Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | NYIAX, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 15,561,499 | |
Amendment Flag | false | |
Entity Central Index Key | 0001679379 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-41626 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-0547534 | |
Entity Address, Address Line One | 180 Maiden Lane | |
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 | |
Title of 12(b) Security | None | |
Entity Interactive Data Current | No | |
No Trading Symbol Flag | true | |
Security Exchange Name | NONE |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 168,786 | $ 792,337 |
Accounts receivable, net | 104,246 | 1,972,034 |
Prepaid expenses and other current assets | 6,500 | 92,497 |
Total current assets | 279,532 | 2,856,868 |
Capitalized software development costs, net | 245,718 | 393,157 |
Patents, net of amortization of $297,520 | 3,702,480 | |
Property, plant and equipment, net | 2,406 | 3,519 |
Operating lease right-of-use asset | 283,060 | 395,470 |
Deferred offering costs | 848,531 | |
Security deposit | 74,067 | 74,068 |
Total assets | 4,587,263 | 4,571,613 |
Current liabilities | ||
Accounts payable and accrued expenses | 4,888,967 | 4,841,045 |
Convertible notes payable, net of deferred debt discounts of $0 and $214,265 as of September 30, 2023 and December 31, 2022, respectively | 1,970,000 | 2,355,735 |
Accrued Payment-In-Kind Interest | 86,551 | 71,614 |
Note payable – stockholder | 100,500 | |
Operating lease obligations, current portion | 172,234 | 162,503 |
Total current liabilities | 7,218,252 | 7,430,897 |
Long-term liabilities | ||
Operating lease obligations, net of current portion | 138,236 | 268,385 |
Note payable – stockholder | 100,500 | |
Total long-term liabilities | 138,236 | 368,885 |
Total liabilities | 7,356,488 | 7,799,782 |
Common stock $0.0001 par value, 125,000,000 common shares authorized; 15,561,499 and 12,370,002 common shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 1,556 | 1,237 |
Preferred shares: 10,000,000 authorized, none outstanding, par value $0.0001 per share | ||
Additional Paid in Capital | 57,907,311 | 50,023,446 |
Accumulated deficit | (60,678,092) | (53,252,852) |
Total shareholders’ (deficit) equity | (2,769,225) | (3,228,169) |
Total liabilities and shareholders’ (deficit) equity | $ 4,587,263 | $ 4,571,613 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parentheticals) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Net of amortization (in Dollars) | $ 297,520 | $ 297,520 |
Net of deferred debt discounts (in Dollars) | $ 0 | $ 214,265 |
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 | 15,561,499 | 12,370,002 |
Common stock, shares outstanding | 15,561,499 | 12,370,002 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue, Net | $ 97,820 | $ 124,987 | $ 324,835 | $ 949,475 |
Cost of Sales | 159,440 | 340,876 | 550,084 | 886,290 |
Gross Margin | (61,620) | (215,889) | (225,249) | 63,185 |
Operating expenses | ||||
Technology and development | 299,007 | 425,878 | 986,669 | 1,254,219 |
Selling, general and Administrative | 1,225,833 | 1,444,714 | 4,356,987 | 5,990,212 |
Deferred offering cost write-off | 177,481 | 1,026,012 | ||
Forfeiture of founders’ deferred compensation | (367,803) | (367,803) | ||
Depreciation and amortization | 297,825 | 298,635 | 1,770 | |
Total operating expenses | 1,632,343 | 1,870,592 | 6,300,500 | 7,246,201 |
Loss from operations | (1,693,963) | (2,086,481) | (6,525,749) | (7,183,016) |
Other (income) expenses | ||||
Interest expense | 452,009 | 45,865 | 899,489 | 1,217,595 |
Total other (income) expenses | 452,009 | 45,865 | 899,489 | 1,217,595 |
Loss before provision for income taxes | (2,145,972) | (2,132,346) | (7,425,238) | (8,400,611) |
Net loss | $ (2,145,972) | $ (2,132,346) | $ (7,425,238) | $ (8,400,611) |
Net loss per share – basic (in Dollars per share) | $ (0.14) | $ (0.17) | $ (0.53) | $ (0.74) |
Weighted Average O/S Shares-basic (in Shares) | 15,410,961 | 12,352,942 | 14,043,190 | 11,317,535 |
Condensed Statements of Opera_2
Condensed Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net loss per share – diluted | $ (0.14) | $ (0.17) | $ (0.53) | $ (0.74) |
Weighted Average O/S Shares- diluted | 15,410,961 | 12,352,942 | 14,043,190 | 11,317,535 |
Condensed Statements of Shareho
Condensed Statements of Shareholders’ (Deficit) Equity (Unaudited) - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
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 | 969,511 | 969,511 | ||
Deemed Dividend from Inducement to Exercise Warrants | 28,600 | (28,600) | ||
Issuance of common stock pursuant to exercise of warrants | $ 22 | 1,225,788 | 1,225,810 | |
Issuance of common stock pursuant to exercise of warrants (in Shares) | 224,693 | |||
Net Loss | (3,789,643) | (3,789,643) | ||
Balance at Mar. 31, 2022 | $ 1,046 | 40,313,194 | (45,928,316) | (5,614,076) |
Balance (in Shares) at Mar. 31, 2022 | 10,468,135 | |||
Share-based compensation | 246,112 | 246,112 | ||
Issuance of common stock pursuant to exercise of warrants | $ 1 | 60,021 | 60,022 | |
Issuance of common stock pursuant to exercise of warrants (in Shares) | 11,000 | |||
Issuance of common stock pursuant to restricted stock awards (share-based compensation) | $ 29 | 167,098 | 167,127 | |
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 | $ 158 | 7,918,849 | 7,919,007 | |
Conversion of Convertible Note Payable and accrued interest to common shares (in Shares) | 1,583,807 | |||
Net Loss | (2,478,622) | (2,478,622) | ||
Balance at Jun. 30, 2022 | $ 1,234 | 48,705,274 | (48,406,938) | 299,570 |
Balance (in Shares) at Jun. 30, 2022 | 12,352,942 | |||
Share-based compensation | 135,136 | 135,136 | ||
Issuance of common stock pursuant to restricted stock awards (share-based compensation) | 220,132 | 220,132 | ||
Deferred debt discount on convertible notes payable | 287,385 | 287,385 | ||
Net Loss | (2,132,346) | (2,132,346) | ||
Balance at Sep. 30, 2022 | $ 1,234 | 49,347,927 | (50,539,284) | (1,190,123) |
Balance (in Shares) at Sep. 30, 2022 | 12,352,942 | |||
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 | |||
Share-based compensation | 125,635 | 125,635 | ||
Issuance of common stock pursuant to restricted stock awards (share-based compensation) | $ (25) | 32,657 | 32,632 | |
Issuance of common stock pursuant to restricted stock awards (share-based compensation) (in Shares) | (250,000) | |||
Conversion of Convertible Note Payable and accrued interest to common shares | $ 144 | 2,719,198 | 2,719,342 | |
Conversion of Convertible Note Payable and accrued interest to common shares (in Shares) | 1,441,497 | |||
Deferred debt discount on convertible notes payable | 16,000 | 16,000 | ||
Net Loss | (2,987,985) | (2,987,985) | ||
Balance at Mar. 31, 2023 | $ 1,356 | 52,916,936 | (56,240,837) | (3,322,545) |
Balance (in Shares) at Mar. 31, 2023 | 13,561,499 | |||
Share-based compensation | 149,467 | 149,467 | ||
Deferred debt discount on convertible notes payable | 704,975 | 791,685 | ||
Net Loss | (2,291,283) | (2,291,293) | ||
Balance at Jun. 30, 2023 | $ 1,356 | 53,771,378 | (58,532,120) | (4,759,386) |
Balance (in Shares) at Jun. 30, 2023 | 13,561,499 | |||
Share-based compensation | 136,133 | 136,133 | ||
Deferred debt discount on convertible notes payable | ||||
Issuance of common stock for patents acquisition | $ 200 | 3,999,800 | 4,000,000 | |
Issuance of common stock for patents acquisition (in Shares) | 2,000,000 | |||
Net Loss | (2,145,972) | (2,145,972) | ||
Balance at Sep. 30, 2023 | $ 1,556 | $ 57,907,311 | $ (60,678,092) | $ (2,769,225) |
Balance (in Shares) at Sep. 30, 2023 | 15,561,499 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (7,425,238) | $ (8,400,611) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 446,072 | 149,675 |
Operating lease right-of-use asset | (8,008) | 9,776 |
Accrued PIK Interest | 185,838 | 316,765 |
Debt discount amortization | 713,681 | 900,979 |
Share-based compensation | 443,868 | 1,737,990 |
Bad Debt expense | 106,959 | |
Forgiveness of stockholders payables | (510,000) | |
Deferred offering cost write-off | 1,026,012 | |
Forfeiture of Founders’ deferred compensation | (367,803) | |
Accounts receivable | 1,760,827 | 1,549,366 |
Prepaid expense | 85,997 | (165,286) |
Accounts payable and accrued expenses | 238,244 | (342,088) |
Total adjustments | 4,631,687 | 3,647,177 |
Net cash used in operating activities | (2,793,551) | (4,753,434) |
Acquisition of Fixed Assets | (2,061) | |
Net cash used in investing activities | (2,061) | |
Proceeds from convertible notes payable, net of cash discount | 2,170,000 | 1,237,400 |
Proceeds from issuance of common stock pursuant to exercise of warrants | 1,285,832 | |
Deferred offering cost | (321,385) | |
Net cash provided by financing activities | 2,170,000 | 2,201,847 |
Net (decrease) in cash and cash equivalents | (623,551) | (2,553,648) |
Cash - Beginning of period | 792,337 | 3,387,200 |
Cash - End of period | 168,786 | 833,552 |
Supplemental disclosures of non-cash flow investing and financing activities: | ||
Deferred debt discount on convertible notes payable | 720,975 | 287,385 |
Deemed Dividend from Inducement to Exercise Warrants | 28,600 | |
Conversion of convertible notes payable and accrued interest to shares | 2,719,341 | 7,919,007 |
Issuance of common stock for patents acquisition | $ 4,000,000 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2023 | |
Nature of Operations [Abstract] | |
Nature of Operations | Note 1 — Nature of Operations 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 date 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 date 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. For the nine months ended September 30, 2023, the Company’s operations lost approximately $7.4 million. The Company generated negative cash flows from operations of approximately $2.8 million for the nine months ended September 30, 2023 of which approximately $2.5 million were non-cash expenses. As of September 30, 2023, NYIAX had total current assets of approximately $280,000 of which approximately $169,000 was cash and total current liabilities of approximately $7.2 million of which approximately $2.1 million were convertible notes payable and accrued payment in kind interest payable in the Company’s common shares. Future capital requirements will depend on many factors, including the Company’s rate of revenue growth and its level of expenditures. Additionally, the Company is planning an initial public offering of its common stock. To the extent that the initial public offering is not successful, or that existing capital resources, revenue growth and cash flow from operations are not sufficient to fund future activities, the Company may need to raise additional funds through equity or debt financing or curtail expenses. On October 31, 2023, NYIAX filed an amended registration statement on Form S-1 with plans to issue 1,875,000 shares of its common stock at a price of $4.00 per share. No assurances can be provided that any additional funding or alternative financing will be available at terms acceptable to the Company, if at all. Management must evaluate whether there are conditions or events considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Due to these factors, substantial doubt exists regarding the Company’s ability to continue as a going concern through twelve months from the issuance date of these financial statements. Management has taken steps to significantly reduce our losses by curtailing certain aspects of our operations or expansion activities. The financial statements for the period ended September 30, 2023, do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. NYIAX expects that in order to fully realize its longer-term goals, it will need to raise additional debt and equity capital. However, no assurances can be provided that additional funding or alternative financing will be available at terms acceptable to the Company, if at all. 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 | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 — Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the balances and results for the period presented. Operating results for the period from December 31, 2022 through September 30, 2023 are not necessarily indicative of the results that may be expected through December 31, 2023. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K as filed on July 21, 2023. 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. Concentrations of Credit risk The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents in the financial statements. 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 providing deposits insurance which exceed the Federal Deposit Insurance Corporation (“FDIC”) federally insured limits. The Company considers all highly liquid investments with an original maturity of three months or less when purchased, to be cash equivalents. There were no cash equivalents at September 30, 2023 and December 31, 2022. As of September 30, 2023 two Media Buyers represented 26% and 20% of accounts receivable. As of September 30, 2023, two Media Sellers represented 80% and 10% of accounts payable. For the nine months ended September 30, 2023, two customers represented 47% and 9% of revenue, net. As of December 31, 2022, two Media Buyers represented 67% and 20% of accounts receivable. As of December 31, 2022, two Media Sellers represented 61% and 8% of accounts payable. As of September 30, 2022, two Media Buyers represented 80% and 11% of accounts receivable. As of September 30, 2022, one Media Seller represented 44% of accounts payable. For the nine months ended September 30, 2022, one customer represented 84% of revenue, net. For the nine months ended September 30, 2022, one customer represented 84% of net revenue. As of September 30, 2022, one Media Seller represented 44% of accounts payable and two Media Buyers represented 80% and 11% of accounts receivable. 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 carrying amounts of cash, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. Accounts Receivable, Net In June 2016, the Financial Accounting Standards Board, or the FASB, issued ASU 2016-13 – Measurement of Credit Losses on Financial Statements. The new standard requires that the Company recognize an allowance for losses on accounts receivable in an amount equal to the current expected credit losses. The estimation of the allowance is based on an analysis of historical loss experience, current receivables aging, and management’s assessment of current conditions and reasonable and supportable expectation of future conditions, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. In November 2019, the FASB issued ASU 2019-10 – Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date for certain companies. The standard is effective for public companies eligible to be smaller reporting companies for annual and interim periods beginning after December 15, 2022. On January 1, 2023, the Company adopted ASU 2016-13, using a modified retrospective approach. The adoption of this standard did not have an effect on the Company’s financial position, results of operations, or cash flows. 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 based on the best estimate of the amount of probable credit losses in existing accounts receivable. 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 year ended and December 31, 2022, the Company had no allowance for doubtful accounts and no write-offs of accounts receivable. For the period ended September 30, 2023, the Company had an allowance for doubtful accounts of $106,959 and no direct 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 with guidance. 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 nine-month period ended September 30, 2023 and the year ended December 31, 2022, no impairments were recorded on those assets. Acquisition of Intellectual Property Intellectual property acquired through purchase are recorded at the time of acquisition at cost of the acquisition plus the transaction costs, if material, of the acquired assets in accordance with ASC 805-50. Asset acquisitions in which the consideration given is cash are measured by the amount of cash paid. However, if the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interests issued) measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Each intellectual property asset, patent’s valuation will be amortized over its useful life. The Company has concluded that patent portfolios have a determinant useful life in accordance with the patents’ expiration dates. Additionally, the Company will prepare periodic reviews of the patent portfolio in accordance with ASC 820 and ASC 360 to assess if a write-down is required. For the nine-month period ended September 30, 2023, no impairments were recorded on those assets. 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 probably 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. Substantially all of the Company’s revenues are recognized when the contract reconciliations are completed and accepted by the Media Buyer and Media Seller. The Company maintains agreements with each Media Buyer and Media Seller which set out the terms of the relationship. 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 the pricing. 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. We use 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, etc. The value of the portion of the award, after considering potential forfeitures, that is ultimately expected to vest is recognized as expense in our statements of operations 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. Deferred Offering Cost Write-off It Is the Company’s policy to defer the recognition of deferred offering costs Pursuant to the Codification of Staff Accounting Bulletins, Topic 5: Miscellaneous Accounting A. Expenses of Offering. As of December 31, 2022, $848,531 of deferred offering costs were recorded on the balance sheet. On February 14, 2023, the Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission was declared effective by the SEC. In March, 2023, the Company’s financial advisor, representative and lead underwriter for its initial public offering (the “Offering”), Boustead Securities LLC (“Boustead”), informed the Company of its decision not to proceed with pricing of the Company’s Offering. In accordance with the Codification of Staff Accounting Bulletins / Topic 5: Miscellaneous Accounting, the Company has written off these costs, $848,531, during the three-month period ended March 31, 2023. And, for the three-month period ended September 30, 2023, the Company recorded $177,481 of deferred offering costs which were written off during the three-month period ended September 30, 2023 as a result of Spartan Capital Securities, LLC’s decision not to continue as lead underwriter on October 6, 2023 (the Company engaged Spartan Capital Securities, LLC, as lead underwriter, deal manager and investment banker for the Offering on April 12, 2023) 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 September 30, 2023 and December 31, 2022, 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 periods ended March 31, 2023, September 30, 2023 and December 31, 2022, 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 carryforwards (“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 met. 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 warrants are excluded from the calculation as the employee incentive options and warrants are anti-dilutive. Common Stock Equivalents As of September 30, 2023, and September 30, 2022, 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. As of As of Equity Incentive Plans 3,086,626 3,086,626 Selling Agent and Advisor Warrants 23,538 362,191 Warrants Issued with Common Stock Offerings 932,374 889,500 Warrants Issued with Convertible Notes Offerings 1,133,400 352,188 Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest 1,028,276 824,650 Total Common Stock Equivalents 6,204,214 5,515,155 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. In June 2016, the FASB issued Update 2016-13 Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The Company evaluated any potential impact from Update 2016-13 Financial Instruments and believes it will have no material impact on our financial results. |
Purchase of Intellectual Proper
Purchase of Intellectual Property Portfolio | 9 Months Ended |
Sep. 30, 2023 | |
Purchase of Intellectual Property Portfolio [Abstract] | |
Purchase of Intellectual Property Portfolio | Note 3 – Purchase of Intellectual Property Portfolio On July 8, 2023, 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 2,000,000 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. In 2007, a NYIAX director, Thomas F. O’Neill., and a NYIAX officer, Mark Grinbaum, Co-Founder and Executive Vice President of Financial Products, purchased approximately 0.17% (acquired for $50,000) and 0.35% (acquired for $ 100,00 The Portfolio consists of a portfolio of eighteen (18) patents and trade secrets, of which six patents are active. The Company will amortize the active patents over their useful lives up to February, 2029. The Company will use the Portfolio to enhance its offerings for the buying and selling of media, advertising audience, and advertising inventory. Additionally, the Company will use the Portfolio acquired from NIFTY to create new revenue streams in markets such as: (i) market data, (ii) streaming media (advertising, livestreaming and video-on-demand), and (iii) the webinar market. NYIAX engaged an intellectual property valuation company to assess the potential opportunities of the patents and trade secrets prior to our acquisition of the Portfolio. The Company has concluded that the purchase of this intellectual property portfolio is an acquisition of an asset group in accordance with ASC 805-10-55 and the Company utilized a $2.00 share valuation based on the Company’s latest convertible notes offering, the 2023B Convertible Notes Offering. A purchase price of approximately $4 million was recorded as of July 8, 2023 for the Portfolio. The amortized cost as of September 30, 2023 was as follows: Portfolio Cost $ 4,000,000 Accumulated amortization as of September 30, 2023 (297,520 ) $ 3,702,480 The Company will record amortization expense of the Portfolio as follows: For the year ending December 31, 2023 $ 595,041 For the year ending December 31, 2024 1,190,083 For the year ending December 31, 2025 958,678 For the year ending December 31, 2026 517,906 For the year ending December 31, 2027 341,598 For the year ending December 31, 2028 264,463 Thereafter 132,231 Total $ 4,000,000 |
Shareholders_ Equity
Shareholders’ Equity | 9 Months Ended |
Sep. 30, 2023 | |
Shareholders’ Equity [Abstract] | |
Shareholders’ Equity | Note 4 — Shareholders’ Equity As of September 30, 2023 and December 31, 2022 the authorized capital stock of 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 with 15,561,499 and 12,370,002 common shares issued and outstanding, respectively. No preferred stock has been issued. On June 21, 2023 the Board of Directors approved a grant of 775,000 Restricted Share Units (RSU). All grants shall be effective upon the first day of trading of the Company’s common stock on the NASDAQ Exchange. 525,000 of the RSUs were awarded to three Board nominees and 250,000 RSUs were awarded to two officers of the Company. For the periods ended September 30, 2023 and 2022, the Company recorded share based compensation as follows: Three-Month Period Nine-Month Period September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Shared-Based Compensation: Cost of Sales $ 5,288 $ 11,740 $ 17,455 $ 48,842 Technology and development 13,386 13,386 40,158 46,348 Sales, general and administrative 117,460 330,142 386,255 1,642,800 Total $ 136,134 $ 355,268 $ 443,868 $ 1,737,990 |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2023 | |
Convertible Notes Payable [Abstract] | |
Convertible Notes Payable | Note 5 — Convertible Notes Payable Issuance of 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 were 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 (defined as declaring the registration statement 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 shall be the 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 was paid as a Payment-in-Kind in the Company’s common stock valued at two dollars ($2.00) per share. Concurrently with the sales of the 2023A Convertible Note Payable, warrants (the “Warrants”) were issued 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. 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 were recorded as deferred debt discount of $16,000 and amortized over the term of the convertible note using the effective interest method. The outstanding principal balance of the 2023A Convertible Notes and all accrued interest automatically converted into 100,933 shares of 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. 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 2023B 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 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 issued 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) years. $1,970,000 of 2023B Convertible Note Payable were sold and the note offering was closed. 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 warrants and beneficial conversion option was recorded as the convertible note payable debt discount. The inputs for the Black-Scholes formula, were as follows: ● Term — 12 months ● Risk-free Interest Rate — 4.59% - 5.25% ● Dividend Rate 0 ● Volatility 75.2% - 78.7% The following table illustrates the value of the 2023B convertible note payable as of September 30, 2023: 2023 B Convertible Note 2023B Convertible Note Payable at Issuance $ 1,970,000 (Deferred Debt Discount) (704,975 ) 1,265,025 Amortization of debt discount for period ending September 30, 2023 704,975 Balance September 30, 2023 $ 1,970,000 For the nine months ended September 30, 2023, the company recorded interest expense from the amortization of deferred debt discount of $ 713,681. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 Related Party Transactions Convertible Note payable – stockholder, founder / related party On September 25, 2023, Mark Grinbaum, a founder, shareholder, and service provider, agreed to loan the Company $100,000, with interest accruing at the annual rate of 4%, due in 60 days, or upon trading of the Company’s common stock on the NASDAQ Exchange, whichever is sooner. On October 26, 2023, the Company and Mark Grinbaum further agreed that upon trading of the Company’s common stock on the NASDAQ Exchange, the convertible notes payables to Mark Grinbaum and related interest convert to NYIAX common shares at $4.00 per share The loan was recorded as of September 30, 2023 as a note payable – stockholder. The funds were received on October 2, 2023. The short-term loan will provide additional short-term funding for operations during completion of the public offering process. On October 26, 2023, Carolina Abenante, a founder, shareholder, officer and director, agreed to loan the Company $100,000, with interest accruing at the annual rate of 4%, due in 60 days, or upon trading of the Company’s common stock on the NASDAQ Exchange, whichever is sooner. Upon trading of the Company’s common stock on the NASDAQ Exchange, the convertible notes payables to Carolina Abenante and related interest convert to NYIAX common shares at $4.00 per share. As of the date herein, the funds have been received. The short-term loan will provide additional short-term funding for operations during completion of the public offering process. Forfeiture of Founders’ Deferred Compensation During September, 2023, in connection with the closing of the Company’s IPO, certain NYIAX founders, owners, agreed to forfeit $367,803 of deferred compensation amounts owed by NYIAX. The deferred compensation arose from a salary deferral program where each founder agreed to defer a portion of their contractual salary or contractor fees. This forfeiture represents a permanent waiver of rights to this deferred compensation. This event was recorded as a contra-expense to selling, general and administrative expenses and a debit to accrued compensation. Goldstreet 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 nine months ended September 30, 2022, the Company recorded $10,000 of general and administrative expenses related to GoldStreet for office space. The Company did not record any related party expenses related to GoldStreet for the nine-month period ended September 30, 2023. |
Threatened Litigation
Threatened Litigation | 9 Months Ended |
Sep. 30, 2023 | |
Threatened Litigation [Abstract] | |
Threatened Litigation | Note 7 — Threatened Litigation On September 20, 2023, the Company entered into a settlement agreement and release with Boustead (the “Boustead Agreement”) to settle the threatened litigation, including any and all potential claims and counterclaims by and between the Company and Boustead with respect to the Engagement Letter dated March 23, 2021. The Company and Boustead have agreed to a contingent mutual release and waiver of claims in exchange for a cash payment of $515,000 by the Company to Boustead as a deduction from the offering proceeds upon consummation of the Company’s IPO. The Boustead Agreement also provides Boustead that certain indemnifications included under Section 4 of the Engagement Letter continue. Unless otherwise amended, the Boustead Agreement shall be deemed null and void in the event the Company’s IPO is not consummated by December 31, 2023. If the settlement is finalized with the consummation of the Company’s initial public offering, the Company does not anticipate any additional charges related to this threatened litigation. The threatened litigation arose from The Company entering into an engagement letter on March 23, 2021 (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. 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 offering 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. During the time the Company was engaged with Boustead with respect to the IPO, the Company raised approximately $10.0 million in private transactions. Based on the formula in the Engagement Letter, the commissions on such amount were approximately $588,000, which has been acknowledged by Boustead and is accrued in our Financial Statements as of September 30, 2023. Additionally, the Company issued Boustead 23,538 warrants to purchase NYIAX common stock at a per share exercise price of $4.00. The amounts above exclude approximately $158,000 in cash commissions and 68,950 warrants to purchase NYIAX common stock at a per share exercise price of $2.00 on 2023B Convertible Note which commenced in April 2023 for which Boustead was given a right of first refusal and did not exercise the right to participate in the 2023B Convertible Note offering. In the event that there is a determination that the Engagement Letter has not expired or that Boustead is entitled to commissions if the Company completes its initial public offering with another underwriter, we believe that the maximum amount of such commissions based on the commission formula in the Engagement Letter would be approximately $560,000 in cash commissions and 122,500 warrants to purchase NYIAX common stock at a per share exercise price of $4.00 which assumes that purchasers of the Company’s shares were investors in the prior offerings during the term of the Engagement Letter or became aware of the Company or known to the Company during twelve months following the termination or expiration of the Engagement Letter. If the settlement is not finalized with the consummation of the Company’s initial public offering, 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. The Company intends to vigorously defend its positions regarding the payment of any commissions to Boustead, however there can be no assurances that the Company’s contentions and affirmative defenses in response to claims by Boustead for any commissions will be successful in the event that the issue of Engagement Letter termination and the entitlement to, and amount of, commissions pursuant to the Engagement Letter are contested by Boustead in a court of law or arbitration or if the matter is otherwise settled by the Company and Boustead. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 8 — 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 November 14, 2023. 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: Forfeiture of Deferred Compensation Amounts In connection with the closing of the Company’s IPO, the interim CEO and certain NYIAX employees agreed to forfeit $282,650 of deferred compensation amounts owed by NYIAX and the NYIAX founders, owners, agreed to forfeit an additional $99,201. The deferred compensation arose from a salary deferral program where those people agreed to defer a portion of their contractual salary or contractor fees. This forfeiture represents a permanent waiver of rights to this deferred compensation. This event will be recorded as a contra-expense to selling, general and administrative expenses and a debit to accrued compensation. Convertible Note payable – stockholder, founder / related party On September 25, 2023, Mark Grinbaum, a founder, shareholder, and service provider, agreed to loan the Company $100,000, with interest accruing at the annual rate of 4%, due in 60 days, or upon trading of the Company’s common stock on the NASDAQ Exchange, whichever is sooner. On October 26, 2023, the Company and Mark Grinbaum further agreed that upon trading of the Company’s common stock on the NASDAQ Exchange, the convertible notes payables to Mark Grinbaum and related interest convert to NYIAX common shares at $4.00 per share. The funds were received on October 2, 2023. The short-term loan will provide additional short-term funding for operations during completion of the public offering process. On October 26, 2023, Carolina Abenante, a founder, shareholder, officer and director, agreed to loan the Company $100,000, with interest accruing at the annual rate of 4%, due in 60 days, or upon trading of the Company’s common stock on the NASDAQ Exchange, whichever is sooner. Upon trading of the Company’s common stock on the NASDAQ Exchange, the convertible notes payables to Carolina Abenante and related interest convert to NYIAX common shares at $4.00 per share. The funds have been received. The short-term loan will provide additional short-term funding for operations during completion of the public offering process. Engagement of Spartan Capital Securities, LLC On April 12, 2023, the Company engaged Spartan Capital Securities, LLC, (“Spartan”) as lead underwriter, deal manager and investment banker for the Company’s initial public offering for a six month period. On October 6, 2023, Spartan informed the Company of its decision not to continue as lead underwriter. The Company does not expect to incur any additional expenses in connection by Spartan. Engagement of WestPark Capital, Inc. On October 9, 2023, the Company entered into an engagement letter agreement (the “LOE”) with WestPark Capital, Inc. (“WestPark Capital”) as exclusive lead underwriter, financial advisor, deal manager, sole book running manager, placement agent and/or investment banker for the Company’s initial public offering (the “IPO”). For certain financing transactions, including the IPO and excluding certain pre-IPO financings, the company will pay WestPark eight percent (8%) of the gross amount to be disbursed to the Company from each such financing transaction, plus warrants to purchase the number of shares equal to ten percent (10%) of the aggregate number of securities sold in such financing transaction. The warrants will be exercisable at any time and from time to time, in whole or in part, during the four and a half-year period commencing six (6) months from the effective date of such financing transaction, at a price per share equal to 125% of the public offering price per security. The LOE terminates on the earlier of (i) six (6) months from October 9, 2023, or (ii) the final closing, if any, of the IPO, provided, however, that (i) the Company may terminate the LOE on or after the one hundred fifth (150 th th There can be no assurance that we will be able to complete an initial public offering in the near future, if at all. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the balances and results for the period presented. Operating results for the period from December 31, 2022 through September 30, 2023 are not necessarily indicative of the results that may be expected through December 31, 2023. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K as filed on July 21, 2023. |
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. |
Concentrations of Credit risk | Concentrations of Credit risk The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents in the financial statements. 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 providing deposits insurance which exceed the Federal Deposit Insurance Corporation (“FDIC”) federally insured limits. The Company considers all highly liquid investments with an original maturity of three months or less when purchased, to be cash equivalents. There were no cash equivalents at September 30, 2023 and December 31, 2022. As of September 30, 2023 two Media Buyers represented 26% and 20% of accounts receivable. As of September 30, 2023, two Media Sellers represented 80% and 10% of accounts payable. For the nine months ended September 30, 2023, two customers represented 47% and 9% of revenue, net. As of December 31, 2022, two Media Buyers represented 67% and 20% of accounts receivable. As of December 31, 2022, two Media Sellers represented 61% and 8% of accounts payable. As of September 30, 2022, two Media Buyers represented 80% and 11% of accounts receivable. As of September 30, 2022, one Media Seller represented 44% of accounts payable. For the nine months ended September 30, 2022, one customer represented 84% of revenue, net. For the nine months ended September 30, 2022, one customer represented 84% of net revenue. As of September 30, 2022, one Media Seller represented 44% of accounts payable and two Media Buyers represented 80% and 11% of accounts receivable. |
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 carrying amounts of cash, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. |
Accounts Receivable, Net | Accounts Receivable, Net In June 2016, the Financial Accounting Standards Board, or the FASB, issued ASU 2016-13 – Measurement of Credit Losses on Financial Statements. The new standard requires that the Company recognize an allowance for losses on accounts receivable in an amount equal to the current expected credit losses. The estimation of the allowance is based on an analysis of historical loss experience, current receivables aging, and management’s assessment of current conditions and reasonable and supportable expectation of future conditions, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. In November 2019, the FASB issued ASU 2019-10 – Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date for certain companies. The standard is effective for public companies eligible to be smaller reporting companies for annual and interim periods beginning after December 15, 2022. On January 1, 2023, the Company adopted ASU 2016-13, using a modified retrospective approach. The adoption of this standard did not have an effect on the Company’s financial position, results of operations, or cash flows. 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 based on the best estimate of the amount of probable credit losses in existing accounts receivable. 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 year ended and December 31, 2022, the Company had no allowance for doubtful accounts and no write-offs of accounts receivable. For the period ended September 30, 2023, the Company had an allowance for doubtful accounts of $106,959 and no direct 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 with guidance. 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 nine-month period ended September 30, 2023 and the year ended December 31, 2022, no impairments were recorded on those assets. |
Acquisition of Intellectual Property | Acquisition of Intellectual Property Intellectual property acquired through purchase are recorded at the time of acquisition at cost of the acquisition plus the transaction costs, if material, of the acquired assets in accordance with ASC 805-50. Asset acquisitions in which the consideration given is cash are measured by the amount of cash paid. However, if the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interests issued) measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Each intellectual property asset, patent’s valuation will be amortized over its useful life. The Company has concluded that patent portfolios have a determinant useful life in accordance with the patents’ expiration dates. Additionally, the Company will prepare periodic reviews of the patent portfolio in accordance with ASC 820 and ASC 360 to assess if a write-down is required. For the nine-month period ended September 30, 2023, no impairments were recorded on those assets. |
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 probably 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. Substantially all of the Company’s revenues are recognized when the contract reconciliations are completed and accepted by the Media Buyer and Media Seller. The Company maintains agreements with each Media Buyer and Media Seller which set out the terms of the relationship. 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 the pricing. |
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. We use 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, etc. The value of the portion of the award, after considering potential forfeitures, that is ultimately expected to vest is recognized as expense in our statements of operations 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. |
Deferred Offering Cost Write-off | Deferred Offering Cost Write-off It Is the Company’s policy to defer the recognition of deferred offering costs Pursuant to the Codification of Staff Accounting Bulletins, Topic 5: Miscellaneous Accounting A. Expenses of Offering. As of December 31, 2022, $848,531 of deferred offering costs were recorded on the balance sheet. On February 14, 2023, the Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission was declared effective by the SEC. In March, 2023, the Company’s financial advisor, representative and lead underwriter for its initial public offering (the “Offering”), Boustead Securities LLC (“Boustead”), informed the Company of its decision not to proceed with pricing of the Company’s Offering. In accordance with the Codification of Staff Accounting Bulletins / Topic 5: Miscellaneous Accounting, the Company has written off these costs, $848,531, during the three-month period ended March 31, 2023. And, for the three-month period ended September 30, 2023, the Company recorded $177,481 of deferred offering costs which were written off during the three-month period ended September 30, 2023 as a result of Spartan Capital Securities, LLC’s decision not to continue as lead underwriter on October 6, 2023 (the Company engaged Spartan Capital Securities, LLC, as lead underwriter, deal manager and investment banker for the Offering on April 12, 2023) |
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 September 30, 2023 and December 31, 2022, 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 periods ended March 31, 2023, September 30, 2023 and December 31, 2022, 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 carryforwards (“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 met. |
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 warrants are excluded from the calculation as the employee incentive options and warrants are anti-dilutive. |
Common Stock Equivalents | Common Stock Equivalents As of September 30, 2023, and September 30, 2022, 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. As of As of Equity Incentive Plans 3,086,626 3,086,626 Selling Agent and Advisor Warrants 23,538 362,191 Warrants Issued with Common Stock Offerings 932,374 889,500 Warrants Issued with Convertible Notes Offerings 1,133,400 352,188 Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest 1,028,276 824,650 Total Common Stock Equivalents 6,204,214 5,515,155 |
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. In June 2016, the FASB issued Update 2016-13 Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The Company evaluated any potential impact from Update 2016-13 Financial Instruments 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) | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Schedule of Common Stock Equivalents | As of September 30, 2023, and September 30, 2022, 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. As of As of Equity Incentive Plans 3,086,626 3,086,626 Selling Agent and Advisor Warrants 23,538 362,191 Warrants Issued with Common Stock Offerings 932,374 889,500 Warrants Issued with Convertible Notes Offerings 1,133,400 352,188 Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest 1,028,276 824,650 Total Common Stock Equivalents 6,204,214 5,515,155 |
Purchase of Intellectual Prop_2
Purchase of Intellectual Property Portfolio (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Purchase of Intellectual Property Portfolio [Abstract] | |
Schedule of Amortized Cost | The amortized cost as of September 30, 2023 was as follows: Portfolio Cost $ 4,000,000 Accumulated amortization as of September 30, 2023 (297,520 ) $ 3,702,480 |
Schedule of Excluding Amortization Expense | The Company will record amortization expense of the Portfolio as follows: For the year ending December 31, 2023 $ 595,041 For the year ending December 31, 2024 1,190,083 For the year ending December 31, 2025 958,678 For the year ending December 31, 2026 517,906 For the year ending December 31, 2027 341,598 For the year ending December 31, 2028 264,463 Thereafter 132,231 Total $ 4,000,000 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Shareholders’ Equity [Abstract] | |
Schedule of Share Based Compensation | For the periods ended September 30, 2023 and 2022, the Company recorded share based compensation as follows: Three-Month Period Nine-Month Period September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Shared-Based Compensation: Cost of Sales $ 5,288 $ 11,740 $ 17,455 $ 48,842 Technology and development 13,386 13,386 40,158 46,348 Sales, general and administrative 117,460 330,142 386,255 1,642,800 Total $ 136,134 $ 355,268 $ 443,868 $ 1,737,990 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Convertible Notes Payable [Abstract] | |
Schedule of Convertible Note Payable | The following table illustrates the value of the 2023B convertible note payable as of September 30, 2023: 2023 B Convertible Note 2023B Convertible Note Payable at Issuance $ 1,970,000 (Deferred Debt Discount) (704,975 ) 1,265,025 Amortization of debt discount for period ending September 30, 2023 704,975 Balance September 30, 2023 $ 1,970,000 |
Nature of Operations (Details)
Nature of Operations (Details) - USD ($) | 9 Months Ended | ||
Oct. 12, 2023 | Sep. 30, 2023 | Oct. 26, 2023 | |
Nature of Operations [Line Items] | |||
Operations lost | $ 7,400,000 | ||
Net proceeds | 2,800,000 | ||
Non cash expenses | 2,500,000 | ||
NYIAX [Member] | |||
Nature of Operations [Line Items] | |||
Total current assets | 280,000 | ||
Cash | 169,000 | ||
Total current liabilities | 7,200,000 | ||
Price per share (in Dollars per share) | $ 4 | ||
Subsequent Event [Member] | |||
Nature of Operations [Line Items] | |||
Price per share (in Dollars per share) | $ 4 | ||
Subsequent Event [Member] | NYIAX [Member] | |||
Nature of Operations [Line Items] | |||
Shares issued (in Shares) | 1,875,000 | ||
Convertible Notes Payable [Member] | |||
Nature of Operations [Line Items] | |||
Notes payable and accrued payment | $ 2,100,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Allowance for doubtful accounts (in Dollars) | $ 106,959 | $ 106,959 | ||||
Written off costs (in Dollars) | $ 848,531 | |||||
Deferred offering costs (in Dollars) | $ 177,481 | $ 1,026,012 | ||||
Maximum [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Office equipment and software | 5 years | 5 years | ||||
Minimum [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Office equipment and software | 3 years | 3 years | ||||
Boustead Securities LLC [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Deferred offering costs (in Dollars) | $ 848,531 | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Media One [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 26% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 20% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Media Buyer [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 80% | 67% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Media Buyer [Member] | Maximum [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 80% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Media Buyer [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 11% | 20% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Media Buyer [Member] | Minimum [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 11% | |||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | One Media Sellers [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 80% | 44% | 61% | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Media Sellers [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 10% | 8% | ||||
Revenue Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | Customer Two [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 9% | |||||
Revenue Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | Customer One [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 47% | 84% | ||||
Revenue Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | Customer One [Member] | Maximum [Member] | ||||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||||
Concentration of credit risk percentage | 84% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Schedule of Common Stock Equivalents - shares | Sep. 30, 2023 | Sep. 30, 2022 |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | ||
Equity Incentive Plans | 3,086,626 | 3,086,626 |
Selling Agent and Advisor Warrants | 23,538 | 362,191 |
Warrants Issued with Common Stock Offerings | 932,374 | 889,500 |
Warrants Issued with Convertible Notes Offerings | 1,133,400 | 352,188 |
Common Stock Issuable Upon Conversion of Convertible Notes, including PIK Interest | 1,028,276 | 824,650 |
Total Common Stock Equivalents | 6,204,214 | 5,515,155 |
Purchase of Intellectual Prop_3
Purchase of Intellectual Property Portfolio (Details) - USD ($) | 9 Months Ended | ||
Jul. 08, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Purchase of Intellectual Property Portfolio [Line Items] | |||
Common stock issued (in Shares) | 15,561,499 | 12,370,002 | |
Intellectual property portfolio (in Dollars per share) | $ 2 | ||
Purchase price | $ 4,000,000 | ||
NIFTY [Member] | |||
Purchase of Intellectual Property Portfolio [Line Items] | |||
Common stock issued (in Shares) | 2,000,000 | ||
NYIAX [Member] | |||
Purchase of Intellectual Property Portfolio [Line Items] | |||
Common stock issued (in Shares) | 2,000,000 | ||
Co-Founder [Member] | |||
Purchase of Intellectual Property Portfolio [Line Items] | |||
Financial products, acquired | $ 50,000 | ||
Executive Vice President [Member] | |||
Purchase of Intellectual Property Portfolio [Line Items] | |||
Financial products, acquired | $ 10,000 | ||
NIFTY [Member] | Co-Founder [Member] | |||
Purchase of Intellectual Property Portfolio [Line Items] | |||
Financial products, purchase percentage | 0.17% | ||
NIFTY [Member] | Executive Vice President [Member] | |||
Purchase of Intellectual Property Portfolio [Line Items] | |||
Financial products, purchase percentage | 0.35% |
Purchase of Intellectual Prop_4
Purchase of Intellectual Property Portfolio (Details) - Schedule of Amortized Cost - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule Of Amortized Cost Abstract | ||
Portfolio Cost | $ 4,000,000 | |
Accumulated amortization as of September 30, 2023 | (297,520) | $ (297,520) |
Total | $ 3,702,480 |
Purchase of Intellectual Prop_5
Purchase of Intellectual Property Portfolio (Details) - Schedule of Excluding Amortization Expense - Intangible Assets, Amortization Period [Member] | Sep. 30, 2023 USD ($) |
Purchase of Intellectual Property Portfolio (Details) - Schedule of Excluding Amortization Expense [Line Items] | |
For the year ending December 31, 2023 | $ 595,041 |
For the year ending December 31, 2024 | 1,190,083 |
For the year ending December 31, 2025 | 958,678 |
For the year ending December 31, 2026 | 517,906 |
For the year ending December 31, 2027 | 341,598 |
For the year ending December 31, 2028 | 264,463 |
Thereafter | 132,231 |
Total | $ 4,000,000 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) - USD ($) | Jun. 21, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Shareholders’ Equity [Line Items] | |||
Capital stock | 135,000,000 | 135,000,000 | |
Common stock shares authorized | 125,000,000 | 125,000,000 | |
Preferred stock shares authorized | 10,000,000 | 10,000,000 | |
Preferred Stock par or stated value per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, shares issued | 15,561,499 | 15,561,499 | |
Common stock, shares outstanding | 12,370,002 | 12,370,002 | |
Common stock (in Dollars) | $ 775,000 | $ 1,556 | $ 1,237 |
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||
Shareholders’ Equity [Line Items] | |||
Loss Contingency, Damages Awarded, Value (in Dollars) | 525,000 | ||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||
Shareholders’ Equity [Line Items] | |||
Loss Contingency, Damages Awarded, Value (in Dollars) | $ 250,000 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) - Schedule of Share Based Compensation - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Shared-Based Compensation: | ||||
Cost of Sales | $ 5,288 | $ 11,740 | $ 17,455 | $ 48,842 |
Technology and development | 13,386 | 13,386 | 40,158 | 46,348 |
Sales, general and administrative | 117,460 | 330,142 | 386,255 | 1,642,800 |
Total | $ 136,134 | $ 355,268 | $ 443,868 | $ 1,737,990 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2023 | Apr. 03, 2023 | Feb. 07, 2023 | Jan. 10, 2023 | |
Convertible Notes Payable [Line Items] | ||||
Convertible note payable (in Dollars) | $ 1,970,000 | |||
Converted into common stock per shares | $ 2 | |||
Annual rate of return percentage | 12% | |||
Common stock valued per shares | $ 2 | |||
Warrants issued (in Shares) | (1) | |||
Principal amount (in Dollars) | $ (10) | |||
Warrant exercisable year | 5 years | |||
Price per share | $ 5.5 | |||
Deferred debt discount (in Dollars) | $ 16,000 | |||
Converted common shares (in Shares) | 100,933 | |||
Conversion amount price per share amount | $ 2 | |||
Annual rate interest | 12% | |||
Exercise price | $ 4 | |||
Dividend rate | 0% | |||
Amortization expense (in Dollars) | $ 713,681 | |||
Minimum [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Annual rate of return percentage | 75.20% | |||
Interest rate | 4.59% | |||
Maximum [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Annual rate of return percentage | 78.70% | |||
Interest rate | 5.25% | |||
Warrant [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Annual rate of return percentage | 10% | |||
Convertible Note Payable [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Conversion per share | $ 2 | |||
Warrant [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Warrant exercisable year | 5 years | |||
Common stock [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Conversion of stock, price per share | $ 2 | |||
Convertible Note Payable [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Convertible note payable (in Dollars) | $ 2,000,000 | $ 500,000 | ||
Total convertible notes sold (in Dollars) | $ 200,000 | |||
Convertible Note Payables [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Price per share | 2 | |||
Exercise price | $ 2 | |||
Convertible Note Payables [Member] | Warrant [Member] | ||||
Convertible Notes Payable [Line Items] | ||||
Warrant issued (in Dollars) | $ 10 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details) - Schedule of Convertible Note Payable - 2023 B Convertible Note Payable [Member] | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Convertible Notes Payable [Line Items] | |
2023B Convertible Note Payable at Issuance | $ 1,970,000 |
(Deferred Debt Discount) | (704,975) |
Convertible Note Payable Gross | 1,265,025 |
Amortization of debt discount for period ending September 30, 2023 | 704,975 |
Balance September 30, 2023 | $ 1,970,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | ||||
Oct. 26, 2023 | Sep. 25, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transactions [Line Items] | |||||
Common shares per share (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||
Deferred compensation amounts | $ 282,650 | ||||
General and administrative expenses | $ 10,000 | ||||
Founder [Member] | |||||
Related Party Transactions [Line Items] | |||||
Loan | $ 100,000 | $ 100,000 | |||
Annual rate | 4% | 4% | |||
Common shares per share (in Dollars per share) | $ 4 | $ 4 | |||
Deferred compensation amounts | $ 367,803 |
Threatened Litigation (Details)
Threatened Litigation (Details) - USD ($) | 9 Months Ended | |
Apr. 07, 2023 | Sep. 30, 2023 | |
Threatened Litigation [Line Items] | ||
Cash payment | $ 515,000 | |
Investment transaction percentage | 7% | |
Allowance percentage | $ 1 | |
Offering amount | 12,000,000 | |
Reduced fees | 33 | |
Accountable expenses | 230,000 | |
Underwriter commission | $ 1,000,000 | |
Transaction amount | 10,000,000 | |
Commissions amount | $ 588,000 | |
Warrants to purchase (in Shares) | 23,538 | |
Exercise price per share (in Dollars per share) | $ 4 | |
Warrant [Member] | ||
Threatened Litigation [Line Items] | ||
Investment transaction percentage | 7% | |
Commissions amount | $ 158,000 | |
Warrants to purchase (in Shares) | 68,950 | |
Exercise price per share (in Dollars per share) | $ 2 | |
IPO [Member] | ||
Threatened Litigation [Line Items] | ||
Underwriter commission | $ 1,230,000 | |
NYIAX [Member] | Warrant [Member] | ||
Threatened Litigation [Line Items] | ||
Commissions amount | $ 560,000 | |
Warrant [Member] | NYIAX [Member] | ||
Threatened Litigation [Line Items] | ||
Warrants to purchase (in Shares) | 122,500 | |
Exercise price per share (in Dollars per share) | $ 4 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 9 Months Ended | ||
Oct. 26, 2023 | Sep. 30, 2023 | Sep. 25, 2023 | |
Subsequent Events [Line Items] | |||
Deferred compensation amounts | $ 282,650 | ||
Agreed to forfeit | $ 99,201 | ||
Agreed to loan | $ 100,000 | ||
Accruing interest rate percentage | 4% | ||
Description of financing transaction | For certain financing transactions, including the IPO and excluding certain pre-IPO financings, the company will pay WestPark eight percent (8%) of the gross amount to be disbursed to the Company from each such financing transaction, plus warrants to purchase the number of shares equal to ten percent (10%) of the aggregate number of securities sold in such financing transaction. The warrants will be exercisable at any time and from time to time, in whole or in part, during the four and a half-year period commencing six (6) months from the effective date of such financing transaction, at a price per share equal to 125% of the public offering price per security. | ||
Subsequent Event [Member] | |||
Subsequent Events [Line Items] | |||
Common shares, price per share (in Dollars per share) | $ 4 | ||
Loan | $ 100,000 | ||
Annual interest rate | 4% | ||
NYIAX [Member] | Subsequent Event [Member] | |||
Subsequent Events [Line Items] | |||
Common shares, price per share (in Dollars per share) | $ 4 |