Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 17, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-56448 | ||
Entity Registrant Name | Sollensys Corp | ||
Entity Central Index Key | 0001519177 | ||
Entity Tax Identification Number | 80-0651816 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 1470 Treeland Blvd SE | ||
Entity Address, City or Town | Palm Bay | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32909 | ||
City Area Code | (866) | ||
Local Phone Number | 438-7657 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 137,684,842 | ||
Entity Common Stock, Shares Outstanding | 106,512,827 | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 483 | ||
Auditor Name | HoganTaylor LLP | ||
Auditor Location | Tulsa, Oklahoma |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 799,496 | $ 586,869 |
Accounts receivable | 286,894 | |
Inventory | 12,000 | 78,000 |
Prepaid expenses | 42,376 | 40,991 |
Current assets of discontinued operations | 27,140 | |
Total current assets | 1,140,766 | 733,000 |
Property, plant and equipment, net | 195,627 | 2,929,363 |
Right-of-use assets | 1,626,521 | |
Other assets | 321,694 | 17,994 |
Non-current assets of discontinued operations | 410,305 | |
Total assets | 3,284,608 | 4,090,661 |
Current liabilities: | ||
Accounts payable | 253,637 | 61,512 |
Accrued expenses | 241,863 | 106,516 |
Deferred revenue | 122,704 | 423,715 |
Lease liabilities - current portion | 361,559 | |
Related party loans-short term | 1,396,975 | |
Notes payable-short term, net of debt issuance costs | 1,045,196 | 2,505,553 |
Current liabilities of discontinued operations | 20,082 | 107,845 |
Total current liabilities | 3,442,015 | 3,205,141 |
Notes payable - long term | 12,760 | 19,137 |
Lease liabilities - long term | 1,362,365 | |
Deferred revenue - long term | 941,251 | 205,714 |
Total liabilities | 5,758,391 | 3,429,992 |
Commitments and contingencies (Note 12) | ||
Stockholders’ Equity (Deficit) | ||
Preferred stock, Series A, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and December 31, 2021 | ||
Common stock, $0.001 par value, 300,000,000 shares authorized; 106,512,827 and 100,715,736 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 106,512 | 100,716 |
Additional paid-in capital | 22,201,440 | 8,527,616 |
Accumulated deficit | (24,781,735) | (7,967,663) |
Total stockholders’ equity (deficit) | (2,473,783) | 660,669 |
Total liabilities and stockholders’ equity (deficit) | $ 3,284,608 | $ 4,090,661 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock series A, par value | $ 0.001 | $ 0.001 |
Preferred stock series A, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock series A, shares issued | 0 | 0 |
Preferred stock series A, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 106,512,827 | 100,715,736 |
Common stock, shares outstanding | 106,512,827 | 100,715,736 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 344,467 | $ 181,071 |
Cost of sales | 857,911 | 339,430 |
Gross margin | (513,444) | (158,359) |
Operating expenses: | ||
General and administrative expense | 4,150,541 | 4,233,858 |
Total operating expenses | 4,150,541 | 4,233,858 |
Loss from operations | (4,663,985) | (4,392,218) |
Other income (expense) | ||
Other income | 12,995 | |
Gain on the sale of building | 988,155 | |
Interest expense | (500,391) | (69,123) |
Total other income (expense) | 500,758 | (69,123) |
Loss from continuing operations after income taxes | (4,163,228) | (4,461,341) |
Provision (benefit) for income taxes | ||
Loss from discontinued operations, net of tax | (12,604,883) | (64,244) |
Net loss | $ (16,768,111) | $ (4,525,585) |
Basic and diluted loss per common share: | ||
Loss from continuing operations | $ (0.04) | $ (0.05) |
Loss from discontinued operations | (0.12) | 0 |
Basic and diluted loss per share | $ (0.16) | $ (0.06) |
Weighted-average number of common shares outstanding: | ||
Basic and diluted | 103,640,868 | 99,719,004 |
Statements of Changes in Stockh
Statements of Changes in Stockholder's Equity (Deficit) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 99,355 | $ 3,390,213 | $ (3,442,078) | $ 47,490 | |
Beginning balance, shares at Dec. 31, 2020 | 99,354,547 | ||||
Stock based compensation | $ 56 | 241,753 | 241,809 | ||
Stock based compensation, shares | 56,365 | ||||
Private placement of common shares | $ 1,232 | 4,602,747 | 4,603,979 | ||
Private placement of common shares, shares | 1,231,580 | ||||
Shares issued in connection with the acquisition of Abstract | $ 73 | 292,903 | 292,976 | ||
Shares issued in connection with the acquisition of Abstract, shares | 73,244 | ||||
Net loss | (4,525,585) | (4,525,585) | |||
Ending balance, value at Dec. 31, 2021 | $ 100,716 | 8,527,616 | (7,967,663) | 660,669 | |
Ending balance, shares at Dec. 31, 2021 | 100,715,736 | ||||
Impact of the adoption of ASC 842 | (45,961) | (45,961) | |||
Issuance of common stock to purchase Celerit | $ 4,000 | 12,796,500 | 12,800,500 | ||
Issuance of common stock to buy Celerit, shares | 4,000,000 | ||||
Return of common stock for Celerit recission | $ (4,000) | (808,000) | (812,000) | ||
Return of common stock for Celerit rescission, shares | (4,000,000) | ||||
Common stock issued as financing fee | $ 5,125 | 456,125 | 461,250 | ||
Common stock issued as financing fee, shares | 5,125,000 | ||||
Stock based compensation | $ 380 | 610,022 | 610,402 | ||
Stock based compensation, shares | 380,008 | ||||
Issuance of warrants associated with debt issuance costs | 89,469 | 89,469 | |||
Private placement of common shares | $ 292 | 529,708 | 530,001 | ||
Private placement of common shares, shares | 292,083 | ||||
Net loss | (16,768,111) | (16,768,111) | |||
Ending balance, value at Dec. 31, 2022 | $ 106,512 | $ 22,201,440 | $ (24,781,735) | $ (2,473,783) | |
Ending balance, shares at Dec. 31, 2022 | 106,512,827 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (16,768,111) | $ (4,589,529) |
Net loss from discontinued operations | (12,604,883) | (64,244) |
Net loss from continuing operations | (4,163,228) | (4,525,585) |
Stock-based compensation | 610,402 | 241,809 |
Depreciation and amortization | 99,755 | 10,440 |
Amortization of debt discount | 312,427 | |
Gain on the sale of the building | (988,155) | |
Write down inventory to net realizable value | 66,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (73,612) | |
ROU Leases | 51,442 | |
Prepaid expenses | 18,373 | (60,749) |
Inventory | (24,000) | |
Other assets | (308,000) | (13,694) |
Accounts payable | 192,123 | 61,514 |
Accrued expenses | 155,431 | 60,380 |
Deferred revenues | 434,526 | 539,429 |
Net cash used in operating activities - continuing operations | (3,592,516) | (3,710,457) |
Net cash provided by (used in) operating activities - discontinued operations | 2,188,652 | (6,580) |
Net cash used in operating activities | (1,403,864) | (3,717,037) |
Cash flows from investing activities | ||
Proceeds from the sale of building | 3,626,330 | |
Purchase of property, plant and equipment | (10,526) | (413,533) |
Net cash provided by (used in) investing activities-continuing operations | 3,615,804 | (413,533) |
Net cash used in investing activities-discontinued operations | (2,351,425) | (8,920) |
Net cash used in investing activities | 1,264,379 | (422,453) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 1,355,000 | |
Payments on notes payable | (2,504,934) | (1,580) |
Proceeds from related party loans | 1,418,175 | |
Payments on related party notes | (21,200) | |
Debt issuance costs | (78,510) | |
Proceeds from the sale of common stock | 530,001 | 4,603,399 |
Net cash provided by investing activities-continuing operations | 698,532 | 4,602,399 |
Net cash used in investing activities -discontinued operations | (352,084) | |
Net cash provided by investing activities | 346,448 | 4,602,399 |
Net increase in cash and cash equivalents | 206,962 | 462,909 |
Cash and cash equivalents at beginning of period | 592,534 | 129,624 |
Cash and cash equivalents at end of period | 799,496 | 592,534 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 135,869 | 61,623 |
Supplemental disclosure of non-cash activities | ||
Common stock issued for the acquisition of a business | 292,976 | |
Common stock and warrants issued as debt issuance costs | 550,719 | |
Acquisition of property and equipment with debt | $ 2,526,270 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Sollensys Corp (“Sollensys” or the “Company”) was formerly a development stage company, incorporated in Nevada on September 29, 2010, under the name Health Directory, Inc. The Company’s wholly owned subsidiary Eagle Lake Laboratories, Inc (“Eagle Lake”) is a Florida-based science, technology, and engineering solutions corporation offering products that ensure their clients’ data integrity through the collection, storage, and transmission. The Company generates revenue with Eagle’s innovative flagship product, the Blockchain Archive Server™ that can be utilized to protect client data from ransomware. Blockchain technology is a leading-edge tool for data security, providing an added layer of security against data loss due to malware. Abstract Media On October 15, 2021, the Company entered into a Membership Interest Exchange Agreement (the “Agreement”), dated as of October 15, 2021, by and among (i) the Company; (ii) Abstract Media, LLC (“Abstract Media”), (iii) each of the members of Abstract Media (collectively, the “Abstract Media Members”); and (iv) Andrew Baker as the representative of the Abstract Media Members (the “Members’ Representative”). The Acquisition closed on December 6, 2021. Abstract Media is a Texas limited liability company formed in October 2011, with the goal of improving user engagement using visualization tools. The Company has evolved into an interactive media and software development company to optimize effective corporate learning, operational workflow and communication using technology in the augmented reality or virtual reality space. Abstract Media conducts its operations from its office location in Houston, Texas. On November 4, 2022 the Company entered into a Membership Interest Purchase Agreement with TechEdge Services, a Texas corporation, to sell 100% of its ownership interest in Abstract Media. As a result, Abstract Media became a discontinued operation. See Note 5. “Discontinued Operations”. Celerit Merger and Rescission On April 7, 2022, the Company completed a Merger Agreement (“Merger Agreement”) by and among (i) the Company; (ii) S-CC Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-CC Merger Sub”); (iii) S-Solutions Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-Solutions Merger Sub”); (iv) Celerit Corporation (“Celerit”); (v) Celerit Solutions Corporation (“Celerit Solutions”); and (vi) Terry Rothwell (collectively, (i)-(v), the “Merger Parties”). On August 22, 2022 the Company entered into Recission Agreement with the Merger Parties. As a result of the Recission Agreement Celerit and Celerit Solutions became discontinued operations. See Note 5. “Discontinued Operations”. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the Financial Accounting Standard Board (FASB)’s Accounting Standard Codification (ASC), which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. The consolidated financial statements of Sollensys include its wholly-owned subsidiary, Eagle Lake Laboratories, Inc. (“Eagle Lake”). The operations of the Company’s former Celerit division, and Abstract Media division have both been presented as discontinued operations for all periods presented. See Note–6 - “Discontinued Operations” for further information. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these consolidated financial statements are available. The Company has incurred significant operating losses since its inception. As of December 31, 2022, the Company had a working capital deficit of $ 2,301,249 The Company expects to generate operating cash flows that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining short-term loans. The Company will be required to continue to do so until its revenues support its operations. The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of expenses during the reporting period. The most significant estimates relate to right of use assets and liabilities, fair value of warrants and stock awards, and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company maintains accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC). Cash balances at times are in excess of FDIC insurance limits. Business Combinations Under the acquisition method of accounting, we allocate the fair value of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values assigned, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, are based on estimates and assumptions determined by management. These valuations require us to make significant estimates and assumptions, especially with respect to intangible assets. We record the excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, as goodwill. If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our consolidated financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and we record those adjustments to our consolidated financial statements. Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships. The useful life of these customer relationships is estimated to be three years. Goodwill is not amortized, but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess. On November 4, 2022 the Company entered into a Membership Interest Purchase Agreement with TechEdge Services, a Texas corporation, to sell all of its ownership interest in Abstract Media. As a result, the Company recorded an impairment charge on its intangible assets including goodwill of $ 344,787 Fair Value Measurements The FASB ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level–1 Level–2 Level–3 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. We use the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash and cash equivalents, trade receivables, related party payables, accounts payable, accrued liabilities and short-term borrowings. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature, and they are receivable or payable on demand. The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. Revenue Recognition Revenues are accounted for in accordance with the FASB’s Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606 or ASC 606). The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for the products and/or services. To achieve this principle, the Company applies the following five steps: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to performance obligations in the contract, and 5. Recognize revenue when or as the Company satisfies a performance obligation. The Company derives revenue from numerous sources. One of the Company’s products is the Blockchain Archive Server—a turn-key, off-the-shelf, blockchain solution that works with virtually any hardware and software combinations currently used in commerce, without the need to replace or eliminate any part of the client’s data security that is being utilized. The Company accounts for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Binding contracts or agreements with customers together with agreement to the Company’s terms and conditions are considered the contract with a customer. The Company considers collection of the contract to be probable at the onset of the arrangement. The second product offering is called the “Regional Service Center” which is a single unit system of 32 Blockchain Archive Servers capable of servicing up to 2,580 individual small accounts, and is marketed to existing IT service providers with established accounts. The service is delivered over the Internet and is considered software as a service “SaaS”. The Company recognizes revenue when the control of the Blockchain Archive Server is transferred to the Company’s customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for these products. Control is generally transferred when products are delivered. The Company’s revenue contracts generally represent a single performance obligation to sell its products to customers. For the SaaS software, which typically involves a significant customer deposit with services provided by the Company over a 60 month period, the Company recognizes revenue ratably as service is provided over the contract period. Under the terms of the Company’s regional service center contracts, the Company requires a substantial deposit in advance of the support work required to be performed by the Company. All deposits that have not been deemed earned by the Company following the guidelines of the ASC 606 are considered to be contract liabilities and are classified as deferred revenue on the Company’s consolidated balance sheets. As of December 31, 2022, the current balance of deferred revenue was $ 122,704 941,251 423,715 Under the guidelines of ASC 606, the Company disaggregates its revenues from contracts with customers by service types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. Management has determined that this level of disaggregation is beneficial to the users of the Company’s consolidated financial statements. As of December 31, 2022 and 2021, all of the revenue was earned from the Company’s Blockchain Archive Servers and SaaS. Net Income (Loss) Per Share Net income (loss) per common share is computed by dividing net income (loss) by the weighted average common shares outstanding during the period as defined by ASC 260, “Earnings per Share.” Basic earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. As of December 31, 2021, there were no instruments which would have a dilutive effect. As of December 31, 2022, the Company excluded the convertible notes and warrants from dilutive earnings per share as its effect is antidilutive. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. On November 15, 2019, the FASB issued ASU 2019-10, which amends the effective dates for three major accounting standards. The ASU defers the effective dates for the credit losses, derivatives, and lease standards for certain companies. In the first quarter of fiscal 2022, the Company adopted ASU 2016-02 using the “Comparatives Under 840 Option” approach to transition. Under this method, financial information related to periods prior to adoption will be as originally reported under the previous standard – ASC 840, Leases. The effects of adopting the new standard (ASC 842, Leases) in fiscal 2022 were recognized as a cumulative-effect adjustment to accumulated deficit as of the beginning of the fiscal first quarter. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification as operating or capital leases. We also elected to combine lease and non-lease components and to exclude short-term leases from our consolidated balance sheets. The most significant impact of adoption was the recognition of right-of-use operating lease assets and right-of-use operating lease liabilities of $496,000 and $541,000, respectively. The cumulative impact of these changes increased the accumulated deficit by approximately $ 46,000 Accounts receivable The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. The Company uses the allowance method to estimate for uncollectible receivables and maintains reserves, when necessary, for potential credit losses. An allowance for doubtful accounts, when necessary, is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Accounts receivable are ordinarily due 30 days after the issuance of an invoice. Accounts more than 120 days past due are considered delinquent and are written off after all collection attempts have been exhausted. As of December 31, 2022 and December 31, 2021, the balance of accounts receivable was $ 286,894 0 |
NOTES PAYABLE AND RELATED PARTY
NOTES PAYABLE AND RELATED PARTY LOANS | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND RELATED PARTY LOANS | NOTE 4 – NOTES PAYABLE AND RELATED PARTY LOANS As of December 31, 2022 and December 31, 2021, the Company had the following notes payable, and related party loans outstanding: Schedule of notes payable related party outstanding December 31, December 31, 2022 2021 Related party loans (a) $ 1,396,975 $ - Notes payable - short term less debt issuance costs (b) $ 1,045,196 $ 2,505,553 Notes payable - long term (c) $ 12,760 $ 19,137 (a) Related party loans are comprised of the following: (i) As of December 31, 2022, David Beavers, a related party, loaned the Company on an unsecured basis, $ 168,903 6 September 30, 2023 15,372 August 30, 2023 (ii) The Company had one interest free demand loan, and four 6 13,800 468,900 150,000 350,000 230,000 March 31, 2023 December 31, 2023 April 10, 2023 May 4, 2023 August 11, 2023 468,900 150,000 350,000 230,000 13,800 (b) Notes payable - short term are comprised of the following: (i) On October 18, 2022 the Company entered into a six month maturity $ 600,000 10 60,000 5,125,000 530,000 1,000,000 0.15 89,469 292.40 4.51 339,560 271,160 While the AJB Note is outstanding, each time any third party has the right to convert monies owed to that third party into common stock (or receive shares pursuant to a settlement or otherwise), at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in the AJB Note), then AJB, in its sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments in this AJB Note) until the AJB Note is no longer outstanding. While the AJB Note is outstanding, each time any third party has a look back period greater than the look back period in effect under the AJB Note at that time, then AJB, in its sole discretion, may utilize such greater number of look back days until the AJB Note is no longer outstanding. Upon the occurrence of certain events of default specified in the AJB Note, including, but not limited to, a failure to honor a conversion request, failure to maintain the Company’s quotation, or the Company’s failure to comply with its obligations under Exchange Act, all amounts owed to AJB under the AJB Note, including default interest if any, shall then become due and payable. Further, if the Company fail to maintain its quotation, fails to comply with its obligations under the Exchange Act, or loses the “bid” price for its common stock for a period of five days after written notice thereof to the Company, after the nine-month anniversary of the AJB Note, then the principal amount of the AJB Note will increase by $15,000 and AJB will be entitled to use the lowest trading price during the delinquency period as a base price for the conversion and the Conversion Price will be redefined to mean 40% multiplied by the Conversion Price, subject to adjustment as provided in the AJB Note. Security Agreement In connection with the issuance of the AJB Note, on October 13, 2022, the Company entered into a Security Agreement, dated as of October 13, 2022, by and between the Company and AJB (the “Security Agreement”). Pursuant to the terms of the Security Agreement, the Company agreed to grant to AJB an unconditional and continuing first priority security interest in all of the assets and property of the Company to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the AJB Note, and the other documents executed in connection with its agreements with AJB. (ii) The Company has a vehicle loan which requires monthly payments of principal and interest in the amount of $ 710 13.1 6,996 (iii) On September 20, 2022 the Company entered into a twelve percent (12%) $172,760 promissory note including $18,510 of Original Issue discount with 1800 Diagonal Lending LLC (“Diagonal) with a maturity date of December 31, 2023. Accrued interest, and outstanding principal shall be repaid in ten payments each in the amount of $19,349. In the event of a default, as defined in the note payable agreement, the loan is convertible at the discretion of the lender into common stock at 75% of the lowest ten day trading price prior to the conversion date multiplied by the amount outstanding. (iv) As part of the Celerit recission the Company agreed to a promissory note payable to Celerit for $ 605,000 7 (c) The notes payable – long term balance of $ 12,760 At December 31, 2022, the aggregate maturities of notes payable and related party loans for the next three years are as follows: Schedule of maturities of notes payable Year 2023 $ 2,781,731 Year 2024 7,245 Year 2025 5,515 2,794,491 Less debt issuance costs 339,560 Total notes payable and related party notes payable $ 2,454,931 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations | |
DISCONTINUED OPERATIONS | NOTE 5 – DISCONTINUED OPERATIONS The loss from discontinued operations was $ 12,604,883 64,244 ABSTRACT MEDIA On October 15, 2021, the Company entered into a Membership Interest Exchange Agreement (the “Agreement”), dated as of October 15, 2021, by and among (i) the Company; (ii) Abstract Media, LLC (“Abstract Media”), (iii) each of the members of Abstract Media (collectively, the “Abstract Media Members”); and (iv) Andrew Baker as the representative of the Abstract Media Members (the “Members’ Representative”). The Acquisition closed on December 6, 2021. Pursuant to the terms of the Agreement, the Company agreed to acquire from the Abstract Media Members all of the membership interests of Abstract Media held by the Abstract Media Members, representing 100% of the membership interests of Abstract Media, in exchange for the issuance by the Company to the Abstract Media Members of (i) shares of the Company’s common stock, plus (ii) $ 15,000 Pursuant to the terms of the Agreement, on December 6, 2021, the Abstract Media Members assigned their respective membership interests in Abstract Media to the Company, and Abstract Media became a wholly owned subsidiary of the Company. In exchange therefor, on December 6, 2021, the Company issued to the Abstract Media Members an aggregate of 73,244 For the acquisition of Abstract Media, the following table summarizes the acquisition date fair value of the consideration paid, identifiable assets acquired and liabilities assumed: Consideration paid Schedule of Business Acquisitions by Acquisition Contingent Consideration Cash and cash equivalents $ 30,000 Common stock, 73,244 shares of the Company restricted common stock valued at $4.00 per share 292,976 Net liabilities assumed 77,422 Fair value of total consideration paid $ 400,398 Net assets acquired and liabilities assumed Schedule of assets acquired and liabilities assumed Cash and cash equivalents $ 21,080 Accounts receivable 39,345 Other current assets 19,758 Fixed assets, net 15,467 Total assets $ 95,650 Accounts payable 69,724 Accrued liabilities 103,348 Total liabilities 173,072 Net liabilities assumed $ 77,422 The Company allocated the fair value of the total consideration paid of $ 400,398 200,199 200,199 On November 4, 2022 the Company entered into a Membership Interest Purchase Agreement with TechEdge Services, a Texas corporation, to sell all of its ownership interest in Abstract Media. As a result, the Company recorded an impairment charge on its intangible assets including goodwill of $ 344,787 Following the closing and for a period of 24 months thereafter (the “Earn-Out Period”), Tech Edge Services will pay to the Company an amount equal to 5% of the gross proceeds received with respect to contracts and agreements in place with Abstract Media as of the closing date. Such payments shall be made within seven days of each calendar month during the Earn-Out Period. The Company estimated the total proceeds of this contingent consideration to be $ 0 The Company recorded the following loss on disposal and loss from discontinued operations related to Abstract Media: Schedule of loss from discontinued operations Assets transferred: Cash $ 3,445 Prepaids and other assets 4,300 Property and equipment, net 17,766 Total assets 25,511 Liabilities assumed: Accounts payable 1,444 Accrued expenses 36,861 Total liabilities assumed 38,305 Net loss on disposal of Abstract Media 63,816 Schedule of loss from discontinued operations Year Ended 2022 2021 Revenue $ 439,980 1,250 Costs of sales and operating expenses 982,547 65,494 Loss from discontinued operations (542,567 ) (64,244 ) Loss on disposal (63,816 ) - Discontinued operations, net of tax $ (606,383 ) $ (64,244 ) 2022 2021 Assets: Cash $ - $ 5,565 Receivables - 1,717 Prepaids and other assets - 19,858 Current assets of discontinued operations 27,140 Property and equipment, net - 15,467 Intangible assets, net - 194,638 Goodwill - 200,199 Noncurrent assets of discontinued operations - $ 410,304 Liabilities: - Accounts payable - 4,756 Accrued expenses 20,082 89,073 Deferred revenue - 14,016 Current liabilities of discontinued operations $ 20,082 $ 107,845 CELERIT On April 7, 2022, the Company closed on a Merger Agreement (“Merger Agreement”) by and among (i) the Company; (ii) S-CC Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-CC Merger Sub”); (iii) S-Solutions Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-Solutions Merger Sub”); (iv) Celerit Corporation (“Celerit”); (v) Celerit Solutions Corporation (“Celerit Solutions”); and (vi) Terry Rothwell (collectively, (i)-(v), the “Merger Parties”). Aggregate consideration for the Mergers consisted of (i) $ 2,695,000 4,000,000 10,000 2,695,000 0.0001 December 31, 2022 6 For the acquisition of Celerit and Celerit Solutions, the following table summarizes the acquisition date fair value of consideration paid, identifiable assets acquired and liabilities assumed: Consideration paid Schedule of Business Acquisitions by Acquisition Contingent Consideration Cash and cash equivalents $ 10,000 Common stock, 4,000,000 shares of the Company restricted common stock valued at $3.20 per share 12,800,500 Issuance of promissory note 2,695,000 Fair value of total consideration paid $ 15,505,500 Net assets acquired and liabilities assumed Schedule of assets acquired and liabilities assumed Cash and cash equivalents $ 222,064 Accounts receivable 1,156,146 Prepaid expenses 319,895 Other current assets 276,913 Property, plant and equipment 481,817 Intangible assets (provisional) 2,736,378 Goodwill 10,945,515 Total assets $ 16,138,728 Accounts payable 23,443 Accrued expenses 609,785 Total liabilities assumed 633,228 Net purchase price $ 15,505,500 The Company allocated the fair value of the total consideration paid to goodwill of $ 10,945,515 2,736,378 Subsequent to entry into the Merger Agreement, the parties determined that they would unwind the transactions as set forth in the Merger Agreement and in the other agreements entered into in connection therewith. Rescission Agreement On August 22, 2022, the Company entered into the Rescission, Termination and Release Agreement (the “Rescission Agreement”) by and among (i) the Company, (ii) SCARE Holdings LLC, a wholly-owned subsidiary of Sollensys, (“SCARE”); (iii) Celerit; (iv) Celerit Solutions; (v) Ms. Rothwell; (vi) Ron Harmon; and (vii) CRE. Pursuant to the terms of the Rescission Agreement, the parties agreed to unwind the transactions as set forth in the Merger Agreement and in the other agreements entered into in connection therewith, so as to place each of the parties to the Merger Agreement in the position that they were as of immediately prior to the closing of the transactions as set forth in and as contemplated by the Merger Agreement and the related agreements. As a result, on August 26, 2022, the following agreements were terminated, except as set forth in the Rescission Agreement: (i) the Rothwell Employment Agreement, (ii) the Harmon Employment Agreement, (iii) the Blockchain Archive Server Agreement, (iv) the Rothwell Note, (v) the Banking Agreement, and (vi) the Real Estate Purchase Agreement. Pursuant to the terms of the Rescission Agreement, among other things, the parties agreed as follows: (i) Sollensys agreed to transfer to Ms. Rothwell one share of Celerit common stock; (ii) Sollensys agreed to transfer to Ms. Rothwell one share of Celerit Solutions common stock; (iii) Ms. Rothwell agreed to transfer to Sollensys 4,000,000 (iv) Ms. Rothwell agreed to resign from any and all positions with Sollensys, including as a member of Sollensys’ board of directors; (v) Donald Beavers agreed to resign as a director and officer of Celerit and Celerit Solutions; (vi) Anthony Nolte agreed to resign as a director and officer of Celerit and Celerit Solutions; and (vii) Sollensys agreed, in connection with its withdrawal from Celerit of an aggregate of $ 605,000 In addition, pursuant to the terms of the Rescission Agreement, the parties agreed to terminate: (i) The Executive Employment Agreement, dated as of April 7, 2022, by and between Sollensys and Ms. Rothwell; (ii) The Executive Employment Agreement, dated as of April 7, 2022, by and between Sollensys and Mr. Harmon; (iii) The Rothwell Sollensys Blockchain Archive Server Distributive Data Center Agreement (2 Units); (iv) The Promissory Note issued by Sollensys to Ms. Rothwell on April 7, 2022; (v) The Banking and Credit Union Services Agreement, dated as of April 7, 2022; and (vi) The Real Estate Purchase Agreement, dated as of March 24, 2022. As a result of the recission the Company recorded the following loss from discontinued operations: Schedule of loss from discontinued operations Assets transferred: Cash $ 2,560,058 Accounts receivable 942,862 Other accounts receivable 629,086 Prepaids and other assets 107,109 Property and equipment, net 449,520 Goodwill 10,945,115 Intangibles 2,394,238 Total assets 18,027,988 Liabilities transferred: Accounts payable (56,715 ) Accrued expenses (166,579 ) Total liabilities (223,294 ) Net assets transferred 17,804,694 Consideration received, 4,000,000 shares returned to treasury (812,000 ) Extinguishment of promissory note (2,342,916 ) Loss from disposal of Celerit and Celerit Solutions $ (14,649,778 ) The loss from discontinued operations is follows: Schedule of loss from discontinued operations Year Ended 2022 2021 Revenue $ 7,245,182 $ - Cost of sales and operating expenses 4,593,904 - Income from discontinued operations 2,651,278 - Loss on disposal of Celerit and Celerit Solutions (14,649,778 ) - Discontinued operations, net of tax $ (11,998,500 ) $ - |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 – GOODWILL AND INTANGIBLE ASSETS As of December 31, 2022, the balance of goodwill and intangible assets was $- 0 0 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS During the year ended December 31, 2022 and 2021, the Company received a number of related party loans, See Note 4 – “Notes Payable And Related Party Loans” for a detail of these transactions. During 2021, the Company entered into a contract with a member of management to provide blockchain service to them. For that service, the member of management paid a deposit of $ 90,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 8 – STOCK-BASED COMPENSATION During 2022, the Company issued 380,008 common shares to various consultants in lieu of cash payment. The awards were valued at the market price on the date of grant. The shares were valued at $ 542,163 and are amortized and vest ratably over the requisite service period that the consultants provided service over. In some cases these shares vest immediately. During the year ended December 31, 2022, the Company expensed $ 542,163 . Of the common shares issued in 2022 all have vested. During the year ended December 31, 2021, the Company issued 56,365, free trading common shares to various consultants in lieu of cash payment. The awards were valued at the market price on the date of grant. The shares were valued at $310,048 and are amortized and vest ratably over the one year service period that the consultants provided service over. As of December 31, 2021 the Company expensed $241,809 of the value of the shares issued, and expensed the remaining amount of $68,239 during 2022. Of the 56,365 shares issued, 45,274 have vested during 2021, and 11,091 vested during 2022. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 9 – LEASES The majority of our lease obligations are real estate operating leases from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, or that are on a month-to-month basis are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease assets represent the right-to-use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. We use a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. During 2022, the Company sold its building and subsequently entered into a non-cancellable five-year lease agreement for which it recorded a right-of-use asset and liability based on the present value of the lease payments in the amount of $ 1,227,955 The weighted average remaining lease term is 3.77 12 193,639 Schedule of lease payment Year 2023 $ 540,544 Year 2024 474,305 Year 2025 488,534 Year 2026 364,332 Year 2027 346,657 Total 2,214,372 Imputed interest 490,448 Lease liability $ 1,723,924 The Company’s minimum annual future obligations under all existing operating leases at December 31, 2021 and accounted for under previous lease guidance as follows: 2022 $ 180,905 2023 171,631 2024 157,065 2025 161,777 2026 27,772 Total $ 699,150 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities, and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Schedule Of Components Of Income Tax Expense Benefit December 31, December 31, Rate Reconciliation 2022 2021 Pretax Book Income (Loss) $ (16,768,111 ) $ (4,525,585 ) Add: Stock Valuation Losses Related to Abstract Sale & Celerit Recission 12,281,476 - Pretax Book Loss Net of Stock Valuation Losses (4,486,635 ) (4,525,585 ) Provision at Statutory Rate (1,167,000 ) (1,177,000 ) Permanent Differences 111,000 63,000 Change in Valuation Allowance 1,056,000 1,114,000 Provision for income taxes $ - $ - Net deferred tax assets consist of the following: Schedule Of Deferred Tax Assets And Liabilities Deferred Tax Assets 12/31/2022 12/31/2021 Deferred Tax Assets by Jurisdiction Federal $ 1,781,600 $ 962,300 State 508,400 271,700 Valuation Allowance (2,290,000 ) (1,234,000 ) Net Deferred Tax Assets $ - $ - Deferred Tax Assets by Components Intangible Assets $ - $ 4,800 Net Operating Loss 2,290,000 1,229,200 Valuation Allowance (2,290,000 ) (1,234,000 ) Net Deferred Tax Assets $ - $ - As of December 31, 2022, the Company had federal, state and foreign net operating loss carryforwards of approximately $ 8,930,000 1,056,000 1,114,000 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY Preferred Stock On December 31, 2022, and December 31, 2021, there were 25,000,000 shares of preferred stock authorized, with - 0 Common Stock The Company has authorized 300,000,000 0.001 106,512,827 During the year ended December 31, 2022, the Company: ● 292,083 530,000 ● Issued 4,000,000 ● 5,125,000 600,000 461,250 ● 380,008 542,163 During the year ended December 31, 2021, the Company: ● Raised $ 4,603,979 1,231,580 ● Issued 73,244 292,976 ● Issued an aggregate of 56,365 310,048 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES The Company is subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. Although the asserted value of these matters may be significant, the Company currently does not expect that the ultimate resolution of any open matters will have a material adverse effect on its consolidated financial position or results of operations. See Note 4, with respect to the Company’s note payable with Celerit, and its subsequent collection action initiated against the Company. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 13 – PROPERTY AND EQUIPMENT At December 31, 2022 and 2021, property and equipment is comprised of the following: Schedule of property and equipment 2022 2021 Land $ - $ 484,197 Buildings - 1,946,586 Building improvements - 270,472 Furniture and fixtures 113,398 113,398 Equipment 104,054 93,627 Vehicles 31,223 31,223 Subtotal 248,675 2,939,503 Less: accumulated depreciation (53,048 ) (10,140 ) Total $ 195,627 $ 2,929,363 Depreciation expense for the years ended December 31, 2022 and 2021, was $ 99,755 10,140 On September 8, 2021, the Company acquired a building in Palm Bay, Florida with approximately 36,810 square feet of office space for $2,430,762 excluding closing costs. During 2022, the Company occupied the building and commenced operations from this facility. During December 2022, the Company sold the building for $3,850,000 less closing costs and recognized a gain in the amount of $988,155. In conjunction with the sale, the Company entered into a 5 year lease. See Note 9 Leases. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS On April 6, 2023 the Company issued 10,000,000 0.00001 600,000 The AJB $ 600,000 the interest rate shall equal fifteen percent ( 15 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of expenses during the reporting period. The most significant estimates relate to right of use assets and liabilities, fair value of warrants and stock awards, and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company maintains accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC). Cash balances at times are in excess of FDIC insurance limits. |
Business Combinations | Business Combinations Under the acquisition method of accounting, we allocate the fair value of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values assigned, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, are based on estimates and assumptions determined by management. These valuations require us to make significant estimates and assumptions, especially with respect to intangible assets. We record the excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, as goodwill. If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our consolidated financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and we record those adjustments to our consolidated financial statements. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships. The useful life of these customer relationships is estimated to be three years. Goodwill is not amortized, but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess. On November 4, 2022 the Company entered into a Membership Interest Purchase Agreement with TechEdge Services, a Texas corporation, to sell all of its ownership interest in Abstract Media. As a result, the Company recorded an impairment charge on its intangible assets including goodwill of $ 344,787 |
Fair Value Measurements | Fair Value Measurements The FASB ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level–1 Level–2 Level–3 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. We use the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash and cash equivalents, trade receivables, related party payables, accounts payable, accrued liabilities and short-term borrowings. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature, and they are receivable or payable on demand. The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. |
Revenue Recognition | Revenue Recognition Revenues are accounted for in accordance with the FASB’s Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606 or ASC 606). The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for the products and/or services. To achieve this principle, the Company applies the following five steps: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to performance obligations in the contract, and 5. Recognize revenue when or as the Company satisfies a performance obligation. The Company derives revenue from numerous sources. One of the Company’s products is the Blockchain Archive Server—a turn-key, off-the-shelf, blockchain solution that works with virtually any hardware and software combinations currently used in commerce, without the need to replace or eliminate any part of the client’s data security that is being utilized. The Company accounts for a contract with a customer when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Binding contracts or agreements with customers together with agreement to the Company’s terms and conditions are considered the contract with a customer. The Company considers collection of the contract to be probable at the onset of the arrangement. The second product offering is called the “Regional Service Center” which is a single unit system of 32 Blockchain Archive Servers capable of servicing up to 2,580 individual small accounts, and is marketed to existing IT service providers with established accounts. The service is delivered over the Internet and is considered software as a service “SaaS”. The Company recognizes revenue when the control of the Blockchain Archive Server is transferred to the Company’s customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for these products. Control is generally transferred when products are delivered. The Company’s revenue contracts generally represent a single performance obligation to sell its products to customers. For the SaaS software, which typically involves a significant customer deposit with services provided by the Company over a 60 month period, the Company recognizes revenue ratably as service is provided over the contract period. Under the terms of the Company’s regional service center contracts, the Company requires a substantial deposit in advance of the support work required to be performed by the Company. All deposits that have not been deemed earned by the Company following the guidelines of the ASC 606 are considered to be contract liabilities and are classified as deferred revenue on the Company’s consolidated balance sheets. As of December 31, 2022, the current balance of deferred revenue was $ 122,704 941,251 423,715 Under the guidelines of ASC 606, the Company disaggregates its revenues from contracts with customers by service types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. Management has determined that this level of disaggregation is beneficial to the users of the Company’s consolidated financial statements. As of December 31, 2022 and 2021, all of the revenue was earned from the Company’s Blockchain Archive Servers and SaaS. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Net income (loss) per common share is computed by dividing net income (loss) by the weighted average common shares outstanding during the period as defined by ASC 260, “Earnings per Share.” Basic earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. As of December 31, 2021, there were no instruments which would have a dilutive effect. As of December 31, 2022, the Company excluded the convertible notes and warrants from dilutive earnings per share as its effect is antidilutive. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. On November 15, 2019, the FASB issued ASU 2019-10, which amends the effective dates for three major accounting standards. The ASU defers the effective dates for the credit losses, derivatives, and lease standards for certain companies. In the first quarter of fiscal 2022, the Company adopted ASU 2016-02 using the “Comparatives Under 840 Option” approach to transition. Under this method, financial information related to periods prior to adoption will be as originally reported under the previous standard – ASC 840, Leases. The effects of adopting the new standard (ASC 842, Leases) in fiscal 2022 were recognized as a cumulative-effect adjustment to accumulated deficit as of the beginning of the fiscal first quarter. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification as operating or capital leases. We also elected to combine lease and non-lease components and to exclude short-term leases from our consolidated balance sheets. The most significant impact of adoption was the recognition of right-of-use operating lease assets and right-of-use operating lease liabilities of $496,000 and $541,000, respectively. The cumulative impact of these changes increased the accumulated deficit by approximately $ 46,000 |
Accounts receivable | Accounts receivable The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. The Company uses the allowance method to estimate for uncollectible receivables and maintains reserves, when necessary, for potential credit losses. An allowance for doubtful accounts, when necessary, is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Accounts receivable are ordinarily due 30 days after the issuance of an invoice. Accounts more than 120 days past due are considered delinquent and are written off after all collection attempts have been exhausted. As of December 31, 2022 and December 31, 2021, the balance of accounts receivable was $ 286,894 0 |
NOTES PAYABLE AND RELATED PAR_2
NOTES PAYABLE AND RELATED PARTY LOANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable related party outstanding | Schedule of notes payable related party outstanding December 31, December 31, 2022 2021 Related party loans (a) $ 1,396,975 $ - Notes payable - short term less debt issuance costs (b) $ 1,045,196 $ 2,505,553 Notes payable - long term (c) $ 12,760 $ 19,137 |
Schedule of maturities of notes payable | Schedule of maturities of notes payable Year 2023 $ 2,781,731 Year 2024 7,245 Year 2025 5,515 2,794,491 Less debt issuance costs 339,560 Total notes payable and related party notes payable $ 2,454,931 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Abstract Media [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Business Acquisitions by Acquisition Contingent Consideration | Schedule of Business Acquisitions by Acquisition Contingent Consideration Cash and cash equivalents $ 30,000 Common stock, 73,244 shares of the Company restricted common stock valued at $4.00 per share 292,976 Net liabilities assumed 77,422 Fair value of total consideration paid $ 400,398 |
Schedule of assets acquired and liabilities assumed | Schedule of assets acquired and liabilities assumed Cash and cash equivalents $ 21,080 Accounts receivable 39,345 Other current assets 19,758 Fixed assets, net 15,467 Total assets $ 95,650 Accounts payable 69,724 Accrued liabilities 103,348 Total liabilities 173,072 Net liabilities assumed $ 77,422 |
Schedule of loss from discontinued operations | Schedule of loss from discontinued operations Assets transferred: Cash $ 3,445 Prepaids and other assets 4,300 Property and equipment, net 17,766 Total assets 25,511 Liabilities assumed: Accounts payable 1,444 Accrued expenses 36,861 Total liabilities assumed 38,305 Net loss on disposal of Abstract Media 63,816 |
Schedule of loss from discontinued operations | Schedule of loss from discontinued operations Year Ended 2022 2021 Revenue $ 439,980 1,250 Costs of sales and operating expenses 982,547 65,494 Loss from discontinued operations (542,567 ) (64,244 ) Loss on disposal (63,816 ) - Discontinued operations, net of tax $ (606,383 ) $ (64,244 ) 2022 2021 Assets: Cash $ - $ 5,565 Receivables - 1,717 Prepaids and other assets - 19,858 Current assets of discontinued operations 27,140 Property and equipment, net - 15,467 Intangible assets, net - 194,638 Goodwill - 200,199 Noncurrent assets of discontinued operations - $ 410,304 Liabilities: - Accounts payable - 4,756 Accrued expenses 20,082 89,073 Deferred revenue - 14,016 Current liabilities of discontinued operations $ 20,082 $ 107,845 |
Celerit [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Business Acquisitions by Acquisition Contingent Consideration | Schedule of Business Acquisitions by Acquisition Contingent Consideration Cash and cash equivalents $ 10,000 Common stock, 4,000,000 shares of the Company restricted common stock valued at $3.20 per share 12,800,500 Issuance of promissory note 2,695,000 Fair value of total consideration paid $ 15,505,500 |
Schedule of assets acquired and liabilities assumed | Schedule of assets acquired and liabilities assumed Cash and cash equivalents $ 222,064 Accounts receivable 1,156,146 Prepaid expenses 319,895 Other current assets 276,913 Property, plant and equipment 481,817 Intangible assets (provisional) 2,736,378 Goodwill 10,945,515 Total assets $ 16,138,728 Accounts payable 23,443 Accrued expenses 609,785 Total liabilities assumed 633,228 Net purchase price $ 15,505,500 |
Schedule of loss from discontinued operations | Schedule of loss from discontinued operations Assets transferred: Cash $ 2,560,058 Accounts receivable 942,862 Other accounts receivable 629,086 Prepaids and other assets 107,109 Property and equipment, net 449,520 Goodwill 10,945,115 Intangibles 2,394,238 Total assets 18,027,988 Liabilities transferred: Accounts payable (56,715 ) Accrued expenses (166,579 ) Total liabilities (223,294 ) Net assets transferred 17,804,694 Consideration received, 4,000,000 shares returned to treasury (812,000 ) Extinguishment of promissory note (2,342,916 ) Loss from disposal of Celerit and Celerit Solutions $ (14,649,778 ) |
Schedule of loss from discontinued operations | Schedule of loss from discontinued operations Year Ended 2022 2021 Revenue $ 7,245,182 $ - Cost of sales and operating expenses 4,593,904 - Income from discontinued operations 2,651,278 - Loss on disposal of Celerit and Celerit Solutions (14,649,778 ) - Discontinued operations, net of tax $ (11,998,500 ) $ - |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of lease payment | Schedule of lease payment Year 2023 $ 540,544 Year 2024 474,305 Year 2025 488,534 Year 2026 364,332 Year 2027 346,657 Total 2,214,372 Imputed interest 490,448 Lease liability $ 1,723,924 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Components Of Income Tax Expense Benefit | Schedule Of Components Of Income Tax Expense Benefit December 31, December 31, Rate Reconciliation 2022 2021 Pretax Book Income (Loss) $ (16,768,111 ) $ (4,525,585 ) Add: Stock Valuation Losses Related to Abstract Sale & Celerit Recission 12,281,476 - Pretax Book Loss Net of Stock Valuation Losses (4,486,635 ) (4,525,585 ) Provision at Statutory Rate (1,167,000 ) (1,177,000 ) Permanent Differences 111,000 63,000 Change in Valuation Allowance 1,056,000 1,114,000 Provision for income taxes $ - $ - Net deferred tax assets consist of the following: |
Schedule Of Deferred Tax Assets And Liabilities | Schedule Of Deferred Tax Assets And Liabilities Deferred Tax Assets 12/31/2022 12/31/2021 Deferred Tax Assets by Jurisdiction Federal $ 1,781,600 $ 962,300 State 508,400 271,700 Valuation Allowance (2,290,000 ) (1,234,000 ) Net Deferred Tax Assets $ - $ - Deferred Tax Assets by Components Intangible Assets $ - $ 4,800 Net Operating Loss 2,290,000 1,229,200 Valuation Allowance (2,290,000 ) (1,234,000 ) Net Deferred Tax Assets $ - $ - |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment 2022 2021 Land $ - $ 484,197 Buildings - 1,946,586 Building improvements - 270,472 Furniture and fixtures 113,398 113,398 Equipment 104,054 93,627 Vehicles 31,223 31,223 Subtotal 248,675 2,939,503 Less: accumulated depreciation (53,048 ) (10,140 ) Total $ 195,627 $ 2,929,363 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working capital deficit | $ 2,301,249 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
GoodWill | $ 344,787 | |
Deferred Revenue, Current | 122,704 | $ 423,715 |
Deferred Revenue, Noncurrent | 941,251 | |
Changes increased accumulated deficit | 46,000 | |
Accounts receivable | $ 286,894 | $ 0 |
NOTES PAYABLE AND NOTES PAYABLE
NOTES PAYABLE AND NOTES PAYABLE RELATED PARTY (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Related party loans(a) | $ 1,396,975 | |
Notes payable - short term less debt issuance costs(b) | 1,045,196 | 2,505,553 |
Notes payable - long term(c) | $ 12,760 | $ 19,137 |
NOTES PAYABLE AND NOTES PAYAB_2
NOTES PAYABLE AND NOTES PAYABLE RELATED PARTY (Details 1) | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Year 2023 | $ 2,781,731 |
Year 2024 | 7,245 |
Year 2025 | 5,515 |
2,794,491 | |
Less debt issuance costs | 339,560 |
Total notes payable and related party notes payable | $ 2,454,931 |
NOTES PAYABLE AND RELATED PAR_3
NOTES PAYABLE AND RELATED PARTY LOANS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Sep. 20, 2022 | Dec. 31, 2022 | Oct. 18, 2022 | Jan. 08, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Debt instrument interest rate | 10% | ||||
Principal amount | $ 600,000 | ||||
Original issue discount | $ 60,000 | ||||
Restricted common stock shares | 5,125,000 | ||||
Restricted common stock value | $ 530,000 | ||||
Warrants | 1,000,000 | ||||
Strike price | $ 0.15 | ||||
Warrants value | $ 89,469 | ||||
Volatility | 292.40% | ||||
One year treasury bill rate | 4.51% | ||||
Unamortized note discount | $ 339,560 | ||||
Amortization of debt discount | 271,160 | ||||
Notes payable long term | $ 12,760 | $ 19,137 | |||
Promissory note agreements | the Company entered into a twelve percent (12%) $172,760 promissory note including $18,510 of Original Issue discount with 1800 Diagonal Lending LLC (“Diagonal) with a maturity date of December 31, 2023. Accrued interest, and outstanding principal shall be repaid in ten payments each in the amount of $19,349. In the event of a default, as defined in the note payable agreement, the loan is convertible at the discretion of the lender into common stock at 75% of the lowest ten day trading price prior to the conversion date multiplied by the amount outstanding. | ||||
Accruing interest | 7% | ||||
Chief Executive Officer [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 13,800 | ||||
Unsecured Demand Loans Four [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | May 04, 2023 | ||||
Debt instrument interest rate | 6% | ||||
Loans Payable | $ 350,000 | ||||
Unsecured Demand Loans Four [Member] | Chief Executive Officer [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 230,000 | ||||
Unsecured Demand Loans One [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Mar. 31, 2023 | ||||
Loans Payable | $ 13,800 | ||||
Unsecured Demand Loans One [Member] | Chief Executive Officer [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 468,900 | ||||
Unsecured Demand Loans Two [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Dec. 31, 2023 | ||||
Loans Payable | $ 468,900 | ||||
Unsecured Demand Loans Two [Member] | Chief Executive Officer [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 150,000 | ||||
Unsecured Demand Loans Three [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Apr. 10, 2023 | ||||
Loans Payable | $ 150,000 | ||||
Unsecured Demand Loans Three [Member] | Chief Executive Officer [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 350,000 | ||||
Unsecured Demand Loans Five [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Aug. 11, 2023 | ||||
Loans Payable | $ 230,000 | ||||
Vehicle Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate | 13.10% | ||||
Monthly principal payments | $ 710 | ||||
Notes payable long term | 6,996 | ||||
David Beavers [Member] | |||||
Debt Instrument [Line Items] | |||||
Related party loan | $ 168,903 | ||||
Accrues simple interest | 6% | ||||
Maturity Date | Sep. 30, 2023 | ||||
Donald Beavers [Member] | |||||
Debt Instrument [Line Items] | |||||
Related party loan | $ 15,372 | ||||
Maturity Date | Aug. 30, 2023 | ||||
Celerit [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 605,000 |
BUSINESS ACQUISITIONS_DISCONTIN
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Restructuring Cost and Reserve [Line Items] | |
Fair value of total consideration paid | $ 400,398 |
Abstract Media [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Cash and cash equivalents | $ 30,000 |
Common stock, 73,244 shares of the Company restricted common stock valued at $4.00 per share | shares | 292,976 |
Net liabilities assumed | $ 77,422 |
Fair value of total consideration paid | $ 400,398 |
BUSINESS ACQUISITIONS_DISCONT_2
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Restructuring Cost and Reserve [Line Items] | ||
Cash and cash equivalents | $ 5,565 | |
Accounts payable | 4,756 | |
Accrued liabilities | 20,082 | $ 89,073 |
Abstract Media [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Cash and cash equivalents | 21,080 | |
Accounts receivable | 39,345 | |
Other current assets | 19,758 | |
Fixed assets, net | 15,467 | |
Total assets | 95,650 | |
Accounts payable | 69,724 | |
Accrued liabilities | 103,348 | |
Total liabilities | 173,072 | |
Net liabilities assumed | $ 77,422 |
BUSINESS ACQUISITIONS_DISCONT_3
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 2) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Cash | $ 5,565 | |
Prepaids and other assets | 19,858 | |
Property and equipment, net | 15,467 | |
Accounts payable | 4,756 | |
Accrued expenses | 20,082 | $ 89,073 |
Discontinued Operations [Member] | ||
Cash | 3,445 | |
Prepaids and other assets | 4,300 | |
Property and equipment, net | 17,766 | |
Total assets | 25,511 | |
Accounts payable | 1,444 | |
Accrued expenses | 36,861 | |
Total liabilities assumed | 38,305 | |
Net loss on disposal of Abstract Media | $ 63,816 |
BUSINESS ACQUISITIONS_DISCONT_4
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | $ 344,467 | $ 181,071 |
Costs of sales and operating expenses | 4,150,541 | 4,233,858 |
Cash | 5,565 | |
Receivables | 1,717 | |
Prepaids and other assets | 19,858 | |
Current assets of discontinued operations | 27,140 | |
Property and equipment, net | 15,467 | |
Intangible assets, net | 194,638 | |
Goodwill | 200,199 | |
Noncurrent assets of discontinued operations | 410,304 | |
Accounts payable | 4,756 | |
Accrued expenses | 20,082 | 89,073 |
Deferred revenue | 14,016 | |
Current liabilities of discontinued operations | 20,082 | 107,845 |
Discontinued Operations [Member] | ||
Revenue | 439,980 | 1,250 |
Costs of sales and operating expenses | 982,547 | 65,494 |
Loss from discontinued operations | (542,567) | (64,244) |
Loss on disposal | (63,816) | |
Discontinued operations, net of tax | (606,383) | $ (64,244) |
Cash | 3,445 | |
Prepaids and other assets | 4,300 | |
Property and equipment, net | 17,766 | |
Accounts payable | 1,444 | |
Accrued expenses | $ 36,861 |
BUSINESS ACQUISITIONS_DISCONT_5
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 4) | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Restructuring Cost and Reserve [Line Items] | |
Fair value of total consideration paid | $ 400,398 |
Celerit [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Cash and cash equivalents | $ 10,000 |
Common stock, 4,000,000 shares of the Company restricted common stock valued at $3.20 per share | shares | 12,800,500 |
Issuance of promissory note | $ 2,695,000 |
Fair value of total consideration paid | $ 15,505,500 |
BUSINESS ACQUISITIONS_DISCONT_6
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 5) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Restructuring Cost and Reserve [Line Items] | ||
Cash and cash equivalents | $ 5,565 | |
Prepaid expenses | 19,858 | |
Property, plant and equipment | 15,467 | |
Goodwill | 200,199 | |
Accounts payable | 4,756 | |
Accrued expenses | 20,082 | $ 89,073 |
Celerit [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Cash and cash equivalents | 222,064 | |
Accounts receivable | 1,156,146 | |
Prepaid expenses | 319,895 | |
Other current assets | 276,913 | |
Property, plant and equipment | 481,817 | |
Intangible assets (provisional) | 2,736,378 | |
Goodwill | 10,945,515 | |
Total assets | 16,138,728 | |
Accounts payable | 23,443 | |
Accrued expenses | 609,785 | |
Total liabilities assumed | 633,228 | |
Net purchase price | $ 15,505,500 |
BUSINESS ACQUISITIONS_DISCONT_7
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 6) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Restructuring Cost and Reserve [Line Items] | ||
Cash | $ 5,565 | |
Prepaids and other assets | 19,858 | |
Property and equipment, net | 15,467 | |
Accounts payable | (4,756) | |
Accrued expenses | (20,082) | $ (89,073) |
Discontinued Operations [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Cash | 3,445 | |
Prepaids and other assets | 4,300 | |
Property and equipment, net | 17,766 | |
Total assets | 25,511 | |
Accounts payable | (1,444) | |
Accrued expenses | (36,861) | |
Net assets transferred | 38,305 | |
Celerit [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Cash | 222,064 | |
Accounts receivable | 1,156,146 | |
Other accounts receivable | 276,913 | |
Prepaids and other assets | 319,895 | |
Property and equipment, net | 481,817 | |
Intangibles | 2,736,378 | |
Total assets | 16,138,728 | |
Accounts payable | (23,443) | |
Accrued expenses | (609,785) | |
Net assets transferred | 633,228 | |
Celerit [Member] | Discontinued Operations [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Cash | 2,560,058 | |
Accounts receivable | 942,862 | |
Other accounts receivable | 629,086 | |
Prepaids and other assets | 107,109 | |
Property and equipment, net | 449,520 | |
Goodwill | 10,945,115 | |
Intangibles | 2,394,238 | |
Total assets | 18,027,988 | |
Accounts payable | (56,715) | |
Accrued expenses | (166,579) | |
Total liabilities | (223,294) | |
Net assets transferred | 17,804,694 | |
Consideration received, 4,000,000 shares returned to treasury | (812,000) | |
Extinguishment of promissory note | (2,342,916) | |
Loss from disposal of Celerit and Celerit Solutions | $ (14,649,778) |
BUSINESS ACQUISITIONS_DISCONT_8
BUSINESS ACQUISITIONS/DISCONTINUED OPERATIONS (Details 7) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | $ 344,467 | $ 181,071 |
Discontinued Operations [Member] | ||
Revenue | 439,980 | 1,250 |
Income from discontinued operations | (542,567) | (64,244) |
Discontinued operations, net of tax | (606,383) | (64,244) |
Discontinued Operations [Member] | Celerit [Member] | ||
Revenue | 7,245,182 | |
Cost of sales and operating expenses | 4,593,904 | |
Income from discontinued operations | 2,651,278 | |
Loss on disposal of Celerit and Celerit Solutions | (14,649,778) | |
Discontinued operations, net of tax | $ (11,998,500) |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 12 Months Ended | |||||
Apr. 07, 2022 | Dec. 06, 2021 | Oct. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 18, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Income (loss) from discontinued operations | $ 12,604,883 | $ 64,244 | ||||
Total consideration paid | 400,398 | |||||
Goodwill | 344,787 | |||||
Total proceeds | $ 0 | |||||
Principal amount | $ 600,000 | |||||
Ms Rothwell [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Number of shares transfer | 4,000,000 | |||||
Terry Rothwell [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Principal amount | $ 2,695,000 | |||||
Interest rate | 0.0001% | |||||
Maturity date | Dec. 31, 2022 | |||||
Accrues simple interest | 6% | |||||
Celerit [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Loans Payable | $ 605,000 | |||||
Abstract Media [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Stock Issued During Period, Shares, Acquisitions | 73,244 | 73,244 | ||||
Total consideration paid | 400,398 | |||||
Goodwill | 200,199 | |||||
Fair value of intangible assets | $ 200,199 | |||||
Celerit [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Additional consideration | $ 10,000 | |||||
Stock Issued During Period, Shares, Acquisitions | 4,000,000 | |||||
Total consideration paid | $ 15,505,500 | |||||
Goodwill | 10,945,515 | |||||
Fair value of intangible assets | $ 2,736,378 | |||||
Stock issued, shares | 4,000,000 | |||||
Celerit [Member] | Merger Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Total consideration paid | $ 2,695,000 | |||||
Membership Interest Exchange Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Additional consideration | $ 15,000 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | $ 0 |
Intangible assets | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | Dec. 31, 2022 USD ($) |
Related Party Transactions [Abstract] | |
Deposit | $ 90,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
[custom:SharesBasedCompensation] | $ 542,163 |
Trading common shares description | the Company issued 56,365, free trading common shares to various consultants in lieu of cash payment. The awards were valued at the market price on the date of grant. The shares were valued at $310,048 and are amortized and vest ratably over the one year service period that the consultants provided service over. As of December 31, 2021 the Company expensed $241,809 of the value of the shares issued, and expensed the remaining amount of $68,239 during 2022. Of the 56,365 shares issued, 45,274 have vested during 2021, and 11,091 vested during 2022. |
Common Stock [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | $ 542,163 |
Consultants [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture | shares | 380,008 |
LEASES (Details)
LEASES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 540,544 | $ 171,631 |
2024 | 474,305 | 157,065 |
2025 | 488,534 | 161,777 |
2026 | 364,332 | 27,772 |
Year 2027 | 346,657 | |
Total | 2,214,372 | 699,150 |
Imputed interest | (490,448) | |
Lease liability | $ 1,723,924 | |
2022 | $ 180,905 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Lease payments | $ 1,227,955 |
Weighted average remaining lease term | 3 years 9 months 7 days |
Weighted average discount rate | 12% |
Operating lease expense | $ 193,639 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Pretax Book Income (Loss) | $ (16,768,111) | $ (4,525,585) |
Add: Stock Valuation Losses Related to Abstract Sale & Celerit Recission | 12,281,476 | |
Pretax Book Loss Net of Stock Valuation Losses | (4,486,635) | (4,525,585) |
Provision at Statutory Rate | (1,167,000) | (1,177,000) |
Permanent Differences | 111,000 | 63,000 |
Change in Valuation Allowance | 1,056,000 | 1,114,000 |
Provision for income taxes |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets by Jurisdiction | ||
Federal | $ 1,781,600 | $ 962,300 |
State | 508,400 | 271,700 |
Valuation Allowance | (2,290,000) | (1,234,000) |
Net Deferred Tax Assets | ||
Deferred Tax Assets by Components | ||
Intangible Assets | 4,800 | |
Net Operating Loss | $ 2,290,000 | $ 1,229,200 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 8,930,000 | |
Valuation allowence | $ 1,056,000 | $ 1,114,000 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 06, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, authorized | 300,000,000 | 300,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 106,512,827 | 100,715,736 | |
Common stock, shares outstanding | 106,512,827 | 100,715,736 | |
Sale of stock | 292,083 | ||
Proceeds from issuance of private placement | $ 530,000 | ||
Number of shares issued | 5,125,000 | ||
Promissory note | $ 600,000 | ||
Number of shares issued, value | $ 461,250 | ||
Stock based compensation, shares | 380,008 | ||
Stock based compensation | $ 542,163 | ||
Share issued for acquisition, value | $ 292,976 | ||
Investor [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Sale of stock | 1,231,580 | ||
Sale of stock, value | $ 4,603,979 | ||
Consultants [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of shares issued | 56,365 | ||
Number of shares issued, value | $ 310,048 | ||
Celerit [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Share issued for acquisition | 4,000,000 | ||
Abstract Media [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Share issued for acquisition | 73,244 | 73,244 | |
Share issued for acquisition, value | $ 292,976 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 484,197 | |
Buildings | 1,946,586 | |
Building improvements | 270,472 | |
Furniture and fixtures | 113,398 | 113,398 |
Equipment | 104,054 | 93,627 |
Vehicles | 31,223 | 31,223 |
Subtotal | 248,675 | 2,939,503 |
Less: accumulated depreciation | (53,048) | (10,140) |
Total | $ 195,627 | $ 2,929,363 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 08, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 99,755 | $ 10,140 | |
Acquired a building description | the Company acquired a building in Palm Bay, Florida with approximately 36,810 square feet of office space for $2,430,762 excluding closing costs. During 2022, the Company occupied the building and commenced operations from this facility. During December 2022, the Company sold the building for $3,850,000 less closing costs and recognized a gain in the amount of $988,155. In conjunction with the sale, the Company entered into a 5 year lease. See Note 9 Leases. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Apr. 13, 2023 | Apr. 06, 2023 |
Subsequent Event [Line Items] | ||
Common stock warrants | 10,000,000 | |
Exercise price | $ 0.00001 | |
Due interest payments | $ 600,000 | $ 600,000 |
Interest rate | 15% |