Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 20, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
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 | 001-41276 | ||
Entity Registrant Name | SKYX Platforms Corp. | ||
Entity Central Index Key | 0001598981 | ||
Entity Tax Identification Number | 46-3645414 | ||
Entity Incorporation, State or Country Code | FL | ||
Entity Address, Address Line One | 2855 W. McNab Road | ||
Entity Address, City or Town | Pompano Beach | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33069 | ||
City Area Code | (855) | ||
Local Phone Number | 759-7584 | ||
Title of 12(b) Security | Common Stock, no par value per share | ||
Trading Symbol | SKYX | ||
Security Exchange Name | NASDAQ | ||
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 | $ 107,896,912 | ||
Entity Common Stock, Shares Outstanding | 83,119,862 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 2738 | ||
Auditor Name | M&K CPAS, PLLC | ||
Auditor Location | Houston, TX |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 6,720,543 | $ 10,426,249 |
Investments, available-for-sale | 7,373,956 | |
Inventory | 1,923,540 | 918,651 |
Prepaid expenses and other assets | 311,618 | 41,018 |
Total current assets | 16,329,657 | 11,385,918 |
Long-term assets: | ||
Furniture and equipment, net | 215,998 | 25,710 |
Restricted cash | 2,741,054 | |
Right of use assets | 23,045,293 | |
Intangibles, definite life | 662,802 | 540,033 |
Other assets | 182,306 | 2,174 |
Total long-term assets | 26,847,453 | 567,917 |
Total Assets | 43,177,110 | 11,953,835 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,845,448 | 996,731 |
Accrued expenses, related parties | 104,375 | 32,605 |
Notes payable, current | 405,931 | 404,648 |
Operating lease liabilities, current | 1,130,624 | |
Royalty obligations, current | 2,638,000 | 1,200,000 |
Convertible notes, current related parties | 950,000 | |
Convertible notes, current | 350,000 | |
Total current liabilities | 7,424,378 | 2,633,984 |
Long term liabilities: | ||
Notes payable | 4,867,004 | 5,492,572 |
Operating lease liabilities | 22,758,496 | |
Convertible notes | 350,000 | |
Convertible notes- related parties | 950,000 | |
Royalty obligations | 2,638,000 | |
Total long-term liabilities | 27,625,500 | 9,430,572 |
Total liabilities | 35,049,878 | 12,064,556 |
Commitments and Contingent Liabilities: | ||
Redeemable preferred stock - subject to redemption: $0 par value; 20,000,000 shares authorized; 880,400 and 13,256,936 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 220,099 | 3,314,233 |
Stockholders’ Equity (Deficit): | ||
Common stock and additional paid-in capital: $0 par value, 500,000,000 shares authorized; 82,907,541 and 66,295,288 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 114,039,638 | 70,880,386 |
Accumulated deficit | (106,070,358) | (74,269,898) |
Accumulated other comprehensive loss | (62,147) | |
Total stockholders’ equity (deficit) | 7,907,133 | (3,389,512) |
Non-controlling interest | (35,442) | |
Total equity (deficit) | 7,907,133 | (3,424,954) |
Total Liabilities and Stockholders’ Equity (Deficit) | $ 43,177,110 | $ 11,953,835 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Temporary equity, par value | $ 0 | $ 0 |
Temporary equity, shares authorized | 20,000,000 | 20,000,000 |
Temporary equity, shares issued | 880,400 | 13,256,936 |
Temporary equity, shares outstanding | 880,400 | 13,256,936 |
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 82,907,541 | 66,295,288 |
Common stock, shares outstanding | 82,907,541 | 66,295,288 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 32,022 | $ 43,109 |
Cost of revenues | (18,913) | (88,461) |
Gross profit (loss) | 13,109 | (45,352) |
Selling, general and administrative expenses- related party | 248,215 | |
Selling, general and administrative expenses | 26,390,076 | 5,142,731 |
Loss from operations | (26,625,182) | (5,188,083) |
Other income / (expense) | ||
Interest expense, net | (589,009) | (560,382) |
Other income - loan forgiveness | 178,250 | |
Other income | 18,051 | |
Total other expense, net | (410,759) | (542,331) |
Net loss | (27,035,941) | (5,730,414) |
Common stock issued pursuant to antidilutive provisions | 4,691,022 | |
Non-controlling interest | 35,442 | |
Preferred dividends | 38,055 | 129,456 |
Net loss attributed to common stockholders | (31,800,460) | (5,859,870) |
Other comprehensive loss: | ||
Unrealized loss on debt securities | (62,147) | |
Net comprehensive loss attributed to common stockholders | $ (31,862,607) | $ (5,859,870) |
Net loss per share - basic and diluted | $ (0.40) | $ (0.09) |
Weighted average number of common shares outstanding – basic and diluted | 79,492,181 | 64,943,703 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Common Stock Including Additional Paid in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Beginning balance, shares at Dec. 31, 2020 | 61,901,075 | |||
Balance, beginning of year at Dec. 31, 2020 | $ 56,197,957 | $ (68,410,028) | ||
Common stock issued pursuant to offerings, shares | 896,837 | |||
Common stock issued pursuant to offerings Bridge Line Ventures | 231,624 | |||
Common stock issued pursuant to services, shares | 2,922,001 | |||
Common stock issued pursuant to conversion of preferred stock, shares | 200,000 | |||
Common stock issued pursuant to exercise of options and warrants | 110,417 | 130,000 | ||
Common stock interest expense, shares | 33,334 | |||
Common stock issued pursuant to antidilutive provisions, shares | ||||
Common stock issued pursuant to offerings | $ 2,779,464 | |||
Share-based payments | 11,722,965 | |||
Common stock issued pursuant to conversion of preferred stock | 50,000 | |||
Common stock issued pursuant to antidilutive provisions | ||||
Net loss | (5,730,414) | |||
Non-controlling interest | ||||
Preferred dividends | (129,456) | |||
Other comprehensive loss | ||||
Ending balance, shares at Dec. 31, 2021 | 66,295,288 | |||
Ending balance at Dec. 31, 2021 | $ 70,880,386 | (74,269,898) | ||
Common stock issued pursuant to offerings, shares | 1,650,000 | |||
Common stock issued pursuant to offerings Bridge Line Ventures | ||||
Common stock issued pursuant to services, shares | 1,057,293 | |||
Common stock issued pursuant to conversion of preferred stock, shares | 12,376,536 | |||
Common stock issued pursuant to exercise of options and warrants | 1,193,351 | 862,301 | ||
Common stock interest expense, shares | ||||
Common stock issued pursuant to antidilutive provisions, shares | 335,073 | |||
Common stock issued pursuant to offerings | $ 20,552,000 | |||
Share-based payments | 13,959,795 | |||
Common stock issued pursuant to conversion of preferred stock | 3,094,134 | |||
Common stock issued pursuant to antidilutive provisions | 4,691,022 | (4,691,022) | ||
Net loss | (27,035,941) | |||
Non-controlling interest | (35,442) | |||
Preferred dividends | (38,055) | |||
Other comprehensive loss | (62,147) | |||
Ending balance, shares at Dec. 31, 2022 | 82,907,541 | |||
Ending balance at Dec. 31, 2022 | $ 114,039,638 | $ (106,070,358) | $ (62,147) |
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 | $ (27,035,941) | $ (5,730,414) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 883,231 | 84,287 |
Gain on forgiveness of debt | (178,250) | (10,000) |
Share-based payments | 13,959,796 | 1,463,033 |
Change in operating assets and liabilities: | ||
Inventory | (1,004,889) | |
Prepaid expenses and other assets | (270,600) | (39,474) |
Operating lease liabilities | (109,895) | |
Accretion operating lease liabilities | 377,748 | |
Other assets | (180,132) | |
Royalty obligation | (1,200,000) | (500,000) |
Accounts payable and accrued expenses | 920,487 | 104,813 |
Net cash used in operating activities | (13,838,445) | (4,627,755) |
Cash flows from investing activities: | ||
Investments, available-for-sale | (7,436,103) | |
Purchase of property and equipment | (312,689) | |
Payment of patent costs | (307,625) | (179,203) |
Net cash used in investing activities | (8,056,417) | (179,203) |
Cash flows from financing activities: | ||
Proceeds from common stock issuance | 23,100,000 | 13,039,396 |
Placement cost | (2,548,000) | |
Proceeds from exercise of options and warrants | 862,301 | 130,000 |
Proceeds from SBA - PPP notes payable | 178,235 | |
Proceeds from issuance of convertible notes | 50,000 | |
Dividends paid | (38,055) | (129,456) |
Principal repayments of notes payable | (446,035) | (343,839) |
Net cash provided by financing activities | 20,930,211 | 12,924,336 |
Change in cash and cash equivalents, and restricted cash | (964,651) | 8,117,378 |
Cash and cash equivalents at beginning of year | 10,426,249 | 2,308,871 |
Cash and cash equivalents and restricted cash at end of year | 9,461,598 | 10,426,249 |
Supplementary disclosure of non-cash financing activities: | ||
Preferred stock conversion to common | 3,094,134 | 50,000 |
Common stock issued pursuant to antidilutive provisions | 4,691,022 | |
Right-of-use assets and operating lease liabilities | 23,621,267 | |
Cash paid during the year for: | ||
Interest | 303,957 | 425,323 |
Taxes |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 ORGANIZATION AND NATURE OF OPERATIONS SKYX Platforms Corp., a corporation (the “Company”), was incorporated in Florida in May 2004. The Company maintains offices in Johns Creek, Georgia, Miami and Pompano Beach, Florida, New York City, and Guangdong Province, China. The Company has a series of advanced-safe-smart platform technologies. The Company’s first-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged-in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology, eliminates the need of touching hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years the Company has expanded the capabilities of its power-plug product, to include advanced-safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome App, through WIFI, Bluetooth Low Energy and voice control. It allows scheduling, energy savings eco mode, dimming, back-up emergency light, night light, light color changing and much more. The Company’s second-generation technology is an all-in-one safe and smart-advanced platform that is designed to enhance all-around safety and lifestyle of homes and other buildings. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the Company’s significant accounting policies: Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) under the accrual basis of accounting. Principles of Consolidation The consolidated financial statements include the accounts of SQL Technologies Corp. (f/k/a Safety Quick Lighting & Fans Corp.) and its subsidiary, SQL Lighting & Fans LLC. All intercompany accounts and transactions have been eliminated in consolidation. Non-controlling Interest The Company owns 98.8 . Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates. Reclassifications For comparability, reclassifications of certain prior-year balances were made in order to conform with current-year presentations, such as grouping of common stock and additional paid-in capital and certain expenses initially included in cost of revenues were reclassified to sales and general and administrative expenses. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At December 31, 2022 and December 31, 2021, the Company’s cash composition was follows: SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2022 December 31, 2021 Cash and cash equivalents $ 6,720,543 $ 10,426,249 Restricted cash 2,741,054 — Total cash, cash equivalents and restricted cash $ 9,461,597 $ 10,426,249 Restricted Cash The Company issued a letter of credit of $ 2.7 Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand. SCHEDULE OF INVENTORY December 31, 2022 December 31, 2021 Inventory, component parts $ 1,923,540 $ 918,651 The Company will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period. The Company tracks inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. As of December 31, 2022, and December 31, 2021, the Company has determined that no allowance is required. Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3 7 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. Operating Leases The Company leases certain office space and equipment under various leases. In addition to rent, the leases require the Company to pay for taxes, insurance, maintenance and other operating expenses. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, and operating lease liabilities in the Company’s consolidated balance sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date. The lease liability is based on the present value of lease payments over the lease term (or the remaining term in the case of existing leases at time the Company adopted ASC 842). The Company uses the implicit rate when readily determinable. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset is based on the lease liability, subject to adjustment, such as for initial direct costs, and excludes lease incentives. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. For most operating leases, expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 Securities Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses included in accumulated other comprehensive income. Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are not deemed to be other-than—temporary) reported as a component of other comprehensive income (loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based on the first-in, first-out method. The Company evaluates its available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value. Management does not believe that its investment in debt securities are impaired as of December 31, 2022. Corporate and state and local government debt securities consist of debt from relatively large corporate organizations and certain state and local governmental agencies. The Company reviews trading activity and pricing for each of the debt securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists to support Level I classification of these securities. When sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs at dates other than the measurement dates. As a result, the Company classifies its debt securities as Level I and Level II of the fair value hierarchy. Intangible Asset Patent The Company developed various patents for an installation device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States Patent and Trademark Office for these patents have been capitalized. Patent costs are amortized using the straight-line method over the related 15 The Company incurs certain legal and related costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. The Company also capitalizes legal costs incurred in the defense of the Company’s patents when it is believed that the future economic benefit of the patent will be maintained or increased, and a successful defense is probable. Capitalized patent defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of future economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome of litigation could result in a material impairment charge up to the carrying value of these assets. GE Agreements The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products. ● The first agreement is a U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expires November 30, 2023 and is generally renewed for five-year periods. Pursuant to such agreement, the Company may use the GE brand logo on certain products, including plug and play smart and standard ceiling fans and the Company’s standard and smart plug and play devices. The Company has exclusive U.S. and global rights, including Canada, Asia, Europe, China, Australia, New Zealand and India, subject to a mutually agreed to commercialization plan, to market plug and play smart and standard ceiling fans and the Company’s standard and smart plug and play devices under the GE brand. GE will assist the Company with manufacturing standards, audit of factories, audit of materials, and quality control under “Six Sigma” guidelines, as well as with public relations for products and other. ● The second agreement is a U.S. and Global Licensing and Master Service Agreement dated June 14, 2019. The agreement expires on June 14, 2024 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license Sky’s Standard and Smart plug-and-play products in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work. Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: ● Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. ● Level 2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable – related party, and GE royalty obligation, approximate their fair values because of the short maturity of these instruments. The Company’s cash, cash equivalents and restricted cash are classified as level 1 financial instruments. The Company’s investment securities are classified as Level 1 and 2, depending on liquidity of the markets in which they are trading. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported as charges or credits to income. As of December 31, 2022, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion features on Series A Preferred Stock, warrants, options, and convertible notes. These shares have been reserved for issuance by the Company’s stock transfer agent, and accordingly, no derivative liability has been calculated on these shares. Extinguishments of Liabilities The Company accounts for extinguishments of liabilities in accordance with ASC 405-20 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized. Stock-based Compensation The Company periodically issues common stock and stock options to officers, directors, employees and consultants for services rendered. The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered. In June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees subject to certain exceptions. The Company adopted ASU 2018-07 with respect to grants of shares of common stock of the Company made in January 2019. The adoption of ASU 2018-07 did not have a material impact on the consolidated financial statements. Prior to the adoption of ASU 2018-07 in January 2019, stock-based awards granted to non-employees were accounted for in accordance with ASU 505-50 – Equity-Based Payments to Non-Employees (“ASU 505-50”). ASU 505-50 measures stock-based compensation at either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is completed. The expense resulting from share-based payments is recorded in operating expenses in the statements of operations. Revenue Recognition During 2022 and 2021, the Company derived revenues from the sale of GE branded fans and lighting fixtures to large retailers through retail and online sales. The Company determines the correct revenue recognition using the following steps: Step 1: Identify the contract with a customer Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation. Trade allowances and a provision for estimated returns and other allowances are recorded at the time sales are made, considering historical and anticipated trends. A majority of our sales revenue is recognized when products are shipped from our manufacturing facilities and from our third-party logistics facility. Cost of Revenues Cost of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage and obsolescence. These costs include costs of purchased products, inbound freight, and custom duties. Selling, General and Administrative Expenses Shipping and handling costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative expenses. Additionally, selling, general and administrative expenses include marketing, professional fees, distribution, warehouse costs, and other related selling costs. Selling expenses include costs incurred in the selling of merchandise. General and administrative expenses include costs incurred in the administration or general operations of the business. Stock compensation expense consists of non-cash charges resulting from the issuance of stock units and stock options that are disclosed in the selling, general and administrative expenses and included as operating expenses. Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carrybacks and carryforwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting periods ended December 31, 2022, and 2021. Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows. Comprehensive Income or loss Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’ equity section of the statements of financial condition. Such items along with net income are components of comprehensive income. Loss Per Share Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For 2022 and 2021, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, separate computation of diluted earnings (loss) per share is not presented for the periods presented. The Company had the following anti-dilutive common stock equivalents at December, 2022 and 2021 SCHEDULE OF EARNING (LOSS) PER SHARE December 31, 2022 December 31, 2021 Stock warrants 1,908,211 2,127,895 Stock options 33,289,250 21,927,182 Convertible notes 86,668 86,668 Preferred stock 880,400 13,256,936 Total 36,164,529 29,323,681 Recently Issued Accounting Pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements. |
DEBT SECURITIES
DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
Debt Securities | |
DEBT SECURITIES | NOTE 3 DEBT SECURITIES The components of investments as of December 31, 2022 were as follows: SCHEDULE OF COMPONENTS OF INVESTMENTS Fair value level Cost Unrealized loss Carrying value Corporate debt securities Level 1 $ 3,537,556 $ (56,710 ) $ 3,480,846 State and local government debt securities Level 1 908,354 (5,437 ) 902,917 State and local government debt securities Level 2 2,945,648 — 2,945,648 Accrued Interest Level 1 44,545 — 44,545 Total $ 7,436,103 $ (62,147 ) $ 7,373,956 |
FURNITURE AND EQUIPMENT
FURNITURE AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE AND EQUIPMENT | NOTE 4 FURNITURE AND EQUIPMENT Furniture and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT December 31, December 31, Machinery and equipment $ 67,419 $ 31,456 Computer equipment 6,846 6,846 Furniture and fixtures 36,059 36,059 Tooling and production 534,204 309,111 Leasehold improvements 30,553 30,553 Total 675,081 414,025 Less: accumulated depreciation (459,083 ) (388,315 ) Total, net $ 215,998 $ 25,710 Depreciation expense amounted to $ 70,767 42,025 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 INTANGIBLE ASSETS Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS December 31, December 31, Patents $ 824,372 $ 649,969 Trademark 45,450 45,450 Total 45,450 45,450 Less: accumulated amortization (207,020 ) (155,386 ) Total, net $ 662,802 $ 540,033 Amortization expense on intangible assets was $ 51,634 42,262 The following table sets forth the estimated amortization expense for the next five years: SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE 2023 $ 54,232 2024 $ 53,274 2025 $ 53,274 2026 $ 53,274 2027 $ 54,573 |
DEBTS
DEBTS | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBTS | NOTE 6 DEBTS The following table presents the details of the principal outstanding: SCHEDULE OF DEBT TABLE December 31, December 31, APR at December 31, Maturity Collateral Notes payable (a) $ 5,115,000 $ 5,557,792 8.00] % September 2026 Substantially all Company assets Convertible Notes (b) 1,300,000 1,300,000 6.00 % September 2023-January 2024 - PPP Loans (c) 7,835 189,428 1.00 % April 2025 - Economic Impact Disaster loan 150,000 150,000 3.75 % November 2052 Substantially all Company assets Total $ 6,572,935 $ 7,197,220 SCHEDULE OF INTEREST EXPENSE For the year ended December 31, 2022 2021 Interest expense 366,330 10,000 As of December 31, 2022, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS 2023 1,810,666 2024 1,736,147 2025 1,734,022 2026 1,447,921 2027 and thereafter 139,033 Total $ 6,572,935 (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75 (b) Included in Convertible Notes are loans provided to the Company from two directors, an officer and two investors. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 15 (c) The Small Business Administration forgave approximately $ 178,000 |
OPERATING LEASE LIABILITIES
OPERATING LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Operating Lease Liabilities | |
OPERATING LEASE LIABILITIES | NOTE 7 OPERATING LEASE LIABILITIES In April 2022, the Company entered into a 58-month lease related to certain office and showroom space pursuant to a sublease that expires in February 2027. The Company recognized a right-of-use asset and a liability of $ 1,428,764 In September 2022, the Company entered in a 124-month lease related to its future headquarters offices and showrooms space. The Company recognized a right-of-use asset and a liability of $ 22,192,503 2.7 The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of December 31, 2022: SCHEDULE OF LEASE COST OPERATING LEASE December 31, 2022 Lease costs: Cash paid for operating lease liabilities $ 593,469 Right-of-use assets obtained in exchange for new operating lease obligations 23,045,293 Fixed rent payment $ 255,314 Lease – Depreciation expense $ 575,974 For the year ended December 31, 2022 Other information: Weighted-average discount rate 6.41 % Weighted-average remaining lease term (in months) 114 SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation 2023 $ 1,130,624 2024 1,780,875 2025 1,993,646 2026 2,223,207 2027 and thereafter 16,760,768 Total $ 23,889,120 |
ROYALTY OBLIGATIONS
ROYALTY OBLIGATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Royalty Obligations | |
ROYALTY OBLIGATIONS | NOTE 8 ROYALTY OBLIGATIONS The Company has a license agreement with General Electric (“GE”) which provides, among other things, for rights to market certain of the Company’s products displaying the GE brand in consideration of royalty payments to GE. The agreement cannot be assigned or sublicensed. The agreement imposes certain manufacturing and quality control conditions to continue to use the GE brand. The agreement expires in November 2023. In the event the Company receives significant funding rounds of at least $ 50 Variable royalty payments are due quarterly, using a December 1 – November 30 contract year and based upon the prior quarter’s sales. Royalty payments will be paid from sales of GE branded product subject to the following repayment schedule: SCHEDULE OF ROYALTY OBLIGATIONS Net Sales in Contract Year Percentage of Contract $ 0 50,000,000 7 % $ 50,000,001 100,000,000 6 % $ 100,000,000 5 % As of December 31, 2022 and 2021, the outstanding balance of the aggregate minimum payment was $2,638, 3,838,000 Minimum fixed future payment obligations are approximately as follows: SCHEDULE OF ROYALTY OBLIGATION MINIMUM FUTURE MINIMUM PAYMENT Year Minimum Obligation 2023 2,638,000 Total principal payments $ 2,638,000 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 9 ACCRUED EXPENSES Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES December 31, December 31, Accrued interest, convertible notes $ 104,735 $ 92,919 Trade payables 1,369,702 507,250 Accrued compensation 475,417 429,167 Total accrued expenses $ 1,949,823 $ 1,029,336 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 INCOME TAXES Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled. On December 31, 2022, the Company had a net operating loss carryforward of approximately $ 67,706,349 In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2022 and 2021. The effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2022 and 2021 were approximately as follows: SCHEDULE OF DEFERRED TAX ASSETS December 31 2022 2021 Net operating loss carryforward $ 17,293,894 $ 12,200,298 Stock-based compensation 2,392,262 – Rights of use assets (5,886,344 ) – Operating lease liabilities 6,101,878 – Less Valuation Allowance (19,901,690 ) (12,200,298 ) Total Deferred Tax Assets – Net $ — $ — The Company’s tax expense differs from the statutory tax expense for 2022 and 2021 and the reconciliation is as follows. SCHEDULE OF INCOME TAX RATE RECONCILIATION 2022 2021 Computed statutory tax benefit – Federal $ (5,977,363 ) $ (1,171,879 ) Computed statutory tax benefit – State (1,292,961 ) (204,495 ) Change in valuation allowance 7,270,323 1,376,374 $ - –– $ - –– |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS Convertible Notes Due to Related Parties Convertible notes due to related parties represent amounts provided to the Company from two directors and the Chief Executive Officer of the Company. The outstanding principal on the convertible promissory notes, associated with related parties was $ 950,000,000 104,375 68,679 Initial Public Offering The Company issued 455,353 6,374,942 The Company issued 95,386 Consulting Services The Company issued 200,000 307,786 248,214 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY (DEFICIT) | NOTE 12 STOCKHOLDERS’ EQUITY (DEFICIT) (A) Common Stock The Company issued the following common stock during 2022, and 2021: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ (Issued) Range of Value Per Share 2022 Equity Transactions Common stock issued per exercise of options and warrants 599,651 $ 862,301 $ 0.10 14.0 Common stock issued per exercise of warrants, cashless 593,700 — — Common stock issued, pursuant to services provided 1,057,293 8,235,880 2.0 14.0 Conversion of preferred stock 12,376,536 3,094,134 0.25 Issuance of common stock pursuant to offering, net 1,650,000 23,100,000 14.0 Issuance of common stock, pursuant to anti-dilutive provisions 335,073 4,691,022 14.0 Transaction Type Qty Shares Issued Valuation $ (Issued) Range of Value Per Share 2021 Equity Transactions Common stock issued per PPM, Bridge Line Ventures 231,624 $ — $ 12.0 Common Stock interest expense 33,334 — 12.0 Common stock issued, exercise of warrants and options, net 110,417 130,000 3.50 Common stock issued, pursuant to services provided 2,922,001 11,722,965 4 Issuance of common stock pursuant to offering, net 896,837 2,779,464 14 Conversion of preferred stock 200,000 50,000 0.25 The Company issued 335,073 (B) Preferred Stock The following is a summary of the Company’s Preferred SCHEDULE OF PREFERRED STOCK Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2021 13,256,936 $ 3,314,233 $ 0.25 Preferred Stock redemptions (12,376,536 ) (3,094,134 ) 0.25 Preferred Stock Balance at December 31, 2022 880,400 $ 220,099 $ 0.25 Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2020 13,456,936 $ 3,364,233 $ 0.25 2021 Preferred Stock redemptions (200,000 ) (50,000 ) 0.25 Preferred Stock Balance at December 31, 2021 13,256,936 $ 3,314,233 $ 0.25 The Preferred Stock is convertible at the holder’s option. Shares of the Preferred Stock may be repurchased by the Company upon 30 days’ prior written notice, for $ 3.50 0.25 38,055 129,456 (C) Stock Options The following is a summary of the Company’s stock option activity during 2022 and 2021: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2022 21,927,182 $ 3.36 –– $ –– Exercised (635,640 ) 1.49 –– $ –– Granted 13,832,500 11.74 –– Forfeited (1,834,792 ) 3.81 Outstanding, December 31, 2022 33,289,250 $ 7.73 3.43 $ 5,994,300 Exercisable, December 31, 2022 12,236,672 $ 3.92 2.70 $ 5,994,300 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2021 14,010,432 $ 3.28 - Exercised 2.6 – — Granted 7,916,750 6.59 — Outstanding, December 31, 2021 21,927,182 $ 3.36 4.21 $ 5,990,800 Exercisable, December 31, 2021 12,597,658 $ 3.49 4.40 5,979,200 The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2022 and 2021: SCHEDULE OF BLACK SCHOLES PRICING MODEL December 31, 2022 December 31, 2021 Range Range Stock price $ 6.5 12.34 $ 3.0 3.0 Exercise price $ 0.1 14 $ 3.0 12 Expected life (in years) 1.5 5.8 1.3 Volatility 10 31 34 % Risk-fee interest rate 1.37 2.97 .09 2.49 % Dividend yield — — The Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during a term comparable to the expected term of stock option issued. The Company relies on the expected volatility of comparable publicly traded companies within its industry sector, which is deemed more relevant, to compute its expected volatility. Unamortized future option expense was $ 13.5 61 4.00 (D) Warrants Issued The following is a summary of the Company’s warrant activity during 2022 and 2021: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2022 2,127,895 $ 5.4 Issued 608,961 3.3 Exercised (597,021 ) 3.3 Forfeited (231,624 ) 9.8 Balance, December 31, 2022 1,908,211 $ 5.45 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2021 1,602,415 $ 3.24 Issued 555,480 12.00 Exercised (30,000 ) 3.50 Forfeited/Cancelled — — Balance, December 31, 2021 2,127,895 $ 5.4 The warrants issued during 2022 and 2021 were issued to underwriters and private placement agents, as well as certain investors, pursuant to the issuance of shares of common stock. (E) Restricted stock units A summary of the Company’s non-vested restricted stock units during 2022 and 2021 are as follows: SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units on January 1, 2021 530,000 $ 6.1 Granted 544,500 6.5 Vested (304,000 ) 2.3 Forfeited – – Non-Vested restricted stock units on December 31, 2021 770,500 3.3 Granted 2,659,109 9.2 Vested (912,548 ) 6.5 Forfeited (600 ) 2.5 Non-vested restricted stock units on December 31, 2022 2,516,461 8.39 One RSU and RSA gives the right to one share of the Company’s common stock. RSU and RSAs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period. During 2022, and 2021, the Company recognized share based expense of $ 13,959,796 . |
CONCENTRATIONS OF RISKS
CONCENTRATIONS OF RISKS | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISKS | NOTE 13 CONCENTRATIONS OF RISKS Major Customers The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: No customers accounted for more than 10 83 Major Vendors The Company had two major vendors that accounted for 100 Liquidity The Company’s cash and cash equivalents are held primarily with two financial institutions. The Company has deposits which exceed the amount insured by the FDIC. The uninsured deposits amounted to $ 9,461,597 Product and Geographic Markets The Company generates its income primarily from its proprietary-based technology and related products sold in the United States. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 SUBSEQUENT EVENTS Management has evaluated subsequent events through March 31, 2023, which is the date the consolidated financial statements were available to be issued. There were no subsequent events that required adjustment to or disclosure in the consolidated financial statements with the following exceptions: In February 2023, the Company agreed to acquire the operations of Belami, Inc. and certain subsidiaries, subject to certain closing conditions. The Company agreed to pay up to $ 12 9.6 3 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) under the accrual basis of accounting. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of SQL Technologies Corp. (f/k/a Safety Quick Lighting & Fans Corp.) and its subsidiary, SQL Lighting & Fans LLC. All intercompany accounts and transactions have been eliminated in consolidation. |
Non-controlling Interest | Non-controlling Interest The Company owns 98.8 . |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates. |
Reclassifications | Reclassifications For comparability, reclassifications of certain prior-year balances were made in order to conform with current-year presentations, such as grouping of common stock and additional paid-in capital and certain expenses initially included in cost of revenues were reclassified to sales and general and administrative expenses. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At December 31, 2022 and December 31, 2021, the Company’s cash composition was follows: SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2022 December 31, 2021 Cash and cash equivalents $ 6,720,543 $ 10,426,249 Restricted cash 2,741,054 — Total cash, cash equivalents and restricted cash $ 9,461,597 $ 10,426,249 Restricted Cash The Company issued a letter of credit of $ 2.7 |
Inventory | Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand. SCHEDULE OF INVENTORY December 31, 2022 December 31, 2021 Inventory, component parts $ 1,923,540 $ 918,651 The Company will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period. The Company tracks inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. As of December 31, 2022, and December 31, 2021, the Company has determined that no allowance is required. |
Furniture and Equipment | Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3 7 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. |
Operating Leases | Operating Leases The Company leases certain office space and equipment under various leases. In addition to rent, the leases require the Company to pay for taxes, insurance, maintenance and other operating expenses. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, and operating lease liabilities in the Company’s consolidated balance sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date. The lease liability is based on the present value of lease payments over the lease term (or the remaining term in the case of existing leases at time the Company adopted ASC 842). The Company uses the implicit rate when readily determinable. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset is based on the lease liability, subject to adjustment, such as for initial direct costs, and excludes lease incentives. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. For most operating leases, expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 |
Securities | Securities Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses included in accumulated other comprehensive income. Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are not deemed to be other-than—temporary) reported as a component of other comprehensive income (loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based on the first-in, first-out method. The Company evaluates its available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value. Management does not believe that its investment in debt securities are impaired as of December 31, 2022. Corporate and state and local government debt securities consist of debt from relatively large corporate organizations and certain state and local governmental agencies. The Company reviews trading activity and pricing for each of the debt securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists to support Level I classification of these securities. When sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs at dates other than the measurement dates. As a result, the Company classifies its debt securities as Level I and Level II of the fair value hierarchy. |
Intangible Asset Patent | Intangible Asset Patent The Company developed various patents for an installation device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States Patent and Trademark Office for these patents have been capitalized. Patent costs are amortized using the straight-line method over the related 15 The Company incurs certain legal and related costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. The Company also capitalizes legal costs incurred in the defense of the Company’s patents when it is believed that the future economic benefit of the patent will be maintained or increased, and a successful defense is probable. Capitalized patent defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of future economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome of litigation could result in a material impairment charge up to the carrying value of these assets. |
GE Agreements | GE Agreements The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products. ● The first agreement is a U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expires November 30, 2023 and is generally renewed for five-year periods. Pursuant to such agreement, the Company may use the GE brand logo on certain products, including plug and play smart and standard ceiling fans and the Company’s standard and smart plug and play devices. The Company has exclusive U.S. and global rights, including Canada, Asia, Europe, China, Australia, New Zealand and India, subject to a mutually agreed to commercialization plan, to market plug and play smart and standard ceiling fans and the Company’s standard and smart plug and play devices under the GE brand. GE will assist the Company with manufacturing standards, audit of factories, audit of materials, and quality control under “Six Sigma” guidelines, as well as with public relations for products and other. ● The second agreement is a U.S. and Global Licensing and Master Service Agreement dated June 14, 2019. The agreement expires on June 14, 2024 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license Sky’s Standard and Smart plug-and-play products in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: ● Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. ● Level 2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable – related party, and GE royalty obligation, approximate their fair values because of the short maturity of these instruments. The Company’s cash, cash equivalents and restricted cash are classified as level 1 financial instruments. The Company’s investment securities are classified as Level 1 and 2, depending on liquidity of the markets in which they are trading. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported as charges or credits to income. As of December 31, 2022, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion features on Series A Preferred Stock, warrants, options, and convertible notes. These shares have been reserved for issuance by the Company’s stock transfer agent, and accordingly, no derivative liability has been calculated on these shares. |
Extinguishments of Liabilities | Extinguishments of Liabilities The Company accounts for extinguishments of liabilities in accordance with ASC 405-20 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized. |
Stock-based Compensation | Stock-based Compensation The Company periodically issues common stock and stock options to officers, directors, employees and consultants for services rendered. The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered. In June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees subject to certain exceptions. The Company adopted ASU 2018-07 with respect to grants of shares of common stock of the Company made in January 2019. The adoption of ASU 2018-07 did not have a material impact on the consolidated financial statements. Prior to the adoption of ASU 2018-07 in January 2019, stock-based awards granted to non-employees were accounted for in accordance with ASU 505-50 – Equity-Based Payments to Non-Employees (“ASU 505-50”). ASU 505-50 measures stock-based compensation at either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is completed. The expense resulting from share-based payments is recorded in operating expenses in the statements of operations. |
Revenue Recognition | Revenue Recognition During 2022 and 2021, the Company derived revenues from the sale of GE branded fans and lighting fixtures to large retailers through retail and online sales. The Company determines the correct revenue recognition using the following steps: Step 1: Identify the contract with a customer Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation. Trade allowances and a provision for estimated returns and other allowances are recorded at the time sales are made, considering historical and anticipated trends. A majority of our sales revenue is recognized when products are shipped from our manufacturing facilities and from our third-party logistics facility. |
Cost of Revenues | Cost of Revenues Cost of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage and obsolescence. These costs include costs of purchased products, inbound freight, and custom duties. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Shipping and handling costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative expenses. Additionally, selling, general and administrative expenses include marketing, professional fees, distribution, warehouse costs, and other related selling costs. Selling expenses include costs incurred in the selling of merchandise. General and administrative expenses include costs incurred in the administration or general operations of the business. Stock compensation expense consists of non-cash charges resulting from the issuance of stock units and stock options that are disclosed in the selling, general and administrative expenses and included as operating expenses. |
Income Tax Provision | Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carrybacks and carryforwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. |
Uncertain Tax Positions | Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting periods ended December 31, 2022, and 2021. |
Contingencies | Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows. |
Comprehensive Income or loss | Comprehensive Income or loss Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’ equity section of the statements of financial condition. Such items along with net income are components of comprehensive income. |
Loss Per Share | Loss Per Share Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For 2022 and 2021, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, separate computation of diluted earnings (loss) per share is not presented for the periods presented. The Company had the following anti-dilutive common stock equivalents at December, 2022 and 2021 SCHEDULE OF EARNING (LOSS) PER SHARE December 31, 2022 December 31, 2021 Stock warrants 1,908,211 2,127,895 Stock options 33,289,250 21,927,182 Convertible notes 86,668 86,668 Preferred stock 880,400 13,256,936 Total 36,164,529 29,323,681 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH | The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At December 31, 2022 and December 31, 2021, the Company’s cash composition was follows: SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2022 December 31, 2021 Cash and cash equivalents $ 6,720,543 $ 10,426,249 Restricted cash 2,741,054 — Total cash, cash equivalents and restricted cash $ 9,461,597 $ 10,426,249 |
SCHEDULE OF INVENTORY | SCHEDULE OF INVENTORY December 31, 2022 December 31, 2021 Inventory, component parts $ 1,923,540 $ 918,651 |
SCHEDULE OF EARNING (LOSS) PER SHARE | The Company had the following anti-dilutive common stock equivalents at December, 2022 and 2021 SCHEDULE OF EARNING (LOSS) PER SHARE December 31, 2022 December 31, 2021 Stock warrants 1,908,211 2,127,895 Stock options 33,289,250 21,927,182 Convertible notes 86,668 86,668 Preferred stock 880,400 13,256,936 Total 36,164,529 29,323,681 |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Securities | |
SCHEDULE OF COMPONENTS OF INVESTMENTS | The components of investments as of December 31, 2022 were as follows: SCHEDULE OF COMPONENTS OF INVESTMENTS Fair value level Cost Unrealized loss Carrying value Corporate debt securities Level 1 $ 3,537,556 $ (56,710 ) $ 3,480,846 State and local government debt securities Level 1 908,354 (5,437 ) 902,917 State and local government debt securities Level 2 2,945,648 — 2,945,648 Accrued Interest Level 1 44,545 — 44,545 Total $ 7,436,103 $ (62,147 ) $ 7,373,956 |
FURNITURE AND EQUIPMENT (Tables
FURNITURE AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF FURNITURE AND EQUIPMENT | Furniture and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT December 31, December 31, Machinery and equipment $ 67,419 $ 31,456 Computer equipment 6,846 6,846 Furniture and fixtures 36,059 36,059 Tooling and production 534,204 309,111 Leasehold improvements 30,553 30,553 Total 675,081 414,025 Less: accumulated depreciation (459,083 ) (388,315 ) Total, net $ 215,998 $ 25,710 |
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 December 31, December 31, Patents $ 824,372 $ 649,969 Trademark 45,450 45,450 Total 45,450 45,450 Less: accumulated amortization (207,020 ) (155,386 ) Total, net $ 662,802 $ 540,033 |
SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE | The following table sets forth the estimated amortization expense for the next five years: SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE 2023 $ 54,232 2024 $ 53,274 2025 $ 53,274 2026 $ 53,274 2027 $ 54,573 |
DEBTS (Tables)
DEBTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT TABLE | The following table presents the details of the principal outstanding: SCHEDULE OF DEBT TABLE December 31, December 31, APR at December 31, Maturity Collateral Notes payable (a) $ 5,115,000 $ 5,557,792 8.00] % September 2026 Substantially all Company assets Convertible Notes (b) 1,300,000 1,300,000 6.00 % September 2023-January 2024 - PPP Loans (c) 7,835 189,428 1.00 % April 2025 - Economic Impact Disaster loan 150,000 150,000 3.75 % November 2052 Substantially all Company assets Total $ 6,572,935 $ 7,197,220 (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75 (b) Included in Convertible Notes are loans provided to the Company from two directors, an officer and two investors. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 15 (c) The Small Business Administration forgave approximately $ 178,000 |
SCHEDULE OF INTEREST EXPENSE | SCHEDULE OF INTEREST EXPENSE For the year ended December 31, 2022 2021 Interest expense 366,330 10,000 |
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS | As of December 31, 2022, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS 2023 1,810,666 2024 1,736,147 2025 1,734,022 2026 1,447,921 2027 and thereafter 139,033 Total $ 6,572,935 |
OPERATING LEASE LIABILITIES (Ta
OPERATING LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating Lease Liabilities | |
SCHEDULE OF LEASE COST OPERATING LEASE | The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of December 31, 2022: SCHEDULE OF LEASE COST OPERATING LEASE December 31, 2022 Lease costs: Cash paid for operating lease liabilities $ 593,469 Right-of-use assets obtained in exchange for new operating lease obligations 23,045,293 Fixed rent payment $ 255,314 Lease – Depreciation expense $ 575,974 For the year ended December 31, 2022 Other information: Weighted-average discount rate 6.41 % Weighted-average remaining lease term (in months) 114 |
SCHEDULE OF MINIMUM LEASE OBLIGATION | SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation 2023 $ 1,130,624 2024 1,780,875 2025 1,993,646 2026 2,223,207 2027 and thereafter 16,760,768 Total $ 23,889,120 |
ROYALTY OBLIGATIONS (Tables)
ROYALTY OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Royalty Obligations | |
SCHEDULE OF ROYALTY OBLIGATIONS | SCHEDULE OF ROYALTY OBLIGATIONS Net Sales in Contract Year Percentage of Contract $ 0 50,000,000 7 % $ 50,000,001 100,000,000 6 % $ 100,000,000 5 % |
SCHEDULE OF ROYALTY OBLIGATION MINIMUM FUTURE MINIMUM PAYMENT | Minimum fixed future payment obligations are approximately as follows: SCHEDULE OF ROYALTY OBLIGATION MINIMUM FUTURE MINIMUM PAYMENT Year Minimum Obligation 2023 2,638,000 Total principal payments $ 2,638,000 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES December 31, December 31, Accrued interest, convertible notes $ 104,735 $ 92,919 Trade payables 1,369,702 507,250 Accrued compensation 475,417 429,167 Total accrued expenses $ 1,949,823 $ 1,029,336 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF DEFERRED TAX ASSETS | SCHEDULE OF DEFERRED TAX ASSETS December 31 2022 2021 Net operating loss carryforward $ 17,293,894 $ 12,200,298 Stock-based compensation 2,392,262 – Rights of use assets (5,886,344 ) – Operating lease liabilities 6,101,878 – Less Valuation Allowance (19,901,690 ) (12,200,298 ) Total Deferred Tax Assets – Net $ — $ — |
SCHEDULE OF INCOME TAX RATE RECONCILIATION | The Company’s tax expense differs from the statutory tax expense for 2022 and 2021 and the reconciliation is as follows. SCHEDULE OF INCOME TAX RATE RECONCILIATION 2022 2021 Computed statutory tax benefit – Federal $ (5,977,363 ) $ (1,171,879 ) Computed statutory tax benefit – State (1,292,961 ) (204,495 ) Change in valuation allowance 7,270,323 1,376,374 $ - –– $ - –– |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SCHEDULE OF COMMON STOCK | The Company issued the following common stock during 2022, and 2021: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ (Issued) Range of Value Per Share 2022 Equity Transactions Common stock issued per exercise of options and warrants 599,651 $ 862,301 $ 0.10 14.0 Common stock issued per exercise of warrants, cashless 593,700 — — Common stock issued, pursuant to services provided 1,057,293 8,235,880 2.0 14.0 Conversion of preferred stock 12,376,536 3,094,134 0.25 Issuance of common stock pursuant to offering, net 1,650,000 23,100,000 14.0 Issuance of common stock, pursuant to anti-dilutive provisions 335,073 4,691,022 14.0 Transaction Type Qty Shares Issued Valuation $ (Issued) Range of Value Per Share 2021 Equity Transactions Common stock issued per PPM, Bridge Line Ventures 231,624 $ — $ 12.0 Common Stock interest expense 33,334 — 12.0 Common stock issued, exercise of warrants and options, net 110,417 130,000 3.50 Common stock issued, pursuant to services provided 2,922,001 11,722,965 4 Issuance of common stock pursuant to offering, net 896,837 2,779,464 14 Conversion of preferred stock 200,000 50,000 0.25 |
SCHEDULE OF PREFERRED STOCK | The following is a summary of the Company’s Preferred SCHEDULE OF PREFERRED STOCK Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2021 13,256,936 $ 3,314,233 $ 0.25 Preferred Stock redemptions (12,376,536 ) (3,094,134 ) 0.25 Preferred Stock Balance at December 31, 2022 880,400 $ 220,099 $ 0.25 Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2020 13,456,936 $ 3,364,233 $ 0.25 2021 Preferred Stock redemptions (200,000 ) (50,000 ) 0.25 Preferred Stock Balance at December 31, 2021 13,256,936 $ 3,314,233 $ 0.25 |
SCHEDULE OF STOCK OPTION ACTIVITY | The following is a summary of the Company’s stock option activity during 2022 and 2021: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2022 21,927,182 $ 3.36 –– $ –– Exercised (635,640 ) 1.49 –– $ –– Granted 13,832,500 11.74 –– Forfeited (1,834,792 ) 3.81 Outstanding, December 31, 2022 33,289,250 $ 7.73 3.43 $ 5,994,300 Exercisable, December 31, 2022 12,236,672 $ 3.92 2.70 $ 5,994,300 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2021 14,010,432 $ 3.28 - Exercised 2.6 – — Granted 7,916,750 6.59 — Outstanding, December 31, 2021 21,927,182 $ 3.36 4.21 $ 5,990,800 Exercisable, December 31, 2021 12,597,658 $ 3.49 4.40 5,979,200 |
SCHEDULE OF BLACK SCHOLES PRICING MODEL | The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2022 and 2021: SCHEDULE OF BLACK SCHOLES PRICING MODEL December 31, 2022 December 31, 2021 Range Range Stock price $ 6.5 12.34 $ 3.0 3.0 Exercise price $ 0.1 14 $ 3.0 12 Expected life (in years) 1.5 5.8 1.3 Volatility 10 31 34 % Risk-fee interest rate 1.37 2.97 .09 2.49 % Dividend yield — — |
SCHEDULE OF WARRANT ACTIVITY | The following is a summary of the Company’s warrant activity during 2022 and 2021: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2022 2,127,895 $ 5.4 Issued 608,961 3.3 Exercised (597,021 ) 3.3 Forfeited (231,624 ) 9.8 Balance, December 31, 2022 1,908,211 $ 5.45 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2021 1,602,415 $ 3.24 Issued 555,480 12.00 Exercised (30,000 ) 3.50 Forfeited/Cancelled — — Balance, December 31, 2021 2,127,895 $ 5.4 |
SCHEDULE OF NON-VESTED RESTRICTED STOCK | A summary of the Company’s non-vested restricted stock units during 2022 and 2021 are as follows: SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units on January 1, 2021 530,000 $ 6.1 Granted 544,500 6.5 Vested (304,000 ) 2.3 Forfeited – – Non-Vested restricted stock units on December 31, 2021 770,500 3.3 Granted 2,659,109 9.2 Vested (912,548 ) 6.5 Forfeited (600 ) 2.5 Non-vested restricted stock units on December 31, 2022 2,516,461 8.39 |
SCHEDULE OF CASH EQUIVALENTS AN
SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 6,720,543 | $ 10,426,249 | |
Restricted cash | 2,741,054 | $ 2,700,000 | |
Total cash, cash equivalents and restricted cash | $ 9,461,597 | $ 10,426,249 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Inventory, component parts | $ 1,923,540 | $ 918,651 |
SCHEDULE OF EARNING (LOSS) PER
SCHEDULE OF EARNING (LOSS) PER SHARE (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 36,164,529 | 29,323,681 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,908,211 | 2,127,895 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 33,289,250 | 21,927,182 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 86,668 | 86,668 |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 880,400 | 13,256,936 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Ownership in subsidiary companies, percentage | 98.80% | ||
Restricted cash | $ 2,741,054 | $ 2,700,000 | |
Operating lease term | 12 months | ||
Intangible assets amortization period | 15 years | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment useful life | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment useful life | 7 years |
SCHEDULE OF COMPONENTS OF INVES
SCHEDULE OF COMPONENTS OF INVESTMENTS (Details) | Dec. 31, 2022 USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Cost | $ 7,436,103 |
Unrealized loss | (62,147) |
Debt Securities, Available-for-Sale | 7,373,956 |
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Cost | 3,537,556 |
Unrealized loss | (56,710) |
Debt Securities, Available-for-Sale | 3,480,846 |
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Cost | 908,354 |
Unrealized loss | (5,437) |
Debt Securities, Available-for-Sale | 902,917 |
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Cost | 2,945,648 |
Unrealized loss | |
Debt Securities, Available-for-Sale | 2,945,648 |
Fair Value, Inputs, Level 2 [Member] | Accrued Interest [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Cost | 44,545 |
Unrealized loss | |
Debt Securities, Available-for-Sale | $ 44,545 |
SCHEDULE OF FURNITURE AND EQUIP
SCHEDULE OF FURNITURE AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 675,081 | $ 414,025 |
Less: accumulated depreciation | (459,083) | (388,315) |
Total, net | 215,998 | 25,710 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 67,419 | 31,456 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 6,846 | 6,846 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 36,059 | 36,059 |
Tooling And Production [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 534,204 | 309,111 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 30,553 | $ 30,553 |
FURNITURE AND EQUIPMENT (Detail
FURNITURE AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 70,767 | $ 42,025 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (207,020) | $ (155,386) |
Total, net | 662,802 | 540,033 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 824,372 | 649,969 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 45,450 | $ 45,450 |
SCHEDULE OF INTANGIBLE ASSETS A
SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE (Details) | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 54,232 |
2024 | 53,274 |
2025 | 53,274 |
2026 | 53,274 |
2026 | $ 54,573 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 51,634 | $ 42,262 |
SCHEDULE OF DEBT TABLE (Details
SCHEDULE OF DEBT TABLE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Short-Term Debt [Line Items] | |||
Total | $ 6,572,935 | $ 7,197,220 | |
Debt instrument interest rate stated percentage | 6% | ||
Notes Payable [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [1] | $ 5,115,000 | 5,557,792 |
Debt instrument interest rate stated percentage | [1] | 8% | |
Maturity date description | [1] | September 2026 | |
Convertible Notes [Member] | |||
Short-Term Debt [Line Items] | |||
Total | $ 1,300,000 | 1,300,000 | |
Debt instrument interest rate stated percentage | 6% | ||
Maturity date description | September 2023-January 2024 | ||
Paycheck Protection Program Loans [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [2] | $ 7,835 | 189,428 |
Debt instrument interest rate stated percentage | [2] | 1% | |
Maturity date description | [2] | April 2025 | |
Economic impact disaster loan [Member] | |||
Short-Term Debt [Line Items] | |||
Total | $ 150,000 | $ 150,000 | |
Debt instrument interest rate stated percentage | 3.75% | ||
Maturity date description | November 2052 | ||
[1]The unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75 6 15 |
SCHEDULE OF INTEREST EXPENSE (D
SCHEDULE OF INTEREST EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 366,330 | $ 10,000 |
SCHEDULE OF FUTURE PRINCIPAL PA
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 1,810,666 | |
2024 | 1,736,147 | |
2025 | 1,734,022 | |
2026 | 1,447,921 | |
2027 and thereafter | 139,033 | |
Total | $ 6,572,935 | $ 7,197,220 |
SCHEDULE OF DEBT TABLE (Detai_2
SCHEDULE OF DEBT TABLE (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Debt Instrument [Line Items] | |
Bears interest at a rate of percentage | 6% |
Debt Instrument conversion price | $ / shares | $ 15 |
PPP Loans [Member] | |
Debt Instrument [Line Items] | |
Other income | $ | $ 178,000 |
Prime Rate [Member] | Nielsen and Bainbridge LLC [Member] | Secured Promissory Note [Member] | |
Debt Instrument [Line Items] | |
Bears interest at a rate of percentage | 1.75% |
SCHEDULE OF LEASE COST OPERATIN
SCHEDULE OF LEASE COST OPERATING LEASE (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Operating Lease Liabilities | |
Cash paid for operating lease liabilities | $ 593,469 |
Right-of-use assets obtained in exchange for new operating lease obligations | 23,045,293 |
Fixed rent payment | 255,314 |
Lease - Depreciation expense | $ 575,974 |
Operating lease, weighted average discount rate, percentage | 6.41% |
Operating lease, weighted average remaining lease term | 114 months |
SCHEDULE OF MINIMUM LEASE OBLIG
SCHEDULE OF MINIMUM LEASE OBLIGATION (Details) | Dec. 31, 2022 USD ($) |
Operating Lease Liabilities | |
2023 | $ 1,130,624 |
2024 | 1,780,875 |
2025 | 1,993,646 |
2026 | 2,223,207 |
2027 and thereafter | 16,760,768 |
Total | $ 23,889,120 |
OPERATING LEASE LIABILITIES (De
OPERATING LEASE LIABILITIES (Details Narrative) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | Apr. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||||
Operating lease, right-of-use asset | $ 23,045,293 | |||
Restricted cash | $ 2,741,054 | $ 2,700,000 | ||
58-Month Lease [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, right-of-use asset | $ 1,428,764 | |||
Operating lease, liability | $ 1,428,764 | |||
124-Month Lease [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, right-of-use asset | 22,192,503 | |||
Operating lease, liability | $ 22,192,503 |
SCHEDULE OF ROYALTY OBLIGATIONS
SCHEDULE OF ROYALTY OBLIGATIONS (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Tier One [Member] | |
Guarantor Obligations [Line Items] | |
Percentage of Contract Year Net Sales owed to GE | 7% |
Tier One [Member] | Minimum [Member] | |
Guarantor Obligations [Line Items] | |
Net Sales in Contract Year | $ 0 |
Tier One [Member] | Maximum [Member] | |
Guarantor Obligations [Line Items] | |
Net Sales in Contract Year | $ 50,000,000 |
Tier Two [Member] | |
Guarantor Obligations [Line Items] | |
Percentage of Contract Year Net Sales owed to GE | 6% |
Tier Two [Member] | Minimum [Member] | |
Guarantor Obligations [Line Items] | |
Net Sales in Contract Year | $ 50,000,001 |
Tier Two [Member] | Maximum [Member] | |
Guarantor Obligations [Line Items] | |
Net Sales in Contract Year | 100,000,000 |
Tier Three [Member] | |
Guarantor Obligations [Line Items] | |
Net Sales in Contract Year | $ 100,000,000 |
Percentage of Contract Year Net Sales owed to GE | 5% |
SCHEDULE OF ROYALTY OBLIGATION
SCHEDULE OF ROYALTY OBLIGATION MINIMUM FUTURE MINIMUM PAYMENT (Details) | Dec. 31, 2022 USD ($) |
Royalty Obligations | |
2023 | $ 2,638,000 |
Total principal payments | $ 2,638,000 |
ROYALTY OBLIGATIONS (Details Na
ROYALTY OBLIGATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Royalty guarantees commitments amount | $ 3,838,000 | |
License Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Proceeds from royalties | $ 50,000,000 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued interest, convertible notes | $ 104,735 | $ 92,919 |
Trade payables | 1,369,702 | 507,250 |
Accrued compensation | 475,417 | 429,167 |
Total accrued expenses | $ 1,949,823 | $ 1,029,336 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 17,293,894 | $ 12,200,298 |
Stock-based compensation | 2,392,262 | |
Rights of use assets | (5,886,344) | |
Operating lease liabilities | 6,101,878 | |
Less Valuation Allowance | (19,901,690) | (12,200,298) |
Deferred Tax Assets, Net of Valuation Allowance |
SCHEDULE OF INCOME TAX RATE REC
SCHEDULE OF INCOME TAX RATE RECONCILIATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Computed statutory tax benefit – Federal | $ (5,977,363) | $ (1,171,879) |
Computed statutory tax benefit – State | (1,292,961) | (204,495) |
Change in valuation allowance | 7,270,323 | 1,376,374 |
Income tax expense benefit |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Dec. 31, 2022 USD ($) |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforward | $ 67,706,349 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Accrued interest | $ 104,735 | $ 92,919 |
Stock issuance cost | $ 2,548,000 | |
IPO [Member] | ||
Related Party Transaction [Line Items] | ||
Number of shares issued | 455,353 | |
Proceeds from IPO | $ 6,374,942 | |
Chief Executive Officer [Member] | Two Directors [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transactions amount | 950,000,000 | 950,000,000 |
Accrued interest | $ 104,375 | $ 68,679 |
Director [Member] | ||
Related Party Transaction [Line Items] | ||
Stock issued during period service, shares | 200,000 | |
Stock issued during period service, value | $ 307,786 | |
Stock issuance cost | $ 248,214 | |
Director [Member] | IPO [Member] | ||
Related Party Transaction [Line Items] | ||
Number of shares issued | 95,386 |
SCHEDULE OF COMMON STOCK (Detai
SCHEDULE OF COMMON STOCK (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
[custom:CommonStockInterestExpenseValuationIssued] | ||
Common Stock [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issued, pursuant to services provided, Shares Issued | 1,057,293 | 2,922,001 |
Conversion of preferred stock, Shares Issued | 12,376,536 | 200,000 |
Common stock issued per PPM, Bridge Line Ventures, Shares Issued | 1,650,000 | 896,837 |
Common stock interest expense, Shares Issued | 33,334 | |
Common Stock [Member] | 2022 Equity Transactions [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issued per exercise of options and warrants, Shares Issued | 599,651 | |
Common stock issued per exercise of options and warrants, Valuation Issued | $ 862,301 | |
Common stock issued, exercise of warrants, Shares Issued | 593,700 | |
Common stock issued, exercise of warrants, Valuation issued | ||
Common stock issued per exercise of warrants, cashless, Range of Value Per Share | ||
Common stock issued, pursuant to services provided, Shares Issued | 1,057,293 | |
Common stock issued, pursuant to services provided, Valuation issued | $ 8,235,880 | |
Conversion of preferred stock, Shares Issued | 12,376,536 | |
Conversion of preferred stock, Valuation issued | $ 3,094,134 | |
Conversion of preferred stock, Range of value per share | $ 0.25 | |
Common stock issued per PPM, Bridge Line Ventures, Shares Issued | 1,650,000 | |
Common stock issued per PPM, Bridge Line Ventures, Valuation issued | $ 23,100,000 | |
Common stock issued per PPM, Bridge Line Ventures, Range of value per share | $ 14 | |
Issuance of common stock, pursuant to anti-dilutive provisions, Shares Issued | 335,073 | |
Issuance of common stock, pursuant to anti-dilutive provisions, Valuation issued | $ 4,691,022 | |
Issuance of common stock, pursuant to anti-dilutive provisions, Range of value per share | $ 14 | |
Common Stock [Member] | 2022 Equity Transactions [Member] | Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issued per exercise of options and warrants, Range of value per share | 0.10 | |
Common stock issued, pursuant to services provided, Range of value per share | 2 | |
Common Stock [Member] | 2022 Equity Transactions [Member] | Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issued per exercise of options and warrants, Range of value per share | 14 | |
Common stock issued, pursuant to services provided, Range of value per share | $ 14 | |
Common Stock [Member] | 2021 Equity Transactions [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Common stock issued, exercise of warrants, Shares Issued | 110,417 | |
Common stock issued, exercise of warrants, Valuation issued | $ 130,000 | |
Common stock issued per exercise of warrants, cashless, Range of Value Per Share | $ 3.50 | |
Common stock issued, pursuant to services provided, Shares Issued | 2,922,001 | |
Common stock issued, pursuant to services provided, Valuation issued | $ 11,722,965 | |
Common stock issued, pursuant to services provided, Range of value per share | $ 4 | |
Conversion of preferred stock, Shares Issued | 200,000 | |
Conversion of preferred stock, Valuation issued | $ 50,000 | |
Conversion of preferred stock, Range of value per share | $ 0.25 | |
Common stock issued per PPM, Bridge Line Ventures, Shares Issued | 231,624 | |
Common stock issued per PPM, Bridge Line Ventures, Valuation issued | ||
Common stock issued per PPM, Bridge Line Ventures, Range of value per share | $ 12 | |
Common stock interest expense, Shares Issued | 33,334 | |
Common stock issued per PPM, Bridge Line Ventures, Range of value per share | $ 12 | |
Issuance of common stock pursuant to offering, net, Shares Issued | 896,837 | |
Issuance of common stock pursuant to offering, net, Valuation issued | $ 2,779,464 | |
Issuance of common stock pursuant to offering, net, Range of value per share | $ 14 |
SCHEDULE OF PREFERRED STOCK (De
SCHEDULE OF PREFERRED STOCK (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Preferred Stock beginning, shares outstanding | 13,256,936 | |
Preferred Stock ending, shares outstanding | 880,400 | 13,256,936 |
Preferred Stock [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Preferred Stock beginning, shares outstanding | 13,256,936 | 13,456,936 |
Preferred Stock beginning, Valuation | $ 3,314,233 | $ 3,364,233 |
Preferred Stock, Value per Share | $ 0.25 | $ 0.25 |
Preferred stock redemption shares | $ (12,376,536) | $ (200,000) |
Preferred stock, Valuation | $ (3,094,134) | $ (50,000) |
Preferred stock redemption, Value per Share | $ 0.25 | $ 0.25 |
Preferred Stock ending, shares outstanding | 880,400 | 13,256,936 |
Preferred Stock ending, Valuation | $ 220,099 | $ 3,314,233 |
Preferred Stock, Value per Share | $ 0.25 | $ 0.25 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Number of shares, outstanding | 21,927,182 | 14,010,432 |
Weighted Average Exercise Price, Outstanding beginning | $ 3.36 | $ 3.28 |
Number of shares, Exercised | (635,640) | |
Weighted Average Exercise Price, Exercised | $ 1.49 | $ 2.6 |
Number of shares, Granted | 13,832,500 | 7,916,750 |
Weighted Average Exercise Price, Granted | $ 11.74 | $ 6.59 |
Number of shares, Forfeited | (1,834,792) | |
Weighted Average Exercise Price, Forfeited | $ 3.81 | |
Number of shares, outstanding | 33,289,250 | 21,927,182 |
Weighted Average Exercise Price, Outstanding Ending | $ 7.73 | $ 3.36 |
Number of shares, Exercisable | 12,236,672 | 12,597,658 |
Weighted Average Exercise Price, Exercisable ending | $ 3.92 | $ 3.49 |
Weighted Average Remaining Contractual Life in Years, Outstanding ending | 4 years 2 months 15 days | |
Aggregate Intrinsic value, Outstanding ending | $ 5,990,800 | |
Weighted Average Remaining Contractual Life in Years, Exercisable ending | 4 years 4 months 24 days | |
Aggregate Intrinsic value, Exercisable ending | $ 5,979,200 |
SCHEDULE OF BLACK SCHOLES PRICI
SCHEDULE OF BLACK SCHOLES PRICING MODEL (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Expected term (in years) | 1 year 3 months 18 days | |
Expected volatility | 34% | |
Dividend yield | 0% | 0% |
Minimum [Member] | ||
Share price | $ 6.5 | $ 3 |
Exercise price | $ 0.1 | $ 3 |
Expected term (in years) | 1 year 6 months | |
Expected volatility | 10% | |
Risk-fee interest rate | 1.37% | 0.09% |
Maximum [Member] | ||
Share price | $ 12.34 | $ 3 |
Exercise price | $ 14 | $ 12 |
Expected term (in years) | 5 years 9 months 18 days | |
Expected volatility | 31% | |
Risk-fee interest rate | 2.97% | 2.49% |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Number of Warrants, Beginning balance | 2,127,895 | 1,602,415 |
Weighted average exercise price outstanding | $ 5.4 | $ 3.24 |
Number of Warrants, Issued | 608,961 | 555,480 |
Weighted Average, Issued | $ 3.3 | $ 12 |
Number of Warrants, Exercised | (597,021) | (30,000) |
Weighted Average, Exercised | $ 3.3 | $ 3.50 |
Number of Warrants, Forfeited | (231,624) | |
Weighted Average, Forfeited | $ 9.8 | |
Number of Warrants, Ending balance | 1,908,211 | 2,127,895 |
Weighted average exercise price outstanding | $ 5.45 | $ 5.4 |
SCHEDULE OF NON-VESTED RESTRICT
SCHEDULE OF NON-VESTED RESTRICTED STOCK (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-vested restricted stock, granted | 13,832,500 | 7,916,750 |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-vested restricted stock units, beginning balance | 770,500 | 530,000 |
Non-vested restricted stock units, Weighted average grant due fair value, beginning balance | $ 3.3 | $ 6.1 |
Non-vested restricted stock, granted | 2,659,109 | 544,500 |
Non-vested restricted stock, Weighted average grant due fair value, granted | $ 9.2 | $ 6.5 |
Non-vested restricted stock, vested | (912,548) | (304,000) |
Non-vested restricted stock, Weighted average grant due fair value, vested | $ 6.5 | $ 2.3 |
Non-vested restricted stock, forfeited | (600) | |
Non-vested restricted stock, Weighted average grant due fair value, forfeited | $ 2.5 | |
Non-vested restricted stock units, ending balance | 2,516,461 | 770,500 |
Non-vested restricted stock units, Weighted average grant due fair value, ending balance | $ 8.39 | $ 3.3 |
STOCKHOLDERS_ EQUITY (DEFICIT_2
STOCKHOLDERS’ EQUITY (DEFICIT) (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unamortized future option expense | $ 13,500,000 | |
Unamortized future option expense excluding market based options | $ 61,000,000 | |
Weighted average period | 4 years | |
Share-Based Payment Arrangement, Noncash Expense | $ 13,959,796 | $ 1,463,033 |
Preferred Stock [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Preferred stock, par value | $ 3.50 | |
Sale of stock, price per share | $ 0.25 | |
Dividends, preferred stock | $ 38,055 | $ 129,456 |
Stockholders [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Number of shares issued | 335,073 |
CONCENTRATIONS OF RISKS (Detail
CONCENTRATIONS OF RISKS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||
Uninusured amount | $ 9,461,597 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | No Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 83% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 100% | 100% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | |||
Conversion price of notes | $ 15 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Convertible notes payable issued | $ 9,600 | ||
Conversion price of notes | $ 3 | ||
Subsequent Event [Member] | Maximum [Member] | Belami,Inc. and Certain Subsidiaries [Member] | |||
Subsequent Event [Line Items] | |||
Payments of distributions to affiliates | $ 12,000 |