Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Oct. 20, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | AiADVERTISING, INC. | |
Trading Symbol | N/A | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 1,334,408,773 | |
Amendment Flag | false | |
Entity Central Index Key | 0000743758 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-13215 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 30-0050402 | |
Entity Address, Address Line One | 1114 S. St. Mary’s Street #120 | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78210 | |
City Area Code | (917) | |
Local Phone Number | 273-8429 | |
Title of 12(b) Security | N/A | |
Security Exchange Name | NONE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash | $ 2,409,646 | $ 55,831 |
Accounts receivable, net | 727,932 | 95,300 |
Prepaid and other current Assets | 202,859 | 105,076 |
TOTAL CURRENT ASSETS | 3,340,437 | 256,207 |
PROPERTY & EQUIPMENT, net | 86,560 | 102,659 |
RIGHT-OF-USE ASSETS | 169,319 | 175,974 |
OTHER ASSETS | ||
Lease deposit | 8,939 | 8,939 |
Goodwill and other intangible assets, net | 20,202 | 20,202 |
TOTAL OTHER ASSETS | 29,141 | 29,141 |
TOTAL ASSETS | 3,625,457 | 563,981 |
CURRENT LIABILITIES | ||
Accounts payable | 1,457,419 | 2,071,122 |
Accrued expenses | 23,545 | 39,233 |
Operating lease liability | 29,717 | 28,494 |
Deferred revenue and customer deposit | 837,295 | 791,133 |
TOTAL CURRENT LIABILITIES | 2,347,976 | 2,940,799 |
LONG TERM LIABILITIES | ||
Operating lease obligation, long term | 139,602 | 147,480 |
TOTAL LONG TERM LIABILITIES | 139,602 | 147,480 |
TOTAL LIABILITIES | 2,487,578 | 3,088,279 |
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | ||
Common stock, $0.001 par value; 10,000,000,000 and 2,000,000,000 authorized shares; 1,334,408,773 and 1,175,324,203 shares issued and outstanding, respectively | 1,334,414 | 1,175,330 |
Additional paid in capital | 55,870,245 | 49,595,914 |
Common stock payable, consisting of 5,000,000 shares valued at $0.1128 | 564,000 | 564,000 |
Accumulated deficit | (56,633,184) | (53,859,673) |
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) | 1,137,879 | (2,524,298) |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | 3,625,457 | 563,981 |
Series B Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | 18 | 18 |
Series C Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | 14 | 14 |
Series D Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | 86 | 86 |
Series E Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | 10 | 10 |
Series F Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | ||
Series G Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | 3 | 3 |
Series H Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | ||
Series I Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | 2,273 | |
Series J Preferred Stock | ||
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock value | ||
Related Party | ||
CURRENT LIABILITIES | ||
Accounts payable, related party | $ 10,817 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 86,021 | 86,021 |
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 10,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 1,334,408,773 | 1,175,324,203 |
Common stock, shares outstanding | 1,334,408,773 | 1,175,324,203 |
Common stock, payable shares | 5,000,000 | 5,000,000 |
Common stock, payable per share (in Dollars per share) | $ 0.1128 | $ 0.1128 |
Series B Preferred Stock | ||
Preferred stock, shares authorized | 25,000 | 25,000 |
Preferred stock, shares issued | 18,025 | 18,025 |
Preferred stock, shares outstanding | 18,025 | 18,025 |
Series C Preferred Stock | ||
Preferred stock, shares authorized | 25,000 | 25,000 |
Preferred stock, shares issued | 14,425 | 14,425 |
Preferred stock, shares outstanding | 14,425 | 14,425 |
Series D Preferred Stock | ||
Preferred stock, shares authorized | 90,000 | 90,000 |
Preferred stock, shares issued | 86,021 | 86,021 |
Preferred stock, shares outstanding | 86,021 | 86,021 |
Series E Preferred Stock | ||
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 10,000 | 10,000 |
Preferred stock, shares outstanding | 10,000 | 10,000 |
Series F Preferred Stock | ||
Preferred stock, shares authorized | 800,000 | 800,000 |
Preferred stock, shares issued | 0 | 2,413 |
Preferred stock, shares outstanding | 0 | 2,413 |
Series G Preferred Stock | ||
Preferred stock, shares authorized | 2,600 | 2,600 |
Preferred stock, shares issued | 2,597 | 2,597 |
Preferred stock, shares outstanding | 2,597 | 2,597 |
Series H Preferred Stock | ||
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series I Preferred Stock | ||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 2,272,727 | 0 |
Preferred stock, shares outstanding | 2,272,727 | 0 |
Series J Preferred Stock | ||
Preferred stock, shares authorized | 700,000 | 700,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
REVENUE | $ 1,594,041 | $ 1,618,626 | $ 3,768,793 | $ 2,818,288 |
COST OF REVENUE | 1,953,936 | 1,627,788 | 3,609,385 | 3,163,620 |
Gross Profit | (359,895) | (9,162) | 159,408 | (345,332) |
OPERATING EXPENSES | ||||
Salaries and outside services | 1,151,803 | 858,804 | 1,823,064 | 2,123,509 |
Selling, general and administrative expenses | 805,499 | 1,139,493 | 1,528,784 | 2,154,057 |
Depreciation and amortization | 8,047 | 9,321 | 16,097 | 18,434 |
TOTAL OPERATING EXPENSES | 1,965,349 | 2,007,618 | 3,367,945 | 4,296,000 |
INCOME (LOSS) FROM OPERATIONS BEFORE OTHER INCOME AND TAXES | (2,325,244) | (2,016,780) | (3,208,537) | (4,641,332) |
OTHER INCOME (EXPENSE) | ||||
Other income | 435,021 | 435,026 | ||
Gain (loss) on Sales of Discontinued Operations | 25,197 | |||
TOTAL OTHER INCOME (EXPENSE) | 435,021 | 435,026 | 25,197 | |
INCOME/(LOSS) BEFORE PROVISION FOR TAXES | (1,890,223) | (2,016,780) | (2,773,511) | (4,616,135) |
PROVISION (BENEFIT) FOR INCOME TAXES | ||||
NET INCOME/(LOSS) | (1,890,223) | (2,016,780) | (2,773,511) | (4,616,135) |
PREFERRED DIVIDENDS | ||||
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (1,890,223) | $ (2,016,780) | $ (2,773,511) | $ (4,616,135) |
NET LOSS PER SHARE | ||||
BASIC (in Dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
DILUTED (in Dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||
BASIC (in Shares) | 1,329,921,400 | 1,131,934,620 | 1,281,214,213 | 1,094,989,076 |
DILUTED (in Shares) | 1,329,921,400 | 1,131,934,620 | 1,281,214,213 | 1,094,989,076 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Shareholders’ Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Common Stock Payable | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 131 | $ 1,055,566 | $ 46,667,049 | $ 564,000 | $ (45,369,749) | $ 2,916,997 |
Balance (in Shares) at Dec. 31, 2021 | 131,068 | 1,055,556,518 | ||||
Proceeds from issuance of common stock | $ 55,300 | 588,324 | 643,624 | |||
Proceeds from issuance of common stock (in Shares) | 55,300,000 | |||||
Stock based compensation | 393,546 | 393,546 | ||||
Stock option exercised - cashless basis | $ 912 | (912) | ||||
Stock option exercised - cashless basis (in Shares) | 912,442 | |||||
Net Loss | (2,599,355) | (2,599,355) | ||||
Balance at Mar. 31, 2022 | $ 131 | $ 1,111,778 | 47,648,007 | 564,000 | (47,969,104) | 1,354,812 |
Balance (in Shares) at Mar. 31, 2022 | 131,068 | 1,111,768,960 | ||||
Balance at Dec. 31, 2021 | $ 131 | $ 1,055,566 | 46,667,049 | 564,000 | (45,369,749) | 2,916,997 |
Balance (in Shares) at Dec. 31, 2021 | 131,068 | 1,055,556,518 | ||||
Net Loss | (4,616,135) | |||||
Balance at Jun. 30, 2022 | $ 131 | $ 1,134,093 | 48,426,172 | 564,000 | (49,985,884) | $ 138,512 |
Balance (in Shares) at Jun. 30, 2022 | 131,068 | 1,134,084,046 | 912 | |||
Balance at Dec. 31, 2021 | $ 131 | $ 1,055,566 | 46,667,049 | 564,000 | (45,369,749) | $ 2,916,997 |
Balance (in Shares) at Dec. 31, 2021 | 131,068 | 1,055,556,518 | ||||
Stock option exercised - cashless basis (in Shares) | 4,000,000 | |||||
Balance at Dec. 31, 2022 | $ 131 | $ 1,175,330 | 49,595,914 | 564,000 | (53,859,673) | $ (2,524,298) |
Balance (in Shares) at Dec. 31, 2022 | 131,068 | 1,175,324,203 | ||||
Balance at Mar. 31, 2022 | $ 131 | $ 1,111,778 | 47,648,007 | 564,000 | (47,969,104) | 1,354,812 |
Balance (in Shares) at Mar. 31, 2022 | 131,068 | 1,111,768,960 | ||||
Proceeds from issuance of common stock | $ 22,120 | 274,415 | 296,535 | |||
Proceeds from issuance of common stock (in Shares) | 22,120,000 | |||||
Stock Issuance in exchange for services | $ 195 | 3,179 | 3,374 | |||
Stock Issuance in exchange for services (in Shares) | 195,086 | |||||
Stock based compensation | 500,571 | 500,571 | ||||
Net Loss | (2,016,780) | (2,016,780) | ||||
Balance at Jun. 30, 2022 | $ 131 | $ 1,134,093 | 48,426,172 | 564,000 | (49,985,884) | $ 138,512 |
Balance (in Shares) at Jun. 30, 2022 | 131,068 | 1,134,084,046 | 912 | |||
Balance at Dec. 31, 2022 | $ 131 | $ 1,175,330 | 49,595,914 | 564,000 | (53,859,673) | $ (2,524,298) |
Balance (in Shares) at Dec. 31, 2022 | 131,068 | 1,175,324,203 | ||||
Proceeds from issuance of common stock | $ 140,533 | 415,473 | 556,006 | |||
Proceeds from issuance of common stock (in Shares) | 140,532,512 | |||||
Stock based compensation | 462,163 | 462,163 | ||||
Net Loss | (883,288) | (883,288) | ||||
Balance at Mar. 31, 2023 | $ 131 | $ 1,315,863 | 50,473,550 | 564,000 | (54,742,961) | (2,389,417) |
Balance (in Shares) at Mar. 31, 2023 | 131,068 | 1,315,856,715 | ||||
Balance at Dec. 31, 2022 | $ 131 | $ 1,175,330 | 49,595,914 | 564,000 | (53,859,673) | (2,524,298) |
Balance (in Shares) at Dec. 31, 2022 | 131,068 | 1,175,324,203 | ||||
Stock option exercised - cashless basis | $ 3,931 | |||||
Stock option exercised - cashless basis (in Shares) | 9,222,228 | |||||
Net Loss | $ (2,773,511) | |||||
Balance at Jun. 30, 2023 | $ 2,404 | $ 1,334,414 | 55,870,245 | 564,000 | (56,633,184) | 1,137,879 |
Balance (in Shares) at Jun. 30, 2023 | 2,403,795 | 1,334,408,773 | ||||
Balance at Mar. 31, 2023 | $ 131 | $ 1,315,863 | 50,473,550 | 564,000 | (54,742,961) | (2,389,417) |
Balance (in Shares) at Mar. 31, 2023 | 131,068 | 1,315,856,715 | ||||
Proceeds from Issuance of preferred stock | $ 2,273 | 4,997,727 | 5,000,000 | |||
Proceeds from Issuance of preferred stock (in Shares) | 2,272,727 | |||||
Proceeds from issuance of common stock | $ 14,620 | 28,801 | 43,421 | |||
Proceeds from issuance of common stock (in Shares) | 14,620,945 | |||||
Stock based compensation | 374,098 | 374,098 | ||||
Stock option exercised - cashless basis | $ 3,931 | (3,931) | ||||
Stock option exercised - cashless basis (in Shares) | 3,931,113 | |||||
Net Loss | (1,890,223) | (1,890,223) | ||||
Balance at Jun. 30, 2023 | $ 2,404 | $ 1,334,414 | $ 55,870,245 | $ 564,000 | $ (56,633,184) | $ 1,137,879 |
Balance (in Shares) at Jun. 30, 2023 | 2,403,795 | 1,334,408,773 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) from continued operations | $ (2,773,511) | $ (4,616,135) |
Adjustment to reconcile net loss to net cash (used in) operating activities | ||
Bad debt expense | (1,150) | |
Depreciation and amortization | 16,099 | 18,434 |
Gain on Sale of Discontinued Operations | (25,197) | |
Non-cash compensation expense | 836,261 | 894,117 |
Non-cash service expense | 3,374 | |
Change in assets and liabilities: | ||
Accounts receivable | (632,632) | (12,428) |
Prepaid expenses and other assets | (97,783) | 1,063 |
Costs in excess of billings | 3,942 | |
Lease deposit | 4,361 | |
Accounts payable | (624,520) | 593,589 |
Accrued expenses | (15,688) | (6,680) |
Customer Deposits | 46,162 | 218,756 |
NET CASH (USED IN) OPERATING ACTIVITIES | (3,245,612) | (2,923,954) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for purchase of fixed assets | (23,209) | |
Proceeds from the sale of discontinued operations | 25,197 | |
NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES | 1,988 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds of issuance of common stock, net | 599,427 | 940,159 |
Proceeds of issuance of preferred stock | 5,000,000 | |
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES | 5,599,427 | 940,159 |
NET INCREASE / (DECREASE) IN CASH | 2,353,815 | (1,981,807) |
CASH, BEGINNING OF PERIOD | 55,831 | 3,431,455 |
CASH, END OF PERIOD | 2,409,646 | 1,449,648 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | ||
Taxes paid | ||
Right of Use Assets | 6,655 | 56,650 |
Cashless Exercise of stock options | $ 3,931 | $ 912 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying unaudited Consolidated Financial Statements of AiAdvertising, Inc. (“AiAdvertising,” “we,” “us,” “our,” or the “Company”) and its wholly-owned subsidiaries, have been prepared in accordance with the instructions to interim financial reporting as prescribed by the Securities and Exchange Commission (the “SEC”). The results for the interim periods are not necessarily indicative of results for the entire year. These interim financial statements do not include all disclosures required by generally accepted accounting principles (“GAAP”) and should be read in conjunction with our consolidated financial statements and footnotes in the Company’s annual report on Form 10-K filed with the SEC on May 16, 2023. In the opinion of management, the unaudited Consolidated Financial Statements contained in this report include all known accruals and adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods reported herein. Any such adjustments are of a normal recurring nature. There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries which the Company does not expect to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Going Concern The accompanying Consolidated Financial Statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying Consolidated Financial Statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, raising additional capital. Historically, the Company has obtained funds from investors since its inception through sales of our securities. The Company will also seek to generate additional working capital from increasing sales from its data sciences, creative, website development and digital advertising service offerings, and continue to pursue its business plan and purposes. As of June 30, 2023, the Company had working capital of $992,461. We have historically reported net losses, and negative cash flows from operations, which raised substantial doubt about the Company’s ability to continue as a going concern in previous years. The appropriateness of using the going concern basis is dependent upon, among other things, raising additional capital. Historically, the Company has obtained funds from investors since its inception through sales of our securities. The Company will also seek to generate additional working capital from increasing sales from its Ai Platform, creative, website development and digital advertising service offerings, and continue to pursue its business plan and purposes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of AiAdvertising is presented to assist in understanding the Company’s Consolidated Financial Statements. The Consolidated Financial Statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the Consolidated Financial Statements. The Consolidated Financial Statements include the Company and its wholly owned subsidiaries CLWD Operations, Inc a Delaware corporation (“CLWD Operations”), and Giles Design Bureau, Inc., a Nevada corporation (“Giles Design Bureau). All significant inter-company transactions are eliminated in consolidation of the financial statements. Accounts Receivable The Company extends credit to its customers, who are located nationwide. Accounts receivable are customer obligations due under normal trade terms. The Company performs continuing credit evaluations of its customers’ financial condition. Management reviews accounts receivable on a regular basis, based on contractual terms and how recently payments have been received to determine if any such amounts will potentially be uncollected. The Company includes any balances that are determined to be uncollectible in its allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off. The balance of the allowance account at June 30, 2023 Use of Estimates The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are primarily used in our revenue recognition, the allowance for doubtful account receivable, fair value assumptions in accounting, intangible assets and long-lived asset impairments and adjustments, the deferred tax valuation allowance, and the fair value of stock options and warrants. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of June 30, 2023, the Company held cash and cash equivalents in the amount of $2,409,646 which was held in the Company’s operating bank accounts. Property and Equipment Property and equipment are stated at cost, and are depreciated or amortized using the straight-line method over the following estimated useful lives: Furniture, fixtures & equipment 7 Years Computer equipment 5 Years Commerce server 5 Years Computer software 3 - 5 Years Leasehold improvements Length of the lease Depreciation expenses were $16,099 and $18,434 for the six months ended June 30, 2023, and 2022, respectively. Revenue Recognition The Company recognizes income when the service is provided or when product is delivered. We present revenue, net of customer incentives. Most of our income is generated from professional services and site development fees. We provide online marketing services that we purchase from third parties. The gross revenue presented in our statement of operations includes digital advertising revenue. We also offer professional services such as development services. The fees for development services with multiple deliverables constitute a separate unit of accounting in accordance with ASC 606, which are recognized as the work is performed. Upfront fees for development services or other customer services are deferred until certain implementation or contractual milestones have been achieved. If we have performed work for our clients, but have not invoiced clients for that work, then we record the value of the work on the balance sheet as costs in excess of billings. The terms of services contracts generally are for periods of less than one year. The deferred revenue and customer deposits as of June 30, 2023, and December 31, 2022, were $837,295 and $791,133, respectively. The costs in excess of billings as of June 30, 2023, and December 31, 2022, was zero and zero, respectively. We always strive to satisfy our customers by providing superior quality and service. Since we typically bill based on a Time and Materials basis, there are no returns for work delivered. When discrepancies or disagreements arise, we do our best to reconcile them by assessing the situation on a case-by-case basis and determining if any discounts can be given. Historically, we have not granted any significant discounts. Included in revenue are costs that are reimbursed by our clients, including third party services, such as photographers and stylists, furniture, supplies, and the largest component, digital advertising. We have determined, based on our review of ASC 606-10-55-39, that the amounts classified as reimbursable costs should be recorded as gross revenue, due to the following factors: ● The Company is primarily in control of the inputs of the project and responsible for the completion of the client contract; ● We have discretion in establishing price; and ● We have discretion in supplier selection. Research and Development Research and development costs are expensed as incurred. Total research and development costs were $141,260 and $461,038 for the six months ended June 30, 2023, and 2022, respectively. Advertising Costs The Company expenses the cost of advertising and promotional materials when incurred. Total advertising costs were $64,391 and $88,705 for the six months ended June 30, 2023, and 2022, respectively. Fair value of financial instruments The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments. As of June 30, 2023, and December 31, 2022, the Company’s notes payable have stated borrowing rates that are consistent with those currently available to the Company and, accordingly, the Company believes the carrying value of these debt instruments approximates their fair value. Fair value is defined as the price to sell an asset or transfer a liability, between market participants at the measurement date. Fair value measurements assume that the asset or liability is (1) exchanged in an orderly manner, (2) the exchange is in the principal market for that asset or liability, and (3) the market participants are independent, knowledgeable, able and willing to transact an exchange. Fair value accounting and reporting establishes a framework for measuring fair value by creating a hierarchy for observable independent market inputs and unobservable market assumptions and expands disclosures about fair value measurements. Considerable judgment is required to interpret the market data used to develop fair value estimates. As such, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current exchange. The use of different market assumptions and/or estimation methods could have a material effect on the estimated fair value. ASC Topic 820 established a nine-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows from the asset are less than its carrying amount. If impairment is indicated, the long-lived asset would be written down to fair value. Fair value is determined by an evaluation of available price information at which assets could be bought or sold, including quoted market prices, if available, or the present value of the estimated future cash flows based on reasonable and supportable assumptions. Indefinite Lived Intangibles The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. The impairment test conducted by the Company includes a two-step approach to determine whether it is more likely than not that impairment exists. If it is determined, after step one, that it is not more likely than not, that impairment exists, then no further analysis is conducted. The steps are as follows: 1. Based on the totality of qualitative factors, determine whether the carrying amount of the intangible asset may not be recoverable. Qualitative factors and key assumptions reviewed include the following: ● Increases in costs, such as labor, materials or other costs that could negatively affect future cash flows. The Company assumed that costs associated with labor, materials, and other costs should be consistent with fair market levels. If the costs were materially higher than fair market levels, then such costs may adversely affect the future cash flows of the Company or reporting units. ● Financial performance, such as negative or declining cash flows, or reductions in revenue may adversely affect recoverability of the recorded value of the intangible assets. During our analysis, the Company assumes that revenues should remain relatively consistent or show gradual growth month-to-month and quarter-to-quarter. If we report revenue declines, instead of increases or flat levels, then such condition may adversely affect the future cash flows of the Company or reporting units. ● Legal, regulatory, contractual, political, business or other factors that could affect future cash flows. During our analysis, the Company assumes that the legal, regulatory, political or business conditions should remain consistent, without placing material pressure on the Company or any of its reporting units. If such conditions were to become materially different than what has been experienced historically, then such conditions may adversely affect the future cash flows of the Company or reporting units. ● Entity-specific events such as losses of management, key personnel, or customers, may adversely affect future cash flows. During our analysis, the Company assumes that members of management, key personnel, and customers will remain consistent period-over-period. If not effectively replaced, the loss of members of management and key employees could adversely affect operations, culture, morale and overall success of the company. In addition, if material revenue from key customers is lost and not replaced, then future cash flows will be adversely affected. ● Industry or market considerations, such as competition, changes in the market, changes in customer dependence on our service offerings, or obsolescence could adversely affect the Company or its reporting units. We understand that the markets we serve are constantly changing, requiring us to change with them. During our analysis, we assume that we will address new opportunities in service offering and industries served. If we do not make such changes, then we may experience declines in revenue and cash flow, making it difficult to re-capture market share. ● Macroeconomic conditions such as deterioration in general economic conditions or limitations on accessing capital could adversely affect the Company. During our analysis, we acknowledge that macroeconomic factors, such as the economy, may affect our business plan because our customers may reduce budgets for our services. If there are material worsening in economic conditions, which lead to reductions in revenue then such conditions may adversely affect the Company. 2. Compare the carrying amount of the intangible asset to the fair value. 3. If the carrying amount is greater than the fair value, then the carrying amount is reduced to reflect fair value. Intangible assets are comprised of the following, presented as net of amortization: June 30, 2023 AiAdvertising Total Domain name 20,202 20,202 Total $ 20,202 $ 20,202 December 31, 2022 AiAdvertising Total Domain name 20,202 20,202 Total $ 20,202 $ 20,202 Concentrations of Business and Credit Risk The Company operates in a single industry segment. The Company markets its services to companies and individuals in many industries and geographic locations. The Company’s operations are subject to rapid technological advancement and intense competition. Accounts receivable represent financial instruments with potential credit risk. The Company typically offers its customers credit terms. The Company makes periodic evaluations of the credit worthiness of its enterprise customers and other than obtaining deposits pursuant to its policies, it generally does not require collateral. In the event of nonpayment, the Company has the ability to terminate services. As of June 30, 2023, the Company held cash and cash equivalents in the amount of $2,409,646 which was held in the operating bank accounts. Of this amount, none was held in any one account, in amounts exceeding the FDIC insured limit of $250,000. For further discussion on Concentrations see footnote 10. Stock-Based Compensation The Company addressed the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for either equity instruments of the enterprise or liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The transactions are accounted for using a fair-value-based method and recognized as expenses in our statement of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. Stock-based compensation expense recognized in the consolidated statement of operations during the six months ended June 30, 2023, included compensation expense for the stock-based payment awards granted prior to, but not yet vested, as of June 30, 2023, based on the grant date fair value estimated. Stock-based compensation expense recognized in the consolidated statement of operations for the three months ended June 30, 2023, is based on awards ultimately expected to vest or has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation expense recognized in the consolidated statements of operations during the six months ended June 30, 2023, and 2022 were $836,261 and $894,117, respectively. Basic and Diluted Net Income (Loss) per Share Calculations Income (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, warrants and convertible notes were used in the calculation of the income per share. For the six months ended June 30, 2023, the Company has excluded 609,087,214 shares of common stock underlying options, 18,025 Series B Preferred shares convertible into 450,625,000 shares of common stock, 14,425 Series C Preferred shares convertible into 144,250,000 shares of common stock, 86,021 Series D Preferred shares convertible into 215,052,500 shares of common stock, 10,000 Series E Preferred shares convertible into 20,000,000 shares of common stock, 2,597 Series G Preferred shares convertible into 136,684,211 shares of common stock, 2,272,727 Series I preferred shares convertible into 909,090,800 shares of common stock, and 162,703,869 shares of common stock underlying warrants, because their impact on the loss per share is anti-dilutive. During the six months ended June 30, 2023, the Series I Preferred shares are included in the calculation for diluted earnings per share, resulting in 909,090,800 being added to the weighted average common and common equivalent shares outstanding. The balance of the above-mentioned shares are excluded in the calculation for diluted earnings per share. For the six months ended June 30, 2022, the Company has excluded 258,424,694 shares of common stock underlying options, 18,025 Series B Preferred shares convertible into 450,625,000 shares of common stock, 14,425 Series C Preferred shares convertible into 144,250,000 shares of common stock, 86,021 Series D Preferred shares convertible into 215,052,500 shares of common stock, 10,000 Series E Preferred shares convertible into 20,000,000 shares of common stock, 2,597 Series G Preferred shares convertible into 136,684,211 shares of common stock and 162,703,869 shares of common stock underlying warrants, because their impact on the loss per share is anti-dilutive. During the six months ended June 30, 2022, the above-mentioned shares are not included in the calculation for diluted earnings per share. Dilutive per share amounts are computed using the weighted-average number of common shares outstanding and potentially dilutive securities, using the treasury stock method if their effect would be dilutive. Recently Adopted Accounting Pronouncements The Company does not elect to delay complying with any new or revised accounting standards, but to apply all standards required of public companies, according to those required application dates. Management reviewed accounting pronouncements issued during the quarter ended June 30, 2023, and no pronouncements were adopted during the period. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2022. Due to the fact that we have no credit instruments recorded at expected losses, at June 30, 2023 the impact of this ASU on our consolidated financial statements was immaterial. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. The measurement of deferred tax assets and liabilities is based on provisions of applicable tax law. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the amount of tax benefits that, based on available evidence, the Company does not expect realize. For the six months ended June 30, 2023, we used the federal tax rate of 21% in our determination of the deferred tax assets and liabilities balances. For the Current tax provision: Federal Taxable income $ - Total current tax provision $ - Deferred tax provision: Loss carryforwards $ 5,796,217 Change in valuation allowance (5,796,217 ) Total Deferred tax provision $ - |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers The core principles of revenue recognition under ASC 606 includes the following five criteria: 1. Identify the contract with the customer Contract with our customers may be oral, written, or implied. A written and signed contract stating the terms and conditions is the preferred method and is consistent with most customers. The terms of a written contract may be contained within the body of an email, during which proposals are made and campaign plans are outlined, or it may be a stand-alone document signed by both parties. Contracts that are oral in nature are consummated in status and pitch meetings and may be later followed up with an email detailing the terms of the arrangement, along with a proposal document. No work is commenced without an understanding between the Company and our customers, that a valid contract exists. 2. Identify the performance obligations in the contract Our sales and account management teams define the scope of services to be offered, to ensure all parties are in agreement and obligations are being delivered to the customer as promised. The performance obligation may not be fully identified in a mutually signed contract, but may be outlined in email correspondence, face-to-face meetings, additional proposals or scopes of work, or phone conversations. 3. Determine the transaction price Pricing is discussed and identified by the operations team prior to submitting a proposal to the customer. Based on the obligation presented, third-party service pricing is established, and time and labor are estimated, to determine the most accurate transaction pricing for our customer. Price is subject to change upon agreed parties, and could be fixed or variable, milestone focused or time and materials. 4. Allocate the transaction price to the performance obligations in the contract If a contract involves multiple obligations, the transaction pricing is allocated accordingly, during the performance obligation phase (criteria 2 above). 5. Recognize revenue when (or as) we satisfy a performance obligation The Company uses several means to satisfy the performance obligations: a. Billable Hours – The Company employs a time tracking system where employees record their time by project. This method of satisfaction is used for time and material projects, change orders, website edits, revisions to designs, and any other project that is hours-based. The hours satisfy the performance obligation as the hours are incurred. b. Ad Spend - To satisfy ad spend, the Company generates analytical reports monthly or as required to show how the ad dollars were spent and how the targeting resulted in click-throughs. The ad spend satisfies the performance obligation, regardless of the outcome or effectiveness of the campaign. In addition, the Company utilizes third party invoices after the ad dollars are spent, in order to satisfy the obligation. c. Milestones – If the contract requires milestones to be hit, then the Company satisfies the performance obligation when that milestone is completed and presented to the customer for review. As each phase of a project is complete, we consider it as a performance obligation being satisfied and transferred to the customer. At this point, the customer is invoiced the amount due based on the transaction pricing for that specific phase and/or we apply the customer deposit to recognize revenue. d. Monthly Retainer – If the contract is a retainer for work performed, then the customer is paying the Company for its expertise and accessibility, not for a pre-defined amount of output. In this case, the obligation is satisfied at the end of the period, regardless of the amount of work effort required. e. Hosting – Monthly recurring fees for hosting are recognized on a monthly basis, at a fixed rate. Hosting contracts are typically one-year and reviewed annually for renewal. Prices are subject to change at management discretion. During the year ended December 31, 2021, web hosting services was discontinued from our operating revenue streams. Historically, the Company generates income from four main revenue streams: Platform, creative design, web development, and digital marketing. Each revenue stream is unique, and includes the following features: Platform We provide a subscription-based, end-to-end Ad Management Campaign Performance Platform. We believe in harnessing the power of artificial intelligence (AI) and machine learning (ML) to eliminate waste and maximize return on digital ad spend. The platform empowers brands and agencies to easily target, predict, create, scale, and measure hyper-personalized campaigns. We prove what works and what doesn’t, enabling our clients to make informed and strategic decisions impacting their bottom lines positively. We classify revenue as a percentage of the ad spend budget or as a monthly fixed fee for the platform license subscription. Contracts are generated to assure both the Company and the client are committed to partnership, agree to the defined terms and conditions, and are typically for one year. The transaction price is usually a percentage of the media budget, which is subject to change on a case-by-case basis. The Company evaluates the fair value of the platform license obligation by using the expected cost-plus margin approach to determine the reasonableness of the transaction price. The Company recognizes revenue when performance obligations are met, such as the ad spend has run for percentage-based contracts. If the platform license fee is fixed, then the obligation is earned at the end of the period, regardless of how much media spend is performed. Creative Design We provide branding and creative design services, which we believe, set apart our clients from their competitors and establish them in their specific markets. We believe in showcasing our clients’ brands uniquely and creatively to infuse the public with curiosity to learn more. We classify revenue as creative design that includes branding, photography, copyrighting, printing, signs and interior design. Contracts are generated to assure both the Company and the client are committed to partnership and both agree to the defined terms and conditions and are typically less than one year. The Company recognizes revenue when performance obligations are met, usually when creative design services obligations are complete, when the hours are recorded, designs are presented, website themes are complete, or any other criteria as mutually agreed. Web Development We develop websites that attract high levels of traffic for our clients. We offer our clients the expertise to manage and protect their website, and the agility to adjust their online marketing strategy as their business expands. We classify revenue as web development that includes website coding, website patch installs, ongoing development support and fixing inoperable sites. Contracts are generated to assure both the Company and the client are committed to the partnership and both agree to the defined terms and conditions. Although most projects are long-term (6-8 months) in scope, we do welcome short-term projects which are invoiced as the work is completed at a specified hourly rate. The Company records web development revenue as earned, when the developer hours are recorded (if time and materials arrangements) or when the milestones are achieved (if a milestone arrangement). Digital Marketing We have a reputation for providing digital marketing services that get results. We classify revenue as digital marketing, including, ad spend and digital ad support. Billable hours and advertising spending are estimated based on client-specific needs and subject to change with client concurrence. Revenue is recognized when ads are run on one of the third-party platforms or when the hours are recorded by the digital marketing specialist if the obligation relates to support or services. Included in creative design and digital marketing revenues are costs that are reimbursed by our clients, including third-party services, such as photographers and stylists, supplies, and the largest component, digital advertising. We have determined, based on our review, that the amounts classified as reimbursable costs should be recorded as gross (principal), due to the following factors: - The Company is the primary obligor in the arrangement; - We have latitude in establishing price; - We have discretion in supplier selection; and The Company has credit risk included in creative design and digital marketing revenues are costs that are reimbursed by our clients, including third party services, such as photographers and stylists, supplies, and the largest component, digital advertising. We have determined, based on our review, that the amounts classified as reimbursable costs should be recorded as gross (principal), due to the following factors: - The Company is the primary obligor in the arrangement; - We have latitude in establishing price; - We have discretion in supplier selection; and - The Company has credit risk For the six months ended June 30, 2023, and 2022 (unaudited), revenue was disaggregated into the four categories as follows: Six months ended June 30, 2023 Six months ended June 30, 2022 Third Related Total Third Related Total Design 550,933 - 550,933 727,670 - 727,670 Development 28,000 - 28,000 20,119 - 20,119 Digital Marketing 2,922,620 - 2,922,620 1,802,124 - 1,802,124 Platform License 267,240 - 267,240 268,375 - 268,375 Total $ 3,768,793 $ - $ 3,768,793 $ 2,818,288 $ - $ 2,818,288 |
Liquidity and Operations
Liquidity and Operations | 6 Months Ended |
Jun. 30, 2023 | |
Liquidity and Operations [Abstract] | |
LIQUIDITY AND OPERATIONS | 4. LIQUIDITY AND OPERATIONS The Company had a net loss of $2,773,511 for the six months ended June 30, 2023, a net loss of $4,616,135 for the six months ended June 30, 2022, and net cash used in operating activities of $(3,245,612) and $(2,923,954), in the same periods, respectively. While the Company expects that its capital needs in the foreseeable future may be met by cash-on-hand and projected positive cash-flow, there is no assurance that the Company will be able to generate enough positive cash flow to finance its growth and business operations in which event, the Company may need to seek outside sources of capital. There can be no assurance that such capital will be available on terms that are favorable to the Company or at all. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Domain Name On June 26, 2015, the Company purchased the rights to the domain “CLOUDCOMMERCE.COM”, from a private party at a purchase price of $20,000, plus transaction costs of $202. We use the domain as the main landing page for the Company. The total recorded cost of this domain of $20,202 has been included in other assets on the balance sheet. As of June 30, 2023, we determined that this domain has an indefinite useful life, and as such, is not included in depreciation and amortization expense. The Company will assess this intangible asset annually for impairment, in addition to it being classified with indefinite useful life. The Company will assess this intangible asset for impairment, if an event occurs that may affect the fair value, or at least annually. The Company’s intangible assets consist of the following: June 30, 2023 December 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Domain name 20,202 - 20,202 20,202 - 20,202 Total $ 20,202 $ - $ 20,202 $ 20,202 $ - $ 20,202 Total amortization expense charged to operations for the six months ended June 30, 2023, and 2022, were zero and zero, respectively. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2023 | |
Capital Stock [Abstract] | |
CAPITAL STOCK | 6. CAPITAL STOCK At June 30, 2023 and December 31, 2022, the Company’s authorized stock consists of 10,000,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value of $0.001 per share. The rights, preferences, and privileges of the holders of the preferred stock will be determined by the Board of Directors prior to issuance of such shares. The conversion of certain outstanding preferred stock could have a significant impact on our common stockholders. As of the date of this report, the Board has designated Series A, Series B, Series C, Series D, Series E, Series F, Series G, Series H, Series I, and Series J Preferred Stock. Series A Preferred The Company has designated 10,000 shares of its preferred stock as Series A Preferred Stock. Each share of Series A Preferred Stock is convertible into 10,000 shares of the Company’s common stock. The holders of outstanding shares of Series A Preferred Stock are entitled to receive dividends, payable quarterly, out of any assets of the Company legally available therefore, at the rate of $8 per share annually, payable in preference and priority to any payment of any dividend on the common stock. As of June 30, 2023, the Company had zero shares of Series A Preferred Stock outstanding. As of June 30, 2023, and December 31, 2022, the balance owed on the Series A Preferred stock dividend was zero. Series B Preferred The Company has designated 25,000 shares of its preferred stock as Series B Preferred Stock. Each share of Series B Preferred Stock has a stated value of $100. The Series B Preferred Stock is convertible into shares of the Company’s common stock in amount determined by dividing the stated value by a conversion price of $0.004 per share. The Series B Preferred Stock does not have voting rights except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series B Preferred Stock. As of June 30, 2023, and December 31, 2022, the Company has 18,025 shares of Series B Preferred Stock outstanding. Series C Preferred The Company has designated 25,000 shares of its preferred stock as Series C Preferred Stock. Each share of Series C Preferred Stock has a stated value of $100. The Series C Preferred Stock is convertible into shares of the Company’s common stock in the amount determined by dividing the stated value by a conversion price of $0.01 per share. The Series C Preferred Stock does not have voting rights except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series C Preferred Stock. As of June 30, 2023, and December 31, 2022, the Company has 14,425 shares of Series C Preferred Stock outstanding. Series D Preferred The Company has designated 90,000 shares of its preferred stock as Series D Preferred Stock. Each share of Series D Preferred Stock has a stated value of $100. The Series D Preferred Stock is convertible into common stock at a ratio of 2,500 shares of common stock per share of preferred stock, and pays a quarterly dividend, calculated as (1/90,000) x (5% of the Adjusted Gross Revenue) of the Company’s subsidiary Parscale Digital. Adjusted Gross Revenue means the top line gross revenue of Parscale Digital, as calculated under GAAP (generally accepted accounting principles) less any reselling revenue attributed to third party advertising products or service, such as, but not limited to, search engine keyword campaign fees, social media campaign fees, radio or television advertising fees, and the like. The Series D Preferred Stock does not have voting rights except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series D Preferred Stock. As of June 30, 2023, and December 31, 2022, the Company had 86,021 shares of Series D Preferred Stock outstanding. During the three months ended June 30, 2023, and June 30, 2022, we paid dividends of $0, and $0 respectively, to the holders of Series D Preferred stock. As of June 30, 2023, and December 31, 2022, the balance owed on the Series D Preferred stock dividend was zero. Series E Preferred The Company has designated 10,000 shares of its preferred stock as Series E Preferred Stock. Each share of Series E Preferred Stock has a stated value of $100. The Series E Preferred Stock is convertible into shares of the Company’s common stock in an amount determined by dividing the stated value by a conversion price of $0.05 per share. The Series E Preferred Stock does not have voting rights except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series E Preferred Stock. As of June 30, 2023, and December 31, 2022, the Company has 10,000 shares of Series E Preferred Stock outstanding. Series F Preferred The Company has designated 800,000 shares of its preferred stock as Series F Preferred Stock. Each share of Series F Preferred Stock has a stated value of $25. The Series F Preferred Stock is not convertible into common stock. The holders of outstanding shares of Series F Preferred Stock are entitled to receive dividends, at the annual rate of 10%, payable monthly, payable in preference and priority to any payment of any dividend on the Company’s common stock. The Series F Preferred Stock does not have voting rights, except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation. To the extent it may lawfully do so, the Company may, in its sole discretion, after the first anniversary of the original issuance date of the Series F Preferred Stock, redeem any or all of the then outstanding shares of Series F Preferred Stock at a redemption price of $25 per share plus any accrued but unpaid dividends. The Series F Preferred Stock was offered in connection with the Company’s offering under Regulation A under the Securities Act of 1933, as amended. As of June 30, 2023, and December 31, 2022, the Company had zero shares of Series F Preferred Stock outstanding, and the balance on stock dividend was zero. Series G Preferred On February 6, 2020, the Company designated 2,600 shares of its preferred stock as Series G Preferred Stock. Each share of Series G Preferred Stock has a stated value of $100. The Series G Preferred Stock is convertible into shares of the Company’s common stock in an amount determined by dividing the stated value by a conversion price of $0.0019 per share. The Series G Preferred Stock does not have voting rights except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series G Preferred Stock. As of June 30, 2023, and December 31, 2022, the Company had 2,597 shares of Series G Preferred Stock outstanding. Series H Preferred On March 18, 2021, the Company issued 1,000 shares of its Series H Preferred Stock to the Chief Executive Officer of the Company, Andrew Van Noy. The Series H Preferred Stock is not convertible into shares of the Company’s common stock and entitles the holder to 51% of the voting power of the Company’s shareholders, as set forth in the Certificate of Designation. The 1,000 shares of Series H Preferred stock provided for automatic redemption by the Company at the par value of $0.001 per share on the sooner of: 1) sixty days (60) from the effective date of the Certificate of Designation, 2) on the date Andrew Van Noy ceases to serve as an officer, director or consultant of the Company, or 3) on the date that the Company’s shares of common stock first trade on any national securities exchange. On May 18, 2021, the Company redeemed all shares of Series H Preferred stock. On September 29, 2021, the Company filed a certificate of withdrawal with the Secretary of State of Nevada, to withdraw the Company’s existing certificate of designation of Series H Preferred Stock, filed a certificate of designation for a new series of Series H Preferred Stock with the Secretary of State of Nevada, and issued 1,000 shares of Series H Preferred Stock to Andrew Van Noy, the Company’s chief executive officer, for services rendered. As of June 30, 2023, and December 31, 2022, there was zero shares of Series H Preferred stock outstanding . Series I Preferred On April 10, 2023, the Company designated 3,000,000, shares of its preferred stock as Series I Preferred Stock. Each share of Series I Preferred Stock has a stated value of $0.001. The Series I Preferred Stock is convertible into shares of the Company’s common stock at the option of the shareholder, at any time and from time to time, into four hundred (400) fully-paid and non-assessable shares of Common stock. The Series I Preferred Stock has voting rights equal to 400 common votes per Series I share on all matters upon which the holders of Common stock of the Company are entitled to vote, except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series I Preferred Stock. On April 11, 2023, Hexagon Partners, Ltd. purchased 2,272,727 shares of Series I Preferred Stock at a purchase price of $2.20 per share. The Company also granted the Purchaser a six-month option from the date of the initial closing to purchase (i) up to 333,333 additional shares of Series I Preferred Stock for a purchase price of $6.00 per share, and (ii) up to 312,500 shares of Series I Preferred Stock for a purchase price of $7.20 per share. For so long as at least 50% of the Series I Preferred Stock purchased have not been redeemed by the Company or converted into common stock of the Company, Hexagon will have the right to designate two directors to the Company’s Board of Directors (the “Board”), and the Company may not increase the size of the Board above six directors without Hexagon’s prior written consent. As of June 30, 2023, the Company had 2,272,727 shares of Series I Preferred Stock outstanding and as of December 31, 2022, the Company had zero shares of Series I Preferred Stock outstanding. Series J Junior Participating Preferred On June 7, 2023, the Company designated 700,000 shares of its preferred stock as Series J Junior Participating Preferred Stock. Each share of Series J Preferred Stock has a stated value of $0.001. Pursuant to the Rights Agreement, the Board declared a dividend distribution of one preferred share purchase right (a “Right”) for each outstanding share of common stock, held by the shareholders of the Company at the close of business on June 7, 2023 (the “Record Date”). Holders of the Company’s warrants and certain of its existing preferred stock (including the Series I Preferred stock issued pursuant to the Purchase Agreement) as of the Record Date were also issued one Right for each share of common stock that such holders would be entitled to receive upon full exercise or conversion of their warrants or existing preferred stock, as applicable. Each Right will entitle the holder to purchase one ten-thousandth of a share of Series J Junior Participating Preferred Stock, of the Company (the “Series J Preferred Shares”) at the purchase price set forth in the Rights Agreement. If issued, holders of the Series J Preferred Stock shall be entitled to receive 10,000 times the value of all declared cash and non-cash dividends paid to any and all junior classes of capital stock. The Series J Preferred Stock has voting rights equal to 10,000 votes on all matters upon which the holders of Common stock of the Company are entitled to vote, except as required by law and with respect to certain protective provisions set forth in the Certificate of Designation of Series J Preferred Stock. As of June 30, 2023, and December 31, 2022, the Company had zero shares of Series J Preferred Stock outstanding. Common On February 8, 2023, in accordance with Section 2 of the purchase agreement, dated March 28, 2022, and amended on July 28, 2022, between the Company and an accredited investor, the Company submitted a purchase notice to the investor of a sale by the Company to the investor of 58,000,000 shares of common stock amounting to $230,975. On February 16, 2023, in accordance with Section 2 of the purchase agreement, dated March 28, 2022, and amended on July 28, 2022, between the Company and an accredited investor, the Company submitted a purchase notice to the investor of a sale by the Company to the investor of 21,649,574 shares of common stock amounting to $110,687. On February 28, 2023, in accordance with Section 2 of the purchase agreement, dated March 28, 2022, and amended on July 28, 2022, between the Company and an accredited investor, the Company submitted a purchase notice to the investor of a sale by the Company to the investor of 26,858,175 shares of common stock amounting to $102,110. On March 13, 2023, in accordance with Section 2 of the purchase agreement, dated March 28, 2022, and amended on July 28, 2022, between the Company and an accredited investor, the Company submitted a purchase notice to the investor of a sale by the Company to the investor of 16,954,805 shares of common stock amounting to $61,367. On March 23, 2023, in accordance with Section 2 of the purchase agreement, dated March 28, 2022, and amended on July 28, 2022, between the Company and an accredited investor, the Company submitted a purchase notice to the investor of a sale by the Company to the investor of 17,069,958 shares of common stock amounting to $50,867. On April 4, 2023, in accordance with Section 2 of the purchase agreement, dated March 28, 2022, and amended on July 28, 2022, between the Company and an accredited investor (see Note 6), the Company submitted a purchase notice to the investor of a sale by the Company to the investor of 14,620,464 shares of common stock for a purchase price of $0.003 per share amounting to $43,421. On June 28, 2023, our former Chief Financial Officer exercised 9,222,228 vested, in-the-money-options. The exercise was completed with a cashless transaction yielding a total of 3,931,113 newly issued shares. |
Stock Options and Warrants
Stock Options and Warrants | 6 Months Ended |
Jun. 30, 2023 | |
Stock Options and Warrants [Abstract] | |
STOCK OPTIONS AND WARRANTS | 7. STOCK OPTIONS AND WARRANTS Stock Options The Company used the historical industry index to calculate volatility, since the Company’s stock history did not represent the expected future volatility of the Company’s common stock. The fair value of options granted during the six months ending June 30, 2023, and 2022, were determined using the Black Scholes method with the following assumptions: Six months Year ended Risk free interest rate 4.49 % 1.29 % Stock volatility factor 206 % 229 % Weighted average expected option life 3.5 years 2.5 years Expected dividend yield - % - % A summary of the Company’s stock option activity and related information follows: Six months ended Year ended Options Weighted Options Weighted Outstanding - beginning of year 879,733,332 $ 0.0092 768,233,332 $ 0.0052 Granted 100,000,000 0.0100 125,500,000 0.0068 Exercised (9,222,228 ) 0.0057 (4,000,000 ) 0.0019 Forfeited (361,423,890 ) 0.0090 (7,000,000 ) 0.0127 Outstanding - end of the year 609,087,214 $ 0.0091 879,733,332 $ 0.0092 Exercisable at the end of the year 424,270,281 $ 0.0071 519,773,058 $ 0.0072 Weighted average fair value of options granted during the year $ 1,000,000 $ 2,495,600 As of June 30, 2023, and December 31, 2022, the intrinsic value of the stock options was approximately $2,563,500 and $362,102, respectively. Stock option expense for the six months ended June 30, 2023, and 2022 were $836,261 and $894,117, respectively. The Black Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The weighted average remaining contractual life of options outstanding, as of June 30, 2023, was as follows: Exercise prices Number of options outstanding Weighted Average remaining $ 0.0100 100,000,000 4.93 $ 0.0068 257,000,000 2.52 $ 0.0019 150,566,666 1.55 $ 0.0018 17,000,000 1.93 $ 0.0295 84,520,548 1.59 609,087,214 Warrants As of June 30, 2023, and December 31, 2022, there were 162,703,869 and 162,703,869 warrants outstanding, respectively. The fair value of warrants issued during the six months ended June 30, 2023, and 2022, were determined using the Black Scholes method with the following assumptions: Six months Year ended Risk free interest rate % 1.86 % Stock volatility factor % 272 % Weighted average expected warrant life - years 5 years Expected dividend yield -- % -- % A summary of the Company’s warrant activity and related information follows: Six months ended Year ended Warrants Weighted exercise Warrants Weighted Outstanding - beginning of period 162,703,869 $ 0.048 162,703,869 $ 0.048 Issued - - - - Exercised - - - - Forfeited - - - - Outstanding - end of period 162,703,869 $ 0.048 162,703,869 $ 0.048 Exercisable at the end of period 162,703,869 $ 0.048 162,703,869 $ 0.048 Weighted average fair value of warrants granted during the period $ - $ - Warrant expense for the three months ended June 30, 2023, and 2022 were $0 and $0, respectively. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2023 | |
Related Parties [Abstract] | |
RELATED PARTIES | 8. RELATED PARTIES None |
Concentrations
Concentrations | 6 Months Ended |
Jun. 30, 2023 | |
Concentrations [Abstract] | |
CONCENTRATIONS | 9. CONCENTRATIONS For the six months ended June 30, 2023, and 2022, the Company had three and four major customers who represented approximately 63% and 45% of total revenue, respectively. On June 30, 2023, and December 31, 2022, accounts receivable from two and three customers, represented approximately 58% and 61% of total accounts receivable, respectively. The two customers comprising the concentration within the accounts receivable are two of the same customers that comprise the concentration with the revenues discussed above. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Leases In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases The Company adopted the new lease guidance effective January 1, 2019, using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The Company has elected the practical expedient to combine lease and non-lease components as a single component. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate of 10%, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019, adoption date. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of 1 year to 3 years, some of which include options to extend the lease term for up to an undetermined number of years. Operating Leases On August 1, 2022, the Company signed a lease agreement with JJ Real Co., an unrelated party, which commenced on August 1, 2022, for approximately 2,000 square feet, located at 1114 S St. Mary’s Suite 120, San Antonio, TX 78210, for $3,333 per month, includes a pro rata share of the common building expenses and each year the monthly lease payment is subject to change per the lease agreement. The lease expires on July 31, 2027. The lease expiration is greater than twelve months, thus included on the Balance Sheet as Right-of-Use lease. This lease does not include a residual value guarantee, nor do we expect any material exit costs. As of August 1, 2022, we determined that this lease meets the criterion to be classified as a ROU Asset and is included on the balance sheet as Right-Of-Use Assets. As of June 30, 2023, and December 31, 2022, the ROU asset and liability balances of this lease were $169,319 and $175,974, respectively. During February 2023, JJ Real Co transferred ownership of the building and our lease located at 1114 S St. Mary’s - Suite 120, San Antonio, TX 78210 to Hooks Holding Ltd., a non-related party. No details of our lease or commitments have changed with the ownership transfer. Finance Leases None. The following is a schedule of the net book value of the finance lease. Assets June 30, December 31, Leased equipment under finance lease, $ 100,097 $ 100,097 less accumulated amortization (100,097 ) (100,097 ) Net $ - $ - Below is a reconciliation of leases to the financial statements. ROU Finance Leased asset balance $ 169,319 $ - Liability balance 169,319 - Cash flow (non-cash) - - Interest expense $ - $ - The following is a schedule, by years, of future minimum lease payments required under the operating and finance leases. Years Ending December 31, ROU Finance 2023 33,833 — 2024 46,833 — 2025 48,833 — 2026 50,833 — 2027 30,335 — Thereafter — — Total $ 210,667 $ — Less imputed interest (41,348 ) — Total liability $ 169,319 $ — Other information related to leases is as follows: Lease Type Weighted Weighted Operating Leases 49 months 10 % Finance Leases 0 months 0 % (1) This discount rate is consistent with our borrowing rates from various lenders. Legal Matters The Company may be involved in legal actions and claims arising in the ordinary course of business, from time to time, none of which at this time the Company considers to be material to the Company’s business or financial condition. |
Supplemental Statement of Cash
Supplemental Statement of Cash Flows Information | 6 Months Ended |
Jun. 30, 2023 | |
Supplemental Statement of Cash Flows Information [Abstract] | |
SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION | 11. SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION During the six months ended June 30, 2023, there were the following non-cash activities . - The holder of 9,222,228 vested stock options exercised their options into 3,931,113 shares of common stock through a cashless transaction in the amount of $3,931. - The values of the ROU operating leases assets and liabilities each declined $6,655, netting to zero on the statement of cash flows. During the six months ended June 30, 2022, there were the following non-cash activities. - The values of the ROU operating leases assets and liabilities each declined $56,650, netting to zero on the statement of cash flows. - The holder of 1,000,000 stock options exercised their options into 912,442 shares of common stock in the amount of $912. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Management has evaluated subsequent events according to ASC TOPIC 855 as the date of the financial statements and has determined that there are no reportable events. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Accounts Receivable | Accounts Receivable The Company extends credit to its customers, who are located nationwide. Accounts receivable are customer obligations due under normal trade terms. The Company performs continuing credit evaluations of its customers’ financial condition. Management reviews accounts receivable on a regular basis, based on contractual terms and how recently payments have been received to determine if any such amounts will potentially be uncollected. The Company includes any balances that are determined to be uncollectible in its allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off. The balance of the allowance account at June 30, 2023 |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are primarily used in our revenue recognition, the allowance for doubtful account receivable, fair value assumptions in accounting, intangible assets and long-lived asset impairments and adjustments, the deferred tax valuation allowance, and the fair value of stock options and warrants. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of June 30, 2023, the Company held cash and cash equivalents in the amount of $2,409,646 which was held in the Company’s operating bank accounts. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, and are depreciated or amortized using the straight-line method over the following estimated useful lives: Furniture, fixtures & equipment 7 Years Computer equipment 5 Years Commerce server 5 Years Computer software 3 - 5 Years Leasehold improvements Length of the lease Depreciation expenses were $16,099 and $18,434 for the six months ended June 30, 2023, and 2022, respectively. |
Revenue Recognition | Revenue Recognition The Company recognizes income when the service is provided or when product is delivered. We present revenue, net of customer incentives. Most of our income is generated from professional services and site development fees. We provide online marketing services that we purchase from third parties. The gross revenue presented in our statement of operations includes digital advertising revenue. We also offer professional services such as development services. The fees for development services with multiple deliverables constitute a separate unit of accounting in accordance with ASC 606, which are recognized as the work is performed. Upfront fees for development services or other customer services are deferred until certain implementation or contractual milestones have been achieved. If we have performed work for our clients, but have not invoiced clients for that work, then we record the value of the work on the balance sheet as costs in excess of billings. The terms of services contracts generally are for periods of less than one year. The deferred revenue and customer deposits as of June 30, 2023, and December 31, 2022, were $837,295 and $791,133, respectively. The costs in excess of billings as of June 30, 2023, and December 31, 2022, was zero and zero, respectively. We always strive to satisfy our customers by providing superior quality and service. Since we typically bill based on a Time and Materials basis, there are no returns for work delivered. When discrepancies or disagreements arise, we do our best to reconcile them by assessing the situation on a case-by-case basis and determining if any discounts can be given. Historically, we have not granted any significant discounts. Included in revenue are costs that are reimbursed by our clients, including third party services, such as photographers and stylists, furniture, supplies, and the largest component, digital advertising. We have determined, based on our review of ASC 606-10-55-39, that the amounts classified as reimbursable costs should be recorded as gross revenue, due to the following factors: ● The Company is primarily in control of the inputs of the project and responsible for the completion of the client contract; ● We have discretion in establishing price; and ● We have discretion in supplier selection. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Total research and development costs were $141,260 and $461,038 for the six months ended June 30, 2023, and 2022, respectively. |
Advertising Costs | Advertising Costs The Company expenses the cost of advertising and promotional materials when incurred. Total advertising costs were $64,391 and $88,705 for the six months ended June 30, 2023, and 2022, respectively. |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments. As of June 30, 2023, and December 31, 2022, the Company’s notes payable have stated borrowing rates that are consistent with those currently available to the Company and, accordingly, the Company believes the carrying value of these debt instruments approximates their fair value. Fair value is defined as the price to sell an asset or transfer a liability, between market participants at the measurement date. Fair value measurements assume that the asset or liability is (1) exchanged in an orderly manner, (2) the exchange is in the principal market for that asset or liability, and (3) the market participants are independent, knowledgeable, able and willing to transact an exchange. Fair value accounting and reporting establishes a framework for measuring fair value by creating a hierarchy for observable independent market inputs and unobservable market assumptions and expands disclosures about fair value measurements. Considerable judgment is required to interpret the market data used to develop fair value estimates. As such, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current exchange. The use of different market assumptions and/or estimation methods could have a material effect on the estimated fair value. ASC Topic 820 established a nine-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of a long-lived asset, management evaluates whether the estimated future undiscounted net cash flows from the asset are less than its carrying amount. If impairment is indicated, the long-lived asset would be written down to fair value. Fair value is determined by an evaluation of available price information at which assets could be bought or sold, including quoted market prices, if available, or the present value of the estimated future cash flows based on reasonable and supportable assumptions. |
Indefinite Lived Intangibles | Indefinite Lived Intangibles The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. The impairment test conducted by the Company includes a two-step approach to determine whether it is more likely than not that impairment exists. If it is determined, after step one, that it is not more likely than not, that impairment exists, then no further analysis is conducted. The steps are as follows: 1. Based on the totality of qualitative factors, determine whether the carrying amount of the intangible asset may not be recoverable. Qualitative factors and key assumptions reviewed include the following: ● Increases in costs, such as labor, materials or other costs that could negatively affect future cash flows. The Company assumed that costs associated with labor, materials, and other costs should be consistent with fair market levels. If the costs were materially higher than fair market levels, then such costs may adversely affect the future cash flows of the Company or reporting units. ● Financial performance, such as negative or declining cash flows, or reductions in revenue may adversely affect recoverability of the recorded value of the intangible assets. During our analysis, the Company assumes that revenues should remain relatively consistent or show gradual growth month-to-month and quarter-to-quarter. If we report revenue declines, instead of increases or flat levels, then such condition may adversely affect the future cash flows of the Company or reporting units. ● Legal, regulatory, contractual, political, business or other factors that could affect future cash flows. During our analysis, the Company assumes that the legal, regulatory, political or business conditions should remain consistent, without placing material pressure on the Company or any of its reporting units. If such conditions were to become materially different than what has been experienced historically, then such conditions may adversely affect the future cash flows of the Company or reporting units. ● Entity-specific events such as losses of management, key personnel, or customers, may adversely affect future cash flows. During our analysis, the Company assumes that members of management, key personnel, and customers will remain consistent period-over-period. If not effectively replaced, the loss of members of management and key employees could adversely affect operations, culture, morale and overall success of the company. In addition, if material revenue from key customers is lost and not replaced, then future cash flows will be adversely affected. ● Industry or market considerations, such as competition, changes in the market, changes in customer dependence on our service offerings, or obsolescence could adversely affect the Company or its reporting units. We understand that the markets we serve are constantly changing, requiring us to change with them. During our analysis, we assume that we will address new opportunities in service offering and industries served. If we do not make such changes, then we may experience declines in revenue and cash flow, making it difficult to re-capture market share. ● Macroeconomic conditions such as deterioration in general economic conditions or limitations on accessing capital could adversely affect the Company. During our analysis, we acknowledge that macroeconomic factors, such as the economy, may affect our business plan because our customers may reduce budgets for our services. If there are material worsening in economic conditions, which lead to reductions in revenue then such conditions may adversely affect the Company. 2. Compare the carrying amount of the intangible asset to the fair value. 3. If the carrying amount is greater than the fair value, then the carrying amount is reduced to reflect fair value. Intangible assets are comprised of the following, presented as net of amortization: June 30, 2023 AiAdvertising Total Domain name 20,202 20,202 Total $ 20,202 $ 20,202 December 31, 2022 AiAdvertising Total Domain name 20,202 20,202 Total $ 20,202 $ 20,202 |
Concentrations of Business and Credit Risk | Concentrations of Business and Credit Risk The Company operates in a single industry segment. The Company markets its services to companies and individuals in many industries and geographic locations. The Company’s operations are subject to rapid technological advancement and intense competition. Accounts receivable represent financial instruments with potential credit risk. The Company typically offers its customers credit terms. The Company makes periodic evaluations of the credit worthiness of its enterprise customers and other than obtaining deposits pursuant to its policies, it generally does not require collateral. In the event of nonpayment, the Company has the ability to terminate services. As of June 30, 2023, the Company held cash and cash equivalents in the amount of $2,409,646 which was held in the operating bank accounts. Of this amount, none was held in any one account, in amounts exceeding the FDIC insured limit of $250,000. For further discussion on Concentrations see footnote 10. |
Stock-Based Compensation | Stock-Based Compensation The Company addressed the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for either equity instruments of the enterprise or liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The transactions are accounted for using a fair-value-based method and recognized as expenses in our statement of operations. Stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. Stock-based compensation expense recognized in the consolidated statement of operations during the six months ended June 30, 2023, included compensation expense for the stock-based payment awards granted prior to, but not yet vested, as of June 30, 2023, based on the grant date fair value estimated. Stock-based compensation expense recognized in the consolidated statement of operations for the three months ended June 30, 2023, is based on awards ultimately expected to vest or has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation expense recognized in the consolidated statements of operations during the six months ended June 30, 2023, and 2022 were $836,261 and $894,117, respectively. |
Basic and Diluted Net Income (Loss) per Share Calculations | Basic and Diluted Net Income (Loss) per Share Calculations Income (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, warrants and convertible notes were used in the calculation of the income per share. For the six months ended June 30, 2023, the Company has excluded 609,087,214 shares of common stock underlying options, 18,025 Series B Preferred shares convertible into 450,625,000 shares of common stock, 14,425 Series C Preferred shares convertible into 144,250,000 shares of common stock, 86,021 Series D Preferred shares convertible into 215,052,500 shares of common stock, 10,000 Series E Preferred shares convertible into 20,000,000 shares of common stock, 2,597 Series G Preferred shares convertible into 136,684,211 shares of common stock, 2,272,727 Series I preferred shares convertible into 909,090,800 shares of common stock, and 162,703,869 shares of common stock underlying warrants, because their impact on the loss per share is anti-dilutive. During the six months ended June 30, 2023, the Series I Preferred shares are included in the calculation for diluted earnings per share, resulting in 909,090,800 being added to the weighted average common and common equivalent shares outstanding. The balance of the above-mentioned shares are excluded in the calculation for diluted earnings per share. For the six months ended June 30, 2022, the Company has excluded 258,424,694 shares of common stock underlying options, 18,025 Series B Preferred shares convertible into 450,625,000 shares of common stock, 14,425 Series C Preferred shares convertible into 144,250,000 shares of common stock, 86,021 Series D Preferred shares convertible into 215,052,500 shares of common stock, 10,000 Series E Preferred shares convertible into 20,000,000 shares of common stock, 2,597 Series G Preferred shares convertible into 136,684,211 shares of common stock and 162,703,869 shares of common stock underlying warrants, because their impact on the loss per share is anti-dilutive. During the six months ended June 30, 2022, the above-mentioned shares are not included in the calculation for diluted earnings per share. Dilutive per share amounts are computed using the weighted-average number of common shares outstanding and potentially dilutive securities, using the treasury stock method if their effect would be dilutive. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company does not elect to delay complying with any new or revised accounting standards, but to apply all standards required of public companies, according to those required application dates. Management reviewed accounting pronouncements issued during the quarter ended June 30, 2023, and no pronouncements were adopted during the period. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2022. Due to the fact that we have no credit instruments recorded at expected losses, at June 30, 2023 the impact of this ASU on our consolidated financial statements was immaterial. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. The measurement of deferred tax assets and liabilities is based on provisions of applicable tax law. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the amount of tax benefits that, based on available evidence, the Company does not expect realize. For the six months ended June 30, 2023, we used the federal tax rate of 21% in our determination of the deferred tax assets and liabilities balances. For the Current tax provision: Federal Taxable income $ - Total current tax provision $ - Deferred tax provision: Loss carryforwards $ 5,796,217 Change in valuation allowance (5,796,217 ) Total Deferred tax provision $ - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives | Property and equipment are stated at cost, and are depreciated or amortized using the straight-line method over the following estimated useful lives: Furniture, fixtures & equipment 7 Years Computer equipment 5 Years Commerce server 5 Years Computer software 3 - 5 Years Leasehold improvements Length of the lease |
Schedule of Intangible Assets, Net of Amortization | Intangible assets are comprised of the following, presented as net of amortization: AiAdvertising Total Domain name 20,202 20,202 Total $ 20,202 $ 20,202 AiAdvertising Total Domain name 20,202 20,202 Total $ 20,202 $ 20,202 |
Schedule of Deferred Tax Assets and Liabilities | For the six months ended June 30, 2023, we used the federal tax rate of 21% in our determination of the deferred tax assets and liabilities balances. For the Current tax provision: Federal Taxable income $ - Total current tax provision $ - Deferred tax provision: Loss carryforwards $ 5,796,217 Change in valuation allowance (5,796,217 ) Total Deferred tax provision $ - |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition [Abstract] | |
Schedule of Revenue Disaggregated | For the six months ended June 30, 2023, and 2022 (unaudited), revenue was disaggregated into the four categories as follows: Six months ended June 30, 2023 Six months ended June 30, 2022 Third Related Total Third Related Total Design 550,933 - 550,933 727,670 - 727,670 Development 28,000 - 28,000 20,119 - 20,119 Digital Marketing 2,922,620 - 2,922,620 1,802,124 - 1,802,124 Platform License 267,240 - 267,240 268,375 - 268,375 Total $ 3,768,793 $ - $ 3,768,793 $ 2,818,288 $ - $ 2,818,288 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets consist of the following: June 30, 2023 December 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Domain name 20,202 - 20,202 20,202 - 20,202 Total $ 20,202 $ - $ 20,202 $ 20,202 $ - $ 20,202 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stock Options and Warrants [Abstract] | |
Schedule of Fair Value of Options Granted | The fair value of options granted during the six months ending June 30, 2023, and 2022, were determined using the Black Scholes method with the following assumptions: Six months Year ended Risk free interest rate 4.49 % 1.29 % Stock volatility factor 206 % 229 % Weighted average expected option life 3.5 years 2.5 years Expected dividend yield - % - % |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity and related information follows: Six months ended Year ended Options Weighted Options Weighted Outstanding - beginning of year 879,733,332 $ 0.0092 768,233,332 $ 0.0052 Granted 100,000,000 0.0100 125,500,000 0.0068 Exercised (9,222,228 ) 0.0057 (4,000,000 ) 0.0019 Forfeited (361,423,890 ) 0.0090 (7,000,000 ) 0.0127 Outstanding - end of the year 609,087,214 $ 0.0091 879,733,332 $ 0.0092 Exercisable at the end of the year 424,270,281 $ 0.0071 519,773,058 $ 0.0072 Weighted average fair value of options granted during the year $ 1,000,000 $ 2,495,600 |
Schedule of Weighted Average Remaining Contractual Life of Options Outstanding | The weighted average remaining contractual life of options outstanding, as of June 30, 2023, was as follows: Exercise prices Number of options outstanding Weighted Average remaining $ 0.0100 100,000,000 4.93 $ 0.0068 257,000,000 2.52 $ 0.0019 150,566,666 1.55 $ 0.0018 17,000,000 1.93 $ 0.0295 84,520,548 1.59 609,087,214 |
Schedule of Fair Value of Warrants Issued | The fair value of warrants issued during the six months ended June 30, 2023, and 2022, were determined using the Black Scholes method with the following assumptions: Six months Year ended Risk free interest rate % 1.86 % Stock volatility factor % 272 % Weighted average expected warrant life - years 5 years Expected dividend yield -- % -- % |
Schedule of Warrant Activity | A summary of the Company’s warrant activity and related information follows: Six months ended Year ended Warrants Weighted exercise Warrants Weighted Outstanding - beginning of period 162,703,869 $ 0.048 162,703,869 $ 0.048 Issued - - - - Exercised - - - - Forfeited - - - - Outstanding - end of period 162,703,869 $ 0.048 162,703,869 $ 0.048 Exercisable at the end of period 162,703,869 $ 0.048 162,703,869 $ 0.048 Weighted average fair value of warrants granted during the period $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of the Net Book Value of the Finance Lease | The following is a schedule of the net book value of the finance lease. Assets June 30, December 31, Leased equipment under finance lease, $ 100,097 $ 100,097 less accumulated amortization (100,097 ) (100,097 ) Net $ - $ - |
Schedule of Reconciliation of Leases to the Financial Statements | Below is a reconciliation of leases to the financial statements. ROU Finance Leased asset balance $ 169,319 $ - Liability balance 169,319 - Cash flow (non-cash) - - Interest expense $ - $ - |
Schedule of Future Minimum Lease Payments for Operating and Finance Leases | The following is a schedule, by years, of future minimum lease payments required under the operating and finance leases. Years Ending December 31, ROU Finance 2023 33,833 — 2024 46,833 — 2025 48,833 — 2026 50,833 — 2027 30,335 — Thereafter — — Total $ 210,667 $ — Less imputed interest (41,348 ) — Total liability $ 169,319 $ — |
Schedule of Other Information Related To Leases | Other information related to leases is as follows: Lease Type Weighted Weighted Operating Leases 49 months 10 % Finance Leases 0 months 0 % (1) This discount rate is consistent with our borrowing rates from various lenders. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working capital | $ 992,461 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Accounts receivable, allowance (in Dollars) | $ 5,619 | $ 5,619 | |
Cash and cash equivalents (in Dollars) | 2,409,646 | 55,831 | |
Depreciation expenses (in Dollars) | 16,099 | $ 18,434 | |
Deferred revenue and customer deposits (in Dollars) | 837,295 | 791,133 | |
Costs excess of billings (in Dollars) | 0 | $ 0 | |
Research and development costs (in Dollars) | 141,260 | 461,038 | |
Advertising costs (in Dollars) | 64,391 | 88,705 | |
Stock-based compensation expense (in Dollars) | $ 836,261 | $ 894,117 | |
Weighted average common equivalent shares outstanding | 909,090,800 | ||
Federal tax rate percentage | 21% | ||
Stock Option [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 609,087,214 | 258,424,694 | |
Common Stock [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Shares converted into common stock | 162,703,869 | 162,703,869 | |
Series B Preferred Shares [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 18,025 | 18,025 | |
Shares converted into common stock | 450,625,000 | 450,625,000 | |
Series C Preferred Shares [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 14,425 | 14,425 | |
Shares converted into common stock | 144,250,000 | 144,250,000 | |
Series D Preferred Shares [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 86,021 | 86,021 | |
Shares converted into common stock | 215,052,500 | 215,052,500 | |
Series E Preferred Shares [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 10,000 | 10,000 | |
Shares converted into common stock | 20,000,000 | 20,000,000 | |
Series G Preferred Shares [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 2,597 | 2,597 | |
Shares converted into common stock | 136,684,211 | 136,684,211 | |
Series I Preferred Shares [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Common stock underlying options shares | 2,272,727 | ||
Shares converted into common stock | 909,090,800 | ||
Credit Risk [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Cash and cash equivalents (in Dollars) | $ 2,409,646 | ||
FDIC insured amount (in Dollars) | $ 250,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives | Jun. 30, 2023 |
Furniture, fixtures & equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives [Line Items] | |
Property and equipment estimated useful lives | 7 years |
Computer equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Commerce server [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Computer software [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Computer software [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost, Estimated Useful Lives [Line Items] | |
Property and equipment estimated useful lives | Length of the lease |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Intangible Assets, Net of Amortization - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Summary of Significant Accounting Policies (Details) - Schedule of Intangible Assets, Net of Amortization [Line Items] | ||
Goodwill and other intangible assets, net | $ 20,202 | $ 20,202 |
AiAdvertising Inc [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Intangible Assets, Net of Amortization [Line Items] | ||
Goodwill and other intangible assets, net | 20,202 | 20,202 |
Domain name [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Intangible Assets, Net of Amortization [Line Items] | ||
Goodwill and other intangible assets, net | 20,202 | 20,202 |
Domain name [Member] | AiAdvertising Inc [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Intangible Assets, Net of Amortization [Line Items] | ||
Goodwill and other intangible assets, net | $ 20,202 | $ 20,202 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Deferred Tax Assets and Liabilities | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Federal | |
Taxable income | |
Total current tax provision | |
Deferred tax provision: | |
Loss carryforwards | 5,796,217 |
Change in valuation allowance | (5,796,217) |
Total Deferred tax provision |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of Revenue Disaggregated - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of revenue disaggregated [Abstract] | ||
Third Parties | $ 3,768,793 | $ 2,818,288 |
Related Parties | ||
Total | 3,768,793 | 2,818,288 |
Design [Member] | ||
Schedule of revenue disaggregated [Abstract] | ||
Third Parties | 550,933 | 727,670 |
Related Parties | ||
Total | 550,933 | 727,670 |
Development [Member] | ||
Schedule of revenue disaggregated [Abstract] | ||
Third Parties | 28,000 | 20,119 |
Related Parties | ||
Total | 28,000 | 20,119 |
Digital Marketing [Member] | ||
Schedule of revenue disaggregated [Abstract] | ||
Third Parties | 2,922,620 | 1,802,124 |
Related Parties | ||
Total | 2,922,620 | 1,802,124 |
Platform License [Member] | ||
Schedule of revenue disaggregated [Abstract] | ||
Third Parties | 267,240 | 268,375 |
Related Parties | ||
Total | $ 267,240 | $ 268,375 |
Liquidity and Operations (Detai
Liquidity and Operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss | $ (1,890,223) | $ (883,288) | $ (2,016,780) | $ (2,599,355) | $ (2,773,511) | $ (4,616,135) |
Net cash in operating activities | $ (3,245,612) | $ (2,923,954) |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Jun. 26, 2015 | Jun. 30, 2023 | Jun. 30, 2022 | |
Intangible Assets (Details) [Line Items] | |||
Amortization expense | $ 0 | $ 0 | |
Domain Name [Member] | |||
Intangible Assets (Details) [Line Items] | |||
Purchase price | $ 20,000 | ||
Transaction costs | 202 | ||
Other assets | $ 20,202 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of Intangible Assets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Intangible Assets (Details) - Schedule of Intangible Assets [Line Items] | ||
Gross | $ 20,202 | $ 20,202 |
Accumulated Amortization | ||
Net | 20,202 | 20,202 |
Domain name [Member] | ||
Intangible Assets (Details) - Schedule of Intangible Assets [Line Items] | ||
Gross | 20,202 | 20,202 |
Accumulated Amortization | ||
Net | $ 20,202 | $ 20,202 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 07, 2023 | Apr. 11, 2023 | Apr. 04, 2023 | Mar. 23, 2023 | Mar. 13, 2023 | Feb. 28, 2023 | Feb. 16, 2023 | Feb. 08, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 28, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Apr. 10, 2023 | Sep. 29, 2021 | Mar. 18, 2021 | Feb. 06, 2020 | |
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 10,000,000,000 | 10,000,000,000 | 2,000,000,000 | ||||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Preferred stock, shares outstanding | 86,021 | 86,021 | 86,021 | ||||||||||||||||
Purchase price per share (in Dollars per share) | $ 0.003 | ||||||||||||||||||
Share percentage | 50% | ||||||||||||||||||
Sale of common stock | 14,620,464 | 17,069,958 | 16,954,805 | 26,858,175 | 21,649,574 | 58,000,000 | |||||||||||||
Common stock amounting (in Dollars) | $ 43,421 | $ 50,867 | $ 61,367 | $ 102,110 | $ 110,687 | $ 230,975 | $ 599,427 | $ 940,159 | |||||||||||
Options, exercised shares | 9,222,228 | 9,222,228 | 4,000,000 | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Options, exercised shares | 3,931,113 | 912,442 | 3,931,113 | ||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 10,000 | 10,000 | |||||||||||||||||
Preferred Stock convertible shares | 10,000 | 10,000 | |||||||||||||||||
Preferred stock dividend per share (in Dollars per share) | $ 8 | ||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||||||||||
Preferred stock dividend (in Dollars) | $ 0 | $ 0 | |||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 25,000 | 25,000 | 25,000 | ||||||||||||||||
Preferred stock, shares outstanding | 18,025 | 18,025 | 18,025 | ||||||||||||||||
Conversion price per share (in Dollars per share) | $ 0.004 | $ 0.004 | |||||||||||||||||
Shares issued | 18,025 | 18,025 | 18,025 | ||||||||||||||||
Series B Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 100 | $ 100 | |||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 25,000 | 25,000 | 25,000 | ||||||||||||||||
Preferred stock, shares outstanding | 14,425 | 14,425 | 14,425 | ||||||||||||||||
Conversion price per share (in Dollars per share) | $ 0.01 | $ 0.01 | |||||||||||||||||
Shares issued | 14,425 | 14,425 | 14,425 | ||||||||||||||||
Series C Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 100 | $ 100 | |||||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 90,000 | 90,000 | 90,000 | ||||||||||||||||
Preferred stock, shares outstanding | 86,021 | 86,021 | 86,021 | ||||||||||||||||
Preferred stock dividend (in Dollars) | $ 0 | $ 0 | |||||||||||||||||
Preferred stock is convertible into common stock, description | Series D Preferred Stock is convertible into common stock at a ratio of 2,500 shares of common stock per share of preferred stock, and pays a quarterly dividend, calculated as (1/90,000) x (5% of the Adjusted Gross Revenue) of the Company’s subsidiary Parscale Digital | ||||||||||||||||||
Paid dividends (in Dollars) | $ 0 | $ 0 | |||||||||||||||||
Voting power description | The Series H Preferred Stock is not convertible into shares of the Company’s common stock and entitles the holder to 51% of the voting power of the Company’s shareholders | ||||||||||||||||||
Shares issued | 86,021 | 86,021 | 86,021 | ||||||||||||||||
Series D Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 100 | $ 100 | |||||||||||||||||
Preferred stock is convertible into common stock | 2,500 | 2,500 | |||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 10,000 | 10,000 | 10,000 | ||||||||||||||||
Preferred stock, shares outstanding | 10,000 | 10,000 | 10,000 | ||||||||||||||||
Conversion price per share (in Dollars per share) | $ 0.05 | $ 0.05 | |||||||||||||||||
Shares issued | 10,000 | 10,000 | 10,000 | ||||||||||||||||
Series E Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 100 | $ 100 | |||||||||||||||||
Series F Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 800,000 | 800,000 | 800,000 | ||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 2,413 | ||||||||||||||||
Preferred stock dividend (in Dollars) | $ 0 | ||||||||||||||||||
Annual rate | 10% | ||||||||||||||||||
Redemption price per share (in Dollars per share) | $ 25 | $ 25 | |||||||||||||||||
Shares issued | 0 | 0 | 2,413 | ||||||||||||||||
Series F Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 25 | $ 25 | |||||||||||||||||
Series G Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 2,600 | 2,600 | 2,600 | 2,600 | |||||||||||||||
Preferred stock, shares outstanding | 2,597 | 2,597 | 2,597 | ||||||||||||||||
Conversion price per share (in Dollars per share) | $ 0.0019 | $ 0.0019 | |||||||||||||||||
Shares issued | 2,597 | 2,597 | 2,597 | ||||||||||||||||
Series G Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 100 | $ 100 | |||||||||||||||||
Series H Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 1,000 | 1,000 | 1,000 | 1,000 | |||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||||||||||
Preferred Stock, Redemption Terms | The 1,000 shares of Series H Preferred stock provided for automatic redemption by the Company at the par value of $0.001 per share on the sooner of: 1) sixty days (60) from the effective date of the Certificate of Designation, 2) on the date Andrew Van Noy ceases to serve as an officer, director or consultant of the Company, or 3) on the date that the Company’s shares of common stock first trade on any national securities exchange. | ||||||||||||||||||
Holder shares | 1,000 | ||||||||||||||||||
Shares issued | 0 | 0 | 0 | ||||||||||||||||
Series I Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | |||||||||||||||
Preferred stock, shares outstanding | 2,272,727 | 2,272,727 | 0 | ||||||||||||||||
Preferred stock is convertible into common stock | 400 | ||||||||||||||||||
Shares issued | 2,272,727 | 2,272,727 | 0 | 2,272,727 | |||||||||||||||
Purchase price per share (in Dollars per share) | $ 2.2 | ||||||||||||||||||
Purchase stock, description | The Company also granted the Purchaser a six-month option from the date of the initial closing to purchase (i) up to 333,333 additional shares of Series I Preferred Stock for a purchase price of $6.00 per share, and (ii) up to 312,500 shares of Series I Preferred Stock for a purchase price of $7.20 per share | ||||||||||||||||||
Series I Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | ||||||||||||||||||
Series J Preferred Stock [Member] | |||||||||||||||||||
Capital Stock (Details) [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized | 700,000 | 700,000 | 700,000 | 700,000 | |||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | ||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||||||||||
Paid dividends (in Dollars) | $ 10,000 | ||||||||||||||||||
Voting power description | The Series J Preferred Stock has voting rights equal to 10,000 votes on all matters upon which the holders of Common stock of the Company are entitled to vote | ||||||||||||||||||
Shares issued | 0 | 0 | 0 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details) - Equity Option [Member] - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Stock Options and Warrants (Details) [Line Items] | |||
Intrinsic value of the stock options | $ 2,563,500 | $ 362,102 | |
Stock option expense | $ 836,261 | $ 894,117 | |
Warrants outstanding (in Shares) | 162,703,869 | 162,703,869 | |
Warrant expense | $ 0 | $ 0 |
Stock Options and Warrants (D_2
Stock Options and Warrants (Details) - Schedule of Fair Value of Options Granted | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Schedule of the fair value of options granted [Abstract] | ||
Risk free interest rate | 4.49% | 1.29% |
Stock volatility factor | 206% | 229% |
Weighted average expected option life | 3 years 6 months | 2 years 6 months |
Expected dividend yield |
Stock Options and Warrants (D_3
Stock Options and Warrants (Details) - Schedule of Stock Option Activity - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 28, 2023 | Dec. 31, 2022 | |
Schedule of stock option activity [Abstract] | |||
Options, Outstanding - beginning of year (in Shares) | 879,733,332 | 879,733,332 | 768,233,332 |
Weighted average exercise price, Outstanding - beginning of year | $ 0.0092 | $ 0.0052 | |
Weighted average fair value of options granted during the year | $ 1,000,000 | $ 2,495,600 | |
Options, Granted (in Shares) | 100,000,000 | 125,500,000 | |
Weighted average exercise price, Granted | $ 0.01 | $ 0.0068 | |
Options, Exercised (in Shares) | (9,222,228) | (9,222,228) | (4,000,000) |
Weighted average exercise price, Exercised | $ 0.0057 | $ 0.0019 | |
Options, Forfeited (in Shares) | (361,423,890) | (7,000,000) | |
Weighted average exercise price, Forfeited | $ 0.009 | $ 0.0127 | |
Options, Outstanding - end of year (in Shares) | 609,087,214 | 879,733,332 | |
Weighted average exercise price, Outstanding - end of year | $ 0.0091 | $ 0.0092 | |
Options, Exercisable at the end of year (in Shares) | 424,270,281 | 519,773,058 | |
Weighted average exercise price, Exercisable at the end of year | $ 0.0071 | $ 0.0072 |
Stock Options and Warrants (D_4
Stock Options and Warrants (Details) - Schedule of Weighted Average Remaining Contractual Life of Options Outstanding - Warrant [Member] | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of options outstanding | 609,087,214 |
0.0100 Exercise Price [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices (in Dollars per share) | $ / shares | $ 0.01 |
Number of options outstanding | 100,000,000 |
Weighted Average remaining contractual life (years) | 4 years 11 months 4 days |
0.0068 Exercise prices [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices (in Dollars per share) | $ / shares | $ 0.0068 |
Number of options outstanding | 257,000,000 |
Weighted Average remaining contractual life (years) | 2 years 6 months 7 days |
0.0019 Exercise Price [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices (in Dollars per share) | $ / shares | $ 0.0019 |
Number of options outstanding | 150,566,666 |
Weighted Average remaining contractual life (years) | 1 year 6 months 18 days |
0.0018 Exercise prices [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices (in Dollars per share) | $ / shares | $ 0.0018 |
Number of options outstanding | 17,000,000 |
Weighted Average remaining contractual life (years) | 1 year 11 months 4 days |
0.0295 Exercise Price [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices (in Dollars per share) | $ / shares | $ 0.0295 |
Number of options outstanding | 84,520,548 |
Weighted Average remaining contractual life (years) | 1 year 7 months 2 days |
Stock Options and Warrants (D_5
Stock Options and Warrants (Details) - Schedule of Fair Value of Warrants Issued - Warrant [Member] | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Stock Options and Warrants (Details) - Schedule of Fair Value of Warrants Issued [Line Items] | ||
Risk free interest rate | 1.86% | |
Stock volatility factor | 272% | |
Weighted average expected warrant life | 5 years | |
Expected dividend yield |
Stock Options and Warrants (D_6
Stock Options and Warrants (Details) - Schedule of Warrant Activity - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Schedule of the warrant activity [Abstract] | ||
Warrants, Outstanding - beginning of period | 162,703,869 | 162,703,869 |
Weighted average exercise price, Outstanding - beginning of period | $ 0.048 | $ 0.048 |
Warrants, Issued | ||
Weighted average exercise price, Issued | ||
Warrants, Exercised | ||
Weighted average exercise price, Exercised | ||
Warrants, Forfeited | ||
Weighted average exercise price, Forfeited | ||
Warrants, Outstanding - end of period | 162,703,869 | 162,703,869 |
Weighted average exercise price, Outstanding - end of period | $ 0.048 | $ 0.048 |
Warrants, Exercisable at the end of period | 162,703,869 | 162,703,869 |
Weighted average exercise price, Exercisable at the end of period | $ 0.048 | $ 0.048 |
Weighted average fair value of warrants granted during the period |
Concentrations (Details)
Concentrations (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Revenue [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||
Concentrations (Details) [Line Items] | |||
Total revenue percentage | 63% | ||
Revenue [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||
Concentrations (Details) [Line Items] | |||
Total revenue percentage | 45% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||
Concentrations (Details) [Line Items] | |||
Total revenue percentage | 58% | ||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Three Customers [Member] | |||
Concentrations (Details) [Line Items] | |||
Total revenue percentage | 61% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Aug. 01, 2022 USD ($) m² | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Commitments and Contingencies (Details) [Line Items] | |||
Borrowing rate | 10% | ||
Square feet (in Square Meters) | m² | 2,000 | ||
Pro rata share | $ 3,333 | ||
ROU asset and liability | $ 169,319 | $ 175,974 | |
Minimum [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Remaining lease terms | 1 year | ||
Maximum [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Remaining lease terms | 3 years |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of the Net Book Value of the Finance Lease - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of the Net Book Value of the Finance Lease [Abstract] | ||
Leased equipment under finance lease, | $ 100,097 | $ 100,097 |
less accumulated amortization | (100,097) | (100,097) |
Net |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of Reconciliation of Leases to the Financial Statements | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
ROU Operating Leases [Member] | |
Commitments and Contingencies (Details) - Schedule of Reconciliation of Leases to the Financial Statements [Line Items] | |
Leased asset balance | $ 169,319 |
Liability balance | 169,319 |
Cash flow (non-cash) | |
Interest expense | |
Finance Leases [Member] | |
Commitments and Contingencies (Details) - Schedule of Reconciliation of Leases to the Financial Statements [Line Items] | |
Leased asset balance | |
Liability balance | |
Cash flow (non-cash) | |
Interest expense |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of Future Minimum Lease Payments for Operating and Finance Leases | Jun. 30, 2023 USD ($) |
ROU Operating Leases [Member] | |
Commitments and Contingencies (Details) - Schedule of Future Minimum Lease Payments for Operating and Finance Leases [Line Items] | |
2023 | $ 33,833 |
2024 | 46,833 |
2025 | 48,833 |
2026 | 50,833 |
2027 | 30,335 |
Thereafter | |
Total | 210,667 |
Less imputed interest | (41,348) |
Total liability | 169,319 |
Finance leases [Member] | |
Commitments and Contingencies (Details) - Schedule of Future Minimum Lease Payments for Operating and Finance Leases [Line Items] | |
2023 | |
2024 | |
2025 | |
2026 | |
2027 | |
Thereafter | |
Total | |
Less imputed interest | |
Total liability |
Commitments and Contingencies_6
Commitments and Contingencies (Details) - Schedule of Other Information Related To Leases | Jun. 30, 2023 | |
Operating Leases [Member] | ||
Commitments and Contingencies (Details) - Schedule of Other Information Related To Leases [Line Items] | ||
Operating Leases Weighted Average Remaining Term | 49 months | |
Operating Leases Weighted Average Discount Rate | 10% | [1] |
Finance Leases [Member] | ||
Commitments and Contingencies (Details) - Schedule of Other Information Related To Leases [Line Items] | ||
Finance Leases Weighted Average Remaining Term | 0 months | |
Finance Leases Weighted Average Discount Rate | 0% | [1] |
[1] This discount rate is consistent with our borrowing rates from various lenders. |
Supplemental Statement of Cas_2
Supplemental Statement of Cash Flows Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Supplemental Statement of Cash Flows Information [Abstract] | ||||
Share vested, stock options exercised | 9,222,228 | 1,000,000 | ||
Common stock issued for stock options exercised | 3,931,113 | 912,442 | ||
Cashless transaction (in Dollars) | $ 3,931 | |||
ROU operating leases assets and liabilities (in Dollars) | $ 6,655 | $ 56,650 | ||
Common stock amount | 912 |