercise Price Outstanding - December 31, 2023 23,604 $ 1,270.00 Granted 42,652 146.00 Exercised (20,555 ) 156.50 Forfeited - - Outstanding - September 30, 2024 45,701 $ 580.00 Exercisable at December 31, 2023 23,604 $ 1,270.00 Exercisable at September 30, 2024 45,701 $ 580.00 Stock Options As of September 30, 2024 and December 31, 2023, the Company had 31 452,500 Stock-based compensation expense of $ 1,061 101,417 169,261 308,511 23,998 43,197 353 0.03 | NOTE 11: SHARE-BASED PAYMENTS Common Stock Warrants 2023 Transactions In connection with the January Private Placement, the Company granted 642 pre-funded warrants which were immediately exercised for shares of common stock. The Company also granted an additional 1,022 warrants as part of the offering. Each warrant has an exercise price of $ 471.50 per share, is immediately exercisable upon issuance and expires five years after issuance. The Company also granted the placement agent 77 warrants to purchase common stock at an exercise price of $ 6,117.50 per share, which is immediately exercisable upon issuance and expires five years after issuance. In connection with merchant advances (Note 6), the Company granted 122 warrants to purchase common stock at an exercise price of $ 6,562.50 . The warrants are immediately exercisable upon issuance and expire five years after issuance. In connection with the August Private Placement, the Company granted 9,638 20,555 471.50 5.5 771 608 5.5 In connection with the August Private Placement, the Company entered into a warrant amendment (the “Warrant Amendment”) with certain investors to amend certain existing warrants to purchase up to 3,931 6,562.50 4,750.00 471.50 five one half 2,476 1,167,566 2022 Transactions In connection with the April note agreement, the Company granted warrants to acquire 252 $ 6,100 On May 10, 2022, pursuant to the Underwriting Agreement, the Company issued the Underwriters’ Warrants to purchase up to an aggregate of 299 1,625 130 In connection with the July 22 and July 28 notes, the Company issued an aggregate of 822 553 760 565 In connection with the November public offering, the Company granted 33,004 36,364 36,364 262.50 five years 262.50 thirteen months 2,727 344.00 180 days five years In connection with the December Notes, the Company issued to the investors an aggregate of 9,390 213 164,200 The Company granted 880 250.00 A summary of information related to common stock warrants for the years ended December 31, 2023 and 2022 is as follows: SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS Common Weighted Stock Average Warrants Exercise Price Outstanding - December 31, 2022 3,535 $ 10,462.50 Granted 32,825 734.53 Exercised (12,756 ) 705.50 Forfeited - - Outstanding - December 31, 2023 23,604 $ 1,270.20 Exercisable at December 31, 2022 3,426 $ 10,525.00 Exercisable at December 31, 2023 23,604 $ 1,270.00 Stock Options 2020 Incentive Stock Plan The Company has adopted a 2020 Omnibus Incentive Stock Plan (the “2020 Plan”). An aggregate of 26 22 19,250 20,750 5 2013 Incentive Stock Plan The Company has adopted the 2013 Stock Plan, as amended and restated (the “Plan”), which provides for the grant of shares of stock options, stock appreciation rights, and stock awards (performance shares) to employees, non-employee directors, and non-employee consultants. The number of shares authorized by the Plan was 239 7 four years A summary of information related to stock options under our 2013 and 2020 Stock Plan for the years ended December 31, 2023 and 2022 is as follows: SUMMARY OF INFORMATION RELATED TO STOCK OPTIONS UNDER STOCK PLAN Weighted Average Options Exercise Price Outstanding - December 31, 2022 31 $ 452,500.00 Granted - - Exercised - - Forfeited - - Outstanding - December 31, 2023 31 $ 452,500.00 Exercisable at December 31, 2022 28 $ 506,250.00 Exercisable at December 31, 2023 30 $ 454,900.00 Weighted average duration (years) to expiration of outstanding options at December 31, 2023 5.47 - Stock-based compensation expense of $ 408,810 479,038 351,214 421,442 57,596 57,596 169,190 0.46 |
LEASE OBLIGATIONS
LEASE OBLIGATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Lease Obligations | ||
LEASE OBLIGATIONS | NOTE 10: LEASE OBLIGATIONS Rent is classified by function on the consolidated statements of operations either as general and administrative, sales and marketing, or cost of revenue. The Company determines whether an arrangement is or contains a lease at inception by evaluating potential lease agreements including services and operating agreements to determine whether an identified asset exists that the Company controls over the term of the arrangement. Lease commencement is determined to be when the lessor provides access to, and the right to control, the identified asset. The rental payments for the Company’s leases are typically structured as either fixed or variable payments. Fixed rent payments include stated minimum rent and stated minimum rent with stated increases. The Company considers lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from the calculation of lease liabilities. Management uses judgment in determining lease classification, including determination of the economic life and the fair market value of the identified asset. The fair market value of the identified asset is generally estimated based on comparable market data provided by third-party sources. In January 2023, the Company entered into a lease agreement extension for its corporate office and distribution center in Vernon, California that expires on January 31, 2025. The lease has monthly base rent payments of $ 12,000 31,597 170,002 10.0 In September 2023, the Company entered into a lease agreement extension for a showroom space in Los Angeles, California that commences in March 2023 which expired in September 2024. The lease had a monthly base rent of $ 25,000 658,091 1,040,812 10.0 In April 2024, the Company entered into a lease agreement extension for a retail outlet space in Allen, Texas that commences in April 2024 and expires in April 2027. The lease has a monthly base rent of $ 13,261 425,634 425,634 10.0 The following is a summary of operating lease assets and liabilities: SUMMARY OF OPERATING LEASE ASSETS AND LIABILITIES September 30, December 31, Operating leases 2024 2023 Assets ROU operating lease assets $ 365,246 $ 689,688 Liabilities Current portion of operating lease 899,726 1,210,814 Non Current portion of lease liability 313,723 - Total operating lease liabilities $ 1,213,449 $ 1,210,814 Operating leases September 30, December 31, 2023 Weighted average remaining lease term (years) 0.75 1.00 Weighted average discount rate 10.00 % 10.00 % SUMMARY OF OPERATING LEASE OBLIGATIONS September 30, Future minimum payments $ 1,282,975 Less imputed interest (69,526 ) Total lease obligations $ 1,213,449 | NOTE 12: LEASE OBLIGATIONS Rent is classified by function on the consolidated statements of operations either as general and administrative, sales and marketing, or cost of revenue. The Company determines whether an arrangement is or contains a lease at inception by evaluating potential lease agreements including services and operating agreements to determine whether an identified asset exists that the Company controls over the term of the arrangement. Lease commencement is determined to be when the lessor provides access to, and the right to control, the identified asset. The rental payments for the Company’s leases are typically structured as either fixed or variable payments. Fixed rent payments include stated minimum rent and stated minimum rent with stated increases. The Company considers lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from the calculation of lease liabilities. Management uses judgment in determining lease classification, including determination of the economic life and the fair market value of the identified asset. The fair market value of the identified asset is generally estimated based on comparable market data provided by third-party sources. In January 2023, the Company entered into a lease agreement extension for its corporate office and distribution center in Vernon, California that expires on January 31, 2025. The lease has monthly base rent payments of $ 12,000 31,597 170,002 10.0 In September 2023, the Company entered into a lease agreement extension for a showroom space in Los Angeles, California that commences in March 2023 and expires in September 2024. The lease has a monthly base rent of $ 25,000 658,091 1,040,812 10.0 The following is a summary of operating lease assets and liabilities: SUMMARY OF OPERATING LEASE ASSETS AND LIABILITIES Operating leases 2023 2022 December 31, Operating leases 2023 2022 Assets ROU operating lease assets $ 689,688 $ 102,349 Liabilities Current portion of operating lease 1,210,814 102,349 Total operating lease liabilities $ 1,210,814 $ 102,349 Operating leases 2023 2022 December 31, Operating leases 2023 2022 Weighted average remaining lease term (years) 1.00 1.00 Weighted average discount rate 10.00 % 6.00 % SUMMARY OF OPERATING LEASE OBLIGATIONS December 31, 2023 Future minimum payments - 2024 $ 1,268,230 Less imputed interest (57,416 ) Total lease obligations $ 1,210,814 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||
CONTINGENCIES | NOTE 11: CONTINGENCIES We are currently involved in, and may in the future be involved in, legal proceedings, claims, and government investigations in the ordinary course of business. These include proceedings, claims, and investigations relating to, among other things, regulatory matters, commercial matters, intellectual property, competition, tax, employment, pricing, discrimination, consumer rights, personal injury, and property rights. These matters also include the following: On March 21, 2023, a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 43,501 On February 7, 2023, a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 182,400 . Such amounts include interest due, and are included in accounts payable, net of payments made to date, in the accompanying consolidated balance sheets. The Company settled for $ 250,000 in October 2024, which included additional legal costs. In August 2020 and March 2021, two lawsuits were filed against Bailey’s by third-party’s related to prior services rendered. The claims (including fines, fees, and legal expenses) total an aggregate of $ 96,900 On December 21, 2020, a Company investor filed a lawsuit against DBG for reimbursement of their investment totaling $ 100,000 On November 16, 2023 a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 345,384 On November 15, 2023 a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 582,208 292,604 On December 21, 2023, a former employee from over two years ago filed a wrongful termination lawsuit against the Company. The Company is disputing this claim. To this point, this same law firm recently sent a demand letter for another wrongful termination of a temporary worker we used from a third party placement agency. This person was not a Company employee at any time. A vendor filed a lawsuit against Bailey 44 related to a retail store lease in the amount of $ 1.5 450,968 All claims above, to the extent management believes it will be liable, have been included in accounts payable and accrued expenses and other liabilities in the accompanying consolidated balance sheet as of September 30, 2024. Depending on the nature of the proceeding, claim, or investigation, we may be subject to monetary damage awards, fines, penalties, or injunctive orders. Furthermore, the outcome of these matters could materially adversely affect our business, results of operations, and financial condition. The outcomes of legal proceedings, claims, and government investigations are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters. While it is not possible to determine the outcomes, we believe based on our current knowledge that the resolution of all such pending matters will not, either individually or in the aggregate, have a material adverse effect on our business, results of operations, cash flows, or financial condition. Except as may be set forth above the Company is not a party to any legal proceedings, and the Company is not aware of any claims or actions pending or threatened against us. In the future, the Company might from time to time become involved in litigation relating to claims arising from its ordinary course of business, the resolution of which the Company does not anticipate would have a material adverse impact on our financial position, results of operations or cash flows. | NOTE 13: CONTINGENCIES ● On March 21, 2023, a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 43,501 ● On February 7, 2023, a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 182,400 ● On November 9, 2022, a vendor filed a lawsuit against Digital Brand’s Group related to prior services rendered. The claims (including fines, fees, and legal expenses) total an aggregate of $ 50,190 ● In August 2020 and March 2021, two 96,900 ● On December 21, 2020, a Company investor filed a lawsuit against DBG for reimbursement of their investment totaling $ 100,000 ● On November 16, 2023 a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 345,384 ● On November 15, 2023 a vendor filed a lawsuit against Digital Brands Group related to trade payables totaling approximately $ 582,208 292,604 ● On December 21, 2023, a former employee from over two years ago filed a wrongful termination lawsuit against the Company. The Company is disputing this claim. To this point, this same law firm recently sent a demand letter for another wrongful termination of a temporary worker we used from a third party placement agency. This person was not a Company employee at any time. ● A vendor filed a lawsuit against Bailey 44 related to a retail store lease in the amount of $ 1.5 450,968 All claims above, to the extent management believes it will be liable, have been included in accounts payable and accrued expenses and other liabilities in the accompanying consolidated balance sheet as of December 31, 2023. Depending on the nature of the proceeding, claim, or investigation, we may be subject to monetary damage awards, fines, penalties, or injunctive orders. Furthermore, the outcome of these matters could materially adversely affect our business, results of operations, and financial condition. The outcomes of legal proceedings, claims, and government investigations are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters. While it is not possible to determine the outcomes, we believe based on our current knowledge that the resolution of all such pending matters will not, either individually or in the aggregate, have a material adverse effect on our business, results of operations, cash flows, or financial condition. Except as may be set forth above the Company is not a party to any legal proceedings, and the Company is not aware of any claims or actions pending or threatened against us. In the future, the Company might from time to time become involved in litigation relating to claims arising from its ordinary course of business, the resolution of which the Company does not anticipate would have a material adverse impact on our financial position, results of operations or cash flows. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14: INCOME TAXES Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to depreciable assets using accelerated depreciation methods for income tax purposes, share-based compensation expense, and for net operating loss carryforwards. As of December 31, 2023, and 2022, the Company had net deferred tax assets before valuation allowance of $ 17,882,355 16,733,585 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 19,354,491 $ 16,733,582 Deferred tax liabilities: Indefinite lived intangible assets (1,840,170 ) — Valuation allowance (17,882,355 ) (16,733,582 ) Net deferred tax assets (liabilities) $ (368,034 ) $ — A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: SCHEDULE OF THE COMPANY'S EFFECTIVE TAX RATE TO THE STATUTORY FEDERAL RATE 2023 2022 Years Ended December 31, 2023 2022 Statutory federal rate 21.0 % 21.0 % State income taxes net of federal income tax benefit 7.0 7.0 Permanent adjustment (18.0 ) — Change in valuation allowance (14.4 ) (28.0 ) Effective income tax rate (4.4 )% — The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due, cumulative losses through December 31, 2023, and no history of generating taxable income. Therefore, valuation allowances of $ 17,882,355 16,733,582 1,148,773 3,630,314 28.0 368,034 (4.4 0 The Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income. At December 31, 2023 and 2022, the Company had net operating loss carryforwards available to offset future taxable income in the amounts of approximately $ 69,242,000 59,865,000 As a result of prior operating losses, the Company has net operating loss, or “NOL,” carryforwards for federal income tax purposes. The ability to utilize NOL carryforwards to reduce taxable income in future years could become subject to significant limitations under Section 382 of the Internal Revenue Code if the Company undergoes an ownership change. The Company would undergo an ownership change if, among other things, the stockholders who own, directly or indirectly, 5 50 The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense. The Company is not presently subject to any income tax audit in any taxing jurisdiction, though all tax years from 2018 on remain open to examination. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 12: SUBSEQUENT EVENTS As previously reported, the Company and various purchasers (the “Investors”) executed a securities purchase agreement (the “SPA”) on or around April 7, 2023, whereby the Investors purchased from the Company promissory notes in the aggregate principal amount of approximately $ 2,500,000 1,789,668.37 1,789,668.37 500,000.00 1,289,668.37 Between October 3, 2024 and October 15, 2024, the Company issued 26,227 19.9 26,227 On November 5, 2024, the Holder facilitated the cancellation of 26,227 Completion of offering Common Stock and Pre-Funded Warrants On October 28, 2024, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain accredited investors named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a best efforts offering (the “Offering”): (i) 124,673 5.00 482,187 4.995 0.005 The Company offered Pre-Funded Warrants to those Purchasers whose purchase of Common Stock in the Offering would have resulted in the Purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or at the election of the Purchaser, 9.99%) of our Common Stock immediately following the consummation of the Offering in lieu of the Common Stock that would otherwise result in ownership in excess of 4.99% (or at the election of the purchaser, 9.99%) of the outstanding Common Stock of the Company. The Common Stock, the Pre-Funded Warrants, and the Common Stock issuable upon exercise of the Pre-Funded Warrants were offered pursuant to a registration statement on Form S-1 as filed with the SEC on October 24, 2024, as amended, and was declared effective on October 28, 2024 (the “Registration Statement”). RBW Capital Partners LLC, acting through Dominari Securities LLC (the “Placement Agent”), acted as the exclusive placement agent for the Offering pursuant to a Placement Agency Agreement dated October 28, 2024 (the “Placement Agency Agreement”) by and between the Company and the Placement Agent. The Offering resulted in gross proceeds to the Company of approximately $ 3,000,000 8.0 1.0 50,000 15,950 2,555,261 Shareholder Equity Between October 1, 2024 and October 22, 2024, the Company issued and sold 90,012 1,320,873 2,500,000 | NOTE 15: SUBSEQUENT EVENTS Through the issuance date, the Company has issued 9,623 Through the issuance date, the Company converted shares of Series C Preferred Stock into 1,001 |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Equity [Abstract] | ||
STOCKHOLDERS’ DEFICIT | NOTE 7: STOCKHOLDERS’ DEFICIT Amendments to Certificate of Incorporation On August 21, 2023, the Board of Directors approved a one-for-25 Common Stock The Company had 1,000,000,000 0.0001 Common stockholders have voting rights of one 2024 Transactions During the nine months ended September 30, 2024, the Company issued 24,012 2,478,719 During the nine months ended September 30, 2024, the Company issued an aggregate of 2,582 shares of common stock pursuant to services and conversion of accounts payable totaling a fair value of $ 312,634 . During the nine months ended September 30, 3,442 3,841 As previously reported, the Company entered into a securities purchase agreement with an accredited investor (the “Investor”), pursuant to which the Company issued on September 5, 2023 those certain Series A warrants to purchase 10,278 10,278 On May 3, 2024, the Company entered into that certain inducement offer to exercise common stock purchase warrants with the Investor (the “Inducement Agreement”), pursuant to which (i) the Company agreed to lower the exercise price of the Existing Warrants to $ 156.50 per share and (ii) the Investor agreed to exercise the Existing Warrants into 20,555 shares of common stock (the “Exercise Shares”) by payment of the aggregate exercise price of $ 3,216,857.50 (gross proceeds before expenses, including but not limited to fees to H.C. Wainwright & Co., LLC (the “Placement Agent”), the exclusive placement agent in connection therewith). The closing occurred on May 7, 2024. Through September 30, 2024, the Company had exercised 7,575 of the 20,555 warrants at the amended exercise price of $ 156.50 per share. The Company received the entire gross proceeds of $ 3,216,857 in May 2024, which represents the exercise of the entire 20,555 warrants at the $ 156.50 exercise price. The Company received net proceeds of $ 2,877,475 after placement agent fees and expenses. The Company also exercised 12,980 In May 2024, the Company converted the outstanding principal and accrued interest of $ 313,816 2,120 Series A Convertible Preferred Stock On September 29, 2022, the Company filed the Certificate of Designation designating up to 6,800 shares out of the authorized but unissued shares of its preferred stock as Series A Convertible Preferred Stock. Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series A Preferred Stock (the “Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series A Preferred Stock. With respect to any vote with the class of Common Stock, each share of the Series A Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible. The Series A Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”); and (iv) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Each share of the Series A Preferred Stock shall be convertible, at any time and from time to time from and after September 29, 2022 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series A Preferred Stock ($ 1,000 9.30 As of September30, 2024 and December 31, 2023, there were 6,300 Series C Convertible Preferred Stock On June 21, 2023, the Company, on the one hand, and Moise Emquies, George Levy, Matthieu Leblan, Carol Ann Emquies, Jenny Murphy and Elodie Crichi (collectively, the “Sundry Investors”), on the other hand, executed a Securities Purchase Agreement (the “Sundry SPA”) whereby the Company issued 5,761 0.0001 1,000 1,000 0.717 On June 21, 2023, the Company filed the Certificate of Designation with the Secretary of State for the State of Delaware designating up to 5,761 Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series C Preferred Stock. The Series C Holders are entitled to vote as a class as expressly provided in the Certificate of Designation. The Series C Holders are also entitled to vote with the holders of shares of Common Stock, voting together as one class, on all matters in which the Series C Holders are permitted to vote with the class of shares of Common Stock. With respect to any vote with the class of Common Stock, each share of the Series C Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the ownership limitations specified in the Certificate of Designation) using the record date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the conversion price is calculated. The Series C Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to Junior Securities; (iii) on parity with Parity Securities; and (iv) junior to Senior Securities, in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Subject to any superior liquidation rights of the holders of any Senior Securities of the Company and the rights of the Company’s existing and future creditors, upon a Liquidation, each Holder shall be entitled to be paid out of the assets of the Company legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value (as defined in the Certificate of Designation) for each share of the Series C Preferred Stock held by such Holder and an amount equal to any accrued and unpaid dividends thereon, and thereafter the Series C Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. Each share of the Series C Preferred Stock shall be convertible, at any time and from time to time from and after June 21, 2023 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series C Preferred Stock ($ 1,000 0.717 The Company has the option to redeem any or all of the then outstanding Series C Preferred Stock at 112 In October 2023, 975 1,088 During the nine months ended September 30, 2024, 3,442 3,841 | NOTE 9: STOCKHOLDERS’ EQUITY (DEFICIT) Amendments to Certificate of Incorporation On October 13, 2022, the Company amended its Amended and Restated Certificate of Incorporation to increase to increase the number of authorized shares of the Company’s common stock from 200,000,000 1,000,000,000 1,010,000,000 On October 21, 2022, the Board of Directors approved a one-for-100 On August 21, 2023, the Board of Directors approved a one-for-25 Common Stock The Company had 1,000,000,000 0.0001 Common stockholders have voting rights of one vote per share 2023 Transactions On January 11, 2023, the Company, entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “January Private Placement”), an aggregate of 9,500 9,500 195.75 16,043 16,043 16,043 195.75 5 25,543 9,500 16,043 5.0 4.3 In January 2023, the Company issued 2,200 322,300 In March 2023, the Company issued an aggregate of 2,378 499,338 210.00 In June 2023, the Company issued 39,052 1,357,043 On August 31, 2023, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to issue and sell, in a private placement (the “August Private Placement”), an aggregate of 640 640 640 486.50 9,638 9,638 9,638 9,638 486.50 5 3.8 9,638 In connection with the August Private Placement, the Company entered into a warrant amendment (the “Warrant Amendment”) with certain investors to amend certain existing warrants to purchase up to 3,931 6,562.50 4,750.00 471.50 2,476 1,167,566 In September 2023, the Company issued 856 500,000 On September 10, 2023, the non-employee members of the board of directors adopted a 2023 Stock Purchase Plan (the “2023 Plan”) to enable the Company to attract, retain and motivate its employees. Under the 2023 Plan, qualified employees can purchase shares of the Company’s common stock at fair market value by either the delivery of cash or the delivery of a form of acceptable non-recourse promissory note. The aggregate number of common stock issuable under the 2023 Plan shall not exceed 1,300 Pursuant to the 2023 Plan, the Company issued an aggregate of 1,260 5 657,090 521.50 In October 2023, 975 1,088 2022 Transactions During the year ended December 31, 2022, the Company issued an aggregate of 1,596 In September 2022, the Company issued 1 123,000 As part of the Sundry acquisition (see Note 4), the Company issued 73 1,000,000 In connection with the December Notes, the Company issued 48 264,000 Series A Preferred Stock On August 31, 2022, the Company entered into a Subscription and Investment Representation Agreement with Hil Davis, its Chief Executive Officer, pursuant to which the Company agreed to issue 1 share of the Company’s Series A Preferred Stock to for $ 25,000 250,000,000 25,000 On September 13, 2023, the Company filed a certificate of cancellation (the “Series A Certificate of Cancellation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, cancelling the Series A Certificate of Designation relating to the Series A Preferred Stock. Series A Convertible Preferred Stock On September 29, 2022, the Company filed the Certificate of Designation designating up to 6,800 Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series A Preferred Stock (the “Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series A Preferred Stock. With respect to any vote with the class of Common Stock, each share of the Series A Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible. The Series A Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to any Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”); and (iv) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Each share of the Series A Preferred Stock shall be convertible, at any time and from time to time from and after September 29, 2022 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series A Preferred Stock ($ 1,000 9.30 As of December 31, 2023 and 2022, there were 6,300 Series B Preferred Stock On May 30, 2023, the Company entered into a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with John Hilburn Davis IV, its Chief Executive Officer pursuant to which the Company agreed to issue and sell 1 share of the Company’s Series B Preferred Stock, par value $ 0.0001 25,000 On May 30, 2023, the Company filed a certificate of designation (the “Certificate of Designation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, designating the rights, preferences, privileges and restrictions of the share of Series B Preferred Stock. The Certificate of Designation provides that the Series B Preferred Stock will have 250,000,000 0.0001 0.0001 The Series B Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series B Preferred Stock has no rights with respect to any distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily. The holder of the Series B Preferred Stock will not be entitled to receive dividends of any kind. The outstanding share of Series B Preferred Stock shall be redeemed in whole, but not in part, at any time (i) if such redemption is ordered by the Board of Directors in its sole discretion or (ii) automatically upon the effectiveness of the amendment to the Restated Certificate implementing a reverse stock split. Upon such redemption, the holder of the Series B Preferred Stock will receive consideration of $ 25,000 On September 13, 2023, the Company filed a certificate of cancellation (the “Series B Certificate of Cancellation”) with the Secretary of State of the State of Delaware, effective as of the time of filing, cancelling the Series B Certificate of Designation, and thereby eliminating all Series B Preferred Stock. Series C Convertible Preferred Stock On June 21, 2023, the Company, on the one hand, and Moise Emquies, George Levy, Matthieu Leblan, Carol Ann Emquies, Jenny Murphy and Elodie Crichi (collectively, the “Sundry Investors”), on the other hand, executed a Securities Purchase Agreement (the “Sundry SPA”) whereby the Company issued 5,761 0.0001 1,000 1,000 0.717 five On June 21, 2023, the Company filed the Certificate of Designation with the Secretary of State for the State of Delaware designating up to 5,761 Except for stock dividends or distributions for which adjustments are to be made pursuant to the Certificate of Designation, the holders of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive, and the Company shall pay, dividends on shares of the Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of the Series C Preferred Stock. The Series C Holders are entitled to vote as a class as expressly provided in the Certificate of Designation. The Series C Holders are also entitled to vote with the holders of shares of Common Stock, voting together as one class, on all matters in which the Series C Holders are permitted to vote with the class of shares of Common Stock. With respect to any vote with the class of Common Stock, each share of the Series C Preferred Stock shall entitle the Holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the ownership limitations specified in the Certificate of Designation) using the record date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the conversion price is calculated. The Series C Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to Junior Securities; (iii) on parity with Parity Securities; and (iv) junior to Senior Securities, in each case, as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily. Subject to any superior liquidation rights of the holders of any Senior Securities of the Company and the rights of the Company’s existing and future creditors, upon a Liquidation, each Holder shall be entitled to be paid out of the assets of the Company legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value (as defined in the Certificate of Designation) for each share of the Series C Preferred Stock held by such Holder and an amount equal to any accrued and unpaid dividends thereon, and thereafter the Series C Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. Each share of the Series C Preferred Stock shall be convertible, at any time and from time to time from and after June 21, 2023 at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of the Series C Preferred Stock ($ 1,000 $ 0.717 five The Company has the option to redeem any or all of the then outstanding Series C Preferred Stock at 112 In October 2023, 975 1,088 2022 Underwritin A reements and Public Offerin On May 5, 2022, the Company entered into an underwriting agreement (the “Alexander Underwriting Agreement”) with Alexander Capital, L.P., acting as representative of the several underwriters named in the Alexander Underwriting Agreement (the “ Alexander Underwriters”), relating to the Company’s underwritten the offering pursuant to which the Company agreed to issue and sell 7478 1,250.00 1,150 45 1,122 The shares were sold in the Offering pursuant to a Registration Statement on Form S-1, as amended (File No. 333-264347) (the “Registration Statement”), a Registration Statement on Form S-1 pursuant to 462(b) of the Securities Act of 1933, as amended (File No. 333-264775), and a related prospectus filed with the Securities and Exchange Commission. The public offering closed on May 10, 2022 and the Company sold 7,478 9.3 8.1 0.7 0.5 On November 29, 2022, the Company, entered into a Securities Purchase Agreement with investors pursuant to which the Company agreed to issue and sell, in an offering (i) an aggregate of 168,000 3,360 3,360 275 (i) 33,004 33,004 33,004 33,004 275 0.0001 10 36,364 3,360 33,004 10.0 9.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). | Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). |
Principles of Consolidation | Principles of Consolidation These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Bailey, and Stateside from the dates of acquisition. All inter-company transactions and balances have been eliminated on consolidation. | Principles of Consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Bailey, H&J, Stateside and Sundry from the dates of acquisition. All inter-company transactions and balances have been eliminated on consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, inventory, impairment of long-lived assets, contingent consideration and derivative liabilities. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Discontinued Operations | Discontinued Operations Certain prior year accounts have been reclassified to conform with current year presentation regarding income (loss) from discontinued operations. | Discontinued Operations Certain prior year accounts have been reclassified to conform with current year presentation regarding income (loss) from discontinued operations. H&J’s assets and liabilities as of December 31, 2022 have also been reclassified on the consolidated balance sheet. See Note 5. |
Cash and Equivalents and Concentration of Credit Risk | Cash and Equivalents and Concentration of Credit Risk The Company considers all highly liquid securities with an original maturity of less than six months to be cash equivalents. As of September 30,2024, and December 31, 2023, the Company did not hold any cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits of $ 250,000 | Cash and Equivalents and Concentration of Credit Risk The Company considers all highly liquid securities with an original maturity of less than three months to be cash equivalents. As of December 31, 2023 and 2022, the Company did not hold any cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits of $ 250,000 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, due to related parties, related party note payable, and convertible debt. The carrying value of these assets and liabilities is representative of their fair market value, due to the short maturity of these instruments. | Fair Value of Financial Instruments FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, due from factor, prepaid expenses, accounts payable, accrued expenses, deferred revenue, due to related parties, related party note payable, accrued interest, loan payable and convertible debt. The carrying value of these assets and liabilities is representative of their fair market value, due to the short maturity of these instruments. The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Fair Value Measurements as of December 31, 2023 Using: Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration — — — — $ — $ — $ — $ — Fair Value Measurements as of December 31, 2022 Using: Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration — — 12,098,475 12,098,475 $ — $ — $ 12,098,475 $ 12,098,475 Contin ent Consideration The Company records a contingent consideration liability relating to stock price guarantees included in its acquisition and consulting agreements. The estimated fair value of the contingent consideration is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The Company estimates and records the acquisition date fair value of contingent consideration as part of purchase price consideration for acquisitions. Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration and recognizes any change in fair in the consolidated statement of operations. The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of future operating results, discount rates and probabilities assigned to various potential operating result scenarios. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and, therefore, materially affect the Company’s future financial results. The contingent consideration liability is to be settled with the issuance of shares of common stock once contingent provisions set forth in respective acquisition agreements have been achieved. Upon achievement of contingent provisions, respective liabilities are relieved and offset by increases to common stock and additional paid-in capital in the stockholders’ equity section of the Company’s consolidated balance sheets. The fair value of the contingent consideration liability related to the Company’s business combinations is valued using the Monte Carlo simulation model. The Monte Carlo simulation inputs include the stock price, volatility of common stock, timing of settlement and resale restrictions and limits. The fair value of the contingent consideration is then calculated based on guaranteed equity values at settlement as defined in the acquisition agreements. Changes in contingent consideration liability during the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF CHANGES IN ACQUISITION-RELATED CONTINGENT CONSIDERATION Contingent Consideration Liability Balance as of December 31, 2022 $ 12,098,475 Norwest Waiver - settlement of Bailey44 contingent consideration (10,698,475 ) H&J Settlement Agreement - settlement of H&J contingent consideration (1,400,000 ) Outstanding as of December 31, 2023 $ — Norwest Waiver On June 21, 2023, the Company, on the one hand, and Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP (together, the “Norwest Investors”), on the other hand, executed a Waiver and Amendment (the “Norwest Amendment”) whereby the Norwest Investors agreed to waive and terminate certain true up rights of the Norwest Investors under the Agreement and Plan of Merger, dated February 12, 2020 (the “Bailey Merger Agreement”), among the Company, Bailey 44, LLC, Norwest Venture Partners XI, LP, and Norwest Venture Partners XII, LP and Denim.LA Acquisition Corp. This transaction is known as the “Norwest Waiver”. As a result of the Norwest Waiver, the Company recorded a fair value of $ 0 10,698,475 H&J Settlement A reement On June 21, 2023, the Company and the former owners of H&J executed a Settlement Agreement and Release (the “Settlement Agreement”) whereby the Company transferred 100 229,000 39,052 1,400,000 The detail of contingent consideration by company is as follows: SCHEDULE OF CONTINGENT CONSIDERATION December 31, 2023 2022 Bailey $ — 10,698,475 Harper & Jones — 1,400,000 $ — $ 12,098,475 Derivative Liability In connection with the Company’s convertible notes, the Company recorded a derivative liability (see Note 7). The estimated fair value of the derivative liability is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument. The fair value of the derivative liability is valued using a multinomial lattice model. The multinomial lattice inputs include the underlying stock price, volatility of common stock and remaining term of the convertible note. Changes in derivative liability during the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF CHANGES IN DERIVATIVE LIABILITY Derivative Liability Outstanding as of December 31, 2021 $ 2,294,720 Initial fair value on issuance of convertible note 559,957 Conversion of underlying notes into common stock (1,500,243 ) Change in fair value (1,354,434 ) Outstanding as of December 31, 2022 — Initial fair value on issuance of convertible note — Change in fair value — Outstanding as of December 31, 2023 $ — During the year ended December 31, 2022, the Company utilized the following inputs for the fair value of the derivative liability: volatility of 70.9 96.7 2.71 3.74 .08 0.62 The change in fair value of the derivative liability is included in other non-operating income (expense), net in the consolidated statements of operations. Accounts Receivable and Expected Credit Loss We carry our accounts receivable at invoiced amounts less allowances for customer credit losses and other deductions to present the net amount expected to be collected on the financial asset. All receivables are expected to be collected within one year of the consolidated balance sheet. We do not accrue interest on the trade receivables. Management evaluates the ability to collect accounts receivable based on a combination of factors. Receivables are determined to be past due based on individual credit terms. An allowance for credit losses is maintained based on the length of time receivables are past due, historical collections, or the status of a customer’s financial position. Receivables are written off in the year deemed uncollectible after efforts to collect the receivables have proven unsuccessful. We do not have any off-balance sheet credit exposure related to our customers. We periodically review accounts receivable, estimate an allowance for bad debts, and simultaneously record the appropriate expense in the statement of operations. Such estimates are based on general economic conditions, the financial conditions of customers, and the amount and age of past due accounts. Past due accounts are written off against that allowance only after all collection attempts have been exhausted and the prospects for recovery are remote. Recoveries of accounts receivable previously written off are recorded as income when received. The Company provides credit to its customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. As of December 31, 2023, the Company determined an allowance for credit losses of $ 41,854 |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method for DSTLD and first-in, first-out method for Bailey, Stateside and Sundry. The inventory balances as of September 30, 2024 and December 31, 2023 consist substantially of finished good products purchased or produced for resale, as well as any raw materials the Company purchased to modify the products and work in progress. Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, December 31, 2024 2023 Raw materials $ 722,963 $ 695,580 Work in process 608,432 585,387 Finished goods 3,709,123 3,568,633 Inventory $ 5,040,518 $ 4,849,600 | Inventory Inventory is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method for DSTLD and H&J and first-in, first-out method for Bailey, Stateside and Sundry. The inventory balances as of December 31, 2023 and 2022 consist substantially of finished good products purchased or produced for resale, as well as any raw materials the Company purchased to modify the products and work in progress. Inventory consisted of the following: SCHEDULE OF INVENTORY 2023 2022 December 31, 2023 2022 Raw materials $ 695,580 $ 1,611,134 Work in process 585,387 888,643 Finished goods 3,568,633 2,622,787 Inventory $ 4,849,600 $ 5,122,564 |
Property, Equipment, and Software | Property, Equipment, and Software Property, equipment, and software are recorded at cost. Depreciation/amortization is recorded for property, equipment, and software using the straight-line method over the estimated useful lives of assets. The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. The balances at December 31, 2023 and 2022 consist of software with three ( 3 3 10 Depreciation and amortization charges on property, equipment, and software are included in general and administrative expenses and amounted to $ 50,823 75,126 | |
Business Combinations | Business Combinations The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Intangible assets are established with business combinations and consist of brand names and customer relationships. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight- line method. The estimated useful lives of amortizable intangible assets are as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION Customer relationships 3 | |
Impairment | Impairment Long-Lived Assets The Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. | |
Goodwill | Goodwill Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually for impairment and upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. | Goodwill Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually for impairment and upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. The quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. It is our practice, at a minimum, to perform a qualitative or quantitative goodwill impairment test in the fourth quarter every year. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets established in connection with business combinations consist of the brand name. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. |
Annual Impairment Tests | Annual Impairment Tests At December 31, 2023, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44, Stateside and Sundry may not be recoverable. The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets. Upon the quantitative analysis performed, the Company determined that the fair value of the intangible assets and reporting units were greater than the respective carrying values. As such, no 3,158,123 At December 31, 2022, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44 and Harper & Jones may not be recoverable. The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets. As such, the Company compared the estimated fair value of the brand names with its carrying value and recorded an impairment loss of $ 3,667,000 11,872,332 The following is a summary of goodwill and intangible impairment recorded pertaining to each entity: SCHEDULE OF GOODWILL AND INTANGIBLE IMPAIRMENT Year Ended December 31, 2023 2022 Bailey brand name $ — $ 2,182,000 Harper & Jones brand name — 1,485,000 Total impairment of intangibles — 3,667,000 Bailey goodwill — 3,321,095 Harper & Jones goodwill — 8,551,237 Total impairment of goodwill — 11,872,332 Total impairment $ — $ 15,539,332 In determining the fair value of the respective reporting units, management estimated the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants at the measurement date. This includes reviewing market comparables such as revenue multipliers and assigning certain assets and liabilities to the reporting units, such as the respective working capital deficits of each entity and debt obligations that would need to be assumed by a market participant buyer in an orderly transaction. The Company calculated the carrying amounts of each reporting unit by utilizing the entities’ assets and liabilities at December 31, 2023, including the carrying value of the identifiable intangible assets and goodwill assigned to the respective reporting units. | |
Convertible Instruments | Convertible Instruments U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. | |
Accounting for Preferred Stock | Accounting for Preferred Stock ASC 480, Distinguishing Liabilities from Equity, includes standards for how an issuer of equity (including equity shares issued by consolidated entities) classifies and measures on its balance sheet certain financial instruments with characteristics of both liabilities and equity. Management is required to determine the presentation for the preferred stock as a result of the redemption and conversion provisions, among other provisions in the agreement. Specifically, management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely related to the host instrument, and whether the bifurcation of the conversion feature is required and whether the conversion feature should be accounted for as a derivative instrument. If the host instrument and conversion feature are determined to be clearly and closely related (both more akin to equity), derivative liability accounting under ASC 815, Derivatives and Hedging, is not required. Management determined that the host contract of the preferred stock is more akin to equity, and accordingly, liability accounting is not required by the Company. The Company has presented preferred stock within stockholders’ equity. Costs incurred directly for the issuance of the preferred stock are recorded as a reduction of gross proceeds received by the Company, resulting in a discount to the preferred stock. The discount is not amortized. | |
Revenue Recognition | Revenue Recognition In accordance with FASB ASC 606, Revenue from Contracts with Customers ● Identification of a contract with a customer; ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract, and ● Recognition of revenue when or as the performance obligations are satisfied Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, upon shipment of product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. The Company derives its revenue primarily from wholesale and e-commerce transactions. For both channels, revenue is recognized at the time the product is shipped to the customer, which is the point in time when control is transferred. The Company considers the sale of products as a single performance obligation. The Company provides the customer the right of return on the product and revenue is adjusted based on an estimate of the expected returns based on historical rates. The Company deducts discounts, sales tax, and estimated refunds to arrive at net revenue. Sales tax collected from clients is not considered revenue and is included in accrued expenses until remitted to the taxing authorities. Shipping and handling fees charged to customers are included in net revenues. All shipping and handling costs are accounted for as distribution expenses, and are therefore not evaluated as a separate performance obligation. | |
Cost of Revenues | Cost of Revenues Cost of revenues consists primarily of inventory sold and related freight-in. Cost of revenues includes direct labor pertaining to our inventory production activities and an allocation of overhead costs including rent and insurance. Cost of revenues also includes inventory write-offs and reserves. | |
Shipping and Handling | Shipping and Handling The Company recognizes shipping and handling billed to customers as a component of net revenues, and the cost of shipping and handling as distribution costs. Total shipping and handling billed to customers as a component of net revenues was approximately $ 128,000 72,000 $ 1,016,716 525,000 | |
Advertising and Promotion | Advertising and Promotion Advertising and promotional costs are expensed as incurred. Advertising and promotional expense for the years ended December 31, 2023 and 2022 amounted to approximately $ 728,000 1,178,000 | |
General and Administrative | General and Administrative General and administrative expenses consist primarily of compensation and benefits costs, professional services and information technology. General and administrative expenses also include payment processing fees, design and warehousing fees. | |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At December 31, 2023 and 2022, the Company did not have any derivative instruments that were designated as hedges. | |
Stock Option and Warrant Valuation | Stock Option and Warrant Valuation Stock option and warrant valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model. For warrants and stock options issued to non- employees, the Company accounts for the expected life based on the contractual life of the warrants and stock options. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of options grants. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The number of stock award forfeitures are recognized as incurred. | |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Stock-based compensation is recognized as an expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services. The Company measures employee stock-based awards at grant-date fair value and recognizes employee compensation expense on a straight- line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and expected stock price volatility. The Company used the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. | |
Deferred Offering Costs | Deferred Offering Costs The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed. As of December 31, 2020, the Company had capitalized $ 214,647 367,696 | |
Segment Information | Segment Information In accordance with ASC 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business activities are managed and evaluated. As of December 31, 2023 our operating segments included: DSTLD, Bailey, Stateside and Sundry. Each operating segment currently reports to the Chief Executive Officer. Each of our brands serve or are expected to serve customers through our wholesale, in store and online channels, allowing us to execute on our omni-channel strategy. We have determined that each of our operating segments share similar economic and other qualitative characteristics, and therefore the results of our operating segments are aggregated into one one | |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized. We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. | |
Net Loss per Share | Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of September 30, 2024 and 2023, diluted net loss per share is the same as basic net loss per share for each year. Potentially dilutive items outstanding as of September 30, 2024 and 2023 are as follows: SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING September 30, 2024 2023 Series A convertible preferred stock 542 542 Series C convertible preferred stock 1,499 6,428 Common stock warrants 914 4,755 Stock options 31 31 Total potentially dilutive shares 2,986 11,756 The stock options and warrants above are out-of-the-money as of September 30, 2024 and 2023. | Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2023 and 2022, diluted net loss per share is the same as basic net loss per share for each year. Potentially dilutive items outstanding as of December 31, 2023 and 2022 are as follows: SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING December 31, 2023 2022 Convertible notes - 758 Series A convertible preferred stock 542 86 Series C convertible preferred stock 5,340 - Common stock warrants 23,604 3,535 Stock options 31 31 Total potentially dilutive shares 29,518 4,411 The stock options and warrants above are out-of-the-money as of December 31, 2023 and 2022. |
Leases | Leases On January 1, 2022, the Company adopted ASC 842, Leases The Company elected transitional practical expedients for existing leases which eliminated the requirements to reassess existing lease classification, initial direct costs, and whether contracts contain leases. Also, the Company elected to present the payments associated with short- term leases as an expense in statements of operations. Short-term leases are leases with a lease term of 12 | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2024, the Company adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. The following accounting pronouncements have been issued as of May 20, 2024 but are not yet effective and may affect the future financial reporting by the Company: ● ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02: Leases (Topic 842). In June 2016, the FASB issued ASU No. 2016-13, “Financial Instrument – Credit Losses”. This ASU, and the related ASUs issued subsequently by the FASB introduce a new model for recognizing credit loss on financial assets not accounted for at fair values through net income, including loans, debt securities, trade receivables, net investment in leases and available-for-sale debt securities. The new ASU broadens the information that an entity must consider in developing estimates of expected credit losses and requires an entity to estimate credit losses over the life of an exposure based on historical information, current information and reasonable supportable forecasts. The Company adopted this ASU on January 1, 2023, using the modified retrospective approach. The adoption of this ASU did not have a material impact on financial statements as Company’s customers are direct consumers and pay at the time of purchase. As of December 31, 2023, the Company determined an allowance for expected credit loss of $ 48,326 Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. The following accounting pronouncements have been issued as of April 15, 2024 but are not yet effective and may affect the future financial reporting by the Company: ● ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): ● ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions: |
Reverse Stock Split | Reverse Stock Split On August 21, 2023, the Board of Directors approved a one-for-25 On December 2, 2024, the Board of Directors approved a one-for-50 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The reverse stock split became effective as of December 12, 2024. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited condensed consolidated balance sheet as of September 30, 2024, the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2024, and 2023 and of cash flows for the nine months ended September 30, 2024 and 2023 have been prepared by the Company, pursuant to the rules and regulations of the SEC for the interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated results for the interim periods presented and of the consolidated financial condition as of the date of the interim consolidated balance sheet. The results of operations are not necessarily indicative of the results expected for the year ended December 31, 2024. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s Annual Form 10-K filed with SEC on April 15, 2024. | |
Accounts Receivable and Expected Credit Loss | Accounts Receivable and Expected Credit Loss We carry our accounts receivable at invoiced amounts less allowances for customer credit losses and other deductions to present the net amount expected to be collected on the financial asset. All receivables are expected to be collected within one year of the consolidated balance sheet. We do not accrue interest on the trade receivables. Management evaluates the ability to collect accounts receivable based on a combination of factors. Receivables are determined to be past due based on individual credit terms. An allowance for credit losses is maintained based on the length of time receivables are past due, historical collections, or the status of a customer’s financial position. Receivables are written off in the year deemed uncollectible after efforts to collect the receivables have proven unsuccessful. We do not have any off-balance sheet credit exposure related to our customers. We periodically review accounts receivable, estimate an allowance for bad debts, and simultaneously record the appropriate expense in the statement of operations. Such estimates are based on general economic conditions, the financial conditions of customers, and the amount and age of past due accounts. Past due accounts are written off against that allowance only after all collection attempts have been exhausted and the prospects for recovery are remote. Recoveries of accounts receivable previously written off are recorded as income when received. The Company provides credit to its customers in the normal course of business and has established credit evaluation and monitoring processes to mitigate credit risk. As of September 30, 2024, and December 31, 2023, the Company determined an allowance for credit losses of $ 51,552 41,854 | |
Annual Impairment | Annual Impairment At December 31, 2023, management determined that certain events and circumstances occurred that indicated that the carrying value of the Company’s brand name assets, and the carrying amount of the reporting units, pertaining to Bailey44, Stateside and Sundry may not be recoverable. The qualitative assessment was primarily due to reduced or stagnant revenues of both entities as compared to the Company’s initial projections at the time of each respective acquisition, as well as the entities’ liabilities in excess of assets. Upon the quantitative analysis performed, the Company determined that the fair value of the intangible assets and reporting units were greater than the respective carrying values. As such, no impairment was recorded. The Company utilized the enterprise value approach in the impairment tests of each reporting unit in 2023. At September 30, 2024, management determined that indicators of impairment existed with regards to the Bailey44 reporting unit. The qualitative assessment was primarily due to reduced revenues of Bailey44 as compared to the Company’s projections, as well as the entity’ liabilities in excess of assets. As such, the Company recorded an impairment to intangible assets of $ 600,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Accounting Policies [Abstract] | ||
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS | The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Fair Value Measurements as of December 31, 2023 Using: Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration — — — — $ — $ — $ — $ — Fair Value Measurements as of December 31, 2022 Using: Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration — — 12,098,475 12,098,475 $ — $ — $ 12,098,475 $ 12,098,475 | |
SCHEDULE OF CHANGES IN ACQUISITION-RELATED CONTINGENT CONSIDERATION | SCHEDULE OF CHANGES IN ACQUISITION-RELATED CONTINGENT CONSIDERATION Contingent Consideration Liability Balance as of December 31, 2022 $ 12,098,475 Norwest Waiver - settlement of Bailey44 contingent consideration (10,698,475 ) H&J Settlement Agreement - settlement of H&J contingent consideration (1,400,000 ) Outstanding as of December 31, 2023 $ — | |
SCHEDULE OF CONTINGENT CONSIDERATION | SCHEDULE OF CONTINGENT CONSIDERATION December 31, 2023 2022 Bailey $ — 10,698,475 Harper & Jones — 1,400,000 $ — $ 12,098,475 | |
SCHEDULE OF CHANGES IN DERIVATIVE LIABILITY | SCHEDULE OF CHANGES IN DERIVATIVE LIABILITY Derivative Liability Outstanding as of December 31, 2021 $ 2,294,720 Initial fair value on issuance of convertible note 559,957 Conversion of underlying notes into common stock (1,500,243 ) Change in fair value (1,354,434 ) Outstanding as of December 31, 2022 — Initial fair value on issuance of convertible note — Change in fair value — Outstanding as of December 31, 2023 $ — | |
SCHEDULE OF INVENTORY | Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, December 31, 2024 2023 Raw materials $ 722,963 $ 695,580 Work in process 608,432 585,387 Finished goods 3,709,123 3,568,633 Inventory $ 5,040,518 $ 4,849,600 | Inventory consisted of the following: SCHEDULE OF INVENTORY 2023 2022 December 31, 2023 2022 Raw materials $ 695,580 $ 1,611,134 Work in process 585,387 888,643 Finished goods 3,568,633 2,622,787 Inventory $ 4,849,600 $ 5,122,564 |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION | Intangible assets are established with business combinations and consist of brand names and customer relationships. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight- line method. The estimated useful lives of amortizable intangible assets are as follows: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION Customer relationships 3 | |
SCHEDULE OF GOODWILL AND INTANGIBLE IMPAIRMENT | The following is a summary of goodwill and intangible impairment recorded pertaining to each entity: SCHEDULE OF GOODWILL AND INTANGIBLE IMPAIRMENT Year Ended December 31, 2023 2022 Bailey brand name $ — $ 2,182,000 Harper & Jones brand name — 1,485,000 Total impairment of intangibles — 3,667,000 Bailey goodwill — 3,321,095 Harper & Jones goodwill — 8,551,237 Total impairment of goodwill — 11,872,332 Total impairment $ — $ 15,539,332 | |
SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING | SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING September 30, 2024 2023 Series A convertible preferred stock 542 542 Series C convertible preferred stock 1,499 6,428 Common stock warrants 914 4,755 Stock options 31 31 Total potentially dilutive shares 2,986 11,756 | SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING December 31, 2023 2022 Convertible notes - 758 Series A convertible preferred stock 542 86 Series C convertible preferred stock 5,340 - Common stock warrants 23,604 3,535 Stock options 31 31 Total potentially dilutive shares 29,518 4,411 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
SCHEDULE OF COMPONENTS OF PURCHASE PRICE CONSIDERATION | Total fair value of the purchase price consideration was determined as follows: SCHEDULE OF COMPONENTS OF PURCHASE PRICE CONSIDERATION Cash $ 7,500,000 Promissory notes payable 5,500,000 Common stock 1,000,000 Purchase price consideration $ 14,000,000 |
SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATION | SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATION Purchase Price Allocation Cash and cash equivalents $ 252,697 Accounts receivable, net 63,956 Due from factor, net 387,884 Inventory 2,941,755 Prepaid expenses and other current assets 32,629 Property, equipment and software, net 48,985 Goodwill 3,711,322 Intangible assets 7,403,800 Accounts payable (615,706 ) Accrued expenses and other liabilities (227,321 ) Purchase price consideration $ 14,000,000 |
SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION | SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION Year Ended December 31, 2022 Net revenues $ 28,519,261 Net loss $ (42,001,415 ) Net loss per common share $ (2,722.78 ) |
SCHEDULE OF FAIR VALUE OF PURCHASE PRICE CONSIDERATION | SCHEDULE OF FAIR VALUE OF PURCHASE PRICE CONSIDERATION Cash $ 5,000,000 Common stock 3,403,196 Purchase price consideration $ 8,403,196 |
SCHEDULE OF ALLOCATION OF PURCHASE PRICE IN REGARD TO ACQUISITION | SCHEDULE OF ALLOCATION OF PURCHASE PRICE IN REGARD TO ACQUISITION Purchase Price Allocation Cash and cash equivalents 32,700 Accounts receivable, net 154,678 Due from factor, net 371,247 Inventory 603,625 Prepaid expenses and other current assets 7,970 Deposits 9,595 Property, equipment and software, net — Goodwill 2,104,056 Intangible assets 5,939,140 Accounts payable (374,443 ) Accrued expenses and other liabilities (445,372 ) Purchase price consideration $ 8,403,196 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF COMPONENTS OF DISPOSITION | The H&J Settlement was accounted for a business disposition in accordance with ASC 810-40-40-3A. As of June 21, 2023, the Company no longer consolidated the assets, liabilities, revenues and expenses of H&J. The components of the disposition are as follows: SCHEDULE OF COMPONENTS OF DISPOSITION Cash payment due to H&J Seller $ (229,000 ) Common shares issued to H&J Seller* (1,357,043 ) Total fair value of consideration received (given) $ (1,586,043 ) Carrying amount of assets and liabilities Cash and cash equivalents 18,192 Accounts receivable, net 55,782 Prepaid expenses and other current assets 25,115 Goodwill 1,130,311 Intangible assets, net 1,246,915 Deposits 4,416 Accounts payable (40,028 ) Accrued expenses and other liabilities (734,068 ) Deferred revenue (18,347 ) Due to related parties (1,008 ) Contingent consideration (1,400,000 ) Loan payable (219,894 ) Note payable - related party (129,489 ) Total carrying amount of assets and liabilities (62,103 ) Loss on disposition of business $ (1,523,940 ) * Represents the fair value of 39,052 2023 2022 Year Ended December 31, 2023 2022 Net revenues $ 1,405,482 $ 3,637,620 Cost of net revenues 565,621 1,241,594 Gross profit 839,861 2,396,026 Operating expenses: General and administrative 520,582 1,731,299 Sales and marketing 346,167 931,650 Total operating expenses 866,749 2,662,949 Loss from operations (26,889 ) (266,922 ) Other income (expense): Interest expense (11,675 ) (52,927 ) Loss on disposition of business (1,523,940 ) — Total other income (expense), net (1,535,615 ) (52,927 ) Income tax benefit (provision) — — Net loss from discontinued operations $ (1,562,503 ) $ (319,849 ) Weighted average common shares outstanding - basic and diluted 8,488 617 Net income (loss) from discontinued operations per common share - basic and diluted $ (184.08 ) $ (518.36 ) |
DUE FROM FACTOR (Tables)
DUE FROM FACTOR (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Due From Factor | ||
SCHEDULE OF DUE TO/ FROM FACTOR | Due to/from factor consist of the following: SCHEDULE OF DUE TO/ FROM FACTOR September 30, December 31, 2024 2023 Outstanding receivables: Without recourse $ 916,045 $ 808,233 With recourse 18,994 99,055 Matured funds and deposits 55,043 65,321 Advances (551,813 ) (483,187 ) Credits due customers — (151,611 ) Due from factor, net $ 438,269 $ 337,811 | Due to/from factor consist of the following: SCHEDULE OF DUE TO/ FROM FACTOR 2023 2022 December 31, 2023 2022 Outstanding receivables: Without recourse $ 808,233 $ 1,680,042 With recourse 99,055 65,411 Matured funds and deposits 65,321 81,055 Advances (483,187 ) (632,826 ) Credits due customers (151,611 ) (354,282 ) Due from factor, net $ 337,811 $ 839,400 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION | The following is a summary of goodwill attributable to each business combination: SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION September 30, December 31 2024 2023 Bailey $ 3,158,123 $ 3,158,123 Stateside 2,104,056 2,104,056 Sundry 3,711,322 3,711,322 Goodwill $ 8,973,501 $ 8,973,501 | The Company recorded goodwill from each of its business combinations. The following is a summary of goodwill by entity for the years ended December 31, 2023 and 2022: SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION 2023 2022 December 31, 2023 2022 Bailey $ 3,158,123 $ 3,158,123 Stateside 2,104,056 2,104,056 Sundry 3,711,322 3,711,322 Goodwill $ 8,973,501 $ 8,973,501 |
SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS | The following table summarizes information relating to the Company’s identifiable intangible assets as of September 30, 2024: SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS Gross Accumulated Carrying Amount Amortization Value Amortized: Customer relationships $ 8,634,560 $ (6,551,861 ) $ 2,082,699 $ 8,634,560 $ (6,551,861 ) $ 2,082,699 Indefinite-lived: Brand name 5,241,880 — 5,241,880 $ 13,876,440 $ (6,551,861 ) $ 7,324,579 | The following table summarizes information relating to the Company’s identifiable intangible assets as of December 31, 2023 and 2022: SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS December 31, 2023 Gross Accumulated Carrying Amortized: Customer relationships $ 8,634,560 $ (4,494,223 ) $ 4,140,337 $ 8,634,560 $ (4,494,223 ) $ 4,140,337 Indefinite-lived: Brand name 5,841,880 — 5,841,880 $ 14,476,440 $ (4,494,223 ) $ 9,982,217 December 31, 2022 Gross Amount Accumulated Amortization Carrying Value Amortized: Customer relationships $ 9,734,560 (2,670,202 ) $ 7,064,358 9,734,560 (2,670,202 ) 7,064,358 Indefinite-lived: Brand name 5,841,880 — 5,841,880 $ 15,576,440 $ (2,670,202 ) $ 12,906,238 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | Future amortization expense at December 31, 2023 is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE Year Ending December 31, 2024 2,474,177 2025 1,666,160 Carrying value $ 4,140,337 |
LIABILITIES AND DEBT (Tables)
LIABILITIES AND DEBT (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Liabilities And Debt | ||
SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES | The Company accrued expenses and other liabilities line in the consolidated balance sheets is comprised of the following as of December 31, 2023 and 2022: SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES 2023 2022 December 31, 2023 2022 Accrued expenses $ 617,374 $ 668,714 Reserve for returns — 307,725 Payroll related liabilities 3,895,640 2,618,870 Sales tax liability 145,545 262,765 Other liabilities 99,934 78,845 Accrued expenses and other liabilities $ 4,758,492 $ 3,936,920 | |
SCHEDULE OF CONVERTIBLE NOTES | The following is a summary of the convertible notes for the years ended December 31, 2023 and 2022: SCHEDULE OF CONVERTIBLE NOTES Principal Unamortized Debt Discount Convertible Note Payable, Net Balance, December 31, 2022 $ 4,100,000 $ (1,378,200 ) $ 2,721,800 Repayments of notes (4,000,000 ) — (4,000,000 ) Amortization of debt discount — 1,220,830 1,220,830 Loss on extinguishment of debt — 157,370 157,370 Balance, December 31, 2023 $ 100,000 $ — $ 100,000 | |
SCHEDULE OF MERCHANT ADVANCES | The following is a summary of the merchant advances as of September 30, 2024, and December 31, 2023: SCHEDULE OF MERCHANT ADVANCES September 30, December 31, 2024 2023 Principal $ 2,347,564 $ 2,960,946 Less: unamortized debt discount (550,183 ) (1,966,881 ) Merchant cash advances, net $ 1,797,381 $ 994,065 | The following is a summary of the merchant advances as of December 31, 2023 and 2022: SCHEDULE OF MERCHANT ADVANCES 2023 2022 December 31, 2023 2022 Principal $ 2,960,946 $ 896,334 Less: unamortized debt discount (1,966,881 ) — Merchant cash advances, net $ 994,065 $ 896,334 |
SCHEDULE OF PROMISSORY NOTES PAYABLE, NET | The following is a summary of promissory notes payable, net: SCHEDULE OF PROMISSORY NOTES PAYABLE, NET September 30, December 31, 2024 2023 Bailey Note $ 3,500,000 $ 3,500,000 March 2023 Notes – principal 1,230,740 1,730,740 Notes – principal 1,230,740 1,730,740 March 2023 Notes - unamortized debt discount - (346,148 ) Promissory note payable, net $ 4,730,740 $ 4,884,592 | The following is a summary of promissory notes payable, net: SCHEDULE OF PROMISSORY NOTES PAYABLE, NET 2023 2022 December 31, 2023 2022 Bailey Note $ 3,500,000 $ 3,500,000 Sundry Note — 5,500,000 March 2023 Notes - principal 1,730,740 — March 2023 Notes - unamortized debt discount (346,148 ) — Promissory note payable, net $ 4,884,592 $ 9,000,000 |
SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES | The Company accrued expenses and other liabilities line in the consolidated balance sheets is comprised of the following as of September 30, 2024, and December 31, 2023: SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES September 30, December 31, 2024 2023 Accrued expenses $ 733,865 $ 617,374 Payroll related liabilities 4,224,259 3,895,640 Sales tax liability 178,960 145,545 Other liabilities 99,353 99,934 Accrued expenses and other liabilities, Total $ 5,236,437 $ 4,758,492 |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS | A summary of information related to common stock warrants for the nine months ended September 30, 2024 is as follows: SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS Common Weighted Stock Average Warrants Exercise Price Outstanding - December 31, 2023 23,604 $ 1,270.00 Granted 42,652 146.00 Exercised (20,555 ) 156.50 Forfeited - - Outstanding - September 30, 2024 45,701 $ 580.00 Exercisable at December 31, 2023 23,604 $ 1,270.00 Exercisable at September 30, 2024 45,701 $ 580.00 | SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS Common Weighted Stock Average Warrants Exercise Price Outstanding - December 31, 2022 3,535 $ 10,462.50 Granted 32,825 734.53 Exercised (12,756 ) 705.50 Forfeited - - Outstanding - December 31, 2023 23,604 $ 1,270.20 Exercisable at December 31, 2022 3,426 $ 10,525.00 Exercisable at December 31, 2023 23,604 $ 1,270.00 |
SUMMARY OF INFORMATION RELATED TO STOCK OPTIONS UNDER STOCK PLAN | SUMMARY OF INFORMATION RELATED TO STOCK OPTIONS UNDER STOCK PLAN Weighted Average Options Exercise Price Outstanding - December 31, 2022 31 $ 452,500.00 Granted - - Exercised - - Forfeited - - Outstanding - December 31, 2023 31 $ 452,500.00 Exercisable at December 31, 2022 28 $ 506,250.00 Exercisable at December 31, 2023 30 $ 454,900.00 Weighted average duration (years) to expiration of outstanding options at December 31, 2023 5.47 - |
LEASE OBLIGATIONS (Tables)
LEASE OBLIGATIONS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2024 | Dec. 31, 2023 | |
Lease Obligations | ||
SUMMARY OF OPERATING LEASE ASSETS AND LIABILITIES | The following is a summary of operating lease assets and liabilities: SUMMARY OF OPERATING LEASE ASSETS AND LIABILITIES September 30, December 31, Operating leases 2024 2023 Assets ROU operating lease assets $ 365,246 $ 689,688 Liabilities Current portion of operating lease 899,726 1,210,814 Non Current portion of lease liability 313,723 - Total operating lease liabilities $ 1,213,449 $ 1,210,814 Operating leases September 30, December 31, 2023 Weighted average remaining lease term (years) 0.75 1.00 Weighted average discount rate 10.00 % 10.00 % | SUMMARY OF OPERATING LEASE ASSETS AND LIABILITIES Operating leases 2023 2022 December 31, Operating leases 2023 2022 Assets ROU operating lease assets $ 689,688 $ 102,349 Liabilities Current portion of operating lease 1,210,814 102,349 Total operating lease liabilities $ 1,210,814 $ 102,349 Operating leases 2023 2022 December 31, Operating leases 2023 2022 Weighted average remaining lease term (years) 1.00 1.00 Weighted average discount rate 10.00 % 6.00 % |
SUMMARY OF OPERATING LEASE OBLIGATIONS | SUMMARY OF OPERATING LEASE OBLIGATIONS September 30, Future minimum payments $ 1,282,975 Less imputed interest (69,526 ) Total lease obligations $ 1,213,449 | SUMMARY OF OPERATING LEASE OBLIGATIONS December 31, 2023 Future minimum payments - 2024 $ 1,268,230 Less imputed interest (57,416 ) Total lease obligations $ 1,210,814 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 19,354,491 $ 16,733,582 Deferred tax liabilities: Indefinite lived intangible assets (1,840,170 ) — Valuation allowance (17,882,355 ) (16,733,582 ) Net deferred tax assets (liabilities) $ (368,034 ) $ — |
SCHEDULE OF THE COMPANY'S EFFECTIVE TAX RATE TO THE STATUTORY FEDERAL RATE | SCHEDULE OF THE COMPANY'S EFFECTIVE TAX RATE TO THE STATUTORY FEDERAL RATE 2023 2022 Years Ended December 31, 2023 2022 Statutory federal rate 21.0 % 21.0 % State income taxes net of federal income tax benefit 7.0 7.0 Permanent adjustment (18.0 ) — Change in valuation allowance (14.4 ) (28.0 ) Effective income tax rate (4.4 )% — |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Aug. 21, 2023 | Jun. 21, 2023 | Oct. 21, 2022 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 30, 2022 | Aug. 30, 2021 | May 18, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Reverse stock split | one-for-25 | one-for-100 | ||||||
Issuance of common stock, shares | 1 | 25,543 | ||||||
Harper and Jones Llc Business Acquisition [Member] | HJ Settlement Agreement [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | D Jones Tailored Collection Ltd [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Aggregate cash payment agreed to pay | $ 229,000 | |||||||
Issuance of common stock, shares | 39,052 | |||||||
Percentage of membership interest | 100% | |||||||
D.Jones Tailored Collection Ltd [Member] | Harper and Jones Llc Business Acquisition [Member] | HJ Settlement Agreement [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Aggregate cash payment agreed to pay | $ 229,000 | |||||||
Issuance of common stock pursuant to disposition (in shares) | shares | 39,052 | |||||||
Percentage of membership interest transferred | 100% | |||||||
Harper Jones Llc [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Percentage of equity acquired | 100% | |||||||
Stateside [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Percentage of equity acquired | 100% | |||||||
Sundry [Member] | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Percentage of equity acquired | 100% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Going Concern | ||||
Net loss | $ 7,735,453 | $ 6,528,082 | $ 10,247,133 | $ 38,043,362 |
Working capital deficit | $ 16,044,544 | $ 17,655,720 |
SCHEDULE OF FINANCIAL ASSETS AN
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Platform Operator, Crypto Asset [Line Items] | ||
Fair value of contingent consideration | $ 12,098,475 | |
Fair value of contingent consideration | 12,098,475 | |
Fair Value, Inputs, Level 1 [Member] | ||
Platform Operator, Crypto Asset [Line Items] | ||
Fair value of contingent consideration | ||
Fair value of contingent consideration | ||
Fair Value, Inputs, Level 2 [Member] | ||
Platform Operator, Crypto Asset [Line Items] | ||
Fair value of contingent consideration | ||
Fair value of contingent consideration | ||
Fair Value, Inputs, Level 3 [Member] | ||
Platform Operator, Crypto Asset [Line Items] | ||
Fair value of contingent consideration | 12,098,475 | |
Fair value of contingent consideration | $ 12,098,475 |
SCHEDULE OF CHANGES IN ACQUISIT
SCHEDULE OF CHANGES IN ACQUISITION-RELATED CONTINGENT CONSIDERATION (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Fair value of contingent consideration | $ 12,098,475 |
Fair value of contingent consideration | |
Bailey LLC [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Contingent consideration | (10,698,475) |
Harper and Jones Llc Business Acquisition [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Fair value of contingent consideration | 1,400,000 |
Contingent consideration | (1,400,000) |
Fair value of contingent consideration |
SCHEDULE OF CONTINGENT CONSIDER
SCHEDULE OF CONTINGENT CONSIDERATION (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Restructuring Cost and Reserve [Line Items] | ||
Fair value of contingent consideration | ||
Outstanding as of ending balance | $ 12,098,475 | |
Bailey [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Fair value of contingent consideration | ||
Outstanding as of ending balance | 10,698,475 | |
Harper and Jones Llc Business Acquisition [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Fair value of contingent consideration | ||
Outstanding as of ending balance | $ 1,400,000 |
SCHEDULE OF CHANGES IN DERIVATI
SCHEDULE OF CHANGES IN DERIVATIVE LIABILITY (Details) - Derivative Financial Instruments, Liabilities [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Outstanding as of beginning balance | $ 2,294,720 | |
Initial fair value on issuance of convertible note | 559,957 | |
Change in fair value | (1,500,243) | |
Change in fair value | (1,354,434) | |
Outstanding as of ending balance |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | |||
Raw materials | $ 722,963 | $ 695,580 | $ 1,611,134 |
Work in process | 608,432 | 585,387 | 888,643 |
Finished goods | 3,709,123 | 3,568,633 | 2,622,787 |
Inventory | $ 5,040,518 | $ 4,849,600 | $ 5,122,564 |
SCHEDULE OF FINITE-LIVED INTANG
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED AS PART OF BUSINESS COMBINATION (Details) | Dec. 31, 2023 | Dec. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives | 3 years | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives | 3 years |
SCHEDULE OF GOODWILL AND INTANG
SCHEDULE OF GOODWILL AND INTANGIBLE IMPAIRMENT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Impairment loss of consolidated statements of operations | $ 600,000 | $ 600,000 | ||||
Impairment loss of consolidated statements of operations | $ 3,667,000 | |||||
Impairment of goodwill | 11,872,332 | |||||
Goodwill and Intangible Asset Impairment | 15,539,332 | |||||
Bailey Goodwill [Member] | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Impairment of goodwill | 3,321,095 | |||||
Harper and Jones Goodwill [Member] | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Impairment of goodwill | 8,551,237 | |||||
Trade Names [Member] | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Impairment loss of consolidated statements of operations | 2,182,000 | |||||
Trademarks [Member] | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Impairment loss of consolidated statements of operations | $ 1,485,000 |
SCHEDULE OF POTENTIALLY DILUTIV
SCHEDULE OF POTENTIALLY DILUTIVE ITEMS OUTSTANDING (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 2,986 | 11,756 | 29,518 | 4,411 |
Convertible Notes Payable [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 758 | |||
Series A Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 542 | 542 | 542 | 86 |
Series C Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 1,499 | 6,428 | 5,340 | |
Common Stock Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 914 | 4,755 | 23,604 | 3,535 |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 31 | 31 | ||
Share-Based Payment Arrangement, Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 31 | 31 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Aug. 21, 2023 | Jun. 21, 2023 USD ($) shares | Oct. 21, 2022 | Jun. 30, 2023 shares | Sep. 30, 2024 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2024 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) Integer | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||||||||||
Cash and cash equivalents in bank deposit | $ 250,000 | |||||||||||
Fair value of contingent consideration | $ 12,098,475 | |||||||||||
Gain in the change in fair value of contingent consideration | $ (10,698,475) | (10,698,475) | 564,303 | |||||||||
Aggregate cash payment agreed to pay | $ (229,000) | |||||||||||
Allowance for credit losses | 41,854 | 19,394 | ||||||||||
General and administrative expenses | 50,823 | 75,126 | ||||||||||
Goodwill | 8,973,501 | 8,973,501 | 8,973,501 | 8,973,501 | ||||||||
Impairment loss of consolidated statements of operations | 3,667,000 | |||||||||||
Impairment of goodwill | 11,872,332 | |||||||||||
Total shipping and handling | 128,000 | 72,000 | ||||||||||
Total shipping and handling costs included in distribution costs | 1,016,716 | 525,000 | ||||||||||
Advertising and promotional expense | $ 728,000 | 1,178,000 | ||||||||||
Deferred offering costs | $ 214,647 | |||||||||||
Deferred offering costs | $ 367,696 | |||||||||||
Number of reportable segments | Integer | 1 | |||||||||||
Short term leases | 12 months | |||||||||||
Determined allowance for expected credit loss | $ 48,326 | |||||||||||
Reverse stock split | one-for-25 | one-for-100 | ||||||||||
Cash and cash equivalents in bank deposit | 250,000 | 250,000 | 250,000 | |||||||||
Allowance for credit loss | 51,552 | 51,552 | 41,854 | |||||||||
Impairment to intangible assets | 600,000 | 600,000 | ||||||||||
Trade Names [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Impairment loss of indefinite-lived intangible assets | 0 | |||||||||||
Goodwill | 3,158,123 | |||||||||||
Impairment to intangible assets | $ 2,182,000 | |||||||||||
Software Development [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Lease life or expected life | 3 years | 3 years | ||||||||||
Minimum [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of the derivative liability | 29 days | |||||||||||
Minimum [Member] | Property, Plant and Equipment [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Lease life or expected life | 3 years | |||||||||||
Minimum [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of the derivative liability | 70.9 | |||||||||||
Minimum [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of the derivative liability | 2.71 | |||||||||||
Maximum [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of the derivative liability | 7 months 13 days | |||||||||||
Maximum [Member] | Property, Plant and Equipment [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Lease life or expected life | 10 years | |||||||||||
Maximum [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of the derivative liability | 96.7 | |||||||||||
Maximum [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of the derivative liability | 3.74 | |||||||||||
Bailey [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of contingent consideration | $ 10,698,475 | |||||||||||
Goodwill | $ 3,158,123 | $ 3,158,123 | $ 3,158,123 | $ 3,158,123 | ||||||||
Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP [Member] | Bailey [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Fair value of contingent consideration | 0 | |||||||||||
Gain in the change in fair value of contingent consideration | $ 10,698,475 | |||||||||||
Percentage of membership interest transferred | 100% | |||||||||||
D.Jones Tailored Collection Ltd [Member] | HJ Settlement Agreement [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Gain in the change in fair value of contingent consideration | $ 1,400,000 | |||||||||||
Aggregate cash payment agreed to pay | $ 229,000 | |||||||||||
Issuance of common stock pursuant to disposition | shares | 39,052 | 39,052 |
SCHEDULE OF COMPONENTS OF PURCH
SCHEDULE OF COMPONENTS OF PURCHASE PRICE CONSIDERATION (Details) - Acquisitions 2022 [Member] | Dec. 30, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 7,500,000 |
Promissory notes payable | 5,500,000 |
Common stock | 1,000,000 |
Purchase price consideration | $ 14,000,000 |
SCHEDULE OF ASSETS AND LIABILIT
SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATION (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 30, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 8,973,501 | $ 8,973,501 | $ 8,973,501 | |
Acquisitions 2022 [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 252,697 | |||
Accounts receivable, net | 63,956 | |||
Due from factor, net | 387,884 | |||
Inventory | 2,941,755 | |||
Prepaid expenses and other current assets | 32,629 | |||
Property, equipment and software, net | 48,985 | |||
Goodwill | 3,711,322 | |||
Intangible assets | 7,403,800 | |||
Accounts payable | (615,706) | |||
Accrued expenses and other liabilities | (227,321) | |||
Purchase price consideration | $ 14,000,000 |
SCHEDULE OF BUSINESS ACQUISITIO
SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Net revenues | $ 28,519,261 |
Net loss | $ (42,001,415) |
Net loss per common share | $ / shares | $ (2,722.78) |
SCHEDULE OF FAIR VALUE OF PURCH
SCHEDULE OF FAIR VALUE OF PURCHASE PRICE CONSIDERATION (Details) - Stateside [Member] | Aug. 30, 2021 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 5,000,000 |
Common stock | 3,403,196 |
Purchase price consideration | $ 8,403,196 |
SCHEDULE OF ALLOCATION OF PURCH
SCHEDULE OF ALLOCATION OF PURCHASE PRICE IN REGARD TO ACQUISITION (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 30, 2021 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 8,973,501 | $ 8,973,501 | $ 8,973,501 | |
Stateside [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 32,700 | |||
Accounts receivable, net | 154,678 | |||
Due from factor, net | 371,247 | |||
Inventory | 603,625 | |||
Prepaid expenses and other current assets | 7,970 | |||
Deposits | 9,595 | |||
Property, equipment and software, net | ||||
Goodwill | $ 2,104,056 | $ 2,104,056 | $ 2,104,056 | 2,104,056 |
Intangible assets | 5,939,140 | |||
Accounts payable | (374,443) | |||
Accrued expenses and other liabilities | (445,372) | |||
Purchase price consideration | $ 8,403,196 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Narrative) - USD ($) | Dec. 30, 2022 | Aug. 30, 2021 | Feb. 12, 2020 | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||||||
Estimated useful lives | 3 years | |||||
Contingent consideration liability | $ 12,098,475 | |||||
Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful lives | 3 years | |||||
Bailey [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate principal amount | $ 3,500,000 | $ 3,500,000 | ||||
Bailey [Member] | Promissory Note Payable [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate principal amount | 3,500,000 | 3,500,000 | ||||
Acquisitions 2022 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 7,500,000 | |||||
Consideration in promissory notes | 5,500,000 | |||||
Common stock | $ 1,000,000 | |||||
Percentage of equity acquired | 8% | |||||
Number of shares of common stock issued | 1,818 | |||||
Business acquisition, equity interest fair value | $ 1,000,000 | |||||
Previous Acquisitions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition interest acquired | 100% | |||||
Sale parent stock gross proceeds does not exceed | $ 11,000,000 | |||||
Previous Acquisitions [Member] | Bailey [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Price of acquisition | 15,500,000 | |||||
Contingent consideration liability | $ 0 | $ 10,698,475 | ||||
Previous Acquisitions [Member] | Bailey [Member] | Promissory Note Payable [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate principal amount | $ 4,500,000 | |||||
Previous Acquisitions [Member] | Series B Preferred Stock [Member] | Preferred Stock [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Conversion of preferred shares into common stock | 20,754,717 | |||||
Stateside [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 5,000,000 | |||||
Common stock | $ 3,403,196 | |||||
Percentage of equity acquired | 100% | |||||
Number of shares of common stock issued | 22,031 | |||||
Cash held in escrow | $ 375,000 | |||||
Value of shares held in escrow | $ 375,000 | |||||
Value of shares held in escrow | 1,652 | |||||
Stateside [Member] | Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful lives | 3 years |
SCHEDULE OF COMPONENTS OF DISPO
SCHEDULE OF COMPONENTS OF DISPOSITION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 21, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Aggregate cash payment agreed to pay | $ (229,000) | ||||||||
Common shares issued to H&J Seller | (1,357,043) | [1] | $ 1,357,043 | $ 1,357,043 | |||||
Common shares issued to H&J Seller | (1,586,043) | ||||||||
Cash and cash equivalents | 18,192 | ||||||||
Accounts receivable, net | 55,782 | ||||||||
Prepaid expenses and other current assets | 25,115 | ||||||||
Goodwill | 1,130,311 | ||||||||
Intangible assets, net | 1,246,915 | ||||||||
Deposits | 4,416 | ||||||||
Accounts payable | (40,028) | ||||||||
Accrued expenses and other liabilities | (734,068) | ||||||||
Deferred revenue | (18,347) | ||||||||
Due to related parties | (1,008) | ||||||||
Contingent consideration | (1,400,000) | ||||||||
Loan payable | (219,894) | ||||||||
Note payable - related party | (129,489) | ||||||||
Total carrying amount of assets and liabilities | (62,103) | ||||||||
Loss on disposition of business | $ (1,523,940) | $ (1,523,940) | (1,523,940) | ||||||
Net revenues | $ 2,440,801 | $ 3,257,332 | 9,413,457 | 12,127,135 | 14,916,422 | 10,333,558 | |||
Cost of net revenues | 1,319,214 | 1,554,044 | 5,012,457 | 6,094,532 | 8,372,642 | 6,789,314 | |||
Gross profit | 1,121,587 | 1,703,288 | 4,401,000 | 6,032,603 | 6,543,780 | 3,544,244 | |||
General and administrative | 2,429,040 | 3,735,527 | 6,347,460 | 12,115,590 | 14,299,389 | 14,067,681 | |||
Sales and marketing | 655,833 | 1,151,377 | 1,979,173 | 3,188,054 | 4,035,835 | 4,018,985 | |||
Total operating expenses | 3,865,752 | 5,125,450 | 9,672,045 | 5,356,114 | 8,639,092 | 24,765,633 | |||
Loss from operations | (2,744,165) | (3,422,162) | (5,271,045) | 676,489 | (2,095,312) | (21,221,389) | |||
Total other income (expense), net | (54,515) | (57,752) | 22,765 | (734,501) | (704,166) | 3,068,080 | |||
Income tax benefit (provision) | 368,034 | ||||||||
Net loss from discontinued operations | $ (1,562,503) | $ (1,562,503) | $ (10,928,643) | ||||||
Weighted average common shares outstanding - basic | 43,436 | 7,470 | 41,225 | 5,674 | 8,488 | 617 | |||
Weighted average common shares outstanding - diluted | 43,436 | 7,470 | 41,225 | 5,674 | 8,488 | 617 | |||
Net income (loss) from discontinued operations per common share - basic | $ (81.53) | $ (727.71) | $ (187.64) | $ (875.21) | |||||
Net income (loss) from discontinued operations per common share - diluted | $ (81.53) | $ (727.71) | $ (187.64) | $ (875.21) | |||||
Harper and Jones Llc Business Acquisition [Member] | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Net revenues | $ 1,405,482 | $ 3,637,620 | |||||||
Cost of net revenues | 565,621 | 1,241,594 | |||||||
Gross profit | 839,861 | 2,396,026 | |||||||
General and administrative | 520,582 | 1,731,299 | |||||||
Sales and marketing | 346,167 | 931,650 | |||||||
Total operating expenses | 866,749 | 2,662,949 | |||||||
Loss from operations | (26,889) | (266,922) | |||||||
Interest expense | (11,675) | (52,927) | |||||||
Loss on disposition of business | (1,523,940) | ||||||||
Total other income (expense), net | (1,535,615) | (52,927) | |||||||
Income tax benefit (provision) | |||||||||
Net loss from discontinued operations | $ (1,562,503) | $ (319,849) | |||||||
Weighted average common shares outstanding - basic | 8,488 | 617 | |||||||
Weighted average common shares outstanding - diluted | 8,488 | 617 | |||||||
Net income (loss) from discontinued operations per common share - basic | $ (184.08) | $ (518.36) | |||||||
Net income (loss) from discontinued operations per common share - diluted | $ (184.08) | $ (518.36) | |||||||
[1]Represents the fair value of 39,052 |
SCHEDULE OF COMPONENTS OF DIS_2
SCHEDULE OF COMPONENTS OF DISPOSITION (Details) (Parenthetical) | Jun. 21, 2023 shares |
D Jones Tailored Collection Ltd [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Harper and Jones Llc Business Acquisition [Member] | HJ Settlement Agreement [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Issuance of common stock pursuant to disposition | 39,052 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Jun. 21, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Accrued expenses and other liabilities | $ 29,000 | ||||
Loss on disposition of business | $ (1,523,940) | $ (1,523,940) | (1,523,940) | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on disposition of business | 1,523,940 | ||||
D.Jones Tailored Collection Ltd [Member] | Harper and Jones Llc Business Acquisition [Member] | HJ Settlement Agreement [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Aggregate cash payment agreed to pay | $ 229,000 | ||||
Issuance of common stock pursuant to disposition (in shares) | shares | 39,052 | ||||
Percentage of membership interest transferred | 100% | ||||
D Jones Tailored Collection Ltd [Member] | Harper and Jones Llc Business Acquisition [Member] | HJ Settlement Agreement [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Payments for disposition of business | $ 200,000 |
SCHEDULE OF DUE TO_ FROM FACTOR
SCHEDULE OF DUE TO/ FROM FACTOR (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Outstanding receivables: | |||
Without recourse | $ 916,045 | $ 808,233 | $ 1,680,042 |
With recourse | 18,994 | 99,055 | 65,411 |
Matured funds and deposits | 55,043 | 65,321 | 81,055 |
Advances | (551,813) | (483,187) | (632,826) |
Credits due customers | (151,611) | (354,282) | |
Due from factor, net | $ 438,269 | $ 337,811 | $ 839,400 |
DUE FROM FACTOR (Details Narrat
DUE FROM FACTOR (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Stateside [Member] | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 4% |
Maximum commission and fees payable | $ 30,000 |
London Interbank Offered Rate Libor 2 [Member] | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 2.50% |
Prime Rate [Member] | Stateside [Member] | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 2% |
Maximum commission and fees payable | $ 30,000 |
Prime Rate [Member] | Bailey 44 LLc [Member] | |
Debt Instrument [Line Items] | |
Debt instrument variable rate | 4.25% |
SCHEDULE OF GOODWILL ATTRIBUTAB
SCHEDULE OF GOODWILL ATTRIBUTABLE TO EACH BUSINESS COMBINATION (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 30, 2021 |
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | $ 8,973,501 | $ 8,973,501 | $ 8,973,501 | |
Bailey [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | 3,158,123 | 3,158,123 | 3,158,123 | |
Stateside [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | 2,104,056 | 2,104,056 | 2,104,056 | $ 2,104,056 |
Sundry [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | $ 3,711,322 | $ 3,711,322 | $ 3,711,322 |
SCHEDULE OF INFORMATION RELATIN
SCHEDULE OF INFORMATION RELATING TO THE COMPANY’S IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 8,634,560 | $ 8,634,560 | $ 9,734,560 |
Accumulated Amortization | (6,551,861) | (4,494,223) | (2,670,202) |
Carrying Value | 2,082,699 | 4,140,337 | 7,064,358 |
Indefinite-lived | 13,876,440 | 14,476,440 | 15,576,440 |
Accumulated Amortization | (6,551,861) | (4,494,223) | (2,670,202) |
Indefinite-lived | 7,324,579 | 9,982,217 | 12,906,238 |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived | 5,241,880 | 5,841,880 | 5,841,880 |
Accumulated Amortization | |||
Indefinite-lived | 5,241,880 | 5,841,880 | 5,841,880 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 8,634,560 | 8,634,560 | 9,734,560 |
Accumulated Amortization | (6,551,861) | (4,494,223) | (2,670,202) |
Carrying Value | $ 2,082,699 | $ 4,140,337 | $ 7,064,358 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2024 | $ 2,474,177 | ||
2025 | 1,666,160 | ||
Carrying value | $ 2,082,699 | $ 4,140,337 | $ 7,064,358 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 21, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Goodwill | $ 1,130,311 | ||||||
Amortization expense | $ 618,543 | $ 719,547 | $ 2,057,637 | $ 2,478,824 | $ 1,993,616 | $ 2,151,250 | |
Impairment of intangible assets | $ 600,000 | $ 600,000 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Harper and Jones Llc Business Acquisition [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Goodwill | $ 1,130,311 |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Liabilities And Debt | |||
Accrued expenses | $ 733,865 | $ 617,374 | $ 668,714 |
Reserve for returns | 307,725 | ||
Payroll related liabilities | 4,224,259 | 3,895,640 | 2,618,870 |
Sales tax liability | 178,960 | 145,545 | 262,765 |
Other liabilities | 99,353 | 99,934 | 78,845 |
Accrued expenses and other liabilities, Total | $ 5,236,437 | $ 4,758,492 | $ 3,936,920 |
SCHEDULE OF CONVERTIBLE NOTES (
SCHEDULE OF CONVERTIBLE NOTES (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2024 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Repayments of notes | $ (500,000) | ||||
Loss on extinguishment of debt | $ (689,100) | $ (716,517) | |||
Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Balance | 100,000 | 4,100,000 | 4,100,000 | ||
Unamortized discount balance | (1,378,200) | (1,378,200) | |||
Convertible Note Payable, Net Balance | $ 100,000 | $ 2,721,800 | 2,721,800 | ||
Amortization of debt discount | 1,220,830 | 6,506,384 | |||
Loss on extinguishment of debt | 157,370 | ||||
Balance | 100,000 | 4,100,000 | |||
Unamortized discount balance | 1,378,200 | ||||
Convertible Note Payable, Net Balance | 100,000 | $ 2,721,800 | |||
Convertible Debt [Member] | Repayments Of Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayments of notes | (4,000,000) | ||||
Convertible Debt [Member] | Derivative [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization of debt discount | $ 1,220,830 |
SCHEDULE OF MERCHANT ADVANCES (
SCHEDULE OF MERCHANT ADVANCES (Details) - Merchant Advances [Member] - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Short-Term Debt [Line Items] | |||
Principal | $ 2,347,564 | $ 2,960,946 | $ 896,334 |
Less: unamortized debt discount | (550,183) | (1,966,881) | |
Merchant cash advances, net | 1,797,381 | 994,065 | 896,334 |
Merchant cash advances, net | $ 1,797,381 | $ 994,065 | $ 896,334 |
SCHEDULE OF PROMISSORY NOTES PA
SCHEDULE OF PROMISSORY NOTES PAYABLE, NET (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Promissory note payable, net | $ 4,730,740 | $ 4,884,592 | $ 9,000,000 | |
Sundry Note [Member] | ||||
Promissory note payable, net | 5,500,000 | |||
March 2023 Notes [Member] | ||||
Promissory note payable, net | 1,730,740 | $ 2,458,750 | ||
March 2023 Notes - unamortized debt discount | (346,148) | |||
Notes – principal | 1,230,740 | 1,730,740 | $ 7,500,000 | |
Bailey [Member] | ||||
Promissory note payable, net | 3,500,000 | $ 3,500,000 | ||
Notes – principal | $ 3,500,000 | $ 3,500,000 |
LIABILITIES AND DEBT (Details N
LIABILITIES AND DEBT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Apr. 30, 2024 | Jun. 21, 2023 | Dec. 29, 2022 | Sep. 29, 2022 | Apr. 08, 2022 | May 31, 2024 | Sep. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | May 31, 2022 | Apr. 30, 2022 | Feb. 28, 2022 | Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2024 | Aug. 31, 2023 | Feb. 15, 2023 | Dec. 31, 2021 | |
Estimated penalties associated with accrued payroll taxes | $ 535,000 | ||||||||||||||||||||||||
Shares of common stock owned per agreement | 4 | ||||||||||||||||||||||||
Interest expense | $ 0 | $ 573,455 | |||||||||||||||||||||||
Repayment of debt | $ 2,484,248 | $ 8,840,092 | $ 10,129,811 | 7,350,276 | |||||||||||||||||||||
Exercise price per share | $ 471.50 | $ 6,562.50 | |||||||||||||||||||||||
Number of share of common stock | 1 | 25,543 | |||||||||||||||||||||||
Loss on extinguishment of debt | (689,100) | $ (716,517) | |||||||||||||||||||||||
Derivative liability | $ 0 | 0 | |||||||||||||||||||||||
Promissory note payable, net | 9,000,000 | $ 4,730,740 | 4,730,740 | 4,884,592 | 9,000,000 | ||||||||||||||||||||
Fair value per share | $ 210 | ||||||||||||||||||||||||
Convertible debt | 100,000 | 100,000 | 100,000 | ||||||||||||||||||||||
Accrued liabilities | 668,714 | 733,865 | 733,865 | 617,374 | 668,714 | ||||||||||||||||||||
Payment for promissory note payable | $ 500,000 | ||||||||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||||||||
Number of share of common stock | 2,200 | ||||||||||||||||||||||||
Bailey [Member] | |||||||||||||||||||||||||
Principal amount | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||||||||||||||
Promissory note payable, net | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||||||||||||||
Target Capital 1 L L C [Member] | Convertible Debt [Member] | |||||||||||||||||||||||||
Principal amount | $ 250,000 | ||||||||||||||||||||||||
Repayment of debt | $ 300,000 | ||||||||||||||||||||||||
Number of share of common stock | 1,000 | ||||||||||||||||||||||||
Maturity date | Apr. 30, 2025 | ||||||||||||||||||||||||
Principal and interest payment | $ 50,000 | ||||||||||||||||||||||||
Accrued liabilities | 141,000 | 141,000 | |||||||||||||||||||||||
Gynger Inc [Member] | |||||||||||||||||||||||||
Debt conversion shares issued | 2,120 | ||||||||||||||||||||||||
Debt conversion amount | $ 313,816 | ||||||||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||||||||
Unamortized debt discount | 1,378,200 | 1,378,200 | |||||||||||||||||||||||
Amortization of debt discount | 1,220,830 | 6,506,384 | |||||||||||||||||||||||
Loss on extinguishment of debt | 157,370 | ||||||||||||||||||||||||
Long term debt, gross | 4,100,000 | 100,000 | 4,100,000 | ||||||||||||||||||||||
Merchant cash advances, net | 2,721,800 | 100,000 | 2,721,800 | ||||||||||||||||||||||
Note Warrant [Member] | |||||||||||||||||||||||||
Loan fees and discounts from warrants were amortized to interest expense | 12,500 | ||||||||||||||||||||||||
Loan fees and discounts from warrants unamortized balance | 0 | 0 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Series C Convertible Preferred Stock [Member] | |||||||||||||||||||||||||
Debt conversion shares issued | 5,761 | ||||||||||||||||||||||||
Fair value per share | $ 1,000 | ||||||||||||||||||||||||
Venture Debt [Member] | Securities Purchase Agreement With Black Oak Capital [Member] | Series Convertible Preferred Stock [Member] | |||||||||||||||||||||||||
Debt conversion shares issued | 6,300 | ||||||||||||||||||||||||
Convertible Debt 2020 Regulation Cf Offering [Member] | |||||||||||||||||||||||||
Outstanding principal and accrued interest upon closing of IPO | 100,000 | 100,000 | 100,000 | ||||||||||||||||||||||
Convertible Promissory Notes April 2022 [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Principal amount | $ 3,068,750 | ||||||||||||||||||||||||
Original issue discount | 613,750 | ||||||||||||||||||||||||
Net proceeds | 2,313,750 | ||||||||||||||||||||||||
Unamortized debt discount | $ 755,000 | ||||||||||||||||||||||||
Repayment of debt | $ 3,068,750 | ||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 252 | ||||||||||||||||||||||||
Exercise price per share | $ 6,100 | ||||||||||||||||||||||||
Debt discount for the fair value of the warrants | $ 98,241 | ||||||||||||||||||||||||
Convertible Promissory Notes July 2022 [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Principal amount | 1,875,000 | ||||||||||||||||||||||||
Original issue discount | 375,000 | ||||||||||||||||||||||||
Net proceeds | $ 1,450,000 | ||||||||||||||||||||||||
Repayment of debt | 1,875,000 | ||||||||||||||||||||||||
Percentage of annual interest rate for notes, if notes are not repaid in full by the maturity date or if any other event of default occurs | 20% | ||||||||||||||||||||||||
Derivative liability | $ 559,957 | ||||||||||||||||||||||||
Repayments of additional amount of debt | 416,923 | ||||||||||||||||||||||||
Convertible Promissory Notes July 20, 2022 [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 822 | ||||||||||||||||||||||||
Exercise price per share | $ 760 | ||||||||||||||||||||||||
Convertible Promissory Notes July 28, 2022 [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 553 | ||||||||||||||||||||||||
Exercise price per share | $ 565 | ||||||||||||||||||||||||
July 2022 Year [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Debt discount for the fair value of the warrants | $ 692,299 | ||||||||||||||||||||||||
Convertible Promissory Notes December 2022 [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Principal amount | $ 4,000,000 | ||||||||||||||||||||||||
Original issue discount | 800,000 | ||||||||||||||||||||||||
Net proceeds | $ 3,000,000 | ||||||||||||||||||||||||
Unamortized debt discount | $ 1,378,200 | ||||||||||||||||||||||||
Repayment of debt | $ 4,000,000 | ||||||||||||||||||||||||
Number of warrants issued to purchase common stock | 9,390 | ||||||||||||||||||||||||
Exercise price per share | $ 213 | ||||||||||||||||||||||||
Debt discount for the fair value of the warrants | $ 428,200 | ||||||||||||||||||||||||
Increased percentage of face value of the notes, if notes are not repaid in full by the maturity date or if any other event of default occurs | 120% | 120% | |||||||||||||||||||||||
Percentage of annual interest rate for notes, if notes are not repaid in full by the maturity date or if any other event of default occurs | 20% | ||||||||||||||||||||||||
Number of share of common stock | 1,200 | ||||||||||||||||||||||||
Amortization of debt discount | 1,220,830 | ||||||||||||||||||||||||
Loss on extinguishment of debt | $ 157,370 | ||||||||||||||||||||||||
Second Paycheck Protection Program [Member] | Bailey [Member] | |||||||||||||||||||||||||
Debt instrument, forgiveness | $ 1,347,050 | ||||||||||||||||||||||||
First Paycheck Protection Program [Member] | Bailey [Member] | |||||||||||||||||||||||||
Debt instrument, forgiveness | $ 413,705 | ||||||||||||||||||||||||
Paycheck Protection Program Cares Act [Member] | Bailey [Member] | |||||||||||||||||||||||||
Long term debt, gross | 933,295 | 933,295 | 933,295 | $ 933,295 | 933,295 | ||||||||||||||||||||
Merchant Advances [Member] | |||||||||||||||||||||||||
Unamortized debt discount | 550,183 | 550,183 | $ 1,966,881 | ||||||||||||||||||||||
Exercise price per share | $ 6,562.50 | ||||||||||||||||||||||||
Loss on extinguishment of debt | $ 559,147 | ||||||||||||||||||||||||
Long term debt, gross | 896,334 | 2,347,564 | 2,347,564 | 2,960,946 | 896,334 | ||||||||||||||||||||
Merchant cash advances, net | 896,334 | 1,797,381 | 1,797,381 | 994,065 | 896,334 | ||||||||||||||||||||
Net proceeds | 2,452,923 | ||||||||||||||||||||||||
Repayments of debt | 1,547,182 | 4,518,512 | |||||||||||||||||||||||
Interest expense | 1,781,972 | $ 1,247,403 | |||||||||||||||||||||||
Warrants issued | 122 | ||||||||||||||||||||||||
Merchant Advances [Member] | Forecast [Member] | |||||||||||||||||||||||||
Unamortized debt discount | $ 1,966,881 | ||||||||||||||||||||||||
Merchant Advance From Shopify Capital [Member] | |||||||||||||||||||||||||
Proceeds from debt | $ 690,000 | ||||||||||||||||||||||||
Repayments | 3,850 | 658,718 | |||||||||||||||||||||||
Secured debt | 12,832 | 12,832 | 149,898 | ||||||||||||||||||||||
Merchant Advances From Gynger Inc [Member] | |||||||||||||||||||||||||
Proceeds from debt | 312,938 | ||||||||||||||||||||||||
Secured debt | 273,188 | ||||||||||||||||||||||||
Promissory Note Payable [Member] | |||||||||||||||||||||||||
Promissory note payable, net | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||||||||||||||
Promissory Note Payable [Member] | Bailey [Member] | |||||||||||||||||||||||||
Principal amount | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||||||||||||||
Promissory Note Payable [Member] | Notes Payable to Banks [Member] | |||||||||||||||||||||||||
Interest expense | 105,000 | $ 105,000 | 315,000 | $ 315,000 | $ 420,000 | 420,000 | |||||||||||||||||||
Promissory note, annual interest rate | 12% | ||||||||||||||||||||||||
Sundry Note [Member] | |||||||||||||||||||||||||
Interest expense | $ 259,177 | ||||||||||||||||||||||||
Promissory note, annual interest rate | 8% | ||||||||||||||||||||||||
Promissory note payable, net | 5,500,000 | 5,500,000 | |||||||||||||||||||||||
Sundry Note [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||
Cancellation of principal amount | 5,500,000 | ||||||||||||||||||||||||
Accrued interest converted | 259,177 | ||||||||||||||||||||||||
Sundry Note [Member] | Securities Purchase Agreement [Member] | Series C Convertible Preferred Stock [Member] | |||||||||||||||||||||||||
Debt conversion shares issued | 5,761 | ||||||||||||||||||||||||
Fair value per share | $ 1,000 | ||||||||||||||||||||||||
March 2023 Notes [Member] | |||||||||||||||||||||||||
Principal amount | $ 7,500,000 | 1,230,740 | 1,230,740 | 1,730,740 | |||||||||||||||||||||
Original issue discount | 608,750 | ||||||||||||||||||||||||
Unamortized debt discount | 346,148 | ||||||||||||||||||||||||
Amortization of debt discount | 608,750 | ||||||||||||||||||||||||
Promissory note payable, net | 2,458,750 | 1,730,740 | |||||||||||||||||||||||
Net proceeds | $ 1,850,000 | ||||||||||||||||||||||||
Percentage of notes to be repaid, if the Company completes a debt or equity financing of less than the threshold amount | 50% | ||||||||||||||||||||||||
Percentage of notes to be repaid, if the Company completes a debt or equity financing of greater than the threshold amount | 100% | ||||||||||||||||||||||||
Percentage of notes to be repaid, if the Company completes a debt or equity financing of less than the threshold amount | 20% | ||||||||||||||||||||||||
Repayments of principal | $ 1,247,232 | ||||||||||||||||||||||||
Original issue discount | $ 608,750 | ||||||||||||||||||||||||
Maturity date | September 30, 2023 | ||||||||||||||||||||||||
March 2023 Notes [Member] | Maximum [Member] | |||||||||||||||||||||||||
Principal amount | $ 7,500,000 | ||||||||||||||||||||||||
March 2023 Notes [Member] | |||||||||||||||||||||||||
Amortization of debt discount | 608,750 | ||||||||||||||||||||||||
Promissory note payable, net | 519,222 | ||||||||||||||||||||||||
Net proceeds | 1,850,000 | ||||||||||||||||||||||||
Debt instrument, threshold amount of debt | $ 7,500,000 | $ 7,500,000 | |||||||||||||||||||||||
Percentage of notes to be repaid, if the Company completes a debt or equity financing of less than the threshold amount | 50% | ||||||||||||||||||||||||
Percentage of notes to be repaid, if the Company completes a debt or equity financing of greater than the threshold amount | 100% | ||||||||||||||||||||||||
Percentage of notes to be repaid, if the Company completes a debt or equity financing of less than the threshold amount | 20% | ||||||||||||||||||||||||
Repayments of principal | $ 1,247,232 | ||||||||||||||||||||||||
Secured Debt [Member] | Venture Debt [Member] | |||||||||||||||||||||||||
Maximum borrowing capacity | $ 237,500 | $ 6,001,755 | |||||||||||||||||||||||
Loan fees | $ 12,500 | ||||||||||||||||||||||||
Secured Debt [Member] | Venture Debt [Member] | Series Convertible Preferred Stock [Member] | Follow On Public Offering [Member] | |||||||||||||||||||||||||
Debt conversion price | $ 1,000 | ||||||||||||||||||||||||
Secured Debt [Member] | Amended Venture Debt [Member] | Secondary Follow On Public Offering Prior To September 302021 [Member] | |||||||||||||||||||||||||
Loan payment | $ 6,251,755 | ||||||||||||||||||||||||
Accrued interest | $ 48,245 | ||||||||||||||||||||||||
Secured Debt [Member] | Amended Venture Debt [Member] | Secondary Follow On Public Offering After September 302021 [Member] | |||||||||||||||||||||||||
Loan payment | $ 269,870 | $ 269,870 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
Sep. 10, 2023 USD ($) $ / shares shares | Aug. 31, 2023 USD ($) $ / shares shares | Aug. 21, 2023 | Jun. 21, 2023 USD ($) Integer $ / shares shares | May 30, 2023 USD ($) $ / shares shares | Jan. 11, 2023 USD ($) shares | Nov. 29, 2022 USD ($) $ / shares shares | Oct. 21, 2022 | Oct. 13, 2022 USD ($) shares | May 10, 2022 USD ($) shares | May 05, 2022 $ / shares shares | Oct. 31, 2023 shares | Sep. 30, 2023 USD ($) shares | Aug. 31, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) shares | Mar. 31, 2023 USD ($) $ / shares shares | Jan. 31, 2023 USD ($) shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2024 USD ($) shares | Mar. 31, 2024 USD ($) shares | Sep. 30, 2023 USD ($) shares | Jun. 30, 2023 USD ($) shares | Mar. 31, 2023 USD ($) $ / shares shares | Sep. 30, 2024 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Oct. 12, 2022 shares | Sep. 29, 2022 USD ($) $ / shares shares | Aug. 31, 2022 USD ($) shares | ||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common stock, share authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 200,000,000 | ||||||||||||||||||||||||||
Aggregate shares authorized | 1,010,000,000 | |||||||||||||||||||||||||||||||
Reverse stock split | one-for-25 | one-for-100 | ||||||||||||||||||||||||||||||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||||||||||
Voting rights | one | one vote per share | ||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 1 | 25,543 | ||||||||||||||||||||||||||||||
Issuance of Series A preferred stock | $ | $ 25,000 | $ 742,513 | $ 2,877,475 | $ 1,736,206 | $ 4,463,076 | |||||||||||||||||||||||||||
Common stock issued for services (in shares) | 2,378 | |||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 499,338 | $ 88,369 | $ 224,265 | $ 1,157,090 | $ 499,338 | 499,338 | ||||||||||||||||||||||||||
Fair value per share | $ / shares | $ 210 | $ 210 | ||||||||||||||||||||||||||||||
Issuance of common stock pursuant to disposition | $ | $ (1,357,043) | [1] | $ 1,357,043 | $ 1,357,043 | ||||||||||||||||||||||||||||
Combined purchase price | $ / shares | $ 486.50 | $ 486.50 | ||||||||||||||||||||||||||||||
Number of warrants exercised | 2,476 | |||||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 6,562.50 | $ 6,562.50 | $ 471.50 | |||||||||||||||||||||||||||||
Proceeds from exercise of warrants | $ | $ 1,167,566 | |||||||||||||||||||||||||||||||
Shares issued in accrued amounts owed to Sundry executives based on their employment agreements | 856 | |||||||||||||||||||||||||||||||
Proceeds from exercise of warrants | $ | $ 500,000 | |||||||||||||||||||||||||||||||
Common stock issued pursuant to consulting agreement | $ | $ 123,000 | $ 123,000 | ||||||||||||||||||||||||||||||
Preferred stock | $ | $ 25,000 | $ 25,000 | ||||||||||||||||||||||||||||||
Consideration upon redemption | $ | $ 25,000 | |||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 8,100,000 | $ 5,356,194 | 8,145,381 | |||||||||||||||||||||||||||||
Net proceeds of after deducting underwriting discounts and commissions | $ | 700,000 | |||||||||||||||||||||||||||||||
Direct offering expenses | $ | 500,000 | |||||||||||||||||||||||||||||||
Aggregate gross proceeds from Offering | $ | $ 1,167,566 | |||||||||||||||||||||||||||||||
Sunnyside LLC [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Number of shares of common stock issued | 73 | |||||||||||||||||||||||||||||||
Fair value of shares issued | $ | $ 1,000,000 | |||||||||||||||||||||||||||||||
Convertible Promissory Notes December 2022 [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 48 | |||||||||||||||||||||||||||||||
Fair value of shares issued | $ | $ 264,000 | |||||||||||||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Conversion of stock, shares converted | 975 | 3,442 | ||||||||||||||||||||||||||||||
Convertible preferred stock | 3,841 | 3,841 | ||||||||||||||||||||||||||||||
Preferred stock | $ | $ 1 | $ 1 | $ 1 | |||||||||||||||||||||||||||||
Preferred stock, shares outstanding (in shares) | 1,643 | 1,643 | 4,786 | 0 | ||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||||||||||
Redemption percentage | 112% | |||||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Convertible preferred stock | 1,088 | |||||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Preferred stock | $ | $ 25,000 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Chief Executive Officer [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Preferred stock | $ | $ 25,000 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding (in shares) | 250,000,000 | |||||||||||||||||||||||||||||||
Series Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Preferred stock | $ | $ 1 | $ 1 | $ 1,000 | |||||||||||||||||||||||||||||
Preferred stock, shares authorized (in shares) | 6,300 | 6,300 | 6,800 | |||||||||||||||||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 9.30 | |||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||||||||||||||||||||
Number of votes per share | 250,000,000 | |||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | Chief Executive Officer [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||||||||||||||||||||
2023 Plan [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common stock issued for services (in shares) | 1,260 | |||||||||||||||||||||||||||||||
Common stock issued for services | $ | $ 657,090 | |||||||||||||||||||||||||||||||
Fair value per share | $ / shares | $ 521.50 | |||||||||||||||||||||||||||||||
Aggregate number of common stock issuable | 1,300 | |||||||||||||||||||||||||||||||
Term for non-recourse promissory notes | 5 years | |||||||||||||||||||||||||||||||
Equity Purchase Agreement [Member] | Oasis and First Fire Notes [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Number of shares resulting from conversion | 1,596 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Gross proceeds | $ | $ 10,000,000 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Statement Scenario One [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Combined purchase price | $ / shares | $ 275 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Statement Scenario Two [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 36,364 | |||||||||||||||||||||||||||||||
Combined purchase price | $ / shares | $ 275 | |||||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | 0.0001 | |||||||||||||||||||||||||||||||
Warrants exercisable | $ / shares | $ 33,004 | |||||||||||||||||||||||||||||||
Aggregate gross proceeds from Offering | $ | $ 10,000,000 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Series C Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Number of shares resulting from conversion | 5,761 | |||||||||||||||||||||||||||||||
Fair value per share | $ / shares | $ 1,000 | |||||||||||||||||||||||||||||||
Conversion price (in dollars per share) | $ / shares | 0.717 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||||||||||||||||||||||||
Convertible preferred stock value | $ / shares | $ 1,000 | |||||||||||||||||||||||||||||||
Number of trading days | Integer | 5 | |||||||||||||||||||||||||||||||
Convertible preferred stock value | $ | $ 1,000 | |||||||||||||||||||||||||||||||
D.Jones Tailored Collection Ltd [Member] | HJ Settlement Agreement [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to disposition (in shares) | 39,052 | 39,052 | ||||||||||||||||||||||||||||||
Issuance of common stock pursuant to disposition | $ | $ 1,357,043 | |||||||||||||||||||||||||||||||
Convertible Debt [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 2,200 | |||||||||||||||||||||||||||||||
Issuance of Series A preferred stock | $ | $ 322,300 | |||||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 28,094 | 7,575 | 8,898 | |||||||||||||||||||||||||||||
Number of shares resulting from conversion | 640 | |||||||||||||||||||||||||||||||
Warrants issued | 9,638 | 9,638 | ||||||||||||||||||||||||||||||
Gross proceeds | $ | $ 5,000,000 | |||||||||||||||||||||||||||||||
Net proceeds | $ | $ 4,300,000 | |||||||||||||||||||||||||||||||
Issuance of Series A preferred stock | $ | $ 3 | $ 1 | $ 1 | |||||||||||||||||||||||||||||
Common stock issued for services (in shares) | 1,211 | 1,372 | 2,103 | 95 | 2,582 | |||||||||||||||||||||||||||
Common stock issued for services | $ | $ 312,634 | |||||||||||||||||||||||||||||||
Issuance of common stock pursuant to disposition (in shares) | 1,562 | |||||||||||||||||||||||||||||||
Issuance of common stock pursuant to disposition | $ | ||||||||||||||||||||||||||||||||
Conversion of stock, shares converted | 1,088 | |||||||||||||||||||||||||||||||
Convertible preferred stock | 3,841 | 3,841 | 1,001 | |||||||||||||||||||||||||||||
Preferred stock | $ | ||||||||||||||||||||||||||||||||
Common Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Aggregate shares authorized | 168,000 | |||||||||||||||||||||||||||||||
Warrants issued | 3,360 | |||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 9,000,000 | |||||||||||||||||||||||||||||||
Common Warrants [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Reverse stock split conversion ratio | 9,500 | |||||||||||||||||||||||||||||||
Common Warrants [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 9,500 | |||||||||||||||||||||||||||||||
Pre Funded Warrant [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 16,043 | |||||||||||||||||||||||||||||||
Volume weighted average | 195.75 | |||||||||||||||||||||||||||||||
Number of shares resulting from conversion | 16,043 | 16,043 | ||||||||||||||||||||||||||||||
Warrants issued | 9,638 | 16,043 | 9,638 | |||||||||||||||||||||||||||||
Number of warrants issued | 9,638 | |||||||||||||||||||||||||||||||
Number of warrants exercised | 9,638 | |||||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 471.50 | |||||||||||||||||||||||||||||||
Pre Funded Warrant [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants issued | 33,004 | |||||||||||||||||||||||||||||||
Pre Funded Warrant [Member] | Securities Purchase Agreement [Member] | Statement Scenario One [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants exercisable | $ / shares | $ 33,004 | |||||||||||||||||||||||||||||||
Series B Warrants [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants issued | 9,638 | 9,638 | ||||||||||||||||||||||||||||||
Class B Warrant [Member] | Securities Purchase Agreement [Member] | Statement Scenario One [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants issued | 3,360 | |||||||||||||||||||||||||||||||
Class B Warrant [Member] | Securities Purchase Agreement [Member] | Statement Scenario Two [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants issued | 33,004 | |||||||||||||||||||||||||||||||
Class C Warrant [Member] | Securities Purchase Agreement [Member] | Statement Scenario One [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants issued | 3,360 | |||||||||||||||||||||||||||||||
Class C Warrant [Member] | Securities Purchase Agreement [Member] | Statement Scenario Two [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Warrants issued | 33,004 | |||||||||||||||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 9,500 | |||||||||||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||||||||||||||||
Combined purchase price | $ / shares | $ 486.50 | $ 486.50 | ||||||||||||||||||||||||||||||
Aggregate net proceeds | $ | $ 3,800,000 | |||||||||||||||||||||||||||||||
Number of warrants amended | 3,931 | |||||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 4,750 | $ 4,750 | ||||||||||||||||||||||||||||||
Reduce the exercise price of the Amended Warrants | $ / shares | $ 471.50 | $ 471.50 | ||||||||||||||||||||||||||||||
Private Placement [Member] | Series Warrants [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 640 | |||||||||||||||||||||||||||||||
Private Placement [Member] | Series B Warrants [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 640 | |||||||||||||||||||||||||||||||
IPO [Member] | ||||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||||||||||||||||||||
Common shares issued for cash, shares | 7,478 | |||||||||||||||||||||||||||||||
Fair value per share | $ / shares | $ 1,150 | |||||||||||||||||||||||||||||||
Combined purchase price | $ / shares | $ 1,250 | |||||||||||||||||||||||||||||||
Number of shares agreed to issued and sell | 7,478 | |||||||||||||||||||||||||||||||
Number of option days granted to purchase an additional shares | 45 days | |||||||||||||||||||||||||||||||
Maximum number of additional shares allowed to purchase within 45 option days | 1,122 | |||||||||||||||||||||||||||||||
Proceeds from issuance of common stock, gross | $ | $ 9,300,000 | |||||||||||||||||||||||||||||||
[1]Represents the fair value of 39,052 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2024 | |
Related Party Transaction [Line Items] | ||||
Repayments from related parties | $ 130,205 | $ 170,000 | ||
Other liabilities | 99,934 | 78,845 | $ 99,353 | |
Other current liabilities | 400,012 | 426,921 | ||
Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other liabilities | 400,012 | 556,217 | ||
Other current liabilities | 400,012 | 555,217 | $ 426,921 | |
Director [Member] | Mark Lynn [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other current liabilities | 104,568 | 104,568 | ||
Director [Member] | Trevor Pettennude [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other current liabilities | 175,000 | 325,000 | ||
Proceeds from related party debt | $ 325,000 | |||
Officer [Member] | Accrued Salary and Expense Reimbursements [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other current liabilities | 87,222 | $ 100,649 | ||
Chief Executive Officer [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other current liabilities | $ 33,222 |
SUMMARY OF INFORMATION RELATED
SUMMARY OF INFORMATION RELATED TO COMMON STOCK WARRANTS (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Class of Warrant or Right [Line Items] | |||
Weighted Average Exercise Price Outstanding Beginning Balance | $ 471.50 | ||
Weighted Average Exercise Price Outstanding Beginning Balance | $ 471.50 | ||
Common Stock Warrant [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrant Outstanding Beginning Balance | 23,604 | 3,535 | |
Weighted Average Exercise Price Outstanding Beginning Balance | $ 1,270.20 | $ 10,462.50 | |
Warrant Outstanding, Granted | 42,652 | 32,825 | |
Weighted Average Exercise Price Outstanding, Granted | $ 146 | $ 734.53 | |
Warrant Outstanding, Exercised | (20,555) | (12,756) | |
Weighted Average Exercise Price Outstanding, Exercised | $ 156.50 | $ 705.50 | |
Warrant Outstanding, Forfeited | |||
Weighted Average Exercise Price Outstanding, Forfeited | |||
Warrant Outstanding Ending Balance | 45,701 | 23,604 | 3,535 |
Weighted Average Exercise Price Outstanding Beginning Balance | $ 580 | $ 1,270.20 | $ 10,462.50 |
Common Stock Warrants Exercisable | 45,701 | 23,604 | 3,426 |
Weighted Average Exercise Price Exercisable | $ 1,270 | $ 10,525 | |
Weighted Average Exercise Price Exercisable | $ 1,270 | ||
Weighted Average Exercise Price Exercisable | $ 580 | $ 1,270 |
SUMMARY OF INFORMATION RELATE_2
SUMMARY OF INFORMATION RELATED TO STOCK OPTIONS UNDER STOCK PLAN (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Stock Options Outstanding Beginning Balance | 31 | |
Stock Options Weighted Average Exercise Price Outstanding Beginning Balance | $ 452,500 | |
Stock Options, Granted | ||
Stock Options Weighted Average Exercise Price Outstanding, Granted | ||
Stock Options, Exercised | ||
Stock Options Weighted Average Exercise Price Outstanding, Exercised | ||
Stock Options, Forfeited | ||
Stock Options Weighted Average Exercise Price Outstanding, Forfeited | ||
Stock Options Outstanding Ending Balance | 31 | 31 |
Stock Options Weighted Average Exercise Price Outstanding Ending Balance | $ 452,500 | $ 452,500 |
Stock Options, Exercisable | 30 | 28 |
Stock Options Weighted Average Exercise Price, Exercisable | $ 454,900 | $ 506,250 |
Stock Options, Weighted average duration (Years) | 5 years 5 months 19 days |
SHARE-BASED PAYMENTS (Details N
SHARE-BASED PAYMENTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Aug. 31, 2023 | May 10, 2022 | Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 31, 2023 | Jan. 11, 2023 | Nov. 29, 2022 | May 05, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | |||||||||||||
Exercise price per share | $ 6,562.50 | $ 471.50 | |||||||||||
Weighted average duration (Years) | 5 years 5 months 19 days | ||||||||||||
Number of awards granted | 20,555 | ||||||||||||
Number of warrants exercised | 2,476 | ||||||||||||
Proceeds from exercise of warrants | $ 1,167,566 | ||||||||||||
Option outstanding exercise price | $ 452,500 | $ 452,500 | $ 452,500 | $ 452,500 | |||||||||
Combined purchase price | $ 486.50 | ||||||||||||
Stock-based compensation expense | $ 1,061 | $ 101,417 | $ 169,261 | $ 308,511 | $ 408,810 | $ 479,038 | |||||||
Unrecognized compensation cost related to non-vested stock option | $ 353 | $ 353 | $ 169,190 | ||||||||||
Share-based arrangement, non-vested weighted average period | 10 days | 5 months 15 days | |||||||||||
Option outstanding | 31 | 31 | 31 | 31 | |||||||||
General and Administrative Expense [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense | $ 351,214 | $ 421,442 | |||||||||||
Selling and Marketing Expense [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense | $ 23,998 | $ 43,197 | $ 57,596 | $ 57,596 | |||||||||
IPO [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Combined purchase price | $ 1,250 | ||||||||||||
Omnibus Incentive Stock Plan 2020 [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Common stock, capital shares reserved for future issuance | 26 | ||||||||||||
Omnibus Incentive Stock Plan 2020 [Member] | IPO [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | 22 | ||||||||||||
Common stock, capital shares reserved for future issuance | 5 | ||||||||||||
Incentive Stock Plan 2013 [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Number of shares authorized | 239 | 239 | |||||||||||
Number of shares available for grant | 7 | ||||||||||||
Vesting period | 4 years | ||||||||||||
July 22, 2022 Year [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 760 | ||||||||||||
July 28, 2022 Year [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants issued | 553 | ||||||||||||
July 28, 2022 Year [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 565 | ||||||||||||
Maximum [Member] | Omnibus Incentive Stock Plan 2020 [Member] | IPO [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Combined purchase price | $ 20,750 | ||||||||||||
Minimum [Member] | Omnibus Incentive Stock Plan 2020 [Member] | IPO [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Combined purchase price | $ 19,250 | ||||||||||||
Placement Agent [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 608 | ||||||||||||
Number of awards granted | 771 | ||||||||||||
Pre Funded Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | 642 | 33,004 | |||||||||||
Exercise price per share | $ 471.50 | ||||||||||||
Warrants issued | 9,638 | 16,043 | |||||||||||
Number of awards granted | 9,638 | ||||||||||||
Warrants exercisable term | 5 years 6 months | ||||||||||||
Number of warrants exercised | 9,638 | ||||||||||||
Pre Funded Warrant [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants issued | 33,004 | ||||||||||||
Pre Funded Warrant [Member] | Maximum [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants exercisable term | 5 years | ||||||||||||
Pre Funded Warrant [Member] | Minimum [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants exercisable term | 1 year 6 months | ||||||||||||
Pre Funded Warrant [Member] | Placement Agent [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 6,562.50 | $ 4,750 | |||||||||||
Warrants issued | 3,931 | ||||||||||||
Number of warrants exercised | 2,476 | ||||||||||||
Proceeds from exercise of warrants | $ 1,167,566 | ||||||||||||
Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | 1,022 | ||||||||||||
Placement Agent Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | 77 | 2,727 | |||||||||||
Exercise price per share | $ 6,117.50 | $ 344 | |||||||||||
Weighted average duration (Years) | 5 years | 5 years | |||||||||||
Share-based compensation arrangement by share-based payment award, options, exercisable contractual term | 180 days | ||||||||||||
Placement Agent Warrant [Member] | Placement Agent [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants exercisable term | 5 years 6 months | ||||||||||||
Aggregate Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants issued | 122 | 9,390 | |||||||||||
Exercise price of additional units | $ 6,562.50 | $ 213 | |||||||||||
Warrant to purchase common stock fair value | $ 164,200 | ||||||||||||
Common Stock Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 580 | $ 580 | 1,270.20 | $ 10,462.50 | |||||||||
Common Stock Warrant [Member] | April Notes [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 6,100 | ||||||||||||
Warrants issued | 252 | ||||||||||||
Underwriters Warrants [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Exercise price per share | $ 1,625 | ||||||||||||
Warrants issued | 299 | ||||||||||||
Percentage of initial exercise price representing the public offering price | 130% | ||||||||||||
Common Stock Warrants Funding Platform Preferred Stock Raise [Member] | July 22, 2022 Year [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants issued | 822 | ||||||||||||
Class B Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | 36,364 | ||||||||||||
Weighted average duration (Years) | 5 years | ||||||||||||
Option outstanding exercise price | $ 262.50 | ||||||||||||
Class C Warrant [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Aggregate shares of stock options granted | 36,364 | ||||||||||||
Weighted average duration (Years) | 13 months | ||||||||||||
Option outstanding exercise price | $ 262.50 | ||||||||||||
Merchant Cash Advance [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Warrants issued | 880 | ||||||||||||
Exercise price of additional units | $ 250 |
SUMMARY OF OPERATING LEASE ASSE
SUMMARY OF OPERATING LEASE ASSETS AND LIABILITIES (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | |||
ROU operating lease assets | $ 365,246 | $ 689,688 | $ 102,349 |
Liabilities | |||
Current portion of operating lease | 899,726 | 1,210,814 | 102,349 |
Total operating lease liabilities | $ 1,213,449 | $ 1,210,814 | $ 102,349 |
Weighted average remaining lease term (years) | 9 months | 1 year | 1 year |
Weighted average discount rate | 10% | 10% | 6% |
Non Current portion of lease liability | $ 313,723 |
SUMMARY OF OPERATING LEASE OBLI
SUMMARY OF OPERATING LEASE OBLIGATIONS (Details) - USD ($) | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Lease Obligations | |||
Future minimum payments | $ 1,282,975 | $ 1,268,230 | |
Less imputed interest | (69,526) | (57,416) | |
Total lease obligations | 1,213,449 | 1,210,814 | $ 102,349 |
Total lease obligations | $ 1,213,449 | $ 1,210,814 | $ 102,349 |
LEASE OBLIGATIONS (Details Narr
LEASE OBLIGATIONS (Details Narrative) - USD ($) | 1 Months Ended | |||||
Apr. 30, 2024 | Sep. 30, 2023 | Jan. 31, 2023 | Sep. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Right of use asset | $ 365,246 | $ 689,688 | $ 102,349 | |||
Operating lease liability | $ 1,213,449 | $ 1,210,814 | $ 102,349 | |||
Discount rate | 10% | 10% | 6% | |||
Corporate Office and Distribution Center [Member] | ||||||
Rent expense | $ 12,000 | |||||
Right of use asset | 31,597 | |||||
Operating lease liability | $ 170,002 | |||||
Discount rate | 10% | |||||
Showroom Space [Member] | ||||||
Rent expense | $ 13,261 | $ 25,000 | ||||
Right of use asset | 425,634 | 658,091 | ||||
Operating lease liability | $ 425,634 | $ 1,040,812 | ||||
Discount rate | 10% | 10% |
CONTINGENCIES (Details Narrativ
CONTINGENCIES (Details Narrative) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 16, 2023 USD ($) | Nov. 15, 2023 USD ($) | Mar. 21, 2023 USD ($) | Feb. 07, 2023 USD ($) | Dec. 21, 2020 USD ($) | Oct. 31, 2024 USD ($) | Mar. 31, 2021 USD ($) Integer | Aug. 31, 2020 USD ($) Integer | Sep. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | Nov. 09, 2022 USD ($) | |
Loss Contingencies [Line Items] | |||||||||||
Settlement amount payable to vendor | $ 50,190 | ||||||||||
Loss contingency amount | $ 450,968 | $ 450,968 | |||||||||
Subsequent Event [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Legal Fees | $ 250,000 | ||||||||||
Lawsuits Against Baileys Related To Prior Services Rendered [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 100,000 | $ 96,900 | $ 96,900 | ||||||||
Number of lawsuit settled | Integer | 2 | 2 | |||||||||
Lawsuit Against Bailey 44 Related To Retail Store Lease [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 1,500,000 | ||||||||||
Bailey LLC [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 96,900 | $ 96,900 | $ 1,500,000 | ||||||||
Short Term Notes Payable [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 100,000 | ||||||||||
Non Payment Of Trade Payables [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 345,384 | $ 582,208 | $ 43,501 | $ 182,400 | |||||||
Non Payment Of Trade Payables [Member] | Double Damages [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency accrual | 292,604 | ||||||||||
Trade Payables [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 345,384 | 582,208 | $ 43,501 | ||||||||
Accounts Payable, Trade | $ 182,400 | ||||||||||
Trade Payables [Member] | Vendor [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency amount | $ 292,604 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 19,354,491 | $ 16,733,582 |
Deferred tax liabilities: | ||
Indefinite lived intangible assets | (1,840,170) | |
Valuation allowance | (17,882,355) | (16,733,582) |
Net deferred tax assets (liabilities) | $ (368,034) |
SCHEDULE OF THE COMPANY'S EFFEC
SCHEDULE OF THE COMPANY'S EFFECTIVE TAX RATE TO THE STATUTORY FEDERAL RATE (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal rate | 21% | 21% |
State income taxes net of federal income tax benefit | 7% | 7% |
Permanent adjustment | (18.00%) | |
Change in valuation allowance | (14.40%) | (28.00%) |
Effective income tax rate | (4.40%) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets before valuation allowance | $ 17,882,355 | $ 16,733,585 |
Deferred tax assets before valuation allowance | 17,882,355 | 16,733,582 |
Increase in valuation allowance | $ 1,148,773 | 3,630,314 |
Statutory tax rate | 28% | |
Net deferred tax assets (liabilities) | $ 368,034 | |
Tax rate | (4.40%) | |
Operating loss carry forward indefinitely | $ 69,242,000 | $ 59,865,000 |
Change in ownership percentage in common stock | 5% | |
Aggregate percentage of ownership | 50% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Nov. 05, 2024 | Oct. 28, 2024 | Oct. 16, 2024 | Oct. 15, 2024 | Sep. 30, 2024 | May 28, 2024 | May 24, 2024 | May 10, 2022 | Oct. 31, 2024 | Oct. 22, 2024 | Sep. 30, 2022 | Sep. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Nov. 14, 2024 | Oct. 01, 2023 | Aug. 31, 2023 | Jun. 30, 2023 | Apr. 07, 2023 | Mar. 31, 2023 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Common shares issued for cash, shares | 1 | 25,543 | |||||||||||||||||||||||
Cancellation of shares | |||||||||||||||||||||||||
Common stock, shares, issued | 75,397 | 75,397 | 75,397 | 22,287 | 3,575 | ||||||||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||
Warrants to purchase common stock | 12,980 | 12,980 | 12,980 | ||||||||||||||||||||||
Share price per share | $ 486.50 | ||||||||||||||||||||||||
Warrant exercise price | $ 471.50 | $ 6,562.50 | |||||||||||||||||||||||
Proceeds from issuance initial public offering | $ 10,000,003 | $ 19,347,446 | |||||||||||||||||||||||
Proceeds from issuance fo common stock | $ 8,100,000 | 5,356,194 | 8,145,381 | ||||||||||||||||||||||
Stockholder's equity | $ 19,046 | $ 19,046 | $ 2,728,339 | $ 2,979,627 | $ 19,046 | 5,221,344 | $ 1,602,592 | (7,453,174) | $ 4,423,960 | $ (7,863,021) | $ (7,089,781) | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Pre-transaction shares outstanding percentage | 19.90% | ||||||||||||||||||||||||
Offering description | The Company offered Pre-Funded Warrants to those Purchasers whose purchase of Common Stock in the Offering would have resulted in the Purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or at the election of the Purchaser, 9.99%) of our Common Stock immediately following the consummation of the Offering in lieu of the Common Stock that would otherwise result in ownership in excess of 4.99% (or at the election of the purchaser, 9.99%) of the outstanding Common Stock of the Company. | ||||||||||||||||||||||||
Proceeds from Issuance or Sale of Equity | $ 3,000,000 | ||||||||||||||||||||||||
[custom:CashFeePercentage-0] | 8% | ||||||||||||||||||||||||
[custom:NonAccountableExpenseAllowance-0] | 1% | ||||||||||||||||||||||||
Legal Fees | $ 250,000 | ||||||||||||||||||||||||
Subsequent Event [Member] | Maximum [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Legal Fees | $ 50,000 | ||||||||||||||||||||||||
Other Expenses | 15,950 | ||||||||||||||||||||||||
Proceeds from issuance initial public offering | $ 2,555,261 | ||||||||||||||||||||||||
Subsequent Event [Member] | Minimum [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Stockholder's equity | $ 2,500,000 | ||||||||||||||||||||||||
Original Notes [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Aggregate principal amount | $ 2,500,000 | ||||||||||||||||||||||||
Exchange Notes [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Aggregate principal amount | $ 1,789,668.37 | ||||||||||||||||||||||||
Settlement Agreement [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Payment for debt extinguishment | $ 1,289,668.37 | $ 500,000 | $ 1,789,668.37 | ||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Common shares issued for cash, shares | 28,094 | 7,575 | 8,898 | ||||||||||||||||||||||
Convertible preferred stock | 3,841 | 3,841 | 3,841 | 1,001 | |||||||||||||||||||||
Proceeds from Issuance or Sale of Equity | $ 5,000,000 | ||||||||||||||||||||||||
Stockholder's equity | $ 7 | $ 7 | $ 4 | $ 3 | $ 7 | $ 2 | |||||||||||||||||||
Common Stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Common shares issued for cash, shares | 26,227 | ||||||||||||||||||||||||
Shares decrease | 26,227 | ||||||||||||||||||||||||
Cancellation of shares | 26,227 | ||||||||||||||||||||||||
Common Stock [Member] | Subsequent Event [Member] | Sales Agent [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Common shares issued for cash, shares | 90,012 | ||||||||||||||||||||||||
Proceeds from issuance fo common stock | $ 1,320,873 | ||||||||||||||||||||||||
Common Stock [Member] | Subsequent Event [Member] | Securities Purchase Agreements [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Common stock, shares, issued | 124,673 | ||||||||||||||||||||||||
Common stock, par value | $ 5 | ||||||||||||||||||||||||
Pre Funded Warrants [Member] | Subsequent Event [Member] | Securities Purchase Agreements [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Warrants to purchase common stock | 482,187 | ||||||||||||||||||||||||
Share price per share | $ 4.995 | ||||||||||||||||||||||||
Warrant exercise price | $ 0.005 | ||||||||||||||||||||||||
At Market Offering [Member] | |||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||
Common shares issued for cash, shares | 9,623 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||
May 03, 2024 | Aug. 31, 2023 | Aug. 21, 2023 | Jun. 21, 2023 | May 30, 2023 | Nov. 29, 2022 | Oct. 21, 2022 | May 10, 2022 | Sep. 30, 2024 | May 31, 2024 | Oct. 31, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 05, 2023 | Oct. 13, 2022 | Oct. 12, 2022 | Sep. 29, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Reverse stock split | one-for-25 | one-for-100 | ||||||||||||||||||||||||
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 200,000,000 | |||||||||||||||||||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||
Voting rights | one | one vote per share | ||||||||||||||||||||||||
Common stock, shares issued | $ 25,000 | $ 742,513 | $ 2,877,475 | $ 1,736,206 | $ 4,463,076 | |||||||||||||||||||||
Insurance for common stock for cash | $ 8,100,000 | $ 5,356,194 | 8,145,381 | |||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 2,378 | |||||||||||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 499,338 | $ 88,369 | 224,265 | $ 1,157,090 | $ 499,338 | $ 499,338 | ||||||||||||||||||||
Warrants exercised | 12,980 | 12,980 | 12,980 | |||||||||||||||||||||||
Exercise price per share | $ 6,562.50 | $ 471.50 | ||||||||||||||||||||||||
Common shares issued for cash, shares | 1 | 25,543 | ||||||||||||||||||||||||
[custom:PlacementAgentFeesAndExpenses.] | $ 2,877,475 | |||||||||||||||||||||||||
Conversion of loan into common stock | 313,816 | $ 5,759,177 | ||||||||||||||||||||||||
Issue price (in dollars per share) | $ 210 | $ 210 | ||||||||||||||||||||||||
Merchant Advances From Gynger Inc [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Conversion of loan into common stock | $ 313,816 | |||||||||||||||||||||||||
Conversion of loan into common stock, shares | 2,120 | |||||||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Conversion of stock, shares converted | 975 | 3,442 | ||||||||||||||||||||||||
Convertible preferred stock | 3,841 | 3,841 | 3,841 | |||||||||||||||||||||||
Stated value | $ 1 | $ 1 | $ 1 | $ 1 | ||||||||||||||||||||||
Preferred stock, shares issued | 1,643 | 1,643 | 1,643 | 4,786 | ||||||||||||||||||||||
Preferred stock, shares outstanding | 1,643 | 1,643 | 1,643 | 4,786 | 0 | |||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||
Redemption percentage | 112% | |||||||||||||||||||||||||
Series Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Preferred stock, shares authorized (in shares) | 6,300 | 6,300 | 6,800 | |||||||||||||||||||||||
Stated value | $ 1 | $ 1 | $ 1,000 | |||||||||||||||||||||||
Conversion price (in dollars per share) | $ 9.30 | |||||||||||||||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Preferred stock, shares authorized (in shares) | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | |||||||||||||||||||||
Stated value | $ 1 | $ 1 | $ 1 | $ 1 | ||||||||||||||||||||||
Preferred stock, shares issued | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | |||||||||||||||||||||
Preferred stock, shares outstanding | 6,300 | 6,300 | 6,300 | 6,300 | 6,300 | |||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Common stock, shares issued | $ 3 | $ 1 | $ 1 | |||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,211 | 1,372 | 2,103 | 95 | 2,582 | |||||||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 312,634 | |||||||||||||||||||||||||
Conversion of stock, shares converted | 1,088 | |||||||||||||||||||||||||
Convertible preferred stock | 3,841 | 3,841 | 3,841 | 1,001 | ||||||||||||||||||||||
Common shares issued for cash, shares | 28,094 | 7,575 | 8,898 | |||||||||||||||||||||||
Conversion of loan into common stock | ||||||||||||||||||||||||||
Conversion of loan into common stock, shares | 2,120 | |||||||||||||||||||||||||
Number of shares resulting from conversion | 640 | |||||||||||||||||||||||||
A T M Agreement [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Common stock, shares issued | $ 24,012 | |||||||||||||||||||||||||
Insurance for common stock for cash | $ 2,478,719 | |||||||||||||||||||||||||
Securities Purchasement [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Warrants exercised | 20,555 | |||||||||||||||||||||||||
Exercise price per share | $ 156.50 | $ 156.50 | $ 156.50 | $ 156.50 | $ 156.50 | |||||||||||||||||||||
Warrant, Exercise Price, Increase | $ 3,216,857.50 | $ 3,216,857 | ||||||||||||||||||||||||
Common shares issued for cash, shares | 7,575 | |||||||||||||||||||||||||
Securities Purchasement [Member] | Series A Warrants [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Warrants exercised | 10,278 | |||||||||||||||||||||||||
Securities Purchasement [Member] | Series B Warrants [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Warrants exercised | 10,278 | |||||||||||||||||||||||||
Securities Purchasement [Member] | Warrant [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Warrants exercised | 20,555 | 20,555 | 20,555 | 20,555 | ||||||||||||||||||||||
Securities Purchase Agreement [Member] | Series C Convertible Preferred Stock [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Conversion price (in dollars per share) | $ 0.717 | |||||||||||||||||||||||||
Number of shares resulting from conversion | 5,761 | |||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | |||||||||||||||||||||||||
Issue price (in dollars per share) | $ 1,000 | |||||||||||||||||||||||||
Convertible preferred stock value | $ 1,000 | |||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Insurance for common stock for cash | $ 9,000,000 |