Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 25, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | KULR Technology Group, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Central Index Key | 0001662684 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 81,618,875 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 634,148 | $ 108,857 |
Accounts receivable | 56,812 | 30,101 |
Inventory | 31,605 | 27,091 |
Prepaid expenses | 68,579 | 23,825 |
Other current assets | 13,764 | 19,376 |
Total Current Assets | 804,908 | 209,250 |
Property and equipment, net | 26,973 | 27,516 |
Deferred offering costs | 78,259 | 0 |
Total Assets | 910,140 | 236,766 |
Current Liabilities: | ||
Accounts payable | 210,008 | 344,660 |
Accounts payable - related party | 3,622 | 4,253 |
Accrued expenses and other current liabilities | 665,320 | 659,399 |
Accrued expenses and other current liabilities - related party | 0 | 10,419 |
Current portion of notes payable, net of debt discount of $166,163 and $0 at March 31, 2020 and December 31, 2019, respectively | 1,033,837 | 0 |
Line of credit | 8,401 | 0 |
Deferred revenue | 47,000 | 15,000 |
Total Current Liabilities | 1,968,188 | 1,033,731 |
Notes payable, non-current portion, net of debt discount of $34,617 and $0 at March 31, 2020 and December 31, 2019, respectively | 215,383 | 0 |
Total Liabilities | 2,183,571 | 1,033,731 |
Commitments and contingencies (Note 10) | ||
Stockholders' Deficiency: | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 81,167,678 and 81,071,831 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 8,117 | 8,107 |
Additional paid-in capital | 7,665,016 | 7,591,239 |
Accumulated deficit | (8,946,565) | (8,396,312) |
Total Stockholders' Deficiency | (1,273,431) | (796,965) |
Total Liabilities and Stockholders' Deficiency | 910,140 | 236,766 |
Series A Preferred Stock [Member] | ||
Stockholders' Deficiency: | ||
Preferred stock | 0 | 0 |
Series B Convertible Preferred Stock | ||
Stockholders' Deficiency: | ||
Preferred stock | 1 | 1 |
Total Stockholders' Deficiency | 1 | 1 |
Series C Preferred Stock [Member] | ||
Stockholders' Deficiency: | ||
Preferred stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt discount, Current | $ 166,163 | $ 0 |
Debt discount, Non-current | $ 34,617 | $ 0 |
Preferred Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued | 81,167,678 | 81,071,831 |
Common Stock, Shares Outstanding | 81,167,678 | 81,071,831 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series B Convertible Preferred Stock | ||
Preferred Stock, Shares Authorized | 31,000 | 31,000 |
Preferred Stock, Shares Issued | 14,487 | 14,487 |
Preferred Stock, Shares Outstanding | 14,487 | 14,487 |
Preferred Stock Shares Liquidated Preference | $ 14,487 | $ 14,487 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 400 | 400 |
Preferred Stock, Shares Issued | 24.01 | 24.01 |
Preferred Stock, Shares Outstanding | 24.01 | 24.01 |
Preferred Stock Shares Liquidated Preference | $ 240,100 | $ 240,100 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 77,500 | $ 194,952 |
Cost of revenue | 25,926 | 61,517 |
Gross Profit | 51,574 | 133,435 |
Operating Expenses: | ||
Research and development | 111,713 | 129,492 |
Selling, general and administrative | 469,527 | 569,191 |
Total Operating Expenses | 581,240 | 698,683 |
Loss From Operations | (529,666) | (565,248) |
Other Expenses: | ||
Interest expense, net | (1,367) | (445) |
Amortization of debt discount | (19,220) | 0 |
Total Other Expenses | (20,587) | (445) |
Net Loss | $ (550,253) | $ (565,693) |
Net Loss Per Share - Basic and Diluted (In dollars per share) | $ (0.01) | $ (0.01) |
Weighted Average Number of Common Shares Outstanding - Basic and Diluted (In Shares) | 81,098,163 | 78,730,818 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Balance | $ (796,965) | $ (125,137) |
Stock-based compensation | 10,528 | 36,060 |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement | 63,259 | |
Common stock issued for cash | 155,000 | |
Net loss | (550,253) | (565,693) |
Balance | (1,273,431) | (499,770) |
Common Stock | ||
Balance | $ 8,107 | $ 7,871 |
Balance (shares) | 81,071,831 | 78,706,256 |
Stock-based compensation | $ 0 | $ 3 |
Stock-based compensation (in shares) | 0 | 25,000 |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement | $ 10 | |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement (in shares) | 95,847 | |
Common stock issued for cash | $ 23 | |
Common stock issued for cash (in shares) | 234,849 | |
Net loss | $ 0 | $ 0 |
Balance | $ 8,117 | $ 7,897 |
Balance (shares) | 81,167,678 | 78,966,105 |
Additional Paid-in Capital | ||
Balance | $ 7,591,239 | $ 6,283,548 |
Stock-based compensation | 10,528 | 36,057 |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement | 63,249 | |
Common stock issued for cash | 154,977 | |
Net loss | 0 | 0 |
Balance | 7,665,016 | 6,474,582 |
Accumulated Deficit | ||
Balance | (8,396,312) | (6,416,559) |
Stock-based compensation | 0 | 0 |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement | 0 | |
Common stock issued for cash | 0 | |
Net loss | (550,253) | (565,693) |
Balance | (8,946,565) | (6,982,252) |
Series B Convertible Preferred Stock | ||
Balance | $ 1 | $ 3 |
Balance (shares) | 14,487 | 30,858 |
Stock-based compensation | $ 0 | $ 0 |
Stock-based compensation (in shares) | 0 | 0 |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement | $ 0 | |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement (in shares) | 0 | |
Common stock issued for cash | $ 0 | |
Common stock issued for cash (in shares) | 0 | |
Net loss | $ 0 | $ 0 |
Balance | $ 1 | $ 3 |
Balance (shares) | 14,487 | 30,858 |
Series C Convertible Preferred Stock | ||
Balance | $ 0 | |
Balance (shares) | 24.01 | |
Stock-based compensation | $ 0 | |
Stock-based compensation (in shares) | 0 | |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement | $ 0 | |
Common stock issued as a commitment fee for the Standby Equity Distribution Agreement (in shares) | 0 | |
Net loss | $ 0 | |
Balance | $ 0 | |
Balance (shares) | 24.01 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (550,253) | $ (565,693) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 19,220 | 0 |
Depreciation expense | 543 | 3,000 |
Bad debt expense | 335 | 0 |
Write-down of inventory | 0 | 90 |
Stock-based compensation | 12,728 | 47,940 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (27,046) | 79,381 |
Inventory | (4,514) | 1,200 |
Prepaid expenses | (44,754) | (7,626) |
Other current assets | 5,612 | (10,246) |
Accounts payable | (135,283) | 134,063 |
Accrued expenses and other current liabilities | (6,698) | 31,471 |
Deferred revenue | 32,000 | 0 |
Total Adjustments | (147,857) | 279,273 |
Net Cash Used In Operating Activities | (698,110) | (286,420) |
Cash Flows from Financing Activities: | ||
Proceeds from note payable | 1,410,000 | 0 |
Payment of debt issuance costs | (130,000) | 0 |
Repayments of note payable | (50,000) | 0 |
Proceeds from line of credit | 10,000 | 0 |
Repayments of line of credit | (1,599) | 0 |
Proceeds from sale of common stock | 0 | 155,000 |
Payment of financing costs on equity line of credit | (15,000) | 0 |
Net Cash Provided By Financing Activities | 1,223,401 | 155,000 |
Net Increase (Decrease) In Cash | 525,291 | (131,420) |
Cash - Beginning of Period | 108,857 | 229,896 |
Cash - End of Period | 634,148 | 98,476 |
Cash paid during the period for: | ||
Cash paid during the period for interest | 1,367 | 446 |
Non-cash investing and financing activities: | ||
Value of common stock issued as a commitment fee for the Standby Equity Distribution Agreement | 63,259 | $ 0 |
Original issuance discount on note payable | $ 90,000 |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 BUSINESS ORGANIZATION AND NATURE OF OPERATIONS Organization and Operations KULR Technology Group, Inc., through its wholly-owned subsidiary, KULR Technology Corporation (collectively referred to as “KULR” or the “Company”), develops and commercializes high-performance thermal management technologies for electronics, batteries, and other components across a range of applications. Currently, the Company is focused on targeting the following applications: electric vehicles and autonomous driving systems (collectively referred to herein as “E-Mobility”); artificial intelligence and Cloud computing; energy storage; and 5G communication technologies. KULR provides heat management solutions to enhance the performance and safety of battery packs used in electric vehicles, communication devices, and aerospace and defense applications. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2020 and for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results for the full year ending December 31, 2020 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2019 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on May 14, 2020. |
GOING CONCERN AND MANAGEMENT'S
GOING CONCERN AND MANAGEMENT'S PLANS | 3 Months Ended |
Mar. 31, 2020 | |
GOING CONCERN AND MANAGEMENT'S PLANS | |
GOING CONCERN AND MANAGEMENT'S PLANS | NOTE 2 GOING CONCERN AND MANAGEMENT’S PLANS The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. As of March 31, 2020, the Company had cash of $634,148 and a working capital deficit of $1,163,280. For the three months ended March 31, 2020 and 2019, the Company incurred net losses of $550,253 and $565,693, respectively, and used cash in operations of $698,110 and $286,420, respectively. It is expected that its research and development and general and administrative expenses will continue to increase and, as a result, the Company will eventually need to generate significant revenues to achieve profitability. Further, as of March 31, 2020, the Company has debt principal in the amount of $1,450,000 which matures on May 31, 2021. In January 2020, an outbreak of a new strain of coronavirus, COVID-19, was identified in Wuhan, China. Through the first quarter of 2020, the disease became widespread around the world, and on March 11, 2020, the World Health Organization declared a pandemic. Our business is dependent on developing new markets and new products to be used on a global basis, thus restrictions on travel could lead to reduced demand for our products and interruptions to supply chains. Also, the local regulations such as “Shelter in Place” will affect our ability to maintain regular R&D and manufacturing schedules as well as the capability to meet customer demands in a timely manner. Given the uncertainty around the extent and timing of the potential future spread or mitigation of the Coronavirus and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our future results of operations, cash flows, or financial condition Effective February 27, 2020, the Company entered into a twenty-four month Standby Equity Distribution Agreement (“SEDA”) with an Investor, pursuant to which the Company may, at its discretion, sell to up to an aggregate of $8,000,000 (subject to the Investor’s approval for amounts over $100,000) of shares of the Company’s common stock at a price equal to Company 80% of the lowest daily volume weighted average price for the five days immediately following the date the Company delivers notice requiring the Investor to purchase the shares under the SEDA. For each advance, the Company shall have delivered all shares relating to all prior advances, and, unless waived by the Investor, at least 5 trading days shall have elapsed from the immediately preceding advance date. See Note 9 – Stockholder Deficiency for additional details. Additionally, the Company applied for, and in April 2020, received, a loan of $155,000 under the government Small Business Administration (“SBA”) sponsored Payroll Protection Program (“PPP”) to support continuing employment during the COVID-19 pandemic (see Note 11 – Subsequent Events). The Company currently has $8,000,000 available in connection with the SEDA, in order to fund its ongoing operations; however, there can be no assurance that the Company will be able to continue sell common shares pursuant to the SEDA at an acceptable price, or without causing undue dilution to existing investors beyond what the Company sold subsequent to March 31, 2020. Further, there is also no assurance that the Company will be able to continue to obtain additional funds on commercially acceptable terms, if at all. If the Company is unable to obtain adequate funds on reasonable terms, it may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms. The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The aforementioned conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statement issuance date. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustment that might become necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the date of the Annual Report on Form 10-K for the year ended December 31, 2019, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. A significant portion of the Company’s cash is held at one major financial institution. The Company has not experienced any losses in such accounts. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. There was an uninsured balance of $376,359 and no uninsured cash balances as of March 31, 2020 and December 31, 2019, respectively. Customer concentrations are as follows: Revenues Accounts Receivable For the Three Months Ended As of As of March 31, March 31, 2020 December 31, 2019 2020 2019 Customer A * 61 % * * Customer B * 17 % * * Customer C * * * 33 % Customer D * * * 17 % Customer E * * * 20 % Customer F * * * 19 % Customer G 59 % * 56 % * Customer H 23 % * 32 % * Customer I * * 11 % * Total 82 % 78 % 99 % 89 % * There is no assurance the Company will continue to receive significant revenues from any of these customers. Any reduction or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects. As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers. Vendor concentrations are as follows: Accounts Payable As of As of March 31, 2020 December 31, 2019 Vendor A 15 % 15 % Vendor B * 16 % Vendor C 17 % 17 % Vendor D * 12 % Vendor E 20 % * Vendor F 20 % * 72 % 60 % * Deferred Offering Costs Deferred offering costs, which consist of direct, incremental professional fees incurred in connection with closing the SEDA for a potential sale of the Company’s equity securities (as described in Note 9 – Stockholders’ Deficiency), are capitalized as non-current assets on the balance sheet. Upon continued utilization of the SEDA, the deferred offering costs will be offset against the equity offering proceeds. As of March 31, 2020, the Company incurred deferred offering costs in the amount of $78,259. See Note – 9 Stockholders’ Deficiency, Standby Equity Distribution Agreement for more information. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The following five steps are applied to achieve that core principle: · Step 1 : Identify the contract with the 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; and · Step 5 : Recognize revenue when the company satisfies a performance obligation. The Company recognizes revenue primarily from the following different types of contracts: · Product sales – Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time it ships the product to the customer. · Contract services – Revenue is recognized at the point in time that the Company satisfies its performance obligation under the contract, which is generally at the time it delivers a report to the customer. The following table summarizes our revenue recognized in our unaudited condensed consolidated statements of operations: For the Three Months Ended March 31, 2020 2019 Product sales $ 28,000 $ 169,440 Contract services 49,500 25,512 Total revenue $ 77,500 $ 194,952 As of March 31, 2020 and December 31, 2019, the Company had $47,000 and $15,000 of deferred revenue, respectively, from contracts with customers. The contract liabilities represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract. During the three months ended March 31, 2020 and 2019, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding, plus the impact of common share, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments. The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three Months Ended March 31, 2020 2019 Series B Convertible Preferred Stock 724,350 1,542,900 Series C Convertible Preferred Stock 240,100 — Options 395,000 300,000 Warrants 210,025 — Total potentially dilutive shares 1,569,475 1,842,900 Reclassification Certain prior period balances have been reclassified in order to conform to the current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share. |
PREPAID EXPENSES
PREPAID EXPENSES | 3 Months Ended |
Mar. 31, 2020 | |
PREPAID EXPENSES | |
PREPAID EXPENSES | NOTE 4 PREPAID EXPENSES As of March 31, 2020 and December 31, 2019, prepaid expenses consisted of the following: March 31, December 31, 2020 2019 Travel expenses $ 56,544 $ 487 Insurance 5,837 8,026 Filing fees 5,365 11,625 Research and development services 833 1,812 Other — 1,875 Total prepaid expenses $ 68,579 $ 23,825 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 5 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of March 31, 2020 and December 31, 2019, accrued expenses and other current liabilities consisted of the following: March 31, December 31, 2020 2019 Payroll and vacation $ 510,830 $ 525,917 Legal and professional fees 102,676 60,000 Credit card payable 23,139 4,581 Travel expenses 10,591 45,707 Other 18,084 23,194 Total accrued expenses and other current liabilities $ 665,320 $ 659,399 See Note 8 – Related Party Transactions for more information on accrued expenses – related party. |
LINE OF CREDIT
LINE OF CREDIT | 3 Months Ended |
Mar. 31, 2020 | |
LINE OF CREDIT | |
LINE OF CREDIT | NOTE 6 LINE OF CREDIT On February 18, 2020, the Company entered into a financing agreement (the “Line of Credit”) wherein it may borrow up to $10,000. The repayment terms (interest rate, repayment amount and number of consecutive weekly periodic installments) are determined at the time the Company borrows proceeds under the Line of Credit. On February 19, 2020, the Company borrowed and received gross proceeds of $10,000 under the Line of Credit for its working capital needs, which is being repaid weekly for the next 26 weeks at a weekly interest rate of 1.7%. As of March 31, 2020, the outstanding aggregate principal amount on the Line of Credit was $8,401.During the three months ended March 31, 2020 and 2019, the Company recorded interest expense of $797 and $0, respectively, related to the Line of Credit. There was no accrued interest related to the Line of Credit as of March 31, 2020. |
NOTE PAYABLE
NOTE PAYABLE | 3 Months Ended |
Mar. 31, 2020 | |
NOTE PAYABLE | |
NOTE PAYABLE | NOTE 7 NOTE PAYABLE On February 27, 2020, the Company entered into a note purchase agreement with the YAII PN, Ltd., a Cayman Island exempt limited partnership (the “Investor”), pursuant to which the Investor purchased a full recourse promissory note (the “Note”) in the original principal amount of $1,500,000 (“Principal Amount”) for cash proceeds of $1,410,000. The Note included an original issue discount of $90,000, which represents the difference between the principal and proceeds received. The original issue discount, along with the $130,000 advisory fee were recorded as a debt discount and contra liability and is being amortized over the term of the Note using the effective interest rate method. The Note bears no coupon interest (original issue discount only) and will become immediately due and payable on May 31, 2021 or upon acceleration, redemption or otherwise upon the occurrence of an event of default, as set forth in the Note and which includes the early termination of a standby equity distribution agreement with the Investor (see Note 9 – Stockholders’ Deficiency – Standby Equity Distribution Agreement for additional details). The Company will repay the Principal Amount in monthly installments as set forth in the Note. The Company may, at its discretion, prepay any installment amount or the principal amount, subject to a payment premium equal to the 10% of the amount being prepaid. During the three months ended March 31, 2020, the Company repaid principal on the Note of $50,000, and as of March 31, 2020, the outstanding aggregate principal balance of the Note was $1,450,000. During the three months ended March 31, 2020, the Company recognized amortization of debt discount of $19,220 related to the Note. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 8 RELATED PARTY TRANSACTIONS Accounts Payable – Related Party Accounts payable – related party consists of a liability of $3,622 and $4,253 as of March 31, 2020 and December 31, 2019, respectively, to Energy Science Laboratories, Inc. (“ESLI”), a company controlled by the Company’s Chief Technology Officer (“CTO”), in connection with consulting services provided to the Company associated with the development of the Company’s CFV thermal management solutions in prior periods. Accrued Expenses and Other Current Liabilities – Related Party Accrued expenses and other current liabilities – related parties consist of a liability of $0 and $10,419 as of March 31, 2020 and December 31, 2019, respectively, to Energy Science Laboratories, Inc. (“ESLI”), a company controlled by the Company’s Chief Technology Officer (“CTO”), in connection with consulting services provided by ESLI to the Company associated with the development of the Company’s CFV thermal management solutions. |
STOCKHOLDERS' DEFICIENCY
STOCKHOLDERS' DEFICIENCY | 3 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' DEFICIENCY | |
STOCKHOLDERS' DEFICIENCY | NOTE 9 STOCKHOLDERS’ DEFICIENCY Standby Equity Distribution Agreement On February 27, 2020, KULR Technology Group, Inc. entered into a SEDA with the Investor, pursuant to which the Company may, at its discretion, sell to the Investor up to $8,000,000 of shares of the Company’s common stock (the “Offering”), par value $0.0001 per share (the “Common Stock”). For each share of Common Stock purchased under the SEDA (the “Shares”), the Investor will pay the Company 80% of the lowest daily volume weighted average price of the Common Stock on the OTC Markets OTCQB or other principal market on which the Common Stock is traded for the five days immediately following the date the Company delivers notice requiring the Investor to purchase the Shares under the SEDA. See Note 7 – Note Payable. The Investor’s obligation to purchase the Shares under the SEDA is subject to certain conditions, including the Company maintaining the effectiveness of a registration statement for the securities sold under the SEDA, and subject to the Investor’s approval for amounts over $100,000. In addition, the Company may not request advances if the Shares to be issued would result in the Investor owning more than 4.99% of the Company’s outstanding Common Stock, with any such request being automatically modified to reduce the advance amount. The Company shall not be able to request advances under the SEDA if the Registration Statement is not effective or if any issuances of Common Stock pursuant to any Advances would violate any rules. The commitment period under the SEDA commenced on February 27, 2020 (the “Effective Date”) and expires on the earliest to occur of (i) first day of the month following the twenty-four months after the Effective Date, (ii) on which the Investor has purchased an aggregate amount of $8,000,000 of Shares under the SEDA, or (iii) the date the SEDA is earlier terminated. The SEDA contains customary representations, warranties and agreements of the Company and the Investor, indemnification rights and other obligations of the parties. The Company has the right to terminate the SEDA at any time upon prior written notice, at no cost to the Company, provided that (i) there are no outstanding advances which have yet to be issued and (ii) the Company has paid all amounts owed to the Investor, including amounts borrowed under the Note (see Note 7 – Note Payable for additional details). The Investor has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s shares of Common Stock. The Company paid cash of $15,000 and issued to the Investor 95,847 shares of Common Stock to the Investor and as consideration for entering into the SEDA. The shares of common stock issued to the Investor had an issuance date fair value of $63,259. The aggregate consideration of $78,259 was recorded as deferred offering costs and additional paid in capital on the condensed consolidated balance sheet. The Company did not sell any Shares pursuant to the SEDA during the three months ended March 31, 2020. Please see Note 11 - Subsequent Events for additional details regarding the sale of Shares subsequent to March 31, 2020. Stock Options On January 1, 2020, the Company granted five-year options to purchase a total of 10,000 shares of common stock at an exercise price of $0.66 per share to an employee pursuant to the 2018 Plan. One-fourth of the options will vest on the first-year anniversary of the grant date and the remaining options vest monthly over three years. The options had an aggregate grant date value of $3,609 which is recognized over the vesting period. The Company estimated the fair value of the options using the Black-Scholes Option Pricing Model with the following assumptions: (a) stock price of $0.66 per share; (b) volatility of 93%; (c) expected term of 2.5 years; (d) risk-free interest rate of 1.58%; and (e) a dividend rate of 0.0%. Stock-Based Compensation During the three months ended March 31, 2020 and 2019, the Company recognized stock-based compensation expense of $12,728 and $47,940 (which includes the issuance of 25,000 shares of immediately-vested common stock for legal fees), respectively, related to restricted common stock and stock options, of which $8,112 and $16,300, respectively was charged to research and development expense and $4,616 and $31,640, respectively was charged to general and administrative expense. As of March 31, 2020, there was $85,917 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 2.22 years. The following table presents information related to stock-based compensation for the three months ended March 31, 2020 and 2019: March 31, 2020 2019 Common stock $ 2,200 $ 28,380 Stock options 10,528 19,560 Total $ 12,728 $ 47,940 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 COMMITMENTS AND CONTINGENCIES Operating Lease On January 1, 2020, KULR Technology Group, Inc. renewed a lease agreement for the 5,296 square feet of space located in San Diego, California under a six-month lease agreement ending June 30, 2020. The base rent was increased to $4,552 per month plus association fees of $555 per month. For the three months ended March 31, 2020 and 2019, operating lease expense was $10,016 and $40,385, respectively. The Company evaluated their operating lease and determined that the short-term exemption available under ASC 842 applies since the lease term is less than 12 months and the lease does not include a purchase option whose exercise is reasonably certain. Since the short-term exemption applies, lease payments are recognized as expense and no right of use asset or lease liability is recorded. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 11 SUBSEQUENT EVENTS Common Stock Subsequent to March 31, 2020, the Company issued an aggregate of 421,197 shares of common stock at prices between $0.72 - $1.53 per share for aggregate proceeds of $526,000 received against advance notices submitted to the Investor under the SEDA. On June 12, 2020, the Company issued 30,000 shares of common stock that vest immediately with a grant date value of approximately $30,000 related to consulting services provided. Note Purchase Agreement and Promissory Note Subsequent to March 31, 2020, and pursuant to the terms of the Note, the Company repaid an aggregate of $175,000 against the Principal Amount. Paycheck Protection Program Loan On April 27, 2020, the Company received approximately $155,000 of cash proceeds pursuant to an unsecured loan provided in connection with the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (“CARES Act”). Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company is eligible to apply for and receive forgiveness for all or a portion of their respective PPP Loans. Such forgiveness will be determined, subject to limitations, based on the use of the loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”) incurred during the 24 weeks subsequent to funding, and on the maintenance of employee and compensation levels, as defined, following the funding of the PPP Loan. The Company intends to use the proceeds of their PPP Loans for Qualifying Expenses. However, no assurance is provided KULR will be able to obtain forgiveness of the PPP Loans in whole or in part. Any amounts not forgiven incur interest at 1.0% per annum and monthly repayments of principal and interest are deferred until the Small Business Administration decides on forgiveness. While the Company’s PPP loans currently have a two-year maturity, the amended law will permit the Company to request a five-year maturity. Operating Lease Renewal On June 15, 2020, the Company entered into an agreement to extend the term of its original lease from June 30, 2020 to December 31, 2020. Monthly rental payments under the renewed lease total $5,107, which comprises of $4,552 of base rent plus $555 of association fees. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. A significant portion of the Company’s cash is held at one major financial institution. The Company has not experienced any losses in such accounts. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. There was an uninsured balance of $376,359 and no uninsured cash balances as of March 31, 2020 and December 31, 2019, respectively. Customer concentrations are as follows: Revenues Accounts Receivable For the Three Months Ended As of As of March 31, March 31, 2020 December 31, 2019 2020 2019 Customer A * 61 % * * Customer B * 17 % * * Customer C * * * 33 % Customer D * * * 17 % Customer E * * * 20 % Customer F * * * 19 % Customer G 59 % * 56 % * Customer H 23 % * 32 % * Customer I * * 11 % * Total 82 % 78 % 99 % 89 % * There is no assurance the Company will continue to receive significant revenues from any of these customers. Any reduction or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects. As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers. Vendor concentrations are as follows: Accounts Payable As of As of March 31, 2020 December 31, 2019 Vendor A 15 % 15 % Vendor B * 16 % Vendor C 17 % 17 % Vendor D * 12 % Vendor E 20 % * Vendor F 20 % * 72 % 60 % * |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs, which consist of direct, incremental professional fees incurred in connection with closing the SEDA for a potential sale of the Company’s equity securities (as described in Note 9 – Stockholders’ Deficiency), are capitalized as non-current assets on the balance sheet. Upon continued utilization of the SEDA, the deferred offering costs will be offset against the equity offering proceeds. As of March 31, 2020, the Company incurred deferred offering costs in the amount of $78,259. See Note – 9 Stockholders’ Deficiency, Standby Equity Distribution Agreement for more information. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The following five steps are applied to achieve that core principle: · Step 1 : Identify the contract with the 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; and · Step 5 : Recognize revenue when the company satisfies a performance obligation. The Company recognizes revenue primarily from the following different types of contracts: · Product sales – Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time it ships the product to the customer. · Contract services – Revenue is recognized at the point in time that the Company satisfies its performance obligation under the contract, which is generally at the time it delivers a report to the customer. The following table summarizes our revenue recognized in our unaudited condensed consolidated statements of operations: For the Three Months Ended March 31, 2020 2019 Product sales $ 28,000 $ 169,440 Contract services 49,500 25,512 Total revenue $ 77,500 $ 194,952 As of March 31, 2020 and December 31, 2019, the Company had $47,000 and $15,000 of deferred revenue, respectively, from contracts with customers. The contract liabilities represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract. During the three months ended March 31, 2020 and 2019, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. |
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding, plus the impact of common share, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments. The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three Months Ended March 31, 2020 2019 Series B Convertible Preferred Stock 724,350 1,542,900 Series C Convertible Preferred Stock 240,100 — Options 395,000 300,000 Warrants 210,025 — Total potentially dilutive shares 1,569,475 1,842,900 |
Reclassification | Reclassification Certain prior period balances have been reclassified in order to conform to the current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of concentrations of credit risk | Revenues Accounts Receivable For the Three Months Ended As of As of March 31, March 31, 2020 December 31, 2019 2020 2019 Customer A * 61 % * * Customer B * 17 % * * Customer C * * * 33 % Customer D * * * 17 % Customer E * * * 20 % Customer F * * * 19 % Customer G 59 % * 56 % * Customer H 23 % * 32 % * Customer I * * 11 % * Total 82 % 78 % 99 % 89 % * Accounts Payable As of As of March 31, 2020 December 31, 2019 Vendor A 15 % 15 % Vendor B * 16 % Vendor C 17 % 17 % Vendor D * 12 % Vendor E 20 % * Vendor F 20 % * 72 % 60 % * |
Schedule of revenue recognized | The following table summarizes our revenue recognized in our unaudited condensed consolidated statements of operations: For the Three Months Ended March 31, 2020 2019 Product sales $ 28,000 $ 169,440 Contract services 49,500 25,512 Total revenue $ 77,500 $ 194,952 |
Schedule of weighted average dilutive common shares because their inclusion would have been anti-dilutive | The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three Months Ended March 31, 2020 2019 Series B Convertible Preferred Stock 724,350 1,542,900 Series C Convertible Preferred Stock 240,100 — Options 395,000 300,000 Warrants 210,025 — Total potentially dilutive shares 1,569,475 1,842,900 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
PREPAID EXPENSES | |
Schedule of prepaid expenses | March 31, December 31, 2020 2019 Travel expenses $ 56,544 $ 487 Insurance 5,837 8,026 Filing fees 5,365 11,625 Research and development services 833 1,812 Other — 1,875 Total prepaid expenses $ 68,579 $ 23,825 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, 2020 2019 Payroll and vacation $ 510,830 $ 525,917 Legal and professional fees 102,676 60,000 Credit card payable 23,139 4,581 Travel expenses 10,591 45,707 Other 18,084 23,194 Total accrued expenses and other current liabilities $ 665,320 $ 659,399 |
STOCKHOLDERS' DEFICIENCY (Table
STOCKHOLDERS' DEFICIENCY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' DEFICIENCY | |
Schedule of Information relating to stock based compensation | The following table presents information related to stock-based compensation for the three months ended March 31, 2020 and 2019: March 31, 2020 2019 Common stock $ 2,200 $ 28,380 Stock options 10,528 19,560 Total $ 12,728 $ 47,940 |
GOING CONCERN AND MANAGEMENT'_2
GOING CONCERN AND MANAGEMENT'S PLANS (Details) - USD ($) | Apr. 27, 2020 | Feb. 27, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 18, 2020 |
Cash | $ 634,148 | |||||
Working capital deficit | 1,163,280 | |||||
Net loss | (550,253) | $ (565,693) | ||||
Cash used in operations | (698,110) | $ (286,420) | ||||
Debt principal amount | $ 1,450,000 | |||||
Maturity Date | May 31, 2021 | |||||
Maximum borrowing capacity under Line of credit | $ 10,000 | |||||
Paycheck Protection Program Loan | Subsequent Event | ||||||
Loan proceeds received | $ 155,000 | $ 155,000 | ||||
Standby Equity Distribution Agreement | ||||||
Commitment period | 24 months | |||||
Value of shares authorized to be issued under the SEDA agreement | 8,000,000 | |||||
Investor's obligation to purchase, per advance amount | $ 100,000 | |||||
Lowest daily volume weighted average price of the Common Stock to be paid (as a percent) | 80.00% | |||||
Maximum borrowing capacity under Line of credit | $ 8,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer concentrations (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues [Member] | |||
Concentration Risk, Percentage | 82.00% | 78.00% | |
Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 99.00% | 89.00% | |
Accounts Payable [Member] | |||
Concentration Risk, Percentage | 72.00% | 60.00% | |
Customer A [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | 61.00% | ||
Customer A [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | |||
Customer B [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | 17.00% | ||
Customer B [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | |||
Customer C [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | |||
Customer C [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 33.00% | ||
Customer D [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | |||
Customer D [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 17.00% | ||
Customer E [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | |||
Customer E [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 20.00% | ||
Customer F [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | |||
Customer F [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 19.00% | ||
Customer G [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | 59.00% | ||
Customer G [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 56.00% | ||
Customer H [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | 23.00% | ||
Customer H [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 32.00% | ||
Customer I [Member] | Revenues [Member] | |||
Concentration Risk, Percentage | |||
Customer I [Member] | Accounts Receivable [Member] | |||
Concentration Risk, Percentage | 11.00% | ||
Vendor A [Member] | Accounts Payable [Member] | |||
Concentration Risk, Percentage | 15.00% | 15.00% | |
Vendor B [Member] | Accounts Payable [Member] | |||
Concentration Risk, Percentage | 16.00% | ||
Vendor C [Member] | Accounts Payable [Member] | |||
Concentration Risk, Percentage | 17.00% | 17.00% | |
Vendor D [Member] | Accounts Payable [Member] | |||
Concentration Risk, Percentage | 12.00% | ||
Vendor E [Member] | Accounts Payable [Member] | |||
Concentration Risk, Percentage | 20.00% | ||
Vendor F [Member] | Accounts Payable [Member] | |||
Concentration Risk, Percentage | 20.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- consolidated statements of operations: (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 77,500 | $ 194,952 |
Product sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 28,000 | 169,440 |
Contract services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 49,500 | $ 25,512 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - weighted average dilutive common shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,569,475 | 1,842,900 |
Series B Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 724,350 | 1,542,900 |
Series C Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 240,100 | |
options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 395,000 | 300,000 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 210,025 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 15 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Cash, FDIC Insured Amount | $ 250,000 | |
Uninsured cash | 376,359 | $ 0 |
Deferred financing costs | 78,259 | 0 |
Deferred revenue | 47,000 | $ 15,000 |
Revenue Recognized | $ 0 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Total prepaid expenses | $ 68,579 | $ 23,825 |
Business development services [Member] | ||
Travel expenses | 56,544 | 487 |
Insurance | 5,837 | 8,026 |
Filing fees | 5,365 | 11,625 |
Research and development services | $ 833 | 1,812 |
Other | $ 1,875 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Payroll and vacation | $ 510,830 | $ 525,917 |
Legal and professional fees | 102,676 | 60,000 |
Credit card payable | 23,139 | 4,581 |
Travel expenses | 10,591 | 45,707 |
Other | 18,084 | 23,194 |
Total accrued expenses and other current liabilities | $ 665,320 | $ 659,399 |
LINE OF CREDIT (Details)
LINE OF CREDIT (Details) - USD ($) | Feb. 19, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 18, 2020 | Dec. 31, 2019 |
LINE OF CREDIT | |||||
Maximum borrowing capacity | $ 10,000 | ||||
Gross proceeds under line of credit | $ 10,000 | $ 10,000 | $ 0 | ||
Term | 182 days | ||||
Interest rate | 1.70% | ||||
Outstanding line of credit | 8,401 | $ 0 | |||
Interest expense | 797 | $ 0 | |||
Accrued interest | $ 0 |
NOTE PAYABLE (Details)
NOTE PAYABLE (Details) - USD ($) | Feb. 27, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Debt Instrument [Line Items] | |||
Purchase price of the Note paid | $ 1,450,000 | ||
Proceeds from notes payable | 1,410,000 | $ 0 | |
Original issuance discount on note payable | 90,000 | ||
Repayments of note payable | 50,000 | 0 | |
Amortization of debt discount | $ 19,220 | $ 0 | |
Note payable | |||
Debt Instrument [Line Items] | |||
Purchase price of the Note paid | $ 1,500,000 | ||
Proceeds from notes payable | 1,410,000 | ||
Advisory fees paid to financial advisor | 130,000 | ||
Original issuance discount on note payable | $ 90,000 | ||
Prepayment premium (as a percentage) | 10.00% | ||
Repayments of note payable | $ 50,000 | ||
Outstanding aggregate principal balance | 1,450,000 | ||
Amortization of debt discount | $ 19,220 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||
Accounts payable - related party | $ 3,622 | $ 4,253 |
Accrued expenses and other current liabilities - related party | 0 | 10,419 |
Chief Technology Officer CTO [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable - related party | $ 3,622 | $ 4,253 |
STOCKHOLDERS' DEFICIENCY - Stoc
STOCKHOLDERS' DEFICIENCY - Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 12,728 | $ 47,940 |
Stock Issued During Period, Shares, Issued for Services | 0 | 25,000 |
Unrecognized stock-based compensation expense | $ 85,917 | |
Weighted average remaining vesting period | 2 years 2 months 19 days | |
Selling, general and administrative expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 4,616 | $ 31,640 |
Research and development expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 8,112 | 16,300 |
Common Stock | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 2,200 | 28,380 |
Stock options | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 10,528 | $ 19,560 |
STOCKHOLDERS' DEFICIENCY - Stan
STOCKHOLDERS' DEFICIENCY - Standby Equity Distribution Agreement (Details) - USD ($) | Feb. 27, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Deferred offering costs | $ 78,259 | $ 0 | |
Standby Equity Distribution Agreement | |||
Value of shares authorized to be issued under the SEDA agreement | 8,000,000 | ||
Par value per share (in dollars per share) | $ 0.0001 | ||
Lowest daily volume weighted average price of the Common Stock to be paid (as a percent) | 80.00% | ||
Threshold number of trading days for investor payments | 5 days | ||
Investor's obligation to purchase, per advance amount | $ 100,000 | ||
Threshold maximum investor's ownership percentage | 4.99% | ||
Commitment period | 24 months | ||
Cash paid | $ 15,000 | ||
Shares issued to investors | 95,847 | ||
Fair value of shares | $ 63,259 | ||
Deferred offering costs | $ 78,259 | ||
Series B Convertible Preferred Stock | |||
Shares issued to investors | 0 | ||
Series C Convertible Preferred Stock | |||
Shares issued to investors | 0 | ||
Common Stock | |||
Shares issued to investors | 95,847 |
STOCKHOLDERS' DEFICIENCY - St_2
STOCKHOLDERS' DEFICIENCY - Stock options (Details) | Jan. 01, 2020USD ($)$ / sharesshares |
STOCKHOLDERS' DEFICIENCY | |
Options Outstanding, Exercise Price | $ / shares | $ 0.66 |
Options Outstanding, Number of Options | shares | 10,000 |
Share based Compensation Arrangement By Share based Payment Award Options Non vested Weighted Average Aggregate Grant Date Fair Value | $ | $ 3,609 |
Expected term | 2 years 6 months |
Expected volatility (as a percent) | 93.00% |
Risk free interest rate (as a percent) | 1.58% |
Expected dividends (as a percent) | 0.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended | ||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Jan. 01, 2020ft² | |
COMMITMENTS AND CONTINGENCIES | |||
Area of Land | ft² | 5,296 | ||
Operating Lease, Base Rent | $ 4,552 | ||
Operating Lease Association Fees | 555 | ||
Operating Lease, Expense | 10,016 | $ 40,385 | |
Right of use assets | 0 | ||
Lease liabilities | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Jun. 12, 2020 | Apr. 27, 2020 | Feb. 19, 2020 | Apr. 30, 2020 | Jun. 26, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 15, 2020 | Feb. 27, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||||||||
Par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Common stock issued for cash | $ 155,000 | |||||||||
Shares of common stock issued related to consulting services provided | 0 | 25,000 | ||||||||
Loan maturity term | 182 days | |||||||||
Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Shares of common stock issued related to consulting services provided | 30,000 | |||||||||
Grant date value of common stock issued related to consulting services provided | $ 30,000 | |||||||||
Repaid aggregate principal amount | $ 175,000 | |||||||||
Monthly rental payments | $ 5,107,000 | |||||||||
Base rent | 4,552,000 | |||||||||
Association fees | $ 555,000 | |||||||||
Subsequent Event | Paycheck Protection Program Loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Loan maturity term | 5 years | |||||||||
Interest rate of unforgiven loan | 1.00% | |||||||||
Subsequent Event | Paycheck Protection Program Loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Loan proceeds received | $ 155,000 | $ 155,000 | ||||||||
Standby Equity Distribution Agreement | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Par value per share (in dollars per share) | $ 0.0001 | |||||||||
Standby Equity Distribution Agreement | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Common stock issued for cash, net of issuance costs (in shares) | 421,197 | |||||||||
Common stock issued for cash | $ 526,000 | |||||||||
Minimum | Standby Equity Distribution Agreement | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Par value per share (in dollars per share) | $ 0.72 | |||||||||
Maximum | Subsequent Event | Paycheck Protection Program Loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Loan maturity term | 2 years | |||||||||
Maximum | Standby Equity Distribution Agreement | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Par value per share (in dollars per share) | $ 1.53 |