CREATD, INC., S-1/A filed on 1/31/2023
Securities Registration Statement
v3.22.4
Document And Entity Information
9 Months Ended
Sep. 30, 2022
Document Information Line Items  
Entity Registrant Name CREATD, INC.
Document Type S-1/A
Amendment Flag true
Amendment Description Amendment No. 1
Entity Central Index Key 0001357671
Entity Filer Category Non-accelerated Filer
Entity Small Business true
Entity Emerging Growth Company false
Entity Incorporation, State or Country Code NV
v3.22.4
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Current Assets      
Cash $ 439,539 $ 3,794,734 $ 7,906,782
Accounts receivable, net 222,183 337,440 90,355
Inventory 879,050 106,403  
Marketable securities 96  
Prepaid expenses and other current assets 139,726 236,665 23,856
Total Current Assets 1,680,594 4,475,242 8,020,993
Property and equipment, net 248,963 102,939 56,258
Intangible assets 2,536,599 2,432,841 960,611
Goodwill 1,365,328 1,374,835 1,035,795
Marketable securities   62,733
Deposits and other assets 769,136 718,951 191,836
Minority investment in businesses   50,000 217,096
Operating lease right of use asset 2,123,171 18,451 239,158
Total Assets 8,723,791 9,173,259 10,784,480
Current Liabilities      
Accounts payable and accrued liabilities 6,714,606 3,730,540 2,638,688
Derivative liabilities     42,231
Share liability 52,080    
Convertible Notes, net of debt discount and issuance costs 6,062,926 159,193 897,516
Current portion of operating lease payable 279,593 18,451 79,816
Note payable, net of debt discount and issuance costs 1,758,179 1,278,672 1,221,539
Deferred revenue 305,555 234,159 88,637
Total Current Liabilities 15,172,939 5,421,015 4,968,427
Non-current Liabilities:      
Note payable 28,920 63,992 213,037
Operating lease payable 2,135,393 157,820
Total Non-current Liabilities 2,164,313 63,992 370,857
Total Liabilities 17,337,252 5,485,007 5,339,284
Commitments and contingencies  
Stockholders’ Equity      
Subscription receivable     (40,000)
Stockholders’ Equity (Deficit)      
Preferred stock, $0.001 par value, 20,000,000 shares authorized  
Series E Preferred stock, $0.001 par value, 8,000 shares authorized 500 and 500 shares issued and outstanding, respectively 8
Common stock par value $0.001: 100,000,000 shares authorized; 24,469,675 issued and 24,380,218 outstanding as of September 30, 2022 and 16,691,170 Outstanding 16,685,513 outstanding as of December 31, 2021 24,470 16,691 8,737
Additional paid in capital 124,667,772 111,563,618 77,505,013
Less: Treasury stock at cost, 89,457 and 5,657 shares, respectively (76,106) (62,406) (62,406)
Accumulated deficit (133,762,800) (109,632,574) (71,928,922)
Accumulated other comprehensive income (143,991) (78,272) (37,234)
Total Creatd, Inc. Stockholders’ Equity (9,290,655) 1,807,057 5,445,196
Non-controlling interest in consolidated subsidiaries 677,194 1,881,195  
Total Stockholders' Deficit (8,613,461) 3,688,252 5,445,196
Total Liabilities and Stockholders’ Equity (Deficit) $ 8,723,791 $ 9,173,259 $ 10,784,480
v3.22.4
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000 100,000,000
Common stock, shares issued 24,469,675 16,691,170 8,736,378
Common stock, shares outstanding 24,380,218 16,685,513 8,727,028
Treasury stock, shares 89,457 5,657 5,657
Preferred Stock      
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001  
Preferred stock, shares authorized 20,000,000 20,000,000  
Series E Preferred Stock      
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001 $ 0.001
Preferred stock, shares authorized 8,000 8,000  
Preferred stock, shares issued 500 500 7,738
Preferred stock, shares outstanding 500 500 7,738
v3.22.4
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Income Statement [Abstract]            
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
Cost of revenue 1,404,562 1,418,213 4,771,151 4,160,743 5,300,037 1,495,042
Gross margin (loss) (381,711) (238,593) (773,661) (1,266,353) (1,000,320) (282,172)
Operating expenses            
Research and development 234,965 322,946 686,131 708,396 983,528 257,431
Marketing 646,520 1,812,400 4,016,051 8,049,579 9,626,982 2,854,904
Stock based compensation 626,568 2,151,900 3,848,578 5,662,389 9,661,168 6,861,163
Impairment of goodwill         1,035,795  
Impairment of intangible assets 249,586   257,117 93,791    
General and administrative 3,837,469 2,385,135 11,397,989 5,457,258 11,060,927 6,027,665
Total operating expenses 5,595,108 6,672,381 20,205,866 19,971,413 32,368,400 16,001,163
Loss from operations (5,976,819) (6,910,974) (20,979,527) (21,237,766) (33,368,720) (16,283,335)
Other income (expenses)            
Other income   123,710 99 123,710 396,223 512,071
Interest expense (673,694) (59,859) (707,950) (319,290) (372,106) (1,376,902)
Accretion of debt discount and issuance cost (1,884,679) (2,176,651) (2,531,687) (3,028,015) (3,612,669) (4,303,072)
Derivative expense       (100,502) (100,502)  
Change in derivative liability   (833,456) 3,729 (1,096,287) (1,096,287) 3,019,457
Impairment of investment     (50,000) (62,733) (589,461) (11,450)
Impairment of debt security           (50,000)
Settlement of vendor liabilities     (2,867) 92,909 59,792 (126,087)
Loss on marketable securities (11,415)   (11,646)     (7,453)
Gain (loss) on extinguishment of debt (979,738) 137,109 (832,482) 423,118 1,025,555 (5,586,482)
Gain on forgiveness of debt       279,022 279,022 470
Other expenses, net (3,549,526) (2,809,147) (4,132,804) (3,688,068) (4,010,433) (7,929,448)
Loss before income tax provision (9,526,345) (9,720,121) (25,112,331) (24,925,834) (37,379,153) (24,212,783)
Equity in net loss from equity method investment   (16,413)   (16,413)
Income tax provision    
Net loss (9,526,345) (9,736,534) (25,112,331) (24,942,247) (37,379,153) (24,212,783)
Non-controlling interest in net loss 299,903 (60,477) 1,285,661 (60,045) 86,251  
Net Loss attributable to Creatd, Inc. (9,226,442) (9,797,011) (23,826,670) (25,002,292) (37,292,902) (24,212,783)
Deemed dividend (221,829)   (303,557) (410,750) (410,750) (3,135,702)
Inducement expense        
Net loss attributable to common shareholders (9,448,271) (9,797,011) (24,130,227) (25,413,042) (37,703,652) (27,348,485)
Comprehensive loss            
Net loss (9,526,345) (9,736,534) (25,112,331) (24,942,247) (37,379,153) (24,212,783)
Currency translation gain (loss) (36,110) (8,436) (65,719) (16,299) (41,038) (31,239)
Comprehensive loss $ (9,562,455) $ (9,744,970) $ (25,178,050) $ (24,958,546) $ (37,420,191) $ (24,244,022)
Per-share data            
Basic and diluted loss per share (in Dollars per share) $ (0.45) $ (0.71) $ (1.23) $ (2.2) $ (2.98) $ (5.68)
Weighted average number of common shares outstanding (in Shares) 21,030,188 13,710,111 19,669,411 11,563,150 12,652,470 4,812,153
v3.22.4
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Income Statement [Abstract]            
Basic and diluted loss per share (in Dollars per share) $ (0.45) $ (0.71) $ (1.23) $ (2.20) $ (2.98) $ (5.68)
Weighted average number of common shares outstanding (in Shares) 21,030,188 13,710,111 19,669,411 11,563,150 12,652,470 4,812,153
Net revenue related party         $ 80,000 $ 0
v3.22.4
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) (Unaudited) - USD ($)
Series E
Preferred Stock
Common Stock
Treasury stock
Additional Paid In Capital
Accumulated Deficit
Non-Controlling Interest
Other Comprehensive Income
Subscription Receivable
Total
Balance at Dec. 31, 2019 $ 3,059 $ (367,174) $ 36,391,819 $ (44,580,437) $ (5,995) $ (8,558,728)
Balance (in Shares) at Dec. 31, 2019 3,059,646 (53,283)            
Shares issued with notes payable $ 60 243,685 243,745
Shares issued with notes payable (in Shares)   59,774              
Stock based compensation $ 170 5,743,970 5,744,140
Stock based compensation (in Shares)   169,800              
Conversion of warrants to stock $ 7 (4,236) (4,229)
Conversion of warrants to stock (in Shares)   7,239              
Conversion of options to stock $ 229 1,116,802 1,117,031
Conversion of options to stock (in Shares)   229,491              
Shares issued to settle vendor liabilities $ 24 235,607 235,631
Shares issued to settle vendor liabilities (in Shares)   23,565              
Purchase of treasury stock $ (69,416) (69,416)
Purchase of treasury stock (in Shares)     (6,717)            
Recognition of intrinsic value of beneficial conversion features – convertible notes 3,099,837 3,099,837
Cash received for common stock and warrants $ 1,725 7,028,355 7,030,080
Cash received for common stock and warrants (in Shares)   1,725,000              
Cash received for preferred series E and warrants $ 8 6,710,417 (40,000) 6,670,425
Cash received for preferred series E and warrants (in Shares) 7,738                
Common stock and warrants issued upon conversion of notes payable $ 769 3,182,898 3,183,667
Common stock and warrants issued upon conversion of notes payable (in Shares)   768,225              
Common stock and warrants issued upon extinguishment of notes payable   $ 2,744 9,915,790 9,918,534
Common stock and warrants issued upon extinguishment of notes payable (in Shares)   2,744,288              
Stock warrants issued with note payable 1,078,501 1,078,501
Cancellation of Treasury stock $ (50) $ 374,184 (374,134)
Cancellation of Treasury stock (in Shares)   (50,650) 54,343            
Foreign currency translation adjustments (31,239) (31,239)
Dividends 3,135,702 (3,135,702)
Net loss (24,212,783) (24,212,783)
Balance at Dec. 31, 2020 $ 8 $ 8,737 $ (62,406) 77,505,013 (71,928,922)   (37,234) (40,000) 5,445,196
Balance (in Shares) at Dec. 31, 2020 7,738 8,736,378 (5,657)            
Stock based compensation $ 224 5,505,165 5,505,389
Stock based compensation (in Shares)   224,245              
Shares issued for prepaid services $ 50 226,450 226,500
Shares issued for prepaid services (in Shares)   50,000              
Shares issued to settle vendor liabilities $ 44 181,341 181,385
Shares issued to settle vendor liabilities (in Shares)   44,895              
Shares issued for acquisition $ 225 893,297 893,522
Shares issued for acquisition (in Shares)   224,503              
Common stock issued upon conversion of notes payable $ 901 4,014,424 4,015,325
Common stock issued upon conversion of notes payable (in Shares)   900,665              
Exercise of warrants to stock $ 1,275 5,470,793 5,472,068
Exercise of warrants to stock (in Shares)   1,275,261              
Cash received for common $ 837 2,461,363 2,462,200
Cash received for common (in Shares)   837,500              
Cash received for preferred series E and warrants (4,225) 40,000 35,775
Cash received for preferred series E and warrants (in Shares) 40                
Conversion of preferred series E to stock $ (7) $ 1,739 (1,732)
Conversion of preferred series E to stock (in Shares) (7,168) 1,739,750            
Stock warrants issued with note payable 1,601,452 1,601,452
Foreign currency translation adjustments (16,299) (16,299)
Non-controlling interest in consolidated subsidiary from acquisition 1,246,865 1,246,865
Dividends 410,750 (410,750)
Net loss (25,002,292) 60,045 (24,942,247)
Balance at Sep. 30, 2021 $ 1 $ 14,032 $ (62,406) 98,264,091 (97,341,964) 1,306,910 (53,533) 2,127,131
Balance (in Shares) at Sep. 30, 2021 610 14,033,197 (5,657)            
Balance at Dec. 31, 2020 $ 8 $ 8,737 $ (62,406) 77,505,013 (71,928,922)   (37,234) (40,000) 5,445,196
Balance (in Shares) at Dec. 31, 2020 7,738 8,736,378 (5,657)            
Stock based compensation $ 388 9,446,687 9,447,075
Stock based compensation (in Shares)   388,411              
Shares issued for prepaid services $ 50 226,450 226,500
Shares issued for prepaid services (in Shares)   50,000              
Shares issued to settle vendor liabilities $ 295 791,091 791,386
Shares issued to settle vendor liabilities (in Shares)   294,895              
Shares issued for acquisition $ 388 1,217,828 1,967,446 3,185,662
Shares issued for acquisition (in Shares)   387,847              
Cash received for common stock and warrants $ 1,687 5,665,263 5,666,950
Cash received for common stock and warrants (in Shares)   1,687,500              
Common stock issued upon conversion of notes payable $ 1,129 5,155,865 5,156,994
Common stock issued upon conversion of notes payable (in Shares)   1,128,999              
Exercise of warrants to stock $ 2,251 9,484,972 9,487,223
Exercise of warrants to stock (in Shares)   2,250,691              
Cash received for preferred series E and warrants (4,225) 40,000 35,775
Cash received for preferred series E and warrants (in Shares) 40                
Conversion of preferred series E to stock $ (8) $ 1,766 (1,758)
Conversion of preferred series E to stock (in Shares) (7,278) 1,766,449            
Stock warrants issued with note payable 1,665,682 1,665,682
Foreign currency translation adjustments (41,038) (41,038)
Dividends 410,750 (410,750)
Net loss (37,292,902) (86,251) (37,379,153)
Balance at Dec. 31, 2021 $ 16,691 $ (62,406) 111,563,618 (109,632,574) 1,881,195 (78,272) 3,688,252
Balance (in Shares) at Dec. 31, 2021 500 16,691,170 (5,657)            
Balance at Jun. 30, 2021 $ 1 $ 11,858 $ (62,406) 87,131,333 (87,544,953) 56,433 (45,097)   (452,831)
Balance (in Shares) at Jun. 30, 2021 1,048 11,857,675 (5,657)            
Stock based compensation $ 23 2,094,787   2,094,810
Stock based compensation (in Shares)   22,934              
Conversion of warrants to stock $ 955 4,198,442   4,199,397
Conversion of warrants to stock (in Shares)   954,568              
Shares issued for acquisition $ 224 893,297   893,521
Shares issued for acquisition (in Shares)   224,503              
Cash received for common stock and warrants $ 87 248,613         248,700
Cash received for common stock and warrants (in Shares)   87,500              
Common stock issued upon conversion of notes payable $ 779 3,697,725   3,698,504
Common stock issued upon conversion of notes payable (in Shares)   779,706              
Conversion of preferred series E to stock $ 106 (106)  
Conversion of preferred series E to stock (in Shares) (438) 106,311            
Foreign currency translation adjustments (8,436)   (8,436)
Non-controlling interest in consolidated subsidiary from acquisition 1,190,000   1,190,000
Net loss (9,797,011) 60,477   (9,736,534)
Balance at Sep. 30, 2021 $ 1 $ 14,032 $ (62,406) 98,264,091 (97,341,964) 1,306,910 (53,533) 2,127,131
Balance (in Shares) at Sep. 30, 2021 610 14,033,197 (5,657)            
Balance at Dec. 31, 2021 $ 16,691 $ (62,406) 111,563,618 (109,632,574) 1,881,195 (78,272) 3,688,252
Balance (in Shares) at Dec. 31, 2021 500 16,691,170 (5,657)            
Stock based compensation $ 415 3,822,564   3,822,979
Stock based compensation (in Shares)   415,180              
Shares issued for prepaid services $ 150 141,000   141,150
Shares issued for prepaid services (in Shares)   150,000              
Shares issued for acquisition $ 58 40,937 81,660   122,655
Shares issued for acquisition (in Shares)   57,576              
Purchase of treasury stock $ (13,700)   (13,700)
Purchase of treasury stock (in Shares)     (83,800)            
Cash received for common stock and warrants $ 7,046 5,715,254   5,722,300
Cash received for common stock and warrants (in Shares)   7,046,314              
Common stock issued upon conversion of notes payable $ 110 173,346   173,456
Common stock issued upon conversion of notes payable (in Shares)   109,435              
Stock warrants issued with note payable 2,907,497   2,907,497
Foreign currency translation adjustments (65,719)   (65,719)
Dividends 303,556 (303,556)  
Net loss (23,826,670) (1,285,661)   (25,112,331)
Balance at Sep. 30, 2022 $ 24,470 $ (76,106) 124,667,772 (133,762,800) 677,194 (143,991)   (8,613,461)
Balance (in Shares) at Sep. 30, 2022 500 24,469,675 (89,457)            
Balance at Jun. 30, 2022 $ 20,255 $ (62,406) 122,068,892 (124,314,529) 895,437 (107,881)   (1,500,232)
Balance (in Shares) at Jun. 30, 2022 500 20,254,839 (5,657)            
Stock based compensation $ 107 568,107   568,214
Stock based compensation (in Shares)   107,260              
Shares issued for prepaid services $ 50 34,900   34,950
Shares issued for prepaid services (in Shares)   50,000              
Shares issued for acquisition $ 58 40,937 81,660   122,655
Shares issued for acquisition (in Shares)   57,576              
Purchase of treasury stock $ (13,700)   (13,700)
Purchase of treasury stock (in Shares)     (83,800)            
Cash received for common stock and warrants $ 4,000 721,000   725,000
Cash received for common stock and warrants (in Shares)   4,000,000              
Stock warrants issued with note payable 1,012,107   1,012,107
Foreign currency translation adjustments (36,110)   (36,110)
Dividends 221,829 (221,829)  
Net loss (9,226,442) (299,903)   (9,526,345)
Balance at Sep. 30, 2022 $ 24,470 $ (76,106) $ 124,667,772 $ (133,762,800) $ 677,194 $ (143,991)   $ (8,613,461)
Balance (in Shares) at Sep. 30, 2022 500 24,469,675 (89,457)            
v3.22.4
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) (Unaudited) (Parentheticals) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]    
Net of issuance costs $ 75,000 $ 190,000
v3.22.4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss $ (25,112,331) $ (24,942,247) $ (37,379,153) $ (24,212,783)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization 441,943 194,929 397,440  
Impairment of investment 50,000 62,733 589,461  
Impairment of intangible assets 257,117 93,791 1,727,032  
Accretion of debt discount and issuance cost 2,531,687 3,028,015 3,612,669  
Share-based compensation 3,848,578 5,662,389 9,661,174  
Bad debt expense 124,186 110,805  
Change in fair value of derivative liabilities      
Loss (Gain) on Forgiveness of debt 832,482 (702,140) (279,022)  
Settlement of vendor liabilities 2,867 (92,909) (59,692)  
Change in fair value of derivative liability (3,729) 1,096,287 1,096,287  
Derivative Expense 100,502 100,502  
(Gain) loss on extinguishment of debt     (1,025,655)  
Loss on marketable securities 11,646  
Non cash lease expense 44,305 60,756 82,511  
Equity interest granted for other income (123,710) (123,710)  
Equity in net loss from unconsolidated investment 16,413 16,413  
Changes in operating assets and liabilities:        
Prepaid expenses 114,925 (471,899) (174,819)  
Inventory (492,128) (68,091) (39,182)  
Accounts receivable (481,080) 150,980 (80,407)  
Deposits and other assets (50,185) 107,115 (527,115)  
Deferred revenue 71,396 111,192 144,851  
Accounts payable and accrued expenses 3,805,245 160,434 1,714,902  
Unrecognized tax benefit      
Operating lease liability 145,887 (61,605) (84,099)  
Net Cash Used In Operating Activities (13,857,189) (15,617,065) (20,518,807)  
CASH FLOWS FROM INVESTING ACTIVITIES:        
Issuance of note receivable      
Cash paid for property and equipment (213,975) (65,971) (95,935)  
Deposits (325,000)  
Cash paid for minority investment in business (510,000) (325,000)  
Cash paid for equity method investment     (510,000)  
Cash paid for investments in marketable securities (48,878)  
Sale of marketable securities 37,135  
Cash consideration for acquisition (75,679) (412,943) (225,947)  
Purchases of digital assets (192,795) (11,241) (11,241)  
Net Cash Used In Investing Activities (494,192) (1,325,155) (1,168,123)  
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from the exercise of warrant 5,472,068 9,487,223  
Net proceeds from issuance of notes 2,174,402 321,229 747,937  
Repayment of notes (2,292,953) (403,843) (456,233)  
Proceeds from issuance of demand loan      
Repayment of demand Loan      
Proceeds from issuance of convertible note 5,809,755 3,610,491 3,610,491  
Repayment of convertible notes (337,899) (941,880) (941,880)  
Proceeds from issuance of convertible notes - related party      
Proceeds from issuance of note payable - related party      
Repayment of note payable - related party     (538,574)  
Purchase of treasury stock (13,700)    
Proceeds from issuance of common stock and warrants 5,722,300 2,502,200 5,666,951  
Cash received for preferred series E and warrants      
Purchase of treasury stock and warrants      
Net Cash Provided By Financing Activities 11,061,905 10,560,265 17,615,915  
Effect of exchange rate changes on cash (65,719) (16,299) (41,038)  
Net Change in Cash (3,355,195) (6,398,254) (4,112,048)  
Cash - Beginning of period 3,794,734 7,906,782 7,906,782  
Cash - End of period 439,539 1,508,528 3,794,734 7,906,782
Cash Paid During the Year for:        
Income taxes  
Interest 139,000 58,395 60,073  
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Conversion of marketable debt securities into equity securities      
Beneficial conversion feature on convertible notes      
Shares issued with debt      
Cancellation of Treasury stock      
Conversion of note payable and interest into convertible notes      
Reduction of ROU asset related to re-measurement of lease liability     135,086  
Repayment of promissory notes from Australian R&D credits     146,630  
Conversion of Demand loan into notes payable      
Settlement of vendor liabilities 147,649 168,667 168,667  
Warrants issued with debt 2,907,497 1,601,452 1,665,682  
Issuance of common stock for prepaid services 141,150 226,500 226,500  
Operating Lease liability 2,250,648    
Deferred offering costs 4,225 4,225  
Common stock and warrants issued upon conversion of notes payable 173,455 4,015,325 5,156,994  
Shares issued for acquisition $ 40,994 893,520 1,318,218  
Previously Reported [Member]        
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss       (24,162,783)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization       157,760
Impairment of investment       11,450
Impairment of intangible assets      
Accretion of debt discount and issuance cost       4,303,072
Share-based compensation       6,861,163
Bad debt expense       53,692
Change in fair value of derivative liabilities       (3,019,457)
Loss (Gain) on Forgiveness of debt      
Settlement of vendor liabilities       126,087
Change in fair value of derivative liability      
Derivative Expense      
(Gain) loss on extinguishment of debt       5,586,012
Loss on marketable securities       7,453
Non cash lease expense       72,553
Equity interest granted for other income      
Equity in net loss from unconsolidated investment      
Changes in operating assets and liabilities:        
Prepaid expenses       (19,729)
Inventory      
Accounts receivable       (93,198)
Deposits and other assets       (4,829)
Deferred revenue       37,946
Accounts payable and accrued expenses       2,880,392
Unrecognized tax benefit       (68,000)
Operating lease liability       (70,071)
Net Cash Used In Operating Activities       (7,340,487)
CASH FLOWS FROM INVESTING ACTIVITIES:        
Issuance of note receivable      
Cash paid for property and equipment       (44,988)
Deposits       (175,000)
Cash paid for minority investment in business      
Cash paid for equity method investment       (115,000)
Cash paid for investments in marketable securities       (248,272)
Sale of marketable securities       36,048
Cash consideration for acquisition      
Purchases of digital assets      
Net Cash Used In Investing Activities       (547,212)
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from the exercise of warrant      
Net proceeds from issuance of notes       1,501,661
Repayment of notes       (492,665)
Proceeds from issuance of demand loan       440,000
Repayment of demand Loan       (90,000)
Proceeds from issuance of convertible note       3,650,835
Repayment of convertible notes       (1,658,001)
Proceeds from issuance of convertible notes - related party       50,000
Proceeds from issuance of note payable - related party       152,989
Repayment of note payable - related party       (983,752)
Proceeds from issuance of common stock and warrants       6,662,015
Cash received for preferred series E and warrants       6,670,417
Purchase of treasury stock and warrants       (89,416)
Net Cash Provided By Financing Activities       15,814,083
Effect of exchange rate changes on cash       (31,239)
Net Change in Cash       7,895,145
Cash - Beginning of period   $ 7,906,782 $ 7,906,782 11,637
Cash - End of period       7,906,782
Cash Paid During the Year for:        
Income taxes      
Interest       178,461
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Conversion of marketable debt securities into equity securities       102,096
Beneficial conversion feature on convertible notes       3,099,837
Shares issued with debt       243,741
Cancellation of Treasury stock       374,184
Conversion of note payable and interest into convertible notes       385,000
Reduction of ROU asset related to re-measurement of lease liability      
Repayment of promissory notes from Australian R&D credits      
Conversion of Demand loan into notes payable       200,000
Settlement of vendor liabilities       475,220
Warrants issued with debt       1,078,500
Issuance of common stock for prepaid services       585,000
Deferred offering costs      
Common stock and warrants issued upon conversion of notes payable       11,217,362
Shares issued for acquisition      
v3.22.4
Organization and Operations
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Accounting Policies [Abstract]    
Organization and Operations

Note 1 – Organization and Operations

 

Creatd, Inc., formerly Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Creatd”), is a technology company focused on providing economic opportunities for creators, which it accomplishes through its four main business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Creatd’s flagship product, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through Creatd’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests. 

 

The Company was originally incorporated under the laws of the State of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 to Great Plains Holdings, Inc. as part of its plan to diversify its business.

 

On February 5, 2016 (the “Closing Date”), GTPH, GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Merger”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). GTPH acquired, pursuant to the Merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 475,000 shares of GTPH’s common stock. In connection therewith, GTPH acquired 33,415 shares of Jerrick’s Series A Convertible Preferred Stock (the “Jerrick Series A Preferred”) and 8,064 shares of Series B Convertible Preferred Stock (the “Jerrick Series B Preferred”).

 

In connection with the Merger, on the Closing Date, GTPH and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from GTPH (i) all of GTPH’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of GTPH’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 39,091 shares of GTPH’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of GTPH, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

 

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to that of Jerrick.

 

Effective February 28, 2016, GTPH entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”) with Jerrick, pursuant to which GTPH became the parent company of Jerrick Ventures, LLC, a wholly-owned operating subsidiary of Jerrick (the “Statutory Merger”) and GTPH changed its name to Jerrick Media Holdings, Inc. to better reflect its new business strategy.

 

On September 11, 2019, the Company acquired 100% of the membership interests of Seller’s Choice, LLC, a New Jersey limited liability company (“Seller’s Choice”), a digital e-commerce agency.

 

On September 9, 2020, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada to change our name to “Creatd, Inc.”, which became effective on September 10, 2020.  

 

On June 4, 2021, the Company acquired 89% of the membership interests of Plant Camp, LLC, a Delaware limited liability company (“Plant Camp”), which the Company subsequently rebranded as Camp. Camp is a direct-to-consumer (DTC) food brand which creates healthy upgrades to classic comfort food favorites. The results of Plant Camp’s operations have been included since the date of acquisition in the Statements of Operations.

 

On July 20, 2021, the Company acquired 44% of the membership interests of WHE Agency, Inc. WHE Agency, Inc, is a talent management and public relations agency based in New York (“WHE”). WHE has been consolidated due to the Company’s ownership of 55% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

 

Between October 21, 2020, and August 16, 2021, the Company acquired 21% of the membership interests of Dune, Inc. Dune, Inc. is a direct-to-consumer brand focused on promoting wellness through its range of health-oriented beverages.

 

On October 3, 2021, the Company acquired an additional 29% of the membership interests of Dune, Inc., bringing our total membership interests to 50%. Dune, Inc., has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations. 

 

On March 7, 2022, the Company acquired 100% of the membership interests of Denver Bodega, LLC, d/b/a Basis, a Colorado limited liability company (“Basis”). Basis is a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Denver Bodega, LLC has been consolidated due to the Company’s ownership of 100% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

 

On August 1, 2022, the Company acquired 51% of the membership interests of Orbit Media LLC, a New York limited liability company. Orbit is a app-based stock trading platform designed to empower a new generation of investors. Orbit has been consolidated due to the Company’s ownership of 51% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

 

On September 13, 2022, the Company acquired 100% of the membership interests of Brave Foods, LLC, a Maine limited liability company. Brave is a plant-based food company that provides convenient and healthy breakfast food products. Brave Foods, LLC has been consolidated due to the Company’s ownership of 100% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

Note 1 – Organization and Operations

 

Creatd, Inc., formerly Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Creatd”), is a technology company focused on providing economic opportunities for creators, which it accomplishes through its four main business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Creatd’s flagship product, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through Creatd’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests. 

 

The Company was originally incorporated under the laws of the State of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 to Great Plains Holdings, Inc. as part of its plan to diversify its business.

 

On February 5, 2016 (the “Closing Date”), GTPH, GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Merger”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). GTPH acquired, pursuant to the Merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 475,000 shares of GTPH’s common stock. In connection therewith, GTPH acquired 33,415 shares of Jerrick’s Series A Convertible Preferred Stock (the “Jerrick Series A Preferred”) and 8,064 shares of Series B Convertible Preferred Stock (the “Jerrick Series B Preferred”).

 

In connection with the Merger, on the Closing Date, GTPH and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from GTPH (i) all of GTPH’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of GTPH’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 39,091 shares of GTPH’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of GTPH, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

 

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to that of Jerrick.

 

Effective February 28, 2016, GTPH entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”) with Jerrick, pursuant to which GTPH became the parent company of Jerrick Ventures, LLC, a wholly-owned operating subsidiary of Jerrick (the “Statutory Merger”) and GTPH changed its name to Jerrick Media Holdings, Inc. to better reflect its new business strategy.

 

On September 11, 2019, the Company acquired 100% of the membership interests of Seller’s Choice, LLC, a New Jersey limited liability company (“Seller’s Choice”). Seller’s Choice is a digital e-commerce agency based in New Jersey.

 

On September 9, 2020, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada to change our name to “Creatd, Inc.”, which became effective on September 10, 2020. 

 

On June 4, 2021, the Company acquired 89% of the membership interests of Plant Camp, LLC, a Delaware limited liability company (“Plant Camp”), which the Company subsequently rebranded as Camp. Plant Camp is a direct-to-consumer (DTC) food brand which creates healthy upgrades to classic comfort food favorites. The results of Plant Camp’s operations have bene included since the date of acquisition in the Statements of Operations.

 

On July 20, 2021, the Company acquired 44% of the membership interests of WHE Agency, Inc,. WHE Agency, Inc, is a talent management and public relations agency based in New York. WHE Agency, Inc, has been consolidated due to the Company’s ownership of 55% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

On August 16, 2021, the Company acquired 16% of the membership interests of Dune, Inc. bring our total membership interests to 21%.

 

On October 3, 2021, the Company acquired 29% of the membership interests of Dune, Inc. bring our total membership interests to 50%. Dune, Inc. is a direct-to-consumer brand focused on promoting wellness through its range of health-oriented beverages. Dune, Inc, has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations. 

v3.22.4
Significant Accounting Policies and Practices
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Accounting Policies [Abstract]    
Significant Accounting Policies and Practices

Note 2 – Significant Accounting Policies and Practices

 

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by the accounting principles generally accepted in the United States of America. 

 

Basis of Presentation

 

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in the Company’s 2021 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, 2021 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

 

Use of Estimates and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

  

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

 

Actual results could differ from those estimates.

 

Presentation

 

During 2021, we adopted a change in presentation on our Condensed Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation.

 

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of September 30, 2022, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate   State or other
jurisdiction of
incorporation
or organization
  Company
Ownership
Interest
 
Jerrick Ventures LLC   Delaware     100 %
Abacus Tech Pty Ltd   Australia     100 %
Brave Foods, LLC   Brave Foods, LLC     100 %
Denver Bodega, LLC   Colorado     100 %
Dune Inc.   Delaware     50 %
Plant Camp LLC   Delaware     89 %
OG Collection, Inc.   Delaware     100 %
OG Gallery, LLC   Delaware     100 %
Orbit Media LLC   New York     51 %
WHE Agency, Inc.   Delaware     44 %

  

All inter-company balances and transactions have been eliminated. The condensed consolidated financial statements include Denver Bodega, LLC activity since March 7, 2022, Orbit Media LLC activity since August 1, 2022, and Brave Foods, LLC activity since September 13, 2022.

 

Variable Interest Entities

 

Management performs an ongoing assessment of its noncontrolling interests from investments in unrelated entities to determine if those entities are variable interest entities (VIEs), and if so, whether the Company is the primary beneficiary. If an entity in such a transaction, by design, meets the definition of a VIE and the Company determines that it, or a condensed consolidated subsidiary is the primary beneficiary, the Company will include the VIE in its condensed consolidated financial statements. If such an entity is deemed to not be condensed consolidated, the Company records only its investment in equity securities as a marketable security or investment under the equity method, as applicable

  

Fair Value of Financial Instruments

 

The fair value measurement disclosures are grouped into three levels based on valuation factors:

 

  Level 1 – quoted prices in active markets for identical investments

 

  Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

 

  Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

 

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, marketable trading securities, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2022 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

 

The Company’s Level 2 assets/liabilities include certain of the Company’s notes payable. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace.

 

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, equity investments at cost, and derivative liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. 

 

The following tables provides a summary of the relevant assets that are measured at fair value on a recurring basis:

 

Fair Value Measurements as of

September 30, 2022

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                
Marketable securities - equity securities  $96   $96   $
       -
   $
       -
 
Total assets  $96   $96   $
-
   $
-
 

 

Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of September 30, 2022 are $96.

 

The change in net realized depreciation on equity trading securities that has been included in other expenses for the nine months ended September 30, 2022 and 2021 was $11,646 and $0, respectively. 

 

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits. The Company has never experienced any losses related to these balances. The uninsured cash balance as of September 30, 2022, was $0. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 

Concentration of Credit Risk and Other Risks and Uncertainties

 

The Company provides credit in the normal course of business. The Company maintains allowances for credit losses on factors surrounding the credit risk of specific customers, historical trends, and other information.

 

The Company operates in Australia and holds total assets of $622,445. It is reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

  

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

   Estimated
Useful Life
(Years)
 
     
Computer equipment and software  3 
Furniture and fixtures  5 

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the condensed consolidated statements of operations.

 

Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

 

We evaluate the recoverability of property and equipment, acquired finite-lived intangible assets and, purchased infinite life digital assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. Digital assets accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases other than temporary below the carrying value. The fair value is measured using the quoted price of the crypto asset at the time its fair value is being measured. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the three months ended September 30, 2022, the Company recorded an impairment charge of $249,586  for intangible assets. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $257,117 for intangible assets.

 

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 7.1 years.

 

Scheduled amortization over the next five years are as follows:

 

Twelve months ending September 30,
     
2023  $415,215 
2024   443,236 
2025   280,223 
2026   260,935 
2027   239,934 
Thereafter   739,762 
Total   2,379,305 
      
Intangible assets not subject to amortization   157,294 
Total Intangible Assets  $2,536,599 

 

Amortization expense was $94,130 and $75,069 for the three months ended September 30, 2022 and 2021, respectively. Amortization expense was $355,509 and $143,776 for the nine months ended September 30, 2022 and 2021, respectively.

 

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles – Goodwill and Other – Testing Indefinite-Lived Intangible Assets for Impairment” (“ASC Topic 350”). The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units.

  

During the year ended December 31, 2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for goodwill.

 

During the three months ended September 30, 2022, management observed impairment indicators that led them to believe the carrying amount of goodwill was below its carrying value. The Company determined that the carrying value of the Plant Camp and Dune reporting units were more likely than not greater than their carrying value, including Goodwill. Based on estimated impairment computed, the Company recorded an impairment charge of $25,139 for goodwill.

 

The following table sets forth a summary of the changes in goodwill for the three months ended September 30, 2022.

 

   For the
Three Months ended
September 30,
2022
 
   Total 
As of July 1, 2022    $1,383,785 
Goodwill acquired in a business combination   6,682 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

The following table sets forth a summary of the changes in goodwill for the nine months ended September 30, 2022.

 

   For the
Nine Months ended
September 30,
2022
 
   Total 
As of January 1, 2022    $1,374,835 
Goodwill acquired in a business combination   15,632 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Foreign Currency

 

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our Condensed Consolidated Balance Sheet dates. Results of operations and cash flows are translated using the average exchange rates throughout the periods. The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in operating expenses, have not been significant in any period presented.

 

Derivative Liability

 

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the condensed consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. 

 

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.  

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. 

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.

 

The Company utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 

Shipping and Handling Costs

 

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of revenue.

 

Revenue Recognition   

 

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

  identification of the contract, or contracts, with a customer;

 

  identification of the performance obligations in the contract;

 

  determination of the transaction price. The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mile basis) and cash prizes offered to Challenge winners;

 

  allocation of the transaction price to the performance obligations in the contract; and

 

  recognition of revenue when, or as, we satisfy a performance obligation.

 

Revenue disaggregated by revenue source for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Agency (Managed Services, Branded Content, & Talent Management Services)  $442,867   $555,766   $1,613,924   $1,472,902 
Platform (Creator Subscriptions)   230,212    611,714    1,138,812    1,370,581 
Ecommerce   347,944    4,153    1,237,634    9,679 
Affiliate Sales   1,828    7,619    7,120    23,425 
Other Revenue   
-
    368    
-
    17,803 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Products and services transferred over time  $673,079   $1,167,480   $2,752,736   $2,843,483 
Products transferred at a point in time   349,772    12,140    1,244,754    50,907 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

Agency Revenue

 

Managed Services

 

The Company provides Studio/Agency Service offerings to business-to-business (B2B) and business-to-consumer (B2C) product and service brands which encompasses a full range of digital marketing and e-commerce solutions. The Company’s services include the setup and ongoing management of clients’ websites, Amazon and Shopify storefronts and listings, social media pages, search engine marketing, and other various tools and sales channels utilized by e-commerce sellers for sales and growth optimization. Contracts are broken into three categories: Partners, Monthly Services, and Projects. Contract amounts for Partner and Monthly Services clients range from approximately $500-$7,500 per month while Project amounts vary depending on the scope of work. Partner and Monthly clients are billed monthly for the work completed within that month. Partner Clients may or may not have an additional billing component referred to as Sales Performance Fee, which is a fee based upon a previously agreed upon percentage point of the client’s total sales for the month. Some Partners may also have projects within their contracts that get billed and recognized as agreed upon project milestones are achieved. Revenue is recognized over time as service obligations and milestones in the contract are met.

 

Branded Content

 

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles and/or branded challenges for clients on the Vocal platform and promote said stories, tracking engagement for the client. In the case of branded articles, the performance obligation is satisfied when the Company successfully publishes the articles on its platform and meets any required promotional milestones as per the contract. In the case of branded challenges, the performance obligation is satisfied when the Company successfully closes the challenge and winners have been announced. The Company utilizes the completed contract method when revenue is recognized over time as the services are performed and any required milestones are met. Certain contracts contain separate milestones whereas the Company separates its performance obligations and utilizes the stand-alone selling price method and residual method to determine the estimate of the allocation of the transaction price.

 

Below are the significant components of a typical agreement pertaining to branded content revenue:

 

  The Company collects fixed fees ranging from $10,000 to $110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.
     
  Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

 

  Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.
     
  Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee. 

 

Talent Management Services

 

Talent Management represents the revenue recognized by WHE Agency, Inc. (“WHE”) from the Company’s obligation to manage and oversee influencer-led campaigns from the contract negotiation stage through content creation and publication. WHE acts in an agent capacity for influencers and collects a management fee of 20% of the value of an influencer’s contract with a brand. Revenue is recognized net of the 80% of the contract that is collected by the influencer and is recognized when performance obligations of the contract are met. Performance obligations are complete when milestones and deliverables of contracts are delivered to the client. 

 

Below are the significant components of a typical agreement pertaining to talent management revenue:

 

  Total gross contracts range from $500-$50,000.

 

The Company collects fixed fees in the amount of 20% of the gross contract amount, ranging from $100 to $20,000 in net revenue per contract.

 

  The campaign is created and made live by the influencer within the timeframe specified in the contract.

 

Campaigns are promoted per the contract and the customer is provided a link to the live deliverables on the influencer’s social media channels.

 

Most billing for contracts occur 100% at execution of the performance obligation. Net payment terms vary by client.

  

Platform Revenue

 

Creator Subscriptions

 

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are subject to promotional discounts and free trials. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

 

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Potential revenue offset is calculated by reviewing a subscriber’s earnings in conjunction with payments made by the subscriber on a monthly and/or annual basis.

 

Affiliate Sales Revenue

 

Affiliate sales represents the commission the Company receives when a purchase is made through affiliate links placed within content hosted on the Vocal platform. Affiliate revenue is earned on a “click through” basis, upon referring visitors, via said links, to an affiliate’s site and having them complete a specific outcome, most commonly a product purchase. The Company uses multiple affiliate platforms, such as Skimlinks, Amazon, and Tune, to form and maintain thousands of vendor relationships. Each vendor establishes their own commission percentage, which typically range from 2-20%. The revenue is recognized upon receipt as reliable estimates could not be made.

 

E-Commerce Revenue

 

The Company’s e-commerce businesses are housed under Creatd Ventures, and currently consists of four majority-owned e-commerce companies, Camp (previously Plant Camp), Dune Glow Remedy (“Dune”), Basis, and Brave. The Company generates revenue through the sale of Camp, Dune, and Basis, and Brave’s consumer products through its e-commerce distribution channels. The Company satisfies its performance obligation upon shipment of product to its customers and recognizes shipping and handling costs as a fulfillment cost. Customers have 30 days from receipt of an item to return unopened, unused, or damaged items for a full refund. All returns are processed within the relevant recording period and accounted for as a reduction in revenue. The Company runs discounts from time to time to promote sales, improve market penetration, and increase customer retention. Any discounts are run as coupon codes applied at the time of transaction and accounted for as a reduction in gross revenue. The Company assesses variable consideration using the most likely amount method.

 

Deferred Revenue

 

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue within the next twelve months. As of September 30, 2022, the Company had deferred revenue of $305,555. As of December 31, 2021, the Company had deferred revenue of $234,159, of which $159,727 was recognized as revenue in the nine months ended September 30, 2022, and $13,512 was recognized as revenue in the three months ended September 30, 2022.

 

Accounts Receivable and Allowances

 

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the nine months ended September 30, 2022, the Company recorded $124,186, as a bad debt expense. As of September 30, 2022, the Company has an allowance for doubtful accounts of $311,133. As of December 31, 2021, the Company has an allowance for doubtful accounts of $186,147.

 

Inventory

 

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of September 30, 2022, and December 31, 2021, the Company had no valuation allowance.

 

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted in accordance with Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation over the requisite service period of the award. The company has a relatively low forfeiture rate of stock based compensation and forfeitures are recognized as they occur.

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods.

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is volatility is derived from the Company’s historical data over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. Forfeitures are recognized as they occur.

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. The Company issues awards of equity instruments, such as stock options and restricted stock units, to employees and certain non-employee directors. Compensation expense related to these awards is based on the fair value of the underlying stock on the award date and is amortized over the service period, defined as the vesting period. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock units. Compensation expense is reduced for actual forfeitures as they occur.

 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three and nine months ended September 30, 2022 and 2021 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at September 30, 2022 and 2021:

 

   September 30, 
   2022   2021 
Series E preferred   121    148 
Options   4,408,267    2,327,445 
Warrants   20,429,630    6,558,705 
Convertible notes   32,215,486    228,334 
Totals   57,053,504    9,114,632 

 

Reclassifications

 

Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our condensed consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

   

Recently Adopted Accounting Guidance

 

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance’s amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The updated guidance, which became effective for fiscal years beginning after December 15, 2021, During the nine months ended September 30, 2022 the Company recognized a deemed dividend of $63,064 from the modification of warrants.

 

Recent Accounting Guidance Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. On October 16, 2019, FASB approved a final ASU delaying the effective date of ASU 2016-13 for small reporting companies to interim and annual periods beginning after December 15, 2022. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The Company does not believe the adoption will have a material impact on the Company’s condensed consolidated financial statements. The adoption of the guidance will affect disclosures and estimates around accounts receivable. 

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. ASU 2020-06 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

 

In July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. 

Note 2 – Significant Accounting Policies and Practices

 

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by the accounting principles generally accepted in the United States of America. 

 

Use of Estimates and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

During the fourth quarter of 2021, management changed its estimates for cost of revenues. This change in estimates did not result in a change to loss from operations or net loss.

 

Actual results could differ from those estimates.

 

Presentation

 

During 2021, we adopted a change in presentation on our Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation.

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of December 31, 2021, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate   State or other
jurisdiction of
incorporation
or organization
  Company
Ownership
Interest
 
Jerrick Ventures LLC   Delaware   100 %
Abacus Tech Pty Ltd   Australia     100 %
Seller’s Choice, LLC   New Jersey     100 %
Recreatd, LLC   Delaware     100 %
Give, LLC   Delaware     100 %
Creatd Partners LLC   Delaware     100 %
Dune Inc.   Delaware     50 %
Plant Camp LLC   Delaware     89 %
Sci-Fi Shop, LLC   Delaware     100 %
OG Collection LLC   Delaware     100 %
VMENA LLC   Delaware     100 %
Vocal For Brands, LLC   Delaware     100 %
Vocal Ventures LLC   Delaware     100 %
What to Buy, LLC   Delaware     100 %
WHE Agency, Inc.   Delaware     44 %

 

All inter-company balances and transactions have been eliminated.

 

Variable Interest Entities

 

Management performs an ongoing assessment of its noncontrolling interests from investments in unrelated entities to determine if those entities are variable interest entities (VIEs), and if so, whether the Company is the primary beneficiary. If an entity in such a transaction, by design, meets the definition of a VIE and the Company determines that it, or a consolidated subsidiary is the primary beneficiary, the Company will include the VIE in its consolidated financial statements. If such an entity is deemed to not be consolidated, the Company records only its investment in equity securities as a marketable security or investment under the equity method, as applicable

  

Fair Value of Financial Instruments

 

The fair value measurement disclosures are grouped into three levels based on valuation factors:

 

  Level 1 – quoted prices in active markets for identical investments

 

  Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

 

  Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

 

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at December 31, 2021 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

 

The Company’s Level 2 assets/liabilities include certain of the Company’s notes payable and capital lease obligations. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace.

 

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, marketable debt securities, equity investments at cost, and derivative liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. 

 

The following tables provides a summary of the relevant assets and liabilities that are measured at fair value on recurring basis:

 

Fair Value Measurements as of

December 31, 2020

 

   Total   Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                                            
Marketable securities - debt securities  $62,733   $-   $-   $62,733 
Total assets  $62,733   $-   $-   $62,733 
                     
Liabilities:                    
Derivative liabilities  $42,231   $-   $-   $42,231 
Total Liabilities   42,231   $-   $-   $42,231 

 

Fair Value Measurements as of

December 31, 2021

 

    Total     Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
    Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
Assets:                                
Marketable securities - debt securities   $     -     $        -     $         -     $         -  
Total assets   $ -     $ -     $ -     $ -  
                                 
Liabilities:                                
Derivative liabilities   $ -     $ -     $ -     $ -  
Total Liabilities     -     $ -     $ -     $ -  

 

The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on recurring basis as of December 31, 2021 and 2020:

 

   Fair Value
As of
December 31,
2021
   Fair Value
As of
December 31,
2020
   Valuation
Methodology
  Unobservable
Inputs
Marketable securities - debt securities  $         -   $62,733   Discounted cash flow analysis  Expected cash flows from the investment
                 
Derivative liabilities  $-   $42,231   Monte Carlo simulations and Binomial model  Risk free rate Expected volatility; Drift rate

 

The following tables provides a summary of the relevant assets that are measured at fair value on non-recurring basis:

 

Fair Value Measurements as of

December 31, 2021

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                
Equity investments, at cost  $50,000   $       -   $         -   $50,000 
Total assets  $50,000   $-   $-   $50,000 

 

Fair Value Measurements as of

December 31, 2020

 

    Total     Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
    Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
Assets:                        
Equity investments, at cost   $ 217,096     $              -     $              -     $ 217,096  
                                 
Total assets   $ 217,096     $ -     $ -     $ 217,096  

 

The following table shows the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on non-recurring basis as of December 31, 2021:

 

   Fair Value
As of
December 31,
2021
   Fair Value
As of
December 31,
2020
   Valuation Methodology  Unobservable Inputs
Equity investments, at cost  $       -   $217,096   Qualitative assessment per ASC 321-10-35  Qualitative factors

 

The Company recognizes impairment on loans or notes receivable (that do not meet the definition of a debt security) when it is probable that it will be unable to collect all amounts due according to the contractual terms, and the amount of loss can be estimated. The loss is estimated based on the present value of expected cash flows. 

The change in net realized depreciation on equity trading securities that has been included in other expenses for the year ended December 31, 2021 and 2020 was $0 and $(7,453), respectively.

 

The Company valued the initial value of debt securities, which are investments in convertible notes receivable, by assessing the separate values of the debt and equity components for similar instruments convertible into private company equity (Level 3). The investment was initially measured at cost, which was determined to approximate fair value due to the lack of marketability of the conversion shares underlying these convertible instruments and the expected recoverability of the note principal. The key assumption affecting the level 3 fair values would be observable price changes to the equity investments. The Company monitors for impairment indicators at each balance sheet date.

 

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits . The Company has never experienced any losses related to these balances. As of December 31, 2021 and 2020, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2021 and 2020, was approximately $2.7 million and $7.7 million, respectively. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 

Concentration of Credit Risk and Other Risks and Uncertainties

 

The Company provides credit in the normal course of business. The Company maintains allowances for credit losses on factors surrounding the credit risk of specific customers, historical trends, and other information.

 

The Company operates in Australia and holds total assets of $675,024 that are considered to be reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

 

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

    Estimated
Useful Life
(Years)
     
Computer equipment and software   3
Furniture and fixtures   5

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

 

Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

 

We evaluate the recoverability of property and equipment and acquired finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the year ended December 31, 2021 and 2020, the Company recorded an impairment charge of $688,127.00 and $0, respectively for intangible assets.

 

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 7.26 years.

 

Scheduled amortization over the next five years are as follows:

 

Twelve months ending December 31,
       
2022   $ 493,660  
2023     407,848  
2024     347,936  
2025     231,624  
2026     219,749  
Thereafter     732,024  
Total   $ 2,432,841  

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment” (“ASC Topic 350”). The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units.

 

During the year ended December 31, 2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for goodwill.

 

The following table sets forth a summary of the changes in goodwill for the years ended December 31, 2020 and 2021.

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020 and 2021    $1,035,795 
Goodwill acquired in a business combination   1,374,835 
Impairment of goodwill   (1,035,795)
As of December 31, 2021   1,374,835 

 

Investments

 

Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.

 

The Company accounts for its investments in available-for-sale debt securities, in accordance with sub-topic 320-10 of the FASB ASC (“Sub-Topic 320-10”). Accrued interest on these securities is included in fair value and amortized cost.

 

Pursuant to Paragraph 320-10-35, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized.

 

The Company follows FASB ASC 320-10-35 to assess whether an investment in debt securities is impaired in each reporting period. An investment in debt securities is impaired if the fair value of the investment is less than its amortized cost. If the Company intends to sell the debt security (that is, it has decided to sell the security), an other-than-temporary impairment shall be considered to have occurred. If the Company more likely than not will be required to sell the security before recovery of its amortized cost basis or it otherwise does not expect to recover the entire amortized cost basis of the security, an other-than-temporary impairment shall be considered to have occurred. The Company considers the expected cash flows from the investment based on reasonable and supportable forecasts as well as several other factors to estimate whether a credit loss exists. If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date.

 

The following table sets forth a summary of the changes in marketable securities - available-for-sale debt securities that are measured at fair value on a recurring basis:

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020           - 
Purchase of marketable securities  $210,000 
Interest due at maturity   4,829 
Other than temporary impairment   (50,000)
Conversion of marketable securities   (102,096)
As of December 31, 2020   62,733 
Purchase of marketable securities   - 
Interest due at maturity   - 
Other than temporary impairment   (62,733)
Conversion of marketable securities   - 
December 31, 2021  $- 

We invest in debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of December 31, 2021, all of our investments had maturities between one and three years. The marketable debt security investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. During the years ended December 31, 2021 and 2020, the Company recognized a $62,733 and $50,000 respectively from the impairment of the debt security.

 

The following table sets forth a summary of the changes in equity investments, at cost that are measured at fair value on a non-recurring basis: 

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020  $- 
Purchase of equity investments   115,000 
Conversion of marketable securities   102,096 
As of December 31, 2020   217,096 
Purchase of equity investments   150,000 
Other than temporary impairment   (102,096)
Conversion to equity method investments   (215,000)
As of December 31, 2021  $50,000 

  

The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.

 

The Company performed a qualitative assessment considering impairment indicators to evaluate whether these investments were impaired. Impairment indicators that the Company considered included the following: a) a significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee; b) a significant adverse change in the regulatory, economic or technology environment of the investee; c) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; d) a bona fide offer to purchase or an offer by the investee to sell the investment; e) factors that raise significant concerns about the investee’s ability to continue as a going concern. During the year ended December 31, 2021 the Company recognized a $102,096 impairment of the equity security.

 

Equity Method Investments

 

Investments in unconsolidated entities over which we have significant influence are accounted for under the equity method of accounting. Under the equity method of accounting, the Company does not consolidate the investment’s financial statements within its consolidated financial statements. Equity method investments are initially recorded at cost, then our proportional share of the underlying net income or loss is recorded as equity in net loss from equity method investments in our statement of operations, with a corresponding increase or decrease to the carrying value of the investment. Distributions received from the investee reduce our carrying value of the investment and are recorded in the consolidated statements of cash flows using the cumulative earnings approach. These investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. There were indicators of impairment related to our equity method investments for the year ended December 31, 2021. During the year ended December 31, 2021, the Company recorded an impairment charge of $487,365 for investments.

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Foreign Currency

 

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our Consolidated Balance Sheet dates. Results of operations and cash flows are translated using the average exchange rates throughout the periods. The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in operating expenses, have not been significant in any period presented.

 

Derivative Liability

 

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity.

  

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.  

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017, on a retrospective basis.

 

The Company utilizes a Monte Carlo simulation model for the make whole feature and a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Monte Carlo model included a starting stock price, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, drift, and a risk-free rate. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.

 

Shipping and Handling Costs

 

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost or revenue.

 

Revenue Recognition  

 

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

  identification of the contract, or contracts, with a customer;

 

  identification of the performance obligations in the contract;

 

  determination of the transaction price. The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mile basis) and cash prizes offered to Challenge winners;

 

  allocation of the transaction price to the performance obligations in the contract; and

 

  recognition of revenue when, or as, we satisfy a performance obligation.

 

Revenue disaggregated by revenue source for the years ended December 31, 2021 and 2020 consists of the following:

 

   Years Ended 
   December 31, 
   2021   2020 
Agency (Managed Services, Branded Content, & Talent Management Services)  $2,256,546   $1,100,199 
Platform (Creator Subscriptions)   1,926,135    70,623 
Ecommerce (Tangible products)   90,433    - 
Affiliate Sales   26,453    33,748 
Other Revenue   150    8,300 
   $4,299,717   $1,212,870 

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the years ended December 31, 2021 and 2020 consists of the following:

 

   Years Ended 
   December 31, 
   2021   2020 
Products and services transferred over time  $4,182,681   $1,100,199 
Products and services transferred at a point in time   117,036    112,671 
   $4,299,717   $1,212,870 

Agency Revenue

 

Managed Services

 

The Company provides Studio/Agency Service offerings to business-to-business (B2B) and business-to-consumer (B2C) product and service brands which encompasses a full range of digital marketing and e-commerce solutions. The Company’s services include the setup and ongoing management of clients’ websites, Amazon and Shopify storefronts and listings, social media pages, search engine marketing, and other various tools and sales channels utilized by e-commerce sellers for sales and growth optimization. Contracts are broken into three categories: Partners, Monthly Services, and Projects. Contract amounts for Partner and Monthly Services clients range from approximately $500-$7,500 per month while Project amounts vary depending on the scope of work. Partner and Monthly clients are billed monthly for the work completed within that month. Partner Clients may or may not have an additional billing component referred to as Sales Performance Fee, which is a fee based upon a previously agreed upon percentage point of the client’s total sales for the month. Some Partners may also have projects within their contracts that get billed and recognized as agreed upon project milestones are achieved. Revenue is recognized over time as service obligations and milestones in the contract are met.

 

Branded Content

 

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles and/or branded challenges for clients on the Vocal platform and promote said stories, tracking engagement for the client. In the case of branded articles, the performance obligation is satisfied when the Company successfully publishes the articles on its platform and meets any required promotional milestones as per the contract. In the case of branded challenges, the performance obligation is satisfied when the Company successfully closes the challenge and winners have been announced. The Company utilizes the completed contract method when revenue is recognized over time as the services are performed and any required milestones are met. Certain contracts contain separate milestones whereas the Company separates its performance obligations and utilizes the stand-alone selling price method and residual method to determine the estimate of the allocation of the transaction price.

 

Below are the significant components of a typical agreement pertaining to branded content revenue:

 

  The Company collects fixed fees ranging from $10,000 to $110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.
     
  Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

 

  Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.
     
  Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee. 

 

Talent Management Services

 

Talent Management represents the revenue recognized by WHE Agency, Inc. (“WHE”) from the Company’s obligation to manage and oversee influencer-led campaigns from the contract negotiation stage through content creation and publication. WHE acts in an agent capacity for influencers and collects a management fee of 20% of the value of an influencer’s contract with a brand. Revenue is recognized net of the 80% of the contract that is collected by the influencer and is recognized when performance obligations of the contract are met. Performance obligations are complete when milestones and deliverables of contracts are delivered to the client. 

 

Below are the significant components of a typical agreement pertaining to talent management revenue:

 

  Total gross contracts range from $500-$50,000.

 

  The Company collects fixed fees in the amount of 20% of the gross contract amount, ranging from $100 to $20,000 in net revenue per contract.

 

  The campaign is created and made live by the influencer within one month of the signed agreement, or as previously negotiated with the client.

 

  Campaigns are promoted per the contract and the customer is provided a link to the live deliverables on the influencer’s social media channels.

 

  Most billing for contracts occur 100% at execution of the performance obligation. Net payment terms vary by client.

  

Platform Revenue

 

Creator Subscriptions

 

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are subject to promotional discounts and free trials. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

 

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Estimates are utilized for payments made for earnings through reads, by establishing the lifetime a subscriber has had a Vocal account, determining the percentage of that lifetime that the subscriber has been a paying customer, and applying that percentage to payments for earnings through reads in the relevant reporting period. 

 

Affiliate Sales Revenue

 

Affiliate sales represents the commission the Company receives when a purchase is made through affiliate links placed within content hosted on the Vocal platform. Affiliate revenue is earned on a “click through” basis, upon referring visitors, via said links, to an affiliate’s site and having them complete a specific outcome, most commonly a product purchase. The Company uses multiple affiliate platforms, such as Skimlinks, Amazon, and Tune, to form and maintain thousands of vendor relationships. Each vendor establishes their own commission percentage, which typically range from 2-20%. The revenue is recognized upon receipt as reliable estimates could not be made.

 

E-Commerce Revenue

 

The Company’s e-commerce businesses are housed under Creatd Ventures, and currently consists of two majority-owned e-commerce companies, Camp (previously Plant Camp) and Dune Glow Remedy (“Dune”).  The Company generates revenue through the sale of Camp and Dune’s consumer products through its e-commerce distribution channels. The Company satisfies its performance obligation upon shipment of product to its customers and recognizes shipping and handling costs as a fulfillment cost. Customers have 30 days from receipt of an item to return unopened, unused items. The Company runs discounts from time to time to promote sales, improve market penetration, and increase customer retention.

 

Deferred Revenue

 

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue over the next year. As of December 31, 2021, and 2020, the Company had deferred revenue of $234,159 and $88,637, respectively.

 

Accounts Receivable and Allowances

 

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the years ended December 31, 2021 and 2020, the Company recorded $110,805 and $53,692, respectively as a bad debt expense. As of December 31, 2021 and 2020, the Company has an allowance for doubtful accounts of $186,147 and $80,509, respectively.

 

Inventory

 

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of December 31, 2021 and 2020, the Company has no valuation allowance.

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted in accordance with Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation over the requisite service period of the award. The company has a relatively low forfeiture rate of stock based compensation and forfeitures are recognized as they occur.

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods.

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is volatility is derived from the Company’s historical data over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. Forfeitures are recognized as they occur.

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. The Company issues awards of equity instruments, such as stock options and restricted stock units, to employees and certain non-employee directors. Compensation expense related to these awards is based on the fair value of the underlying stock on the award date and is amortized over the service period, defined as the vesting period. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock units. Compensation expense is reduced for actual forfeitures as they occur.

 

Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 

 

During the year ended December 31, 2021 and 2020, we recognized a $275,213 and $507,242 respectively, benefit for research and development tax credits in other income on the Statements of Comprehensive Income (Loss). The tax credits were claimed on our previous Australian tax returns and were based upon a research and development costs paid to an Australian company.

 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the years ended December 31, 2021 and 2020 presented in these consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at December 31, 2021 and 2020:

 

   December 31, 
   2021   2020 
Options   2,902,619    541,021 
Warrants   5,658,830    3,228,235 
Totals   8,561,449    3,769,256 

 

Reclassifications

 

Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

  

Recently Adopted Accounting Guidance

 

In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The updated guidance, which became effective for fiscal years beginning after December 15, 2020, did not have a material impact on the Company’s consolidated financial statements.

 

Recent Accounting Guidance Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021, and interim periods within those annual periods and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. This guidance is effective for annual periods after December 15, 2021, including interim periods within those annual periods. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 

In July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. 

v3.22.4
Going Concern
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Going Concern [Abstract]    
Going Concern

Note 3 – Going Concern

 

The Company’s condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the condensed consolidated financial statements, as of September 30, 2022, the Company had an accumulated deficit of $133.8 million, a net loss of $25.1 million and net cash used in operating activities of $13.9 million for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

  

On January 30, 2020, the World Health Organization declared the COVID-19 novel coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial impact will be to the Company, capital raising efforts and our operations may be negatively affected.

 

The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance that it will be able to do so on reasonable terms, or at all. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering. 

 

The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Going Concern

 

The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the consolidated financial statements, as of December 31, 2021, the Company had an accumulated deficit of $109.6 million, a net loss of $37.3 million and net cash used in operating activities of $21.1 million for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

 

On January 30, 2020, the World Health Organization declared the COVID-19 novel coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial impact will be to the Company, capital raising efforts and our operations may be negatively affected.

  

The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance that it will be able to do so on reasonable terms, or at all. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering. 

 

The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

v3.22.4
Inventory
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Inventory

Note 4 – Inventory

 

Inventory was comprised of the following at September 30, 2022 and December 31, 2021:

 

    September 30,
2022
    December 31,
2021
 
Raw Materials   $ 82,834     $ -  
Packaging     78,799       2,907  
Finished goods     717,417       103,496  
    $ 879,050     $ 106,403  

Note 4 – Inventory

 

Inventory was comprised of the following at December 31, 2021:

 

  

December 31,

2021

 
Packaging  $2,907 
Finished goods   103,496 
   $106,403 
v3.22.4
Property and Equipment
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Property, Plant and Equipment [Abstract]    
Property and Equipment

Note 5 – Property and Equipment

 

Property and equipment stated at cost, less accumulated depreciation, consisted of the following:

 

   September 30,
2022
   December 31,
2021
 
Computer Equipment  $447,342   $353,880 
Furniture and Fixtures   184,524    102,416 
Leasehold Improvements   47,616    11,457 
    679,482    467,753 
Less: Accumulated Depreciation   (430,519)   (364,814)
   $248,963   $102,939 

 

Depreciation expense was $43,546 and $10,047 for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense was $67,951 and $30,141 for the nine months ended September 30, 2022 and 2021, respectively.

Note 5 – Property and Equipment

 

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

 

   December 31,
2021
   December 31,
2020
 
Computer Equipment  $353,880   $284,928 
Furniture and Fixtures   102,416    86,888 
Leasehold Improvements   11,457    - 
    467,753    371,816 
Less: Accumulated Depreciation   (364,814)   (315,558)
   $102,939   $56,258 

Depreciation expense was $49,254 and $31,094 for the year ended December 31, 2021 and 2020, respectively.

v3.22.4
Notes Payable
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Notes Payable [Abstract]    
Notes Payable

Note 6 – Notes Payable

 

Notes payable as of September 30, 2022 and December 31, 2021 is as follows:

 

   Outstanding
Principal as of
        
   September 30,
2022
   December 31,
2021
   Interest
Rate
   Maturity
Date
Seller’s Choice Note  $-   $660,000    30%  September 2020
The April 2020 PPP Loan Agreement   198,577    198,577    1%  May 2022
The First December 2021 Loan Agreement   47,990    185,655    10%  June 2023
The Second December 2021 Loan Agreement   -    313,979    14%  June 2022
First Denver Bodega LLC Loan   44,008    
-
    5%  March 2025
The Third May 2022 Loan Agreement   16,169    
-
    
-
%  November 2022
The Fourth May 2022 Loan Agreement   30,558    
-
    
-
%  November 2022
The First August 2022 Loan Agreement   129,634    
-
    14%  November 2022
The Second August 2022 Loan Agreement   646,100    
-
    
-
%  January 2023
The First September 2022 Loan Agreement   87,884    
-
    
-
%  September 2023
The Second September 2022 Loan Agreement   848,625    
-
    
-
%  May 2023
The Third September 2022 Loan Agreement   351,964    
-
    
-
%  April 2023
    2,401,509    1,358,211         
Less: Debt Discount   (614,410)   (15,547)        
Less: Debt Issuance Costs   
-
    
-
         
    1,787,099    1,342,664         
Less: Current Debt   (1,758,179)   (1,278,672)        
Total Long-Term Debt  $28,920   $63,992         

 

Seller’s Choice Note

 

On September 11, 2019, the Company entered into Seller’s Choice Purchase Agreement with Home Revolution LLC. As a part of the consideration provided pursuant to the Seller’s Choice Acquisition, the Company issued the Seller’s Choice Note to the Seller in the principal amount of $660,000. The Seller’s Choice Note bears interest at a rate of 9.5% per annum and is payable on March 11, 2020 (the “Seller’s Choice Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts become due. Upon maturity the Company utilized an automatic extension up to 6 months. This resulted in a 5% increase in the interest rate every month the Seller’s Choice Note is outstanding. As of December 31, 2021, the Company was in default on the Seller’s Choice note.

 

On March 3, 2022, after substantial motion practice, Creatd successfully settled the dispute with Home Revolution, LLC for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed. As part of the settlement the Company recorded a Gain on extinguishment of debt of $147,256.

  

The April 2020 PPP Loan Agreement

 

On April 30, 2020, the Company was granted a loan with a principal amount of $282,432 (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020. The Note may be prepaid by the Company at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments.

  

During the nine months ended September 30, 2022, the Company accrued interest of $4,815.

  

The Company is in the process of returning the funds received from the Loan.

 

As of September 30, 2022, the Loan is in default, and the lender may require immediate payment of all amounts owed under the Loan or file suit and obtain judgment.

 

The First December 2021 Loan Agreement

 

On December 3, 2021, the Company entered into a loan agreement (the “First December 2021 Loan Agreement”) with a lender (the “First December 2021 Lender”) whereby the First December 2021 Lender issued the Company a promissory note of $191,975 (the “First December 2021 Note”). Pursuant to the First December 2021 Loan Agreement, the First December 2021 Note has an effective interest rate of 9%. The maturity date of the First December 2021 Note is June 3, 2023 (the “First December 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First December 2021 Note are due.

 

During the nine months ended September 30, 2022, the Company repaid $137,665 in principal.

 

The Second December 2021 Loan Agreement

 

On December 14, 2021, the Company entered into a secured loan agreement (the “Second December 2021 Loan Agreement”) with a lender (the “Second December 2021 Lender”), whereby the Second December 2021 Lender issued the Company a secured promissory note of $438,096 AUD or $329,127 United States Dollars (the “Second December 2021 Note”). Pursuant to the Second December 2021 Loan Agreement, the Second December 2021 Note has an effective interest rate of 14%. The maturity date of the Second December 2021 Note is June 30, 2022 (the “Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second December 2021 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

 

During the nine months ended September 30, 2022, the Company accrued $22,287  in interest. 

 

As of the date of this filing the Company has exercised its option to extend the maturity date to August 29, 2022.

 

During the nine months ended September 30, 2022, the Company repaid $293,499 of principal and $26,115 of interest.  

 

The First February 2022 Loan Agreement

 

On February 22, 2022, the Company entered into a secured loan agreement (the “First February 2022 Loan Agreement”) with a lender (the “First February 2022 Lender”), whereby the First February 2022 Lender issued the Company a secured promissory note of $222,540 AUD or $159,223 United States Dollars (the “First February 2022 Note”). Pursuant to the First February 2022 Loan Agreement, the First February 2022 Note has an effective interest rate of 14%. The maturity date of the First February 2022 Note is June 30, 2022 (the “First February 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First February 2022 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

 

During the nine months ended September 30, 2022, the Company accrued $8,120 in interest. 

 

As of the date of this filing the Company has exercised its option to extend the maturity date to August 29, 2022.

 

During the nine months ended September 30, 2022, the Company repaid $149,089 of principal and $8,120 of interest.  

 

Denver Bodega LLC Notes payable

 

On March 7, 2022, The Company acquired five note payable agreements from the acquisition of Denver Bodega LLC. See note 12. The total liabilities of these notes amounted to $293,888. During the nine months ended September 30, 2022, the Company repaid $249,880. As of September 30, 2022, the Company has one note outstanding. This note has a principal balance of $44,088, bears interest at 5%, and requires 36 monthly payments of $1,496.

 

The First May 2022 Loan Agreement

 

On May 9, 2022, the Company entered into a loan agreement (the “First May 2022 Loan Agreement”) with a lender (the “First May 2022 Lender”), whereby the First May 2022 Lender issued the Company a promissory note of $693,500 (the “First May 2022 Note”). The Company received cash proceeds of $455,924. Pursuant to the First May 2022 Loan Agreement, the First May 2022 Note has an effective interest rate of 143%. The maturity date of the First May 2022 Note is December 18, 2022 (the “First May 2022 Maturity Date”). The Company is required to make weekly payment of $21,673. The First May 2022 Note is secured by officers of the Company.

 

The Company recorded a $237,576 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $390,114 in principal.

 

On September 22, 2022, the Company and the First May 2022 Lender entered into an exchange agreement whereas both parties agreed to roll the remaining $303,386 in the Second September 2022 Loan Agreement. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $33,115 as loss on extinguishment of debt due to the remaining debt discount on the First May 2022 Loan Agreement.

 

The Second May 2022 Loan Agreement

 

On May 9, 2022, the Company entered into a loan agreement (the “Second May 2022 Loan Agreement”) with a lender (the “Second May 2022 Lender”), whereby the Second May 2022 Lender issued the Company a promissory note of $401,500 (the “Second May 2022 Note”). The Company received cash proceeds of $263,815. Pursuant to the Second May 2022 Loan Agreement, the Second May 2022 Note has an effective interest rate of 162 %. The maturity date of the Second May 2022 Note is November 20, 2022 (the “Second May 2022 Maturity Date”). The Company is required to make weekly payment of $14,339. The Second May 2022 Note is secured by officers of the Company.

 

The Company recorded a $137,685 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $272,447 in principal.

 

On September 23, 2022, the Company and the Second May 2022 Lender entered into an exchange agreement whereas both parties agreed to roll the remaining $129,053 in the Third September 2022 Loan Agreement. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $3,905 as loss on extinguishment of debt due to the remaining debt discount on the Second May 2022 Loan Agreement.

 

The Third May 2022 Loan Agreement

 

On May 25, 2022, the Company entered into a loan agreement (the “Third May 2022 Loan Agreement”) with a lender (the “Third May 2022 Lender”), whereby the Third May 2022 Lender issued the Company a promissory note of $27,604 (the “Third May 2022 Note”). Pursuant to the Third May 2022 Loan Agreement, the Third May 2022 Note has an effective interest rate of 20%. The maturity date of the Third May 2022 Note is November 23, 2022 (the “Third May 2022 Maturity Date”). The Company is required to make monthly payments of $3,067.

 

During the nine months ended September 30, 2022, the Company repaid $11,435 in principal.

 

The Fourth May 2022 Loan Agreement

 

On May 26, 2022, the Company entered into a loan agreement (the “Fourth May 2022 Loan Agreement”) with a lender (the “Fourth May 2022 Lender”), whereby the Fourth May 2022 Lender issued the Company a promissory note of $40,000 (the “Fourth May 2022 Note”). Pursuant to the Fourth May 2022 Loan Agreement, the Fourth May 2022 Note has an effective interest rate of 17%. The maturity date of the Fourth May 2022 Note is November 23, 2022 (the “Fourth May 2022 Maturity Date”).

 

During the nine months ended September 30, 2022, the Company repaid $9,442 in principal.

 

The June 2022 Loan Agreement

 

On June 17, 2022, the Company entered into a loan agreement (the “June 2022 Loan Agreement”) with a lender (the “June 2022 Lender”), whereby the June 2022 Lender issued the Company a promissory note of $568,000 (the “June 2022 Note”). The Company received cash proceeds of $378,000. Pursuant to the June 2022 Loan Agreement, the June 2022 Note has an effective interest rate of 217%. The maturity date of the June 2022 Note is November 4, 2022 (the “June 2022 Maturity Date”). The Company is required to make weekly payment of $28,400. The June 2022 Note is secured by officers of the Company.

 

The Company recorded a $190,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $255,600 in principal. 

 

On August 19, 2022, the Company and the June 2022 Lender entered into an exchange agreement whereas both parties agreed to roll the remaining $312,400 in the Third September 2022 Loan Agreement. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $66,749 as loss on extinguishment of debt due to the remaining debt discount on the Second May 2022 Loan Agreement.

 

The First August 2022 Loan Agreement

 

On August 18, 2022, the Company entered into a secured loan agreement (the “First August 2022 Loan Agreement”) with a lender (the “First August 2022 Lender”), whereby the First August 2022 Lender issued the Company a secured promissory note of $193,500 AUD or $129,634 United States Dollars (the “First August 2022 Note”). Pursuant to the First August 2022 Loan Agreement, the First August 2022 Note has an effective interest rate of 14%. The maturity date of the First August 2022 Note is June 30, 2023 (the “First August 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First August 2022 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

 

During the nine months ended September 30, 2022, the Company accrued $2,037 AUD in interest. 

 

The Second August 2022 Loan Agreement

 

On August 19, 2022, the Company entered into a loan agreement (the “Second August 2022 Loan Agreement”) with a lender (the “Second August 2022 Lender”), whereby the Second August 2022 Lender issued the Company a promissory note of $923,000 (the “Second August 2022 Note”). The Company received cash proceeds of $300,100 and rolled the remaining $312,400 of principal from the June 2022 Loan Agreement. Pursuant to the Second August 2022 Loan Agreement, the Second August 2022 Note has an effective interest rate of 704%. The maturity date of the Second August 2022 Note is January 9, 2022 (the “Second August 2022 Maturity Date”). The Company is required to make weekly payment of $46,150. The Second August 2022 Note is secured by officers of the Company.

 

The Company recorded a $310,500 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $276,900 in principal. 

 

The First September 2022 Loan Agreement

 

On September 1, 2022, the Company entered into a loan agreement (the “First September 2022 Loan Agreement”) with a lender (the “First September 2022 Lender”), whereby the First September 2022 Lender issued the Company a promissory note of $87,884 (the “First September 2022 Note”). Pursuant to the First September 2022 Loan Agreement, the First September 2022 Note has an effective interest rate of 13%. The maturity date of the First September 2022 Note is September 1, 2023 (the “First September 2022 Maturity Date”).

 

During the nine months ended September 30, 2022, the Company repaid $0 in principal.

 

The Second September 2022 Loan Agreement

 

On September 22, 2022, the Company entered into a loan agreement (the “Second September 2022 Loan Agreement”) with a lender (the “Second September 2022 Lender”), whereby the Second September 2022 Lender issued the Company a promissory note of $876,000 (the “Second September 2022 Note”). The Company received cash proceeds of $272,614 and rolled the remaining $303,386 of principal from the First May 2022 Loan Agreement. Pursuant to the Second September 2022 Loan Agreement, the Second September 2022 Note has an effective interest rate of 475%. The maturity date of the Second September 2022 Note is May 5, 2023 (the “Second September 2022 Maturity Date”). The Company is required to make weekly payment of $27,375. The Second September 2022 Note is secured by officers of the Company.

 

The Company recorded a $300,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $27,375 in principal. 

 

The Third September 2022 Loan Agreement

 

On September 22, 2022, the Company entered into a loan agreement (the “Third September 2022 Loan Agreement”) with a lender (the “Third September 2022 Lender”), whereby the Third September 2022 Lender issued the Company a promissory note of $365,000 (the “Third September 2022 Note”). The Company received cash proceeds of $110,762 and rolled the remaining $129,053 of principal from the Second May 2022 Loan Agreement. Pursuant to the Third September 2022 Loan Agreement, the Third September 2022 Note has an effective interest rate of 556%. The maturity date of the Third September 2022 Note is May 5, 2023 (the “Second September 2022 Maturity Date”). The Company is required to make weekly payment of $13,036. The Third September 2022 Note is secured by officers of the Company.

 

The Company recorded a $300,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $13,036 in principal. 

Note 8 – Notes Payable

 

Notes payable as of December 31, 2021 and 2020 is as follows:

 

    Outstanding Principal as of            
    December 31,
2021
    December 31,
2020
    Interest
Rate
    Maturity
Date
Seller’s Choice Note   $ 660,000     $ 660,000       30 %   September 2020
The May 2020 PPP Loan Agreement     -       412,500       1 %   April 2022
The April 2020 PPP Loan Agreement     198,577       282,432       1 %   May 2022
The October 2020 Loan Agreement     -       55,928       14 %   July 2021
The November 2020 Loan Agreement     -       23,716       14 %   May 2021
The February 2021 Loan Agreement     -       -       14 %   July 2021
The July 2021 Loan Agreement     -       -       10 %   October 2022
The First December 2021 Loan Agreement     185,655       -       10 %   June 2023
The Second December 2021 Loan Agreement     313,979       -       14 %   June 2022
      1,358,211       1,434,576              
Less: Debt Discount     (15,547 )     -              
Less: Debt Issuance Costs     -       -              
      1,342,664       1,434,576              
Less: Current Debt     (1,278,672 )     (1,221,539 )            
Total Long-Term Debt   $ 63,992     $ 213,037              

 

Seller’s Choice Note

 

On September 11, 2019, the Company entered into Seller’s Choice Purchase Agreement with Home Revolution LLC. As a part of the consideration provided pursuant to the Seller’s Choice Acquisition, the Company issued the Seller’s Choice Note to the Seller in the principal amount of $660,000. The Seller’s Choice Note bears interest at a rate of 9.5% per annum and is payable on March 11, 2020 (the “Seller’s Choice Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts become due. Upon maturity the Company utilized an automatic extension up to 6 months. This resulted in a 5% increase in the interest rate every month the Seller’s Choice Note is outstanding. As of December 31, 2021, the Company is in default on the Seller’s Choice note.

 

During the year ended December 31, 2021, the Company accrued interest of $198,000.

 

On March 3, 2022, the Company settled the Seller’s Choice Note for a cash payment of $799,000.

 

The First March 2020 Loan Agreement

 

On March 23, 2020, the Company entered into a loan agreement (the “First March 2020 Loan Agreement”) with an individual (the “First March 2020 Lender”) whereby the First March 2020 Lender issued the Company a promissory note of $11,000 (the “First March 2020 Note”). Pursuant to the First March 2020 Loan Agreement, the First March 2020 Note has an effective interest rate of 25%. The maturity date of the First March 2020 Note was September 23, 2020 (the “First March 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First March 2020 Note were due.

 

During the year ended December 31, 2020, the Company repaid $11,000 in principal and $2,695 in interest.

 

The Second March 2020 Loan Agreement

 

On March 26, 2020, the Company entered into a loan agreement (the “Second March 2020 Loan Agreement”) with an individual (the “Second March 2020 Lender”), whereby the Second March 2020 Lender issued the Company a promissory note of $17,000 (the “Second March 2020 Note”). Pursuant to the Second March 2020 Loan Agreement, the Second March 2020 Note has an effective interest rate of 19%. The maturity date of the Second March 2020 Note was September 17, 2020 (the “Second March 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second March 2020 Note were due.

 

During the year ended December 31, 2020, the Company repaid $17,000 in principal and $1,398 in interest.

 

The April 2020 PPP Loan Agreement

 

On April 30, 2020, the Company was granted a loan with a principal amount of $282,432 (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020. The Note may be prepaid by the Company at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments.

 

During the year ended December 31, 2021, the Company accrued interest of $1,637.

 

During the year ended December 31, 2021, the Company repaid $83,855 in principal.

 

The Company is in the process of returning the funds received from the Loan.

 

When the applications for PPP first opened up, there was limited available funding and much confusion surrounding the application process. The Company initially submitted its application for the May 2020 PPP Loan in early April but received no response in the aftermath of submitting the application. After consulting multiple advisors, the Company made the decision to apply elsewhere, due to the rampant media coverage of institutions running out of funding and the Company’s need for the capital and belief that if 2 separate loans were approved, the remaining application could simply be withdrawn.

 

Therefore, in late April, the company proceeded with applying for the April 2020 PPP Loan. After some conflicting communications regarding acceptance, the Company attempted to contact the lender to clarify but got no response. After continued attempts to follow up with both lenders, the Company received approval for the May 2020 PPP Loan and funding for the April 2020 PPP Loan on the same day, followed the next day by the funding of the May 2020 PPP Loan. The Company immediately separated the funds for the April 2020 PPP Loan into a separate reserved bank account with the intention of returning the funds. However, after several attempts to contact the lender with no response, the Company was faced with difficulty raising funds in the early-Covid economy and made the decision to utilize the funds for operations and pursue an installment repayment plan when they were able to reach the lender. As of the date of this filing, the Company has begun making repayments on the loan, absent a formal installment agreement due to difficulties reaching the lender.

 

As each company is only permitted one loan under the CARES Act, there is a possibility the loan may be called by the SBA and the Company would have to repay the loan in full at such time.

 

The May 2020 PPP Loan Agreement

 

On May 4, 2020, Jerrick Ventures, LLC (“Jerrick Ventures”), the Company’s wholly-owned subsidiary, was granted a loan from PNC Bank, N.A. with a principal amount of $412,500, pursuant to the Paycheck Protection Program (the “PPP”). The Loan, which was in the form of a Note dated May 4, 2020, matures on May 4, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on November 4, 2020. The Note may be prepaid by Jerrick Ventures at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments. Jerrick Ventures intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. 

 

During the year ended December 31, 2021, the Company accrued interest of $396. 

 

During the year ended December 31, 2021, the Company repaid $136,597 in principal and was forgiven $275,903 of principal and $3,119 of accrued interest.

 

The June 2020 Loan Agreement

 

On June 30, 2020, the Company entered into a loan agreement (the “June 2020 Loan Agreement”) with a banking institution (the “June 2020 Lender”), whereby the June 2020 Lender issued the Company a promissory note of A$510,649 Australian dollar (“AUD”) or $351,692 United States Dollar (the “June 2020 Note”). Pursuant to the June 2020 Loan Agreement, the June 2020 Note has an effective interest rate of 15%. The maturity date of the June 2020 Note was July 31, 2020 (the “June 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2020 Note were due in AUD currency. This loan was secured by the Australian research & development credit.

 

During the year ended December 31, 2020 the Company repaid A$510,649 in principal and A$14,814 in interest.

 

The October 2020 Loan Agreement

 

On October 6, 2020, the Company entered into a secured loan agreement (the “October 2020 Loan Agreement”) with a lender (the “October 2020 Lender”), whereby the October 2020 Lender issued the Company a secured promissory note of $74,300 AUD or $54,412 United States Dollars (the “October 2020 Note”). Pursuant to the October 2020 Loan Agreement, the October 2020 Note has an effective interest rate of 14%. The maturity date of the October 2020 Note is September 30, 2021 (the “October 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the October 2020 Loan Agreement are due. The loan is secured by the Australian research & development credit.

 

During the year ended December 31, 2021, the Company accrued $4,850 AUD in interest. 

 

During the year ended December 31, 2021, the Company’s repaid $111,683 in principal and $6,408 in interest from our R&D tax credit receivable.

 

The November 2020 Loan Agreement

 

On November 24, 2020, the Company entered into a loan agreement (the “November 2020 Loan Agreement”) with a lender (the “November 2020 Lender”) whereby the November 2020 Lender issued the Company a promissory note of $34,000 (the “November 2020 Note”). Pursuant to the November 2020 Loan Agreement, the November 2020 Note has an effective interest rate of 14%. The maturity date of the November 2020 Note is May 25, 2021 (the “November 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the November 2020 Note are due.

 

During the year ended December 31, 2020, the Company repaid $10,284 in principal.

 

During the year ended December 31, 2021, the Company repaid $23,716 in principal and $4,736 of accrued interest.

 

The February 2021 Loan Agreement

 

On February 24, 2021, the Company entered into a secured loan agreement (the “February 2021 Loan Agreement”) with a lender (the “February 2021 Lender”), whereby the February 2021 Lender issued the Company a secured promissory note of $111,683 AUD or $81,789 United States Dollars (the “February 2021 Note”). Pursuant to the February 2021 Loan Agreement, the February 2021 Note has an effective interest rate of 14%. The maturity date of the February 2021 Note is July 31, 2021 (the “February 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.

 

During the year ended December 31, 2021, the Company accrued $9,339 AUD in interest. 

 

The April 2021 Loan Agreement

 

On April 9, 2021, the Company entered into a loan agreement (the “April 2021 Loan Agreement”) with a lender (the “April 2021 Lender”) whereby the April 2021 Lender issued the Company a promissory note of $128,110 (the “April 2021 Note”). Pursuant to the April 2021 Loan Agreement, the April 2021 Note has an effective interest rate of 11%. The maturity date of the April 2021 Note is October 8, 2022 (the “April 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the April 2021 Note are due.

 

During the year ended December 31, 2021, the Company repaid $92,140 in principal and converted $35,970 into the July 2021 Loan Agreement. As part of the conversion the Company recorded $8,341 as extinguishment expense.

 

The July 2021 Loan Agreement

 

On July 2, 2021, the Company entered into a loan agreement (the “July 2021 Loan Agreement”) with a lender (the “July 2021 Lender”) whereby the July 2021 Lender issued the Company a promissory note of $137,625 (the “July 2021 Note”). Pursuant to the July 2021 Loan Agreement, the July 2021 Note has an effective interest rate of 10%. The maturity date of the July 2021 Note is December 31, 2022 (the “July 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the July 2021 Note are due.

 

During the year ended December 31, 2021, the Company repaid $113,606 in principal and converted $24,019 into the Second December 2021 Loan. As part of the conversion the Company recorded $7,109 as extinguishment expense.

 

The First December 2021 Loan Agreement

 

On December 3, 2021, the Company entered into a loan agreement (the “First December 2021 Loan Agreement”) with a lender (the “First December 2021 Lender”) whereby the First December 2021 Lender issued the Company a promissory note of $191,975 (the “First December 2021 Note”). Pursuant to the First December 2021 Loan Agreement, the First December 2021 Note has an effective interest rate of 9%. The maturity date of the First December 2021 Note is June 3, 2023 (the “First December 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First December 2021 Note are due.

 

During the year ended December 31, 2021, the Company repaid $6,320 in principal.

 

The Second December 2021 Loan Agreement

 

On December 14, 2021, the Company entered into a secured loan agreement (the “Second December 2021 Loan Agreement”) with a lender (the “Second December 2021 Lender”), whereby the Second December 2021 Lender issued the Company a secured promissory note of $438,096 AUD or $329,127 United States Dollars (the “Second December 2021 Note”). Pursuant to the Second December 2021 Loan Agreement, the Second December 2021 Note has an effective interest rate of 14%. The maturity date of the Second December 2021 Note is June 30, 2022 (the “Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second December 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.

 

During the year ended December 31, 2021, the Company accrued $2,857 AUD in interest. 

v3.22.4
Convertible Notes Payable
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Convertible Notes Payable [Abstract]    
Convertible Notes Payable

Note 7 – Convertible Notes Payable

 

Convertible notes payable as of September 30, 2022, is as follows:

 

   Outstanding 
Principal as of
              Warrants granted 
  

September 30,

2022

  

Interest

Rate

  

Conversion

Price

  

Maturity

Date

  Quantity  

Exercise

Price

 
The Second February 2022 Loan Agreement  $112,613    11%   
-
(*)  February-23   
-
    - 
The May 2022 Convertible Loan Agreement   76,814    11%   
-
(*)  May-23   
-
    - 
The May 2022 Convertible Note Offering   4,090,000    18%   2.00(*)  November-22   4,000,000    $3.00 – $6.00 
The July 2022 Convertible Note Offering   2,150,000    18%   2.00(*)  November-22   2,150,000    $3.00 – $6.00 
    6,429,427                        
Less: Debt Discount   (360,854)                       
Less: Debt Issuance Costs   (5,648)                       
    6,062,926                        

 

(*) As subject to adjustment as further outlined in the notes

 

The July 2021 Convertible Loan Agreement

 

On July 6, 2021, the Company entered into a loan agreement (the “July 2021 Loan Agreement”) with an individual (the “July 2021 Lender”), whereby the July 2021 Lender issued the Company a promissory note of $168,850 (the “July 2021 Note”). Pursuant to the July 2021 Loan Agreement, the July 2021 Note has interest of six percent (6%). The July 2021 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default or 180 days after issuance the July 2021 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $15,850 debt discount relating to an original issue discount and $3,000 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the July 2021 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date. The conversion feature of July 2021 Note gave rise to a derivative liability of $100,532. The Company recorded this as a debt discount. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

 

During the nine months ended September 30, 2022, the note holder converted $168,850 of principal and $4,605 of interest into 109,435 shares of the Company’s common stock. The unamortized debt discount of $96,803 was recorded to extinguishment of debt due to conversion.

 

The Second February 2022 Loan Agreement

 

On February 22, 2022, the Company entered into a loan agreement (the “Second February 2022 Loan Agreement”) with a lender (the “Second February 2022 Lender”), whereby the Second February 2022 Lender issued the Company a promissory note of $337,163 (the “Second February 2022 Note”). Pursuant to the Second February 2022 Loan Agreement, the Second February 2022 Note has an interest rate of 11%. The maturity date of the Second February 2022 Note is February 22, 2023 (the “Second February 2022 Maturity Date”). The Company is required to make 10 monthly payments of $37,425. 

 

Upon default the May 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $37,163 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $224,550 in principal.

 

The May 2022 Convertible Loan Agreement

 

On May 20, 2022, the Company entered into a loan agreement (the “May 2022 Loan Agreement”) with an individual (the “May 2022 Lender”), whereby the May 2022 Lender issued the Company a promissory note of $115,163 (the “July 2021 Note”). Pursuant to the Third May 2022 Loan Agreement, the Third May 2022 Note has an interest rate of 11%. The May 2022 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default the May 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $15,163 debt discount relating to an original issue discount The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $38,349 in principal.

 

The May 2022 Convertible Note Offering

 

During May of 2022, the Company conducted multiple closings of a private placement offering to accredited investors (the “May 2022 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “May 2022 Investors”) for aggregate gross proceeds of $4,000,000. The May 2022 convertible notes are convertible into shares of the Company’s common stock, par value $.001 per share at a conversion price of $2.00 per share. As additional consideration for entering in the May 2022 Convertible Note Offering, the Company issued 4,000,000 warrants of the Company’s common stock. The May 2022 Convertible Note matures on November 30, 2022. 

 

The Company recorded a $1,895,391 debt discount relating to 4,000,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

The Company recorded a $399,964 debt discount relating to an original issue discount and $125,300 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

On September 2, 2022, the Company went into default on these notes. As part of the default terms the Company owes 110% of the principal outstanding and the notes accrue interest at a rate of 18%.

 

On September 15, 2022, the Company and six out of eight lenders May 2022 Investors agreed to forgive default interest and extend the maturity date to March 31, 2023, for a reduced conversion price of $0.20 for the convertible notes and warrants. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $737,756 as loss on extinguishment of debt due to the remaining debt discount and recognized $331,861 as a gain on extinguishment of debt due to the forgiveness of interest. The company also recognized an additional $75,610 of debt discount from the change in relative fair value on the warrants.

 

During the nine months ended September 30, 2022, the Company accrued $103,670 in interest that was not forgiven. As of September 30, 2022, the Company is in default on $900,000 of principal and $103,670 of interest.

 

Subsequent to September 30, 2022, the Company made a repayment of $35,714 towards these notes.

 

The July 2022 Convertible Note Offering

 

During July of 2022, the Company conducted multiple closings of a private placement offering to accredited investors (the “July 2022 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “July 2022 Investors”) for aggregate gross proceeds of $2,150,000. The July 2022 convertible notes are convertible into shares of the Company’s common stock, par value $.001 per share at a conversion price of $2.00 per share. As additional consideration for entering in the July 2022 Convertible Note Offering, the Company issued 2,150,000 warrants of the Company’s common stock. The July 2022 Convertible Note matures on November 30, 2022. 

 

The Company recorded a $863,792 debt discount relating to 2,150,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

The Company recorded a $214,981 debt discount relating to an original issue discount. The debt discount are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

On September 2, 2022, the Company went into default on these notes. As part of the default terms the Company owes 110% of the principal outstanding and the notes accrue interest at a rate of 18%.

 

On September 15, 2022, the Company and the July Investors agreed to forgive default interest and extend the maturity date to March 31, 2023 for a reduced conversion price of $0.20 for the convertible notes and warrants. Since the present value of the cash flows of the new and old debt were more than 10% different, the company used extinguishment accounting. As part of the agreement the Company recognized $640,521 as loss on extinguishment related to the change in fair value from the restructuring agreement.

 

Subsequent to September 30, 2022, the Company made a repayment of $714,285 towards these notes.

Note 9 – Convertible Notes Payable

 

Convertible notes payable as of December 31, 2021, and 2020, is as follows:

 

    Outstanding Principal as of                         Warrants granted  
   

December 31,

2021

   

December 31,

2020

   

Interest

Rate

   

Conversion

Price

       

Maturity

Date

  Quantity    

Exercise

Price

 
The September 2020 convertible Loan Agreement   $ -     $ 341,880       12 %     -   (*)      September-21     85,555       5  
The First December 2020 convertible Loan Agreement     -       600,000       12 %     -   (*)      December-21     -       -  
The October 2020 convertible Loan Agreement     -       169,400       6 %     -   (*)      October-21     -       -  
The Second December 2020 convertible Loan Agreement     -       169,400       6 %     -   (*)      December-21     -       -  
The May 2021 Loan     -       -       - %     5.00   (*)      November-22     1,090,908       4.50  
The July 2021 Loan     168,850       -       6 %     -   (*)      July - 22                
      168,850       1,280,680                                          
Less: Debt Discount     (8,120 )     (309,637 )                                        
Less: Debt Issuance Costs     (1,537 )     (73,527 )                                        
              897,516                                          
Less: Current Debt     (159,193 )     (897,516 )                                        
Total Long-Term Debt   $ -     $ -                                          

 

(*) As subject to adjustment as further outlined in the notes

 

The February 2018 Convertible Note Offering

 

During the three months ended March 31, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “February 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “February 2018 Investors”) for aggregate gross proceeds of $725,000. In addition, $250,000 of the Company’s short-term debt along with accrued but unpaid interest of $40,675 was exchanged for convertible debt in the February 2018 Offering. These conversions resulted in the issuance of 24,223 warrants with a fair value of $181,139. These were recorded as a loss on extinguishment of debt.

 

The February 2018 Convertible Note Offering consisted of a maximum of $750,000 of units of the Company’s securities (each, a “February 2018 Unit” and collectively, the “February 2018 Units”), with each February 2018 Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “February 2018 Convertible Note” and together the “February 2018 Convertible Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“February 2018 Conversion Shares”) at a conversion price of $12.00 per share (the “February 2018 Note Conversion Price”), and (b) a five-year warrant (each a “February 2018 Offering Warrant and together the “February 2018 Offering Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the February 2018 Convertible Notes can be converted into (“February 2018 Warrant Shares”) at an exercise price of $12.00 per share (“February 2018 Warrant Exercise Price”). The February 2018 Offering Notes mature on the second (2nd) anniversary of their issuance dates. The February 2018 Offering Notes are secured by a second priority security interest in the Company’s assets up to $1,000,000.

 

The February 2018 Note Conversion Price and the February 2018 Offering Warrant Exercise Price are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The conversion feature of the February 2018 Convertible Note Offering provides for an effective conversion price that is below market value on the date of issuance. Such feature is normally characterized as a beneficial conversion feature (“BCF”). When the Company records a BCF the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The Company recorded a BCF and related debt discount of $37,350, the discount is being accreted over the life of the first Debenture to accretion of debt discount and issuance cost.

 

The Company recorded a $316,875 debt discount relating to 60,416 February 2018 Offering Warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

In connection with the February 2018 Convertible Note Offering, the Company retained a placement agent (the “Placement Agent”), to carry out the Offering on a “best-efforts” basis. For services in its capacity as Placement Agent, the Company has paid the Placement Agent a cash fee of $94,250 and issued to the Placement Agent shares of the Company’s common stock equal to ten percent (10%) of the Conversion Shares underlying the February 2018 Convertible Notes or 6,041 shares that had a fair value of $74,881, which was recorded as issuance cost and is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2018, the Company converted $940,675 of principal and $86,544 of unpaid interest into the August 2018 Equity Raise.

 

During the year ended December 31, 2019 the Company repaid $19,758 in interest.

 

During the year ended December 31, 2020 the Company repaid $75,000 in principal and $781 in interest, and the February 2018 Convertible Notes are no longer outstanding.

 

The March 2018 Convertible Note Offering

 

During the three months ended March 31, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “March 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “March 2018 Investors”) for aggregate gross proceeds of $770,000. In addition, $50,000 of the Company’s short-term debt, $767 accrued but unpaid interest and $140,600 of the Company’s vendor liabilities was exchanged for convertible debt within the March 2018 Convertible Note Offering. These conversions resulted in the issuance of 15,947 warrants with a fair value of $84,087. These were recorded as a loss on extinguishment of debt.

 

The March 2018 Convertible Note Offering consisted of a maximum of $900,000, with an over-allotment option of an additional $300,000 of units of the Company’s securities (each, a “March 2018 Unit” and collectively, the “March 2018 Units”), with each March 2018 Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $12.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $12.00 per share (“Exercise Price”). The March 2018 Notes mature on the second (2nd) anniversary of their issuance dates.

 

The Conversion Price of the March 2018 Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The Company recorded a $254,788 debt discount relating to 80,114 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2018, the Company converted $886,367 of principal and $51,293 of unpaid interest pursuant to the August 2018 Equity Raise.

 

During the year ended December 31, 2020, the Company converted $50,000 of principal and $17,949 of unpaid interest into the September 2020 Equity Raise.

 

During the year ended December 31, 2020, the Company repaid $25,000 in principal and $9,364 in interest.

 

The February 2019 Convertible Note Offering

 

During the year ended December 31, 2019, the Company conducted an offering to accredited investors (the “February 2019 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “February 2019 Investors”) for aggregate gross proceeds of $1,993,025.

 

The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $15.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $18.00 per share (“Exercise Price”). During the year ended December 31, 2019 a total of 44,396 Warrants were issued in conjunction with The February 2019 Convertible Note Offering.

 

The February 2019 Notes mature on the first (1st) anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates, the principal and interest evidenced by the Note shall be mandatorily converted upon the earlier of (i) the listing of the Common Stock onto a national securities exchange, or (ii) upon a Qualified Offering.

 

The Conversion Price of the February 2019 Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The Company recorded a $222,632 debt discount relating to 44,396 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $1,963,567 of principal and $416,786 of unpaid interest into the September 2020 Equity Raise.

 

During the year ended December 31, 2020, the Company repaid $348,136 in principal and $0 in interest.

 

The November 2019 Convertible Note Offering

 

During the year ended December 31, 2019, the Company conducted an offering to accredited investors (the “November 2019 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “November 2019 Investors”) for aggregate gross proceeds of $479,500. In addition, the Company converted $318,678 in Accounts Payable into this offering.

 

The November 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “November 2019 Note” and together, the “November 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a fixed conversion price equal to $13.50 per share.

 

The November 2019 Notes mature six months after the anniversary of their issuance dates. At any time on or after the maturity date, at the election of the Offering’s Purchaser, this Note may convert into Common Stock equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest of this Note on the date of such conversion by $13.50.

 

The Company recorded a $84,377 debt discount relating to an original issue discount equal to $79,933 and a beneficial conversion feature of $4,444. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $559,433 of principal and $77,785 of unpaid interest into the September 2020 Equity Raise.

 

The January 2020 Convertible Note Offering

 

During the three months ended March 31, 2020, the Company conducted an offering to accredited investors (the “January 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “January 2020 Investors”) for aggregate gross proceeds of $87,473.

 

The January 2020 Convertible Note Offering consisted of (a) a 12% Convertible Promissory Note (each a “January 2020 Note” and together, the “January 2020 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $13.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

The January 2020 Notes mature on the first (6th) month anniversary of their issuance dates. If an event of default occurs and is not cured within 30 days of the Company receiving notice, the notes will be convertible at 80% multiplied by the lowest VWAP of the common stock during the five (5) consecutive trading day period immediately preceding the date of the respective conversion, and a default interest rate of 24% will become effective.

 

The Conversion Price of the January 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The Company recorded a $12,473 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $87,473 of principal and $8,275 of unpaid interest into the September 2020 Equity Raise.

The First February 2020 Convertible Loan Agreement

 

On February 4, 2020, the Company entered into a loan agreement (the “First February 2020 Loan Agreement”) with an individual (the “First February 2020 Lender”), whereby the First February 2020 Lender issued the Company a promissory note of $85,000 (the “First February 2020 Note”). Pursuant to the First February 2020 Loan Agreement, the First February 2020 Note has interest of ten percent (10%).

 

The First February 2020 Note are convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $12.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

 

The First February 2020 Notes mature on the first (6th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the Notes have not been repaid or an event of default occurs as defined in the Notes, the notes will be convertible at the lesser of the fixed conversion price or 65% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion and a default interest rate of 15% will be applied. 

 

The Conversion Price of the First February 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.  

 

The Company recorded a $8,000 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company repaid $158,065 in principal and $0 in interest.

 

The Second February 2020 Convertible Loan Agreement

 

On February 11, 2020, the Company entered into a loan agreement (the “Second February 2020 Loan Agreement”) with an individual (the “Second February 2020 Lender”), whereby the Second February 2020 Lender issued the Company a promissory note of $200,000 (the “Second February 2020 Note”). Pursuant to the Second February 2020 Loan Agreement, the Second February 2020 Note has interest of twelve percent (12%).  As additional consideration for entering in the Second February 2020 convertible Loan Agreement, the Company issued a five-year warrant to purchase 6,666 shares of the Company’s common stock at a purchase price of $15.00 per share.

 

The Second February 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $13.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

 

The Second February 2020 Note matures on the first (12th) month anniversary of its issuance date. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Date and the Note is unpaid, the note will be convertible at the lesser of the fixed conversion price or 75% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.

 

The Conversion Price of the First February 2020 Note is subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

The Company recorded a $33,340 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $125,000 of principal and $0 of unpaid interest into the September 2020 Equity Raise.

 

The Company recorded a Loss on extinguishment of debt of $136,115.

 

During the year ended December 31, 2020, the Company repaid $175,000 in principal and $0 in interest.

 

The Third February 2020 Convertible Loan Agreement

 

On February 25, 2020, the Company entered into a loan agreement (the “Third February 2020 Loan Agreement”) with an individual (the “Third February 2020 Lender”), whereby the Third February 2020 Lender issued the Company a promissory note of $1,500,000 (the “Third February 2020 Note”). The Company received proceeds of $864,950 and converted notes payable of $385,000 in exchange for the note (see Note 5).  Pursuant to the Third February 2020 Loan Agreement, the Second February 2020 Note has interest of twelve percent (12%). 

 

The Third February 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

 

The Third February 2020 Note matures on the first (12th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the note is unpaid, the notes will be convertible at the lower of the fixed conversion price or 75% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.

 

The Conversion Price of the Third February 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

In accordance with ASC 470-50, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the note exchange as described above as a debt extinguishment. The Company recorded a loss on debt extinguishment of $535,041. This represents the fair value of the warrants issued $445,705 and a debt premium of $89,336. The note has an effective interest rate of 24%. The Company recorded a debt discount of $160,714. This is made up of an original issue discount of $250,050 less a debt premium of $89,336.

 

During the year ended December 31, 2020, the Company converted $1,500,000 of principal and $100,603 of unpaid interest into the September 2020 Equity Raise.

The April 2020 Convertible Note Offering

 

During April of 2020, the Company conducted multiple closings of a private placement offering to accredited investors (the “April 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “April 2020 Investors”) for aggregate gross proceeds of $350,010. The April 2020 Convertible Note Offering accrues interest at a rate of twelve percent per annum (12%). The April 2020 Convertible Note Offering mature on the six (6th) month anniversary of their issuance dates.

 

The April 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $13.50 per share after the maturity date or (ii) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

 

The Company recorded a $50,010 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $350,010 of principal and $16,916 of unpaid interest into the September 2020 Equity Raise.

 

The June 2020 Convertible Loan Agreement

 

On June 19, 2020, the Company entered into a loan agreement (the “June 2020Loan Agreement”) with an individual (the “June 2020 Lender”), whereby the June 2020 Lender issued the Company a promissory note of $550,000 (the “June 2020 Note”). Pursuant to the June 2020 Loan Agreement, the June 2020 Note has interest of twelve percent (12%).  As additional consideration for entering in the June 2020 convertible Loan Agreement, the Company issued a five-year warrant to purchase 49,603 shares of the Company’s common stock at a purchase price of $11.55 per share. The June 2020 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default the June 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $67,500 debt discount relating to original issue discount associated with this note. The Company recorded a $274,578 debt discount relating to 49,603 warrants and 5,424 shares issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the lender converted $59,200 of principal into the Second July 2020 Convertible Loan Agreement

 

During the year ended December 31, 2020, the Company repaid $490,800 in principal and $16,944 in interest.

 

The First July 2020 Convertible Loan Agreement

 

On July 01, 2020, the Company entered into a loan agreement (the “First July 2020 Loan Agreement”) with an individual (the “First July 2020 Lender”), whereby the First July 2020 Lender issued the Company a promissory note of $68,000 (the “First July 2020 Note”). Pursuant to the First July 2020 Loan Agreement, the First July 2020 Note has interest of ten percent (10%). The First July 2020 Note matures on June 29, 2021.

 

Upon default or 180 days after issuance the First July 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the lowest trade of the common stock during the twenty (15) consecutive trading day period immediately preceding the date of the respective conversion.

 

During the year ended December 31, 2021, the First July 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of First July 2020 Note gave rise to a derivative liability of $112,743. The Company recorded $68,000 as a debt discount and $44,743 was recorded to derivative expense. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

 

During the year ended December 31, 2021, the Company converted $68,000 in principal and $3,400 in interest into 35,469 shares of the Company’s common stock. 

The Second July 2020 Convertible Loan Agreement

 

On July 17, 2020, the Company entered into a loan agreement (the “Second July 2020 Loan Agreement”) with an individual (the “Second July 2020 Lender”), whereby the Second July 2020 Lender issued the Company a promissory note of $250,000 (the “Second July 2020 Note”). Pursuant to the Second July 2020 Loan Agreement, the Second July 2020 Note has interest of twelve percent (12%).  The Second July 2020 Note matures on July 17, 2021. 

 

Upon default the Second July 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $46,750 debt discount relating to original issue discount associated with this note. The Company recorded a $71,329 debt discount relating to 6,667 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company repaid $250,000 in principal and $0 in interest.

 

The July 2020 Convertible Note Offering

 

From July 2020 to September 2020, the Company conducted multiple closings of a private placement offering to accredited investors (the “July 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “July 2020 Investors”) for aggregate gross proceeds of $390,000. The July 2020 Convertible Note Offering accrues interest at a rate of twelve percent per annum (12%). The July 2020 Convertible Note Offering mature on the six (6th) month anniversary of their issuance dates.

 

The July 2020 Note Offering is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $12.75 per share after the maturity date or (ii) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

 

Upon default the July 2020 Convertible Note Offering is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the lowest trade of the common stock during the twenty (15) consecutive trading day period immediately preceding the date of the respective conversion.

 

The conversion feature of the July 2020 Convertible Note Offering provides for an effective conversion price that is below market value on the date of issuance. Such feature is normally characterized as a beneficial conversion feature. When the Company records a BCF the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The Company recorded a BCF and related debt discount of $38,215, the discount is being accreted over the life of the Debenture to accretion of debt discount and issuance cost.

 

The Company recorded a $158,078 debt discount relating to 30,589 July 2020 Convertible Note Offering issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $390,000 of principal and $3,436 of unpaid interest into the September 2020 Equity Raise.

 

The August 2020 Convertible Loan Agreement

 

On August 17, 2020, the Company entered into a loan agreement (the “August 2020 Loan Agreement”) with an individual (the “August 2020 Lender”), whereby the August 2020 Lender issued the Company a promissory note of $68,000 (the “August 2020 Note”). Pursuant to the August 2020 Loan Agreement, the August 2020 Note has interest of twelve percent (12%). The August 2020 Note matures on August 17, 2021.

 

Upon default or 180 days after issuance the August 2020 Convertible Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the lowest trade of the common stock during the twenty (15) consecutive trading day period immediately preceding the date of the respective conversion.

 

The Company recorded a $3,000 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.t

 

During the year ended December 31, 2021, the August 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of August 2020 Note gave rise to a derivative liability of $120,759. The Company recorded $65,000 was recorded as a debt discount and $55,759 was recorded to derivative expense. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

 

During the year ended December 31, 2021, the Company converted $68,000 in principal and $3,400 in interest into 29,859 shares of the Company’s common stock.

 

The September 2020 Convertible Loan Agreement

 

On September 23, 2020, the Company entered into a loan agreement (the “September 2020 Loan Agreement”) with an individual (the “September 2020 Lender”), whereby the September 2020 Lender issued the Company a promissory note of $385,000 (the “September 2020 Note”). Pursuant to the September 2020 Loan Agreement, the September 2020 Note has interest of twelve percent (12%). The September 2020 Note matures on September 23, 2021. 

 

Upon default or 180 days after issuance the Second July 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $68,255 debt discount relating to original issue discount associated with this note. The Company recorded a $146,393 debt discount relating to 85,555 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. 

 

During the year ended December 31, 2021, the Company repaid $341,880 in principal and $46,200 in interest.

 

The October 2020 Convertible Loan Agreement

 

On October 2, 2020, the Company entered into a loan agreement (the “October 2020 Loan Agreement”) with an individual (the “October 2020 Lender”), whereby the October 2020 Lender issued the Company a promissory note of $169,400 (the “October 2020 Note”). Pursuant to the October 2020 Loan Agreement, the October 2020 Note has interest of six percent (6%). The October 2020 Note matures on the first (12th) month anniversary of its issuance date.

 

Upon default or 180 days after issuance the October 2020 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $19,400 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2021, the Second July 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of Second July 2020 Note gave rise to a derivative liability of $74,860. The Company recorded this as a debt discount. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

 

During the year ended December 31, 2021, the Company converted $169,400 in principal and $4,620 in interest into 55,631 shares of the Company’s common stock. 

 

The First December 2020 convertible Loan Agreement

 

On December 9, 2020, the Company entered into a loan agreement (the “First December 2020 Loan Agreement”) with an individual (the “First December 2020 Lender”), whereby the First December 2020 Lender issued the Company a promissory note of $600,000 (the “First December 2020 Note”). Pursuant to the First December 2020 Loan Agreement, the First December 2020 Note has interest of twelve percent (12%). As additional consideration for entering in the First December 2020 convertible Loan Agreement, the Company issued 45,000 shares of the Company’s common stock. The First December 2020 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default the First December 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $110,300 debt discount relating to original issue discount associated with this note. The Company recorded a $113,481 debt discount relating to 45,000 shares issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2021 the Company repaid $600,000 in principal and $4,340 in interest.

 

The Second December 2020 Convertible Loan Agreement

 

On December 30, 2020, the Company entered into a loan agreement (the “Second December 2020 Loan Agreement”) with an individual (the “Second December 2020 Lender”), whereby the Second December 2020 Lender issued the Company a promissory note of $169,400 (the “Second December 2020 Note”). Pursuant to the Second December 2020 Loan Agreement, the Second December 2020 Note has interest of six percent (6%). The Second December 2020 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default the Second December 2020 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $18,900 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2021, the Second December 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of Second December 2020 Note gave rise to a derivative liability of $108,880. The Company recorded this as a debt discount. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

 

During the year ended December 31, 2021, the Company converted $168,900 in principal and $4,605 in interest into 74,706 shares of the Company’s common stock.

 

The May 2021 Convertible Note Offering

 

On May 14, 2021, the Company conducted multiple closings of a private placement offering to accredited investors (the “May 2021 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “May 2021 Investors”) for aggregate gross proceeds of $3,690,491. The May 2021 convertible notes are convertible into shares of the Company’s common stock, par value $.001 per share at a conversion price of $5.00 per share. As additional consideration for entering in the May 2021 Convertible Note Offering, the Company issued 1,090,908 warrants of the Company’s common stock. The May 2021 Convertible Note matures on November 14, 2022. 

 

The Company recorded a $1,601,452 debt discount relating to 1,090,908 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

The Company recorded a $666,669 debt discount relating to an original issue discount and $539,509 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2021, the Company converted $4,666,669 in principal into 933,334 shares of the Company’s common stock.

 

The July 2021 Convertible Loan Agreement

 

On July 6, 2021, the Company entered into a loan agreement (the “July 2021 Loan Agreement”) with an individual (the “July 2021 Lender”), whereby the July 2021 Lender issued the Company a promissory note of $168,850 (the “July 2021 Note”). Pursuant to the July 2021 Loan Agreement, the July 2021 Note has interest of six percent (6%). The July 2021 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default or 180 days after issuance the July 2021 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $15,850 debt discount relating to an original issue discount and $3,000 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2021, the Company accrued $4,941 in interest.

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Dec. 31, 2021
Related Party Transactions [Abstract]    
Related Party

Note 8 – Related Party

 

Equity raises

 

During the nine months ended September 30, 2022, the Company conducted two equity raises in which officers, directors, employees, and an affiliate of an officer cumulatively invested $421,001 for 240,571 shares of common stock and 240,571 warrants to purchase common stock.

 

Officer compensation

 

During the nine months ended September 30, 2022 and 2021, the Company paid $87,275 and $72,328, respectively for living expenses for officers of the Company.

Note 10 – Related Party

 

Note receivable

 

October 2019 Cacher Loan Agreement

 

On October 28, 2019, the Company entered into a loan agreement with Cacher Studios LLC (the “October 2019 Cacher Loan Agreement”) whereby Cacher Studios issued the Company a promissory note in the principal amount of $11,450 (the “October 2019 Cacher Note”). The October 2019 Cacher Note has a maturity date of October 28, 2020. Repayment is due from Cacher Studios LLC’s revenues, with 100% of net revenues due to the Company until $2,500 in principal has been repaid, and 50% of net revenues due to the Company thereafter. Cacher Studios LLC is owned and operated by Alexandra Frommer, daughter of Jeremy Frommer, the Company’s CEO. This investment is evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. During the year ended December 31, 2020 the Company recorded an impairment of $11,450.

 

Convertible notes

 

The March 2018 Convertible Note Offering

 

During the year ended December 31, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “March 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $239,400.

 

The March 2018 Convertible Note Offering consisted of a maximum of $900,000, with an over-allotment option of an additional $300,000, of units of the Company’s securities (each, a “March 2018 Unit” and collectively, the “March 2018 Units”), with each March 2018 Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $12.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $12.00 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates.

 

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

  

The Company recorded a $84,854 debt discount relating to 19,950 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2018, the Company converted $239,000 of principal and $15,401 of unpaid interest into the August 2018 Equity Raise.

 

During the year ended December 31, 2020 the lender forgave $400 of principal and $70 of unpaid interest. This was recorded as a gain on settlement of debt on the Consolidated Statements of Comprehensive Income (Loss).

 

The February 2019 Convertible Note Offering

 

During the year ended December 31, 2019, the Company conducted an offering to accredited investors (the “February 2019 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “February 2019 Investors”) for aggregate gross proceeds of $20,000.

 

The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $15.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $18.00 per share (“Exercise Price”). During the year ended December 31, 2019 a total of 440 Warrants were issued in conjunction with The February 2019 Convertible Note Offering. 

 

The February 2019 Notes mature on the first (1st) anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates, the principal and interest evidenced by the Note shall be mandatorily converted upon the earlier of (i) the listing of the Common Stock onto a national securities exchange, or (ii) upon a Qualified Offering.

 

The Company recorded a $2,465 debt discount relating to 440 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2019, $20,000 of principal was converted from a promissory note into this offering.

 

During the year ended December 31, 2020, the Company converted $20,000 of principal and $3,065 of unpaid interest into the September 2020 Equity Raise.

 

The July 2020 Convertible Note Offering

 

From July 2020 to September 2020, the Company conducted multiple closings of a private placement offering to accredited investors (the “July 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “July 2020 Investors”) for aggregate gross proceeds of $50,000. The July 2020 Convertible Note Offering accrues interest at a rate of twelve percent per annum (12%). The July 2020 Convertible Note Offering mature on the six (6th) month anniversary of their issuance dates. 

 

The July 2020 Note Offering is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $12.75 per share after the maturity date or (ii) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

 

Upon default the July 2020 Convertible Note Offering is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the lowest trade of the common stock during the twenty (15) consecutive trading day period immediately preceding the date of the respective conversion.

 

The conversion feature of the July 2020 Convertible Note Offering provides for an effective conversion price that is below market value on the date of issuance. Such feature is normally characterized as a beneficial conversion feature. When the Company records a BCF the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The Company recorded a BCF and related debt discount of $9,812, the discount is being accreted over the life of the Debenture to accretion of debt discount and issuance cost.

 

The Company recorded a $21,577 debt discount relating to 3,922 July 2020 Convertible Note Offering issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $50,000 of principal and $630 of unpaid interest into the September 2020 Equity Raise.

 

Notes payable

 

Notes payable – related party as of December 31, 2021 and 2020 is as follows:

 

   Outstanding Principal as of          Warrants granted 
   December 31,
2021
   December 31,
2020
   Interest
Rate
   Maturity
Date
  Quantity   Exercise
Price
 
The September 2020 Goldberg Loan Agreement   
            -
    16,705           7%  September 2022   
      -
    
       -
 
The September 2020 Rosen Loan Agreement   
-
    3,295    7%  September 2022   
-
    
-
 
    
-
    20,000                   
Less: Debt Discount   
-
    (17,068)                  
    
-
    2,932                   
Less: Current Debt   
-
    (2,932)                  
   $
-
   $
-
                   

The June 2018 Frommer Loan Agreement

 

On June 29, 2018, the Company entered into a loan agreement (the “June 2018 Frommer Loan Agreement”) with Jeremy Frommer, an officer and director of the Company, whereby the Company issued Frommer a promissory note in the principal amount of $10,000 (the “June 2018 Frommer Note”). As additional consideration for entering in the June 2018 Frommer Note Loan Agreement, the Company issued Frommer a four-year warrant to purchase 500 shares of the Company’s common stock at a purchase price of $12.00 per share. Pursuant to the June 2018 Frommer Loan Agreement, the June 2018 Frommer Note bears interest at a rate of 6% per annum and payable on the maturity date of August 17, 2018 (the “June 2018 Frommer Maturity Date”). On November 8, 2018, the Company executed upon an agreement that extended the maturity date of the June 2018 Frommer Agreement to March 7, 2019. As part of the extension agreement, the Company issued Frommer an additional 681 warrants to purchase common stock of the Company at an exercise price of $18.00. These warrants had a fair value of $4,645 which was recorded to loss on extinguishment of debt. On February 18, 2019 the Company executed upon an agreement that further extended the maturity date of the June 2018 Frommer Agreement to March 30, 2019. As part of the extension agreement, the Company issued Frommer an additional 692 warrants to purchase common stock of the Company at an exercise price of $18.00. On March 29, 2019, the Company entered into an agreement with Mr. Frommer that further extended the maturity date of this loan to May 15, 2019. On June 29, 2019 the Company entered into an agreement with Mr. Frommer that further extended the maturity date of this loan to December 15, 2019. On December 15, 2019 the Company entered into an agreement with Mr. Frommer that further extended the maturity date to May 15, 2020.

 

During the year ended December 31, 2020, the Company converted $10,000 of principal and $2,748 of unpaid interest into the September 2020 Equity Raise and the June 2018 Frommer Note is no longer outstanding.

 

The July 2018 Schiller Loan Agreement

 

On July 17, 2018, the Company entered into a loan agreement (the “Second July 2018 Schiller Loan Agreement”) with Schiller, a member of the Board, whereby the Company issued Schiller a promissory note in the principal aggregate amount of $25,000 (the “Second July 2018 Schiller Note”). As additional consideration for entering in the Second July 2018 Schiller Loan Agreement, the Company issued Schiller a four-year warrant to purchase 1,250 shares of the Company’s common stock at a purchase price of $12.00 per share. Pursuant to the Second July 2018 Schiller Loan Agreement, the Second July 2018 Schiller Note bears interest at a rate of 6% per annum and payable on the maturity date of August 17, 2018. Subsequent to the balance sheet date, on November 8, 2018 the Company executed upon an agreement that extended the maturity date of this loan to March 7, 2019. As part of the extension agreement, the Company issued Schiller warrants to purchase 1,698 shares of common stock of the Company at an exercise price of $18.00. On February 18, 2019 the Company executed upon an agreement that further extended the maturity date of the Second July 2018 Schiller Loan Agreement to March 7, 2019. As part of the extension agreement, the Company issued Schiller an additional 1,726 warrants to purchase common stock of the Company at an exercise price of $18.00. On March 29, 2019 the Company entered into an agreement with Mr. Schiller that further extended the maturity date of this loan to May 15, 2019. On December 15, 2019 the Company entered into an agreement that further extended the maturity date of this loan to May 15, 2020.

 

During the year ended December 31, 2019 $4,137 in principal was converted into the February 2019 Convertible Note Offering. 

 

During the year ended December 31, 2020 the Company repaid $20,863 in principal and $3,216 in interest. 

 

The June 2019 Loan Agreement

 

On June 3, 2019, the Company entered into a loan agreement (the “June 2019 Loan Agreement”), pursuant to which the Company was to be indebted in the amount of $2,400,000, of which $1,200,000 was funded by September 30, 2019 and $1,200,000 was exchanged from the May 2016 Rosen Loan Agreement dated May 26, 2016 in favor of Rosen for a joint and several interest in the Term Loan pursuant to the Debt Exchange Agreement. The June 2019 Loan Agreement, the June 2019 Loan bears interest at a rate of 12.5% per annum, compounded annually and payable on the maturity date of December 3, 2019 (the “June 2019 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2019. In connection with the conversion of the May 2016 Rosen Loan Agreement the Company recorded a debt discount of $92,752. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

On July 29, 2019, the Company entered into the First Amendment Agreement to the June 2019 Loan Agreement pursuant to which the parties agreed to amend the June 2019 Loan Agreement and the June 2019 Security Agreement so as to (i) increase the principal aggregate amount of the June 2019 Loan to $2,500,000, and (ii) amend the provisions regarding the ranking of interest of such loan.

 

On August 12, 2019, the Company entered into the Second Amendment Agreement to the June 2019 Loan Agreement pursuant to which the parties agreed to further amend the June 2019 Loan Agreement and the June 2019 Security Agreement so as to (i) increase the principal aggregate amount of the June 2019 Loan to $3,000,000, and (ii) amend the provisions regarding the ranking of interest of such loan. 

 

On September 16, 2019, the Company entered into the Third Amendment Agreement to the June 2019 Loan Agreement pursuant to which the parties agreed to further amend the June 2019 Loan Agreement and the June 2019 Security Agreement so as to (i) increase the principal amount of the June 2019 Loan to $4,000,000; and (ii) amend the provisions therein with regard to the ranking of security interests.

 

On October 10, 2019 the Company and investors entered into the Fourth Amendment Agreement to the June 2019 Loan Agreement, whereby the parties thereto agreed to (i) increase the principal amount of the June 2019 Loan to $4,825,000; and (ii) amend the interest, conversion terms, and other covenants of the note.

 

On February 27, 2020, the Company entered into a fifth amendment agreement to the June 2019 Loan Agreement, whereby the parties agreed to amend Section 2.6 of the June 2019 Loan Agreement and provide for: (i) an additional 10% of shares to be issued at the time of conversion in the event that the price per share (or unit, as applicable) of securities issued in a Qualified Public Offering (as such term is defined in the Fifth Amendment) is below $15.00; and (ii) provide for the acceleration of all outstanding interest due on the Loan upon the consummation of a Qualified Public Offering.

 

During year ended December 31, 2020, the Company converted $4,325,000 of principal and $752,346 of unpaid interest into the September 2020 Equity Raise.

 

During the year ended December 31, 2020 the Company repaid $500,000 in principal and $0 in interest.

 

The December 2019 Gravitas Loan Agreement

 

On December 23, 2019, the Company entered into a loan agreement (the “December 2019 Gravitas Loan Agreement”), whereby the Company issued Gravitas a promissory note in the principal amount of $300,000 (the “December 2019 Gravitas Note”). Pursuant to the December 2019 Gravitas Loan Agreement, the December 2019 Gravitas Note has a flat interest payment of $20,000.  

 

During the year ended December 31, 2020 the Company repaid $300,000 in principal and $50,000 in accrued interest.

 

The First January 2020 Loan Agreement

 

On January 3, 2020, the Company entered into a loan agreement (the “First January 2020 Loan Agreement”) with an individual (the “First January 2020 Lender”) whereby the First January 2020 Lender issued the Company a promissory note of $250,000 (the “First January 2020 Note”). Pursuant to the First January 2020 Loan Agreement, the First January 2020 Note has an effective interest rate of 6%. As additional consideration for entering in the First January 2020 Loan Agreement, the Company issued the First January 2020 Lender 1,333 shares of the Company’s common stock. The maturity date of the First January 2020 Note was January 15, 2020 (the “First January 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First January 2020 Note were due.  The Company recorded a $16,000 debt discount relating to the 1,333 shares issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company converted $250,000 in principal to the Third February 2020 Note (as defined in Note 8).

 

The Second January 2020 Loan Agreement

 

On January 14, 2020, the Company entered into a loan agreement (the “Second January 2020 Loan Agreement”) with an individual (the “Second January 2020 Lender”), whereby the Second January 2020 Lender issued the Company a promissory note of $10,000 (the “Second January 2020 Note”). Pursuant to the Second January 2020 Loan Agreement, the Second January 2020 Note has an effective interest rate of 5%. The maturity date of the Second January 2020 Note was January 24, 2020 (the “Second January 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second January 2020 Note were due. As additional consideration for entering in the Second January Loan Agreement, the Company issued a five-year warrant to purchase 50 shares of the Company’s common stock at a purchase price of $18.00 per share. The Company recorded a $580 debt discount relating to 50 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company repaid $10,000 in principal and $500 in interest.

 

The Third January 2020 Loan Agreement

 

On January 22, 2020, the Company entered into a loan agreement (the “Third January 2020 Loan Agreement”) with an individual (the “Third January 2020 Lender”), whereby the Third January 2020 Lender issued the Company a promissory note of $15,000 (the “Third January 2020 Note”). Pursuant to the Third January 2020 Loan Agreement, the Third January 2020 Note has an effective interest rate of 10%. The maturity date of the Third January 2020 Note was January 29, 2020 (the “Third January 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Third January 2020 Note were due. As additional consideration for entering in the Third January Loan Agreement, the Company issued a five-year warrant to purchase 75 shares of the Company’s common stock at a purchase price of $18.00 per share. The Company recorded a $892 debt discount relating to 75 warrants issued to the Third January 2020 Lender based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company repaid $15,000 in principal and $1,500 in interest.

  

The Fourth January 2020 Loan Agreement

 

On January 23, 2020, the Company entered into a loan agreement (the “Fourth January 2020 Loan Agreement”) with an individual (the “Fourth January 2020 Lender”) whereby the Fourth January 2020 Lender issued the Company a promissory note of $135,000 (the “Fourth January 2020 Note”). Pursuant to the Fourth January 2020 Loan Agreement, the Fourth January 2020 Note has an effective interest rate of 7%. As additional consideration for entering in the First January 2020 Loan Agreement, the Company issued the Fourth January 2020 Lender 750 shares of the Company’s common stock. The maturity date of the Fourth January 2020 Note was February 23, 2020 (the “Fourth January 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Fourth January 2020 Note were due.

 

During the year ended December 31, 2020, the Company converted $135,000 in principal to the Second February 2020 Note (as defined below).

 

The January 2020 Rosen Loan Agreement

 

On January 14, 2020, the Company entered into a loan agreement (the “January 2020 Rosen Loan Agreement”), whereby the Company issued a promissory note in the principal amount of $150,000 (the “January 2020 Rosen Note”). Pursuant to the January 2020 Rosen Loan Agreement, the January 2020 Rosen Note accrues interest at a fixed amount of $2,500 for the duration of the note.

 

During the year ended December 31, 2020 the Company repaid $150,000 in principal and $15,273 in interest.

 

The February Banner 2020 Loan Agreement

 

On February 15, 2020, the Company entered into a loan agreement (the “February 2020 Banner Loan Agreement”), whereby the Company issued a promissory note in the principal amount of $9,900 (the “February 2020 Note”) for expenses paid on behalf of the Company by an employee. Pursuant to the February 2020 Loan Agreement, the February 2020 Note bears interest at a rate of $495. As additional consideration for entering in the February 2020 Loan Agreement, the Company issued a five-year warrant to purchase 49 shares of the Company’s common stock at a purchase price of $18.00 per share.

 

During the year ended December 31, 2020 the Company repaid $9,900 in principal and $495 in interest.

 

The February 2020 Frommer Loan Agreement

 

On February 18, 2020, the Company entered into a loan agreement (the “February 2020 Frommer Loan Agreement”) with Jeremy Frommer, an officer of the Company, whereby the Company issued Frommer a promissory note in the principal amount of $2,989 (the “February 2020 Frommer Note”). As additional consideration for entering in the June 2018 Frommer Note Loan Agreement, the Company issued Frommer a five-year warrant to purchase 15 shares of the Company’s common stock at a purchase price of $18.00 per share. Pursuant to the February 2020 Frommer Loan Agreement, the note is payable on the maturity date of February 28, 2020 (the “February 2020 Frommer Maturity Date”).

 

During the year ended December 31, 2020 the Company repaid $2,989 in principal and $160 in interest.

 

The February 2020 Loan Agreement

 

On February 25, 2020, the Company entered into a loan agreement (the “February 2020 Loan Agreement”) with an individual (the “February 2020 Lender”), whereby the February 2020 Lender issued the Company a promissory note of $15,000 (the “February 2020 Note”). Pursuant to the February 2020 Loan Agreement, the February 2020 Note has an effective interest rate of 5%. The maturity date of the February 2020 Note was March 3, 2020 (the “February 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2020 Note were due. As additional consideration for entering in the February 2020 Loan Agreement, the Company issued a five-year warrant to purchase 75 shares of the Company’s common stock at a purchase price of $18.00 per share. The Company recorded a $801 debt discount relating to 75 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company repaid $15,000 in principal and $750 in interest.

 

The July 2020 Loan Agreement

 

On July 30, 2020, the Company entered into a loan agreement (the “July 2020 Loan Agreement”) with an individual (the “July 2020 Lender”), whereby the July 2020 Lender issued the Company a promissory note of $5,000 (the “July 2020 Note”). Pursuant to the July 2020 Loan Agreement, the July 2020 Note has an effective interest rate of 5%. The maturity date of the July 2020 Note was August 06, 2020 (the “July 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the July 2020 Note were due. As additional consideration for entering in the July 2020 Loan Agreement, the Company issued a five-year warrant to purchase 25 shares of the Company’s common stock at a purchase price of $18.00 per share. The Company recorded a $316 debt discount relating to 25 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the year ended December 31, 2020, the Company repaid $5,000 in principal and $250 in interest.

 

The September 2020 Goldberg Loan Agreement

 

On September 15, 2020, the Company entered into a loan agreement (the “September 2020 Goldberg Loan Agreement”) with Goldberg whereby the Company issued a promissory note of $16,705 (the “September 2020 Goldberg Note”). Pursuant to the September 2020 Goldberg Loan Agreement, the September 2020 Goldberg Note has an interest rate of 7%. The maturity date of the September 2020 Goldberg Note is September 15, 2022 (the “September 2020 Goldberg Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under note are due. The September 2020 Goldberg Loan is secured by the tangible and intangible property of the Company.

  

Since the September 2020 Goldberg Note has a make-whole provision if the shares of the Company’s common stock issued to the lender in accordance with the Lender’s Exchange Agreement (see note 10) have a value equal to or less than $6,463,363 determined by using the lowest VWAP of the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Goldberg Note shall increase by 200% of the difference between the initial consideration and the September 14, 2021, value. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The make-whole feature gave rise to a derivative liability that has been marked to market during the year ended December 31, 2021, and the change in derivative liability is recorded on Consolidated Statements of Comprehensive Loss. See note 10.

 

On September 15, 2021, the make-whole provision was triggered, causing an increase in principal of the September 2020 Goldberg Note by $939,022.

 

During the year ended December 31, 2021, the Company accrued interest of $3,576.

 

During the year ended December 31, 2021, the Company entered into a settlement agreement whereas the Company agreed to pay $200,000 in cash and $150,000 in shares of Common Stock. 

 

The September 2020 Rosen Loan Agreement

 

On September 15, 2020, the Company entered into a loan agreement (the “September 2020 Rosen Loan Agreement”) with Rosen whereby the Company issued a promissory note of $3,295 (the “September 2020 Rosen Note”). Pursuant to the September 2020 Rosen Loan Agreement, the September 2020 Rosen Note has an interest rate of 7%. The maturity date of the September 2020 Rosen Note is September 15, 2022 (the “September 2020 Rosen Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the note are due. The September 2020 Rosen Loan is secured by the tangible and intangible property of the Company.

 

Since the September 2020 Rosen Note has a make-whole provision if the shares of the Company’s common stock issued to the lender in accordance with the Lender’s Exchange Agreement (see note 10) have a value equal to or less than $1,274,553 determined by using the lowest VWAP of the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Rosen Note shall increase by 200% of the difference the initial consideration and the September 14, 2021 value. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The make-whole feature of gave rise to a derivative that has been marked to market during the year ended December 31, 2021, and the change in derivative liability is recorded on Consolidated Statements of Comprehensive Loss. See note 10.

 

On September 15, 2021 the make-whole provision was triggered, causing an increase in principal of the September 2020 Rosen Note by $185,279.

 

During the year ended December 31, 2021, the Company accrued interest of $1,610.

 

During the year ended December 31, 2021, the Company repaid $188,574 in principal and $1,677 in interest.

 

Demand loan

 

During the year ended December 31, 2020 the Company repaid $75,000 of principal.

 

On December 17, 2019, Standish made non-interest bearing loans of $150,000 to the Company in the form of cash. The loan is due on demand and unsecured.

 

During the year ended December 31, 2020 the Company repaid $150,000 of principal.

 

On March 27, 2020, a lender made non-interest bearing loans of $100,000 to the Company in the form of cash. The loan is due on demand and unsecured.

 

During the year ended December 31, 2020, the Company converted $100,000 of principal and $6,707 of unpaid interest into the September 2020 Equity Raise.

 

On April 9, 2020, a lender made non-interest bearing loans of $50,000 to the Company in the form of cash. The loan is due on demand and unsecured.

 

During the year ended December 31, 2020, the Company converted $50,000 of principal into the September 2020 Equity Raise.

 

On April 21, 2020, a lender made non-interest bearing loans of $100,000 to the Company in the form of cash. The loan is due on demand and unsecured.  

 

During the year ended December 31, 2020, the Company converted $100,000 of principal and $6,707 of unpaid interest into the September 2020 Equity Raise.

 

On July 6, 2020, a lender made non-interest bearing loans of $100,000 to the Company in the form of cash. The loan is due on demand and unsecured.  

 

During the year ended December 31, the Company converted $100,000 of principal and $6,707 of unpaid interest into the September 2020 Equity Raise.

 

On August 10, 2020, a lender made non-interest bearing loans of $40,000 to the Company in the form of cash. The loan is due on demand and unsecured.  

 

During the year ended December 31, 2020 the Company repaid $40,000 of principal.

 

On September 9, 2020, a lender made non-interest bearing loans of $50,000 to the Company in the form of cash. The loan is due on demand and unsecured.

 

During the year ended December 31, 2020 the Company repaid $50,000 of principal.

 

Officer compensation

 

During the year ended December 31, 2021 and 2020, the Company paid $138,713 and $57,455, respectively for living expenses for officers of the Company.

 

Revenue

 

During the year ended December 31, 2021 the Company received revenue of $80,000 from Dune for branded content services prior to consolidation but after recognition as an equity method investee.

v3.22.4
Derivative Liabilities
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Derivative Liabilities [Abstract]    
Derivative Liabilities

Note 9 – Derivative Liabilities

 

The Company has identified derivative instruments arising from convertible notes that have an option to convert at a variable number of shares in the Company’s convertible notes payable during the nine months ended September 30, 2022. For the terms of the conversion features see Note 7. The Company had no derivative assets measured at fair value on a recurring basis as of September 30, 2022.

 

The Company utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note adjusted to be on a continuous return basis to align with the Monte Carlo simulation model and binomial model.

 

Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

 

Volatility: The Company calculates the expected volatility based on the company’s historical stock prices with a look back period commensurate with the period to maturity.

 

Expected term: The Company’s remaining term is based on the remaining contractual maturity of the convertible notes.

 

The following are the changes in the derivative liabilities during the nine months ended September 30, 2022.

 

   Nine Months Ended
September 30, 2022
 
   Level 1   Level 2   Level 3 
Derivative liabilities as January 1, 2022  $
   -
   $
     -
   $
-
 
Addition   
-
    
-
    100,532 
Changes in fair value   
-
    
-
    (3,729)
Extinguishment   
-
    
-
    (96,803)
Derivative liabilities as September 30, 2022  $
-
   $
-
   $
-
 

Note 11 – Derivative Liabilities

 

The Company has identified derivative instruments arising from a make-whole feature in the Company’s notes payable during the year ended December 31, 2021. For the terms of the make-whole features see the September 2020 Rosen Loan Agreement and the September 2020 Goldberg Loan Agreement in Note 10. The Company has also identified derivative instruments arising from convertible notes that have an option to convert at a variable number of shares in the Company’s convertible notes payable during the year ended December 31, 2021. For the terms of the conversion features see Note 10. The Company had no derivative assets or liabilities measured at fair value on a recurring basis as of December 31, 2021.

 

The Company utilizes a Monte Carlo simulation model for the make whole feature and a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Monte Carlo model included a starting stock price, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, drift, and a risk-free rate. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.

 

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note adjusted to be on a continuous return basis to align with the Monte Carlo simulation model and binomial model.

 

Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

 

Volatility: The Company calculates the expected volatility based on the company’s historical stock prices with a look back period commensurate with the period to maturity.

 

Expected term: The Company’s remaining term is based on the remaining contractual maturity of the convertible notes.

 

The following are the changes in the derivative liabilities during the year ended December 31, 2021 and 2020.

 

   Years Ended
December 31, 2021 and 2020
 
   Level 1   Level 2   Level 3 
Derivative liabilities as January 1, 2020  $
-
   $
-
   $
-
 
Addition   
-
    
-
    3,061,688 
Changes in fair value   
-
    
-
    (3,019,457)
Derivative liabilities as January 1, 2021   
-
    
-
    42,231 
Addition   
-
    
-
    417,241 
Extinguishment   
-
    
-
    (431,458)
Conversion to Note payable - related party   
-
    
-
    (1,124,301)
Changes in fair value   
-
    
-
    1,096,287 
Derivative liabilities as December 31, 2021  $
-
   $
-
   $
-
 
v3.22.4
Stockholders’ Equity
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Stockholders' Equity Note [Abstract]    
Stockholders’ Equity

Note 10 – Stockholders’ Equity

 

Shares Authorized

 

The Company is authorized to issue up to one hundred and twenty million (120,000,000) shares of capital stock, of which one hundred million (100,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as preferred stock, par value $0.001 per share.

  

Preferred Stock

 

Series E Convertible Preferred Stock

 

The Company has designated 8,000 shares of Series E Convertible Preferred stock and has 500 shares issued and outstanding as of September 30, 2022.

 

The shares of Series E Preferred Stock have a stated value of $1,000 per share and are convertible into Common Stock at the election of the holder of the Series E Preferred Stock, at any time following the Original Issue Date at a price of $4.12 per share, subject to adjustment. Each holder of Series E Preferred Stock shall be entitled to receive, with respect to each share of Series E Preferred Stock then outstanding and held by such holder, dividends on an as-converted basis in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

 

The holders of Series E Preferred Stock shall be paid pari passu with the holders of Common Stock with respect to payment of dividends and rights upon liquidation and shall have no voting rights. In addition, as further described in the Series E Designation, as long as any of the shares of Series E Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock or alter or amend this Series E Designation, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series E Preferred Stock, (c) increase the number of authorized shares of Series E Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

 

Each share of Series E Preferred Stock shall be convertible, at any time and from time to time at the option of the holder of such shares, into that number of shares of Common Stock determined by dividing the Series E Stated Value by the Conversion Price, subject to certain beneficial ownership limitations.

 

Common Stock

 

During the nine months ended September 30, 2022, the Company issued 82,342 shares of its restricted common stock to settle outstanding vendor liabilities of $130,625. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of $17,024.

 

On January 6, 2022, the Company issued 8,850 shares of its restricted common stock to consultants in exchange for services at a fair value of $19,736.

 

On February 24, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for four months of services at a fair value of $69,000. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the nine months ended September 30, 2022 the Company recorded $69,000 to share based payments.

 

On March 1, 2022, the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share. The Company has recorded $40,000 to stock issuance costs, which are part of Additional Paid-in Capital.

 

On March 7, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with thirteen accredited investors resulting in the raise of $2,659,750 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 1,519,857 shares of the Company’s common stock together with warrants to purchase an aggregate of 1,519,857 shares of Common Stock at an exercise price of $1.75 per share. The warrants are immediately exercisable and will expire on March 9, 2027. The Company has recorded $75,000 to stock issuance costs, which are part of Additional Paid-in Capital.

 

During the three months ended March 31, 2022, the Company issued 7,488 shares of its restricted common stock to consultants in exchange for services at a fair value of $8,364.

 

On April 5, 2022 the Company issued 185,000 shares of its restricted common stock to officers of the company in exchange for services at a fair value of $192,400.

 

On June 24, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for four months of services at a fair value of $37,200. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the nine months ended September 30, 2022 the Company recorded $2,405 to share based payments.

 

During the three months ended June 30, 2022, the Company issued 29,387 shares of its restricted common stock to consultants in exchange for services at a fair value of $24,001.

 

On September 15, 2022, the Company entered into a securities purchase agreement with five accredited investors resulting in the raise of $796,000 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 4,000,000 shares of the Company’s common stock together with warrants to purchase an aggregate of 4,000,000 shares of Common Stock at an exercise price of $0.20 per share. The warrants are immediately exercisable and will expire on September 15, 2027. The Company has recorded $75,000 to stock issuance costs, which are part of Additional Paid-in Capital.

 

During the three months ended September 30, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for prepaid services at a fair value of $34,900.

 

During the three months ended September 30, 2022, the Company issued 107,206 shares of its restricted common stock to consultants in exchange for services at a fair value of $22,892.

 

During the three months ended September 30, 2022 the company repurchased 83,800 shares of common stock for $13,700

 

Stock Options

 

The assumptions used for options granted during the nine months ended September 30, 2022 and 2021, are as follows:

 

   September 30,
2022
 
Exercise price  $1.10 – 1.90 
Expected dividends   0%
Expected volatility   165.38% – 166.48%
Risk free interest rate   2.69% – 2.95%
Expected life of option   5 years 

 

   September 30,
2021
 
Exercise price  $2.55 – 14.10 
Expected dividends   0%
Expected volatility   194.39% – 242.98%
Risk free interest rate   0.46% – 0.98%
Expected life of option   5 - 7 years 

 

The following is a summary of the Company’s stock option activity:


 

   Options   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (in years)
 
Balance – December 31, 2020 – outstanding   541,021    12.75    3.27 
Granted   1,850,588    6.32    6.20 
Exercised   
-
    
-
    - 
Forfeited/Cancelled   (64,164)   13.06    - 
Balance – September 30, 2021 – outstanding   2,327,445    7.63    4.29 
Balance – September 30, 2021 – exercisable   608,524    12.75    3.75 

 

   Options   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (in years)
 
Balance – January 1, 2022 – outstanding   2,902,619    7.07    4.71 
Granted   1,940,000    1.38    
-
 
Exercised   
-
    
-
    
-
 
Forfeited/Cancelled   (434,352)   13.56    
-
 
Balance – September 30, 2022 – outstanding   4,408,267    3.93    4.43 
Balance – September 30, 2022 – exercisable   3,010,101    4.12    4.32 

 

Option Outstanding   Option Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life
(in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Remaining
Contractual
Life
(in years)
 
$3.93    4,408,267        4.43       4.12    3,010,101    4.32 

  

During the year ended December 31, 2018 the Company granted options of 11,667 to consultants that have a fair value of $57,123. As of the date of this filing the company has not issued these options and they are recorded as an accrued liability on the Condensed Consolidated Balance Sheet.

 

Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled $4,100,729, for the nine months ended September 30, 2021.

  

Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled $523,749, for the three months ended September 30, 2022. Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled $3,355,445, for the nine months ended September 30, 2022.

 

As of September 30, 2022, there was $1,283,111 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.21 years.

Warrants

 

The Company applied fair value accounting for all share-based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.

 

The assumptions used for warrants granted during the nine months ended September 30, 2022  and 2021 are as follows:

 

   September 30,
2021
 
Exercise price    $4.50 – 4.95 
Expected dividends   0%
Expected volatility    237.14% - 237.68 % 
Risk free interest rate    0.82% - 0.86 % 
Expected life of warrant   5 years 
      

 

   September  30,
2022
 
Exercise price   $0.20 – 6.00 
Expected dividends   0%
Expected volatility   164.34% - 169.75% 
Risk free interest rate   2.81% – 4.00% 
Expected life of warrant   5.00 – 5.50 years 

  

Warrant Activities

 

The following is a summary of the Company’s warrant activity:

 

   Warrant   Weighted
Average
Exercise
Price
 
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Granted   1,881,267    5.63 
Exercised   (1,438,788)   4.59 
Forfeited/Cancelled   (14,722)   24.00 
Balance – September 30, 2021 – outstanding   6,558,705    4.92 
Balance – September 30, 2021 – exercisable   6,558,705   $4.92 

 

   Warrant   Weighted
Average
Exercise
Price
 
Balance – January 1, 2022 – outstanding   5,658,830    4.98 
Granted   14,812,262    2.29 
Exercised   
-
    
-
 
Forfeited/Cancelled   (41,462)   12.00 
Balance – September 30, 2022 – outstanding   20,429,630    1.88 
Balance – September 30, 2022 – exercisable   16,429,630   $2.62 

 

Warrants Outstanding   Warrants Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life
(in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Exercise
Price
 
$1.88    20,429,630    4.07    2.62    16,429,630    3.81 

   

During the nine months ended September 30, 2021, the Company issued 1,275,261 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 1,438,788 shares of common stock. The Company received $5,472,068 in connection with the exercise of the warrant.

 

During the nine months ended September 30, 2021, a total of 486,516 warrants were issued in connection with the Series E Convertible Preferred Stock raise.

 

During the nine months ended September 30, 2021, a total of 1,090,908 warrants were issued with convertible notes. The warrants have a grant date fair value of $3,067,617 using a Black-Scholes option-pricing model and the above assumptions.

 

During the nine months ended September 30, 2021, some of the Company’s warrants had a reset provision triggered that also resulted in an additional 127,801 warrants to be issued. A deemed dividend of $410,750 was recorded to the Statements of Comprehensive Loss.

 

On June 17, 2021, the Company issued 46,667 warrants in connection with the underwriting agreement.

 

Stock-based compensation for stock warrants has been recorded in the consolidated statements of operations and totaled $480,863, for the nine months ended September 30, 2021

 

During the nine months ended September 30, 2022, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 1,740,948 warrants to be issued. A deemed dividend of $303,557 was recorded to the Statements of Operations and Comprehensive Loss.

 

During the nine months ended September 30, 2022, a total of 6,150,000 warrants were issued with convertible notes (See Note 7 above). The warrants have a grant date fair value of $5,185,826 using a Black-Scholes option-pricing model and the above assumptions and a relative fair value of $2,929,303.

Note 12 – Stockholders’ Equity

 

Shares Authorized

 

Prior to July 13, 2020, the Company was authorized to issue up to thirty-five million (35,000,000) shares of capital stock, of which fifteen million (15,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as “blank check” preferred stock, par value $0.001 per share. The designations, rights, and preferences of such preferred stock are to be determined by the Company’s board of directors.

 

On July 13, 2020, the Company filed the Second Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada, which authorize the issuance of 100,000,000 shares of common stock, and 20,000,000 shares of preferred stock.

 

On August 17, 2020, following board of director’s approval, the Company filed a Certificate of Change to its Articles of Incorporation (the “Amendment”), with the Secretary of State of the State of Nevada to effectuate a one-for-twenty (1:3) reverse stock split (the “Reverse Stock Split”) of its common stock, par value $0.001 per share, without any change to its par value. The Amendment became effective on August 17, 2020. No fractional shares were issued in connection with the Reverse Stock Split as all fractional shares were “rounded up” to the next whole share. As a result, all share information in the accompanying consolidated financial statements has been adjusted as if the reverse stock split happened on the earliest date presented.

 

Preferred Stock

 

Series E Convertible Preferred Stock

 

On December 29, 2020, the Company entered into securities purchase agreements with thirty-three accredited investors whereby the Investors have agreed to purchase from the Company an aggregate of 7,778 shares of the Company’s Series E Convertible Preferred Stock, par value $0.001 per share and 2,831,715 warrants to purchase shares of the Company’s common stock, par value $0.001 per share. The Series E Preferred Stock is convertible into a total of 1,887,810 shares of Common Stock. The combined purchase price of one Conversion Share and one and a half warrant was $4.12. The aggregate purchase price for the Series E Preferred Stock and warrants was $7,777,777. The Company has recorded $817,353 to stock issuance costs, which are part of Additional Paid-in Capital.

 

The warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $4.50 per share. The warrants provide for cashless exercise to the extent that there is no registration statement available for the underlying shares of Common Stock.

 

The placement agent for the transaction and received cash compensation equal to 10% of the aggregate purchase price and warrants to purchase 471,953 shares of the Company’s common stock, at an exercise price of $5.15 per share (the “PA Warrants”). The PA Warrants are exercisable for a term of five-years from the date of issuance.

 

During the year ended December 31, 2021, the Company received the $40,000 of the subscription receivable for the Series E Convertible Preferred Stock. The Company has recorded $4,225 to stock issuance costs, which are part of Additional Paid-in Capital.

 

During the year ended December 31, 2021, investors converted 7,278 shares of the Company’s Series E Convertible Preferred Stock into 1,766,449 shares of the Company’s common stock.

 

Common Stock

 

On January 30, 2020, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for three months of services at a fair value of $585,000. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the year ended December 31, 2020 the Company recorded $585,000 to share based payments.

 

On January 6, 2020, the Company issued 1,412 shares of its restricted common stock to settle outstanding vendor liabilities of $12,500. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of $4,233.

 

On March 5, 2020, the Company issued 2,153 shares of its restricted common stock to settle outstanding vendor liabilities of $25,000. In connection with this transaction, the Company also recorded a gain on settlement of vendor liabilities of $1,098.

 

On March 13, 2020 the Company entered into an exchange agreement with a warrant holder. The company agreed to exchange 5,833 warrants for 5,000 shares of the company common stock. In connection with this agreement the company recorded a loss on conversion of warrants to stock of $5,772. 

 

On March 19, 2020, the Company issued 20,000 shares of its restricted common stock to settle outstanding vendor liabilities of $72,048. In connection with this transaction the Company also recorded a gain on settlement of vendor liabilities of $122,953.

 

On June 18, 2020, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $525,000.

 

On June 29, 2020 the Company entered into an exchange agreement with a warrant holder. The company agreed to exchange 5,833 warrants for 2,239 shares of the company common stock and $10,000.

 

On July 3, 2020, the Company issued 15,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $204,300.

 

On July 17, 2020 the Company issued 6,667 shares of its restricted common stock to the Second February 2020 Lender in connection with the Second July 2020 convertible Loan Agreement.

 

On August 15, 2020, the Company issued 6,167 shares of its restricted common stock to consultants in exchange for services at a fair value of $50,693.

 

On August 21, 2020, the Company issued 20,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $180,000.

 

On August 31, 2020, the Company issued 1,866 shares of its restricted common stock to consultants in exchange for services at a fair value of $15,842.

 

On September 11, 2020 the Second February 2020 Lender converted $125,000 of the outstanding principal into 34,722 shares of the Company’s common stock.

 

On September 11, 2020 the February 2019 Convertible Note Lender converted $70,542 of the outstanding principal and $112,888 of the outstanding interest into 64,124 shares of the Company’s common stock.

 

Lender’s Exchange Agreement

 

On September 15, 2020, the Company exchanged $7,325,000 of principal and $967,518 of accrued but unpaid interest of the Company’s debt obligations for $500,000 cash, 2,744,288 shares of Common Stock, and 331,456 warrants (the “Lender’s Exchange Agreement”). The Company also issued the lenders notes totaling $20,000. See note 9 for the September 2020 Goldberg Loan and the September 2020 Rosen Loan. The warrants have an exercise price equal to $4.50 per share, expiring five years from the date of issuance. Since the terms of the original debt were exchanged this was accounted for under extinguishment accounting. The Company determined this debt exchange was a debt extinguishment and the Company recognized a loss on debt extinguishment of $4,915,327, including the derivative liability value.

 

September 2020 Equity Raise

 

Effective September 15, 2020, the Company consummated an underwritten public offering (the “September 2020 Equity Raise”) of 1,725,000 units of securities (the “Units”), with each Unit consisting of (i) one share of common stock, and (ii) one warrant to purchase one share of common stock (the “Warrants”). The September 2020 Equity Raise was conducted pursuant to an Underwriting Agreement, dated September 10, 2020, by and between the Company and The Benchmark Company, LLC, acting as the representative (the “Representative”) of the several underwriters named therein (the “Underwriting Agreement”). In connection with the September 2020 Equity Raise, the Company granted the underwriters a 45-day option to purchase up to 258,750 shares of common stock and/or 258,750 Warrants to purchase common stock to cover over-allotments, if any.

 

The public offering price per Unit was $4.50. The shares of common stock and Warrants were issued separately and were immediately separable upon issuance. Each Warrant represents the right to purchase one share of common stock at an exercise price of $4.50 per share, expiring 5 years from the date of issuance.

 

The gross proceeds to the Company from the September 2020 Equity Raise, before deducting underwriting discounts and commissions and other estimated offering expenses, and excluding the exercise of any Warrants, was approximately $7,762,500.

 

In connection with the September 2020 Equity Raise, the Company converted $3,183,667 of principal and accrued but unpaid interest of the Company’s debt obligations into 768,204 shares of Common Stock and $570,416 warrants. See Notes 7, 8, and 9. The warrants have an exercise price equal to $4.50 per share, expiring five years from the date of issuance. A down-round event was triggered in connection with the September 2020 Equity Raise, resulting in a contingent BCF that had a value of $3,051,810. As these notes were fully converted in the September 2020 Equity Raise, the discount was expensed to accretion of debt discount and issuance cost on the Consolidated Statements of Comprehensive Loss.

  

On September 30, 2020, the Company issued 7,979 shares of its restricted common stock to consultants in exchange for services at a fair value of $21,304.

 

On December 14, 2020, the Company issued 10,417 shares of its restricted common stock to consultants in exchange for services at a fair value of $38,647.

 

On December 21, 2020, the Company issued 8,371 shares of its restricted common stock to employees in exchange for services at a fair value of $31,323.

 

During the year ended December 31, 2020 the Company cancelled 50,650 shares of treasury stock.

 

On January 14, 2021, the Company issued 30,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $133,200.

 

On January 20, 2021, the Company issued 40,000 shares of its restricted common stock to consultants in exchange for a year of services at a fair value of $192,000. On May 24, 2021, the Company amended the contract and issued and additional 10,000 shares of its restricted common stock. these shares had a fair value of $34,500. The shares issued to the consultant were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the year ended December 31, 2021, the Company recorded $99,908 to stock-based compensation expense related to these shares.

 

On February 1, 2021, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $196,000.

 

On February 3, 2021, the Company issued 1,929 shares of its restricted common stock to consultants in exchange for services at a fair value of $8,198.

 

On February 8, 2021, the Company entered into a consulting agreement whereas the Company issued a total of 2,092 shares of common stock in exchange for services at a fair value of $7,502.

 

On February 18, 2021, the Company issued 10,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $48,000.

 

On February 18, 2021, the Company issued 10,417 shares of its restricted common stock to consultants in exchange for services at a fair value of $50,002.

 

On February 26, 2021, the Company issued 291 shares of its restricted common stock to consultants in exchange for services at a fair value of $1,499.

 

On March 17, 2021, the Company issued 9,624 shares of its restricted common stock to consultants in exchange for services at a fair value of $49,371.

 

On March 28, 2021, the Company issued 31,782 shares of its restricted common stock to settle outstanding vendor liabilities of $125,000.

 

On March 31, 2021, the Company issued 13,113 shares of its restricted common stock to settle outstanding vendor liabilities of $43,667. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of $12,719.

 

On April 10, 2021, the Company issued 16,275 shares of its restricted common stock to consultants in exchange for services at a fair value of $69,332.

 

On April 21, 2021, the Company entered into a consulting agreement whereas the Company issued a total of 1,048 shares of common stock in exchange for services at a fair value of $3,587.

 

On June 17, 2021, the Company entered into an underwriting agreement with The Benchmark Company LLC, pursuant to which we agreed to sell to the Underwriter in a firm commitment underwritten public offering an aggregate of 750,000 shares of the Company’s common stock, at a public offering price of $3.40 per share. The Company also granted the Underwriter a 30-day option to purchase up to an additional 112,500 shares of Common Stock to cover over-allotments, if any. The Offering closed on June 21, 2021. The net proceeds to the Company from the equity raise was $2,213,500. As part of the underwriting agreement the Company issued 46,667 warrants of the Company’s common stock to Benchmark. The warrants have an exercise price $5.40 and a term of five years. On July 9, 2021, the Representative exercised the over-allotment option to purchase an additional 954,568 shares of Common Stock.

 

On July 20, 2021, the Company issued 2,154 shares of its restricted common stock to consultants in exchange for services at a fair value of $8,570.

 

On July 15, 2021, the Company issued 715 shares of its restricted common stock to consultants in exchange for services at a fair value of $2,500.

 

On August 15, 2021, the Company issued 820 shares of its restricted common stock to consultants in exchange for services at a fair value of $2,500.

 

On August 26, 2021, the Company issued 348 shares of its restricted common stock to consultants in exchange for services at a fair value of $999.

 

On September 15, 2021, the Company issued 793 shares of its restricted common stock to consultants in exchange for services at a fair value of $2,500.

 

On October 25, 2021, the Company entered into a securities purchase agreement with institutional investors resulting in the raise of $3,407,250 in gross proceeds to the Company. Pursuant to the terms of the purchase agreement, the Company agreed to sell, in a registered direct offering, an aggregate of 850,000 shares of the Company’s common stock, par value $0.001 per share, at a purchase price of $4.50 per Share.

 

On November 5, 2021, the Company issued 25,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $85,750.

 

On November 15, 2021, the Company issued 13,392 shares of its restricted common stock to consultants in exchange for services at a fair value of $41,917.

 

On November 29, 2021, the Company issued 250,000 shares of its restricted common stock to settle outstanding vendor liabilities of $576,783. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of $33,217.

 

On November 29, 2021, the Company issued 101,097 shares of its restricted common stock to consultants in exchange for services at a fair value of $246,676.

 

On December 3, 2021, the Company issued 194 shares of its restricted common stock to consultants in exchange for services at a fair value of $429.

 

On December 14, 2021, the Company issued 211 shares of its restricted common stock to consultants in exchange for services at a fair value of $452.

 

Stock Options

 

The Company applied fair value accounting for all share-based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model.  

 

The assumptions used for options granted during the years December 31, 2021 and 2020, are as follows:

 

   December 31,
2021
   December 31,
2020
 
Exercise price   $ 2.09 - 4.89       $ 8.55 
Expected dividends   0%    0% 
Expected volatility   169.78 – 242.98%    229.95% 
Risk free interest rate   0.46 – 1.26%    0.25% 
Expected life of option   5 - 7 years      5.67 years   

 

The following is a summary of the Company’s stock option activity:

 

   Options   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (in years)
 
Balance – January 1, 2020 – outstanding   303,825    24.48    2.51 
Granted   391,853    8.55    5.67 
Exercised   
-
    
-
    
-
 
Cancelled/Modified   (154,657)   25.17    
-
 
Balance – December 31, 2020 – outstanding   541,021    12.75    4.29 
Balance – December 31, 2020 – exercisable   149,168    23.77    1.75 
                
Balance – December 31, 2020 – outstanding   541,021    12.75    3.27 
Granted   2,425,762    5.97    5.91 
Exercised   
-
    
-
    
-
 
Forfeited/Cancelled   (64,164)   13.06    
-
 
Balance – December 31, 2021 – outstanding   2,902,619    7.07    4.71 
Balance – December 31, 2021 – exercisable   1,165,191    9.01    4.12 

 

Option Outstanding   Option Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life (in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Remaining
Contractual
Life (in years)
 
$7.07    2,902,619    4.71    9.01    1,165,191    4.12 

 

During the year ended December 31, 2018 the Company granted options of 11,667 to consultants that has a fair value of $57,123. As of the date of this filing the company has not issued these options and they are recorded as an accrued liability on the Consolidated Balance Sheet.

 

On May 7, 2020, the board of directors approved the Jerrick Media Holdings, Inc. 2020 Omnibus Equity Incentive Plan (the “Plan”). Only employees, non-employee directors and consultants are eligible for awards under the Plan. The Plan provides for awards in the form of options (incentive stock options or nonstatutory stock options) restricted stock grants, and restricted stock unit grants. Up to 2,500,000 shares of common stock may be issued under the Plan and the option exercise price of stock options granted under the Plan shall not be less than 100% of the Fair Market Value (as defined in the Plan) (110% for 10% shareholders in the case of ISOs) of a share of common stock on the date of the grant. The option exercise price may be payable in cash, surrender of stock, cashless exercise or net exercise. Each grant awarded under the Plan shall be evidenced by a grant agreement and may or may not be subject to vesting. The Plan is subject to the approval of the Company’s stockholders within one year of the date of adoption by the Board of Directors. On July 8, 2020, the Company’s stockholders approved the Plan, which terminates on May 7, 2030. The Board of Directors may amend or terminate the Plan at any time and for any reason. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules.

 

On May 13, 2020 the Company entered into an exchange agreement with eight option holders. The company agreed to exchange 152,992 options previously issued under the 2015 Incentive Stock and Award Plan for 229,491 shares of the Company common stock. In connection with this agreement the Company recorded incremental compensation on the exchange of options to stock of $1,117,031.

 

Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled $7,616,195 and $4,092,013, for the year ended December 31, 2021 and 2020, respectively.

 

As of December 31, 2021, there was $3,197,018 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.23 year.

 

Warrants

 

The Company applied fair value accounting for all share-based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.

 

The assumptions used for warrants granted during the year ended December 31, 2021 are as follows:

 

    December 31,  
2021
    December 31,
2020
  
 
Exercise price   $ 4.50 – 5.40     $ 4.50 - 18.00  
Expected dividends     0 %     0 %
Expected volatility     232.10% - 237.14 %     234.03% - 247 %
Risk free interest rate     0.82% - 0.89 %     0.21% - 1.63 %
Expected life of warrant     5 – 5.5 years       5 years  

 

Warrant Activities

 

The following is a summary of the Company’s warrant activity:

 

   Warrant   Weighted
Average
Exercise
Price
 
Balance – January 1, 2020 – outstanding   247,403    15.75 
Granted   5,921,071    4.70 
Exercised   
-
    
-
 
Cancelled/Modified   (37,526)   13.31 
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Balance – December 31, 2020 – exercisable   3,228,235    5.37 
           
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Granted   1,961,267    5.60 
Exercised   (2,414,218)   4.55 
Forfeited/Cancelled   (19,167)   24.00 
Balance – December 31, 2021 – outstanding   5,658,830    4.98 
Balance – December 31, 2021 – exercisable   5,616,330   $4.97 

 

Warrants Outstanding   Warrants Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life (in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Exercise
Price
 
$4.98    5,658,830    3.80    4.97    5,616,330    3.79 

 

On October 6, 2020, the underwriters for the September 2020 Equity Raise partially exercised the over-allotment option and on October 8, 2020, purchased an additional 258,750 warrants, generating gross proceeds, before deducting underwriting discounts and commissions, of $2,588.

 

During the year ended December 31, 2020 a total of 214,080 warrants were issued with convertible notes (See Note 8 above). The warrants have a grant date fair value of $1,520,449 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2020, a total of 289 warrants were issued with notes payable – related party (See Note 9 above). The warrants have a grant date fair value of $3,342 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2020, a total of 3,922 warrants were issued with convertible notes payable – related party (See Note 9 above). The warrants have a grant date fair value of $37,927 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2020, some of the Company’s warrants had a down-round provision triggered that resulted in a lower exercise price. A deemed dividend of $18,421 was recorded to the Statements of Comprehensive Loss.

 

During the Year ended December 31, 2021, the Company issued 2,250,691 shares of common stock to a certain warrant holder upon the exercise of 2,414,218 warrants. The Company received $9,487,223 in connection with the exercise of the warrant.

 

During the year ended December 31, 2021, a total of 486,516 warrants were issued in connection with the Series E Convertible Preferred Stock raise.

 

During the year ended December 31, 2021, a total of 1,137,575 warrants were issued with convertible notes (See Note 9 above). The warrants have a grant date fair value of $3,258,955 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2021, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 127,801 warrants to be issued. A deemed dividend of $410,750 was recorded to the Statements of Comprehensive Loss.

 

During the year ended December 31, 2021, the Company issued 80,000 warrants in connection with the underwriting agreement.

 

Stock-based compensation for stock warrants of 129,375 has been recorded in the Consolidated Statements of Comprehensive Loss and totaled $480,863, for the year ended December 31, 2021.

 

Share-based awards, restricted stock award (“RSAs”)

 

On February 4, 2021, the Board resolved that, the Company shall pay each member of the Board, for each calendar quarter during which such member continues to serve on the Board, compensation as a group amounts to $62,500 per quarter. The shares vest one year after issuance.

 

A summary of the activity related to RSUs for the year ended December 31, 2021 is presented below:

 

Restricted stock units (RSUs)   Total
shares
    Grant date
fair value
 
RSAs non-vested at January 1, 2021     -     $ -  
RSAs granted     112,010     $ 2.71 – 4.32  
RSAs vested     -     $ -  
RSAs forfeited     (13,927 )   $ 3.75 – 4.32  
RSAs non-vested December 31, 2021     98,083     $ 2.71 – 4.32  

 

Stock-based compensation for RSA’s has been recorded in the consolidated statements of operations and totaled $391,035 for the year ended December 31, 2021.

v3.22.4
Commitments and Contingencies
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]    
Commitments and Contingencies

Note 11 – Commitments and Contingencies

 

Litigation 

 

On or about June 25, 2020, Home Revolution, LLC (“Home Revolution”) filed a lawsuit in the United States District Court for the District of New Jersey, Home Revolution, LLC, et al. v. Jerrick Media Holdings, Inc. et al., Case No. 2:20-cv-07775-JMV-MF. The Complaint alleges, among other things, that Creatd, Inc. breached the Membership Interest Purchase Agreement, as modified, and ancillary transaction documents in connection with the acquisition of Seller’s Choice, LLC, from Home Revolution in September 2019. The Complaint additionally alleges violation of the New Jersey Uniform Securities Law, violations of the Exchange Act and Rule 10b-5 thereunder, fraud, equitable accounting, breach of fiduciary duty, conversion and unjust enrichment. Plaintiff also sought to have a receiver appointed by the Court to take over Creatd’s operations. After substantial motion practice, Creatd successfully settled this dispute from June 2020 for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed as of March 3, 2022.

 

On or about August 30, 2021, Robert W. Monster and Anonymize, Inc. (“Monster”) filed a lawsuit in the United States District Court for the Western District of Washington at Seattle, Robert W. Monster, et al. v. Creatd, Inc., et al. (Western District of Washington at Seattle 2:21-CV-1177). The Complaint alleges, among other things, that action for Declaratory Judgment under 28 U.S.C. § 2201 that Monster’s registration and use of the internet domain name VOCL.COM (the “Domain Name”) does not violate Creatd’s rights under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), or otherwise under the Lanham Act, 15 U.S.C. § 1051 et seq. Creatd claims trademark rights and certain other rights with respect to the term and the domain name VOCL.COM. Monster seeks a determination by the Court that Monster’s registration and/or use of VOCL.COM is not, and has not been in violation of the ACPA, and that Plaintiffs’ use of VOCL.COM constitutes neither a violation of the ACPA nor trademark infringement or dilution under the Lanham Act. Creatd believes the lawsuit lacks merit and will vigorously challenge the action. At this time, we are unable to estimate potential damage exposure, if any, related to the litigation.

 

A complaint against the Company, dated September 21, 2022, has been filed in the Supreme Court of the State of New York, New York County, by Lind Global Macro Fund LP and Lind Global Fund II LP, making certain claims alleging breach of contract related to two Securities Purchase Agreements executed on May 31, 2022, seeking damages in excess of $920,000. No response to the Complaint has been filed at this time. The Company has not yet submitted a response to the Complaint or had the opportunity to conduct discovery as to the allegations. The Company will file an initial response on or before November 18, 2022. Given the premature nature of this case, it is still too early for the Company to make an assessment as to liability.

 

Inflation Reduction Act of 2022

 

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA includes a 15% Corporate Alternative Minimum Tax (“Corporate AMT”) for tax years beginning after December 31, 2022. We do not expect the Corporate AMT to have a material impact on our consolidated financial statements. Additionally, the IRA imposes a 1% excise tax on net repurchases of stock by certain publicly traded corporations. The excise tax is imposed on the value of the net stock repurchased or treated as repurchased. The new law will apply to stock repurchases occurring after December 31, 2022.

 

Lease Agreements

 

On April 26, 2022, the Company signed a 7-year lease for approximately 8,000 square feet of office space at 419 Lafayette Street, 6th Floor, New York, NY, 10003. Commencement date of the lease is May 1, 2022. The total amount due under this lease is $3,502,033.

 

On July 28, 2022, the Company signed a 3-year lease for approximately 1,364 square feet of office space at 1674 Meridian Ave., Miami Beach, FL, 33131. Commencement date of the lease is July 28, 2022. The total amount due under this lease is $181,299. During the three months ended September 30, 2022, it was decided the company would not be using the office space and recorded an impairment of $101,623 on the right-of-use asset.

   

The components of lease expense were as follows:

 

   Three Months
Ended
September 30,
2022
 
Operating lease cost  $148,446 
Short term lease cost   5,568 
Total net lease cost  $154,015 

 

   Nine Months
Ended
September 30,
2022
 
Operating lease cost  $241,601 
Short term lease cost   154,108 
Total net lease cost  $395,709 

 

Supplemental cash flow and other information related to leases was as follows:

 

   Nine Months
Ended
September 30,
2022
 
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments   54,564 
Weighted average remaining lease term (in years):   3.40 
Weighted average discount rate:   12.50%

  

Total future minimum payments required under the lease as of September 30, are as follows:

 

For the Twelve Months Ended September 30,     Operating
Leases
 
2023     $  534,880  
2024        541,905  
2025        513,507  
2026        528,589  
2027        544,122  
Thereafter        892,399  
Total lease payments        3,555,402  
Less: Amounts representing interest        (1,140,416 )
Total lease obligations       2,414,986  
Less: Current        (279,593 )
      $ 2,135,393  

 

Rent expense for the three months ended September 30, 2022 and 2021 was $154,015 and $67,397, respectively. Rent expense for the nine months ended September 30, 2022 and 2021 was $395,709 and $121,266, respectively. 

 

Market price risk of crypto (“digital”) assets

 

The Company holds crypto and digital assets in third-party wallets. Crypto asset price risk could adversely affect its operating results and will depend upon the market price of Bitcoin, ETH, as well as other crypto assets. Crypto asset prices have fluctuated significantly from quarter to quarter. There is no assurance that crypto asset prices will reflect historical trends. A decline in the market price of Bitcoin, ETH, and Other crypto assets could have an adverse effect on our earnings, the carrying value of the crypto assets, and future cash flows. This may also affect the liquidity and the ability to meet our ongoing obligations.

 

Appointment of New Directors

 

On February 17, 2022, the Board of Directors (the “Board”) of the Company appointed Joanna Bloor, Brad Justus, and Lorraine Hendrickson to serve as members of the Board. Ms. Bloor has been nominated to, and will serve as, chair of the Compensation Committee, and to be a member of the Audit Committee and Nominating & Corporate Governance Committee. Mr. Justus has been nominated, and will serve as, chair of the Nominating & Corporate Governance Committee, and to be a member of the Compensation Committee and Audit Committee. Ms. Hendrickson has been nominated to, and will serve as, chair of the Audit Committee and to be a member of the Compensation and Nominating & Corporate Governance Committee.

 

Departure of Directors

 

On February 17, 2022, the Board received notice that effective immediately, Mark Standish resigned as Chair of the Board, Chair of the Audit Committee and as a member of the Compensation Committee and Nominating & Corporate Governance Committee; Leonard Schiller resigned as member of the Board, Chair of the Compensation Committee and as a member of the Audit Committee and Nominating & Corporate Governance Committee; and LaBrena Martin resigned as a member of the Board, Chair of the Nominating & Corporate Governance Committee and as a member of the Audit Committee and Compensation Committee. Such resignations are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

  

Management Restructuring

 

On February 17, 2022, the Board of the Company approved the restructuring of the Company’s senior management team to eliminate the Co-Chief Executive Officer role, appointing Jeremy Frommer as Executive Chairman and Founder, and appointing Laurie Weisberg as Chief Executive Officer (the “Second Restructuring”). Prior to the Second Restructuring, Mr. Frommer and Ms. Weisberg served as the Company’s co-Chief Executive Officers and Ms. Weisberg served as the Company’s Chief Operating Officer. The Second Restructuring does not impact the role or functions of the Company’s Chief Financial Officer, Chelsea Pullano, or the role or functions of the Company’s President and Chief Operating Officer, Justin Maury.

 

Nasdaq Notice of Delisting 

On September 2, 2022, the Company received a letter from the staff of The Nasdaq Capital Market notifying the Company that the Nasdaq Hearings Panel has determined to delist the Company’s common stock from the Exchange, based on the Company’s failure to comply with the listing requirements of Nasdaq Rule 5550(b)(1) as a result of the Company’s shareholder equity deficit for the period ended June 30, 2022, as demonstrated in Company’s Quarterly Report on Form 10-Q filed on August 15, 2022, following the Company having not complied with the market value of listed securities requirement in Nasdaq Rule 5550(b)(2) on March 1, 2022, while the Company was under a Panel Monitor, as had been previously disclosed. Suspension of trading in the Company’s shares on the Exchange became effective at the opening of business on September 7, 2022, at which time the Company’s common stock, under the symbol “CRTD,” and publicly-traded warrants, under the symbol “CRTDW,” was quoted on the OTCPink marketplace operated by OTC Markets Group Inc.  

 

Following passage of the proscribed 15-day time period for appeal as stated in the Letter, on October 26, 2022, Nasdaq completed the delisting by filing a Form 25 Notification of Delisting with the Securities and Exchange Commission.

 

The Company’s common stock, under the symbol “CRTD,” is quoted on the OTCQB marketplace operated by OTC Markets Group Inc. effective as of September 26, 2022. The Company’s publicly-traded warrants, under the symbol “CRTDW,” are quoted on the OTCPink marketplace operated by OTC Markets Group Inc.

 

Employment Agreements

 

On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).

 

Pursuant to the Executive Employment Arrangements, the Company entered into executive employment agreements with each of the respective executives as of April 5, 2022 (the “Executive Employment Agreements”). The Executive Employment Agreements contain customary terms, conditions and rights.

 

Executive Separation Agreement

 

On September 2, 2022, the Company entered into an Executive Separation Agreement with Laurie Weisberg the Company’s Chief Executive Officer and member of the Board of Directors setting forth the terms and conditions related to the Executive’s resignation for good reason as Chief Executive Officer, Director and any other positions held with the Company or any subsidiary.

 

The Company will pay severance in the aggregate amount of $475,000, payable as follows: (i) 1/24 will be paid on each of September 15, 2022, October 1, 2022 and November 1, 2022, respectively; (ii) 1/8 will be paid on each of December 1, 2022, January 1, 2023 and February 1, 2023, respectively; (iii) 1/4 will be paid on April 1, 2023; and (iv) the balance will be paid on May 1, 2023. The Company has executed and delivered a Confession of Judgment concerning the severance amount, which is being held in escrow pending satisfaction of payment.

 

Additionally, all unvested and/or outstanding stock options held by Ms. Weisberg as of the date of the separation agreement that are not subject to metric based vesting shall automatically and fully vest. All unvested and/or outstanding stock options held by Ms. Weisberg as of the date of the separation agreement that are subject to metric based vesting shall vest in accordance with their respective original terms.

Note 13 – Commitments and Contingencies

 

The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carry back net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.

 

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the year ended December 31, 2020.

 

On March 26, 2020 and April 30, 2020, the Company received 2 separate loans pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act.

 

When the applications for PPP first opened up, there was limited available funding and much confusion surrounding the application process. The Company initially submitted its application for the May 2020 PPP Loan in early April but received no response in the aftermath of submitting the application. After consulting multiple advisors, the Company made the decision to apply elsewhere, due to the rampant media coverage of institutions running out of funding and the Company’s need for the capital and belief that if 2 separate loans were approved, the remaining application could simply be withdrawn.

 

Therefore, in late April, the company proceeded with applying for the April 2020 PPP Loan. After some conflicting communications regarding acceptance, the Company attempted to contact the lender to clarify but got no response. After continued attempts to follow up with both lenders, the Company received approval for the May 2020 PPP Loan and funding for the April 2020 PPP Loan on the same day, followed the next day by the funding of the May 2020 PPP Loan. The Company immediately separated the funds for the April 2020 PPP Loan into a separate reserved bank account with the intention of returning the funds. However, after several attempts to contact the lender with no response, the Company was faced with difficulty raising funds in the early-Covid economy and made the decision to utilize the funds for operations and pursue an installment repayment plan when they were able to reach the lender. As of the date of this filing, the Company has begun making repayments on the loan, absent a formal installment agreement due to difficulties reaching the lender. The Company intends to complete repayment before the end of 2021.

 

As each company is only permitted one loan under the CARES Act, there is a possibility the loan may be called by the SBA and the Company would have to repay the loan in full at such time.

 

As of December 31, 2021, the May 2020 PPP Loan is no longer outstanding, as during the year ended December 31, 2021, the Company repaid $136,597 in principal and was forgiven $275,903 of principal and $3,119 of accrued interest. As of December 31, 2021 there was $198,655 in principal outstanding on the April 2020 PPP Loan. 

 

Litigation

 

On or about June 25, 2020, Home Revolution, LLC (“Home Revolution”) filed a lawsuit in the United States District Court for the District of New Jersey, Home Revolution, LLC, et al. v. Jerrick Media Holdings, Inc. et al., Case No. 2:20-cv-07775-JMV-MF. The Complaint alleges, among other things, that Creatd, Inc. breached the Membership Interest Purchase Agreement, as modified, and ancillary transaction documents in connection with the acquisition of Seller’s Choice, LLC, from Home Revolution in September 2019. The Complaint additionally alleges violation of the New Jersey Uniform Securities Law, violations of the Exchange Act and Rule 10b-5 thereunder, fraud, equitable accounting, breach of fiduciary duty, conversion and unjust enrichment. Plaintiff also sought to have a receiver appointed by the Court to take over Creatd’s operations. After substantial motion practice, Creatd successfully settled this dispute from June 2020 for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed as of March 3, 2022.

 

On or about August 30, 2021, Robert W. Monster and Anonymize, Inc. (“Monster”) filed a lawsuit in the United States District Court for the Western District of Washington at Seattle, Robert W. Monster, et al. v. Creatd, Inc., et al. (Western District of Washington at Seattle 2:21-CV-1177). The Complaint alleges, among other things, that action for Declaratory Judgment under 28 U.S.C. § 2201 that Monster’s registration and use of the internet domain name VOCL.COM (the “Domain Name”) does not violate Creatd’s rights under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), or otherwise under the Lanham Act, 15 U.S.C. § 1051 et seq. Creatd claims trademark rights and certain other rights with respect to the term and the domain name VOCL.COM. Monster seeks a determination by the Court that Monster’s registration and/or use of VOCL.COM is not, and has not been in violation of the ACPA, and that Plaintiffs’ use of VOCL.COM constitutes neither a violation of the ACPA nor trademark infringement or dilution under the Lanham Act. Creatd believes the lawsuit lacks merit and will vigorously challenge the action. At this time, we are unable to estimate potential damage exposure, if any, related to the litigation.

 

Lease Agreements

 

On May 5, 2018, the Company signed a 5-year lease for approximately 2,300 square feet of office space at 2050 Center Avenue Suite 640, Fort Lee, New Jersey 07024. Commencement date of the lease is June 1, 2018. The total amount due under this lease is $411,150.

 

On April 1, 2019, the Company signed a 4-year lease for approximately 796 square feet of office space at 2050 Center Avenue Suite 660, Fort Lee, New Jersey 07024. Commencement date of the lease is April 1, 2019. The total amount due under this lease is $108,229.

 

On July 28, 2021, the Company signed a 3-year lease for approximately 1,364 square feet of office space at 1674 Meridian Avenue, Miami Beach, Florida 33139. The office space is currently under construction and the Company’s commencement date was April 1, 2022. The total amount due under this lease is $181,300.

 

On February 16, 2022, the company entered into a termination agreement whereas CRTD agrees to pay $115,000 and forfeit the security deposit of $16,836. The lease was terminated as of February 28, 2022 and was determined that the lease agreement was abandoned under ASC 842- 20 -35 -10. The Company updated useful life of the ROU asset and marked the ROU asset and lease liability its single lease cost of $18,451.

 

   Year
Ended
December 31,
2021
 
Operating lease cost  $202,804 
Short term lease cost   14,041 
Total net lease cost  $216,845 

 

Supplemental cash flow and other information related to leases was as follows:

 

   Year
Ended
December 31,
2021
 
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments  $100,100 
Weighted average remaining lease term (in years):   0.17 
Weighted average discount rate:   0%

 

Total payments required under the lease as of December 31, 2021, are $18,451 and will recognized in the first quarter of 2022.

 

Rent expense for the year ended December 31, 2021 and 2020 was $216,845 and $107,737, respectively. 

v3.22.4
Acquisitions
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Asset Acquisition [Abstract]    
Acquisitions

Note 12 – Acquisitions

  

Denver Bodega, LLC d/b/a Basis

 

On March 7, 2022, the Company entered into a Membership Interest Purchase (the “Agreement”) with Henry Springer and Kyle Nowak (collectively the “Sellers”), whereby the Company purchased a majority stake in Denver Bodega, LLC, a Colorado limited liability company whose product is Basis, a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Pursuant to the Agreement, Creatd acquired all of the issued and outstanding membership interests of Denver Bodega, LLC for consideration of one dollar ($1.00), as well as the Company’s payoff, assumption, or satisfaction of certain debts and liabilities.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $1 
Total purchase price   1 
      
Assets acquired:     
Cash   44,977 
Accounts Receivable   2,676 
Inventory   194,365 
Total assets acquired   242,018 
      
Liabilities assumed:     
Accounts payable and accrued expenses   127,116 
Notes payable   293,888 
Total liabilities assumed   421,004 
      
Net liabilities acquired   (178,986)
      
Excess purchase price  $178,987 

  

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $8,950 
Trade Names & Trademarks   8,949 
Know-How and Intellectual Property   107,392 
Website   8,949 
Customer Relationships   44,747 
      
Excess purchase price  $178,987 

 

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

   

Acquisition of Orbit

 

On August 1, 2022 the Company entered into a Membership Interest Purchase (the “Agreement”) with Zachary Shenkman, Wuseok Jung, Wesley Petry, Nicholas Scibilia, Gary Rettig, Brandon Fallin (collectively the “Sellers”), whereby the Company purchased a majority stake in Orbit Media LLC, a New York limited liability company whose product is an app-based stock trading platform designed to empower a new generation of investors, providing users with a like-minded community as well as access to tools, content, and other resources to learn, train, and excel in the financial markets. Pursuant to the Agreement, Creatd acquired fifty one percent (51%) of the issued and outstanding membership interests of Orbit Media LLC for consideration of forty-four thousand dollars ($44,000) in cash and 57,576 shares of the Company’s Common Stock.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $44,000 
Shares granted to seller   40,994 
Total purchase price   84,994 
      
Net Assets acquired   - 
      
Non-controlling interest in consolidated subsidiary   81,661 
      
Excess purchase price  $166,655 

  

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Know-How and Intellectual Property  $166,655 
      
Excess purchase price  $166,655 

 

On September 13, 2022, the Company acquired 100% of the membership interests of Brave Foods, LLC, a Maine limited liability company for $150,000. Brave is a plant-based food company that provides convenient and healthy breakfast food products.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $150,000 
Total purchase price   150,000 
      
Assets acquired:     
Cash   73,344 
Inventory   86,154 
Total assets acquired   159,498 
      
Liabilities assumed:     
Accounts payable and accrued expenses   1,316 
Notes payable   75,000 
Total liabilities assumed   76,316 
      
Net assets acquired   83,182 
      
Excess purchase price  $66,818 

  

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $6,683 
Trade Names & Trademarks   16,704 
Know-How and Intellectual Property   16,704 
Website   16,704 
Customer Relationships   10,023 
      
Excess purchase price  $66,818 

 

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

 

The following presents the unaudited pro-forma combined results of operations of the Company with Plant Camp, WHE, Dune, Denver Bodega, Orbit, and Brave as if the entities were combined on January 1, 2021. 

 

   Three Months
Ended
 
   September 30, 
   2021 
Revenues  $3,429,748 
Net loss attributable to common shareholders  $(25,735,007)
Net loss per share  $(2.17)
Weighted average number of shares outstanding   11,845,229 

 

   Three Months Ended 
   September 30, 
   2022 
Revenues  $4,057,080 
Net loss attributable to common shareholders  $(9,425,313)
Net loss per share  $(0.45)
Weighted average number of shares outstanding   21,087,764 

 

   Nine  Months
Ended
 
   2021 
Revenues  $5,069,181 
Net loss attributable to common shareholders  $(26,428,192)
Net loss per share  $(2.23)
Weighted average number of shares outstanding   11,845,229 

 

  

 

Nine  Months
Ended

 
   2022 
Revenues  $4,683,843 
Net loss attributable to common shareholders  $(24,217,030)
Net loss per share  $(1.23)
Weighted average number of shares outstanding   19,726,987 

Note 14 – Acquisition

 

Plant Camp LLC

 

On June 1, 2021, the Company, entered into a Membership Interest Purchase Agreement (the “MIPA”) with Angela Hein (“Hein”) and Heidi Brown (“Brown”, and together with Hein, the “Sellers”), pursuant to which the Purchaser acquired 490,863 common units (the “Membership Interests”) of Plant Camp LLC, a Delaware limited liability company (“Plant Camp”) from the Sellers, resulting in the Purchaser owning 33% of the issued and outstanding equity of Plant Camp. The Membership Interests were purchased for $175,000.

 

On June 4, 2021, the Company, entered into a MIPA with Sellers, pursuant to which the Purchaser acquired 841,005 common units of Plant Camp from the Sellers, resulting in the Purchaser owning a total of 89% of the issued and outstanding equity of Plant Camp. The additional Membership Interests were purchased for $300,000. The acquisition was accounted for as a step acquisition however there was no change in value of the Company’s existing equity interest. The Company utilized the fair value of the consideration to determine the fair value of the existing equity interest based on the total merger consideration offered.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $300,000 
Fair value of equity investment purchased on June 1, 2021   175,000 
Total purchase price   475,000 
      
Assets acquired:     
Cash   5,232 
Accounts Receivable   7,645 
Inventory   19,970 
Total assets acquired   32,847 
      
Liabilities assumed:     
Accounts payable and accrued expenses   5,309 
Deferred Revenue   671 
Total liabilities assumed   5,980 
      
Net assets acquired   26,867 
      
Non-controlling interest in consolidated subsidiary   56,865 
      
Excess purchase price  $504,998 

 

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $7,198 
Trade Names & Trademarks   100,000 
Know-How and Intellectual Property   316,500 
Website   51,300 
Customer Relationships   30,000 
      
Excess purchase price  $504,998 

 

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

 

The following presents the unaudited pro-forma combined results of operations of the Company with Plant Camp as if the entities were combined on January 1, 2020.

 

   Year Ended 
   December 31, 
   2021 
Revenues  $4,335,593 
Net loss attributable to common shareholders  $(37,822,820)
Net loss per share  $(2.99)
Weighted average number of shares outstanding   12,652,470 

 

   Year Ended
December 31,
2020
 
Revenues  $1,213,430 
Net loss attributable to common shareholders  $(27,476,400)
Net loss per share  $(5.71)
Weighted average number of shares outstanding   4,812,153 

 

WHE Agency, Inc.

 

On July 20, 2021, the Company entered into a Stock Purchase Agreement to purchase 44% ownership and 55% of voting power of the issued and outstanding shares of WHE Agency, Inc., (“WHE”). The aggregate closing consideration was $1,038,271, which consists of a combination of $144,750 in cash and $893,521 in the form of 224,503 shares of the Company’s restricted common stock at a price of $3.98 per share. Based on the purchase price of $1,038,271 for 44% ownership, the fair value of the non-controlling interest was estimated to be $1,190,000 based on the consideration from the Company.

 

WHE is a talent management and public relations agency dedicated to the representation and management of family- and lifestyle-focused influencers and digital creators.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $144,750 
Shares granted to seller   893,521 
Total purchase price   1,038,271 
      
Assets acquired:     
Cash   26,575 
Accounts Receivable   446,272 
Total assets acquired   472,847 
      
Liabilities assumed:     
Accounts payable and accrued expenses   353,017 
Total liabilities assumed   353,017 
      
Net assets acquired   119,830 
      
Non-controlling interest in consolidated subsidiary   1,190,000 
      
Excess purchase price  $2,108,442 

 

The excess purchase price amounts were recorded to goodwill and is provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $1,349,697 
Trade Names & Trademarks   85,945 
Non-Compete Agreements   45,190 
Influencers / Customers   627,610 
      
Excess purchase price  $2,108,442 

 

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

 

The following presents the unaudited pro-forma combined results of operations of the Company with WHE as if the entities were combined on January 1, 2020.

 

   Year Ended 
   December 31, 
   2021 
Revenues  $4,916,777 
Net loss attributable to common shareholders  $(37,707,250)
Net loss per share  $(2.98)
Weighted average number of shares outstanding   12,652,470 

 

   Year Ended 
   December 31, 
   2020 
Revenues  $1,685,336 
Net loss attributable to common shareholders  $(27,235,057)
Net loss per share  $(5.66)
Weighted average number of shares outstanding   4,812,153 

 

Dune Inc.

 

Prior to October 3, 2021, the Company invested $732,297 into Dune See note 6 & 7. Using step acquisition accounting, the Company decreased the value of its existing equity interest to its fair value based on its purchase price on October 3, 2021, resulting in the recognition of an impairment in investment of $424,632, which was included in within our consolidated statements of operations. The Company utilized the fair value of the consideration to determine the fair value of the existing equity interest based on the total merger consideration offered and the Company’s stock price at acquisition.

 

On October 3, 2021, we, through Creatd Partners, LLC (“Buyer”), entered into a Stock Purchase Agreement (the “Dune Agreement”) with Standard Holdings, Inc. (“SHI”) and Mark De Luca (“De Luca”) (SHI and De Luca, collectively the “Dune Sellers”), and Stephanie Roy Dufault, whereby Buyer purchased a majority stake in Dune, Inc., a Delaware corporation (“Dune”). Pursuant to the Dune Agreement, which closed on October 4, 2021, Buyer acquired a total of 3,905,634 shares of the common stock of Dune (the “Purchased Shares”). The Company issued 163,344 restricted shares of the Company’s common stock to the Dune Sellers.

 

In addition, pursuant to the Dune Agreement, $50,000 worth of the Company’s common stock issuable to the Dune Sellers on a pro rata basis, priced in accordance with the terms and conditions set forth in the Dune Agreement (the “Indemnification Escrow Amount”), shall be held in escrow and reserved in each Dune Seller’s name by the Company’s transfer agent until such time as release is authorized under the Agreement.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Shares granted to seller  $424,698 
Fair value of equity investment purchased before October 4, 2021   307,665 
Total purchase price   732,363 
      
Assets acquired:     
Cash   186,995 
Inventory   47,250 
Total assets acquired   234,246 
      
Liabilities assumed:     
Accounts payable   40,000 
Total liabilities assumed   40,000 
      
Net assets acquired   194,246 
      
Non-controlling interest in consolidated subsidiary   720,581 
      
Excess purchase price  $1,258,698 

 

Due to the limited amount of time since the acquisition date, the assets and liabilities of Dune Inc. were recorded based primarily on their acquisition date carrying values. Management believes the estimated fair value of these accounts on the acquisition date approximates their carrying value as reflected in the table above due to the short-term nature of these instruments. The remaining assets and liabilities primarily consisted of goodwill, customer relationships, know how, and tradenames. We will adjust the remaining assets and liabilities to fair value as valuations are completed and we obtain information necessary to complete the analyses, but no later than one year from the acquisition data.

 

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $17,941 
Trade Names & Trademarks   249,248 
Know-How and Intellectual Property   788,870 
Website   127,864 
Customer Relationships   74,774 
      
Excess purchase price  $1,258,698 

 

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

 

The following presents the unaudited pro-forma combined results of operations of the Company with Dune as if the entities were combined on January 1, 2020.

 

   Year Ended 
   December 31, 
   2021 
Revenues  $4,299,717 
Net loss attributable to common shareholders  $(38,265,301)
Net loss per share  $(3.02)
Weighted average number of shares outstanding   12,652,470 

 

   Year Ended 
   December 31, 
   2020 
Revenues  $1,212,870 
Net loss attributable to common shareholders  $(27,382,216)
Net loss per share  $(5.69)
Weighted average number of shares outstanding   4,812,153 
v3.22.4
Segment Information
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Segment Reporting [Abstract]    
Segment Information

Note 13 – Segment Information 

 

We operate in three reportable segments: Creatd Labs, Creatd Ventures, and Creatd Partners. Our segments were determined based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating losses.

 

Operations of:   Products and services provided:
Creatd Labs  

Creatd Labs is the segment focused on development initiatives. Creatd Labs houses the Company’s proprietary technology, including its flagship platform, Vocal, as well as oversees the Company’s content creation framework, and management of its digital communities. Creatd Labs derives revenues from Vocal creator subscriptions, platform processing fees and technology licensing fees.

 

Creatd Ventures  

Creatd Ventures builds, develops, and scales e-commerce brands. This segment generates revenues through product sales of its two majority-owned direct-to-consumer brands, Camp and Dune Glow Remedy.

 

Creatd Partners   Creatd Partners fosters relationships between brands and creators through its suite of agency services, including content marketing (Vocal for Brands), performance marketing (Seller’s Choice), and influencer marketing (WHE Agency). Creatd Partners derives revenues in the form of brand fees and talent management commissions.

 

The following tables present certain financial information related to our reportable segments and Corporate:

 

   As of September 30, 2022 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Accounts receivable, net  $
-
   $4,973   $217,210   $
-
   $222,183 
Prepaid expenses and other current assets   43,336    
-
    
-
    96,390    139,726 
Deposits and other assets   576,551    
-
    
-
    192,585    769,136 
Intangible assets   162,489    1,568,347    648,469    157,294    2,536,599 
Goodwill   
-
    15,632    1,349,696    
-
    1,365,328 
Inventory   
-
    879,050    
-
    
-
    879,050 
All other assets   
-
    
-
    
-
    2,811,769    2,811,769 
Total Assets  $782,376   $2,468,002   $2,215,375   $3,258,038   $8,723,791 
                          
Accounts payable and accrued liabilities  $1,365   $1,518,544   $68,063   $5,126,634   $6,714,606 
Note payable, net of debt discount and issuance costs   129,634    170,365    
-
    1,487,100    1,787,099 
Deferred revenue   161,112    -    144,443    
-
    305,555 
All other Liabilities   
-
    
-
    
-
    8,529,992    8,529,992 
Total Liabilities  $292,111   $1,688,909   $212,506   $15,143,726   $17,337,252 

 

   As of December 31, 2021 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Accounts receivable, net  $
-
   $2,884   $334,556   $
-
   $337,440 
Prepaid expenses and other current assets   48,495    
-
    
-
    188,170    236,665 
Deposits and other assets   626,529    
-
    
-
    92,422    718,951 
Intangible assets   
-
    1,637,924    783,676    11,241    2,432,841 
Goodwill   
-
    25,139    1,349,696    
-
    1,374,835 
Inventory   
-
    106,403    
-
    
-
    106,403 
All other assets   
-
    
-
    
-
    3,966,124    3,966,124 
Total Assets  $675,024   $1,772,350   $2,467,928   $4,257,957   $9,173,259 
                          
Accounts payable and accrued liabilities  $9,693   $766,253   $6,232   $2,948,362   $3,730,540 
Note payable, net of debt discount and issuance costs   313,979    
-
    
-
    1,028,685    1,342,664 
Deferred revenue   161,112    13,477    59,570    
-
    234,159 
All other Liabilities   
-
    
-
    
-
    177,644    177,644 
Total Liabilities  $484,784   $779,730   $65,802   $4,154,691   $5,485,007 

 

   For the three months ended September 30, 2022 
   Creatd
Labs
   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $291,414   $316,654   $414,783   $
-
   $1,022,851 
Cost of revenue   564,349    502,396    337,817    
-
    1,404,562 
Gross margin (loss)   (272,935)   (185,742)   76,966    
-
    (381,711)
                          
Research and development   139,997    
-
    94,968    
-
    234,965 
Marketing   370,584    234,760    41,176    
-
    646,520 
Stock based compensation   122,964    111,472    126,654    265,478    626,568 
General and administrative not including depreciation, amortization, or Impairment   90,212    476,386    384,365    3,136,092    4,087,055 
Depreciation and amortization   1,489    43,001    40,917    72,589    157,996 
Impairment of intangibles   
-
    85,406    
-
    164,180    249,586 
                          
Total operating expenses  $723,757   $822,618   $647,163   $3,401,570   $5,595,108 
                          
Interest expense   (17,048)   
-
    
-
    (656,647)   (673,694)
All other expenses   
-
    
-
    
-
    (2,875,832)   (2,875,832)
Other expenses, net   (17,048)   
-
    
-
    (3,532,479)   (3,549,526)
                          
Loss before income tax provision  $(1,001,024)  $(1,008,360)  $(570,197)  $(6,946,764)  $(9,526,345)

 

   For the three months ended September 30, 2021 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Net revenue  $565,852   $3,919   $609,849   $-   $1,179,620 
Cost of revenue   849,079    174,438    394,696    -    1,418,213 
                          
Gross margin   (283,227)   (170,519)   215,153    -    (238,593)
                          
Research and development   250,474    60    72,412    -    322,946 
Marketing   1,540,540    -    181,240    90,620    1,812,400 
Stock based compensation   337,026    -    332,531    1,179,579    2,151,900 
General and administrative   386,844    302,764    293,296    1,672,176    2,385,135 
Total operating expenses     2,514,884      32,819      879,479      2,942,375      6,672,381 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(2,802,443)  $(506,162)  $(664,326)  $(5,747,190)  $(9,720,121)

 

   For the Nine months ended September 30, 2022 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Net revenue  $1,138,904   $1,237,542   $1,621,044   $-   $3,997,490 
Cost of revenue   1,917,039    1,706,586    1,147,526    -    4,771,151 
Gross margin (loss)   (778,135)   (469,044)   473,518    -    (773,661)
                          
Research and development   408,810    -    277,321    -    686,131 
Marketing   2,301,994    1,458,280    255,777    -    4,016,051 
Stock based compensation   755,284    684,697    777,948    1,630,649    3,848,578 
General and administrative not including depreciation, amortization, or Impairment   242,330    1,279,676    1,032,487    8,401,553    10,956,046 
Depreciation and amortization   4,166    120,282    114,453    203,042    441,943 
Impairment of intangibles   -    87,983    -    169,134    257,117 
                          
Total operating expenses  $3,712,584   $3,630,918   $2,457,986   $10,404,378   $20,205,866 
                          
Interest expense   (34,095)   
-
    -    (673,855)   (707,950)
All other expenses        -    -    (3,424,854)   (3,424,854)
Other expenses, net   (34,095)   
-
    -    (4,098,709)   (4,132,804)
                          
Loss before income tax provision  $(4,524,814)  $(4,099,962)  $(1,984,468)  $(14,503,087)  $(25,112,331)

 

   For the nine months ended September 30, 2021 
   Creatd
Labs
   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $1,388,411   $9,616   $1,496,363   $-   $2,894,390 
Cost of revenue   2,482,848    497,194    1,180,701    -    4,160,743 
Gross margin   (1,094,437)   (487,578)   315,662    -    (1,266,353)
                          
Research and development   549,426    131    158,839    -    708,396 
Marketing   6,842,142    -    804,958    402,479    8,049,579 
Stock based compensation   886,832    796,676    875,004    3,103,877    5,662,389 
General and administrative   900,323    76,381    682,602    3,891,743    5,551,049 
Total operating expenses  $9,178,723   $873,188   $2,521,403   $7,398,099   $19,971,413 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(10,286,156)  $(1,360,766)  $(2,205,741)  $(11,073,171)  $(24,925,834)

Note 15 – Segment Information

 

We operate in three reportable segments: Creatd Labs, Creatd Ventures, and Creatd Partners. Our segments were determined based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating losses.

 

Operations of:   Products and services provided:
Creatd Labs  

Creatd Labs is the segment focused on development initiatives. Creatd Labs houses the Company’s proprietary technology, including its flagship platform, Vocal, as well as oversees the Company’s content creation framework, and management of its  digital communities. Creatd Labs derives revenues from Vocal creator subscriptions, platform processing fees and technology licensing fees.

 

Creatd Ventures  

Creatd Ventures builds, develops, and scales e-commerce brands. This segment generates revenues through product sales of its two majority-owned direct-to-consumer brands, Camp and Dune Glow Remedy.

 

Creatd Partners   Creatd Partners fosters relationships between brands and creators through its suite of agency services, including content marketing (Vocal for Brands), performance marketing (Seller’s Choice), and influencer marketing (WHE Agency). Creatd Partners derives revenues in the form of brand fees and talent management commissions.

 

The following tables present certain financial information related to our reportable segments and Corporate:

 

   As of December 31, 2021 
   Creatd Labs   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Accounts receivable, net  $
-
   $2,884   $334,556   $
-
   $337,440 
Prepaid expenses and other current assets   48,495    
-
    
-
    188,170    236,665 
Deposits and other assets   626,529    
-
    
-
    92,422    718,951 
Intangible assets   
-
    1,637,924    783,676    11,241    2,432,841 
Goodwill   
-
    25,139    1,349,696    
-
    1,374,835 
Inventory   
-
    106,403    
-
    
-
    106,403 
All other assets   
-
    
-
    
-
    3,966,124    3,966,124 
Total Assets  $675,024   $1,772,350   $2,467,928   $4,257,957   $9,173,259 
                          
Accounts payable and accrued liabilities  $9,693   $766,253   $6,232   $2,948,362   $3,730,540 
Note payable, net of debt discount and issuance costs   313,979    
-
    
-
    1,028,685    1,342,664 
Deferred revenue   161,112    13,477    59,570    
-
    234,159 
All other Liabilities   
-
    
-
    
-
    177,644    177,644 
Total Liabilities  $484,784   $779,730   $65,802   $4,154,691   $5,485,007 

 

   As of December 31, 2020 
   Creatd Labs   Creatd Partners   Corporate   Total 
                 
Accounts receivable, net  $3,800   $86,555   $
-
   $90,355 
Prepaid expenses and other current assets   19,631    
-
    4,225    23,856 
Intangible assets   
-
    960,611    
-
    960,611 
Goodwill   
-
    1,035,795    
-
    1,035,795 
All other assets   
-
    
-
    8,673,863    8,673,863 
Total Assets  $23,431   $2,082,961   $8,678,088   $10,784,480 
                     
Accounts payable and accrued liabilities  $6,221   $83,964   $2,548,503   $2,638,688 
Note payable, net of debt discount and issuance costs   55,928    
-
    1,165,611    1,221,539 
Deferred revenue   
-
    88,637    
-
    88,637 
All other Liabilities   
-
    
-
    1,390,420    1,390,420 
Total Liabilities  $62,149   $172,601   $5,104,534   $5,339,284 

 

   For the year ended December 31, 2021 
   Creatd Labs   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $1,926,374   $90,194   $2,283,149   $
-
   $4,299,717 
Cost of revenue   3,186,240    148,989    1,964,808    
-
    5,300,037 
Gross margin   (1,259,866)   (58,940)   318,341    
-
    (1,000,320)
                          
Research and development   758,293    131    225,104    
-
    983,528 
Marketing   8,182,935    
-
    962,698    481,349    9,626,982 
Stock based compensation   1,727,021    1,560,546    1,884,986    4,488,615    9,661,168 
Impairment of  goodwill   
-
    
-
    1,035,795    
-
    1,035,795 
General and administrative not including depreciation,  amortization, or Impairment   3,918,130    1,665,783    1,600,212    2,791,236    9,975,360 
Depreciation and amortization   
-
    100,633    252,730    44,076    397,440 
Impairment of intangibles   
-
    
-
    688,127    
-
    688,127 
                          
Total operating expenses  $14,586,379   $3,327,093   $6,649,652   $11,803,003   $32,368,400 
                          
Interest expense   (12,706)   
-
    
-
    (359,400)   (372,106)
All other expenses   
-
    
-
    
-
    (3,638,327)   (3,638,327)
Other expenses, net   (12,706)             (3,997,727)   (4,010,433)
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(15,858,951)  $(3,385,888)  $(6,331,311)  $(11,803,003)  $(37,379,153)

 

   For the year ended December 31, 2020 
    Creatd Labs   Creatd Partners   Corporate   Total 
                 
Net revenue  $375,043   $837,827   $
-
   $1,212,870 
Cost of revenue   652,259    842,783    
-
    1,495,042 
Gross margin   (277,216)   (4,956)   
-
    (282,172)
                     
Research and development   227,656    29,775    
-
    257,431 
Marketing   2,426,668    285,490    142,745    2,854,904 
Stock based compensation   1,226,495    1,338,678    4,295,990    6,861,163 
General and administrative not including depreciation,  amortization, or Impairment   2,301,088    939,792    2,592,581    5,858,454 
Depreciation and amortization   
-
    132,768    24,993    157,761 
Impairment of intangibles   
-
    
-
    11,450    11,450 
Total operating expenses  $6,181,907   $2,726,504   $7,067,759   $16,001,163 
                     
Interest expense   (15,828)   
-
    (356,278)   (372,106)
All other expenses   
-
    
-
    (7,557,342)   (7,557,342)
Other expenses, net   (15,828)   
-
    (7,913,620)   (7,929,448)
                     
Loss before income tax provision and equity in net loss from unconsolidated investments  $(6,474,951)  $(2,731,460)  $(14,981,379)  $(24,212,783)

 

During the year ended December 31, 2021, Creatd Partners acquired assets from the Purchase of WHE. See note 14 for a list of assets acquired.

 

During the year ended December 31, 2021, Creatd Ventures acquired assets from the Purchase of Dune and Plant Camp. See note 14 for a list of assets acquired.

v3.22.4
Subsequent Events
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Subsequent Events [Abstract]    
Subsequent Events

Note 14 – Subsequent Events 

 

Warrant Exercises

 

Subsequent to September 30, 2022, a total of 4,227,114 warrants were exercised, resulting in the cancellation of 4,227,114 warrants, the issuance of 3,802,626 shares of Common Stock, and gross proceeds of $354,994 to the Company.

 

Promissory Notes

 

Subsequent to September 30, 2022, the Company entered into one promissory note agreement with net proceeds of $100,000.

 

Common Stock Purchase Agreement, Securities Purchase Agreement and Promissory Note

 

On October 20, 2022, Creatd, Inc. a Nevada corporation (the “Company”), entered into a Common Stock Purchase Agreement (the “Investment Agreement”) with an otherwise unaffiliated third party (the “Investor”). Pursuant to the terms of the Investment Agreement, for a period of thirty-six (36) months commencing on the trading day immediately following date of effectiveness of the Registration Statement (as defined below), the Investor purchase up to $15,000,000 of the Company’s common stock, par value $0.001 per share (the “Shares”), pursuant to Drawdown Notices (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Investment Agreement is equal to 82% of the lowest volume weighted average price (VWAP) during the last ten trading days after the Company delivers to the Investor a Put notice (a “Drawdown Notice”) in writing requiring Investor to purchase shares of the Company, subject to the terms of the Investment Agreement.

 

On October 20, 2022, the Company also entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the Investor, pursuant to which the Company issued to the Investor on that date a Promissory Note (the “Note”) in the principal amount of $300,000 in exchange for a purchase price of $255,000, which the Investor funded on October 20,2022.  The proceeds of the Note will be used by the Company for general working capital purposes.  

 

The Note bears interest at the rate of 10% per annum.  Starting on the fifth month anniversary of the funding of the Note, and for the next six months thereafter, the Company will make seven equal monthly payments of $47,142.85 to the Investor.

 

On October 20, 2022, in connection with the entry by the Company and the Investor into the economic agreements, (i.e., the Investment Agreement, the Purchase Agreement, and the Note and the funding thereof), the Company issued 800,000 shares of its common stock to the Investor.

 

Securities Purchase Agreement

 

On October 24, 2022 (the “Effective Date”), the Company, entered into and closed securities purchase agreement (the “Purchase Agreement”) with one accredited investor (the “Investor”), whereby the Investor purchased from the Company for an aggregate of $1,500,000 in subscription amount, an unsecured debenture in the principal amount of $1,666,650 (the “Debenture”).

 

The Debenture has an original issue discount of 10%, has a term of six months with a maturity date of April 24, 2023, may be extended by six months at the Company’s option subject to certain conditions, and are convertible into shares of Common Stock at a conversion price of $0.20 per share, subject to adjustment upon certain events.

 

In connection with its entry into the Purchase Agreement and issuance of the Debenture, the Company also entered into a side letter agreement (the “Letter Agreement”) with the holders of debentures of the Company, the Series C Warrants and Series D Warrants issued as of May 31, 2022 (the “May Investors”) and the holders of debentures of the Company, the Series E Warrants and Series F Warrants issued as of July 25, 2022 (the “July Investors”). Pursuant to the Letter Agreement each of the May Investors and the July Investors have entered into a lock-up agreement whereby they may not sell any such debentures, warrants, the shares into which such debentures may be converted, or certain shares underlying such warrants until the date that is 30 days after the date on which the registration statement registering for resale the shares of the Company’s common stock underlying the Debenture is declared effective by the Securities and Exchange Commission. Additionally, the Letter Agreement, provides that the May Investors and July Investors have agreed to a further lock up of such shares for a further 30 days upon the receipt of a certain amount of the proceeds from future potential issuances of debentures, common stock or similar securities by the Company. Further additionally, pursuant to the Letter Agreement, the May Investors and the July Investors have agreed to exchange and return for cancellation the Series C Warrants, Series D Warrants, Series E Warrants and Series F Warrants, receiving replacement warrants from the Company (the “Replacement Warrants”), in consideration for (i) the Company’s payment of $750,000 of the proceeds from the sale of the Debenture to the May Investors and July Investors on a pro rata basis and (ii) the Company’s agreement to pay, on a pro rata basis to the May Investors and July Investors, the greater of (x) $750,000 and (y) 50% of the gross proceeds raised in a subsequent financing. The Replacement Warrants reflect a reduction in the number of Series C and Series D Warrants from 1,550,000 in each class to 1,536,607 in each class and a reduction in the number of Series E and Series F Warrants from 1,075,000 in each class to 807,143 in each class, and the initial exercise date for the Replacement Warrants are unchanged from the date as set forth in the respective exchanged Series C, Series D, Series E or Series F Warrant.

Note 17 – Subsequent Events 

 

Board of Directors and Management

 

Appointment of New Directors

 

On February 17, 2022, the Board of Directors (the “Board”) of the Company appointed Joanna Bloor, Brad Justus, and Lorraine Hendrickson to serve as members of the Board. Ms. Bloor has been nominated to, and will serve as, chair of the Compensation Committee, and to be a member of the Audit Committee and Nominating & Corporate Governance Committee. Mr. Justus has been nominated, and will serve as, chair of the Nominating & Corporate Governance Committee, and to be a member of the Compensation Committee and Audit Committee. Ms. Hendrickson has been nominated to, and will serve as, chair of the Audit Committee and to be a member of the Compensation and Nominating & Corporate Governance Committee.

 

Departure of Directors

 

On February 17, 2022, the Board received notice that effective immediately, Mark Standish resigned as Chair of the Board, Chair of the Audit Committee and as a member of the Compensation Committee and Nominating & Corporate Governance Committee; Leonard Schiller resigned as member of the Board, Chair of the Compensation Committee and as a member of the Audit Committee and Nominating & Corporate Governance Committee; and LaBrena Martin resigned as a member of the Board, Chair of the Nominating & Corporate Governance Committee and as a member of the Audit Committee and Compensation Committee. Such resignations are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

 

Management Restructuring

 

On February 17, 2022, the Board of the Company approved the restructuring of the Company’s senior management team to eliminate the Co-Chief Executive Officer role, appointing Jeremy Frommer as Executive Chairman and Founder, and appointing Laurie Weisberg as Chief Executive Officer (the “Second Restructuring”). Prior to the Second Restructuring, Mr. Frommer and Ms. Weisberg served as the Company’s co-Chief Executive Officers and Ms. Weisberg served as the Company’s Chief Operating Officer. The Second Restructuring does not impact the role or functions of the Company’s Chief Financial Officer, Chelsea Pullano, or the role or functions of the Company’s President and Chief Operating Officer, Justin Maury.

 

Securities Purchase Agreement

 

On March 1, 2022, the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share.

 

Nasdaq Notice of Delisting

 

On March 1, 2022, the Company received a letter (the “Letter”) from the staff of The Nasdaq Capital Market (the “Exchange”) notifying the Company that the Exchange has determined to delist the Company’s common stock from the Exchange based on the Company’s Market Value of Listed Securities for the 30-consecutive day period between January 15, 2022 and February 25, 2022 falling short of the requirements under Listing Rule 5550(b)(2) (the “Rule”). Although a 180-day period is typically allowed for an issuer to regain compliance, the Company is not eligible to use such compliance period, as the Exchange had instituted a Panel Monitor through March 9, 2022.

 

The Company is pursuing an appeal to the Panel of such determination, in accordance with the Exchange’s rules and, pursuant to such request by the Company to appeal, the delisting of the Company’s securities and the Form 25 Notification of Delisting filing will be stayed pending the Panel’s decision.

 

The Company intends to present to the Panel evidence that the Company has regained compliance with the Rule; however, there can be no assurance that the Panel will grant the Company’s request for continued listing.

 

The Letter has no immediate impact on the listing of the Company’s common stock or warrants, which will continue to be listed and traded on the Exchange, subject to the Company’s compliance with other continued listing requirements. The Company’s receipt of the Letter does not affect the Company’s business, operations or reporting requirements with the Securities and Exchange Commission.

 

Registered Direct Offering

 

On March 7, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with thirteen accredited investors resulting in the raise of $2,659,750 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 1,519,857 shares of the Company’s common stock together with warrants to purchase an aggregate of 1,519,857 shares of Common Stock at an exercise price of $1.75 per share. The warrants are immediately exercisable and will expire on March 9, 2027.

 

Acquisition of Denver Bodega, LLC d/b/a Basis

 

On March 7, 2022, the Company entered into a Membership Interest Purchase (the “Agreement”) with Henry Springer and Kyle Nowak (collectively the “Sellers”), whereby the Company purchased a majority stake in Denver Bodega, LLC, a Colorado limited liability company whose product is Basis, a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Pursuant to the Agreement, Creatd acquired all of the issued and outstanding membership interests of Denver Bodega, LLC for consideration of one dollar ($1.00), as well as the Company’s payoff, assumption, or satisfaction of certain debts and liabilities totaling $278,163.

 

Settlement of Home Revolution Litigation

 

On March 3, 2022, after substantial motion practice, Creatd successfully settled the dispute with Home Revolution, LLC for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed.

 

Note Conversions

 

Subsequent to December 31, 2021, a total of $168,850 in principal of convertible notes converted into 109,435 shares of common stock.

 

Promissory Note

 

Subsequent to December 31, 2021, the Company entered into one promissory note agreement with net proceeds of $300,000 and one promissory note agreement with net proceeds of AUD$224,540.

 

Consultant Shares

 

Subsequent to December 31, 2021, the Company issued 183,590 shares of Common Stock to consultants.

 

Employment Agreements

 

On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).

 

Pursuant to the Executive Employment Arrangements, the Company entered into executive employment agreements with each of the respective executives as of April 5, 2022 (the “Executive Employment Agreements”). The Executive Employment Agreements contain customary terms, conditions and rights.

 

The foregoing descriptions of the Executive Employment Agreements do not purport to be complete and are qualified in their entirety by reference to the forms of Amended Executive Employment Agreements, copies of which are filed as Exhibits 10.40, 10.41, 10.42 and 10.43 to this Annual Report on Form 10-K and is incorporated herein by reference.  

v3.22.4
Equity Investments, at Cost
12 Months Ended
Dec. 31, 2021
Equity Investments, at Cost [Abstract]  
Equity investments, at cost

Note 6 – Equity investments, at cost

 

The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.

 

The Company performed a qualitative assessment considering impairment indicators to evaluate whether these investments were impaired. Impairment indicators that the Company considered included the following: a) a significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee; b) a significant adverse change in the regulatory, economic or technology environment of the investee; c) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; d) a bona fide offer to purchase or an offer by the investee to sell the investment; e) factors that raise significant concerns about the investee’s ability to continue as a going concern.

 

On October 2, 2020, the Company converted $102,096 of its marketable debt security into 119,355 shares of preferred stock or a 1.3% equity investment in a private company. During the year ended December 31, 2021, the Company recorded a full impairment on this investment.

 

On October 23, 2020, the Company entered into an equity interest purchase agreement whereas the Company purchased 3.8% ownership of a private company for $115,000. During the year ended December 31, 2021, the Company acquired additional equity interests that resulted in the Company achieving significant influence over this investee, therefore the investments were reclassified as an equity method investment (see Note 7).

 

On February 17, 2021, the Company entered into a membership interest purchase agreement whereas the Company purchased another 3.3% ownership of a private company for $100,000. During the year ended December 31, 2021, the Company acquired additional equity interests that resulted in the Company achieving significant influence over this investee, therefore the investments were reclassified as an equity method investment (see Note 7).

 

On May 21, 2021, the Company entered into a common stock purchase agreement whereas the Company purchased 10.0% ownership of a private company for $50,000.

v3.22.4
Equity Method Investments
12 Months Ended
Dec. 31, 2021
Equity Method Investments [Abstract]  
Equity Method Investments

Note 7 – Equity Method Investments

 

During the year ended December 31, 2021, we invested $410,000 in cash into Dune, Inc., and received equity interest for services valued at $123,710 that were recorded to other income on the Statement of Operations. Our investment in Dune, Inc., was accounted for under the equity method until the 29% purchased on October 3, 2021 that increased our ownership to 50.41%. During the year ended December 31, 2021, we recorded $16,413 of losses from this investment as equity in net loss from equity method investment and an impairment in investment of $424,632 related to the remeasurement of previously held interest as of October 3, 2021. These amounts are recorded within our consolidated statements of operations. As of December 31, 2021, our Equity method investment total $0.

v3.22.4
Income Taxes
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

Note 16 –Income Taxes

 

Components of deferred tax assets are as follows:

 

   December 31,
2021
   December 31,
2020
 
Net deferred tax assets – Non-current:        
Depreciation  $(70,194)  $(145,749)
Amortization   95,115    21,096 
Stock based compensation   4,369,372    1,653,617 
Expected income tax benefit from NOL carry-forwards   15,073,606    8,780,233 
Less valuation allowance   (19,467,900)   (10,309,197)
Deferred tax assets, net of valuation allowance  $
-
   $
-
 

 

Income Tax Provision in the Consolidated Statements of Operations

 

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

 

   For the
Year Ended
December 31,
2021
   For the
Year Ended
December 31,
2020
 
         
Federal statutory income tax rate   21.0%   21.0%
State tax rate, net of federal benefit   7.1%   6.5%
           
Change in valuation allowance on net operating loss carry-forwards   (28.1)%   (27.5)%
           
Effective income tax rate   0.0%   0.0%

 

The following is a reconciliation of the beginning and ending amount of the unrecognized tax benefit for the years ended December 31, 2021 and 2020:

 

   2021   2020 
Balance at January 1,  $
     -
   $68,000 
Additions based on tax positions relating to the current year   
-
    
-
 
Reductions for tax positions of prior years   
-
    (68,000)
           
Balance at December 31,  $
-
   $
-
 

 

Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets of the Company will not be fully realizable for the years ended December 31, 2021 and 2020. Accordingly, management had applied a full valuation allowance against net deferred tax assets as of December 31, 2021 and 2020.

 

As of December 31, 2021, the Company had approximately $54 million of federal net operating loss carryforwards available to reduce future taxable income which will begin to expire in 2034 for both federal and state purposes.

 

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code of 1986, as amended (the “Code”). The Act reduces the federal corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017. ASC 470 requires the Company to remeasure the existing net deferred tax asset in the period of enactment. The Act also provides for immediate expensing of 100% or the costs of qualified property that is incurred and placed in service during the period from September 27, 2017 to December 31, 2022. Beginning January 1, 2023, the immediate expensing provision is phased down by 20% per year until it is completely phased out as of January 1, 2027. Additionally, effective January 1, 2018, the Act imposes possible limitations on the deductibility of interest expense. As a result of the provisions of the Act, the Company’s deduction for interest expense could be limited in future years. The effects of other provisions of the Act are not expected to have a material impact on the Company’s financial statements.

 

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that begins in the reporting period that includes the Act’s enactment date and ends when an entity has obtained, prepared and analyzed the information that was needed in order to complete the accounting requirements under ASC 720. However, in no circumstance should the measurement period extend beyond one year from the enactment date. In accordance with SAB 118, a company must reflect in its financial statements the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. SAB 118 provides that to the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.

 

The Company does not reflect a deferred tax asset in its financial statements but includes that calculation and valuation in its footnotes. We are still analyzing the impact of certain provisions of the Act and refining our calculations. The Company will disclose any change in the estimates as it refines the accounting for the impact of the Act.

 

Federal and state tax laws impose limitations on the utilization of net operating losses and credit carryforwards in the event of an ownership change for tax purposes, as defined in Section 382 of the Internal Revenue Code. Accordingly, the Company’s ability to utilize these carryforwards may be limited as a result of an ownership change which may have already happened or may happen in the future. Such an ownership change could result in a limitation in the use of the net operating losses in future years and possibly a reduction of the net operating losses available.

v3.22.4
Accounting Policies, by Policy (Policies)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Accounting Policies [Abstract]    
Basis of Presentation

Basis of Presentation

 

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in the Company’s 2021 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, 2021 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

 

 
Use of Estimates and Critical Accounting Estimates and Assumptions

Use of Estimates and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

  

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

 

Actual results could differ from those estimates.

 

Use of Estimates and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

During the fourth quarter of 2021, management changed its estimates for cost of revenues. This change in estimates did not result in a change to loss from operations or net loss.

 

Actual results could differ from those estimates.

 

Presentation

Presentation

 

During 2021, we adopted a change in presentation on our Condensed Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation.

 

Presentation

 

During 2021, we adopted a change in presentation on our Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation.

Principles of consolidation

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of September 30, 2022, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate   State or other
jurisdiction of
incorporation
or organization
  Company
Ownership
Interest
 
Jerrick Ventures LLC   Delaware     100 %
Abacus Tech Pty Ltd   Australia     100 %
Brave Foods, LLC   Brave Foods, LLC     100 %
Denver Bodega, LLC   Colorado     100 %
Dune Inc.   Delaware     50 %
Plant Camp LLC   Delaware     89 %
OG Collection, Inc.   Delaware     100 %
OG Gallery, LLC   Delaware     100 %
Orbit Media LLC   New York     51 %
WHE Agency, Inc.   Delaware     44 %

  

All inter-company balances and transactions have been eliminated. The condensed consolidated financial statements include Denver Bodega, LLC activity since March 7, 2022, Orbit Media LLC activity since August 1, 2022, and Brave Foods, LLC activity since September 13, 2022.

 

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of December 31, 2021, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate   State or other
jurisdiction of
incorporation
or organization
  Company
Ownership
Interest
 
Jerrick Ventures LLC   Delaware   100 %
Abacus Tech Pty Ltd   Australia     100 %
Seller’s Choice, LLC   New Jersey     100 %
Recreatd, LLC   Delaware     100 %
Give, LLC   Delaware     100 %
Creatd Partners LLC   Delaware     100 %
Dune Inc.   Delaware     50 %
Plant Camp LLC   Delaware     89 %
Sci-Fi Shop, LLC   Delaware     100 %
OG Collection LLC   Delaware     100 %
VMENA LLC   Delaware     100 %
Vocal For Brands, LLC   Delaware     100 %
Vocal Ventures LLC   Delaware     100 %
What to Buy, LLC   Delaware     100 %
WHE Agency, Inc.   Delaware     44 %

 

All inter-company balances and transactions have been eliminated.

 

Variable Interest Entities

Variable Interest Entities

 

Management performs an ongoing assessment of its noncontrolling interests from investments in unrelated entities to determine if those entities are variable interest entities (VIEs), and if so, whether the Company is the primary beneficiary. If an entity in such a transaction, by design, meets the definition of a VIE and the Company determines that it, or a condensed consolidated subsidiary is the primary beneficiary, the Company will include the VIE in its condensed consolidated financial statements. If such an entity is deemed to not be condensed consolidated, the Company records only its investment in equity securities as a marketable security or investment under the equity method, as applicable

  

Variable Interest Entities

 

Management performs an ongoing assessment of its noncontrolling interests from investments in unrelated entities to determine if those entities are variable interest entities (VIEs), and if so, whether the Company is the primary beneficiary. If an entity in such a transaction, by design, meets the definition of a VIE and the Company determines that it, or a consolidated subsidiary is the primary beneficiary, the Company will include the VIE in its consolidated financial statements. If such an entity is deemed to not be consolidated, the Company records only its investment in equity securities as a marketable security or investment under the equity method, as applicable

  

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The fair value measurement disclosures are grouped into three levels based on valuation factors:

 

  Level 1 – quoted prices in active markets for identical investments

 

  Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

 

  Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

 

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, marketable trading securities, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2022 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

 

The Company’s Level 2 assets/liabilities include certain of the Company’s notes payable. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace.

 

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, equity investments at cost, and derivative liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. 

 

The following tables provides a summary of the relevant assets that are measured at fair value on a recurring basis:

 

Fair Value Measurements as of

September 30, 2022

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                
Marketable securities - equity securities  $96   $96   $
       -
   $
       -
 
Total assets  $96   $96   $
-
   $
-
 

 

Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of September 30, 2022 are $96.

 

The change in net realized depreciation on equity trading securities that has been included in other expenses for the nine months ended September 30, 2022 and 2021 was $11,646 and $0, respectively. 

 

Fair Value of Financial Instruments

 

The fair value measurement disclosures are grouped into three levels based on valuation factors:

 

  Level 1 – quoted prices in active markets for identical investments

 

  Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

 

  Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

 

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at December 31, 2021 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

 

The Company’s Level 2 assets/liabilities include certain of the Company’s notes payable and capital lease obligations. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace.

 

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, marketable debt securities, equity investments at cost, and derivative liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. 

 

The following tables provides a summary of the relevant assets and liabilities that are measured at fair value on recurring basis:

 

Fair Value Measurements as of

December 31, 2020

 

   Total   Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                                            
Marketable securities - debt securities  $62,733   $-   $-   $62,733 
Total assets  $62,733   $-   $-   $62,733 
                     
Liabilities:                    
Derivative liabilities  $42,231   $-   $-   $42,231 
Total Liabilities   42,231   $-   $-   $42,231 

 

Fair Value Measurements as of

December 31, 2021

 

    Total     Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
    Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
Assets:                                
Marketable securities - debt securities   $     -     $        -     $         -     $         -  
Total assets   $ -     $ -     $ -     $ -  
                                 
Liabilities:                                
Derivative liabilities   $ -     $ -     $ -     $ -  
Total Liabilities     -     $ -     $ -     $ -  

 

The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on recurring basis as of December 31, 2021 and 2020:

 

   Fair Value
As of
December 31,
2021
   Fair Value
As of
December 31,
2020
   Valuation
Methodology
  Unobservable
Inputs
Marketable securities - debt securities  $         -   $62,733   Discounted cash flow analysis  Expected cash flows from the investment
                 
Derivative liabilities  $-   $42,231   Monte Carlo simulations and Binomial model  Risk free rate Expected volatility; Drift rate

 

The following tables provides a summary of the relevant assets that are measured at fair value on non-recurring basis:

 

Fair Value Measurements as of

December 31, 2021

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                
Equity investments, at cost  $50,000   $       -   $         -   $50,000 
Total assets  $50,000   $-   $-   $50,000 

 

Fair Value Measurements as of

December 31, 2020

 

    Total     Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
    Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
Assets:                        
Equity investments, at cost   $ 217,096     $              -     $              -     $ 217,096  
                                 
Total assets   $ 217,096     $ -     $ -     $ 217,096  

 

The following table shows the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on non-recurring basis as of December 31, 2021:

 

   Fair Value
As of
December 31,
2021
   Fair Value
As of
December 31,
2020
   Valuation Methodology  Unobservable Inputs
Equity investments, at cost  $       -   $217,096   Qualitative assessment per ASC 321-10-35  Qualitative factors

 

The Company recognizes impairment on loans or notes receivable (that do not meet the definition of a debt security) when it is probable that it will be unable to collect all amounts due according to the contractual terms, and the amount of loss can be estimated. The loss is estimated based on the present value of expected cash flows. 

The change in net realized depreciation on equity trading securities that has been included in other expenses for the year ended December 31, 2021 and 2020 was $0 and $(7,453), respectively.

 

The Company valued the initial value of debt securities, which are investments in convertible notes receivable, by assessing the separate values of the debt and equity components for similar instruments convertible into private company equity (Level 3). The investment was initially measured at cost, which was determined to approximate fair value due to the lack of marketability of the conversion shares underlying these convertible instruments and the expected recoverability of the note principal. The key assumption affecting the level 3 fair values would be observable price changes to the equity investments. The Company monitors for impairment indicators at each balance sheet date.

 

Cash Equivalents

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits. The Company has never experienced any losses related to these balances. The uninsured cash balance as of September 30, 2022, was $0. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits . The Company has never experienced any losses related to these balances. As of December 31, 2021 and 2020, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2021 and 2020, was approximately $2.7 million and $7.7 million, respectively. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 

Concentration of Credit Risk and Other Risks and Uncertainties

Concentration of Credit Risk and Other Risks and Uncertainties

 

The Company provides credit in the normal course of business. The Company maintains allowances for credit losses on factors surrounding the credit risk of specific customers, historical trends, and other information.

 

The Company operates in Australia and holds total assets of $622,445. It is reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

  

Concentration of Credit Risk and Other Risks and Uncertainties

 

The Company provides credit in the normal course of business. The Company maintains allowances for credit losses on factors surrounding the credit risk of specific customers, historical trends, and other information.

 

The Company operates in Australia and holds total assets of $675,024 that are considered to be reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

 

Property and Equipment

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

   Estimated
Useful Life
(Years)
 
     
Computer equipment and software  3 
Furniture and fixtures  5 

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the condensed consolidated statements of operations.

 

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

    Estimated
Useful Life
(Years)
     
Computer equipment and software   3
Furniture and fixtures   5

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

 

Long-lived Assets Including Goodwill and Other Acquired Intangibles Assets

Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

 

We evaluate the recoverability of property and equipment, acquired finite-lived intangible assets and, purchased infinite life digital assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. Digital assets accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases other than temporary below the carrying value. The fair value is measured using the quoted price of the crypto asset at the time its fair value is being measured. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the three months ended September 30, 2022, the Company recorded an impairment charge of $249,586  for intangible assets. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $257,117 for intangible assets.

 

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 7.1 years.

 

Scheduled amortization over the next five years are as follows:

 

Twelve months ending September 30,
     
2023  $415,215 
2024   443,236 
2025   280,223 
2026   260,935 
2027   239,934 
Thereafter   739,762 
Total   2,379,305 
      
Intangible assets not subject to amortization   157,294 
Total Intangible Assets  $2,536,599 

 

Amortization expense was $94,130 and $75,069 for the three months ended September 30, 2022 and 2021, respectively. Amortization expense was $355,509 and $143,776 for the nine months ended September 30, 2022 and 2021, respectively.

 

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles – Goodwill and Other – Testing Indefinite-Lived Intangible Assets for Impairment” (“ASC Topic 350”). The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units.

  

During the year ended December 31, 2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for goodwill.

 

During the three months ended September 30, 2022, management observed impairment indicators that led them to believe the carrying amount of goodwill was below its carrying value. The Company determined that the carrying value of the Plant Camp and Dune reporting units were more likely than not greater than their carrying value, including Goodwill. Based on estimated impairment computed, the Company recorded an impairment charge of $25,139 for goodwill.

 

The following table sets forth a summary of the changes in goodwill for the three months ended September 30, 2022.

 

   For the
Three Months ended
September 30,
2022
 
   Total 
As of July 1, 2022    $1,383,785 
Goodwill acquired in a business combination   6,682 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

The following table sets forth a summary of the changes in goodwill for the nine months ended September 30, 2022.

 

   For the
Nine Months ended
September 30,
2022
 
   Total 
As of January 1, 2022    $1,374,835 
Goodwill acquired in a business combination   15,632 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

 

We evaluate the recoverability of property and equipment and acquired finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the year ended December 31, 2021 and 2020, the Company recorded an impairment charge of $688,127.00 and $0, respectively for intangible assets.

 

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 7.26 years.

 

Scheduled amortization over the next five years are as follows:

 

Twelve months ending December 31,
       
2022   $ 493,660  
2023     407,848  
2024     347,936  
2025     231,624  
2026     219,749  
Thereafter     732,024  
Total   $ 2,432,841  

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment” (“ASC Topic 350”). The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units.

 

During the year ended December 31, 2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for goodwill.

 

The following table sets forth a summary of the changes in goodwill for the years ended December 31, 2020 and 2021.

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020 and 2021    $1,035,795 
Goodwill acquired in a business combination   1,374,835 
Impairment of goodwill   (1,035,795)
As of December 31, 2021   1,374,835 

 

Commitments and Contingencies

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Foreign Currency

Foreign Currency

 

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our Condensed Consolidated Balance Sheet dates. Results of operations and cash flows are translated using the average exchange rates throughout the periods. The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in operating expenses, have not been significant in any period presented.

 

Foreign Currency

 

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our Consolidated Balance Sheet dates. Results of operations and cash flows are translated using the average exchange rates throughout the periods. The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in operating expenses, have not been significant in any period presented.

 

Derivative Liability

Derivative Liability

 

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the condensed consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. 

 

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.  

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. 

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.

 

The Company utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 

Derivative Liability

 

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity.

  

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.  

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017, on a retrospective basis.

 

The Company utilizes a Monte Carlo simulation model for the make whole feature and a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Monte Carlo model included a starting stock price, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, drift, and a risk-free rate. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.

 

Shipping and Handling Costs

Shipping and Handling Costs

 

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of revenue.

 

Shipping and Handling Costs

 

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost or revenue.

 

Revenue Recognition

Revenue Recognition   

 

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

  identification of the contract, or contracts, with a customer;

 

  identification of the performance obligations in the contract;

 

  determination of the transaction price. The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mile basis) and cash prizes offered to Challenge winners;

 

  allocation of the transaction price to the performance obligations in the contract; and

 

  recognition of revenue when, or as, we satisfy a performance obligation.

 

Revenue disaggregated by revenue source for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Agency (Managed Services, Branded Content, & Talent Management Services)  $442,867   $555,766   $1,613,924   $1,472,902 
Platform (Creator Subscriptions)   230,212    611,714    1,138,812    1,370,581 
Ecommerce   347,944    4,153    1,237,634    9,679 
Affiliate Sales   1,828    7,619    7,120    23,425 
Other Revenue   
-
    368    
-
    17,803 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Products and services transferred over time  $673,079   $1,167,480   $2,752,736   $2,843,483 
Products transferred at a point in time   349,772    12,140    1,244,754    50,907 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

Agency Revenue

 

Managed Services

 

The Company provides Studio/Agency Service offerings to business-to-business (B2B) and business-to-consumer (B2C) product and service brands which encompasses a full range of digital marketing and e-commerce solutions. The Company’s services include the setup and ongoing management of clients’ websites, Amazon and Shopify storefronts and listings, social media pages, search engine marketing, and other various tools and sales channels utilized by e-commerce sellers for sales and growth optimization. Contracts are broken into three categories: Partners, Monthly Services, and Projects. Contract amounts for Partner and Monthly Services clients range from approximately $500-$7,500 per month while Project amounts vary depending on the scope of work. Partner and Monthly clients are billed monthly for the work completed within that month. Partner Clients may or may not have an additional billing component referred to as Sales Performance Fee, which is a fee based upon a previously agreed upon percentage point of the client’s total sales for the month. Some Partners may also have projects within their contracts that get billed and recognized as agreed upon project milestones are achieved. Revenue is recognized over time as service obligations and milestones in the contract are met.

 

Branded Content

 

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles and/or branded challenges for clients on the Vocal platform and promote said stories, tracking engagement for the client. In the case of branded articles, the performance obligation is satisfied when the Company successfully publishes the articles on its platform and meets any required promotional milestones as per the contract. In the case of branded challenges, the performance obligation is satisfied when the Company successfully closes the challenge and winners have been announced. The Company utilizes the completed contract method when revenue is recognized over time as the services are performed and any required milestones are met. Certain contracts contain separate milestones whereas the Company separates its performance obligations and utilizes the stand-alone selling price method and residual method to determine the estimate of the allocation of the transaction price.

 

Below are the significant components of a typical agreement pertaining to branded content revenue:

 

  The Company collects fixed fees ranging from $10,000 to $110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.
     
  Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

 

  Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.
     
  Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee. 

 

Talent Management Services

 

Talent Management represents the revenue recognized by WHE Agency, Inc. (“WHE”) from the Company’s obligation to manage and oversee influencer-led campaigns from the contract negotiation stage through content creation and publication. WHE acts in an agent capacity for influencers and collects a management fee of 20% of the value of an influencer’s contract with a brand. Revenue is recognized net of the 80% of the contract that is collected by the influencer and is recognized when performance obligations of the contract are met. Performance obligations are complete when milestones and deliverables of contracts are delivered to the client. 

 

Below are the significant components of a typical agreement pertaining to talent management revenue:

 

  Total gross contracts range from $500-$50,000.

 

The Company collects fixed fees in the amount of 20% of the gross contract amount, ranging from $100 to $20,000 in net revenue per contract.

 

  The campaign is created and made live by the influencer within the timeframe specified in the contract.

 

Campaigns are promoted per the contract and the customer is provided a link to the live deliverables on the influencer’s social media channels.

 

Most billing for contracts occur 100% at execution of the performance obligation. Net payment terms vary by client.

  

Platform Revenue

 

Creator Subscriptions

 

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are subject to promotional discounts and free trials. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

 

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Potential revenue offset is calculated by reviewing a subscriber’s earnings in conjunction with payments made by the subscriber on a monthly and/or annual basis.

 

Affiliate Sales Revenue

 

Affiliate sales represents the commission the Company receives when a purchase is made through affiliate links placed within content hosted on the Vocal platform. Affiliate revenue is earned on a “click through” basis, upon referring visitors, via said links, to an affiliate’s site and having them complete a specific outcome, most commonly a product purchase. The Company uses multiple affiliate platforms, such as Skimlinks, Amazon, and Tune, to form and maintain thousands of vendor relationships. Each vendor establishes their own commission percentage, which typically range from 2-20%. The revenue is recognized upon receipt as reliable estimates could not be made.

 

E-Commerce Revenue

 

The Company’s e-commerce businesses are housed under Creatd Ventures, and currently consists of four majority-owned e-commerce companies, Camp (previously Plant Camp), Dune Glow Remedy (“Dune”), Basis, and Brave. The Company generates revenue through the sale of Camp, Dune, and Basis, and Brave’s consumer products through its e-commerce distribution channels. The Company satisfies its performance obligation upon shipment of product to its customers and recognizes shipping and handling costs as a fulfillment cost. Customers have 30 days from receipt of an item to return unopened, unused, or damaged items for a full refund. All returns are processed within the relevant recording period and accounted for as a reduction in revenue. The Company runs discounts from time to time to promote sales, improve market penetration, and increase customer retention. Any discounts are run as coupon codes applied at the time of transaction and accounted for as a reduction in gross revenue. The Company assesses variable consideration using the most likely amount method.

 

Revenue Recognition  

 

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

  identification of the contract, or contracts, with a customer;

 

  identification of the performance obligations in the contract;

 

  determination of the transaction price. The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mile basis) and cash prizes offered to Challenge winners;

 

  allocation of the transaction price to the performance obligations in the contract; and

 

  recognition of revenue when, or as, we satisfy a performance obligation.

 

Revenue disaggregated by revenue source for the years ended December 31, 2021 and 2020 consists of the following:

 

   Years Ended 
   December 31, 
   2021   2020 
Agency (Managed Services, Branded Content, & Talent Management Services)  $2,256,546   $1,100,199 
Platform (Creator Subscriptions)   1,926,135    70,623 
Ecommerce (Tangible products)   90,433    - 
Affiliate Sales   26,453    33,748 
Other Revenue   150    8,300 
   $4,299,717   $1,212,870 

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the years ended December 31, 2021 and 2020 consists of the following:

 

   Years Ended 
   December 31, 
   2021   2020 
Products and services transferred over time  $4,182,681   $1,100,199 
Products and services transferred at a point in time   117,036    112,671 
   $4,299,717   $1,212,870 

Agency Revenue

 

Managed Services

 

The Company provides Studio/Agency Service offerings to business-to-business (B2B) and business-to-consumer (B2C) product and service brands which encompasses a full range of digital marketing and e-commerce solutions. The Company’s services include the setup and ongoing management of clients’ websites, Amazon and Shopify storefronts and listings, social media pages, search engine marketing, and other various tools and sales channels utilized by e-commerce sellers for sales and growth optimization. Contracts are broken into three categories: Partners, Monthly Services, and Projects. Contract amounts for Partner and Monthly Services clients range from approximately $500-$7,500 per month while Project amounts vary depending on the scope of work. Partner and Monthly clients are billed monthly for the work completed within that month. Partner Clients may or may not have an additional billing component referred to as Sales Performance Fee, which is a fee based upon a previously agreed upon percentage point of the client’s total sales for the month. Some Partners may also have projects within their contracts that get billed and recognized as agreed upon project milestones are achieved. Revenue is recognized over time as service obligations and milestones in the contract are met.

 

Branded Content

 

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles and/or branded challenges for clients on the Vocal platform and promote said stories, tracking engagement for the client. In the case of branded articles, the performance obligation is satisfied when the Company successfully publishes the articles on its platform and meets any required promotional milestones as per the contract. In the case of branded challenges, the performance obligation is satisfied when the Company successfully closes the challenge and winners have been announced. The Company utilizes the completed contract method when revenue is recognized over time as the services are performed and any required milestones are met. Certain contracts contain separate milestones whereas the Company separates its performance obligations and utilizes the stand-alone selling price method and residual method to determine the estimate of the allocation of the transaction price.

 

Below are the significant components of a typical agreement pertaining to branded content revenue:

 

  The Company collects fixed fees ranging from $10,000 to $110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.
     
  Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

 

  Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.
     
  Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee. 

 

Talent Management Services

 

Talent Management represents the revenue recognized by WHE Agency, Inc. (“WHE”) from the Company’s obligation to manage and oversee influencer-led campaigns from the contract negotiation stage through content creation and publication. WHE acts in an agent capacity for influencers and collects a management fee of 20% of the value of an influencer’s contract with a brand. Revenue is recognized net of the 80% of the contract that is collected by the influencer and is recognized when performance obligations of the contract are met. Performance obligations are complete when milestones and deliverables of contracts are delivered to the client. 

 

Below are the significant components of a typical agreement pertaining to talent management revenue:

 

  Total gross contracts range from $500-$50,000.

 

  The Company collects fixed fees in the amount of 20% of the gross contract amount, ranging from $100 to $20,000 in net revenue per contract.

 

  The campaign is created and made live by the influencer within one month of the signed agreement, or as previously negotiated with the client.

 

  Campaigns are promoted per the contract and the customer is provided a link to the live deliverables on the influencer’s social media channels.

 

  Most billing for contracts occur 100% at execution of the performance obligation. Net payment terms vary by client.

  

Platform Revenue

 

Creator Subscriptions

 

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are subject to promotional discounts and free trials. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

 

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Estimates are utilized for payments made for earnings through reads, by establishing the lifetime a subscriber has had a Vocal account, determining the percentage of that lifetime that the subscriber has been a paying customer, and applying that percentage to payments for earnings through reads in the relevant reporting period. 

 

Affiliate Sales Revenue

 

Affiliate sales represents the commission the Company receives when a purchase is made through affiliate links placed within content hosted on the Vocal platform. Affiliate revenue is earned on a “click through” basis, upon referring visitors, via said links, to an affiliate’s site and having them complete a specific outcome, most commonly a product purchase. The Company uses multiple affiliate platforms, such as Skimlinks, Amazon, and Tune, to form and maintain thousands of vendor relationships. Each vendor establishes their own commission percentage, which typically range from 2-20%. The revenue is recognized upon receipt as reliable estimates could not be made.

 

E-Commerce Revenue

 

The Company’s e-commerce businesses are housed under Creatd Ventures, and currently consists of two majority-owned e-commerce companies, Camp (previously Plant Camp) and Dune Glow Remedy (“Dune”).  The Company generates revenue through the sale of Camp and Dune’s consumer products through its e-commerce distribution channels. The Company satisfies its performance obligation upon shipment of product to its customers and recognizes shipping and handling costs as a fulfillment cost. Customers have 30 days from receipt of an item to return unopened, unused items. The Company runs discounts from time to time to promote sales, improve market penetration, and increase customer retention.

 

Deferred Revenue

Deferred Revenue

 

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue within the next twelve months. As of September 30, 2022, the Company had deferred revenue of $305,555. As of December 31, 2021, the Company had deferred revenue of $234,159, of which $159,727 was recognized as revenue in the nine months ended September 30, 2022, and $13,512 was recognized as revenue in the three months ended September 30, 2022.

 

Deferred Revenue

 

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue over the next year. As of December 31, 2021, and 2020, the Company had deferred revenue of $234,159 and $88,637, respectively.

 

Accounts Receivable and Allowances

Accounts Receivable and Allowances

 

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the nine months ended September 30, 2022, the Company recorded $124,186, as a bad debt expense. As of September 30, 2022, the Company has an allowance for doubtful accounts of $311,133. As of December 31, 2021, the Company has an allowance for doubtful accounts of $186,147.

 

Accounts Receivable and Allowances

 

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the years ended December 31, 2021 and 2020, the Company recorded $110,805 and $53,692, respectively as a bad debt expense. As of December 31, 2021 and 2020, the Company has an allowance for doubtful accounts of $186,147 and $80,509, respectively.

 

Inventory

Inventory

 

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of September 30, 2022, and December 31, 2021, the Company had no valuation allowance.

 

Inventory

 

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of December 31, 2021 and 2020, the Company has no valuation allowance.

Stock-Based Compensation

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted in accordance with Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation over the requisite service period of the award. The company has a relatively low forfeiture rate of stock based compensation and forfeitures are recognized as they occur.

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods.

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is volatility is derived from the Company’s historical data over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. Forfeitures are recognized as they occur.

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. The Company issues awards of equity instruments, such as stock options and restricted stock units, to employees and certain non-employee directors. Compensation expense related to these awards is based on the fair value of the underlying stock on the award date and is amortized over the service period, defined as the vesting period. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock units. Compensation expense is reduced for actual forfeitures as they occur.

 

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted in accordance with Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation over the requisite service period of the award. The company has a relatively low forfeiture rate of stock based compensation and forfeitures are recognized as they occur.

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods.

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is volatility is derived from the Company’s historical data over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. Forfeitures are recognized as they occur.

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. The Company issues awards of equity instruments, such as stock options and restricted stock units, to employees and certain non-employee directors. Compensation expense related to these awards is based on the fair value of the underlying stock on the award date and is amortized over the service period, defined as the vesting period. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock units. Compensation expense is reduced for actual forfeitures as they occur.

 

Loss Per Share

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three and nine months ended September 30, 2022 and 2021 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at September 30, 2022 and 2021:

 

   September 30, 
   2022   2021 
Series E preferred   121    148 
Options   4,408,267    2,327,445 
Warrants   20,429,630    6,558,705 
Convertible notes   32,215,486    228,334 
Totals   57,053,504    9,114,632 

 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the years ended December 31, 2021 and 2020 presented in these consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at December 31, 2021 and 2020:

 

   December 31, 
   2021   2020 
Options   2,902,619    541,021 
Warrants   5,658,830    3,228,235 
Totals   8,561,449    3,769,256 

 

Reclassifications

Reclassifications

 

Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our condensed consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

   

Reclassifications

 

Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

  

Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance

 

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance’s amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The updated guidance, which became effective for fiscal years beginning after December 15, 2021, During the nine months ended September 30, 2022 the Company recognized a deemed dividend of $63,064 from the modification of warrants.

 

Recently Adopted Accounting Guidance

 

In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The updated guidance, which became effective for fiscal years beginning after December 15, 2020, did not have a material impact on the Company’s consolidated financial statements.

 

Recent Accounting Guidance Not Yet Adopted

Recent Accounting Guidance Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. On October 16, 2019, FASB approved a final ASU delaying the effective date of ASU 2016-13 for small reporting companies to interim and annual periods beginning after December 15, 2022. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The Company does not believe the adoption will have a material impact on the Company’s condensed consolidated financial statements. The adoption of the guidance will affect disclosures and estimates around accounts receivable. 

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. ASU 2020-06 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

 

In July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. 

Recent Accounting Guidance Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021, and interim periods within those annual periods and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. This guidance is effective for annual periods after December 15, 2021, including interim periods within those annual periods. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

 

In July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. 

Equity Method Investments  

Equity Method Investments

 

Investments in unconsolidated entities over which we have significant influence are accounted for under the equity method of accounting. Under the equity method of accounting, the Company does not consolidate the investment’s financial statements within its consolidated financial statements. Equity method investments are initially recorded at cost, then our proportional share of the underlying net income or loss is recorded as equity in net loss from equity method investments in our statement of operations, with a corresponding increase or decrease to the carrying value of the investment. Distributions received from the investee reduce our carrying value of the investment and are recorded in the consolidated statements of cash flows using the cumulative earnings approach. These investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. There were indicators of impairment related to our equity method investments for the year ended December 31, 2021. During the year ended December 31, 2021, the Company recorded an impairment charge of $487,365 for investments.

Income Taxes  

Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 

 

During the year ended December 31, 2021 and 2020, we recognized a $275,213 and $507,242 respectively, benefit for research and development tax credits in other income on the Statements of Comprehensive Income (Loss). The tax credits were claimed on our previous Australian tax returns and were based upon a research and development costs paid to an Australian company.

 

Investments  

Investments

 

Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.

 

The Company accounts for its investments in available-for-sale debt securities, in accordance with sub-topic 320-10 of the FASB ASC (“Sub-Topic 320-10”). Accrued interest on these securities is included in fair value and amortized cost.

 

Pursuant to Paragraph 320-10-35, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized.

 

The Company follows FASB ASC 320-10-35 to assess whether an investment in debt securities is impaired in each reporting period. An investment in debt securities is impaired if the fair value of the investment is less than its amortized cost. If the Company intends to sell the debt security (that is, it has decided to sell the security), an other-than-temporary impairment shall be considered to have occurred. If the Company more likely than not will be required to sell the security before recovery of its amortized cost basis or it otherwise does not expect to recover the entire amortized cost basis of the security, an other-than-temporary impairment shall be considered to have occurred. The Company considers the expected cash flows from the investment based on reasonable and supportable forecasts as well as several other factors to estimate whether a credit loss exists. If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date.

 

The following table sets forth a summary of the changes in marketable securities - available-for-sale debt securities that are measured at fair value on a recurring basis:

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020           - 
Purchase of marketable securities  $210,000 
Interest due at maturity   4,829 
Other than temporary impairment   (50,000)
Conversion of marketable securities   (102,096)
As of December 31, 2020   62,733 
Purchase of marketable securities   - 
Interest due at maturity   - 
Other than temporary impairment   (62,733)
Conversion of marketable securities   - 
December 31, 2021  $- 

We invest in debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of December 31, 2021, all of our investments had maturities between one and three years. The marketable debt security investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. During the years ended December 31, 2021 and 2020, the Company recognized a $62,733 and $50,000 respectively from the impairment of the debt security.

 

The following table sets forth a summary of the changes in equity investments, at cost that are measured at fair value on a non-recurring basis: 

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020  $- 
Purchase of equity investments   115,000 
Conversion of marketable securities   102,096 
As of December 31, 2020   217,096 
Purchase of equity investments   150,000 
Other than temporary impairment   (102,096)
Conversion to equity method investments   (215,000)
As of December 31, 2021  $50,000 

  

The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.

 

The Company performed a qualitative assessment considering impairment indicators to evaluate whether these investments were impaired. Impairment indicators that the Company considered included the following: a) a significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee; b) a significant adverse change in the regulatory, economic or technology environment of the investee; c) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; d) a bona fide offer to purchase or an offer by the investee to sell the investment; e) factors that raise significant concerns about the investee’s ability to continue as a going concern. During the year ended December 31, 2021 the Company recognized a $102,096 impairment of the equity security.

 

v3.22.4
Significant Accounting Policies and Practices (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Accounting Policies [Abstract]    
Schedule of consolidated subsidiaries and/or entities
Name of combined affiliate   State or other
jurisdiction of
incorporation
or organization
  Company
Ownership
Interest
 
Jerrick Ventures LLC   Delaware     100 %
Abacus Tech Pty Ltd   Australia     100 %
Brave Foods, LLC   Brave Foods, LLC     100 %
Denver Bodega, LLC   Colorado     100 %
Dune Inc.   Delaware     50 %
Plant Camp LLC   Delaware     89 %
OG Collection, Inc.   Delaware     100 %
OG Gallery, LLC   Delaware     100 %
Orbit Media LLC   New York     51 %
WHE Agency, Inc.   Delaware     44 %

  

Name of combined affiliate   State or other
jurisdiction of
incorporation
or organization
  Company
Ownership
Interest
 
Jerrick Ventures LLC   Delaware   100 %
Abacus Tech Pty Ltd   Australia     100 %
Seller’s Choice, LLC   New Jersey     100 %
Recreatd, LLC   Delaware     100 %
Give, LLC   Delaware     100 %
Creatd Partners LLC   Delaware     100 %
Dune Inc.   Delaware     50 %
Plant Camp LLC   Delaware     89 %
Sci-Fi Shop, LLC   Delaware     100 %
OG Collection LLC   Delaware     100 %
VMENA LLC   Delaware     100 %
Vocal For Brands, LLC   Delaware     100 %
Vocal Ventures LLC   Delaware     100 %
What to Buy, LLC   Delaware     100 %
WHE Agency, Inc.   Delaware     44 %

 

Schedule of relevant assets and liabilities that are measured at fair value on recurring basis
   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                
Marketable securities - equity securities  $96   $96   $
       -
   $
       -
 
Total assets  $96   $96   $
-
   $
-
 

 

   Total   Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                                            
Marketable securities - debt securities  $62,733   $-   $-   $62,733 
Total assets  $62,733   $-   $-   $62,733 
                     
Liabilities:                    
Derivative liabilities  $42,231   $-   $-   $42,231 
Total Liabilities   42,231   $-   $-   $42,231 

 

    Total     Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
    Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
Assets:                                
Marketable securities - debt securities   $     -     $        -     $         -     $         -  
Total assets   $ -     $ -     $ -     $ -  
                                 
Liabilities:                                
Derivative liabilities   $ -     $ -     $ -     $ -  
Total Liabilities     -     $ -     $ -     $ -  

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)
   Significant
Unobservable
Inputs
(Level 3)
 
Assets:                
Equity investments, at cost  $50,000   $       -   $         -   $50,000 
Total assets  $50,000   $-   $-   $50,000 

 

    Total     Quoted
Prices
in Active
Markets for
Identical
Assets or
Liabilities
(Level 1)
    Quoted
Prices
for Similar
Assets or
Liabilities in
Active
Markets
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
Assets:                        
Equity investments, at cost   $ 217,096     $              -     $              -     $ 217,096  
                                 
Total assets   $ 217,096     $ -     $ -     $ 217,096  

 

Schedule of property and equipment estimated useful lives
   Estimated
Useful Life
(Years)
 
     
Computer equipment and software  3 
Furniture and fixtures  5 

 

    Estimated
Useful Life
(Years)
     
Computer equipment and software   3
Furniture and fixtures   5

 

Schedule of amortization over the next five years
Twelve months ending September 30,
     
2023  $415,215 
2024   443,236 
2025   280,223 
2026   260,935 
2027   239,934 
Thereafter   739,762 
Total   2,379,305 
      
Intangible assets not subject to amortization   157,294 
Total Intangible Assets  $2,536,599 

 

Twelve months ending December 31,
       
2022   $ 493,660  
2023     407,848  
2024     347,936  
2025     231,624  
2026     219,749  
Thereafter     732,024  
Total   $ 2,432,841  

Schedule of changes in marketable securities
   For the
Three Months ended
September 30,
2022
 
   Total 
As of July 1, 2022    $1,383,785 
Goodwill acquired in a business combination   6,682 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

   For the
Nine Months ended
September 30,
2022
 
   Total 
As of January 1, 2022    $1,374,835 
Goodwill acquired in a business combination   15,632 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020 and 2021    $1,035,795 
Goodwill acquired in a business combination   1,374,835 
Impairment of goodwill   (1,035,795)
As of December 31, 2021   1,374,835 

 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020           - 
Purchase of marketable securities  $210,000 
Interest due at maturity   4,829 
Other than temporary impairment   (50,000)
Conversion of marketable securities   (102,096)
As of December 31, 2020   62,733 
Purchase of marketable securities   - 
Interest due at maturity   - 
Other than temporary impairment   (62,733)
Conversion of marketable securities   - 
December 31, 2021  $- 

   For the
years ended
December 31,
2021 and
2020
 
   Total 
As of January 1, 2020  $- 
Purchase of equity investments   115,000 
Conversion of marketable securities   102,096 
As of December 31, 2020   217,096 
Purchase of equity investments   150,000 
Other than temporary impairment   (102,096)
Conversion to equity method investments   (215,000)
As of December 31, 2021  $50,000 

  

Schedule of revenue disaggregated by revenue
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Agency (Managed Services, Branded Content, & Talent Management Services)  $442,867   $555,766   $1,613,924   $1,472,902 
Platform (Creator Subscriptions)   230,212    611,714    1,138,812    1,370,581 
Ecommerce   347,944    4,153    1,237,634    9,679 
Affiliate Sales   1,828    7,619    7,120    23,425 
Other Revenue   
-
    368    
-
    17,803 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

   Years Ended 
   December 31, 
   2021   2020 
Agency (Managed Services, Branded Content, & Talent Management Services)  $2,256,546   $1,100,199 
Platform (Creator Subscriptions)   1,926,135    70,623 
Ecommerce (Tangible products)   90,433    - 
Affiliate Sales   26,453    33,748 
Other Revenue   150    8,300 
   $4,299,717   $1,212,870 

Schedule of revenue recognition
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Products and services transferred over time  $673,079   $1,167,480   $2,752,736   $2,843,483 
Products transferred at a point in time   349,772    12,140    1,244,754    50,907 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

   Years Ended 
   December 31, 
   2021   2020 
Products and services transferred over time  $4,182,681   $1,100,199 
Products and services transferred at a point in time   117,036    112,671 
   $4,299,717   $1,212,870 

Schedule of common stock equivalents
   September 30, 
   2022   2021 
Series E preferred   121    148 
Options   4,408,267    2,327,445 
Warrants   20,429,630    6,558,705 
Convertible notes   32,215,486    228,334 
Totals   57,053,504    9,114,632 

 

   December 31, 
   2021   2020 
Options   2,902,619    541,021 
Warrants   5,658,830    3,228,235 
Totals   8,561,449    3,769,256 

 

Schedule of fair value measurement inputs and valuation methodology  
   Fair Value
As of
December 31,
2021
   Fair Value
As of
December 31,
2020
   Valuation
Methodology
  Unobservable
Inputs
Marketable securities - debt securities  $         -   $62,733   Discounted cash flow analysis  Expected cash flows from the investment
                 
Derivative liabilities  $-   $42,231   Monte Carlo simulations and Binomial model  Risk free rate Expected volatility; Drift rate

 

   Fair Value
As of
December 31,
2021
   Fair Value
As of
December 31,
2020
   Valuation Methodology  Unobservable Inputs
Equity investments, at cost  $       -   $217,096   Qualitative assessment per ASC 321-10-35  Qualitative factors

 

v3.22.4
Inventory (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Schedule of Inventory
    September 30,
2022
    December 31,
2021
 
Raw Materials   $ 82,834     $ -  
Packaging     78,799       2,907  
Finished goods     717,417       103,496  
    $ 879,050     $ 106,403  
  

December 31,

2021

 
Packaging  $2,907 
Finished goods   103,496 
   $106,403 
v3.22.4
Property and Equipment (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Property, Plant and Equipment [Abstract]    
Schedule of property and equipment stated at cost, less accumulated depreciation
   September 30,
2022
   December 31,
2021
 
Computer Equipment  $447,342   $353,880 
Furniture and Fixtures   184,524    102,416 
Leasehold Improvements   47,616    11,457 
    679,482    467,753 
Less: Accumulated Depreciation   (430,519)   (364,814)
   $248,963   $102,939 

 

   December 31,
2021
   December 31,
2020
 
Computer Equipment  $353,880   $284,928 
Furniture and Fixtures   102,416    86,888 
Leasehold Improvements   11,457    - 
    467,753    371,816 
Less: Accumulated Depreciation   (364,814)   (315,558)
   $102,939   $56,258 

v3.22.4
Notes Payable (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Notes Payable [Abstract]    
Schedule of notes payable
   Outstanding
Principal as of
        
   September 30,
2022
   December 31,
2021
   Interest
Rate
   Maturity
Date
Seller’s Choice Note  $-   $660,000    30%  September 2020
The April 2020 PPP Loan Agreement   198,577    198,577    1%  May 2022
The First December 2021 Loan Agreement   47,990    185,655    10%  June 2023
The Second December 2021 Loan Agreement   -    313,979    14%  June 2022
First Denver Bodega LLC Loan   44,008    
-
    5%  March 2025
The Third May 2022 Loan Agreement   16,169    
-
    
-
%  November 2022
The Fourth May 2022 Loan Agreement   30,558    
-
    
-
%  November 2022
The First August 2022 Loan Agreement   129,634    
-
    14%  November 2022
The Second August 2022 Loan Agreement   646,100    
-
    
-
%  January 2023
The First September 2022 Loan Agreement   87,884    
-
    
-
%  September 2023
The Second September 2022 Loan Agreement   848,625    
-
    
-
%  May 2023
The Third September 2022 Loan Agreement   351,964    
-
    
-
%  April 2023
    2,401,509    1,358,211         
Less: Debt Discount   (614,410)   (15,547)        
Less: Debt Issuance Costs   
-
    
-
         
    1,787,099    1,342,664         
Less: Current Debt   (1,758,179)   (1,278,672)        
Total Long-Term Debt  $28,920   $63,992         

 

    Outstanding Principal as of            
    December 31,
2021
    December 31,
2020
    Interest
Rate
    Maturity
Date
Seller’s Choice Note   $ 660,000     $ 660,000       30 %   September 2020
The May 2020 PPP Loan Agreement     -       412,500       1 %   April 2022
The April 2020 PPP Loan Agreement     198,577       282,432       1 %   May 2022
The October 2020 Loan Agreement     -       55,928       14 %   July 2021
The November 2020 Loan Agreement     -       23,716       14 %   May 2021
The February 2021 Loan Agreement     -       -       14 %   July 2021
The July 2021 Loan Agreement     -       -       10 %   October 2022
The First December 2021 Loan Agreement     185,655       -       10 %   June 2023
The Second December 2021 Loan Agreement     313,979       -       14 %   June 2022
      1,358,211       1,434,576              
Less: Debt Discount     (15,547 )     -              
Less: Debt Issuance Costs     -       -              
      1,342,664       1,434,576              
Less: Current Debt     (1,278,672 )     (1,221,539 )            
Total Long-Term Debt   $ 63,992     $ 213,037              

 

v3.22.4
Convertible Notes Payable (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Convertible Notes Payable [Abstract]    
Schedule of convertible notes payable
   Outstanding 
Principal as of
              Warrants granted 
  

September 30,

2022

  

Interest

Rate

  

Conversion

Price

  

Maturity

Date

  Quantity  

Exercise

Price

 
The Second February 2022 Loan Agreement  $112,613    11%   
-
(*)  February-23   
-
    - 
The May 2022 Convertible Loan Agreement   76,814    11%   
-
(*)  May-23   
-
    - 
The May 2022 Convertible Note Offering   4,090,000    18%   2.00(*)  November-22   4,000,000    $3.00 – $6.00 
The July 2022 Convertible Note Offering   2,150,000    18%   2.00(*)  November-22   2,150,000    $3.00 – $6.00 
    6,429,427                        
Less: Debt Discount   (360,854)                       
Less: Debt Issuance Costs   (5,648)                       
    6,062,926                        

 

(*) As subject to adjustment as further outlined in the notes

 

    Outstanding Principal as of                         Warrants granted  
   

December 31,

2021

   

December 31,

2020

   

Interest

Rate

   

Conversion

Price

       

Maturity

Date

  Quantity    

Exercise

Price

 
The September 2020 convertible Loan Agreement   $ -     $ 341,880       12 %     -   (*)      September-21     85,555       5  
The First December 2020 convertible Loan Agreement     -       600,000       12 %     -   (*)      December-21     -       -  
The October 2020 convertible Loan Agreement     -       169,400       6 %     -   (*)      October-21     -       -  
The Second December 2020 convertible Loan Agreement     -       169,400       6 %     -   (*)      December-21     -       -  
The May 2021 Loan     -       -       - %     5.00   (*)      November-22     1,090,908       4.50  
The July 2021 Loan     168,850       -       6 %     -   (*)      July - 22                
      168,850       1,280,680                                          
Less: Debt Discount     (8,120 )     (309,637 )                                        
Less: Debt Issuance Costs     (1,537 )     (73,527 )                                        
              897,516                                          
Less: Current Debt     (159,193 )     (897,516 )                                        
Total Long-Term Debt   $ -     $ -                                          

 

v3.22.4
Related Party (Tables)
12 Months Ended
Dec. 31, 2021
Related Party Transactions [Abstract]  
Schedule of notes payable - related party
   Outstanding Principal as of          Warrants granted 
   December 31,
2021
   December 31,
2020
   Interest
Rate
   Maturity
Date
  Quantity   Exercise
Price
 
The September 2020 Goldberg Loan Agreement   
            -
    16,705           7%  September 2022   
      -
    
       -
 
The September 2020 Rosen Loan Agreement   
-
    3,295    7%  September 2022   
-
    
-
 
    
-
    20,000                   
Less: Debt Discount   
-
    (17,068)                  
    
-
    2,932                   
Less: Current Debt   
-
    (2,932)                  
   $
-
   $
-
                   

v3.22.4
Derivative Liabilities (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Derivative Liabilities [Abstract]    
Schedule of changes in the derivative liabilities
   Nine Months Ended
September 30, 2022
 
   Level 1   Level 2   Level 3 
Derivative liabilities as January 1, 2022  $
   -
   $
     -
   $
-
 
Addition   
-
    
-
    100,532 
Changes in fair value   
-
    
-
    (3,729)
Extinguishment   
-
    
-
    (96,803)
Derivative liabilities as September 30, 2022  $
-
   $
-
   $
-
 
   Years Ended
December 31, 2021 and 2020
 
   Level 1   Level 2   Level 3 
Derivative liabilities as January 1, 2020  $
-
   $
-
   $
-
 
Addition   
-
    
-
    3,061,688 
Changes in fair value   
-
    
-
    (3,019,457)
Derivative liabilities as January 1, 2021   
-
    
-
    42,231 
Addition   
-
    
-
    417,241 
Extinguishment   
-
    
-
    (431,458)
Conversion to Note payable - related party   
-
    
-
    (1,124,301)
Changes in fair value   
-
    
-
    1,096,287 
Derivative liabilities as December 31, 2021  $
-
   $
-
   $
-
 
v3.22.4
Stockholders’ Equity (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Stockholders’ Equity (Tables) [Line Items]    
Schedule of assumption granted warrants
   September 30,
2022
 
Exercise price  $1.10 – 1.90 
Expected dividends   0%
Expected volatility   165.38% – 166.48%
Risk free interest rate   2.69% – 2.95%
Expected life of option   5 years 

 

   September 30,
2021
 
Exercise price  $2.55 – 14.10 
Expected dividends   0%
Expected volatility   194.39% – 242.98%
Risk free interest rate   0.46% – 0.98%
Expected life of option   5 - 7 years 

 

   September 30,
2021
 
Exercise price    $4.50 – 4.95 
Expected dividends   0%
Expected volatility    237.14% - 237.68 % 
Risk free interest rate    0.82% - 0.86 % 
Expected life of warrant   5 years 
      

 

   September  30,
2022
 
Exercise price   $0.20 – 6.00 
Expected dividends   0%
Expected volatility   164.34% - 169.75% 
Risk free interest rate   2.81% – 4.00% 
Expected life of warrant   5.00 – 5.50 years 

  

 
Schedule of the stock option activity
   Options   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (in years)
 
Balance – December 31, 2020 – outstanding   541,021    12.75    3.27 
Granted   1,850,588    6.32    6.20 
Exercised   
-
    
-
    - 
Forfeited/Cancelled   (64,164)   13.06    - 
Balance – September 30, 2021 – outstanding   2,327,445    7.63    4.29 
Balance – September 30, 2021 – exercisable   608,524    12.75    3.75 

 

   Options   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (in years)
 
Balance – January 1, 2022 – outstanding   2,902,619    7.07    4.71 
Granted   1,940,000    1.38    
-
 
Exercised   
-
    
-
    
-
 
Forfeited/Cancelled   (434,352)   13.56    
-
 
Balance – September 30, 2022 – outstanding   4,408,267    3.93    4.43 
Balance – September 30, 2022 – exercisable   3,010,101    4.12    4.32 

 

   Options   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (in years)
 
Balance – January 1, 2020 – outstanding   303,825    24.48    2.51 
Granted   391,853    8.55    5.67 
Exercised   
-
    
-
    
-
 
Cancelled/Modified   (154,657)   25.17    
-
 
Balance – December 31, 2020 – outstanding   541,021    12.75    4.29 
Balance – December 31, 2020 – exercisable   149,168    23.77    1.75 
                
Balance – December 31, 2020 – outstanding   541,021    12.75    3.27 
Granted   2,425,762    5.97    5.91 
Exercised   
-
    
-
    
-
 
Forfeited/Cancelled   (64,164)   13.06    
-
 
Balance – December 31, 2021 – outstanding   2,902,619    7.07    4.71 
Balance – December 31, 2021 – exercisable   1,165,191    9.01    4.12 

 

Schedule of option outstanding and option exercisable
Option Outstanding   Option Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life
(in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Remaining
Contractual
Life
(in years)
 
$3.93    4,408,267        4.43       4.12    3,010,101    4.32 

  

Option Outstanding   Option Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life (in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Remaining
Contractual
Life (in years)
 
$7.07    2,902,619    4.71    9.01    1,165,191    4.12 

 

Schedule of warrant activity
   Warrant   Weighted
Average
Exercise
Price
 
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Granted   1,881,267    5.63 
Exercised   (1,438,788)   4.59 
Forfeited/Cancelled   (14,722)   24.00 
Balance – September 30, 2021 – outstanding   6,558,705    4.92 
Balance – September 30, 2021 – exercisable   6,558,705   $4.92 

 

   Warrant   Weighted
Average
Exercise
Price
 
Balance – January 1, 2022 – outstanding   5,658,830    4.98 
Granted   14,812,262    2.29 
Exercised   
-
    
-
 
Forfeited/Cancelled   (41,462)   12.00 
Balance – September 30, 2022 – outstanding   20,429,630    1.88 
Balance – September 30, 2022 – exercisable   16,429,630   $2.62 

 

Warrants Outstanding   Warrants Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life (in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Exercise
Price
 
$4.98    5,658,830    3.80    4.97    5,616,330    3.79 

 

Schedule of warrants outstanding and warrants exercisable
Warrants Outstanding   Warrants Exercisable 
Exercise price   Number
Outstanding
   Weighted
Average
Remaining
Contractual
Life
(in years)
   Weighted
Average
Exercise
Price
   Number
Exercisable
   Weighted
Average
Exercise
Price
 
$1.88    20,429,630    4.07    2.62    16,429,630    3.81 

   

 
Schedule of activity related to RSUs  
Restricted stock units (RSUs)   Total
shares
    Grant date
fair value
 
RSAs non-vested at January 1, 2021     -     $ -  
RSAs granted     112,010     $ 2.71 – 4.32  
RSAs vested     -     $ -  
RSAs forfeited     (13,927 )   $ 3.75 – 4.32  
RSAs non-vested December 31, 2021     98,083     $ 2.71 – 4.32  

 

Options [Member]    
Stockholders’ Equity (Tables) [Line Items]    
Schedule of assumption granted warrants  
   December 31,
2021
   December 31,
2020
 
Exercise price   $ 2.09 - 4.89       $ 8.55 
Expected dividends   0%    0% 
Expected volatility   169.78 – 242.98%    229.95% 
Risk free interest rate   0.46 – 1.26%    0.25% 
Expected life of option   5 - 7 years      5.67 years   

 

Warrant [Member]    
Stockholders’ Equity (Tables) [Line Items]    
Schedule of assumption granted warrants  
    December 31,  
2021
    December 31,
2020
  
 
Exercise price   $ 4.50 – 5.40     $ 4.50 - 18.00  
Expected dividends     0 %     0 %
Expected volatility     232.10% - 237.14 %     234.03% - 247 %
Risk free interest rate     0.82% - 0.89 %     0.21% - 1.63 %
Expected life of warrant     5 – 5.5 years       5 years  

 

Schedule of the stock option activity  
   Warrant   Weighted
Average
Exercise
Price
 
Balance – January 1, 2020 – outstanding   247,403    15.75 
Granted   5,921,071    4.70 
Exercised   
-
    
-
 
Cancelled/Modified   (37,526)   13.31 
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Balance – December 31, 2020 – exercisable   3,228,235    5.37 
           
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Granted   1,961,267    5.60 
Exercised   (2,414,218)   4.55 
Forfeited/Cancelled   (19,167)   24.00 
Balance – December 31, 2021 – outstanding   5,658,830    4.98 
Balance – December 31, 2021 – exercisable   5,616,330   $4.97 

 

v3.22.4
Commitments and Contingencies (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]    
Schedule of components of lease expense
   Three Months
Ended
September 30,
2022
 
Operating lease cost  $148,446 
Short term lease cost   5,568 
Total net lease cost  $154,015 

 

   Nine Months
Ended
September 30,
2022
 
Operating lease cost  $241,601 
Short term lease cost   154,108 
Total net lease cost  $395,709 

 

 
Schedule of supplemental cash flow and other information related to leases
   Nine Months
Ended
September 30,
2022
 
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments   54,564 
Weighted average remaining lease term (in years):   3.40 
Weighted average discount rate:   12.50%

  

   Year
Ended
December 31,
2021
 
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments  $100,100 
Weighted average remaining lease term (in years):   0.17 
Weighted average discount rate:   0%

 

Schedule of future minimum payments required under the lease
For the Twelve Months Ended September 30,     Operating
Leases
 
2023     $  534,880  
2024        541,905  
2025        513,507  
2026        528,589  
2027        544,122  
Thereafter        892,399  
Total lease payments        3,555,402  
Less: Amounts representing interest        (1,140,416 )
Total lease obligations       2,414,986  
Less: Current        (279,593 )
      $ 2,135,393  

 

 
Schedule of components of lease expense  
   Year
Ended
December 31,
2021
 
Operating lease cost  $202,804 
Short term lease cost   14,041 
Total net lease cost  $216,845 

 

v3.22.4
Acquisitions (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Asset Acquisition [Abstract]    
Schedule of components of the purchase price
Purchase price:    
Cash paid to seller  $1 
Total purchase price   1 
      
Assets acquired:     
Cash   44,977 
Accounts Receivable   2,676 
Inventory   194,365 
Total assets acquired   242,018 
      
Liabilities assumed:     
Accounts payable and accrued expenses   127,116 
Notes payable   293,888 
Total liabilities assumed   421,004 
      
Net liabilities acquired   (178,986)
      
Excess purchase price  $178,987 

  

Purchase price:    
Cash paid to seller  $44,000 
Shares granted to seller   40,994 
Total purchase price   84,994 
      
Net Assets acquired   - 
      
Non-controlling interest in consolidated subsidiary   81,661 
      
Excess purchase price  $166,655 

  

Purchase price:    
Cash paid to seller  $150,000 
Total purchase price   150,000 
      
Assets acquired:     
Cash   73,344 
Inventory   86,154 
Total assets acquired   159,498 
      
Liabilities assumed:     
Accounts payable and accrued expenses   1,316 
Notes payable   75,000 
Total liabilities assumed   76,316 
      
Net assets acquired   83,182 
      
Excess purchase price  $66,818 

  

Purchase price:    
Cash paid to seller  $300,000 
Fair value of equity investment purchased on June 1, 2021   175,000 
Total purchase price   475,000 
      
Assets acquired:     
Cash   5,232 
Accounts Receivable   7,645 
Inventory   19,970 
Total assets acquired   32,847 
      
Liabilities assumed:     
Accounts payable and accrued expenses   5,309 
Deferred Revenue   671 
Total liabilities assumed   5,980 
      
Net assets acquired   26,867 
      
Non-controlling interest in consolidated subsidiary   56,865 
      
Excess purchase price  $504,998 

 

Goodwill  $7,198 
Trade Names & Trademarks   100,000 
Know-How and Intellectual Property   316,500 
Website   51,300 
Customer Relationships   30,000 
      
Excess purchase price  $504,998 

 

Purchase price:    
Cash paid to seller  $144,750 
Shares granted to seller   893,521 
Total purchase price   1,038,271 
      
Assets acquired:     
Cash   26,575 
Accounts Receivable   446,272 
Total assets acquired   472,847 
      
Liabilities assumed:     
Accounts payable and accrued expenses   353,017 
Total liabilities assumed   353,017 
      
Net assets acquired   119,830 
      
Non-controlling interest in consolidated subsidiary   1,190,000 
      
Excess purchase price  $2,108,442 

 

Goodwill  $1,349,697 
Trade Names & Trademarks   85,945 
Non-Compete Agreements   45,190 
Influencers / Customers   627,610 
      
Excess purchase price  $2,108,442 

 

Purchase price:    
Shares granted to seller  $424,698 
Fair value of equity investment purchased before October 4, 2021   307,665 
Total purchase price   732,363 
      
Assets acquired:     
Cash   186,995 
Inventory   47,250 
Total assets acquired   234,246 
      
Liabilities assumed:     
Accounts payable   40,000 
Total liabilities assumed   40,000 
      
Net assets acquired   194,246 
      
Non-controlling interest in consolidated subsidiary   720,581 
      
Excess purchase price  $1,258,698 

 

Goodwill  $17,941 
Trade Names & Trademarks   249,248 
Know-How and Intellectual Property   788,870 
Website   127,864 
Customer Relationships   74,774 
      
Excess purchase price  $1,258,698 

 

Schedule of excess purchase price amounts
Goodwill  $8,950 
Trade Names & Trademarks   8,949 
Know-How and Intellectual Property   107,392 
Website   8,949 
Customer Relationships   44,747 
      
Excess purchase price  $178,987 

 

Know-How and Intellectual Property  $166,655 
      
Excess purchase price  $166,655 

 

Goodwill  $6,683 
Trade Names & Trademarks   16,704 
Know-How and Intellectual Property   16,704 
Website   16,704 
Customer Relationships   10,023 
      
Excess purchase price  $66,818 

 

 
Schedule of unaudited pro-forma combined results of operations
   Three Months
Ended
 
   September 30, 
   2021 
Revenues  $3,429,748 
Net loss attributable to common shareholders  $(25,735,007)
Net loss per share  $(2.17)
Weighted average number of shares outstanding   11,845,229 

 

   Three Months Ended 
   September 30, 
   2022 
Revenues  $4,057,080 
Net loss attributable to common shareholders  $(9,425,313)
Net loss per share  $(0.45)
Weighted average number of shares outstanding   21,087,764 

 

   Nine  Months
Ended
 
   2021 
Revenues  $5,069,181 
Net loss attributable to common shareholders  $(26,428,192)
Net loss per share  $(2.23)
Weighted average number of shares outstanding   11,845,229 

 

  

 

Nine  Months
Ended

 
   2022 
Revenues  $4,683,843 
Net loss attributable to common shareholders  $(24,217,030)
Net loss per share  $(1.23)
Weighted average number of shares outstanding   19,726,987 
   Year Ended 
   December 31, 
   2021 
Revenues  $4,335,593 
Net loss attributable to common shareholders  $(37,822,820)
Net loss per share  $(2.99)
Weighted average number of shares outstanding   12,652,470 

 

   Year Ended
December 31,
2020
 
Revenues  $1,213,430 
Net loss attributable to common shareholders  $(27,476,400)
Net loss per share  $(5.71)
Weighted average number of shares outstanding   4,812,153 

 

   Year Ended 
   December 31, 
   2021 
Revenues  $4,916,777 
Net loss attributable to common shareholders  $(37,707,250)
Net loss per share  $(2.98)
Weighted average number of shares outstanding   12,652,470 

 

   Year Ended 
   December 31, 
   2020 
Revenues  $1,685,336 
Net loss attributable to common shareholders  $(27,235,057)
Net loss per share  $(5.66)
Weighted average number of shares outstanding   4,812,153 

 

   Year Ended 
   December 31, 
   2021 
Revenues  $4,299,717 
Net loss attributable to common shareholders  $(38,265,301)
Net loss per share  $(3.02)
Weighted average number of shares outstanding   12,652,470 

 

   Year Ended 
   December 31, 
   2020 
Revenues  $1,212,870 
Net loss attributable to common shareholders  $(27,382,216)
Net loss per share  $(5.69)
Weighted average number of shares outstanding   4,812,153 
v3.22.4
Segment Information (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Segment Reporting [Abstract]    
Schedule of reportable segments and corporate
   As of September 30, 2022 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Accounts receivable, net  $
-
   $4,973   $217,210   $
-
   $222,183 
Prepaid expenses and other current assets   43,336    
-
    
-
    96,390    139,726 
Deposits and other assets   576,551    
-
    
-
    192,585    769,136 
Intangible assets   162,489    1,568,347    648,469    157,294    2,536,599 
Goodwill   
-
    15,632    1,349,696    
-
    1,365,328 
Inventory   
-
    879,050    
-
    
-
    879,050 
All other assets   
-
    
-
    
-
    2,811,769    2,811,769 
Total Assets  $782,376   $2,468,002   $2,215,375   $3,258,038   $8,723,791 
                          
Accounts payable and accrued liabilities  $1,365   $1,518,544   $68,063   $5,126,634   $6,714,606 
Note payable, net of debt discount and issuance costs   129,634    170,365    
-
    1,487,100    1,787,099 
Deferred revenue   161,112    -    144,443    
-
    305,555 
All other Liabilities   
-
    
-
    
-
    8,529,992    8,529,992 
Total Liabilities  $292,111   $1,688,909   $212,506   $15,143,726   $17,337,252 

 

   As of December 31, 2021 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Accounts receivable, net  $
-
   $2,884   $334,556   $
-
   $337,440 
Prepaid expenses and other current assets   48,495    
-
    
-
    188,170    236,665 
Deposits and other assets   626,529    
-
    
-
    92,422    718,951 
Intangible assets   
-
    1,637,924    783,676    11,241    2,432,841 
Goodwill   
-
    25,139    1,349,696    
-
    1,374,835 
Inventory   
-
    106,403    
-
    
-
    106,403 
All other assets   
-
    
-
    
-
    3,966,124    3,966,124 
Total Assets  $675,024   $1,772,350   $2,467,928   $4,257,957   $9,173,259 
                          
Accounts payable and accrued liabilities  $9,693   $766,253   $6,232   $2,948,362   $3,730,540 
Note payable, net of debt discount and issuance costs   313,979    
-
    
-
    1,028,685    1,342,664 
Deferred revenue   161,112    13,477    59,570    
-
    234,159 
All other Liabilities   
-
    
-
    
-
    177,644    177,644 
Total Liabilities  $484,784   $779,730   $65,802   $4,154,691   $5,485,007 

 

   As of December 31, 2021 
   Creatd Labs   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Accounts receivable, net  $
-
   $2,884   $334,556   $
-
   $337,440 
Prepaid expenses and other current assets   48,495    
-
    
-
    188,170    236,665 
Deposits and other assets   626,529    
-
    
-
    92,422    718,951 
Intangible assets   
-
    1,637,924    783,676    11,241    2,432,841 
Goodwill   
-
    25,139    1,349,696    
-
    1,374,835 
Inventory   
-
    106,403    
-
    
-
    106,403 
All other assets   
-
    
-
    
-
    3,966,124    3,966,124 
Total Assets  $675,024   $1,772,350   $2,467,928   $4,257,957   $9,173,259 
                          
Accounts payable and accrued liabilities  $9,693   $766,253   $6,232   $2,948,362   $3,730,540 
Note payable, net of debt discount and issuance costs   313,979    
-
    
-
    1,028,685    1,342,664 
Deferred revenue   161,112    13,477    59,570    
-
    234,159 
All other Liabilities   
-
    
-
    
-
    177,644    177,644 
Total Liabilities  $484,784   $779,730   $65,802   $4,154,691   $5,485,007 

 

   As of December 31, 2020 
   Creatd Labs   Creatd Partners   Corporate   Total 
                 
Accounts receivable, net  $3,800   $86,555   $
-
   $90,355 
Prepaid expenses and other current assets   19,631    
-
    4,225    23,856 
Intangible assets   
-
    960,611    
-
    960,611 
Goodwill   
-
    1,035,795    
-
    1,035,795 
All other assets   
-
    
-
    8,673,863    8,673,863 
Total Assets  $23,431   $2,082,961   $8,678,088   $10,784,480 
                     
Accounts payable and accrued liabilities  $6,221   $83,964   $2,548,503   $2,638,688 
Note payable, net of debt discount and issuance costs   55,928    
-
    1,165,611    1,221,539 
Deferred revenue   
-
    88,637    
-
    88,637 
All other Liabilities   
-
    
-
    1,390,420    1,390,420 
Total Liabilities  $62,149   $172,601   $5,104,534   $5,339,284 

 

Schedule of financial information related to our reportable segments and corporate
   For the three months ended September 30, 2022 
   Creatd
Labs
   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $291,414   $316,654   $414,783   $
-
   $1,022,851 
Cost of revenue   564,349    502,396    337,817    
-
    1,404,562 
Gross margin (loss)   (272,935)   (185,742)   76,966    
-
    (381,711)
                          
Research and development   139,997    
-
    94,968    
-
    234,965 
Marketing   370,584    234,760    41,176    
-
    646,520 
Stock based compensation   122,964    111,472    126,654    265,478    626,568 
General and administrative not including depreciation, amortization, or Impairment   90,212    476,386    384,365    3,136,092    4,087,055 
Depreciation and amortization   1,489    43,001    40,917    72,589    157,996 
Impairment of intangibles   
-
    85,406    
-
    164,180    249,586 
                          
Total operating expenses  $723,757   $822,618   $647,163   $3,401,570   $5,595,108 
                          
Interest expense   (17,048)   
-
    
-
    (656,647)   (673,694)
All other expenses   
-
    
-
    
-
    (2,875,832)   (2,875,832)
Other expenses, net   (17,048)   
-
    
-
    (3,532,479)   (3,549,526)
                          
Loss before income tax provision  $(1,001,024)  $(1,008,360)  $(570,197)  $(6,946,764)  $(9,526,345)

 

   For the three months ended September 30, 2021 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Net revenue  $565,852   $3,919   $609,849   $-   $1,179,620 
Cost of revenue   849,079    174,438    394,696    -    1,418,213 
                          
Gross margin   (283,227)   (170,519)   215,153    -    (238,593)
                          
Research and development   250,474    60    72,412    -    322,946 
Marketing   1,540,540    -    181,240    90,620    1,812,400 
Stock based compensation   337,026    -    332,531    1,179,579    2,151,900 
General and administrative   386,844    302,764    293,296    1,672,176    2,385,135 
Total operating expenses     2,514,884      32,819      879,479      2,942,375      6,672,381 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(2,802,443)  $(506,162)  $(664,326)  $(5,747,190)  $(9,720,121)

 

   For the Nine months ended September 30, 2022 
   Creatd
Labs
   Creatd
Ventures
   Creatd
Partners
   Corporate   Total 
                     
Net revenue  $1,138,904   $1,237,542   $1,621,044   $-   $3,997,490 
Cost of revenue   1,917,039    1,706,586    1,147,526    -    4,771,151 
Gross margin (loss)   (778,135)   (469,044)   473,518    -    (773,661)
                          
Research and development   408,810    -    277,321    -    686,131 
Marketing   2,301,994    1,458,280    255,777    -    4,016,051 
Stock based compensation   755,284    684,697    777,948    1,630,649    3,848,578 
General and administrative not including depreciation, amortization, or Impairment   242,330    1,279,676    1,032,487    8,401,553    10,956,046 
Depreciation and amortization   4,166    120,282    114,453    203,042    441,943 
Impairment of intangibles   -    87,983    -    169,134    257,117 
                          
Total operating expenses  $3,712,584   $3,630,918   $2,457,986   $10,404,378   $20,205,866 
                          
Interest expense   (34,095)   
-
    -    (673,855)   (707,950)
All other expenses        -    -    (3,424,854)   (3,424,854)
Other expenses, net   (34,095)   
-
    -    (4,098,709)   (4,132,804)
                          
Loss before income tax provision  $(4,524,814)  $(4,099,962)  $(1,984,468)  $(14,503,087)  $(25,112,331)

 

   For the nine months ended September 30, 2021 
   Creatd
Labs
   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $1,388,411   $9,616   $1,496,363   $-   $2,894,390 
Cost of revenue   2,482,848    497,194    1,180,701    -    4,160,743 
Gross margin   (1,094,437)   (487,578)   315,662    -    (1,266,353)
                          
Research and development   549,426    131    158,839    -    708,396 
Marketing   6,842,142    -    804,958    402,479    8,049,579 
Stock based compensation   886,832    796,676    875,004    3,103,877    5,662,389 
General and administrative   900,323    76,381    682,602    3,891,743    5,551,049 
Total operating expenses  $9,178,723   $873,188   $2,521,403   $7,398,099   $19,971,413 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(10,286,156)  $(1,360,766)  $(2,205,741)  $(11,073,171)  $(24,925,834)
   For the year ended December 31, 2021 
   Creatd Labs   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $1,926,374   $90,194   $2,283,149   $
-
   $4,299,717 
Cost of revenue   3,186,240    148,989    1,964,808    
-
    5,300,037 
Gross margin   (1,259,866)   (58,940)   318,341    
-
    (1,000,320)
                          
Research and development   758,293    131    225,104    
-
    983,528 
Marketing   8,182,935    
-
    962,698    481,349    9,626,982 
Stock based compensation   1,727,021    1,560,546    1,884,986    4,488,615    9,661,168 
Impairment of  goodwill   
-
    
-
    1,035,795    
-
    1,035,795 
General and administrative not including depreciation,  amortization, or Impairment   3,918,130    1,665,783    1,600,212    2,791,236    9,975,360 
Depreciation and amortization   
-
    100,633    252,730    44,076    397,440 
Impairment of intangibles   
-
    
-
    688,127    
-
    688,127 
                          
Total operating expenses  $14,586,379   $3,327,093   $6,649,652   $11,803,003   $32,368,400 
                          
Interest expense   (12,706)   
-
    
-
    (359,400)   (372,106)
All other expenses   
-
    
-
    
-
    (3,638,327)   (3,638,327)
Other expenses, net   (12,706)             (3,997,727)   (4,010,433)
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(15,858,951)  $(3,385,888)  $(6,331,311)  $(11,803,003)  $(37,379,153)

 

   For the year ended December 31, 2020 
    Creatd Labs   Creatd Partners   Corporate   Total 
                 
Net revenue  $375,043   $837,827   $
-
   $1,212,870 
Cost of revenue   652,259    842,783    
-
    1,495,042 
Gross margin   (277,216)   (4,956)   
-
    (282,172)
                     
Research and development   227,656    29,775    
-
    257,431 
Marketing   2,426,668    285,490    142,745    2,854,904 
Stock based compensation   1,226,495    1,338,678    4,295,990    6,861,163 
General and administrative not including depreciation,  amortization, or Impairment   2,301,088    939,792    2,592,581    5,858,454 
Depreciation and amortization   
-
    132,768    24,993    157,761 
Impairment of intangibles   
-
    
-
    11,450    11,450 
Total operating expenses  $6,181,907   $2,726,504   $7,067,759   $16,001,163 
                     
Interest expense   (15,828)   
-
    (356,278)   (372,106)
All other expenses   
-
    
-
    (7,557,342)   (7,557,342)
Other expenses, net   (15,828)   
-
    (7,913,620)   (7,929,448)
                     
Loss before income tax provision and equity in net loss from unconsolidated investments  $(6,474,951)  $(2,731,460)  $(14,981,379)  $(24,212,783)

 

v3.22.4
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Schedule of deferred tax assets
   December 31,
2021
   December 31,
2020
 
Net deferred tax assets – Non-current:        
Depreciation  $(70,194)  $(145,749)
Amortization   95,115    21,096 
Stock based compensation   4,369,372    1,653,617 
Expected income tax benefit from NOL carry-forwards   15,073,606    8,780,233 
Less valuation allowance   (19,467,900)   (10,309,197)
Deferred tax assets, net of valuation allowance  $
-
   $
-
 

 

Schedule of federal statutory income tax rate
   For the
Year Ended
December 31,
2021
   For the
Year Ended
December 31,
2020
 
         
Federal statutory income tax rate   21.0%   21.0%
State tax rate, net of federal benefit   7.1%   6.5%
           
Change in valuation allowance on net operating loss carry-forwards   (28.1)%   (27.5)%
           
Effective income tax rate   0.0%   0.0%

 

Schedule of beginning and ending amount of the unrecognized tax benefit
   2021   2020 
Balance at January 1,  $
     -
   $68,000 
Additions based on tax positions relating to the current year   
-
    
-
 
Reductions for tax positions of prior years   
-
    (68,000)
           
Balance at December 31,  $
-
   $
-
 

 

v3.22.4
Organization and Operations (Details) - shares
9 Months Ended 12 Months Ended
Oct. 03, 2021
Aug. 16, 2021
Feb. 05, 2016
Sep. 30, 2022
Dec. 31, 2021
Sep. 13, 2022
Aug. 01, 2022
Mar. 07, 2022
Jul. 20, 2021
Jun. 04, 2021
Sep. 11, 2019
Great Plains Holdings Inc [Member]                      
Organization and Operations (Details) [Line Items]                      
Issuance of common shares for cash (in Shares)     475,000                
Series A Convertible Preferred Stock [Member]                      
Organization and Operations (Details) [Line Items]                      
Issuance of common shares for cash (in Shares)     33,415                
Series B Convertible Preferred Stock [Member]                      
Organization and Operations (Details) [Line Items]                      
Issuance of common shares for cash (in Shares)     8,064                
Lil Marc, Inc [Member]                      
Organization and Operations (Details) [Line Items]                      
Cancelled of common stock (in Shares)       39,091 39,091            
Seller’s Choice [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage                     100.00%
Plant Camp [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage                   89.00%  
WHE Agency [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage                 44.00%    
Ownership voting interest                 55.00%    
Dune, Inc [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage 29.00% 16.00%                  
Ownership voting interest 50.00%                    
Total membership interests percentage 50.00% 21.00%                  
Denver Bodega, LLC [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage               100.00%      
Ownership voting interest               100.00%      
Orbit Media LLC [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage             51.00%        
Ownership voting interest             51.00%        
Brave Foods, LLC [Member]                      
Organization and Operations (Details) [Line Items]                      
Acquired percentage           100.00%          
Ownership voting interest           100.00%          
v3.22.4
Significant Accounting Policies and Practices (Details) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2022
Significant Accounting Policies and Practices (Details) [Line Items]              
Marketable equity securities $ 96   $ 96       $ 96
Other expenses     11,646 $ 0      
Uninsured cash balance 0   0   $ 2,700,000 $ 7,700,000  
Total assets     622,445        
Impairment charge 249,586   $ 257,117        
Weighted average life of the intangible assets     7 years 1 month 6 days   7 years 3 months 3 days    
Amortization expense 94,130 $ 75,069 $ 355,509 $ 143,776      
Goodwill $ 25,139   $ 25,139   $ 1,035,795    
Management fee percentage     20.00%   20.00%    
Revenue percentage 80.00%   80.00%   80.00%    
Fixed fees percentage     20.00%   20.00%    
Contract occur percentage     100.00%   100.00%    
Promotional discounts amount     $ 9.99        
Free trials amount     99        
Deferred revenue $ 305,555   305,555   $ 234,159 88,637  
Deferred revenue 13,512   159,727        
Bad debt expense     124,186   110,805 53,692  
Allowance for doubtful accounts     311,133   186,147 80,509  
Deemed dividend     63,064   410,750    
Other expenses         0 (7,453)  
Cash excess amounts         250,000    
Total assets         675,024    
Impairment charge of investments         688,127 0  
impairment charge of investements         487,365    
Research and development tax         $ 275,213 507,242  
Equity Investments [Member]              
Significant Accounting Policies and Practices (Details) [Line Items]              
Description of investments         Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less.    
Minimum [Member]              
Significant Accounting Policies and Practices (Details) [Line Items]              
Contract amounts for partner and monthly services clients     500   $ 500    
Fixed fees     10,000   10,000    
Branded challenges     10,000   10,000    
Branded articles     2,500   2,500    
Total gross 500   500   500    
Net revenue     $ 100   $ 100    
Affiliate sales percentage     2.00%   2.00%    
Maximum [Member]              
Significant Accounting Policies and Practices (Details) [Line Items]              
Contract amounts for partner and monthly services clients     $ 7,500   $ 7,500    
Fixed fees     110,000   110,000    
Branded challenges     25,000   25,000    
Branded articles     7,500   7,500    
Total gross $ 50,000   50,000   50,000    
Net revenue     $ 20,000   $ 20,000    
Affiliate sales percentage     20.00%   20.00%    
Subscription Arrangement [Member]              
Significant Accounting Policies and Practices (Details) [Line Items]              
Payment related percentage, description         Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are subject to promotional discounts and free trials. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.     
Fair Value, Recurring [Member]              
Significant Accounting Policies and Practices (Details) [Line Items]              
Marketable equity securities         62,733  
Impairment of debt security         62,733 $ 50,000  
Fair Value, Nonrecurring [Member]              
Significant Accounting Policies and Practices (Details) [Line Items]              
Impairment of debt security         $ 102,096    
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of consolidated subsidiaries and/or entities
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Jerrick Ventures LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 100.00% 100.00%
Abacus Tech Pty Ltd [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Australia Australia
Company Ownership Interest 100.00% 100.00%
Brave Foods, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Brave Foods, LLC  
Company Ownership Interest 100.00%  
Denver Bodega, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Colorado  
Company Ownership Interest 100.00%  
Dune Inc. [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 50.00% 50.00%
Plant Camp LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 89.00% 89.00%
OG Collection, Inc. [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware  
Company Ownership Interest 100.00%  
OG Gallery, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware  
Company Ownership Interest 100.00%  
Orbit Media LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization New York  
Company Ownership Interest 51.00%  
WHE Agency, Inc. [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 44.00% 44.00%
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis - USD ($)
Dec. 31, 2022
Dec. 03, 2022
Sep. 30, 2022
Mar. 02, 2022
Mar. 01, 2022
Assets:          
Marketable securities - equity securities $ 96   $ 96    
Total assets $ 96        
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]          
Assets:          
Marketable securities - equity securities         $ 96
Total assets         $ 96
Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) [Member]          
Assets:          
Marketable securities - equity securities        
Total assets        
Significant Unobservable Inputs (Level 3) [Member]          
Assets:          
Marketable securities - equity securities        
Total assets        
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Computer equipment and software [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives [Line Items]    
Property and Equipment, Estimated Useful Life (Years) 3 years 3 years
Furniture and fixtures [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives [Line Items]    
Property and Equipment, Estimated Useful Life (Years) 5 years 5 years
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of amortization over the next five years - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Amortization Over The Next Five Years Abstract    
2023 $ 415,215 $ 407,848
2024 443,236 347,936
2025 280,223 231,624
2026 260,935 219,749
2027 239,934  
Thereafter 739,762 732,024
Total 2,379,305  
Intangible assets not subject to amortization 157,294  
Total Intangible Assets $ 2,536,599 $ 2,432,841
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Changes In Marketable Securities Abstract      
Balance of beginning $ 1,383,785 $ 1,374,835  
Goodwill acquired in a business combination 6,682 15,632  
Impairment of goodwill (25,139) (25,139) $ (1,035,795)
Balance of ending $ 1,365,328 $ 1,365,328 $ 1,374,835
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
Agency (Managed Services, Branded Content, & Talent Management Services) [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 442,867 555,766 1,613,924 1,472,902 2,256,546 1,100,199
Platform (Creator Subscriptions) [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 230,212 611,714 1,138,812 1,370,581 1,926,135 70,623
Ecommerce (Tangible products) [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 347,944 4,153 1,237,634 9,679 90,433
Affiliate Sales [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 1,828 7,619 7,120 23,425 26,453 33,748
Other Revenue [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue $ 368 $ 17,803 $ 150 $ 8,300
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of revenue recognition - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Schedule Of Revenue Recognition Abstract            
Products and services transferred over time $ 673,079 $ 1,167,480 $ 2,752,736 $ 2,843,483 $ 4,182,681 $ 1,100,199
Products transferred at a point in time 349,772 12,140 1,244,754 50,907 117,036 112,671
Revenue recognition $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents - shares
9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 57,053,504 9,114,632
Series E Preferred [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 121 148
Warrants [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 20,429,630 6,558,705
Convertible notes [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 32,215,486 228,334
Options [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 4,408,267 2,327,445
v3.22.4
Going Concern (Details) - USD ($)
$ in Millions
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Going Concern [Abstract]    
Accumulated deficit $ 133.8 $ 109.6
Net cash used in operating activities 13.9 21.1
Net loss $ 25.1 $ 37.3
v3.22.4
Inventory (Details) - Schedule of inventory - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Inventory Abstract    
Raw Materials $ 82,834
Packaging 78,799 2,907
Finished goods 717,417 103,496
Total $ 879,050 $ 106,403
v3.22.4
Property and Equipment (Details) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Abstract]            
Depreciation expense $ 43,546 $ 10,047 $ 67,951 $ 30,141 $ 49,254 $ 31,094
v3.22.4
Property and Equipment (Details) - Schedule of property and equipment stated at cost, less accumulated depreciation - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 679,482 $ 467,753 $ 371,816
Less: Accumulated Depreciation (430,519) (364,814) (315,558)
Property and Equipment, Net 248,963 102,939 56,258
Computer Equipment [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 447,342 353,880 284,928
Furniture and Fixtures [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 184,524 102,416 $ 86,888
Leasehold Improvements [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 47,616 $ 11,457  
v3.22.4
Notes Payable (Details)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 23, 2022
USD ($)
Sep. 22, 2022
USD ($)
Aug. 19, 2022
USD ($)
Aug. 18, 2022
USD ($)
Jun. 17, 2022
USD ($)
May 25, 2022
USD ($)
May 09, 2022
USD ($)
Mar. 22, 2022
USD ($)
Mar. 03, 2022
USD ($)
Feb. 22, 2022
USD ($)
Dec. 14, 2021
USD ($)
Dec. 14, 2021
USD ($)
Apr. 30, 2020
USD ($)
Sep. 11, 2019
USD ($)
Sep. 11, 2019
USD ($)
Sep. 15, 2020
USD ($)
Jun. 25, 2020
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2022
AUD ($)
Sep. 30, 2021
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
AUD ($)
Dec. 31, 2020
USD ($)
Sep. 30, 2022
AUD ($)
Sep. 01, 2022
USD ($)
Aug. 18, 2022
AUD ($)
May 26, 2022
USD ($)
Mar. 07, 2022
USD ($)
Feb. 22, 2022
AUD ($)
Dec. 14, 2021
AUD ($)
Dec. 03, 2021
USD ($)
Jul. 02, 2021
USD ($)
Apr. 09, 2021
USD ($)
Feb. 24, 2021
USD ($)
Feb. 24, 2021
AUD ($)
Nov. 24, 2020
USD ($)
Oct. 06, 2020
USD ($)
Oct. 06, 2020
AUD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2020
AUD ($)
May 04, 2020
USD ($)
Mar. 26, 2020
USD ($)
Mar. 23, 2020
USD ($)
Mar. 11, 2020
Notes Payable (Details) [Line Items]                                                                                            
Promissory note                                 $ 660,000                                               $ 660,000          
Gain on extinguishment of debt                               $ 4,915,327   $ (979,738) $ 137,109 $ (832,482)   $ 423,118 $ 1,025,555   $ (5,586,482)                                          
Interest (in Dollars)                                 $ 139,000 673,694 $ 59,859 707,950   $ 319,290 372,106   $ 1,376,902                                          
Total liabilities                                   $ 17,337,252   $ 17,337,252     $ 5,485,007                                              
Principal repaid, description                                             During the year ended December 31, 2021, the Company repaid $136,597 in principal and was forgiven $275,903 of principal and $3,119 of accrued interest.  During the year ended December 31, 2021, the Company repaid $136,597 in principal and was forgiven $275,903 of principal and $3,119 of accrued interest.                                             
Seller’s Choice Note [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Principal amount                           $ 660,000 $ 660,000                                                              
Notes conversion, description                           The Seller’s Choice Note bears interest at a rate of 9.5% per annum and is payable on March 11, 2020 (the “Seller’s Choice Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts become due. Upon maturity the Company utilized an automatic extension up to 6 months. This resulted in a 5% increase in the interest rate every month the Seller’s Choice Note is outstanding. As of December 31, 2021, the Company was in default on the Seller’s Choice note.                                                                
Promissory note                 $ 799,000                                                                          
Principal amount                 660,000                                                                          
Accrued interest                 139,000                                                                          
Gain on extinguishment of debt                 $ 147,256                                                                          
Interest rate                                   30.00%   30.00%         30.00% 30.00%                                       9.50%
Increase in interest rate                             5.00%                                                              
Accrued interest                                             $ 198,000                                              
Seller’s Choice Note [Member] | Forecast [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Repayment of Cash               $ 799,000                                                                            
The April 2020 PPP Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                         The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020.                   The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020. The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020.                                            
Principal amount                         $ 282,432                                                                  
Accrued interest                                   $ 4,815   $ 4,815                                                    
Accrued interest                                             $ 1,637                                              
The First December 2021 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the First December 2021 Note is June 3, 2023 (the “First December 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First December 2021 Note are due. The maturity date of the First December 2021 Note is June 3, 2023 (the “First December 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First December 2021 Note are due.                                            
Promissory note                                                                 $ 191,975                          
Principal amount                                   137,665   137,665                                                    
Effective interest rate                                                                 9.00%                          
Interest rate                                                                 9.00%                          
Principal repaid                     $ 6,320                                                                      
The Second December 2021 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the Second December 2021 Note is June 30, 2022 (the “Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second December 2021 Loan Agreement are due. The maturity date of the Second December 2021 Note is June 30, 2022 (the “Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second December 2021 Loan Agreement are due.                                            
Promissory note                     $ 329,127 $ 329,127                                       $ 438,096                            
Principal amount                                                   $ 293,499                                        
Accrued interest                                                   22,287                                        
Effective interest rate                     14.00% 14.00%                                       14.00%                            
Maturity days                       60 days                                                                    
Interest (in Dollars)                                         $ 26,115                                                  
Interest rate                     14.00% 14.00%                                       14.00%                            
Accrued interest                                               $ 2,857                                            
The First February 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                   The maturity date of the First February 2022 Note is June 30, 2022 (the “First February 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First February 2022 Loan Agreement are due.                                                                        
Promissory note                   $ 159,223                                         $ 222,540                              
Principal amount                                                   149,089                                        
Accrued interest                                                   $ 8,120                                        
Effective interest rate                   14.00%                                         14.00%                              
Maturity days                   60 days                                                                        
Interest (in Dollars)                                         $ 8,120                                                  
Denver Bodega LLC Notes Payable [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Total liabilities                                                           $ 293,888                                
Repaid amount                                   249,880   249,880                                                    
Principal balance                                   $ 44,088   $ 44,088                                                    
Bears interest                                   5.00%   5.00%           5.00%                                        
Requires payments                                   $ 1,496   $ 1,496                                                    
The First May 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note             $ 693,500                                                                              
Gain on extinguishment of debt   $ 33,115                                                                                        
Effective interest rate             143.00%                                                                              
Cash proceeds             $ 455,924                                                                              
Payments             21,673                                                                              
Debt discount                                   $ 237,576   237,576                                                    
Repaid principal amount                                       390,114                                                    
The Second September 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note   876,000                                                                                        
Principal amount   $ 303,386                                                                                        
Effective interest rate   475.00%                                                                                        
Cash proceeds   $ 272,614                                                                                        
Payments   27,375                                                                                        
Debt discount   300,000                                                                                        
Repaid principal amount                                       27,375                                                    
Loan agreement amount   $ 303,386                                                                                        
New and old debt percentage   10.00%                                                                                        
The Second May 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note             $ 401,500                                                                              
Gain on extinguishment of debt $ 3,905   $ 66,749                                                                                      
Effective interest rate             162.00%                                                                              
Cash proceeds             $ 263,815                                                                              
Payments             14,339                                                                              
Debt discount             $ 137,685                                                                              
Repaid principal amount                                       272,447                                                    
The Third September 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note   $ 365,000                                                                                        
Principal amount   $ 129,053                                                                                        
Effective interest rate   556.00%                                                                                        
Cash proceeds   $ 110,762                                                                                        
Payments   13,036                                                                                        
Debt discount   $ 300,000                                                                                        
Repaid principal amount                                       13,036                                                    
Loan agreement amount $ 129,053   $ 312,400                                                                                      
New and old debt percentage 10.00%   10.00%                                                                                      
The Third May 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note           $ 27,604                                                                                
Effective interest rate           20.00%                                                                                
Payments           $ 3,067                                                                                
Repaid principal amount                                       11,435                                                    
The Fourth May 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note                                                         $ 40,000                                  
Effective interest rate                                                         17.00%                                  
Repaid principal amount                                       9,442                                                    
The June 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note         $ 568,000                                                                                  
Principal amount     $ 312,400                                                                                      
Effective interest rate         217.00%                                                                                  
Cash proceeds         $ 378,000                                                                                  
Payments         28,400                                                                                  
Debt discount         $ 190,000                                                                                  
Repaid principal amount                                       255,600                                                    
The First August 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note       $ 129,634                                               $ 193,500                                    
Accrued interest                                                   $ 2,037                                        
Effective interest rate       14.00%                                               14.00%                                    
Maturity days       60 days                                                                                    
The Second August 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note     $ 923,000                                                                                      
Effective interest rate     704.00%                                                                                      
Cash proceeds     $ 300,100                                                                                      
Payments     46,150                                                                                      
Debt discount     $ 310,500                                                                                      
Repaid principal amount                                       276,900                                                    
The First September 2022 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note                                                     $ 87,884                                      
Effective interest rate                                                     13.00%                                      
Repaid principal amount                                       $ 0                                                    
The First March 2020 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the First March 2020 Note was September 23, 2020 (the “First March 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First March 2020 Note were due. The maturity date of the First March 2020 Note was September 23, 2020 (the “First March 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First March 2020 Note were due.                                            
Promissory note                                                                                         $ 11,000  
Interest rate                                                                                         25.00%  
Principal repaid                                                 $ 11,000                                          
Unpaid interest                                                 2,695                                          
The Second March 2020 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the Second March 2020 Note was September 17, 2020 (the “Second March 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second March 2020 Note were due. The maturity date of the Second March 2020 Note was September 17, 2020 (the “Second March 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second March 2020 Note were due.                                            
Promissory note                                                                                       $ 17,000    
Interest rate                                                                                       19.00%    
Principal repaid                                                 17,000                                          
Unpaid interest                                                 1,398                                          
The May 2020 PPP Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The Loan, which was in the form of a Note dated May 4, 2020, matures on May 4, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on November 4, 2020. The Loan, which was in the form of a Note dated May 4, 2020, matures on May 4, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on November 4, 2020.                                            
Principal amount                                             $ 83,855                                       $ 412,500      
Accrued interest                                             $ 396                                              
The June 2020 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the June 2020 Note was July 31, 2020 (the “June 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2020 Note were due in AUD currency. This loan was secured by the Australian research & development credit. The maturity date of the June 2020 Note was July 31, 2020 (the “June 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2020 Note were due in AUD currency. This loan was secured by the Australian research & development credit.                                            
Promissory note                                                                                 $ 351,692 $ 510,649        
Interest rate                                                                                 15.00% 15.00%        
Principal repaid                                             $ 510,649                                              
Unpaid interest                                             14,814                                              
The October 2020 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Principal amount                                             $ 111,683                                              
Notes conversion, description                                             The maturity date of the October 2020 Note is September 30, 2021 (the “October 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the October 2020 Loan Agreement are due. The loan is secured by the Australian research & development credit.During the year ended December 31, 2021, the Company accrued $4,850 AUD in interest.  During the year ended December 31, 2021, the Company’s repaid $111,683 in principal and $6,408 in interest from our R&D tax credit receivable. The November 2020 Loan Agreement On November 24, 2020, the Company entered into a loan agreement (the “November 2020 Loan Agreement”) with a lender (the “November 2020 Lender”) whereby the November 2020 Lender issued the Company a promissory note of $34,000 (the “November 2020 Note”). Pursuant to the November 2020 Loan Agreement, the November 2020 Note has an effective interest rate of 14%. The maturity date of the November 2020 Note is May 25, 2021 (the “November 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the November 2020 Note are due. During the year ended December 31, 2020, the Company repaid $10,284 in principal. During the year ended December 31, 2021, the Company repaid $23,716 in principal and $4,736 of accrued interest. The February 2021 Loan Agreement On February 24, 2021, the Company entered into a secured loan agreement (the “February 2021 Loan Agreement”) with a lender (the “February 2021 Lender”), whereby the February 2021 Lender issued the Company a secured promissory note of $111,683 AUD or $81,789 United States Dollars (the “February 2021 Note”). Pursuant to the February 2021 Loan Agreement, the February 2021 Note has an effective interest rate of 14%. The maturity date of the February 2021 Note is July 31, 2021 (the “February 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.  The maturity date of the October 2020 Note is September 30, 2021 (the “October 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the October 2020 Loan Agreement are due. The loan is secured by the Australian research & development credit.During the year ended December 31, 2021, the Company accrued $4,850 AUD in interest.  During the year ended December 31, 2021, the Company’s repaid $111,683 in principal and $6,408 in interest from our R&D tax credit receivable. The November 2020 Loan Agreement On November 24, 2020, the Company entered into a loan agreement (the “November 2020 Loan Agreement”) with a lender (the “November 2020 Lender”) whereby the November 2020 Lender issued the Company a promissory note of $34,000 (the “November 2020 Note”). Pursuant to the November 2020 Loan Agreement, the November 2020 Note has an effective interest rate of 14%. The maturity date of the November 2020 Note is May 25, 2021 (the “November 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the November 2020 Note are due. During the year ended December 31, 2020, the Company repaid $10,284 in principal. During the year ended December 31, 2021, the Company repaid $23,716 in principal and $4,736 of accrued interest. The February 2021 Loan Agreement On February 24, 2021, the Company entered into a secured loan agreement (the “February 2021 Loan Agreement”) with a lender (the “February 2021 Lender”), whereby the February 2021 Lender issued the Company a secured promissory note of $111,683 AUD or $81,789 United States Dollars (the “February 2021 Note”). Pursuant to the February 2021 Loan Agreement, the February 2021 Note has an effective interest rate of 14%. The maturity date of the February 2021 Note is July 31, 2021 (the “February 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.                                             
Promissory note                                                                             $ 54,412 $ 74,300            
Interest rate                                                                             14.00% 14.00%            
Accrued interest                                               $ 4,850                                            
Unpaid interest                                             $ 6,408                                              
The November 2020 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Promissory note                                                                           $ 34,000                
Interest rate                                                                           14.00%                
Accrued interest                                             4,736                                              
Principal repaid                                             $ 23,716   $ 10,284                                          
The February 2021 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the February 2021 Note is July 31, 2021 (the “February 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit. The maturity date of the February 2021 Note is July 31, 2021 (the “February 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.                                            
Promissory note                                                                       $ 81,789 $ 111,683                  
Interest rate                                                                       14.00% 14.00%                  
Accrued interest                                               $ 9,339                                            
The April 2021 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the April 2021 Note is October 8, 2022 (the “April 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the April 2021 Note are due. The maturity date of the April 2021 Note is October 8, 2022 (the “April 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the April 2021 Note are due.                                            
Promissory note                                                                     $ 128,110                      
Interest rate                                                                     11.00%                      
Principal repaid                                             $ 92,140                                              
Converted amount                                             35,970                                              
Extinguishment expense                                             $ 8,341                                              
The July 2021 Loan Agreement [Member]                                                                                            
Notes Payable (Details) [Line Items]                                                                                            
Notes conversion, description                                             The maturity date of the July 2021 Note is December 31, 2022 (the “July 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the July 2021 Note are due. The maturity date of the July 2021 Note is December 31, 2022 (the “July 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the July 2021 Note are due.                                            
Promissory note                                                                   $ 137,625                        
Interest rate                                                                   10.00%                        
Principal repaid                                             $ 113,606                                              
Converted amount                                             24,019                                              
Extinguishment expense                                             $ 7,109                                              
v3.22.4
Notes Payable (Details) - Schedule of notes payable - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Mar. 11, 2020
Debt Instrument [Line Items]        
Outstanding principal, Total $ 2,401,509 $ 1,358,211 $ 1,434,576  
Less: Debt Discount (614,410) (15,547)    
Less: Debt Issuance Costs  
Outstanding Principal, Total 1,787,099 1,342,664 1,434,576  
Less: Current Debt (1,758,179) (1,278,672) (1,221,539)  
Total Long-Term Debt 28,920 63,992 213,037  
The April 2020 PPP Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 198,577 198,577 $ 282,432  
Interest Rate 1.00%   1.00%  
Maturity Date May 2022   May 2022  
The First December 2021 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 47,990 185,655  
Interest Rate 10.00%   10.00%  
Maturity Date June 2023   June 2023  
The Second December 2021 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total   313,979    
Interest Rate 14.00%      
Maturity Date June 2022      
First Denver Bodega LLC Loan [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 44,008    
Interest Rate 5.00%      
Maturity Date March 2025      
The Third May 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 16,169    
Interest Rate      
Maturity Date November 2022      
The Fourth May 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 30,558    
Interest Rate      
Maturity Date November 2022      
The First August 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 129,634    
Interest Rate 14.00%      
Maturity Date November 2022      
The Second August 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 646,100    
Interest Rate      
Maturity Date January 2023      
The First September 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 87,884    
Interest Rate      
Maturity Date September 2023      
The Second September 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 848,625    
Interest Rate      
Maturity Date May 2023      
The Third September 2022 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total $ 351,964    
Interest Rate      
Maturity Date April 2023      
Seller’s Choice Note [Member]        
Debt Instrument [Line Items]        
Outstanding principal, Total   $ 660,000 $ 660,000  
Interest Rate 30.00%   30.00% 9.50%
Maturity Date September 2020   September 2020  
v3.22.4
Convertible Notes Payable (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 07, 2022
Oct. 25, 2021
May 14, 2021
Dec. 09, 2020
Oct. 31, 2020
Jul. 06, 2020
Jul. 01, 2020
Feb. 11, 2020
Sep. 15, 2022
Jul. 31, 2022
May 31, 2022
May 20, 2022
Feb. 22, 2022
Jun. 19, 2021
Sep. 23, 2020
Sep. 15, 2020
Feb. 25, 2020
Nov. 30, 2019
Mar. 31, 2018
Feb. 28, 2018
Sep. 30, 2022
Dec. 31, 2021
Sep. 30, 2021
Dec. 31, 2020
Sep. 30, 2020
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Sep. 02, 2022
Jul. 31, 2021
Jul. 06, 2021
Aug. 17, 2020
Jul. 31, 2020
Jul. 17, 2020
Jul. 13, 2020
Jun. 30, 2020
Jun. 25, 2020
Apr. 30, 2020
Feb. 04, 2020
Jul. 17, 2018
Convertible Notes Payable (Details) [Line Items]                                                                                      
Conversion shares percentage         75.00%                                                                            
Debt discount                                           $ 113,481           $ 113,481                              
Derivative liability                                               $ 42,231         $ 42,231                            
Debt discount                                           84,854           84,854                              
Convertible note                                         $ 1,787,099 $ 1,342,664   1,221,539   $ 1,787,099   $ 1,342,664 1,221,539                            
Common Stock Par Value (in Dollars per share)   $ 0.001 $ 1         $ 1                 $ 1 $ 1     $ 0.001 $ 1       $ 0.001   $ 1               $ 1   $ 0.001       $ 1  
Repaid principal amount                                                   $ 2,292,953 $ 403,843 $ 456,233                              
Gross proceeds $ 2,659,750 $ 3,407,250             $ 796,000                                 354,994                                  
Issuance of warrants (in Shares)                               331,456                       19,950                              
Loss on extinguishment of debt                               $ 4,915,327         $ (979,738)   $ 137,109     (832,482) 423,118 $ 1,025,555 $ (5,586,482)                            
Promissory note                                                                             $ 660,000 $ 660,000      
Exercise price (in Dollars per share) $ 1.75 $ 4.5             $ 0.2             $ 4.5                                                     $ 18
Maturity date, description                                     The Notes mature on the second (2nd) anniversary of their issuance dates.                                                
Received proceeds                                                   2,174,402 321,229 $ 747,937                              
Warrant issued (in Shares)                                                       6,667                              
Converted principal                                     (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $12.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $12.00 per share (“Exercise Price”).                 The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $15.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $18.00 per share (“Exercise Price”).                              
Common stock issued                                         $ 34,950         $ 141,150 226,500 $ 226,500                              
Related debt discount                                             $ (17,068)                                      
Common stock per value (in Dollars per share)                                         $ 0.001 $ 0.001   $ 0.001   $ 0.001   $ 0.001 $ 0.001                            
Converted shares principal (in Shares)                                                       7,278                              
Warrants issued (in Shares)                               258,750         6,150,000         6,150,000                                  
Common Stock [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Principal amount of convertible notes (in Shares)                                                         59,774                            
Common stock issued                                         $ 50         $ 150 $ 50 $ 50                              
The march 2018 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Unpaid interest                                                             $ 51,293                        
Converted principal amount                                                         $ 50,000                            
The July 2021 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Promissory notes           $ 168,850                                                                          
Note accrues interest rate           6.00%                                                     6.00%                    
Common stock, par value (in Dollars per share)           $ 0.001                                                                          
Conversion shares percentage           75.00%                                                                          
Debt discount                                         15,850 $ 15,850       15,850   15,850                              
Debt issuance costs                                         3,000 3,000       3,000   $ 3,000                              
Derivative liability                                         100,532         100,532                                  
Converted of principal amount                                         168,850         168,850                                  
Unpaid interest                                                   $ 4,605                                  
Conversion Shares (in Shares)                                                   109,435                                  
Debt discount                                         96,803         $ 96,803                                  
Promissory note                                                                   $ 168,850                  
Maturity date, description                                                       Upon default or 180 days after issuance the July 2021 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.                               
Accrued interest                                           4,941           $ 4,941                              
The Second February 2022 Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Unpaid interest                         $ 37,425                                                            
Debt discount                                         $ 37,163         37,163                                  
Convertible note                         $ 337,163                                                            
Effective interest rate                         11.00%                                                            
Common Stock Par Value (in Dollars per share)                     $ 0.001                                                                
Conversion shares at percentage                     75.00%                                                                
Repaid principal amount                                                   $ 224,550                                  
Interest of agreement                                         11.00%         11.00%                                  
Price per shares (in Dollars per share) [1]                                                                                  
Warrant issued (in Shares)                                                                                    
The May 2022 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Promissory notes                       $ 115,163                                                              
Debt discount                       $ 15,163                                                              
Effective interest rate                       11.00%                                                              
Common Stock Par Value (in Dollars per share)                       $ 0.001                                                              
Conversion shares at percentage                       75.00%                                                              
Repaid principal amount                                                   $ 38,349                                  
Interest of agreement                                         11.00%         11.00%                                  
Price per shares (in Dollars per share) [1]                                                                                  
Warrant issued (in Shares)                                                                                    
The May 2022 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt issuance costs                                         $ 125,300         $ 125,300                                  
Converted of principal amount                                         900,000         900,000                                  
Unpaid interest                                                   103,670                                  
Debt discount                 $ 75,610   $ 1,895,391                   $ 399,964         399,964                                  
Gross proceeds                     $ 4,000,000                                                                
Conversion Price Per Share (in Dollars per share)                     $ 2                                                                
Issuance of warrants (in Shares)                     4,000,000                                                                
Principal outstanding percentage                                                               110.00%                      
Accrue interest rate percentage                                                               18.00%                      
Conversion price (in Dollars per share)                 $ 0.2                                                                    
Debt percentage                 10.00%                                                                    
Accrued interest                                                   103,670                                  
Repayment of principal                                                   $ 35,714                                  
Interest of agreement                                         18.00%         18.00%                                  
Price per shares (in Dollars per share) [1]                                         $ 2         $ 2                                  
Warrant issued (in Shares)                                                   4,000,000                                  
The May 2022 Convertible Note Offering [Member] | Common Stock [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Common Stock Par Value (in Dollars per share)                     $ 1                                                                
The May 2022 Convertible Note Offering [Member] | Warrant [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Issuance of warrants (in Shares)                     4,000,000                                                                
The May 2022 Convertible Note Offering [Member] | Maximum [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Loss on extinguishment of debt                 $ 737,756                                                                    
The May 2022 Convertible Note Offering [Member] | Minimum [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Loss on extinguishment of debt                 $ 331,861                                                                    
The July 2022 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                   $ 863,792                     $ 214,981         $ 214,981                                  
Gross proceeds                   $ 2,150,000                                                                  
Conversion Price Per Share (in Dollars per share)                   $ 2                                                                  
Issuance of warrants (in Shares)                   2,150,000                                                                  
Principal outstanding percentage                                                               110.00%                      
Accrue interest rate percentage                                                               18.00%                      
Conversion price (in Dollars per share)                 $ 0.2                                                                    
Debt percentage                 10.00%                                                                    
Repayment of principal                                                   $ 714,285                                  
Interest of agreement                                         18.00%         18.00%                                  
Price per shares (in Dollars per share) [1]                                         $ 2         $ 2                                  
Warrant issued (in Shares)                                                   2,150,000                                  
The July 2022 Convertible Note Offering [Member] | Common Stock [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Common Stock Par Value (in Dollars per share)                   $ 1                                                                  
The July 2022 Convertible Note Offering [Member] | Warrant [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Issuance of warrants (in Shares)                   2,150,000                                                                  
The July 2022 Convertible Note Offering [Member] | Maximum [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Loss on extinguishment of debt                 $ 640,521                                                                    
The february 2018 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                       $ 37,350                                              
Debt issuance costs                                     $ 725,000 $ 316,875                                              
Unpaid interest                                                           $ 19,758 86,544                        
Conversion Shares (in Shares)                                       6,041                                              
Issuance of warrants (in Shares)                                     24,223 60,416                                              
Accrued interest                                     $ 40,675                                                
Secured debt                                     250,000                                                
Fair value derivative liability                                     181,139                                                
Convertible secured promissory note, description                                       The February 2018 Convertible Note Offering consisted of a maximum of $750,000 of units of the Company’s securities (each, a “February 2018 Unit” and collectively, the “February 2018 Units”), with each February 2018 Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “February 2018 Convertible Note” and together the “February 2018 Convertible Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“February 2018 Conversion Shares”) at a conversion price of $12.00 per share (the “February 2018 Note Conversion Price”), and (b) a five-year warrant (each a “February 2018 Offering Warrant and together the “February 2018 Offering Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the February 2018 Convertible Notes can be converted into (“February 2018 Warrant Shares”) at an exercise price of $12.00 per share (“February 2018 Warrant Exercise Price”). The February 2018 Offering Notes mature on the second (2nd) anniversary of their issuance dates. The February 2018 Offering Notes are secured by a second priority security interest in the Company’s assets up to $1,000,000.                                               
Placement fees                                       $ 94,250                                              
Conversion share percentage                                                       10.00%                              
Conversion shares fair value                                       $ 74,881                                              
Converted principal amount                                                         75,000   940,675                        
Un paid principal amount                                               $ 781         781                            
The march 2018 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                           254,788           $ 254,788                              
Debt issuance costs                                     770,000                                                
Unpaid interest                                     $ 140,600                   17,949                            
Issuance of warrants (in Shares)                                     15,947                 80,114                              
Accrued interest                                     $ 767                                                
Secured debt                                     50,000                                                
Fair value derivative liability                                     $ 84,087                                                
Convertible secured promissory note, description                                                       (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $12.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $12.00 per share (“Exercise Price”).                              
Converted principal amount                                                             $ 886,367                        
Repaid principal amount                                                         25,000                            
Repaid of interest                                                         9,364                            
The february 2019 convertible note offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                           222,632           $ 222,632                              
Unpaid interest                                                         416,786                            
Repaid principal amount                                                         348,136                            
Issuance of warrants (in Shares)                                                       44,396                              
Convertible secured promissory note, description                                                       The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $15.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $18.00 per share (“Exercise Price”). During the year ended December 31, 2019 a total of 44,396 Warrants were issued in conjunction with The February 2019 Convertible Note Offering.                               
Converted principal amount                                                         1,963,567                            
Repaid of interest                                                         0                            
Promissory note                                               1,993,025         1,993,025                            
The november 2019 convertible note offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                           84,377           $ 84,377                              
Debt issuance costs                                           79,933           79,933                              
Unpaid interest                                                         77,785                            
Convertible note                                                           479,500                          
Converted principal amount                                                         559,433                            
Accounts Payable into offering                                                           $ 318,678                          
Offering discount percentage                                   10.00%                                                  
Exercise price (in Dollars per share)                                   $ 13.5                                                  
Unpaid accrued interest                                   $ 13.5                                                  
Beneficial conversion feature                                                       4,444                              
The january 2020 convertible note offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                           12,473           $ 12,473                              
Unpaid interest                                                         8,275                            
Convertible note                                               87,473         87,473                            
Convertible secured promissory note, description                                                       a 12% Convertible Promissory Note (each a “January 2020 Note” and together, the “January 2020 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $13.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).The January 2020 Notes mature on the first (6th) month anniversary of their issuance dates. If an event of default occurs and is not cured within 30 days of the Company receiving notice, the notes will be convertible at 80% multiplied by the lowest VWAP of the common stock during the five (5) consecutive trading day period immediately preceding the date of the respective conversion, and a default interest rate of 24% will become effective. The Conversion Price of the January 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein. The Company recorded a $12,473 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. During the year ended December 31, 2020, the Company converted $87,473 of principal and $8,275 of unpaid interest into the September 2020 Equity Raise.The First February 2020 Convertible Loan Agreement On February 4, 2020, the Company entered into a loan agreement (the “First February 2020 Loan Agreement”) with an individual (the “First February 2020 Lender”), whereby the First February 2020 Lender issued the Company a promissory note of $85,000 (the “First February 2020 Note”). Pursuant to the First February 2020 Loan Agreement, the First February 2020 Note has interest of ten percent (10%). The First February 2020 Note are convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $12.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”). The First February 2020 Notes mature on the first (6th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the Notes have not been repaid or an event of default occurs as defined in the Notes, the notes will be convertible at the lesser of the fixed conversion price or 65% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion and a default interest rate of 15% will be applied.  The Conversion Price of the First February 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.   The Company recorded a $8,000 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. During the year ended December 31, 2020, the Company repaid $158,065 in principal and $0 in interest. The Second February 2020 Convertible Loan Agreement On February 11, 2020, the Company entered into a loan agreement (the “Second February 2020 Loan Agreement”) with an individual (the “Second February 2020 Lender”), whereby the Second February 2020 Lender issued the Company a promissory note of $200,000 (the “Second February 2020 Note”). Pursuant to the Second February 2020 Loan Agreement, the Second February 2020 Note has interest of twelve percent (12%).  As additional consideration for entering in the Second February 2020 convertible Loan Agreement, the Company issued a five-year warrant to purchase 6,666 shares of the Company’s common stock at a purchase price of $15.00 per share. The Second February 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $13.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).                               
Maturity date, description                                                       The January 2020 Notes mature on the first (6th) month anniversary of their issuance dates. If an event of default occurs and is not cured within 30 days of the Company receiving notice, the notes will be convertible at 80% multiplied by the lowest VWAP of the common stock during the five (5) consecutive trading day period immediately preceding the date of the respective conversion, and a default interest rate of 24% will become effective.                               
Converted principal amount                                                         87,473                            
The first february 2020 convertible loan agreemen [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate                                                                                   10.00%  
Debt discount                                           8,000           $ 8,000                              
Convertible note                                                                                   $ 85,000  
Repayment of principal                                                         158,065                            
Un paid principal amount                                               0         0                            
Maturity date, description                                                       The First February 2020 Notes mature on the first (6th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the Notes have not been repaid or an event of default occurs as defined in the Notes, the notes will be convertible at the lesser of the fixed conversion price or 65% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion and a default interest rate of 15% will be applied.                              
Fixed conversion price per share (in Dollars per share)                                                       $ 12                              
Principal amount of convertible notes                                           1,500,000           $ 1,500,000                              
The second february 2020 convertible loan agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate               12.00%                                                                      
Debt discount                                           33,340           33,340                              
Unpaid interest                                                         0                            
Convertible note               $ 200,000                                                                      
Issuance of warrants (in Shares)               6,666                                                                      
Loss on extinguishment of debt                                                       $ 136,115                              
Converted principal amount                                                         125,000                            
Exercise price (in Dollars per share)               $ 15                                                                      
Maturity date, description                                                       The Second February 2020 Note matures on the first (12th) month anniversary of its issuance date. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Date and the Note is unpaid, the note will be convertible at the lesser of the fixed conversion price or 75% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.                               
Fixed conversion price per share (in Dollars per share)                                                       $ 13.5                              
Principal amount of convertible notes                                           1,500,000           $ 1,500,000                              
Repaid principal amount                                                         175,000                            
Repaid principal interest                                                         0                            
The third february 2020 convertible loan agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate                                 12.00%                                                    
Unpaid interest                                                         100,603                            
Convertible note                                 $ 385,000                                                    
Gross proceeds                                                         350,010                            
Converted principal amount                                 1,500,000                     $ 1,500,000 1,500,000                            
Maturity date, description                                                       The Third February 2020 Note matures on the first (12th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the note is unpaid, the notes will be convertible at the lower of the fixed conversion price or 75% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.                               
Fixed conversion price per share (in Dollars per share)                                                       $ 4.5                              
Received proceeds                                 $ 864,950                                                    
Description of debt instrument                                                       In accordance with ASC 470-50, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the note exchange as described above as a debt extinguishment. The Company recorded a loss on debt extinguishment of $535,041. This represents the fair value of the warrants issued $445,705 and a debt premium of $89,336. The note has an effective interest rate of 24%. The Company recorded a debt discount of $160,714. This is made up of an original issue discount of $250,050 less a debt premium of $89,336.                               
April Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt issuance costs                                           $ 50,010           $ 50,010                              
Common Stock Par Value (in Dollars per share)                                                                                 $ 1    
Converted principal amount                                                         350,010                            
Interest of agreement                                           12.00%           12.00%                              
Price per shares (in Dollars per share)                                                                                 $ 13.5    
Converted principal unpaid interest                                                         16,916                            
June Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt issuance costs                                           $ 67,500           $ 67,500                              
Common Stock Par Value (in Dollars per share)                                                                             $ 1        
Repaid principal amount                                                         490,800                            
Repaid of interest                                                         $ 16,944                            
Promissory note                                           $ 550,000           $ 550,000                              
Exercise price (in Dollars per share)                                           $ 274,578           $ 274,578                              
Interest of agreement                                           12.00%           12.00%                              
Warrant issued (in Shares)                           49,603                           49,603                              
Common stock par value (in Shares)                           11.55                                                          
Converted principal                                                       5,424 $59,200                            
The First July 2020 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate             10.00%                                                                        
Debt discount                                           $ 68,000           $ 68,000                              
Repaid of interest                                                       3,400                              
Principal amount of convertible notes                                           68,000           68,000                              
Principal amount of convertible notes (in Shares)             68,000                                                                        
Derivative liability                                                       112,743                              
Derivative liability                                           $ 44,743           44,743                              
Common stock issued                                                       $ 35,469                              
The Second July 2020 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Common Stock Par Value (in Dollars per share)                                           $ 1           $ 1                              
Repaid principal amount                                                         $ 250,000                            
Repaid of interest                                                         0                            
Promissory note                                                                         $ 250,000            
Interest of agreement                                           12.00%           12.00%                              
Related debt discount                                                       $ 46,750                              
Debt discount related to original issue                                                       $ 71,329                              
The July 2020 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Common Stock Par Value (in Dollars per share)                                           $ 1           $ 1                              
Conversion shares at percentage                                                       61.00%                              
Gross proceeds                                                 $ 390,000                                    
Unpaid accrued interest                                               3,436         $ 3,436                            
Interest of agreement                                           12.00%           12.00%                              
Common stock par value (in Shares)                                                       12.75                              
Converted principal                                                         $390,000                            
Related debt discount                                                       $ 38,215                              
Debt discount related to original issue                                                       $ 158,078                              
Convertible note offering issued (in Shares)                                                       30,589                              
The August 2020 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                           $ 65,000           $ 65,000                              
Derivative liability                                           $ 120,759           $ 120,759                              
Common Stock Par Value (in Dollars per share)                                           $ 1           $ 1                              
Conversion shares at percentage                                                       61.00%                              
Converted principal amount                                                       $ 68,000                              
Repaid of interest                                                       $ 3,400                              
Promissory note                                                                     $ 68,000                
Interest of agreement                                           12.00%           12.00%                              
Derivative liability                                           $ 55,759           $ 55,759                              
Common stock issued                                                       29,859                              
Related debt discount                                                       3,000                              
The September 2020 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate                             12.00%                                                        
Debt discount                                           146,393           146,393                              
Debt issuance costs                                           $ 68,255           68,255                              
Unpaid interest                                                       $ 46,200                              
Promissory note                             $ 385,000                                                        
Maturity date, description                             Upon default or 180 days after issuance the Second July 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.                                                         
Interest of agreement                                           12.00%           12.00%                              
Price per shares (in Dollars per share) [1]                                                                                  
Warrant issued (in Shares)                                                       85,555                              
Warrants purchase of common stock (in Shares)                                                       85,555                              
Repaid shares (in Shares)                                                       341,880                              
The October 2020 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate         6.00%                                                                            
Debt discount                                           $ 19,400           $ 19,400                              
Derivative liability                                           $ 74,860           $ 74,860                              
Promissory note         $ 169,400                                                                            
Interest of agreement                                           6.00%           6.00%                              
Price per shares (in Dollars per share) [1]                                                                                  
Warrant issued (in Shares)                                                                                    
Common stock per value (in Dollars per share)         $ 0.001                                                                            
Converted shares principal (in Shares)                                                       169,400                              
Interest on conversion shares                                                       $ 4,620                              
Shares issued (in Shares)                                           55,631           55,631                              
The First December 2020 convertible Loan Agreement                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Promissory notes       $ 600,000                                                                              
Note accrues interest rate       12.00%                                                                              
Debt discount                                           $ 110,300           $ 110,300                              
Unpaid interest                                                       $ 4,340                              
Common Stock Par Value (in Dollars per share)       $ 1                                                                              
Maturity date, description       Upon default the First December 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.                                                                               
Interest of agreement                                           12.00%           12.00%                              
Price per shares (in Dollars per share) [1]                                                                                  
Warrant issued (in Shares)                                                                                    
Common stock issued       $ 45,000                                                                              
Repaid shares (in Shares)                                                       600,000                              
Shares issued (in Shares)                                           45,000           45,000                              
The Second December 2020 Convertible Loan Agreement [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Note accrues interest rate                                           6.00%           6.00%                              
Debt discount                                           $ 18,900           $ 18,900                              
Derivative liability                                           $ 108,880           108,880                              
Unpaid interest                                                       $ 4,605                              
Conversion Shares (in Shares)                                                       74,706                              
Promissory note                                               $ 169,400         $ 169,400                            
Maturity date, description                                                         Upon default the Second December 2020 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.                             
Interest of agreement                                           6.00%           6.00%                              
Price per shares (in Dollars per share) [1]                                                                                  
Warrant issued (in Shares)                                                                                    
Repaid shares (in Shares)                                                       168,900                              
The May 2021 Convertible Note Offering [Member]                                                                                      
Convertible Notes Payable (Details) [Line Items]                                                                                      
Debt discount                                           $ 1,601,452           $ 1,601,452                              
Debt issuance costs                                           $ 539,509           539,509                              
Gross proceeds     $ 3,690,491                                                                                
Conversion Price Per Share (in Dollars per share)     $ 5                                                                                
Maturity date, description     The May 2021 Convertible Note matures on November 14, 2022.                                                                                
Debt discount related to original issue                                                       $ 666,669                              
Repaid shares (in Shares)                                                       933,334                              
Warrants issued (in Shares)     1,090,908                                     1,090,908           1,090,908                              
Converted principal amount                                           $ 4,666,669           $ 4,666,669                              
[1] As subject to adjustment as further outlined in the notes
v3.22.4
Convertible Notes Payable (Details) - Schedule of convertible notes payable - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal (in Dollars) $ 6,429,427 $ 168,850 $ 1,280,680
Warrants granted, Quantity (in Shares)   6,667  
Less: Debt Discount (in Dollars) (360,854) $ (8,120) (309,637)
Less: Debt Issuance Costs (in Dollars) (5,648) $ (1,537) (73,527)
Total (in Dollars) 6,062,926   $ 897,516
The Second February 2022 Loan Agreement [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal (in Dollars) $ 112,613    
Interest Rate 11.00%    
Conversion Price [1]    
Maturity Date February-23    
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price    
The May 2022 Convertible Loan Agreement [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal (in Dollars) $ 76,814    
Interest Rate 11.00%    
Conversion Price [1]    
Maturity Date May-23    
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price    
The May 2022 Convertible Note Offering [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal (in Dollars) $ 4,090,000    
Interest Rate 18.00%    
Conversion Price [1] $ 2    
Maturity Date November-22    
Warrants granted, Quantity (in Shares) 4,000,000    
The May 2022 Convertible Note Offering [Member] | Minimum [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Warrants granted, Exercise Price $ 3    
The May 2022 Convertible Note Offering [Member] | Maximum [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Warrants granted, Exercise Price $ 6    
The July 2022 Convertible Note Offering [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal (in Dollars) $ 2,150,000    
Interest Rate 18.00%    
Conversion Price [1] $ 2    
Maturity Date November-22    
Warrants granted, Quantity (in Shares) 2,150,000    
The July 2022 Convertible Note Offering [Member] | Minimum [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Warrants granted, Exercise Price $ 3    
The July 2022 Convertible Note Offering [Member] | Maximum [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Warrants granted, Exercise Price $ 6    
[1] As subject to adjustment as further outlined in the notes
v3.22.4
Related Party (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 07, 2022
Aug. 10, 2021
Sep. 09, 2020
Jul. 06, 2020
May 13, 2020
Apr. 09, 2020
Jan. 14, 2020
Jan. 03, 2020
Jun. 03, 2019
Sep. 15, 2022
Sep. 30, 2020
Sep. 15, 2020
Jul. 30, 2020
Apr. 21, 2020
Mar. 27, 2020
Feb. 27, 2020
Feb. 25, 2020
Feb. 18, 2020
Feb. 15, 2020
Jan. 23, 2020
Jan. 22, 2020
Dec. 31, 2019
Dec. 23, 2019
Dec. 17, 2019
Oct. 28, 2019
Sep. 30, 2019
Jul. 17, 2018
Jun. 29, 2018
Mar. 31, 2018
May 31, 2016
Dec. 31, 2021
Dec. 31, 2020
Sep. 30, 2020
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Oct. 25, 2021
Sep. 15, 2021
Jul. 31, 2020
Jun. 30, 2020
Jun. 25, 2020
Dec. 03, 2019
Oct. 10, 2019
Sep. 16, 2019
Aug. 12, 2019
Jul. 29, 2019
Aug. 17, 2018
Related Party (Details) [Line Items]                                                                                                    
Invested amount                                                                   $ 421,001                                
Shares of common stock (in Shares)                                                                   240,571                                
Warrants to purchase common stock (in Shares) 1,519,857                 4,000,000                                               240,571                                
Expenses                                                                   $ 87,275 $ 72,328                              
Maturity date                                                         The Notes mature on the second (2nd) anniversary of their issuance dates.                                          
Repaid principal                                                                   2,292,953 $ 403,843 $ 456,233                            
Impairment amount                                                                         $ 11,450                          
Convertible note                                                             $ 1,342,664 $ 1,221,539   $ 1,787,099   1,342,664 1,221,539                          
Fair value of warrants                                                         $ 300,000                                        
Convertible secured promissory note, description                                                         (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $12.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $12.00 per share (“Exercise Price”).             The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $15.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $18.00 per share (“Exercise Price”).                            
Debt discount                                                             84,854         $ 84,854                            
Issuance of warrants (in Shares)                       331,456                                               19,950                            
Warrants issued to purchase shares (in Shares)                                           440                               440                        
Exercise price (in Dollars per share) $ 1.75                 $ 0.2   $ 4.5                             $ 18                         $ 4.5                    
Debt discount                                                             (17,068)                                    
Issued common stock shares (in Shares)         229,491                                                                                          
Promissory note                                                                                     $ 660,000 $ 660,000            
cash                                                             200,000         $ 200,000                            
Shares of common stock                                                             150,000         150,000                            
Derivative laibility                                                               42,231         42,231                          
Revenue                                                             $ 80,000 0       $ 80,000 0                          
September 2020 Equity Raise [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Exercise price (in Dollars per share)                                                             $ 4.5         $ 4.5                            
October 2019 Cacher Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                 $ 11,450                                                  
Maturity date                                                 The October 2019 Cacher Note has a maturity date of October 28, 2020.                                                  
Percentage of net revenues                                                 100.00%                                                  
Repaid principal                                                 $ 2,500                                                  
Interest rate                                                 50.00%                                                  
The June 2018 Frommer Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         400                          
Convertible note                                                         $ 900,000                   $ 239,000                      
Unpaid interest                                                                         70   15,401                      
Warrants issued to purchase shares (in Shares)                                                       681                                            
The February 2019 Convertible Note Offering [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         20,000 $ 20,000                        
Maturity date                                                                       The February 2019 Notes mature on the first (1st) anniversary of their issuance dates.                            
Gross proceeds                                           $ 20,000                                                        
Debt discount                                                             $ 2,465         $ 2,465                            
Unpaid interest                                                                         3,065                          
Warrants issued to purchase shares (in Shares)                                                             440         440                            
The July 2020 Convertible Note Offering [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         50,000                          
Maturity date                                                                       The July 2020 Convertible Note Offering mature on the six (6th) month anniversary of their issuance dates.                            
Interest rate                                                                                   12.00%                
Gross proceeds                                                                 $ 50,000                                  
Convertible note                                                             $ 3,922         $ 3,922                            
Debt discount                                                             $ 21,577         $ 21,577                            
Unpaid interest                                                                         630                          
Conversion price per share (in Dollars per share)                                                                                   $ 12.75                
Loan agreement, description                                                                       Upon default the July 2020 Convertible Note Offering is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the lowest trade of the common stock during the twenty (15) consecutive trading day period immediately preceding the date of the respective conversion.                             
BCF and related debt discount                                                                       $ 9,812                            
The June 2019 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                       $ 10,000                                            
Interest rate                                                       6.00%     18.00%         18.00%                            
Convertible note                                                               10,000         10,000                          
Fair value of warrants                                                                       $ 4,645                            
Warrants issued to purchase shares (in Shares)                                                       500     692         692                            
Purchase price per share (in Dollars per share)                                                       $ 12                                            
Exercise price (in Dollars per share)                                                       $ 18                                            
Unpaid interest                                                               2,748         2,748                          
Principal aggregate amount                                                                                             $ 4,000,000      
The July 2018 Schiller Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Convertible note                                           $ 4,137                               $ 4,137                        
Warrants issued to purchase shares (in Shares)                                                     1,698                                              
Exercise price (in Dollars per share)                                                     $ 18                                              
Principal aggregate amount                                                     $ 25,000                                              
Warrant to purchase (in Shares)                                                     1,250                                              
Purchase price (in Dollars per share)                                                     $ 12                                              
Bear interest Rate                                                                                                   6.00%
Warrant to purchase common stock (in Shares)                                                     1,726                                              
Repaid amount                                                                         20,863                          
Interest amount                                                                         3,216                          
The June 2019 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Convertible note                                                               4,325,000         4,325,000                          
Unpaid interest                                                                         0                          
Unpaid interest                                                               752,346         752,346                          
Principal aggregate amount                                                                                           $ 4,825,000   $ 3,000,000 $ 2,500,000  
Bear interest Rate                                                                                         12.50%          
Repaid amount                                                                         500,000                          
Indebted amount                 $ 2,400,000                                 $ 1,200,000       $ 1,200,000                                        
Debt discount                                                           $ 92,752                                        
Additional shares issued percentage                               10.00%                                                                    
Securities issued public offering amount                               $ 15                                                                    
The December 2019 Gravitas Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Repaid amount                                                                         300,000                          
Principal amount                                             $ 300,000                                                      
Interest payment                                             $ 20,000                                                      
Accrued interest                                                               50,000         50,000                          
Officer [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Living expenses for officers                                                                       $ 138,713 57,455                          
Convertible Notes [Member] | The June 2018 Frommer Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Gross proceeds                                                                             $ 239,400                      
The First January 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Interest rate               6.00%                                                                                    
Convertible note                                                               250,000         250,000                          
Debt discount               $ 16,000                                                                                    
Lender issued promissory note amount               $ 250,000                                                                                    
Issued common stock shares (in Shares)               1,333                                                                                    
Shares issued (in Shares)               1,333                                                                                    
The Second January 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Interest rate             5.00%                                                                                      
Warrants issued to purchase shares (in Shares)             50                                                                                      
Purchase price (in Dollars per share)             $ 18                                                                                      
Repaid amount                                                                         10,000                          
Debt discount             $ 580                                                                                      
Accrued interest                                                               500         500                          
Lender issued promissory note amount             $ 10,000                                                                                      
Warrants to purchase of common stock (in Shares)             50                                                                                      
The Third January 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Interest rate                                         10.00%                                                          
Warrants issued to purchase shares (in Shares)                                         75                                                          
Purchase price (in Dollars per share)                                         $ 18                                                          
Repaid amount                                                                         15,000                          
Debt discount                                         $ 892                                                          
Accrued interest                                                               1,500         1,500                          
Lender issued promissory note amount                                         $ 15,000                                                          
Issued common stock shares (in Shares)                                         75                                                          
The Fourth January 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Interest rate                                       7.00%                                                            
Convertible note                                                               135,000         135,000                          
Lender issued promissory note amount                                       $ 135,000                                                            
Issued common stock shares (in Shares)                                       750                                                            
The January 2020 Rosen Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Repaid amount                                                                         150,000                          
Interest payment             $ 2,500                                                                                      
Accrued interest                                                               15,273         15,273                          
Lender issued promissory note amount             $ 150,000                                                                                      
The February Banner 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Purchase price (in Dollars per share)                                     $ 18                                                              
Repaid amount                                                                         9,900                          
Accrued interest                                                               495         495                          
Lender issued promissory note amount                                     $ 9,900                                                              
Warrants to purchase of common stock (in Shares)                                     49                                                              
Pursuant bears interest rate                                     $ 495                                                              
The February 2020 Frommer Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Purchase price (in Dollars per share)                                   $ 18                                                                
Repaid amount                                                                         2,989                          
Accrued interest                                                               160         160                          
Lender issued promissory note amount                                   $ 2,989                                                                
Warrants to purchase of common stock (in Shares)                                   15                                                                
The February 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Interest rate                                 5.00%                                                                  
Purchase price (in Dollars per share)                                 $ 18                                                                  
Repaid amount                                                                         15,000                          
Debt discount                                 $ 801                                                                  
Accrued interest                                                               750         750                          
Lender issued promissory note amount                                 $ 15,000                                                                  
Warrants to purchase of common stock (in Shares)                                 75                                                                  
The July 2020 Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Interest rate                         5.00%                                                                          
Purchase price (in Dollars per share)                         $ 18                                                                          
Repaid amount                                                                         5,000                          
Debt discount                         $ 316                                                                          
Accrued interest                                                               $ 250         250                          
Lender issued promissory note amount                         $ 5,000                                                                          
Warrants to purchase of common stock (in Shares)                         25                                                                          
The September 2020 Goldberg Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Maturity date                       The maturity date of the September 2020 Goldberg Note is September 15, 2022 (the “September 2020 Goldberg Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under note are due.                                                                            
Interest rate                       7.00%                                                                            
Unpaid interest                                                                       3,576                            
Loan agreement, description                     the Company’s common stock issued to the lender in accordance with the Lender’s Exchange Agreement (see note 10) have a value equal to or less than $6,463,363 determined by using the lowest VWAP of the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Goldberg Note shall increase by 200% of the difference between the initial consideration and the September 14, 2021, value.                                                                              
Promissory note                       $ 16,705                                                                            
Principal amount                                                                                 $ 939,022                  
The September 2020 Rosen Loan Agreement [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                       188,574                            
Interest rate                       7.00%                                                                            
Loan agreement, description                     the Company’s common stock issued to the lender in accordance with the Lender’s Exchange Agreement (see note 10) have a value equal to or less than $1,274,553 determined by using the lowest VWAP of the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Rosen Note shall increase by 200% of the difference the initial consideration and the September 14, 2021 value.                                                                              
Interest amount                                                                       1,677                            
Promissory note                       $ 3,295                                                                            
Principal amount                                                                                 $ 185,279                  
Derivative laibility                     $ 200                                           $ 200                                  
Accrued interest                                                             $ 1,610         1,610                            
Demand loan [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Repaid principal                                                                         75,000                          
Related party made non-interest bearing loans   $ 40,000 $ 50,000 $ 100,000   $ 50,000               $ 100,000 $ 100,000                 $ 150,000                                                    
Demand loan [Member] | December 17, 2019 [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Repaid principal                                                                         150,000                          
Demand loan [Member] | March 27, 2020 [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Repaid principal                                                                         100,000                          
Demand loan [Member] | March 27, 2020 [Member] | September 2020 Equity Raise [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Unpaid interest                                                                         6,707                          
Demand loan [Member] | April 9, 2020 [Member] | September 2020 Equity Raise [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         50,000                          
Demand loan [Member] | April 21, 2020 [Member] | September 2020 Equity Raise [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         100,000                          
Unpaid interest                                                                         6,707                          
Demand loan [Member] | July 6, 2020 [Member] | September 2020 Equity Raise [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                       100,000                            
Unpaid interest                                                                       $ 6,707                            
Demand loan [Member] | August 10, 2020 [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         40,000                          
Demand loan [Member] | September 9, 2020 [Member]                                                                                                    
Related Party (Details) [Line Items]                                                                                                    
Principal amount                                                                         $ 50,000                          
v3.22.4
Derivative Liabilities (Details)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Derivative Liabilities [Abstract]    
Expected dividend yield, percentage 0.00% 0.00%
v3.22.4
Derivative Liabilities (Details) - Schedule of changes in the derivative liabilities - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Level 1 [Member]      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]      
Derivative liabilities as January 1, 2022    
Addition
Changes in fair value
Extinguishment  
Derivative liabilities as September 30, 2022  
Level 2 [Member]      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]      
Derivative liabilities as January 1, 2022    
Addition
Changes in fair value
Extinguishment  
Derivative liabilities as September 30, 2022  
Level 3 [Member]      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]      
Derivative liabilities as January 1, 2022    
Addition 100,532 417,241 3,061,688
Changes in fair value (3,729) 1,096,287 $ (3,019,457)
Extinguishment (96,803) (431,458)  
Derivative liabilities as September 30, 2022  
v3.22.4
Stockholders’ Equity (Details)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 05, 2022
USD ($)
shares
Mar. 07, 2022
USD ($)
$ / shares
shares
Mar. 01, 2022
Jan. 06, 2022
USD ($)
shares
Dec. 14, 2021
USD ($)
shares
Dec. 03, 2021
USD ($)
shares
Nov. 15, 2021
USD ($)
shares
Nov. 05, 2021
USD ($)
shares
Oct. 25, 2021
USD ($)
$ / shares
shares
Aug. 15, 2021
USD ($)
shares
Jul. 15, 2021
USD ($)
shares
Feb. 04, 2021
Feb. 03, 2021
USD ($)
shares
Feb. 01, 2021
USD ($)
shares
Jan. 14, 2021
USD ($)
shares
Dec. 14, 2020
USD ($)
shares
Oct. 08, 2020
USD ($)
shares
Sep. 11, 2020
USD ($)
shares
Aug. 15, 2020
USD ($)
shares
Jul. 03, 2020
USD ($)
shares
May 13, 2020
USD ($)
shares
May 07, 2020
USD ($)
Mar. 13, 2020
Mar. 05, 2020
USD ($)
shares
Jan. 06, 2020
USD ($)
shares
Sep. 15, 2022
USD ($)
$ / shares
shares
Jun. 24, 2022
USD ($)
shares
Feb. 24, 2022
USD ($)
shares
Nov. 29, 2021
USD ($)
shares
Sep. 15, 2021
USD ($)
shares
Aug. 26, 2021
USD ($)
shares
Jul. 20, 2021
USD ($)
shares
Jun. 17, 2021
USD ($)
$ / shares
shares
Mar. 17, 2021
USD ($)
shares
Feb. 26, 2021
USD ($)
shares
Feb. 18, 2021
USD ($)
shares
Dec. 29, 2020
$ / shares
Dec. 21, 2020
USD ($)
shares
Sep. 30, 2020
USD ($)
shares
Sep. 15, 2020
USD ($)
$ / shares
shares
Aug. 31, 2020
USD ($)
shares
Aug. 21, 2020
USD ($)
shares
Aug. 17, 2020
Jul. 17, 2020
shares
Jun. 29, 2020
Jun. 18, 2020
USD ($)
shares
Mar. 19, 2020
USD ($)
shares
Jan. 30, 2020
USD ($)
shares
Dec. 31, 2018
USD ($)
shares
Sep. 30, 2022
USD ($)
$ / shares
shares
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2022
USD ($)
$ / shares
shares
Sep. 30, 2021
USD ($)
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2021
AUD ($)
shares
Dec. 31, 2020
USD ($)
shares
Dec. 31, 2018
USD ($)
shares
Jul. 17, 2021
$ / shares
shares
Jul. 09, 2021
shares
May 24, 2021
USD ($)
shares
May 14, 2021
$ / shares
Apr. 21, 2021
USD ($)
shares
Apr. 10, 2021
USD ($)
shares
Mar. 31, 2021
USD ($)
shares
Mar. 28, 2021
USD ($)
shares
Feb. 08, 2021
USD ($)
shares
Jan. 20, 2021
USD ($)
shares
Jul. 31, 2020
$ / shares
Jul. 13, 2020
$ / shares
shares
Feb. 25, 2020
$ / shares
Feb. 11, 2020
$ / shares
Feb. 04, 2020
$ / shares
Nov. 30, 2019
$ / shares
Jul. 17, 2018
$ / shares
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Shares of capital stock (in Shares)                                                                                                   120,000,000       120,000,000                                 35,000,000          
Designated of common stock shares (in Shares)                                                                                                   100,000,000       100,000,000                                 15,000,000          
Common stock, par value (in Dollars per share) | $ / shares                 $ 0.001                                                                                 $ 0.001       $ 0.001   $ 1             $ 1             $ 1 $ 0.001 $ 1 $ 1 $ 1 $ 1  
Designated of preferred stock (in Shares)                                                                                                   20,000,000       20,000,000                                            
Preferred stock, par value (in Dollars per share) | $ / shares                                                                                                   $ 0.001       $ 0.001                                 $ 0.001          
Common stock per share (in Dollars per share) | $ / shares                                                                                                                       $ 3.4                                
Restricted common stock (in Shares) 185,000                                                   50,000                                                                           16,275 13,113 31,782   40,000              
Gain/Loss on settlement of vendor liabilities | $                                                         $ 33,217                                         $ 130,625       $ 130,625                                            
Restricted common stock issued, shares (in Shares)         211 194 13,392 25,000                                         101,097 793           10,417                                                                                
Fair value of services | $ $ 192,400       $ 452 $ 429 $ 41,917 $ 85,750                                     $ 37,200   $ 246,676 $ 2,500           $ 50,002                             $ 29,387 $ 7,488                                                
Accrued but unpaid. | $                                                                               $ 967,518                           69,000                                            
Gross proceeds | $   $ 2,659,750             $ 3,407,250                                 $ 796,000                                                       $ 354,994                                            
Aggregate common stock shares (in Shares)   1,519,857             850,000                                 4,000,000                                                                   750,000                                
warrants to purchase common stock (in Shares)   1,519,857                                               4,000,000                                                       240,571                                            
Exercise price (in Dollars per share) | $ / shares   $ 1.75             $ 4.5                                 $ 0.2                           $ 4.5                                                                       $ 18
Restricted common stock issued | $                                                   $ 75,000                                                       $ 75,000                                            
Fair value for service exchange | $                                                                                                     $ 24,001 $ 8,364                                                
Share based payments | $                                                                                                           2,405                                            
Repurchased share (in Shares)                                                                                                   83,800                                                    
Grant options (in Shares)                                                                                                 11,667                   11,667                                  
Fair value | $                                                                                                 $ 57,123                   $ 57,123     $ 34,500   $ 3,587 $ 69,332 $ 43,667 $ 125,000 $ 7,502 $ 192,000              
Stock-based compensation | $                                                                                                   $ 4,100,729     $ 480,863 $ 4,100,729 $ 480,863                                          
Unvested employee options, description                                                                                                           As of September 30, 2022, there was $1,283,111 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.21 years.   As of December 31, 2021, there was $3,197,018 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.23 year.  As of December 31, 2021, there was $3,197,018 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.23 year.                                       
Warrant holder shares (in Shares)                                                                                                           1,275,261                                            
Exercise warrant shares (in Shares)                                                                                                           1,438,788                                            
Warrant exercises | $                                                                                                           $ 5,472,068                                            
Convertible share (in Shares)                                                                                                   1,090,908       1,090,908                                            
Fair value amount | $                                                                                                           $ 3,067,617                                            
Additional warrant (in Shares)                                                                                                           127,801                                            
Dividend cash | $                                                                                                           $ 410,750   $ 410,000                                        
Underwriting agreement. (in Shares)                                                                 46,667                                                                                      
Additional warrants (in Shares)                                                                                                           1,740,948                                            
Deemed dividend | $                                                                                                           $ 303,557                                            
Warrants to purchase (in Shares)                                                                               258,750                   6,150,000       6,150,000                                            
Warrants | $                                                                                                   $ 2,929,303       $ 2,929,303                                            
Designated of preferred stock (in Shares)                                                                                                                                             20,000,000          
Issuance shares of common stock (in Shares)                                                                                                                                             100,000,000          
Issuance of preferred stock (in Shares)                                                                                                                                             20,000,000          
Reverse stock split, description                                                                                     On August 17, 2020, following board of director’s approval, the Company filed a Certificate of Change to its Articles of Incorporation (the “Amendment”), with the Secretary of State of the State of Nevada to effectuate a one-for-twenty (1:3) reverse stock split (the “Reverse Stock Split”) of its common stock, par value $0.001 per share, without any change to its par value.                                                                  
Warrants, description                                                                                                           The Replacement Warrants reflect a reduction in the number of Series C and Series D Warrants from 1,550,000 in each class to 1,536,607 in each class and a reduction in the number of Series E and Series F Warrants from 1,075,000 in each class to 807,143 in each class, and the initial exercise date for the Replacement Warrants are unchanged from the date as set forth in the respective exchanged Series C, Series D, Series E or Series F Warrant.                                            
Converted shares (in Shares)                                                                                                               7,278 7,278                                      
Share based payments | $                                                                                                   626,568     2,151,900 $ 3,848,578 5,662,389 $ 9,661,174                                        
Number of shares authorized to issue (in Shares)                                                                               2,744,288                                                                        
Principal | $                                                                               $ 7,325,000                                                                        
Debt obligations (in Shares)                                                                               500,000                                                                        
Warrants issued (in Shares)                                                                               331,456                               19,950 19,950                                      
Lenders notes totaling | $                                                                               $ 20,000                                                                        
Loss on debt extinguishment | $                                                                               $ 4,915,327                   $ (979,738)     $ 137,109 (832,482) $ 423,118 $ 1,025,555   $ (5,586,482)                                    
Underwritten public offering (in Shares)                                                                               1,725,000                                                                        
Option to purchase shares (in Shares)                                                                               258,750                                                                        
Underwriting discounts and commissions. | $                                 $ 2,588                                                                                                                      
Additional common stock (in Shares)                                                                 112,500                                                         10,000                            
Stock based compensation expense | $                                                                                                               $ 99,908                                        
Total common stock shares (in Shares)                                                                                                                               1,048       2,092                
Loss on settlement of vendor liabilities | $                                                                                                                                   $ 12,719                    
Net proceeds                                                                 $ 2,213,500                                               $ 224,540                                      
Warrants issued (in Shares)                                                                 46,667                                             1,137,575 1,137,575 3,922                                    
Warrant exercise price (in Dollars per share) | $ / shares                                                                 $ 5.4                                                                                      
Additional shares of common stock (in Shares)                                                                                                                         954,568                              
Outstanding vendor liabilities (in Shares)                                                         576,783                                                                                              
Restricted stock unit grants | $                                           $ 2,500,000                                                                                                            
Fair market value percentage                                           100.00%                                                                                                            
Options previously issued (in Shares)                                         152,992                                                                                                              
Issued common stock (in Shares)                                         229,491                                                                                                              
Exchange of options to stock | $                                         $ 1,117,031                                                                                                              
Weighted average remaining life                                                                                                               1 year 2 months 23 days 1 year 2 months 23 days                                      
Additional warrant issued (in Shares)                                 258,750                                                                             127,801 127,801                                      
Fair value of Warrants | $                                                                                                               $ 3,258,955   $ 37,927                                    
Deemed dividend | $                                                                                                           $ 63,064   410,750                                        
Received exercise of warrants | $                                                                                                               $ 9,487,223                                        
Warrants issued (in Shares)                                                                                                               80,000 80,000                                      
Stock-based compensation for stock warrants | $                                                                                                               $ 129,375                                        
Stock-based compensation for stock warrants | $                                                                                                               480,863                                        
Share-based awards, restricted stock award, description                       On February 4, 2021, the Board resolved that, the Company shall pay each member of the Board, for each calendar quarter during which such member continues to serve on the Board, compensation as a group amounts to $62,500 per quarter. The shares vest one year after issuance.                                                                                                                                 
Stock-based compensation for RSA’s amount | $                                                                                                               $ 391,035                                        
Common Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Restricted common stock (in Shares)                                                                                                   82,342       82,342                                            
Gain/Loss on settlement of vendor liabilities | $                                               $ 1,098 $ 4,233                                           $ 122,953     $ 17,024       $ 17,024                                            
Restricted common stock issued, shares (in Shares)       8,850           820 715   1,929 50,000 30,000 10,417     6,167 15,000       2,153 1,412     50,000   793 348 2,154   9,624 291 10,000   8,371 7,979   1,866 20,000   6,667   50,000 20,000 50,000                                                        
Fair value of services | $       $ 19,736           $ 2,500 $ 2,500   $ 8,198 $ 196,000 $ 133,200 $ 38,647     $ 50,693 $ 204,300                   $ 2,500 $ 999 $ 8,570   $ 49,371 $ 1,499 $ 48,000   $ 31,323 $ 21,304   $ 15,842 $ 180,000       $ 525,000   $ 585,000                                                        
Fair value exchange services | $                                                       $ 69,000                                                                                                
Common stock value | $                                                                                                   13,700       13,700                                            
Share based payments | $                                                                                                                   $ 585,000                                    
Restricted common stock issued to settle liabilities, value | $                                               $ 25,000 $ 12,500                                           $ 72,048                                                          
Conversion of warrant, description                                             The company agreed to exchange 5,833 warrants for 5,000 shares of the company common stock. In connection with this agreement the company recorded a loss on conversion of warrants to stock of $5,772.                                           The company agreed to exchange 5,833 warrants for 2,239 shares of the company common stock and $10,000.                                                              
Outstanding vendor liabilities (in Shares)                                                                                                             44,895 294,895 294,895 23,565                                    
Treasury Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Cancelled shares (in Shares)                                                                                                                   50,650                                    
Warrant [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Warrants issued (in Shares)                                                                                                               2,250,691 2,250,691                                      
Deemed dividend | $                                                                                                                   $ 18,421                                    
Warrant to purchase of common stock (in Shares)                                                                                                               2,414,218 2,414,218                                      
Stock Option [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Stock option | $                                                                                                   523,749       $ 3,355,445                                            
Share based payments | $                                                                                                               $ 7,616,195   $ 4,092,013                                    
Minimum [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Fair value of services | $                                                                                                   50,000                                                    
Fair value for service exchange | $                                                                                                   22,892                                                    
Share holders in the case of ISOs                                           10.00%                                                                                                            
Maximum [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Fair value of services | $                                                                                                   107,206                                                    
Fair value for service exchange | $                                                                                                   $ 34,900                                                    
Share holders in the case of ISOs                                           110.00%                                                                                                            
September 2020 Equity Raise [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Exercise price (in Dollars per share) | $ / shares                                                                                                               $ 4.5                                        
Principal | $                                                                                                               $ 3,183,667                                        
Debt obligations (in Shares)                                                                                                               768,204 768,204                                      
Common stock exercise price. (in Dollars per share) | $ / shares                                                                                                               $ 4.5                                        
Warrant expiring                                                                                                               5 years 5 years                                      
Underwriting discounts and commissions. | $                                                                                                               $ 7,762,500                                        
Warrants to purchase. | $                                                                                                               570,416                                        
Resulting in contingent BCF value | $                                                                                                               $ 3,051,810                                        
Securities purchase agreements [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Securities purchase agreement, description     On March 1, 2022, the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share. The Company has recorded $40,000 to stock issuance costs, which are part of Additional Paid-in Capital.                                                                                                                                                   
IPO [Member] | September 2020 Equity Raise [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Price per unit (in Dollars per share) | $ / shares                                                                                                               $ 4.5                                        
Series E Convertible Preferred Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Preferred stock, share authorized (in Shares)                                                                                                   8,000       8,000                                            
Preferred stock, share issued (in Shares)                                                                                                   500       500                                            
Preferred stock, share outstanding (in Shares)                                                                                                   500       500                                            
Series E Preferred Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Preferred stock, par value (in Dollars per share) | $ / shares                                                                                                   $ 1,000       $ 1,000                                            
Preferred stock, share authorized (in Shares)                                                                                                   8,000       8,000   8,000                                        
Preferred stock, share issued (in Shares)                                                                                                   500       500   500   7,738                                    
Preferred stock, share outstanding (in Shares)                                                                                                   500       500   500   7,738                                    
Common stock per share (in Dollars per share) | $ / shares                                                                                                   $ 4.12       $ 4.12                                            
Convertible share (in Shares)                                                                                                   486,516       486,516                                            
Series E Convertible Preferred Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Exercise price (in Dollars per share) | $ / shares                                                                         $ 4.5                                                                              
Preferred stock, description                                                                         On December 29, 2020, the Company entered into securities purchase agreements with thirty-three accredited investors whereby the Investors have agreed to purchase from the Company an aggregate of 7,778 shares of the Company’s Series E Convertible Preferred Stock, par value $0.001 per share and 2,831,715 warrants to purchase shares of the Company’s common stock, par value $0.001 per share. The Series E Preferred Stock is convertible into a total of 1,887,810 shares of Common Stock. The combined purchase price of one Conversion Share and one and a half warrant was $4.12. The aggregate purchase price for the Series E Preferred Stock and warrants was $7,777,777. The Company has recorded $817,353 to stock issuance costs, which are part of Additional Paid-in Capital.                                                                               
Warrants, description                                                                         The placement agent for the transaction and received cash compensation equal to 10% of the aggregate purchase price and warrants to purchase 471,953 shares of the Company’s common stock, at an exercise price of $5.15 per share (the “PA Warrants”). The PA Warrants are exercisable for a term of five-years from the date of issuance.                                                                               
Subscription receivable | $                                                                                                               $ 40,000                                        
Issuance cost | $                                                                                                               $ 4,225                                        
Converted shares (in Shares)                                                                                                               1,766,449 1,766,449                                      
Warrants issued (in Shares)                                                                                                               486,516 486,516                                      
Settlement of Vendor Liabilities [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Restricted common stock issued, shares (in Shares)                                                         250,000                                                                                              
Black-Scholes Option-Pricing Model [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Warrants | $                                                                                                   $ 5,185,826       $ 5,185,826                                            
The Second February 2020 [Member] | Common Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Convertible note outstanding | $                                   $ 125,000                                                                                                                    
Number of shares authorized to issue (in Shares)                                   34,722                                                                                                                    
February 2019 [Member] | Common Stock [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Convertible note outstanding | $                                   $ 70,542                                                                                                                    
Number of shares authorized to issue (in Shares)                                   64,124                                                                                                                    
Interest on Convertible Debt, Net of Tax | $                                   $ 112,888                                                                                                                    
Convertible Notes [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Warrants issued (in Shares)                                                                                                                   214,080                                    
Fair value of Warrants | $                                                                                                                   $ 1,520,449                                    
Notes Payable – Related Party [Member]                                                                                                                                                        
Stockholders’ Equity (Details) [Line Items]                                                                                                                                                        
Warrants issued (in Shares)                                                                                                                   289                                    
Fair value of Warrants | $                                                                                                                   $ 3,342                                    
v3.22.4
Stockholders’ Equity (Details) - Schedule of assumption granted warrants - $ / shares
9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Stock Options [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Expected dividends 0.00% 0.00%
Expected life of warrant 5 years  
Stock Options [Member] | Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 1.1 $ 2.55
Expected volatility 165.38% 194.39%
Risk free interest rate 2.69% 0.46%
Expected life of warrant   5 years
Stock Options [Member] | Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 1.9 $ 14.1
Expected volatility 166.48% 242.98%
Risk free interest rate 2.95% 0.98%
Expected life of warrant   7 years
Warrants granted [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Expected dividends 0.00% 0.00%
Expected life of warrant   5 years
Warrants granted [Member] | Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 0.2 $ 4.5
Expected volatility 164.34% 237.14%
Risk free interest rate 2.81% 0.82%
Expected life of warrant 5 years  
Warrants granted [Member] | Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 6 $ 4.95
Expected volatility 169.75% 237.68%
Risk free interest rate 4.00% 0.86%
Expected life of warrant 5 years 6 months  
v3.22.4
Stockholders’ Equity (Details) - Schedule of the stock option activity - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Schedule Of The Stock Option Activity Abstract        
Options beginning balance 2,902,619 541,021 541,021  
Weighted Average Exercise Price, beginning balance $ 7.07 $ 12.75 $ 12.75  
Weighted Average Remaining Contractual Life (in years), beginning balance 4 years 8 months 15 days 3 years 3 months 7 days    
Options, Granted 1,940,000 1,850,588    
Weighted Average Exercise Price, Granted $ 1.38 $ 6.32 $ 5.97  
Weighted Average Remaining Contractual Life (in years), Granted 6 years 2 months 12 days 5 years 10 months 28 days  
Options, Exercised  
Weighted Average Exercise Price, Exercised  
Weighted Average Remaining Contractual Life (in years), Exercised    
Options, Forfeited/Cancelled (434,352) (64,164) (64,164)  
Weighted Average Exercise Price, Forfeited/Cancelled $ 13.56 $ 13.06 $ 13.06  
Weighted Average Remaining Contractual Life (in years), Forfeited/Cancelled    
Options outstanding, ending balance 4,408,267 2,327,445 2,902,619 541,021
Weighted Average Exercise Price outstanding, ending balance $ 3.93 $ 7.63 $ 7.07 $ 12.75
Weighted Average Remaining Contractual Life (in years) outstanding, ending balance 4 years 5 months 4 days 4 years 3 months 14 days 4 years 8 months 15 days 3 years 3 months 7 days
Options, exercisable 3,010,101 608,524 1,165,191 149,168
Weighted Average Exercise Price, exercisable $ 4.12 $ 12.75 $ 9.01 $ 23.77
Weighted Average Remaining Contractual Life (in years), exercisable 4 years 3 months 25 days 3 years 9 months 4 years 1 month 13 days 1 year 9 months
v3.22.4
Stockholders’ Equity (Details) - Schedule of option outstanding and option exercisable - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Option Outstanding And Option Exercisable Abstract    
Option Outstanding, Exercise price $ 3.93 $ 7.07
Option Outstanding, Number Outstanding 4,408,267 2,902,619
Option Outstanding, Weighted Average Remaining Contractual Life (in years) 4 years 5 months 4 days 4 years 8 months 15 days
Option Exercisable, Weighted Average Exercise Price $ 4.12 $ 9.01
Option Exercisable, Number Exercisable 3,010,101 1,165,191
Option Exercisable, Weighted Average Remaining Contractual Life (in years) 4 years 3 months 25 days 4 years 1 month 13 days
v3.22.4
Stockholders’ Equity (Details) - Schedule of warrant activity - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Warrant [Member]        
Class of Warrant or Right [Line Items]        
Warrant, outstanding beginning balance 5,658,830 6,130,948 6,130,948 247,403
Warrant, Granted 14,812,262 1,881,267 1,961,267 5,921,071
Warrant, Exercised (1,438,788) (2,414,218)
Warrant, Forfeited/Cancelled (41,462) (14,722) (19,167) (37,526)
Warrant, outstanding ending balance 20,429,630 6,558,705 5,658,830 6,130,948
Warrant, exercisable 16,429,630 6,558,705 5,616,330 3,228,235
Weighted Average Exercise Price [Member]        
Class of Warrant or Right [Line Items]        
Weighted Average Exercise Price, beginning balance $ 4.98 $ 4.96 $ 4.96  
Weighted Average Exercise Price, Granted 2.29 5.63 5.6 $ 4.7
Weighted Average Exercise, Exercised 4.59 4.55
Weighted Average Exercise Price, Forfeited/Cancelled 12 24 24 13.31
Weighted Average Exercise Price, outstanding ending balance 1.88 4.92    
Weighted Average Exercise Price, exercisable $ 2.62 $ 4.92 $ 4.97 $ 5.37
v3.22.4
Stockholders’ Equity (Details) - Schedule of warrants outstanding and warrants exercisable - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Warrants Outstanding [Member]    
Stockholders’ Equity (Details) - Schedule of warrants outstanding and warrants exercisable [Line Items]    
Warrants Outstanding, Exercise price $ 1.88 $ 4.98
Warrants Outstanding, Number Outstanding (in Shares) 20,429,630 5,658,830
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) 4 years 25 days 3 years 9 months 18 days
Warrants Outstanding, Weighted Average Exercise Price   $ 4.97
Warrants Exercisable, Number Exercisable (in Shares)   5,616,330
Warrants Exercisable, Weighted Average Exercise Price   $ 3.79
Warrants Exercisable [Member]    
Stockholders’ Equity (Details) - Schedule of warrants outstanding and warrants exercisable [Line Items]    
Warrants Outstanding, Weighted Average Exercise Price $ 2.62  
Warrants Exercisable, Number Exercisable (in Shares) 16,429,630  
Warrants Exercisable, Weighted Average Exercise Price $ 3.81  
v3.22.4
Commitments and Contingencies (Details)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 05, 2022
Jan. 04, 2021
May 05, 2018
USD ($)
Dec. 31, 2022
Aug. 16, 2022
Jul. 28, 2022
USD ($)
Apr. 26, 2022
USD ($)
Feb. 28, 2022
USD ($)
Jul. 28, 2021
USD ($)
Jun. 30, 2020
USD ($)
Jun. 25, 2020
USD ($)
Apr. 01, 2019
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2021
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Mar. 31, 2022
USD ($)
Feb. 16, 2022
USD ($)
Commitments and Contingencies (Details) [Line Items]                                        
Settlement amount                   $ 799,000 $ 799,000                  
Principal amount                   660,000 660,000                  
Accrued interest                   $ 139,000                    
Purchase agreements                                     $ 920,000  
Excise tax on net repurchases         1.00%                              
Lease agreements, description           On July 28, 2022, the Company signed a 3-year lease for approximately 1,364 square feet of office space at 1674 Meridian Ave., Miami Beach, FL, 33131. On April 26, 2022, the Company signed a 7-year lease for approximately 8,000 square feet of office space at 419 Lafayette Street, 6th Floor, New York, NY, 10003.                          
Total lease amount           $ 181,299 $ 3,502,033                          
Impaired asset           $ 101,623                            
Rent expense                         $ 154,015 $ 67,397 $ 395,709 $ 121,266        
Stockholders’ equity requirement, description   On September 2, 2022, the Company received a letter from the staff of The Nasdaq Capital Market notifying the Company that the Nasdaq Hearings Panel has determined to delist the Company’s common stock from the Exchange, based on the Company’s failure to comply with the listing requirements of Nasdaq Rule 5550(b)(1) as a result of the Company’s shareholder equity deficit for the period ended June 30, 2022, as demonstrated in Company’s Quarterly Report on Form 10-Q filed on August 15, 2022, following the Company having not complied with the market value of listed securities requirement in Nasdaq Rule 5550(b)(2) on March 1, 2022, while the Company was under a Panel Monitor, as had been previously disclosed.                                    
Employment agreements description On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).                                       
Aggregate amount                         475,000   475,000          
Commitments and contingencies, description                                 The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carry back net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.       
Taxable income percentage                                   25.00%    
Property generally eligible term                                   15 years    
Bonus depreciation rate                                   100.00%    
Accrued interest                     $ 139,000   673,694 $ 59,859 707,950 $ 319,290 $ 372,106 $ 1,376,902    
Lease term     5 years           3 years     4 years                
Office space (in Square Meters) | m²     2,300           1,364     796                
Operating lease due amount     $ 411,150           $ 181,300     $ 108,229                
Single lease cost                         $ 154,015   $ 395,709   216,845      
Total payments                                 18,451      
Subsequent Event [Member]                                        
Commitments and Contingencies (Details) [Line Items]                                        
Payable                                       $ 115,000
Security deposit                                       $ 16,836
Single lease cost               $ 18,451                        
Agreements [Member]                                        
Commitments and Contingencies (Details) [Line Items]                                        
Rental expense                                 216,845 $ 107,737    
Forecast [Member]                                        
Commitments and Contingencies (Details) [Line Items]                                        
Tax percentage       15.00%                                
The May 2020 PPP Loan Agreement [Member]                                        
Commitments and Contingencies (Details) [Line Items]                                        
Repaid principal                                 136,597      
Forgiven principal                                 275,903      
Accrued interest                                 3,119      
The April 2020 PPP Loan Agreement [Member]                                        
Commitments and Contingencies (Details) [Line Items]                                        
Principle outstanding                                 $ 198,655      
v3.22.4
Commitments and Contingencies (Details) - Schedule of components of lease expense - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Components Of Lease Expense Abstract      
Operating lease cost $ 148,446 $ 241,601 $ 202,804
Short term lease cost 5,568 154,108 14,041
Total net lease cost $ 154,015 $ 395,709 $ 216,845
v3.22.4
Commitments and Contingencies (Details) - Schedule of supplemental cash flow and other information related to leases - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments $ 54,564 $ 100,100
Weighted average remaining lease term (in years): 3 years 4 months 24 days 2 months 1 day
Weighted average discount rate: 12.50% 0.00%
v3.22.4
Commitments and Contingencies (Details) - Schedule of future minimum payments required under the lease
Sep. 30, 2022
USD ($)
Schedule Of Future Minimum Payments Required Under The Lease Abstract  
2023 $ 534,880
2024 541,905
2025 513,507
2026 528,589
2027 544,122
Thereafter 892,399
Total lease payments 3,555,402
Less: Amounts representing interest (1,140,416)
Total lease obligations 2,414,986
Less: Current (279,593)
Total $ 2,135,393
v3.22.4
Acquisitions (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 13, 2022
Aug. 01, 2022
Mar. 07, 2022
Dec. 14, 2021
Dec. 03, 2021
Nov. 15, 2021
Nov. 05, 2021
Oct. 03, 2021
Jul. 20, 2021
Jun. 04, 2021
Jun. 01, 2021
Nov. 29, 2021
Sep. 15, 2021
Feb. 18, 2021
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Acquisitions (Details) [Line Items]                                        
Purchase price per share (in Dollars per share)     $ 1                                  
Cash                                 $ 410,750   $ 410,000  
Membership interests purchased                             $ 122,655 $ 893,521 $ 122,655 $ 893,522 3,185,662  
Consideration in form of shares, value                                  
Impairment in investment               $ 424,632                        
Common stock shares (in Shares)                             100,000,000   100,000,000   100,000,000 100,000,000
Restricted shares (in Shares)       211 194 13,392 25,000         101,097 793 10,417            
Stock Purchase Agreement [Member]                                        
Acquisitions (Details) [Line Items]                                        
Consideration in cash                 $ 144,750                      
Plant Camp LLC [Member]                                        
Acquisitions (Details) [Line Items]                                        
Membership interests purchased                   $ 300,000                    
Plant Camp LLC [Member] | Membership Interest Purchase Agreement [Member]                                        
Acquisitions (Details) [Line Items]                                        
Purchase of acquired common shares (in Shares)                   841,005 490,863                  
Issued and outstanding equity, percentage                   89.00%                    
Membership interests purchased                     $ 175,000                  
Plant Camp LLC [Member] | Plant Camp LLC [Member]                                        
Acquisitions (Details) [Line Items]                                        
Issued and outstanding equity, percentage                     33.00%                  
WHE Agency, Inc. [Member] | Stock Purchase Agreement [Member]                                        
Acquisitions (Details) [Line Items]                                        
Purchase ownership                 44.00%                      
Percentage of voting power                 55.00%                      
Aggregate closing consideration                 $ 1,038,271                      
Consideration in form of shares, value                 $ 893,521                      
Consideration in form of shares, shares (in Shares)                 224,503                      
Common stock at a price (in Dollars per share)                 $ 3.98                      
Purchase price                 $ 1,038,271                      
Purchase price percentage                 44.00%                      
Fair value of the non-controlling interest                 $ 1,190,000                      
Dune, Inc [Member]                                        
Acquisitions (Details) [Line Items]                                        
Invested amount               $ 732,297                        
Common stock shares (in Shares)               3,905,634                        
Restricted shares (in Shares)               163,344                        
Common stock shares issuable               $ 50,000                        
Orbit Media LLC [Member]                                        
Acquisitions (Details) [Line Items]                                        
Membership interest percentage   51.00%                                    
Cash   $ 44,000                                    
Shares of common stock (in Shares)   57,576                                    
Brave Foods, LLC [Member]                                        
Acquisitions (Details) [Line Items]                                        
Membership interest percentage 100.00%                                      
Limited liability $ 150,000                                      
v3.22.4
Acquisitions (Details) - Schedule of components of the purchase price
Sep. 30, 2022
USD ($)
Denver Bodega, LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller $ 1
Total purchase price 1
Cash 44,977
Accounts Receivable 2,676
Inventory 194,365
Total assets acquired 242,018
Accounts payable and accrued expenses 127,116
Notes payable 293,888
Total liabilities assumed 421,004
Net liabilities acquired (178,986)
Excess purchase price 178,987
Orbit Media LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller 44,000
Shares granted to seller 40,994
Total purchase price 84,994
Non-controlling interest in consolidated subsidiary 81,661
Excess purchase price 166,655
Brave Foods, LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller 150,000
Total purchase price 150,000
Net Assets acquired 83,182
Cash 73,344
Inventory 86,154
Total assets acquired 159,498
Accounts payable and accrued expenses 1,316
Notes payable 75,000
Total liabilities assumed 76,316
Excess purchase price $ 66,818
v3.22.4
Acquisitions (Details) - Schedule of excess purchase price amounts
Sep. 30, 2022
USD ($)
Denver Bodega, LLC [Member]  
Acquisitions (Details) - Schedule of excess purchase price amounts [Line Items]  
Goodwill $ 8,950
Trade Names & Trademarks 8,949
Know-How and Intellectual Property 107,392
Website 8,949
Customer Relationships 44,747
Excess purchase price 178,987
Orbit Media LLC [Member]  
Acquisitions (Details) - Schedule of excess purchase price amounts [Line Items]  
Know-How and Intellectual Property 166,655
Excess purchase price 166,655
Brave Foods, LLC [Member]  
Acquisitions (Details) - Schedule of excess purchase price amounts [Line Items]  
Goodwill 6,683
Trade Names & Trademarks 16,704
Know-How and Intellectual Property 16,704
Website 16,704
Customer Relationships 10,023
Excess purchase price $ 66,818
v3.22.4
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]            
Revenues     $ 4,683,843 $ 5,069,181    
Net loss attributable to common shareholders     $ (24,217,030) $ (26,428,192)    
Net loss per share (in Dollars per share)     $ (1.23) $ (2.23)    
Weighted average number of shares outstanding (in Shares)     19,726,987 11,845,229    
Plant Camp LLC [Member]            
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]            
Revenues   $ 3,429,748        
Net loss attributable to common shareholders   $ (25,735,007)     $ (37,822,820) $ (27,476,400)
Net loss per share (in Dollars per share)   $ (2.17)        
Weighted average number of shares outstanding (in Shares)   11,845,229        
WHE Agency, Inc. [Member]            
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]            
Revenues $ 4,057,080          
Net loss attributable to common shareholders $ (9,425,313)       $ (37,707,250) $ (27,235,057)
Net loss per share (in Dollars per share) $ (0.45)          
Weighted average number of shares outstanding (in Shares) 21,087,764          
v3.22.4
Segment Information (Details) - Schedule of reportable segments and corporate - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net $ 222,183 $ 337,440 $ 90,355
Prepaid expenses and other current assets 139,726 236,665 23,856
Deposits and other assets 769,136 718,951 191,836
Intangible assets 2,536,599 2,432,841  
Goodwill 1,365,328 1,374,835  
Inventory 879,050 106,403  
All other assets 2,811,769 3,966,124 8,673,863
Total Assets 8,723,791 9,173,259  
Accounts payable and accrued liabilities 6,714,606 3,730,540  
Note payable, net of debt discount and issuance costs 1,787,099 1,342,664 1,221,539
Deferred revenue 305,555 234,159 88,637
All other Liabilities 8,529,992 177,644 1,390,420
Total Liabilities 17,337,252 5,485,007  
Creatd Labs [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net 3,800
Prepaid expenses and other current assets 43,336 48,495 19,631
Deposits and other assets 576,551 626,529  
Intangible assets 162,489  
Goodwill  
Inventory  
All other assets
Total Assets 782,376 675,024  
Accounts payable and accrued liabilities 1,365 9,693  
Note payable, net of debt discount and issuance costs 129,634 313,979 55,928
Deferred revenue 161,112 161,112
All other Liabilities
Total Liabilities 292,111 484,784  
Creatd Ventures [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net 4,973 2,884  
Prepaid expenses and other current assets  
Deposits and other assets  
Intangible assets 1,568,347 1,637,924  
Goodwill 15,632 25,139  
Inventory 879,050 106,403  
All other assets  
Total Assets 2,468,002 1,772,350  
Accounts payable and accrued liabilities 1,518,544 766,253  
Note payable, net of debt discount and issuance costs 170,365  
Deferred revenue   13,477  
All other Liabilities  
Total Liabilities 1,688,909 779,730  
Creatd Partners [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net 217,210 334,556 86,555
Prepaid expenses and other current assets
Deposits and other assets  
Intangible assets 648,469 783,676  
Goodwill 1,349,696 1,349,696  
Inventory  
All other assets
Total Assets 2,215,375 2,467,928  
Accounts payable and accrued liabilities 68,063 6,232  
Note payable, net of debt discount and issuance costs
Deferred revenue 144,443 59,570 88,637
All other Liabilities
Total Liabilities 212,506 65,802  
Corporate [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net
Prepaid expenses and other current assets 96,390 188,170 4,225
Deposits and other assets 192,585 92,422  
Intangible assets 157,294 11,241  
Goodwill  
Inventory  
All other assets 2,811,769 3,966,124 8,673,863
Total Assets 3,258,038 4,257,957  
Accounts payable and accrued liabilities 5,126,634 2,948,362  
Note payable, net of debt discount and issuance costs 1,487,100 1,028,685 1,165,611
Deferred revenue
All other Liabilities 8,529,992 177,644 $ 1,390,420
Total Liabilities $ 15,143,726 $ 4,154,691  
v3.22.4
Segment Information (Details) - Schedule of financial information related to our reportable segments and corporate - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Segment Reporting Information [Line Items]            
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
Cost of revenue 1,404,562 1,418,213 4,771,151 4,160,743 5,300,037 1,495,042
Gross margin (381,711) (238,593) (773,661) (1,266,353) (1,000,320) (282,172)
Research and development 234,965 322,946 686,131 708,396 983,528 257,431
Marketing 646,520 1,812,400 4,016,051 8,049,579 9,626,982 2,854,904
Stock based compensation 626,568 2,151,900 3,848,578 5,662,389 9,661,174  
General and administrative not including depreciation, amortization, or Impairment 4,087,055 2,385,135 10,956,046 5,551,049 9,975,360 5,858,454
Depreciation and amortization 157,996   441,943 194,929 397,440  
Impairment of intangibles 249,586   257,117 93,791 1,727,032  
Total operating expenses 5,595,108 6,672,381 20,205,866 19,971,413    
Interest expense (673,694)   (707,950)      
All other expenses (2,875,832)   (3,424,854)      
Other expenses, net (3,549,526)   (4,132,804)      
Loss before income tax provision (9,526,345) (9,720,121) (25,112,331) (24,925,834) (37,379,153) (24,212,783)
Creatd Labs [Member]            
Segment Reporting Information [Line Items]            
Net revenue 291,414 565,852 1,138,904 1,388,411 1,926,374 375,043
Cost of revenue 564,349 849,079 1,917,039 2,482,848 3,186,240 652,259
Gross margin (272,935) (283,227) (778,135) (1,094,437) (1,259,866) (277,216)
Research and development 139,997 250,474 408,810 549,426 758,293 227,656
Marketing 370,584 1,540,540 2,301,994 6,842,142 8,182,935 2,426,668
Stock based compensation 122,964 337,026 755,284 886,832    
General and administrative not including depreciation, amortization, or Impairment 90,212 386,844 242,330 900,323 3,918,130 2,301,088
Depreciation and amortization 1,489   4,166      
Impairment of intangibles          
Total operating expenses 723,757 2,514,884 3,712,584 9,178,723    
Interest expense (17,048)   (34,095)      
All other expenses          
Other expenses, net (17,048)   (34,095)      
Loss before income tax provision (1,001,024) (2,802,443) (4,524,814) (10,286,156) (15,858,951) (6,474,951)
Creatd Ventures [Member]            
Segment Reporting Information [Line Items]            
Net revenue 316,654 3,919 1,237,542 9,616 90,194  
Cost of revenue 502,396 174,438 1,706,586 497,194 148,989  
Gross margin (185,742) (170,519) (469,044) (487,578) (58,940)  
Research and development 60   131 131  
Marketing 234,760   1,458,280    
Stock based compensation 111,472   684,697 796,676    
General and administrative not including depreciation, amortization, or Impairment 476,386 302,764 1,279,676 76,381 1,665,783  
Depreciation and amortization 43,001   120,282      
Impairment of intangibles 85,406   87,983      
Total operating expenses 822,618 32,819 3,630,918 873,188    
Interest expense        
All other expenses          
Other expenses, net        
Loss before income tax provision (1,008,360) (506,162) (4,099,962) (1,360,766) (3,385,888)  
Creatd Partners [Member]            
Segment Reporting Information [Line Items]            
Net revenue 414,783 609,849 1,621,044 1,496,363 2,283,149 837,827
Cost of revenue 337,817 394,696 1,147,526 1,180,701 1,964,808 842,783
Gross margin 76,966 215,153 473,518 315,662 318,341 (4,956)
Research and development 94,968 72,412 277,321 158,839 225,104 29,775
Marketing 41,176 181,240 255,777 804,958 962,698 285,490
Stock based compensation 126,654 332,531 777,948 875,004    
General and administrative not including depreciation, amortization, or Impairment 384,365 293,296 1,032,487 682,602 1,600,212 939,792
Depreciation and amortization 40,917   114,453      
Impairment of intangibles          
Total operating expenses 647,163 879,479 2,457,986 2,521,403    
Interest expense          
All other expenses          
Other expenses, net          
Loss before income tax provision (570,197) (664,326) (1,984,468) (2,205,741) (6,331,311) (2,731,460)
Corporate [Member]            
Segment Reporting Information [Line Items]            
Net revenue      
Cost of revenue      
Gross margin      
Research and development      
Marketing 90,620   402,479 481,349 142,745
Stock based compensation 265,478 1,179,579 1,630,649 3,103,877    
General and administrative not including depreciation, amortization, or Impairment 3,136,092 1,672,176 8,401,553 3,891,743 2,791,236 2,592,581
Depreciation and amortization 72,589   203,042      
Impairment of intangibles 164,180   169,134      
Total operating expenses 3,401,570 2,942,375 10,404,378 7,398,099    
Interest expense (656,647)   (673,855)      
All other expenses (2,875,832)   (3,424,854)      
Other expenses, net (3,532,479)   (4,098,709)      
Loss before income tax provision $ (6,946,764) $ (5,747,190) $ (14,503,087) $ (11,073,171) $ (11,803,003) $ (14,981,379)
v3.22.4
Subsequent Events (Details)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 05, 2022
Mar. 07, 2022
USD ($)
Mar. 03, 2022
USD ($)
Mar. 01, 2022
Oct. 25, 2021
USD ($)
Oct. 24, 2022
USD ($)
Oct. 20, 2022
USD ($)
$ / shares
Sep. 15, 2022
USD ($)
Jun. 17, 2021
USD ($)
Sep. 30, 2022
USD ($)
$ / shares
shares
Sep. 30, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2021
AUD ($)
shares
Dec. 31, 2020
$ / shares
shares
Subsequent Events (Details) [Line Items]                            
Warrants exercised (in Shares) | shares                   4,227,114 4,227,114      
Cancellation of warrants (in Shares) | shares                     4,227,114      
Common stock, share issued (in Shares) | shares                   24,469,675 24,469,675 16,691,170   8,736,378
Gross proceeds   $ 2,659,750     $ 3,407,250     $ 796,000     $ 354,994      
Net proceeds                   $ 75,000 $ 190,000      
Common stock, per share (in Dollars per share) | $ / shares                   $ 0.001 $ 0.001 $ 0.001   $ 0.001
Proceeds from sale                     $ 750,000      
Agreement to pay                     $ 750,000      
Gross proceeds percentage                     50.00%      
Description of warrants                     The Replacement Warrants reflect a reduction in the number of Series C and Series D Warrants from 1,550,000 in each class to 1,536,607 in each class and a reduction in the number of Series E and Series F Warrants from 1,075,000 in each class to 807,143 in each class, and the initial exercise date for the Replacement Warrants are unchanged from the date as set forth in the respective exchanged Series C, Series D, Series E or Series F Warrant.      
Note conversion, description                       Subsequent to December 31, 2021, a total of $168,850 in principal of convertible notes converted into 109,435 shares of common stock.  Subsequent to December 31, 2021, a total of $168,850 in principal of convertible notes converted into 109,435 shares of common stock.   
Net proceeds                 $ 2,213,500       $ 224,540  
Common stock shares to consultants (in Shares) | shares                       183,590 183,590  
Common Stock [Member]                            
Subsequent Events (Details) [Line Items]                            
Common stock, share issued (in Shares) | shares                   3,802,626 3,802,626      
One Promissory Note [Member]                            
Subsequent Events (Details) [Line Items]                            
Net proceeds                       $ 300,000    
Subsequent Event [Member]                            
Subsequent Events (Details) [Line Items]                            
Investor purchase           $ 1,500,000 $ 15,000,000              
Common stock, per share (in Dollars per share) | $ / shares             $ 0.001              
Weighted average             82.00%              
Principal amount             $ 300,000              
Purchase price             $ 255,000              
Debt Instrument, Interest Rate, Effective Percentage             10.00%              
Payments to investor             $ 47,142.85              
Unsecured debenture           $ 1,666,650                
Securities purchase agreement , description           The Debenture has an original issue discount of 10%, has a term of six months with a maturity date of April 24, 2023, may be extended by six months at the Company’s option subject to certain conditions, and are convertible into shares of Common Stock at a conversion price of $0.20 per share, subject to adjustment upon certain events.                 
Forecast [Member]                            
Subsequent Events (Details) [Line Items]                            
Securities purchase agreement , description       the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share.                    
Registered direct offering, description   the Company entered into a securities purchase agreement (the “Purchase Agreement”) with thirteen accredited investors resulting in the raise of $2,659,750 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 1,519,857 shares of the Company’s common stock together with warrants to purchase an aggregate of 1,519,857 shares of Common Stock at an exercise price of $1.75 per share. The warrants are immediately exercisable and will expire on March 9, 2027.                        
Certain debts and liabilities   $ 278,163                        
Settlement total     $ 799,000                      
Note principal     660,000                      
Accrued interest     $ 139,000                      
Employment agreements, description On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).                           
Promissory Notes [Member]                            
Subsequent Events (Details) [Line Items]                            
Net proceeds                     $ 100,000      
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of consolidated subsidiaries and/or entities
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Jerrick Ventures LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 100.00% 100.00%
Abacus Tech Pty Ltd [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Australia Australia
Company Ownership Interest 100.00% 100.00%
Seller’s Choice, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   New Jersey
Company Ownership Interest   100.00%
Recreatd, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
Give, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
Creatd Partners LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
Dune Inc. [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 50.00% 50.00%
Plant Camp LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 89.00% 89.00%
Sci-Fi Shop, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
OG Collection LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
VMENA LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
Vocal For Brands, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
Vocal Ventures LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
What to Buy, LLC [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization   Delaware
Company Ownership Interest   100.00%
WHE Agency, Inc [Member]    
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]    
State or other jurisdiction of incorporation or organization Delaware Delaware
Company Ownership Interest 44.00% 44.00%
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis - USD ($)
Dec. 31, 2021
Dec. 31, 2020
Fair value on recurring [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Marketable securities - debt securities $ 62,733
Total assets 62,733
Liabilities:    
Derivative liabilities 42,231
Total Liabilities 42,231
Fair value on recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Marketable securities - debt securities
Total assets
Liabilities:    
Derivative liabilities
Total Liabilities
Fair value on recurring [Member] | Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Marketable securities - debt securities
Total assets
Liabilities:    
Derivative liabilities
Total Liabilities
Fair value on recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Marketable securities - debt securities 62,733
Total assets 62,733
Liabilities:    
Derivative liabilities 42,231
Total Liabilities 42,231
Fair value on non-recurring [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Total assets 50,000 217,096
Liabilities:    
Equity investments, at cost 50,000 217,096
Fair value on non-recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Total assets
Liabilities:    
Equity investments, at cost
Fair value on non-recurring [Member] | Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Total assets
Liabilities:    
Equity investments, at cost
Fair value on non-recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis [Line Items]    
Total assets 50,000 217,096
Liabilities:    
Equity investments, at cost $ 50,000 $ 217,096
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of fair value measurement inputs and valuation methodology - USD ($)
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Marketable securities - debt securities [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair Value $ 62,733
Valuation Methodology Discounted cash flow analysis  
Unobservable Inputs Expected cash flows from the investment  
Derivative liabilities [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair Value 42,231
Valuation Methodology Monte Carlo simulations and Binomial model  
Unobservable Inputs Risk free rate Expected volatility; Drift rate  
Equity investments, at cost [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair Value $ 217,096
Valuation Methodology Qualitative assessment per ASC 321-10-35  
Unobservable Inputs Qualitative factors  
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Computer equipment and software [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives [Line Items]    
Property and Equipment, Estimated Useful Life (Years) 3 years 3 years
Furniture and fixtures [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives [Line Items]    
Property and Equipment, Estimated Useful Life (Years) 5 years 5 years
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of amortization over the next five years - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Amortization Over The Next Five Years Abstract    
2022   $ 493,660
2023 $ 415,215 407,848
2024 443,236 347,936
2025 280,223 231,624
2026 260,935 219,749
Thereafter 739,762 732,024
Total $ 2,536,599 $ 2,432,841
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities [Line Items]        
Goodwill acquired in a business combination $ 6,682 $ 15,632    
Impairment of goodwill $ (25,139) $ (25,139) $ (1,035,795)  
Fair Value, Recurring [Member] | Goodwill [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities [Line Items]        
Beginning of period     1,035,795  
Goodwill acquired in a business combination     1,374,835  
Impairment of goodwill     (1,035,795)  
Ending of period     1,374,835  
Marketable Securities - Debt Securities [Member] | Fair Value, Nonrecurring [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities [Line Items]        
Beginning of period      
Ending of period     62,733
Purchase of marketable securities     210,000
Interest due at maturity     4,829
Other than temporary impairment     (62,733) (50,000)
Conversion to equity method investments      
Conversion of marketable securities       (102,096)
Equity Investments [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities [Line Items]        
Beginning of period      
Ending of period     50,000 217,096
Purchase of equity investments     150,000 115,000
Other than temporary impairment     (102,096)  
Conversion to equity method investments     $ (215,000)  
Conversion of marketable securities       $ 102,096
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
Agency (Managed Services, Branded Content, & Talent Management Services) [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 442,867 555,766 1,613,924 1,472,902 2,256,546 1,100,199
Platform (Creator Subscriptions) [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 230,212 611,714 1,138,812 1,370,581 1,926,135 70,623
Ecommerce (Tangible products) [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 347,944 4,153 1,237,634 9,679 90,433
Affiliate Sales [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue 1,828 7,619 7,120 23,425 26,453 33,748
Other Revenue [Member]            
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]            
Net revenue $ 368 $ 17,803 $ 150 $ 8,300
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of revenue recognition - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Schedule Of Revenue Recognition Abstract            
Products and services transferred over time $ 673,079 $ 1,167,480 $ 2,752,736 $ 2,843,483 $ 4,182,681 $ 1,100,199
Products and services transferred at a point in time 349,772 12,140 1,244,754 50,907 117,036 112,671
Revenue recognition $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
v3.22.4
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents - shares
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 8,561,449 3,769,256
Warrants [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 5,658,830 3,228,235
Options [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 2,902,619 541,021
v3.22.4
Inventory (Details) - Schedule of inventory - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Inventory Abstract    
Packaging $ 78,799 $ 2,907
Finished goods 717,417 103,496
Total $ 879,050 $ 106,403
v3.22.4
Property and Equipment (Details) - Schedule of property and equipment stated at cost, less accumulated depreciation - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 679,482 $ 467,753 $ 371,816
Less: Accumulated Depreciation (430,519) (364,814) (315,558)
Property and Equipment, Net 248,963 102,939 56,258
Computer Equipment [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 447,342 353,880 284,928
Furniture and Fixtures [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 184,524 102,416 $ 86,888
Leasehold Improvements [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 47,616 $ 11,457  
v3.22.4
Equity Investments, at Cost (Details) - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Oct. 03, 2021
May 21, 2021
Feb. 17, 2021
Oct. 23, 2020
Oct. 02, 2020
Equity Investments, at Cost (Details) [Line Items]              
Marketable debt security $ 96         $ 102,096
Converted into shares of preferred stock             119,355
Purchase of ownership amount       $ 50,000 $ 100,000 $ 115,000  
Equity Investments [Member]              
Equity Investments, at Cost (Details) [Line Items]              
Equity investment ownership percentage     29.00% 10.00% 3.30% 3.80% 1.30%
v3.22.4
Equity Method Investments (Details) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Oct. 03, 2021
May 21, 2021
Feb. 17, 2021
Oct. 23, 2020
Oct. 02, 2020
Equity Method Investments (Details) [Line Items]              
Cash $ 410,750 $ 410,000          
Equity interest   123,710          
Purchased of ownership amount     50.41%        
Loss of investment   16,413          
Investment impairment   424,632          
Equity method investment total   $ 0          
Equity Investments [Member]              
Equity Method Investments (Details) [Line Items]              
Equity investment ownership percentage     29.00% 10.00% 3.30% 3.80% 1.30%
v3.22.4
Notes Payable (Details) - Schedule of notes payable - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2020
Dec. 31, 2021
Mar. 11, 2020
Debt Instrument [Line Items]        
Outstanding Principal, Total $ 2,401,509 $ 1,434,576 $ 1,358,211  
Outstanding Principal, Less: Debt Discount   (15,547)  
Outstanding Principal, Less: Debt Issuance Costs  
Outstanding Principal, Less: Debt Total 1,787,099 1,434,576 1,342,664  
Outstanding Principal, Less: Current Debt (1,758,179) (1,221,539) (1,278,672)  
Outstanding Principal, Total Long-Term Debt 28,920 213,037 63,992  
The May 2020 PPP Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total   $ 412,500  
Interest Rate   1.00%    
Maturity Date, description   April 2022    
The April 2020 PPP Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total $ 198,577 $ 282,432 198,577  
Interest Rate 1.00% 1.00%    
Maturity Date, description May 2022 May 2022    
The October 2020 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total   $ 55,928  
Interest Rate   14.00%    
Maturity Date, description   July 2021    
The November 2020 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total   $ 23,716  
Interest Rate   14.00%    
Maturity Date, description   May 2021    
The February 2021 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total    
Interest Rate   14.00%    
Maturity Date, description   July 2021    
The July 2021 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total    
Interest Rate   10.00%    
Maturity Date, description   October 2022    
The December 2021 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total $ 47,990 185,655  
Interest Rate 10.00% 10.00%    
Maturity Date, description June 2023 June 2023    
The Second December 2021 Loan Agreement [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total   313,979  
Interest Rate   14.00%    
Maturity Date, description   June 2022    
Seller’s Choice Note [Member]        
Debt Instrument [Line Items]        
Outstanding Principal, Total   $ 660,000 $ 660,000  
Interest Rate 30.00% 30.00%   9.50%
Maturity Date, description September 2020 September 2020    
v3.22.4
Convertible Notes Payable (Details) - Schedule of convertible notes payable - USD ($)
12 Months Ended
Dec. 31, 2021
Sep. 30, 2022
Dec. 31, 2020
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal $ 168,850 $ 6,429,427 $ 1,280,680
Warrants granted, Quantity (in Shares) 6,667    
Less: Debt Discount $ (8,120) (360,854) (309,637)
Less: Debt Issuance Costs (1,537) (5,648) (73,527)
Total   $ 6,062,926 897,516
Less: Current Debt (159,193)   (897,516)
Total Long-Term Debt  
The September 2020 convertible Loan Agreement [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal   341,880
Interest Rate 12.00%    
Conversion Price (in Dollars per share) [1]    
Maturity Date September-21    
Warrants granted, Quantity (in Shares) 85,555    
Warrants granted, Exercise Price (in Dollars per share) $ 5    
The First December 2020 convertible Loan Agreement [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal   600,000
Interest Rate 12.00%    
Conversion Price (in Dollars per share) [1]    
Maturity Date December-21    
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price (in Dollars per share)    
The October 2020 convertible Loan Agreement [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal   169,400
Interest Rate 6.00%    
Conversion Price (in Dollars per share) [1]    
Maturity Date October-21    
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price (in Dollars per share)    
The Second December 2020 convertible Loan Agreement [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal   169,400
Interest Rate 6.00%    
Conversion Price (in Dollars per share) [1]    
Maturity Date December-21    
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price (in Dollars per share)    
May 2021 Loan [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal  
Interest Rate    
Conversion Price (in Dollars per share) [1] $ 5    
Maturity Date November-22    
Warrants granted, Quantity (in Shares) 1,090,908    
Warrants granted, Exercise Price (in Dollars per share) $ 4.5    
The July 2021 Loan [Member]      
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]      
Outstanding Principal $ 168,850  
Interest Rate 6.00%    
Conversion Price (in Dollars per share) [1]    
Maturity Date July - 22    
[1] As subject to adjustment as further outlined in the notes
v3.22.4
Related Party (Details) - Schedule of notes payable - related party - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2020
Related Party (Details) - Schedule of notes payable - related party [Line Items]      
Notes payable - related party, gross $ 20,000 $ 20,000
Less: Debt Discount (17,068)  
Notes payable 2,932 2,932
Less: Current Debt (2,932) (2,932)
Notes payable - related party, net
The September 2020 Goldberg Loan Agreement [Member]      
Related Party (Details) - Schedule of notes payable - related party [Line Items]      
Notes payable - related party, gross $ 16,705 $ 16,705
Interest Rate   7.00% 7.00%
Maturity Date     September 2022
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price (in Dollars per share)    
The September 2020 Rosen Loan Agreement [Member]      
Related Party (Details) - Schedule of notes payable - related party [Line Items]      
Notes payable - related party, gross $ 3,295 $ 3,295
Interest Rate   7.00% 7.00%
Maturity Date     September 2022
Warrants granted, Quantity (in Shares)    
Warrants granted, Exercise Price (in Dollars per share)    
v3.22.4
Derivative Liabilities (Details) - Schedule of changes in the derivative liabilities - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Level 1 [Member]      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]      
Derivative liabilities at beginning
Derivative liabilities at ending  
Addition
Changes in fair value
Extinguishment  
Conversion to Note payable - related party    
Level 2 [Member]      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]      
Derivative liabilities at beginning
Derivative liabilities at ending  
Addition
Changes in fair value
Extinguishment  
Conversion to Note payable - related party    
Level 3 [Member]      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]      
Derivative liabilities at beginning 42,231
Derivative liabilities at ending   42,231
Addition 100,532 417,241 3,061,688
Changes in fair value (3,729) 1,096,287 $ (3,019,457)
Extinguishment $ (96,803) (431,458)  
Conversion to Note payable - related party   $ (1,124,301)  
v3.22.4
Stockholders’ Equity (Details) - Schedule of assumptions options granted - Options [Member] - $ / shares
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Stockholders’ Equity (Details) - Schedule of assumptions options granted [Line Items]    
Exercise price (in Dollars per share)   $ 8.55
Expected dividends 0.00% 0.00%
Expected volatility   229.95%
Risk free interest rate   0.25%
Expected life of option   5 years 8 months 1 day
Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of assumptions options granted [Line Items]    
Exercise price (in Dollars per share) $ 2.09  
Expected volatility 169.78%  
Risk free interest rate 0.46%  
Expected life of option 5 years  
Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of assumptions options granted [Line Items]    
Exercise price (in Dollars per share) $ 4.89  
Expected volatility 242.98%  
Risk free interest rate 1.26%  
Expected life of option 7 years  
v3.22.4
Stockholders’ Equity (Details) - Schedule of the stock option activity - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Stockholders’ Equity (Details) - Schedule of the stock option activity [Line Items]        
Options beginning balance 2,902,619 541,021 541,021  
Weighted Average Exercise Price, beginning balance $ 7.07 $ 12.75 $ 12.75  
Weighted Average Remaining Contractual Life (in years), beginning balance 4 years 8 months 15 days 3 years 3 months 7 days    
Options, Granted     2,425,762  
Weighted Average Exercise Price, Granted $ 1.38 $ 6.32 $ 5.97  
Weighted Average Remaining Contractual Life (in years), Granted 6 years 2 months 12 days 5 years 10 months 28 days  
Options, Exercised  
Weighted Average Exercise Price, Exercised  
Weighted Average Remaining Contractual Life (in years), Exercised    
Options, Forfeited/Cancelled (434,352) (64,164) (64,164)  
Weighted Average Exercise Price, Forfeited/Cancelled $ 13.56 $ 13.06 $ 13.06  
Weighted Average Remaining Contractual Life (in years), Forfeited/Cancelled    
Options outstanding, ending balance 4,408,267 2,327,445 2,902,619 541,021
Weighted Average Exercise Price outstanding, ending balance $ 3.93 $ 7.63 $ 7.07 $ 12.75
Weighted Average Remaining Contractual Life (in years) outstanding, ending balance 4 years 5 months 4 days 4 years 3 months 14 days 4 years 8 months 15 days 3 years 3 months 7 days
Options, exercisable 3,010,101 608,524 1,165,191 149,168
Weighted Average Exercise Price, exercisable $ 4.12 $ 12.75 $ 9.01 $ 23.77
Weighted Average Remaining Contractual Life (in years), exercisable 4 years 3 months 25 days 3 years 9 months 4 years 1 month 13 days 1 year 9 months
Equity Option [Member]        
Stockholders’ Equity (Details) - Schedule of the stock option activity [Line Items]        
Options beginning balance   541,021 541,021 303,825
Weighted Average Exercise Price, beginning balance   $ 12.75 $ 12.75 $ 24.48
Weighted Average Remaining Contractual Life (in years), beginning balance       2 years 6 months 3 days
Options, Granted       391,853
Weighted Average Exercise Price, Granted       $ 8.55
Weighted Average Remaining Contractual Life (in years), Granted       5 years 8 months 1 day
Options, Exercised      
Weighted Average Exercise Price, Exercised      
Weighted Average Remaining Contractual Life (in years), Exercised      
Options, Forfeited/Cancelled       (154,657)
Weighted Average Exercise Price, Forfeited/Cancelled       $ 25.17
Weighted Average Remaining Contractual Life (in years), Forfeited/Cancelled      
Options outstanding, ending balance       541,021
Weighted Average Exercise Price outstanding, ending balance       $ 12.75
Weighted Average Remaining Contractual Life (in years) outstanding, ending balance       4 years 3 months 14 days
v3.22.4
Stockholders’ Equity (Details) - Schedule of outstanding and exercisable - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Outstanding And Exercisable Abstract    
Option Outstanding, Exercise price $ 3.93 $ 7.07
Option Outstanding, Number Outstanding 4,408,267 2,902,619
Option Outstanding, Weighted Average Remaining Contractual Life (in years) 4 years 5 months 4 days 4 years 8 months 15 days
Option Exercisable, Weighted Average Exercise Price $ 4.12 $ 9.01
Option Exercisable, Number Exercisable 3,010,101 1,165,191
Option Exercisable, Weighted Average Remaining Contractual Life (in years) 4 years 3 months 25 days 4 years 1 month 13 days
v3.22.4
Stockholders’ Equity (Details) - Schedule of assumptions warrant granted - $ / shares
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Stockholders’ Equity (Details) - Schedule of assumptions warrant granted [Line Items]    
Expected dividends 0.00% 0.00%
Expected life of warrant   5 years
Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of assumptions warrant granted [Line Items]    
Exercise price (in Dollars per share) $ 4.5 $ 4.5
Expected volatility 232.10% 234.03%
Risk free interest rate 0.82% 0.21%
Expected life of warrant 5 years  
Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of assumptions warrant granted [Line Items]    
Exercise price (in Dollars per share) $ 5.4 $ 18
Expected volatility 237.14% 247.00%
Risk free interest rate 0.89% 1.63%
Expected life of warrant 5 years 6 months  
v3.22.4
Stockholders’ Equity (Details) - Schedule of warrant activity - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Warrant [Member]        
Stockholders’ Equity (Details) - Schedule of warrant activity [Line Items]        
Warrant, outstanding beginning balance 5,658,830 6,130,948 6,130,948 247,403
Warrant, Granted 14,812,262 1,881,267 1,961,267 5,921,071
Warrant, Exercised (1,438,788) (2,414,218)
Warrant, Forfeited/Cancelled (41,462) (14,722) (19,167) (37,526)
Warrant, outstanding ending balance 20,429,630 6,558,705 5,658,830 6,130,948
Warrant, exercisable 16,429,630 6,558,705 5,616,330 3,228,235
Weighted Average Exercise Price [Member]        
Stockholders’ Equity (Details) - Schedule of warrant activity [Line Items]        
Weighted Average Exercise Price, outstanding beginning balance $ 4.98 $ 4.96 $ 4.96 $ 15.75
Weighted Average Exercise Price, Granted 2.29 5.63 5.6 4.7
Weighted Average Exercise, Exercised 4.59 4.55
Weighted Average Exercise Price, Forfeited/Cancelled 12 24 24 13.31
Weighted Average Exercise Price, outstanding ending balance     4.98 4.96
Weighted Average Exercise Price, exercisable $ 2.62 $ 4.92 $ 4.97 $ 5.37
v3.22.4
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable - Warrant [Member] - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Class of Warrant or Right [Line Items]    
Warrants Outstanding, Exercise price $ 1.88 $ 4.98
Warrants Outstanding, Number Outstanding (in Shares) 20,429,630 5,658,830
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) 4 years 25 days 3 years 9 months 18 days
Warrants Outstanding, Weighted Average Exercise Price   $ 4.97
Warrants Exercisable, Number Exercisable (in Shares)   5,616,330
Warrants Exercisable, Weighted Average Exercise Price   $ 3.79
v3.22.4
Stockholders’ Equity (Details) - Schedule of activity related to RSUs
12 Months Ended
Dec. 31, 2021
$ / shares
shares
RSAs non-vested at January 1, 2021 [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Total shares (in Shares) | shares
Grant date fair value
RSAs granted [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Total shares (in Shares) | shares 112,010
RSAs granted [Member] | Minimum [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Grant date fair value $ 2.71
RSAs granted [Member] | Maximum [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Grant date fair value $ 4.32
RSAs vested [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Total shares (in Shares) | shares
Grant date fair value
RSAs forfeited [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Total shares (in Shares) | shares (13,927)
RSAs forfeited [Member] | Minimum [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Grant date fair value $ 3.75
RSAs forfeited [Member] | Maximum [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Grant date fair value $ 4.32
RSAs non-vested September 30, 2021 [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Total shares (in Shares) | shares 98,083
RSAs non-vested September 30, 2021 [Member] | Minimum [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Grant date fair value $ 2.71
RSAs non-vested September 30, 2021 [Member] | Maximum [Member]  
Stockholders’ Equity (Details) - Schedule of activity related to RSUs [Line Items]  
Grant date fair value $ 4.32
v3.22.4
Commitments and Contingencies (Details) - Schedule of components of lease expense - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Components Of Lease Expense Abstract      
Operating lease cost $ 148,446 $ 241,601 $ 202,804
Short term lease cost 5,568 154,108 14,041
Total net lease cost $ 154,015 $ 395,709 $ 216,845
v3.22.4
Commitments and Contingencies (Details) - Schedule of supplemental cash flow and other information related to leases - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Supplemental Cash Flow And Other Information Related To Leases Abstract    
Operating lease payments $ 54,564 $ 100,100
Weighted average remaining lease term (in years): 3 years 4 months 24 days 2 months 1 day
Weighted average discount rate: 12.50% 0.00%
v3.22.4
Acquisition (Details) - Schedule of components of the purchase price
Dec. 31, 2021
USD ($)
Plant Camp LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller $ 300,000
Fair value of equity investment purchased on June 1, 2021 175,000
Total purchase price 475,000
Cash 5,232
Accounts Receivable 7,645
Inventory 19,970
Total assets acquired 32,847
Accounts payable and accrued expenses 5,309
Deferred Revenue 671
Total liabilities assumed 5,980
Net assets acquired 26,867
Non-controlling interest in consolidated subsidiary 56,865
Excess purchase price 504,998
Excess purchase price 504,998
Plant Camp LLC [Member] | Goodwill [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 7,198
Plant Camp LLC [Member] | Trade Names & Trademarks [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 100,000
Plant Camp LLC [Member] | Know-How and Intellectual Property [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 316,500
Plant Camp LLC [Member] | Website [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 51,300
Plant Camp LLC [Member] | Customer Relationships [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 30,000
WHE Agency, Inc. [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller 144,750
Shares granted to seller 893,521
Total purchase price 1,038,271
Cash 26,575
Accounts Receivable 446,272
Total assets acquired 472,847
Accounts payable and accrued expenses 353,017
Total liabilities assumed 353,017
Net assets acquired 119,830
Non-controlling interest in consolidated subsidiary 1,190,000
Excess purchase price 2,108,442
Excess purchase price 2,108,442
WHE Agency, Inc. [Member] | Goodwill [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 1,349,697
WHE Agency, Inc. [Member] | Trade Names & Trademarks [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 85,945
WHE Agency, Inc. [Member] | Non-Compete Agreements [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 45,190
WHE Agency, Inc. [Member] | Influencers / Customers [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 627,610
Dune, Inc [Member]  
Asset Acquisition [Line Items]  
Shares granted to seller 424,698
Fair value of equity investment purchased before October 4, 2021 307,665
Total purchase price 732,363
Cash 186,995
Inventory 47,250
Total assets acquired 234,246
Accounts payable and accrued expenses 40,000
Total liabilities assumed 40,000
Net assets acquired 194,246
Non-controlling interest in consolidated subsidiary 720,581
Excess purchase price 1,258,698
Excess purchase price 1,258,698
Dune, Inc [Member] | Goodwill [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 17,941
Dune, Inc [Member] | Trade Names & Trademarks [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 249,248
Dune, Inc [Member] | Know-How and Intellectual Property [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 788,870
Dune, Inc [Member] | Website [Member]  
Asset Acquisition [Line Items]  
Excess purchase price 127,864
Dune, Inc [Member] | Customer Relationships [Member]  
Asset Acquisition [Line Items]  
Excess purchase price $ 74,774
v3.22.4
Acquisition (Details) - Schedule of unaudited pro-forma combined results of operations - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Plant Camp LLC [Member]        
Acquisition (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]        
Revenues     $ 4,335,593 $ 1,213,430
Net loss attributable to common shareholders   $ (25,735,007) $ (37,822,820) $ (27,476,400)
Net loss per share (in Dollars per share)     $ (2.99) $ (5.71)
Weighted average number of shares outstanding (in Shares)     12,652,470 4,812,153
WHE Agency, Inc. [Member]        
Acquisition (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]        
Revenues     $ 4,916,777 $ 1,685,336
Net loss attributable to common shareholders $ (9,425,313)   $ (37,707,250) $ (27,235,057)
Net loss per share (in Dollars per share)     $ (2.98) $ (5.66)
Weighted average number of shares outstanding (in Shares)     12,652,470 4,812,153
Dune, Inc [Member]        
Acquisition (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]        
Revenues     $ 4,299,717 $ 1,212,870
Net loss attributable to common shareholders     $ (38,265,301) $ (27,382,216)
Net loss per share (in Dollars per share)     $ (3.02) $ (5.69)
Weighted average number of shares outstanding (in Shares)     12,652,470 4,812,153
v3.22.4
Segment Information (Details) - Schedule of reportable segments and corporate - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net $ 222,183 $ 337,440 $ 90,355
Prepaid expenses and other current assets 139,726 236,665 23,856
Deposits and other assets 769,136 718,951 191,836
Intangible assets 2,536,599 2,432,841 960,611
Goodwill 1,365,328 1,374,835 1,035,795
Inventory 879,050 106,403  
All other assets 2,811,769 3,966,124 8,673,863
Total Assets 8,723,791 9,173,259 10,784,480
Accounts payable and accrued liabilities 6,714,606 3,730,540 2,638,688
Note payable, net of debt discount and issuance costs 1,787,099 1,342,664 1,221,539
Deferred revenue 305,555 234,159 88,637
All other Liabilities 8,529,992 177,644 1,390,420
Total Liabilities 17,337,252 5,485,007 5,339,284
Creatd Labs [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net 3,800
Prepaid expenses and other current assets 43,336 48,495 19,631
Deposits and other assets 576,551 626,529  
Intangible assets  
Goodwill  
Inventory    
All other assets
Total Assets   675,024 23,431
Accounts payable and accrued liabilities   9,693 6,221
Note payable, net of debt discount and issuance costs 129,634 313,979 55,928
Deferred revenue 161,112 161,112
All other Liabilities
Total Liabilities   484,784 62,149
Creatd Ventures [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net 4,973 2,884  
Prepaid expenses and other current assets  
Deposits and other assets  
Intangible assets   1,637,924  
Goodwill   25,139  
Inventory   106,403  
All other assets  
Total Assets   1,772,350  
Accounts payable and accrued liabilities   766,253  
Note payable, net of debt discount and issuance costs 170,365  
Deferred revenue   13,477  
All other Liabilities  
Total Liabilities   779,730  
Creatd Partners [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net 217,210 334,556 86,555
Prepaid expenses and other current assets
Deposits and other assets  
Intangible assets   783,676 960,611
Goodwill   1,349,696 1,035,795
Inventory    
All other assets
Total Assets   2,467,928 2,082,961
Accounts payable and accrued liabilities   6,232 83,964
Note payable, net of debt discount and issuance costs
Deferred revenue 144,443 59,570 88,637
All other Liabilities
Total Liabilities   65,802 172,601
Corporate [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Accounts receivable, net
Prepaid expenses and other current assets 96,390 188,170 4,225
Deposits and other assets 192,585 92,422  
Intangible assets   11,241
Goodwill  
Inventory    
All other assets 2,811,769 3,966,124 8,673,863
Total Assets   4,257,957 8,678,088
Accounts payable and accrued liabilities   2,948,362 2,548,503
Note payable, net of debt discount and issuance costs 1,487,100 1,028,685 1,165,611
Deferred revenue
All other Liabilities $ 8,529,992 177,644 1,390,420
Total Liabilities   $ 4,154,691 $ 5,104,534
v3.22.4
Segment Information (Details) - Schedule of financial information related to our reportable segments and corporate - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Segment Reporting Information [Line Items]            
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390 $ 4,299,717 $ 1,212,870
Cost of revenue 1,404,562 1,418,213 4,771,151 4,160,743 5,300,037 1,495,042
Gross margin (381,711) (238,593) (773,661) (1,266,353) (1,000,320) (282,172)
Research and development 234,965 322,946 686,131 708,396 983,528 257,431
Marketing 646,520 1,812,400 4,016,051 8,049,579 9,626,982 2,854,904
Stock based compensation         9,661,168 6,861,163
Impairment of goodwill         1,035,795  
General and administrative not including depreciation, amortization, or Impairment 4,087,055 2,385,135 10,956,046 5,551,049 9,975,360 5,858,454
Depreciation and amortization         397,440 157,761
Impairment of intangibles         688,127 11,450
Total operating expenses 5,595,108 6,672,381 20,205,866 19,971,413 32,368,400 16,001,163
Interest expense         (372,106) (372,106)
All other expenses         (3,638,327) (7,557,342)
Other expenses, net         (4,010,433) (7,929,448)
Loss before income tax provision and equity in net loss from unconsolidated investments (9,526,345) (9,720,121) (25,112,331) (24,925,834) (37,379,153) (24,212,783)
Creatd Labs [Member]            
Segment Reporting Information [Line Items]            
Net revenue 291,414 565,852 1,138,904 1,388,411 1,926,374 375,043
Cost of revenue 564,349 849,079 1,917,039 2,482,848 3,186,240 652,259
Gross margin (272,935) (283,227) (778,135) (1,094,437) (1,259,866) (277,216)
Research and development 139,997 250,474 408,810 549,426 758,293 227,656
Marketing 370,584 1,540,540 2,301,994 6,842,142 8,182,935 2,426,668
Stock based compensation         1,727,021 1,226,495
Impairment of goodwill          
General and administrative not including depreciation, amortization, or Impairment 90,212 386,844 242,330 900,323 3,918,130 2,301,088
Depreciation and amortization        
Impairment of intangibles        
Total operating expenses         14,586,379 6,181,907
Interest expense         (12,706) (15,828)
All other expenses        
Other expenses, net         (12,706) (15,828)
Loss before income tax provision and equity in net loss from unconsolidated investments (1,001,024) (2,802,443) (4,524,814) (10,286,156) (15,858,951) (6,474,951)
Creatd Ventures [Member]            
Segment Reporting Information [Line Items]            
Net revenue 316,654 3,919 1,237,542 9,616 90,194  
Cost of revenue 502,396 174,438 1,706,586 497,194 148,989  
Gross margin (185,742) (170,519) (469,044) (487,578) (58,940)  
Research and development 60   131 131  
Marketing 234,760   1,458,280    
Stock based compensation         1,560,546  
Impairment of goodwill          
General and administrative not including depreciation, amortization, or Impairment 476,386 302,764 1,279,676 76,381 1,665,783  
Depreciation and amortization         100,633  
Impairment of intangibles          
Total operating expenses         3,327,093  
Interest expense          
All other expenses          
Loss before income tax provision and equity in net loss from unconsolidated investments (1,008,360) (506,162) (4,099,962) (1,360,766) (3,385,888)  
Creatd Partners [Member]            
Segment Reporting Information [Line Items]            
Net revenue 414,783 609,849 1,621,044 1,496,363 2,283,149 837,827
Cost of revenue 337,817 394,696 1,147,526 1,180,701 1,964,808 842,783
Gross margin 76,966 215,153 473,518 315,662 318,341 (4,956)
Research and development 94,968 72,412 277,321 158,839 225,104 29,775
Marketing 41,176 181,240 255,777 804,958 962,698 285,490
Stock based compensation         1,884,986 1,338,678
Impairment of goodwill         1,035,795  
General and administrative not including depreciation, amortization, or Impairment 384,365 293,296 1,032,487 682,602 1,600,212 939,792
Depreciation and amortization         252,730 132,768
Impairment of intangibles         688,127
Total operating expenses         6,649,652 2,726,504
Interest expense        
All other expenses        
Other expenses, net          
Loss before income tax provision and equity in net loss from unconsolidated investments (570,197) (664,326) (1,984,468) (2,205,741) (6,331,311) (2,731,460)
Corporate [Member]            
Segment Reporting Information [Line Items]            
Net revenue      
Cost of revenue      
Gross margin      
Research and development      
Marketing 90,620   402,479 481,349 142,745
Stock based compensation         4,488,615 4,295,990
Impairment of goodwill          
General and administrative not including depreciation, amortization, or Impairment 3,136,092 1,672,176 8,401,553 3,891,743 2,791,236 2,592,581
Depreciation and amortization         44,076 24,993
Impairment of intangibles         11,450
Total operating expenses         11,803,003 7,067,759
Interest expense         (359,400) (356,278)
All other expenses         (3,638,327) (7,557,342)
Other expenses, net         (3,997,727) (7,913,620)
Loss before income tax provision and equity in net loss from unconsolidated investments $ (6,946,764) $ (5,747,190) $ (14,503,087) $ (11,073,171) $ (11,803,003) $ (14,981,379)
v3.22.4
Income Taxes (Details) - USD ($)
$ in Millions
1 Months Ended 12 Months Ended
Dec. 22, 2017
Dec. 31, 2021
Dec. 31, 2020
Income Taxes (Details) [Line Items]      
Net operating loss (in Dollars)   $ 54  
Federal corporate income Tax in percentage   0.00% 0.00%
Expensing percentage 100.00% 20.00%  
Maximum [Member]      
Income Taxes (Details) [Line Items]      
Federal corporate income Tax in percentage 35.00%    
Minimum [Member]      
Income Taxes (Details) [Line Items]      
Federal corporate income Tax in percentage 21.00%    
v3.22.4
Income Taxes (Details) - Schedule of deferred tax assets - USD ($)
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Schedule Of Deferred Tax Assets Abstract    
Depreciation $ (70,194) $ (145,749)
Amortization 95,115 21,096
Stock based compensation 4,369,372 1,653,617
Expected income tax benefit from NOL carry-forwards 15,073,606 8,780,233
Less valuation allowance (19,467,900) (10,309,197)
Deferred tax assets, net of valuation allowance
v3.22.4
Income Taxes (Details) - Schedule of federal statutory income tax rate
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Schedule Of Federal Statutory Income Tax Rate Abstract    
Federal statutory income tax rate 21.00% 21.00%
State tax rate, net of federal benefit 7.10% 6.50%
Change in valuation allowance on net operating loss carry-forwards (28.10%) (27.50%)
Effective income tax rate 0.00% 0.00%
v3.22.4
Income Taxes (Details) - Schedule of beginning and ending amount of the unrecognized tax benefit - USD ($)
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Schedule Of Beginning And Ending Amount Of The Unrecognized Tax Benefit Abstract    
Balance at January 1, $ 68,000
Additions based on tax positions relating to the current year
Reductions for tax positions of prior years (68,000)
Balance at December 31,