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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Vado Corporation (PK) | USOTC:VADP | OTCMarkets | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.005 | -11.11% | 0.04 | 0.0325 | 0.04 | 0.0445 | 0.0325 | 0.0445 | 62,367 | 18:49:32 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from to
COMMISSION FILE NO.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
(IRS Employer Identification No.)
Tel:
(Address and telephone number of registrant's executive office)
73 Market St., Venice, CA 90291
(Former address)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| | N/A | N/A |
Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
|
| | Smaller reporting company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:
| Class | Outstanding as of August 09, 2024: |
| Common Stock, $0.001 |
|
Vado Corp.
Table of Contents
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PART I |
Financial information |
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Item 1 |
3 |
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Item 2 |
Management’s discussion and analysis of financial condition and results of operations |
22 |
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Item 3 |
28 |
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Item 4 |
28 |
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PART II |
Other Information |
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Item 1 |
29 |
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Item 1A |
29 |
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Item 2 |
29 |
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Item 3 |
29 |
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Item 4 |
29 |
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Item 5 |
29 |
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Item 6 |
30 |
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31 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Vado Corp.
Condensed Consolidated Balance Sheets
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June 30, |
December 31, |
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2024 |
2023 |
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ASSETS |
(unaudited) |
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Current assets |
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Cash |
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Cash - restricted |
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Investments - restricted |
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Accounts receivable |
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Other current assets |
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Total current assets |
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| Property and equipment, net of accumulated depreciation of $ |
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Intangible assets -amortizable |
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Total Assets |
$ | |||||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities |
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Accounts payable and accrued liabilities |
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Acquisition liabilities |
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Deferred revenue |
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Accrued settlement |
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Loans payable, current |
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Loans payable, related party, current |
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Bank overdraft |
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Convertible notes payable, related party, current, net of discount |
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Total current liabilities |
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Loans payable |
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Loans payable, related party |
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Convertible notes payable, related party, net of discount |
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Total Liabilities |
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Commitments and contingencies |
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Stockholders' deficit |
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| Common stock, $ |
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| Preferred stock, Series A; $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
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Total stockholders' deficit |
( |
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Total liabilities and stockholders' deficit |
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited financial statements.
Vado Corp.
Condensed Consolidated Statements of Operations
(unaudited)
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For the Three Months Ended |
For the Six Months Ended |
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June 30, |
June 30, |
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2024 |
2023 |
2024 |
2023 |
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Revenue |
$ | $ | $ | |||||||||||||
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Cost of revenue |
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Gross Profit |
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Operating expenses: |
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Selling, general and administrative |
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Cost of legal settlement |
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Total operating expenses |
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Net operating loss |
( |
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Other income (expense): |
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Interest expense, net of interest income |
( |
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) | ( |
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Interest income, restricted investment |
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Total other expense |
( |
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) | ( |
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Net loss before provision for income taxes |
( |
) | ( |
) | ( |
) | ( |
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Provision for income taxes |
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Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Net loss per share - basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Net loss per share - diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Weighted average shares outstanding - basic |
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Weighted average shares outstanding - diluted |
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The accompanying notes are an integral part of these unaudited financial statements.
Vado Corp.
Condensed Consolidated Statements of Cash Flows
(unaudited)
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For the Six |
For the Six |
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Months Ended |
Months Ended |
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June 30 |
June 30 |
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2024 |
2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss income |
$ | ( |
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Adjustment to reconcile net loss income to net cash used in operating activities: |
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Stock based compensation |
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Amortization of discount on investment |
( |
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Depreciation and amortization |
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Amortization of ROU asset |
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Amortization of discount on convertible note payable |
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Provision for doubtful accounts |
( |
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Minimum interest liability on loan |
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Changes in assets and liabilities: |
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Accounts receivable |
( |
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Other current assets |
( |
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Accounts payable |
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Bank overdraft |
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Deferred revenue |
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Acquisition liability |
( |
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Accrued settlement |
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Reclassify restricted investment to restricted cash |
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Operating lease liability |
( |
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Net cash used in by operating activities |
( |
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INVESTING ACTIVITIES |
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Cash paid for fixed assets |
( |
) | ( |
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Cash paid for development of intangible assets |
( |
) | ( |
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Investment in securities |
( |
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Net cash used in investing activities |
( |
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FINANCING ACTIVITIES |
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Proceeds from sale of common stock |
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Proceeds from notes payable - related parties |
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Proceeds from convertible notes payable |
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Issuance of Series A Preferred Stock for cash |
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Principal payments on loan payable |
( |
) | ( |
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Net cash provided by financing activities |
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Net increase in cash, cash equivalents, and restricted cash |
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| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | |||||||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
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Interest paid |
$ | |||||||
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Income taxes paid |
$ | |||||||
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NON-CASH INVESTING AND FINANCING ACTIVITIES: |
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Increase in minimum interest liability on Decathlon loan |
$ | |||||||
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Cumulative effect adjustment to implement ASU 2020-06 |
$ | |||||||
The accompanying notes are an integral part of these unaudited financial statements.
Vado Corp.
Condensed Consolidated Statements of Stockholders’ Equity
For the Three and Six Months Ended June 30, 2024 and 2023
|
Common Stock |
Preferred Stock Series A |
Additional Paid-in |
Accumulated |
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Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Total |
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Balance, March 31, 2023 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
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Share based compensation |
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Issuance of shares to service provider |
- | |||||||||||||||||||||||||||
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Sale of Series A Preferred Stock for cash |
- | |||||||||||||||||||||||||||
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Discount on convertible notes payable |
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Net loss for the three months ended June 30, 2023 |
( |
) | ( |
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Balance, June 30, 2023 |
( |
) | ( |
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Balance, December 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
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Effect of reverse merger |
( |
) | ( |
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Share based compensation |
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Issuance of shares to service provider |
- | |||||||||||||||||||||||||||
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Sale of common stock for cash |
- | - | - | |||||||||||||||||||||||||
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Sale of Series A Preferred Stock for cash |
- | |||||||||||||||||||||||||||
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Discount on convertible notes payable |
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Net loss for the six months ended June 30, 2023 |
( |
) | ( |
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Balance, June 30, 2023 |
( |
) | ( |
) | ||||||||||||||||||||||||
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Balance, March 31, 2024 |
( |
) | ( |
) | ||||||||||||||||||||||||
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Share based compensation |
- | - | - | - | - | |||||||||||||||||||||||
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Cumulative effect adjustment to implement ASU 2020-06 |
- | - | - | - | - | |||||||||||||||||||||||
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Net loss for the three months ended June 30, 2024 |
- | - | - | - | - | ( |
) | ( |
) | |||||||||||||||||||
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Balance, June 30, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
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Balance, December 31, 2023 |
( |
) | ( |
) | ||||||||||||||||||||||||
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Share based compensation |
- | - | - | - | - | |||||||||||||||||||||||
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Cumulative effect adjustment to implement ASU 2020-06 |
- | - | - | - | ( |
) | - | ( |
) | |||||||||||||||||||
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Net loss for the six months ended June 30, 2024 |
- | - | - | - | - | ( |
) | ( |
) | |||||||||||||||||||
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Balance, June 30, 2024 |
( |
) | ( |
) | ||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
VADO CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(UNAUDITED)
1. Organization and Business
Our History
In 2013 co-founders Reeve Benaron and Jason Wulfsohn formed Socialcom Inc (“Socialcom”) by bringing together three businesses they held: a creative agency, a digital performance agency, and a demand side platform (DSP) or programmatic media-buying platform. The core areas of expertise represented by each of these companies - creative and brand building, performance marketing and ad tech - still defines Socialcom’s unique competitive advantage today, as it continues to lean into full-funnel and omnichannel performance solutions for independent agencies and brands. During the last 10 years Socialcom has experienced significant achievements in terms of growth, market relevance, and product innovation, evidenced by an array of prestigious industry awards, including being named one of the fastest-growing companies in America by Deloitte, The Financial Times and the Los Angeles Business Journal, as well ranking on the Inc. 5000 list for four consecutive years, starting in 2019 and most recently in 2022. In 2021 Socialcom was an AdExchanger finalist for Best Programmatic Capabilities, a W3 Silver Award winner for best integrated campaign and in 2022 Socialcom VP of Partnership Solutions, Danielle Gale, was honored by Cynoposis as one of the Top Women in Media. Socialcom is the operating subsidiary of Vado Corp (the “Company,” “Vado,” “we,” “our” and “us”), which we acquired in the share exchange described below. Since 2023 the Company has been focused on developing powerful data science and predictive analytics solutions, through AXi, it’s proprietary suite of audience intelligence tools, that can help deliver significantly improved performance outcomes for their brand and agency clients, driving differentiation for their tech stack and competitive advantage for their clients.
Share Exchange
On February 24, 2023 the Company completed the share exchange (the “Exchange”) contemplated by the Share Exchange Agreement (the “Exchange Agreement”) dated January 30, 2023 with Socialcom and the stockholders of Socialcom signatory thereto (the “Closing”). Pursuant to the Closing of the Exchange, the Company issued the Socialcom stockholders signatory thereto a total of
In connection with the Exchange, the Company also agreed to the following: (i) the cancellation of
Effective at the Closing, the number of directors of the Company was fixed at three, and Jason Wulfsohn and Reeve Benaron were appointed to serve on the Board of Directors. Effective upon the Closing, David Lelong tendered his resignation as the sole officer of the Company, and Jason Wulfsohn was appointed as the Company’s Chief Executive Officer. Mr. Lelong remains as a director.
Summary of Business
Socialcom continues to embrace future-first solutions, recognizing ongoing changes in the ad tech space, from data usage and privacy, to emerging technologies and platforms. The Company operates tdX, an omnichannel trading desk platform, providing unified buy-side access to the full-breadth of the ad tech ecosystem, including 24 performance platforms across programmatic, display, CTV, DOOH, and audio, along with search and social. tdX represents a holistic performance solution, unified by the company’s robust data infrastructure, delivering powerful real-time campaign learnings and cross-channel performance optimizations, along with sophisticated analytics designed to deliver scalable and sustainable campaign outcomes. Tech-enabled creative services, delivered by the Company’s internal creative team, Socialcom Studio, ensures that creative is a powerful driver of campaign success, providing differentiated, performance-oriented brand and product ad units and other digital content for deployment within customer campaigns.
Each of these elements, seamlessly integrated within Socialcom’s tech stack, represents a unified customer acquisition and growth solution for the performance marketer, seeking a holistic advertising solution that can deliver measurable and scalable results against clearly defined business goals.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. The Company has adopted a fiscal year end of December 31. The accompanying condensed consolidated financial statements include the accounts of Socialcom and Vado Corp. All material intercompany transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Restricted Cash and Restricted Investment
On December 31, 2023, the Company had a restricted investment of $
Property, Plant, and Equipment
Property and equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over its estimated useful life. Property acquired in a business combination is recorded at estimated initial fair value.
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Years |
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Office equipment |
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Furniture & fixtures |
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Leasehold improvements |
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Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is reflected in operations.
Long-Lived Assets
The Company reviews its property and equipment and any identifiable intangibles including goodwill for impairment on an annual basis utilizing the guidance set forth in the Statement of Financial Accounting Standards Board ASC 350 “Intangibles – Goodwill and Other” and ASC 360 “Property, Plant, and Equipment.” At June 30, 2024 and December 31, 2023, the net carrying value of intangible assets on the Company’s balance sheet was $
Concentrations of Credit Risk
The Company maintains its cash in bank deposit accounts and other accounts, the balances of which at times may be uninsured or exceed federally insured limits. From time to time, some of the Company’s funds are also held by escrow agents; these funds may not be federally insured. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts.
Advertising and Marketing Costs
All costs associated with advertising and promoting products are expensed as incurred. Total recognized advertising and marketing expenses were $
Fair Value of Financial Instruments
Pursuant to Accounting Standards Codification (“ASC”) No. 825 - Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying amounts of the Company’s cash and cash equivalents, notes receivable, convertible notes payable, accounts payable and accrued expenses, none of which is held for trading, approximate their estimated fair values due to the short-term maturities of those financial instruments.
A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
Level 3 - Significant unobservable inputs that cannot be corroborated by market data.
Capitalized Software Development Costs
The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the development of the Company’s platform solution. These costs include third party development expenses for that are directly associated with and devote time to software development projects. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in operating expenses in the consolidated statements of operations.
The Company’s customers do not take possession of the software and cannot run the software on their own hardware. For these reasons, pursuant to ASC 985-20 Costs of Software to Be Sold, Leased, or Marketed (“ASC 982-20”), the software is considered a software hosting arrangement and the Company applied the guidance of ASC 350-40 Intangibles – Goodwill and Other: Internal Use Software” (“ASC 350-40"). Pursuant to ASC 350-40, software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized using a straight-line method over the estimated useful life of
Operating Leases
The Company accounts for its leasing arrangements by applying the guidance of Accounting Standards Update No. 2016-02, Leases (Topic 842), (“ASU 2016-02”). The Company enters into operating leases for its office space. The Company does not have finance leases.
The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.
Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. The Company has elected to not separate lease and non-lease components.
Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, along with the change in the operating lease liabilities, are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.
Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors.
Refer to Note 8 for additional information.
Revenue Recognition
The Company generates its revenue by providing marketers and advertising agencies with the ability to deliver digital marketing and marketing-related solutions. The Company’s primary business is to deliver omnichannel programmatic, paid search, and paid social advertising services for its customers. The Company also does a limited amount of marketing-related project work for customers, including creative services, and also has a reseller solution with a partner. This results in the following revenue streams:
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Programmatic Solutions |
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Paid Search & Social Solutions |
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Services Revenue |
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Self-Serve Revenue |
The Company applies a five-step approach as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606: Revenue from Contracts with Customers (“ASC 606”) in determining the amount and timing of revenue to be recognized:
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Identification of a contract with a customer; |
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Identification of the performance obligation in the contract; |
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Determination of the transaction price; |
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Allocation of the transaction price to the performance obligations in the contract; and |
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Recognition of revenue when or as the performance obligations are satisfied. |
The determination of whether revenue should be reported on a gross or a net basis is based upon an assessment of whether we are acting as the principal or agent in the transaction based upon the guidance in ASC 606. Making such determinations involves judgment and is based on an evaluation of the terms of each arrangement, none of which are considered presumptive or determinative. We act as a principal and recognize revenue on a gross basis if (i) we control the advertising inventory before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. We applied the guidance of ASC 606 to our revenue streams as follows:
Programmatic Solutions: Programmatic revenue consists of delivering our customer’s budget programmatically through our trading desk model, where multiple Demand Side Platforms (“DSP”) are utilized to deliver advertising budgets as paid impressions. The Company, through its deep understanding of DSP platforms, transacts to spend customer’s budgets within the platforms to execute against customer marketing goals as efficiently and effectively as possible. In this arrangement, our team will perform all of the setup, activation, strategy, tactic building, implementation and delivery of the campaign through a partner platform or platforms. We enter into an Insertion Order / Media Plan (“IO”) with all Programmatic customers. The IO states the services that are to be performed and a budget for each tactic or tactics. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. Because we are in control of this process and assume inventory risk, we recognize revenue on a gross basis.
Paid Search & Social Solutions: We also enter into an IO with all Paid Search & Social customers. The IO states the services that are to be performed and a budget for each tactic. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. In instances where we pay the third party for inventory, we recognize revenue on a gross basis because we bear the inventory risk. In instances where the customer pays the third party, we recognize revenue on a net basis.
Services Revenue: We enter into Statement of Work (“SOW”) agreements with all Services customers. The SOW includes estimated costs to be applied against the services to be performed, and establishes payment and billing terms. Services revenue is recognized on a gross basis.
Self-Serve Revenue: Self-serve revenue consists of revenues generated through our Admatx platform, as well as through reselling access to a major enterprise DSP. Users of Admatx agree to our platform terms and conditions, and we enter into Master Services Agreements (“MSA”) with all reseller customers. The Platform Terms and Conditions and MSAs detail the work and responsibilities of each party and their respective obligations. Self-serve revenue is recognized on a net basis.
Deferred Revenue
Certain customer arrangements in the Company's business result in deferred revenues when cash payments are received in advance of performance.
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Balance acquired as of December 31, 2023 |
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Cash payments received |
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Net sales recognized |
( |
) | ||
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Balance as of June 30, 2024 |
$ |
Stock-Based Compensation
We recognize compensation costs to employees under FASB ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under FASB ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
Equity instruments issued to other than employees are recorded pursuant to the guidance contained in ASU 2018-07 (“ASU 2018-07”), Improvements to Non-employee Share-Based Payment Accounting, which simplified the accounting for share-based payments granted to non-employees for goods and services. Under the ASU 2018-07, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees.
Basic and Diluted Earnings or Loss Per Share
Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options to purchase common stock. Basic and diluted net loss per share are computed based on the weighted average number of shares of common stock outstanding during the period. At June 30, 2024 and December 31, 2023, the Company had the following potentially dilutive instruments outstanding: a total of
The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculations. At June 30, 2024 and December 31, 2023,
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
Commitments and Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company management may consult its legal counsel to evaluate the perceived merits of any legal proceedings or unasserted claims brought to such legal counsel’s attention 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 financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
Recent Accounting Pronouncements
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)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard was effective for us on January 1, 2023. The adoption of this standard did not have a material effect on our consolidated financial statements.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
3. Transfer of Customers and Employees
On March 15, 2024, Socialcom Inc, a subsidiary of Vado Corp. (the “Company”), entered into an Agreement for Transfer of Customers and Employees (the “Agreement”) with a third party (the “Counterparty”). Under the Agreement, the Company acquired the customer base (comprised of
During the three and six months ended June 30, 2024, the Company recorded revenue in the amount of $
4. Cash – Restricted and Investments - Restricted
The Company had a restricted investment in connection with a complaint filed by a former services provider of the Company in the amount of $
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Fair |
Unrealized |
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|
December 31, 2023 |
Value |
Losses |
||||||
|
U.S. Treasury Bill |
$ | $ | ( |
) | ||||
The investment consists of one U.S. Treasury Bill with a maturity date of
5. Accounts Receivable
Accounts receivable, net was $
On June 13, 2019, the Company entered into an accounts receivable financing and security agreement (the “Financing Agreement”) in the maximum amount of $
|
June 30, |
December 31, |
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|
2024 |
2023 |
|||||||
|
Accounts receivable |
$ | $ | ||||||
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Due under Financing Agreement, net |
||||||||
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Allowance for doubtful accounts |
( |
) | ( |
) | ||||
|
Total |
$ | $ | ||||||
6. Other Current Assets
|
June 30, |
December 31, |
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2024 |
2023 |
|||||||
|
Deposits |
$ | |||||||
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Prepaid expenses |
||||||||
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Total |
$ | $ | ||||||
7. Property and Equipment
|
June 30, |
December 31, |
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2024 |
2023 |
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Computer equipment |
$ | $ | ||||||
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Leasehold improvements |
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Furniture and equipment |
||||||||
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Less: accumulated depreciation |
( |
) | ( |
) | ||||
|
Property and equipment, net |
$ | $ | ||||||
The Company made payments in the amounts of $
8. Intangible Assets
In January 2021 the Company completed the acquisition of certain assets consisting of customer contracts and customer lists (the “BigBuzz Customer Lists”) from BigBuzz Marketing Group (“BigBuzz”). The cost of the BigBuzz Customer Lists was $
The Company began to capitalize the costs of development of internal use software in August 2021, and software was first placed into service in May 2022. In 2021, the Company capitalized $
The Company has $
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June 30, 2024 |
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Accumulated |
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Gross |
Amortization |
Net |
||||||||||
|
Customer lists |
$ | $ | ( |
) | $ | |||||||
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Internal use software |
( |
) | ||||||||||
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Total |
$ | $ | ( |
) | $ | |||||||
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December 31, 2023 |
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Accumulated |
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Gross |
Amortization |
Net |
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|
Customer lists |
$ | $ | ( |
) | $ | |||||||
|
Internal use software |
( |
) | ||||||||||
|
Total |
$ | $ | ( |
) | $ | |||||||
The Company amortized the amount of $
9. Accounts Payable and Accrued Liabilities
|
June 30, |
December 31, |
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2024 |
2023 |
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Trade accounts payable |
$ | $ | ||||||
|
Credit cards payable |
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Accrued payroll, commissions, and payroll taxes |
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|
Accrued interest |
||||||||
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Total |
$ | $ | ||||||
10. Acquisition Liabilities
In January 2021 the Company recorded a liability in the amount of $
11. Loans Payable
| June 30, 2024 | December 31, 2023 | |||||||
| Loan payable to Decathlon dated December 31, 2019 (the “Decathlon Loan”) in the principal amount of $
During the six months ended June 30, 2024, the Company made principal payments in the amount of $ | $ | $ | ||||||
| Loan payable to the US Small Business Administration (the “EIDL Loan”) dated July 7, 2020 pursuant to the Small Business Administration Economic Injury Disaster Loan Program (the “EIDL”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in the original principal amount of $ | ||||||||
| Total | $ | $ | ||||||
| Current portion | $ | $ | ||||||
| Long-term maturities | ||||||||
| Total | $ | $ | ||||||
For the twelve months ended June 30,
|
2025 |
$ | |||
|
2026 |
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|
2027 |
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2028 |
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2029 and thereafter |
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Total |
$ |
12. Loans Payable - Related Parties
| June 30, 2024 | December 31, 2023 | |||||||
| Loan payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, originally dated March 21, 2020 and renewed March 21, 2021, March 21, 2022, March 21, 2023 and March 31, 2024 in the amount of $ | $ | $ | ||||||
| Loan payable to an entity affiliated to Reeve Benaron, the Company’s Chairman, originally dated March 21, 2020 and renewed March 21, 2021, March 21, 2022, March 11, 2023 and March 31, 2024 in the amount of $ | ||||||||
| Loan payable to an entity affiliated to Reeve Benaron, the Company’s Chairman and a principal stockholder, dated June 20, 2022 in the amount of $ | ||||||||
| Loan payable to Jason Wulfsohn, the Company’s CEO, in the original amount of $ | ||||||||
| Loan payable to Jason Wulfsohn, the Company’s CEO, in the original amount of $ | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| Loan payable to Jason Wulfsohn, the Company’s CEO, in the original amount of $ | ||||||||
| Total | $ | $ | ||||||
| Current portion | $ | $ | ||||||
| Long-term maturities | ||||||||
| Total | $ | $ | ||||||
For the twelve months ended June 30,
|
2025 |
$ | |||
|
2026 |
||||
|
Total |
$ |
13. Convertible Note Payable – Related Party
| June 30, 2024 | December 31, 2023 | |||||||
| Convertible promissory note payable to an entity affiliated to Reeve Benaron, the Company’s Chairman and a principal shareholder, dated February 7, 2023 in the amount of $ | $ | $ | ||||||
| Convertible promissory note payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, dated May 12, 2023, in the amount of $ | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| Convertible promissory note payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, dated November 15, 2023, in the amount of $ | ||||||||
| Total | $ | $ | ||||||
| Current portion | $ | $ | ||||||
| Long-term maturities | ||||||||
| Total | $ | $ | ||||||
Aggregate maturities of convertible notes payable – related parties as of June 30, 2024 are as follows:
|
2025 |
$ | |||
|
2026 |
||||
|
Total |
$ |
14. Accrued Settlements
On December 31, 2019 the Company accrued $
15. Stockholders’ Equity
The Company’s authorized capital stock consists of
Common Stock
Six months ended June 30, 2024:
No activity.
Six months ended June 30, 2023:
On February 24, 2023 the Company completed the Exchange Agreement with pursuant which to the Company issued to the Socialcom shareholders a total of
On June 1, 2023, the Company issued
Series A Convertible Preferred Stock
The Company has designated 1,000,000 shares of Series A Convertible Preferred Stock, par value $0.001. Subject to certain limitations set forth in the Certificate of Designation of the Series A, each share of Series A is convertible into
Six months ended June 30, 2024:
No activity.
Six months ended June 30, 2023:
On February 24, 2023, the Company sold
On June 1, 2023, the Company issued
Options
| Weighted | Weighted | |||||||||||||||||||||
| Weighted | Average | Average | ||||||||||||||||||||
| Average | Exercise | Exercise | ||||||||||||||||||||
| Range of | Number of | Remaining | Price of | Number of | Price of | |||||||||||||||||
| Exercise | Options | Contractual | Outstanding | Options | Exercisable | |||||||||||||||||
| Prices | Outstanding | Life (years) | Options | Exercisable | Options | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
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| $ | $ | |||||||||||||||||||||
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Number of Shares |
Weighted Average Exercise Price |
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Options outstanding at December 31, 2023 |
$ | |||||||
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Granted |
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Exercised |
||||||||
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Cancelled / Expired |
( |
) | ||||||
|
Options outstanding at June 30, 2024 |
$ | |||||||
|
Options exercisable at June 30, 2024 |
$ | |||||||
During the three months ended June 30, 2024 and 2023, the Company charged $
The aggregate intrinsic value of options outstanding and exercisable at June 30, 2024 and December 31, 2023 was $
| December 31, | ||||
| 2023 | ||||
| Volatility | % | |||
| Dividends | $ | |||
| Risk-free interest rates | % | |||
| Expected term (years) | ||||
16. Income Taxes
The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a carryforward exists, the Company decides as to whether the carryforward will be utilized in the future. Currently, a valuation allowance is established for all deferred tax assets and carryforwards as their recoverability is deemed to be uncertain. If the Company’s expectations for future operating results at the federal or at the state jurisdiction level vary from actual results due to changes in healthcare regulations, general economic conditions, or other factors, it may need to adjust the valuation allowance, for all or a portion of the Company’s deferred tax assets. The Company’s income tax expense in future periods will be reduced or increased to the extent of offsetting decreases or increases, respectively, in the Company’s valuation allowance in the period when the change in circumstances occurs. These changes could have a significant impact on the Company’s future earnings.
Income tax expense was $
17. Going Concern
As of June 30, 2024, we had restricted cash of $
18. Commitments and Contingencies
In June 2019, a former services provider of the Company filed a complaint in the amount of $
From time to time, the Company has become and may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business, or current or previous employees, or current or previous directors, or as a result of acquisitions and dispositions or other corporate activities. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position or our business, and the outcome of these matters cannot be ultimately predicted.
19. Related Party Transactions
See Notes 12 and 13 for a description of related party transactions.
20. Subsequent Events
None
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Company Overview and Business Update
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business and operations following our acquisition of Socialcom, a digital marketing and services company, future trends and operating results of such business, the planned expansion of those operations into new markets and applications, characteristics and trends in the digital marketing industry and the demand for products and services we offer, our plan to search for and acquire complementary businesses and the objectives and potential impacts of those efforts, the need for and use of proceeds from one or more financings for strategic arrangements and partnerships, our future capital needs and ability to obtain financings and liquidity. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, working capital sources, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include the future impact of the geopolitical conflicts in Israel and Ukraine, inflation and Federal Reserve interest rate increases in response thereto on the economy including the potential for a recession, downturn in economic activity and the capital markets and a resulting reduction in demand for our offerings, declines in expenditures for digital marketing campaigns and a trend towards in-housing those functions, our limited operating history and revenue, our ability to effectively navigate challenges posed by the complex industries we serve including the potential for rapid and unpredictable technological change, regulatory burdens and an intense competitive environment, and the delay in the launch of our Regulation A offering and any inability to raise sufficient capital therefrom. Further information on the risk factors affecting our business is contained in “Risk Factors” of our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as may be amended or supplemented from time-to-time. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.
Background of the Company
Vado, through Socialcom, operates as a digital marketing and services company focused on delivering integrated advertising and technology performance solutions to independent agencies and brands through its omnichannel trading desk platform.
During the fiscal year ended December 31, 2021, the Company acquired BigBuzz Marketing Group, a New York based creative digital marketing agency to expand its creative-based product and services offerings, including a focus on organic social content.
In response to a decline in customer ad purchasing which began in 2022, management has taken steps to (i) improve the employee experience and in turn improve employee retention; and (ii) enhance our product offerings and strengthen our core solutions to the middle market. More specifically, in order to drive increased customer acquisition, the Company is focused on improved market differentiation related to product development and innovation in the key three areas of: (i) predictive analytics, (ii) supply optimization, and (iii) creative automation. In 2023 we developed an industry leading, data-driven addition to our tech stack, successfully incorporating several layers of artificial intelligence (AI), predictive analytics, and automation in the application of data science, audience insights and tech-powered creative, an integrated and holistic system designed to optimize performance in real time for our brand and agency customers. We have successfully taken our new AI-powered data science solutions to market through various ongoing sales and marketing activities and are currently activating campaigns and delivering impact for both existing and new customers.
In addition, in March 2024 we obtained 11 customer accounts and 14 employees from a very large company, which includes over $4 million in prepaid amounts (and thereby potential additional revenue), in addition to the continued good will, subject to our provision of services to the new customers and to that party’s right to offset for personnel expenses.
Moving forward, we are actively assessing the mergers and acquisitions (M&A) landscape to identify potential acquisition targets, whether creative, media or technology companies, with stable customers and revenues, that can drive improved business outcomes through integrated access to the Socialcom media services solution.
Trends and Uncertainties
Our operations and industry are subject to the following trends and uncertainties:
Seasonality
In the advertising industry, companies commonly experience seasonal fluctuations in revenue. For example, some advertisers may allocate the largest portion of their budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing. Historically, the fourth quarter of the year reflects our highest level of advertising activity and the first quarter reflects the lowest level of such activity. We expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole.
Developments in the Programmatic Advertising Market
Our operating results and prospects will be impacted by the overall adoption of programmatic advertising by inventory owners and content providers, as well as advertisers and the agencies and service providers that represent them. Programmatic advertising has grown rapidly in recent years, and any acceleration or slowing of this growth may affect our operating and financial performance. In addition, even if the programmatic advertising market continues to grow at its current rate, our ability to position ourselves within the market will impact the future growth of our business.
In addition, technological and other changes and developments in the digital ad space will also affect our operations and operating results. For example, many websites including Google are expected to update or alter their privacy settings and practices in the coming years, including by eliminating “cookies” and the collection of personal identifiable information about users, for which we and our industry will need to adjust in order to maintain and grow our operations.
Growth in and Retention of Customers
Our ability to generate and maintain revenue depends on retaining our existing customers and adding new customers. Our customers consist of small-to-medium sized businesses, with spending patterns that can be inconsistent or unpredictable. We also depend on a relatively small number of customers for a large proportion of our revenue streams. As a result, future revenue and growth depends upon our ability to retain our existing customers and to gain a larger amount of their advertising spend through our platform and related services.
Labor Shortages
Because of our focus on digital advertisements and the underlying technology and infrastructure involved in those processes, as well as providing a wide variety of businesses with their digital marketing needs, our operations depend on procuring, training and maintaining skilled personnel to assist us and our customers in fulfilling these demands. In recent periods, macroeconomic factors have contributed to labor shortages in the U.S. across industries. As a result of this and other factors, in fiscal year 2022 the loss of certain personnel, including members of our sales and customer support team, adversely impacted our operating results in that period. If the tightened labor market trend continues in general or for our business in particular, this trend could persist. In fiscal year 2023, we made significant strides in optimizing our operations, which not only reduced our operating expenses but also strategically positioned us for sustained incremental growth in the upcoming year. Through a combination of streamlining initiatives and technological advancements, we have enhanced our efficiency and productivity across all departments. Our team is now more agile, our cost structure more efficient, and our business model has been refined to capitalize on emerging opportunities in digital advertising and marketing services. We are confident that the measures taken to strengthen our workforce and operational practices will continue to yield beneficial results and drive growth in fiscal year 2024.
Omnichannel Access
Because we assist in the selection and purchase of advertising inventory across a wide variety of formats for our customers, such as display, mobile, video, audio, social and native, our future growth will depend on our ability to maintain and grow the inventory of, and customer spend on, advertising channels. For instance, as we proceed further into the digital age, new channels can arise rapidly and gain popularity within relatively short periods, diverting attention from existing channels and forcing stakeholders in the industry, including us, to adapt quickly. Further, each channel we now or may in the future access to service our customers has its own policies in terms of content and use, and we must continually monitor and adhere to these requirements to continue to access those channels for our customers. We believe that our ability to integrate and offer access to new means of digital communication, such as Connected Television (CTV), digital out-of-home (DOOH), and digital radio advertising inventory and to manage the increased costs that will accompany these developments, will impact the operating results and future growth of our business.
Results of Operations for the Three Months Ended June 30, 2024 Compared with the Three Months Ended June 30, 2023
Revenue
Revenue was $7,372,393 for the three months ended June 30, 2024, an increase of $3,592,083 or 95.0% compared to revenue of $3,780,310 for the three months ended June 30, 2023. In addition to the ongoing organic growth, the primary reason for the increase was the Agreement for Transfer of Customers and Employees (the “Agreement”) entered into on March 15, 2024 which resulted in onboarding sales of $3,314,458 during the three months ended June 30, 2024.
Costs of Revenue
Cost of revenue was $6,018,725 for the three months ended June 30, 2024, an increase of $3,301,106 or 121.5% compared to $2,717,619 during the three months ended June 30, 2023. The increase was driven primarily by costs associated with revenue onboarded pursuant to the Agreement, which were $2,804,893 during the three months ended June 30, 2024.
Our gross profit margins were 18% during the three months ended June 30, 2024 compared to 28% during the three months ended June 30, 2023. The decrease was driven primarily by an increase in lower margin revenue, in part linked to the Agreement for Transfer of Customers and Employees (the “Agreement”) entered into on March 15, 2024.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses (“SG&A”) were $2,591,892 for the three months ended June 30, 2024, an increase of $289,190 or 12.6%, compared to $2,302,702 during the three months ended June 30, 2023. The increase was driven primarily by costs associated with the onboarding of personnel and certain other costs arising from the Agreement, which were $756,625 during the three months ended June 30, 2024. See Note 3 in the financial statements contained in this report.
Cost of Legal Settlement
Legal settlement expense was $894,274 for the three months ended June 30, 2023 in the amount of liability claimed by a vendor in a legal dispute and to court costs. There was no comparable transaction during the current period.
Interest Expense, Net of Interest Income
Interest expense, net of interest income was $520,800 during the three months ended June 30, 2024, an increase of $270,548 or 108.1%, compared to interest expense of $250,252 during the three months ended June 30, 2023. The increase was driven primarily by the amortization of the discount on the Decathlon loan and to increased principal balances under our notes payable.
Interest Income, Restricted Investment
Interest income, restricted investment $9,347 during the three months ended June 30, 2024. There were no comparable transactions in the prior period. The increase is due to the cash held in connection with a vendor dispute.
Results of Operations for the Six Months Ended June 30, 2024 Compared with the Six Months Ended June 30, 2023
Revenue
Revenue was $10,950,565 for the six months ended June 30, 2024, an increase of $3,635,016 or 49.7% compared to revenue of $7,315,549 for the six months ended June 30, 2023. In addition to ongoing organic growth, the primary reason for the increase was the Agreement for Transfer of Customers which resulted in onboarding sales of $4,322,943 during the six months ended June 30, 2024. See Note 3 in the financial statements contained in this report.
Costs of Revenue
Cost of revenue was $9,149,027 for the six months ended June 30, 2024, an increase of $4,091,687 or 80.9% compared to $5,057,340 during the six months ended June, 2023. The increase was driven primarily by costs associated with revenue from customers onboarded pursuant to the Agreement, which were $3,636,428 during the six months ended June 30, 2024. See Note 3 in the financial statements contained in this report.
Our gross profit margins were 17% during the six months ended June 30, 2024 compared to 31% during the six months ended June 30, 2023. The decrease was driven primarily by an increase in lower margin revenue, in part linked to the Agreement for Transfer of Customers and Employees (the “Agreement”) entered into on March 15, 2024.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $4,367,126 for the six months ended June 30, 2024, a decrease of $492,065 or 10.1%, compared to $4,859,191 during the six months ended June 30, 2023. SG&A expenses increased during the period by $887,047 due to the costs associated with the Agreement. The overall decrease was driven primarily by a decrease in headcount related expenses and stock-based compensation expenses during the period.
Cost of Legal Settlement
Legal settlement expense was $894,274 for the six months ended June 30, 2023 in the amount of liability claimed by a vendor in a legal dispute and to court costs. There was no comparable transaction during the current period.
Interest Expense, Net of Interest Income
Interest expense, net of interest income was $1,225,137 during the six months ended June 30, 2024, an increase of $809,508 or 181.7%, compared to interest expense of $445,629 during the six months ended June 30, 2023. The increase was driven primarily by the amortization of the discount on the Decathlon loan and to increased principal balances under our notes payable.
Interest Income, Restricted Investment
Interest income, restricted investment $22,509 during the six months ended June 30, 2024. There were no comparable transactions in the prior period. The increase is due to the cash held in connection with a vendor dispute.
Cash Flows from Operating Activities
Our cash flows from operating activities are primarily influenced by growth or decline in operations, increases or decreases in collections from our customers and related payments to suppliers for advertising media and data. Cash flows from operating activities are typically affected by changes in the components of working capital, particularly changes in accounts receivable, accounts payable, and accrued liabilities. Timing differences from cash receipts from customers and payments to suppliers have a significant impact on our cash flows from operating activities. We often pay suppliers in advance of collections from our customers. Our collection and payment cycles can vary from period to period, and we additionally expect seasonality to impact cash flows from operating activities on a quarterly basis during the year.
For the six months ended June 30, 2024, cash provided by operating activities of ($897,056) resulted primarily from a net loss of ($3,798,216) adjusted for non-cash items totaling $1,011,865 and a net decrease of $2,630,888 resulting from changes in the components of working capital. The $1,011,865 in non-cash adjustments to net income are attributable to primarily to charges of $1,036,731 in connection with a minimum interest liability on the Decathlon Loan; $49,439 of depreciation and amortization; and $25,780 related to employee stock-based compensation, partially offset by a $80,341 reduction in bad debt expense and $19,744 of interest income on restricted investment. The change in the components of working capital of $2,634,407 was due primarily to a $1,877,446 increase in accounts payable, $1,049,000 from the reclassification of restricted investment to restricted cash, and a $740,873 increase in deferred revenue, with the remaining change attributable to normal operational fluctuations in current assets and current liabilities.
For the six months ended June 30, 2023, cash used in operating activities of ($2,134,676) resulted primarily from a net loss of ($3,940,885) adjusted for non-cash items totaling $1,010,286 and a net increase of $787,591 in the components of working capital. The $1,010,286 in non-cash adjustments to net income are attributable to charges of $408,910 related to employee stock-based compensation, $286,543 for amortization of our office lease, $112,992 for depreciation and amortization, $93,882 for bad debt expense, $110,248 for amortization of discount on convertible note payable, and ($2,289) for amortization of discount on investment. The change in the components of working capital of $787,591 was due primarily to a $769,274 change in accrued settlement expense with the remaining change attributable to normal operational fluctuations in current assets and current liabilities.
Cash Flows Used in Investing Activities
Our primary investing activities consist primarily of the purchase of fixed assets and costs paid for the development of software to improve our platform. As our business grows, we expect our capital expenditures and our investment activity to continue to increase.
For the six months ended June 30, 2024, we used $11,441 of cash in investing activities, consisting of $7,189 invested in capitalized software and $4,252to purchase fixed assets.
For the six months ended June 30, 2023, we used $1,024,065 of cash in investing activities, consisting of $1,000,786 to purchase securities in connection with the legal dispute, $18,300 invested in capitalized software, and $4,979 to purchase fixed assets.
Cash Flows Provided by Financing Activities
Our financing activities consisted primarily of the sale of common and preferred stock, borrowings and repayments of our debt, proceeds from forgiveness on borrowings, proceeds from the exercise of options issued under our equity compensation plan.
For the six months ended June 30, 2024, cash provided by financing activities of $33,748 was due to $200,000 in proceeds from convertible notes payable to related parties and $96,000 in proceeds from the issuance of notes payable to related parties, partially offset by $262,252 in principal payments on loans.
For the six months ended June 30, 2023, cash provided by financing activities of $4,076,442 was due to $2,100,000 in proceeds from the issuance of notes payable to related parties; $1,500,000 in proceeds from the sale of Series A Preferred stock; and $500,000 in proceeds from the sale of common stock, partially offset by $23,558 in principle payments on loans.
Non-GAAP Measures
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before (a) certain stock-based compensation expense, (b) costs attributable to non-recurring settlement expense, legal activity, professional fees, and other transaction and offering costs, (c) interest, (d) tax, and (e) depreciation and amortization. We use Adjusted EBITDA to evaluate the performance of our core business operations. We believe that information about Adjusted EBITDA assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.
The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the three and six months ended June 30, 2024 and 2023:
|
Three Months Ended June 30, |
||||||||
|
2024 |
2023 |
|||||||
|
Net Loss |
$ | (1,749,677 | ) | $ | (2,384,537 | ) | ||
|
Interest, net |
511,453 | 250,252 | ||||||
|
Taxes |
- | - | ||||||
|
Depreciation and Amortization |
17,990 | 56,067 | ||||||
|
EBITDA |
$ | (1,220,234 | ) | $ | (2,078,218 | ) | ||
|
Stock-based compensation costs |
9,073 | 210,527 | ||||||
|
Settlement expense (1) |
- | 894,274 | ||||||
|
Litigation expense (2) |
6,810 | 19,788 | ||||||
|
Transaction costs (3) |
- | 27,283 | ||||||
|
Adjusted EBITDA |
$ | (1,204,351 | ) | $ | (926,346 | ) | ||
|
Six Months Ended June 30, |
||||||||
|
2024 |
2023 |
|||||||
|
Net Loss |
$ | (3,798,216 | ) | $ | (3,940,885 | ) | ||
|
Interest, net |
1,232,628 | 445,629 | ||||||
|
Taxes |
- | 25 | ||||||
|
Depreciation and Amortization |
49,439 | 112,992 | ||||||
|
EBITDA |
$ | (2,516,149 | ) | $ | (3,382,239 | ) | ||
|
Stock-based compensation costs |
25,780 | 425,575 | ||||||
|
Settlement expense (1) |
- | 894,274 | ||||||
|
Litigation expense (2) |
6,810 | 25,122 | ||||||
|
Transaction costs (3) |
- | 170,447 | ||||||
|
Adjusted EBITDA |
$ | (2,483,559 | ) | $ | (1,866,821 | ) | ||
|
|
1. |
Relates to one-time settlement accrual for Zeta dispute as described in Part II. Other Information Item 1. Legal Proceedings. |
|
|
|
|
|
|
2. |
Relates to litigation expense specific to Zeta dispute as described in Part II. Other Information Item 1. Legal Proceedings |
|
|
3. |
Relates to legal and consulting fees specific to share exchange as described in Note 1 to the financial statements contained in this report. |
Liquidity and Capital Resources
As of August 11, 2024, we have a net unrestricted cash of $56,119. Management believes we do not have sufficient working capital to meet our operating needs for the next 12 months. In order to meet our working capital requirements, we will need to either raise sufficient capital or reduce our expenditures. We will rely on our ability to improve operating cash flow or raise additional capital through the sale of debt or equity securities and draw on our existing credit facility, in addition to our existing cash and cash equivalents to meet our working capital requirements for at least the next 12 months.
The Company’s ability to continue as a going concern is dependent upon its ability to improve cash flow and the ability to obtain additional financing, including potentially through proceeds raised from its Regulation A offering. These and other factors substantial doubt about the Company’s ability to continue as a going concern in the following 12-month period.
Our recent and potential future financing transactions, outstanding indebtedness and other developments which will potentially impact our liquidity are summarized below.
During the year ended December 31, 2023, we recorded an increase in the minimum interest liability due on our Decathlon Loan in the amount of $900,000, and during the three months ended June 30, 2024, this amount was increased by an additional $150,000.
Financing Agreements
On June 13, 2019, Socialcom entered into an accounts receivable financing and security agreement (the “Financing Agreement”) with SLR Digital Finance, LLC as the secured lender which was amended on September 18, 2023, January 31, 2024 and April 1, 2024. The Financing Agreement as amended has a current maximum amount of $2,000,000 and an interest rate per annum equal to 5% plus the “prime rate”, which is defined as the higher of the highest rate as reported by the Wall Street Journal or 8.5%. The Financing Agreement provided for an initial financing fee equal to 1/12th of the facility interest rate and additional monthly financing fees of 1/12th of the facility interest rate. The Financing Agreement is subject to an early termination fee equal to 2% of the maximum amount available under the Financing Agreement. Further, the Financing Agreement provides that Socialcom shall at all times use at least 20% of the maximum amount. The revolving credit facility under the Financing Agreement is secured by the trade accounts receivable of Socialcom and guaranteed by its assets and the assets of Vado, including the Socialcom common stock Vado holds representing 100% of the outstanding Socialcom common stock. Upon any event of default, the lender may, among other things, immediately demand repayment of all advanced amounts thereunder. The Financing Agreement provides, among other things, that the lender can immediately terminate the Financing Agreement and demand payment. In addition, Jason Wulfsohn, our Chief Executive Officer and a principal stockholder, guaranteed the loan and pledged his shares of Vado common stock to secure payment.
On December 31, 2019, Socialcom borrowed $3,000,000 (the “Decathlon Loan”). The Decathlon Loan is due December 13, 2024 and is secured by all the assets of Socialcom. The Decathlon Loan accrues interest at a variable rate based upon internal rate of return targets, which interest multiple is subject to increase by 0.015 upon an event of default. The effective rate of interest for the years ended December 31, 2023 and 2022 was approximately 17%. Repayments are required based upon a fixed percentage of our earned revenue. If not repaid prior the final balance is due on December 13, 2024. The Decathlon Loan is subject to minimum interest that escalates over the term of the loan. At June 30, 2024 and December 31, 2023, the potential liability for unearned minimum interest was $116,837 and $886,733, respectively. During the six months ended June 30, 2024, the Company made principal and interest payments in the amount $262,252 on the Decathlon loan.
Related Party Indebtedness
The Company has a total of $4,230,000 in outstanding related party indebtedness payable to our officers and directors or affiliated entities. For more information on this related party indebtedness, see footnotes 12 and 13 to our financial statements contained in this report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Mr. Jason Wulfsohn, our Chief Executive Officer (principal executive officer) and Mr. Steve Dang, our Vice President – Finance principal financial officer), have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that our disclosure controls and procedures were effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.
Changes in Internal Controls over Financial Reporting
There have been no changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
All material legal proceedings and material developments thereto have previously been disclosed.
ITEM 1A. RISK FACTORS
See the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for the Risk Factors applicable to the Company and its securities.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the period covered by this report, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
ITEM 6. EXHIBITS
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|
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Incorporated by Reference |
Filed or Furnished |
||
|
Exhibit Number |
Exhibit Description |
Form |
Date |
Number |
Herewith |
|
3.1(a) |
S-1 |
01/18/18 |
3.1 |
|
|
|
3.1(b) |
10-Q |
07/15/20 |
3.1B |
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|
|
3.1(c) |
8-K |
04/01/21 |
3.1 |
|
|
|
3.1(d) |
10-Q |
10/12/21 |
3.1D |
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|
|
3.2 |
8-K |
05/29/20 |
3.1 |
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|
4.1 |
Certificate of Designations of Series A Convertible Preferred Stock |
8-K |
06/29/20 |
4.1 |
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|
4.1(a) |
Certificate of Amendment to Certificate of Designation of Series A Convertible Preferred Stock |
8-K |
2/21/23 |
4.1 |
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|
10.1 |
10-Q |
03/31/24 |
10.1 |
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|
31.1 |
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Filed |
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31.2 |
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Filed |
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32.1 |
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Filed |
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101.INS |
Inline XBRL Instance Document |
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101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
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||
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101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
Inline XBRL Taxonomy Extension Definition Document |
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101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
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||
|
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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|
||
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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|||
* Certain schedules and exhibits to this agreement have been omitted. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
Vado Corp. |
||
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||
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Dated: August 14, 2024 |
By: |
/s/ Jason Wulfsohn |
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|
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Jason Wulfsohn, Chief Executive Officer (Principal Executive Officer) |
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||
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Dated: August 14, 2024 |
By: |
/s/ Steve Dang |
|
|
|
|
Steve Dang, Vice President – Finance (Principal Financial Officer) |
|
Exhibit 31.1
Certification of Chief Executive Officer pursuant
to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)
I, Jason Wulfsohn, certify that:
1. I have reviewed this Quarterly Report ended June 30, 2024 on Form 10-Q of Vado Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and I have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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|
|
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
|
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
August 14, 2024 |
By: /s/ Jason Wulfsohn |
|
|
Name: Jason Wulfsohn Title: Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
Certification of Principal Financial Officer pursuant
to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)
I, Steve Dang, certify that:
1. I have reviewed this Quarterly Report ended June 30, 2024 on Form 10-Q of Vado Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and I have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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|
|
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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|
|
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
August 14, 2024 |
By: /s/ Steve Dang |
|
|
Name: Steve Dang Title: Vice President – Finance (Principal Financial Officer) |
Exhibit 32.1
Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
In connection with the Quarterly Report of Vado Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jason Wulfsohn, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
|
August 14, 2024 |
By: /s/ Jason Wulfsohn |
|
|
Name: Jason Wulfsohn Title: Chief Executive Officer (Principal Executive Officer) |
In connection with the Quarterly Report of Vado Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steve Dang, Vice President – Finance of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
|
August 14, 2024 |
By: /s/ Steve Dang |
|
|
Name: Steve Dang Title: Vice President – Finance (Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Accumulated depreciation (in Dollars) | $ 181,090 | $ 170,854 |
| Common stock, shares authorized | 490,000,000 | 490,000,000 |
| Common stock, shares issued | 182,492,221 | 182,492,221 |
| Common stock, shares outstanding | 182,492,221 | 182,492,221 |
| Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 10,000,000 | |
| Preferred stock, shares issued | 223,333 | 223,333 |
| Preferred stock, shares outstanding | 223,333 | 223,333 |
| Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Series A Preferred Stock [Member] | ||
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Condensed Consolidated Statements of Operations - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Income Statement [Abstract] | ||||
| Revenue | $ 7,372,393 | $ 3,780,310 | $ 10,950,565 | $ 7,315,549 |
| Cost of revenue | 6,018,725 | 2,717,619 | 9,149,027 | 5,057,340 |
| Gross Profit | 1,353,668 | 1,062,691 | 1,801,538 | 2,258,209 |
| Operating expenses: | ||||
| Selling, general and administrative | 2,591,892 | 2,302,702 | 4,367,126 | 4,859,191 |
| Cost of legal settlement | 0 | 894,274 | 0 | 894,274 |
| Total operating expenses | 2,591,892 | 3,196,976 | 4,367,126 | 5,753,465 |
| Net operating loss | (1,238,224) | (2,134,285) | (2,565,588) | (3,495,256) |
| Other income (expense): | ||||
| Interest expense, net of interest income | (520,800) | (250,252) | (1,255,137) | (445,629) |
| Interest income, restricted investment | 9,347 | 0 | 22,509 | 0 |
| Total other expense | (511,453) | (250,252) | (1,232,628) | (445,629) |
| Net loss before provision for income taxes | (1,749,677) | (2,384,537) | (3,798,216) | (3,940,885) |
| Provision for income taxes | 0 | 0 | 0 | 0 |
| Net loss | $ (1,749,677) | $ (2,384,537) | $ (3,798,216) | $ (3,940,885) |
| Net loss per share - basic (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
| Net loss per share - diluted (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
| Weighted average shares outstanding - basic (in Shares) | 182,492,222 | 182,435,898 | 182,492,222 | 180,561,471 |
| Weighted average shares outstanding - diluted (in Shares) | 182,492,222 | 182,435,898 | 182,492,222 | 180,561,471 |
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) |
Common Stock [Member] |
Preferred Stock [Member]
Series A Preferred Stock [Member]
|
Preferred Stock [Member] |
Additional Paid-in Capital [Member]
Series A Preferred Stock [Member]
|
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Series A Preferred Stock [Member] |
Total |
|---|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2022 | $ 173,758 | $ 170 | $ 1,793,966 | $ (6,678,294) | $ (4,710,400) | |||
| Balance (in Shares) at Dec. 31, 2022 | 173,757,921 | 170,000 | ||||||
| Effect of reverse merger | $ 6,986 | (53,308) | (46,322) | |||||
| Effect of reverse merger (in Shares) | 6,985,500 | |||||||
| Share based compensation | 417,232 | 417,232 | ||||||
| Cumulative effect adjustment to implement ASU 2020-06 | Accounting Standards Update 2020-06 [Member] | 0 | |||||||
| Issuance of shares to service provider | $ 3 | 99,997 | 100,000 | |||||
| Issuance of shares to service provider (in Shares) | 3,333 | |||||||
| Sale of stock | $ 1,692 | $ 50 | $ 1,499,950 | 498,308 | $ 1,500,000 | 500,000 | ||
| Sale of stock (in Shares) | 1,692,477 | 50,000 | ||||||
| Discount on convertible notes payable | 540,686 | 540,686 | ||||||
| Net loss | (3,940,885) | (3,940,885) | ||||||
| Balance at Jun. 30, 2023 | $ 182,436 | $ 223 | 4,796,831 | (10,619,179) | (5,639,689) | |||
| Balance (in Shares) at Jun. 30, 2023 | 182,435,898 | 223,333 | ||||||
| Balance at Mar. 31, 2023 | $ 182,436 | $ 195 | 3,419,675 | (8,234,642) | (4,632,336) | |||
| Balance (in Shares) at Mar. 31, 2023 | 182,435,898 | 195,000 | ||||||
| Share based compensation | 202,184 | 202,184 | ||||||
| Issuance of shares to service provider | $ 3 | 99,997 | 100,000 | |||||
| Issuance of shares to service provider (in Shares) | 3,333 | |||||||
| Sale of stock | $ 25 | $ 749,975 | $ 750,000 | |||||
| Sale of stock (in Shares) | 25,000 | |||||||
| Discount on convertible notes payable | 325,000 | 325,000 | ||||||
| Net loss | (2,384,537) | (2,384,537) | ||||||
| Balance at Jun. 30, 2023 | $ 182,436 | $ 223 | 4,796,831 | (10,619,179) | (5,639,689) | |||
| Balance (in Shares) at Jun. 30, 2023 | 182,435,898 | 223,333 | ||||||
| Balance at Dec. 31, 2023 | $ 182,493 | $ 223 | 5,868,972 | (15,199,934) | (9,148,246) | |||
| Balance (in Shares) at Dec. 31, 2023 | 182,492,221 | 223,333 | ||||||
| Share based compensation | 25,780 | 25,780 | ||||||
| Cumulative effect adjustment to implement ASU 2020-06 | Accounting Standards Update 2020-06 [Member] | (394,027) | (394,027) | ||||||
| Net loss | (3,798,216) | (3,798,216) | ||||||
| Balance at Jun. 30, 2024 | $ 182,493 | $ 223 | 5,500,725 | (18,998,150) | (13,314,709) | |||
| Balance (in Shares) at Jun. 30, 2024 | 182,492,221 | 223,333 | ||||||
| Balance at Mar. 31, 2024 | $ 182,493 | $ 223 | 5,491,652 | (17,248,473) | (11,574,105) | |||
| Balance (in Shares) at Mar. 31, 2024 | 182,492,221 | 223,333 | ||||||
| Share based compensation | 9,073 | 9,073 | ||||||
| Cumulative effect adjustment to implement ASU 2020-06 | Accounting Standards Update 2020-06 [Member] | 0 | |||||||
| Net loss | (1,749,677) | (1,749,677) | ||||||
| Balance at Jun. 30, 2024 | $ 182,493 | $ 223 | $ 5,500,725 | $ (18,998,150) | $ (13,314,709) | |||
| Balance (in Shares) at Jun. 30, 2024 | 182,492,221 | 223,333 |
Organization and Business |
6 Months Ended |
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Jun. 30, 2024 | |
| Accounting Policies [Abstract] | |
| Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Organization and Business
Our History
In 2013 co-founders Reeve Benaron and Jason Wulfsohn formed Socialcom Inc (“Socialcom”) by bringing together three businesses they held: a creative agency, a digital performance agency, and a demand side platform (DSP) or programmatic media-buying platform. The core areas of expertise represented by each of these companies - creative and brand building, performance marketing and ad tech - still defines Socialcom’s unique competitive advantage today, as it continues to lean into full-funnel and omnichannel performance solutions for independent agencies and brands. During the last 10 years Socialcom has experienced significant achievements in terms of growth, market relevance, and product innovation, evidenced by an array of prestigious industry awards, including being named one of the fastest-growing companies in America by Deloitte, The Financial Times and the Los Angeles Business Journal, as well ranking on the Inc. 5000 list for four consecutive years, starting in 2019 and most recently in 2022. In 2021 Socialcom was an AdExchanger finalist for Best Programmatic Capabilities, a W3 Silver Award winner for best integrated campaign and in 2022 Socialcom VP of Partnership Solutions, Danielle Gale, was honored by Cynoposis as one of the Top Women in Media. Socialcom is the operating subsidiary of Vado Corp (the “Company,” “Vado,” “we,” “our” and “us”), which we acquired in the share exchange described below. Since 2023 the Company has been focused on developing powerful data science and predictive analytics solutions, through AXi, it’s proprietary suite of audience intelligence tools, that can help deliver significantly improved performance outcomes for their brand and agency clients, driving differentiation for their tech stack and competitive advantage for their clients.
Share Exchange
On February 24, 2023 the Company completed the share exchange (the “Exchange”) contemplated by the Share Exchange Agreement (the “Exchange Agreement”) dated January 30, 2023 with Socialcom and the stockholders of Socialcom signatory thereto (the “Closing”). Pursuant to the Closing of the Exchange, the Company issued the Socialcom stockholders signatory thereto a total of 169,434,640 shares of the Company’s common stock, representing approximately 96% of the shares of the Company’s outstanding common stock after giving effect to such issuance, in exchange for all of the shares of Socialcom common stock held by such Socialcom stockholders. As a result of the Closing of the Exchange, Socialcom became an approximately 96.6% owned subsidiary of the Company.
In connection with the Exchange, the Company also agreed to the following: (i) the cancellation of 93 million shares of common stock held by David Lelong, a director of the Company who at that time was also the Company’s sole officer, which cancellation was effected at the Closing, (ii) the issuance 22,793,540 options to purchase common stock of the Company to Socialcom directors, officers, employees and consultants under the Company’s 2023 Equity Incentive Plan in exchange for the cancellation of 2,604,976 outstanding Socialcom stock options held by such persons, and (iii) execution of the Stock Purchase Agreement (the “SPA”) for a financing resulting in gross proceeds to the Company of $1,500,000 (the “Secondary Financing”). The first tranche of the Secondary Financing, in which the Company sold 25,000 shares of Series A Convertible Preferred Stock (the “Series A”) for $750,000, closed simultaneously with the Closing of the Exchange. The second tranche of the Secondary Financing in which the Company sold an additional 25,000 shares of Series A for an additional $750,000 closed on May 25, 2023.
Effective at the Closing, the number of directors of the Company was fixed at three, and Jason Wulfsohn and Reeve Benaron were appointed to serve on the Board of Directors. Effective upon the Closing, David Lelong tendered his resignation as the sole officer of the Company, and Jason Wulfsohn was appointed as the Company’s Chief Executive Officer. Mr. Lelong remains as a director.
Summary of Business
Socialcom continues to embrace future-first solutions, recognizing ongoing changes in the ad tech space, from data usage and privacy, to emerging technologies and platforms. The Company operates tdX, an omnichannel trading desk platform, providing unified buy-side access to the full-breadth of the ad tech ecosystem, including 24 performance platforms across programmatic, display, CTV, DOOH, and audio, along with search and social. tdX represents a holistic performance solution, unified by the company’s robust data infrastructure, delivering powerful real-time campaign learnings and cross-channel performance optimizations, along with sophisticated analytics designed to deliver scalable and sustainable campaign outcomes. Tech-enabled creative services, delivered by the Company’s internal creative team, Socialcom Studio, ensures that creative is a powerful driver of campaign success, providing differentiated, performance-oriented brand and product ad units and other digital content for deployment within customer campaigns.
Each of these elements, seamlessly integrated within Socialcom’s tech stack, represents a unified customer acquisition and growth solution for the performance marketer, seeking a holistic advertising solution that can deliver measurable and scalable results against clearly defined business goals. |
Basis of Presentation and Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Significant Accounting Policies [Text Block] | 2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. The Company has adopted a fiscal year end of December 31. The accompanying condensed consolidated financial statements include the accounts of Socialcom and Vado Corp. All material intercompany transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company had cash of $1,052,545 at June 30, 2024, including $1,052,519 restricted cash; and $133,182 at December 31, 2023. There were no cash equivalents in either period.
Restricted Cash and Restricted Investment
On December 31, 2023, the Company had a restricted investment of $1,029,256 in the form of a United States Treasury Bill which matured on May 16, 2024. Upon maturity, this amount, including interest, was classified to Restricted Cash, and the amount of $1,052,519 is classified as Restricted Cash on the Company’s balance sheet at June 30, 2024 See notes 4, 14, and 18.
Property, Plant, and Equipment
Property and equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over its estimated useful life. Property acquired in a business combination is recorded at estimated initial fair value. Property, plant, and equipment are depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based upon the following life expectancy:
Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is reflected in operations.
Long-Lived Assets
The Company reviews its property and equipment and any identifiable intangibles including goodwill for impairment on an annual basis utilizing the guidance set forth in the Statement of Financial Accounting Standards Board ASC 350 “Intangibles – Goodwill and Other” and ASC 360 “Property, Plant, and Equipment.” At June 30, 2024 and December 31, 2023, the net carrying value of intangible assets on the Company’s balance sheet was $77,661 and $110,425, respectively.
Concentrations of Credit Risk
The Company maintains its cash in bank deposit accounts and other accounts, the balances of which at times may be uninsured or exceed federally insured limits. From time to time, some of the Company’s funds are also held by escrow agents; these funds may not be federally insured. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts.
Advertising and Marketing Costs
All costs associated with advertising and promoting products are expensed as incurred. Total recognized advertising and marketing expenses were $81,068 and $78,203 for the six months ended June 30, 2024 and 2023, respectively.
Fair Value of Financial Instruments
Pursuant to Accounting Standards Codification (“ASC”) No. 825 - Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying amounts of the Company’s cash and cash equivalents, notes receivable, convertible notes payable, accounts payable and accrued expenses, none of which is held for trading, approximate their estimated fair values due to the short-term maturities of those financial instruments.
A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
Level 3 - Significant unobservable inputs that cannot be corroborated by market data.
Capitalized Software Development Costs
The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the development of the Company’s platform solution. These costs include third party development expenses for that are directly associated with and devote time to software development projects. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in operating expenses in the consolidated statements of operations.
The Company’s customers do not take possession of the software and cannot run the software on their own hardware. For these reasons, pursuant to ASC 985-20 Costs of Software to Be Sold, Leased, or Marketed (“ASC 982-20”), the software is considered a software hosting arrangement and the Company applied the guidance of ASC 350-40 Intangibles – Goodwill and Other: Internal Use Software” (“ASC 350-40"). Pursuant to ASC 350-40, software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized using a straight-line method over the estimated useful life of three years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived.
Operating Leases
The Company accounts for its leasing arrangements by applying the guidance of Accounting Standards Update No. 2016-02, Leases (Topic 842), (“ASU 2016-02”). The Company enters into operating leases for its office space. The Company does not have finance leases.
The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.
Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. The Company has elected to not separate lease and non-lease components.
Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, along with the change in the operating lease liabilities, are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.
Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors.
Refer to Note 8 for additional information.
Revenue Recognition
The Company generates its revenue by providing marketers and advertising agencies with the ability to deliver digital marketing and marketing-related solutions. The Company’s primary business is to deliver omnichannel programmatic, paid search, and paid social advertising services for its customers. The Company also does a limited amount of marketing-related project work for customers, including creative services, and also has a reseller solution with a partner. This results in the following revenue streams:
The Company applies a five-step approach as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606: Revenue from Contracts with Customers (“ASC 606”) in determining the amount and timing of revenue to be recognized:
The determination of whether revenue should be reported on a gross or a net basis is based upon an assessment of whether we are acting as the principal or agent in the transaction based upon the guidance in ASC 606. Making such determinations involves judgment and is based on an evaluation of the terms of each arrangement, none of which are considered presumptive or determinative. We act as a principal and recognize revenue on a gross basis if (i) we control the advertising inventory before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. We applied the guidance of ASC 606 to our revenue streams as follows:
Programmatic Solutions: Programmatic revenue consists of delivering our customer’s budget programmatically through our trading desk model, where multiple Demand Side Platforms (“DSP”) are utilized to deliver advertising budgets as paid impressions. The Company, through its deep understanding of DSP platforms, transacts to spend customer’s budgets within the platforms to execute against customer marketing goals as efficiently and effectively as possible. In this arrangement, our team will perform all of the setup, activation, strategy, tactic building, implementation and delivery of the campaign through a partner platform or platforms. We enter into an Insertion Order / Media Plan (“IO”) with all Programmatic customers. The IO states the services that are to be performed and a budget for each tactic or tactics. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. Because we are in control of this process and assume inventory risk, we recognize revenue on a gross basis.
Paid Search & Social Solutions: We also enter into an IO with all Paid Search & Social customers. The IO states the services that are to be performed and a budget for each tactic. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. In instances where we pay the third party for inventory, we recognize revenue on a gross basis because we bear the inventory risk. In instances where the customer pays the third party, we recognize revenue on a net basis.
Services Revenue: We enter into Statement of Work (“SOW”) agreements with all Services customers. The SOW includes estimated costs to be applied against the services to be performed, and establishes payment and billing terms. Services revenue is recognized on a gross basis.
Self-Serve Revenue: Self-serve revenue consists of revenues generated through our Admatx platform, as well as through reselling access to a major enterprise DSP. Users of Admatx agree to our platform terms and conditions, and we enter into Master Services Agreements (“MSA”) with all reseller customers. The Platform Terms and Conditions and MSAs detail the work and responsibilities of each party and their respective obligations. Self-serve revenue is recognized on a net basis.
Deferred Revenue
Certain customer arrangements in the Company's business result in deferred revenues when cash payments are received in advance of performance.
The following table represents the changes in deferred revenue as reported on the Company’s consolidated balance sheets:
Stock-Based Compensation
We recognize compensation costs to employees under FASB ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under FASB ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
Equity instruments issued to other than employees are recorded pursuant to the guidance contained in ASU 2018-07 (“ASU 2018-07”), Improvements to Non-employee Share-Based Payment Accounting, which simplified the accounting for share-based payments granted to non-employees for goods and services. Under the ASU 2018-07, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees.
Basic and Diluted Earnings or Loss Per Share
Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options to purchase common stock. Basic and diluted net loss per share are computed based on the weighted average number of shares of common stock outstanding during the period. At June 30, 2024 and December 31, 2023, the Company had the following potentially dilutive instruments outstanding: a total of 20,296,798 and 21,684,635 shares, respectively, issuable upon the exercise of stock options.
The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculations. At June 30, 2024 and December 31, 2023, 20,296,798 and 21,684,635 stock options, respectively, are excluded from the calculation of fully-diluted shares outstanding.
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
Commitments and Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company management may consult its legal counsel to evaluate the perceived merits of any legal proceedings or unasserted claims brought to such legal counsel’s attention 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 financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
Recent Accounting Pronouncements
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)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard was effective for us on January 1, 2023. The adoption of this standard did not have a material effect on our consolidated financial statements.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
Transfer of Customers and Employees |
6 Months Ended |
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Jun. 30, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Collaborative Arrangement Disclosure [Text Block] | 3. Transfer of Customers and Employees
On March 15, 2024, Socialcom Inc, a subsidiary of Vado Corp. (the “Company”), entered into an Agreement for Transfer of Customers and Employees (the “Agreement”) with a third party (the “Counterparty”). Under the Agreement, the Company acquired the customer base (comprised of 11 customers and one prospective customer) and hired 14 employees of the Counterparty, and assumed the related liabilities thereof, with an effective date on March 1, 2024 (the “Transfer Date”). The Agreement provides that the Company will receive payment for all services provided on the acquired customer accounts beginning on the Transfer Date, including customer prepayments held by the Counterparty totaling $4,164,269 for future services to be rendered on customer accounts, subject to performance of the services on such accounts and on the Counterparty’s right to offset transferred employee compensation. The customer prepayments will be determined and paid on a monthly basis. At June 30, 2024, the remaining amount held by the Counterparty for customer prepayments was $214,969.
During the three and six months ended June 30, 2024, the Company recorded revenue in the amount of $3,314,458 and $4,322,943, respectively, and costs in the amount of $3,561,518 and $4,523,475, respectively, in connection with the Agreement. |
Cash – Restricted and Investments - Restricted |
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| Disclosure Text Block Supplement [Abstract] | ||||||||||||||||||||||||||||
| Investment [Text Block] | 4. Cash – Restricted and Investments - Restricted
The Company had a restricted investment in connection with a complaint filed by a former services provider of the Company in the amount of $0 and $1,029,981 at June 30, 2024 and December 31, 2023, for amounts due in connection with the complaint. During the three and six months ended June 30, 2024, the Company recorded interest income in the amount of $9,347 and $22,509, respectively, in connection with this investment. The restricted investment was held in the form of a United States Treasury Bill which matured on May 16, 2024.
The components of restricted investments were as follows:
The investment consists of one U.S. Treasury Bill with a maturity date of May 16, 2024 and original par value of $1,049,000. This instrument was purchased June 13, 2023 at a price of $1,000,786 and an original issue discount of $48,214. During the three and six months ended June 30, 2024, the Company recorded interest income in the amount of $6,439 and $19,901, respectively, in connection with this investment. Upon maturity, this amount, including interest, was classified to Restricted Cash, and the amount of $1,052,519 is classified as Restricted Cash on the Company’s balance sheet at June 30, 2024 See notes 4, 14, and 18. |
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Accounts Receivable |
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| Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 5. Accounts Receivable
Accounts receivable, net was $2,954,586 and $2,953,497 at June 30, 2024 and December 31, 2023, respectively. During the six months ended June 30, 2024 and 2023, the Company (credited) charged the amount of $(80,341) and $93,882, respectively, to bad debt expense. At June 30, 2024 and December 31, 2023, the Company maintained a reserve for doubtful accounts in the amount of $200,846 and $571,773, respectively.
On June 13, 2019, the Company entered into an accounts receivable financing and security agreement (the “Financing Agreement”) in the maximum amount of $10,000,000 whereby the Company would be advanced 85% of the gross value of accounts receivable invoices submitted to the lender for purchase. The cost of the financing consists of (i) an initial financing fee equal to one-twelfth of the net amount advanced multiplied by the facility rate, initially defined as LIBOR plus 6.5% per annum (the “Facility Rate”), and (ii) an additional financing fee consisting of one-twelfth of the amount advanced, prorated on a daily rate, multiplied by the Facility Rate. On June 11, 2021, the maximum amount available under the Financing Agreement was reduced to $5,000,000, and on June 8, 2022, the maximum amount available under the Financing Agreement was reduced to $3,000,000 and the Facility Rate was increased to LIBOR plus 7.25% per annum. On September 18, 2023, the maximum amount available under the Financing Agreement was reduced to $2,000,000 and the Facility Rate was increased to Prime Rate (defined as the higher of the highest rate as reported by the Wall Street Journal or 8.5%) plus 5% per annum. During the six months ended June 30, 2024 and 2023, the Company charged to interest expense the amount of $36,825 and $56,144, respectively, pursuant to the Financing Agreement.
Accounts receivable, net consisted of the following at June 30, 2024 and December 31, 2023:
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Other Current Assets |
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| Other Current Assets [Text Block] | 6. Other Current Assets
Other current assets consisted of the following at June 30, 2024 and December 31, 2023:
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Property and Equipment |
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| Property, Plant and Equipment Disclosure [Text Block] | 7. Property and Equipment
Property and equipment consisted of the following at June 30, 2024 and December 31, 2023:
The Company made payments in the amounts of $4,252 and $4,979 for property and equipment during the six months ended June 30, 2024 and 2023, respectively. Depreciation expense was $9,486 and $9,788 for the six months ended June 30, 2024 and 2023, respectively. |
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Intangible Assets |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible Assets Disclosure [Text Block] | 8. Intangible Assets
In January 2021 the Company completed the acquisition of certain assets consisting of customer contracts and customer lists (the “BigBuzz Customer Lists”) from BigBuzz Marketing Group (“BigBuzz”). The cost of the BigBuzz Customer Lists was $475,000 payable over three years (see note 10). The Company also capitalized the direct costs of this transaction in the amount of $7,462 for a total cost basis of $482,462. The BigBuzz Customer Lists are being amortized over a period of three years based on the expected customer life of the assets acquired.
The Company began to capitalize the costs of development of internal use software in August 2021, and software was first placed into service in May 2022. In 2021, the Company capitalized $43,454 of costs to develop internal use software. In 2022, the Company capitalized an additional $89,094 of costs to develop internal use software. The Company placed $31,618 of costs to develop internal use software into service and amortized the amount of $207,994 during the year ended December 31, 2023; the Company placed $7,189 of costs to develop internal use software into service and amortized the amount of $39,953 during the six months ended June 30, 2024.
The Company has $4,497 and $8,611 in capitalized software costs that have not yet been placed into service at June 30, 2024 and December 31, 2023.
Intangible assets consisted of the following at June 30, 2024 and December 31, 2023:
The Company amortized the amount of $13,449 and $51,860 during the three months ended June 30, 2024 and 2023, respectively. The Company amortized the amount of $39,953 and $103,204 during the six months ended June 30, 2024 and 2023, respectively. |
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Accounts Payable and Accrued Liabilities |
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| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 9. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following at June 30, 2024 and December 31, 2023:
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Acquisition Liabilities |
6 Months Ended |
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Jun. 30, 2024 | |
| Business Combinations [Abstract] | |
| Business Combination Disclosure [Text Block] | 10. Acquisition Liabilities
In January 2021 the Company recorded a liability in the amount of $475,000 in connection with the acquisition of the BigBuzz Customer Lists, which consisted of a three-year employment agreement for each of the two founders of BigBuzz. As this was an acquisition of only certain assets consisting of customer contracts and customer lists (see note 8), no other assets were acquired that would give rise to acquisition related liabilities; there were no requirements to hire any other employees as part of the asset acquisition. The Company paid $25,000 of this amount on February 2, 2021; the remainder is payable at the rate of $12,500 per month through January 31, 2024. During the six months ended June 30, 2024 and 2023, the Company paid the amount of $12,500 and $75,000, respectively, in connection with this liability. The amount due under this transaction is fully paid as of June 30, 2024. |
Loans Payable |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Text Block] | 11. Loans Payable
Aggregate maturities of loans payable as of June 30, 2024 are as follows:
For the twelve months ended June 30,
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| Long-Term Debt [Text Block] | 12. Loans Payable - Related Parties
Aggregate maturities of loans payable – related parties as of June 30, 2024 are as follows:
For the twelve months ended June 30,
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Convertible Note Payable – Related Party |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Text Block] | 13. Convertible Note Payable – Related Party
Aggregate maturities of convertible notes payable – related parties as of June 30, 2024 are as follows:
For the twelve months ended June 30,
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Accrued Settlements |
6 Months Ended |
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Jun. 30, 2024 | |
| Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
| Other Liabilities Disclosure [Text Block] | 14. Accrued Settlements
On December 31, 2019 the Company accrued $1,582,652 in connection with a vendor dispute. During the three months ended September 30, 2023, the Company accrued an additional $894,274 pursuant to this dispute. At June 30, 2024, the amount of $2,476,926 remains on the Company’s balance sheet as an accrued liability. The Company has investments in the amount of $1,049,000 on its balance sheet at June 30, 2024 for the purpose of funding a surety bond in connection with this liability. See note 18. |
Stockholders’ Equity |
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| Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Text Block] | 15. Stockholders’ Equity
The Company’s authorized capital stock consists of 490,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001, 1,000,000 shares of which are designated as Series A Preferred Stock. The Company had 182,492,221 shares of common stock issued and outstanding as of June 30, 2024 and December 31, 2023.
Common Stock
Six months ended June 30, 2024:
No activity.
Six months ended June 30, 2023:
On February 24, 2023 the Company completed the Exchange Agreement with pursuant which to the Company issued to the Socialcom shareholders a total of 173,757,921 shares of the Company’s common stock, representing approximately 96% of the outstanding shares of common stock of the Company after giving effect to such issuance, in exchange for all of the shares of Socialcom common stock held by such Socialcom shareholders. As a result of the foregoing, Socialcom became an approximately 96.6% owned subsidiary of the Company. See note 1.
On June 1, 2023, the Company issued 3,333 shares of Series A Preferred Stock to a service provider with a fair value of $30 per shares. The amount of $100,000 was charged to prepaid expenses and will be amortized over the one year term of the agreement. During the three months ended June 30, 2023, the company charged to operations the amount of $3,333 in connection with this transaction.
Series A Convertible Preferred Stock
The Company has designated 1,000,000 shares of Series A Convertible Preferred Stock, par value $0.001. Subject to certain limitations set forth in the Certificate of Designation of the Series A, each share of Series A is convertible into 20 shares of the Company’s common stock. The Series A is non-voting except as may be required by applicable law. The Series A also provides the holders with senior ranking with respect to the Company’s capital stock upon the occurrence of a liquidation, dissolution or winding up, and a liquidation preference in the event of the merger or consolidation of the Company in which the Company is not the surviving entity, the sale of all of the assets of the Company in a transaction which requires stockholder approval or the dissolution or winding up of the Company, in each case at the stated value of $30 per share of Series A.
Six months ended June 30, 2024:
No activity.
Six months ended June 30, 2023:
On February 24, 2023, the Company sold 25,000 shares of Series A Preferred Stock at a price of $30.00 per share for cash proceeds of $750,000 in the first tranche of a Securities Purchase Agreement entered into on January 30, 2023. On May 25, 2023, the Company sold an additional 25,000 shares of Series A Preferred stock for cash proceeds of $750,000.
On June 1, 2023, the Company issued 3,333 shares of Series A Preferred Stock to a service provider with a fair value of $30 per shares. The amount of $100,000 was charged to prepaid expenses and will be amortized over the one year term of the agreement. During the three months ended June 30, 2023, the company charged to operations the amount of $3,333 in connection with this transaction.
Options
The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company as of June 30, 2024:
Transactions involving stock options are summarized as follows:
During the three months ended June 30, 2024 and 2023, the Company charged $9,073 and $202,194, respectively, to stock based compensation expense for stock options. During the six months ended June 30, 2024 and 2023, the Company charged $25,780 and $417,242, respectively, to stock based compensation expense for stock options.
The aggregate intrinsic value of options outstanding and exercisable at June 30, 2024 and December 31, 2023 was $3,417,070 and $4,443,397, respectively. Aggregate intrinsic value represents the difference between the fair value of the Company’s stock on the last day of the fiscal period, which was $0.295 as of June 30, 2024 and December 31, 2023, and the exercise price multiplied by the number of options outstanding.
There were no options valued during the six months ended June 30, 2024. During the year ended December 31, 2023, the Company valued options using the Black-Scholes valuation model utilizing the following variables:
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Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax Disclosure [Text Block] | 16. Income Taxes
The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a carryforward exists, the Company decides as to whether the carryforward will be utilized in the future. Currently, a valuation allowance is established for all deferred tax assets and carryforwards as their recoverability is deemed to be uncertain. If the Company’s expectations for future operating results at the federal or at the state jurisdiction level vary from actual results due to changes in healthcare regulations, general economic conditions, or other factors, it may need to adjust the valuation allowance, for all or a portion of the Company’s deferred tax assets. The Company’s income tax expense in future periods will be reduced or increased to the extent of offsetting decreases or increases, respectively, in the Company’s valuation allowance in the period when the change in circumstances occurs. These changes could have a significant impact on the Company’s future earnings.
Income tax expense was $0 for the six months ended June 30, 2024, compared to $0 for the six months ended June 30, 2023. The annual forecasted effective income tax rate for 2023 is 0%. The Company has no net operating loss carryforward due to the change of control inherent in the Exchange Agreement (see note 1). The Company has no uncertain tax positions at June 30, 2024 or December 31, 2023. |
Going Concern |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Substantial Doubt about Going Concern [Text Block] | 17. Going Concern
As of June 30, 2024, we had restricted cash of $1,052,519 and unrestricted cash on hand of $26 net of an overdraft in the amount of $5,013, and a working capital deficit of $10,383,599. Management believes this amount is not sufficient to meet our operating needs for the 12 months subsequent to the date of this filing. In order to meet our working capital requirements, we will need to either raise sufficient capital and/or increase revenue by executing against our various ongoing strategic growth initiatives while continuing to actively reduce, maintain, or manage our current expenditures. The Company’s ability to continue as a going concern is dependent upon its ability to improve cash flow and the ability to obtain additional financing, including debt and equity offerings. These and other listed factors cause substantial doubt about the Company’s ability to continue as a going concern. |
Commitments and Contingencies |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies Disclosure [Text Block] | 18. Commitments and Contingencies
In June 2019, a former services provider of the Company filed a complaint in the amount of $1,442,441 for amounts due. The Company countersued for breach of agreement. During the three months ended September 30, 2023, the Company accrued an additional $894,274 pursuant to this dispute as a result a claim for an additional liability and a judgment for court costs against the Company. The Company plans to appeal this judgement which the Company believes is unlawful. The Company has recorded a liability in the amount of $2,476,926 on the balance sheet at June 30, 2024 in connection with this complaint. The Company has restricted cash in the amount of $1,052,519 at June 30, 2024 for purposes of funding a surety bond in connection with this complaint. See note 14.
From time to time, the Company has become and may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business, or current or previous employees, or current or previous directors, or as a result of acquisitions and dispositions or other corporate activities. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position or our business, and the outcome of these matters cannot be ultimately predicted. |
Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions Disclosure [Text Block] | 19. Related Party Transactions
See Notes 12 and 13 for a description of related party transactions. |
Subsequent Events |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Events [Text Block] | 20. Subsequent Events
None |
Pay vs Performance Disclosure - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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| Pay vs Performance Disclosure | ||||
| Net Income (Loss) | $ (1,749,677) | $ (2,384,537) | $ (3,798,216) | $ (3,940,885) |
Insider Trading Arrangements |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Trading Arrangements, by Individual | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. The Company has adopted a fiscal year end of December 31. The accompanying condensed consolidated financial statements include the accounts of Socialcom and Vado Corp. All material intercompany transactions have been eliminated in consolidation. |
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| Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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| Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company had cash of $1,052,545 at June 30, 2024, including $1,052,519 restricted cash; and $133,182 at December 31, 2023. |
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| Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash and Restricted Investment On December 31, 2023, the Company had a restricted investment of $1,029,256 in the form of a United States Treasury Bill which matured on May 16, 2024. Upon maturity, this amount, including interest, was classified to Restricted Cash, and the amount of $1,052,519 is classified as Restricted Cash on the Company’s balance sheet at June 30, 2024 See notes 4, 14, and 18. |
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| Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant, and Equipment Property and equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over its estimated useful life. Property acquired in a business combination is recorded at estimated initial fair value. Property, plant, and equipment are depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based upon the following life expectancy:
Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is reflected in operations. |
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| Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles including goodwill for impairment on an annual basis utilizing the guidance set forth in the Statement of Financial Accounting Standards Board ASC 350 “Intangibles – Goodwill and Other” and ASC 360 “Property, Plant, and Equipment.” At June 30, 2024 and December 31, 2023, the net carrying value of intangible assets on the Company’s balance sheet was $77,661 and $110,425, respectively. |
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| Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk The Company maintains its cash in bank deposit accounts and other accounts, the balances of which at times may be uninsured or exceed federally insured limits. From time to time, some of the Company’s funds are also held by escrow agents; these funds may not be federally insured. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts.
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| Advertising Cost [Policy Text Block] | Advertising and Marketing Costs All costs associated with advertising and promoting products are expensed as incurred. Total recognized advertising and marketing expenses were $81,068 and $78,203 for the six months ended June 30, 2024 and 2023, respectively. |
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| Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments Pursuant to Accounting Standards Codification (“ASC”) No. 825 - Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying amounts of the Company’s cash and cash equivalents, notes receivable, convertible notes payable, accounts payable and accrued expenses, none of which is held for trading, approximate their estimated fair values due to the short-term maturities of those financial instruments. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3 - Significant unobservable inputs that cannot be corroborated by market data. |
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| Internal Use Software, Policy [Policy Text Block] | Capitalized Software Development Costs The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the development of the Company’s platform solution. These costs include third party development expenses for that are directly associated with and devote time to software development projects. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in operating expenses in the consolidated statements of operations. The Company’s customers do not take possession of the software and cannot run the software on their own hardware. For these reasons, pursuant to ASC 985-20 Costs of Software to Be Sold, Leased, or Marketed (“ASC 982-20”), the software is considered a software hosting arrangement and the Company applied the guidance of ASC 350-40 Intangibles – Goodwill and Other: Internal Use Software” (“ASC 350-40"). Pursuant to ASC 350-40, software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized using a straight-line method over the estimated useful life of three years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. |
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| Lessee, Leases [Policy Text Block] | Operating Leases The Company accounts for its leasing arrangements by applying the guidance of Accounting Standards Update No. 2016-02, Leases (Topic 842), (“ASU 2016-02”). The Company enters into operating leases for its office space. The Company does not have finance leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right. Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. The Company has elected to not separate lease and non-lease components.
Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, along with the change in the operating lease liabilities, are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors. Refer to Note 8 for additional information. |
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| Revenue [Policy Text Block] | Revenue Recognition The Company generates its revenue by providing marketers and advertising agencies with the ability to deliver digital marketing and marketing-related solutions. The Company’s primary business is to deliver omnichannel programmatic, paid search, and paid social advertising services for its customers. The Company also does a limited amount of marketing-related project work for customers, including creative services, and also has a reseller solution with a partner. This results in the following revenue streams:
The Company applies a five-step approach as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606: Revenue from Contracts with Customers (“ASC 606”) in determining the amount and timing of revenue to be recognized:
The determination of whether revenue should be reported on a gross or a net basis is based upon an assessment of whether we are acting as the principal or agent in the transaction based upon the guidance in ASC 606. Making such determinations involves judgment and is based on an evaluation of the terms of each arrangement, none of which are considered presumptive or determinative. We act as a principal and recognize revenue on a gross basis if (i) we control the advertising inventory before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. We applied the guidance of ASC 606 to our revenue streams as follows: Programmatic Solutions: Programmatic revenue consists of delivering our customer’s budget programmatically through our trading desk model, where multiple Demand Side Platforms (“DSP”) are utilized to deliver advertising budgets as paid impressions. The Company, through its deep understanding of DSP platforms, transacts to spend customer’s budgets within the platforms to execute against customer marketing goals as efficiently and effectively as possible. In this arrangement, our team will perform all of the setup, activation, strategy, tactic building, implementation and delivery of the campaign through a partner platform or platforms. We enter into an Insertion Order / Media Plan (“IO”) with all Programmatic customers. The IO states the services that are to be performed and a budget for each tactic or tactics. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. Because we are in control of this process and assume inventory risk, we recognize revenue on a gross basis. Paid Search & Social Solutions: We also enter into an IO with all Paid Search & Social customers. The IO states the services that are to be performed and a budget for each tactic. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. In instances where we pay the third party for inventory, we recognize revenue on a gross basis because we bear the inventory risk. In instances where the customer pays the third party, we recognize revenue on a net basis.
Services Revenue: We enter into Statement of Work (“SOW”) agreements with all Services customers. The SOW includes estimated costs to be applied against the services to be performed, and establishes payment and billing terms. Services revenue is recognized on a gross basis. Self-Serve Revenue: Self-serve revenue consists of revenues generated through our Admatx platform, as well as through reselling access to a major enterprise DSP. Users of Admatx agree to our platform terms and conditions, and we enter into Master Services Agreements (“MSA”) with all reseller customers. The Platform Terms and Conditions and MSAs detail the work and responsibilities of each party and their respective obligations. Self-serve revenue is recognized on a net basis. |
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| Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenue Certain customer arrangements in the Company's business result in deferred revenues when cash payments are received in advance of performance. The following table represents the changes in deferred revenue as reported on the Company’s consolidated balance sheets:
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| Share-Based Payment Arrangement [Policy Text Block] | Stock-Based Compensation We recognize compensation costs to employees under FASB ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under FASB ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. Equity instruments issued to other than employees are recorded pursuant to the guidance contained in ASU 2018-07 (“ASU 2018-07”), Improvements to Non-employee Share-Based Payment Accounting, which simplified the accounting for share-based payments granted to non-employees for goods and services. Under the ASU 2018-07, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees. |
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| Earnings Per Share, Policy [Policy Text Block] | Basic and Diluted Earnings or Loss Per Share Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options to purchase common stock. Basic and diluted net loss per share are computed based on the weighted average number of shares of common stock outstanding during the period. At June 30, 2024 and December 31, 2023, the Company had the following potentially dilutive instruments outstanding: a total of 20,296,798 and 21,684,635 shares, respectively, issuable upon the exercise of stock options. The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculations. At June 30, 2024 and December 31, 2023, 20,296,798 and 21,684,635 stock options, respectively, are excluded from the calculation of fully-diluted shares outstanding. |
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| Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
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| Commitments and Contingencies, Policy [Policy Text Block] | Commitments and Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company management may consult its legal counsel to evaluate the perceived merits of any legal proceedings or unasserted claims brought to such legal counsel’s attention 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 financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
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| New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements 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)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard was effective for us on January 1, 2023. The adoption of this standard did not have a material effect on our consolidated financial statements. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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| Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following at June 30, 2024 and December 31, 2023:
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| Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | The following table represents the changes in deferred revenue as reported on the Company’s consolidated balance sheets:
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| Property, Plant and Equipment [Table Text Block] | Property, plant, and equipment are depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based upon the following life expectancy:
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Cash – Restricted and Investments - Restricted (Tables) |
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| Investment [Table Text Block] | The components of restricted investments were as follows:
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Accounts Receivable (Tables) |
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| Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Accounts receivable, net consisted of the following at June 30, 2024 and December 31, 2023:
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| Schedule of Other Current Assets [Table Text Block] | Other current assets consisted of the following at June 30, 2024 and December 31, 2023:
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Property and Equipment (Tables) |
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| Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following at June 30, 2024 and December 31, 2023:
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Intangible Assets (Tables) |
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| Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets consisted of the following at June 30, 2024 and December 31, 2023:
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Accounts Payable and Accrued Liabilities (Tables) |
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| Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accounts payable and accrued liabilities consisted of the following at June 30, 2024 and December 31, 2023:
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Loans Payable (Tables) |
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| Schedule of Debt [Table Text Block] |
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| Schedule of Maturities of Long-Term Debt [Table Text Block] | Aggregate maturities of loans payable as of June 30, 2024 are as follows:
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Loans Payable - Related Parties (Tables) - Related Party [Member] |
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| Schedule of Long-Term Debt Instruments [Table Text Block] |
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| Schedule of Maturities of Long-Term Debt [Table Text Block] | Aggregate maturities of loans payable – related parties as of June 30, 2024 are as follows:
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| Schedule of Maturities of Long-Term Debt [Table Text Block] | Aggregate maturities of loans payable as of June 30, 2024 are as follows:
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| Schedule of Maturities of Long-Term Debt [Table Text Block] | For the twelve months ended June 30,
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement, Option, Exercise Price Range [Table Text Block] | The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company as of June 30, 2024:
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| Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Transactions involving stock options are summarized as follows:
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| Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | There were no options valued during the six months ended June 30, 2024. During the year ended December 31, 2023, the Company valued options using the Black-Scholes valuation model utilizing the following variables:
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Basis of Presentation and Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Leasehold Improvements [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property, Plant and Equipment, Estimated Useful Life | Term of lease |
| Minimum [Member] | Office Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property, Plant and Equipment, Useful Life | 3 years |
| Minimum [Member] | Furniture and Fixtures [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property, Plant and Equipment, Useful Life | 3 years |
| Maximum [Member] | Office Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property, Plant and Equipment, Useful Life | 5 years |
| Maximum [Member] | Furniture and Fixtures [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property, Plant and Equipment, Useful Life | 7 years |
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Deferred Revenue, by Arrangement, Disclosure |
6 Months Ended |
|---|---|
|
Jun. 30, 2024
USD ($)
| |
| Deferred Revenue By Arrangement Disclosure Abstract | |
| Balance | $ 191,766 |
| Cash payments received | 1,563,998 |
| Net sales recognized | (823,125) |
| Balance | $ 932,639 |
Transfer of Customers and Employees (Details) - Collaborative Arrangement [Member] |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
|
Mar. 15, 2024
USD ($)
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2024
USD ($)
|
|
| Transfer of Customers and Employees (Details) [Line Items] | |||
| Number of customers | 11 | ||
| Number of prospective customers | 1 | ||
| Entity Number of Employees | 14 | ||
| Customer Advances and Deposits | $ 4,164,269 | $ 214,969 | $ 214,969 |
| Revenues | 3,314,458 | 4,322,943 | |
| Cost of Revenue | $ 3,561,518 | $ 4,523,475 |
Cash – Restricted and Investments - Restricted (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
|
| Cash – Restricted and Investments - Restricted (Details) [Line Items] | ||||||
| Loss Contingency, Damages Sought, Value | $ 1,442,441 | $ 0 | $ 1,029,981 | |||
| Investment Income, Interest | $ 9,347 | $ 0 | $ 22,509 | $ 0 | ||
| Investment Maturity Date | May 16, 2024 | May 16, 2024 | ||||
| Investments | $ 1,049,000 | $ 1,049,000 | ||||
| Payments to Acquire Investments | 1,000,786 | |||||
| Investment original issue discount | 48,214 | |||||
| Restricted Cash | 1,052,519 | 1,052,519 | ||||
| US Treasury Bill Securities [Member] | ||||||
| Cash – Restricted and Investments - Restricted (Details) [Line Items] | ||||||
| Investment Income, Interest | $ 6,439 | $ 19,901 | ||||
Cash – Restricted and Investments - Restricted (Details) - Schedule of Investment |
12 Months Ended |
|---|---|
|
Dec. 31, 2023
USD ($)
| |
| Schedule Of Investment Abstract | |
| Fair Value | $ 1,029,891 |
| Unrealized Losses | $ (365) |
Accounts Receivable (Details) - USD ($) |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jun. 08, 2022 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
Sep. 18, 2023 |
Jun. 11, 2021 |
Jun. 13, 2019 |
|
| Receivables [Abstract] | |||||||
| Accounts Receivable, after Allowance for Credit Loss | $ 2,954,586 | $ 2,953,497 | |||||
| Accounts Receivable, Credit Loss Expense (Reversal) | (80,341) | $ 93,882 | |||||
| Accounts Receivable, Allowance for Credit Loss | 200,846 | $ 571,773 | |||||
| Financing Receivable, before Allowance for Credit Loss, Current | $ 3,000,000 | $ 2,000,000 | $ 5,000,000 | $ 10,000,000 | |||
| Financing Receivable, before Allowance for Credit Loss, to Total, Percent | 85.00% | ||||||
| Debt Instrument, Basis Spread on Variable Rate | 7.25% | ||||||
| Finance Lease, Interest Expense | $ 36,825 | $ 56,144 | |||||
Accounts Receivable (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Schedule Of Accounts Notes Loans And Financing Receivable Abstract | ||
| Accounts receivable | $ 3,100,432 | $ 3,155,200 |
| Due under Financing Agreement, net | 55,000 | 370,070 |
| Allowance for doubtful accounts | (200,846) | (571,773) |
| Total | $ 2,954,586 | $ 2,953,497 |
Other Current Assets (Details) - Schedule of Other Current Assets - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Schedule Of Other Current Assets Abstract | ||
| Deposits | $ 0 | $ 39,792 |
| Prepaid expenses | 290,919 | 195,450 |
| Total | $ 290,919 | $ 235,242 |
Property and Equipment (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Property, Plant and Equipment [Abstract] | ||
| Payments to Acquire Property, Plant, and Equipment | $ 4,252 | $ 4,979 |
| Depreciation | $ 9,486 | $ 9,788 |
Property and Equipment (Details) - Property, Plant and Equipment - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Less: accumulated depreciation | $ (181,090) | $ (170,854) |
| Property and equipment, net | 21,229 | 26,463 |
| Computer Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment | 155,678 | 151,426 |
| Leasehold Improvements [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment | 45,891 | 45,891 |
| Furniture and equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment | $ 750 | $ 0 |
Intangible Assets (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Intangible Assets (Details) [Line Items] | |||||||
| Finite-Lived Intangible Assets Acquired | $ 482,462 | ||||||
| Finite-Lived Intangible Assets, Period Increase (Decrease) | $ 7,462 | ||||||
| Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||
| Capitalized Computer Software, Additions | $ 89,094 | $ 43,454 | |||||
| Capitalized Computer Software, Period Increase (Decrease) | $ 7,189 | $ 31,618 | |||||
| Capitalized Computer Software, Amortization | 39,953 | 207,994 | |||||
| Amortization of Intangible Assets | $ 13,449 | $ 51,860 | 39,953 | $ 103,204 | |||
| Customer Lists [Member] | |||||||
| Intangible Assets (Details) [Line Items] | |||||||
| Finite-Lived Intangible Assets Acquired | $ 475,000 | ||||||
| Computer Software, Not in Service [Member] | |||||||
| Intangible Assets (Details) [Line Items] | |||||||
| Capitalized Computer Software, Gross | $ 4,497 | $ 4,497 | $ 8,611 | ||||
Intangible Assets (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible Assets, Gross | $ 653,818 | $ 646,628 |
| Intangible Assets, Accumulated Amortization | (576,157) | (536,203) |
| Intangible Assets, Net | 77,761 | 110,425 |
| Customer Lists [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible Assets, Gross | 482,462 | 482,462 |
| Intangible Assets, Accumulated Amortization | (482,462) | (469,060) |
| Intangible Assets, Net | 0 | 13,402 |
| Computer Software, Intangible Asset [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible Assets, Gross | 171,356 | 164,166 |
| Intangible Assets, Accumulated Amortization | (93,695) | (67,143) |
| Intangible Assets, Net | $ 77,761 | $ 97,023 |
Accounts Payable and Accrued Liabilities (Details) - Schedule of Accounts Payable and Accrued Liabilities - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Schedule Of Accounts Payable And Accrued Liabilities Abstract | ||
| Trade accounts payable | $ 4,518,134 | $ 2,632,999 |
| Credit cards payable | 398,482 | 661,676 |
| Accrued payroll, commissions, and payroll taxes | 218,047 | 65,565 |
| Accrued interest | 298,412 | 195,390 |
| Total | $ 5,433,075 | $ 3,555,630 |
Acquisition Liabilities (Details) - USD ($) |
6 Months Ended | 36 Months Ended | |||
|---|---|---|---|---|---|
Feb. 02, 2021 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Jan. 31, 2024 |
Dec. 31, 2021 |
|
| Business Combinations [Abstract] | |||||
| Asset Acquisition, Contingent Consideration, Liability | $ 475,000 | ||||
| Asset Acquisition, Consideration Transferred | $ 25,000 | $ 12,500 | $ 75,000 | ||
| Intangible Assets Acquired, Periodic Payment | $ 12,500 | ||||
Loans Payable (Details) - Schedule of Debt - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Nonrelated Party [Member] | ||
| Loans Payable (Details) - Schedule of Debt [Line Items] | ||
| Loan payable | $ 4,433,996 | $ 3,659,516 |
| Current portion | 4,233,996 | 3,459,516 |
| Long-term maturities | 200,000 | 200,000 |
| Decathlon Loan [Member] | ||
| Loans Payable (Details) - Schedule of Debt [Line Items] | ||
| Loan payable | 4,233,996 | 3,459,516 |
| EIDL Loan [Member] | ||
| Loans Payable (Details) - Schedule of Debt [Line Items] | ||
| Loan payable | $ 200,000 | $ 200,000 |
Loans Payable (Details) - Schedule of Maturities of Long-Term Debt - Nonrelated Party [Member] |
Jun. 30, 2024
USD ($)
|
|---|---|
| Loans Payable (Details) - Schedule of Maturities of Long-Term Debt [Line Items] | |
| 2025 | $ 4,233,996 |
| 2026 | 0 |
| 2027 | 4,454 |
| 2028 | 4,245 |
| 2029 and thereafter | 191,301 |
| Total | $ 4,433,996 |
Loans Payable - Related Parties (Details) - Schedule of Maturities of Long-Term Debt - Related Party [Member] - Related Party [Member] |
Jun. 30, 2024
USD ($)
|
|---|---|
| Loans Payable - Related Parties (Details) - Schedule of Maturities of Long-Term Debt [Line Items] | |
| 2025 | $ 1,465,544 |
| 2026 | 240,456 |
| Total | $ 1,706,000 |
Convertible Note Payable – Related Party (Details) - Convertible Debt - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Convertible Note Payable – Related Party (Details) - Convertible Debt [Line Items] | ||
| Convertible promissory note payable | $ 2,724,000 | $ 2,724,000 |
| Current portion | 800,000 | 800,000 |
| Long-term maturities | 1,924,000 | 1,924,000 |
| Total | 2,724,000 | 2,724,000 |
| February Convertible Note [Member] | ||
| Convertible Note Payable – Related Party (Details) - Convertible Debt [Line Items] | ||
| Convertible promissory note payable | 800,000 | 800,000 |
| Total | 800,000 | 800,000 |
| May Convertible Note [Member] | ||
| Convertible Note Payable – Related Party (Details) - Convertible Debt [Line Items] | ||
| Convertible promissory note payable | 1,300,000 | 1,300,000 |
| Total | 1,300,000 | 1,300,000 |
| November Convertible Note [Member] | ||
| Convertible Note Payable – Related Party (Details) - Convertible Debt [Line Items] | ||
| Convertible promissory note payable | 624,000 | 624,000 |
| Total | $ 624,000 | $ 624,000 |
Convertible Note Payable – Related Party (Details) - Schedule of Maturities of Long-Term Debt |
Jun. 30, 2024
USD ($)
|
|---|---|
| Schedule Of Maturities Of Long Term Debt Abstract | |
| 2025 | $ 800,000 |
| 2026 | 1,924,000 |
| Total | $ 2,724,000 |
Accrued Settlements (Details) - Vendor Dispute [Member] - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2024 |
Dec. 31, 2019 |
|
| Accrued Settlements (Details) [Line Items] | |||
| Settlement Liabilities, Current | $ 2,476,926 | $ 1,582,652 | |
| Increase (Decrease) in Other Accrued Liabilities | $ 894,274 | ||
| Restricted Investments | $ 1,049,000 |
Stockholders’ Equity (Details) - Share-Based Payment Arrangement, Option, Activity |
6 Months Ended |
|---|---|
|
Jun. 30, 2024
$ / shares
shares
| |
| Share Based Payment Arrangement Option Activity Abstract | |
| Number of Shares, Outstanding | shares | 24,051,825 |
| Weighted Average Exercise Price, Outstanding | $ / shares | $ 0.139 |
| Number of Shares, vested and exercisable | shares | 18,586,969 |
| Weighted Average Exercise Price, vested and exercisable | $ / shares | $ 0.122 |
| Number of Shares, Granted | shares | 0 |
| Weighted Average Exercise Price, Granted | $ / shares | $ 0 |
| Number of Shares, Exercised | shares | 0 |
| Weighted Average Exercise Price, Exercised | $ / shares | $ 0 |
| Number of Shares, Cancelled/Expired | shares | (4,301,903) |
| Weighted Average Exercise Price, Cancelled/Expired | $ / shares | $ 0.207 |
| Number of Shares, Outstanding | shares | 19,749,922 |
| Weighted Average Exercise Price, Outstanding | $ / shares | $ 0.122 |
Stockholders’ Equity (Details) - Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions |
12 Months Ended |
|---|---|
Dec. 31, 2023 | |
| Schedule Of Share Based Payment Award Stock Options Valuation Assumptions Abstract | |
| Volatility | 76.03% |
| Dividends | 0.00% |
| Risk-free interest rates | 4.84% |
| Expected term (years) | 5 years |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Income Tax Disclosure [Abstract] | ||||
| Income Tax Expense (Benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
| Effective Income Tax Rate Reconciliation, Percent | 0.00% | |||
Going Concern (Details) - USD ($) |
Jun. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Restricted Cash | $ 1,052,519 | |
| Cash | 26 | $ 133,182 |
| Bank Overdrafts | 5,013 | $ 0 |
| Working Capital (Deficit) | $ (10,383,599) |
Commitments and Contingencies (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
|---|---|---|---|---|---|
Jun. 30, 2019 |
Sep. 30, 2023 |
Jun. 30, 2024 |
Dec. 31, 2023 |
Dec. 31, 2019 |
|
| Commitments and Contingencies (Details) [Line Items] | |||||
| Loss Contingency, Damages Sought, Value | $ 1,442,441 | $ 0 | $ 1,029,981 | ||
| Restricted Cash | 1,052,519 | ||||
| Vendor Dispute [Member] | |||||
| Commitments and Contingencies (Details) [Line Items] | |||||
| Increase (Decrease) in Other Accrued Liabilities | $ 894,274 | ||||
| Settlement Liabilities, Current | 2,476,926 | $ 1,582,652 | |||
| Restricted Cash | $ 1,052,519 |
1 Year Vado (PK) Chart |
1 Month Vado (PK) Chart |
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