Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Clubhouse Media Group, Inc. | |
Entity Central Index Key | 0001389518 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 94,760,445 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,938,247 | $ 37,774 |
Accounts receivable, net | 47,832 | 213,422 |
Prepaid Expense | 134,025 | |
Other current assets | 266,000 | 219,000 |
Total current assets | 2,386,104 | 470,196 |
Property and equipment, net | 63,076 | 64,792 |
Intangibles | 79,653 | |
Total assets | 2,528,833 | 534,988 |
Current liabilities: | ||
Accounts payable | 434,526 | 219,852 |
Deferred revenue | 83,420 | 73,648 |
Convertible notes payable, net | 563,873 | 19,493 |
Convertible notes payable, net - related party | 2,551,535 | |
Shares to be issued | 951,105 | 87,029 |
Derivative liability | 254,957 | 304,490 |
Due to related parties | 97,761 | |
Total current liabilities | 4,937,177 | 704,512 |
Notes payable - related party | 2,162,562 | |
Total liabilities | 4,937,177 | 2,867,074 |
Commitments and contingencies | ||
Stockholder's equity: | ||
Preferred stock, par value $0.001, authorized 50,000,000 shares; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020 | ||
Common stock, par value $0.001, authorized 500,000,000 shares; 94,302,795 and 92,682,632 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 94,302 | 92,682 |
Additional paid-in capital | 5,954,350 | 152,953 |
Accumulated deficit | (8,456,996) | (2,577,721) |
Accumulated other comprehensive income | ||
Total stockholder's equity (deficit) | (2,408,344) | (2,332,086) |
Total liabilities and stockholder's equity (deficit) | $ 2,528,833 | $ 534,988 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 | Jul. 07, 2020 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common stock, shares issued | 94,302,795 | 92,682,632 | |
Common stock, shares outstanding | 94,302,795 | 92,682,632 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Total Revenue, net | $ 523,376 | |
Cost of sales | 316,684 | |
Gross profit | 206,692 | |
Operating expenses: | ||
Selling, general, and administrative | 3,843,372 | 227,079 |
Rent expense | 523,991 | |
Total operating expenses | 4,367,363 | 227,079 |
Operating loss | (4,160,671) | (227,079) |
Other (income) expenses: | ||
Interest expense, net | 1,336,075 | |
Loss in extinguishment of debt - related party | 297,138 | |
Other expense, net | 54,227 | |
Change in fair value of derivative liability | (49,533) | |
Total other (income) expenses | 1,637,907 | |
Loss before income taxes | (5,798,578) | (227,079) |
Income tax (benefit) expense | ||
Net loss | $ (5,798,578) | $ (227,079) |
Basic and diluted weighted average shares outstanding | 93,330,191 | 92,623,386 |
Basic and diluted net loss per share | $ (0.06) | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholder's Equity (Deficit) (Unaudited) - USD ($) | Common Stock [Member] | Preferred Shares [Member] | Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jan. 03, 2020 | |||||
Balance, shares at Jan. 03, 2020 | |||||
Shares outstanding as of the recapitalization | $ 45,812 | 45,812 | |||
Shares outstanding as of the recapitalization, shares | 45,812,191 | ||||
Shares issued in recapitalization | $ 46,811 | (92,323) | (45,512) | ||
Shares issued in recapitalization, shares | 46,811,195 | ||||
Net loss | (227,079) | (227,079) | |||
Balance at Mar. 31, 2020 | $ 92,623 | (92,323) | (227,079) | (226,779) | |
Balance, shares at Mar. 31, 2020 | 92,623,386 | ||||
Balance at Dec. 31, 2020 | $ 92,682 | 152,953 | (2,577,721) | (2,332,086) | |
Balance, shares at Dec. 31, 2020 | 92,682,632 | ||||
Stock compensation expense | $ 208 | 2,112,980 | 2,113,188 | ||
Stock compensation expense, shares | 207,817 | ||||
Conversion of convertible debt | $ 8 | 12,992 | 13,000 | ||
Conversion of convertible debt, shares | 8,197 | ||||
Shares issued to settle accounts payable | $ 24 | 148,485 | 148,510 | ||
Shares issued to settle accounts payable, shares | 24,460 | ||||
Shares issued as debt issuance costs for convertible notes payable | $ 645 | 3,440,755 | 3,441,400 | ||
Shares issued as debt issuance costs for convertible notes payable, shares | 645,000 | ||||
Beneficial conversion features | 51,000 | 51,000 | |||
Acquisition of Magiclytics | $ 735 | 19,265 | (80,697) | (60,697) | |
Acquisition of Magiclytics, shares | 734,689 | ||||
Imputed interest | 15,920 | 15,920 | |||
Net loss | (5,798,578) | (5,798,578) | |||
Balance at Mar. 31, 2021 | $ 94,302 | $ 5,954,350 | $ (8,456,996) | $ (2,408,344) | |
Balance, shares at Mar. 31, 2021 | 94,302,795 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2020 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (5,798,578) | $ (227,079) | $ (227,079) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 502,871 | ||
Imputed interest | 15,920 | ||
Stock compensation expense | 2,977,264 | ||
Loss in extinguishment of debt - related party | (297,138) | ||
Change in fair value of derivative liability | 49,533 | ||
Loss in extinguishment of debt | 55,525 | ||
Interest expense - derivative liability | |||
Net changes in operating assets & liabilities: | |||
Accounts receivable | 165,590 | ||
Inventory | |||
Other receivable | |||
Prepaid expense, deposits and other current assets | (181,023) | (42,000) | |
Other assets | (104,000) | ||
Accounts payable, accrued liabilities, due to affiliates, and other long-term liabilities | 386,708 | (42,000) | |
Net cash used in operating activities | (1,628,118) | (415,079) | |
Cash flows from investing activities: | |||
Purchases of property, plant, and equipment | (5,220) | ||
Purchases of intangible assets | (1,765) | ||
Cash received from acquisition of Magiclytics | 76 | ||
Net cash used in investing activities | (6,909) | ||
Cash flows from financing activities: | |||
Borrowings from related party note payable | 135,000 | 373,079 | |
Repayment to related party convertible note payable | (137,500) | ||
Borrowings from convertible notes payable | 3,538,000 | ||
Net cash provided by financing activities | 3,535,500 | 373,079 | |
Net increase in cash and cash equivalents | 1,900,473 | (42,000) | |
Cash and cash equivalents at beginning of period | 37,774 | ||
Cash and cash equivalents at end of period | 1,938,247 | (42,000) | $ (42,000) |
Supplemental disclosure of cash flow information | |||
Cash paid during the period for: Interest | |||
Cash paid during the period for: Income taxes | |||
Supplemental disclosure of non-cash investing and financing Activities: | |||
Shares issued for conversion from convertible note payable | 13,000 | ||
Shares issued to settle accounts payable | $ 148,510 |
Organization and Operations
Organization and Operations | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | NOTE 1 - ORGANIZATION AND OPERATIONS Clubhouse Media Group, Inc. (formerly known as Tongji Healthcare Group, Inc. or the “Company”) was incorporated under the laws of the State of Nevada on December 19, 2006 by Nanning Tongji Hospital, Inc. (“NTH”). On December 20, 2006, Tongji, Inc., a wholly owned subsidiary of the Company, was incorporated in the State of Colorado. Tongji, Inc. was later dissolved on March 25, 2011. NTH was established in Nanning in the province of Guangxi of the People’s Republic of China (“PRC” or “China”) by Nanning Tongji Medical Co. Ltd. and an individual on October 30, 2003. NTH is a designated hospital for medical insurance in the city of Nanning and Guangxi province. NTH specializes in the areas of internal medicine, surgery, gynecology, pediatrics, emergency medicine, ophthalmology, medical cosmetology, rehabilitation, dermatology, otolaryngology, traditional Chinese medicine, medical imaging, anesthesia, acupuncture, physical therapy, health examination, and prevention. On December 27, 2006, Tongji, Inc. acquired 100% of the equity in NTH pursuant to an Agreement and Plan of Merger, pursuant to which NTH became a wholly owned subsidiary of Tongji, Inc. Pursuant to the Agreement and Plan of Merger, the Company issued 15,652,557 shares of common stock to the stockholders of NTH in exchange for 100% of the issued and outstanding shares of common stock of NTH. The acquisition of NTH was accounted for as a reverse acquisition under the purchase method of accounting since the stockholders of NTH obtained control of the entity. Accordingly, the reorganization of the two companies was recorded as a recapitalization of NTH, with NTH being treated as the continuing operating entity. The Company, through NTH, thereafter operated the hospital until the Company eventually sold NTH, as described below. Effective December 31, 2017, under the terms of a Bill of Sale, the Company agreed to sell, transfer convey and assign forever all of its rights, title and interest in its equity ownership interest in NTH to Placer Petroleum Co., LLC. Pursuant to the Bill of Sale, consideration for this sale, transfer conveyance and assignment is Placer Petroleum Co., LLC assuming all assets and liabilities of NTH as of December 31, 2017. Thereafter, the Company had minimal operations. On May 20, 2019, pursuant to Case Number A-19-793075-P, Nevada’s 8th Judicial District, Business Court entered an Order Granting Application of Joseph Arcaro as Custodian of Tongji Healthcare Group, Inc. pursuant to Nevada Revised Statutes (“NRS”) 78.347(1)(b), pursuant to which Mr. Arcaro was appointed custodian of the Company and given authority to reinstate the Company with the State of Nevada under NRS 78.347. On May 23, 2019, Mr. Arcaro filed a Certificate of Reinstatement of the Company with the Secretary of State of the State of Nevada. In addition, on May 23, 2019, Mr. Arcaro filed an Annual List of the Company with the Secretary of State of the State of Nevada, designating himself as President, Secretary, Treasurer and Director of the Company for the filing period of 2017 to 2019. On May 29, 2020, Mr. Arcaro, through his ownership of Algonquin Partners Inc. (“Algonquin”), owner 65% of the Company’s common stock, entered into a Stock Purchase Agreement by and among West of Hudson Group, Inc. (“WOHG”), the Company, Algonquin, and Mr. Arcaro. The Stock Purchase Agreement, as subsequently amended, is referred to herein as the “SPA.” Pursuant to the terms of the SPA, WOHG agreed to purchase, and Algonquin agreed to sell, 30,000,000 shares of the Company’s common stock in exchange for payment by WOHG to Algonquin of $240,000 (the “Stock Purchase”). The Stock Purchase closed on June 18, 2020, resulting in a change of control of the Company. Mr. Arcaro resigned from any and all officer and director positions with the Company. On July 7, 2020, the Company increased the authorized capital stock of the Company to 550,000,000, comprised of 500,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001. West of Hudson Group, Inc. (“WOHG”) was incorporated in the State of Delaware on May 19, 2020 and owned 100% of WOH Brands, LLC (“WOH”), Oopsie Daisy Swimwear, LLC (“Oopsie”), and DAK Brands, LLC (“DAK”), which were incorporated in the State of Delaware on May 13, 2020. Doiyen LLC (“Doiyen”) was incorporated in the State of California on January 2, 2020 and renamed to Doiyen LLC in July 7, 2020 and 100% owned by WOHG. The Company is an entertainment company engaged in the sale of own brand products, e-commerce platform advertising, and promotion for other companies on their social media accounts. On November 12, 2020, the Company and WOHG entered into the Merger Agreement, and WOHG thereafter became a wholly owned subsidiary of the Company. WOHG was determined to be the accounting acquirer in the Merger based upon the terms of other factors, including: (1) the security holders owned approximately 50.54% of the Company’s issued and outstanding common stock as of immediately after the closing of the Merger. Following the completion of the Merger, the Company changed its name from Tongji Healthcare Group, Inc. to Clubhouse Media Group, Inc. The Merger was accounted for as a reverse-merger and recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). WOHG was the acquirer for financial reporting purposes and Clubhouse Media Group, Inc. was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger will be those of WOHG and will be recorded at the historical cost basis of WOHG. The unaudited consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and WOHG, historical operations of WOHG and operations of the Company from the closing date of the Merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger. This was a common control transactions so all amounts were based on historical cost and no goodwill was recorded. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation These unaudited consolidated financial statements have been prepared in accordance with GAAP and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The unaudited consolidated balance sheet as of December 31, 2020 was derived from the Company’s audited consolidated financial statements at that date. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 15, 2021, or the Annual Report. Interim results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. Principles of Consolidation The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. Use of Estimates In preparing the unaudited consolidated financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the unaudited consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, useful life of fixed assets, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates. Reverse Merger Accounting The Merger was accounted for as a reverse-merger and recapitalization in accordance with GAAP. WOHG was the acquirer for financial reporting purposes and Clubhouse Media Group, Inc. was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger will be those of WOHG and will be recorded at the historical cost basis of WOHG since its inception on January 2, 2020. The consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and WOHG, historical operations of WOHG since its inception on January 2, 2020 to the closing date of the merger, and operations of the Company from the closing date of the Merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger. In conjunction with the Merger, WOHG received no cash and assumed no liabilities from Clubhouse Media Group, Inc. All members of the Company’s executive management are from WOHG. Business Combination The Company applies the provisions of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, in accounting for its acquisitions. It requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed, at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the acquisition date fair values of the net assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the unaudited consolidated statements of operations. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are on deposit with financial institutions without any restrictions. Advertising Advertising costs are expensed when incurred and are included in selling, general, and administrative expense in the accompanying unaudited consolidated statements of operations. We incurred advertising expenses of $20,545 and $22,770 for the three months ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020, respectively. Accounts Receivable The Company’s accounts receivable arises from providing services. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if it expects to collect the receivables in one year or less from the time of sale. The Company does not expect to collect receivables greater than one year from the time of sale. The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Amounts determined to be uncollectible are charged or written-off against the reserve. As of March 31, 2021 and December 31, 2020, there were $0 and $0 for bad debt allowance for accounts receivable. Property and equipment, net Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of property, plant and equipment and are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows: Classification Useful Life Equipment 3 years Lease On January 2, 2020, the Company adopted ASC Topic 842, Leases, or ASC 842, using the modified retrospective transition method with a cumulative effect adjustment to accumulated deficit as of January 1, 2019, and accordingly, modified its policy on accounting for leases as stated below. As described under “Recently Adopted Accounting Pronouncements,” below, the primary impact of adopting ASC 842 for the Company was the recognition in the unaudited consolidated balance sheet of certain lease-related assets and liabilities for operating leases with terms longer than 12 months. The Company elected to use the short-term exception and does not records assets/liabilities for short term leases as of March 31, 2021 and December 31, 2020. The Company’s leases primarily consist of facility leases which are classified as operating leases. The Company assesses whether an arrangement contains a lease at inception. The Company recognizes a lease liability to make contractual payments under all leases with terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease term. The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate since the implicit rate is unknown. Options to extend or terminate a lease are included in the lease term when it is reasonably certain that the Company will exercise such an option. The right-of-use asset is initially measured as the contractual lease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives. Lease expense is recognized on a straight-line basis over the lease term. Leased right-of-use assets are subject to impairment testing as a long-lived asset at the asset-group level. The Company monitors its long-lived assets for indicators of impairment. As the Company's leased right-of-use assets primarily relate to facility leases, early abandonment of all or part of facility as part of a restructuring plan is typically an indicator of impairment. If impairment indicators are present, the Company tests whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income, and if not recoverable, measures impairment loss for the right-of-use asset or asset group. Revenue Recognition In May 2014 the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards). Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. The Company recognized revenue from providing temporary and permanent staffing solutions and sale of consumer products. The Company generates revenue from its managed services when a marketer (typically a brand, agency or partner) pays the Company to provide custom content, influencer marketing, amplification or other campaign management services (“Managed Services”) The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. The agreement typically provides for either a non-refundable deposit, or a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectibility based on a number of factors, including the creditworthiness of the customer and payment and transaction history. For Managed Services Revenue, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide influencer marketing services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase influencer marketing services for the purpose of providing public awareness or advertising buzz regarding the marketer’s brand and they purchase custom content for internal and external use. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that generally ranges from one day to one year. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that is satisfied at the time the customer receives the benefits from the services. Based on the Company’s evaluations, revenue from Managed Services is reported on a gross basis because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. The contract liabilities as of March 31, 2021 and December 31, 2020 were $83,420 and $73,848, respectively. Goodwill Impairment We test goodwill at least annually for impairment at the reporting unit level. We recognize an impairment charge if the carrying amount of a reporting unit exceeds its fair value. When a portion of a reporting unit is disposed, goodwill is allocated to the gain or loss on disposition based on the relative fair values of the business or businesses disposed and the portion of the reporting unit that will be retained. For other intangible assets that are not deemed indefinite-lived, cost is generally amortized on a straight-line basis over the asset’s estimated economic life, except for individually significant customer-related intangible assets that are amortized in relation to total related sales. Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to estimated fair value based on either discounted cash flows or appraised values. Impairment of Long-Lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of and for the three months ended March 31, 2021 and December 31, 2020, there were no impairment loss of its long-lived assets. Income Taxes The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized. The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying unaudited consolidated statements of operations and comprehensive income (loss) as income tax expense. The Company has not completed a full fiscal year, post-recapitalization and has not filed an income tax return and incurred net operating losses from inception to December 31, 2020. The net operating losses that has future benefits will be recorded as $541,321 deferred tax assets, but net with 100% valuation allowance until the Company expected to realize this deferred tax assets in the future. Fair Value of Financial Instruments The carrying value of cash, accounts receivable, other receivable, note receivable, other current assets, accounts payable, and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value. The Company utilizes the methods of fair value (“FV”) measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, FV is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in FV measurements, ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The FV hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The FV hierarchy gives the lowest priority to Level 3 inputs. The Company used Level 3 inputs for its valuation methodology for the derivative liabilities for conversion feature of the convertible notes in determining the fair value the weighted-average Binomial option pricing model following assumption inputs. The fair value of derivative liability as of March 31, 2021 and December 31, 2020 were $254,957 and $304,490, respectively. Basic Income (Loss) Per Share Under the provisions of ASC 260, “Earnings per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. Potential common shares consist of the convertible promissory notes payable as of March 31, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, there were approximately 4,139,081 and 127,922 potential shares issuable upon conversion of convertible notes payable. The table below presents the computation of basic and diluted earnings per share for the three month ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020: For the three months ended March 31, 2021 For the period from January 2, 2020 (inception) to March 31, 2020 Numerator: Net loss $ (5,798,578 ) $ (227,079 ) Denominator: Weighted average common shares outstanding—basic 93,330,191 92,623,286 Dilutive common stock equivalents - - Weighted average common shares outstanding—diluted 93,330,191 92,623,386 Net loss per share: Basic $ (0.06 ) $ (0.00 ) Diluted $ (0.06 ) $ (0.00 ) Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts receivable. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. Stock based Compensation Stock based compensation cost to employees is measured at the date of grant, based on the calculated fair value of the stock-based award, and will be recognized as expense over the employee’s requisite service period (generally the vesting period of the award). Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. Derivative instruments The fair value of derivative instruments is recorded and shown separately under liabilities. Changes in the fair value of derivatives liability are recorded in the unaudited consolidated statement of operations under other (income) expense. Our Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives under ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited consolidated statements of operations. For stock-based derivative financial instruments, the Company uses binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Beneficial Conversion Features If a conversion features did not meet the definition of derivative liability under ASC 815, the Company evaluates the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note. If the effective conversion price was less than the market value of underlying common stock at the inception of the convertible promissory note, the Company recorded the difference as debt discounts and amortized over the life of the notes using the effective interest method. The Company amortized $495,936 and $0 of the discount on the convertible notes payable to interest expense for the three months ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020, respectively. Related Parties The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825– 10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable a material loss was incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including those interim periods within those fiscal years. We did not expect the adoption of this guidance have a material impact on its unaudited consolidated financial statements. On October 1, 2020, we early adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance was effective beginning January 1, 2021, with early adoption permitted. The adoption of this new standard did not have a material impact on our unaudited consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. The Company is currently evaluating the timing, method of adoption and overall impact of this standard on its consolidated financial statements. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Going Concern | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company had a net loss of $5,798,578 for the three months ended March 31, 2021, negative working capital as of March 31, 2021, and stockholder’s deficit of $8,456,996. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | NOTE 4 – BUSINESS COMBINATIONS Acquisition of Magiclytics On February 3, 2021, the Company entered into an Amended and Restated Share Exchange Agreement (the “A&R Share Exchange Agreement”) by and between the Company, Digital Influence Inc., a Wyoming corporation doing business as Magiclytics (“Magiclytics”), each of the shareholders of Magiclytics (the “Magiclytics Shareholders”) and Christian Young, as the representative of the Magiclytics Shareholders (the “Shareholders’ Representative”). Christian Young is the President, Secretary, and a Director of the Company, and is also an officer, director, and significant shareholder of Magiclytics. The A&R Share Exchange Agreement amended and restated in its entirety the previous Share Exchange Agreement between the same parties, which was executed on December 3, 2020. The A&R Share Exchange Agreement replaces the Share Exchange Agreement in its entirety. On February 3, 2021 (the “Magiclytics Closing Date”), the parties closed on the transactions contemplated in the A&R Share Exchange Agreement, and the Company agreed to issue 734,689 shares of Company common stock to the Magiclytics Shareholders in exchange for all 5,000 Magiclytics Shares (the “Magiclytics Closing”). On February 3, 2021, pursuant to the closing of the Share Exchange Agreement, we acquired Magiclytics, and Magiclytics thereafter became our wholly owned subsidiary. At the Magiclytics Closing, we agreed to issue to Christian Young and Wilfred Man each 330,610 shares of Company Common Stock, representing 45% each, or 90% in total of the Company common stock which we agreed to issue to the Magiclytics Shareholders at the Magiclytics Closing. The number of shares of the Company common stock issued at the Magiclytics Closing was based on the fair market value of the Company common stock as initially agreed to by the parties, which is $4.76 per share (the “Base Value”). The fair market value was determined based on the volume weighted average closing price of the Company common stock for the twenty (20) trading day period immediately prior to the Magiclytics,. In the event that the initial public offering price per share of the Company common stock in this Offering pursuant to Regulation A is less than the Base Value, then within three (3) business days of the qualification by the SEC of the Offering Statement forming part of this offering circular, the Company will issue to the Magiclytics Shareholders a number of additional shares of Company common stock equal to: (1) $3,500,000 divided by the initial public offering price per share of the Company common stock in this Offering pursuant to Regulation A, minus; (2) 734,689 The resulting number of shares of the Company common stock pursuant to the above calculation will be referred to as the “Additional Shares”, and such Additional Shares will also be issued to the Magiclytics Shareholders pro rata based on their respective ownership of Magiclytics Shares. In addition to the exchange of shares between the Magiclytics Shareholders and the Company described above, on the Magiclytics Closing Date the parties took a number of other actions in connection with the Magiclytics Closing pursuant to the terms of the A&R Share Exchange Agreement: (i) The Board of Directors of Magiclytics (the “Magiclytics Board”) expanded the size of the Magiclytics Board to 3 persons and named Simon Yu, a current officer and director of the Company as a director of the Magiclytics Board. (ii) The Magiclytics Board named Wilfred Man as the Chief Executive Officer of Magiclytics, Christian Young as the President and Secretary of the Magiclytics and Simon Yu as the Chief Operating Officer of Magiclytics. Further, immediately following the Magiclytics Closing, the Company assumed responsibility for all outstanding accounts payables and operating costs to continue operations of Magiclytics including but not limited to payment to any of its vendors, lenders, or other parties in which Magiclytics engages with in the regular course of its business. In connection with the closing, the Company entered in a consulting agreement with Christian Young, a Director of the Company. The compensation will be paid according to the 8-K filed on February 8, 2021 with the SEC. Immediately prior to closing of the Agreement, Chris Young is the President and Director of the Company, and was the Chief Executive Officer, a Director, and a principal shareholder of 45% of outstanding capital stock of Magiclytics at the time of the share exchange. As a result of the common ownership upon closing of the transaction, the acquisition was considered a common-control transaction and was outside the scope of the business combination guidance in ASC 805-10. The entities are deemed to be under common control as of February 27, 2018, which was the date that the majority shareholder acquired control of the Company and, therefore, held control over both companies. The Company recorded the consideration issued to purchase Magiclytics based on the carrying value of the net assets received and $97,761 related party payables assumed per the acquisition agreement as of February 3, 2021 of $ (60,697). The financial statements as of March 31, 2021 were adjusted as if the acquisition happened at the beginning of the year as of January 1, 2021. Acquisition Consideration The following table summarizes the carrying value of purchase price consideration to acquire Magiclytics: Description Amount Carrying value of purchase consideration: Common stock issued $ (60,697 ) Total purchase price $ (60,697 ) Purchase Price Allocation The following is an allocation of purchase price as of the February 3, 2021 acquisition closing date based upon an estimate of the carrying value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands): Description Amount Purchase price allocation: Cash $ 76 Intangibles 77,889 Related party payable (97,761 ) AP and accrued liabilities (40,901 ) Identifiable net assets acquired (60,697 ) Total purchase price $ (60,697 ) |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 – PROPERTY AND EQUIPMENT Fixed assets, net consisted of the following: March 31, 2021 December 31, 2020 Estimated Useful Life (unaudited) Equipment $ 84,956 $ 79,737 3 years Property, plant, and equipment, gross 84,956 79,737 Less: accumulated depreciation and amortization (21,880 ) (14,945) Property, plant, and equipment, net $ 63,076 $ 64,792 Depreciation expense were $6,935 and $0 for the three months ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020, respectively. |
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2021 | |
Intangible Assets, Net (Including Goodwill) [Abstract] | |
Intangibles | NOTE 6 – INTANGIBLES As of March 31, 2021 and December 31, 2020, the Company has intangible assets of $79,653 and $0 from the acquisition of Magiclytics in February 2021. It is a platform that internally developed for revenue prediction from influencer collaboration. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2021 | |
Other Assets [Abstract] | |
Other Assets | NOTE 7 – OTHER ASSETS As of March 31, 2021 and December 31, 2020, other assets consist of security deposit of $266,000 and $219,000 for operating leases, respectively. |
Convertible Notes payable
Convertible Notes payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Notes payable | NOTE 8 – CONVERTIBLE NOTES PAYABLE Convertible Promissory Note – Scott Hoey On September 10, 2020, the Company entered into a note purchase agreement with Scott Hoey, pursuant to which, on same date, the Company issued a convertible promissory note to Mr. Hoey the aggregate principal amount of $7,500 for a purchase price of $7,500 (“Hoey Note”). The Hoey Note had a maturity date of September 10, 2022 and bore interest at 8% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Hoey Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. Mr. Hoey had the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of 50% of the volume weighted average of the closing price (“VWAP”) during the 20-trading day period immediately prior to the option conversion date, subject to customary adjustments for stock splits, etc. occurring after the issuance date. On December 8, 2020, the Company issued to Mr. Hoey 10,833 shares of Company common stock upon the conversion of the $7,500 convertible promissory note issued to Mr. Hoey at a conversion price of $0.69 per share. Since the conversion price is based on 50% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10. Convertible Promissory Note – Cary Niu On September 18, 2020, the Company entered into a note purchase agreement with Cary Niu, pursuant to which, on same date, the Company issued a convertible promissory note to Ms. Niu the aggregate principal amount of $50,000 for a purchase price of $50,000 (“Niu Note”). The Niu Note has a maturity date of September 18, 2022 and bears interest at 8% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Niu Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. Ms. Niu will have the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of 30% of the volume weighted average of the closing price during the 20-trading day period immediately prior to the option conversion date, subject to customary adjustments for stock splits, etc. occurring after the issuance date. Since the conversion price is based on 30% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10. Convertible Promissory Note – Jesus Galen On October 6, 2020, the Company entered into a note purchase agreement with Jesus Galen, pursuant to which, on same date, the Company issued a convertible promissory note to Mr. Galen the aggregate principal amount of $30,000 for a purchase price of $30,000 (“Galen Note”). The Galen Note has a maturity date of October 6, 2022 and bears interest at 8% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Galen Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. Mr. Galen will have the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of 50% of the volume weighted average of the closing price during the 20-trading day period immediately prior to the option conversion date, subject to customary adjustments for stock splits, etc. occurring after the issuance date. Since the conversion price is based on 50% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10. Convertible Promissory Note – Darren Huynh On October 6, 2020, the Company entered into a note purchase agreement with Darren Huynh, pursuant to which, on same date, the Company issued a convertible promissory note to Mr. Huynh the aggregate principal amount of $50,000 for a purchase price of $50,000 (“Huynh Note”). The Huynh Note has a maturity date of October 6, 2022, and bears interest at 8% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Huynh Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. Mr. Huynh will have the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of 50% of the volume weighted average of the closing price during the 20-trading day period immediately prior to the option conversion date, subject to customary adjustments for stock splits, etc. occurring after the issuance date. Since the conversion price is based on 50% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10. Convertible Promissory Note – Wayne Wong On October 6, 2020, the Company entered into a note purchase agreement with Wayne Wong, pursuant to which, on same date, the Company issued a convertible promissory note to Mr. Wong the aggregate principal amount of $25,000 for a purchase price of $25,000 (“Wong Note”). The Wong Note has a maturity date of October 6, 2022, and bears interest at 8% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Wong Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. Mr. Wong will have the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of 50% of the volume weighted average of the closing price during the 20-trading day period immediately prior to the option conversion date, subject to customary adjustments for stock splits, etc. occurring after the issuance date. Since the conversion price is based on 50% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10. Convertible Promissory Note – Matthew Singer On January 3, 2021, the Company entered into a note purchase agreement with Matthew Singer, pursuant to which, on same date, the Company issued a convertible promissory note to Mr. Singer the aggregate principal amount of $13,000 for a purchase price of $13,000 (“Singer Note”). The Singer Note had a maturity date of January 3, 2023, and bore interest at 8% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Singer Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. Mr. Singer had the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of 70% of the volume weighted average of the closing price during the 20-trading day period immediately prior to the option conversion date, subject to customary adjustments for stock splits, etc. occurring after the issuance date. On January 26, 2021, the Company issued to Matthew Singer 8,197 shares of Company common stock upon the conversion of the convertible promissory note issued to Mr. Singer in the principal amount of $13,000 on January 3, 2021 at a conversion price of $1.59 per share. Since the conversion price is based on 70% of the VWAP during the 20-trading day period immediately prior to the option conversion date, the Company has determined that the conversion feature is considered a derivative liability for the Company, which is detailed in Note 10. Convertible Promissory Note – ProActive Capital SPV I, LLC On January 20, 2021, the Company entered into a securities purchase agreement (the “ProActive Capital SPA”) with ProActive Capital SPV I, LLC, a Delaware limited liability company (“ProActive Capital”), pursuant to which, on same date, the Company (i) issued a convertible promissory note to ProActive Capital the aggregate principal amount of $250,000 for a purchase price of $225,000, reflecting a $25,000 original issue discount (the “ProActive Capital Note”), and in connection therewith, sold to ProActive Capital 50,000 shares of Company Common Stock at a purchase price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed ProActive Capital the sum of $10,000 for ProActive Capital’s costs in completing the transaction, which amount ProActive Capital withheld from the total purchase price paid to the Company. The ProActive Capital Note has a maturity date of January 20, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the ProActive Capital Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The ProActive Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at ProActive Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Regulation A Offering, at a conversion price equal to 70% of the Regulation A Offering Price of the Company Common Stock in the Regulation A Offering, and is subject to a customary beneficial ownership limitation of 9.99%, which may be waived by ProActive Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. The $25,000 original issue discounts, the fair value of 50,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $217,024. Convertible Promissory Note – GS Capital Partners #1 On January 25, 2021, the Company entered into a securities purchase agreement (the “GS Capital #1”) with GS Capital Partners, LLC (“GS Capital”), pursuant to which, on same date, the Company (i) issued a convertible promissory note to GS Capital the aggregate principal amount of $288,889 for a purchase price of $260,000, reflecting a $28,889 original issue discount (the “GS Capital Note”), and in connection therewith, sold to GS Capital 50,000 shares of Company Common Stock at a purchase price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company. The GS Capital Note has a maturity date of January 25, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Regulation A Offering, at a conversion price equal to 70% of the Regulation A Offering Price of the Company Common Stock in the Regulation A Offering, and is subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. The $28,889 original issue discounts, the fair value of 50,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $288,889. Convertible Promissory Note – GS Capital Partners #2 On February 19, 2021, the Company entered into another securities purchase agreement with GS Capital (the “GS Capital #2”), pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital the aggregate principal amount of $577,778 for a purchase price of $520,000, reflecting a $57,778 original issue discount, and in connection therewith, sold to GS Capital 100,000 shares of Company’s common stock, par value $0.001 per share at a purchase price of $100, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company. The GS Capital Note has a maturity date of February 19, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the “Regulation A Offering”). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. The $57,778 original issue discounts, the fair value of 100,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $577,778. Convertible Promissory Note – GS Capital Partners #3 On March 16, 2021, the Company entered into another securities purchase agreement with GS Capital (the “GS Capital #3”), pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital the aggregate principal amount of $577,778 for a purchase price of $520,000, reflecting a $57,778 original issue discount, and in connection therewith, sold to GS Capital 100,000 shares of Company’s common stock, par value $0.001 per share at a purchase price of $100, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company. The GS Capital Note has a maturity date of March 22, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the “Regulation A Offering”). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. The $57,778 original issue discounts, the fair value of 100,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $577,778. Convertible Promissory Note – Tiger Trout Capital Puerto Rico On January 29, 2021, the Company entered into a securities purchase agreement (the “Tiger Trout SPA”) with Tiger Trout Capital Puerto Rico, LLC, a Puerto Rico limited liability company (“Tiger Trout”), pursuant to which, on same, date, the Company (i) issued a convertible promissory note in the aggregate principal amount of $1,540,000 for a purchase price of $1,100,000, reflecting a $440,000 original issue discount (the “Tiger Trout Note”), and (ii) sold to Tiger Trout 220,000 shares Company common stock for a purchase price of $220.00. The Tiger Trout Note has a maturity date of January 29, 2022, and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the Tiger Trout Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty, provided however, that if the Company does not pay the principal amount and any accrued and unpaid interest by July 2, 2021, an additional $50,000 is required to be paid to Tiger Trout at the time the Tiger Trout Note is repaid, if the Company repays the Tiger Trout Note prior to its maturity date. If the principal amount and any accrued and unpaid interest under the Tiger Trout Note has not been repaid on or before the maturity date, that will be an event of default under the Tiger Trout Note. If an event of default has occurred and is continuing, Tiger Trout may declare all or any portion of the then-outstanding principal amount and any accrued and unpaid interest under the Tiger Trout Note (the “Indebtedness”) due and payable, and the Indebtedness will become immediately due and payable in cash by the Company. Further, Tiger Trout will have the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of $0.50 per share, subject to customary adjustments for stock splits, etc. occurring after the issuance date. The Tiger Trout Note contains a customary beneficial ownership limitation of 9.99%, which may be waived by Tiger Trout on 61 days’ notice to the Company. The $440,000 original issue discounts, the fair value of 220,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $1,540,000. Convertible Promissory Note – Amir Ben-Yohanan On February 2, 2021, the Company and Amir Ben-Yohanan, its Chief Executive Officer, entered into a promissory note in the total principal amount of $2,400,000 (the “Amir 2021 Note”) to replace the Amir 2020 note. The Note memorializes a $2,400,000 loan that Mr. Ben-Yohanan previously advanced to the Company and its subsidiaries to fund their operations. The Note bears simple interest at a rate of eight percent (8%) per annum, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest of the Note at any time without penalty. At the time of the qualification by the SEC of the Company’s Offering Circular, pursuant to Regulation A under the Securities Act of 1933, as amended, $1,000,000 of the Indebtedness shall, automatically and without any further action of the Company or the Holder, be converted into a number of restricted fully paid and non-assessable shares of shares of common stock, par value $0.001 per share, of the Company equal to (i) $1,000,000 divided by (ii) the price per share of the Common Stock as offered in the Offering Circular. The Amir 2021 Note added a substantial new conversion features as compare to the Amir 2020 note, therefore, the issuance of a new debt instrument and satisfaction of an existing debt instrument by the debtor should be accounted for as debt extinguishment if the debt instruments have substantially different terms . Convertible Promissory Note – Labrys Fund, LP On March 11, 2021, the Company entered into a securities purchase agreement (the “Labrys SPA”) with Labrys Fund, LP (“Labrys”), pursuant to which the Company issued a 10% promissory note (the “Labrys Note”) with a maturity date of March 11, 2022 (the “Labrys Maturity Date”), in the principal sum of $1,000,000. In addition, the Company issued 125,000 shares of its common stock to Labrys as a commitment fee pursuant to the Labrys SPA. Pursuant to the terms of the Labrys Note, the Company agreed to pay to $1,000,000 (the “Principal Sum”) to Labrys and to pay interest on the principal balance at the rate of 10% per annum. The Labrys Note carries an original issue discount (“OID”) of $100,000. Accordingly, on the Closing Date (as defined in the Labrys SPA), Labrys paid the purchase price of $900,000 in exchange for the Labrys Note. Labrys may convert the Labrys Note into the Company’s common stock (subject to the beneficial ownership limitations of 4.99% in the Labrys Note) at any time at a conversion price equal to $10.00 per share. The Company may prepay the Labrys Note at any time prior to the date that an Event of Default (as defined in the Labrys Note) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750.00 for administrative fees. The Labrys Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Labrys Note or Labrys SPA. Upon the occurrence of any Event of Default, the Labrys Note shall become immediately due and payable and the Company shall pay to Labrys, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the “Default Amount”). Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law. The $100,000 original issue discounts, the fair value of 125,000 shares issued, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note. Therefore, the total debt discounts at the inception date of this convertible promissory note were $1,000,000. Convertible Promissory Note Holder Start Date End Date Note Debt Discounts As of Issuance Amortization Debt Discounts As of 3/31/2021 Scott Hoey 9/10/2020 9/10/2022 - 7,500 (7,500 ) - Cary Niu 9/18/2020 9/18/2022 50,000 50,000 (13,288 ) 36,712 Jesus Galen 10/6/2020 10/6/2022 30,000 30,000 (7,233 ) 22,767 Darren Huynh 10/6/2020 10/6/2022 50,000 50,000 (12,055 ) 37,945 Wayne Wong 10/6/2020 10/6/2022 25,000 25,000 (6,027 ) 18,973 Matt Singer 1/3/2021 1/3/2023 13,000 13,000 (13,000 ) - ProActive Capital 1/20/2021 1/20/2022 250,000 217,024 (41,621 ) 175,403 GS Capital #1 1/25/2021 1/25/2022 288,889 288,889 (51,446 ) 237,443 Tiger Trout SPA 1/29/2021 1/29/2022 1,540,000 1,540,000 (257,370 ) 1,282,630 GS Capital #2 2/16/2021 2/16/2022 577,778 577,778 (63,318 ) 514,460 Labrys Fund, LLP 3/11/2021 3/11/2022 1,000,000 1,000,000 (54,795 ) 945,205 GS Capital #3 3/16/2021 3/16/2022 577,778 577,778 (23,744 ) 554,034 Total Total 3,825,572 Add: Remaining note principal balance 4,389,445 Total convertible promissory notes, net 563,873 Future maturities of convertible notes payable at March 31, 2021 are as follows: Years ending December 31, 2021 $ - 2022 4,389,445 2023 – 2024 – 2025 - Thereafter – $ 4,389,445 |
Shares to be Issued - Liability
Shares to be Issued - Liability | 3 Months Ended |
Mar. 31, 2021 | |
Shares To Be Issued - Liability | |
Shares to be Issued - Liability | NOTE 9 – SHARES TO BE ISSUED - LIABILITY As of March 31, 2021 and December 31, 2020, the Company entered into various consulting agreements with consultants, directors, and terms of future financing from Labrys. The balances of shares to be issued – liability were $951,105 and $87,029 and has not been issued as of March 31, 2021 and December 31, 2020. The Company recorded these consultant and director shares under liability based on the shares will be issued at a fixed monetary amount known at inception under ASC 480. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Liability [Abstract] | |
Derivative Liability | NOTE 10 – DERIVATIVE LIABILITY The derivative liability is derived from the conversion features in note 8 signed for the period ended December 31, 2020. All were valued using the weighted-average Binomial option pricing model using the assumptions detailed below. As of March 31, 2021 and December 31, 2020, the derivative liability were $254,957 and $304,490, respectively. The Company recorded $49,533 and $0 loss from gain (loss) in derivative liability during the three months ended March 31, 2021 and 2020, respectively. The Binomial model with the following assumption inputs: March 31, 2021 Annual Dividend Yield — Expected Life (Years) 1.4 – 1.5 years Risk-Free Interest Rate 0.16 % Expected Volatility 306 - 311 % Fair value of the derivative is summarized as below: Beginning Balance, December 31, 2020 $ 304,490 Additions - Mark to Market (49,533 ) Cancellation of Derivative Liabilities Due to Conversions - Reclassification to APIC Due to Conversions - Ending Balance, March 31, 2021 $ 254,957 December 31, 2020 Annual Dividend Yield — Expected Life (Years) 1.6 – 2.0 years Risk-Free Interest Rate 0.13 – 0.17 % Expected Volatility 318 - 485 % Fair value of the derivative is summarized as below: Beginning Balance, December 31, 2019 $ - Additions 270,501 Mark to Market 61,029 Cancellation of Derivative Liabilities Due to Conversions - Reclassification to APIC Due to Conversions (27,040 ) Ending Balance, December 31, 2020 $ 304,490 |
Note Payable, Related Party
Note Payable, Related Party | 3 Months Ended |
Mar. 31, 2021 | |
Due to Related Parties [Abstract] | |
Note Payable, Related Party | NOTE 11 – NOTE PAYABLE, RELATED PARTY For the period ended December 31, 2020, the Company signed a note payable agreement (“Amir 2020 note”) with the Company’s Chief Executive Officer for advances up to $5,000,000 at 0% interest rate. The entire balance has to be paid back on or before January 31, 2023. As of December 31, the Company has a balance of $2,162,562 owed to the Chief Executive Officer of the Company. The note payable was subsequently amended on February 2, 2021. On February 2, 2021, the Company and Amir Ben-Yohanan, its Chief Executive Officer, entered into a promissory note in the total principal amount of $2,400,000 (the “Amir 2021 Note”) to replace the Amir 2020 note. The Note memorializes a $2,400,000 loan that Mr. Ben-Yohanan previously advanced to the Company and its subsidiaries to fund their operations. The Note bears simple interest at a rate of eight percent (8%) per annum, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest of the Note at any time without penalty. At the time of the qualification by the SEC of the Company’s Offering Circular, pursuant to Regulation A under the Securities Act of 1933, as amended, $1,000,000 of the Indebtedness shall, automatically and without any further action of the Company or the Holder, be converted into a number of restricted fully paid and non-assessable shares of shares of common stock, par value $0.001 per share, of the Company equal to (i) $1,000,000 divided by (ii) the price per share of the Common Stock as offered in the Offering Circular. In accordance with ASC 470-50-40-10 a modification or an exchange of debt that adds or eliminates a substantive conversion option as of the conversion date would always be considered substantial and require extinguishment accounting. We concluded the conversion features of the Amir 2021 note is substantial. As a result, we recorded a loss on the extinguishment of debt in the amount of $297,138 in our consolidated statements of operations and credit as premium on the note payable to the related party. The premium will be amortized over the life of the loan which is expired on February 2, 2024. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 – RELATED PARTY TRANSACTIONS As of December 31, 2020, the Company’s Chief Executive Officer had advanced $2,162,562 to the Company for payment of the Company’s operating expenses. The Company recorded $87,213 as imputed interest and recorded as additional paid in capital for the year ended December 31, 2020 from the loan advanced by the Company’s Chief Executive Officer. On February 2, 2021, the Company and Amir Ben-Yohanan, its Chief Executive Officer, entered into a promissory note in the total principal amount of $2,400,000 (the “Amir 2021 Note”) to replace the Amir 2020 note. The Note memorializes a $2,400,000 loan that Mr. Ben-Yohanan previously advanced to the Company and its subsidiaries to fund their operations. The Note bears simple interest at a rate of eight percent (8%) per annum, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest of the Note at any time without penalty. The Note bears simple interest at a rate of eight percent (8%) per annum, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest of the Note at any time without penalty. At the time of the qualification by the SEC of the Company’s Offering Circular, pursuant to Regulation A under the Securities Act of 1933, as amended, $1,000,000 of the Indebtedness shall, automatically and without any further action of the Company or the Holder, be converted into a number of restricted fully paid and non-assessable shares of shares of common stock, par value $0.001 per share, of the Company equal to (i) $1,000,000 divided by (ii) the price per share of the Common Stock as offered in the Offering Circular. For the three months ended March 31, 2021, the Board of Directors approved and paid $285,000 cash bonuses to Amir Ben-Yohanan, Chris Young, and Simon Yu. For the three months ended March 31, 2021, the Company’s Chief Executive Officer advanced an additional $135,000 to the Company to pay the Company’s operating expenses. Effective March 4, 2021, the Company entered into three (3) separate director agreements with three Amir Ben-Yohanan, Christopher Young, and Simon Yu. The Director Agreements set out terms and conditions of each of Mr. Ben-Yohanan’s, Mr. Young’s, and Mr. Yu’s role as a director of the Company. Pursuant to the Director Agreements, the Company agreed to compensate each of the Directors as follows: ● An issuance of 31,821 shares of the Company’s common stock, par value par value $0.001 (“Common Stock”), to be issued on the Effective Date, as compensation for services provided by each of the Directors to the Company prior to the Effective Date; and ● An issuance of a number of shares of Common Stock having a fair market value (as defined in each of the Director Agreements) of $25,000 at the end of each calendar quarter that the Director serves as a director. As of March 31, 2021 and December 31, 2020, the Company has a payable balance owed to Christian Young of $0 and $23,685. As of March 31, 2021 and December 31, 2020, the Company has a payable balance owed to the original Magiclytics shareholders of $97,761 and $0 from the acquisition of Magiclytics on February 3, 2021. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholder's equity: | |
Stockholders' Equity (Deficit) | NOTE 13 – STOCKHOLDERS’ EQUITY (DEFICIT) On July 7, 2020, the Company increased the authorized capital stock of the Company to 550,000,000, comprised of 500,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001. Preferred Stock As of March 31, 2021 and December 31, 2020, there were no preferred shares issued and outstanding. Common Stock As of March 31, 2021 and December 31, 2020, the Company had 50,000,000 shares of common stock authorized with a par value of $0.001. There were 94,302,795 and 92,682,632 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively. For the three months ended March 31, 2021, the Company issued 207,817 shares to consultants and directors at fair value of $2,113,188. For the three months ended March 31, 2021, the Company issued 734,689 shares to acquire Magiclytics, For the three months ended March 31, 2021, the Company issued 8,197 shares to settle a conversion of $13,000 convertible promissory note. For the three months ended March 31, 2021, the Company issued 24,460 shares to settle an accounts payable balance of $148,510. For the three months ended March 31, 2021, the Company issued 645,000 shares as debt issuance costs for convertible notes payable at fair value of $3,441,400. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14 – COMMITMENTS AND CONTINGENCIES On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”), and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The Company’s suppliers may decrease production levels based on factory closures and reduced operating hours in those facilities. Likewise, the Company is dependent on its workforce to deliver its products. Developments such as social distancing and shelter-in-place directives may impact the Company’s ability to deploy its workforce effectively. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. The Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time. If the pandemic continues, it may have a material effect on the Company’s results of future operations, financial position, and liquidity in the next 12 months. On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the SBA Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. The Company did not obtain CARES Act relief financing under the Paycheck Protection Program (“PPP Loans”) for each of its operating subsidiaries. The Company continues to examine the impact that the CARES Act may have on our business. Currently, management is unable to determine the total impact that the CARES Act will have on our financial condition, results of operations, or liquidity. The Company has four short term leases in the United States and two month to month leases in Europe as of March 31, 2021. All short-term leases will be expired in 2021. The total monthly rent expense is approximately $180,000. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15 – SUBSEQUENT EVENTS The Company has evaluated events subsequent to March 31, 2021, to assess the need for potential recognition or disclosure in the unaudited consolidated financial statements. Such events were evaluated through May 17, 2021, the date and time the unaudited consolidated financial statements were issued, and it was determined that no subsequent events, except as follows, occurred that required recognition or disclosure in the unaudited consolidated financial statements. Convertible Promissory Note – GS Capital Partners #4 On April 1, 2021, the Company entered into another securities purchase agreement with GS Capital (the “GS Capital #4”), pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital the aggregate principal amount of $550,000 for a purchase price of $500,000, reflecting a $50,000 original issue discount, and in connection therewith, sold to GS Capital 45,000 shares of Company’s common stock, par value $0.001 per share at a purchase price of $45, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $10,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company. The GS Capital Note has a maturity date of April 1, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the GS Capital Note, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the “Regulation A Offering”). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. The $50,000 original issue discounts, 45,000 shares issued at fair value of $437,400, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note, but since the total debt discounts cannot exceed the note principal balance of $550,000, the total debt discount at the inception date of this convertible promissory note were recorded at $550,000. Convertible Promissory Note – Eagle Equities LLC On April 13, 2021, the Company entered into a securities purchase agreement (the “Eagle SPA”) with Eagle Equities LLC (“Eagle Equities”), pursuant to which, on same date, the Company issued a convertible promissory note to Eagle Equities in the aggregate principal amount of $1,100,000 for a purchase price of $1,000,000.00, reflecting a $100,000 original issue discount (the “Eagle Equities Note”), and, in connection therewith, sold to Eagle Equities 165,000 shares of Company’s common stock, par value of $0.001 per share (the “Company Common Stock”) at a purchase price of $165.00, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed Eagle Equities the sum of $10,000 for Eagle Equities’ costs in completing the transaction, which amount Eagle Equities withheld from the total purchase price paid to the Company. The Eagle Equities Note has a maturity date of April 13, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than upon the circumstances set forth in the Eagle Equities Note – specifically, if (i) the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended; and (ii) the Company receives $3,5000,000 in net proceeds from such Regulation A Offering, then Company must repay the principal amount and any accrued and unpaid interest on the Eagle Equities Note within three (3) business days from the date of such occurrence. The Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The Eagle Equities Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at Eagle Equities’ election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended. At such time, the Eagle Equities Note (and the principal amount and any accrued and unpaid interest) will be convertible in restricted shares of Company Common Stock at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by Eagle Equities on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. Alternatively, if the SEC has not qualified the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933 by October 10, 2021, and Eagle Equities Note has not yet been fully repaid, then Eagle Equities will have the right to convert the Eagle Equities Note (and the principal amount and any accrued and unpaid interest) into restricted shares of Company Common Stock at a conversion price of $6.50 per share (subject to customary adjustments for any stock splits, etc. which occur following the April 13, 2021). Convertible Promissory Note – GS Capital Partners #5 On April 29, 2021, Clubhouse Media Group, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with GS Capital Partners, LLC (“GS Capital”), pursuant to which, on same date, the Company issued a convertible promissory note to GS Capital in the aggregate principal amount of $550,000 for a purchase price of $500,000, reflecting a $50,000 original issue discount (the “April 2021 GS Capital Note #2”) and, in connection therewith, sold to GS Capital 125,000 shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at a purchase price of $125, representing a per share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $5,000 for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid to the Company. The April 2021 GS Capital Note #2 has a maturity date of April 29, 2022 and bears interest at 10% per year. No payments of the principal amount or interest are due prior to the maturity date other than as specifically set forth in the April 2021 GS Capital Note #2, and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without penalty. The April 2021 GS Capital Note #2 (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at GS Capital’s election at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the “Regulation A Offering”). At such time, the April 2021 GS Capital Note #2 (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’ notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. Consulting Agreement On April 2, 2021, the Company entered into a Consulting Agreement by and between the Company and Andrew Omori. Pursuant to the terms of the Consulting Agreement, Mr. Omori agreed to (i) provide general corporate advice on strategic matters to the Company, and (ii) serve as an advisor to the Company’s Board of Directors. Among other things, Mr. Omori will not act as an investment advisor or broker/dealer, his services are not exclusive, he will not negotiate the sale of the Company’s securities, and Mr. Omori is not required to render any specific number of hours to the Company. In exchange for Mr. Omori’s services, at the end of each one-month period, the Company will issue to Mr. Omori a number of shares of the Company’s common stock equal to $30,000 divided by the VWAP as of the last day of such monthly period or the date of earlier termination or expiration of the Consulting Agreement, as applicable. The Consulting Agreement will continue for a period of one year from April 2, 2021, unless sooner terminated in accordance with the terms of the Consulting Agreement. The term of the Consulting Agreement may be renewed upon the mutual written agreement of the parties via an amendment to the Consulting Agreement. The Consulting Agreement may be terminated at any time by either party upon notice to the other party. Simon Yu Employment Agreement On April 9, 2021, the Company entered into an employment agreement with Simon Yu, its Chief Operating Officer. Pursuant to this employment agreement, Mr. Yu agreed to continue to serve as Chief Operating Officer of the Company, reporting to the Chief Executive Officer of the Company (or other person determined by the Chief Executive Officer or the Company’s Board of Directors (the “Board”). As compensation for Mr. Yu’s services, the Company agreed to pay Mr. Yu an annual base salary of $380,000 (the “Base Salary”) comprised of two parts a “Cash Portion”, and an “Optional Portion”. The Cash Portion is a monthly cash payment of $15,000 – or $180,000 on an annual basis. The remaining $200,000 per year – the Optional Portion – is payable as follows: (i) If the Company’s Board determines that the Company has sufficient cash on hand to pay all or a portion of the Optional Portion in cash, such amount shall be paid in cash. (i) If the Board determines that the Company does not have sufficient cash on hand to pay all of the Optional Portion in cash, then the portion of the Optional Portion which the Board determines that the Company has sufficient cash on hand to pay in cash will be paid in cash, and the remainder (the “Deferred Portion”) will either: a. be paid at a later date, when the Board determines that the Company has sufficient cash on hand to enable the Company to pay the Deferred Portion; or b. will not be paid in cash – and instead, the Company will issue shares of Company Common Stock equal to (A) the Deferred Portion, divided by (B) the VWAP (as defined in the employment agreement) as of the date of issuance of such shares of Company Common Stock. In addition, pursuant to the employment agreement, Mr. Yu is entitled to be paid discretionary annual bonuses as determined by the Board (currently intended to be a maximum of $250,000 per year), and is also entitled to receive fringe benefits, such as, but not limited to, reimbursement for reimbursement for all reasonable and necessary out-of-pocket business, entertainment and travel, vacation days, and certain insurances. The initial term of the employment agreement is one (1) year from the effective date of the agreement (i.e. April 9, 2022), unless earlier terminated. Thereafter, the term is automatically extended on an annual basis for terms of one (1) year each, unless either the Company or Mr. Yu provides notice to the other party of their desire to not so renew the term of the agreement (as applicable) at least thirty (30) days prior to the expiration of the then-current term. Mr. Yu’s employment with the Company shall be “at will,” meaning that either Mr. Yu or the Company may terminate Mr. Yu’s employment at any time and for any reason, subject to certain terms and conditions. The Company may terminate the employment agreement at any time, with or without “cause”, as defined in the employment agreement and Mr. Yu may terminate the employment agreement at any time, with or without “good reason”, as defined in the employment agreement. If the Company terminates the employment agreement for cause or Mr. Yu terminates the employment agreement without good reason, Mr. Yu will be entitled to be paid any unpaid salary owed or accrued, including the issuance of any shares of Company Common Stock owed or accrued (as compensation) as of the termination date. In the event that there was any Deferred Portion which had been agreed to be paid in cash, such Deferred Portion instead will be paid in shares of Company Common Stock as though such amount had been agreed to be paid via the issuance of shares of Company Common Stock. Mr. Yu will also be entitled to payment for any unreimbursed expenses as of the termination date. However, any unvested portion of any equity granted to Mr. Yu will be immediately forfeited as of the termination date. If the Company terminates the employment agreement without cause or Mr. Yu terminates the employment agreement with good reason, Mr. Yu will be entitled to receive the same compensation (unpaid accrued salary and unreimbursed expenses), and, in addition, will be entitled to receive, in one lump sum, the remainder of Mr. Yu’s annual salary that has not yet been paid as of the date of the termination – either in cash, or in shares of Company Common Stock. Further, any equity grant already made to Mr. Yu shall, to the extent not already vested, be deemed automatically vested. Harris Tulchin Employment Agreement On April 9, 2021, the Company entered into an employment agreement with Harris Tulchin for Mr. Tulchin to serve as Chief Legal Officer of the Company. The terms of Mr. Tulchin’s employment agreement are identical to the terms of the employment agreement of Simon Yu described above. On April 11, 2021, the Company’s Board formally appointed Harris Tulchin as an executive officer of the Company, with the title of Chief Legal Officer. Christian Young Employment Agreement On April 11, 2021, the Company entered into an employment agreement with Christian Young for Mr. Young to serve as President of the Company. The terms of Mr. Young’s employment agreement are identical to the terms of the employment agreement of Simon Yu and Harris Tulchin described above, except for the fact that the Company and Mr. Young acknowledged that each of them are also the parties to that certain Consulting Agreement, dated as of February 3, 2021 and filed as Exhibit 10.8 to the Company’s Current Report on Form 8-K filed February 8, 2021 with the SEC (the “Consulting Agreement”), and that the Consulting Agreement and Mr. Young’s employment agreement will operate independently of each other – except that in the event of a conflict between this employment agreement and the Consulting Agreement, the terms and conditions of this employment agreement will control. Amir Ben-Yohanan Employment Agreement On April 11, 2021, the Company entered into an employment agreement with Amir Ben-Yohanan for Mr. Ben-Yohanan to serve as Chief Executive Officer of the Company. The terms of Mr. Ben-Yohanan’s employment agreement are identical to the terms of the employment agreements of Simon Yu and Harris Tulchin described above, except for the following terms: ● Mr. Ben-Yohanan’s Base Salary is $400,000 per year ● Mr. Ben-Yohanan reports only to the Board of Directors of the Company. Repayment of Labrys Convertible Promissory Note In May 2021, the Company paid $250,000 cash to reduce the balance of the convertible promissory note from Labrys Fund, LP. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation These unaudited consolidated financial statements have been prepared in accordance with GAAP and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The unaudited consolidated balance sheet as of December 31, 2020 was derived from the Company’s audited consolidated financial statements at that date. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 15, 2021, or the Annual Report. Interim results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates In preparing the unaudited consolidated financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the unaudited consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, useful life of fixed assets, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates. |
Reverse Merger Accounting | Reverse Merger Accounting The Merger was accounted for as a reverse-merger and recapitalization in accordance with GAAP. WOHG was the acquirer for financial reporting purposes and Clubhouse Media Group, Inc. was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger will be those of WOHG and will be recorded at the historical cost basis of WOHG since its inception on January 2, 2020. The consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and WOHG, historical operations of WOHG since its inception on January 2, 2020 to the closing date of the merger, and operations of the Company from the closing date of the Merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger. In conjunction with the Merger, WOHG received no cash and assumed no liabilities from Clubhouse Media Group, Inc. All members of the Company’s executive management are from WOHG. |
Business Combination | Business Combination The Company applies the provisions of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, in accounting for its acquisitions. It requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed, at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the acquisition date fair values of the net assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the unaudited consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are on deposit with financial institutions without any restrictions. |
Advertising | Advertising Advertising costs are expensed when incurred and are included in selling, general, and administrative expense in the accompanying unaudited consolidated statements of operations. We incurred advertising expenses of $20,545 and $22,770 for the three months ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020, respectively. |
Accounts Receivable | Accounts Receivable The Company’s accounts receivable arises from providing services. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if it expects to collect the receivables in one year or less from the time of sale. The Company does not expect to collect receivables greater than one year from the time of sale. The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Amounts determined to be uncollectible are charged or written-off against the reserve. As of March 31, 2021 and December 31, 2020, there were $0 and $0 for bad debt allowance for accounts receivable. |
Property and Equipment, Net | Property and equipment, net Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of property, plant and equipment and are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows: Classification Useful Life Equipment 3 years |
Lease | Lease On January 2, 2020, the Company adopted ASC Topic 842, Leases, or ASC 842, using the modified retrospective transition method with a cumulative effect adjustment to accumulated deficit as of January 1, 2019, and accordingly, modified its policy on accounting for leases as stated below. As described under “Recently Adopted Accounting Pronouncements,” below, the primary impact of adopting ASC 842 for the Company was the recognition in the unaudited consolidated balance sheet of certain lease-related assets and liabilities for operating leases with terms longer than 12 months. The Company elected to use the short-term exception and does not records assets/liabilities for short term leases as of March 31, 2021 and December 31, 2020. The Company’s leases primarily consist of facility leases which are classified as operating leases. The Company assesses whether an arrangement contains a lease at inception. The Company recognizes a lease liability to make contractual payments under all leases with terms greater than twelve months and a corresponding right-of-use asset, representing its right to use the underlying asset for the lease term. The lease liability is initially measured at the present value of the lease payments over the lease term using the collateralized incremental borrowing rate since the implicit rate is unknown. Options to extend or terminate a lease are included in the lease term when it is reasonably certain that the Company will exercise such an option. The right-of-use asset is initially measured as the contractual lease liability plus any initial direct costs and prepaid lease payments made, less any lease incentives. Lease expense is recognized on a straight-line basis over the lease term. Leased right-of-use assets are subject to impairment testing as a long-lived asset at the asset-group level. The Company monitors its long-lived assets for indicators of impairment. As the Company's leased right-of-use assets primarily relate to facility leases, early abandonment of all or part of facility as part of a restructuring plan is typically an indicator of impairment. If impairment indicators are present, the Company tests whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income, and if not recoverable, measures impairment loss for the right-of-use asset or asset group. |
Revenue Recognition | Revenue Recognition In May 2014 the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No. 2014-09 that have the same effective date and transition date: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU 2014-09 (collectively, the new revenue standards). Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. The Company recognized revenue from providing temporary and permanent staffing solutions and sale of consumer products. The Company generates revenue from its managed services when a marketer (typically a brand, agency or partner) pays the Company to provide custom content, influencer marketing, amplification or other campaign management services (“Managed Services”) The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. The agreement typically provides for either a non-refundable deposit, or a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectibility based on a number of factors, including the creditworthiness of the customer and payment and transaction history. For Managed Services Revenue, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide influencer marketing services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase influencer marketing services for the purpose of providing public awareness or advertising buzz regarding the marketer’s brand and they purchase custom content for internal and external use. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that generally ranges from one day to one year. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that is satisfied at the time the customer receives the benefits from the services. Based on the Company’s evaluations, revenue from Managed Services is reported on a gross basis because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. The contract liabilities as of March 31, 2021 and December 31, 2020 were $83,420 and $73,848, respectively. |
Goodwill Impairment | Goodwill Impairment We test goodwill at least annually for impairment at the reporting unit level. We recognize an impairment charge if the carrying amount of a reporting unit exceeds its fair value. When a portion of a reporting unit is disposed, goodwill is allocated to the gain or loss on disposition based on the relative fair values of the business or businesses disposed and the portion of the reporting unit that will be retained. For other intangible assets that are not deemed indefinite-lived, cost is generally amortized on a straight-line basis over the asset’s estimated economic life, except for individually significant customer-related intangible assets that are amortized in relation to total related sales. Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to estimated fair value based on either discounted cash flows or appraised values. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of and for the three months ended March 31, 2021 and December 31, 2020, there were no impairment loss of its long-lived assets. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized. The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying unaudited consolidated statements of operations and comprehensive income (loss) as income tax expense. The Company has not completed a full fiscal year, post-recapitalization and has not filed an income tax return and incurred net operating losses from inception to December 31, 2020. The net operating losses that has future benefits will be recorded as $541,321 deferred tax assets, but net with 100% valuation allowance until the Company expected to realize this deferred tax assets in the future. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash, accounts receivable, other receivable, note receivable, other current assets, accounts payable, and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value. The Company utilizes the methods of fair value (“FV”) measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, FV is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in FV measurements, ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The FV hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The FV hierarchy gives the lowest priority to Level 3 inputs. The Company used Level 3 inputs for its valuation methodology for the derivative liabilities for conversion feature of the convertible notes in determining the fair value the weighted-average Binomial option pricing model following assumption inputs. The fair value of derivative liability as of March 31, 2021 and December 31, 2020 were $254,957 and $304,490, respectively. |
Basic Income (Loss) Per Share | Basic Income (Loss) Per Share Under the provisions of ASC 260, “Earnings per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. Potential common shares consist of the convertible promissory notes payable as of March 31, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, there were approximately 4,139,081 and 127,922 potential shares issuable upon conversion of convertible notes payable. The table below presents the computation of basic and diluted earnings per share for the three month ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020: For the three months ended March 31, 2021 For the period from January 2, 2020 (inception) to March 31, 2020 Numerator: Net loss $ (5,798,578 ) $ (227,079 ) Denominator: Weighted average common shares outstanding—basic 93,330,191 92,623,286 Dilutive common stock equivalents - - Weighted average common shares outstanding—diluted 93,330,191 92,623,386 Net loss per share: Basic $ (0.06 ) $ (0.00 ) Diluted $ (0.06 ) $ (0.00 ) |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts receivable. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. |
Stock Based Compensation | Stock based Compensation Stock based compensation cost to employees is measured at the date of grant, based on the calculated fair value of the stock-based award, and will be recognized as expense over the employee’s requisite service period (generally the vesting period of the award). Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. |
Derivative Instruments | Derivative instruments The fair value of derivative instruments is recorded and shown separately under liabilities. Changes in the fair value of derivatives liability are recorded in the unaudited consolidated statement of operations under other (income) expense. Our Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives under ASC 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited consolidated statements of operations. For stock-based derivative financial instruments, the Company uses binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Beneficial Conversion Features | Beneficial Conversion Features If a conversion features did not meet the definition of derivative liability under ASC 815, the Company evaluates the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note. If the effective conversion price was less than the market value of underlying common stock at the inception of the convertible promissory note, the Company recorded the difference as debt discounts and amortized over the life of the notes using the effective interest method. The Company amortized $495,936 and $0 of the discount on the convertible notes payable to interest expense for the three months ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020, respectively. |
Related Parties | Related Parties The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825– 10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Commitments and Contingencies | Commitments and Contingencies The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable a material loss was incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including those interim periods within those fiscal years. We did not expect the adoption of this guidance have a material impact on its unaudited consolidated financial statements. On October 1, 2020, we early adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance was effective beginning January 1, 2021, with early adoption permitted. The adoption of this new standard did not have a material impact on our unaudited consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. The Company is currently evaluating the timing, method of adoption and overall impact of this standard on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Summary Of Significant Accounting Policies | |
Schedule of Property and Equipment, Net Estimated Useful Lives | Depreciation of property, plant and equipment and are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows: Classification Useful Life Equipment 3 years |
Schedule of Computation of Basic and Diluted Earning Per Share | The table below presents the computation of basic and diluted earnings per share for the three month ended March 31, 2021 and for the period from January 2, 2020 (inception) to March 31, 2020: For the three months ended March 31, 2021 For the period from January 2, 2020 (inception) to March 31, 2020 Numerator: Net loss $ (5,798,578 ) $ (227,079 ) Denominator: Weighted average common shares outstanding—basic 93,330,191 92,623,286 Dilutive common stock equivalents - - Weighted average common shares outstanding—diluted 93,330,191 92,623,386 Net loss per share: Basic $ (0.06 ) $ (0.00 ) Diluted $ (0.06 ) $ (0.00 ) |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Consideration | The following table summarizes the carrying value of purchase price consideration to acquire Magiclytics: Description Amount Carrying value of purchase consideration: Common stock issued $ (60,697 ) Total purchase price $ (60,697 ) |
Schedule of Carrying Value of Assets Acquired and Liabilities Assumed | The following is an allocation of purchase price as of the February 3, 2021 acquisition closing date based upon an estimate of the carrying value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands): Description Amount Purchase price allocation: Cash $ 76 Intangibles 77,889 Related party payable (97,761 ) AP and accrued liabilities (40,901 ) Identifiable net assets acquired (60,697 ) Total purchase price $ (60,697 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets, Net | Fixed assets, net consisted of the following: March 31, 2021 December 31, 2020 Estimated Useful Life (unaudited) Equipment $ 84,956 $ 79,737 3 years Property, plant, and equipment, gross 84,956 79,737 Less: accumulated depreciation and amortization (21,880 ) (14,945) Property, plant, and equipment, net $ 63,076 $ 64,792 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Promissory Note | Convertible Promissory Note Holder Start Date End Date Note Debt Discounts As of Issuance Amortization Debt Discounts As of 3/31/2021 Scott Hoey 9/10/2020 9/10/2022 - 7,500 (7,500 ) - Cary Niu 9/18/2020 9/18/2022 50,000 50,000 (13,288 ) 36,712 Jesus Galen 10/6/2020 10/6/2022 30,000 30,000 (7,233 ) 22,767 Darren Huynh 10/6/2020 10/6/2022 50,000 50,000 (12,055 ) 37,945 Wayne Wong 10/6/2020 10/6/2022 25,000 25,000 (6,027 ) 18,973 Matt Singer 1/3/2021 1/3/2023 13,000 13 ,000 (13,000 ) - ProActive Capital 1/20/2021 1/20/2022 250,000 217,024 (41,621 ) 175,403 GS Capital #1 1/25/2021 1/25/2022 288,889 288,889 (51,446 ) 237,443 Tiger Trout SPA 1/29/2021 1/29/2022 1,540,000 1,540,000 (257,370 ) 1,282,630 GS Capital #2 2/16/2021 2/16/2022 577,778 577,778 (63,318 ) 514,460 Labrys Fund, LLP 3/11/2021 3/11/2022 1,000,000 1,000,000 (54,795 ) 945,205 GS Capital #3 3/16/2021 3/16/2022 577,778 577,778 (23,744 ) 554,034 Total Total 3,825,572 Add: Remaining note principal balance 4,389,445 Total convertible promissory notes, net 563,873 |
Schedule of Future Maturities of Convertible Notes payable | Future maturities of convertible notes payable at March 31, 2021 are as follows: Years ending December 31, 2021 $ - 2022 4,389,445 2023 – 2024 – 2025 - Thereafter – $ 4,389,445 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Liability [Abstract] | |
Schedule of Derivative Liablity Assumptions Input | March 31, 2021 Annual Dividend Yield — Expected Life (Years) 1.4 – 1.5 years Risk-Free Interest Rate 0.16 % Expected Volatility 306 - 311 % December 31, 2020 Annual Dividend Yield — Expected Life (Years) 1.6 – 2.0 years Risk-Free Interest Rate 0.13 – 0.17 % Expected Volatility 318 - 485 % |
Schedule of Fair Value of Derivative Liabilty | Fair value of the derivative is summarized as below: Beginning Balance, December 31, 2020 $ 304,490 Additions - Mark to Market (49,533 ) Cancellation of Derivative Liabilities Due to Conversions - Reclassification to APIC Due to Conversions - Ending Balance, March 31, 2021 $ 254,957 Fair value of the derivative is summarized as below: Beginning Balance, December 31, 2019 $ - Additions 270,501 Mark to Market 61,029 Cancellation of Derivative Liabilities Due to Conversions - Reclassification to APIC Due to Conversions (27,040 ) Ending Balance, December 31, 2020 $ 304,490 |
Organization and Operations (De
Organization and Operations (Details Narrative) - USD ($) | May 29, 2020 | Dec. 27, 2006 | Mar. 31, 2021 | Dec. 31, 2020 | Nov. 12, 2020 | Jul. 07, 2020 |
Authorized capital stock | 550,000,000 | |||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
West of Hudson Group, Inc. [Member] | WOH Brands, LLC Oopsie Daisy Swimwear, LLC and DAK Brands, LLC [Member] | ||||||
Business acquisition, acquired percentage | 100.00% | |||||
West of Hudson Group, Inc. [Member] | Doiyen LLC [Member] | ||||||
Business acquisition, acquired percentage | 100.00% | |||||
Share Exchange Agreement With NTH [Member] | ||||||
Ownership interest acquired under share exchange agreement | 100.00% | |||||
Share exchange agreement description | Tongji, Inc. acquired 100% of the equity in NTH pursuant to an Agreement and Plan of Merger, pursuant to which NTH became a wholly owned subsidiary of Tongji, Inc. Pursuant to the Agreement and Plan of Merger, the Company issued 15,652,557 shares of common stock to the stockholders of NTH in exchange for 100% of the issued and outstanding shares of common stock of NTH. | |||||
Number of common stock were issued | 15,652,557 | |||||
Stock Purchase Agreement [Member] | West of Hudson Group, Inc. [Member] | Arcaro [Member] | ||||||
Ownership interest acquired under share exchange agreement | 65.00% | |||||
Sale of stock, shares | 30,000,000 | |||||
Sale of stock, value | $ 240,000 | |||||
Merger Agreement [Member] | West of Hudson Group, Inc. [Member] | Security Holders [Member] | ||||||
Business acquisition, acquired percentage | 50.54% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Advertising expenses | $ 20,545 | $ 22,770 | |
Bad debt allowances for accounts receivable | 0 | 0 | |
Contract liabilities | 83,420 | 73,848 | |
Impairment loss of long lived assets | |||
Deferred tax assets | $ 541,321 | ||
Valuation of allownace percentage | 100.00% | ||
Fair value of derivative liability | $ 254,957 | $ 304,490 | |
Potential shares issuable upon conversion of convertible notes payable | 4,139,081 | 127,922 | |
Amortization of discount on convertible notes payable | $ 495,936 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Property and Equipment, Net Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Estimated Useful Life of Equipment | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Computation of Basic and Diluted Earning Per Share (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | |||
Net loss | $ (5,798,578) | $ (227,079) | $ (227,079) |
Weighted average common shares outstanding-basic | 93,330,191 | 92,623,286 | |
Dilutive common stock equivalents | |||
Weighted average common shares outstanding-diluted | 93,330,191 | 92,623,386 | |
Basic | $ (0.06) | $ 0 | |
Diluted | $ (0.06) | $ 0 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | |
Gaoing Concerndetails Narrative Abstract | ||||
Net income (loss) | $ (5,798,578) | $ (227,079) | $ (227,079) | |
Working capital and stockholders deficit | $ (8,456,996) | $ (2,577,721) |
Business Combinations (Details
Business Combinations (Details Narrative) - USD ($) | Feb. 03, 2021 | Mar. 31, 2021 |
Due to related parties | $ 97,761 | |
Magiclytics [Member] | ||
Number of shares issued for acquisition | 5,000 | |
Due to related parties | 97,761 | |
Total purchase price | $ 60,697 | |
Christian Young [Member] | ||
Number of common stock were issued | 330,610 | |
Common stock percentage | 45.00% | |
Wilfred Man [Member] | ||
Number of common stock were issued | 330,610 | |
Common stock percentage | 45.00% | |
Christian Young and Wilfred Man [Member] | ||
Common stock percentage | 90.00% | |
A&R Share Exchange Agreement [Member] | Magiclytics [Member] | ||
Number of shares issued for acquisition | 734,689 | |
Common stock issuance description | The number of shares of the Company common stock issued at the Magiclytics Closing was based on the fair market value of the Company common stock as initially agreed to by the parties, which is $4.76 per share (the "Base Value"). The fair market value was determined based on the volume weighted average closing price of the Company common stock for the twenty (20) trading day period immediately prior to the Magiclytics,. In the event that the initial public offering price per share of the Company common stock in this Offering pursuant to Regulation A is less than the Base Value, then within three (3) business days of the qualification by the SEC of the Offering Statement forming part of this offering circular, the Company will issue to the Magiclytics Shareholders a number of additional shares of Company common stock equal to: (1) $3,500,000 divided by the initial public offering price per share of the Company common stock in this Offering pursuant to Regulation A, minus; (2) 734,689 |
Business Combinations - Schedul
Business Combinations - Schedule of Purchase Price Consideration (Details) - Magiclytics [Member] | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Common stock issued | $ 60,697 |
Total purchase price | $ 60,697 |
Business Combinations - Sched_2
Business Combinations - Schedule of Carrying Value of Assets Acquired and Liabilities Assumed (Details) - Magiclytics [Member] | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Cash | $ 76 |
Intangibles | 77,889 |
Related party payable | (97,761) |
AP and accrued liabilities | (40,901) |
Identifiable net assets acquired | (60,697) |
Total purchase price | $ (60,697) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 6,935 | $ 0 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Fixed Assets, Net (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Estimated Useful Life | 3 years | |
Property, plant, and equipment, gross | $ 84,956 | $ 79,737 |
Less: accumulated depreciation and amortization | (21,880) | (14,945) |
Property, plant, and equipment, net | $ 63,076 | 64,792 |
Equipment [Member] | ||
Estimated Useful Life | 3 years | |
Property, plant, and equipment, gross | $ 84,956 | $ 79,737 |
Intangibles (Details Narrative)
Intangibles (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets | $ 79,653 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Other Assets [Abstract] | ||
Security deposit | $ 266,000 | $ 219,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | Mar. 16, 2021USD ($)$ / sharesshares | Mar. 11, 2021USD ($)$ / sharesshares | Feb. 19, 2021USD ($)$ / sharesshares | Feb. 02, 2021USD ($)$ / sharesshares | Jan. 29, 2021USD ($)$ / sharesshares | Jan. 25, 2021USD ($)$ / sharesshares | Jan. 20, 2021USD ($)$ / sharesshares | Jan. 03, 2021USD ($)Integer$ / sharesshares | Dec. 08, 2020USD ($)$ / sharesshares | Oct. 06, 2020USD ($)Integer | Sep. 18, 2020USD ($)Integer | Sep. 10, 2020USD ($)Integer | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) |
Purchase price | $ 3,538,000 | |||||||||||||
Debt Instrument original issue discount | 3,825,572 | |||||||||||||
Total debt discounts | 495,936 | 0 | ||||||||||||
Debt extinguishment expense | $ 297,138 | |||||||||||||
Tiger Trout Capital Puerto Rico, LLC [Member] | ||||||||||||||
Additional amount to be paid | $ 50,000 | |||||||||||||
Convertible Promissory Note [Member] | ProActive Capital SPV I, LLC [Member] | ||||||||||||||
Debt instrument maturity date | Jan. 20, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 175,403 | |||||||||||||
Total debt discounts | $ 41,621 | |||||||||||||
Convertible Promissory Note [Member] | Tiger Trout Capital Puerto Rico, LLC [Member] | ||||||||||||||
Debt instrument maturity date | Jan. 29, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 1,282,630 | |||||||||||||
Total debt discounts | $ 257,370 | |||||||||||||
Convertible Promissory Note [Member] | Labrys Fund, LP [Member] | ||||||||||||||
Debt instrument maturity date | Mar. 11, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 945,205 | |||||||||||||
Total debt discounts | $ 54,795 | |||||||||||||
Scott Hoey [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instrument maturity date | Sep. 10, 2022 | |||||||||||||
Debt Instrument original issue discount | ||||||||||||||
Total debt discounts | $ 7,500 | |||||||||||||
Cary Niu [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instrument maturity date | Sep. 18, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 36,712 | |||||||||||||
Total debt discounts | $ 13,288 | |||||||||||||
Jesus Galen [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instrument maturity date | Oct. 6, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 22,767 | |||||||||||||
Total debt discounts | $ 7,233 | |||||||||||||
Darren Huynh [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instrument maturity date | Oct. 6, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 37,945 | |||||||||||||
Total debt discounts | $ 12,055 | |||||||||||||
Wayne Wong [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instrument maturity date | Oct. 6, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 18,973 | |||||||||||||
Total debt discounts | $ 6,027 | |||||||||||||
Chief Executive Officer [Member] | ||||||||||||||
Debt instruement face amount | $ 2,400,000 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Issued shares of common stock upon the conversion | shares | 1,000,000 | |||||||||||||
Common stock purchase per share | $ / shares | $ 0.001 | |||||||||||||
Indebtedness converted into securities | $ 1,000,000 | |||||||||||||
Debt extinguishment expense | $ 297,138 | |||||||||||||
Purchase Agreement [Member] | Scott Hoey [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instruement face amount | $ 7,500 | |||||||||||||
Purchase price | $ 7,500 | |||||||||||||
Debt instrument maturity date | Sep. 10, 2022 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Common stock conversion price percentage | 50.00% | |||||||||||||
Trading day period | Integer | 20 | |||||||||||||
Issued shares of common stock upon the conversion | shares | 10,833 | |||||||||||||
Debt conversion amount | $ 7,500 | |||||||||||||
Convertible note conversion price | $ / shares | $ 0.69 | |||||||||||||
Purchase Agreement [Member] | Cary Niu [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instruement face amount | $ 50,000 | |||||||||||||
Purchase price | $ 50,000 | |||||||||||||
Debt instrument maturity date | Sep. 18, 2022 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Common stock conversion price percentage | 30.00% | |||||||||||||
Trading day period | Integer | 20 | |||||||||||||
Purchase Agreement [Member] | Jesus Galen [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instruement face amount | $ 30,000 | |||||||||||||
Purchase price | $ 30,000 | |||||||||||||
Debt instrument maturity date | Oct. 6, 2022 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Common stock conversion price percentage | 50.00% | |||||||||||||
Trading day period | Integer | 20 | |||||||||||||
Purchase Agreement [Member] | Darren Huynh [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instruement face amount | $ 50,000 | |||||||||||||
Purchase price | $ 50,000 | |||||||||||||
Debt instrument maturity date | Oct. 6, 2022 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Common stock conversion price percentage | 50.00% | |||||||||||||
Trading day period | 20 | |||||||||||||
Purchase Agreement [Member] | Wayne Wong [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instruement face amount | $ 25,000 | |||||||||||||
Purchase price | $ 25,000 | |||||||||||||
Debt instrument maturity date | Oct. 6, 2022 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Common stock conversion price percentage | 50.00% | |||||||||||||
Trading day period | Integer | 20 | |||||||||||||
Purchase Agreement [Member] | Matthew Singer [Member] | Convertible Promissory Note [Member] | ||||||||||||||
Debt instruement face amount | $ 13,000 | |||||||||||||
Purchase price | $ 13,000 | |||||||||||||
Debt instrument maturity date | Jan. 3, 2023 | |||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||
Common stock conversion price percentage | 70.00% | |||||||||||||
Trading day period | Integer | 20 | |||||||||||||
Issued shares of common stock upon the conversion | shares | 8,197 | |||||||||||||
Debt conversion amount | $ 13,000 | |||||||||||||
Convertible note conversion price | $ / shares | $ 1.59 | |||||||||||||
Securities Purchase Agreement [Member] | Labrys Fund, LP [Member] | ||||||||||||||
Debt instruement face amount | $ 1,000,000 | |||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||
Common stock purchase per share | $ / shares | $ 10 | |||||||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | ProActive Capital SPV I, LLC [Member] | ||||||||||||||
Debt instruement face amount | $ 250,000 | |||||||||||||
Purchase price | $ 225,000 | |||||||||||||
Debt instrument maturity date | Jan. 20, 2022 | |||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||
Debt Instrument original issue discount | $ 25,000 | |||||||||||||
Sale of common stock share | shares | 50,000 | |||||||||||||
Common stock purchase per share | $ / shares | $ 0.001 | |||||||||||||
Reimbursement amount | $ 10,000 | |||||||||||||
Debt conversion description | The ProActive Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at ProActive Capital's election at any time following the time that the SEC qualifies the Company's offering statement related to the Regulation A Offering, at a conversion price equal to 70% of the Regulation A Offering Price of the Company Common Stock in the Regulation A Offering, and is subject to a customary beneficial ownership limitation of 9.99%, which may be waived by ProActive Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. | |||||||||||||
Total debt discounts | $ 217,024 | |||||||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | GS Capital Partners, LLC [Member] | ||||||||||||||
Debt instruement face amount | $ 577,778 | $ 577,778 | $ 288,889 | |||||||||||
Purchase price | $ 520,000 | $ 520,000 | $ 260,000 | |||||||||||
Debt instrument maturity date | Mar. 22, 2022 | Feb. 19, 2022 | Jan. 25, 2022 | |||||||||||
Debt instrument interest rate | 10.00% | 10.00% | 10.00% | |||||||||||
Debt Instrument original issue discount | $ 57,778 | $ 57,778 | $ 28,889 | |||||||||||
Sale of common stock share | shares | 100,000 | 100,000 | 50,000 | |||||||||||
Common stock purchase per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Proceeds from isuance of common stock | $ 100 | $ 100 | ||||||||||||
Reimbursement amount | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||
Debt conversion description | The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital's election at any time following the time that the Securities and Exchange Commission ("SEC") qualifies the Company's offering statement related to the Company's planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the "Regulation A Offering"). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. | The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital's election at any time following the time that the Securities and Exchange Commission ("SEC") qualifies the Company's offering statement related to the Company's planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the "Regulation A Offering"). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. | The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at GS Capital's election at any time following the time that the SEC qualifies the Company's offering statement related to the Regulation A Offering, at a conversion price equal to 70% of the Regulation A Offering Price of the Company Common Stock in the Regulation A Offering, and is subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price | |||||||||||
Total debt discounts | $ 577,778 | $ 577,778 | $ 288,889 | |||||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | Tiger Trout Capital Puerto Rico, LLC [Member] | ||||||||||||||
Debt instruement face amount | 1,540,000 | |||||||||||||
Purchase price | $ 1,100,000 | |||||||||||||
Debt instrument maturity date | Jan. 29, 2022 | |||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||
Debt Instrument original issue discount | $ 440,000 | |||||||||||||
Sale of common stock share | shares | 220,000 | |||||||||||||
Common stock purchase per share | $ / shares | $ 220 | |||||||||||||
Debt conversion description | Tiger Trout will have the right, until the Indebtedness is paid in full, to convert all, but only all, of the then-outstanding Indebtedness into shares of Company common stock at a conversion price of $0.50 per share, subject to customary adjustments for stock splits, etc. occurring after the issuance date. The Tiger Trout Note contains a customary beneficial ownership limitation of 9.99%, which may be waived by Tiger Trout on 61 days' notice to the Company. | |||||||||||||
Total debt discounts | $ 1,540,000 | |||||||||||||
Securities Purchase Agreement [Member] | 10% Promissory Note [Member] | Labrys Fund, LP [Member] | ||||||||||||||
Debt instruement face amount | $ 900,000 | |||||||||||||
Debt instrument maturity date | Mar. 11, 2022 | |||||||||||||
Debt Instrument original issue discount | $ 100,000 | |||||||||||||
Debt conversion description | Labrys may convert the Labrys Note into the Company's common stock (subject to the beneficial ownership limitations of 4.99% in the Labrys Note) at any time at a conversion price equal to $10.00 per share. | |||||||||||||
Total debt discounts | $ 1,000,000 | |||||||||||||
Number of common stock were issued | shares | 125,000 | |||||||||||||
Debt instrument, prepayment description | At any time prior to the date that an Event of Default (as defined in the Labrys Note) occurs at an amount equal to 100% of the Principal Sum then outstanding plus accrued and unpaid interest (no prepayment premium) plus $750.00 for administrative fees. The Labrys Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, and breach of provisions of the Labrys Note or Labrys SPA. Upon the occurrence of any Event of Default, the Labrys Note shall become immediately due and payable and the Company shall pay to Labrys, in full satisfaction of its obligations hereunder, an amount equal to the Principal Sum then outstanding plus accrued interest multiplied by 125% (the "Default Amount"). Upon the occurrence of an Event of Default, additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 16% per annum or the highest rate permitted by law. |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible promissory Note (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Amortization | $ (495,936) | $ 0 | |
Debt Discounts As of 03/31/21 | 3,825,572 | ||
Add: Remaining note principal balance | 4,389,445 | ||
Total convertible promissory notes, net | $ 563,873 | $ 19,493 | |
Convertible Promissory Note [Member] | ProActive Capital SPV I, LLC [Member] | |||
Start Date | Jan. 20, 2021 | ||
End Date | Jan. 20, 2022 | ||
Note Principal Balance | $ 250,000 | ||
Debt Discounts As of Issuance | 217,024 | ||
Amortization | (41,621) | ||
Debt Discounts As of 03/31/21 | $ 175,403 | ||
Convertible Promissory Note [Member] | GS Capital Partners, LLC 1 [Member] | |||
Start Date | Jan. 25, 2021 | ||
End Date | Jan. 25, 2022 | ||
Note Principal Balance | $ 288,889 | ||
Debt Discounts As of Issuance | 288,889 | ||
Amortization | (51,446) | ||
Debt Discounts As of 03/31/21 | $ 237,443 | ||
Convertible Promissory Note [Member] | Tiger Trout Capital Puerto Rico, LLC [Member] | |||
Start Date | Jan. 29, 2021 | ||
End Date | Jan. 29, 2022 | ||
Note Principal Balance | $ 1,540,000 | ||
Debt Discounts As of Issuance | 1,540,000 | ||
Amortization | (257,370) | ||
Debt Discounts As of 03/31/21 | $ 1,282,630 | ||
Convertible Promissory Note [Member] | GS Capital Partners, LLC 2 [Member] | |||
Start Date | Feb. 16, 2021 | ||
End Date | Feb. 16, 2022 | ||
Note Principal Balance | $ 577,778 | ||
Debt Discounts As of Issuance | 577,778 | ||
Amortization | (63,318) | ||
Debt Discounts As of 03/31/21 | $ 514,460 | ||
Convertible Promissory Note [Member] | Labrys Fund, LP [Member] | |||
Start Date | Mar. 11, 2021 | ||
End Date | Mar. 11, 2022 | ||
Note Principal Balance | $ 1,000,000 | ||
Debt Discounts As of Issuance | 1,000,000 | ||
Amortization | (54,795) | ||
Debt Discounts As of 03/31/21 | $ 945,205 | ||
Convertible Promissory Note [Member] | GS Capital Partners, LLC 3 [Member] | |||
Start Date | Mar. 16, 2021 | ||
End Date | Mar. 16, 2022 | ||
Note Principal Balance | $ 577,778 | ||
Debt Discounts As of Issuance | 577,778 | ||
Amortization | (23,744) | ||
Debt Discounts As of 03/31/21 | $ 554,034 | ||
Convertible Promissory Note [Member] | Scott Hoey [Member] | |||
Start Date | Sep. 10, 2020 | ||
End Date | Sep. 10, 2022 | ||
Note Principal Balance | |||
Debt Discounts As of Issuance | 7,500 | ||
Amortization | (7,500) | ||
Debt Discounts As of 03/31/21 | |||
Convertible Promissory Note [Member] | Cary Niu [Member] | |||
Start Date | Sep. 18, 2020 | ||
End Date | Sep. 18, 2022 | ||
Note Principal Balance | $ 50,000 | ||
Debt Discounts As of Issuance | 50,000 | ||
Amortization | (13,288) | ||
Debt Discounts As of 03/31/21 | $ 36,712 | ||
Convertible Promissory Note [Member] | Jesus Galen [Member] | |||
Start Date | Oct. 6, 2020 | ||
End Date | Oct. 6, 2022 | ||
Note Principal Balance | $ 30,000 | ||
Debt Discounts As of Issuance | 30,000 | ||
Amortization | (7,233) | ||
Debt Discounts As of 03/31/21 | $ 22,767 | ||
Convertible Promissory Note [Member] | Darren Huynh [Member] | |||
Start Date | Oct. 6, 2020 | ||
End Date | Oct. 6, 2022 | ||
Note Principal Balance | $ 50,000 | ||
Debt Discounts As of Issuance | 50,000 | ||
Amortization | (12,055) | ||
Debt Discounts As of 03/31/21 | $ 37,945 | ||
Convertible Promissory Note [Member] | Wayne Wong [Member] | |||
Start Date | Oct. 6, 2020 | ||
End Date | Oct. 6, 2022 | ||
Note Principal Balance | $ 25,000 | ||
Debt Discounts As of Issuance | 25,000 | ||
Amortization | (6,027) | ||
Debt Discounts As of 03/31/21 | $ 18,973 | ||
Convertible Promissory Note [Member] | Matt Singer [Member] | |||
Start Date | Jan. 3, 2021 | ||
End Date | Jan. 3, 2023 | ||
Note Principal Balance | $ 13,000 | ||
Debt Discounts As of Issuance | 13,000 | ||
Amortization | (13,000) | ||
Debt Discounts As of 03/31/21 |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Future Maturities of Convertible Notes payable (Details) | Mar. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | |
2022 | 4,389,445 |
2023 | |
2024 | |
2025 | |
Thereafter | |
Total | $ 4,389,445 |
Shares to be Issued - Liabili_2
Shares to be Issued - Liability (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Two Directors and One Consultant [Member] | ||
Shares to be issued - liability | $ 951,105 | $ 87,029 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Derivative Liability [Abstract] | |||
Derivative Liability | $ 254,957 | $ 304,490 | |
Loss from changes in derivative liability | $ 49,533 | $ 0 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Derivative Liablity Assumptions Input (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020Integer | |
Annual Dividend Yield [Member] | ||
Derivative liability measurement input | ||
Expected Life (Years) [Member] | Minimum [Member] | ||
Derivative liabilty measurement input period | 1 year 4 months 24 days | 1 year 7 months 6 days |
Expected Life (Years) [Member] | Maximum [Member] | ||
Derivative liabilty measurement input period | 1 year 6 months | 2 years |
Risk-Free Interest Rate [Member] | ||
Derivative liability measurement input | 0.16 | |
Risk-Free Interest Rate [Member] | Minimum [Member] | ||
Derivative liability measurement input | 0.13 | |
Risk-Free Interest Rate [Member] | Maximum [Member] | ||
Derivative liability measurement input | 0.17 | |
Expected Volatility [Member] | Minimum [Member] | ||
Derivative liability measurement input | 306 | 318 |
Expected Volatility [Member] | Maximum [Member] | ||
Derivative liability measurement input | 311 | 485 |
Derivative Liability - Schedu_2
Derivative Liability - Schedule of Fair Value of Derivative Liabilty (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivative Liability [Abstract] | ||
Beginning Balance | $ 304,490 | |
Additions | 270,501 | |
Mark to Market | (49,533) | 61,029 |
Cancellation of Derivative Liabilities Due to Conversions | ||
Reclassification to APIC Due to Conversions | (27,040) | |
Ending Balance | $ 254,957 | $ 304,490 |
Note Payable, Related Party (De
Note Payable, Related Party (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Feb. 02, 2021 | Jul. 07, 2020 | |
Notes payable - related party | $ 2,162,562 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Loss on the extinguishment of debt | $ (55,525) | ||||
Amir 2021 Note [Member] | |||||
Notes payable, Maturity date | Feb. 2, 2024 | ||||
Loss on the extinguishment of debt | $ 297,138 | ||||
Chief Executive Officer [Member] | |||||
Advances | 135,000 | ||||
Debt instrument, face amount | $ 2,400,000 | ||||
Amir Ben-Yohanan [Member] | |||||
Advances | $ 2,400,000 | ||||
Notes Payable, Interest rate | 8.00% | ||||
Debt instrument, face amount | $ 2,400,000 | ||||
Holder [Member] | |||||
Debt instrument, convertible amount | $ 1,000,000 | ||||
Common stock, par value | $ 0.001 | ||||
Note payable agreement [Member] | Chief Executive Officer [Member] | |||||
Advances | $ 5,000,000 | ||||
Notes Payable, Interest rate | 0.00% | ||||
Notes payable, Maturity date | Jan. 31, 2023 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Feb. 02, 2021 | Jul. 07, 2020 | |
Proceeds from related party | $ 135,000 | $ 373,079 | $ 2,162,562 | ||
Imputed interest | $ 87,213 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Christian Young [Member] | |||||
Due to related party payable | $ 0 | $ 23,685 | |||
Magiclytics [Member] | |||||
Number of common stock were issued | 734,689 | ||||
Due to related party payable | $ 97,761 | $ 0 | |||
Director Agreements [Member] | |||||
Common stock, par value | $ 0.001 | ||||
Number of common stock were issued | 31,821 | ||||
Common stock market fair value | $ 25,000 | ||||
Amir Ben-Yohanan [Member] | |||||
Debt instrument, face amount | $ 2,400,000 | ||||
Notes Payable, Interest rate | 8.00% | ||||
Advances | $ 2,400,000 | ||||
Holder [Member] | |||||
Debt instrument, convertible amount | $ 1,000,000 | ||||
Common stock, par value | $ 0.001 | ||||
Amir Ben-Yohanan, Chris Young, and Simon Yu [Member] | |||||
Payments to officers | $ 285,000 | ||||
Chief Executive Officer [Member] | |||||
Debt instrument, face amount | $ 2,400,000 | ||||
Advances | $ 135,000 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jul. 07, 2020 | |
Authorized capital stock | 550,000,000 | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, shares issued | 94,302,795 | 92,682,632 | ||
Common stock, shares outstanding | 94,302,795 | 92,682,632 | ||
Number of common stock value issued | $ (45,512) | |||
Value issued for settle of conversion | $ 13,000 | |||
Number of shares issued to to settle an accounts payable | 24,460 | |||
Number of shares issued to to settle an accounts payable, value | $ 148,510 | |||
Convertible Promissory Note [Member] | ||||
Shares issued settle of conversion | 8,197 | |||
Value issued for settle of conversion | $ 13,000 | |||
Convertible Promissory Note [Member] | ||||
Shares issued settle of conversion | 645,000 | |||
Value issued for settle of conversion | $ 3,441,400 | |||
Magiclytics [Member] | ||||
Number of common stock were issued | 734,689 | |||
Consultants and Directors [Member] | ||||
Number of common stock were issued | 207,817 | |||
Number of common stock value issued | $ 2,113,188 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Rent and expenses | $ 523,991 | |
Short Term Leases [Member] | ||
Operating leases, description | The Company has four short term leases in the United States and two month to month leases in Europe as of March 31, 2021. All short-term leases will be expired in 2021. | |
Rent and expenses | $ 180,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 29, 2021 | Apr. 13, 2021 | Apr. 11, 2021 | Apr. 09, 2021 | Apr. 02, 2021 | Mar. 16, 2021 | Feb. 19, 2021 | Jan. 25, 2021 | May 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 11, 2021 | Feb. 02, 2021 | Dec. 31, 2020 | Jul. 07, 2020 |
Purchase price | $ 3,538,000 | ||||||||||||||
Debt Instrument original issue discount | $ 3,825,572 | ||||||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Amir Ben-Yohanan [Member] | |||||||||||||||
Debt instrument face amount | $ 2,400,000 | ||||||||||||||
Convertible Promissory Note [Member] | Labrys Fund, LP [Member] | |||||||||||||||
Debt Instrument original issue discount | $ 945,205 | ||||||||||||||
Debt instrument maturity date | Mar. 11, 2022 | ||||||||||||||
Securities Purchase Agreement [Member] | Labrys Fund, LP [Member] | |||||||||||||||
Debt instrument face amount | $ 1,000,000 | ||||||||||||||
Common stock purchase per share | $ 10 | ||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||
Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | GS Capital Partners, LLC [Member] | |||||||||||||||
Debt instrument face amount | $ 577,778 | $ 577,778 | $ 288,889 | ||||||||||||
Purchase price | 520,000 | 520,000 | 260,000 | ||||||||||||
Debt Instrument original issue discount | $ 57,778 | $ 57,778 | $ 28,889 | ||||||||||||
Sale of common stock share | 100,000 | 100,000 | 50,000 | ||||||||||||
Common stock purchase per share | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Reimbursement amount | $ 10,000 | $ 10,000 | $ 10,000 | ||||||||||||
Debt instrument maturity date | Mar. 22, 2022 | Feb. 19, 2022 | Jan. 25, 2022 | ||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | 10.00% | ||||||||||||
Debt conversion description | The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital's election at any time following the time that the Securities and Exchange Commission ("SEC") qualifies the Company's offering statement related to the Company's planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the "Regulation A Offering"). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. | The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of the Company Common Stock at GS Capital's election at any time following the time that the Securities and Exchange Commission ("SEC") qualifies the Company's offering statement related to the Company's planned offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the "Regulation A Offering"). At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. | The GS Capital Note (and the principal amount and any accrued and unpaid interest) is convertible into shares of Company Common Stock at GS Capital's election at any time following the time that the SEC qualifies the Company's offering statement related to the Regulation A Offering, at a conversion price equal to 70% of the Regulation A Offering Price of the Company Common Stock in the Regulation A Offering, and is subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price | ||||||||||||
Subsequent Event [Member] | Convertible Promissory Note [Member] | Labrys Fund, LP [Member] | |||||||||||||||
Repayment of debt | $ 250,000 | ||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | GS Capital Partners, LLC [Member] | |||||||||||||||
Debt instrument face amount | $ 550,000 | $ 550,000 | |||||||||||||
Purchase price | 500,000 | 500,000 | |||||||||||||
Debt Instrument original issue discount | $ 50,000 | $ 50,000 | |||||||||||||
Sale of common stock share | 125,000 | 45,000 | |||||||||||||
Common stock par value | $ 0.001 | $ 0.001 | |||||||||||||
Common stock purchase per share | $ 125 | $ 45 | |||||||||||||
Reimbursement amount | $ 5,000 | $ 10,000 | |||||||||||||
Debt instrument maturity date | Apr. 29, 2022 | Apr. 1, 2022 | |||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | |||||||||||||
Debt conversion description | At such time, the April 2021 GS Capital Note #2 (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. | At such time, the GS Capital Note (and the principal amount and any accrued and unpaid interest) will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days' notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following the determination of the conversion price. | |||||||||||||
Debt Instrument description | The $50,000 original issue discounts, 45,000 shares issued at fair value of $437,400, and the beneficial conversion features were recorded as debt discounts and amortized over the term of the note, but since the total debt discounts cannot exceed the note principal balance of $550,000, the total debt discount at the inception date of this convertible promissory note were recorded at $550,000. | ||||||||||||||
Sale of common stock share, value | $ 437,400 | ||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | Eagle Equities LLC [Member] | |||||||||||||||
Debt instrument face amount | $ 1,100,000 | ||||||||||||||
Purchase price | 1,000,000 | ||||||||||||||
Debt Instrument original issue discount | $ 100,000 | ||||||||||||||
Sale of common stock share | 165,000 | ||||||||||||||
Common stock par value | $ 0.001 | ||||||||||||||
Common stock purchase per share | $ 165 | ||||||||||||||
Reimbursement amount | $ 10,000 | ||||||||||||||
Debt instrument maturity date | Apr. 13, 2022 | ||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||
Debt conversion description | At such time, the Eagle Equities Note (and the principal amount and any accrued and unpaid interest) will be convertible in restricted shares of Company Common Stock at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by Eagle Equities on 61 days' notice to the Company. | ||||||||||||||
Net proceeds received from offering | $ 35,000,000 | ||||||||||||||
Debt instrument conversion price per share | $ 6.50 | ||||||||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | Mr. Omori [Member] | |||||||||||||||
Common stock issuance description | (i) provide general corporate advice on strategic matters to the Company, and (ii) serve as an advisor to the Company's Board of Directors. Among other things, Mr. Omori will not act as an investment advisor or broker/dealer, his services are not exclusive, he will not negotiate the sale of the Company's securities, and Mr. Omori is not required to render any specific number of hours to the Company. In exchange for Mr. Omori's services, at the end of each one-month period, the Company will issue to Mr. Omori a number of shares of the Company's common stock equal to $30,000 divided by the VWAP as of the last day of such monthly period or the date of earlier termination or expiration of the Consulting Agreement, as applicable. The Consulting Agreement will continue for a period of one year from April 2, 2021, unless sooner terminated in accordance with the terms of the Consulting Agreement. The term of the Consulting Agreement may be renewed upon the mutual written agreement of the parties via an amendment to the Consulting Agreement. The Consulting Agreement may be terminated at any time by either party upon notice to the other party. | ||||||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Simon Yu [Member] | |||||||||||||||
Debt Instrument description | The initial term of the employment agreement is one (1) year from the effective date of the agreement (i.e. April 9, 2022), unless earlier terminated. Thereafter, the term is automatically extended on an annual basis for terms of one (1) year each, unless either the Company or Mr. Yu provides notice to the other party of their desire to not so renew the term of the agreement (as applicable) at least thirty (30) days prior to the expiration of the then-current term. | ||||||||||||||
Compensation amount | $ 380,000 | ||||||||||||||
Montly compensatiion amount | 15,000 | ||||||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Simon Yu [Member] | Maximum [Member] | |||||||||||||||
Annual bonuses amount | 250,000 | ||||||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Simon Yu [Member] | Cash Portion [Member] | |||||||||||||||
Compensation amount | 180,000 | ||||||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Simon Yu [Member] | Optional Portion [Member] | |||||||||||||||
Compensation amount | $ 200,000 | ||||||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Amir Ben-Yohanan [Member] | |||||||||||||||
Compensation amount | $ 400,000 |