Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 20, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | SOBR SAFE, INC. | |
Entity Central Index Key | 0001425627 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 10,156,081 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-41396 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 26-0731818 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 6400 S. Fiddlers Green Circle | |
Entity Address Address Line 2 | Suite 525 | |
Entity Address City Or Town | Greenwood Village | |
Entity Address State Or Province | CO | |
Entity Address Postal Zip Code | 80111 | |
City Area Code | 844 | |
Local Phone Number | 762-7723 | |
Trading Symbol | SOBR | |
Security 12b Title | Common Stock | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Cash | $ 107,448 | $ 882,268 |
Accounts receivable | 500 | 0 |
Inventory | 104,950 | 39,461 |
Prepaid expenses | 29,286 | 12,553 |
Total current assets | 242,184 | 934,282 |
SOBR Safe Intellectual Technology, net of accumulated amortization of $706,684 and $610,318 at March 31, 2022 and December 31, 2021, respectively | 3,147,991 | 3,244,357 |
Other assets | 30,576 | 30,576 |
Total Assets | 3,420,751 | 4,209,215 |
Current liabilities | ||
Accounts payable | 367,036 | 270,150 |
Current assets | ||
Accrued expenses | 1,395,696 | 463,900 |
Accrued interest payable | 309,809 | 252,110 |
Related party payables | 95,320 | 82,883 |
Derivative liability | 1,380,000 | 1,040,000 |
Convertible debenture payable | ||
* Includes unamortized debt discount related to warrants, beneficial conversion feature and embedded conversion feature of none and $1,291,882 at March 31, 2022 and December 31, 2021, respectively | 3,048,781 | 1,756,899 |
Current portion notes payable - related parties | ||
* Includes unamortized debt discount related to warrants and beneficial conversion features of $259,658 and none at March 31, 2022 and December 31, 2021, respectively | 302,152 | 11,810 |
* Includes unamortized debt discount related to warrants and beneficial conversion features of $258,175 and none at March 31, 2022 and December 31, 2021, respectively | 348,508 | 104,183 |
Total current liabilities | 7,247,302 | 3,981,935 |
Notes payable -related parties-less current portion | ||
Includes unamortized debt discount related to warrants and beneficial conversion features of $262,604 and $645,547 at March 31, 2022 and December 31, 2021, respectively | 187,396 | 354,453 |
Notes payable -non-related parties-less current portion | ||
Includes unamortized debt discount related to warrants and beneficial conversion features of $261,396 and $648,580 at March 31, 2022 and December 31, 2021, respectively | 193,604 | 356,420 |
Total Liabilities | 7,628,302 | 4,692,808 |
Common stock, $0.00001 par value; 100,000,000 shares authorized; 7,803,139 and 8,778,555 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 78 | 88 |
Additional paid-in capital | 58,887,152 | 57,041,447 |
Accumulated deficit | (63,041,171) | (57,471,492) |
Total SOBR Safe, Inc. stockholders' deficit | (4,153,911) | (429,957) |
Noncontrolling interest | (53,640) | (53,636) |
Total Stockholders' Deficit | (4,207,551) | (483,593) |
Total Liabilities and Stockholders' Deficit | 3,420,751 | 4,209,215 |
Non Series Preferred Stock [Member] | ||
Notes payable -non-related parties-less current portion | ||
Preferred stock, value | 0 | 0 |
Series A-1 Convertible Preferred stock [Member] | ||
Notes payable -non-related parties-less current portion | ||
Preferred stock, value | 0 | 0 |
Series A Convertible Preferred Stock [Member] | ||
Notes payable -non-related parties-less current portion | ||
Preferred stock, value | 0 | 0 |
Series B Convertible Preferred Stock [Member] | ||
Notes payable -non-related parties-less current portion | ||
Preferred stock, value | $ 30 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
SOBR Safe Intellectual Technology, net of accumulated amortization | $ 706,684 | $ 610,318 |
Convertible debenture payable including unamortized debt discount related to warrants | 1,291,882 | 1,291,882 |
Current portion notes payable related parties including unamortized debt discount | 259,658 | 259,658 |
Current portion notes payable - non-related parties including unamortized debt discount | 258,175 | 258,175 |
Notes payable -related parties-less current portion including unamortized debt discount | 262,604 | 645,547 |
Notes payable -non-related parties-less current portion including unamortized debt discount | $ 261,396 | $ 648,580 |
Stockholders' Deficit | ||
Common stock, shares par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 7,803,139 | 8,778,555 |
Common stock, shares outstanding | 7,803,139 | 8,778,555 |
Non Series Preferred stock | 16,300,000 | 19,300,000 |
Series A-1 Convertible Preferred stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 2,700,000 | 2,700,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 3,000,000 | 3,000,000 |
Preferred stock, shares outstanding | 3,000,000 | 3,000,000 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||
Revenues | $ 1,500 | $ 0 |
Cost of Goods Sold | 1,100 | 0 |
Gross Profit | 400 | 0 |
Operating expenses: | ||
General and administrative | 2,269,175 | 776,861 |
Stock-based compensation expense | 442,784 | 18,690 |
Research and development | 47,459 | 171,463 |
Total operating expenses | 2,759,418 | 967,014 |
Loss from operations | (2,759,018) | (967,014) |
Other income (expense): | ||
Other income (expense), net | 27 | 0 |
Loss on debt extinguishment | (864,000) | 0 |
Loss on fair value adjustment - derivatives | (340,000) | 0 |
Interest expense | (1,026,471) | (25,878) |
Amortization of interest - beneficial conversion feature | (580,221) | (9,542) |
Total other expense, net | (2,810,665) | (35,420) |
Loss before provision for income taxes | (5,569,683) | (1,002,434) |
Provision for income tax | 0 | 0 |
Net loss | (5,569,683) | (1,002,434) |
Net loss attributable to noncontrolling interest | 4 | 94 |
Net loss attributable to SOBR Safe, Inc. | $ (5,569,679) | $ (1,002,340) |
Basic and diluted loss per common share | $ (0.65) | $ (0.12) |
Weighted average number of common shares outstanding | 8,550,490 | 8,654,108 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Stockholders Deficit SOBR Safe Inc [Member] | Noncontrolling Interest |
Balance, shares at Dec. 31, 2020 | 8,640,678 | ||||||
Balance, amount at Dec. 31, 2020 | $ 3,039,484 | $ 86 | $ 0 | $ 52,694,148 | $ (49,601,220) | $ 3,093,014 | $ (53,630) |
Common stock issued to settle dividends - Series A-1 Convertible Preferred stock, shares | 14,390 | ||||||
Common stock issued to settle dividends - Series A-1 Convertible Preferred stock, amount | 107,880 | $ 0 | 0 | 107,880 | 0 | 107,880 | 0 |
Paid-in capital - fair value of stock options and restricted stock units vested | 105,013 | 0 | 0 | 105,013 | 0 | 105,013 | 0 |
Paid-in capital - fair value of stock warrants granted | 619,381 | 0 | 0 | 619,381 | 0 | 619,381 | 0 |
Paid-in capital - beneficial conversion feature | 480,619 | 0 | 0 | 480,619 | 0 | 480,619 | 0 |
Net loss | (1,002,434) | $ 0 | 0 | 0 | (1,002,340) | (1,002,340) | (94) |
Balance, shares at Mar. 31, 2021 | 8,655,068 | ||||||
Balance, amount at Mar. 31, 2021 | 3,349,943 | $ 86 | 0 | 54,007,041 | 50,603,560 | 3,403,567 | (53,624) |
Balance, shares at Dec. 31, 2021 | 8,778,555 | ||||||
Balance, amount at Dec. 31, 2021 | (483,593) | $ 88 | 0 | 57,041,447 | (57,471,492) | (429,957) | (53,636) |
Paid-in capital - fair value of stock options and restricted stock units vested | 934,225 | 0 | 934,225 | 0 | 934,225 | 0 | |
Paid-in capital - fair value of stock warrants granted | 864,000 | 0 | 0 | 864,000 | 0 | 864,000 | 0 |
Net loss | (5,569,683) | $ 0 | 0 | (5,569,679) | (5,569,679) | (4) | |
Common stock issued for restricted stock units, shares | 16,667 | ||||||
Common stock issued for restricted stock units, amount | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Common stock issued for convertible debt, shares | 7,917 | ||||||
Common stock issued for convertible debt, amount | 47,500 | $ 0 | $ 0 | 47,500 | 0 | 47,500 | 0 |
Common stock exchanged for convertible preferred stock, shares | (1,000,000) | 3,000,000 | |||||
Common stock exchanged for convertible preferred stock, amount | 0 | $ (10) | $ 30 | (20) | 0 | 0 | 0 |
Balance, shares at Mar. 31, 2022 | 7,803,139 | 3,000,000 | |||||
Balance, amount at Mar. 31, 2022 | $ (4,207,551) | $ 78 | $ 30 | $ 58,887,152 | $ (63,041,171) | $ (4,153,911) | $ (53,640) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net loss | $ (5,569,683) | $ (1,002,434) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization | 96,366 | 96,366 |
Amortization of interest - conversion features | 580,221 | 9,542 |
Amortization of interest | 423,782 | 0 |
Loss on extinguishment of debt | 864,000 | 0 |
Change in fair value of derivative liability | 340,000 | 0 |
Stock warrants expense | 540,176 | 13,472 |
Stock options expense | 491,441 | 105,013 |
Stock-based compensation expense | 442,784 | 18,690 |
Changes in assets and liabilities: | ||
Accounts Receivable | (500) | 0 |
Due from related parties | 0 | (2,792) |
Inventory | (65,489) | 0 |
Prepaid expenses | (16,733) | 5,559 |
Accounts payable | 96,886 | 65,317 |
Accrued expenses | 931,796 | (30,566) |
Accrued interest payable | 57,696 | (42,950) |
Related party payables | 12,437 | 7,533 |
Stock subscriptions payable | 0 | 88,469 |
Net cash used in operating activities | (774,820) | (668,781) |
Financing Activities: | ||
Proceeds from notes payable - related parties | 0 | 530,000 |
Proceeds from notes payable - non-related parties | 0 | 600,000 |
Net cash provided by financing activities | 0 | 1,130,000 |
Net Change In Cash | (774,820) | 461,219 |
Cash At The Beginning Of The Period | 882,268 | 232,842 |
Cash At The End Of The Period | 107,448 | 694,061 |
Schedule Of Non-Cash Investing And Financing Activities: | ||
Non-related party debt converted to capital | 47,500 | 0 |
Issuance of common stock for rent | 0 | 49,600 |
Issuance of common stock for prior year accrued dividends | 0 | 107,880 |
Issuance of common stock to settle prior year stock subscriptions payable | 0 | 909,214 |
Intrinsic value-beneficial conversion feature | 0 | 1,939,756 |
Conversion of common stock to preferred stock | 30 | 0 |
Relative fair value of stock warrants granted | 0 | 823,781 |
Convertible debenture payable discount | 0 | 980,000 |
Supplemental Disclosure: | ||
Cash paid for interest | 4,816 | 57,378 |
Cash paid for income taxes | $ 0 | $ 0 |
ORGANIZATION OPERATIONS SUMMARY
ORGANIZATION OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CORRECTION OF ERROR | 3 Months Ended |
Mar. 31, 2022 | |
ORGANIZATION OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CORRECTION OF ERROR | |
ORGANIZATION OPERATIONS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CORRECTION OF ERROR | NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SOBR Safe, Inc. (“SOBR Safe”), formerly TransBiotec, Inc., was incorporated as Imagine Media LTD. in August 2007 in the State of Delaware. A corporation also named TransBiotec, Inc. (“TransBiotec – CA”) was formed in the state of California July 4, 2004. Effective September 19, 2011, TransBiotec was acquired by TransBiotec - CA in a transaction classified as a reverse acquisition as the shareholders of TransBiotec - CA retained the majority of the outstanding common stock of TransBiotec after the share exchange. The consolidated financial statements represent the activity of TransBiotec - CA from July 4, 2004 forward, and the consolidated activity of SOBR Safe and TransBiotec - CA from September 19, 2011 forward. SOBR Safe and TransBiotec - CA are hereinafter referred to collectively as the “Company” or “We”. The Company has developed and began selling a non-invasive alcohol sensing device in 2022. On January 7, 2022, our stockholders approved an amendment to our Articles of Incorporation to effect a reverse stock split of our outstanding common stock at a ratio between of 1-for-2 and 1-for-3 in connection with our planned listing on Nasdaq. On March 4, 2022 the Board of Directors approved the reverse split ratio of 1-for-3 with the anticipated effective date of the reverse split on or about March 28, 2022. The 1-for-3 reverse stock split went effective with the State of Delaware, FINRA and OTC Markets on April 28, 2022. All share and per share amounts have been adjusted in these condensed consolidated financial statements to reflect the effect of the reverse stock split. Also on January 7, 2022, our stockholders also approved an amendment to our 2019 Equity Incentive Plan to increase the shares authorized to be issued under the Plan from 1,282,823 shares to 1,733,333 shares. Basis of Presentation The accompanying unaudited condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements and the notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2022. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2022 and December 31, 2021, and results of operations and cash flows for the three month periods ended March 31, 2022 and 2021. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, TransBiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these unaudited condensed financial statements. Use of Estimates Financial Instruments Pursuant to Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, accrued interest payable, related party payables, notes payable, convertible debentures, and other liabilities. Pursuant to ASC 820 and 825, the fair value of our derivative liabilities is determined based on “Level 3” inputs. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of March 31, 2022 and December 31, 2021: March 31, 2022 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ 1,380,000 December 31, 2021 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ 1,040,000 Cash The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of March 31, 2022 and December 31, 2021. Accounts Receivable Accounts receivable is derived from sales to a limited number of customers at March 31, 2022. Customer accounts are monitored for potential credit losses based upon management’s assessment of expected collectability and the allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance. In making this assessment, management takes into consideration any circumstances of which the Company is aware regarding a customer’s inability to meet its financial obligations to the Company, and any potential prevailing economic conditions and their impact on the Company’s customers. The Company had no allowance for doubtful accounts at March 31, 2022 and December 31, 2021. Inventory Inventory is valued at the lower of cost or net realizable value. The cost of substantially all the Company’s inventory is determined by the FIFO cost method. Inventory is comprised primarily of finished products intended for sale to customers. The Company evaluates the need for reserves for excess or obsolete inventory determined primarily based upon estimates of future demand for the Company’s products. At March 31, 2022 and December 31, 2021 the Company had no reserves for obsolescence. Prepaid Expenses Amounts incurred in advance of contractual performance or coverage periods are recorded as prepaid assets and recognized as expense in the period service or coverage is provided. Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain a beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. Derivative Instruments The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations under other income (expense). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a Monte Carlo Simulation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Debt Issuance Costs Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense over the term of the debt using the effective interest method. The unamortized amount is presented as a reduction of debt on the balance sheet. Preferred Stock We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. Noncontrolling Interest Impairment of Long-Lived Assets Long-lived assets and identifiable intangibles held for use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of undiscounted expected future cash flows is less than the carrying amount of the asset or if changes in facts and circumstances indicate, an impairment loss is recognized and measured using the asset’s fair value. No impairment loss was recognized during the three-month periods end March 31, 2022 and 2021. Revenue Recognition The Company enters contracts with customers and generates revenue through various combinations of software products and services which include the sale of cloud-based software solutions, detection and data collection hardware devices, and cloud-based data reporting and analysis services. Depending on the combination of products and services detailed in the respective customer contract, the identifiable components may be highly interdependent and interrelated with each other such that each is required to provide the substance of the value of SOBR’s offering and accounted for as a combined performance obligation, or the specific components may be generally distinct and accounted for as separate performance obligations. Revenue is recognized when control of these software products and/or services are transferred to the customer in an amount that reflects the consideration the Company expects to be entitled in exchange for these respective services and devices. Revenue is recognized in conjunction with guidance provided by Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) issued by the Financial Accounting Standards Board in May 2014. The company determines revenue recognition through five steps outlined in ASC 606 which include (1) the identification of the contract or contracts with a customer, (2) identification of individual or combined performance obligations contained in the contract, (3) determination of the transaction price detailed within the contract, (4) allocation of the transaction price to the specific performance obligations, and (5) finally, recognition of revenue as the Company’s performance obligations are satisfied according to the terms of the contract. Contracts with a Single License/Service Performance Obligation For contracts with a single performance obligation consisting of a license and/or data services, the entire transaction price is allocated to the single performance obligation and recognized at a point in time. Where the Company provides a performance obligation as licensed software or data services, revenue is recognized upon delivery of the software or services ratably over the respective term of the contract. Contracts for Purchase of Hardware Devices Only Where hardware devices are sold separately by the Company, the entire transaction price is allocated to the device as an individual performance obligation and revenue recognized at a point in time when either legal title, physical possession or control have transferred to the customer. Generally, these requirements are satisfied at the point in time the Company ships the product, as this is when the customer obtains control of the asset under SOBR’s standard terms and conditions of the purchase. Contracts with Multiple Performance Obligations Where a Company’s contract with a respective customer contains multiple performance obligations and due to the interdependent and interrelated nature of the licensed software, hardware devices and data reporting services, the Company accounts for the individual performance obligations if they are distinct in nature and the transaction price is allocated to each distinct performance obligations on a directly observable standalone sales price basis. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting requires significant judgment. Standalone selling prices are primarily based upon the price at which the performance obligation is sold separately. The Company may be able to establish a standalone sales price based upon observable products or services sold or priced separately in comparable circumstances, competitor pricing or similar customers. Where the performance obligations are either not distinct or directly observable, the Company estimates the standalone sales price of the performance obligations based upon the overall pricing objectives taking into consideration the value of the contract arrangement, number of licenses, number and types of hardware devices and the length of term of the contract. Professional judgement is required to determine the standalone sales price for each performance obligation where not directly observable. Revenue for Contracts with Multiple Performance Obligations is recognized on a ratable basis for each respective performance obligation as allocated under the prescribed Transaction Price identification model applied. The Company requires customers to make payments related to subscribed software licenses and data services on a monthly basis via authorized bank account ACH withdrawal or an automatic credit card charge during the approved term of the respective agreement. The collectability of future cash flows are reasonably assured with any potential non-payment easily identified with future services being discontinued or suspended due to non-payment. The Company’s contracts are generally twelve to thirty-six months in duration, are billed monthly in advance and are non-cancelable. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally has an unconditional right to consideration when customers are invoiced and a receivable is recorded. A contract asset (unbilled revenue) is recognized when revenue is recognized prior to invoicing, or a contract liability (deferred revenue) when revenue will be recognized subsequent to invoicing. The Company has elected to charge shipping, freight and delivery to customers as a source of revenue to offset respective costs when control has transferred to the customer. We report revenue net of sales and other taxes collected from customers to be remitted to government authorities. Estimated costs for the Company’s standard one-year warranty are charged to cost of products sold when revenue is recorded for the related product. Royalties are also charged to cost of products sold. Stock-based Compensation The Company follows the guidance of the accounting provisions of ASC 718, Share-based Compensation Research and Development Advertising and Marketing Costs Advertising and marketing costs are charged to operations as incurred. Advertising and marketing costs were $30,185 and $26,242 during the three-month periods ended March 31, 2022 and 2021, respectively, and are included in general and administrative expenses in the consolidated statements of operations. Income Tax Net Loss Per Share Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share gives the effect to all dilutive potential common shares outstanding during the period, including stock options, warrants and convertible instruments. Diluted net loss per share excludes all potentially issuable shares if their effect is anti-dilutive. Because the effect of the Company’s dilutive securities is anti-dilutive, diluted net loss per share is the same as basic loss per share for the periods presented. Concentration of Credit Risk Credit Risk – Concentration of Customers Concentration of Suppliers Related Parties Related parties are any entities or individuals that, through employment, ownership, or other means, possess the ability to direct or cause the direction of the management and policies of the Company. Recently Issued Accounting Guidance In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, The Company has reviewed other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2022 | |
GOING CONCERN | |
GOING CONCERN | NOTE 2. GOING CONCERN The Company has incurred recurring losses from operations and has limited cash liquidity and capital resources. Future capital requirements will depend on many factors, including the Company’s ability to sell and develop products, cash flow from operations, and competing market developments. The Company will need additional capital in the near future. Sources of debt financing may result in high interest expense. Any financing, if available, may be on unfavorable terms. As of March 31, 2022, the Company has an accumulated deficit of approximately ($63,000,000). During the three-months ended March 31, 2022, the Company also experienced negative cash flows from operating activities of approximately ($775,000). The Company is in default on a $3,048,781 convertible debenture due March 27, 2022 subject to penalties, damages and interest of approximately $1,100,000 (see Notes 8 and 9). It appears these principal conditions or events, considered in the aggregate, indicate it is probable that the Company will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. As such, there is substantial doubt about the entity’s ability to continue as a going concern. The Company has identified factors that mitigate the probable conditions that have raised substantial doubt about the entity’s ability to continue as a going concern. On May 18, 2022, we received approximately $8,779,000 of net proceeds from the sale of an underwritten public offering of 2,352,942 units (Units) at a public offering price of $4.25 per Unit, with each Unit consisting of one share of our Common Stock, par value $0.00001, and two warrants each to purchase one share of Common Stock. The Warrants included in the Units are exercisable immediately and have an exercise price of $4.25 per share (100% of the price per Unit sold in the offering). The Warrants will not be listed for trading and will expire five years from the date of their issuance. On May 19, 2022, the $3,048,781 principal balance of the Armistice Capital Master Fund, Ltd 18% Original Issue Discount Convertible Debenture in default at March 31, 2022, was paid in full satisfying all amounts due and accrued under the default, including penalty, damages and interest provisions of the loan agreement (see Note 16). Management believes that the net offering proceeds of approximately $5,729,000, after the payment of the defaulted loan balance of $3,048,781, provides adequate working capital for operating activities for the next twelve months after the date the financial statements are issued. However, convertible notes payable plus interest at 12% per annum are due 24 months from issuance. Total principal balances of the convertible notes at March 31, 2022 are $2,005,000 and are due $1,100,000, $155,000 and $750,000 in March 2023, April 2023 and May 2023, respectively. The notes are convertible at $9 per share of the Company’s common stock. The notes contain both voluntary and automatic conversion features. The notes may be convertible at any time, by the holders, beginning on the date of issuance. The notes automatically convert into shares of the Company’s common stock if the Company’s common stock closes at or above $6 per share for five (5) consecutive trading days while listed on Nasdaq. Should the notes not automatically convert or a significant portion of the note holders voluntarily not convert the notes to our common stock, we may need additional funds beyond the money raised in the underwritten public offering. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak and related variants continues to evolve as of the date of this report. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak, its variants and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2022. However, if the pandemic continues, it may have an adverse effect on the Company’s results of future operations, financial position, and liquidity in fiscal year 2022. Management believes the net proceeds received from the underwritten public offering and actions presently being taken to generate product and services revenues provide the opportunity for the Company to continue as a going concern; however, these plans are contingent upon actions to be performed by the Company and these conditions have not been met on or before March 31, 2022. Additionally, the COVID-19 outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown, which could impair the Company’s ability to raise needed funds to continue as a going concern. As such, substantial doubt about the entity’s ability to continue as a going concern was not alleviated as of March 31, 2022. |
ASSET PURCHASE
ASSET PURCHASE | 3 Months Ended |
Mar. 31, 2022 | |
ASSET PURCHASE | |
ASSET PURCHASE | NOTE 3. ASSET PURCHASE On June 5, 2020, the Company completed a transaction (the “Transaction”) with IDTEC subject to the terms and conditions of the Asset Purchase Agreement (the “APA”). The Transaction, recorded as an asset purchase, was valued at $29,222,955, which consists of the market price as of June 5, 2020 of the Company’s 4,000,000 shares of common stock issued totaling $27,120,000, the value of the APA Note Payable for funds spent by IDTEC and affiliates prior to closing of $1,407,501, and the fair value of warrants issued to IDTEC under a Waiver Under Purchase Asset Agreement and Post Closing Covenant Agreement to purchase 106,667 shares of common stock at an exercise price of $1.50 per share which expires five years after the date of issuance of $695,454. In determining the fair value of the intangible assets, the Company considered, among other factors, the best use of acquired assets such as the analysis of historical financial performance of the products and estimates of future performance of the products and intellectual properties acquired. The allocation to identifiable intangible assets required extensive use of financial information and management's best estimate of fair value. The Company identified and allocated the value of the asset purchase to intangible assets of $29,175,203 and property and equipment of $47,725. Subsequent to the Transaction closing, the Company evaluated the fair value of the assets acquired based on discounted net cash flow for the SOBR Safe intellectual technology and market estimates for property and equipment. Based on the assessment of fair value, the Company recognized an asset impairment loss of $25,320,555 during the year ended December 31, 2020. Intangible assets $ 29,175,230 Less: Asset impairment 25,320,555 Intangible assets, net of impairment $ 3,874,965 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2022 | |
ASSET PURCHASE | |
INVENTORY | NOTE 4. INVENT ORY Inventory at March 31, 2022 and December 31, 2021 consisted of the following: March 31, December 31, 2022 2021 Raw materials $ 51,050 $ - Finished goods 53,900 39,461 Inventory, net $ 104,950 $ 39,461 |
PREPAID EXPENSES
PREPAID EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
PREPAID EXPENSES | |
PREPAID EXPENSES | NOTE 5. PREPAID EXPENSES Prepaid expenses consist of the following: March 31, 2022 December 31, 2021 Insurance $ 4,286 $ 4,286 Consulting services 25,000 8,267 Prepaid expenses $ 29,286 $ 12,553 On February 26, 2021, the Company entered into a new lease agreement for its office facility for a 12-month term beginning March 1, 2021. In addition to monthly base rent of $6,000, the agreement required the issuance of 5,333 shares of its common stock valued at $49,600. Stock-based compensation expense related to this agreement for the three-month periods ending March 31, 2022 and 2021 are $8,267 and $4,133, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS Intangible assets consist of the following at December 31, 2021: Gross Carrying Accumulated Net Intangible Amortization Period Amount Amortization Asset (in years) SOBR Safe Intellectual Technology $ 3,854,675 $ 610,318 $ 3,244,357 10 Intangible assets consist of the following at March 31, 2022: Gross Carrying Accumulated Net Intangible Amortization Period Amount Amortization Asset (in years) SOBR Safe Intellectual Technology $ 3,854,675 $ 706,684 $ 3,147,991 10 Amortization expense for the three-month period ended March 31, 2022 and 2021 was $96,366 and $96,366, respectively, and is included in general and administrative expenses in the condensed consolidated statements of operations. Estimated future amortization expense for device technology intangible assets is as follows: 2023 2024 2025 2026 2027 Thereafter $ 385,467 $ 385,467 $ 385,467 $ 385,467 $ 385,467 $ 1,220,656 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 7. RELATED PARTY TRANSACTIONS On February 12, 2021, the Company entered into a note payable agreement with David Gandini, an officer and shareholder, under which Mr. Gandini advanced the Company $30,000 for working capital purposes. The unsecured note carried interest at 0% and was paid in April 2021. On March 30, 2021, the Company received notification from IDTEC that it was exercising a portion of the 106,667 warrants issued resulting from the 2020 Waiver Under Asset Purchase Agreement and Post-Closing Covenant Agreement with IDTEC. The warrant exercise price is $1.50 per share. With the proceeds of the exercise, the Company paid $88,469 during the three-month period ended December 31, 2021 to settle an outstanding judgement against the Company which was considered as a non-permitted liability under the Post-Closing Covenant Agreement. We issued 58,980 shares of our common stock for the $88,470 we received from IDTEC to pay the settlement. As the shares had not been issued by March 31, 2021, the amount received from IDTEC was included in the common stock subscriptions payable balance at March 31, 2021. On March 3 and 31, 2021, the Company issued convertible notes payable (see Note 10) totaling $350,000 to existing shareholders holding a direct or indirect interest in the Company and $200,000 to a Company’s director and another director’s family member. The principal amount of the secured convertible debentures are convertible at $9 per share, and include warrants to purchase in total 91,667 shares of the Company’s common stock at $9 per share. On May 31, 2021, the Company issued convertible notes payable (see Note 10) totaling $400,000 to existing shareholders holding a direct or indirect interest in the Company and $50,000 to a Company’s officer. The principal amount of the secured convertible debentures are convertible at $9 per share, and include warrants to purchase in total 75,000 shares of the Company’s common stock at $9 per share. On March 1, 2022 the Board of Directors approved the designation of 3,000,000 shares of the Company’s Preferred Stock as “Series B Convertible Preferred Stock”. The Series B Convertible Preferred Stock shares were issued in exchange for 1,000,000 shares of the Company’s common stock held by the Company’s CEO David Gandini and 2,000,000 shares of the Company’s common stock held by IDTEC SPV, LLC, an entity controlled by a beneficial owner of the Company (see Note 13). |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE 8. ACCRUED EXPENSES Accrued expenses consist of the following: March 31, 2022 December 31, 2021 Convertible debt default penalty (see Note 9) $ 914,634 $ - Registration rights and default damages and penalties (see Note 9) 192,399 189,663 Consulting services 178,647 163,647 Taxes and other 110,016 110,590 Accrued expenses $ 1,395,696 $ 463,900 |
CONVERTIBLE DEBENTURE PAYABLE
CONVERTIBLE DEBENTURE PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
CONVERTIBLE DEBENTURE PAYABLE | NOTE 9. CONVERTIBLE DEBENTURE PAYABLE Convertible debenture payable consists of the following: March 31, 2022 December 31, 2021 Convertible Debenture Payable with Detached Free-standing Warrant $ 3,048,781 $ 3,048,781 Unamortized Debt Discount - (1,291,882 ) Net Convertible Debenture Payable $ 3,048,781 $ 1,756,899 On September 28, 2021, (the “Closing Date”) the Company completed a financing transaction under a Securities Purchase Agreement (the “SPA”) and corresponding 18% Original Issue Discount Convertible Debenture (the “Debenture”), Common Stock Purchase Warrant (the “Original Warrant”) and Registration Rights Agreement (“RRA”). Under the terms of the SPA, the Company received $2,500,000 from the Purchaser and in exchange issued the Debenture in the principal amount of $3,048,781 and Original Warrants to purchase up to 406,504 shares of the Company’s common stock. The Debenture is convertible voluntarily by the Purchaser at any time into shares of our common stock, at the lesser of $7.50, representing 100% of the closing price of our common stock on the trading day immediately prior to the Closing Date, or 75% of the average VWAP of our common stock during the 5 trading day period immediately prior to the conversion date (the “Conversion Price”), or automatically upon the occurrence of a single public offering of our common stock which results in the listing of our common stock on a national securities exchange as defined in the Exchange Act (the “Qualified Offering”) into shares of our common stock at the lesser of the Conversion Price, or 75% of the offering price of the securities offered in the Qualified Offering. The Debenture due date is March 27, 2022, does not accrue interest unless there is an event of default under the terms of the Debenture. The Original Warrant is exercisable at any time through September 28, 2026 into shares of our common stock at an exercise price of $6.00 per share, unless an event of default occurs, at which time the exercise price will adjust to $3.00 per share. The Original Warrant contains a cashless exercise provision but only in the event the Company fails to have an effective registration statement registering the common shares underlying the Original Warrant at any time beginning six months from the Closing Date The RRA requires the Company to register for resale and maintain effectiveness of such Registration Statement for such all of the registrable securities under the terms of the Debenture and Original Warrant, within defined time frames. Should the Company fail to meet the RRA requirements, until the date causing such event of noncompliance is cured, Company shall pay to the Purchaser as partial liquidated damages equal to the product of 2% of the principal amount not to exceed 24% of the aggregate principal. If the Company fails to pay of the liquidated damages within seven days after the date payable, the Company will pay interest at 18% until such amounts are paid in full. The filing date requirements were cured in February 2022. Total unpaid RRA damages and estimated related costs of approximately $192,399 and $189,700, are included in accrued expenses at March 31, 2022 and December 31, 2021 (see Note 8). Damage expenses included in general and administrative expenses in the Condensed Consolidated Statement of Operations were $2,736 and none for the three-month periods ended March 31, 2022 and 2021. In exchange for the Waiver of the default penalties the Company agreed to: (i) amend that certain Common Stock Warrant (the “Original Warrant”) issued by the Company to the Purchaser dated September 27, 2021 to extend the Termination Date (as defined in the Original Warrant) from September 28, 2026 to September 28, 2028; and (ii) issue the Purchaser a second Common Stock Purchase Warrant (the “New Warrant”) entitling the Purchaser to subscribe for and purchase up to an additional 101,626 shares of our common stock, expiring March 29, 2029, with all other terms of the warrant the same as the Original Warrant. We also agreed, within thirty (30) days of the date of the Waiver, to file a Registration Statement on Form S-1 (or, if such form is unavailable for such a registration, on such other form as is available for such registration), covering the resale of all of the shares underlying the New Warrant. As a result of the default event, Debenture’s automatic conversion features upon the occurrence of a Qualified Offering no longer apply and interest accrues at 18% per annum on the principal amount. The Company evaluated the Debenture for embedded derivative and beneficial conversion features and determined that its embedded conversion feature carried a debt discount. The total conversion feature debt discount of $980,000 is amortized over the life of the convertible debenture. The debt discount amortization expense recorded as amortization of interest in the condensed consolidated statements of operations was $465,635 and none for the three-month periods ended March 31, 2022 and 2021, respectively. As of March 31, 2022, the debenture carries outstanding warrants of 508,130. The relative fair value of the related stock warrants granted during the three-month periods ended March 31, 2022 and March 31, 2021 was $864,000 and none, respectively. The unamortized discount at March 31, 2022 and December 31, 2021 was none and $402,465, respectively. Stock warrants amortization expense recorded as interest expense was $465,635 and none for the three-month periods ended March 31, 2022 and 2021, respectively. As a result of the change in the Original Warrant extended termination date and the New Warrant issued in exchange for the Waiver, the Company evaluated the reacquisition price of the Debenture under ASC 470-50-40-2 to be $3,912,781. As the net carrying amount of the Debenture is $3,048,781, a loss on extinguishment of debt of $864,000 was recognized during the three-month period ended March 31, 2022. The Company incurred $548,781 of original issue discount and $275,000 of debt issuance costs related to the Debenture which was being amortized to interest expense over the term of the debt using the effective interest method. The unamortized discount and issuance costs at March 31, 2022 and December 31, 2021 was none and $423,782, respectively. Interest expense related to the original issue discount and debt issuance costs was $423,782 and none for the three-month periods ended March 31, 2022 and 2021, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 10. NOTES PAYABLE RELATED PARTIES Related party notes payable consist of the following: March 31, 2022 December 31, 2021 Convertible Notes Payable with Detached Free-standing Warrants $ 1,000,000 $ 1,000,000 Conventional Non-Convertible Notes Payable 11,810 11,810 Unamortized Debt Discount (522,262 ) (645,547 ) Net Related Party Notes Payable $ 489,548 $ 366,263 Current Portion (302,152 ) (11,810 ) Net Long-Term Portion $ 187,396 $ 354,453 Total interest expense for related party notes was $385,889 and $3,847 for the three-month periods ended March 31, 2022 and 2021, respectively. Related Party Convertible Notes Payable with Detached Free-Standing Warrants The Company has thirteen convertible notes payable to related parties, each with detached free-standing warrants to purchase the Company’s common stock at $9 per share, that have a total principal balance of $1,000,000 as of March 31, 2022. The notes, secured by the Company’s patents and patents applications, include interest at 12%, are convertible at $9 per share of the Company’s common stock and are due 24 months after issuance. The note holders may elect to have the interest paid in cash monthly or have the interest accrue and be payable on the maturity date. Interest elected to be accrued will be paid in cash or may be converted into shares of our common stock under the same terms as the principal amount on the maturity date. The notes contain both voluntary and automatic conversion features. The notes will be convertible at any time, by the holders, beginning on the date of issuance. However, the holders may not convert any outstanding amounts due under the note if at the time of such conversion the amount of common stock issued for the conversion, when added to other shares of Company common stock owned by the holders or which can be acquired by holders upon exercise or conversion of any other instrument, would cause the holder to own more than 4.9% of the Company’s outstanding common stock. Beginning on the issuance date, the outstanding principal amount of the note, and any accrued interest, will automatically convert into shares of the Company’s common stock if the Company’s common stock closes at or above $6 per share for five (5) consecutive trading days while listed on NASDAQ. The Company evaluated the convertible notes payable for embedded derivative and beneficial conversion features. The Company determined that there were beneficial conversion features to record. The total beneficial conversion feature debt discount of $448,999 is amortized over the life of the convertible notes payable. The debt discount amortization expense recorded as amortization of interest – beneficial conversion feature in the condensed consolidated statements of operations was $55,356 and $6,361 for the three-month periods ended March 31, 2022 and 2021, respectively. The unamortized beneficial conversion feature was $235,986 and $291,343 at March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, these notes carry outstanding warrants of 166,667. The relative fair value of the related stock warrants granted during the three-month periods ended March 31, 2022 and March 31, 2021 was none and $287,781, respectively. Stock warrants amortization expense recorded as interest expense was $67,932 and $8,981 for the three-month periods ended March 31, 2022 and 2021, respectively. The unamortized discount at March 31, 2022 and December 31, 2021 is $286,274 and $354,205, respectively. Conventional Non-convertible Notes Payable The Company has one non-convertible note payable to a related party that has a principal balance of $11,810 as of March 31, 2022 and December 31, 2021. The note carries an interest rate at 0%. The note payable had a due date of December 31, 2012 and is currently in default. NON-RELATED PARTIES Non-related party notes payable consist of the following: March 31, 2022 December 31, 2021 Convertible Notes Payable with Detached Free-standing Warrants $ 1,005,000 $ 1,005,000 Convertible Notes Payable 9,183 56,683 Conventional Non-Convertible Notes Payable 42,500 42,500 Notes Payable with Detached Free-standing Warrants 5,000 5,000 Unamortized Debt Discount (519,571 ) (648,580 ) Net Non-Related Party Notes Payable $ 542,112 $ 460,603 Current Portion (348,508 ) (104,183 ) Net Long-Term Portion $ 193,604 $ 356,420 Total interest expense for non-related party notes was $129,009 and $5,141 for the three-month periods ended March 31, 2022 and 2021, respectively. Convertible Notes Payable with Warrants The Company has sixteen convertible notes payable to non-related parties, each with detached free-standing warrants to purchase the Company’s common stock at $9 per share, that have a total principal balance of $1,005,000 as of March 31, 2022 and December 31, 2021. The notes, secured by the Company’s patents and patents applications, include interest at 12%, are convertible at $9 per share of the Company’s common stock and are due 24 months after issuance. The note holders may elect to have the interest paid in cash monthly or have the interest accrue and be payable on the maturity date. Interest elected to be accrued will be paid in cash or may be converted into shares of our common stock under the same terms as the principal amount on the maturity date. The notes contain both voluntary and automatic conversion features. The notes will be convertible at any time, by the holders, beginning on the date of issuance. However, the holders may not convert any outstanding amounts due under the note if at the time of such conversion the amount of common stock issued for the conversion, when added to other shares of Company common stock owned by the holders or which can be acquired by holders upon exercise or conversion of any other instrument, would cause the holder to own more than 4.9% of the Company’s outstanding common stock. Beginning on the issuance date, the outstanding principal amount of the note, and any accrued interest, will automatically convert into shares of the Company’s common stock if the Company’s common stock closes at or above $6 per share for five (5) consecutive trading days while listed on NASDAQ. The Company evaluated the convertible notes payable for derivative embedded and beneficial conversion features. The Company determined that there were beneficial conversion features to record. The total beneficial conversion feature debt discount of $460,215 is amortized over the life of the convertible notes payable. The debt discount recorded as amortization of interest – beneficial conversion feature in the consolidated statements of operations was $59,230 and $3,181 for the three-month periods ended March 31, 2022 and 2021. As of March 31, 2022, these notes carry outstanding warrants of 167,500. The relative fair value of the related stock warrants granted during the three-month periods ended March 31, 2022 and 2021 was none and $541,707, respectively. Stock warrants amortization expense recorded as interest expense was $69,780 and $4,491 for the three-month periods ended March 31, 2022 and 2021. The unamortized discount at March 31, 2022 and December 31, 2021 was $281,646 and $351,425, respectively. Convertible Notes Payable The Company has two unsecured, convertible notes payable to non-related parties that have a principal balance of $9,183 as of March 31, 2022 and three convertible notes payable to non-related parties that have a principal balance of $56,683 as of December 31, 2021. These notes carry interest rates ranging from 5% - 12% and have due dates ranging from February 2013 to March 2022. Notes with principal balances of $9,183 are in default at March 31, 2022 and December 31, 2021. These notes carry a conversion price of $6.00 to $32.29 per share. On March 3, 2022 the Company authorized the issuance of 7,917 shares of common stock under the terms of a $47,500 convertible note payable issued March 6, 2020 with interest at 5%, due March 6, 2022 and convertible at $6.00 per share. The Company evaluated these convertible notes payable for embedded derivative and beneficial conversion features. The Company determined that there were beneficial conversion features to record. The beneficial conversion features were either fully amortized upon grant or over the life of the convertible notes payable. Non-convertible Notes Payable The Company has three unsecured, non-convertible notes payable to non-related parties that have a principal balance of $42,500 as of March 31, 2022, and December 31, 2021. These notes carry interest rates ranging from 5% - 10% and have due dates ranging from December 2013 to June 2022. Two of the three notes are currently in default. Notes Payable with Warrants The Company has one unsecured, note payable with detached free-standing warrants to a non-related party that has a principal balance of $5,000 as of March 31, 2022 and December 31, 2021. This note carries an interest rate of 10% and had a due date of September 2014. This note is currently in default. The detached free-standing warrants for this note payable were not exercised by the note holder and expired in 2019. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 3 Months Ended |
Mar. 31, 2022 | |
DERIVATIVE LIABILITY | |
DERIVATIVE LIABILITY | NOTE 11. DERIVATIVE LIABILITY In September 2021, the Company completed a financing transition and received $2,500,000 from the Purchaser and in exchange issued an 18% Original Issue Discount Convertible Debenture in the principal amount of $3,048,781. The debenture includes voluntary and automatic conversion features at a variable conversion prices convertible into the Company’s common shares at an undetermined future date. The Company analyzed the conversion features of the debenture agreement for derivative accounting consideration under ASU 2017-11 (ASC 815-15, Derivatives and Hedging), and determined the embedded conversion features should be classified as a derivative because the exercise price of the convertible note is subject to a variable conversion rate and should therefore be accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures, Financial Instruments The embedded derivative for the debenture is carried on the Company’s balance sheet at fair value. The derivative liability is marked to market each measurement period and any unrealized change in fair value is recorded as a component of the consolidated statement of operations and the associated fair value carrying amount on the balance sheet was adjusted by the change. The Company fair valued the embedded derivative using a Monte Carlo simulation model based on the following assumptions: (1) expected volatility of 120%, (2) risk-free interest rate of 0.05%, and (3) expected life from 4 to 6 months. On September 28, 2021, the Closing Date of the transaction, the fair value of the embedded derivative was $980,000 and is amortized to interest expense over the term of the Debenture. Utilizing level 3 inputs, the Company recorded a fair value loss of $340,000 for the three-month period ended March 31, 2022. The fair value of the embedded derivative recorded on the balance sheet as a liability was $1,380,000 at March 31, 2022. A summary of the activity of the derivative liability is shown below: Balance at December 31, 2021 $ 1,040,000 Fair value of derivatives issued - Fair value adjustments 340,000 Balance at March 31, 2022 $ 1,380,000 |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2022 | |
COMMON STOCK | |
COMMON STOCK | NOTE 12. COMMON STOCK The Company’s common stock transactions for the three-months ended March 31, 2021, consist of the following: The Company issued 14,390 shares of its common stock to SOBR Safe, LLC, an entity controlled by a beneficial owner of the Company, in full satisfaction of $107,880 of accrued dividends resulting from the December 2020 conversion of the Series A-1 Convertible Preferred Stock into common shares, see Note 13. The Company’s common stock transactions for the three-months ended March 31, 2022, consist of the following: The Company issued 16,667 shares of its common stock for RSUs vested during 2021. The Company issued 7,917 shares of common stock under the terms of a $47,500 convertible note payable. The Company exchanged 1,000,000 shares of common stock for 3,000,000 shares of Series B convertible preferred stock (see Note 13). |
PREFERRED STOCK
PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2022 | |
PREFERRED STOCK | |
PREFERRED STOCK | NOTE 13. PREFERRED STOCK On November 20, 2015, the Company’s Board of Directors authorized a class of stock designated as preferred stock with a par value of $0.00001 per share comprising 25,000,000 shares, 3,000,000 shares of which were classified as Series A Convertible Preferred Stock. In each calendar year, the holders of the Series A Convertible Preferred Stock are entitled to receive, when, as and if, declared by the Board of Directors, out of any funds and assets of the Company legally available, non-cumulative dividends, in an amount equal to any dividends or other Distribution on the common stock in such calendar year (other than a Common Stock Dividend). No dividends (other than a Common Stock Dividend) shall be paid and no distribution shall be made with respect to the common stock unless dividends shall have been paid or declared and set apart for payment to the holders of the Series A Convertible Preferred Stock simultaneously. Dividends on the Series A Convertible Preferred Stock shall not be mandatory or cumulative, and no rights or interest shall accrue to the holders of the Series A Convertible Preferred Stock by reason of the fact that the Company shall fail to declare or pay dividends on the Series A Convertible Preferred Stock, except for such rights or interest that may arise as a result of the Company paying a dividend or making a distribution on the common stock in violation of the terms. The holders of each share of Series A Convertible Preferred Stock then outstanding shall be entitled to be paid, out of the Available Funds and Assets, and prior and in preference to any payment or Distribution (or any setting part of any payment or Distribution) of any Available Funds and Assets on any shares of common stock, and equal in preference to any payment or Distribution (or any setting part of any payment or Distribution) of any Available Funds and Assets on any shares of any other series of preferred stock that have liquidation preference, an amount per share equal to the Original Issue Price of the Series A Convertible Preferred Stock plus all declared but unpaid dividends on the Series A Convertible Preferred Stock. A reorganization, or any other consolidation or merger of the Company with or into any other corporation, or any other sale of all or substantially all of the assets of the Company, shall not be deemed a liquidation, dissolution, or winding up of the Company. Shares of the Series A Convertible Preferred Stock are convertible at a 35% discount rate to the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last 15 trading days immediately prior to conversion. However, no conversions of the Series A Convertible Preferred Stock to shares of common stock can occur unless the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last 15 trading days immediately prior to conversion is at least $5.01. The shares of Series A Convertible Preferred Stock vote on a one for one basis. The right of conversion is limited by the fact the holder of the Series A Convertible Preferred Stock may not convert if such conversion would cause the holder to beneficially own more than 4.9% of the Company’s common stock after giving effect to such conversion. On December 9, 2019, the Company’s Board of Directors created a class of preferred stock designated as 8% Series A-1 Convertible Preferred Stock comprising of 2,000,000 shares. During 2020, the authorized shares were increased to 2,700,000 shares. The rights and preferences of the 8% Series A-1 Convertible Preferred Stock are as follows: (a) dividend rights of 8% per annum based on the original issuance price of $1 per share, (b) liquidation preference over the Company’s common stock, (c) conversion rights into shares of the Company’s common stock at $1 per share (not to be affected by any reverse stock split in connection with the Asset Purchase Agreement with IDTEC), (d) redemption rights such that we have the right, upon 30 days written notice, at any time after one year from the date of issuance, to redeem all or part of the Series A-1 Convertible Preferred Stock for 150% of the original issuance price, (e) no call rights by the Company, and (f) each share of Series A-1 Convertible Preferred Stock will vote on an “as converted” basis. On December 12, 2019, the Company entered into a Series A-1 Preferred Stock Purchase Agreement (the “SPA”) with SOBR SAFE, LLC (“SOBR SAFE”), a Delaware limited liability company and an entity controlled by a beneficial owner of the Company, under which SOBR SAFE agreed to acquire 1,000,000 shares of our Series A-1 Convertible Preferred Stock in exchange for $1,000,000 (the “Purchase Price”). The Company received the Purchase Price on December 12, 2019. On May 7, 2020, the Company amended a Convertible Preferred Stock Investment Agreement granting the exclusive right to SOBR SAFE to purchase up to 2,700,000 shares of Series A-1 Convertible Preferred Stock. On July 2, 2020, the Company executed Amendment No. 2 to the Stock Investment Agreement which provides that the full amount of each dividend due on a dividend payment date, even if not declared, shall be paid to any holder regardless of the date on which the holder acquired the stock. The Series A-1 Convertible Preferred Stock earns cumulative dividends at a rate of 8% per annum, payable in cash or common stock at the option of the Company on June 30 and December 31 of each year. If paid in common stock, the common stock will be valued at the average of the closing price for the five business days prior to the dividend payment date. The preferred shareholders will participate in any common stock dividends on an as converted basis. On December 7, 2020, we sent a Notice of Automatic Conversion and Calculation of Dividend Shares to SOBR SAFE notifying them that under the terms governing the shares of Series A-1 Convertible Preferred Stock the 2,700,000 shares of Series A-1 Convertible Preferred Stock owned by SOBR SAFE automatically converted into 900,000 shares of our common stock. In addition, as a result of the conversion of the Series A-1 Convertible Preferred Stock we owed SOBR SAFE accrued dividends totaling $107,880, which we could pay in cash or in shares of our common stock based on the price of common stock on the applicable dividend dates. Our management and Board of Directors elected to pay SOBR SAFE the accrued dividends in shares of our common stock. On March 1, 2022 the Board of Directors approved the designation of 3,000,000 shares of the Company’s Preferred Stock as “Series B Convertible Preferred Stock”. The 3,000,000 Series B Convertible Preferred Stock shares were issued in exchange for 333,333 shares of the Company’s common stock held by the Company’s CEO David Gandini and 666,667 shares of the Company’s common stock held by IDTEC SPV, LLC, an entity controlled by a beneficial owner of the Company. The Company entered into the Share Exchange Agreements to provide certain changes to its capital structure in connection with the planned underwriting offering and listing on Nasdaq. The rights and preferences of the Series B Convertible Preferred Stock are as follows: (a) dividends shall not be mandatory or cumulative, (b) liquidation preference over the Company’s common stock, (c) each three shares of Series B Convertible Preferred Stock shall be convertible, at the option of the holder, beginning on the date that is six months from the date the Holder acquired the shares of Series B Convertible Preferred Stock, and without the payment of additional consideration by the holder , into one share of common stock, (d) no redemption rights by the Company, (e) no call rights by the Company, and (f) each share of Series B Convertible Preferred Stock will vote on an “as converted” basis. As the convertible preferred stock contain voting rights and other comparable features to the common stock it was exchanged for, the exchange resulted in no transfer of value from the common stockholders to the preferred stockholders as included in the condensed consolidated statement of changes in stockholders deficit for the three months ended March 31, 2022. |
STOCK SUBSCRIPTIONS PAYABLE
STOCK SUBSCRIPTIONS PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
STOCK SUBSCRIPTIONS PAYABLE | |
STOCK SUBSCRIPTIONS PAYABLE | NOTE 14. STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS The Company accounts for share-based compensation stock options and restricted stock units, and non-employee stock warrants under ASC 718, whereby costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable, utilizing the Black-Scholes pricing model for stock options and warrants, and the closing price of our common stock on the grant date for restricted stock units. Unless otherwise provided for, the Company covers equity instrument exercises by issuing new shares. Stock Warrants During March, April and May 2021, the Company issued through the Offering convertible notes payable with warrants, (see Note 10), to purchase up to 334,167 shares of our common stock at an exercise price of $9 per share. The warrants expire two years after the date of issuance. On September 28, 2021 and March 30, 2022 the Company issued through the sale of the Debenture Original Warrants and New Warrants, (see Note 9), to purchase up to 406,504 and 101,626, respectively, shares of our common stock at an exercise price of $6 per share. The warrants expire seven years after the date of issuance. March 31, 2022 March 31, 2021 Exercise Price $ 6.00 $ 9.00 Dividend Yield 0 % 0 % Volatility 110 % 158 % Risk-free Interest Rate 2.45 % 0.14 % Life of Warrants 7 Years 2 Years The following table summarizes the changes in the Company’s outstanding warrants during the three-month period ended March 31, 2022 and 2021, and as of March 31, 2022 and 2021: Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2020 194,772 $ 1.50 – 6.00 3.80 Years $ 2.82 $ 1,173,737 Warrants Granted 183,333 $ 6.00 1.96 Years $ 9.00 $ 66,000 Warrants Exercised (58,979 ) $ 1.50 0.50 Years $ 1.50 Warrants Expired - Balance at March 31, 2021 319,126 $ 1.50 – 6.00 2.52 Years $ 6.62 $ 875,493 Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2021 836,464 $ 1.50 – 9.00 3.04 Years $ 6.78 $ 1,784,838 Warrants Granted 101,626 $ 6.00 7.00 Years $ 6.00 $ 152,439 Warrants Exercised - $ - $ - $ - Warrants Expired/Forfeited - $ - $ - $ - Balance at March 31, 2022 938,090 $ 1.50 – 9.00 4.14 Years $ 6.69 $ 757,863 Share-Based Compensation On October 24, 2019, the Company’s 2019 Equity Incentive Plan (the “Plan”) RSUs”) The Company generally recognizes share-based compensation expense on the grant date and over the period of vesting or period that services will be provided. Stock Options As of March 31, 2022 and December 31, 2021, the Company has granted stock options to acquire 1,106,587 and 1,036,588 shares of common stock under the plan, respectively. As of March 31, 2022, the plan has 679,204 vested shares and 427,383 non-vested shares. As of December 31, 2021, the plan had 618,841 vested shares and 417,747 non-vested shares. The stock options are held by our officers, directors, employees, and certain key consultants. In applying the Black-Scholes options pricing model, assumptions used to compute the fair value of the stock options granted during the three-month periods ended March 31, 2022 and 2021 were as follows: March 31, 2022 March 31, 2021 Exercise Price $ 8.25 – 9.0750 - Dividend Yield 0 % - Volatility 191%-192 % - Risk-free Interest Rate 0.78%-1.52 % - Life of Warrants 2 – 3 Years - The following table summarizes the changes in the Company’s outstanding stock options during the three-month periods ended March 31, 2022 and 2021: Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2020 857,409 $ 0.7902 – 9.90 7.45 Years $ 1.4997 $ 6,302,277 Options Granted - Options Exercised - Options Expired - Balance at March 31, 2021 857,409 $ 0.7902 – 9.90 7.21 Years $ 1.4497 $ 6,739,385 Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2021 1,053,356 $ 0.7903 – 10.74 6.21 Years $ 3.3900 $ 5,804,517 Options Granted 70,000 $ 8.25 – 9.0750 2.04 Years $ 8.2893 $ - Options Exercised - Options Expired/Forfeited - Balance at March 31, 2022 1,123,356 $ 0.7903 – 10.7250 5.71 Years $ 3.7042 $ 2,014,970 Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Exercisable at December 31, 2021 635,609 $ 0.7903 - 10.74 6.7 Years $ 1.5861 $ 4,655,089 Exercisable at March 31, 2022 695,973 $ 0.7903 – 10.73 4.16 Years $ 2.1692 $ 3,710,124 Restricted Stock Units The Plan provides for the grant of RSUs. RSUs are settled in shares of the Company’s common stock as the RSUs become vested. In January and February 2022, the Company granted 16,667 service based RSUs to an executive officer and 25,000 service based RSUs to a director, respectively. All RSUs granted in 2022 vest the earlier of the expiration of any lock-up period that includes the securities of the Company owned by the Plan participant after the up list of the Company to a national exchange or January 1, 2023. On January 12, 2022, 16,667 shares of the Company’s common stock were issued for the RSUs vested during 2021. The following table summarizes RSU activity under the Plan for the three-month periods ended March 31, 2022 and 2021: RSUs Weighted Average Grant Date Fair Value Per Share Weighted Average Vesting Period Unvested at December 31, 2020 71,667 $ 8.75 1.70 Years Granted - Vested - Unvested at March 31, 2021 71,667 $ 8.75 1.45 Years RSUs Weighted Average Grant Date Fair Value Per Share Weighted Average Vesting Period Unvested at December 31, 2021 133,585 $ 8.56 0.97 Years Granted 41,667 6.92 1.01 Years Vested - Unvested at March 31, 2022 175,252 $ 8.17 0.74 Years In total for the three months ended March 31, 2022 and 2021, the Company recorded in general and administrative expense $442,784 and $60,531, respectively, of share-based compensation expense related to restricted stock units. As of March 31, 2022, total estimated compensation costs of RSUs granted and outstanding but not yet vested was $774,765 which is expected to be recognized over the weighted average period of 9 months. Executive Officers Stock Options and RSUs The Company has 311,436 and 823,482 outstanding executive officers stock options exercisable at $0.7902 to $10.14 and $0.7902 to $10.14 per share as of March 31, 2022 and December 31, 2021, respectively. The Company has 175,252 and 61,919 unvested RSUs granted to executive officers as of March 31, 2022 and December 31, 2021, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 15. COMMITMENTS AND CONTINGENCIES Operating Leases On February 26, 2021 the Company executed an office lease, effective for a 12-month term beginning March 1, 2021. The lease requires monthly base rent payments of $6,000 and the issuance of 5,333 shares of the Company’s common stock. The value of the common stock of $49,600 is amortized to rent expense on a monthly basis over the lease term. This lease was not renewed. The Company leases shared office space on two-to-three-month basis with monthly rents approximating $4,500. The Company also leases an office space for approximately $5,000 per month on a short-term (month to month) basis through a related party that terminates at any time. Rent expense under office leases, including CAM charges, was $48,819 and $23,629 for the three-month periods ended March 31, 2022 and 2021, respectively. Legal Proceedings On December 6, 2006, Orange County Valet and Security Patrol, Inc. filed a lawsuit against the Company in Orange County California State Superior Court for Breach of Contract in the amount of $11,164. A default judgment was taken against the Company in this matter. In mid-2013 we learned the Plaintiff’s perfected the judgment against the Company, but we have not heard from the Plaintiffs as of the date of this report. As of March 31, 2022, and December 31, 2021, the Company has accrued 11,164 plus accrued interest of approximately 18,000. In the event we pay any money related to this lawsuit, IDTEC agreed to pay the amount for the Company in exchange for shares of our common stock. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 16. SUBSEQUENT EVENTS The Company has evaluated subsequent events for recognition and disclosure through May 23, 2022, which is the date the condensed consolidated financial statements were available to be issued. Our Common Stock has been approved for listing on the Nasdaq Capital Market (“Nasdaq”) under the symbol “SOBR” and began trading the exchange on May 16, 2022. In concert with our up listing to Nasdaq, on May 18, 2022, we received approximately $8,779,000 of net proceeds from the sale of an underwritten public offering of 2,352,942 units (Units) at a public offering price of $4.25 per Unit, with each Unit consisting of one share of our Common Stock, par value $0.00001, and two warrants each to purchase one share of Common Stock. The Units have no stand-alone rights and will not be certified or issued as stand-alone securities. The Warrants included in the Units are exercisable immediately and have an exercise price of $4.25 per share (100% of the price per Unit sold in the offering). The Warrants will not be listed for trading and will expire five years from the date of their issuance. On May 19, 2022, the $3,048,781 principal balance of the Armistice Capital Master Fund, Ltd 18% Original Issue Discount Convertible Debenture, which was in default at March 31, 2022, was paid in full satisfying all amounts due and accrued under the default including penalty, damages and interest provisions of the debt agreement. |
ORGANIZATION OPERATIONS AND SUM
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements and the notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2022. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2022 and December 31, 2021, and results of operations and cash flows for the three month periods ended March 31, 2022 and 2021. |
Stock-based Compensation | The Company follows the guidance of the accounting provisions of ASC 718, Share-based Compensation |
Research and Development | The Company accounts for its research and development costs pursuant to ASC 730, whereby it requires the Company to disclose the amounts of costs for company and customer-sponsored research and development activities, if material. Research and development costs are expensed as incurred. The Company incurred research and development costs as it acquired new knowledge to bring about significant improvements in the functionality and design of its SOBR product. Research and development costs were $47,459 and $171,463 during the three-month periods ended March 31, 2022 and 2021, respectively. |
Advertising and Marketing Costs | Advertising and marketing costs are charged to operations as incurred. Advertising and marketing costs were $30,185 and $26,242 during the three-month periods ended March 31, 2022 and 2021, respectively, and are included in general and administrative expenses in the consolidated statements of operations. |
Income Tax | The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not recorded any deferred tax assets or liabilities at March 31, 2022 and December 31, 2021 as these have been offset by a 100% valuation allowance. |
Net Loss Per Share | Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share gives the effect to all dilutive potential common shares outstanding during the period, including stock options, warrants and convertible instruments. Diluted net loss per share excludes all potentially issuable shares if their effect is anti-dilutive. Because the effect of the Company’s dilutive securities is anti-dilutive, diluted net loss per share is the same as basic loss per share for the periods presented. |
Concentration of Risk | Credit Risk – Concentration of Customers Concentration of Suppliers |
Related Parties | Related parties are any entities or individuals that, through employment, ownership, or other means, possess the ability to direct or cause the direction of the management and policies of the Company. |
Recent Issued Accounting Guidance | In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, The Company has reviewed other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations. |
Principles of Consolidation | The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, TransBiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these unaudited condensed financial statements. |
Use of Estimates | The preparation of unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the recoverability and useful lives of long-lived assets, the intellectual technology, the valuation of the derivative instruments, beneficial conversion feature expenses, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results could differ from those estimates. |
Financial Instruments | Pursuant to Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, accrued interest payable, related party payables, notes payable, convertible debentures, and other liabilities. Pursuant to ASC 820 and 825, the fair value of our derivative liabilities is determined based on “Level 3” inputs. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of March 31, 2022 and December 31, 2021: March 31, 2022 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ 1,380,000 December 31, 2021 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ 1,040,000 |
Cash | The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of March 31, 2022 and December 31, 2021. |
Accounts Receivable | Accounts receivable is derived from sales to a limited number of customers at March 31, 2022. Customer accounts are monitored for potential credit losses based upon management’s assessment of expected collectability and the allowance for doubtful accounts is reviewed periodically to assess the adequacy of the allowance. In making this assessment, management takes into consideration any circumstances of which the Company is aware regarding a customer’s inability to meet its financial obligations to the Company, and any potential prevailing economic conditions and their impact on the Company’s customers. The Company had no allowance for doubtful accounts at March 31, 2022 and December 31, 2021. |
Inventory | Inventory is valued at the lower of cost or net realizable value. The cost of substantially all the Company’s inventory is determined by the FIFO cost method. Inventory is comprised primarily of finished products intended for sale to customers. The Company evaluates the need for reserves for excess or obsolete inventory determined primarily based upon estimates of future demand for the Company’s products. At March 31, 2022 and December 31, 2021 the Company had no reserves for obsolescence. |
Prepaid Expenses | Amounts incurred in advance of contractual performance or coverage periods are recorded as prepaid assets and recognized as expense in the period service or coverage is provided. |
Beneficial Conversion Features | From time to time, the Company may issue convertible notes that may contain a beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. |
Derivative Instruments | The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations under other income (expense). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a Monte Carlo Simulation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Debt Issuance Costs | Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense over the term of the debt using the effective interest method. The unamortized amount is presented as a reduction of debt on the balance sheet. |
Preferred Stock | We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. |
Minority Interest (Noncontrolling Interest) | A subsidiary of the Company has minority members representing ownership interests of 1.38% at March 31, 2022 and December 31, 2021. The Company accounts for these minority, or noncontrolling interests, pursuant to ASC 810-10-65 whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance. |
Impairment of Long-Lived Assets | Long-lived assets and identifiable intangibles held for use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of undiscounted expected future cash flows is less than the carrying amount of the asset or if changes in facts and circumstances indicate, an impairment loss is recognized and measured using the asset’s fair value. No impairment loss was recognized during the three-month periods end March 31, 2022 and 2021. |
Revenue Recognition | The Company enters contracts with customers and generates revenue through various combinations of software products and services which include the sale of cloud-based software solutions, detection and data collection hardware devices, and cloud-based data reporting and analysis services. Depending on the combination of products and services detailed in the respective customer contract, the identifiable components may be highly interdependent and interrelated with each other such that each is required to provide the substance of the value of SOBR’s offering and accounted for as a combined performance obligation, or the specific components may be generally distinct and accounted for as separate performance obligations. Revenue is recognized when control of these software products and/or services are transferred to the customer in an amount that reflects the consideration the Company expects to be entitled in exchange for these respective services and devices. Revenue is recognized in conjunction with guidance provided by Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) issued by the Financial Accounting Standards Board in May 2014. The company determines revenue recognition through five steps outlined in ASC 606 which include (1) the identification of the contract or contracts with a customer, (2) identification of individual or combined performance obligations contained in the contract, (3) determination of the transaction price detailed within the contract, (4) allocation of the transaction price to the specific performance obligations, and (5) finally, recognition of revenue as the Company’s performance obligations are satisfied according to the terms of the contract. Contracts with a Single License/Service Performance Obligation For contracts with a single performance obligation consisting of a license and/or data services, the entire transaction price is allocated to the single performance obligation and recognized at a point in time. Where the Company provides a performance obligation as licensed software or data services, revenue is recognized upon delivery of the software or services ratably over the respective term of the contract. Contracts for Purchase of Hardware Devices Only Where hardware devices are sold separately by the Company, the entire transaction price is allocated to the device as an individual performance obligation and revenue recognized at a point in time when either legal title, physical possession or control have transferred to the customer. Generally, these requirements are satisfied at the point in time the Company ships the product, as this is when the customer obtains control of the asset under SOBR’s standard terms and conditions of the purchase. Contracts with Multiple Performance Obligations Where a Company’s contract with a respective customer contains multiple performance obligations and due to the interdependent and interrelated nature of the licensed software, hardware devices and data reporting services, the Company accounts for the individual performance obligations if they are distinct in nature and the transaction price is allocated to each distinct performance obligations on a directly observable standalone sales price basis. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting requires significant judgment. Standalone selling prices are primarily based upon the price at which the performance obligation is sold separately. The Company may be able to establish a standalone sales price based upon observable products or services sold or priced separately in comparable circumstances, competitor pricing or similar customers. Where the performance obligations are either not distinct or directly observable, the Company estimates the standalone sales price of the performance obligations based upon the overall pricing objectives taking into consideration the value of the contract arrangement, number of licenses, number and types of hardware devices and the length of term of the contract. Professional judgement is required to determine the standalone sales price for each performance obligation where not directly observable. Revenue for Contracts with Multiple Performance Obligations is recognized on a ratable basis for each respective performance obligation as allocated under the prescribed Transaction Price identification model applied. The Company requires customers to make payments related to subscribed software licenses and data services on a monthly basis via authorized bank account ACH withdrawal or an automatic credit card charge during the approved term of the respective agreement. The collectability of future cash flows are reasonably assured with any potential non-payment easily identified with future services being discontinued or suspended due to non-payment. The Company’s contracts are generally twelve to thirty-six months in duration, are billed monthly in advance and are non-cancelable. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally has an unconditional right to consideration when customers are invoiced and a receivable is recorded. A contract asset (unbilled revenue) is recognized when revenue is recognized prior to invoicing, or a contract liability (deferred revenue) when revenue will be recognized subsequent to invoicing. The Company has elected to charge shipping, freight and delivery to customers as a source of revenue to offset respective costs when control has transferred to the customer. We report revenue net of sales and other taxes collected from customers to be remitted to government authorities. Estimated costs for the Company’s standard one-year warranty are charged to cost of products sold when revenue is recorded for the related product. Royalties are also charged to cost of products sold. |
ORGANIZATION OPERATIONS AND S_2
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | |
Schedule of assets and liabilities | March 31, 2022 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ 1,380,000 December 31, 2021 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ 1,040,000 |
ASSET PURCHASE (Tables)
ASSET PURCHASE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
ASSET PURCHASE | |
Summary of closing transactions | Intangible assets $ 29,175,230 Less: Asset impairment 25,320,555 Intangible assets, net of impairment $ 3,874,965 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
ASSET PURCHASE | |
Schedule of inventory | March 31, December 31, 2022 2021 Raw materials $ 51,050 $ - Finished goods 53,900 39,461 Inventory, net $ 104,950 $ 39,461 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
PREPAID EXPENSES | |
Schedule of prepaid expenses | March 31, 2022 December 31, 2021 Insurance $ 4,286 $ 4,286 Consulting services 25,000 8,267 Prepaid expenses $ 29,286 $ 12,553 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS | |
Summary of Intangible Assets | Gross Carrying Accumulated Net Intangible Amortization Period Amount Amortization Asset (in years) SOBR Safe Intellectual Technology $ 3,854,675 $ 610,318 $ 3,244,357 10 Gross Carrying Accumulated Net Intangible Amortization Period Amount Amortization Asset (in years) SOBR Safe Intellectual Technology $ 3,854,675 $ 706,684 $ 3,147,991 10 |
Schedule of estimated future amortization expense | 2023 2024 2025 2026 2027 Thereafter $ 385,467 $ 385,467 $ 385,467 $ 385,467 $ 385,467 $ 1,220,656 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | |
Schedule of Accrued expenses | March 31, 2022 December 31, 2021 Convertible debt default penalty (see Note 9) $ 914,634 $ - Registration rights and default damages and penalties (see Note 9) 192,399 189,663 Consulting services 178,647 163,647 Taxes and other 110,016 110,590 Accrued expenses $ 1,395,696 $ 463,900 |
CONVERTIBLE DEBENTURE PAYABLE (
CONVERTIBLE DEBENTURE PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of debenture payable | March 31, 2022 December 31, 2021 Convertible Debenture Payable with Detached Free-standing Warrant $ 3,048,781 $ 3,048,781 Unamortized Debt Discount - (1,291,882 ) Net Convertible Debenture Payable $ 3,048,781 $ 1,756,899 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
NOTES PAYABLE | |
Schedule of notes payables - related parties | March 31, 2022 December 31, 2021 Convertible Notes Payable with Detached Free-standing Warrants $ 1,000,000 $ 1,000,000 Conventional Non-Convertible Notes Payable 11,810 11,810 Unamortized Debt Discount (522,262 ) (645,547 ) Net Related Party Notes Payable $ 489,548 $ 366,263 Current Portion (302,152 ) (11,810 ) Net Long-Term Portion $ 187,396 $ 354,453 |
Schedule of notes payables - non related parties | March 31, 2022 December 31, 2021 Convertible Notes Payable with Detached Free-standing Warrants $ 1,005,000 $ 1,005,000 Convertible Notes Payable 9,183 56,683 Conventional Non-Convertible Notes Payable 42,500 42,500 Notes Payable with Detached Free-standing Warrants 5,000 5,000 Unamortized Debt Discount (519,571 ) (648,580 ) Net Non-Related Party Notes Payable $ 542,112 $ 460,603 Current Portion (348,508 ) (104,183 ) Net Long-Term Portion $ 193,604 $ 356,420 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
DERIVATIVE LIABILITY | |
Schedule of activity of derivative liability | Balance at December 31, 2021 $ 1,040,000 Fair value of derivatives issued - Fair value adjustments 340,000 Balance at March 31, 2022 $ 1,380,000 |
STOCK WARRANTS AND STOCK OPTION
STOCK WARRANTS AND STOCK OPTIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
STOCK WARRANTS AND STOCK OPTIONS (Tables) | |
Schedule of fair value of non-employee stock/warrants | March 31, 2022 March 31, 2021 Exercise Price $ 6.00 $ 9.00 Dividend Yield 0 % 0 % Volatility 110 % 158 % Risk-free Interest Rate 2.45 % 0.14 % Life of Warrants 7 Years 2 Years Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2020 194,772 $ 1.50 – 6.00 3.80 Years $ 2.82 $ 1,173,737 Warrants Granted 183,333 $ 6.00 1.96 Years $ 9.00 $ 66,000 Warrants Exercised (58,979 ) $ 1.50 0.50 Years $ 1.50 Warrants Expired - Balance at March 31, 2021 319,126 $ 1.50 – 6.00 2.52 Years $ 6.62 $ 875,493 Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2021 836,464 $ 1.50 – 9.00 3.04 Years $ 6.78 $ 1,784,838 Warrants Granted 101,626 $ 6.00 7.00 Years $ 6.00 $ 152,439 Warrants Exercised - $ - $ - $ - Warrants Expired/Forfeited - $ - $ - $ - Balance at March 31, 2022 938,090 $ 1.50 – 9.00 4.14 Years $ 6.69 $ 757,863 |
Schedule of fair value of stock options | March 31, 2022 March 31, 2021 Exercise Price $ 8.25 – 9.0750 - Dividend Yield 0 % - Volatility 191%-192 % - Risk-free Interest Rate 0.78%-1.52 % - Life of Warrants 2 – 3 Years - |
Schedule of outstanding options | Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2020 857,409 $ 0.7902 – 9.90 7.45 Years $ 1.4997 $ 6,302,277 Options Granted - Options Exercised - Options Expired - Balance at March 31, 2021 857,409 $ 0.7902 – 9.90 7.21 Years $ 1.4497 $ 6,739,385 Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2021 1,053,356 $ 0.7903 – 10.74 6.21 Years $ 3.3900 $ 5,804,517 Options Granted 70,000 $ 8.25 – 9.0750 2.04 Years $ 8.2893 $ - Options Exercised - Options Expired/Forfeited - Balance at March 31, 2022 1,123,356 $ 0.7903 – 10.7250 5.71 Years $ 3.7042 $ 2,014,970 Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Exercisable at December 31, 2021 635,609 $ 0.7903 - 10.74 6.7 Years $ 1.5861 $ 4,655,089 Exercisable at March 31, 2022 695,973 $ 0.7903 – 10.73 4.16 Years $ 2.1692 $ 3,710,124 |
Restricted Stock Units | RSUs Weighted Average Grant Date Fair Value Per Share Weighted Average Vesting Period Unvested at December 31, 2020 71,667 $ 8.75 1.70 Years Granted - Vested - Unvested at March 31, 2021 71,667 $ 8.75 1.45 Years RSUs Weighted Average Grant Date Fair Value Per Share Weighted Average Vesting Period Unvested at December 31, 2021 133,585 $ 8.56 0.97 Years Granted 41,667 6.92 1.01 Years Vested - Unvested at March 31, 2022 175,252 $ 8.17 0.74 Years |
ORGANIZATION OPERATIONS AND S_3
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 28, 2021 |
Derivative liabilites | $ 1,380,000 | $ 1,040,000 | $ 980,000 |
Level 1 [Member] | |||
Derivative liabilites | 0 | 0 | |
Level 2 [Member] | |||
Derivative liabilites | 0 | 0 | |
Level 3 [Member] | |||
Derivative liabilites | $ 1,380,000 | $ 1,040,000 |
ORGANIZATION OPERATIONS AND S_4
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Mar. 04, 2022 | Jan. 07, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Research and development costs | $ 47,459 | $ 171,463 | |||
Advertising and marketing costs | $ 30,185 | $ 26,242 | |||
Valuation allowance, percentage | 100.00% | 100.00% | |||
Ownership interest, percentage | 1.38% | 1.38% | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
2019 Equity Incentive Plan [Member] | |||||
Common stock, shares authorized | 1,733,333 | 1,282,823 | |||
Articles of Incorporation [Member] | |||||
Description of reverse stock split | reverse split on or about March 28, 2022. The 1-for-3 reverse stock split went effective with the State of Delaware, FINRA and OTC Markets on April 28, 2022 | reverse stock split of our outstanding common stock at a ratio between of 1-for-2 and 1-for-3 in connection with our planned listing on Nasdaq |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
May 18, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | May 31, 2021 | Mar. 31, 2021 | |
Approximate Accumulated deficit | $ (63,000,000) | ||||
Convertible debenture including penalties, damages and interest | $ 1,100,000 | ||||
Underwritten public offering, price per unit | 4.25 | ||||
Net offering proceeds from loan | $ 5,729,000 | ||||
Convertible notes payable loan balance | $ 3,048,781 | ||||
Original Issue Discount Convertible Debenture | 18.00% | ||||
Convertible notes payable annual interest rate | 12.00% | ||||
Principal balances of convertible notes due, March 31, 2022 | $ 2,005,000 | ||||
Principal balances of convertible notes due, March 2023 | 1,100,000 | ||||
Approximate Net cash used in operating activities | (775,000) | ||||
Principal balances of convertible notes due, April 2023 | 155,000 | ||||
Principal balances of convertible notes due, May 2023 | $ 750,000 | ||||
Common stock closing price per share | $ 6 | ||||
Common Stock, par value | $ 0.00001 | $ 0.00001 | |||
Warrants exercise price | $ 9 | $ 9 | |||
Subsequent Event [Member] | |||||
Price per unit sold, percentage | 100.00% | ||||
Underwritten public offering units issued | 2,352,942 | ||||
Convertible debenture | $ 3,048,781 | ||||
Net proceeds from the sale of an underwritten public offering | 8,779,000 | ||||
Principal balance | $ 3,048,781 | ||||
Common Stock, par value | $ 0.00001 | ||||
Warrants exercise price | $ 4.25 | ||||
Warrants expiry term | five |
ASSET PURCHASE (Details)
ASSET PURCHASE (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
ASSET PURCHASE | |
Intangible assets | $ 29,175,230 |
Less: Asset impairment | 25,320,555 |
Intangible assets, net of impairment | $ 3,874,965 |
ASSET PURCHASE (Details Narrati
ASSET PURCHASE (Details Narrative) - USD ($) | Jun. 05, 2020 | Dec. 31, 2020 |
Asset impairment loss | $ 25,320,555 | |
IDTEC [Member] | Asset Purchase Agreement [Member] | ||
Exercise price per share | $ 1.50 | |
Market price of shares | $ 27,120,000 | |
Assets purchase upon shares issued | 29,222,955 | |
Assets purchase upon shares issued, fair value | 1,407,501 | |
Asset purchase to intangible assets | $ 29,175,203 | |
Post Closing Covenant Agreement to purchase shares of common stock | 106,667 | |
Post Closing Covenant Agreement to purchase shares of common stock, conversion price per share | $ 1.50 | |
Fair value of warrants issued | $ 695,454 | |
Asset impairment loss | $ 25,320,555 | |
Property and equipment | $ 47,725 | |
Common stock, shares issued upon assets purchase | 4,000,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
ASSET PURCHASE | ||
Raw materials | $ 51,050 | $ 0 |
Finished goods | 53,900 | 39,461 |
Inventory, net | $ 104,950 | $ 39,461 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
ASSET PURCHASE | ||
Insurance | $ 4,286 | $ 4,286 |
Consulting services | 25,000 | 8,267 |
Prepaid expenses | $ 29,286 | $ 12,553 |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Feb. 26, 2021 | |
Stock based compensation expense | $ 442,784 | $ 18,690 | ||
Common stock, shares issued | 7,803,139 | 8,778,555 | ||
New Lease Agreement [Member] | ||||
Stock based compensation expense | $ 8,267 | $ 4,133 | ||
Monthly rent | $ 6,000 | |||
Common stock, shares issued | 5,333 | |||
Common stock value | $ 49,600 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Intangible assets, net | $ 3,147,991 | $ 3,244,357 |
Intellectual Technology [Member] | ||
Amortization Period | 10 years | 10 years |
Intangible assets, gross | $ 3,854,675 | $ 3,854,675 |
Accumulated amortization | 706,684 | 610,318 |
Intangible assets, net | $ 3,147,991 | $ 3,244,357 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Dec. 31, 2021USD ($) |
INTANGIBLE ASSETS | |
2023 | $ 385,467 |
2024 | 385,467 |
2025 | 385,467 |
2026 | 385,467 |
2027 | 385,467 |
Thereafter | $ 1,220,656 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
INTANGIBLE ASSETS | ||
Amortization and depreciation expense | $ 96,366 | $ 96,366 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
May 31, 2021 | Mar. 31, 2021 | Mar. 30, 2021 | Mar. 31, 2022 | Feb. 12, 2021 | Apr. 07, 2020 | |
Convertible notes payable | $ 400,000 | |||||
Debt conversion rate | $ 9 | $ 9 | $ 4.9 | |||
Warrants to purchase shares of common stock | 75,000 | 91,667 | ||||
Warrants to purchase shares of common stock, exercise price per share | $ 9 | $ 9 | ||||
Issuance of convertible notes payable | 350,000 | |||||
Indirect interest amount recieved | $ 50,000 | $ 200,000 | ||||
Warrants exercise price | $ 9 | $ 9 | ||||
Board of Directors [Member] | ||||||
Convertible notes payable | $ 400,000 | |||||
Designation shares of Preferred Stock | 3,000,000 | |||||
IDTEC [Member] | ||||||
Warrants exercise price | $ 1.50 | |||||
Warrants purchased | 106,667 | |||||
Settelment of outstanding amount | $ 88,469 | |||||
Settlement of outstanding judgement | $ 88,470 | |||||
Common stock, shares held | 2,000,000 | |||||
Common stock issue for settlement | 58,980 | |||||
David Gandini [Member] | ||||||
Working capital | $ 30,000 | |||||
Preferred Stock shares issued in exchange for common stock | 1,000,000 | |||||
Unseured note interest rate | 0.00% |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
ACCRUED EXPENSES | ||
Convertible debt default penalty (see Note 9) | $ 914,634 | $ 0 |
Registration rights and default damages and penalties (see Note 9) | 192,399 | 189,663 |
Consulting services | 178,647 | 163,647 |
Taxes and other | 110,016 | 110,590 |
Accrued expenses | $ 1,395,696 | $ 463,900 |
CONVERTIBLE DEBENTURE PAYABLE_2
CONVERTIBLE DEBENTURE PAYABLE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
RELATED PARTY TRANSACTIONS | ||
Convertible Debenture Payable with Detached Free-standing Warrant | $ 3,048,781 | $ 3,048,781 |
Unamortized Debt Discount | 0 | (1,291,882) |
Net Convertible Debenture Payable | $ 3,048,781 | $ 1,756,899 |
CONVERTIBLE DEBENTURE PAYABLE_3
CONVERTIBLE DEBENTURE PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
INTANGIBLE ASSETS | |||
Debt face amount | $ 3,048,781 | ||
Warrants issued to purchase common shares | 406,504 | ||
Debenture conversion description | The Debenture is convertible voluntarily by the Purchaser at any time into shares of our common stock, at the lesser of $7.50, representing 100% of the closing price of our common stock on the trading day immediately prior to the Closing Date, or 75% of the average VWAP of our common stock during the 5 trading day period immediately prior to the conversion date (the “Conversion Price”), or automatically upon the occurrence of a single public offering of our common stock which results in the listing of our common stock on a national securities exchange as defined in the Exchange Act (the “Qualified Offering”) into shares of our common stock at the lesser of the Conversion Price, or 75% of the offering price of the securities offered in the Qualified Offering | ||
Proceeds from financing transition | $ 2,500,000 | ||
OID percentage | 18.00% | ||
Exercise price | $ 6 | ||
Adjusted exercise price | $ 3 | ||
Partial liquidated damages description | Company shall pay to the Purchaser as partial liquidated damages equal to the product of 2% of the principal amount not to exceed 24% of the aggregate principal. If the Company fails to pay of the liquidated damages within seven days after the date payable, the Company will pay interest at 18% until such amounts are paid in full | ||
Unamortized discount and issuance costs | $ 423,782 | $ 423,782 | |
Conversion feature debt discount | $ 980,000 | ||
Outstanding warrants | 508,130 | ||
Fair market value of stock warrants | $ 864,000 | ||
Unamortized discount | 402,465 | $ 402,465 | |
Interest expense related to debt issuance costs | 423,782 | 423,782 | |
Interest expense | 465,635 | ||
Debenture reacquisition price | $ 3,912,781 | ||
Outstanding principal amount of debenture, percentage | 130.00% | ||
Accrued and unpaid interest, percentage | 100.00% | ||
Default penalties included in general and administrative expense | $ 914,634 | ||
Warrant to purchase additional shares of common stock | 101,626 | ||
Warrant to purchase additional shares of common stock, expiry date | Mar. 29, 2029 | ||
Debt discount amortization expense | $ 465,365 | 465,635 | |
Original Issue Discount | 548,781 | ||
Debt issuance costs | 275,000 | ||
Damage expenses included in general and administrative expenses | 2,736 | $ 2,736 | |
Unpaid damages and estimated related costs | $ 192,399 | $ 189,700 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Net Related Party Notes Payable Current Portion | $ (302,152) | $ (11,810) |
Related Party Notes Payable [Member] | ||
Conventional Non-Convertible Notes Payable | 11,810 | 11,810 |
Unamortized Discount | (645,547) | |
Net Related Party Notes Payable | 366,263 | |
Notes Payable With Detached Free-standing Warrants | 1,000,000 | 1,000,000 |
Net Long-term Portion | $ 187,396 | $ 354,453 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | May 31, 2021 |
Current portion | $ (348,508) | $ (104,183) | |
Net long term Non-Related Party Notes Payable | 193,604 | 356,420 | |
Convertible notes payable | $ 400,000 | ||
Unamortized Debt Discount | 0 | (1,291,882) | |
Non-Related Party Notes Payable [Member] | |||
Convertible Notes Payable with Detached Free-standing Warrants | 1,005,000 | 1,005,000 | |
Convertible notes payable | 9,183 | 56,683 | |
Conventional Non-Convertible Notes Payable | 42,500 | 42,500 | |
Notes Payable with Detached Free-standing Warrants | 5,000 | 5,000 | |
Unamortized Debt Discount | (519,571) | (648,580) | |
Net Non-Related Party Notes Payable | $ 542,112 | $ 460,603 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Mar. 06, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | May 31, 2021 | Apr. 07, 2020 |
Interest expenses for related party notes | $ 385,889 | $ 3,847 | ||||
Note payable conversion price per share | $ 9 | $ 9 | $ 4.9 | |||
Accrued interest | 309,809 | $ 252,110 | ||||
Interest expense | 1,026,471 | $ 25,878 | ||||
Convertible Notes Payable | 3,048,781 | 3,048,781 | ||||
Unamortized discount | 0 | 1,291,882 | ||||
Amortization expenses, beneficial conversion feature | 465,365 | 465,635 | ||||
Related Party Notes Payable [Member] | ||||||
Notes Payable with Detached Free-standing Warrants | 1,000,000 | 1,000,000 | ||||
Interest expense | 69,780 | 4,491 | ||||
unamortized beneficial conversion feature | $ 235,986 | 291,343 | ||||
Outstanding warrants | 1,000,000 | |||||
Convertible notes payable principal | $ 11,810 | 11,810 | ||||
Convertible Notes Payable | 56,683 | |||||
Beneficial conversion feature debt discount | 448,999 | |||||
Fair market value of warrants | 541,707 | 541,707 | ||||
Unamortized discount | 281,646 | 351,425 | ||||
Amortization expenses, beneficial conversion feature | $ 55,356 | 6,361 | ||||
Default interest rate | 12.00% | |||||
Purchase price of shares issued | $ 12 | |||||
Non-Related Party Notes Payable [Member] | ||||||
Note payable conversion price per share | $ 6 | |||||
Notes Payable with Detached Free-standing Warrants | 5,000 | 5,000 | ||||
Note payable due date | March 6, 2022 | |||||
Unamortized discount | $ 519,571 | 648,580 | ||||
Default interest rate | 5.00% | 12.00% | ||||
Purchase price of shares issued | $ 9 | |||||
shares of common stock | $ 47,500 | |||||
Convertible Notes Payable with Detached Free-standing Warrants | $ 1,005,000 | $ 1,005,000 | ||||
Non-Related Party Notes Payable [Member] | Minimum [Member] | ||||||
Note payable conversion price per share | $ 6 | |||||
Note payable due date | Sep. 21, 2013 | |||||
Interest rate | 5.00% | |||||
Non-Related Party Notes Payable [Member] | Maximum [Member] | ||||||
Note payable conversion price per share | $ 32.29 | |||||
Note payable due date | Jun. 3, 2022 | |||||
Interest rate | 12.00% | |||||
Related Party Convertible Notes Payable [Member] | ||||||
Outstanding warrants | 166,667 | |||||
Beneficial conversion feature debt discount | $ 460,215 | |||||
Fair market value of warrants | 0 | 287,781 | ||||
Unamortized discount | 286,274 | $ 354,205 | ||||
Amortization expenses, beneficial conversion feature | $ 67,932 | 8,981 | ||||
Stock issued during the period | 167,500 | |||||
Non-Convertible Notes Payable Two [Member] | ||||||
Interest expense | $ 129,009 | 5,141 | ||||
Interest rate | 0.00% | |||||
Convertible debt, conversion, principal amount | $ 9,183 | |||||
Non-Convertible Notes Payable [Member] | Non-Related Party Notes Payable [Member] | ||||||
Note payable conversion price per share | $ 6 | |||||
Note payable due date | Mar. 6, 2022 | |||||
Interest rate | 5.00% | |||||
Convertible notes payable principal | $ 42,500 | 42,500 | ||||
Non-Convertible Notes Payable [Member] | Non-Related Party Notes Payable [Member] | Minimum [Member] | ||||||
Note payable due date | December 2013 | |||||
Interest rate | 5.00% | |||||
Non-Convertible Notes Payable [Member] | Non-Related Party Notes Payables [Member] | Maximum [Member] | ||||||
Note payable due date | June 2022 | |||||
Interest rate | 10.00% | |||||
Common Stock Purchase Plans [Member] | Six Related Parties [Member] | ||||||
Accrued interest | $ 59,230 | $ 3,181 | ||||
Notes Payable with Warrants | ||||||
Notes Payable with Detached Free-standing Warrants | $ 5,000 | $ 5,000 | ||||
Interest rate | 10.00% | |||||
Note payable due date | September 2014 |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) | Mar. 31, 2022USD ($) |
DERIVATIVE LIABILITY | |
Balance at December 31, 2021 | $ 1,040,000 |
Fair value of derivatives issued | 0 |
Fair value adjustments | 340,000 |
Balance at March 31, 2022 | $ 1,380,000 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Sep. 28, 2021 | |
Risk-free interest rate | 0.05% | |||
Expected volatility rate | 120.00% | |||
OID percentage | 18.00% | |||
Proceeds from financing transition | $ 2,500,000 | |||
Debt face amount | 3,048,781 | |||
Change in fair value of derivative liability | (340,000) | $ 0 | ||
Derivative liabilites | $ 1,380,000 | $ 1,040,000 | $ 980,000 | |
Minimum [Member] | ||||
Risk-free interest rate | 0.78% | |||
Expected volatility rate | 191.00% | |||
Expected life | 4 months | |||
Maximum [Member] | ||||
Risk-free interest rate | 1.52% | |||
Expected volatility rate | 192.00% | |||
Expected life | 6 months |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($)shares | |
Convertible Note Payable [Member] | |
Common Stock Shares Issued For Services, Shares | 7,917 |
Common Stock Shares Issued For Services, Value | $ | $ 47,500 |
Series B Convertible Preferred Stock [Member] | |
Common Stock Shares Issued For Services, Shares | 1,000,000 |
Debt Conversion, Converted Instrument, Shares Issued | 3,000,000 |
Series A-1 Convertible Preferred stock [Member] | |
Common Stock Shares Issued For Services, Shares | 14,390 |
Debt Conversion, Converted Instrument, Amount | $ | $ 107,880 |
RSUs [Member] | |
Common Stock Shares Issued For Services, Shares | 16,667 |
PREFERRED STOCK (Details Narrat
PREFERRED STOCK (Details Narratve) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Aug. 08, 2019 | Mar. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | May 07, 2020 | Dec. 09, 2019 | Nov. 20, 2015 | |
Preferred stock, shares authorized | 25,000,000 | ||||||
Asset Purchase Agreement [Member] | SOBR SAFE, LLC [Member] | |||||||
Convertible preferred stock issuable | 2,700,000 | ||||||
Series B Convertible Preferred Stock [Member] | |||||||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | |||||
Preferred stock, par value | $ 0.000001 | $ 0.000001 | |||||
Exchange shares issued of common stcok | 333,333 | ||||||
Common stock held by company | 666,667 | ||||||
Series A Convertible Preferred Stock [Member] | |||||||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | 1,000,000 | 3,000,000 | |||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | |||||
Acquire Convertible Preferred Stock | 1,000,000 | ||||||
Preferred stock conversion description | Series A Convertible Preferred Stock are convertible at a 35% discount rate to the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last 15 trading days immediately prior to conversion. However, no conversions of the Series A Convertible Preferred Stock to shares of common stock can occur unless the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last 15 trading days immediately prior to conversion is at least $5.01. The shares of Series A Convertible Preferred Stock vote on a one for one basis. The right of conversion is limited by the fact the holder of the Series A Convertible Preferred Stock may not convert if such conversion would cause the holder to beneficially own more than 4.9% of the Company’s common stock after giving effect to such conversion | ||||||
Series A-1 Convertible Preferred stock [Member] | |||||||
Preferred stock, shares authorized | 2,700,000 | 2,700,000 | |||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | |||||
Series A-1 Convertible Preferred stock [Member] | SOBR's Director company [Member] | Series A-1 Preferred Stock Purchase Agreement [Member] | SOBR SAFE, LLC [Member] | |||||||
Preferred stock, shares authorized | 2,000,000 | ||||||
Authorized shares increased | 2,700,000 | ||||||
Right of dividend | 8.00% | ||||||
Preferences and rights of preferred stock | dividend rights of 8% per annum based on the original issuance price of $1 per share, (b) liquidation preference over the Company’s common stock, (c) conversion rights into shares of the Company’s common stock at $1 per share (not to be affected by any reverse stock split in connection with the Asset Purchase Agreement with IDTEC) |
STOCK WARRANTS, STOCK OPTIONS A
STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dividend yield | 0.00% | |
Volatility | 120.00% | |
Risk free interest rate | 0.05% | |
Warrants [Member] | ||
Exercise Price | $ 6 | $ 9 |
Dividend yield | 0.00% | 0.00% |
Volatility | 110.00% | 158.00% |
Risk free interest rate | 2.45% | 0.14% |
Life of Warrants | 7 years | 2 years |
STOCK WARRANTS, STOCK OPTIONS_2
STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Outstanding at ending of periods | 1,123,356 | 857,409 | 1,053,356 |
Weighted Average Remaining Contractual Life , Beginning balance | 6 years 2 months 15 days | 7 years 5 months 12 days | 0 years |
Weighted Average Remaining Contractual Life, Warrants granted | 2 years 14 days | 0 years | |
Weighted Average Remaining Contractual Life, Ending balance | 5 years 8 months 15 days | 7 years 2 months 15 days | |
Aggregate Intrinsic Value, Beginning balance | $ 5,804,517 | $ 6,302,277 | |
Aggregate Intrinsic Value, Warrants granted | 0 | 0 | |
Aggregate Intrinsic Value, Ending balance | $ 2,014,970 | $ 6,739,385 | |
Warrants [Member] | |||
Outstanding at beginning of period | 836,464 | 194,772 | 194,772 |
Warrants Granted | 101,626 | 183,333 | |
Warrants Exercised | (58,979) | ||
Outstanding at ending of periods | 938,090 | 319,126 | |
Warrant exercise price per shares, Granted | $ 6 | $ 6 | |
Warrant exercise price per shares, Exercised | 0 | 1.50 | |
Weighted Average Exercise Price Per Share, Beginning balance | 6.78 | 2.82 | $ 2.82 |
Weighted Average Exercise Price Per Share, Warrants granted | 6 | 9 | |
Weighted Average Exercise Price Per Share, Warrants exercised | 0 | 1.50 | |
Weighted Average Exercise Price Per Share, Warrants Expired | 0 | ||
Weighted Average Exercise Price Per Share, Ending balance | $ 6.69 | $ 6.62 | 6.78 |
Weighted Average Remaining Contractual Life , Beginning balance | 3 years 14 days | 3 years 9 months 18 days | |
Weighted Average Remaining Contractual Life, Warrants granted | 7 years | 1 year 11 months 15 days | |
Weighted Average Remaining Contractual Life, Warrants exercised | 0 years | 6 months | |
Weighted Average Remaining Contractual Life, Ending balance | 4 years 1 month 20 days | 2 years 6 months 7 days | |
Aggregate Intrinsic Value, Beginning balance | $ 1,784,838 | $ 1,173,737 | |
Aggregate Intrinsic Value, Warrants granted | 152,439 | 66,000 | |
Aggregate Intrinsic Value, Ending balance | $ 757,863 | $ 875,493 | |
Warrants [Member] | Minimum [Member] | |||
Weighted Average Exercise Price Per Share, Beginning balance | $ 0.50 | ||
Weighted Average Exercise Price Per Share, Warrants granted | 2 | $ 0.50 | |
Weighted Average Exercise Price Per Share, Warrants exercised | 1.50 | 1.50 | |
Weighted Average Exercise Price Per Share, Ending balance | 0.50 | 0.50 | |
Warrants [Member] | Maximum [Member] | |||
Weighted Average Exercise Price Per Share, Beginning balance | 3 | ||
Weighted Average Exercise Price Per Share, Warrants granted | 3 | 2 | |
Weighted Average Exercise Price Per Share, Warrants exercised | $ 9 | 6 | |
Weighted Average Exercise Price Per Share, Ending balance | $ 2 | $ 3 |
STOCK WARRANTS, STOCK OPTIONS_3
STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Details 2) | 3 Months Ended |
Mar. 31, 2022$ / shares | |
Dividend yield | 0.00% |
Expected volatility | 120.00% |
Risk free interest rate | 0.05% |
Minimum [Member] | |
Exercise Price | $ 8.25 |
Expected volatility | 191.00% |
Risk free interest rate | 0.78% |
Maximum [Member] | |
Exercise Price | $ 9.0750 |
Expected volatility | 192.00% |
Risk free interest rate | 1.52% |
STOCK WARRANTS, STOCK OPTIONS_4
STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Outstanding at beginning of period | 1,053,356 | 857,409 | 857,409 |
Warrants Granted | 70,000 | ||
Outstanding at ending of periods | 1,123,356 | 857,409 | 1,053,356 |
Weighted Average Remaining Contractual Life , Beginning balance | 6 years 2 months 15 days | 7 years 5 months 12 days | 0 years |
Weighted Average Remaining Contractual Life, Warrants granted | 2 years 14 days | 0 years | |
Weighted Average Remaining Contractual Life, Ending balance | 5 years 8 months 15 days | 7 years 2 months 15 days | |
Weighted Average Remaining Contractual Life, Exercisable | 4 years 1 month 28 days | 6 years 8 months 12 days | |
Weighted Average Exercise Price Per Share, Beginning balance | $ 3.3900 | $ 1.4997 | |
Weighted Average Exercise Price Per Share, Warrants granted | 8.2893 | ||
Weighted Average Exercise Price Per Share, ending balance | 3.7042 | $ 1.4497 | |
Weighted Average Exercise price per share, Exercisable | $ 2.1692 | $ 1.5861 | |
Aggregate Intrinsic Value, Beginning balance | $ 5,804,517 | $ 6,302,277 | |
Aggregate Intrinsic Value, Warrants granted | 0 | 0 | |
Aggregate Intrinsic Value, Ending balance | 2,014,970 | $ 6,739,385 | |
Aggregate Intrinsic value, warrant exercisable | $ 3,710,124 | $ 4,655,089 | |
Warrants [Member] | |||
Outstanding at ending of periods | 938,090 | 319,126 | |
Weighted Average Remaining Contractual Life , Beginning balance | 3 years 14 days | 3 years 9 months 18 days | |
Weighted Average Remaining Contractual Life, Warrants granted | 7 years | 1 year 11 months 15 days | |
Weighted Average Remaining Contractual Life, Ending balance | 4 years 1 month 20 days | 2 years 6 months 7 days | |
Aggregate Intrinsic Value, Beginning balance | $ 1,784,838 | $ 1,173,737 | |
Aggregate Intrinsic Value, Warrants granted | 152,439 | 66,000 | |
Aggregate Intrinsic Value, Ending balance | $ 757,863 | $ 875,493 | |
Warrants Exercised | $ 0 | $ 1.50 | |
Weighted Average Exercise Price Per Share, Beginning balance | 6.78 | 2.82 | $ 2.82 |
Warrants Granted | 6 | 9 | |
Weighted Average Exercise Price Per Share, Ending balance | 6.69 | 6.62 | 6.78 |
Minimum [Member] | Stock Options [Member] | |||
Weighted Average Exercise Price Per Share, Beginning balance | 0.7903 | ||
Warrants Granted | 8.25 | 0.7902 | |
Weighted Average Exercise Price Per Share, Ending balance | 0.7903 | 0.2634 | 0.7903 |
Exercise price per share, warrant exercisable | 0.7903 | 0.7903 | |
Minimum [Member] | Warrants [Member] | |||
Warrants Exercised | 1.50 | 1.50 | |
Weighted Average Exercise Price Per Share, Beginning balance | 0.50 | ||
Warrants Granted | 2 | 0.50 | |
Weighted Average Exercise Price Per Share, Ending balance | 0.50 | 0.50 | |
Maximum [Member] | Stock Options [Member] | |||
Weighted Average Exercise Price Per Share, Beginning balance | 10.74 | ||
Warrants Granted | 9.0750 | 9.90 | |
Weighted Average Exercise Price Per Share, Ending balance | 10.7250 | 3.30 | 10.74 |
Exercise price per share, warrant exercisable | 10.74 | 10.74 | |
Maximum [Member] | Warrants [Member] | |||
Warrants Exercised | 9 | 6 | |
Weighted Average Exercise Price Per Share, Beginning balance | 3 | ||
Warrants Granted | $ 3 | 2 | |
Weighted Average Exercise Price Per Share, Ending balance | $ 2 | $ 3 |
STOCK WARRANTS, STOCK OPTIONS_5
STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Details 4) - Restricted Stock Units [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Unvested begenning | 133,585 | 71,667 |
Granted | 41,667 | |
Unvested ending | 175,252 | 71,667 |
Weighted Average Vesting Period, beginning balance | 11 months 19 days | 8 years 9 months |
Weighted Average Vesting Period RSU granted | 1 year 4 days | 0 years |
Weighted Average Vesting Period, ending balance | 8 months 26 days | 1 year 3 days |
Weighted Average Grant Date Fair Value Per Share beginning balance | $ 8.56 | $ 8.75 |
Weighted Average Grant Date Fair Value Per Share RSU granted | 6.92 | |
Weighted Average Grant Date Fair Value Per Share ending balance | $ 8.17 | $ 8.75 |
STOCK WARRANTS, STOCK OPTIONS_6
STOCK WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS (Details Narrative) - USD ($) | 3 Months Ended | ||||||
Mar. 31, 2022 | Mar. 31, 2021 | Jan. 12, 2022 | Dec. 31, 2021 | Sep. 28, 2021 | May 31, 2021 | Oct. 24, 2019 | |
General and administrative expense | $ 2,269,175 | $ 776,861 | |||||
Stock-based compensation expense | 442,784 | 18,690 | |||||
Restricted Stock Units [Member] | |||||||
General and administrative expense | $ 442,784 | $ 60,531 | |||||
Common stock issued for RSUs vested | 16,667 | 16,667 | |||||
Stock-based compensation expense | $ 774,765 | ||||||
Remaining weighted average vesting period | 9 years | ||||||
Unvested RSUs granted to executive officers | 311,436 | 823,482 | |||||
Options acquire shares of common stock exercise price description | executive officers stock options exercisable at $0.7902 to $10.14 and $0.7902 to $10.14 per share | ||||||
Restricted Stock Units [Member] | Executive Vice Presidentof Salesand Marketingand Revenue Officer [Member] | |||||||
Stock options vested | 175,252 | 61,919 | |||||
Options to acquire shares of common stock | 25,000 | ||||||
Stock Warrant [Member] | |||||||
Number of warrants outstanding | 938,090 | 836,464 | |||||
Common stock purchase | 101,626 | 406,504 | 334,167 | ||||
Common stock purchase per share | $ 6 | $ 9 | |||||
Non-employee detached free-standing stock warrants granted | 101,626 | 183,333 | |||||
Fair value of non-employee stock warrants granted | $ 700,000 | $ 619,381 | |||||
Number of authorized shares | 1,733,333 | ||||||
Authorization of shares of common stock | 1,282,823 | ||||||
Stock Options [Member] | |||||||
Stock options to acquire shares of common stock | 1,106,587 | ||||||
Vested shares | 679,204 | 618,841 | |||||
Non-vested shares | 427,383 | 417,747 | |||||
General and administrative expense | $ 492,441 | $ 105,013 | |||||
Unrecognized compensation expense | $ 2,142,569 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 06, 2006 | |
Contract settlement amount | $ 11,164 | |||
Accrued interest | $ 11,164 | $ 18,000 | ||
Short Term Operating Lease [Member] | ||||
Rent expense | 48,819 | $ 23,629 | ||
Operating lease, monthly payment | $ 4,500 | |||
Issuance of common stock | 5,333 | |||
Rent payments, monthly | $ 6,000 | |||
Office lease term | 12 years | |||
Prepaid expenses with common shares | $ 49,600 | |||
Leases on office space per month | $ 5,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | ||
May 19, 2022 | May 18, 2022 | May 31, 2021 | |
Convertible Notes Payable | $ 400,000 | ||
Subsequent Event [Member] | |||
Proceeds from sale of underwritten public offering | $ 8,779,000 | ||
Sale of underwritten public offering units | 2,352,942 | ||
Sale of underwritten public offering price per unit | $ 4.25 | ||
Warrant exercisable exercise price | $ 4.25 | ||
Sale of price per unit | 100.00% | ||
Public offering price, description | each Unit consisting of one share of our Common Stock, par value $0.00001, and two warrants each to purchase one share of Common Stock | ||
Subsequent Event [Member] | Armistice Capital Master Fund, Ltd | |||
Original Issue Discount Convertible Debenture | 18.00% | ||
Convertible Notes Payable | $ 3,048,781 |