Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | NYIAX, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 18,556,349 | ||
Entity Public Float | $ 0 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001679379 | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 333-265357 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-0547534 | ||
Entity Address, Address Line One | 180 Maiden Lane | ||
Entity Address, Address Line Two | 11th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10005 | ||
City Area Code | (917) | ||
Local Phone Number | 444-9259 | ||
Entity Interactive Data Current | No | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum LLP | ||
Auditor Location | New York, NY |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Cash | $ 792,337 | $ 3,387,200 |
Accounts receivable, net | 1,972,034 | 3,093,066 |
Prepaid expenses and other current assets | 92,497 | 14,813 |
Total current assets | 2,856,868 | 6,495,079 |
Capitalized software development costs, net | 393,157 | 589,735 |
Property, plant and equipment, net | 3,519 | 4,123 |
Operating lease right-of-use asset | 395,470 | 537,836 |
Deferred Offering Costs | 848,531 | 380,000 |
Security deposit | 74,068 | 74,068 |
Total assets | 4,571,613 | 8,080,841 |
Accounts payable and accrued expenses | 4,841,046 | 4,125,868 |
Convertible notes payable, net of deferred debt discounts of $214,265 and $913,505 as of December 31, 2022 and December 31, 2021, respectively | 2,355,735 | 6,354,227 |
Accrued Payment-In-Kind Interest | 71,614 | 443,657 |
Current portion of operating lease obligations | 162,503 | 135,455 |
Total current liabilities | 7,430,897 | 11,059,207 |
Operating lease obligations, net of current maturities | 268,385 | 430,888 |
Stockholder Payable | 100,500 | 610,500 |
Total long-term liabilities | 368,885 | 1,041,388 |
Total liabilities | 7,799,782 | 12,100,595 |
Shareholders’ equity (deficit) | ||
Common stock $0.0001 par value, 125,000,000 common shares authorized; 12,370,022 and 10,243,442 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively. | 1,237 | 1,024 |
Preferred shares: 10,000,000 authorized, none outstanding, par value $0.0001 per share | 0 | 0 |
Additional Paid in Capital | 50,023,446 | 38,089,295 |
Accumulated deficit | (53,252,852) | (42,110,073) |
Total shareholders’ (deficit) equity | (3,228,169) | (4,019,754) |
Total liabilities and shareholders’ (deficit) equity | $ 4,571,613 | $ 8,080,841 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Net of deferred debt discounts (in Dollars) | $ 214,265 | $ 913,505 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 12,370,022 | 10,243,442 |
Common stock, shares outstanding | 12,370,022 | 10,243,442 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | ||
Preferred shares, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue, Net | $ 1,324,304 | $ 593,899 |
Cost of Sales | 1,182,303 | 806,846 |
Gross Margin | 142,001 | (212,947) |
Operating expenses | ||
Technology and development | 1,822,228 | 1,388,188 |
Selling, general and administrative | 7,869,144 | 9,834,427 |
Depreciation and amortization | 1,647 | 6,707 |
Total operating expenses | 9,693,019 | 11,229,322 |
Loss from operations | (9,551,017) | (11,442,269) |
Other (income) expenses | ||
Interest expense, net | 1,563,162 | 2,419,121 |
PPP Loan forgiveness | (361,605) | |
Miscellaneous income, net | (1,159) | |
Total other (income) expenses | 1,563,162 | 2,056,357 |
Loss before provision for income taxes | (11,114,179) | (13,498,626) |
Net loss | $ (11,114,179) | $ (13,498,626) |
Net loss per share - basic and diluted (in Dollars per share) | $ (0.96) | $ (1.43) |
Weighted average number of common shares outstanding – basic and diluted (in Shares) | 11,577,808 | 9,431,718 |
Statements of Operations (Paren
Statements of Operations (Parentheticals) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Net loss per share - diluted | $ (0.96) | $ (1.43) |
Weighted average number of common shares outstanding – diluted | 11,577,808 | 9,431,718 |
Statements of Changes in Shareh
Statements of Changes in Shareholders’ Equity (Deficit) - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 889 | $ 26,154,886 | $ (28,611,447) | $ (2,455,672) |
Balance (in Shares) at Dec. 31, 2020 | 8,892,202 | |||
Share-based compensation | 3,887,852 | 3,887,852 | ||
Conversion of Convertible Note Payable and accrued interest to common shares | $ 87 | 4,339,265 | 4,339,352 | |
Conversion of Convertible Note Payable and accrued interest to common shares (in Shares) | 867,767 | |||
Issuance of common stock pursuant to exercise of employee stock options | $ 6 | 644 | $ 650 | |
Issuance of common stock pursuant to exercise of employee stock options (in Shares) | 65,000 | 65,000 | ||
Issuance of common stock pursuant to exercise of warrants | $ 42 | 2,093,503 | $ 2,093,545 | |
Issuance of common stock pursuant to exercise of warrants (in Shares) | 418,473 | |||
Deferred debt discount convertible notes payable | 1,613,145 | 1,613,145 | ||
Net Loss | (13,498,626) | (13,498,626) | ||
Balance at Dec. 31, 2021 | $ 1,024 | 38,089,295 | (42,110,073) | (4,019,754) |
Balance (in Shares) at Dec. 31, 2021 | 10,243,442 | |||
Share-based compensation | 1,694,344 | 1,694,344 | ||
Issuance of common stock pursuant to restricted stock awards (share-based compensation) | $ 29 | 607,362 | 607,391 | |
Issuance of common stock pursuant to restricted stock awards (share-based compensation) (in Shares) | 290,000 | |||
Conversion of Convertible Note Payable and accrued interest to common shares | $ 159 | 7,973,848 | 7,974,007 | |
Conversion of Convertible Note Payable and accrued interest to common shares (in Shares) | 1,594,807 | |||
Deemed Dividend from Inducement to Exercise Warrants | 28,600 | (28,600) | ||
Issuance of common stock pursuant to exercise of employee stock options | $ 1 | 19,975 | $ 19,976 | |
Issuance of common stock pursuant to exercise of employee stock options (in Shares) | 6,060 | 6,060 | ||
Issuance of common stock pursuant to exercise of warrants | $ 24 | 1,285,809 | $ 1,285,833 | |
Issuance of common stock pursuant to exercise of warrants (in Shares) | 235,693 | |||
Deferred debt discount convertible notes payable | 324,213 | 324,213 | ||
Net Loss | (11,114,179) | (11,114,179) | ||
Balance at Dec. 31, 2022 | $ 1,237 | $ 50,023,446 | $ (53,252,852) | $ (3,228,169) |
Balance (in Shares) at Dec. 31, 2022 | 12,370,002 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (11,114,179) | $ (13,498,626) |
Adjustments to reconcile net income to net cash | ||
Depreciation and amortization | 199,225 | 203,286 |
Operating lease right-of-use asset amortization, net | 6,913 | 28,507 |
Accrued PIK Interest | 375,629 | |
Debt discount amortization | 1,187,656 | 1,499,596 |
Share-based compensation | 2,301,735 | 3,887,852 |
PPP Loan Forgiveness | (361,605) | |
Loss on conversion of convertible notes payable | 290,109 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 1,121,030 | (2,592,005) |
Prepaid expenses and other current assets | (77,685) | 38,487 |
Security deposit | (74,068) | |
Accounts payable and accrued expenses | 715,178 | 4,094,180 |
Total adjustments | 5,829,681 | 7,014,339 |
Net cash used in operating activities | (5,284,498) | (6,484,287) |
Net cash used in investing activities | ||
Acquisition of Fixed Assets | (2,043) | 0 |
Net cash used in investing activities | (2,043) | 0 |
Cash flows from financing activities | ||
Proceeds from convertible notes payable, net of discount | 2,364,400 | 6,863,642 |
Payable (forgiveness) of founders’ stockholder payable | (510,000) | 102,000 |
Issuance of common stock pursuant to exercise of warrants | 1,285,833 | 2,094,148 |
Deferred offering costs | (468,531) | (380,000) |
Proceeds from issuance of stock | 48 | |
Proceeds from issuance of stock upon exercise of Employee Options | 19,996 | 0 |
Net cash provided by financing activities | 2,691,678 | 8,679,838 |
Net (decrease) increase in cash and cash equivalents | (2,594,863) | 2,195,551 |
Cash and cash equivalents - Beginning of period | 3,387,200 | 1,191,649 |
Cash and cash equivalents - End of period | 792,337 | 3,387,200 |
Supplemental disclosures of non-cash flow investing and financing activities: | ||
Deferred debt discount on convertible note payable | (324,212) | 1,613,145 |
Deemed Dividends | 28,600 | |
Conversion of convertible note payable and accrued interest to common shares | $ 7,974,007 | $ 4,339,353 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Nature of Business [Abstract] | |
Organization and Nature of Business | Note 1 — Organization and Nature of Business Brief Overview: NYIAX, Inc. (the “Company” or “NYIAX”) was incorporated on July 12, 2012 in the State of Delaware. NYIAX connects Media Buyers (brands, advertisers or agencies) and Media Sellers (publishers or media) to execute media advertising sales contracts. NYIAX receives a commission or fee upon completion of the media advertising contract. NYIAX does not take ownership or positions of the media at any time during the process. Going Concern, Liquidity and Capital Resources The Company believes it does not have sufficient cash to meet working capital and capital requirements for at least twelve months from the issuance of these financial statements. Historically, the Company’s liquidity needs have been met by the sale of common shares, the issuance of common shares through the exercise of warrants, and issuance of convertible note payable. Without a new loan or other equity support, the Company would not be able to support the current operating plans through twelve months from the issuance of these financial statements. No assurance can be given at this time, however, as to whether we will be able to raise new equity or loan support. The Company generated negative cash flows from operations of approximately $5.8 million for the twelve months ended December 31, 2022. Historically, the Company’s liquidity needs have been met by the sale of common shares, the issuance of common shares through the exercise of warrants, and sale of convertible notes payable. As of December 31, 2022, NYIAX had total current assets of approximately $2.9 million, of which approximately $792,000 was cash and total current liabilities of approximately $7.4 million. For the year ended December 31, 2022, the Company’s operations lost approximately $11.1 million of which approximately $3.6 million were non-cash expenses. For the year ended December 31, 2022, the Company used approximately $5.8 million of cash in operating activities. As of December 31, 2022, NYIAX had total current assets of approximately $2.9 million, of which approximately $792,000 was cash and total current liabilities of approximately $7.4 million, including approximately $2.4 million of convertible notes payable and accrued payment-in-kind interest. The convertible note was paid as a payment-in-kind in the Company’s common stock at the maturity date of the Note. To enable the Company to meet immediate capital requirements until longer term requirements can be met, during the first quarter of fiscal year 2023, the Company sold convertible notes for two 2023 convertible notes offerings (“2023A and 2023B Convertible Note Payable”). 2023A Convertible Note Payable converted to common shares on February 7, 2023. 2023B Convertible Note Payable will convert upon when shares of common stock are sold to the public in the financing event. $1,970,000 of 2023B Convertible Note Payable were sold as of June 28, 2023 and the 2023B Convertible Note Payable was closed. The Company is also subject to certain business risks, including dependence on key employees, competition, market acceptance of the Company’s platform, ability to source demand from buyers of advertising inventory and dependence on growth to achieve its business plan. The Company has been and could in the future be adversely affected by health epidemics, such as the global COVID-19 pandemic. While the COVID-19 pandemic has generally accelerated a move from traditional media to digital media, many marketers have decreased or paused their advertising spending as a response to the economic uncertainty, decline in business activity, and other COVID-related impacts, which have negatively impacted, and may continue to negatively impact, our revenue and results of operations, the extent and duration of which we may not be able to accurately predict. As a result, our financial condition and results of operations may be adversely impacted. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 — Basis of Presentation and Summary of Significant Accounting Policies Financial Statements The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Use of Estimates The preparation of financial statements in conformity with US 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 revenue and expenses during the reporting period. Actual results could differ materially from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for doubtful accounts, (3) the useful lives of property and equipment and capitalized software development costs, (4) income taxes, (5) the valuation of share-based compensation, (6) assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options and warrants and (7) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates relating to the valuation of share-based compensation, options and warrants, require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ materially from those estimates under different assumptions or circumstances. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three Accounts Receivable, Net Accounts receivable consists of amounts billed to Media Buyers. Accounts receivable, net are carried at their contractual amounts, less an estimate for uncollectible amounts. Management estimates the allowance for bad debts based on existing economic conditions, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted. The Company performs ongoing credit evaluations of Media Buyers. The allowance for doubtful accounts is determined based on historical collection experience and the review in each period of the status of the then-outstanding accounts receivable, while taking into consideration current client information, subsequent collection history and other relevant data. The Company reviews the allowance for doubtful accounts on a quarterly basis. For the years’ ended December 31, 2022 and 2021 the Company had no allowance for doubtful accounts and no write-offs of accounts receivable. Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and amortization, which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets, as follows: 3 to 5 years for office equipment and software. Repair and maintenance costs are expensed as incurred and major improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results. Capitalized Software Development Costs The Company capitalizes or expenses costs associated with creating internally developed software related to the Company’s technology infrastructure in accordance with ASC 350-40, Intangibles — Goodwill and Other — Internal Use Software, that generally relate to software that the Company does not intend to sell or market. All costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized in accordance ASC 350-40. Amortization commences when the software is available for its intended use. The estimated useful life of the capitalized software development costs is five years. The Company commenced amortizing the capitalized software development costs related to its platform in January 2020. Certain long-lived assets including capitalized software development costs are also subject to measurement at fair value on a nonrecurring basis if they are deemed to be impaired as a result of an impairment review. For the years ended December 31, 2022 and 2021, no impairments were recorded on those assets. Operating Leases The Company has entered into operating leases consisting principally for the rental of office space. The Company adopted ASC 842. The guidance requires the recognition of right-of-use (“ROU”) assets and related operating lease liabilities on the balance sheet for those leases previously classified as operating leases. The Company adopted this new guidance using the modified retrospective approach. Under ASC 842, lease expense is recognized as a single lease cost on a straight-line basis over the lease term. The lease term consists of non-cancelable periods and may include options to extend or terminate the lease term, when it is reasonably certain such options will be exercised. The Company enters into contracts in the normal course of business and assesses whether any such contracts contain a lease. The Company determines if an arrangement is a lease at inception if it conveys the right to control the identified asset for a period of time in exchange for consideration. The Company classifies leases as operating or financing in nature and records the associated lease liability and right-of-use asset on its balance sheet. The lease liability represents the present value of future lease payments, net of lease incentives, discounted using an incremental borrowing rate, which is a management estimate based on the information available at the commencement date of a lease arrangement. With respect to operating lease arrangements, the Company accounts for lease components, and non-lease components that are fixed, as a single lease component. Non-lease components that are variable are expensed as incurred in the consolidated statement of operations. The Company recognizes costs associated with lease arrangements having an initial term of 12 months or less (“short-term leases”) on a straight-line basis over the lease term; such short-term leases are not recorded on the balance sheet. Lease expense for the years ended December 31, 2022 and 2021 were $197,245 and $63,121, respectively. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 — Unobservable inputs. Observable inputs are based on market data obtained from independent sources. The Company’s financial instruments approximate the carrying amounts of cash, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. Concentrations of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, and accounts receivable. The Company maintains its cash with financial institutions which exceed the Federal Deposit Insurance Corporation (“FDIC”) federally insured limits. As of December 31, 2022, three Media Sellers represented approximately 51%, 12% and 10% respectively of revenue, net. As of December 31, 2022, two Media Buyer represented for 67% and 20% of accounts receivable. As of December 31, 2022, two Media Sellers represented of 61% and 8% of accounts payable. As of December 31, 2021, three Media Sellers represented approximately 30%, 26%, and 11%, respectively of revenue, net. As of December 31, 2021, two Media Buyer represented for 45% and 41% of accounts receivable. As of December 31, 2021, four Media Sellers represented of 39%, 14%, 10% and 9% of accounts payable. Deferred Financing Costs Deferred financing costs include debt discounts and debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct reduction from the carrying value of the debt liability. Amortization of deferred financing costs are included as a component of interest expense. Deferred financing costs are amortized using the effective interest method. Deferred Offering Costs Deferred offering costs include specific incremental costs directly attributable to the Company’s initial public. Offering of securities. Deferred offering costs exclude management salaries or other general and administrative expenses. These costs are being deferred and will be charged against the gross proceeds of the offering. Revenue Recognition NYIAX brings together Media Buyers (brands, advertisers or agencies) and Media Sellers (publishers or media) to execute media sales contracts. NYIAX receives a fee upon completion of the media contract. NYIAX does not take ownership of or positions in the media at any time during the process. Generally, the Company bills Media Buyers the gross amount of advertising, including the Company’s commissions or fees in a single invoice and pays the Media Seller upon receipt. The Company’s accounts receivable are recorded at the amount of gross billings for the amounts it is responsible to collect, and accounts payable are recorded at the amount payable to Media Seller. Substantially all of the Company’s revenues are recognized at the point in time that the (i) contract reconciliations are completed, (ii) accepted by the Media Buyer and Media Seller, and (iii) NYIAX’s performance obligations are completed. The Company maintains agreements with each Media Buyer and Media Seller which set out the terms of the relationship. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 — Identify the Contract with the Customer — A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 — Identify Performance Obligations in the Contract — Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 — Determine the Transaction Price — When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 — Allocate the Transaction Price — After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price at contract inception. Step 5 — Satisfaction of the Performance Obligations (and Recognize Revenue)–Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. The Company considers both the Media Buyers and Media Sellers to be its customers. However, currently, the Media Buyers do not pay the Company, and only the Media Sellers compensate the Company for the use of the platform and other services. Fees or commissions are established differently for each Media Seller dependent upon various variables, including anticipated volume. The performance obligations within the Company’s contractual arrangements with customers is satisfied upon the contract reconciliations being completed and accepted by the Media Buyer and Media Seller. The Company has determined that it is acting as an agent for the Media Seller as (i) NYIAX does not obtain control of the Seller’s media (goods & services) before transferring control to the Buyer. The Seller has control of the media. Specifically, NYIAX does not control the specified media before transferring the media to the Media Buyer, the Company is not primarily responsible for the performance of the Media Seller, nor can the Company redirect those services to fulfill any other contracts. (ii) NYIAX does not have inventory or credit risk for the media. And (iii) the Media Seller establishes the pricing in the Smart-Contracts (self-executing contracts with the terms of the agreement between buyer and seller standardized.) and the Media Buyers and Media Sellers agree on the pricing. Based on these and other factors, the Company has determined it acts as an agent in the purchase and sale of advertising media inventory and therefore reports revenue on a net basis for the commissions and fees the Company charges after the performance obligations are met. Cost of sales Cost of sales consists of datacenter costs (our cloud operations used by our platform to service our customers), amortization expense related to capitalized internal use software development costs, and personnel costs. Personnel costs include salaries, bonuses, share-based compensation, and employee benefit costs, and are primarily attributable to groups which maintains our datacenters, and our client operations group, which is responsible for the integration of new publishers and buyers and providing customer support for existing customers. Operating Expenses Technology and development expenses consist of personnel costs, including salaries, bonuses, share-based compensation, and employee benefits costs, and professional services. These expenses include costs incurred in (i) product development related to the front-end client user interface and back-end systems, ongoing maintenance and operation of the platform, integrations with clients and partners applications. Except to the extent that such costs are associated with software development that qualify for capitalization, which are then recorded as capitalized software development costs; and (ii) infrastructure costs such as AWS or other cloud hosting solutions, software development tools used for the creation and ongoing management and maintenance of the NYIAX platform and service. Selling, general and administrative expenses consist of personnel costs, including salaries, bonuses, share-based compensation, and employee benefits costs, for our employees engaged in sales, business development, executive, finance, legal, and human resources employees. Selling, general and administrative also include expenses related to marketing activities and professional services outside such as legal and accounting services as well as rent expenses. Share-Based Compensation The share-based compensation expense related to stock options and restricted stock awards which are referred to collectively as options and awards granted under the Company’s employee option plans, is measured and recognized in the financial statements based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model. The Company uses the Black-Scholes model to calculate the fair value for all options granted, based on the inputs relevant on the date granted, such as the fair value of our shares, prevailing risk-free interest rate, risk-free interest rate, expected term at issuance, volatility, and dividend rate, etc. The value of the portion of the award is ultimately expected to vest is recognized as expense in the statements of operations on an over the requisite service periods. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. Determining the fair value of stock options awards requires judgement. The Company’s use of the Black-Scholes option pricing model requires the input of subjective assumptions. Income Taxes The Company records income tax expense in accordance with ASC-740 Income Taxes, as amended mandating how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The standards require the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are more-likely-than-not of being sustained upon examination by the applicable tax authority, based on the technical merits of the tax position, and then recognizing the tax benefit that is more-likely-than-not to be realized. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current reporting period. The Company has analyzed its tax positions and has concluded that as of December 31, 2022 and 2021, no uncertain positions are taken or are expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Company’s policy is to record interest expense and penalties pertaining to income taxes in operating expenses. For the years ended December 31, 2022 and 2021, there were no interest and penalties expenses recorded and no accrued interest and penalties. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including net operating loss carry-forwards (“NOL’s”), and liabilities, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Realization of the deferred income tax asset is dependent on generating sufficient taxable income in future years. The amount of the deferred income tax asset considered realizable, if any, could be reduced in the near term if estimates of future taxable income are reduced. Earnings Per Share In accordance with ASC-260 Earnings Per Share, basic earnings per share (EPS) is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share per share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding exclude common stock equivalents because their inclusion would be anti-dilutive. The Company has issued employee incentive options and warrants. These employee incentive options and other warrants are excluded from the calculation as the employee incentive options and warrants are anti-dilutive. As of December 31, 2022 and 2021, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. For the Years Ended 2022 2021 Equity Incentive Plans 3,086,626 3,116,626 Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest 1,506,829 1,533,998 Selling Agent and Advisor Warrants 23,538 338,653 Warrants Issued with Common Stock Offerings 889,500 1,100,195 Warrants Issued with Convertible Notes Offerings 947,150 704,652 6,453,643 6,794,124 During 2022 and 2021, approximately 235,693 and 418,473, respectively, warrants issued with convertible notes payable were exercised for proceeds of approximately $1,285,800 and $2,093,000, respectively. Recently Issued Accounting Pronouncements In August 2020, the FASB issued No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments are effective for fiscal years beginning after December 15, 2023. The Company evaluated any potential impact from ASU 2021-07 and believes it will have no material impact on our financial results. |
Commitments and Licensing Fee
Commitments and Licensing Fee | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Licensing Fee [Abstract] | |
Commitments and Licensing Fee | Note 3 — Commitments and Licensing Fee Commitments On March 23, 2021, the company entered into an engagement letter (the “Engagement Letter”) with Boustead Securities, an advisor to the Company for certain corporate financing transactions. The Engagement Letter provides for Initial Public Offering (“IPO”), Pre-IPO and corporate finance transaction advice and the advisor expressed its intent to enter into an underwriting agreement with the Company to act as the lead underwriter for the proposed IPO on a firm commitment basis. For financing transactions, including IPO and pre-IPO financings, the advisor would charge the Company (i) seven percent (7%) of the gross amount to be disbursed to the Company from each such investment transaction closing plus, (ii) a non-accountable expense allowance equal to one percent (1%) of the gross amount to the disbursed to the Company from each such investment transaction closing, plus (iii) warrants equal to seven percent (7%) of the gross amount to be received by to the Company from each such investment transaction closing. The warrant exercise price is defined as the lower of: (1) the fair market value price per share of the Company’s common stock as of each such financing closing date, (2) the price per share paid by investors in each respective financing, (3) in the event that securities convertible are sold in the financing, the conversion price of such securities, or (4) in the event that warrants or other rights are issued in the financing, the exercise price of such warrants or other rights. Notwithstanding the foregoing, whatever the Company raises up to the maximum note offering of $12 million during its in-process private placement from March 24, 2021 until April 22, 2021, the fees will be reduced to 33% of the amounts indicated in this paragraph during this time period. The engagement letter established accountable expenses up to an aggregate of $230,000. The Engagement Letter terminated on the later of (i) eighteen (18) months from the date executed (March 23, 2021) or (ii) twelve months from the completion date of the IPO and the term may be extended pursuant to the engagement letter. Also, the Company agreed that the advisor shall have the right of first refusal (ROFR) for two (2) years from the consummation of a transaction or termination or expiration of the Engagement Letter to act as advisor or as joint financial advisor under at least equal economic terms to the Engagement Letter. In accordance with the Engagement Letter, NYIAX had engaged Boustead Securities as its sole representative, underwriter and financial advisor. The Company was unable to complete the initial public offering at such time. NYIAX requested the SEC declare the offering effective. Upon the SEC approval NYIAX became a 1934 Securities Act reporting company with all the related responsibilities and costs. In accordance with the ROFR, the Company informed Boustead of its intention to offer the 2023B Convertible Notes Payable. Licensing Fee The Company and Nasdaq, Inc (“NASDAQ”) have entered into a Joint Intellectual Property and an Information Technology Services Agreement. Nasdaq provides cloud-based marketplace technology to NYIAX, and NYIAX custom software instance of Nasdaq’s technology is a backend infrastructure component of that processes. Pursuant to an IT Services Agreement, as amended in December 2020, commencing April 2022, NYIAX is obligated to compensate NASDAQ an annual license fee of $350,000 and revenue sharing of 0.5% to 10% of revenue depending upon various criteria. The Company recognizes expenses related to the NASDAQ annual licensing fee in the period for the which the services related to the annual license are utilized and recognizes expenses related to the NASDAQ revenue sharing in the period that the Company recognizes revenue related to the NASDAQ agreements. For the year ended December 31, 2022, the Company recorded approximately $262,500 of expense related to the annual license fee and $70,000 of expense related to revenue sharing. No expenses were incurred related to the revenue sharing agreements for the year ended December 31 2021. |
Shareholder Equity
Shareholder Equity | 12 Months Ended |
Dec. 31, 2022 | |
Shareholder Equity [Abstract] | |
Shareholder Equity | Note 4 — Shareholder Equity: Authorized and Outstanding Shares As of December 31, 2022 the Company had authorized 135,000,000 shares consisting of 125,000,000 shares of common stock and 10,000,000 shares of preferred stock each with a par value of $0.0001. During 2021, the Company increased its authorized shares from 20,000,000 shares of common stock at a par value $0.0001 per share to 135,000,000 shares consisting of 125,000,000 shares of common stock and 10,000,000 shares of preferred stock each with a par value of $0.0001 As of December 31, 2022 and 2021, there were 12,370,002 and 10,243,442 common shares outstanding, respectively. Issuance of Shares to Founders In 2016, the Company issued 4,233,696 shares to Founders valued at par value, $0.0001 per share. The shares had various restrictions, primarily service periods and vested either immediately or over three years. 604,832 shares were cancelled and did not vest. At December 31 2022 and 2021, 3,628,864 shares were fully vested and outstanding. Registration Rights and Restrictions of Previous Offerings Investors in the August 2016, July 2017, June 2018, July 2019, and April 2020 Offerings (collective, “Previous Offering(s)”) were entitled to standard “piggyback” registration rights on all registrations of the Company effected for other investors. In connection with the Previous Offerings, each investor also entered into a Shareholder Agreement with the Company which contains restrictions on transfer of the shares purchased including lock-up provision pursuant to which no person may sell or transfer any shares acquired or any other shares held by it until 180 days from the date of an initial public offering of the Company. Convertible Notes Payable Conversions to Common Stock On July 19, 2021, the 2020 Convertible Note Payable issued in 2020 including an aggregate principal amount of $4,004,900 (excluding deferred debt discount and amortization of discount) and accrued payment-in-kind interest of approximately $334,000 converted to 867,767 shares of common stock. On May 30, 2022, the 2021 Convertible Note Payable, including an aggregate principal amount of $7,176,335 (excluding deferred debt discount and amortization of discount) and accrued payment-in-kind interest of approximately $742,700 converted to 1,583,807 shares of common stock. On December 21, 2022, the December 2021 Convertible Note Payable, including an aggregate principal amount of $50,000 (excluding deferred debt discount and amortization of discount) and accrued payment-in-kind interest of approximately $5,000 converted to 11,000 shares of common stock. Warrant Exercises During 2022, and 2021 approximately 418,473 and 235,693, respectively, warrants issued with convertible notes payable were exercised for proceeds of approximately $1,285,809 and $2,093,000, respectively. Equity Incentive Plans On September 6, 2016, the Board of Directors adopted a 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan was approved by our shareholders on September 28, 2016. On January 18, 2018, the Board of Directors and shareholders adopted a 2017 Equity Incentive Plan (the “2017 Plan”). On April 23, 2021, the Board of Directors and shareholders adopted a 2021 Equity Incentive Plan (the “2021 Plan”). (collectively the “Equity Incentive Plans”). 13,744,376 options have been authorized under the Equity Incentive Plans as follows: Options Authorized 2016 Plan 1,139,544 2017 Plan 604,832 2021 Plan 12,000,000 13,744,376 The 2016 Plan shall continue in effect until its termination by the Board; provided, however, that all Awards shall be granted, if at all, within ten (10) years from September 6, 2016. “Award” means an Option, Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock Bonus, Restricted Stock Unit, or Stock-Based Award granted under the 2016 Plan. Shares issued pursuant to the 2016 Plan are exempt from requirements of registration and qualification of such securities. The 2017 Plan shall continue in effect until its termination by the Board; provided, however, that all Awards shall be granted, if at all, within ten (10) years from December 15, 2017. “Award” means an Option, Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock Bonus, Restricted Stock Unit, or Stock-Based Award granted under the 2017 Plan. Shares issued pursuant to the 2017 Plan are exempt from requirements of registration and qualification of such securities. The 2021 Plan shall continue in effect until its termination by the Board; provided, however, that all Awards shall be granted, if at all, within ten (10) years from April 23, 2021. “Award” means an Option, Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock Bonus, Restricted Stock Unit, or Stock-Based Award granted under the 2021 Plan. Shares issued pursuant to the 2021 Plan are exempt from requirements of registration and qualification of such securities. Payment of earned Stock-Based Awards shall be as determined by the Board and as evidenced in the award agreement. Subject to the terms of the Plans, the Board, in its sole discretion, may pay earned Stock-Based Awards in the form of cash or in shares of Stock (or in a combination thereof) that have an aggregate Fair Market Value equal to the value of the earned Share-Based Awards. Options are not exercisable after the expiration of ten (10) years after the effective date of grant of such Option. All exercises are subject to various the Equity Incentive Plan restrictions. For the years ended December 31, 2022 and 2021, the Company recorded share based compensation as follows 2022 — Share-based compensation Share-based compensation related to Equity Plans was allocated as follows: Cost of sales $ 62,099 Technology and development 59,734 Sales, general and administrative 2,179,902 Total $ 2,301,735 2021 — Share-based compensation Share-based compensation related to Equity Plans was allocated as follows: Cost of sales $ 7,940 Technology and development 19,226 Sales, general and administrative 3,860,686 Total $ 3,887,852 Of the total share-based compensation for the twelve months ended December 31, 2022 of approximately $2.3 million, approximately $607,000 related to the issuance of restricted share units, approximately $200,000 related to principal stockholder share-based payment award, and the remainder, 1,494,000 related to the issuance of options and warrants. Of the total share-based compensation for the twelve months ended December 31, 2021 of approximately $3.9 million, $1.0 million related to principal stockholder share-based payment award and the remainder related to the issuance of options and warrants. The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted average assumptions used to value options granted to employees and warrants to contractors for the twelve-month period ending December 31, 2021, was as follows: Risk-free Interest rate 0.27% – 2.92% Expected Term at Issuance 5 – 7 years utilizing the practical expedient method in accordance with ASC 718 Volatility 61.7% (The Company used an average volatility of comparable entities, to develop an estimate of expected volatility.) Dividend Rate 0 The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted average assumptions used to value options granted to employees and warrants to contractors for the twelve-month period ending December 31, 2022, was as follows: Risk-free Interest rate 2.8% Expected Term at Issuance 5 – 7 years utilizing the practical expedient method in accordance with ASC 718 Volatility 63.9% (The Company used an average volatility of comparable entities, to develop an estimate of expected volatility.) Dividend Rate 0 The following table summarizes common stock option and warrant award activity: Options Weighted Remaining Aggregate Balance, January 1, 2021 1,574,126 $ 2.71 5.0 — Granted 1,607,500 4.33 10.0 Exercised (65,000 ) (Forfeiture) — Balance, December 31, 2021 3,116,626 $ 4.44 7.0 Exercisable, December 31, 2021 2,405,534 $ 3.25 6.3 Balance, January 1, 2022 3,116,626 $ 4.44 7.0 Granted 517,500 Exercised (6,060 ) (Forfeiture) (555,000 ) Balance, December 31, 2022 3,073,066 $ 5.22 6.0 Exercisable, December 31, 2022 2,711,448 $ 3.40 7.1 As of December 31, 2021, there were 711,092 unvested options to purchase shares of the Company’s common stock and approximately $1,857,000 of unrecognized share-based compensation expense that the Company expected to recognize over the next twelve months. As of December 31, 2022, there were 367,678 unvested options to purchase shares of the Company’s common stock and approximately $1,099,000 of unrecognized share-based compensation expense that the Company expected to recognize over the next twelve months. Principal Stockholder Share-based Payment Award On November 11, 2022 principal stockholders transferred 100,000 of their shares, 50,000 each, to a contractor of the Company; The Company valued the awards on those dates at the most recent price per unit sold by the Company, or $5.00 per share. The expenses, approximately $200,000, was recorded as share-based compensation for the twelve months ended December 31, 2022. There were no performance conditions, in the periods the share-based payment were granted. The Company expensed the awards as share-based compensation as consistent with the Codification of Staff Accounting Bulletins Topic 5: Miscellaneous Accounting, T. Accounting for Expenses or Liabilities Paid by Principal Stockholder(s). On June 22, 2021, principal stockholders transferred 200,000 of their shares, 100,000 each, to a contractor of the Company. The Company valued the awards on those dates at the most recent price per unit sold by the Company, or $2.00 per share. The expenses, approximately, $1,000,000, was recorded as share-based compensation for the twelve months ended December 31, 2021. There were no performance conditions, in the periods the share-based payment were granted. The Company expensed the awards as share-based compensation as consistent with the Codification of Staff Accounting Bulletins Topic 5: Miscellaneous Accounting, T. Accounting for Expenses or Liabilities Paid by Principal Stockholder(s). On October 29, 2020, a terminated employee was granted 65,000 common shares of NYIAX by two principal stockholders to be distributed to the terminated employee only upon an initial public offering (IPO) or merger. The Company estimates the value of these shares at approximately $325,000. In accordance with ASC 718, the Company has not recognized expenses related to these transferred shares as the performance condition of “initial public offering (IPO) or merger” has not been met. Warrant Exercise/Deemed Dividend from Inducement to Exercise Warrants Effective January 13, 2022, as an inducement to warrant holders to exercise their warrants issued previously with common stock offerings, the Company reduced the exercise price to $5.50 from $6.50 – $6.60 until March 25, 2022. Approximately 235,693 warrants were exercised at $5.00 – 5.50 per share for the aggregate proceeds of approximately $1.3 million. 214,693 warrants were exercised resulting from the Company’s reducing the exercise price to $5.50 from $6.50 and 11,000 were exercised from previously issued warrants with a strike price of $5.00 per share. As a result of these transactions, the Company recognized a deemed dividend of approximately $28,600 resulting from the excess of the fair value of the modified warrants over the fair value of the original warrants immediately before the modification. The fair value of the warrants issuable according to the original terms of the original contracts were estimated immediately before the modification based on the Black-Scholes option pricing model. The weighted average assumptions used to value the investor warrants for the periods presented were as follows: Risk-free Interest rate 1.64% Expected Term at Issuance 6.4 – 8.2 years Volatility 69.2% Dividend Rate 0 The fair value of the modified warrants in the transaction were estimated based on the Black-Scholes option pricing model. The weighted average assumptions used to value the investor warrants for the periods presented were as follows: Risk-free Interest rate 1.64% Expected Term at Inducement date 6.4 – 8.2 years Volatility 69.2% Dividend Rate 0 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 5 — Convertible Notes Payable 2020 Convertible Note Payable During the year ended December 31, 2020 the Company sold convertible note payable (the “2020 Convertible Note Payable”) with fifty (50%) percent warrant (the “Warrants”) coverage to the dollar value of the Note at a $5.00 per share exercise price for the Warrants. As of December 31, 2020, $4,004,900 of 2020 Convertible Note Payable were sold, 400,490 Warrants were issued and $148,000 of interest was accrued. The 2020 Convertible Note Payable had an annual rate of return of ten 10.0% percent, which shall be paid as Payment-in-Kind (“PIK”) with a payment in Company common stock valued at $5.00 per share at the Maturity Date, October 30, 2021, or upon conversion. Upon the Company issuing and selling units in a sale or a series of sales of its equity or debt financing securities on or before the maturity date in a financing event in which cumulative gross proceeds equal or exceed $5,000,000, then the outstanding principal balance of the 2020 Convertible Note Payable and all accrued and unpaid interest, automatically converted into such equity or debt financing securities under the same terms and conditions as those equity or debt financing securities purchased in the Financing Event. On July 19, 2021, the Company’s 2021 Convertible Note Payable offering had cumulative gross proceeds exceeding $5,000,000 of outstanding principal balance. In accordance with the 2021 Convertible Note Payable, cumulative proceeds of $5,000,000 or more was a triggering factor and all 2020 Convertible Note Payable issued in 2020 and all accrued and unpaid interest automatically converted into common stock under the same terms and conditions as those equity securities purchased in the financing event. The 2020 Convertible Note Payable, including all outstanding and related interest converted to 867,767 shares of common stock on July 19, 2021. As of December 31, 2021 was there were no 2020 Convertible Note Payable outstanding. 2021 Convertible Note Payable During 2021, the Company sold convertible note payable (the “2021 Convertible Note Payable”) with fifty (50%) percent warrant (the “Warrants”) coverage to the dollar value of the Note at a $5.00 per share exercise price for the Warrants. As of December 31, 2021, $7,226,335 of 2021 Convertible Note Payable were sold, 722,637 Warrants were issued. The 2021 Convertible Notes Payable had an annual rate of return of ten 10.0% percent, which shall be paid as Payment-in-Kind (“PIK”) with a payment in Company common stock valued at $5.00 per share at the Maturity Date, May 30, 2022, or upon conversion. On May 30, 2022 and December 21, 2022, the December 2021 Convertible Note Payable, including an aggregate principal amounts of $7,176,335 and $50,000, respectively (excluding deferred debt discount and amortization of discount) and accrued payment-in-kind interest converted to 1,583,807 and 11,000 shares of common stock, respectively. The warrants did not contain obligations of the Company to (i) redeem the warrants for cash or other assets, (ii) repurchase the Company’s equity shares by transferring assets, or (iii) to issue a variable number of equity shares and in accordance with ASC-480 Distinguishing Liabilities From Equity, the Company is accounting for the conversion feature and the warrants as equity. The relative value of the beneficial conversion features and the warrants are recorded as deferred debt discount and amortized over the term of the convertible note e using the effective interest method. The deferred debt discount is being amortized over the life of the convertible note payable. The warrants as calculated by the Black-Scholes formula, were allocated to the convertible note payable debt discount. The inputs for the Black-Scholes formula, were as follows: ● Term — 4 – 17 months ● Risk-free Interest Rate — 0.1% to 0.8%, average of 0.6% ● Dividend Rate 0 ● Volatility 61.7% In connection with the issuance of the 2021 convertible notes payable, the Company recorded compensation to its advisor of $362,693 and 78,292 of warrants, see below, in accordance with the Advisor’s Engagement Letter – see Note 4 — Commitments and Licensing Fee. The warrants issued had an exercise price of $5.00 per share. The cash payment has not been paid and was included in accounts payable and accrued expenses as of December 31, 2022 and 2021, respectively. The Company determined the conversion feature and warrants qualify for equity treatment. The Warrants did not contain obligations of the Company to (i) redeem the warrants for cash or other assets, (ii) repurchase the Company’s equity shares by transferring assets, or (iii) to issue a variable number of equity shares and in accordance with ASC-480 Distinguishing Liabilities From Equity, the Company is accounting for the conversion feature and the warrants as equity. The relative value of the beneficial conversion features and the warrants are recorded as deferred debt discount and amortized over the term of the convertible note using the effective interest method. The deferred debt discount is being amortized over the life of the convertible note payable. On December 15, 2022 the Company was advised that under FINRA rules the financial advisor could not accept the warrants, as acceptance of the warrants would result in a violation of the FINRA compensation guidelines for the advisor. Accordingly, effective on December 15, 2022, the advisor has waived all rights and privileges in connection with the 78,292 aforementioned warrants. The Company recorded the advisor’s waiver as a forfeiture of the warrants, the deferred debt discount and related amortization were reversed The debt discount of the warrants was calculated by the Black-Scholes formula. The inputs for the Black-Scholes formula, were as follows: ● Term — 12-21 months ● Risk-free Interest Rate — 0.03% to 0.8%, average of 0.36% ● Dividend Rate 0 ● Volatility 61.7% The following table illustrates the value of the convertible note payable as of December 31, 2022: 2021 2021 Convertible Note Payable at Issuance 7,226,335 Payments to advisor, debt discount (362,693 ) 6,863,642 (Deferred debt discount, including beneficial conversion features of $749,551) (1,499,102 ) (Deferred debt discount from Advisor fee) (114,043 ) 5,250,496 Amortization of debt discounts for year ending December 31, 2021 1,103,730 2021 Convertible Note Payable balance at December 31, 2021 $ 6,354,227 2021 Convertible Note Payable balance at December 31, 2022 $ 0 2022 Convertible Note Payable During 2022, the Company sold convertible note payable (the “2022 Convertible Note Payable”) The 2022 Convertible Note Payable convert at $2.00 per share concurrently when shares of common stock are sold to the public in the financing event; or in the event the financing event is not completed within eighteen (18) months from the date of the individually issued notes, the Conversion Price, reduced from the original conversion price of $4.00 per share, was two dollars ($2.00) per share and the Conversion Amount shall automatically be converted into common stock of the Company at $2.00 per share on the Maturity. The 2022 Convertible Note Payable carry an annual rate of return of twelve (12.0%) percent simple interest and all interest and principle are paid in the Company’s Common Shares at a value of five ($2.00) dollars per share, or, as Payment-in-Kind, or P-I-K. Interest shall be paid quarterly until maturity date. Additionally, concurrently, with the 2022 Convertible Notes, the Company issued with the 2022 Convertible Notes Warrant (the “Warrants”) at a rate of one (1) Warrant for every $10 of Notes purchased. Each Warrant shall be exercisable for a period of five (5) years at a price of $5.50 per share. As of December 31, 2022, $2,570,000 of 2022 Convertible Note Payable were sold, 257,000 Warrants were issued. The warrants did not contain obligations of the Company to (i) redeem the warrants for cash or other assets, (ii) repurchase the Company’s equity shares by transferring assets, or (iii) to issue a variable number of equity shares and in accordance with ASC480 Distinguishing Liabilities from Equity, the Company is accounting for the conversion feature and the warrants as equity. In accordance with ASC 480 written put options and warrants to issue redeemable equity securities. The relative value of the beneficial conversion features and the warrants are recorded as deferred debt discount and amortized over the term of the convertible note using the effective interest method. The deferred debt discount is being amortized over the life of the convertible note payable. The warrants were calculated by the Black-Scholes formula, were allocated to the convertible note payable debt discount. The inputs for the Black-Scholes formula, were as follows: ● Term — 3 - 18 months (maturity date of the convertible notes) ● Risk-free Interest Rate — 3.1% to 4.4%, average of 3.9% (US Treasury rates) ● Dividend Rate 0 (Historical amounts) ● Volatility 69.5-82.5% On November 14, 2022, the board of directors modified the terms of the 2022 Convertible Note Payable and decreased the conversion from $4.00 to $2.00. This modification was recorded in accordance with ASC-470. The gain on debt modification of $208,811 was recognized for the year ending December 31, 2022. The gain is being amortized over the life of the debt. In connection with the issuance of the 2022 Convertible Notes Payable, the Company recorded compensation of approximately $205,600 and 66,413 of warrants to our financial advisor. The Warrants issued had an exercise price of $2-$4.00 per share. The cash payments have not been paid and was included in accounts payable and accrued expenses as of December 31, 2022. The debt discount of the warrants remaining after termination was calculated by the Black-Scholes formula. The inputs for the Black-Scholes formula, were as follows: ● Term — 13-15 months ● Risk-free Interest Rate — 4.5% to 4.7%, average of 4.6% ● Dividend Rate 0 ● Volatility 77.3-82.5% 2022 Convertible Note Payable at Issuance 2,570,000 Deferred debt discount and payments to advisor (529,811 ) 2,040,189 Amortization of debt discounts for period 315,546 2022 Convertible Note Payable as of December 31, 2022 2,355,735 |
Paycheck Protection Program Loa
Paycheck Protection Program Loan | 12 Months Ended |
Dec. 31, 2022 | |
Paycheck Protection Program Loan [Abstract] | |
Paycheck Protection Program Loan | Note 6 — Paycheck Protection Program Loan – The Company received a loan from Wells Fargo Bank in the amount of $361,605 under the Paycheck Protection Program established by the CARES Act. The loan is subject to a note dated May 14, 2020 and may be forgiven to the extent proceeds of the loan were used for eligible expenditures such as payroll and other expenses described in the CARES Act. The loan bore an interest at a rate of 1% and was payable in monthly installments of principal and interest over 24 months beginning 6 months from the date of the note. The Company applied for forgiveness of the loan and interest in the full amount. On May 20,2021, the U.S. Small Business Administration forgave NYIAX’s Paycheck Protection Loan as authorized by the CARES Act and the Company recorded other income of $361,605. On December 31, 2022 and 2021, the loan balances were $0. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 — Income Taxes – NYIAX, Inc. is taxed as a “C” Corporation subject to federal, state and local income taxes. For the years ended December 31, 2022 and 2021, NYIAX did not have any income for tax purposes and therefore, no current tax liability or expense has been recorded in these financial statements. A reconciliation of income tax expense computed at the statutory federal income tax rate to the provision for income taxes for the years ended December 31, 2022 and 2021 is as follows: 2022 2021 Net Loss for the Year $ (11,114,179 ) $ (13,498,626 ) Statutory federal income tax rate 21 % 21 % Tax benefit using statutory federal income tax rate (2,333,977 ) (2,834,711 ) State and local taxes, net of federal benefit (965,370 ) (1,286,910 ) Non-deductible expenses, net of federal income tax rate 328,290 432,078 Start-up Costs ( 146,490 ) Change in valuation allowance 2,685,198 3,730,000 SBC 430,501 Other, net 1,849 (40,457 ) Income tax expense (benefit) $ - $ - Effective income tax rate 0 % 0 % At December 31, 2022, the Company has available Federal net operating loss carryforwards (“NOLs”), of approximately $23.9 million to reduce future taxable income which do not expire but are limited to 80% of taxable income and approximately $23.9 million in multiple states the earliest expiring in 2040. The Company evaluates the need for a valuation allowance at each report date. Management has determined that it is not more-likely-than-not that the deferred tax assets will be realized. A full valuation allowance is provided against the deferred tax assets at December 31, 2022 and 2021. Deferred tax asset at December 31, 2022 and 2021 consists of the following: 2022 2021 Deferred tax asset Start-up costs $ 5,042,480 $ 5,188,000 Stock based compensation 2,738,000 2,727,000 Section 174 101,398 Net Operating Loss 7,377,233 4,729,000 Other (81,973 ) 79,000 15,177,167 12,723,000 Valuation allowance (15,177,167 ) (12,723,000 ) Net deferred taxes $ - $ - |
Capitalized Software Developmen
Capitalized Software Development Costs | 12 Months Ended |
Dec. 31, 2022 | |
Capitalized Software Development Costs [Abstract] | |
Capitalized Software Development Costs | Note 8 — Capitalized Software Development Costs - Capitalized software development costs, net of amortization as of December 31, 2022 and 2021 was $393,157 and $589,735, respectively. The Company had gross capitalized software development costs of $982,891 as of December 31, 2022 and 2021. The Company commenced amortizing the capitalized software development costs in January 2020. For the years ended December 31, 2022 and 2021, the Company amortized $196,578 and $196,578 of capitalized software development costs, respectively. In accordance with ASC 360 Impairment Accounting for the Impairment or Disposal of Long-Lived Assets, the Company periodically reviews the carrying value of long-lived assets whenever events or changes in circumstances indicate that the historical carrying value of the long-lived assets may have been impaired. Management determined long-lived assets held at December 31, 2022 had not been impaired. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 — Related Party Transactions - Related Party Transactions — Former CEO The Company’s former CEO is also a shareholder and Director of the Company. The former CEO is a co-founder of a private investment fund, GoldStreet Holdings Limited Partnership (“GoldStreet”). For the year ended December 31, 2022, the Company recorded $10,000 of general and administrative expenses related to GoldStreet for office space. For the year ended December 31, 2021, the Company recorded $34,614 of general and administrative expenses related to GoldStreet for office space and related charges which was included in accounts payable and accrued expenses as of December 31, 2021. Payables to Shareholder-Founders At December 31, 2022 and 2021 the Company had a payable to certain shareholder-founders in aggregate amount of $100,500 and $610,500, respectively, for unpaid bonuses of $510,000 at December 31, 2021, and $100,500 for reimbursement of certain expenses at December 31, 2022 and 2021. The services related to the bonus have been rendered and the amounts are recorded as payables to shareholder-founders. During May 2022 the founder-shareholders Carolina Abenante and Mark Grinbaum entered into a new employment and a new consulting agreement, respectively. The agreements revised their respective responsibilities, terms and future compensation. The employment and consulting agreements revised the amounts owed for unpaid bonuses from $510,000 to $0. This was recorded as a contra-expense to selling, general and administrative expenses. Employment Agreements The Company has entered into employment agreements with executive managers. Generally the agreements are “at will” agreements and have a termination benefit of up to three months of salary. On May 23, 2022, the Company and Carolina Abenante entered into an employment agreement and general release, pursuant to which Ms. Abenante agreed to be employed as Co-Founder, Chief Strategy Officer, Chief Evangelist, Vice Chairperson and Director of the Company. The agreement automatically renews for one year on each anniversary date, unless it is terminated earlier with 30 days’ written notice by either party prior to each renewal. As compensation, the Company agreed to pay Ms. Abenante (i) a base salary at the rate of $255,000 per annum except that for the period of May 16, 2022 through July 15, 2022, Ms. Abenante’s base salary will be $100,000 per year; and (ii) an annual discretionary bonus of 20% of the actual paid base salary. On May 24, 2022, the Company and Mark Grinbaum entered into a consulting agreement, pursuant to which Mr. Grinbaum agreed to perform services in the role of Co-Founder and Executive Vice President of Financial Products of the Company, which is a part-time non-exclusive position for twelve months. The Company agreed to pay Mr. Grinbaum a base compensation of $90,000 per year. On May 26, 2022, Mr. Hogan and the Company entered into an employment agreement, pursuant to which Mr. Hogan agreed to be employed as President and Chief Operating Officer of the Company and agreed to act as Interim Chief Executive Officer. The Company agreed to pay Mr. Hogan (i) a base salary of $360,000 per annum; (ii) a discretionary bonus of up to 50% of salary; (iii) an annual award of incentive stock options to purchase 75,000 shares of common stock of the Company at market price; and (iv) one-time incentive bonus of $20,000 to $250,000 to be paid to Mr. Hogan based upon meeting key performance indicators related to media billed on the Company’s platform. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2022 | |
Operating Leases [Abstract] | |
Operating Leases | Note 10 — Operating Leases On January 1, 2021 (“Effective Date”), the Company adopted ASC 842. The new guidance requires the recognition of right-of-use (“ROU”) assets and related operating lease liabilities on the balance sheet for those leases previously classified as operating leases. The Company adopted this new guidance using the modified retrospective approach. For contracts entered into on or after the Effective Date, at the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtained the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2021, which were accounted for under ASC 840, Leases, were not reassessed for classification. At the Effective Date, there were no leases in place which qualified for accounting under ASC 842, as such existing leases had remaining lease terms of less than twelve months at the Effective Date. During the year ended December 31, 2021, the Company entered into a new office lease which qualified for recognition of ROU assets and related operating lease liabilities. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments. The Company generally uses its incremental borrowing rate as the discount rate for leases unless an interest rate is implicitly stated in the lease. The Company’s incremental borrowing rate used for all leases under ASC 842 was 5.60%, the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The lease term for the Company’s leases includes the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. ROU assets, once recorded, are reviewed annually for impairment. On September 1, 2021, the Company entered into an operating sub-lease for office space at 180 Maiden Lane, New York, NY 10005 that commenced on November 1, 2021 and expires September 29, 2025. Base rent is $14,814 per month, rent escalation is 2% per annum commencing on the first anniversary of lease commencement and there is a rent concession of three months following the Company’s possession of space. On the commencement date, the Company recorded a right-of-use asset and lease liability in the amount of $563,713. Balance sheet information related to our leases is presented below: As of Operating leases: Balance Sheet Location December 31, December 31, November 1, Right-of-use assets Operating lease right-of-use asset $ 395,470 $ 537,836 $ 563,713 Operating lease liability, current Current portion of operating lease obligations 162,503 135,455 106,810 Operating lease liability, long-term Operating lease obligations, net of current maturities 268,385 430,888 456,903 As of Weighted-average discount rate – operating lease 5.60 % Weighted-average remaining lease term – operating lease (in months) 30 As of December 31, 2022, the expected annual minimum lease payments of our operating lease liabilities: For Years Ending December 31, Operating 2023 182,526 2024 186,177 2025 94,320 Total future minimum lease payments, undiscounted 463,023 Less: Imputed interest for leases in excess of one year 32,135 Present value of future minimum lease payments $ 430,888 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 — Subsequent Events Management has evaluated events that have occurred subsequent to the date of these condensed financial statements and has determined that, other than those listed below, no such reportable subsequent events exist through July 20, 2023 in accordance with FASB ASC Topic 855, “Subsequent Events.” Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement other than noted above and below: Convertible Note Offerings 2023A Convertible Note Payable On January 10, 2023, the Company commenced a Convertible Notes Offering (“2023A Convertible Note Payable”) pursuant to which it offered up to $500,000 of convertible notes. A total of approximately $200,000 of the 2023A Convertible Notes have been sold. ● The 2023A Convertible Notes convert at two dollars ($2.00) per share concurrently when shares of common stock are sold to the public in the Financing Event, which was defined as just prior to the Company’s Form S-1 being declared effective, or in the event the Financing Event is not completed within eighteen (18) months from the date of the individually issued notes, the Conversion Price was reduced from four dollars ($4.00) per share to two dollars ($2.00) per share and the conversion amount shall automatically be converted into common stock of the Company at $2.00 per share on the Maturity Date. The annual rate of return was twelve percent (12.0%) per annum, which was paid as a Payment-in-Kind in the Company’s common stock valued at two dollars ($2.00) per share. Concurrently with the 2023A Convertible Notes, the Company issued warrants (the “Warrants”) at a rate of one (1) Warrant for every ten dollars ($10) principal amount of notes purchased. Each Warrant shall be exercisable for a period of five (5) years at a price of $5.50 per share. See Subsequent Events footnote for more details relating to the 2023A Convertible Note Payable The outstanding principal balance of the 2023A Convertible Notes and all accrued interest automatically converted into common stock of the Company on February 7, 2023, immediately prior to the Company’s receipt of an effective order from the SEC declaring the registration statement of its initial public offering effective. Conversion of Notes Payable to Common Stock In accordance with 2022 Convertible Note Payable and the 2023A Convertible Note Payable, just prior to the Company’s Form S-1 being declared effective, the On February 7, 2023, the 2022 Convertible Note Payable and the 2023A Convertible Note Payable, including an aggregate principal of $2,570,000 of the 2022 Convertible Note Payable and $200,000 of the 2023A Convertible Note Payable (excluding deferred debt discount and amortization of discount) and accrued payment-in-kind interest converted to 1,441,497 shares of common stock. Withdrawn Public Offering On February 14, 2023, the Registration Statement on Form S-1 filed by the “Company with the Securities and Exchange Commission (the “SEC”) was declared effective by the SEC. The Company planned to offer 1,850,000 shares of common stock (or 2,127,500 shares of common stock if the underwriters exercised their over-allotment option in full) at a price of $5.00 per share, for an aggregate offering of $9,250,000 (the “Offering”). The Company’s financial advisor, representative and lead underwriter for the Offering was Boustead Securities LLC (“Boustead”). Boustead has informed the Company of its decision not to proceed with pricing of the Company’s Offering. In addition, because the Offering was not timely priced, the Company was informed by NASDAQ on March 7, 2023 that it would not be in compliance with NASDAQ listing requirements and therefore the Company could not currently be listed on the NASDAQ. The Company has determined to continue to pursue an initial public offering (“IPO”) and NASDAQ listing of its securities as well as other possible financing alternatives. On April 12, 2023, the Company engaged Spartan Capital Securities, LLC, as lead underwriter, deal manager and investment banker for the Company’s IPO. However, there can be no assurance that we will be able to complete an IPO in the near future, if at all. 2023B Convertible Note Payable On April 3, 2023, the Company commenced a Convertible Notes Offering (“2023B Convertible Note Payable”) pursuant to which it will offer up to $2,000,000 of convertible notes. The 2023A Convertible Notes convert at two dollars ($2.00) per share concurrently when shares of common stock are sold to the public in the Financing Event, or in the event the Financing Event is not completed within eighteen (18) months from the date of the individually issued notes, the Conversion Price shall be the reduced price of two dollars ($2.00) per share and the conversion amount shall automatically be converted into common stock of the Company at $2.00 per share on the Maturity Date. The annual rate of return is twelve percent (12.0%) per annum, which shall be paid as a Payment-in-Kind in the Company’s common stock valued at two dollars ($2.00) per share. Concurrently with the issuance of the 2023B Convertible Notes Payable, the company issues warrants (the “Warrants”) The Warrants were issued at a rate of one half warrant issued for every $10 of notes purchased with an exercise price of four dollars ($4.00).and one half warrant issued for every $10 of notes purchased with an exercise price of two dollars ($2.00). Each Warrant shall be exercisable for a period of five (5) year. $ 1.970,000 Threatened Litigation As discussed in note 3 — commitments and licensing fee, on March 23, 2021, the company entered into an engagement letter (the “Engagement Letter”) with Boustead Securities LLC, an advisor to the Company for certain corporate financing transactions. The Engagement Letter provides for Initial Public Offering (“IPO”), Pre-IPO and corporate finance transaction advice and the advisor expressed its intent to enter into an underwriting agreement with the Company to act as the lead underwriter for the proposed IPO on a firm commitment basis. For financing transactions, including IPO and pre-IPO financings, the advisor would charge the Company (i) seven percent (7%) of the gross amount to be disbursed to the Company from each such investment transaction closing plus, (ii) a non-accountable expense allowance equal to one percent (1%) of the gross amount to be disbursed to the Company from each such investment transaction closing, plus (iii) warrants equal to seven percent (7%) of the gross amount to be received by the Company from each such investment transaction closing. The warrant exercise price is defined as the lower of: (1) the fair market value price per share of the Company’s common stock as of each such financing closing date, (2) the price per share paid by investors in each respective financing, (3) in the event that securities convertible are sold in the financing, the conversion price of such securities, or (4) in the event that warrants or other rights are issued in the financing, the exercise price of such warrants or other rights. Notwithstanding the foregoing, whatever the Company raises up to the maximum note offering of $12 million during its in-process private placement from March 24, 2021 until April 22, 2021, the fees will be reduced to 33% of the amounts indicated in this paragraph during this time period. The engagement letter established accountable expenses up to an aggregate of $230,000. The Engagement Letter terminated on the later of (i) eighteen (18) months from the date executed (March 23, 2021) or (ii) twelve months from the completion date of the IPO and the term may be extended pursuant to the engagement letter. Also, the Company agreed that the advisor shall have the right of first refusal (ROFR) for two (2) years from the consummation of a transaction or termination or expiration of the Engagement Letter to act as advisor or as joint financial advisor under at least equal economic terms to the Engagement Letter. On February 14, 2023, the Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission (the “SEC”) was declared effective by the SEC. The Company’s financial advisor, representative and lead underwriter for the Offering was Boustead Securities LLC (“Boustead”). Boustead informed the Company of its decision not to price and consequently the Company was unable to complete the initial public offering at such time NYIAX requested the SEC declare the Registration Statement on Form S-1 effective. Upon the SEC approval, NYIAX became a 1934 Securities Act reporting company with all the related responsibilities and costs. The Company has determined to continue to pursue an initial public offering (“IPO”) and NASDAQ listing of its securities. On April 12, 2023, the Company engaged Spartan Capital Securities, LLC, as lead underwriter, deal manager and investment banker for the Company’s IPO. However, there can be no assurance that we will be able to complete an IPO in the near future, if at all. On April 7, 2023, the Company received a demand letter from Boustead. Boustead claims that the Company owes or will owe Boustead approximately $1 million for commissions on funds privately raised by the Company during its engagement with Boustead and approximately $1,230,000 if the Company completes an IPO with another underwriter. The Company disputes the amounts owed that have been claimed by Boustead and further is of the belief that if any commissions are due to Boustead, they would be significantly less than the amounts claimed by Boustead. There can be no assurance that Boustead will not initiate a lawsuit to recover the amounts it claims are owed and any such litigation could impede our ability to complete an IPO and could negatively affect our financial condition. In addition, there can be no assurance that the Company would prevail in any lawsuit it commences against Boustead. Purchase of Intellectual Property Portfolio On July 8, 2023, NYIAX, Inc. (the “Company”) completed the purchase of a portfolio of patents and trade secrets (the “Portfolio”) from Network Foundation Technologies, LLC (“NIFTY”). The Company issued 2,000,000 shares of its common stock to NIFTY as consideration for the Portfolio. The transaction was approved by the Company’s board of directors and by NIFTY’s board of directors. A purchase price of approximately $4 million (plus certain capitalized costs for legal and other costs) will be recorded. The 2 million shares of common stock of NYIAX have various registration restrictions and provisions for the clawback of shares by the Company in certain events as set forth in the Asset Purchase Agreement (the “Agreement”). |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Financial Statements | Financial Statements The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US 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 revenue and expenses during the reporting period. Actual results could differ materially from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for doubtful accounts, (3) the useful lives of property and equipment and capitalized software development costs, (4) income taxes, (5) the valuation of share-based compensation, (6) assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options and warrants and (7) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates relating to the valuation of share-based compensation, options and warrants, require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ materially from those estimates under different assumptions or circumstances. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable consists of amounts billed to Media Buyers. Accounts receivable, net are carried at their contractual amounts, less an estimate for uncollectible amounts. Management estimates the allowance for bad debts based on existing economic conditions, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted. The Company performs ongoing credit evaluations of Media Buyers. The allowance for doubtful accounts is determined based on historical collection experience and the review in each period of the status of the then-outstanding accounts receivable, while taking into consideration current client information, subsequent collection history and other relevant data. The Company reviews the allowance for doubtful accounts on a quarterly basis. For the years’ ended December 31, 2022 and 2021 the Company had no allowance for doubtful accounts and no write-offs of accounts receivable. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and amortization, which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets, as follows: 3 to 5 years for office equipment and software. Repair and maintenance costs are expensed as incurred and major improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company capitalizes or expenses costs associated with creating internally developed software related to the Company’s technology infrastructure in accordance with ASC 350-40, Intangibles — Goodwill and Other — Internal Use Software, that generally relate to software that the Company does not intend to sell or market. All costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized in accordance ASC 350-40. Amortization commences when the software is available for its intended use. The estimated useful life of the capitalized software development costs is five years. The Company commenced amortizing the capitalized software development costs related to its platform in January 2020. Certain long-lived assets including capitalized software development costs are also subject to measurement at fair value on a nonrecurring basis if they are deemed to be impaired as a result of an impairment review. For the years ended December 31, 2022 and 2021, no impairments were recorded on those assets. |
Operating Leases | Operating Leases The Company has entered into operating leases consisting principally for the rental of office space. The Company adopted ASC 842. The guidance requires the recognition of right-of-use (“ROU”) assets and related operating lease liabilities on the balance sheet for those leases previously classified as operating leases. The Company adopted this new guidance using the modified retrospective approach. Under ASC 842, lease expense is recognized as a single lease cost on a straight-line basis over the lease term. The lease term consists of non-cancelable periods and may include options to extend or terminate the lease term, when it is reasonably certain such options will be exercised. The Company enters into contracts in the normal course of business and assesses whether any such contracts contain a lease. The Company determines if an arrangement is a lease at inception if it conveys the right to control the identified asset for a period of time in exchange for consideration. The Company classifies leases as operating or financing in nature and records the associated lease liability and right-of-use asset on its balance sheet. The lease liability represents the present value of future lease payments, net of lease incentives, discounted using an incremental borrowing rate, which is a management estimate based on the information available at the commencement date of a lease arrangement. With respect to operating lease arrangements, the Company accounts for lease components, and non-lease components that are fixed, as a single lease component. Non-lease components that are variable are expensed as incurred in the consolidated statement of operations. The Company recognizes costs associated with lease arrangements having an initial term of 12 months or less (“short-term leases”) on a straight-line basis over the lease term; such short-term leases are not recorded on the balance sheet. Lease expense for the years ended December 31, 2022 and 2021 were $197,245 and $63,121, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 — Unobservable inputs. Observable inputs are based on market data obtained from independent sources. The Company’s financial instruments approximate the carrying amounts of cash, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, and accounts receivable. The Company maintains its cash with financial institutions which exceed the Federal Deposit Insurance Corporation (“FDIC”) federally insured limits. As of December 31, 2022, three Media Sellers represented approximately 51%, 12% and 10% respectively of revenue, net. As of December 31, 2022, two Media Buyer represented for 67% and 20% of accounts receivable. As of December 31, 2022, two Media Sellers represented of 61% and 8% of accounts payable. As of December 31, 2021, three Media Sellers represented approximately 30%, 26%, and 11%, respectively of revenue, net. As of December 31, 2021, two Media Buyer represented for 45% and 41% of accounts receivable. As of December 31, 2021, four Media Sellers represented of 39%, 14%, 10% and 9% of accounts payable. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs include debt discounts and debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct reduction from the carrying value of the debt liability. Amortization of deferred financing costs are included as a component of interest expense. Deferred financing costs are amortized using the effective interest method. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs include specific incremental costs directly attributable to the Company’s initial public. Offering of securities. Deferred offering costs exclude management salaries or other general and administrative expenses. These costs are being deferred and will be charged against the gross proceeds of the offering. |
Revenue Recognition | Revenue Recognition NYIAX brings together Media Buyers (brands, advertisers or agencies) and Media Sellers (publishers or media) to execute media sales contracts. NYIAX receives a fee upon completion of the media contract. NYIAX does not take ownership of or positions in the media at any time during the process. Generally, the Company bills Media Buyers the gross amount of advertising, including the Company’s commissions or fees in a single invoice and pays the Media Seller upon receipt. The Company’s accounts receivable are recorded at the amount of gross billings for the amounts it is responsible to collect, and accounts payable are recorded at the amount payable to Media Seller. Substantially all of the Company’s revenues are recognized at the point in time that the (i) contract reconciliations are completed, (ii) accepted by the Media Buyer and Media Seller, and (iii) NYIAX’s performance obligations are completed. The Company maintains agreements with each Media Buyer and Media Seller which set out the terms of the relationship. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 — Identify the Contract with the Customer — A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 — Identify Performance Obligations in the Contract — Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 — Determine the Transaction Price — When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 — Allocate the Transaction Price — After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price at contract inception. Step 5 — Satisfaction of the Performance Obligations (and Recognize Revenue)–Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. The Company considers both the Media Buyers and Media Sellers to be its customers. However, currently, the Media Buyers do not pay the Company, and only the Media Sellers compensate the Company for the use of the platform and other services. Fees or commissions are established differently for each Media Seller dependent upon various variables, including anticipated volume. The performance obligations within the Company’s contractual arrangements with customers is satisfied upon the contract reconciliations being completed and accepted by the Media Buyer and Media Seller. The Company has determined that it is acting as an agent for the Media Seller as (i) NYIAX does not obtain control of the Seller’s media (goods & services) before transferring control to the Buyer. The Seller has control of the media. Specifically, NYIAX does not control the specified media before transferring the media to the Media Buyer, the Company is not primarily responsible for the performance of the Media Seller, nor can the Company redirect those services to fulfill any other contracts. (ii) NYIAX does not have inventory or credit risk for the media. And (iii) the Media Seller establishes the pricing in the Smart-Contracts (self-executing contracts with the terms of the agreement between buyer and seller standardized.) and the Media Buyers and Media Sellers agree on the pricing. Based on these and other factors, the Company has determined it acts as an agent in the purchase and sale of advertising media inventory and therefore reports revenue on a net basis for the commissions and fees the Company charges after the performance obligations are met. |
Cost of sales | Cost of sales Cost of sales consists of datacenter costs (our cloud operations used by our platform to service our customers), amortization expense related to capitalized internal use software development costs, and personnel costs. Personnel costs include salaries, bonuses, share-based compensation, and employee benefit costs, and are primarily attributable to groups which maintains our datacenters, and our client operations group, which is responsible for the integration of new publishers and buyers and providing customer support for existing customers. |
Operating Expenses | Operating Expenses Technology and development expenses consist of personnel costs, including salaries, bonuses, share-based compensation, and employee benefits costs, and professional services. These expenses include costs incurred in (i) product development related to the front-end client user interface and back-end systems, ongoing maintenance and operation of the platform, integrations with clients and partners applications. Except to the extent that such costs are associated with software development that qualify for capitalization, which are then recorded as capitalized software development costs; and (ii) infrastructure costs such as AWS or other cloud hosting solutions, software development tools used for the creation and ongoing management and maintenance of the NYIAX platform and service. Selling, general and administrative expenses consist of personnel costs, including salaries, bonuses, share-based compensation, and employee benefits costs, for our employees engaged in sales, business development, executive, finance, legal, and human resources employees. Selling, general and administrative also include expenses related to marketing activities and professional services outside such as legal and accounting services as well as rent expenses. |
Share-Based Compensation | Share-Based Compensation The share-based compensation expense related to stock options and restricted stock awards which are referred to collectively as options and awards granted under the Company’s employee option plans, is measured and recognized in the financial statements based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model. The Company uses the Black-Scholes model to calculate the fair value for all options granted, based on the inputs relevant on the date granted, such as the fair value of our shares, prevailing risk-free interest rate, risk-free interest rate, expected term at issuance, volatility, and dividend rate, etc. The value of the portion of the award is ultimately expected to vest is recognized as expense in the statements of operations on an over the requisite service periods. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. Determining the fair value of stock options awards requires judgement. The Company’s use of the Black-Scholes option pricing model requires the input of subjective assumptions. |
Income Taxes | Income Taxes The Company records income tax expense in accordance with ASC-740 Income Taxes, as amended mandating how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The standards require the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are more-likely-than-not of being sustained upon examination by the applicable tax authority, based on the technical merits of the tax position, and then recognizing the tax benefit that is more-likely-than-not to be realized. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current reporting period. The Company has analyzed its tax positions and has concluded that as of December 31, 2022 and 2021, no uncertain positions are taken or are expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Company’s policy is to record interest expense and penalties pertaining to income taxes in operating expenses. For the years ended December 31, 2022 and 2021, there were no interest and penalties expenses recorded and no accrued interest and penalties. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including net operating loss carry-forwards (“NOL’s”), and liabilities, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Realization of the deferred income tax asset is dependent on generating sufficient taxable income in future years. The amount of the deferred income tax asset considered realizable, if any, could be reduced in the near term if estimates of future taxable income are reduced. |
Earnings Per Share | Earnings Per Share In accordance with ASC-260 Earnings Per Share, basic earnings per share (EPS) is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share per share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding exclude common stock equivalents because their inclusion would be anti-dilutive. The Company has issued employee incentive options and warrants. These employee incentive options and other warrants are excluded from the calculation as the employee incentive options and warrants are anti-dilutive. As of December 31, 2022 and 2021, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. For the Years Ended 2022 2021 Equity Incentive Plans 3,086,626 3,116,626 Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest 1,506,829 1,533,998 Selling Agent and Advisor Warrants 23,538 338,653 Warrants Issued with Common Stock Offerings 889,500 1,100,195 Warrants Issued with Convertible Notes Offerings 947,150 704,652 6,453,643 6,794,124 During 2022 and 2021, approximately 235,693 and 418,473, respectively, warrants issued with convertible notes payable were exercised for proceeds of approximately $1,285,800 and $2,093,000, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the FASB issued No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments are effective for fiscal years beginning after December 15, 2023. The Company evaluated any potential impact from ASU 2021-07 and believes it will have no material impact on our financial results. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of common stock equivalents | For the Years Ended 2022 2021 Equity Incentive Plans 3,086,626 3,116,626 Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest 1,506,829 1,533,998 Selling Agent and Advisor Warrants 23,538 338,653 Warrants Issued with Common Stock Offerings 889,500 1,100,195 Warrants Issued with Convertible Notes Offerings 947,150 704,652 6,453,643 6,794,124 |
Shareholder Equity (Tables)
Shareholder Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Shareholder Equity [Abstract] | |
Schedule of equity incentive plans | Options Authorized 2016 Plan 1,139,544 2017 Plan 604,832 2021 Plan 12,000,000 13,744,376 |
Schedule of share-based compensation related to equity plans | Cost of sales $ 62,099 Technology and development 59,734 Sales, general and administrative 2,179,902 Total $ 2,301,735 Cost of sales $ 7,940 Technology and development 19,226 Sales, general and administrative 3,860,686 Total $ 3,887,852 |
Schedule of weighted average assumptions used to value options granted to employees | Risk-free Interest rate 0.27% – 2.92% Expected Term at Issuance 5 – 7 years utilizing the practical expedient method in accordance with ASC 718 Volatility 61.7% (The Company used an average volatility of comparable entities, to develop an estimate of expected volatility.) Dividend Rate 0 Risk-free Interest rate 2.8% Expected Term at Issuance 5 – 7 years utilizing the practical expedient method in accordance with ASC 718 Volatility 63.9% (The Company used an average volatility of comparable entities, to develop an estimate of expected volatility.) Dividend Rate 0 Risk-free Interest rate 1.64% Expected Term at Issuance 6.4 – 8.2 years Volatility 69.2% Dividend Rate 0 Risk-free Interest rate 1.64% Expected Term at Inducement date 6.4 – 8.2 years Volatility 69.2% Dividend Rate 0 |
Schedule of common stock option award activity | Options Weighted Remaining Aggregate Balance, January 1, 2021 1,574,126 $ 2.71 5.0 — Granted 1,607,500 4.33 10.0 Exercised (65,000 ) (Forfeiture) — Balance, December 31, 2021 3,116,626 $ 4.44 7.0 Exercisable, December 31, 2021 2,405,534 $ 3.25 6.3 Balance, January 1, 2022 3,116,626 $ 4.44 7.0 Granted 517,500 Exercised (6,060 ) (Forfeiture) (555,000 ) Balance, December 31, 2022 3,073,066 $ 5.22 6.0 Exercisable, December 31, 2022 2,711,448 $ 3.40 7.1 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of convertible note payable | 2021 2021 Convertible Note Payable at Issuance 7,226,335 Payments to advisor, debt discount (362,693 ) 6,863,642 (Deferred debt discount, including beneficial conversion features of $749,551) (1,499,102 ) (Deferred debt discount from Advisor fee) (114,043 ) 5,250,496 Amortization of debt discounts for year ending December 31, 2021 1,103,730 2021 Convertible Note Payable balance at December 31, 2021 $ 6,354,227 2021 Convertible Note Payable balance at December 31, 2022 $ 0 2022 Convertible Note Payable at Issuance 2,570,000 Deferred debt discount and payments to advisor (529,811 ) 2,040,189 Amortization of debt discounts for period 315,546 2022 Convertible Note Payable as of December 31, 2022 2,355,735 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of statutory federal income tax rate | 2022 2021 Net Loss for the Year $ (11,114,179 ) $ (13,498,626 ) Statutory federal income tax rate 21 % 21 % Tax benefit using statutory federal income tax rate (2,333,977 ) (2,834,711 ) State and local taxes, net of federal benefit (965,370 ) (1,286,910 ) Non-deductible expenses, net of federal income tax rate 328,290 432,078 Start-up Costs ( 146,490 ) Change in valuation allowance 2,685,198 3,730,000 SBC 430,501 Other, net 1,849 (40,457 ) Income tax expense (benefit) $ - $ - Effective income tax rate 0 % 0 % |
Schedule of deferred tax asset | 2022 2021 Deferred tax asset Start-up costs $ 5,042,480 $ 5,188,000 Stock based compensation 2,738,000 2,727,000 Section 174 101,398 Net Operating Loss 7,377,233 4,729,000 Other (81,973 ) 79,000 15,177,167 12,723,000 Valuation allowance (15,177,167 ) (12,723,000 ) Net deferred taxes $ - $ - |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating Leases [Abstract] | |
Schedule of balance sheet information related to our leases | As of Operating leases: Balance Sheet Location December 31, December 31, November 1, Right-of-use assets Operating lease right-of-use asset $ 395,470 $ 537,836 $ 563,713 Operating lease liability, current Current portion of operating lease obligations 162,503 135,455 106,810 Operating lease liability, long-term Operating lease obligations, net of current maturities 268,385 430,888 456,903 As of Weighted-average discount rate – operating lease 5.60 % Weighted-average remaining lease term – operating lease (in months) 30 |
Schedule of minimum lease payments of our operating lease liabilities | For Years Ending December 31, Operating 2023 182,526 2024 186,177 2025 94,320 Total future minimum lease payments, undiscounted 463,023 Less: Imputed interest for leases in excess of one year 32,135 Present value of future minimum lease payments $ 430,888 |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | May 16, 2023 | Dec. 31, 2021 | |
Organization and Nature of Business [Abstract] | |||
Operation amount | $ 5,800,000 | ||
Total current assets | 92,497 | $ 14,813 | |
Total current assets | 792,000 | ||
Total current liabilities | 7,400,000 | ||
Operations lost | 11,100,000 | ||
Non-cash expenses | 3,600,000 | ||
Cash | 792,000 | ||
Convertible notes payable | 2,400,000 | ||
NYIAX [Member] | |||
Organization and Nature of Business [Abstract] | |||
Total current assets | 2,900,000 | ||
NYIAX [Member] | |||
Organization and Nature of Business [Abstract] | |||
Total current assets | 2,900,000 | ||
Total current liabilities | 7,400,000 | ||
Convertible Notes Payable [Member] | |||
Organization and Nature of Business [Abstract] | |||
Operating activities | $ 5,800,000 | ||
2023B Convertible Note Payable [Member] | |||
Organization and Nature of Business [Abstract] | |||
Sales of convertible notes | $ 1,970,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Investments maturity period | 3 months | |
Estimated useful lives of assets | 3 to 5 years for office equipment and software | |
Lease expense (in Dollars) | $ 197,245 | $ 63,121 |
Warrants issued (in Shares) | 418,473 | 235,693 |
Convertible notes payable exercised for proceeds (in Dollars) | $ 1,285,800 | $ 2,093,000 |
Revenue Benchmark [Member] | One Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 51% | 30% |
Revenue Benchmark [Member] | Two Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 12% | 26% |
Revenue Benchmark [Member] | Three Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 10% | 11% |
Accounts Receivable [Member] | One Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 67% | 45% |
Accounts Receivable [Member] | Two Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 20% | 41% |
Accounts Payable [Member] | One Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 61% | 39% |
Accounts Payable [Member] | Two Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 8% | 14% |
Accounts Payable [Member] | Three Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 10% | |
Accounts Payable [Member] | Four Media Sellers [Member] | Revenue from Rights Concentration Risk [Member] | ||
Basis of Presentation and Summary of Significant Accounting Policies (Details) [Line Items] | ||
Revenue, percentage | 9% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of common stock equivalents - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Common Stock Equivalents Abstract | ||
Equity Incentive Plans | 3,086,626 | 3,116,626 |
Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest | 1,506,829 | 1,533,998 |
Selling Agent and Advisor Warrants | 23,538 | 338,653 |
Warrants Issued with Common Stock Offerings (in Dollars) | $ 889,500 | $ 1,100,195 |
Warrants Issued with Convertible Notes Offerings | 947,150 | 704,652 |
Total Common Stock Equivalents | 6,453,643 | 6,794,124 |
Commitments and Licensing Fee (
Commitments and Licensing Fee (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2022 | Apr. 22, 2021 | Apr. 22, 2021 | Dec. 31, 2022 | |
Commitments and Licensing Fee (Details) [Line Items] | ||||
Description of financing transaction | the advisor would charge the Company (i) seven percent (7%) of the gross amount to be disbursed to the Company from each such investment transaction closing plus, (ii) a non-accountable expense allowance equal to one percent (1%) of the gross amount to the disbursed to the Company from each such investment transaction closing, plus (iii) warrants equal to seven percent (7%) of the gross amount to be received by to the Company from each such investment transaction closing. The warrant exercise price is defined as the lower of: (1) the fair market value price per share of the Company’s common stock as of each such financing closing date, (2) the price per share paid by investors in each respective financing, (3) in the event that securities convertible are sold in the financing, the conversion price of such securities, or (4) in the event that warrants or other rights are issued in the financing, the exercise price of such warrants or other rights. | |||
Process of private placement | $ 12,000,000 | $ 12,000,000 | ||
Percentage of private placement fee | 33% | 33% | ||
Engagement letter established accountable expenses up to an aggregate | $ 230,000 | |||
Annual licence fee | $ 350,000 | 262,500 | ||
Expense related to revenue sharing | $ 70,000 | |||
Minimum [Member] | ||||
Commitments and Licensing Fee (Details) [Line Items] | ||||
Revenue sharing percentage | 0.50% | |||
Maximum [Member] | ||||
Commitments and Licensing Fee (Details) [Line Items] | ||||
Revenue sharing percentage | 10% |
Shareholder Equity (Details)
Shareholder Equity (Details) - USD ($) | 12 Months Ended | ||||||||||
Dec. 21, 2022 | Nov. 11, 2022 | May 30, 2022 | Mar. 25, 2022 | Jul. 19, 2021 | Jun. 22, 2021 | Oct. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shareholder Equity (Details) [Line Items] | |||||||||||
Preferred Stock, per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Common stock, per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Founders shares | 4,233,696 | ||||||||||
Founders per share (in Dollars per share) | $ 0.0001 | ||||||||||
Nonvested shares | 604,832 | ||||||||||
Vested shares | 3,628,864 | 3,628,864 | |||||||||
Aggregate principal amount (in Dollars) | $ 50,000 | $ 7,176,335 | $ 4,004,900 | ||||||||
Accrued payment in kind interest (in Dollars) | $ 5,000 | $ 742,700 | $ 334,000 | ||||||||
Common stock , shares | 11,000 | 1,583,807 | 867,767 | 12,370,022 | 10,243,442 | ||||||
Warrants issued | 418,473 | 235,693 | |||||||||
Convertible note payable (in Dollars) | $ 1,285,809 | $ 2,093,000 | |||||||||
Equity incentive plans options | 65,000 | 13,744,376 | |||||||||
Total share-based compensation (in Dollars) | $ 2,300,000 | 3,900,000 | |||||||||
Related to the issuance (in Dollars) | 607,000 | ||||||||||
Share-based payment (in Dollars) | 200,000 | $ 1,000,000 | |||||||||
Issuance of options (in Dollars) | $ 1,494,000 | ||||||||||
Common stock ,purchase shares | 367,678 | 711,092 | |||||||||
Share-based payment expense (in Dollars) | $ 200,000 | $ 1,000,000 | $ 2,301,735 | $ 3,887,852 | |||||||
Principal stockholders | 200,000 | ||||||||||
Contractor shares | 50,000 | 100,000 | |||||||||
Per equity share (in Dollars per share) | $ 2 | $ 4.33 | |||||||||
Estimated value of shares (in Dollars) | $ 325,000 | ||||||||||
Exercise price per share (in Dollars per share) | $ 5.5 | ||||||||||
Warrants issued | 235,693 | ||||||||||
Warrants exercised | 11,000 | ||||||||||
Strike price per share (in Dollars per share) | $ 5 | ||||||||||
Dividend amount (in Dollars) | $ 28,600 | ||||||||||
Common Stock [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 135,000,000 | ||||||||||
Shares issued | 125,000,000 | 125,000,000 | |||||||||
Common stock, per share (in Dollars per share) | $ 0.0001 | ||||||||||
Preferred Stock [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Shares issued | 10,000,000 | 10,000,000 | |||||||||
Preferred Stock, per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Warrant [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Aggregate principal amount (in Dollars) | $ 1,300,000 | ||||||||||
Warrants issued | 214,693 | ||||||||||
Minimum [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Exercise price per share (in Dollars per share) | 6.5 | $ 5 | |||||||||
Minimum [Member] | Common Stock [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 20,000,000 | ||||||||||
Minimum [Member] | Warrant [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Exercise price per share (in Dollars per share) | 5.5 | ||||||||||
Maximum [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Exercise price per share (in Dollars per share) | $ 6.6 | 5.5 | |||||||||
Maximum [Member] | Common Stock [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 135,000,000 | ||||||||||
Maximum [Member] | Warrant [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Exercise price per share (in Dollars per share) | $ 6.5 | ||||||||||
Common Stock [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Common stock ,purchase shares | 1,099,000 | ||||||||||
Share-based payment expense (in Dollars) | $ 1,857,000 | ||||||||||
July 2019 Offering [Member] | |||||||||||
Shareholder Equity (Details) [Line Items] | |||||||||||
Sale of shares of common stock | 12,370,002 | 10,243,442 | |||||||||
Principal stockholders | 100,000 | ||||||||||
Per equity share (in Dollars per share) | $ 5 |
Shareholder Equity (Details) -
Shareholder Equity (Details) - Schedule of equity incentive plans | Dec. 31, 2022 shares |
Shareholder Equity (Details) - Schedule of equity incentive plans [Line Items] | |
Options Authorized | 13,744,376 |
2016 Plan [Member] | |
Shareholder Equity (Details) - Schedule of equity incentive plans [Line Items] | |
Options Authorized | 1,139,544 |
2017 Plan [Member] | |
Shareholder Equity (Details) - Schedule of equity incentive plans [Line Items] | |
Options Authorized | 604,832 |
2021 Plan [Member] | |
Shareholder Equity (Details) - Schedule of equity incentive plans [Line Items] | |
Options Authorized | 12,000,000 |
Shareholder Equity (Details) _2
Shareholder Equity (Details) - Schedule of share-based compensation related to equity plans - USD ($) | 12 Months Ended | |||
Nov. 11, 2022 | Jun. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Share Based Compensation Related To Equity Plans Abstract | ||||
Cost of sales | $ 62,099 | $ 7,940 | ||
Technology and development | 59,734 | 19,226 | ||
Sales, general and administrative | 2,179,902 | 3,860,686 | ||
Total | $ 200,000 | $ 1,000,000 | $ 2,301,735 | $ 3,887,852 |
Shareholder Equity (Details) _3
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options Granted To Employees [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Risk-free Interest rate | 2.80% | |
Expected Term at Issuance | 5 - 7 years utilizing the practical expedient method in accordance with ASC 718 | 5 - 7 years utilizing the practical expedient method in accordance with ASC 718 |
Volatility | 61.70% | 63.90% |
Dividend Rate | 0% | 0% |
Options Granted To Employees [Member] | Minimum [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Risk-free Interest rate | 0.27% | |
Options Granted To Employees [Member] | Maximum [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Risk-free Interest rate | 2.92% | |
Investor Warrants [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Risk-free Interest rate | 1.64% | |
Volatility | 69.20% | |
Dividend Rate | 0% | |
Investor Warrants [Member] | Minimum [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Expected Term at Issuance | 6 years 4 months 24 days | |
Investor Warrants [Member] | Maximum [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Expected Term at Issuance | 8 years 2 months 12 days | |
Investor Warrants One [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Risk-free Interest rate | 1.64% | |
Volatility | 69.20% | |
Dividend Rate | 0% | |
Investor Warrants One [Member] | Minimum [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Expected Term at Issuance | 8 years 2 months 12 days | |
Investor Warrants One [Member] | Maximum [Member] | ||
Shareholder Equity (Details) - Schedule of weighted average assumptions used to value options granted to employees [Line Items] | ||
Expected Term at Issuance | 6 years 4 months 24 days |
Shareholder Equity (Details) _4
Shareholder Equity (Details) - Schedule of common stock option award activity - USD ($) | 12 Months Ended | ||
Jun. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Common Stock Option Award Activity Abstract | |||
Options, Balance beginning | 3,116,626 | 1,574,126 | |
Weighted Average Exercise Price, Balance beginning (in Dollars per share) | $ 4.44 | $ 2.71 | |
Remaining Life, Balance beginning | 7 years | 5 years | |
Aggregate Intrinsic Value for the Activity During the Years,Balance beginning (in Dollars) | |||
Options, Granted | 517,500 | 1,607,500 | |
Weighted Average Exercise Price, Granted (in Dollars per share) | $ 2 | $ 4.33 | |
Remaining Life, Granted | 10 years | ||
Options, Exercised | (6,060) | (65,000) | |
Options, (Forfeiture) | (555,000) | ||
Options, Balance ending | 3,073,066 | 3,116,626 | |
Weighted Average Exercise Price, Balance ending (in Dollars per share) | $ 5.22 | $ 4.44 | |
Remaining Life, Balance ending | 6 years | 7 years | |
Options, Exercisable | 2,711,448 | 2,405,534 | |
Weighted Average Exercise Price, Exercisable (in Dollars per share) | $ 3.4 | $ 3.25 | |
Remaining Life, Exercisable | 7 years 1 month 6 days | 6 years 3 months 18 days |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 21, 2022 | Nov. 14, 2022 | May 30, 2022 | Jul. 19, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 15, 2022 | |
Convertible Notes Payable (Details) [Line Items] | ||||||||
Convertible note payable | $ 2,400,000 | |||||||
Accrued interest | $ 5,000 | $ 742,700 | $ 334,000 | |||||
Maturity date | May 30, 2022 | Oct. 30, 2021 | ||||||
Cumulative gross proceeds | 5,000,000 | |||||||
Warrants and beneficial conversion description | ●Term — 4 – 17 months ●Risk-free Interest Rate — 0.1% to 0.8%, average of 0.6% ●Dividend Rate 0 ●Volatility 61.7% | |||||||
Recorded compensation to advisor | $ 362,693 | |||||||
Convertible warrants shares (in Shares) | 78,292 | |||||||
Warrants exercise price, per share (in Dollars per share) | $ 5 | |||||||
Debt discount of the warrants description | ●Term — 12-21 months ●Risk-free Interest Rate — 0.03% to 0.8%, average of 0.36% ●Dividend Rate 0 ●Volatility 61.7% | |||||||
Note payable conversion description | at $2.00 per share concurrently when shares of common stock are sold to the public in the financing event; or in the event the financing event is not completed within eighteen (18) months from the date of the individually issued notes, the Conversion Price, reduced from the original conversion price of $4.00 per share, was two dollars ($2.00) per share and the Conversion Amount shall automatically be converted into common stock of the Company at $2.00 per share on the Maturity. The 2022 Convertible Note Payable carry an annual rate of return of twelve (12.0%) percent simple interest and all interest and principle are paid in the Company’s Common Shares at a value of five ($2.00) dollars per share, or, as Payment-in-Kind, or P-I-K. Interest shall be paid quarterly until maturity date. Additionally, concurrently, with the 2022 Convertible Notes, the Company issued with the 2022 Convertible Notes Warrant (the “Warrants”) at a rate of one (1) Warrant for every $10 of Notes purchased. Each Warrant shall be exercisable for a period of five (5) years at a price of $5.50 per share. | |||||||
Gain on debt | $ 208,811 | |||||||
Recorded compensation | $ 205,600 | |||||||
Maximum [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Warrants exercise price, per share (in Dollars per share) | $ 4 | |||||||
Conversion price (in Dollars per share) | $ 4 | |||||||
Minimum [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Warrants exercise price, per share (in Dollars per share) | $ 2 | |||||||
Conversion price (in Dollars per share) | $ 2 | |||||||
Black-Scholes [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Warrants and beneficial conversion description | ●Term — 3 - 18 months (maturity date of the convertible notes) ●Risk-free Interest Rate — 3.1% to 4.4%, average of 3.9% (US Treasury rates) ●Dividend Rate 0 (Historical amounts) ●Volatility 69.5-82.5% | |||||||
Advisor [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Convertible warrants shares (in Shares) | 78,292 | |||||||
Financial advisor [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Convertible warrants shares (in Shares) | 66,413 | |||||||
2020 Convertible Note Payable [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Warrents percentage | 50% | |||||||
Warrant price (in Dollars per share) | $ 5 | |||||||
Convertible note payable | $ 4,004,900 | |||||||
Warrants issued (in Shares) | 400,490 | |||||||
Accrued interest | $ 148,000 | |||||||
Annual rate of return percentage | 10% | |||||||
Common stock per share value (in Dollars per share) | $ 5 | |||||||
Cumulative gross proceeds | $ 5,000,000 | |||||||
Outstanding principal balance | $ 5,000,000 | |||||||
Common stock, shares (in Shares) | 867,767 | |||||||
2021 Convertible Note Payable [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Warrents percentage | 50% | |||||||
Warrant price (in Dollars per share) | $ 5 | |||||||
Convertible note payable | $ 7,226,335 | |||||||
Warrants issued (in Shares) | 722,637 | |||||||
Annual rate of return percentage | 10% | |||||||
Common stock per share value (in Dollars per share) | $ 5 | |||||||
Common stock, shares (in Shares) | 11,000 | 1,583,807 | ||||||
Convertible note payable principal amount | $ 50,000 | $ 7,176,335 | ||||||
2022 Convertible Note Payable [Member] | ||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||
Convertible note payable | $ 2,570,000 | |||||||
Convertible warrants shares (in Shares) | 257,000 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details) - Schedule of convertible note payable | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
2021 Convertible Note Payable [Member] | |
Convertible Notes Payable (Details) - Schedule of convertible note payable [Line Items] | |
Convertible Note Payable at Issuance | $ 7,226,335 |
Payments to advisor, debt discount | (362,693) |
Total Convertible Note Payable at Issuance | 6,863,642 |
(Deferred debt discount, including beneficial conversion features of $749,551) | (1,499,102) |
(Deferred debt discount from Advisor fee) | (114,043) |
Total Deferred debt discount | 5,250,496 |
Amortization of debt discounts | 1,103,730 |
Convertible Note Payable balance at Beginning | 6,354,227 |
Convertible Note Payable balance at Ending | 0 |
2022 Convertible Note Payable [Member] | |
Convertible Notes Payable (Details) - Schedule of convertible note payable [Line Items] | |
Convertible Note Payable at Issuance | 2,570,000 |
Deferred debt discount and payments to advisor | (529,811) |
Total Convertible Note Payable | 2,040,189 |
Amortization of debt discounts | 315,546 |
Convertible Note Payable balance at Ending | $ 2,355,735 |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details) - Schedule of convertible note payable (Parentheticals) | Dec. 31, 2022 USD ($) |
2021 Convertible Note Payable [Member] | |
Convertible Notes Payable (Details) - Schedule of convertible note payable (Parentheticals) [Line Items] | |
Beneficial conversion features | $ 749,551 |
Paycheck Protection Program L_2
Paycheck Protection Program Loan (Details) - Paycheck Protection Program [Member] - USD ($) | 1 Months Ended | 12 Months Ended | |
May 20, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Paycheck Protection Program Loan (Details) [Line Items] | |||
Loans received | $ 361,605 | ||
Loan interest rate | 1% | ||
Loan balance | $ 0 | $ 0 | |
U.S. Small Business Administration Forgave [Member] | |||
Paycheck Protection Program Loan (Details) [Line Items] | |||
Other income | $ 361,605 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Income Taxes (Details) [Line Items] | |
Taxable income percentage | 80% |
Maximum [Member] | |
Income Taxes (Details) [Line Items] | |
Net operating loss | $ 23.9 |
Minimum [Member] | |
Income Taxes (Details) [Line Items] | |
Net operating loss | $ 23.9 |
Income Taxes (Details) - Sched
Income Taxes (Details) - Schedule of statutory federal income tax rate - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Statutory Federal Income Tax Rate Abstract | ||
Net Loss for the Year | $ (11,114,179) | $ (13,498,626) |
Statutory federal income tax rate | 21% | 21% |
Tax benefit using statutory federal income tax rate | $ (2,333,977) | $ (2,834,711) |
State and local taxes, net of federal benefit | (965,370) | (1,286,910) |
Non-deductible expenses, net of federal income tax rate | 328,290 | 432,078 |
Start-up Costs | (146,490) | |
Change in valuation allowance | 2,685,198 | 3,730,000 |
SBC | 430,501 | |
Other, net | 1,849 | (40,457) |
Income tax expense (benefit) | ||
Effective income tax rate | 0% | 0% |
Income Taxes (Details) - Sch_2
Income Taxes (Details) - Schedule of deferred tax asset - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax asset | ||
Start-up costs | $ 5,042,480 | $ 5,188,000 |
Stock based compensation | 2,738,000 | 2,727,000 |
Section 174 | 101,398 | |
Net Operating Loss | 7,377,233 | 4,729,000 |
Other | (81,973) | 79,000 |
Deferred tax asset | 15,177,167 | 12,723,000 |
Valuation allowance | (15,177,167) | (12,723,000) |
Net deferred taxes |
Capitalized Software Developm_2
Capitalized Software Development Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Capitalized Software Development Costs [Abstract] | ||
Amortization | $ 393,157 | $ 589,735 |
Gross capitalized costs | 982,891 | 982,891 |
Development costs | $ 196,578 | $ 196,578 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
May 26, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions (Details) [Line Items] | |||
General and administrative expenses | $ 10,000 | $ 34,614 | |
Aggregate amount payable | 100,500 | 610,500 | |
Reimbursement expenses | 100,500 | 100,500 | |
Unpaid Bonuses | 510,000 | ||
Selling, general and administrative expenses | $ 2,179,902 | $ 3,860,686 | |
Employment agreements, description | The Company agreed to pay Mr. Hogan (i) a base salary of $360,000 per annum; (ii) a discretionary bonus of up to 50% of salary; (iii) an annual award of incentive stock options to purchase 75,000 shares of common stock of the Company at market price; and (iv) one-time incentive bonus of $20,000 to $250,000 to be paid to Mr. Hogan based upon meeting key performance indicators related to media billed on the Company’s platform. | The agreement automatically renews for one year on each anniversary date, unless it is terminated earlier with 30 days’ written notice by either party prior to each renewal. As compensation, the Company agreed to pay Ms. Abenante (i) a base salary at the rate of $255,000 per annum except that for the period of May 16, 2022 through July 15, 2022, Ms. Abenante’s base salary will be $100,000 per year; and (ii) an annual discretionary bonus of 20% of the actual paid base salary. | |
Maximum [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Selling, general and administrative expenses | $ 510,000 | ||
Minimum [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Selling, general and administrative expenses | $ 0 |
Operating Leases (Details)
Operating Leases (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Operating Leases [Abstract] | |
Incremental borrowing rate | 5.60% |
Base rent | $ 14,814 |
Rent escalation | 2% |
Right-of-use asset and lease liability | $ 563,713 |
Operating Leases (Details) - Sc
Operating Leases (Details) - Schedule of balance sheet information related to our leases - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 01, 2021 |
Schedule of Balance Sheet Information Related to our Leases [Abstract] | |||
Right-of-use assets | $ 395,470 | $ 537,836 | $ 563,713 |
Operating lease liability, current | 162,503 | 135,455 | 106,810 |
Operating lease liability, long-term | $ 268,385 | $ 430,888 | $ 456,903 |
Weighted-average discount rate – operating lease | 5.60% | ||
Weighted-average remaining lease term – operating lease (in months) | 30 years |
Operating Leases (Details) - _2
Operating Leases (Details) - Schedule of minimum lease payments of our operating lease liabilities | Dec. 31, 2022 USD ($) |
Schedule of Minimum Lease Payments of our Operating Lease Liabilities [Abstract] | |
2023 | $ 182,526 |
2024 | 186,177 |
2025 | 94,320 |
Total future minimum lease payments, undiscounted | 463,023 |
Less: Imputed interest for leases in excess of one year | 32,135 |
Present value of future minimum lease payments | $ 430,888 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Jul. 08, 2023 | Apr. 03, 2023 | Feb. 14, 2023 | Jan. 10, 2023 | Jan. 10, 2023 | Nov. 14, 2022 | Apr. 22, 2021 | Apr. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 07, 2023 | Feb. 07, 2023 | |
Subsequent Events (Details) [Line Items] | ||||||||||||
Warrants issued | $ 1,285,833 | $ 2,094,148 | ||||||||||
Warrant price per share (in Dollars per share) | $ 5 | |||||||||||
Registered shares (in Shares) | 125,000,000 | 125,000,000 | ||||||||||
Convertible note payable | $ 2,400,000 | |||||||||||
Aggregate offering price | $ 146,490 | |||||||||||
Description of financing transaction | the advisor would charge the Company (i) seven percent (7%) of the gross amount to be disbursed to the Company from each such investment transaction closing plus, (ii) a non-accountable expense allowance equal to one percent (1%) of the gross amount to be disbursed to the Company from each such investment transaction closing, plus (iii) warrants equal to seven percent (7%) of the gross amount to be received by the Company from each such investment transaction closing. The warrant exercise price is defined as the lower of: (1) the fair market value price per share of the Company’s common stock as of each such financing closing date, (2) the price per share paid by investors in each respective financing, (3) in the event that securities convertible are sold in the financing, the conversion price of such securities, or (4) in the event that warrants or other rights are issued in the financing, the exercise price of such warrants or other rights. | |||||||||||
Process of private placement | $ 12,000,000 | $ 12,000,000 | ||||||||||
Percentage of private placement fee | 33% | 33% | ||||||||||
Engagement letter established accountable expenses up to an aggregate | $ 230,000 | |||||||||||
Common Stock [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Common shares (in Shares) | 125,000,000 | 125,000,000 | ||||||||||
Maximum [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Conversion price (in Dollars per share) | $ 4 | |||||||||||
Warrant price per share (in Dollars per share) | $ 4 | |||||||||||
Minimum [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Conversion price (in Dollars per share) | $ 2 | |||||||||||
Warrant price per share (in Dollars per share) | $ 2 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Warrant term | 5 years | 5 years | ||||||||||
Common shares (in Shares) | 1,850,000 | |||||||||||
Common stock of underwriters (in Shares) | 2,127,500 | |||||||||||
Price per share (in Dollars per share) | $ 5 | |||||||||||
Aggregate offering price | $ 9,250,000 | |||||||||||
Subsequent Event [Member] | Maximum [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Conversion price (in Dollars per share) | $ 4 | |||||||||||
Subsequent Event [Member] | Minimum [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Conversion price (in Dollars per share) | $ 2 | |||||||||||
Forecast [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Commission fund | $ 1,000,000 | |||||||||||
Purchase price | $ 4,000,000 | |||||||||||
Forecast [Member] | Common Stock [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Shares issued (in Shares) | 2,000,000 | |||||||||||
Forecast [Member] | Intellectual Property [Member] | Common Stock [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Shares issued (in Shares) | 2,000,000 | |||||||||||
Forecast [Member] | IPO [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Issued amount | $ 1,230,000 | |||||||||||
2023A Convertible Note Payable [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Convertible notes | $ 500,000 | $ 500,000 | ||||||||||
Sale of convertible notes | $ 200,000 | |||||||||||
Warrants issued | $ 10 | |||||||||||
Warrant price per share (in Dollars per share) | $ 5.5 | $ 5.5 | ||||||||||
Registered shares (in Shares) | 2,570,000 | |||||||||||
Convertible note payable | $ 1,441,497 | |||||||||||
2023A Convertible Note Payable [Member] | Forecast [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Percentage of annual rate | 12% | |||||||||||
Convertible price per share (in Dollars per share) | $ 2 | |||||||||||
Reduced price per share (in Dollars per share) | (2) | |||||||||||
Common stock convertible conversion price (in Dollars per share) | $ 2 | |||||||||||
Warrant purchase amount | $ 10 | |||||||||||
2023A Convertible Note Payable [Member] | Forecast [Member] | Payment-in-Kind [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Common stock price (in Dollars per share) | $ 2 | |||||||||||
2023B Convertible Note Payable [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Common stock price (in Dollars per share) | 2 | |||||||||||
2023B Convertible Note Payable [Member] | Subsequent Event [Member] | Common Stock [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Common stock price (in Dollars per share) | (2) | |||||||||||
2023B Convertible Note Payable [Member] | Forecast [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Convert per share (in Dollars per share) | $ 2 | $ 2 | ||||||||||
Warrant price per share (in Dollars per share) | $ 4 | |||||||||||
Convertible note payable | $ 1.970000 | |||||||||||
Convertible notes | 2,000,000 | |||||||||||
Warrant purchase amount | $ 10 | |||||||||||
Warrant term | 5 years | |||||||||||
2023B Convertible Note Payable [Member] | Forecast [Member] | Warrant [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Warrant price per share (in Dollars per share) | $ 2 | |||||||||||
2023B Convertible Note Payable [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Percentage of annual rate | 12% | |||||||||||
2022 Convertible Note Payable [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Events (Details) [Line Items] | ||||||||||||
Convertible note payable | $ 200,000 |