Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 28, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41266 | ||
Entity Registrant Name | CEA INDUSTRIES INC. | ||
Entity Central Index Key | 0001482541 | ||
Entity Tax Identification Number | 27-3911608 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 385 South Pierce Avenue | ||
Entity Address, Address Line Two | Suite C | ||
Entity Address, City or Town | Louisville | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80027 | ||
City Area Code | (303) | ||
Local Phone Number | 993-5271 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10,007,535 | ||
Entity Common Stock, Shares Outstanding | 8,076,372 | ||
Documents Incorporated by Reference | None | ||
Auditor Firm ID | 3627 | ||
Auditor Name | Sadler, Gibb & Associates, LLC | ||
Auditor Location | Draper, UT | ||
Common Stock, $0.00001 par value | |||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Trading Symbol | CEAD | ||
Security Exchange Name | NASDAQ | ||
Warrants to purchase common stock | |||
Title of 12(b) Security | Warrants to purchase common stock | ||
Trading Symbol | CEADW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 18,637,114 | $ 2,159,608 |
Accounts receivable, net | 2,649 | 179,444 |
Inventory, net | 348,411 | 378,326 |
Prepaid expenses and other | 1,489,921 | 1,273,720 |
Total Current Assets | 20,478,095 | 3,991,098 |
Noncurrent Assets | ||
Property and equipment, net | 68,513 | 77,346 |
Goodwill | 631,064 | |
Intangible assets, net | 1,830 | 1,830 |
Deposits | 14,747 | 14,747 |
Operating lease right-of-use asset | 462,874 | 565,877 |
Total Noncurrent Assets | 547,964 | 1,290,864 |
TOTAL ASSETS | 21,026,059 | 5,281,962 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 1,207,258 | 1,345,589 |
Deferred revenue | 4,338,570 | 2,839,838 |
Accrued equity compensation | 89,970 | 83,625 |
Other liabilities | 37,078 | |
Current portion of operating lease liability | 118,235 | 100,139 |
Total Current Liabilities | 5,754,033 | 4,406,269 |
Noncurrent Liabilities | ||
Operating lease liability, net of current portion | 376,851 | 486,226 |
Total Noncurrent Liabilities | 376,851 | 486,226 |
TOTAL LIABILITIES | 6,130,884 | 4,892,495 |
Commitments and Contingencies (Note 11) | ||
TEMPORARY EQUITY | ||
Series B Redeemable Convertible Preferred Stock, $0.00001 par value; 0 and 3,300 issued and outstanding, respectively | 3,960,000 | |
Total Temporary Equity | 3,960,000 | |
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock, $.00001 par value; 25,000,000 and 150,000,000 shares authorized, respectively; 0 shares issued and outstanding | ||
Common stock, $0.00001 par value; 200,000,000 and 850,000,000 shares authorized, respectively; 7,953,974 and 1,600,835 shares issued and outstanding, respectively | 80 | 16 |
Additional paid in capital | 49,173,836 | 25,211,017 |
Accumulated deficit | (34,278,741) | (28,781,566) |
Total Shareholders’ Equity (Deficit) | 14,895,175 | (3,570,533) |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ 21,026,059 | $ 5,281,962 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 30, 2021 | Nov. 03, 2021 | Nov. 02, 2021 |
Statement of Financial Position [Abstract] | |||||
Temporary equity, par or stated value per share | $ 0.00001 | $ 0.00001 | |||
Temporary equity, shares issued | 0 | 3,300 | |||
Temporary equity, shares outstanding | 0 | 3,300 | |||
Preferred stock, par or stated value per share | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares authorized | 25,000,000 | 150,000,000 | |||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common stock, par or stated value per share | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized | 200,000,000 | 850,000,000 | 850,000,000 | 350,000,000 | |
Common stock, shares issued | 7,953,974 | 1,600,835 | |||
Common stock, shares outstanding | 7,953,974 | 1,600,835 | 240,125,224 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue, net | $ 11,283,189 | $ 13,638,558 |
Cost of revenue | 10,138,249 | 10,712,563 |
Gross profit | 1,144,940 | 2,925,995 |
Operating expenses: | ||
Advertising and marketing expenses | 1,157,871 | 772,139 |
Product development costs | 319,987 | 469,703 |
Selling, general and administrative expenses | 4,759,865 | 3,662,668 |
Goodwill impairment charges | 631,064 | |
Total operating expenses | 6,868,787 | 4,904,510 |
Operating loss | (5,723,847) | (1,978,515) |
Other income (expense): | ||
Other income (expense), net | 191,358 | 627,592 |
Interest income (expense),net | 35,314 | (2,832) |
Gain on lease termination | 15,832 | |
Total other income (expense) | 226,672 | 640,592 |
Loss before provision for income taxes | (5,497,175) | (1,337,923) |
Income taxes | ||
Net loss | (5,497,175) | (1,337,923) |
Convertible preferred series B stock redemption value adjustment | (2,262,847) | |
Convertible preferred series B stock dividends | (35,984) | (67,447) |
Dividend on redemption of series A preferred stock | (20,595) | |
Deemed dividend on convertible preferred series B stock on down round | (439,999) | |
Net loss available to common shareholders | $ (5,973,158) | $ (3,688,812) |
Loss per common share – basic and diluted | $ (0.84) | $ (2.33) |
Weighted average number of common shares outstanding, basic and diluted | 7,094,410 | 1,582,869 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 420 | $ 16 | $ 26,109,509 | $ (27,443,643) | $ (1,333,698) |
Beginning balance, shares at Dec. 31, 2020 | 42,030,331 | 1,576,844 | |||
Common shares issued in settlement of legal dispute | 67,000 | 67,000 | |||
Common shares issued in settlement of legal dispute, shares | 6,667 | ||||
Fair value of vested stock options granted to employees | 298,040 | 298,040 | |||
Fair value of vested stock options granted to directors | 21,174 | 21,174 | |||
Issuance of series B preferred stock and warrants, net | 927,721 | 927,721 | |||
Conversion of series A preferred stock to common | $ (420) | 420 | |||
Conversion of series A preferred stock to common, shares | (42,030,331) | 2,802 | |||
Issuance of common stock in settlement of accrued interest | 67,447 | 67,447 | |||
Issuance of common stock in settlement of accrued interest, shares | 7,719 | ||||
Issuance of restricted common stock to employee | 50,000 | 50,000 | |||
Issuance of restricted common stock to employee, shares | 6,803 | ||||
Accrued interest on series B preferred stock | (67,447) | (67,447) | |||
Adjustment to redemption value of series B preferred stock | (2,262,847) | (2,262,847) | |||
Net loss | (1,337,923) | (1,337,923) | |||
Ending balance, value at Dec. 31, 2021 | $ 16 | 25,211,017 | (28,781,566) | (3,570,533) | |
Ending balance, shares at Dec. 31, 2021 | 1,600,835 | ||||
Net loss | (5,497,175) | (5,497,175) | |||
Fair value of vested stock options granted to employees | 229,423 | 229,423 | |||
Fair value of vested stock options granted to directors | 29,656 | 29,656 | |||
Common shares issued in settlement of restricted stock units issued to directors | $ 0 | 24,994 | 24,994 | ||
Common shares issued in settlement of restricted stock units issued to directors, shares | 3,367 | ||||
Stock based compensation | 23,663 | 23,663 | |||
Common shares and warrants issued for cash | $ 58 | 21,711,073 | 21,711,131 | ||
Common shares and warrants issued for cash, shares | 5,811,138 | ||||
Dividends on series B preferred stock | (35,984) | (35,984) | |||
Issuance of common shares to round up partial shares following reverse split | |||||
Issuance of common shares to round up partial shares following reverse split, shares | 6,798 | ||||
Common shares and warrants issued on conversion of series B preferred stock | $ 4 | 1,979,996 | 1,980,000 | ||
Common shares and warrants issued on conversion of series B preferred stock, shares | 362,306 | ||||
Cashless exercise of prefunded warrants | $ 2 | (2) | |||
Cashless exercise of prefunded warrants, shares | 169,530 | ||||
Ending balance, value at Dec. 31, 2022 | $ 80 | $ 49,173,836 | $ (34,278,741) | $ 14,895,175 | |
Ending balance, shares at Dec. 31, 2022 | 7,953,974 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (5,497,175) | $ (1,337,923) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and intangible asset amortization expense | 32,442 | 65,372 |
Gain on forgiveness of note payable | (517,032) | |
Share-based compensation | 307,736 | 369,214 |
Common stock issued for other expense | 67,000 | |
Provision for doubtful accounts | (54,708) | 16,844 |
Provision for excess and obsolete inventory | (20,472) | (1,666) |
Gain on lease termination | (15,832) | |
Loss on disposal of assets | 4,489 | 67,567 |
Amortization of operating lease ROU asset | 103,003 | 204,521 |
Goodwill impairment charges | 631,064 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 231,504 | (162,808) |
Inventory | 50,387 | (49,551) |
Prepaid expenses and other | (216,202) | (235,897) |
Accounts payable and accrued liabilities | (175,409) | (476,450) |
Deferred revenue | 1,498,732 | (884,350) |
Accrued interest | 2,832 | |
Deposits | (14,747) | |
Operating lease liability, net | (91,279) | (259,475) |
Accrued equity compensation | 6,345 | (44,809) |
Net cash used in operating activities | (3,189,543) | (3,207,190) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (30,348) | (68,657) |
Proceeds from the sale of property and equipment | 2,250 | 11,500 |
Net cash used in investing activities | (28,098) | (57,157) |
Cash Flows From Financing Activities | ||
Payment of dividends on series B preferred stock | (35,984) | |
Redemption of series B preferred stock | (1,980,000) | |
Net cash proceeds on sale of common stock and warrants, net of expenses | 21,711,131 | |
Cash proceeds from sale of preferred stock and warrants, net of issuance costs | 2,624,874 | |
Proceeds from issuance of note payable | 514,200 | |
Net cash provided by financing activities | 19,695,147 | 3,139,074 |
Net change in cash and cash equivalents | 16,477,506 | (125,273) |
Cash and cash equivalents, beginning of period | 2,159,608 | 2,284,881 |
Cash and cash equivalents, end of period | 18,637,114 | 2,159,608 |
Supplemental cash flow information: | ||
Interest paid | ||
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Adjustment of carrying value of series B preferred stock to redemption value | 2,262,847 | |
Conversion of series B preferred stock | 1,980,000 | |
Accrued series B interest payable settled in shares of common stock | 67,447 | |
Series A preferred stock converted into shares of common stock | 420 | |
Deemed dividend on series B preferred stock arising on down round | 439,999 | |
Dividend on redemption of series A preferred stock settled in shares of common stock | 20,595 | |
Right of Use asset arising on new office lease | 582,838 | |
Cashless exercise of prefunded warrants | $ 2 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | Note 1 – Organization and Description of Business CEA Industries Inc., formerly Surna Inc. (the “Company”), was incorporated in Nevada on October 15, 2009. We design, engineer and sell environmental control and other technologies for the Controlled Environment Agriculture (“CEA”) industry. The CEA industry is one of the fastest-growing sectors of the United States’ economy. From leafy greens (kale, Swiss chard, mustard, cress), microgreens (leafy greens harvested at the first true leaf stage), ethnic vegetables, ornamentals, and small fruits (such as strawberries, blackberries and raspberries) to bell peppers, cucumbers, tomatoes and cannabis and hemp, more and more producers consider or act to grow crops indoors in response to market dynamics or as part of their preferred farming practice. In service of the CEA industry, we provide: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) air sanitation products, (v) LED lighting, (vi) benching and racking solutions for indoor cultivation, (vii) proprietary and third party controls systems and technologies used for environmental, lighting, and climate control, and (viii) preventive maintenance services, through our partnership with a certified service contractor network, for CEA facilities. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services, and technologies to commercial indoor facilities ranging from several thousand to more than 100,000 square feet. Headquartered in Louisville, Colorado, we leverage our experience in this space to bring value-added climate control solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. Although most of our customers do, we neither produce nor sell cannabis or its related products. Impact of the COVID-19 Pandemic on Our Business The impact of the government and the business economic response to the COVID-19 pandemic has affected demand across the majority of our markets and disrupted workflow and completion schedules on projects. The COVID-19 pandemic is expected to have continued adverse effects on our sales, project implementation, supply chain infrastructure, operating margins, and working capital. The resulting effects and uncertainties from the COVID-19 pandemic, including the depth and duration of the disruptions to customers and suppliers, its future effect on our business, on our results of operations, and on our financial condition, cannot be predicted. We expect that the economic disruptions will continue to have an effect on our business over the longer term. Despite this uncertainty, we continue to monitor costs and continue to take actions to reduce costs in order to mitigate the impact of the COVID-19 pandemic to the best of our ability. However, these actions may not be sufficient in the long run to avoid reduced sales, increased losses, and reduced operating cash flows in our business. During the year ended December 31, 2022, the Company experienced significant delays in the receipt of equipment it had ordered to meet its customer orders due to disruption and delays in its supply chain arising from the long-term effects of the COVID-19 pandemic. Consequently, our revenue recognition of these customer sales has been delayed until future periods when the shipment of these orders can be completed. Refer to Risk Factors Impact of Ukrainian Conflict Currently, we believe that the conflict between Ukraine and Russia does not have any direct impact on our operations, financial condition, or financial reporting. We believe the conflict will have only a general impact on our operations in the same manner as it has a general impact on all businesses that have their operations limited to North America resulting from international sanction and embargo regulations, possible shortages of goods and goods incorporating parts that may be supplied from the Ukraine or Russia, supply chain challenges, and the international and US domestic inflationary results of the conflict and government spending for and funding of our country’s response. As our operations are related only to the North American controlled environment agricultural industry, largely within the cannabis space, we do not believe we will be targeted for cyber-attacks related to this conflict. We have no operations in the countries directly involved in the conflict or are specifically impacted by any of the sanctions and embargoes, as we principally operate in the United States and Canada. We do not believe that the conflict will have any impact on our internal control over financial reporting. Other than general securities market trends, we do not have reason to believe that investors will evaluate the company as having special risks or exposures related to the Ukrainian conflict. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Basis of Presentation; Summary
Basis of Presentation; Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation; Summary of Significant Accounting Policies | Note 2 – Basis of Presentation; Summary of Significant Accounting Policies Financial Statement Presentation The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are available to be issued. The Company continues to experience recurring losses since its inception. As a result, in order to continue as a going concern, the Company has been reliant on the ability to obtain additional sources of financing to fund growth. As indicated in Note 12 – Preferred and Common Stock below, on February 15, 2022, the Company received approximately $ 22,000,000 Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. As a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding as of December 31, 2021, was reduced from 240,125,224 1,600,835 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiary, Hydro Innovations, LLC (“Hydro”). Intercompany transactions, profit, and balances are eliminated in consolidation. Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets as it applies to impairment analysis, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, inventory allowances, and legal contingencies. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount of $ 250,000 18,637,000 18,387,000 Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the invoiced amount or based on revenue earned for items not yet invoiced, and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors, which, in management’s judgment, deserve current recognition in estimating bad debts. Based on the Company’s review, it establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. As of December 31, 2022, and December 31, 2021, the allowance for doubtful accounts was $ 127,233 181,942 Inventory Inventory is stated at the lower of cost or net realizable value. The inventory is valued based on a first-in, first-out (“FIFO”) basis. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. As of December 31, 2022, and December 31, 2021, the allowance for excess and obsolete inventory was $ 70,907 91,379 Property and Equipment Property and equipment are stated at cost. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as disclosed in the table below Schedule of Property and Equipment Asset Type Estimated Useful Life Furniture and fixtures 5 Computers 3 Equipment 5 Vehicles 5 Long-lived Assets Long-lived tangible assets, including property and equipment, are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any indicators of impairment during the years ended December 31, 2022 and 2021. Goodwill and Intangible Assets The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. The Company’s fair value is calculated using a market valuation technique whereby an appropriate control premium is applied to the Company’s market capitalization as calculated by applying its publicly quoted share price to the number of its common shares issued and outstanding. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) As of June 30, 2022, the Company experienced a triggering event due to a drop in its stock price and performed a quantitative analysis for potential impairment of its goodwill. As of June 30, 2022, the Company performed a quantitative analysis for potential impairment of its goodwill, by comparing the Company’s fair value to its carrying value as of June 30, 2022. Based on this analysis, the Company determined that its carrying value exceeded its fair value. As a result, the Company recorded a non-cash goodwill impairment charge of $ 631,064 Fair Value Measurement The Company records its financial assets and liabilities at fair value. The accounting standard for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting standard establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 - inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Due to their short-term nature, the carrying values of accounts receivable, accounts payable, and accrued expenses, approximate fair value. Leases The Company accounts for leases in accordance with ASC 842. The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date. At inception or modification, the Company recognizes right-of-use (“ROU”) assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain that a renewal or termination option will be exercised. As the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset. Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) The Company’s facilities operating leases have lease and non-lease fixed cost components, which we account for as one single lease component in calculating the present value of minimum lease payments. Variable lease and non-lease cost components are expensed as incurred. The Company does not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. The Company recognizes the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source 2022 2021 For the Twelve Months Ended December 31, 2022 2021 Equipment and systems sales $ 10,737,875 $ 12,754,131 Engineering and other services 472,464 683,689 Shipping and handling 72,850 200,738 Total revenue $ 11,283,189 $ 13,638,558 Revenue Recognition Accounting Policy Summary The Company accounts for revenue in accordance with ASC 606. Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. The Company does not provide construction services or system installation services. Some of the Company’s contracts with customers contain a single performance obligation, typically engineering only services contracts. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and components and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each promise is fulfilled. Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as services are rendered or completed in exchange for consideration in an amount for which the Company expects to be entitled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Disaggregation of Revenue In accordance with ASC 606-10-50-5 through 6, the Company considered the appropriate level of disaggregated revenue information that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Additionally, per the implementation guidance in ASC 606-10-55-90 through 91, the Company also considered (a) disclosures presented outside of the financial statements such as earnings releases and investor presentations, (b) information regularly reviewed by the Chief Operating Decision Maker for evaluating the financial performance of operating segments and (c) other information that is similar to the types of information identified in (a) and (b) and that is used by the Company or users of the Company’s financial statements to evaluate financial performance or make resource allocation decisions. Finally, we considered the examples of categories found in the guidance that might be appropriate, including: (a) type of good or service (major product lines), (b) geographical region (country or region), (c) market or type of customer (government or non-government customers), (d) type of contract (fixed-price or time-and-materials), (e) contract duration (short- or long-term), (f) timing of transfer of goods or services (point-in-time or over time) and (g) sales channels (direct to customers or through intermediaries). Based on the aforementioned guidance and considerations, the Company determined that disaggregation of revenue by sales, services and shipping and handling was required. Other Judgments and Assumptions The Company typically receives customer payments in advance of its performance of services or transfers of goods. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. Contract Assets and Contract Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in its contracts. Contract assets include unbilled amounts where revenue recognized exceeds the amount billed to the customer and the right of payment is conditional, subject to completing a milestone, such as a phase of a project. The Company typically does not have material amounts of contract assets since revenue is recognized as control of goods are transferred or as services are performed. As of December 31, 2022, and 2021, the Company had no contract assets. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Contract liabilities consist of advance payments in excess of revenue recognized. The Company’s contract liabilities are recorded as a current liability in deferred revenue in the consolidated balance sheets since the timing of when the Company expects to recognize revenue is generally less than one year. As of December 31, 2022, and December 31, 2021, deferred revenue, which was classified as a current liability, was $ 4,338,570 2,839,838 For the year ended December 31, 2022, the Company recognized revenue of $ 2,318,935 82 3,358,578 90 Remaining Performance Obligations Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Further, based on the current economic climate, the uncertainty regarding the COVID-19 virus, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfill its backlog, and the Company may experience contract cancellations, project scope reductions and project delays. As of December 31, 2022, the Company’s remaining performance obligations, or backlog, was $ 5,577,000 35,000 The remaining performance obligations expected to be recognized through 2024 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2023 2024 Total Remaining performance obligations related to engineering only paid contracts $ - $ - $ - Remaining performance obligations related to partial equipment paid contracts 5,577,000 - 5,577,000 Total remaining performance obligations $ 5,577,000 $ - $ 5,577,000 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Product Warranty The Company warrants the products that it manufactures for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. The Company’s warranty provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within stated specification. The Company’s third-party suppliers also warrant their products under similar terms, which are passed through to the Company’s customers. The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue 180,457 186,605 Cost of Revenue Cost of revenue includes product costs (material, direct labor and overhead costs), shipping and handling expense, outside engineering costs, engineering, project management and service salaries and benefits, client visits and warranty. Concentrations Three customers accounted for 27 26 11 24 10 10 The Company’s accounts receivable from two customers made up 57 43 68 23 Four suppliers accounted for 30 17 16 11 29 11 10 Product Development The Company expenses product development costs as incurred. Internal product development costs are expensed as incurred, and third-party product developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. For the years ended December 31, 2022 and December 31, 2021, the Company incurred $ 319,987 469,703 Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its consolidated financial statements based on their grant date fair value. For awards subject to service conditions, compensation expense is recognized over the vesting period on a straight-line basis. Awards subject to performance conditions are attributed separately for each vesting tranche of the award and are recognized ratably from the service inception date to the vesting date for each tranche, based on the probability of vesting. The probability of awards with future performance conditions is evaluated each reporting period and compensation expense is adjusted based on the probability assessment. Awards are considered granted, and the service inception date begins, when mutual understanding of the key terms and conditions of the award between the Company and the recipient has been established. For awards that provide discretion to adjust the amount of the award, the service inception date for such awards could precede the grant date as a mutual understanding of the key terms and conditions of the award between the Company and the recipient has not yet been established. For awards in which the service inception date precedes the grant date, compensation cost is accrued beginning on the service inception date. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) On March 16, 2022, the Company’s Board of Directors (the “Board”) approved annual incentive compensation awards to certain employees payable in non-qualified stock options, based on the Company’s performance and each employee’s contributions to such performance for the 2021 year. The non-qualified stock options were granted, were not subject to an additional service requirement and were immediately vested at the date of the grant. The final amount of the annual incentive compensation award, and number of non-qualified stock options granted, were determined, and communicated to the employees. The estimated compensation expense of $ 83,625 78,938 For the year ended December 31, 2022, $ 89,970 was recorded in respect of the 2022 annual incentive compensation awards. The final amount of the awards was approved by the Compensation Committee and Board of Directors on March 22, 2023. The number of non-qualified stock options to be granted will be determined on March 31, 2023, and communicated to the employees. The estimated expense was accrued as accrued equity compensation in current liabilities at December 31, 2022. The grant date fair value of stock options is based on the Black-Scholes Model. The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. Share-based compensation costs (including expenses from the accrued compensation liabilities related to the annual incentive awards subsequently settled in non-qualified stock options) totaled $ 314,081 324,405 The following is a summary of such share-based compensation costs included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021: Schedule of Share-based Compensation Costs 2022 2021 For the Twelve Months Ended December 31, 2022 2021 Share-based compensation expense included in: Cost of revenue $ 12,403 $ 17,331 Advertising and marketing expenses 13,921 7,938 Product development costs 7,442 11,025 Selling, general and administrative expenses 280,315 288,111 Total share-based compensation expense included in consolidated statement of operations $ 314,081 $ 324,405 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which: (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with the related tax authority. Basic and Diluted Net Loss per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equit |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | Note 3 – Leases The Boulder Facility Lease On June 27, 2017, the Company entered into a lease for its manufacturing and office space (the “Boulder Facility Lease”), which commenced September 29, 2017 and continued through August 31, 2022. The Company occupied a 12,700 12,967 until January 1, 2018 18,952 18,979 until August 31, 2018 19,549 20,135 3 51,000 1,600 Under the Boulder Facility Lease, the landlord agreed to pay the Company or the Company’s contractors for tenant improvements made by the Company not to exceed $ 100,000 81,481 Upon adoption of ASC 842 on January 1, 2019, the Company recognized its Boulder Facility Lease on the balance sheet as an operating lease right-of-use asset in the amount of $ 714,416 822,374 During 2020, the Company entered into an agreement with its landlord to apply its rent deposit of $ 52,600 The deposit required on the lease will be reduced to approximately $32,000 and will be payable in 12 monthly installments from January through December of 2021. Further, the landlord also agreed to defer payment of fifty percent of the three months of lease payments (base rent only) for the period July to September 2020. The deferred lease payments amount to approximately $30,000 and were payable in 12 monthly installments from January to December 2021 On April 30, 2021, the Company entered into an agreement to sublease approximately 6,900 5,989 11,978 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) On July 27, 2021, the Company entered into a Boulder Facility Lease Termination Agreement with its landlord for the 18,952 15,832 The New Facility Lease On July 28, 2021, the Company entered into an agreement to lease 11,491 The New Facility lease commenced on November 1, 2021 and continues through January 31, 2027 10,055 3 14,747 Upon commencement of the New Facility Lease, the Company recognized on the balance sheet an operating lease right-of-use asset and lease liability in the amount of $ 582,838 The Company’s operating and finance right-of-use assets and lease liabilities are as follows: Schedule of Lease Cost As of December 31, 2022 As of December 31, 2021 Operating lease right-of-use asset $ 462,874 $ 565,877 Operating lease liability, current $ 118,235 $ 100,139 Operating lease liability, long-term $ 376,851 $ 486,226 Remaining lease term 4.1 5.1 Discount rate 3.63 % 3.63 % Cash paid during the year for amounts included in the measurement of lease liabilities is as follows: For the Twelve Months Ended December 31, 2022 For the Twelve Months Ended December 31, 2021 Operating cash outflow from operating lease $ 111,204 $ 257,961 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Future annual minimum under non-cancellable operating leases as of December 31, 2022 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2023 $ 124,897 2024 128,643 2025 132,503 2026 136,473 Thereafter 11,654 Total minimum lease payments 534,170 Less imputed interest (39,084 ) Present value of minimum lease payments $ 495,086 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 4 – Inventory Inventory consisted of the following: Schedule of Inventory 2022 2021 December 31, December 31, 2022 2021 Finished goods $ 270,555 $ 272,199 Work in progress 155 1,050 Raw materials 148,608 196,456 Allowance for excess & obsolete inventory (70,907 ) (91,379 ) Inventory, net $ 348,411 $ 378,326 Overhead expenses of $ 12,770 13,589 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment 2022 2021 December 31, December 31, 2022 2021 Furniture and equipment $ 278,389 $ 274,472 Vehicles 15,000 15,000 Property and equipment, gross 293,389 289,472 Accumulated depreciation (224,876 ) (212,126 ) Property and equipment, net $ 68,513 $ 77,346 Depreciation expense amounted to $ 32,442 4,856 1,214 64,937 6,109 1,527 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 – Intangible Assets Intangible assets consisted of the following: Schedule of Intangible Assets As of December 31, 2022 2021 Patents $ - $ - Website development costs 22,713 22,713 Trademarks 1,830 1,830 24,543 24,543 Accumulated amortization (22,713 ) (22,713 ) Intangible assets, net $ 1,830 $ 1,830 Patents when issued are amortized over 14 five years 0 434 0 8,110 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 7 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities 2022 2021 December 31, December 31, 2022 2021 Accounts payable $ 311,162 $ 616,056 Sales commissions payable 25,951 27,592 Accrued payroll liabilities 465,094 322,873 Product warranty accrual 180,457 186,605 Other accrued expenses 224,594 192,463 Total $ 1,207,258 $ 1,345,589 |
Note Payable and Accrued Intere
Note Payable and Accrued Interest | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Note Payable and Accrued Interest | Note 8 – Note Payable and Accrued Interest On February 10, 2021, the Company entered into a note payable with its current bank in the principal amount of $ 514,200 The loan amount incurred interest at 1 February 5, 2026 During the year ended December 31, 2021, interest of $ 2,832 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) On November 30, 2021, the Company received notice from the bank that its loan received on February 10, 2021, in the principal amount of $ 514,200 2,832 |
Temporary Equity
Temporary Equity | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity | |
Temporary Equity | Note 9 – Temporary Equity On September 28, 2021, the Company sold to an institutional investor (the “Investor”), 3,300 1,000 3,000,000 1,260,000 1,365,000 The Series B Preferred Stock had an annual dividend of 8 8.55 The Series B Preferred Stock was mandatorily convertible on the third anniversary of its issuance. All conversions of the Series B Preferred Stock were subject to a blocker provision of 4.99 Probability of Redemption: As it was considered probable the Series B Preferred stock would become redeemable outside of the Company’s control, the Series B Preferred stock was disclosed as temporary equity and was initially adjusted as of September 30, 2021 to its redemption value of 120% of the stated value of $1,000 per share, or $3,960,000 2,262,847 67,000 On February 16, 2022, the Company redeemed 1,650 2.016 1.98 36,000 On February 16, 2022, the remaining 1,650 362,306 703,069 170,382 0.01 532,688 5 5.00 8.55 75 8.55 4.13 8.55 3.0975 75 4.13 439,999 The Company has no shares of Series B Preferred Stock outstanding as of December 31, 2022. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Related Party Agreements and Tr
Related Party Agreements and Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Agreements and Transactions | Note 10 – Related Party Agreements and Transactions Agreements and Transaction with a Company Director On January 7, 2021, the Company entered into a consulting agreement with RSX Enterprises, Inc. (RSX), a company controlled by Mr. James R. Shipley, a director of the Company. RSX provided consulting services to the Company focused on product offerings, engineering requirements, key customer marketing outreach, and related matters, as mutually determined by the Company and RSX. The Company paid a monthly consulting fee of $ 6,500 19,500 The company entered into a manufacturer representative agreement with RSX Enterprises in March 2021 to become a non-exclusive representative for the Company to assist in marketing and soliciting orders. James R. Shipley, a current director of the Company, has a significant ownership interest in RSX. Under the manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada and Mexico and may receive a commission for qualified customer leads. The agreement has an initial term through December 31, 2021, with automatic one-year renewal terms unless prior notice is given 90 days prior to each annual expiration. During the year ended December 31, 2022, the Company paid $ 9,884 42,639 On October 13, 2022, the Company entered into an agreement with Lone Star Bioscience, Inc. (Lone Star) to provide engineering design services. Nicholas Etten, one of our independent directors, is the Chief Executive Officer of Lone Star. The agreement totaled $ 2,500 1,250 10,900 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies Litigation The Company settled a litigation with a former employee effective March 30, 2021. While the Company disputed the merits of the claims, the Company agreed to issue an aggregate of 6,667 107,000 6,667 67,000 From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. Leases The Company has a lease agreement for its manufacturing and office space. Refer to Note 3 Leases CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Other Commitments In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances. |
Preferred and Common Stock
Preferred and Common Stock | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Preferred and Common Stock | Note 12 – Preferred and Common Stock Preferred Stock As of December 31, 2022, and December 31, 2021, the Company had 25,000,000 150,000,000 0.00001 Effective January 17, 2022, the Board of Directors approved a reduction in the number of authorized shares of preferred stock from 150,000,000 25,000,000 No 3,300 Series A Preferred Stock As of December 31, 2022, and December 31, 2021, the Company has 0 Effective November 4, 2021, the Company redeemed all 42,030,331 2,802 The $ 20,595 2,802 21,015 42,030,331 420 Series B Preferred Stock As of December 31, 2022, and December 31, 2021, the Company has 0 3,300 As further described in Note 9 – Temporary Equity 3,300 1,000 3,300,000 192,982 3,000,000 On February 16, 2022, the Company redeemed 1,650 2.016 1.98 36,000 On February 16, 2022, the remaining 1,650 362,306 703,069 170,382 0.01 532,688 5 5.00 Consequently, as of December 31, 2022, no Common Stock Authorized Common Stock As of December 31, 2022, and December 31, 2021, the Company was authorized to issue 200,000,000 850,000,000 0.00001 Effective November 3, 2021, the Company increased the number of authorized shares of common stock from 350,000,000 850,000,000 Effective January 17, 2022, the Company’s Board of Directors approved a reduction in the number of authorized shares of common stock from 850,000,000 200,000,000 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Reverse Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. As a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding as of December 31, 2021, was reduced from 240,125,224 1,600,835 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. Issued Common Stock As of December 31, 2022, and December 31, 2021, the Company has 7,953,974 1,600,835 During the year ended December 31, 2022, the Company issued shares of its common stock as follows: ● On January 17, 2022, the Company issued 3,367 ● Effective January 27, 2022, the Company issued 6,798 shares of common stock to round up partial shares resulting from the reverse share split described above ● On February 15, 2022, the Company issued 5,811,138 6,572,808 5.00 22 million ● On February 16, 2022, the Company issued 362,306 703,069 170,382 0.01 532,688 5 5.00 1,650 ● On June 21, 2022, the Company issued 169,530 170,382 Consequently, effective December 31, 2022, 7,953,974 shares of common stock were issued and outstanding. During the year ended December 31, 2021, the Company issued shares of its common stock as follows: ● On April 8, 2021, the Company issued 6,667 67,000 Note 11 – Commitments and Contingencies – Litigation . ● On November 4, 2021, the Company issued 2,802 21,015 42,303,331 Note 12 – Preferred and Common Stock – Series A Preferred Stock . ● On November 24, 2021, the Company issued 6,803 50,000 Note 14 Equity Incentive Plans ● On December 30, 2021, the Company issued 7,719 39,368 67,448 28,080 Consequently, effective December 31, 2021, 1,600,835 As further discussed in Note 16. Subsequent Events below: Effective January 3, 2023, the Company issued 119,032 in settlement of restricted stock units issued to directors that vested immediately. Effective January 17, 2023, the Company issued 3,366 in settlement of restricted stock units issued to newly appointed directors in 2022 that vested one year after issuance. Consequently, as of the date of the issuance of these financial statements 8,076,372 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Outstanding Warrants
Outstanding Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Outstanding Warrants | |
Outstanding Warrants | Note 13 – Outstanding Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the years ended December 31, 2022 and 2021: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Warrants Average Exercise Remaining Life Aggregate Intrinsic Outstanding Exercisable Price In Months Value Outstanding at December 31, 2020 50,417 50,417 $ 37.50 6 - Granted 222,719 222,719 $ 9.59 36 - Exercised - - $ 0.00 - - Expired (50,417 ) (50,417 ) $ 37.50 - - Outstanding at December 31, 2021 227,719 227,719 $ 9.59 33 $ 0 Granted 7,566,435 7,566,435 $ 4.89 50 * $ 141,434 Exercised (170,382 ) (170,382 ) $ 0.01 - * ($ 141,434 ) Expired - - - - - Outstanding at December 31, 2022 7,623,772 7,623,772 $ 5.14 49 - * Includes 170,382 The following table summarizes information about warrants outstanding at December 31, 2022. Schedule of Warrants Outstanding Warrants Weighted Average Exercise price Outstanding Exercisable Months Outstanding 9.45 192,982 192,982 21 10.40 34,737 34,737 22 5.00 7,105,496 7,105,496 50 5.16 290,557 290,557 50 7,623,772 7,623,772 49 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Q1 2022 Investor Warrants On February 15, 2022, the Company issued 5,811,138 investment units for aggregate gross proceeds of $ 24,000,000 , or $ 4.13 per unit. Each unit consisted of one share of the Company’s common stock and one warrant for the purchase of one share of the Company’s common stock. The warrants vested immediately, have a term of 5 years and an exercise price of $ 5.00 . Q1 2022 Overallotment Warrants Further on February 15, 2022, in connection with the Company’s issuance of 5,811,138 investment units for aggregate gross proceeds of $ 24,000,000 , or $ 4.13 per unit as described above, a further 761,670 warrants were issued in connection with the subscription for substantially all of the available 15% overallotment warrants. The warrants were acquired for consideration of $ 0.01 per warrant, vested immediately, have a term of 5 years and an exercise price of $ 5.00 . Q1 2022 Underwriter Warrants Further on February 15, 2022, in connection with the Company’s issuance of 5,811,138 investment units for aggregate gross proceeds of $ 24,000,000 , or $ 4.13 per unit described above, the Company also issued representatives of the underwriters 290,557 warrants. Each warrant entitles the holder to purchase one share of common stock at an exercise price of $ 5.1625 , during the period commencing August 9, 2022, and expiring on February 10, 2027. Q1 2022 Series B Preferred Shares Pre-Funded Conversion Warrants On February 16, 2022, in connection with the conversion of 1,650 shares of Series B Preferred Stock into 362,306 shares of the Company’s common stock, the Series B Preferred Shareholder was issued 170,382 pre-funded conversion warrants. Each warrant entitled the holder to purchase one share of common stock at an exercise price of $ 0.01 , vested immediately and had an indefinite life. On June 21, 2022, the holder of all 170,382 pre-funded conversion warrants exercised all of their warrants on a cashless basis and received 169,530 shares of the Company’s common stock as a result of the exercise. No pre-funded conversion warrants remained outstanding at December 31, 2022. Q1 2022 Series B Preferred Shares Conversion Warrants Further on February 16, 2022, in connection with the conversion of 1,650 shares of Series B Preferred Stock into 362,306 shares of the Company’s common stock, the Series B Preferred Shareholder was also issued with 532,688 Series B Preferred shares conversion warrants. Each warrant entitled the holder to purchase one share of common stock at an exercise price of $ 5.00 , vested immediately and had a term of 5 years. Q3 2021 Warrants Issued to Series B Preferred Stockholder On September 28, 2021, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the investor purchased from the Company 3,300 shares of convertible Series B Preferred Stock with a stated value of $ 1,000 per share, or $ 3,300,000 of stated value in the aggregate, and a warrant to purchase up to 192,982 shares of common stock of the Company for an aggregate purchase price of $ 3,000,000 . The warrant is exercisable until September 28, 2024, at an exercise price of $ 9.45 , subject to adjustment for stock splits, stock dividends and other typical adjustments and changes in capitalization, including mergers and acquisitions and distribution of rights. Q3 2021 Warrants Issued to Series B Preferred Placement Agent In connection with the sale of the shares of convertible Series B Preferred Stock described above, the Company issued 34,737 warrants to the placement agent and its designees. Half of the warrants were issued on September 28, 2021, and the second half were issued on November 3, 2021, and are exercisable commencing February 28, 2022 and May 3, 2022, respectively, until September 28, 2024 and November 3, 2024, respectively. The exercise price per share of the warrants is $ 10.40 , subject to adjustment for stock splits, stock dividends and other typical adjustments and changes in capitalization, including mergers and acquisitions and distribution of rights. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Incentive Plans | Note 14 – Equity Incentive Plans Revised Compensation Plan On August 20, 2021, the Board of Directors revised the previously adopted equity-based compensation plan and adopted a new compensation plan for independent directors (the “Plan”). The Plan is effective retroactively for the current independent directors and for independent directors elected or appointed after the Effective Date of the Plan. The Company will pay its independent directors an annual cash fee of $ 15,000 15,000 7,500 On January 17, 2022, the Board of Directors revised the previously adopted compensation plan. This plan supersedes the plan adopted on August 20, 2021. The Plan is effective retroactively for the current independent directors and for independent directors elected or appointed after the Effective Date. The plan is divided into two phases: from the Effective Date of the Plan until February 9, 2022, the day prior to the uplisting of the Company to Nasdaq. (“Pre-uplist”) and from February 10, 2022, the uplist date forward (“Post-uplist”). Pre-uplist phase: The Company paid its independent directors an annual cash fee of $ 15,000 At the time of initial election or appointment, each independent director received an equity retention award in the form of restricted stock units (“RSUs”). The aggregate value of the RSUs at the time of grant was to be $ 25,000 Vesting of the RSUs was as follows: (i) 50% at the time of grant, and (ii) 50% on the first anniversary of the grant date In addition, on the first business day of January each year, each independent director will also receive an equity retention award in the form of RSUs. The aggregate value of the RSUs at the time of grant will be $ 25,000 The Company pays the Audit Committee Chairman an additional annual fee of $ 10,000 The Company pays the Chairmen of any other committees of the Board an additional annual fee of $ 5,000 There is no additional compensation paid to members of any committee of the Board. Interested (i.e. Executive directors) serving on the Board do not receive compensation for their Board service. Post-uplist phase: The Company will pay its independent directors an annual cash fee of $ 25,000 Each director is responsible for the payment of any and all income taxes arising with respect to the issuance of common stock and the vesting and settlement of RSUs. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) The Company reimburses independent directors for out-of-pocket expenses incurred in attending Board and committee meetings and undertaking certain matters on the Company’s behalf. All independent directors, Messrs. Shipley, Etten, Reisner, and Mariathasan are subject to the Plan. Each independent director is responsible for the payment of any and all income taxes arising with respect to the issuance of any equity awarded under the plan, including the exercise of any non-qualified stock options. Employee directors do not receive separate fees for their services as directors. 2017 Equity Incentive Plan Under the Company’s 2017 Equity Incentive Plan, as may be modified and amended by the Company from time to time (the “2017 Equity Plan”), the Board of Directors (the “Board”) (or the compensation committee of the Board, if one is established) may award stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock unit awards (“RSUs”), shares granted as a bonus or in lieu of another award, and other stock-based performance awards. The 2017 Equity Plan allocates 333,333 As of December 31, 2022, of the 333,333 163,692 147,177 22,464 2021 Equity Incentive Plan On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which was approved by the stockholders on July 22, 2021. The 2021 Equity Plan permits the Board to grant awards of up to 666,667 i.e. Equity Incentive Plan Issuances During 2022 - Issued 3,367 - Granted awards for 22,167 5,000 - Granted awards for 6,250 - Issued 31,793 10 2.51 As of December 31, 2022, of the 666,667 10,170 61,201 40,816 3,367 551,113 There was $ 65,087 2 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) As further discussed in Note 16 Subsequent Events 119,032 in settlement of restricted stock units issued to directors that vested immediately. 3,366 in settlement of restricted stock units issued to newly appointed directors in 2022 that vested one year after issuance. Restricted Stock Awards No shares of restricted stock were issued during the year ended December 31, 2022. During the year ended December 31, 2021, the Company awarded 6,803 50,000 Stock Options The Company uses the Black-Scholes Model to determine the fair value of options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected stock price volatility assumptions are based on the historical volatility of the Company’s common stock over periods that are similar to the expected terms of grants and other relevant factors. The Company derives the expected term based on an average of the contract term and the vesting period taking into consideration the vesting schedules and future employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. The Company has never paid any cash dividends on its common stock and the Company has no intention to pay a dividend at this time; therefore, the Company assumes that no dividends will be paid over the expected terms of option awards. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. The valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility 157.27 158.7 5 10 1.52 2.73 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Employee and Consultant Options A summary of the stock options granted to employees and consultants under the 2017 Equity Plan and the 2021 Equity Incentive Plan during the years ended December 31, 2022 and 2021 are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2020 95,007 $ 12.45 7.1 $ - Granted 65,508 $ 9.00 10.0 $ - Exercised - $ - - $ - Forfeited (2,341 ) $ 16.83 7.0 $ - Expired - $ - - $ - Outstanding, December 31, 2021 158,174 $ 10.99 7.6 $ - Granted 53,960 $ 2.90 9.2 $ - Exercised - $ - - $ - Forfeited (20,061 ) $ 8.85 8.6 $ - Expired - $ - - $ - Outstanding, December 31, 2022 192,073 $ 8.94 7.6 $ - Exercisable, December 31, 2022 148,227 $ 9.86 7.2 $ - A summary of non-vested stock options activity for employees and consultants under the 2017 Equity Plan and the 2021 Equity Plan for the years ended December 31, 2022 and 2021 are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 65,508 $ 8.85 $ - $ 575,711 Vested (23,662 ) $ 10.65 $ - $ (252,571 ) Forfeited - $ - $ - $ - Expired - $ - $ - $ - Nonvested, December 31, 2021 41,846 $ 7.65 $ - $ 320,122 Granted 53,960 $ 2.86 $ - $ 154,555 Vested (36,960 ) $ 2.68 $ - $ - Forfeited (15,000 ) $ 8.52 $ - $ - Expired - $ - $ - $ - Nonvested, December 31, 2022 43,846 $ 5.65 $ - $ 247,739 For the years ended December 31, 2022 and 2021, the Company recorded $ 149,081 169,746 18,942 130,139 63,770 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Director Options A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and 2021 Equity Plan during the years ended December 31, 2022 and 2021 are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2020 49,333 $ 10.05 4.5 $ - Granted 1,539 $ 9.75 10.0 $ - Exercised - - - $ - Forfeited/Cancelled - - - $ - Expired - - - $ - Outstanding, December 31, 2021 50,872 $ 10.02 6.6 $ - Granted 6,250 $ 4.80 9.0 $ - Exercised - - - $ - Forfeited/Cancelled - - - $ - Expired - - - $ - Outstanding, December 31, 2022 57,122 $ 9.44 6.0 $ - Exercisable, December 31, 2022 57,122 $ 9.44 6.0 $ - A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan and the 2021 Equity Plan for the years ended December 31, 2022 and 2021 are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 6,666 $ 4.35 $ 3,400 $ 29,000 Granted 1,539 $ 9.75 - $ 15,000 Vested (8,205 ) $ 5.40 $ 4,431 $ (44,000 ) Forfeited - - - $ - Expired - - - $ - Nonvested, December 31, 2021 - - - $ - Granted 6,250 $ 4.75 $ - $ 29,656 Vested (6,250 ) $ 4.75 $ - $ - Forfeited - - - $ - Expired - - - $ - Nonvested, December 31, 2022 - $ - $ - During the years ended December 31, 2022 and 2021, the Company incurred $ 29,656 21,174 6,250 8,205 Effective January 3, 2022, the Company issued 6,250 10 Effective August 20, 2021, the Company issued 1,539 10 9.75 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Restricted Stock Units A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the years ended December 31, 2022 and 2021 are presented in the table below: Schedule of Restricted Stock Units Activity Number of Units Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2020 50,333 $ 19.50 $ - Granted - - $ - Vested and settled with share issuance (45,000 ) $ 18.15 $ - Forfeited/canceled (5,333 ) $ 23.10 $ - Outstanding, December 31, 2021 - $ - $ - Granted 6,734 $ 7.42 $ - Vested and settled with share issuance (3,367 ) $ 7.42 $ - Forfeited/canceled - $ - $ - Outstanding, December 31, 2022 3,367 $ 7.42 $ - For the years ended December 31, 2022 and 2021, the Company recorded $ 18,736 0 1,317 As further discussed in Note 16 Subsequent Events below, effective January 3, 2023, the Company issued 119,032 in settlement of restricted stock units issued to directors that vested immediately. 3,366 in settlement of restricted stock units issued to newly appointed directors in 2022 that vested one year after issuance. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 – Income Taxes For financial reporting purposes, there were no provisions for U.S. federal, state or international income taxes for the years ended December 31, 2022 or 2021 due to the Company’s net operating losses (“NOLs”) in such periods and full valuation allowance recorded against the net deferred tax assets. The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported provision for income taxes are summarized as follows: Schedule of U.S Federal Statutory Income Tax Rate and Reported Provision for Income Taxes 2022 2021 Income taxes computed at the federal statutory rate $ (1,154,000 ) $ (281,000 ) States taxes, net of federal benefits (217,000 ) (53,000 ) Permanent differences 7,000 (124,000 ) True-up adjustments 164,000 9,000 Adjustment to net operating loss (30,000 ) (13,000 ) Change in valuation allowance 1,230,000 462,000 Reported income tax (benefit) expense $ - $ - CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) The components of the net deferred tax assets as of December 31, 2022 and 2021 are as follows: Schedule of Deferred Tax Assets 2022 2021 Deferred tax assets: Net operating losses $ 6,474,000 $ 5,262,000 Equity compensation 252,000 177,000 Other deferred tax assets 94,000 141,000 Total deferred tax assets 6,820,000 5,580,000 Deferred tax liabilities: Other deferred tax liabilities (88,000 ) (78,000 ) Total deferred tax liabilities (88,000 ) (78,000 ) Net deferred tax assets before valuation allowance 6,732,000 5,502,000 Less valuation allowance (6,732,000 ) (5,502,000 ) Net deferred tax assets $ - $ - As of December 31, 2022, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $ 25,949,000 11,196,000 2034 through 2037 14,753,000 80 50 three-year period 50 As further discussed in Note 12 Preferred and Common Stock 22 5,811,138 5,811,138 1,052,227 290,557 761,670 15 290,557 5 years 5.1625 761,670 5 years 5.00 These securities sales and our September 2021 securities sales as described in Note 9 Temporary Equity The Company must assess the likelihood that its net deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. Management’s judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred tax assets. The Company recorded a full valuation allowance as of December 31, 2022 and 2021. Based on the available evidence, the Company believes it is more likely than not that it will not be able to utilize its net deferred tax assets in the foreseeable future. The Company intends to maintain valuation allowances until sufficient evidence exists to support the reversal of such valuation allowances. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s plans. Should the actual amounts differ from the Company’s estimates, the carrying value of the Company’s deferred tax assets could be materially impacted. The Company is subject to examination by the IRS for the calendar year 2018 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to the Company’s taxes or the Company’s net operating losses with respect to years under examination as well as subsequent periods. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) The Company recognizes in its consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of operating expense. The Company does not believe there are any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date. There were no penalties or interest liabilities accrued as of December 31, 2022 or 2021, nor were any penalties or interest costs included in expense for the years ended December 31, 2022 and 2021. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 – Subsequent Events In accordance with ASC 855, Subsequent Events Effective January 3, 2023, the Company issued 119,032 in settlement of restricted stock units issued to directors that vested immediately. Effective January 17, 2023, the Company issued 3,366 in settlement of restricted stock units issued to newly appointed directors in 2022 that vested one year after issuance. Consequently, as of the date of the issuance of these financial statements 8,076,372 Workforce Reduction The Company has experienced a decline in activity, as indicated in its 2022 sales and its current backlog. This decline is due to many factors, including (i) recent challenges in the cannabis market, (ii) continued supply chain-related delays and cancellations that have affected many of its vendors and partners, and (iii) a broader slowdown in the macroeconomic environment. As a result of this decline in activity, the Company evaluated its current operations, personnel needs and liquidity to make sure our personnel levels match the activity we expect to service over the next several months. On February 21, 2023, we implemented a downsizing of our operations, including a 32% reduction in our workforce, and significant non-personnel cost reductions in order to preserve our cash resources and better reflect our activity levels. We believe these efforts are necessary and will help focus our existing operations on delivering value for customers of both our equipment sales and project management activities. In the meantime, we continue aggressive efforts to increase liquidity and reduce costs and will take additional actions as market conditions warrant. |
Basis of Presentation; Summar_2
Basis of Presentation; Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Financial Statement Presentation | Financial Statement Presentation The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. |
Liquidity | Liquidity The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are available to be issued. The Company continues to experience recurring losses since its inception. As a result, in order to continue as a going concern, the Company has been reliant on the ability to obtain additional sources of financing to fund growth. As indicated in Note 12 – Preferred and Common Stock below, on February 15, 2022, the Company received approximately $ 22,000,000 |
Reverse Stock Split | Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. As a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding as of December 31, 2021, was reduced from 240,125,224 1,600,835 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiary, Hydro Innovations, LLC (“Hydro”). Intercompany transactions, profit, and balances are eliminated in consolidation. |
Use of Estimates | Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets as it applies to impairment analysis, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, inventory allowances, and legal contingencies. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount of $ 250,000 18,637,000 18,387,000 |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the invoiced amount or based on revenue earned for items not yet invoiced, and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors, which, in management’s judgment, deserve current recognition in estimating bad debts. Based on the Company’s review, it establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. As of December 31, 2022, and December 31, 2021, the allowance for doubtful accounts was $ 127,233 181,942 |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. The inventory is valued based on a first-in, first-out (“FIFO”) basis. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. As of December 31, 2022, and December 31, 2021, the allowance for excess and obsolete inventory was $ 70,907 91,379 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as disclosed in the table below Schedule of Property and Equipment Asset Type Estimated Useful Life Furniture and fixtures 5 Computers 3 Equipment 5 Vehicles 5 |
Long-lived Assets | Long-lived Assets Long-lived tangible assets, including property and equipment, are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any indicators of impairment during the years ended December 31, 2022 and 2021. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. The Company’s fair value is calculated using a market valuation technique whereby an appropriate control premium is applied to the Company’s market capitalization as calculated by applying its publicly quoted share price to the number of its common shares issued and outstanding. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) As of June 30, 2022, the Company experienced a triggering event due to a drop in its stock price and performed a quantitative analysis for potential impairment of its goodwill. As of June 30, 2022, the Company performed a quantitative analysis for potential impairment of its goodwill, by comparing the Company’s fair value to its carrying value as of June 30, 2022. Based on this analysis, the Company determined that its carrying value exceeded its fair value. As a result, the Company recorded a non-cash goodwill impairment charge of $ 631,064 |
Fair Value Measurement | Fair Value Measurement The Company records its financial assets and liabilities at fair value. The accounting standard for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting standard establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 - inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Due to their short-term nature, the carrying values of accounts receivable, accounts payable, and accrued expenses, approximate fair value. |
Leases | Leases The Company accounts for leases in accordance with ASC 842. The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date. At inception or modification, the Company recognizes right-of-use (“ROU”) assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain that a renewal or termination option will be exercised. As the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset. Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) The Company’s facilities operating leases have lease and non-lease fixed cost components, which we account for as one single lease component in calculating the present value of minimum lease payments. Variable lease and non-lease cost components are expensed as incurred. The Company does not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. The Company recognizes the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source 2022 2021 For the Twelve Months Ended December 31, 2022 2021 Equipment and systems sales $ 10,737,875 $ 12,754,131 Engineering and other services 472,464 683,689 Shipping and handling 72,850 200,738 Total revenue $ 11,283,189 $ 13,638,558 Revenue Recognition Accounting Policy Summary The Company accounts for revenue in accordance with ASC 606. Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. The Company does not provide construction services or system installation services. Some of the Company’s contracts with customers contain a single performance obligation, typically engineering only services contracts. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and components and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each promise is fulfilled. Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as services are rendered or completed in exchange for consideration in an amount for which the Company expects to be entitled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Disaggregation of Revenue In accordance with ASC 606-10-50-5 through 6, the Company considered the appropriate level of disaggregated revenue information that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Additionally, per the implementation guidance in ASC 606-10-55-90 through 91, the Company also considered (a) disclosures presented outside of the financial statements such as earnings releases and investor presentations, (b) information regularly reviewed by the Chief Operating Decision Maker for evaluating the financial performance of operating segments and (c) other information that is similar to the types of information identified in (a) and (b) and that is used by the Company or users of the Company’s financial statements to evaluate financial performance or make resource allocation decisions. Finally, we considered the examples of categories found in the guidance that might be appropriate, including: (a) type of good or service (major product lines), (b) geographical region (country or region), (c) market or type of customer (government or non-government customers), (d) type of contract (fixed-price or time-and-materials), (e) contract duration (short- or long-term), (f) timing of transfer of goods or services (point-in-time or over time) and (g) sales channels (direct to customers or through intermediaries). Based on the aforementioned guidance and considerations, the Company determined that disaggregation of revenue by sales, services and shipping and handling was required. Other Judgments and Assumptions The Company typically receives customer payments in advance of its performance of services or transfers of goods. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. Contract Assets and Contract Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in its contracts. Contract assets include unbilled amounts where revenue recognized exceeds the amount billed to the customer and the right of payment is conditional, subject to completing a milestone, such as a phase of a project. The Company typically does not have material amounts of contract assets since revenue is recognized as control of goods are transferred or as services are performed. As of December 31, 2022, and 2021, the Company had no contract assets. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Contract liabilities consist of advance payments in excess of revenue recognized. The Company’s contract liabilities are recorded as a current liability in deferred revenue in the consolidated balance sheets since the timing of when the Company expects to recognize revenue is generally less than one year. As of December 31, 2022, and December 31, 2021, deferred revenue, which was classified as a current liability, was $ 4,338,570 2,839,838 For the year ended December 31, 2022, the Company recognized revenue of $ 2,318,935 82 3,358,578 90 Remaining Performance Obligations Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Further, based on the current economic climate, the uncertainty regarding the COVID-19 virus, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfill its backlog, and the Company may experience contract cancellations, project scope reductions and project delays. As of December 31, 2022, the Company’s remaining performance obligations, or backlog, was $ 5,577,000 35,000 The remaining performance obligations expected to be recognized through 2024 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2023 2024 Total Remaining performance obligations related to engineering only paid contracts $ - $ - $ - Remaining performance obligations related to partial equipment paid contracts 5,577,000 - 5,577,000 Total remaining performance obligations $ 5,577,000 $ - $ 5,577,000 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Product Warranty | Product Warranty The Company warrants the products that it manufactures for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. The Company’s warranty provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within stated specification. The Company’s third-party suppliers also warrant their products under similar terms, which are passed through to the Company’s customers. The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue 180,457 186,605 |
Cost of Revenue | Cost of Revenue Cost of revenue includes product costs (material, direct labor and overhead costs), shipping and handling expense, outside engineering costs, engineering, project management and service salaries and benefits, client visits and warranty. |
Concentrations | Concentrations Three customers accounted for 27 26 11 24 10 10 The Company’s accounts receivable from two customers made up 57 43 68 23 Four suppliers accounted for 30 17 16 11 29 11 10 |
Product Development | Product Development The Company expenses product development costs as incurred. Internal product development costs are expensed as incurred, and third-party product developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. For the years ended December 31, 2022 and December 31, 2021, the Company incurred $ 319,987 469,703 |
Accounting for Share-Based Compensation | Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its consolidated financial statements based on their grant date fair value. For awards subject to service conditions, compensation expense is recognized over the vesting period on a straight-line basis. Awards subject to performance conditions are attributed separately for each vesting tranche of the award and are recognized ratably from the service inception date to the vesting date for each tranche, based on the probability of vesting. The probability of awards with future performance conditions is evaluated each reporting period and compensation expense is adjusted based on the probability assessment. Awards are considered granted, and the service inception date begins, when mutual understanding of the key terms and conditions of the award between the Company and the recipient has been established. For awards that provide discretion to adjust the amount of the award, the service inception date for such awards could precede the grant date as a mutual understanding of the key terms and conditions of the award between the Company and the recipient has not yet been established. For awards in which the service inception date precedes the grant date, compensation cost is accrued beginning on the service inception date. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) On March 16, 2022, the Company’s Board of Directors (the “Board”) approved annual incentive compensation awards to certain employees payable in non-qualified stock options, based on the Company’s performance and each employee’s contributions to such performance for the 2021 year. The non-qualified stock options were granted, were not subject to an additional service requirement and were immediately vested at the date of the grant. The final amount of the annual incentive compensation award, and number of non-qualified stock options granted, were determined, and communicated to the employees. The estimated compensation expense of $ 83,625 78,938 For the year ended December 31, 2022, $ 89,970 was recorded in respect of the 2022 annual incentive compensation awards. The final amount of the awards was approved by the Compensation Committee and Board of Directors on March 22, 2023. The number of non-qualified stock options to be granted will be determined on March 31, 2023, and communicated to the employees. The estimated expense was accrued as accrued equity compensation in current liabilities at December 31, 2022. The grant date fair value of stock options is based on the Black-Scholes Model. The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. Share-based compensation costs (including expenses from the accrued compensation liabilities related to the annual incentive awards subsequently settled in non-qualified stock options) totaled $ 314,081 324,405 The following is a summary of such share-based compensation costs included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021: Schedule of Share-based Compensation Costs 2022 2021 For the Twelve Months Ended December 31, 2022 2021 Share-based compensation expense included in: Cost of revenue $ 12,403 $ 17,331 Advertising and marketing expenses 13,921 7,938 Product development costs 7,442 11,025 Selling, general and administrative expenses 280,315 288,111 Total share-based compensation expense included in consolidated statement of operations $ 314,081 $ 324,405 CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which: (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with the related tax authority. |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in periods when losses are reported where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. As of December 31, 2022, and December 31, 2021, 7,876,334 115,684 |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, customer disputes, government investigations and tax matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired, or a liability had been incurred and the amount of loss can be reasonably estimated. |
Other Risks and Uncertainties | Other Risks and Uncertainties To achieve profitable operations, the Company must successfully develop, manufacture and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows. The Company is subject to risks common to similarly-situated companies including, but not limited to, general economic conditions, its customers’ operations and access to capital, and market and business disruptions including severe weather conditions, natural disasters, health hazards, terrorist activities, financial crises, political crises or other major events, or the prospect of these events, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. As a supplier of services and equipment to cannabis cultivators, the Company is also subject to risks related to the cannabis industry. Although certain states have legalized medical and/or recreational cannabis, U.S. federal laws continue to prohibit marijuana in all its forms as well as its derivatives. Any changes in the enforcement of U.S. federal laws may adversely affect the implementation of state and local cannabis laws and regulations that permit medical or recreational cannabis and, correspondingly, may adversely impact the Company’s customers. The Company’s success is also dependent upon its ability to raise additional capital and to successfully develop and market its products. CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Company’s senior management team in deciding how to allocate resources and in assessing performance. The Company has one |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In December 2022, the FASB issued ASU No. 2022-06, which defers the sunset date of Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In September 2022, the FASB issued Update 2022-04, “Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”. The update was issued in response to requests from financial statement users for increased transparency surrounding the use of supplier finance programs. The amendments in Update 2022-04 require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect this ASU to have a material impact on its consolidated results of operations, cash flows and financial position. In October 2021, the FASB issued ASU 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. The guidance is effective for interim and annual periods beginning after December 15, 2021. Early adoption is permitted. The guidance is to be applied prospectively to modifications or exchanges occurring on or after the effective date. The adoption of this guidance has not had a material impact on the Company’s consolidated financial statements. In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). CEA Industries Inc. Notes to Consolidated Financial Statements December 31, 2022 (in US Dollars except share numbers) Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Basis of Presentation; Summar_3
Basis of Presentation; Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment | Schedule of Property and Equipment Asset Type Estimated Useful Life Furniture and fixtures 5 Computers 3 Equipment 5 Vehicles 5 |
Schedule of Revenue by Source | The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source 2022 2021 For the Twelve Months Ended December 31, 2022 2021 Equipment and systems sales $ 10,737,875 $ 12,754,131 Engineering and other services 472,464 683,689 Shipping and handling 72,850 200,738 Total revenue $ 11,283,189 $ 13,638,558 |
Schedule of Remaining Performance Obligations Expected to be Recognized | The remaining performance obligations expected to be recognized through 2024 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2023 2024 Total Remaining performance obligations related to engineering only paid contracts $ - $ - $ - Remaining performance obligations related to partial equipment paid contracts 5,577,000 - 5,577,000 Total remaining performance obligations $ 5,577,000 $ - $ 5,577,000 |
Schedule of Share-based Compensation Costs | The following is a summary of such share-based compensation costs included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021: Schedule of Share-based Compensation Costs 2022 2021 For the Twelve Months Ended December 31, 2022 2021 Share-based compensation expense included in: Cost of revenue $ 12,403 $ 17,331 Advertising and marketing expenses 13,921 7,938 Product development costs 7,442 11,025 Selling, general and administrative expenses 280,315 288,111 Total share-based compensation expense included in consolidated statement of operations $ 314,081 $ 324,405 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of Lease Cost | The Company’s operating and finance right-of-use assets and lease liabilities are as follows: Schedule of Lease Cost As of December 31, 2022 As of December 31, 2021 Operating lease right-of-use asset $ 462,874 $ 565,877 Operating lease liability, current $ 118,235 $ 100,139 Operating lease liability, long-term $ 376,851 $ 486,226 Remaining lease term 4.1 5.1 Discount rate 3.63 % 3.63 % Cash paid during the year for amounts included in the measurement of lease liabilities is as follows: For the Twelve Months Ended December 31, 2022 For the Twelve Months Ended December 31, 2021 Operating cash outflow from operating lease $ 111,204 $ 257,961 |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum under non-cancellable operating leases as of December 31, 2022 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2023 $ 124,897 2024 128,643 2025 132,503 2026 136,473 Thereafter 11,654 Total minimum lease payments 534,170 Less imputed interest (39,084 ) Present value of minimum lease payments $ 495,086 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory 2022 2021 December 31, December 31, 2022 2021 Finished goods $ 270,555 $ 272,199 Work in progress 155 1,050 Raw materials 148,608 196,456 Allowance for excess & obsolete inventory (70,907 ) (91,379 ) Inventory, net $ 348,411 $ 378,326 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment 2022 2021 December 31, December 31, 2022 2021 Furniture and equipment $ 278,389 $ 274,472 Vehicles 15,000 15,000 Property and equipment, gross 293,389 289,472 Accumulated depreciation (224,876 ) (212,126 ) Property and equipment, net $ 68,513 $ 77,346 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: Schedule of Intangible Assets As of December 31, 2022 2021 Patents $ - $ - Website development costs 22,713 22,713 Trademarks 1,830 1,830 24,543 24,543 Accumulated amortization (22,713 ) (22,713 ) Intangible assets, net $ 1,830 $ 1,830 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities 2022 2021 December 31, December 31, 2022 2021 Accounts payable $ 311,162 $ 616,056 Sales commissions payable 25,951 27,592 Accrued payroll liabilities 465,094 322,873 Product warranty accrual 180,457 186,605 Other accrued expenses 224,594 192,463 Total $ 1,207,258 $ 1,345,589 |
Outstanding Warrants (Tables)
Outstanding Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Outstanding Warrants | |
Schedule of Outstanding Warrants to Purchase Common Stock | The following table summarizes information with respect to outstanding warrants to purchase common stock during the years ended December 31, 2022 and 2021: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Warrants Average Exercise Remaining Life Aggregate Intrinsic Outstanding Exercisable Price In Months Value Outstanding at December 31, 2020 50,417 50,417 $ 37.50 6 - Granted 222,719 222,719 $ 9.59 36 - Exercised - - $ 0.00 - - Expired (50,417 ) (50,417 ) $ 37.50 - - Outstanding at December 31, 2021 227,719 227,719 $ 9.59 33 $ 0 Granted 7,566,435 7,566,435 $ 4.89 50 * $ 141,434 Exercised (170,382 ) (170,382 ) $ 0.01 - * ($ 141,434 ) Expired - - - - - Outstanding at December 31, 2022 7,623,772 7,623,772 $ 5.14 49 - * Includes 170,382 |
Schedule of Warrants Outstanding | The following table summarizes information about warrants outstanding at December 31, 2022. Schedule of Warrants Outstanding Warrants Weighted Average Exercise price Outstanding Exercisable Months Outstanding 9.45 192,982 192,982 21 10.40 34,737 34,737 22 5.00 7,105,496 7,105,496 50 5.16 290,557 290,557 50 7,623,772 7,623,772 49 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Restricted Stock Units Activity | A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the years ended December 31, 2022 and 2021 are presented in the table below: Schedule of Restricted Stock Units Activity Number of Units Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2020 50,333 $ 19.50 $ - Granted - - $ - Vested and settled with share issuance (45,000 ) $ 18.15 $ - Forfeited/canceled (5,333 ) $ 23.10 $ - Outstanding, December 31, 2021 - $ - $ - Granted 6,734 $ 7.42 $ - Vested and settled with share issuance (3,367 ) $ 7.42 $ - Forfeited/canceled - $ - $ - Outstanding, December 31, 2022 3,367 $ 7.42 $ - |
2017 and 2021 Equity Plan [Member] | Employees And Consultants [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the stock options granted to employees and consultants under the 2017 Equity Plan and the 2021 Equity Incentive Plan during the years ended December 31, 2022 and 2021 are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2020 95,007 $ 12.45 7.1 $ - Granted 65,508 $ 9.00 10.0 $ - Exercised - $ - - $ - Forfeited (2,341 ) $ 16.83 7.0 $ - Expired - $ - - $ - Outstanding, December 31, 2021 158,174 $ 10.99 7.6 $ - Granted 53,960 $ 2.90 9.2 $ - Exercised - $ - - $ - Forfeited (20,061 ) $ 8.85 8.6 $ - Expired - $ - - $ - Outstanding, December 31, 2022 192,073 $ 8.94 7.6 $ - Exercisable, December 31, 2022 148,227 $ 9.86 7.2 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested stock options activity for employees and consultants under the 2017 Equity Plan and the 2021 Equity Plan for the years ended December 31, 2022 and 2021 are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 65,508 $ 8.85 $ - $ 575,711 Vested (23,662 ) $ 10.65 $ - $ (252,571 ) Forfeited - $ - $ - $ - Expired - $ - $ - $ - Nonvested, December 31, 2021 41,846 $ 7.65 $ - $ 320,122 Granted 53,960 $ 2.86 $ - $ 154,555 Vested (36,960 ) $ 2.68 $ - $ - Forfeited (15,000 ) $ 8.52 $ - $ - Expired - $ - $ - $ - Nonvested, December 31, 2022 43,846 $ 5.65 $ - $ 247,739 |
2017 and 2021 Equity Plan [Member] | Directors [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and 2021 Equity Plan during the years ended December 31, 2022 and 2021 are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2020 49,333 $ 10.05 4.5 $ - Granted 1,539 $ 9.75 10.0 $ - Exercised - - - $ - Forfeited/Cancelled - - - $ - Expired - - - $ - Outstanding, December 31, 2021 50,872 $ 10.02 6.6 $ - Granted 6,250 $ 4.80 9.0 $ - Exercised - - - $ - Forfeited/Cancelled - - - $ - Expired - - - $ - Outstanding, December 31, 2022 57,122 $ 9.44 6.0 $ - Exercisable, December 31, 2022 57,122 $ 9.44 6.0 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan and the 2021 Equity Plan for the years ended December 31, 2022 and 2021 are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 6,666 $ 4.35 $ 3,400 $ 29,000 Granted 1,539 $ 9.75 - $ 15,000 Vested (8,205 ) $ 5.40 $ 4,431 $ (44,000 ) Forfeited - - - $ - Expired - - - $ - Nonvested, December 31, 2021 - - - $ - Granted 6,250 $ 4.75 $ - $ 29,656 Vested (6,250 ) $ 4.75 $ - $ - Forfeited - - - $ - Expired - - - $ - Nonvested, December 31, 2022 - $ - $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of U.S Federal Statutory Income Tax Rate and Reported Provision for Income Taxes | The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported provision for income taxes are summarized as follows: Schedule of U.S Federal Statutory Income Tax Rate and Reported Provision for Income Taxes 2022 2021 Income taxes computed at the federal statutory rate $ (1,154,000 ) $ (281,000 ) States taxes, net of federal benefits (217,000 ) (53,000 ) Permanent differences 7,000 (124,000 ) True-up adjustments 164,000 9,000 Adjustment to net operating loss (30,000 ) (13,000 ) Change in valuation allowance 1,230,000 462,000 Reported income tax (benefit) expense $ - $ - |
Schedule of Deferred Tax Assets | The components of the net deferred tax assets as of December 31, 2022 and 2021 are as follows: Schedule of Deferred Tax Assets 2022 2021 Deferred tax assets: Net operating losses $ 6,474,000 $ 5,262,000 Equity compensation 252,000 177,000 Other deferred tax assets 94,000 141,000 Total deferred tax assets 6,820,000 5,580,000 Deferred tax liabilities: Other deferred tax liabilities (88,000 ) (78,000 ) Total deferred tax liabilities (88,000 ) (78,000 ) Net deferred tax assets before valuation allowance 6,732,000 5,502,000 Less valuation allowance (6,732,000 ) (5,502,000 ) Net deferred tax assets $ - $ - |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 293,389 | $ 289,472 |
Accumulated depreciation | (224,876) | (212,126) |
Property and equipment, net | $ 68,513 | 77,346 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 5 years | |
Property and equipment, gross | $ 278,389 | 274,472 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 3 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 5 years | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment useful life | 5 years | |
Property and equipment, gross | $ 15,000 | $ 15,000 |
Schedule of Revenue by Source (
Schedule of Revenue by Source (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||
Total revenue | $ 11,283,189 | $ 13,638,558 |
Equipment and Systems Sales [Member] | ||
Product Information [Line Items] | ||
Total revenue | 10,737,875 | 12,754,131 |
Engineering and Other Services [Member] | ||
Product Information [Line Items] | ||
Total revenue | 472,464 | 683,689 |
Shipping and Handling [Member] | ||
Product Information [Line Items] | ||
Total revenue | $ 72,850 | $ 200,738 |
Schedule of Remaining Performan
Schedule of Remaining Performance Obligations Expected to be Recognized (Details) | Dec. 31, 2022 USD ($) |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | |
Remaining performance obligations related to partial equipment paid contracts | 5,577,000 |
Total remaining performance obligations | 5,577,000 |
2023 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | |
Remaining performance obligations related to partial equipment paid contracts | 5,577,000 |
Total remaining performance obligations | 5,577,000 |
2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | |
Remaining performance obligations related to partial equipment paid contracts | |
Total remaining performance obligations |
Schedule of Share-based Compens
Schedule of Share-based Compensation Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Total share-based compensation expense included in consolidated statement of operations | $ 314,081 | $ 324,405 |
Cost of Sales [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 12,403 | 17,331 |
Advertising and Marketing Expenses [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 13,921 | 7,938 |
Product Development Costs [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 7,442 | 11,025 |
Selling, General and Administrative Expenses [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | $ 280,315 | $ 288,111 |
Basis of Presentation; Summar_4
Basis of Presentation; Summary of Significant Accounting Policies (Details Narrative) | 6 Months Ended | 12 Months Ended | ||||
Feb. 15, 2022 USD ($) | Jan. 27, 2022 | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Segment shares | Dec. 31, 2021 USD ($) shares | Dec. 30, 2021 shares | |
Product Information [Line Items] | ||||||
Proceeds from issuance of common stock | $ 22,000,000 | |||||
Reverse stock split description | Effective January 27, 2022, the Company issued 6,798 shares of common stock to round up partial shares resulting from the reverse share split described above | On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. | ||||
Common stock shares outstanding | shares | 7,953,974 | 1,600,835 | 240,125,224 | |||
Federal insured amount | $ 250,000 | |||||
Cash balance, amount | 18,637,000 | |||||
Cash equivalent balance, amount | 18,387,000 | |||||
Allowance for doubtful accounts | 127,233 | $ 181,942 | ||||
Goodwill and intangible asset impairment | $ 631,064 | 631,064 | ||||
Contract with customer liability current | 4,338,570 | 2,839,838 | ||||
Revenue recognized | $ 2,318,935 | $ 3,358,578 | ||||
Revenue recognized, percentage | 82% | 90% | ||||
Revenue remaining performance obligation | $ 5,577,000 | |||||
Product warranty description | The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue | |||||
Product warranty accrual classified current | $ 180,457 | $ 186,605 | ||||
Product development costs | 319,987 | 469,703 | ||||
Share based compensation cost | 314,081 | $ 324,405 | ||||
Share based compensation, incentive compensation awards | $ 89,970 | |||||
Number of operating segments | Segment | 1 | |||||
Warrant [Member] | ||||||
Product Information [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 7,876,334 | 115,684 | ||||
Restricted Stock Units (RSUs) [Member] | ||||||
Product Information [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 7,876,334 | 115,684 | ||||
Share-Based Payment Arrangement, Option [Member] | ||||||
Product Information [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 7,876,334 | 115,684 | ||||
Series B Preferred Stock [Member] | ||||||
Product Information [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 7,876,334 | 115,684 | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 27% | 24% | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 26% | 10% | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 11% | 10% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 57% | 68% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 43% | 23% | ||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 30% | 29% | ||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 17% | 11% | ||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier Three [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 16% | 10% | ||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier Four [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 11% | |||||
One Customer [Member] | ||||||
Product Information [Line Items] | ||||||
Revenue remaining performance obligation | $ 35,000 | |||||
Board Of Directors [Member] | ||||||
Product Information [Line Items] | ||||||
Share based compensation cost | $ 83,625 | |||||
Share based compensation, incentive compensation awards | 78,938 | |||||
Inventory Valuation and Obsolescence [Member] | ||||||
Product Information [Line Items] | ||||||
Inventory adjustments | $ 70,907 | $ 91,379 |
Schedule of Lease Cost (Details
Schedule of Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease right-of-use asset | $ 462,874 | $ 565,877 |
Operating lease liability, current | 118,235 | 100,139 |
Operating lease liability, long-term | $ 376,851 | $ 486,226 |
Remaining lease term | 4 years 1 month 6 days | 5 years 1 month 6 days |
Discount rate | 3.63% | 3.63% |
Operating cash outflow from operating lease | $ 111,204 | $ 257,961 |
Schedule of Future Annual Minim
Schedule of Future Annual Minimum Lease Payments (Details) | Dec. 31, 2022 USD ($) |
Leases | |
2023 | $ 124,897 |
2024 | 128,643 |
2025 | 132,503 |
2026 | 136,473 |
Thereafter | 11,654 |
Total minimum lease payments | 534,170 |
Less imputed interest | (39,084) |
Present value of minimum lease payments | $ 495,086 |
Leases (Details Narrative)
Leases (Details Narrative) | 12 Months Ended | ||||||||||||
Jul. 28, 2021 USD ($) ft² | Jul. 27, 2021 USD ($) ft² | Jul. 01, 2021 USD ($) | Apr. 30, 2021 USD ($) ft² | Sep. 02, 2019 USD ($) | Sep. 02, 2018 USD ($) | Jan. 02, 2018 USD ($) ft² | Jun. 27, 2017 USD ($) ft² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 02, 2019 USD ($) | Jul. 31, 2017 USD ($) | |
Area of land | ft² | 6,900 | ||||||||||||
Lease rental expense | $ 11,978 | $ 5,989 | |||||||||||
Increase in rent percent | 3% | ||||||||||||
Operating lease right-of-use asset | $ 462,874 | $ 565,877 | |||||||||||
Operating lease liability | 495,086 | ||||||||||||
The Boulder Facility Lease [Member] | |||||||||||||
Area of land | ft² | 18,952 | 12,700 | |||||||||||
Lease rental expense | $ 20,135 | $ 19,549 | $ 18,979 | $ 12,967 | |||||||||
Operating lease term description | until August 31, 2018 | until January 1, 2018 | |||||||||||
Security deposit | $ 51,000 | ||||||||||||
Payment to deposit | $ 1,600 | ||||||||||||
The Boulder Facility Lease [Member] | Accounting Standards Update 2016-02 [Member] | |||||||||||||
Unamortized amount of tenant improvement allowance | $ 81,481 | ||||||||||||
Operating lease right-of-use asset | 714,416 | ||||||||||||
Operating lease liability | 822,374 | ||||||||||||
The Boulder Facility Lease [Member] | Accounting Standards Update 2016-02 [Member] | Minimum [Member] | |||||||||||||
Tenant improvements | $ 100,000 | ||||||||||||
Agreement with Landlord [Member] | |||||||||||||
Lease rental expense | $ 52,600 | ||||||||||||
Operating lease term description | The deposit required on the lease will be reduced to approximately $32,000 and will be payable in 12 monthly installments from January through December of 2021. Further, the landlord also agreed to defer payment of fifty percent of the three months of lease payments (base rent only) for the period July to September 2020. The deferred lease payments amount to approximately $30,000 and were payable in 12 monthly installments from January to December 2021 | ||||||||||||
Boulder Facility Lease Termination Agreement [Member] | |||||||||||||
Area of land | ft² | 18,952 | ||||||||||||
Gain on lease extinguishment | $ 15,832 | ||||||||||||
New Facility Lease [Member] | |||||||||||||
Area of land | ft² | 11,491 | ||||||||||||
Lease rental expense | $ 10,055 | ||||||||||||
Operating lease term description | The New Facility lease commenced on November 1, 2021 and continues through January 31, 2027 | ||||||||||||
Increase in rent percent | 3% | ||||||||||||
Security deposit | $ 14,747 | ||||||||||||
Operating lease liability | $ 582,838 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 270,555 | $ 272,199 |
Work in progress | 155 | 1,050 |
Raw materials | 148,608 | 196,456 |
Allowance for excess & obsolete inventory | (70,907) | (91,379) |
Inventory, net | $ 348,411 | $ 378,326 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||
Overhead expenses | $ 12,770 | $ 13,589 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expenses | $ 32,442 | $ 64,937 |
Property, Plant and Equipment [Member] | Cost of Sales [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expenses | 4,856 | 6,109 |
Property, Plant and Equipment [Member] | Inventory [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expenses | $ 1,214 | $ 1,527 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 24,543 | $ 24,543 |
Accumulated amortization | (22,713) | (22,713) |
Intangible assets, net | 1,830 | 1,830 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | ||
WebSite Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 22,713 | 22,713 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 1,830 | $ 1,830 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 0 | $ 434 |
Written-off intangible assets | $ 0 | $ 8,110 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets amortization period | 14 years | |
WebSite Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets amortization period | 5 years |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 311,162 | $ 616,056 |
Sales commissions payable | 25,951 | 27,592 |
Accrued payroll liabilities | 465,094 | 322,873 |
Product warranty accrual | 180,457 | 186,605 |
Other accrued expenses | 224,594 | 192,463 |
Total | $ 1,207,258 | $ 1,345,589 |
Note Payable and Accrued Inte_2
Note Payable and Accrued Interest (Details Narrative) - USD ($) | 12 Months Ended | ||
Nov. 30, 2021 | Feb. 10, 2021 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Note payable principal amount | $ 514,200 | $ 514,200 | |
Loan interest rate | 1% | ||
Loan due date | Feb. 05, 2026 | ||
Accrued interest | $ 2,832 | $ 2,832 |
Temporary Equity (Details Narra
Temporary Equity (Details Narrative) - USD ($) | 12 Months Ended | ||||||||
Feb. 16, 2022 | Feb. 16, 2022 | Feb. 16, 2022 | Feb. 15, 2022 | Nov. 04, 2021 | Sep. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Temporary equity shares issued | 0 | 3,300 | |||||||
Temporary equity, stated value per share | $ 0.00001 | $ 0.00001 | |||||||
Aggregate purchase price amount | $ 3,960,000 | ||||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 1,365,000 | $ 1,260,000 | |||||||
Common stock, conversion price | $ 8.55 | ||||||||
Redemption value adjustment | $ 67,000 | ||||||||
Exercise price per share | $ 5.14 | $ 9.59 | $ 37.50 | ||||||
Recognized deemed dividend | $ 439,999 | ||||||||
Common Stock [Member] | |||||||||
Stock issued during period, shares, conversion | 362,306 | 362,306 | |||||||
Warrant [Member] | |||||||||
Number of shares vested in period | 532,688 | 532,688 | |||||||
Exercise price per share | $ 5 | $ 5 | $ 5 | ||||||
Vesting period | 5 years | ||||||||
Series B Redeemable Convertible Preferred Stock [Member] | Investor [Member] | |||||||||
Temporary equity shares issued | 3,300 | ||||||||
Temporary equity, stated value per share | $ 1,000 | ||||||||
Aggregate purchase price amount | $ 3,000,000 | ||||||||
Series B Preferred Stock [Member] | |||||||||
Dividend rate percentage | 8% | ||||||||
Common stock, conversion price | $ 8.55 | ||||||||
Percentage of preferred stock conversion provision | 4.99% | ||||||||
Probability of redemption description | Probability of Redemption: As it was considered probable the Series B Preferred stock would become redeemable outside of the Company’s control, the Series B Preferred stock was disclosed as temporary equity and was initially adjusted as of September 30, 2021 to its redemption value of 120% of the stated value of $1,000 per share, or $3,960,000 | ||||||||
Non-cash redemption value adjustment | $ 2,262,847 | ||||||||
Shares redeemed or called during period, shares | 1,650 | ||||||||
Shares redeemed or called during period, value | $ 2,016,000 | ||||||||
preferred stock prinicipal redeemed ,amount | 1,980,000 | ||||||||
Principal and accrued dividends, amount | $ 36,000 | ||||||||
Stock issued during period, shares, conversion | 1,650 | ||||||||
Conversion price reduced offering price percentage | 75% | ||||||||
Preferred stock convertible conversion price | $ 8.55 | 8.55 | 8.55 | ||||||
Offering price per share | 4.13 | 4.13 | 4.13 | $ 4.13 | |||||
Series B Preferred Stock [Member] | Maximum [Member] | |||||||||
Preferred stock convertible conversion price | 8.55 | 8.55 | 8.55 | ||||||
Series B Preferred Stock [Member] | Minimum [Member] | |||||||||
Preferred stock convertible conversion price | $ 3.0975 | $ 3.0975 | $ 3.0975 | ||||||
Series B Preferred Stock [Member] | Common Stock [Member] | |||||||||
Conversion of stock shares converted1 | 362,306 | ||||||||
Series B Preferred Stock [Member] | Warrant [Member] | |||||||||
Warrants issued | 703,069 | 703,069 | 6,572,808 | ||||||
Number of shares vested in period | 170,382 | ||||||||
Series B Preferred Stock [Member] | Warrant One [Member] | Indefinite Term [Member] | |||||||||
Number of shares vested in period | 170,382 | ||||||||
Series B Preferred Stock [Member] | Pre Funded Conversion Warrants [Member] | |||||||||
Exercise price per share | $ 0.01 | $ 0.01 | $ 0.01 |
Related Party Agreements and _2
Related Party Agreements and Transactions (Details Narrative) - Consulting Agreement [Member] - USD ($) | 12 Months Ended | ||||
Dec. 20, 2022 | Oct. 13, 2022 | Jan. 07, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||
Payments for consulting agreement | $ 19,500 | ||||
Payments for commissions | $ 9,884 | $ 42,639 | |||
Proceeds from deposits | $ 10,900 | ||||
Mr.James R. Shipley [Member] | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||
Monthly consulting fee | $ 6,500 | ||||
Chief Executive Officer [Member] | Lone Star Bioscience Inc [Member] | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||
Proceeds from deposits | $ 2,500 | $ 1,250 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Apr. 08, 2021 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | ||
Common shares issued in settlement of legal dispute, value | $ 67,000 | $ 67,000 |
Other Expense [Member] | ||
Loss Contingencies [Line Items] | ||
Cost of settelement | $ 107,000 | |
Common Stock [Member] | ||
Loss Contingencies [Line Items] | ||
Common shares issued in settlement of legal dispute, shares | 6,667 | 6,667 |
Common shares issued in settlement of legal dispute, value |
Preferred and Common Stock (Det
Preferred and Common Stock (Details Narrative) - USD ($) | 12 Months Ended | |||||||||||||||||||
Jan. 17, 2023 | Jan. 03, 2023 | Jun. 21, 2022 | Feb. 16, 2022 | Feb. 16, 2022 | Feb. 16, 2022 | Feb. 15, 2022 | Jan. 27, 2022 | Jan. 17, 2022 | Nov. 24, 2021 | Nov. 04, 2021 | Sep. 28, 2021 | Apr. 08, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 30, 2021 | Jan. 16, 2022 | Nov. 03, 2021 | Nov. 02, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, shares authorized | 25,000,000 | 150,000,000 | ||||||||||||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | ||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||||||||||||
Shares of restricted stock award | 169,530 | 7,719 | ||||||||||||||||||
Share-Based Payment Arrangement, Plan Modification, Incremental Cost | $ 89,970 | |||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 39,368 | |||||||||||||||||||
Temporary equity, shares outstanding | 0 | 3,300 | ||||||||||||||||||
Prefunded conversion warrants | 170,382 | |||||||||||||||||||
Common shares and conversion of series B preferred stock | $ 1,980,000 | |||||||||||||||||||
Exercise price per share | $ 5.14 | $ 9.59 | $ 37.50 | |||||||||||||||||
Common stock, shares authorized | 200,000,000 | 850,000,000 | 850,000,000 | 350,000,000 | ||||||||||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | ||||||||||||||||||
Reverse stock split description | Effective January 27, 2022, the Company issued 6,798 shares of common stock to round up partial shares resulting from the reverse share split described above | On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. | ||||||||||||||||||
Common stock, shares outstanding | 7,953,974 | 1,600,835 | 240,125,224 | |||||||||||||||||
Net proceeds from sale of common stock | $ 22,000,000 | |||||||||||||||||||
Common stock, shares issued | 7,953,974 | 1,600,835 | ||||||||||||||||||
Common shares issued in settlement of legal dispute, value | $ 67,000 | $ 67,000 | ||||||||||||||||||
Gain (Loss) Related to Litigation Settlement | $ 28,080 | |||||||||||||||||||
2021 Plan [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares of restricted stock award | 6,803 | 6,803 | ||||||||||||||||||
2021 Equity Plan [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares of restricted stock award | 3,367 | |||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares of restricted stock award | 2,802 | 2,802 | ||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 21,015 | $ 21,015 | ||||||||||||||||||
Stock issued during period, shares, conversion | 362,306 | 362,306 | ||||||||||||||||||
Common shares and conversion of series B preferred stock | $ 4 | |||||||||||||||||||
Common stock, shares authorized | 200,000,000 | 850,000,000 | ||||||||||||||||||
Common stock, shares outstanding | 8,076,372 | |||||||||||||||||||
Common stock, shares issued | 8,076,372 | |||||||||||||||||||
Common shares issued in settlement of legal dispute, shares | 6,667 | 6,667 | ||||||||||||||||||
Common shares issued in settlement of legal dispute, value | ||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Number of shares vested in period | 532,688 | 532,688 | ||||||||||||||||||
Exercise price per share | $ 5 | $ 5 | $ 5 | |||||||||||||||||
Vesting period | 5 years | |||||||||||||||||||
2022 Investor Warrants [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Exercise price per share | $ 5 | |||||||||||||||||||
Number of warrant issuance | 5,811,138 | |||||||||||||||||||
Series B Preferred Shares Conversion Warrants [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Stock issued during period, shares, conversion | 532,688 | |||||||||||||||||||
Exercise price per share | $ 5 | $ 5 | $ 5 | $ 5 | ||||||||||||||||
Preferred Class B [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, shares issued | 3,300 | |||||||||||||||||||
Preferred stock, shares outstanding | 3,300 | |||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||||||||
Preferred stock, shares outstanding | 42,030,331 | 0 | 0 | |||||||||||||||||
Shares of restricted stock award | 42,303,331 | 42,030,331 | ||||||||||||||||||
Share-Based Payment Arrangement, Plan Modification, Incremental Cost | $ 20,595 | |||||||||||||||||||
Shares redeemed or called during period, value | $ 420 | |||||||||||||||||||
Dividends accrued on preferred stock | $ 67,448 | |||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares of restricted stock award | 2,802 | |||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, par value | $ 1,000 | |||||||||||||||||||
Preferred stock, shares issued | 0 | |||||||||||||||||||
Preferred stock, shares outstanding | 0 | |||||||||||||||||||
Shares redeemed or called during period, value | $ 2,016,000 | |||||||||||||||||||
Temporary equity, shares outstanding | 0 | 3,300 | ||||||||||||||||||
Stock repurchased during period, value | $ 3,300,000 | |||||||||||||||||||
Temporary equity aggregate amount of redemption requirement | $ 3,000,000 | |||||||||||||||||||
Shares redeemed or called during period, shares | 1,650 | |||||||||||||||||||
preferred stock prinicipal redeemed ,amount | $ 1,980,000 | |||||||||||||||||||
Principal and accrued dividends, amount | $ 36,000 | |||||||||||||||||||
Stock issued during period, shares, conversion | 1,650 | |||||||||||||||||||
Common shares and conversion of series B preferred stock | $ 362,306 | |||||||||||||||||||
Number of shares issued upon conversion | 1,650 | |||||||||||||||||||
Series B Preferred Stock [Member] | Maximum [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Prefunded conversion warrants | 192,982 | |||||||||||||||||||
Series B Preferred Stock [Member] | Purchase Agreement [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Stock repurchased during period, shares | 3,300 | |||||||||||||||||||
Series B Preferred Stock [Member] | Common Stock [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Conversion of stock shares converted1 | 362,306 | |||||||||||||||||||
Series B Preferred Stock [Member] | Warrant [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Warrants issued | 703,069 | 703,069 | 6,572,808 | |||||||||||||||||
Number of shares vested in period | 170,382 | |||||||||||||||||||
Series B Preferred Stock [Member] | Warrant One [Member] | Indefinite Term [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Number of shares vested in period | 170,382 | |||||||||||||||||||
Series B Preferred Stock [Member] | Pre Funded Conversion Warrants [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Exercise price per share | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||||||
Board Of Directors [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, shares authorized | 25,000,000 | 150,000,000 | ||||||||||||||||||
Share-Based Payment Arrangement, Plan Modification, Incremental Cost | $ 78,938 | |||||||||||||||||||
Directors [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Warrants issued | 3,367 | |||||||||||||||||||
Directors [Member] | Restricted Stock Units (RSUs) [Member] | 2021 Equity Plan [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Number of shares vested in period | 119,032 | |||||||||||||||||||
Directors [Member] | Restricted Stock Units (RSUs) [Member] | 2021 Equity Plan [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Warrants issued | 3,366 | |||||||||||||||||||
Number of shares vested in period | 3,366 | 119,032 | ||||||||||||||||||
Chief Executive Officer [Member] | 2021 Equity Incentive Plan [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Value of restricted stock award | $ 50,000 | $ 50,000 |
Schedule of Outstanding Warrant
Schedule of Outstanding Warrants to Purchase Common Stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Outstanding Warrants | |||
Warrants Outstanding, Beginning Balance | 227,719 | 50,417 | |
Warrants Exercisable, Beginning Balance | 227,719 | 50,417 | |
Weighted Average Exercise Price, Beginning Balance | $ 9.59 | $ 37.50 | |
Weighted Average Life of Outstanding Warrants in Months, Beginning Balance | 33 months | 6 months | |
Aggregate Intrinsic Value, Beginning Balance | |||
Warrants, Issued | 222,719 | ||
Warrants, Granted | 7,566,435 | 222,719 | |
Weighted Average Exercise Price, Issued | $ 9.59 | ||
Weighted Average Life of Outstanding Warrants in Months, Issued | 36 months | ||
Aggregate Intrinsic Value, Issued | |||
Warrants, Exercised | (170,382) | ||
Warrants, Exercised | (170,382) | ||
Weighted Average Exercise Price, Exercised | $ 0.01 | $ 0 | |
Weighted Average Remaining Life, Exercised | [1] | ||
Aggregate Intrinsic Value, Exercised | |||
Warrants, Expired | (50,417) | ||
Warrants, Expired | (50,417) | ||
Weighted Average Exercise Price, Expired | $ 37.50 | ||
Aggregate Intrinsic Value, Expired | |||
Aggregate Intrinsic Value, Beginning Balance | $ 0 | ||
Warrants, Granted | 7,566,435 | ||
Weighted Average Exercise Price, Granted | $ 4.89 | ||
Weighted Average Life of Outstanding Warrants in Months, Granted | [1] | 50 months | |
Aggregate Intrinsic Value, Granted | $ 141,434 | ||
Aggregate Intrinsic Value, Exercised | $ 141,434 | ||
Warrants, Expired | |||
Aggregate Intrinsic Value, Expired | |||
Warrants Outstanding, Ending Balance | 7,623,772 | 227,719 | |
Warrants Exercisable, Ending Balance | 7,623,772 | 227,719 | |
Weighted Average Exercise Price, Ending Balance | $ 5.14 | $ 9.59 | |
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 49 months | ||
Aggregate Intrinsic Value, Ending Balance | $ 0 | ||
[1]Includes 170,382 |
Schedule of Outstanding Warra_2
Schedule of Outstanding Warrants to Purchase Common Stock (Details) (Parenthetical) | Dec. 31, 2022 shares |
Indefinite Life [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Warrants | 170,382 |
Schedule of Warrants Outstandin
Schedule of Warrants Outstanding (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 5.14 | $ 9.59 | $ 37.50 |
Warrants Outstanding | 7,623,772 | 227,719 | 50,417 |
Warrants Exercisable | 7,623,772 | 227,719 | 50,417 |
Weighted Average Life of Outstanding Warrants in Months | 49 months | ||
Warrants Range [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 9.45 | ||
Warrants Outstanding | 192,982 | ||
Warrants Exercisable | 192,982 | ||
Weighted Average Life of Outstanding Warrants in Months | 21 months | ||
Warrants Range One [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 10.40 | ||
Warrants Outstanding | 34,737 | ||
Warrants Exercisable | 34,737 | ||
Weighted Average Life of Outstanding Warrants in Months | 22 months | ||
Warrants Range Two [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 5 | ||
Warrants Outstanding | 7,105,496 | ||
Warrants Exercisable | 7,105,496 | ||
Weighted Average Life of Outstanding Warrants in Months | 50 months | ||
Warrants Range Three [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 5.16 | ||
Warrants Outstanding | 290,557 | ||
Warrants Exercisable | 290,557 | ||
Weighted Average Life of Outstanding Warrants in Months | 50 months |
Outstanding Warrants (Details N
Outstanding Warrants (Details Narrative) - USD ($) | 12 Months Ended | |||||||||
Jun. 21, 2022 | Feb. 16, 2022 | Feb. 15, 2022 | Feb. 15, 2022 | Nov. 04, 2021 | Sep. 28, 2021 | Dec. 31, 2022 | Dec. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.14 | $ 9.59 | $ 37.50 | |||||||
Stock Issued During Period, Shares, New Issues | 169,530 | 7,719 | ||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 170,382 | |||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | ||||||||
Stock Issued During Period, Value, New Issues | $ 39,368 | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Shares Issued, Price Per Share | $ 4.13 | $ 4.13 | $ 4.13 | |||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1,650 | |||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | |||||||||
Series B Preferred Stock [Member] | Maximum [Member] | ||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 192,982 | |||||||||
Series B Preferred Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9.45 | |||||||||
Stock Issued During Period, Shares, New Issues | 3,300 | |||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | |||||||||
Stock Issued During Period, Value, New Issues | $ 3,300,000 | |||||||||
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | $ 3,000,000 | |||||||||
Series B Preferred Stock [Member] | Securities Purchase Agreement [Member] | Maximum [Member] | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 192,982 | |||||||||
2022 Investor Warrants [Member] | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,811,138 | 5,811,138 | ||||||||
Proceeds from Issuance of Warrants | $ 24,000,000 | |||||||||
Shares Issued, Price Per Share | $ 4.13 | $ 4.13 | ||||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5 | $ 5 | ||||||||
2022 Underwriterwarrants [Member] | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,811,138 | 5,811,138 | ||||||||
Proceeds from Issuance of Warrants | $ 24,000,000 | |||||||||
Shares Issued, Price Per Share | $ 4.13 | $ 4.13 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.1625 | $ 5.1625 | ||||||||
Stock Issued During Period, Shares, New Issues | 290,557 | |||||||||
2022 OverAllotment Warrants [Member] | ||||||||||
Proceeds from Issuance of Warrants | $ 24,000,000 | |||||||||
Shares Issued, Price Per Share | $ 4.13 | $ 4.13 | ||||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5 | $ 5 | ||||||||
Stock Issued During Period, Shares, New Issues | 761,670 | |||||||||
Exercise price, per share | 0.01 | $ 0.01 | ||||||||
Common Stock [Member] | ||||||||||
Stock Issued During Period, Shares, New Issues | 2,802 | 2,802 | ||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 362,306 | 362,306 | ||||||||
Stock Issued During Period, Value, New Issues | $ 21,015 | $ 21,015 | ||||||||
Series B Preferred Shares Pre Funded Conversion Warrants [Member] | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||||||||
Stock Issued During Period, Shares, New Issues | 169,530 | |||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 170,382 | |||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 170,382 | |||||||||
Series B Preferred Shares Conversion Warrants [Member] | ||||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5 | $ 5 | $ 5 | |||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 532,688 | |||||||||
Placement Agent Warrants [Member] | Private Placement [Member] | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 10.40 | |||||||||
Class of Warrant or Right, Outstanding | 34,737 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Feb. 15, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Options, Exercised | 761,670 | ||
Employees And Consultants [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Options, Granted | 53,960 | 65,508 | |
Employees And Consultants [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Options, Outstanding Beginning | 158,174 | 95,007 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 10.99 | $ 12.45 | |
Weighted Average Remaining Contractual Term, Beginning | 7 years 7 months 6 days | 7 years 1 month 6 days | |
Aggregate Intrinsic Value, Outstanding Beginning | |||
Number of Options, Granted | 53,960 | 65,508 | |
Weighted Average Exercise Price, Granted | $ 2.90 | $ 9 | |
Weighted Average Remaining Contractual Term, Granted | 9 years 2 months 12 days | 10 years | |
Number of Options, Exercised | |||
Weighted Average Exercise Price, Exercised | |||
Number of Options, Forfeited/Cancelled | (20,061) | (2,341) | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ 8.85 | $ 16.83 | |
Weighted Average Remaining Contractual Term, Forfeited | 8 years 7 months 6 days | 7 years | |
Number of Options, Expired | |||
Weighted Average Exercise Price, Expired | |||
Number of Options, Outstanding Ending | 192,073 | 158,174 | |
Weighted Average Exercise Price, Outstanding Ending | $ 8.94 | $ 10.99 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years 7 months 6 days | ||
Aggregate Intrinsic Value, Outstanding Ending | |||
Number of Options, Exercisable Ending | 148,227 | ||
Weighted Average Exercise Price, Exercisable Ending | $ 9.86 | ||
Aggregate Intrinsic Value, Exercisable Ending | |||
Employees And Consultants [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Weighted Average Remaining Contractual Term, Exercisable Ending | 7 years 2 months 12 days | ||
Directors [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Options, Granted | 6,250 | 1,539 | |
Directors [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Options, Outstanding Beginning | 50,872 | 49,333 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 10.02 | $ 10.05 | |
Weighted Average Remaining Contractual Term, Beginning | 6 years 7 months 6 days | 4 years 6 months | |
Aggregate Intrinsic Value, Outstanding Beginning | |||
Number of Options, Granted | 6,250 | 1,539 | |
Weighted Average Exercise Price, Granted | $ 4.80 | $ 9.75 | |
Weighted Average Remaining Contractual Term, Granted | 9 years | 10 years | |
Number of Options, Exercised | |||
Weighted Average Exercise Price, Exercised | |||
Number of Options, Forfeited/Cancelled | |||
Weighted Average Exercise Price, Forfeited/Cancelled | |||
Number of Options, Expired | |||
Weighted Average Exercise Price, Expired | |||
Number of Options, Outstanding Ending | 57,122 | 50,872 | |
Weighted Average Exercise Price, Outstanding Ending | $ 9.44 | $ 10.02 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 6 years | ||
Aggregate Intrinsic Value, Outstanding Ending | |||
Number of Options, Exercisable Ending | 57,122 | ||
Weighted Average Exercise Price, Exercisable Ending | $ 9.44 | ||
Weighted Average Remaining Contractual Term, Exercisable Ending | 6 years | ||
Aggregate Intrinsic Value, Exercisable Ending |
Summary of Non-vested Non-quali
Summary of Non-vested Non-qualified Stock Option Activity (Details) - 2017 Equity Plan and 2021 Equity Plan [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employees And Consultants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options Nonvested, Beginning | 41,846 | |
Weighted Average Grant-Date Fair Value, Nonvested, Beginning | $ 7.65 | |
Aggregated Intrinsic Value, Nonvested Beginning | ||
Grant Date Fair Value Nonvested, Beginning | $ 320,122 | |
Number of Options Nonvested, Granted | 53,960 | 65,508 |
Weighted Average Grant-Date Fair Value, Nonvested, Granted | $ 2.86 | $ 8.85 |
Number of Options Nonvested, Vested | $ 154,555 | $ 575,711 |
Number of Options Nonvested, Vested | (36,960) | (23,662) |
Weighted Average Grant-Date Fair Value, Nonvested, Vested | $ 2.68 | $ 10.65 |
Grant Date Fair Value Nonvested, Vested | $ (252,571) | |
Number of Options Nonvested, Forfeited | (15,000) | |
Weighted Average Grant-Date Fair Value, Nonvested, Forfeited | $ 8.52 | |
Grant Date Fair Value Nonvested, Forfeited/Cancelled | ||
Number of Options Nonvested, Expired | ||
Weighted Average Grant-Date Fair Value, Nonvested, Expired | ||
Grant Date Fair Value Nonvested, Expired | ||
Number of Options Nonvested, Ending | 43,846 | 41,846 |
Weighted Average Grant-Date Fair Value, Ending | $ 5.65 | $ 7.65 |
Aggregated Intrinsic Value, Nonvested Ending | ||
Grant Date Fair Value Nonvested, Ending | $ 247,739 | $ 320,122 |
Directors [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options Nonvested, Beginning | 6,666 | |
Weighted Average Grant-Date Fair Value, Nonvested, Beginning | $ 4.35 | |
Aggregated Intrinsic Value, Nonvested Beginning | $ 3,400 | |
Grant Date Fair Value Nonvested, Beginning | $ 29,000 | |
Number of Options Nonvested, Granted | 6,250 | 1,539 |
Weighted Average Grant-Date Fair Value, Nonvested, Granted | $ 4.75 | $ 9.75 |
Number of Options Nonvested, Vested | $ (6,250) | $ 15,000 |
Number of Options Nonvested, Vested | (8,205) | |
Weighted Average Grant-Date Fair Value, Nonvested, Vested | $ 4.75 | $ 5.40 |
Grant Date Fair Value Nonvested, Vested | ||
Number of Options Nonvested, Forfeited | ||
Weighted Average Grant-Date Fair Value, Nonvested, Forfeited | ||
Number of Options Nonvested, Expired | ||
Weighted Average Grant-Date Fair Value, Nonvested, Expired | ||
Number of Options Nonvested, Ending | ||
Weighted Average Grant-Date Fair Value, Ending | ||
Aggregated Intrinsic Value, Nonvested Ending | ||
Grant Date Fair Value Nonvested, Ending | ||
Aggregated Intrinsic Value, Nonvested Granted | ||
Aggregated Intrinsic Value, Nonvested Vested | 4,431 | |
Grant Date Fair Value Nonvested, Vested | $ (44,000) | |
Grant Date Fair Value Nonvested, Granted | $ 29,656 |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Aggregate Intrinsic Value, Beginning Balance | $ 0 | |
Aggregate Intrinsic Value, Ending Balance | $ 0 | |
2017 Equity Incentive Plan [Member] | Employees, Directors and Consultants [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Units Outstanding, beginning | 50,333 | |
Weighted Average Grant-Date Fair Value Outstanding, Beginning | $ 19.50 | |
Aggregate Intrinsic Value, Beginning Balance | ||
Number of Units, Granted | 6,734 | |
Weighted Average Grant-Date Fair Value, Granted | $ 7.42 | |
Number of Units, Vested and settled with share issuance | (3,367) | (45,000) |
Weighted Average Grant-Date Fair Value, Vested and settled with share issuance | $ 7.42 | $ 18.15 |
Number of Units, Forfeited/canceled | (5,333) | |
Weighted Average Grant-Date Fair Value, Forfeited/Canceled | $ 23.10 | |
Number of Units, Forfeited/canceled | 5,333 | |
Number of Units Outstanding, ending | 3,367 | |
Weighted Average Grant-Date Fair Value Outstanding,ending | $ 7.42 | |
Aggregate Intrinsic Value, Ending Balance |
Equity Incentive Plans (Details
Equity Incentive Plans (Details Narrative) - USD ($) | 12 Months Ended | |||||||||||||
Jan. 17, 2023 | Jan. 03, 2023 | Jun. 21, 2022 | Jan. 17, 2022 | Jan. 17, 2022 | Jan. 03, 2022 | Nov. 24, 2021 | Aug. 20, 2021 | Aug. 20, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 30, 2021 | Mar. 22, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares of restricted stock award | 169,530 | 7,719 | ||||||||||||
Share based compensation | $ 307,736 | $ 369,214 | ||||||||||||
Minimum [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock price volatility | 157.27% | |||||||||||||
Fair value assumptions of expected term | 5 years | |||||||||||||
Interest rate | 1.52% | |||||||||||||
Maximum [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock price volatility | 158.70% | |||||||||||||
Fair value assumptions of expected term | 10 years | |||||||||||||
Interest rate | 2.73% | |||||||||||||
2017 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of options to purchase shares | 333,333 | |||||||||||||
Number of shares authorized | 333,333 | |||||||||||||
2017 Equity Incentive Plan [Member] | Non Qualified Stock Option [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of option remain outstanding | 147,177 | |||||||||||||
Shares available for future equity awards | 22,464 | |||||||||||||
2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares available for future equity awards | 551,113 | |||||||||||||
Number of shares grant in period | 666,667 | |||||||||||||
Shares of restricted stock award | 3,367 | |||||||||||||
Expected term years | 2 years | |||||||||||||
Number of shares authorized | 666,667 | |||||||||||||
Unrecognized share-based compensation | $ 65,087 | |||||||||||||
2021 Equity Plan [Member] | Non Qualified Stock Option [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of option remain outstanding | 61,201 | |||||||||||||
2021 Equity Plan [Member] | Incentive Stock Option [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of option remain outstanding | 40,816 | |||||||||||||
2021 Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares of restricted stock award | 6,803 | 6,803 | ||||||||||||
Non-Qualified Stock Options [Member] | 2021 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Share based compensation arrangement payment | $ 15,000 | |||||||||||||
Non-Qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock option plan expense | $ 18,942 | |||||||||||||
Non-Qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Unrecognized share-based compensation | 63,770 | |||||||||||||
Non-Qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | Employees And Consultants [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Share based compensation | $ 149,081 | $ 169,746 | ||||||||||||
Non-Qualified Stock Options [Member] | 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Expected term years | 10 years | 10 years | ||||||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Vesting rights description | Vesting of the RSUs was as follows: (i) 50% at the time of grant, and (ii) 50% on the first anniversary of the grant date | |||||||||||||
Restricted Stock Units (RSUs) [Member] | 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of option remain outstanding | 3,367 | |||||||||||||
Restricted Stock [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares issued | 163,692 | |||||||||||||
Restricted Stock [Member] | 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares issued | 10,170 | |||||||||||||
Incentive Qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock option plan expense | $ 130,139 | |||||||||||||
Director [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Management fee expense | $ 15,000 | |||||||||||||
Director [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Share based compensation | $ 29,656 | $ 21,174 | ||||||||||||
Number of options to purchase shares | 6,250 | 8,205 | ||||||||||||
Director [Member] | Non-Qualified Stock Options [Member] | 2021 Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of options to purchase shares | 6,250 | 1,539 | ||||||||||||
Number of options to purchase shares | $ 9.75 | $ 9.75 | ||||||||||||
Director [Member] | Pre Uplist Phase [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Management fee expense | $ 15,000 | |||||||||||||
Director [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Share based compensation arrangement payment | 25,000 | |||||||||||||
Director [Member] | Post Uplist [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Management fee expense | 25,000 | |||||||||||||
Board of Directors Chairman [Member] | Non-Qualified Stock Options [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Share based compensation arrangement payment | $ 7,500 | |||||||||||||
Audit Committee Chairman [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Management fee expense | 10,000 | |||||||||||||
Committee Chairman [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Management fee expense | $ 5,000 | |||||||||||||
Employees [Member] | 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares, granted | 22,167 | |||||||||||||
Number of share awards granted | $ 5,000 | |||||||||||||
Directors [Member] | 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares, granted | 6,250 | |||||||||||||
Directors [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares, granted | 6,250 | 1,539 | ||||||||||||
Number of options to purchase shares | 8,205 | |||||||||||||
Directors [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of option remain outstanding | 57,122 | 50,872 | 49,333 | |||||||||||
Shares, granted | 6,250 | 1,539 | ||||||||||||
Expected term years | 6 years 7 months 6 days | 4 years 6 months | ||||||||||||
Exercise price per share | $ 4.80 | $ 9.75 | ||||||||||||
Directors [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares granted | 3,367 | |||||||||||||
Directors [Member] | Restricted Stock Units (RSUs) [Member] | 2021 Equity Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares vested in period | 119,032 | |||||||||||||
Unrecognized share based compensation | $ 1,317 | |||||||||||||
Directors [Member] | Restricted Stock Units (RSUs) [Member] | 2021 Equity Plan [Member] | Subsequent Event [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares vested in period | 3,366 | 119,032 | ||||||||||||
Number of shares granted | 3,366 | |||||||||||||
21 Employees [Member] | 2021 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Shares, granted | 31,793 | |||||||||||||
Expected term years | 10 years | |||||||||||||
Exercise price per share | $ 2.51 | |||||||||||||
Chief Executive Officer [Member] | 2021 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Value of restricted stock award | $ 50,000 | $ 50,000 | ||||||||||||
Employees, Directors and Consultants [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Share based compensation | $ 18,736 | $ 0 | ||||||||||||
Employees, Directors and Consultants [Member] | Restricted Stock Units (RSUs) [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares vested in period | 3,367 | 45,000 | ||||||||||||
Number of shares granted | 6,734 |
Schedule of U.S Federal Statuto
Schedule of U.S Federal Statutory Income Tax Rate and Reported Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income taxes computed at the federal statutory rate | $ (1,154,000) | $ (281,000) |
States taxes, net of federal benefits | (217,000) | (53,000) |
Permanent differences | 7,000 | (124,000) |
True-up adjustments | 164,000 | 9,000 |
Adjustment to net operating loss | (30,000) | (13,000) |
Change in valuation allowance | 1,230,000 | 462,000 |
Reported income tax (benefit) expense |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses | $ 6,474,000 | $ 5,262,000 |
Equity compensation | 252,000 | 177,000 |
Other deferred tax assets | 94,000 | 141,000 |
Total deferred tax assets | 6,820,000 | 5,580,000 |
Deferred tax liabilities: | ||
Other deferred tax liabilities | (88,000) | (78,000) |
Total deferred tax liabilities | (88,000) | (78,000) |
Net deferred tax assets before valuation allowance | 6,732,000 | 5,502,000 |
Less valuation allowance | (6,732,000) | (5,502,000) |
Net deferred tax assets |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |||
Feb. 16, 2022 | Feb. 15, 2022 | Dec. 31, 2022 | Dec. 31, 2017 | |
Operating loss carryforward | $ 25,949,000 | $ 14,753,000 | ||
Net operating loss carry forward expected to expire amount | $ 11,196,000 | |||
Net operating loss expiration term | 2034 through 2037 | |||
NOLs usage against taxable income, percentage | 80% | |||
NOLs carryforwards term | three-year period | |||
Proceeds from issuance of common stock | $ 22,000,000 | |||
Number of warrants issued | 290,557 | |||
Exercises in period | 761,670 | |||
Percentage of overallotment | 15% | |||
Common Stock [Member] | ||||
Number of warrants issued | 5,811,138 | |||
Warrant [Member] | ||||
Number of warrants issued | 5,811,138 | |||
Vesting period, term | 5 years | |||
Warrant [Member] | Private Placement [Member] | ||||
Number of warrants issued | 1,052,227 | |||
Number of warrants issued | 290,557 | |||
Vesting period, term | 5 years | |||
Exercise price per share | $ 5.1625 | |||
Warrant [Member] | Over-Allotment Option [Member] | ||||
Number of warrants issued | 761,670 | |||
Vesting period, term | 5 years | |||
Exercise price per share | $ 5 | |||
Ownership [Member] | ||||
Percentage of ownership change | 50% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - shares | Jan. 17, 2023 | Jan. 03, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||||
Common stock options outstanding | 7,953,974 | 1,600,835 | ||
Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock options outstanding | 8,076,372 | |||
Directors [Member] | 2021 Equity Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares vested in period | 119,032 | |||
Directors [Member] | 2021 Equity Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares vested in period | 3,366 | 119,032 |