Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Mar. 29, 2023 | |
Document and Entity Information | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-56192 | |
Entity Registrant Name | ELECTROMEDICAL TECHNOLOGIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-2619815 | |
Entity Address, Address Line One | 16561 N. 92nd Street | |
Entity Address, Address Line Two | Ste. 101 | |
Entity Address, City or Town | Scottsdale | |
Entity Address State Or Province | AZ | |
Entity Address, Postal Zip Code | 85260 | |
City Area Code | 888 | |
Local Phone Number | 880-7888 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Public Float | $ 1,328,492 | |
Auditor Name | dbbmckennon | |
Auditor Firm ID | 3501 | |
Auditor Location | San Diego, California | |
Entity Central Index Key | 0001715819 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 189,784,529 | 296,886,685 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 368,425 | $ 383,170 |
Accounts receivable | 9,444 | 35,085 |
Inventories | 62,061 | 218,510 |
Prepaid inventories and other current assets | 207,872 | 38,002 |
Total current assets | 647,802 | 674,767 |
Property and equipment, net | 705,469 | 727,344 |
Total assets | 1,353,271 | 1,402,111 |
Current liabilities: | ||
Accounts payable | 266,744 | 214,785 |
Credit cards payable | 37,633 | 11,283 |
Accrued expenses and other current liabilities | 1,065,483 | 317,037 |
Customer deposits | 217,588 | 0 |
Convertible promissory notes, net of discount of $375,865 and $723,166, respectively | 1,304,909 | 811,687 |
Related party notes payable | 57,875 | |
Long term debt, current portion | 31,818 | 29,502 |
Total current liabilities | 2,924,175 | 1,442,169 |
Long-term liabilities: | ||
Bank debt, net of current portion | 489,707 | 518,849 |
Government debt, net of current portion | 150,000 | 154,429 |
Other liabilities | 10,234 | 9,167 |
Total liabilities | 3,574,116 | 2,124,614 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Common stock, $.00001 par value, 999,000,000 and 250,000,000 shares authorized; 189,784,529 and 87,725,842 shares outstanding at December 31, 2022 and 2021, respectively | 1,896 | 876 |
Additional paid-in-capital | 22,237,300 | 20,804,333 |
Accumulated deficit | (24,825,041) | (21,882,712) |
Total stockholders' deficit | (2,220,845) | (722,503) |
Total liabilities and stockholders' deficit | 1,353,271 | 1,402,111 |
Series A Preferred Stock | ||
Stockholders' deficit | ||
Preferred Stock | 365,000 | 355,000 |
Series B Preferred Stock | ||
Stockholders' deficit | ||
Preferred Stock |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Discount on convertible promissory notes | $ 375,865 | $ 723,166 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 999,000,000 | 250,000,000 |
Common stock, shares outstanding | 189,784,529 | 87,725,842 |
Series A Preferred Stock | ||
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares outstanding | 1,000,000 | 500,000 |
Series B Preferred Stock | ||
Preferred Stock, shares authorized | 1 | 1 |
Preferred Stock, shares outstanding | 0 | 0 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STATEMENTS OF OPERATIONS | ||
Net sales | $ 1,149,844 | $ 907,362 |
Cost of sales | 261,203 | 199,234 |
Gross profit | 888,641 | 708,128 |
Selling, general and administrative expenses | 2,492,169 | 4,508,391 |
Loss from operations | (1,603,528) | (3,800,263) |
Other income (expense) | ||
Interest expense | (791,072) | (3,313,852) |
Change in fair market value of derivative liabilities | (1,415,685) | |
Other income (expense) | (432) | |
Forgiveness of debt | 5,900 | 50,083 |
Loss on extinguishment of debt | (1,079,800) | |
Total other expense | (1,864,972) | (4,679,886) |
Net loss | (3,468,500) | (8,480,149) |
Deemed dividend related to warrant resets | (107,888) | (3,770,831) |
Net loss attributable to common stockholders | $ (3,576,388) | $ (12,250,980) |
Weighted average shares outstanding - basic | 133,596,295 | 50,992,414 |
Weighted average shares outstanding - diluted | 133,596,295 | 50,992,414 |
Weighted average loss per share - basic | $ (0.03) | $ (0.24) |
Weighted average loss per share - diluted | $ (0.03) | $ (0.24) |
STATEMENT OF STOCKHOLDERS' DEFI
STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Series A Preferred Stock Preferred Stock | Common Stock | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | Total |
Increase (Decrease) in Stockholders' Equity | ||||||||
Shares issued for consulting services and director's fees | $ 39 | $ 906,187 | $ 906,226 | |||||
Shares issued for consulting services | 3,834,120 | 2,200,000 | ||||||
Warrants issued for consulting services | 57,191 | $ 57,191 | ||||||
Shares issued in conjunction with forbearance of convertible promissory notes | $ 43 | (43) | ||||||
Shares issued in conjunction with forbearance of convertible promissory notes (in shares) | 4,281,871 | |||||||
Warrants issued in conjunction with convertible promissory notes | 1,095,096 | 1,095,096 | ||||||
Warrants reset in conjunction with convertible promissory notes | 3,770,831 | $ (3,770,831) | ||||||
Conversion of convertible promissory notes | $ 494 | 5,225,580 | 5,226,074 | |||||
Conversion of convertible promissory notes (In shares) | 49,334,051 | |||||||
Conversion of related party notes payable | $ 20 | 124,915 | 124,935 | |||||
Conversion of related party notes payable (in shares) | 2,000,000 | |||||||
Stock-based compensation | $ (11) | (1,666,716) | (1,666,727) | |||||
Stock-based compensation (in shares) | (1,100,000) | |||||||
Net loss | (8,480,149) | (8,480,149) | ||||||
Beginning balance at Dec. 31, 2020 | $ 355,000 | $ 269 | 7,957,860 | (9,631,732) | (1,318,603) | |||
Ending balance at Dec. 31, 2021 | $ 355,000 | $ 876 | 20,804,333 | (21,882,712) | (722,503) | |||
Beginning balance (in shares) at Dec. 31, 2020 | 500,000 | 27,175,800 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 500,000 | 87,725,842 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock for cash | $ 15 | 42,751 | 42,766 | |||||
Issuance of common stock for cash (in shares) | 1,500,000 | |||||||
Shares issued for consulting services and director's fees | $ 221 | 494,679 | $ 494,900 | |||||
Shares issued for consulting services | 22,058,999 | 7,500,000 | ||||||
Shares issued in conjunction with forbearance of convertible promissory notes | $ 40 | 142,760 | $ 142,800 | |||||
Shares issued in conjunction with forbearance of convertible promissory notes (in shares) | 4,000,000 | |||||||
Shares issued in conjunction with convertible promissory notes settlement | $ 307 | 708,063 | 708,370 | |||||
Shares issued in conjunction with convertible promissory notes settlement (in Shares) | 30,734,801 | |||||||
Warrants issued in conjunction with debt settlement | 65,000 | 65,000 | ||||||
Warrants issued in conjunction with convertible promissory notes | 445,974 | 445,974 | ||||||
Warrants reset in conjunction with convertible promissory notes | 107,888 | (107,888) | ||||||
Conversion of convertible promissory notes | $ 305 | 434,695 | $ 435,000 | |||||
Conversion of convertible promissory notes (In shares) | 30,500,000 | |||||||
Conversion of related party notes payable (in shares) | 30,500,000 | |||||||
Stock-based compensation | $ 10,000 | 4,703 | $ 14,703 | |||||
Stock-based compensation (in shares) | 500,000 | |||||||
Net loss | (3,468,500) | (3,468,500) | ||||||
Cashless warrant exercises | $ 132 | (132) | ||||||
Cashless warrant exercises (in shares) | 13,264,887 | |||||||
Ending balance (ASU 2020-06) at Dec. 31, 2022 | $ (1,013,414) | $ 634,059 | $ (379,355) | |||||
Ending balance at Dec. 31, 2022 | $ 365,000 | $ 1,896 | $ 22,237,300 | $ (24,825,041) | $ (2,220,845) | |||
Ending balance (in shares) at Dec. 31, 2022 | 1,000,000 | 189,784,529 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (3,468,500) | $ (8,480,149) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 509,603 | 2,630,144 |
Depreciation and amortization | 21,875 | 21,875 |
Forgiveness of debt | (5,900) | (50,083) |
Loss on extinguishment of debt | 1,079,800 | |
Amortization of debt discount and day 1 derivative loss | 584,261 | 3,036,792 |
Change in fair value of derivative liabilities- convertible promissory notes | 1,415,685 | |
Other | 2,839 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 25,641 | (17,391) |
Inventories | 156,449 | (139,798) |
Prepaid inventories and other current assets | (169,870) | 285,860 |
Other assets | (17,401) | |
Accounts payable | 51,959 | (40,529) |
Credit cards payable | 26,350 | (12,427) |
Accrued expenses and other current liabilities | 196,340 | 205,982 |
Customer deposits | 217,588 | (28,651) |
Other liabilities | 1,067 | (6,436) |
Net cash used in operating activities | (773,337) | (1,193,688) |
Cash flows from financing activities: | ||
Repayments on bank debt | (25,355) | (26,334) |
Related party notes payable-net | (57,875) | (158,875) |
Issuance of convertible promissory notes | 1,545,140 | 1,510,000 |
Repayments on notes payable | (746,084) | (12,846) |
Issuance of common stock for cash- net | 42,766 | |
Net cash provided by financing activities | 758,592 | 1,311,945 |
Net increase in cash and cash equivalents | (14,745) | 118,257 |
Cash and cash equivalents, beginning of year | 383,170 | 264,913 |
Cash and cash equivalents, end of year | 368,425 | 383,170 |
Cash paid during the year for: | ||
Interest | 103,819 | 154,081 |
Non-cash investing and financing activities: | ||
January 1, 2022 adoption of ASU2020-06 | 379,355 | |
Warrants, common stock and beneficial conversion feature issued in conjunction with convertible promissory notes | 510,974 | 1,095,096 |
Derivative liabilities issued in conjunction with convertible promissory notes | 1,197,607 | |
Conversion of convertible promissory note and accrued interest into shares of common stock | $ 1,103,370 | $ 5,223,235 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND NATURE OF BUSINESS | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1. ORGANIZATION AND NATURE OF BUSINESS Electro Medical Technologies, LLC (“the Company”), was formed in November 2010 as an Arizona limited liability company. In August 2017, the Company converted to a Delaware C Corporation under Electromedical Technologies, Inc. The Company is a bioelectronic engineering company with medical device certifications in the United States (FDA) and Mexico (Cofepris). The Company engineers simple-to-use portable bioelectronics devices, which provide fast and long -lasting pain relief across a broad range of ailments. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Method The Company maintains its accounting records on an accrual method in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates affecting the financial statements have been prepared on the basis of the most current and best available information. However, actual results from the resolution of such estimates and assumptions may vary from those used in the preparation of the financial statements. Going Concern Since inception, the Company has incurred approximately $21.1 million of accumulated net losses. In addition, during the year ended December 31, 2022, the Company used $773,337 in operations and had a working capital deficit of $2.3 million. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company expects to obtain funding through additional debt and equity placement offerings until it consistently achieves positive cash flows from operations. If the Company is unable to obtain additional funding, it may not be able to meet all of its obligations as they come due for the next twelve months. The continuing viability of the entity and its ability to continue as a going concern is dependent upon the entity being successful in its continuing efforts in growing its revenue base and/or accessing additional sources of capital, and/or selling assets. As a result, there is significant uncertainty whether the entity will continue as a going concern and, therefore, whether it will realize its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial statements. Accordingly, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the entity not continue as a going concern. At this time, management is of the opinion that no asset is likely to be realized for an amount less than the amount at which it is recorded in the financial statements as at December 31, 2022. Revenue Recognition The FASB issued Accounting Standards Update (“ASU”) No. 2014-09, codified as ASC 606: Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1,2019 using modified retrospective basis and the cumulative effect was immaterial to the financial statements. Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities, allowance for estimated returns, chargebacks, and markdowns based upon management’s estimates and the Company’s historical experience. The Company’s liability for sales return refunds is recognized within other current liabilities, and an asset for the value of inventory which is expected to be returned is recognized within other current assets on the balance sheets. The Company generally allows a 30 day right of return to its customers. As of both December 31, 2022 and 2021, the sales returns allowance was $6,990. Certain larger customers pay in advance for future shipments. These advance payments totaled $217,588 and $0 at December 31, 2022 and 2021, respectively, and are recorded as customer deposits in the accompanying balance sheets. Revenue related to these advance payments is recognized upon shipment to the distributor or the end-customer. At the completion of the initial three-year warranty, the Company sells extended warranties for periods ranging from one Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Accounts Receivable Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts, and the Company generally does not require collateral. As a general policy, the Company determines an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Company recorded an allowance for doubtful accounts of $1,000 as of both December 31, 2022 and 2021, respectively. Financial Instruments and Concentrations of Business and Credit Risk The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk. The Company’s accounts receivable, which are unsecured, expose the Company to credit risks such as collectability and business risks such as customer concentrations. The Company mitigates credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic review of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. The Company mitigates business risks by attempting to diversify its customer base. Significant customer sales greater than 10% as a percentage of total sales are as follows: YEAR ENDED DEC 31, 2022 2021 Customer A 23.5 % 19.6 % Customer B 13.5 % 12.8 % Customer C — 10.5 % Amounts due these customers totaled $14,047 and $13,900 at December 31, 2022 and December 31, 2021, respectively for commissions and reimbursements. Amounts due from these customers totaled $0 and $12,800 at December 31, 2022 and December 31, 2021, respectively. Customer deposits on hand from these customers totaled $66,445 The Company’s supplier concentrations expose the Company to business risks, which the Company mitigates by attempting to diversify its supply chain. Significant supplier purchases, including inventory deposits, as a percentage of total inventory purchases are as follows: YEAR ENDED DEC 31, 2022 2021 Supplier A 81.6 % 86.7 % There were no amounts outstanding due this supplier at December 31, 2022 and December 31, 2021. The loss of key vendors may have a significant impact on the operations and cash flows of the Company. The estimated fair value of financial instruments has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is often required to interpret market data used to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts. Disclosure of Fair Value The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below: ● Cash and cash equivalents are carried at cost, which approximates fair value. ● The carrying amounts of receivables approximate fair value due to their short-term maturities. ● The carrying amounts of payables approximate fair value due to their short-term maturities. Asset and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity 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 and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. The following table presents changes during the year ended December 31, 2021 in Level 3 liabilities measured at fair value on a recurring basis: Fair value- December 31, 2020 $ 831,852 Change in fair value of derivative liabilities 1,415,685 Derivative liabilities in conjunction with convertible promissory notes 1,197,607 Conversion of convertible promissory notes (3,445,144) Fair value- December 31, 2021 $ — There were not Level 3 liabilities in 2022. Inventories Inventories are stated at the lower of cost or market. Cost is determined based on the first-in, first-out cost flow assumption (“FIFO”) while market is determined based upon the estimated net realizable value less an allowance for selling and distribution expenses and a normal gross profit. The Company evaluates the need for inventory reserves associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis. As of December 31, 2022, and 2021, the Company believes there are no excess and obsolete inventories and accordingly, did not record an inventory reserve. Inventories consist of purchased finished goods. Property and Equipment Property and equipment are recorded at cost and is comprised of a building and office furniture and equipment. The building is depreciated using the straight-line method over the estimated useful life of 40 years. Office furniture and equipment is depreciated using the double-declining method or the straight-line method over the estimated useful lives of three Betterments, renewals, and extraordinary repairs that materially extend the useful life of the asset are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation applicable to assets retired are removed from the accounts, and the gain or loss on disposition, if any, is recognized in the accompanying statements of operations. Impairment of Long-Lived Assets In accordance with FASB ASC Topic 360, Property, Plant and Equipment, long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized on long-lived assets when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of the assets. In such cases, the carrying value of these assets are adjusted to their estimated fair values and assets held for sale are adjusted to their estimated fair values less selling expenses. No impairment losses of long-lived assets were recognized for the years ended December 31, 2022 and 2021. Income Taxes The Company, which was formed as a Limited liability Company in Arizona, previously filed an Entity Classification Election, commonly known as a check-the-box-election, to be classified as a corporation for tax purposes. The Company also made an election to be treated for income tax purposes as an S corporation. Under U.S. and Arizona law, the taxable income or loss of an S corporation is included in the shareholder’s income tax returns. In August 2017, the Company converted to a Delaware Corporation. The conversion was tax-free under Internal Revenue Code Section 368(a)(1)(F) and is referred to as an F-reorganization, which is typically defined as a mere change in identity, form or place of organization. Management elected to terminate the S corporation election effective January 1, 2018 and the Company will operate for tax purposes as a C corporation from that date forward. The Company follows the provisions of uncertain tax positions as addressed in FASB ASC Subtopic 740-10-65-1, Income Taxes The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to examination by U.S. federal tax authorities for returns filed for the prior three years and by state and local income tax authorities for returns filed for the prior four years. There are no examinations currently pending. The Company’s tax provision for 2022 related to deferred tax charges consisting of accrued liabilities, customer deposits and accounts payable, for which the Company will receive the benefit from when paid and the net operating loss incurred during 2022. During the year ended December 31, 2022, the Company evaluated its deferred tax assets of $933,627 and determined a full valuation allowance was appropriate since it is not more likely than not that the Company will produce income in the foreseeable future to utilize the Net Operating Loss (NOL) carryforward. Deferred tax assets related primarily to book to tax timing differences pertaining to accrued liabilities of $193,848, accounts payable of $13,457 and customer deposits of $56,355 after applying a blended federal and state effective tax rate of 25.9%. In addition, the deferred tax balance also increased as a result of the federal NOL increasing to $42,789 after applying the 21% federal tax rate. During the year ended December 31, 2022, the valuation allowance increased by $53,288 to fully offset the increase in the deferred tax asset The Company’s tax provision for 2021 related to deferred tax charges consisting of accrued liabilities and accounts payable, for which the Company will receive the benefit from when paid and the net operating loss incurred during 2021. During the year ended December 31, 2021, the Company evaluated its deferred tax assets of $880,340 and determined a full valuation allowance was appropriate. Deferred tax assets related primarily to accrued liabilities and accounts payable of $132,945 and net operating losses of $747,395. During the year ended December 31, 2021, the valuation allowance increased by $333,084. For the years ended December 31, 2022 and 2021 the Company’s net operating loss carry forward was increased by $214,257 and $1,339,245, respectively. NOLs originating in 2021 and 2022 can be carried forward indefinitely until the loss is fully recovered, but they are limited to 80% of the taxable income in any one tax period. However, this 80% limitation was removed for the 2018, 2019, and 2020 tax years by the CARES Act, which also allows for a 5-year carryback of the NOLs generated in 2018 and 2019. The difference between the statutory rate of 21% and the effective tax rate is due to permanent differences and a full valuation allowance. The Company was granted a PPP loan from the SBA in 2020 in the amount of $39,500 that was fully forgiven in 2021. This amount was treated as a permanent book to tax difference for federal tax reporting purposes in 2021 and fully excluded as a nontaxable income item. Total net loss operating carry forward at December 31, 2022 and 2021 totaled $4,090,409 and $3,876,152, respectively. Sales Taxes Sales taxes for the years ended December 31, 2022 and 2021 were recorded on a net basis. Included in accrued expenses at both December 31,2022 and 2021 is approximately $61,000 related to sales taxes. Shipping and Handling Costs The Company included shipping and handling costs in cost of sales on the accompanying statements of operations for the years ended December 31, 2022 and 2021. Warranty The Company warranties the sale of most of its products and records an accrual for estimated future claims. The standard warranty is typically for a period of three years. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The Company recorded a liability as of, December 31, 2022 and 2021 of $12,679 and $14,828, respectively. The expense is included in cost of sales in the statements of operations and within accrued expenses on the accompanying balance sheets. Research and Development Costs Research and development costs are expensed as incurred. Total research and development costs amounted to $92,299 and $215,320 for the years ended December 31, 2022 and 2021, respectively. Total research and development costs are included in selling, general and administrative expenses on the accompanying statements of operations. Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2022 and 2021, diluted net loss per share is the same as basic net loss per share for each year. Stock options, warrants, accrued liabilities to be converted to common stock and convertible promissory notes with underlying shares totaling 231,796,422 and 32,883,205 at December 31, 2022 and 2021, respectively, have not been included in the net loss per share calculation. The number of underlying shares related to convertible promissory notes may vary based upon the actual date of conversion. COVID-19 On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While we are taking diligent steps to mitigate disruptions to our supply chain, we are unable to predict the extent or nature of these impacts at this time to our future financial condition and results of operations. Recently Issued Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). This update simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this update amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. Entities may adopt the requirements of ASU 2020-06 using either a full or modified retrospective approach, and it is effective for public businesses, excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method of transition, which resulted in an increase in convertible promissory notes of $379,355, a decrease in additional paid-in capital of $1,013,414 and an increase to retained earnings of $634,059 as of January 1, 2022. See Note 4. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of December 31: 2022 2021 Building $ 875,000 $ 875,000 Furniture and equipment 24,987 24,987 899,987 899,987 Less: accumulated depreciation and amortization (194,518) (172,643) $ 705,469 $ 727,344 Depreciation and amortization expense related to property and equipment was $21,875 for both the years ended December 31, 2022 and 2021, respectively. Depreciation and amortization are included in selling, general and administrative expenses on the accompanying statements of operations. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 4. NOTES PAYABLE In April 2020, the Company received $39,500 in payroll protection program loans (“PPP”). These loans provide for certain funding based on previous employment which in part may be forgivable under certain conditions. No payment is due during the deferral period which ends the earlier of the date of SBA forgiveness or ten months after the last day of the covered period. The remaining portion needs to be repaid over two years and carries a 1% annual interest rate. These loans require no collateral nor personal guarantees. The loan was forgiven in its entirety in February 2021 and has been included in other income in the accompanying statement of operations. Related Party Notes Payable On December 1, 2021, the Company entered into a settlement agreement with the related party to repay the then remaining balance of $231,500 plus $18,370 in accrued interest. Under the terms of the agreement, the total was settled in cash of $125,620 divided into two payments and 2,000,000 shares of Company common stock at a conversion price of $0.062 per share. Cash payments totaling $158,875, were made in 2021, with the remaining principal balance of $57,875 paid in January 2022. Interest expense totaled $78 and $18,590 for the years ended December 31, 2022 and 2021, respectively. Convertible Promissory Notes We adopted ASU 2020-06 on January 1,2022 using the modified retrospective method of transition. This resulted in an increase in convertible promissory notes of $379,355, by eliminating remaining debt discount related to beneficial conversion features on outstanding notes as of January 1, 2022. See Note 2. On September 3, 2021, the Company entered into a forbearance agreement with one of its lenders. As additional consideration for entering into the forbearance agreement, the Company agreed to issue the lender the number of shares equal to $100,000 on January 15, 2022 at a 25% discount based upon the previous 15-day average closing price. Effective after January 15, 2022, if the Company enters into an agreement with a third-party investor for consideration per share less than the $0.50 fixed price per share of the notes, the Company agrees to amend and restate the notes to reduce the conversion price. On January 20, 2022, the conversion price was reset to $0.025 for the remaining outstanding notes. The terms of the forbearance agreement have been treated as a modification to the existing notes and are being amortized over the remaining term of the notes. Amortization of $80,000 related to the stock consideration has been recorded in 2021 as interest expense. On March 25, 2022, the Company amended the forbearance agreement. Under the amendment, the maturity dates of the outstanding notes were changed to October 1, 2022. In addition, the Company will issue 8,000,000 shares of its common stock at a fair market value of $0.0357 per share based on the quoted stock price as of the amendment date, 4,000,000 which is in lieu of the discounted shares equal to $100,000 stated in the original agreement. The Company will also make six monthly payments of $30,000. The Company made a good faith payment of $30,000 in February 2022 and its first payment under the amendment in March 2022. The terms of the forbearance agreement have been accounted for as an extinguishment of debt resulting in a loss of $205,600 which has been recorded as other expense in the accompanying statement of operations. In June 2022, the Company entered into a settlement agreement with the above lender to convert the outstanding convertible notes payable of $617,353 and accrued interest of $51,017 into 26,734,801 restricted shares of the Company’s common stock at a price of $0.025 per share as dictated by the terms of the notes. Under the terms of the settlement agreement, the number of shares of common stock to be issued under the earlier forbearance agreement was reduced to 4,000,000 and recorded as a reduction of $142,800 in the extinguishment of debt. In October 2022, the Company amended its settlement agreement with the lender and issued the lender 4,000,000 shares of common stock and accounted for as an extinguishment of debt resulting in a loss of $100,000, of which $60,000 relates to 6,000,000 shares that are to be issued and are recorded as accrued expense in the Company’s balance sheet at December 31, 2022. If, upon the one-year anniversary of the effective date of the June 2022 settlement agreement, the lender and its designees have beneficial ownership over the settlement payment shares, and the closing price of the Company’s common stock as reported on the OTC Markets is less than $0.025 per share, then for a period of thirty (30) days after the one-year anniversary, the lender and its designees shall have the right to elect, and the Company shall have the obligation, to issue additional shares to the lender and its designees. If, for a period of two years from the effective date, the Company issues, sells or grants any option to purchase, or sells or otherwise disposes of, or sells or issues any common stock or other securities convertible into, exercisable for, or otherwise entitle any person or entity the right to acquire, shares of Common Stock at an effective price per share less than $0.025 (such lower price a “Dilutive Issuance”), then the price per share used to calculate the settlement payment shares shall be reduced to the lower price. Certain subsequent transactions resulted in a recalculation of the number of shares originally issued as the settlement payment. Additional shares totaling 40,102,156 are to be issued as of December 31, 2022 and have been accounted for as an extinguishment of debt resulting in a loss of $638,000 and recorded as other expense in the accompanying statement of operations and as an accrued expense in the accompanying balance sheet. See Note 11. In April 2022, the Company entered into an agreement with one of its lenders to push back the allowable conversion date of a convertible note payable totaling $500,000. In conjunction with the agreement, the Company issued the lender 2,500,000 warrants at an exercise price of $0.025 and with a 5-year On July 6, 2022, the Company borrowed $172,480 in conjunction with an unsecured promissory note with an investor. Proceeds of $154,000 include an original issue discount of $18,480. An up-front interest charge at twelve percent (12%) of the principal will be added to the principal balance for an outstanding balance of $193,178 to be paid in ten monthly payments of $19,318 beginning August 30, 2022. The note matures on July 6, 2023. At any time only following an event of default, the investor shall have the right, to convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of common stock. The note may be converted at a 25% discount to trading prices during the 10 days prior to conversion. During the year ended December 31, 2022, the Company issued convertible promissory notes, including the note discussed above, to certain investors totaling $1,859,480 with net proceeds of $1,545,140. Original issue discount totaling $185,580, loan costs totaling $128,760 and the fair value of warrants issued or to be issued to third party advisors of $110,552 have been recorded as a discount on the notes. The notes accrue interest at 12% per annum and have initial conversion prices of $0.015-$0.025 subject to adjustment, in the case of subsequent dilutive issuances, and mature nine months to one year from issuance. As of December 31, 2022, outstanding convertible promissory notes are convertible into 152,312,233 shares of common stock. As additional consideration for the financings, the Company issued the investors three three During the year ended December 31, 2022, lenders converted principal totaling approximately $350,000 plus accrued interest and fees into 30,500,000 shares of common stock. During the year ended December 31, 2021, lenders converted principal totaling $1,699,800 plus accrued interest into 49,334,051 shares of common stock. During the year ended December 31, 2022, the subsequent issuance of convertible promissory notes with warrant exercises and stock issuances triggered a conversion price reset on certain convertible promissory notes to $0.01 per share. See Note 8. Retroactive issuance of 3,700,000 shares may be issued in conjunction with certain 2022 conversions at $0.015 per share. During the year ended December 31, 2021, the Company issued convertible promissory notes to certain investors totaling $1,750,000 with net proceeds of $1,560,000. Original issue discount totaling $125,000 and loan costs totaling $65,000 have been recorded as a discount on the notes. The notes accrue interest at 10% per annum and have initial conversion prices of $0.06- $0.40 subject to adjustment and mature one year from issuance. As additional consideration for the financings, the Company issued the investors five- The aggregate of convertible promissory notes is as follows: December 31, December 31, Convertible promissory notes 2022 2021 Principal balance $ 1,680,774 $ 1,534,853 Debt discount balance (375,865) (723,166) Net Notes balance $ 1,304,909 $ 811,687 As of the date of this filing, the Company is currently in default with one its lenders, for non-payment of two matured convertible promissory notes issued on October 13, 2021, and February 11, 2022, with principal and interest due in the amounts of $78,495 and $95,410, respectively. Further, and as a result of the Company's sale of its real property on March 15, 2023, the Company is in default with its unmatured convertible promissory note issued to the lender on September 15, 2022. The convertible promissory notes issued to the lender all contain provisions for default amounts equal to the principal amounts, plus accrued interest, and default interest, through the date of repayment, multiplied by 125%. Separately, and also as a result of the Company's sale of its real property on March 15, 2023, the Company is in default respecting unmatured convertible promissory notes issued to two lenders on February 11, 2022, and August 8, 2022, in the principal amounts of $307,500 and $176,000, respectively, each not including interest due. One convertible note included a cross-default provision which required the Company to remit full repayment of interest and principal due through the date of full repayment multiplied by 125%. As of the date of this filing, the note holders have agreed to temporarily waive the respective defaults, including principal, interest, default penalties, and default amounts, and to enter into negotiations to reform the respective outstanding convertible notes payable. Accordingly, no amounts were accrued as a result of the defaults. The Net Notes balance at December 31, 2022 is comprised of the following: Principal Debt Discount Net Pre 2020 $ 50,000 $ — $ 50,000 October 2021 73,336 — 73,336 February 2022 91,953 (7,721) 84,232 March 2022 307,500 (29,510) 277,990 July 2022 85,985 (9,443) 76,542 August 2022 176,000 (51,405) 124,595 September 2022 896,000 (277,786) 618,214 $ 1,680,774 $ (375,865) $ 1,304,909 The Net Notes balance at December 31, 2021 is comprised of the following: Principal Debt Discount Net Pre 2020 $ 50,000 $ — $ 50,000 July 2020 57,500 — 57,500 August 2020 215,000 — 215,000 September 2020 107,500 — 107,500 November 2020 244,853 (20,000) 224,853 December 2020 110,000 (15,000) 95,000 October 2021 750,000 (688,166) 61,834 $ 1,534,853 $ (723,166) $ 811,687 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | NOTE 5. LONG-TERM DEBT Government Debt In June 2020, the Company received a $150,000 economic injury disaster loan (“EIDL”). The loan accrues interest at a rate of 3.75% annually and is collateralized by all personal property and intangible assets of the Company. The loan has a 30-month moratorium on payments, after which monthly principal and interest payments of $731 will be made through the maturity date of June 2050. Bank Debt In September 2015, the Company entered into a credit agreement for a $700,000 term loan with a financial institution. Payment terms consist of monthly payments in arrears of $3,547 for the first year outstanding. The monthly payment then increases to $4,574 until the term loan matures on September 30, 2025, in which the remaining unpaid principal balance and accrued interest is due. The interest rate for the first year was 1.99% per annum and increased to 4.95% per annum for the remaining life of the term loan. The term loan is collateralized by a deed of trust in the office building. The proceeds were used to purchase a building for which the Company’s operations are located. The net principal balance outstanding on the term loan at December 31, 2022 and 2021 was $551,525 and $546,880, respectively. The term loan is personally guaranteed by the Company’s CEO. Future annual aggregate maturities of long-term debt, are as follows: For the Years Ending December 31: 2023 $ 31,490 2024 30,586 2025 459,449 2026 — 2027 1,675 Thereafter 148,325 $ 671,525 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE LIABILITIES | |
DERIVATIVE LIABILITIES | NOTE 6. DERIVATIVE LIABILITIES The Company previously issued convertible promissory notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and shares to be issued were recorded as derivative liabilities on the issuance date. As of December 31, 2021, all convertible promissory notes which contained embedded derivatives were fully converted. There were no instruments issued during the year ended or outstanding as of December 31, 2022 that qualified as derivative liabilities. The fair value of applicable derivative liabilities on notes and the change in fair value of derivative liabilities are as follows for the year ended December 31, 2021: Fair value- December 31, 2020 $ 831,852 Change in fair value of derivative liabilities 1,415,685 Derivative liabilities in conjunction with convertible promissory notes 1,197,607 Conversion of convertible promissory notes (3,445,144) Fair value- December 31, 2021 $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 7. RELATED PARTY TRANSACTIONS On December 1, 2021, the Company entered into a settlement agreement with a related party to repay the then remaining balance of $231,500 plus $18,370 in accrued interest. Under the terms of the agreement, the total was settled in cash of $125,620 divided into two payments and 2,000,000 shares of Company stock at a conversion price of $0.062 per share. Cash payments totaling of $158,875, were made in 2021, with the remaining principal balance of $57,875 paid in January 2022. Interest expense totaled $78 and $18,590 for the years ended December 31, 2022 and 2021, respectively. In June 2022, the Company entered into a one-year independent director agreement in conjunction with the appointment of a new member to its Board of Directors. The agreement requires the Company to issue the director $5,000 worth of registered shares for each month of service as compensation. Compensation expense totaling $31,935 has been recorded for the year ended December 31, 2022. On November 2, 2022, the Company issued 1,658,999 shares as payment for $25,000 in director compensation with the remaining $6,935 accrued to be settled upon issuance of shares Company of common stock. The agreement was mutually terminated in December 2022, upon the director’s resignation. The Company previously entered into a consulting agreement with this director for $60,000. During the year ended December 31, 2022, the Company settled the $60,000 liability by issuing 6,000,000 shares of its common stock. In addition, the Company issued the director 800,000 shares as payment for certain marketing funds advanced totaling $8,000. See Note 8. In December 2022, the Company appointed two new members to its Board of Directors, a consultant and an employee. During the years ended December 31, 2022 and 2021, the Company issued 7,500,000 and 2,200,000 shares of common stock, respectively, at prices ranging from $0.035 to $0.64 per share, in conjunction with agreements for financial and strategic advisory consulting services. The fair market value of the shares for the years ended December 31, 2022 and 2021 totaling $262,500 and $550,000, respectively was determined based the on the Company's closing price at the date of issuance. See Notes 8 and 11. The Company paid the Company’s CEO a bonus of $133,751 and $105,042 during the years ended December 31,2022 and 2021, respectively. During the year ended December 31, 2021, the Company also paid the Company's CEO $20,978 towards the balance of the 2019 signing bonus. In September 2022, the Company issued 500,000 shares of its Series A Preferred Stock to the Company’s CEO as compensation at $0.02 per share or $10,000. See Note 8. In February 2021, the Company issued 1,100,000 shares of common stock to the Company’s CEO as compensation at $0.5499 per share. Compensation expense of $604,890 has been recorded in selling, general and administrative expenses in the accompanying statement of operations for the year ended December 31, 2021. In October 2021, the Company issued the Company’s CEO 5,000,000 cashless warrants at an exercise price of $0.025 per share. Compensation expense of $589,903 has been recorded in selling, general and administrative expenses in the accompanying statement of operations for the year ended December 31, 2021. See Note 9. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | NOTE 8. STOCKHOLDERS’ DEFICIT In January and February 2022, the Company sold 1,500,000 shares of common stock at prices ranging from $0.0259- $0.0353 under a stock purchase agreement with net proceeds totaling $42,766. In March 2022, the Company’s board of directors approved a resolution to amend the Company’s Certificate of Incorporation to increase the Company’s authorized common shares authorized from 250,000,000 to 500,000,000. In September 2022, the Company’s board of directors approved a resolution to amend the Company’s Certificate of Incorporation to increase the Company’s authorized common shares from 500,000,000 to 999,000,000. See Note 11. In June 2022, the Company entered into a settlement agreement with the above lender to convert the outstanding convertible notes payable of $617,353 and accrued interest of $51,017 into 26,734,801 restricted shares of the Company’s common stock at a price of $0.025 per share as dictated by the terms of the notes. See Note 4. During the year ended December 31, 2022, the Company issued 19,600,000 shares of common stock, at prices ranging from $0.01-$0.035 per share, in conjunction with agreements for financial and strategic advisory consulting services. The fair market value of the shares totaling $461,900 was determined based on the Company’s closing price on the dates of issuance and has been recorded as selling, general and administrative expense in the Company’s statement of operations. One of the agreements for which 3,000,000 shares were issued, provides for anti-dilution rights to secure the consultant’s original ownership percentage. Additional shares totaling 2,000,000 are to be issued and have been accounted for as an extinguishment of debt resulting in a loss of $20,000 which has been recorded as other expense in the accompanying statement of operations and as an accrued expense in the accompanying balance sheet. See Note 11. In addition, the Company issued a member of its board of directors 800,000 shares as payment for certain marketing funds advanced totaling $8,000. See Note 7. During the year ended December 31, 2022, certain lenders exercised 17,249,999 of warrants through cashless exercise at $0.015-$0.025 per share issuing 13,264,887 shares of common stock. During the year ended December 31, 2022, certain lenders converted principal totaling $350,000 plus accrued interest into 30,500,000 shares of common stock. During the year ended December 31, 2021, the Company issued 1,100,000 shares of common stock to the Company’s CEO as compensation expense at a value of $604,901 or $0.5499 per share. The value of the compensation has been recorded in selling, general and administrative expenses in the Company’s statement of operations. The fair market value of the shares was determined based the on the Company’s closing price on the date of issuance. During the year ended December 31, 2021, the Company issued 2,334,120 shares of common stock at prices ranging from $0.085 to $0.64 per share, in conjunction with agreements for financial and strategic advisory consulting services. The fair market value of the shares totaling $804,226 was determined based the on the Company's closing price at the date of issuance. The value of the compensation has been recorded in selling, general and administrative expenses in the Company's statement of operations. During the year ended December 31, 2021, lenders converted principal totaling $1,699,800 plus accrued interest into 49,334,051 shares of common stock. Series A Preferred Stock On November 1, 2019, the Company’s board of directors and a majority of shareholders eligible to vote adopted a resolution designating a new Series A Preferred Stock. One Million (1,000,000) shares were authorized. Holders of Series A Preferred hold rights to vote on all matters requiring a shareholder vote at 100 common shares vote equivalents for each share of Series A Preferred held. The Series A Preferred Stock shall hold senior liquidation rights to all other classes of shares, including, but not limited to Common Shares. In September 2022, the Company issued 500,000 shares of its Series A Preferred Stock to the Company’s CEO, for a total of 1,000,000 outstanding, as compensation at $0.02 per share or $10,000. The value of the compensation has been recorded in selling, general and administrative expenses in the Company’s statement of operations. The fair market value of the shares was determined based on the Company’s closing price on the date of issuance. Series B Preferred Stock In September 2021, the Company’s board of directors and a majority of shareholders eligible to vote adopted a resolution designating a new Series B Preferred Stock. One (1) share was authorized. The Series B Preferred Stock shall rank: senior to all of the Common Stock, par value $0.00001 per share, of the Company and senior to all other classes or series of capital stock of the Company currently outstanding. The Holder of the Series B Preferred Stock shall be entitled to vote on all matters subject to a vote or written consent of the holders of the Company’s Common Stock, and on all such matters, the share of Series B Preferred Stock shall be entitled to that number of votes equal to the total number of eligible votes of issued and outstanding shares of Common Stock, and all other securities of the Company, plus one hundred thousand (100,000) votes on a fully diluted basis, it being the intention of the Company that the Holder of the Series B Preferred Stock shall have effective voting control of the Corporation, on a fully diluted basis. The Holder of the Series B Preferred Stock shall vote together with the holders of Common Stock as a single class. See Note 11. See Note 9 for activity related to warrants. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
STOCK OPTIONS AND WARRANTS | |
STOCK OPTIONS AND WARRANTS | NOTE 9. STOCK OPTIONS AND WARRANTS In 2017, the Company’s Board of Directors approved the 2017 Employee and Consultant Stock Ownership Plan, (the “Plan”). The Plan provides that the Board of Directors may grant stock units, incentive stock options and non-statutory stock options to officers, key employees and certain consultants and advisors to the Company up to a maximum of 50,000,000 shares. Stock options granted under the Plan have up to ten-year terms with vesting terms to be determined by the administrator of the Plan. Stock unit grant terms will be set by the administrator and at the discretion of the administrator, be settled in cash, shares, or a combination of both. As of December 31, 2022, the Company granted 3,000,000 shares of common stock under the Company’s Employee and Consultant Stock Ownership Plan at a price of $0.01 per share. Compensation expense of $21,000 has been recorded as accrued expense in the Company’s balance sheet at December 31, 2022. No time-based options were granted during the years ended December 31, 2022 and 2021. The Company recorded pretax stock compensation expense of $0 and $21,807 during the years ended December 31,2022 and 2021, respectively. Stock-based compensation is included in selling, general, and administrative expense in the accompanying statements of operations. Stock-based compensation expense is based on awards ultimately expected to vest. Weighted Weighted Average Average Contractual Number of Exercise term shares Price (years) Options outstanding at December 31, 2020 445,000 $ 0.71 1.5 Granted — — — Exercised — — — Forfeited — — — Expired — — — Options outstanding at December 31, 2021 445,000 $ 0.71 0.5 Granted — — — Exercised — — — Forfeited — — — Expired (445,000) — — Options outstanding at December 31, 2022 — $ — — Exercisable at December 31, 2022 — $ — — Options exercisable and expected to vest at December 31, 2022 — $ — — Warrants During the year ended December 31, 2022, the Company issued warrants to purchase 21,000,000 shares of the Company’s common stock in conjunction with various convertible promissory notes. See Note 4. The warrants entitle the holders to each purchase shares of the Company’s common stock at an initial exercise price of $0.025 per share. The warrants expire in three The warrants qualified for equity accounting as the warrants did not fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity. The warrants were measured at fair value at the time of issuance and classified as equity. The Company valued the warrants using a Black Scholes Merton pricing model and recorded the warrants as a reduction of the notes included in the debt discount balance. The following table summarizes the assumptions used in the valuation model to determine the fair value of the warrants: Fair Value of Common Share $ 0.0233-0.0380 Exercise Price $ 0.025 Risk Free Rate 1.35-3.57 % Expected Life (Yrs.) 3.0 - 5.0 Volatility 154.1-162.3 % The relative fair value of the warrants of $385,422 has been recorded as a discount on the notes. In addition, the Company issued three five-year The Company is required to issue warrants in conjunction these convertible debt financings to third-party financial advisors. In accordance with the terms of the advisory agreements, such warrants shall equal 6%-8% of equity securities sold in the financings. The fair value of 1,476,000 warrants to be issued of approximately $50,000 has been accrued and recorded as a discount on the notes. The fair value of 3,117,533 warrants issued of $60,552 has been recorded as a discount on the note. In April 2022, the Company entered into an agreement with one of its lenders to push back the allowable conversion date of a convertible note payable totaling $500,000. In conjunction with the agreement, the Company issued the lender 2,500,000 warrants at an exercise price of $0.025 and with a five-year maturity. The fair value of the warrants of $65,000 and the unamortized debt discount on the note have been accounted for as an extinguishment of debt resulting in a loss of $259,000 which has been recorded as other expense in the accompanying statement of operations. The warrants qualified for equity accounting as the warrants did not fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity. The warrants were measured at fair value at the time of issuance and classified as equity. The Company valued the warrants using a Black Scholes pricing model. The following table summarizes the assumptions used in the valuation model to determine the fair value of the warrants: Fair Value of Common Share $ 0.028 - 0.0345 Exercise Price $ 0.025 - 0.0232 Risk Free Rate 0.98 - 3.59 % Expected Life (Yrs.) 3.0 - 5.0 Volatility 142.4 - 162.1 % The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at December 31, 2022: Date Issued Exercise Price Number Outstanding Expiration Date December 1, 2018 $ 0.01 170,000 December 1, 2023 May 1, 2020 $ 0.52 100,000 May 1, 2025 October 1, 2021 $ 0.025 9,000,000 October 1, 2026 October 17, 2021 $ 0.01 450,000 October 17, 2024 August 10, 2022 $ 0.01 3,336,843 August 10, 2027 September 15, 2022 $ 0.01 12,000,000 September 15, 2025 September 29, 2022 $ 0.01 2,780,690 September 29, 2027 27,837,533 During the year ended December 31, 2022, certain transactions triggered the warrant reset feature on certain previously issued warrants. The resets for all outstanding warrants were recorded as a reduction to retained earnings and in an increase to additional paid-in-capital of $107,888. Retroactive application of the reset rate to a 2022 exercise may result in an additional 375,000 shares to be issued. On October 1, 2021, the Company issued 5,000,000 and 4,000,000 cashless warrants to the Company’s CEO and an employee, respectively. The warrants have an exercise price of $0.025 and a maturity date of October 1, 2026. Compensation expense of $1,061,826 been recorded in selling, general and administrative expenses in the accompanying statement of operations for the year ended December 31, 2021. The Company utilizes the Black Scholes valuation model which relies on certain assumptions to estimate the warrant’s fair value. The assumptions used in the determination of the fair value of the warrants awarded are provided in the table below. Assumptions Expected volatility rate 244.6 % Expected dividend yield — % Average risk-free interest rate 0.93 % Expected term years 5.0 On October 17, 2021, the Company issued a warrant to purchase 450,000 shares of the Company’s common stock in conjunction with a finder’s fee agreement entered in June 2021. The warrant entitles the holder to purchase 450,000 shares of the Company’s common stock at an exercise price of $0.12 per share. The warrant expires on October 17, 2024. Compensation expense of $57,191 been recorded in selling, general and administrative expenses in the accompanying statement of operations for the year ended December 31, 2021. The Company utilizes the Monte Carlo pricing model which relies on certain assumptions to estimate the warrant’s fair value. The assumptions used in the determination of the fair value of the warrant awarded are provided in the table below. Assumptions Fair value of common share $ 0.0610-0.1420 Exercise Price $ 0.12 Risk Free Rate 0.55-.58 % Expected Life (Yrs.) 2.88 - 3.0 Volatility 161.0-161.9 % The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at December 31, 2021: Date Issued Exercise Price Number Outstanding Expiration Date December 1, 2018 $ 0.025 168,500 December 1, 2023 May 1, 2020 $ 0.52 100,000 May 1, 2025 February 8, 2021 $ 0.025 2,500,000 February 8, 2026 October 1, 2021 $ 0.025 9,000,000 October 1, 2026 October 13, 2021 $ 0.062 6,249,999 October 13, 2026 October 17, 2021 $ 0.062 450,000 October 17, 2024 18,468,499 During the year ended December 31, 2021, the subsequent issuance of convertible promissory notes with certain terms and convertible promissory note conversions triggered the warrant reset feature on certain previously issued warrants. The resets for all outstanding warrants were recorded as a reduction to retained earnings and in an increase to additional paid-in-capital of $3,770,831. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 10. COMMITMENTS AND CONTINGENCIES Commitments The Company has entered into a product development with payments totaling approximately $525,000 , of which $212,000 has been paid to date. The agreement requires that the remaining payments be made in conjunction with certain development milestones. The Company expects to meet these milestones over the next twelve to eighteen months. Contingencies The Company is subject to various loss contingencies and assessments arising in the normal course of the business, some of which relate to litigation, claims, property taxes and sales and use tax or goods and services tax assessments. The Company considers the likelihood of the loss or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies and assessments. An estimated loss contingency or assessment is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Management regularly evaluates current information available to them to determine whether such accruals should be adjusted. Based on the information presently available, including discussion with counsel and other consultants, management believes that resolution of these matters will not have a material adverse effect on its business, results of operations, financial condition or cash flows. As of the date of this filing, the Company is currently in default with one its lenders, for non-payment of two matured convertible promissory notes issued on October 13, 2021, and February 11, 2022, with principal and interest due in the amounts of $78,495 and $95,410, respectively. Further, and as a result of the Company's sale of its real property on March 15, 2023, the Company is in default with its unmatured convertible promissory note issued to the lender on September 15, 2022. The convertible promissory notes issued to the lender all contain provisions for default amounts equal to the principal amounts, plus accrued interest, and default interest, through the date of repayment, multiplied by 125%. Separately, and also as a result of the Company's sale of its real property on March 15, 2023, the Company is in default respecting unmatured convertible promissory notes issued to two lenders on February 11, 2022, and August 8, 2022, in the principal amounts of $307,500 and $176,000, respectively, each not including interest due. One convertible note included a cross-default provision which required the Company to remit full repayment of interest and principal due through the date of full repayment multiplied by 125%. As of the date of this filing, the note holders have agreed to temporarily waive the respective defaults, including principal, interest, default penalties, and default amounts, and to enter into negotiations to reform the respective outstanding convertible notes payable. Accordingly, no amounts were accrued as a result of the defaults. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS In January 2023, the Company amended the CEO’s employment agreement to include the following: ● Increased annual salary to $365,000 ● An annual bonus of 25 million shares of common stock for an increase in gross revenue of 10% or more over the previous years ● Instituted a bonus plan that provides for monthly and quarterly cash bonuses based on certain growth requirements ● A bonus of 10 million shares of common stock upon up listing to a senior stock exchange or successful reverse stock split ● Issuance of the authorized Series "B" Preferred stock. In the event of a change of control of the Company, a cash payment of at least $1.5 million, subject to increase or change by the disinterested board will be paid to the CEO. In January 2023, holders of convertible promissory notes converted $50,000 of principal and interest into 5,000,000 of common stock at a price of $0.01 per share. In January 2023, the Company issued 3,000,000 shares of common stock granted and accrued at December 31, 2022 under the Company’s Employee and Consultant Stock Ownership Plan. In January 2023, the Company’s board of directors approved a resolution to amend the Company’s Certificate of Incorporation to increase the Company’s authorized common shares from 999,000,000 to 1,999,000,000. In February 2023, the Company entered into a one-year consulting agreement under the Company’s Employee and Consultant Stock Ownership Plan, with an advisor and director in exchange for compensation of 35 million shares of common stock. The agreement includes a registration requirement. In February 2023, 2,000,000 shares to be issued in conjunction with anti-dilution provisions of a third -party consulting agreement were settled for a cash payment totaling $12,000. See Note 8. In February 2023, the Company issued 46,102,156 shares of common stock as part of the June 2022 convertible notes payable settlement. See Note 4. On March 15, 2023, the Company entered into an agreement to sell the building of its principal offices at a purchase price of $2 million and net proceeds of $1,363,818 , upon repayment in full of the Company’s bank debt. The Company simultaneously entered into a one-year lease agreement with the purchaser to lease the facilities for $9,000 a month. In March 2023, the Company issued 18,000,000 shares of common stock in conjunction with the cashless exercise of 24,000,000 warrants by convertible note holders. Trigger warrants to purchase a total of 25,000,000 shares of common stock, became exercisable as of March 31, 2023, as the convertible promissory notes were not paid in full at the maturity dates. SUPPLEMENTARY DATA The Company is a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Accounting Method | Accounting Method The Company maintains its accounting records on an accrual method in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates affecting the financial statements have been prepared on the basis of the most current and best available information. However, actual results from the resolution of such estimates and assumptions may vary from those used in the preparation of the financial statements. |
Going Concern | Going Concern Since inception, the Company has incurred approximately $21.1 million of accumulated net losses. In addition, during the year ended December 31, 2022, the Company used $773,337 in operations and had a working capital deficit of $2.3 million. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company expects to obtain funding through additional debt and equity placement offerings until it consistently achieves positive cash flows from operations. If the Company is unable to obtain additional funding, it may not be able to meet all of its obligations as they come due for the next twelve months. The continuing viability of the entity and its ability to continue as a going concern is dependent upon the entity being successful in its continuing efforts in growing its revenue base and/or accessing additional sources of capital, and/or selling assets. As a result, there is significant uncertainty whether the entity will continue as a going concern and, therefore, whether it will realize its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial statements. Accordingly, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the entity not continue as a going concern. At this time, management is of the opinion that no asset is likely to be realized for an amount less than the amount at which it is recorded in the financial statements as at December 31, 2022. |
Revenue Recognition | Revenue Recognition The FASB issued Accounting Standards Update (“ASU”) No. 2014-09, codified as ASC 606: Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1,2019 using modified retrospective basis and the cumulative effect was immaterial to the financial statements. Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities, allowance for estimated returns, chargebacks, and markdowns based upon management’s estimates and the Company’s historical experience. The Company’s liability for sales return refunds is recognized within other current liabilities, and an asset for the value of inventory which is expected to be returned is recognized within other current assets on the balance sheets. The Company generally allows a 30 day right of return to its customers. As of both December 31, 2022 and 2021, the sales returns allowance was $6,990. Certain larger customers pay in advance for future shipments. These advance payments totaled $217,588 and $0 at December 31, 2022 and 2021, respectively, and are recorded as customer deposits in the accompanying balance sheets. Revenue related to these advance payments is recognized upon shipment to the distributor or the end-customer. At the completion of the initial three-year warranty, the Company sells extended warranties for periods ranging from one |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts, and the Company generally does not require collateral. As a general policy, the Company determines an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Company recorded an allowance for doubtful accounts of $1,000 as of both December 31, 2022 and 2021, respectively. |
Financial Instruments and Concentrations of Business and Credit Risk | Financial Instruments and Concentrations of Business and Credit Risk The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk. The Company’s accounts receivable, which are unsecured, expose the Company to credit risks such as collectability and business risks such as customer concentrations. The Company mitigates credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic review of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. The Company mitigates business risks by attempting to diversify its customer base. Significant customer sales greater than 10% as a percentage of total sales are as follows: YEAR ENDED DEC 31, 2022 2021 Customer A 23.5 % 19.6 % Customer B 13.5 % 12.8 % Customer C — 10.5 % Amounts due these customers totaled $14,047 and $13,900 at December 31, 2022 and December 31, 2021, respectively for commissions and reimbursements. Amounts due from these customers totaled $0 and $12,800 at December 31, 2022 and December 31, 2021, respectively. Customer deposits on hand from these customers totaled $66,445 The Company’s supplier concentrations expose the Company to business risks, which the Company mitigates by attempting to diversify its supply chain. Significant supplier purchases, including inventory deposits, as a percentage of total inventory purchases are as follows: YEAR ENDED DEC 31, 2022 2021 Supplier A 81.6 % 86.7 % There were no amounts outstanding due this supplier at December 31, 2022 and December 31, 2021. The loss of key vendors may have a significant impact on the operations and cash flows of the Company. The estimated fair value of financial instruments has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is often required to interpret market data used to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts. Disclosure of Fair Value The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below: ● Cash and cash equivalents are carried at cost, which approximates fair value. ● The carrying amounts of receivables approximate fair value due to their short-term maturities. ● The carrying amounts of payables approximate fair value due to their short-term maturities. Asset and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity 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 and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. The following table presents changes during the year ended December 31, 2021 in Level 3 liabilities measured at fair value on a recurring basis: Fair value- December 31, 2020 $ 831,852 Change in fair value of derivative liabilities 1,415,685 Derivative liabilities in conjunction with convertible promissory notes 1,197,607 Conversion of convertible promissory notes (3,445,144) Fair value- December 31, 2021 $ — There were not Level 3 liabilities in 2022. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined based on the first-in, first-out cost flow assumption (“FIFO”) while market is determined based upon the estimated net realizable value less an allowance for selling and distribution expenses and a normal gross profit. The Company evaluates the need for inventory reserves associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis. As of December 31, 2022, and 2021, the Company believes there are no excess and obsolete inventories and accordingly, did not record an inventory reserve. Inventories consist of purchased finished goods. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and is comprised of a building and office furniture and equipment. The building is depreciated using the straight-line method over the estimated useful life of 40 years. Office furniture and equipment is depreciated using the double-declining method or the straight-line method over the estimated useful lives of three Betterments, renewals, and extraordinary repairs that materially extend the useful life of the asset are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation applicable to assets retired are removed from the accounts, and the gain or loss on disposition, if any, is recognized in the accompanying statements of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with FASB ASC Topic 360, Property, Plant and Equipment, long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized on long-lived assets when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of the assets. In such cases, the carrying value of these assets are adjusted to their estimated fair values and assets held for sale are adjusted to their estimated fair values less selling expenses. No impairment losses of long-lived assets were recognized for the years ended December 31, 2022 and 2021. |
Income Taxes | Income Taxes The Company, which was formed as a Limited liability Company in Arizona, previously filed an Entity Classification Election, commonly known as a check-the-box-election, to be classified as a corporation for tax purposes. The Company also made an election to be treated for income tax purposes as an S corporation. Under U.S. and Arizona law, the taxable income or loss of an S corporation is included in the shareholder’s income tax returns. In August 2017, the Company converted to a Delaware Corporation. The conversion was tax-free under Internal Revenue Code Section 368(a)(1)(F) and is referred to as an F-reorganization, which is typically defined as a mere change in identity, form or place of organization. Management elected to terminate the S corporation election effective January 1, 2018 and the Company will operate for tax purposes as a C corporation from that date forward. The Company follows the provisions of uncertain tax positions as addressed in FASB ASC Subtopic 740-10-65-1, Income Taxes The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to examination by U.S. federal tax authorities for returns filed for the prior three years and by state and local income tax authorities for returns filed for the prior four years. There are no examinations currently pending. The Company’s tax provision for 2022 related to deferred tax charges consisting of accrued liabilities, customer deposits and accounts payable, for which the Company will receive the benefit from when paid and the net operating loss incurred during 2022. During the year ended December 31, 2022, the Company evaluated its deferred tax assets of $933,627 and determined a full valuation allowance was appropriate since it is not more likely than not that the Company will produce income in the foreseeable future to utilize the Net Operating Loss (NOL) carryforward. Deferred tax assets related primarily to book to tax timing differences pertaining to accrued liabilities of $193,848, accounts payable of $13,457 and customer deposits of $56,355 after applying a blended federal and state effective tax rate of 25.9%. In addition, the deferred tax balance also increased as a result of the federal NOL increasing to $42,789 after applying the 21% federal tax rate. During the year ended December 31, 2022, the valuation allowance increased by $53,288 to fully offset the increase in the deferred tax asset The Company’s tax provision for 2021 related to deferred tax charges consisting of accrued liabilities and accounts payable, for which the Company will receive the benefit from when paid and the net operating loss incurred during 2021. During the year ended December 31, 2021, the Company evaluated its deferred tax assets of $880,340 and determined a full valuation allowance was appropriate. Deferred tax assets related primarily to accrued liabilities and accounts payable of $132,945 and net operating losses of $747,395. During the year ended December 31, 2021, the valuation allowance increased by $333,084. For the years ended December 31, 2022 and 2021 the Company’s net operating loss carry forward was increased by $214,257 and $1,339,245, respectively. NOLs originating in 2021 and 2022 can be carried forward indefinitely until the loss is fully recovered, but they are limited to 80% of the taxable income in any one tax period. However, this 80% limitation was removed for the 2018, 2019, and 2020 tax years by the CARES Act, which also allows for a 5-year carryback of the NOLs generated in 2018 and 2019. The difference between the statutory rate of 21% and the effective tax rate is due to permanent differences and a full valuation allowance. The Company was granted a PPP loan from the SBA in 2020 in the amount of $39,500 that was fully forgiven in 2021. This amount was treated as a permanent book to tax difference for federal tax reporting purposes in 2021 and fully excluded as a nontaxable income item. Total net loss operating carry forward at December 31, 2022 and 2021 totaled $4,090,409 and $3,876,152, respectively. |
Sales Taxes | Sales Taxes Sales taxes for the years ended December 31, 2022 and 2021 were recorded on a net basis. Included in accrued expenses at both December 31,2022 and 2021 is approximately $61,000 related to sales taxes. |
Shipping and Handling Costs | Shipping and Handling Costs The Company included shipping and handling costs in cost of sales on the accompanying statements of operations for the years ended December 31, 2022 and 2021. |
Warranty | Warranty The Company warranties the sale of most of its products and records an accrual for estimated future claims. The standard warranty is typically for a period of three years. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The Company recorded a liability as of, December 31, 2022 and 2021 of $12,679 and $14,828, respectively. The expense is included in cost of sales in the statements of operations and within accrued expenses on the accompanying balance sheets. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Total research and development costs amounted to $92,299 and $215,320 for the years ended December 31, 2022 and 2021, respectively. Total research and development costs are included in selling, general and administrative expenses on the accompanying statements of operations. |
Net Loss per Share | Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2022 and 2021, diluted net loss per share is the same as basic net loss per share for each year. Stock options, warrants, accrued liabilities to be converted to common stock and convertible promissory notes with underlying shares totaling 231,796,422 and 32,883,205 at December 31, 2022 and 2021, respectively, have not been included in the net loss per share calculation. The number of underlying shares related to convertible promissory notes may vary based upon the actual date of conversion. |
COVID-19 | COVID-19 On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While we are taking diligent steps to mitigate disruptions to our supply chain, we are unable to predict the extent or nature of these impacts at this time to our future financial condition and results of operations. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). This update simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this update amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. Entities may adopt the requirements of ASU 2020-06 using either a full or modified retrospective approach, and it is effective for public businesses, excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method of transition, which resulted in an increase in convertible promissory notes of $379,355, a decrease in additional paid-in capital of $1,013,414 and an increase to retained earnings of $634,059 as of January 1, 2022. See Note 4. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of significant customer sales as a percentage of total sales | YEAR ENDED DEC 31, 2022 2021 Customer A 23.5 % 19.6 % Customer B 13.5 % 12.8 % Customer C — 10.5 % |
Schedules of supplier purchases, including inventory deposits, as percentage of total inventory purchases | YEAR ENDED DEC 31, 2022 2021 Supplier A 81.6 % 86.7 % |
Schedule of changes during the year ended December 31, 2021 in Level 3 liabilities measured at fair value on a recurring basis | Fair value- December 31, 2020 $ 831,852 Change in fair value of derivative liabilities 1,415,685 Derivative liabilities in conjunction with convertible promissory notes 1,197,607 Conversion of convertible promissory notes (3,445,144) Fair value- December 31, 2021 $ — |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | 2022 2021 Building $ 875,000 $ 875,000 Furniture and equipment 24,987 24,987 899,987 899,987 Less: accumulated depreciation and amortization (194,518) (172,643) $ 705,469 $ 727,344 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NOTES PAYABLE | |
Schedule of convertible note | December 31, December 31, Convertible promissory notes 2022 2021 Principal balance $ 1,680,774 $ 1,534,853 Debt discount balance (375,865) (723,166) Net Notes balance $ 1,304,909 $ 811,687 Principal Debt Discount Net Pre 2020 $ 50,000 $ — $ 50,000 October 2021 73,336 — 73,336 February 2022 91,953 (7,721) 84,232 March 2022 307,500 (29,510) 277,990 July 2022 85,985 (9,443) 76,542 August 2022 176,000 (51,405) 124,595 September 2022 896,000 (277,786) 618,214 $ 1,680,774 $ (375,865) $ 1,304,909 Principal Debt Discount Net Pre 2020 $ 50,000 $ — $ 50,000 July 2020 57,500 — 57,500 August 2020 215,000 — 215,000 September 2020 107,500 — 107,500 November 2020 244,853 (20,000) 224,853 December 2020 110,000 (15,000) 95,000 October 2021 750,000 (688,166) 61,834 $ 1,534,853 $ (723,166) $ 811,687 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT | |
Schedule of future annual aggregate maturities of long-term debt | For the Years Ending December 31: 2023 $ 31,490 2024 30,586 2025 459,449 2026 — 2027 1,675 Thereafter 148,325 $ 671,525 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE LIABILITIES | |
Schedule of fair value of derivative liability | Fair value- December 31, 2020 $ 831,852 Change in fair value of derivative liabilities 1,415,685 Derivative liabilities in conjunction with convertible promissory notes 1,197,607 Conversion of convertible promissory notes (3,445,144) Fair value- December 31, 2021 $ — |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of option activity | Weighted Weighted Average Average Contractual Number of Exercise term shares Price (years) Options outstanding at December 31, 2020 445,000 $ 0.71 1.5 Granted — — — Exercised — — — Forfeited — — — Expired — — — Options outstanding at December 31, 2021 445,000 $ 0.71 0.5 Granted — — — Exercised — — — Forfeited — — — Expired (445,000) — — Options outstanding at December 31, 2022 — $ — — Exercisable at December 31, 2022 — $ — — Options exercisable and expected to vest at December 31, 2022 — $ — — |
Schedule of warrants to purchase common stock | Date Issued Exercise Price Number Outstanding Expiration Date December 1, 2018 $ 0.01 170,000 December 1, 2023 May 1, 2020 $ 0.52 100,000 May 1, 2025 October 1, 2021 $ 0.025 9,000,000 October 1, 2026 October 17, 2021 $ 0.01 450,000 October 17, 2024 August 10, 2022 $ 0.01 3,336,843 August 10, 2027 September 15, 2022 $ 0.01 12,000,000 September 15, 2025 September 29, 2022 $ 0.01 2,780,690 September 29, 2027 27,837,533 Date Issued Exercise Price Number Outstanding Expiration Date December 1, 2018 $ 0.025 168,500 December 1, 2023 May 1, 2020 $ 0.52 100,000 May 1, 2025 February 8, 2021 $ 0.025 2,500,000 February 8, 2026 October 1, 2021 $ 0.025 9,000,000 October 1, 2026 October 13, 2021 $ 0.062 6,249,999 October 13, 2026 October 17, 2021 $ 0.062 450,000 October 17, 2024 18,468,499 |
Warrant using monte carlo pricing model | |
Schedule of assumptions used in the determination of the fair value of the warrant | Fair Value of Common Share $ 0.0233-0.0380 Exercise Price $ 0.025 Risk Free Rate 1.35-3.57 % Expected Life (Yrs.) 3.0 - 5.0 Volatility 154.1-162.3 % |
Warrants using a Black Scholes pricing model | |
Schedule of assumptions used in the determination of the fair value of the warrant | Fair Value of Common Share $ 0.028 - 0.0345 Exercise Price $ 0.025 - 0.0232 Risk Free Rate 0.98 - 3.59 % Expected Life (Yrs.) 3.0 - 5.0 Volatility 142.4 - 162.1 % |
Warrant | Black-Scholes model and recorded warrants as reduction of note included debt discount balance | |
Schedule of assumptions used in estimating the fair value of stock options | Assumptions Expected volatility rate 244.6 % Expected dividend yield — % Average risk-free interest rate 0.93 % Expected term years 5.0 Assumptions Fair value of common share $ 0.0610-0.1420 Exercise Price $ 0.12 Risk Free Rate 0.55-.58 % Expected Life (Yrs.) 2.88 - 3.0 Volatility 161.0-161.9 % |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Going Concern (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Accumulated net losses | $ 21,100,000 | |
Cash used in operating activities | 773,337 | $ 1,193,688 |
Working capital deficit | $ 2,300,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Right of return period | 30 days | |
Sales returns allowance | $ 6,990 | $ 6,990 |
Customer deposits | $ 217,588 | 0 |
Initial warranty period | 3 years | |
Deferred revenue | $ 23,313 | $ 28,252 |
Minimum | ||
Extended warranty period | 1 year | |
Maximum | ||
Extended warranty period | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Allowance for doubtful accounts | $ 1,000 | $ 1,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial Instruments and Concentrations of Business and Credit Risk (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Amount due from customers | $ 14,047 | $ 13,900 |
Due from customers | 0 | 12,800 |
Customer deposits | 217,588 | 0 |
Net purchase | Supplier concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Amount due to suppliers | $ 0 | $ 0 |
Customer A | Net sales | Customer concentration | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 23.50% | 19.60% |
Customer B | Net sales | Customer concentration | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 13.50% | 12.80% |
Customer C | Net sales | Customer concentration | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 10.50% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplier Purchases as a Percentage of Total Inventory Purchases (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Purchases | Supplier concentrations | Supplier A | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 81.60% | 86.70% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Changes in Level 3 liabilities measured at fair value on a recurring basis (Details) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value, Beginning balance | $ 831,852 |
Change in fair value of derivative liabilities | $ 1,415,685 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change In Fair Value Of Derivative Liabilities |
Derivative liabilities in conjunction with convertible promissory notes | $ 1,197,607 |
Conversion of convertible promissory notes | $ (3,445,144) |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful life | 40 years |
Furniture and equipment | Minimum | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful life | 3 years |
Furniture and equipment | Maximum | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Estimated useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Pronouncements (Details) - USD ($) | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Increase in convertible promissory notes | $ 1,304,909 | $ 811,687 | |
Decrease in additional paid-in capital | 22,237,300 | 20,804,333 | |
Increase to retained earnings | $ (24,825,041) | $ (21,882,712) | |
ASU 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Increase in convertible promissory notes | $ 379,355 | ||
Decrease in additional paid-in capital | 1,013,414 | ||
Increase to retained earnings | $ 634,059 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Impairment loss | $ 0 | $ 0 |
Accruals for interest and penalties on unrecognized tax benefits | 0 | 0 |
Accrued Liabilities, Current | 193,848 | |
Deferred Tax Accounts Payable | 13,457 | |
Deferred tax assets | 933,627 | 880,340 |
Customer Deposits | 56,355 | |
Accrued liabilities and accounts payable | 132,945 | |
Net operating loss | 747,395 | |
Valuation allowance increased | 53,288 | 333,084 |
Increase in net operating loss carry forward | $ 214,257 | 1,339,245 |
Statutory tax rate (as a percent) | 21% | |
Statutory tax rate | 25.90% | |
Federal tax rate (as a percent) | 25.90% | |
Proceeds from PPP loan | 39,500 | |
Total net loss operating carry forward | $ 4,090,409 | 3,876,152 |
Sales tax payable | $ 61,000 | 61,000 |
Standard warranty period | 3 years | |
Warranty liability | $ 12,679 | 14,828 |
Research and development cost | $ 92,299 | $ 215,320 |
Stock options, warrants and convertible promissory notes with underlying shares | 231,796,422 | 32,883,205 |
Federal | ||
Federal tax rate (as a percent) | 21% | |
Deferred tax balance federal NOL | $ 42,789 |
PROPERTY AND EQUIPMENT - Summar
PROPERTY AND EQUIPMENT - Summary of Property and Equipment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PROPERTY AND EQUIPMENT | ||
Total | $ 899,987 | $ 899,987 |
Less: accumulated depreciation and amortization | (194,518) | (172,643) |
Property and equipment | 705,469 | 727,344 |
Building | ||
PROPERTY AND EQUIPMENT | ||
Total | 875,000 | 875,000 |
Furniture and equipment | ||
PROPERTY AND EQUIPMENT | ||
Total | $ 24,987 | $ 24,987 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | ||
Depreciation and amortization expense | $ 21,875 | $ 21,875 |
NOTES PAYABLE - Convertible Not
NOTES PAYABLE - Convertible Note (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
NOTES PAYABLE | ||
Principal balance | $ 1,680,774 | $ 1,534,853 |
Debt discount balance | (375,865) | (723,166) |
Net Notes balance | $ 1,304,909 | $ 811,687 |
NOTES PAYABLE - The Net Notes (
NOTES PAYABLE - The Net Notes (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
NOTES PAYABLE | ||
Principal | $ 1,680,774 | $ 1,534,853 |
Debt discount balance | (375,865) | (723,166) |
Net | 1,304,909 | 811,687 |
Pre 2020 | ||
NOTES PAYABLE | ||
Principal | 50,000 | 50,000 |
Net | 50,000 | 50,000 |
July 2020 | ||
NOTES PAYABLE | ||
Principal | 57,500 | |
Net | 57,500 | |
August 2020 | ||
NOTES PAYABLE | ||
Principal | 215,000 | |
Net | 215,000 | |
September 2020 | ||
NOTES PAYABLE | ||
Principal | 107,500 | |
Net | 107,500 | |
November 2020 | ||
NOTES PAYABLE | ||
Principal | 244,853 | |
Debt discount balance | (20,000) | |
Net | 224,853 | |
December 2020 | ||
NOTES PAYABLE | ||
Principal | 110,000 | |
Debt discount balance | (15,000) | |
Net | 95,000 | |
October 2021 | ||
NOTES PAYABLE | ||
Principal | 73,336 | 750,000 |
Debt discount balance | (688,166) | |
Net | 73,336 | $ 61,834 |
February 2022 | ||
NOTES PAYABLE | ||
Principal | 91,953 | |
Debt discount balance | (7,721) | |
Net | 84,232 | |
March 2022 | ||
NOTES PAYABLE | ||
Principal | 307,500 | |
Debt discount balance | (29,510) | |
Net | 277,990 | |
July 2022 | ||
NOTES PAYABLE | ||
Principal | 85,985 | |
Debt discount balance | (9,443) | |
Net | 76,542 | |
August 2022 | ||
NOTES PAYABLE | ||
Principal | 176,000 | |
Debt discount balance | (51,405) | |
Net | 124,595 | |
September 2022 | ||
NOTES PAYABLE | ||
Principal | 896,000 | |
Debt discount balance | (277,786) | |
Net | $ 618,214 |
NOTES PAYABLE - Additional Info
NOTES PAYABLE - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||||||||||||||
Jul. 06, 2023 D | Aug. 30, 2022 USD ($) M | Aug. 08, 2022 USD ($) | Jul. 06, 2022 USD ($) | Mar. 25, 2022 USD ($) payment $ / shares shares | Feb. 11, 2022 USD ($) | Jan. 15, 2022 D USD ($) $ / shares | Dec. 01, 2021 USD ($) installment item $ / shares | Oct. 31, 2022 USD ($) item shares | Jun. 30, 2022 USD ($) $ / shares shares | Apr. 30, 2022 USD ($) $ / shares shares | Feb. 28, 2022 USD ($) | Jan. 31, 2022 USD ($) | Apr. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jan. 20, 2022 $ / shares | Jan. 01, 2022 USD ($) | Oct. 01, 2021 $ / shares | |
Price per share of debt converted | $ / shares | $ 0.025 | ||||||||||||||||||
Amortization of debt discount and day one derivative loss and warrant expense | $ 584,261 | $ 3,036,792 | |||||||||||||||||
Total amount of convertible note payable push backed | $ 350,000 | 1,699,800 | |||||||||||||||||
Price per share of debt converted | shares | 26,734,801 | ||||||||||||||||||
Number of warrants issued | shares | 2,500,000 | ||||||||||||||||||
Warrants maturity period | 5 years | ||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.025 | $ 0.025 | $ 0.025 | ||||||||||||||||
Repayment of notes payable to related party | $ 57,875 | 158,875 | |||||||||||||||||
Interest expense | $ 78 | 18,590 | |||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||
Loss on extinguishment of debt | $ (1,079,800) | ||||||||||||||||||
Outstanding balance | 1,304,909 | 811,687 | |||||||||||||||||
Increase in convertible promissory notes | 1,304,909 | 811,687 | |||||||||||||||||
Net proceeds | $ 1,545,140 | 1,510,000 | |||||||||||||||||
Principal amount due | $ 78,495 | ||||||||||||||||||
Interest due | 95,410 | ||||||||||||||||||
Interest expense | |||||||||||||||||||
Amortization of debt discount and day one derivative loss and warrant expense | 80,000 | ||||||||||||||||||
Settlement Agreement | |||||||||||||||||||
Number of shares agreed to be issued | item | 6,000,000 | ||||||||||||||||||
Loss on extinguishment of debt | $ 100,000 | ||||||||||||||||||
Number of shares of common stock to be issued | shares | 4,000,000 | ||||||||||||||||||
Loss on extinguishment of debt related to shares to be issued | $ 60,000 | ||||||||||||||||||
Promissory note with a related party | Settlement Agreement | |||||||||||||||||||
Price per share of debt converted | $ / shares | $ 0.062 | ||||||||||||||||||
Repayment of notes payable to related party | $ 231,500 | ||||||||||||||||||
Repayable amount of debt to related party | 125,620 | ||||||||||||||||||
Accrued interest | $ 18,370 | ||||||||||||||||||
Number of installment for cash repayment of debt to related party | installment | 2 | ||||||||||||||||||
Number of shares agreed to be issued | 2,000,000 | ||||||||||||||||||
Maximum | |||||||||||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.025 | ||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||
Maximum | Trigger warrants | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.025 | ||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||
Minimum | |||||||||||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.015 | ||||||||||||||||||
Warrants term | 3 years | ||||||||||||||||||
Minimum | Trigger warrants | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.015 | ||||||||||||||||||
Warrants term | 3 years | ||||||||||||||||||
ASU 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||||||||||
Increase in convertible promissory notes | $ 379,355 | ||||||||||||||||||
Black-Scholes model and recorded warrants as reduction of note included debt discount balance | |||||||||||||||||||
Fair Value of Warrants | $ 385,422 | $ 885,838 | |||||||||||||||||
PPP loan | |||||||||||||||||||
Proceeds from Issuance of Debt | $ 39,500 | ||||||||||||||||||
Debt instrument term | 2 years | ||||||||||||||||||
Interest Rate (as a percent) | 1% | ||||||||||||||||||
Convertible notes payable | |||||||||||||||||||
Price per share of debt converted | $ / shares | $ 0.025 | $ 0.015 | $ 0.025 | ||||||||||||||||
Monthly payment of debt | $ 19,318 | ||||||||||||||||||
Proceeds from Issuance of Debt | $ 154,000 | ||||||||||||||||||
Payment of monthly installment | $ 30,000 | ||||||||||||||||||
Debt instrument term | 1 year | ||||||||||||||||||
Fair value of the liability | $ 913,910 | ||||||||||||||||||
Number of warrants issued | shares | 21,000,000 | 8,749,999 | |||||||||||||||||
Original issue discount | 18,480 | ||||||||||||||||||
Interest Rate (as a percent) | 12% | 12% | 10% | ||||||||||||||||
Total amount of convertible note payable push backed | $ 350,000 | $ 1,699,800 | |||||||||||||||||
Price per share of debt converted | shares | 3,700,000 | ||||||||||||||||||
Shares issued in lieu of discounted shares | shares | 4,000,000 | ||||||||||||||||||
Discount rate (as a percent) | 25% | ||||||||||||||||||
Discount based on average closing price of number of days | D | 15 | ||||||||||||||||||
Consideration per share less than fixed price per share | $ / shares | $ 0.50 | ||||||||||||||||||
Accrued interest | $ 51,017 | ||||||||||||||||||
Number of shares agreed to be issued | 100,000 | 26,734,801 | 152,312,233 | ||||||||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.0357 | ||||||||||||||||||
Number of monthly installments | 10 | 6 | |||||||||||||||||
Shares issued in lieu of discounted shares, value | $ 100,000 | ||||||||||||||||||
Monthly installment amount | $ 30,000 | ||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||
Conversion of convertible promissory notes (In shares) | shares | 8,000,000 | 30,500,000 | 49,334,051 | ||||||||||||||||
Additional number of shares to be issued | shares | 40,102,156 | ||||||||||||||||||
Loss on extinguishment of debt | $ 142,800 | $ 638,000 | |||||||||||||||||
Outstanding balance | $ 193,178 | $ 617,353 | |||||||||||||||||
Number of shares of common stock to be issued | shares | 4,000,000 | ||||||||||||||||||
Net proceeds | 1,545,140 | $ 1,560,000 | |||||||||||||||||
Original issue discount | 185,580 | 125,000 | |||||||||||||||||
Loan costs | 128,760 | 65,000 | |||||||||||||||||
Fair value of warrants issued to third party advisors | 110,552 | ||||||||||||||||||
Principal amount | 172,480 | $ 500,000 | 1,859,480 | 1,750,000 | |||||||||||||||
Outstanding balance of debt | $ 172,480 | $ 500,000 | $ 1,859,480 | $ 1,750,000 | |||||||||||||||
Percentage of discount on conversion of note | 25% | ||||||||||||||||||
Threshold trading days | D | 10 | ||||||||||||||||||
Principal amount due | 78,495 | ||||||||||||||||||
Interest due | $ 95,410 | ||||||||||||||||||
Interest on payment default (as a percent) | 125% | 125% | |||||||||||||||||
Principal amount | $ 176,000 | $ 307,500 | |||||||||||||||||
Convertible notes payable | Trigger warrants | |||||||||||||||||||
Price per share of debt converted | $ / shares | $ 0.01 | ||||||||||||||||||
Number of warrants issued | shares | 173,000,000 | ||||||||||||||||||
Convertible notes payable | Other Expense | |||||||||||||||||||
Loss on extinguishment of debt | $ 205,600 | ||||||||||||||||||
Convertible notes payable | Maximum | |||||||||||||||||||
Price per share of debt converted | $ / shares | $ 0.025 | $ 0.40 | |||||||||||||||||
Debt instrument term | 1 year | ||||||||||||||||||
Warrants exercise price | $ / shares | 0.40 | ||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||
Convertible notes payable | Maximum | Trigger warrants | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.025 | ||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||
Convertible notes payable | Minimum | |||||||||||||||||||
Price per share of debt converted | $ / shares | $ 0.015 | 0.06 | |||||||||||||||||
Debt instrument term | 9 months | ||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.12 | ||||||||||||||||||
Warrants term | 3 years | ||||||||||||||||||
Convertible notes payable | Minimum | Trigger warrants | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.015 | ||||||||||||||||||
Warrants term | 3 years |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | 1 Months Ended | |||
Jun. 30, 2020 | Sep. 30, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 671,525 | |||
Economic injury disaster loan | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of long term debt | $ 150,000 | |||
Interest Rate (as a percent) | 3.75% | |||
Moratorium period | 30 months | |||
Monthly payment of debt | $ 731 | |||
Bank Debt | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 700,000 | |||
Outstanding balance | $ 551,525 | $ 546,880 | ||
Bank Debt | First Year | ||||
Debt Instrument [Line Items] | ||||
Interest Rate (as a percent) | 1.99% | |||
Monthly payment of debt | $ 3,547 | |||
Bank Debt | Subsequent period | ||||
Debt Instrument [Line Items] | ||||
Interest Rate (as a percent) | 4.95% | |||
Monthly payment of debt | $ 4,574 |
LONG-TERM DEBT - Future annual
LONG-TERM DEBT - Future annual aggregate maturities of long-term (Details) | Dec. 31, 2022 USD ($) |
LONG-TERM DEBT | |
2023 | $ 31,490 |
2024 | 30,586 |
2025 | 459,449 |
2027 | 1,675 |
Thereafter | 148,325 |
Total | $ 671,525 |
DERIVATIVE LIABILITIES - Fair v
DERIVATIVE LIABILITIES - Fair value of derivative liability (Details) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value, Beginning balance | $ 831,852 |
Change in fair value of derivative liabilities | $ 1,415,685 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change In Fair Value Of Derivative Liabilities |
Derivative liabilities in conjunction with convertible promissory notes | $ 1,197,607 |
Conversion of convertible promissory notes | $ (3,445,144) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||
Nov. 02, 2022 USD ($) shares | Dec. 01, 2021 USD ($) installment item $ / shares | Oct. 17, 2021 USD ($) | Oct. 01, 2021 $ / shares shares | Dec. 31, 2022 USD ($) item $ / shares | Oct. 31, 2022 item | Sep. 30, 2022 USD ($) $ / shares shares | Apr. 30, 2022 $ / shares shares | Jan. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) $ / shares shares | Feb. 28, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares | |
Related Party Transactions | ||||||||||||||
Repayment of notes payable to related party | $ 57,875 | $ 158,875 | ||||||||||||
Conversion price | $ / shares | $ 0.025 | |||||||||||||
Interest expense | $ 78 | $ 18,590 | ||||||||||||
Shares issued for consulting services | shares | 7,500,000 | 2,200,000 | ||||||||||||
Fair market value | $ 262,500 | $ 550,000 | ||||||||||||
Price at which shares are issued | $ / shares | $ 0.02 | $ 0.5499 | ||||||||||||
Stock compensation expense | $ 0 | $ 21,807 | ||||||||||||
Number of warrants issued | shares | 2,500,000 | 21,000,000 | ||||||||||||
Fixed price of warrants | $ / shares | $ 0.025 | $ 0.025 | $ 0.025 | $ 0.025 | ||||||||||
Selling, general and administrative expense | ||||||||||||||
Related Party Transactions | ||||||||||||||
Stock compensation expense | $ 57,191 | 1,061,826 | ||||||||||||
Settlement Agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Number of shares agreed to be issued | item | 6,000,000 | |||||||||||||
Independent director agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Compensation expense accrued | $ 31,935 | $ 31,935 | ||||||||||||
Amount of marketing fund advanced | $ 60,000 | |||||||||||||
Number of shares issued for marketing fund advanced | shares | 6,000,000 | |||||||||||||
Financial and Strategic Advisory Consulting Services [Member] | Minimum | ||||||||||||||
Related Party Transactions | ||||||||||||||
Per share value of common shares issued in conjunction with agreements for financial and marketing consulting services (in dollars per share) | $ / shares | $ 0.035 | |||||||||||||
Financial and Strategic Advisory Consulting Services [Member] | Maximum | ||||||||||||||
Related Party Transactions | ||||||||||||||
Per share value of common shares issued in conjunction with agreements for financial and marketing consulting services (in dollars per share) | $ / shares | $ 0.64 | |||||||||||||
CEO | ||||||||||||||
Related Party Transactions | ||||||||||||||
Additional bonus paid | $ 133,751 | 105,042 | ||||||||||||
Payment of signing bonus | $ 20,978 | |||||||||||||
Number of common shares issued as compensation expense (in shares) | shares | 1,000,000 | 1,100,000 | 1,100,000 | |||||||||||
Price at which shares are issued | $ / shares | $ 0.5499 | |||||||||||||
Number of warrants issued | shares | 5,000,000 | 5,000,000 | ||||||||||||
Fixed price of warrants | $ / shares | $ 0.025 | |||||||||||||
CEO | Series A Preferred Stock | ||||||||||||||
Related Party Transactions | ||||||||||||||
Number of common shares issued as compensation expense (in shares) | shares | 500,000 | |||||||||||||
Price at which shares are issued | $ / shares | $ 0.02 | |||||||||||||
Value of shares issued for compensation | $ 10,000 | |||||||||||||
CEO | Selling, general and administrative expense | ||||||||||||||
Related Party Transactions | ||||||||||||||
Stock compensation expense | $ 589,903 | $ 604,890 | ||||||||||||
Director | ||||||||||||||
Related Party Transactions | ||||||||||||||
Amount of marketing fund advanced | $ 8,000 | |||||||||||||
Number of shares issued for marketing fund advanced | shares | 800,000 | |||||||||||||
Director | Independent director agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Compensation expense accrued | $ 5,000 | |||||||||||||
Number of shares issued for compensation | shares | 1,658,999 | |||||||||||||
Amount of registered shares to be issued for compensation | $ 25,000 | |||||||||||||
Bonus remaining payable | 6,935 | |||||||||||||
Amount of marketing fund advanced | $ 60,000 | $ 8,000 | ||||||||||||
Number of shares issued for marketing fund advanced | shares | 800,000 | |||||||||||||
Promissory note with a related party | Settlement Agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Repayment of notes payable to related party | $ 231,500 | |||||||||||||
Accrued Interest on Debt | 18,370 | |||||||||||||
Repayable amount of debt to related party | $ 125,620 | |||||||||||||
Number of installment for cash repayment of debt to related party | installment | 2 | |||||||||||||
Number of shares agreed to be issued | 2,000,000 | |||||||||||||
Conversion price | $ / shares | $ 0.062 | |||||||||||||
Consultant and employee | ||||||||||||||
Related Party Transactions | ||||||||||||||
Number of members appointed in the board | item | 2 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Apr. 30, 2022 USD ($) | Feb. 28, 2022 $ / shares shares | Jan. 31, 2022 $ / shares shares | Feb. 28, 2021 $ / shares shares | Feb. 28, 2022 USD ($) $ / shares | Dec. 31, 2022 USD ($) Vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Mar. 31, 2022 shares | Sep. 30, 2021 $ / shares | Nov. 01, 2019 Vote shares | |
Stockholder's deficit | ||||||||||||
Shares issued in exchange of services | 7,500,000 | 2,200,000 | ||||||||||
Price per share of debt converted | 26,734,801 | |||||||||||
Fair market value | $ | $ 262,500 | $ 550,000 | ||||||||||
Common stock, shares authorized | 999,000,000 | 250,000,000 | ||||||||||
Proceeds from issuance of common stock | $ | $ 42,766 | |||||||||||
Extinguishment of debt | $ | $ 259,000 | |||||||||||
Price at which shares are issued | $ / shares | $ 0.02 | $ 0.5499 | ||||||||||
Number of common shares issued upon conversion of various notes payable and unpaid accrued interest (in shares) | 30,500,000 | |||||||||||
Number of cashless warrants exercised | 17,249,999 | |||||||||||
Accrued interest | $ | $ 51,017 | $ 49,334,051 | ||||||||||
Shares issued upon exercise of warrants | 13,264,887 | |||||||||||
Total amount of convertible note payable push backed | $ | $ 350,000 | 1,699,800 | ||||||||||
Shares issued for consulting services | $ | $ 494,900 | $ 906,226 | ||||||||||
Series A Preferred Stock | ||||||||||||
Stockholder's deficit | ||||||||||||
Series A Preferred Stock, Authorized shares (in shares) | 1,000,000 | 1,000,000 | 1,000,000,000,000 | |||||||||
Common shares vote equivalents for each share | Vote | 100 | |||||||||||
Series B Preferred Stock | ||||||||||||
Stockholder's deficit | ||||||||||||
Series A Preferred Stock, Authorized shares (in shares) | 1 | 1 | ||||||||||
Preferred Shares, par value | $ / shares | $ 0.00001 | |||||||||||
Number of votes on fully diluted | Vote | 100,000 | |||||||||||
Maximum | ||||||||||||
Stockholder's deficit | ||||||||||||
Common stock, shares authorized | 999,000,000 | 500,000,000 | ||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.025 | |||||||||||
Minimum | ||||||||||||
Stockholder's deficit | ||||||||||||
Common stock, shares authorized | 500,000,000 | 250,000,000 | ||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.015 | |||||||||||
Selling, general and administrative expense | ||||||||||||
Stockholder's deficit | ||||||||||||
Proceeds from issuance of common stock | $ | $ 804,226 | |||||||||||
CEO | ||||||||||||
Stockholder's deficit | ||||||||||||
Price at which shares are issued | $ / shares | $ 0.5499 | |||||||||||
Number of common shares issued as compensation expense (in shares) | 1,000,000 | 1,100,000 | 1,100,000 | |||||||||
Value of shares issued for compensation for services | $ | $ 604,901 | |||||||||||
CEO | Series A Preferred Stock | ||||||||||||
Stockholder's deficit | ||||||||||||
Series A Preferred Stock, Shares issued (in shares) | 500,000 | |||||||||||
Price at which shares are issued | $ / shares | $ 0.02 | |||||||||||
Number of common shares issued as compensation expense (in shares) | 500,000 | |||||||||||
Value of shares issued for compensation for services | $ | $ 10,000 | |||||||||||
Value of shares issued for compensation | $ | $ 10,000 | |||||||||||
Director | ||||||||||||
Stockholder's deficit | ||||||||||||
Number of shares issued for marketing fund advanced | 800,000 | |||||||||||
Amount of marketing fund advanced | $ | $ 8,000 | |||||||||||
Consulting agreement with third party | ||||||||||||
Stockholder's deficit | ||||||||||||
Number of shares issued | 3,000,000 | |||||||||||
Additional number of shares to be issued | 2,000,000 | |||||||||||
Extinguishment of debt | $ | $ 20,000 | |||||||||||
Shares issued to employee for services (In shares) | 19,600,000 | |||||||||||
Shares issued for consulting services | $ | $ 2,334,120 | |||||||||||
Consulting agreement with third party | Maximum | ||||||||||||
Stockholder's deficit | ||||||||||||
Per share value of common shares issued in conjunction with agreements for financial and marketing consulting services (in dollars per share) | $ / shares | $ 0.035 | $ 0.085 | ||||||||||
Consulting agreement with third party | Minimum | ||||||||||||
Stockholder's deficit | ||||||||||||
Per share value of common shares issued in conjunction with agreements for financial and marketing consulting services (in dollars per share) | $ / shares | $ 0.01 | $ 0.64 | ||||||||||
Consulting agreement with third party | Selling, general and administrative expense | ||||||||||||
Stockholder's deficit | ||||||||||||
Fair market value | $ | $ 461,900 | |||||||||||
Stock purchase agreement | ||||||||||||
Stockholder's deficit | ||||||||||||
Number of shares issued | 1,500,000 | 1,500,000 | ||||||||||
Proceeds from issuance of common stock | $ | $ 42,766 | |||||||||||
Price at which shares are issued | $ / shares | $ 0.025 | |||||||||||
Total amount of convertible note payable push backed | $ | $ 617,353 | |||||||||||
Stock purchase agreement | Maximum | ||||||||||||
Stockholder's deficit | ||||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.0353 | $ 0.0353 | $ 0.0353 | |||||||||
Stock purchase agreement | Minimum | ||||||||||||
Stockholder's deficit | ||||||||||||
Issued price (in dollars per share) | $ / shares | $ 0.0259 | $ 0.0259 | $ 0.0259 |
STOCK OPTIONS AND WARRANTS - St
STOCK OPTIONS AND WARRANTS - Stock options activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of shares | |||
Options outstanding at beginning of period (in shares) | 445,000 | 445,000 | |
Granted and accrued | 0 | ||
Exercised (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Expired (in shares) | (445,000) | ||
Options outstanding at end of period (in shares) | 0 | 445,000 | 445,000 |
Exercisable | 0 | ||
Options exercisable and expected to vest | 0 | ||
Weighted Average Exercise Price | |||
Weighted average exercise price options outstanding at beginning of period (in dollars per share) | $ 0.71 | $ 0.71 | |
Weighted average exercise price options, Granted (in dollars per share) | 0 | ||
Weighted average exercise price options, Exercised (in dollars per share) | 0 | ||
Weighted average exercise price option, Forfeited (in dollars per share) | 0 | ||
Weighted average exercise price options, Expired (in dollars per share) | 0 | ||
Weighted average exercise price options outstanding at end of period (in dollars per share) | 0 | $ 0.71 | $ 0.71 |
Weighted average exercise price, options Exercisable | 0 | ||
Weighted average exercise price, options exercisable and expected to vest | $ 0 | ||
Weighted Average Contractual term (years) | |||
Weighted Average Contractual term, outstanding (years) | 6 months | 1 year 6 months |
STOCK OPTIONS AND WARRANTS - Ad
STOCK OPTIONS AND WARRANTS - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||||
Oct. 17, 2021 USD ($) $ / shares shares | Oct. 01, 2021 $ / shares shares | Apr. 30, 2022 USD ($) $ / shares shares | Oct. 31, 2021 USD ($) $ / shares shares | Feb. 28, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2017 shares | Jun. 30, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized to be issued under the Plan | 50,000,000 | ||||||||
Term of the awards granted | 5 years | ||||||||
Stock compensation expense | $ | $ 0 | $ 21,807 | |||||||
Warrants Issued | 2,500,000 | 21,000,000 | |||||||
Fixed price of warrants | $ / shares | $ 0.025 | $ 0.025 | $ 0.025 | ||||||
Fair value of the warrant | $ | 65,000 | 385,422 | |||||||
Reduction to retained earnings and an increase additional paid-in-capital (Restated) | $ | 3,770,831 | ||||||||
Amount of debt which is extended | $ | $ 500,000 | ||||||||
Warrants maturity term | 5 years | ||||||||
Price per share of debt converted | $ / shares | $ 0.025 | ||||||||
Extinguishment of debt | $ | $ 259,000 | ||||||||
Number of shares issued | 3,000,000 | ||||||||
Price per share | $ / shares | $ 0.01 | ||||||||
Compensation expense | $ | $ 21,000 | ||||||||
Trigger warrants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized to be issued under the Plan | 375,000 | ||||||||
Number of shares issued by warrants | 173,000,000 | ||||||||
Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants maturity term | 5 years | ||||||||
Maximum | Trigger warrants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fixed price of warrants | $ / shares | $ 0.025 | ||||||||
Warrants maturity term | 5 years | ||||||||
Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants maturity term | 3 years | ||||||||
Minimum | Trigger warrants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fixed price of warrants | $ / shares | $ 0.015 | ||||||||
Warrants maturity term | 3 years | ||||||||
Finder's Fee Agreement | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares issued by warrants | 450,000 | ||||||||
Warrants Issued | 450,000 | ||||||||
Fixed price of warrants | $ / shares | $ 0.12 | ||||||||
Advisory agreement | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares issued by warrants | 3,117,533 | ||||||||
Warrants Issued | 60,552 | ||||||||
Percentage of warrants on shares sold in financings | 8% | ||||||||
Advisory agreement | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares issued by warrants | 1,476,000 | ||||||||
Warrants Issued | 50,000 | ||||||||
Percentage of warrants on shares sold in financings | 6% | ||||||||
Employee | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants Issued | 4,000,000 | ||||||||
CEO | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants Issued | 5,000,000 | 5,000,000 | |||||||
Fixed price of warrants | $ / shares | $ 0.025 | ||||||||
Selling, general and administrative expense | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock compensation expense | $ | $ 57,191 | $ 1,061,826 | |||||||
Selling, general and administrative expense | CEO | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock compensation expense | $ | $ 589,903 | $ 604,890 | |||||||
Subsequent convertible promissory note conversions | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fixed price of warrants | $ / shares | $ 107,888 | ||||||||
Subsequent issuance of convertible promissory notes with certain terms and convertible promissory note conversions | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fixed price of warrants | $ / shares | $ 0.025 | ||||||||
Stock options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Term of the awards granted | 10 years | ||||||||
Warrant using monte carlo pricing model | Time-based options | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fair value of the warrant | 58 |
STOCK OPTIONS AND WARRANTS - Fa
STOCK OPTIONS AND WARRANTS - Fair value of the warrant awarded (Details) | 12 Months Ended | ||||
Oct. 17, 2021 $ / shares | Dec. 31, 2022 item USD ($) $ / shares shares | Apr. 30, 2022 USD ($) $ / shares | Dec. 31, 2021 $ / shares shares | Oct. 01, 2021 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | $ | 385,422 | 65,000 | |||
Warrants exercise price | $ 0.025 | $ 0.025 | $ 0.025 | ||
Total underlying shares | shares | 27,837,533 | 18,468,499 | |||
Exercise price 0.01 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.01 | ||||
Total underlying shares | shares | 170,000 | ||||
Exercise price 0.01 One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.01 | ||||
Total underlying shares | shares | 450,000 | ||||
Exercise price 0.01 Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.01 | ||||
Total underlying shares | shares | 3,336,843 | ||||
Exercise price 0.01 Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.01 | ||||
Total underlying shares | shares | 12,000,000 | ||||
Exercise price 0.01 Four | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.01 | ||||
Total underlying shares | shares | 2,780,690 | ||||
Exercise Price 0.025 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.025 | ||||
Total underlying shares | shares | 2,500,000 | ||||
Exercise Price 0.52 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.52 | $ 0.52 | |||
Total underlying shares | shares | 100,000 | 100,000 | |||
Exercise price 0.025 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.025 | ||||
Total underlying shares | shares | 168,500 | ||||
Exercise Price 0.025 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.025 | $ 0.025 | |||
Total underlying shares | shares | 9,000,000 | 9,000,000 | |||
Exercise price 0.062 One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.062 | ||||
Total underlying shares | shares | 6,249,999 | ||||
Exercise price 0.062 Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants exercise price | $ 0.062 | ||||
Total underlying shares | shares | 450,000 | ||||
Time-based options | Fair value of common share | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 0.0610 | ||||
Time-based options | Fair value of common share | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 0.1420 | ||||
Black-Scholes model and recorded warrants as reduction of note included debt discount balance | Exercise Price | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.025 | ||||
Black-Scholes model and recorded warrants as reduction of note included debt discount balance | Time-based options | Exercise Price | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 0.12 | ||||
Warrant using monte carlo pricing model | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected Life (Yrs.) | 3 years | ||||
Warrant using monte carlo pricing model | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected Life (Yrs.) | 5 years | ||||
Warrant using monte carlo pricing model | Fair value of common share | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 0.0233 | ||||
Warrant using monte carlo pricing model | Fair value of common share | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 0.0380 | ||||
Warrant using monte carlo pricing model | Risk Free Rate | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 1.35 | ||||
Warrant using monte carlo pricing model | Risk Free Rate | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 3.57 | ||||
Warrant using monte carlo pricing model | Time-based options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 58 | ||||
Warrant using monte carlo pricing model | Time-based options | Expected term years | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected Life (Yrs.) | 2 years 10 months 17 days | ||||
Warrant using monte carlo pricing model | Time-based options | Expected term years | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected Life (Yrs.) | 3 years | ||||
Warrant using monte carlo pricing model | Time-based options | Risk Free Rate | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 0.55 | ||||
Warrant using monte carlo pricing model | Time-based options | Expected volatility | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 161 | ||||
Warrant using monte carlo pricing model | Time-based options | Expected volatility | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | 161.9 | ||||
Warrants using a Black Scholes pricing model | Expected volatility rate | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 1.424 | ||||
Warrants using a Black Scholes pricing model | Expected volatility rate | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 1.621 | ||||
Warrants using a Black Scholes pricing model | Expected term years | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected Life (Yrs.) | 3 years | ||||
Warrants using a Black Scholes pricing model | Expected term years | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected Life (Yrs.) | 5 years | ||||
Warrants using a Black Scholes pricing model | Fair value of common share | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.00028 | ||||
Warrants using a Black Scholes pricing model | Fair value of common share | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.000345 | ||||
Warrants using a Black Scholes pricing model | Exercise Price | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.00025 | ||||
Warrants using a Black Scholes pricing model | Exercise Price | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.000232 | ||||
Warrants using a Black Scholes pricing model | Risk Free Rate | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.0098 | ||||
Warrants using a Black Scholes pricing model | Risk Free Rate | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of the warrant | item | 0.0359 |
STOCK OPTIONS AND WARRANTS - As
STOCK OPTIONS AND WARRANTS - Assumptions used in estimating the fair value of time-based stock options (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate | 244.60% | |
Average risk-free interest rate | 0.93% | |
Expected term years | 5 years | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate | 154.10% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate | 162.30% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Aug. 08, 2022 | Feb. 11, 2022 | Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |||
Commitment for product development | $ 525,000 | ||
Amount for product development paid | $ 212,000 | ||
Principal amount due | $ 78,495 | ||
Interest due | 95,410 | ||
Convertible Notes Payable | |||
COMMITMENTS AND CONTINGENCIES | |||
Principal amount due | 78,495 | ||
Interest due | $ 95,410 | ||
Interest on payment default (as a percent) | 125% | 125% | |
Principal amount | $ 176,000 | $ 307,500 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Mar. 15, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 20, 2022 | |
Subsequent events | ||||||||
Amount of principal and interest converted | $ 350,000 | $ 1,699,800 | ||||||
Number of shares upon conversion of debt instrument | 26,734,801 | |||||||
Granted and accrued | 0 | |||||||
Common stock, shares authorized | 999,000,000 | 250,000,000 | ||||||
Shares issued for consulting services | 7,500,000 | 2,200,000 | ||||||
Debt Instrument, Convertible, Conversion Price | $ 0.025 | |||||||
Price per share of debt converted | 26,734,801 | |||||||
Issuance of common stock for cash- net | $ 42,766 | |||||||
Common Stock | ||||||||
Subsequent events | ||||||||
Common stock, shares authorized | 999,000,000 | |||||||
Shares issued for consulting services | 22,058,999 | 3,834,120 | ||||||
Shares issued as a part of convertible notes payable settlement | 30,734,801 | |||||||
Convertible notes payable | ||||||||
Subsequent events | ||||||||
Amount of principal and interest converted | $ 350,000 | $ 1,699,800 | ||||||
Number of shares upon conversion of debt instrument | 3,700,000 | |||||||
Debt Instrument, Convertible, Conversion Price | $ 0.025 | $ 0.015 | $ 0.025 | |||||
Price per share of debt converted | 3,700,000 | |||||||
Subsequent event [Member] | ||||||||
Subsequent events | ||||||||
Minimum cash payment in the event of change in control | $ 1,500,000 | |||||||
Amount of principal and interest converted | $ 50,000 | |||||||
Number of shares upon conversion of debt instrument | 5,000,000 | |||||||
Shares issued for consulting services | 2,000,000 | |||||||
Aggregate purchase price to sell the building of its principal offices | $ 2,000,000 | |||||||
Net proceeds | $ 1,363,818 | |||||||
Debt Instrument, Convertible, Conversion Price | $ 0.01 | |||||||
Lease term | 1 year | |||||||
Operating lease rent per month | $ 9,000 | |||||||
Price per share of debt converted | 5,000,000 | |||||||
Issuance of common stock for cash- net | $ 12,000 | |||||||
Subsequent event [Member] | Employee and Consultant Stock Ownership Plan | ||||||||
Subsequent events | ||||||||
Granted and accrued | 3,000,000 | |||||||
Subsequent event [Member] | Amendment to CEO's employment agreement | ||||||||
Subsequent events | ||||||||
Annual salary | $ 365,000 | |||||||
Annual bonus in the form of shares | 25,000,000 | |||||||
Percentage of increase in gross revenue | 10% | |||||||
Bonus in the form of shares upon listing to a senior stock exchange or successful reverse stock split | 10,000,000 | |||||||
Subsequent event [Member] | Consulting agreement | Advisor and director | Employee and Consultant Stock Ownership Plan | ||||||||
Subsequent events | ||||||||
Shares issued for consulting services | 35,000,000 | |||||||
Consulting term agreement | 1 year | |||||||
Subsequent event [Member] | Common Stock | ||||||||
Subsequent events | ||||||||
Common stock, shares authorized | 1,999,000,000 | |||||||
Subsequent event [Member] | Convertible promissory note | ||||||||
Subsequent events | ||||||||
Shares issued as a part of convertible notes payable settlement | 25,000,000 | |||||||
Subsequent event [Member] | Convertible notes payable | ||||||||
Subsequent events | ||||||||
Shares issued as a part of convertible notes payable settlement | 18,000,000 | |||||||
Cashless exercise of warrants | 24,000,000 | |||||||
Subsequent event [Member] | Convertible notes payable | Common Stock | ||||||||
Subsequent events | ||||||||
Shares issued as a part of convertible notes payable settlement | 46,102,156 |