Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 01, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
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 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 Common Stock, Shares Outstanding | 101,589,495 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 10,684,989 | $ 16,810,983 |
Restricted cash | 2,000,000 | 2,750,000 |
Accounts receivable | 3,020,314 | 3,384,976 |
Inventory | 4,220,575 | 3,425,734 |
Deferred cost of revenues | 310,679 | 224,445 |
Prepaid expenses and other assets | 1,314,637 | 721,717 |
Total current assets | 21,551,194 | 27,317,855 |
Other assets: | ||
Furniture and equipment, net | 347,644 | 436,587 |
Restricted cash | 2,916,678 | 2,869,270 |
Right of use assets | 20,835,756 | 21,214,652 |
Intangibles, definite life | 7,151,496 | 8,141,032 |
Goodwill | 16,157,000 | 16,157,000 |
Other assets | 204,807 | 204,807 |
Total other assets | 47,613,381 | 49,023,348 |
Total Assets | 69,164,575 | 76,341,203 |
Current liabilities: | ||
Accounts payable and accrued expenses | 13,223,089 | 12,388,475 |
Notes payable, current | 5,495,192 | 5,724,129 |
Operating lease liabilities, current | 2,256,501 | 1,898,428 |
Royalty obligation | 800,000 | 800,000 |
Consideration payable | 730,999 | |
Deferred revenues | 2,072,123 | 1,475,519 |
Total current liabilities | 28,089,313 | 24,192,550 |
Long term liabilities: | ||
Long term accounts payable and accrued expenses | 261,624 | 744,953 |
Notes payable | 763,276 | 1,016,924 |
Consideration payable | 3,038,430 | |
Operating lease liabilities | 21,550,497 | 22,267,558 |
Royalty obligations | 1,700,000 | 3,100,000 |
Total long-term liabilities | 31,591,172 | 35,926,643 |
Total liabilities | 59,680,485 | 60,119,193 |
Stockholders’ Equity: | ||
Common stock and additional paid-in-capital: $0 par value, 500,000,000 shares authorized; and 101,249,700 and 93,473,433 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 172,426,254 | 162,025,024 |
Accumulated deficit | (162,942,164) | (145,803,014) |
Accumulated other comprehensive loss | ||
Total stockholders’ equity | 9,484,090 | 16,222,010 |
Total Liabilities and Stockholders’ Equity | 69,164,575 | 76,341,203 |
Related Party [Member] | ||
Current liabilities: | ||
Convertible notes, current | 950,000 | 950,000 |
Long term liabilities: | ||
Convertible notes | ||
Nonrelated Party [Member] | ||
Current liabilities: | ||
Convertible notes, current | 3,292,408 | 225,000 |
Long term liabilities: | ||
Convertible notes | $ 7,315,775 | $ 5,758,778 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 101,249,700 | 93,473,433 |
Common stock, shares outstanding | 101,249,700 | 93,473,433 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenue | $ 21,446,148 | $ 14,984,055 | $ 40,423,969 | $ 14,994,080 |
Cost of revenues | 14,869,521 | 10,288,643 | 28,269,292 | 10,290,111 |
Gross profit loss | 6,576,627 | 4,695,412 | 12,154,677 | 4,703,969 |
Selling and marketing expenses | 6,271,708 | 5,544,230 | 12,798,524 | 6,844,089 |
General and administrative expenses | 6,540,218 | 11,402,522 | 14,479,799 | 17,350,868 |
Total expenses, net | 12,811,926 | 16,946,752 | 27,278,323 | 24,194,957 |
Loss from operations | (6,235,299) | (12,251,340) | (15,123,646) | (19,490,988) |
Other income / (expense) | ||||
Interest expense, net | (1,227,650) | (1,218,732) | (2,015,504) | (1,939,353) |
Gain on extinguishment of debt | 1,201,857 | 1,201,857 | ||
Other income | ||||
Total other expense, net | (1,227,650) | (16,875) | (2,015,504) | (737,496) |
Net loss | (7,462,949) | (12,268,215) | (17,139,150) | (20,228,484) |
Other comprehensive loss: | ||||
Other comprehensive income (loss): | 4,653 | 62,147 | ||
Net comprehensive loss attributed to common stockholders | $ (7,462,949) | $ (12,263,562) | $ (17,139,150) | $ (20,166,337) |
Net loss per share - basic | $ (0.08) | $ (0.14) | $ (0.18) | $ (0.24) |
Net loss per share - diluted | $ (0.08) | $ (0.14) | $ (0.18) | $ (0.24) |
Weighted average number of common shares outstanding - basic | 99,445,289 | 86,621,015 | 97,261,721 | 84,843,914 |
Weighted average number of common shares outstanding - diluted | 99,445,289 | 86,621,015 | 97,261,721 | 84,843,914 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock Including Additional Paid in Capital [Member] | Common Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2022 | $ 114,039,638 | $ (106,070,358) | $ (62,147) | ||
Balance, shares at Dec. 31, 2022 | 82,907,541 | ||||
Balance, shares | 2,984,308 | ||||
Common stock issued pursuant to services, shares | 1,389,901 | ||||
Common stock issued pursuant to conversion of preferred stock, shares | 880,400 | ||||
Common stock issued pursuant to exercise of options and warrants | |||||
Common stock issued pursuant to acquisition, shares | 1,923,285 | ||||
Common stock issued pursuant to antidilutive provisions, shares | |||||
Common stock issued pursuant to extinguishment of debt, shares | 574,713 | ||||
Common stock issued pursuant to stock offering | 7,446,274 | ||||
Common stock issued pursuant to services | 10,638,534 | ||||
Common stock issued pursuant to conversion of preferred stock | 220,099 | ||||
Common stock issued pursuant to exercise of options and warrants | |||||
Debt discount | 5,569,978 | ||||
Common stock issued pursuant to acquisition | 7,327,716 | ||||
Common stock issued pursuant to extinguishment of debt | 2,040,231 | ||||
Common stock issued pursuant to antidilutive provisions | |||||
Net loss | (20,228,484) | $ (20,228,484) | |||
Non-controlling interest | |||||
Preferred dividends | |||||
Other comprehensive income | 62,147 | ||||
Balance at Jun. 30, 2023 | 147,282,469 | (126,298,842) | 20,983,627 | ||
Balance, shares at Jun. 30, 2023 | 90,660,148 | ||||
Balance at Mar. 31, 2023 | 122,573,318 | (114,030,627) | (4,653) | ||
Balance, shares at Mar. 31, 2023 | 83,189,729 | ||||
Balance, shares | 2,984,308 | ||||
Common stock issued pursuant to services, shares | 1,107,713 | ||||
Common stock issued pursuant to conversion of preferred stock, shares | 880,400 | ||||
Common stock issued pursuant to exercise of options and warrants | |||||
Common stock issued pursuant to acquisition, shares | 1,923,285 | ||||
Common stock issued pursuant to antidilutive provisions, shares | |||||
Common stock issued pursuant to extinguishment of debt, shares | 574,713 | ||||
Common stock issued pursuant to stock offering | 7,446,274 | ||||
Common stock issued pursuant to services | 7,674,832 | ||||
Common stock issued pursuant to conversion of preferred stock | 220,099 | ||||
Common stock issued pursuant to exercise of options and warrants | |||||
Debt discount | |||||
Common stock issued pursuant to acquisition | 7,327,716 | ||||
Common stock issued pursuant to extinguishment of debt | 2,040,231 | ||||
Common stock issued pursuant to antidilutive provisions | |||||
Net loss | (12,268,215) | (12,268,215) | |||
Non-controlling interest | |||||
Preferred dividends | |||||
Other comprehensive income | 4,653 | ||||
Balance at Jun. 30, 2023 | 147,282,469 | (126,298,842) | 20,983,627 | ||
Balance, shares at Jun. 30, 2023 | 90,660,148 | ||||
Balance at Dec. 31, 2023 | 162,025,024 | (145,803,014) | |||
Balance, shares at Dec. 31, 2023 | 93,473,433 | ||||
Balance, shares | 3,535,067 | ||||
Common stock issued pursuant to services, shares | 2,387,779 | ||||
Common stock issued pursuant to conversion of preferred stock, shares | |||||
Common stock issued pursuant to exercise of options and warrants | |||||
Common stock issued pursuant to acquisition, shares | 1,853,421 | ||||
Common stock issued pursuant to antidilutive provisions, shares | |||||
Common stock issued pursuant to extinguishment of debt, shares | |||||
Common stock issued pursuant to stock offering | 4,330,295 | ||||
Common stock issued pursuant to services | 6,070,935 | ||||
Common stock issued pursuant to conversion of preferred stock | |||||
Common stock issued pursuant to exercise of options and warrants | |||||
Debt discount | |||||
Common stock issued pursuant to acquisition | |||||
Common stock issued pursuant to extinguishment of debt | |||||
Common stock issued pursuant to antidilutive provisions | |||||
Net loss | (17,139,150) | (17,139,150) | |||
Non-controlling interest | |||||
Preferred dividends | |||||
Other comprehensive income | |||||
Balance at Jun. 30, 2024 | 172,426,254 | (162,942,164) | 9,484,090 | ||
Balance, shares at Jun. 30, 2024 | 101,249,700 | ||||
Balance at Mar. 31, 2024 | 168,975,808 | (155,479,215) | |||
Balance, shares at Mar. 31, 2024 | 97,096,897 | ||||
Balance, shares | 801,706 | ||||
Common stock issued pursuant to services, shares | 1,497,676 | ||||
Common stock issued pursuant to conversion of preferred stock, shares | |||||
Common stock issued pursuant to exercise of options and warrants | |||||
Common stock issued pursuant to acquisition, shares | 1,853,421 | ||||
Common stock issued pursuant to antidilutive provisions, shares | |||||
Common stock issued pursuant to extinguishment of debt, shares | |||||
Common stock issued pursuant to stock offering | 674,540 | ||||
Common stock issued pursuant to services | 2,775,906 | ||||
Common stock issued pursuant to conversion of preferred stock | |||||
Common stock issued pursuant to exercise of options and warrants | |||||
Debt discount | |||||
Common stock issued pursuant to acquisition | |||||
Common stock issued pursuant to extinguishment of debt | |||||
Common stock issued pursuant to antidilutive provisions | |||||
Net loss | (7,462,949) | (7,462,949) | |||
Non-controlling interest | |||||
Preferred dividends | |||||
Other comprehensive income | |||||
Balance at Jun. 30, 2024 | $ 172,426,254 | $ (162,942,164) | $ 9,484,090 | ||
Balance, shares at Jun. 30, 2024 | 101,249,700 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (17,139,150) | $ (20,228,484) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,399,350 | 1,031,732 |
Amortization of debt discount | 604,976 | 520,349 |
Gain on forgiveness of debt | (1,201,857) | |
Non-cash equity-based compensation expense | 6,070,935 | 10,638,534 |
Change in operating assets and liabilities: | ||
Inventory | (794,841) | (1,114,063) |
Accounts receivable | 364,662 | 40,551 |
Prepaid expenses and other assets | (592,920) | 449,358 |
Deferred charges | (86,234) | 186,900 |
Deferred revenues | 596,604 | (266,218) |
Operating lease liabilities | (1,021,684) | (199,417) |
Accretion operating lease liabilities | 798,229 | |
Other assets | ||
Royalty obligation | (400,000) | |
Consideration payable | (750,000) | |
Accounts payable and accrued expenses | 351,283 | 2,700,311 |
Net cash used in operating activities | (10,397,019) | (6,644,075) |
Cash flows from investing activities: | ||
Purchase of debt securities | (136,033) | |
Proceeds from disposition of debt securities | 7,572,136 | |
Acquisition, net of cash acquired | (4,206,200) | |
Purchase of property and equipment | (279,277) | |
Net cash used in investing activities | (279,277) | 3,229,903 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock- offerings | 4,418,721 | 7,826,045 |
Placement cost | (88,426) | (379,772) |
Proceeds from line of credit | 2,000,000 | |
Proceeds from issuance of convertible notes | 10,350,000 | |
Principal repayments of notes payable | (482,585) | (2,147,900) |
Net cash provided by financing activities | 3,847,710 | 17,648,373 |
(Decrease) increase in cash, cash equivalents and restricted cash | (6,828,586) | 14,234,201 |
Cash, cash equivalents, and restricted cash at beginning of period | 22,430,253 | 9,461,597 |
Cash, cash equivalents and restricted cash at end of period | 15,601,667 | 23,695,798 |
Supplementary disclosure of non-cash financing activities: | ||
Substitution of consideration payable to convertible notes | 3,117,408 | |
Substitution of royalty payable to convertible notes | 1,000,000 | |
Common stock issued pursuant to extinguishment of debt | 2,040,231 | |
Right-of-use assets and operating lease liabilities | 662,698 | |
Preferred stock conversion to common | 220,099 | |
Assets acquired excluding identifiable intangible assets and goodwill and cash | 7,090,094 | |
Liabilities assumed and consideration payable | 19,439,856 | |
Identifiable intangible assets and goodwill, net of cash outlay | 19,677,478 | |
Fair value of shares issued pursuant to acquisition | 7,327,716 | |
Debt discount | $ 5,569,978 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure [Table] | ||||
Net Income (Loss) | $ (7,462,949) | $ (12,268,215) | $ (17,139,150) | $ (20,228,484) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2024 | |
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 Sacramento, California, 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 its second generation 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 third-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. Since April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties. Going Concern The Company’s liquidity sources include $ 15.6 4.9 6.5 10.4 6.6 3.8 17.6 Management intends to mitigate such conditions by supporting its continued growth, decreasing its cash used in operating activities through increased revenues and increased margins from products sold to large retailers and its internet portals, and to the extent necessary, generate cash provided by financing activities through its at the market (“ATM”) offering or other equity or debt financing means. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional disclosures and accounting policies. 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 prior-year balances were made to conform with current-year presentations, such as sales and marketing expenses which were previously included in selling, general, and administrative expenses in the 2023 comparable periods. Basis of Consolidation The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2023 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28, 2023. All intercompany balances and transactions have been eliminated in consolidation. 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. On June 30, 2024, and December 31, 2023, the Company’s cash composition was follows: SCHEDULE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH June 30, 2024 December 31, 2023 Cash and cash equivalents $ 10,684,989 $ 16,810,983 Restricted cash 4,916,678 5,619,270 Total cash, cash equivalents and restricted cash $ 15,601,667 $ 22,430,253 Restricted Cash The Company issued a letter of credit of $ 2.8 2.8 750,000 2.0 Customer Contracts Balances Accounts receivables are recorded in the period when the right to receive payment or other consideration becomes unconditional. Accounts receivables are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts based upon an estimate of probable credit losses in existing accounts receivable. The majority of the Company’s accounts receivable are from third-party payers and are paid within a few days from the order date. The Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, historical experience, and currently available evidence. As of June 30, 2024, and December 31, 2023, the Company’s allowance for doubtful accounts was $ 16,394 54,987 255,234 182,584 The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. Deferred revenues amounted to $ 2,072,123 1,475,519 The costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet. Such charges include the carrying value of related inventory, freight, and sales charges. The deferred charges amounted to $ 310,679 224,445 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 June 30, 2024 December 31, 2023 Inventory, component parts $ 2,961,795 $ 2,230,252 Inventory, finished goods 2,558,780 2,495,482 Allowance (1,300,000 ) (1,300,000 ) Inventory-total $ 4,220,575 $ 3,425,734 The Company will maintain an allowance based on specific inventory items that have shown no activity over a reasonable period. The Company tracks inventory as it is repurposed, disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. The Company has recorded an allowance of $ 1.3 GE Agreements The Company has the following agreements with General Electric (“GE”) related to the Company’s products. A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement with similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of the Company’s Standard and Smart plug-and-play products set forth in a statement of work 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. The second agreement consists of a letter agreement dated November 28, 2023, as amended on April 11, 2024. The agreement expires on December 15, 2027 and includes a Repayment Plan Under U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, the Company pays royalty payment obligation of $ 2.7 1.0 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 stocks, 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 the three- and six-month ended June 30, 2024, and 2023, 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, a 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 on June 30, 2024, and June 30, 2023: SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS June 30, 2024 June 30, 2023 Stock warrants 1,834,191 2,063,522 Stock options 36,846,476 34,233,900 Convertible notes 6,275,148 3,536,668 Preferred stock – – Total 44,955,815 39,834,090 Anti-dilutive securities 44,955,815 39,834,090 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. |
FURNITURE AND EQUIPMENT
FURNITURE AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE AND EQUIPMENT | NOTE 3 FURNITURE AND EQUIPMENT Furniture and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT June 30, 2024 December 31, 2023 Machinery and equipment $ 391,895 $ 282,799 Computer equipment 6,846 6,846 Furniture and fixtures 36,059 36,059 Tooling and production 672,509 642,509 Software development costs 219,076 109,096 Leasehold improvements 30,553 30,553 Total 1,356,938 1,107,862 Less: accumulated depreciation (1,009,294 ) (671,275 ) Total, net $ 347,644 $ 436,587 Depreciation expenses amounted to $ 338,019 64,494 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 4 INTANGIBLE ASSETS AND GOODWILL Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS June 30, 2024 December 31, 2023 Useful life Carrying Value Accumulated Amortization Net carrying value Carrying Value Accumulated Amortization Net carrying value Customer relationships 7 $ 4,500,000 $ (803,571 ) $ 3,696,429 $ 4,500,000 $ (428,571 ) $ 4,071,429 E-commerce technology platforms 4 3,900,000 (1,137,500 ) 2,762,500 3,900,000 (650,000 ) 3,250,000 Patents and other 15 931,831 (239,264 ) 692,567 1,040,927 (221,324 ) 819,603 $ 9,331,831 $ (2,180,335 ) $ 7,151,496 $ 9,440,927 $ (1,299,895 ) $ 8,141,032 Amortization expense on intangible assets amounted to $ 880,440 283,550 The following table sets forth the estimated amortization expense for the next five years: SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE Six months ended December 31, 2024 $ 755,591 2025 1,673,613 2026 1,673,613 2027 1,511,113 2028 698,613 2029 698,613 |
DEBTS
DEBTS | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
DEBTS | NOTE 5 DEBTS The following table presents the details of the principal outstanding: SCHEDULE OF DEBT June 30, 2024 December 31, 2023 APR at June 30, 2024 Maturity Collateral Convertible Notes (b,c) 15,592,408 11,525,000 6.00 10.00 % September 2023-March 2026 Substantially all company assets Notes payable to financial institutions (a) 6,211,424 6,348,104 7.93 8.5 % August 2024-August 2026 Inventory, accounts receivable, cash Notes payable to Belami sellers – 247,927 4.86 % April 2024 – SBA-related loans 145,022 145,022 3.75 % April 2025-November 2052 Substantially all Company assets Total $ 21,948,854 $ 18,266,053 Unamortized debt discount (4,132,203 ) (4,591,222 ) Debt, net of Unamortized debt Discount $ 17,816,651 $ 13,674,831 SCHEDULE OF INTEREST EXPENSE For the six-month period ended June 30, 2024 June 30, 2023 Interest expense $ 2,015,504 $ 1,939,353 As of June 30, 2024, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS Twelve months ended June 30, 2025 $ 9,737,600 Twelve months ended June 30, 2026 508,677 Twelve months ended June 30, 2027 1,118,138 Twelve months ended June 30, 2028 10,451,017 Twelve months ended June 30, 2029 and thereafter 133,422 Total $ 21,948,854 (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 and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $ 600,000 6 10 3 15 During 2023, the Company issued convertible promissory notes for $ 10.4 1,391,667 2.70 5.6 278,499 (c) On March 29, 2024, the Company and the Belami Sellers entered into a letter agreement modifying certain obligations under the Belami stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $ 3,117,408 1,039,303 10 May 16, 2025 3.00 Additionally, the convertible promissory notes include a $ 1.0 1.07 |
OPERATING LEASE LIABILITIES
OPERATING LEASE LIABILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
OPERATING LEASE LIABILITIES | NOTE 6 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 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 In January 2024 the Company entered in a 35-month lease related to its Sacramento office. The Company recognized a right-of-use asset and a liability of $ 662,698 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 June 30, 2024: SCHEDULE OF LEASE COST OPERATING LEASE Six Month Ended June 30, 2024 2023 Cash paid for operating lease liabilities $ 1,021,684 $ 207,130 Right-of-use assets obtained in exchange for new operating lease obligations $ 662,696 $ - Fixed rent payments Lease – Depreciation expense $ 1,041,593 $ 426,714 Weighted-average discount rate 6.48 % 6.41 % Weighted-average remaining lease term (in months) 98 108 SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation Twelve months ended June 30, 2025 $ 2,315,810 Twelve months ended June 30, 2026 2,480,432 Twelve months ended June 30, 2027 2,500,009 Twelve months ended June 30, 2028 2,377,117 Twelve months ended June 30, 2029 and thereafter 14,133,630 Total $ 23,806,998 |
ROYALTY OBLIGATIONS
ROYALTY OBLIGATIONS | 6 Months Ended |
Jun. 30, 2024 | |
Royalty Obligations | |
ROYALTY OBLIGATIONS | NOTE 7 ROYALTY OBLIGATIONS The Company had a license agreement with General Electric (“GE”) which provided, 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 expired in 2023. The Company owes $ 2.5 0.8 0.9 1.4 1.4 400,000 1.0 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 8 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES June 30, 2024 December 31, 2023 Accrued interest, convertible notes $ 889,383 $ 744,953 Trade payables 12,092,406 11,513,918 Accrued compensation 502,924 874,557 Total $ 13,484,713 $ 13,133,428 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 RELATED PARTY TRANSACTIONS Convertible Notes Due to Related Parties Convertible notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers. The outstanding principal on the convertible promissory notes, associated with related parties was $ 950,000 289,887 151,081 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY (DEFICIT) | NOTE 10 STOCKHOLDERS’ EQUITY (DEFICIT) (A) Common Stock The Company issued the following common stock during the six months ended June 30, 2024, and 2023: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ Range of Value 2024 Equity Transactions Common stock issued, pursuant to services provided 2,387,779 6,070,935 $ 0.83 1.78 Common stock issued pursuant to stock at the market offering, net 3,535,067 4,330,295 0.952 1.64 Common stock issued pursuant to acquisition (1) 1,853,421 – –– Transaction Type Shares Issued Valuation $ Range of Value 2023 Equity Transactions Common stock issued, pursuant to services provided 1,389,901 10,638,534 $ 2.67 3.49 Common stock issued pursuant to stock at the market offering, net 2,984,308 7,446,274 2.55 3.25 Common stock issued pursuant to conversion of preferred stock 880,400 220,099 0.25 Common stock issued pursuant to acquisition 1,923,285 7,327,716 3.81 Common stock issued pursuant to extinguishment of debt 574,713 2,040,231 3.55 As of June 30, 2024, the remaining amount to be used under the ATM offering program is $ 5.8 (1) Common stock issued pursuant to the acquisition consists of shares issued in April 2024 pursuant to the acquisition of Belami. The value of the shares issued in April 2024 was reflected in the common stock and additional paid-in capital at the date of acquisition in 2023. (B) Preferred Stock The following is a summary of the Company’s Preferred Stock activity during the six months ended June 30, 2023: SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at January 1, 2023 880,400 $ 220,099 $ 0.25 2023 Preferred Stock redemptions 880,400 220,099 0.25 Preferred Stock Balance at June 30, 2023 — $ — $ — The Series A Preferred Stock was convertible at the holder’s option. The Company could repurchase shares of the Preferred Stock for $ 3.50 0.25 There were no (C) Stock Options The following is a summary of the Company’s stock option activity during the six-month ended June 30, 2024, and 2023: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2024 35,805,976 $ 7.33 –– $ 1,017,750 Exercised – –– –– –– Granted 1,481,000 1.23 –– –– Forfeited (440,500 ) 2.21 — — Awards expired - $ - - - Outstanding, June 30, 2024 36,846,476 $ 7.14 2.58 $ 1,029,750 Exercisable, June 30, 2024 14,442,850 $ 4.50 2.07 $ 1,017,750 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2023 33,289,250 $ 7.7 - $ 6,472,400 Awards Granted in Period 1,370,150 3.3 - - Awards expired (425,500 ) $ 4.0 - - Outstanding, June 30, 2023 34,233,900 $ 7.6 3.15 $ 6,472,400 Exercisable, June 30, 2023 12,847,747 $ 4.4 1.92 $ 6,472,400 The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during the six months ended June 30, 2024 and 2023: SCHEDULE OF BLACK SCHOLES PRICING MODEL June 30, 2024 June 30, 2023 Range Range Stock price $ 0.92 1.76 $ 3.74 3.84 Exercise price $ 0.92 1.68 $ 3.74 3.84 Expected life (in years) 2.57 3.50 3.5 5 Volatility 36 90 % 48 54 % Risk-fee interest rate 4.10 4.62 % 3.51 5.02 % Dividend yield — — The Company does not have historical stock prices that can be reliably determined for a period that is at least equal to the expected terms of its options. The expected options terms are 3.5 2.4 Unamortized future option expense was $ 14.4 63 2 (D) Warrants Issued The following is a summary of the Company’s warrant activity during the six months ended June 30, 2024 and 2023: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2024 2,063,522 $ 5.76 Issued — — Exercised — — Forfeited (229,331 ) 9.94 Balance, June 30, 2024 1,834,191 $ 5.25 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2023 671,855 $ 11.5 Issued 1,391,667 3.0 Exercised — — Forfeited — — Balance, June 30, 2023 2,063,522 $ 5.76 During the six months ended June 30, 2024, the Company did not issue any warrants. During the six months ended June 30, 2023, as an inducement to enter certain financing transactions, the Company issued 1,391,667 3 2.70 5.6 (D) Restricted stock units A summary of the Company’s non-vested restricted stock units during the six months ended June 30, 2024 and 2023 are as follows: SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units, January 1, 2024 $ 4,919,702 $ 4.21 Granted 2,238,480 1.16 Vested (2,556,393 ) 2.9 Forfeited (22,334 ) 1.45 Non-Vested restricted stock units, June 30, 2024 4,579,455 3.46 Non-vested restricted stock units, January 1, 2023 2,516,461 8.39 Granted 2,955,900 3.08 Vested (1,689,901 ) 5.27 Forfeited (227,891 ) 10.71 Non-vested restricted stock units on June 30, 2023 3,554,569 5.27 The weighted-average remaining contractual life of the restricted units as of December 31, 2023, is 1.85 One RSU and RSA gives the right to receive 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 the six-month ended June 30, 2024, and 2023, the Company recognized compensation expenses of $ 6,070,935 10,638,534 |
CONCENTRATIONS OF RISKS
CONCENTRATIONS OF RISKS | 6 Months Ended |
Jun. 30, 2024 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISKS | NOTE 11 CONCENTRATIONS OF RISKS Major Customers and Accounts Receivable The Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue during the six-month period ended June 30, 2024 and 2023. The Company had one third-party payor accounts receivable balance representing 24 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. To reduce the risk associated with the failure of such counterparties, the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits. Product and Geographic Markets The Company generates its income primarily from lighting and heating products sold primarily in the United States. |
PROFORMA FINANCIAL STATEMENTS (
PROFORMA FINANCIAL STATEMENTS (unaudited) | 6 Months Ended |
Jun. 30, 2024 | |
Proforma Financial Statements | |
PROFORMA FINANCIAL STATEMENTS (unaudited) | NOTE 12 PROFORMA FINANCIAL STATEMENTS (unaudited) The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2023: SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION Three-month period ended June 30, 2023 Six-month period ended June 30, 2023 Revenues $ 20,416,569 $ 39,031,541 Net loss $ (10,362,183 ) $ (18,802,429 ) Basic and diluted loss per share $ (0.11 ) $ (0.20 ) Weighted average number of shares outstanding- basic and diluted 93,874,115 92,097,014 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 SUBSEQUENT EVENTS Management has evaluated subsequent events through August 12, 2024, which is the date the consolidated financial statements were available to be issued. There were no significant subsequent events that required adjustment to or disclosure in the unaudited consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional disclosures and accounting policies. |
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 prior-year balances were made to conform with current-year presentations, such as sales and marketing expenses which were previously included in selling, general, and administrative expenses in the 2023 comparable periods. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2023 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28, 2023. All intercompany balances and transactions have been eliminated in consolidation. |
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. On June 30, 2024, and December 31, 2023, the Company’s cash composition was follows: SCHEDULE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH June 30, 2024 December 31, 2023 Cash and cash equivalents $ 10,684,989 $ 16,810,983 Restricted cash 4,916,678 5,619,270 Total cash, cash equivalents and restricted cash $ 15,601,667 $ 22,430,253 |
Restricted Cash | Restricted Cash The Company issued a letter of credit of $ 2.8 2.8 750,000 2.0 |
Customer Contracts Balances | Customer Contracts Balances Accounts receivables are recorded in the period when the right to receive payment or other consideration becomes unconditional. Accounts receivables are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts based upon an estimate of probable credit losses in existing accounts receivable. The majority of the Company’s accounts receivable are from third-party payers and are paid within a few days from the order date. The Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, historical experience, and currently available evidence. As of June 30, 2024, and December 31, 2023, the Company’s allowance for doubtful accounts was $ 16,394 54,987 255,234 182,584 The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. Deferred revenues amounted to $ 2,072,123 1,475,519 The costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet. Such charges include the carrying value of related inventory, freight, and sales charges. The deferred charges amounted to $ 310,679 224,445 |
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 June 30, 2024 December 31, 2023 Inventory, component parts $ 2,961,795 $ 2,230,252 Inventory, finished goods 2,558,780 2,495,482 Allowance (1,300,000 ) (1,300,000 ) Inventory-total $ 4,220,575 $ 3,425,734 The Company will maintain an allowance based on specific inventory items that have shown no activity over a reasonable period. The Company tracks inventory as it is repurposed, disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. The Company has recorded an allowance of $ 1.3 |
GE Agreements | GE Agreements The Company has the following agreements with General Electric (“GE”) related to the Company’s products. A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement with similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of the Company’s Standard and Smart plug-and-play products set forth in a statement of work 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. The second agreement consists of a letter agreement dated November 28, 2023, as amended on April 11, 2024. The agreement expires on December 15, 2027 and includes a Repayment Plan Under U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, the Company pays royalty payment obligation of $ 2.7 1.0 |
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 stocks, 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 the three- and six-month ended June 30, 2024, and 2023, 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, a 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 on June 30, 2024, and June 30, 2023: SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS June 30, 2024 June 30, 2023 Stock warrants 1,834,191 2,063,522 Stock options 36,846,476 34,233,900 Convertible notes 6,275,148 3,536,668 Preferred stock – – Total 44,955,815 39,834,090 Anti-dilutive securities 44,955,815 39,834,090 |
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) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
SCHEDULE OF 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. On June 30, 2024, and December 31, 2023, the Company’s cash composition was follows: SCHEDULE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH June 30, 2024 December 31, 2023 Cash and cash equivalents $ 10,684,989 $ 16,810,983 Restricted cash 4,916,678 5,619,270 Total cash, cash equivalents and restricted cash $ 15,601,667 $ 22,430,253 |
SCHEDULE OF INVENTORY | SCHEDULE OF INVENTORY June 30, 2024 December 31, 2023 Inventory, component parts $ 2,961,795 $ 2,230,252 Inventory, finished goods 2,558,780 2,495,482 Allowance (1,300,000 ) (1,300,000 ) Inventory-total $ 4,220,575 $ 3,425,734 |
SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS | The Company had the following anti-dilutive common stock equivalents on June 30, 2024, and June 30, 2023: SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS June 30, 2024 June 30, 2023 Stock warrants 1,834,191 2,063,522 Stock options 36,846,476 34,233,900 Convertible notes 6,275,148 3,536,668 Preferred stock – – Total 44,955,815 39,834,090 Anti-dilutive securities 44,955,815 39,834,090 |
FURNITURE AND EQUIPMENT (Tables
FURNITURE AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF FURNITURE AND EQUIPMENT | Furniture and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT June 30, 2024 December 31, 2023 Machinery and equipment $ 391,895 $ 282,799 Computer equipment 6,846 6,846 Furniture and fixtures 36,059 36,059 Tooling and production 672,509 642,509 Software development costs 219,076 109,096 Leasehold improvements 30,553 30,553 Total 1,356,938 1,107,862 Less: accumulated depreciation (1,009,294 ) (671,275 ) Total, net $ 347,644 $ 436,587 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS June 30, 2024 December 31, 2023 Useful life Carrying Value Accumulated Amortization Net carrying value Carrying Value Accumulated Amortization Net carrying value Customer relationships 7 $ 4,500,000 $ (803,571 ) $ 3,696,429 $ 4,500,000 $ (428,571 ) $ 4,071,429 E-commerce technology platforms 4 3,900,000 (1,137,500 ) 2,762,500 3,900,000 (650,000 ) 3,250,000 Patents and other 15 931,831 (239,264 ) 692,567 1,040,927 (221,324 ) 819,603 $ 9,331,831 $ (2,180,335 ) $ 7,151,496 $ 9,440,927 $ (1,299,895 ) $ 8,141,032 |
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 Six months ended December 31, 2024 $ 755,591 2025 1,673,613 2026 1,673,613 2027 1,511,113 2028 698,613 2029 698,613 |
DEBTS (Tables)
DEBTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT | The following table presents the details of the principal outstanding: SCHEDULE OF DEBT June 30, 2024 December 31, 2023 APR at June 30, 2024 Maturity Collateral Convertible Notes (b,c) 15,592,408 11,525,000 6.00 10.00 % September 2023-March 2026 Substantially all company assets Notes payable to financial institutions (a) 6,211,424 6,348,104 7.93 8.5 % August 2024-August 2026 Inventory, accounts receivable, cash Notes payable to Belami sellers – 247,927 4.86 % April 2024 – SBA-related loans 145,022 145,022 3.75 % April 2025-November 2052 Substantially all Company assets Total $ 21,948,854 $ 18,266,053 Unamortized debt discount (4,132,203 ) (4,591,222 ) Debt, net of Unamortized debt Discount $ 17,816,651 $ 13,674,831 (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 and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $ 600,000 6 10 3 15 During 2023, the Company issued convertible promissory notes for $ 10.4 1,391,667 2.70 5.6 278,499 (c) On March 29, 2024, the Company and the Belami Sellers entered into a letter agreement modifying certain obligations under the Belami stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $ 3,117,408 1,039,303 10 May 16, 2025 3.00 Additionally, the convertible promissory notes include a $ 1.0 1.07 |
SCHEDULE OF INTEREST EXPENSE | SCHEDULE OF INTEREST EXPENSE For the six-month period ended June 30, 2024 June 30, 2023 Interest expense $ 2,015,504 $ 1,939,353 |
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS | As of June 30, 2024, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS Twelve months ended June 30, 2025 $ 9,737,600 Twelve months ended June 30, 2026 508,677 Twelve months ended June 30, 2027 1,118,138 Twelve months ended June 30, 2028 10,451,017 Twelve months ended June 30, 2029 and thereafter 133,422 Total $ 21,948,854 |
OPERATING LEASE LIABILITIES (Ta
OPERATING LEASE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
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 June 30, 2024: SCHEDULE OF LEASE COST OPERATING LEASE Six Month Ended June 30, 2024 2023 Cash paid for operating lease liabilities $ 1,021,684 $ 207,130 Right-of-use assets obtained in exchange for new operating lease obligations $ 662,696 $ - Fixed rent payments Lease – Depreciation expense $ 1,041,593 $ 426,714 Weighted-average discount rate 6.48 % 6.41 % Weighted-average remaining lease term (in months) 98 108 |
SCHEDULE OF MINIMUM LEASE OBLIGATION | SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation Twelve months ended June 30, 2025 $ 2,315,810 Twelve months ended June 30, 2026 2,480,432 Twelve months ended June 30, 2027 2,500,009 Twelve months ended June 30, 2028 2,377,117 Twelve months ended June 30, 2029 and thereafter 14,133,630 Total $ 23,806,998 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES June 30, 2024 December 31, 2023 Accrued interest, convertible notes $ 889,383 $ 744,953 Trade payables 12,092,406 11,513,918 Accrued compensation 502,924 874,557 Total $ 13,484,713 $ 13,133,428 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
SCHEDULE OF COMMON STOCK | The Company issued the following common stock during the six months ended June 30, 2024, and 2023: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ Range of Value 2024 Equity Transactions Common stock issued, pursuant to services provided 2,387,779 6,070,935 $ 0.83 1.78 Common stock issued pursuant to stock at the market offering, net 3,535,067 4,330,295 0.952 1.64 Common stock issued pursuant to acquisition (1) 1,853,421 – –– Transaction Type Shares Issued Valuation $ Range of Value 2023 Equity Transactions Common stock issued, pursuant to services provided 1,389,901 10,638,534 $ 2.67 3.49 Common stock issued pursuant to stock at the market offering, net 2,984,308 7,446,274 2.55 3.25 Common stock issued pursuant to conversion of preferred stock 880,400 220,099 0.25 Common stock issued pursuant to acquisition 1,923,285 7,327,716 3.81 Common stock issued pursuant to extinguishment of debt 574,713 2,040,231 3.55 (1) Common stock issued pursuant to the acquisition consists of shares issued in April 2024 pursuant to the acquisition of Belami. The value of the shares issued in April 2024 was reflected in the common stock and additional paid-in capital at the date of acquisition in 2023. |
SCHEDULE OF PREFERRED STOCK ACTIVITY | The following is a summary of the Company’s Preferred Stock activity during the six months ended June 30, 2023: SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at January 1, 2023 880,400 $ 220,099 $ 0.25 2023 Preferred Stock redemptions 880,400 220,099 0.25 Preferred Stock Balance at June 30, 2023 — $ — $ — |
SCHEDULE OF STOCK OPTION ACTIVITY | The following is a summary of the Company’s stock option activity during the six-month ended June 30, 2024, and 2023: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2024 35,805,976 $ 7.33 –– $ 1,017,750 Exercised – –– –– –– Granted 1,481,000 1.23 –– –– Forfeited (440,500 ) 2.21 — — Awards expired - $ - - - Outstanding, June 30, 2024 36,846,476 $ 7.14 2.58 $ 1,029,750 Exercisable, June 30, 2024 14,442,850 $ 4.50 2.07 $ 1,017,750 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2023 33,289,250 $ 7.7 - $ 6,472,400 Awards Granted in Period 1,370,150 3.3 - - Awards expired (425,500 ) $ 4.0 - - Outstanding, June 30, 2023 34,233,900 $ 7.6 3.15 $ 6,472,400 Exercisable, June 30, 2023 12,847,747 $ 4.4 1.92 $ 6,472,400 |
SCHEDULE OF BLACK SCHOLES PRICING MODEL | The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during the six months ended June 30, 2024 and 2023: SCHEDULE OF BLACK SCHOLES PRICING MODEL June 30, 2024 June 30, 2023 Range Range Stock price $ 0.92 1.76 $ 3.74 3.84 Exercise price $ 0.92 1.68 $ 3.74 3.84 Expected life (in years) 2.57 3.50 3.5 5 Volatility 36 90 % 48 54 % Risk-fee interest rate 4.10 4.62 % 3.51 5.02 % Dividend yield — — |
SCHEDULE OF WARRANT ACTIVITY | The following is a summary of the Company’s warrant activity during the six months ended June 30, 2024 and 2023: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2024 2,063,522 $ 5.76 Issued — — Exercised — — Forfeited (229,331 ) 9.94 Balance, June 30, 2024 1,834,191 $ 5.25 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2023 671,855 $ 11.5 Issued 1,391,667 3.0 Exercised — — Forfeited — — Balance, June 30, 2023 2,063,522 $ 5.76 |
SCHEDULE OF NON-VESTED RESTRICTED STOCK | A summary of the Company’s non-vested restricted stock units during the six months ended June 30, 2024 and 2023 are as follows: SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units, January 1, 2024 $ 4,919,702 $ 4.21 Granted 2,238,480 1.16 Vested (2,556,393 ) 2.9 Forfeited (22,334 ) 1.45 Non-Vested restricted stock units, June 30, 2024 4,579,455 3.46 Non-vested restricted stock units, January 1, 2023 2,516,461 8.39 Granted 2,955,900 3.08 Vested (1,689,901 ) 5.27 Forfeited (227,891 ) 10.71 Non-vested restricted stock units on June 30, 2023 3,554,569 5.27 |
PROFORMA FINANCIAL STATEMENTS_2
PROFORMA FINANCIAL STATEMENTS (unaudited) (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Proforma Financial Statements | |
SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION | The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2023: SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION Three-month period ended June 30, 2023 Six-month period ended June 30, 2023 Revenues $ 20,416,569 $ 39,031,541 Net loss $ (10,362,183 ) $ (18,802,429 ) Basic and diluted loss per share $ (0.11 ) $ (0.20 ) Weighted average number of shares outstanding- basic and diluted 93,874,115 92,097,014 |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Restricted cash and cash equivalents | $ 15,600,000 | |
Restricted cash | 4,900,000 | |
Working capital | 6,500,000 | |
Net cash used in operating activities | 10,397,019 | $ 6,644,075 |
Net cash provided by financing activities | $ 3,847,710 | $ 17,648,373 |
SCHEDULE OF CASH, CASH EQUIVALE
SCHEDULE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Sep. 30, 2023 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 10,684,989 | $ 16,810,983 | |
Restricted cash | 4,916,678 | 5,619,270 | $ 2,800,000 |
Total cash, cash equivalents and restricted cash | $ 15,601,667 | $ 22,430,253 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Inventory, component parts | $ 2,961,795 | $ 2,230,252 |
Inventory, finished goods | 2,558,780 | 2,495,482 |
Allowance | (1,300,000) | (1,300,000) |
Inventory-total | $ 4,220,575 | $ 3,425,734 |
SCHEDULE OF ANTI-DILUTIVE COMMO
SCHEDULE OF ANTI-DILUTIVE COMMON STOCK EQUIVALENTS (Details) - shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 44,955,815 | 39,834,090 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 1,834,191 | 2,063,522 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 36,846,476 | 34,233,900 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 6,275,148 | 3,536,668 |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Dec. 15, 2023 | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 16, 2023 | Sep. 30, 2023 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Restricted cash | $ 4,916,678 | $ 5,619,270 | $ 2,800,000 | ||
Restricted investments | 2,800,000 | 2,800,000 | |||
Escrow deposit | 750,000 | ||||
Line of credit | 2,000,000 | ||||
Allowance for doubtful accounts | 16,394 | 54,987 | |||
Allowance for sales returns | 255,234 | 182,584 | |||
Deferred revenues | 2,072,123 | 1,475,519 | |||
Deferred charges | 310,679 | 224,445 | |||
Inventory allowance | $ 1,300,000 | $ 1,300,000 | |||
Global Trademark Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Royalty payment | $ 2,700,000 | ||||
Convertible promissory note | $ 1,000,000 |
SCHEDULE OF FURNITURE AND EQUIP
SCHEDULE OF FURNITURE AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,356,938 | $ 1,107,862 |
Less: accumulated depreciation | (1,009,294) | (671,275) |
Total, net | 347,644 | 436,587 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 391,895 | 282,799 |
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 | 672,509 | 642,509 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 219,076 | 109,096 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 30,553 | $ 30,553 |
FURNITURE AND EQUIPMENT (Detail
FURNITURE AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 338,019 | $ 64,494 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Value | $ 9,331,831 | $ 9,440,927 |
Accumulated Amortization | (2,180,335) | (1,299,895) |
Net carrying value | $ 7,151,496 | 8,141,032 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 7 years | |
Carrying Value | $ 4,500,000 | 4,500,000 |
Accumulated Amortization | (803,571) | (428,571) |
Net carrying value | $ 3,696,429 | 4,071,429 |
E-Commerce Technology Platforms [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 4 years | |
Carrying Value | $ 3,900,000 | 3,900,000 |
Accumulated Amortization | (1,137,500) | (650,000) |
Net carrying value | $ 2,762,500 | 3,250,000 |
Patents and Others [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 15 years | |
Carrying Value | $ 931,831 | 1,040,927 |
Accumulated Amortization | (239,264) | (221,324) |
Net carrying value | $ 692,567 | $ 819,603 |
SCHEDULE OF INTANGIBLE ASSETS A
SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE (Details) | Jun. 30, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Nine months ended December 31, 2024 | $ 755,591 |
2025 | 1,673,613 |
2026 | 1,673,613 |
2027 | 1,511,113 |
2028 | 698,613 |
2029 | $ 698,613 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 880,440 | $ 283,550 |
SCHEDULE OF DEBT (Details)
SCHEDULE OF DEBT (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2024 | Dec. 31, 2023 | ||
Short-Term Debt [Line Items] | |||
Total | $ 21,948,854 | $ 18,266,053 | |
Debt instrument interest rate stated percentage | 1.75% | ||
Unamortized debt discount | $ (4,132,203) | (4,591,222) | |
Debt, net of Unamortized debt Discount | 17,816,651 | 13,674,831 | |
Convertible Notes [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [1],[2] | $ 15,592,408 | 11,525,000 |
Debt instrument interest rate stated percentage | 10% | ||
Maturity date description | [1],[2] | September 2023-March 2026 | |
Convertible Notes [Member] | Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [1],[2] | 6% | |
Convertible Notes [Member] | Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [1],[2] | 10% | |
Notes Payable Financial Institutions [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [3] | $ 6,211,424 | 6,348,104 |
Maturity date description | [3] | August 2024-August 2026 | |
Notes Payable Financial Institutions [Member] | Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [3] | 7.93% | |
Notes Payable Financial Institutions [Member] | Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [3] | 8.50% | |
Notes Payble Belami Sellers [Member] | |||
Short-Term Debt [Line Items] | |||
Total | 247,927 | ||
Debt instrument interest rate stated percentage | 4.86% | ||
Maturity date description | April 2024 | ||
SBA Related Loans [Member] | |||
Short-Term Debt [Line Items] | |||
Total | $ 145,022 | $ 145,022 | |
Debt instrument interest rate stated percentage | 3.75% | ||
Maturity date description | April 2025-November 2052 | ||
[1]Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $ 600,000 6 10 3 15 3,117,408 1,039,303 10 May 16, 2025 3.00 1.75 |
SCHEDULE OF INTEREST EXPENSE (D
SCHEDULE OF INTEREST EXPENSE (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 2,015,504 | $ 1,939,353 |
SCHEDULE OF FUTURE PRINCIPAL PA
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Twelve months ended June 30, 2025 | $ 9,737,600 | |
Twelve months ended June 30, 2026 | 508,677 | |
Twelve months ended June 30, 2027 | 1,118,138 | |
Twelve months ended June 30, 2028 | 10,451,017 | |
Twelve months ended June 30, 2029 and thereafter | 133,422 | |
Total | $ 21,948,854 | $ 18,266,053 |
SCHEDULE OF DEBT TABLE (Details
SCHEDULE OF DEBT TABLE (Details) (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 29, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | ||
Short-Term Debt [Line Items] | ||||
Bears interest at a rate of percentage | 1.75% | |||
Debt instrument, convertible, conversion price | $ 1.07 | |||
Belami Stock Purchase Agreement [Member] | ||||
Short-Term Debt [Line Items] | ||||
Bears interest at a rate of percentage | 10% | |||
Debt instrument, convertible, conversion price | $ 3 | |||
Debt conversion, original debt, amount | $ 3,117,408 | |||
Debt conversion, converted instrument, amount | $ 1,039,303 | |||
Debt instrument, maturity date | May 16, 2025 | |||
Stock Purchase Agreement [Member] | ||||
Short-Term Debt [Line Items] | ||||
Convertible notes payable | $ 1,000,000 | |||
Convertible Notes [Member] | ||||
Short-Term Debt [Line Items] | ||||
Bears interest at a rate of percentage | 10% | |||
Convertible notes payable | $ 600,000 | $ 10,400,000 | ||
Annual rate | 6% | |||
Warrants issued | 1,391,667 | 1,391,667 | ||
Warrant price per share | $ 2.70 | $ 2.70 | ||
Debt instrument convertible beneficial conversion feature | $ 5,600,000 | $ 5,600,000 | ||
Amortization of debt discount | $ 278,499 | |||
Convertible Notes [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Bears interest at a rate of percentage | [1],[2] | 6% | ||
Debt instrument, convertible, conversion price | $ 3 | |||
Convertible Notes [Member] | Maximum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Bears interest at a rate of percentage | [1],[2] | 10% | ||
Debt instrument, convertible, conversion price | $ 15 | |||
[1]Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, one of the convertible promissory note of $ 600,000 6 10 3 15 3,117,408 1,039,303 10 May 16, 2025 3.00 |
SCHEDULE OF LEASE COST OPERATIN
SCHEDULE OF LEASE COST OPERATING LEASE (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||
Cash paid for operating lease liabilities | $ 1,021,684 | $ 207,130 |
Right-of-use assets obtained in exchange for new operating lease obligations | 662,696 | |
Lease - Depreciation expense | $ 1,041,593 | $ 426,714 |
Operating lease, weighted average discount rate, percentage | 6.48% | 6.41% |
Operating lease, weighted average remaining lease term (in months) | 98 months | 108 months |
SCHEDULE OF MINIMUM LEASE OBLIG
SCHEDULE OF MINIMUM LEASE OBLIGATION (Details) | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
Twelve months ended June 30, 2025 | $ 2,315,810 |
Twelve months ended June 30, 2026 | 2,480,432 |
Twelve months ended June 30, 2027 | 2,500,009 |
Twelve months ended June 30, 2028 | 2,377,117 |
Twelve months ended June 30, 2029 and thereafter | 14,133,630 |
Total | $ 23,806,998 |
OPERATING LEASE LIABILITIES (De
OPERATING LEASE LIABILITIES (Details Narrative) - USD ($) | Jan. 31, 2024 | Sep. 30, 2022 | Apr. 30, 2022 |
58-Month Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, liability | $ 1,428,764 | ||
124-Month Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, liability | $ 22,192,503 | ||
Letter of credit | $ 2,700,000 | ||
35-Month Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, liability | $ 662,698 |
ROYALTY OBLIGATIONS (Details Na
ROYALTY OBLIGATIONS (Details Narrative) - USD ($) | 6 Months Ended | ||
Apr. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Issuance of convertible promissory note | $ 10,350,000 | ||
License Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Proceeds from royalties received | 2,500,000 | ||
Accounts payable | $ 1,400,000 | ||
Decrease in accounts payable | 400,000 | ||
Issuance of convertible promissory note | $ 1,000,000 | ||
License Agreement [Member] | 2024 and 2025 [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Debt, current | 800,000 | ||
License Agreement [Member] | 2026 [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Debt, current | 900,000 | ||
License Agreement [Member] | 2027 [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Accounts payable | $ 1,400,000 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued interest, convertible notes | $ 889,383 | $ 744,953 |
Trade payables | 12,092,406 | 11,513,918 |
Accrued compensation | 502,924 | 874,557 |
Total | $ 13,484,713 | $ 13,133,428 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Accrued interest | $ 889,383 | $ 744,953 |
Director and Co-Chief Executive Officer [Member] | ||
Related party transactions amount | 950,000 | 950,000 |
Accrued interest | $ 289,887 | $ 151,081 |
SCHEDULE OF COMMON STOCK (Detai
SCHEDULE OF COMMON STOCK (Details) - Common Stock [Member] - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Shares Issued | 1,497,676 | 1,107,713 | 2,387,779 | 1,389,901 | |
Common stock issued pursuant to stock at the market offering, Shares Issued | 801,706 | 2,984,308 | 3,535,067 | 2,984,308 | |
Common stock issued pursuant to acquisition, Shares Issued | 1,853,421 | 1,923,285 | 1,853,421 | 1,923,285 | |
Common stock issued pursuant to conversion of preferred stock, Shares Issued | 880,400 | 880,400 | |||
2024 Equity Transactions [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Shares Issued | 2,387,779 | ||||
Common stock issued, pursuant to services provided, Valuation issued | $ 6,070,935 | ||||
Common stock issued pursuant to stock at the market offering, Shares Issued | 3,535,067 | ||||
Common stock issued pursuant to stock at the market offering, Valuation issued | $ 4,330,295 | ||||
Common stock issued pursuant to acquisition, Shares Issued | [1] | 1,853,421 | |||
Common stock issued pursuant to acquisition, Valuation issued | [1] | ||||
2024 Equity Transactions [Member] | Minimum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Range of value per share | $ 0.83 | $ 0.83 | |||
Common stock issued pursuant to stock at the market offering, Range of value per share | 0.952 | 0.952 | |||
Common stock issued pursuant to conversion of preferred stock, Range of value per share | [1] | 0 | 0 | ||
2024 Equity Transactions [Member] | Maximum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Range of value per share | 1.78 | 1.78 | |||
Common stock issued pursuant to stock at the market offering, Range of value per share | $ 1.64 | $ 1.64 | |||
2023 Equity Transactions [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Shares Issued | 1,389,901 | ||||
Common stock issued, pursuant to services provided, Valuation issued | $ 10,638,534 | ||||
Common stock issued pursuant to stock at the market offering, Shares Issued | 2,984,308 | ||||
Common stock issued pursuant to stock at the market offering, Valuation issued | $ 7,446,274 | ||||
Common stock issued pursuant to acquisition, Shares Issued | 1,923,285 | ||||
Common stock issued pursuant to acquisition, Valuation issued | $ 7,327,716 | ||||
Common stock issued pursuant to conversion of preferred stock, Range of value per share | $ 0.25 | $ 0.25 | |||
Common stock issued pursuant to conversion of preferred stock, Shares Issued | 880,400 | ||||
Common stock issued pursuant to conversion of preferred stock, Valuation issued | $ 220,099 | ||||
Common stock issued pursuant to acquisition, Range of value per share | 3.81 | $ 3.81 | |||
Common stock issued pursuant to extinguishment of debt, Shares Issued | 574,713 | ||||
Common stock issued pursuant to extinguishment of debt, Valuation issued | $ 2,040,231 | ||||
Common stock issued pursuant to extinguishment of debt, Range of value per share | 3.55 | $ 3.55 | |||
2023 Equity Transactions [Member] | Minimum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Range of value per share | 2.67 | 2.67 | |||
Common stock issued pursuant to stock at the market offering, Range of value per share | 2.55 | 2.55 | |||
2023 Equity Transactions [Member] | Maximum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock issued, pursuant to services provided, Range of value per share | 3.49 | 3.49 | |||
Common stock issued pursuant to stock at the market offering, Range of value per share | $ 3.25 | $ 3.25 | |||
[1]Common stock issued pursuant to the acquisition consists of shares issued in April 2024 pursuant to the acquisition of Belami. The value of the shares issued in April 2024 was reflected in the common stock and additional paid-in capital at the date of acquisition in 2023. |
SCHEDULE OF PREFERRED STOCK ACT
SCHEDULE OF PREFERRED STOCK ACTIVITY (Details) - Preferred Stock [Member] | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Preferred stock beginning, shares outstanding | shares | 880,400 |
Preferred stock beginning, carrying value | $ | $ 220,099 |
Preferred stock, value per share, beginning | $ / shares | $ 0.25 |
2023 Preferred stock redemption, shares | shares | 880,400 |
2023 Preferred stock redemption shares, carrying value | $ | $ 220,099 |
2023 Preferred stock redemption, value per share | $ / shares | $ 0.25 |
Preferred stock ending, shares outstanding | shares | |
2023 Preferred stock ending, carrying value | $ | |
Preferred stock, value per share, ending | $ / shares |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Equity [Abstract] | ||
Number of shares, Outstanding beginning | 35,805,976 | 33,289,250 |
Weighted Average Exercise Price, Outstanding beginning | $ 7.33 | $ 7.7 |
Aggregate Intrinsic value, Outstanding beginning | $ 1,017,750 | $ 6,472,400 |
Number of shares, Exercised | ||
Weighted Average Exercise Price, Exercised | $ 0 | |
Number of shares, Granted | 1,481,000 | 1,370,150 |
Weighted Average Exercise Price, Granted | $ 1.23 | $ 3.3 |
Number of shares, Forfeited | (440,500) | |
Weighted Average Exercise Price, Forfeited | $ 2.21 | |
Number of shares, Awards expired | (425,500) | |
Weighted Average Exercise Price, Awards expired | $ 4 | |
Number of shares, Outstanding ending | 36,846,476 | 34,233,900 |
Weighted Average Exercise Price, Outstanding Ending | $ 7.14 | $ 7.6 |
Weighted Average Remaining Contractual Life (In Years), Outstanding ending | 2 years 6 months 29 days | 3 years 1 month 24 days |
Aggregate Intrinsic value, Outstanding ending | $ 1,029,750 | $ 6,472,400 |
Number of shares, Exercisable | 14,442,850 | 12,847,747 |
Weighted Average Exercise Price, Exercisable ending | $ 4.50 | $ 4.4 |
Weighted Average Remaining Contractual Life (In Years), Exercisable ending | 2 years 25 days | 1 year 11 months 1 day |
Aggregate Intrinsic value, Exercisable ending | $ 1,017,750 | $ 6,472,400 |
SCHEDULE OF BLACK SCHOLES PRICI
SCHEDULE OF BLACK SCHOLES PRICING MODEL (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Dividend yield | ||
Minimum [Member] | ||
Stock price | $ 0.92 | $ 3.74 |
Exercise price | $ 0.92 | $ 3.74 |
Expected term (in years) | 2 years 6 months 25 days | 3 years 6 months |
Expected volatility | 36% | 48% |
Risk-fee interest rate | 4.10% | 3.51% |
Maximum [Member] | ||
Stock price | $ 1.76 | $ 3.84 |
Exercise price | $ 1.68 | $ 3.84 |
Expected term (in years) | 3 years 6 months | 5 years |
Expected volatility | 90% | 54% |
Risk-fee interest rate | 4.62% | 5.02% |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Equity [Abstract] | ||
Number of Warrants, Beginning balance | 2,063,522 | 671,855 |
Weighted average exercise price outstanding, beginning | $ 5.76 | $ 11.5 |
Number of Warrants, Issued | 1,391,667 | |
Weighted Average Exercise Price, Issued | $ 3 | |
Number of Warrants, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Number of Warrants, Forfeited | (229,331) | |
Weighted Average Exercise Price, Forfeited | $ 9.94 | |
Number of Warrants, Ending balance | 1,834,191 | 2,063,522 |
Weighted average exercise price outstanding, ending | $ 5.25 | $ 5.76 |
SCHEDULE OF NON-VESTED RESTRICT
SCHEDULE OF NON-VESTED RESTRICTED STOCK (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-vested restricted stock units, beginning balance | 4,919,702 | 2,516,461 |
Non-vested restricted stock units, Weighted average grant due fair value, beginning balance | $ 4.21 | $ 8.39 |
Non-vested restricted stock units, granted | 2,238,480 | 2,955,900 |
Non-vested restricted stock units, Weighted average grant due fair value, granted | $ 1.16 | $ 3.08 |
Non-vested restricted stock units, vested | (2,556,393) | (1,689,901) |
Non-vested restricted stock units, Weighted average grant due fair value, vested | $ 2.9 | $ 5.27 |
Non-vested restricted stock units, forfeited | (22,334) | (227,891) |
Non-vested restricted stock units, Weighted average grant due fair value, forfeited | $ 1.45 | $ 10.71 |
Non-vested restricted stock units, beginning balance | 4,579,455 | 3,554,569 |
Non-vested restricted stock units, Weighted average grant due fair value, ending balance | $ 3.46 | $ 5.27 |
STOCKHOLDERS_ EQUITY (DEFICIT_2
STOCKHOLDERS’ EQUITY (DEFICIT) (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Subsidiary, Sale of Stock [Line Items] | |||
Expected option terms | 2 years 6 months 29 days | 3 years 1 month 24 days | |
Historical period terms | 2 years 25 days | 1 year 11 months 1 day | |
Unamortized future option expense | $ 14,400,000 | ||
Unamortized future option expense excluding market based options | $ 63,000,000 | ||
Weighted average period | 2 years | ||
Weighted-average remaining contractual life | 1 year 10 months 6 days | ||
Share based compensation expense | $ 6,070,935 | $ 10,638,534 | |
Convertible Notes [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Warrants issued | 1,391,667 | 1,391,667 | |
Warrants term | 3 years | ||
Warrant exercise price | $ 2.70 | $ 2.70 | |
Debt instrument convertible beneficial conversion feature | $ 5,600,000 | $ 5,600,000 | |
Options Held [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Expected option terms | 3 years 6 months | ||
Historical period terms | 2 years 4 months 24 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Share based compensation expense | $ 6,070,935 | $ 10,638,534 | |
Series A Preferred Stock [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Preferred stock, shares outstanding | 0 | ||
Preferred Stock [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Preferred stock, par value | $ 3.50 | ||
Sale of stock, price per share | $ 0.25 | ||
ATM Offering Program [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares value issued | $ 5,800,000 |
CONCENTRATIONS OF RISKS (Detail
CONCENTRATIONS OF RISKS (Details Narrative) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Third-party Payor [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 24% | 24% |
SCHEDULE OF PROFORMA CONSOLIDAT
SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Proforma Financial Statements | ||
Revenues | $ 20,416,569 | $ 39,031,541 |
Net loss | $ (10,362,183) | $ (18,802,429) |
Basic loss per share | $ (0.11) | $ (0.20) |
Diluted loss per share | (0.11) | (0.20) |
Weighted average number of shares outstanding- basic | 93,874,115 | 92,097,014 |
Weighted average number of shares outstanding- diluted | $ 93,874,115 | $ 92,097,014 |