Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 16, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2021 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40454 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-1004273 | |
Entity Address, Postal Zip Code | 92111 | |
City Area Code | 408 | |
Local Phone Number | 663-5247 | |
Entity Address, Address Line One | 4863 Shawline Street, | |
Entity Address, City or Town | San Diego, | |
Entity Address, State or Province | CA | |
Entity Registrant Name | KULR Technology Group, Inc. | |
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 | 101,701,263 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | KULR | |
Security Exchange Name | NYSE | |
Entity Central Index Key | 0001662684 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash | $ 12,159,583 | $ 8,880,140 |
Accounts receivable | 614,784 | 55,492 |
Inventory | 182,458 | 55,452 |
Prepaid expenses and other current assets | 488,538 | 150,468 |
Total Current Assets | 13,445,363 | 9,141,552 |
Property and equipment, net | 84,441 | 57,857 |
Security deposits | 58,941 | 8,728 |
Right of use asset | 793,769 | 0 |
Total Assets | 14,382,514 | 9,208,137 |
Current Liabilities: | ||
Accounts payable | 119,677 | 66,537 |
Accounts payable - related party | 2,628 | 2,628 |
Accrued expenses and other current liabilities | 343,026 | 395,012 |
Accrued issuable equity | 349,093 | 128,380 |
Notes payable, net of debt discount of $0 and $128,198 at June 30, 2021 and December 31, 2020, respectively | 0 | 2,321,802 |
Loan payable, current portion | 155,226 | 12,936 |
Lease liability, current portion | 252,081 | 0 |
Deferred revenue | 29,229 | 20,000 |
Total Current Liabilities | 1,250,960 | 2,947,295 |
Lease liability, non-current portion | 542,344 | 0 |
Loan payable, non-current portion | 0 | 142,290 |
Total Liabilities | 1,793,304 | 3,089,585 |
Commitments and contingencies (Note 10) | ||
Stockholders' Equity: | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 100,567,930 and 89,908,600 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 10,058 | 8,991 |
Additional paid-in capital | 28,567,426 | 17,355,968 |
Accumulated deficit | (15,988,274) | (11,246,408) |
Total Stockholders' Equity | 12,589,210 | 6,118,552 |
Total Liabilities and Stockholders' Equity | 14,382,514 | 9,208,137 |
Series A Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock | 0 | 0 |
Series B Convertible Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock | 0 | 1 |
Total Stockholders' Equity | 1 | |
Series C Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock | 0 | 0 |
Series D Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Debt discount, Current | $ 0 | $ 128,198 |
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 | 100,567,930 | 89,908,600 |
Common Stock, Shares Outstanding | 100,567,930 | 89,908,600 |
Series A Preferred Stock | ||
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 | 0 | 13,972 |
Preferred Stock, Shares Outstanding | 0 | 13,972 |
Preferred Stock Shares Liquidated Preference | $ 0 | $ 13,972 |
Series C Preferred Stock | ||
Preferred Stock, Shares Authorized | 400 | 400 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series D Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 650 | 650 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 628,244 | $ 201,128 | $ 1,046,149 | $ 278,628 |
Cost of revenue | 439,206 | 44,734 | 714,474 | 74,777 |
Gross Profit | 189,038 | 156,394 | 331,675 | 203,851 |
Operating Expenses: | ||||
Research and development | 352,741 | 57,991 | 475,724 | 169,704 |
Selling, general, and administrative | 2,723,303 | 421,544 | 4,216,114 | 886,954 |
Total Operating Expenses | 3,076,044 | 479,535 | 4,691,838 | 1,056,658 |
Loss From Operations | (2,887,006) | (323,141) | (4,360,163) | (852,807) |
Other (Expense) Income | ||||
Interest expense, net | (766) | (2,353) | (1,631) | (3,720) |
Debt redemption costs | (140,000) | 0 | (140,000) | |
Amortization of debt discount | (20,074) | (77,691) | (128,198) | (96,911) |
Change in fair value of accrued issuable equity | 20,703 | (25,800) | (111,874) | (25,800) |
Total Other Expenses, net | (140,137) | (105,844) | (381,703) | (126,431) |
Net Loss | (3,027,143) | (428,985) | (4,741,866) | (979,238) |
Deemed dividend to Series D preferred stockholders | (2,624,326) | 0 | (2,624,326) | |
Net Loss Attributable to Common Stockholders | $ (5,651,469) | $ (428,985) | $ (7,366,192) | $ (979,238) |
Net Loss Per Share - Basic and Diluted (In dollars per share) | $ (0.06) | $ (0.01) | $ (0.08) | $ (0.01) |
Weighted Average Number of Common Shares Outstanding - Basic and Diluted (In Shares) | 92,513,238 | 81,234,608 | 91,302,814 | 81,166,393 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) - USD ($) | Series B Convertible Preferred StockStock options | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Common stockCommon stock | Common stockStock options | Common stockMarket-Based Awards | Common stock | Additional Paid-in CapitalCommon stock | Additional Paid-in CapitalStock options | Additional Paid-in CapitalMarket-Based Awards | Additional Paid-in Capital | Accumulated DeficitCommon stock | Accumulated DeficitStock options | Accumulated DeficitMarket-Based Awards | Accumulated Deficit | Common stock | Stock options | Market-Based Awards | Total | |
Balance at Dec. 31, 2019 | $ 1 | $ 8,107 | $ 7,591,239 | $ (8,396,312) | $ (796,965) | ||||||||||||||||
Balance (shares) at Dec. 31, 2019 | 14,487 | 24.01 | 81,071,831 | ||||||||||||||||||
Common stock issued for the commitment fee pursuant to the SEDA agreement | $ 0 | $ 10 | 63,249 | 0 | 63,259 | ||||||||||||||||
Common stock issued for the commitment fee pursuant to the SEDA agreement (in shares) | 0 | 95,847 | |||||||||||||||||||
Additional Paid in Capital, Amortization of Equity Options And Awards | $ 0 | $ 0 | $ 10,528 | $ 0 | $ 10,528 | ||||||||||||||||
Net loss | $ 0 | $ 0 | 0 | (550,253) | (550,253) | ||||||||||||||||
Balance at Mar. 31, 2020 | $ 1 | $ 8,117 | 7,665,016 | (8,946,565) | (1,273,431) | ||||||||||||||||
Balance (shares) at Mar. 31, 2020 | 14,487 | 24.01 | 81,167,678 | ||||||||||||||||||
Balance at Dec. 31, 2019 | $ 1 | $ 8,107 | 7,591,239 | (8,396,312) | (796,965) | ||||||||||||||||
Balance (shares) at Dec. 31, 2019 | 14,487 | 24.01 | 81,071,831 | ||||||||||||||||||
Net loss | (979,238) | ||||||||||||||||||||
Balance at Jun. 30, 2020 | $ 1 | $ 8,176 | 8,383,982 | (9,375,550) | (983,391) | ||||||||||||||||
Balance (shares) at Jun. 30, 2020 | 14,487 | 24.01 | 81,759,242 | ||||||||||||||||||
Balance at Mar. 31, 2020 | $ 1 | $ 8,117 | 7,665,016 | (8,946,565) | (1,273,431) | ||||||||||||||||
Balance (shares) at Mar. 31, 2020 | 14,487 | 24.01 | 81,167,678 | ||||||||||||||||||
Common stock issued for the commitment fee pursuant to the SEDA agreement | [1] | $ 0 | $ 56 | 679,381 | 0 | 679,437 | |||||||||||||||
Common stock issued for the commitment fee pursuant to the SEDA agreement (in shares) | [1] | 0 | 561,564 | ||||||||||||||||||
Stock-based compensation | $ 0 | $ 3 | 29,997 | 0 | 30,000 | ||||||||||||||||
Stock-based compensation (in shares) | 0 | 30,000 | |||||||||||||||||||
Additional Paid in Capital, Amortization of Equity Options And Awards | $ 0 | 0 | 9,588 | 0 | 9,588 | ||||||||||||||||
Net loss | $ 0 | $ 0 | 0 | (428,985) | (428,985) | ||||||||||||||||
Balance at Jun. 30, 2020 | $ 1 | $ 8,176 | 8,383,982 | (9,375,550) | (983,391) | ||||||||||||||||
Balance (shares) at Jun. 30, 2020 | 14,487 | 24.01 | 81,759,242 | ||||||||||||||||||
Balance at Dec. 31, 2020 | $ 1 | $ 8,991 | 17,355,968 | (11,246,408) | 6,118,552 | ||||||||||||||||
Balance (shares) at Dec. 31, 2020 | 13,972 | 89,908,600 | |||||||||||||||||||
Common stock issued upon conversion of Series B Convertible Preferred Stock | $ (1) | $ 70 | (69) | 0 | 0 | ||||||||||||||||
Common stock issued upon conversion of Series B Convertible Preferred Stock (in shares) | (13,972) | 698,600 | |||||||||||||||||||
Common stock issued for services | $ 2 | 49,798 | 0 | 49,800 | |||||||||||||||||
Common stock issued for services (in shares) | 20,000 | ||||||||||||||||||||
Restricted common stock issued | $ 200 | (200) | 0 | 0 | |||||||||||||||||
Restricted common stock issued (in shares) | 2,000,000 | ||||||||||||||||||||
Additional Paid in Capital, Amortization of Equity Options And Awards | $ 0 | 0 | $ 0 | $ 126,625 | 9,112 | $ 130,245 | $ 0 | 0 | $ 0 | $ 126,625 | 9,112 | $ 130,245 | |||||||||
Net loss | $ 0 | 0 | (1,714,723) | (1,714,723) | |||||||||||||||||
Balance at Mar. 31, 2021 | $ 9,263 | 17,671,479 | (12,961,131) | 4,719,611 | |||||||||||||||||
Balance (shares) at Mar. 31, 2021 | 92,627,200 | ||||||||||||||||||||
Balance at Dec. 31, 2020 | $ 1 | $ 8,991 | 17,355,968 | (11,246,408) | $ 6,118,552 | ||||||||||||||||
Balance (shares) at Dec. 31, 2020 | 13,972 | 89,908,600 | |||||||||||||||||||
Common stock issued for services (in shares) | 40,000 | ||||||||||||||||||||
Net loss | $ (4,741,866) | ||||||||||||||||||||
Balance at Jun. 30, 2021 | $ 10,058 | 28,567,426 | (15,988,274) | 12,589,210 | |||||||||||||||||
Balance (shares) at Jun. 30, 2021 | 100,567,930 | ||||||||||||||||||||
Balance at Mar. 31, 2021 | $ 9,263 | 17,671,479 | (12,961,131) | 4,719,611 | |||||||||||||||||
Balance (shares) at Mar. 31, 2021 | 92,627,200 | ||||||||||||||||||||
Issuance of Series D Convertible Preferred Stock, Common Stock and warrants for cash | [2] | $ 130 | 6,134,870 | 0 | 6,135,000 | ||||||||||||||||
Issuance of Series D Convertible Preferred Stock, Common Stock and warrants for cash (in shares) | [2] | 650 | 1,300,000 | ||||||||||||||||||
Common stock issued upon conversion of Series D Convertible Preferred Stock | $ 317 | (317) | 0 | 0 | |||||||||||||||||
Common stock issued upon conversion of Series D Convertible Preferred Stock (in shares) | (650) | 3,170,730 | |||||||||||||||||||
Common stock issued upon the exercise of warrants | $ 300 | 3,712,200 | 0 | 3,712,500 | |||||||||||||||||
Common stock issued upon the exercise of warrants (in shares) | 3,000,000 | ||||||||||||||||||||
Common stock issued for services | $ 6 | 109,994 | 0 | 110,000 | |||||||||||||||||
Common stock issued for services (in shares) | 55,000 | ||||||||||||||||||||
Restricted common stock issued | $ 42 | (42) | 0 | 0 | |||||||||||||||||
Restricted common stock issued (in shares) | 415,000 | ||||||||||||||||||||
Additional Paid in Capital, Amortization of Equity Options And Awards | $ 0 | $ 0 | $ 0 | $ 433,689 | $ 15,779 | $ 489,774 | $ 0 | $ 0 | $ 0 | $ 433,689 | $ 15,779 | $ 489,774 | |||||||||
Net loss | $ 0 | 0 | (3,027,143) | (3,027,143) | |||||||||||||||||
Balance at Jun. 30, 2021 | $ 10,058 | $ 28,567,426 | $ (15,988,274) | $ 12,589,210 | |||||||||||||||||
Balance (shares) at Jun. 30, 2021 | 100,567,930 | ||||||||||||||||||||
[1] | Amount represents gross proceeds of $757,695 less $78,258 of amortized deferred offering costs. | ||||||||||||||||||||
[2] | Represents relative fair value of preferred stock issued, net of cash issuance costs of $365,000. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) (Parenthetical) | 3 Months Ended |
Jun. 30, 2020USD ($) | |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) | |
Proceeds from Issuance of Common Stock | $ 757,695 |
Amortized deferred offering costs | $ 78,258 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (4,741,866) | $ (979,238) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 128,198 | 96,911 |
Depreciation expense | 9,908 | 5,534 |
Bad debt expense | 0 | 933 |
Change in fair value of accrued issuable equity | 111,874 | 25,800 |
Stock-based compensation | 1,473,863 | 94,816 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (559,292) | (43,513) |
Inventory | (127,006) | (13,585) |
Prepaid expenses and other current assets | (338,070) | (1,119) |
Security deposits | (50,213) | 0 |
Right of use asset | 21,048 | 0 |
Accounts payable | 53,140 | (235,754) |
Accrued expenses and other current liabilities | (51,986) | (203,212) |
Lease liability | (20,392) | 0 |
Deferred revenue | 9,229 | (15,000) |
Total Adjustments | 660,301 | (288,189) |
Net Cash Used In Operating Activities | (4,081,565) | (1,267,427) |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (36,492) | (30,000) |
Net Cash Used In Investing Activities | (36,492) | (30,000) |
Cash Flows from Financing Activities: | ||
Proceeds from sale of Series D convertible preferred stock, common stock and warrants | 6,500,000 | 0 |
Proceeds from sale of common stock | 0 | 757,695 |
Repayments of notes payable | (2,450,000) | (225,000) |
Proceeds from the exercise of warrants | 3,712,500 | 0 |
Proceeds from Paycheck Protection Program loan | 0 | 155,226 |
Proceeds from note payable | 0 | 1,410,000 |
Proceeds from line of credit, net | 0 | 3,555 |
Payment of debt issuance costs | 0 | (130,000) |
Payment of financing costs | (365,000) | (15,000) |
Net Cash Provided By Financing Activities | 7,397,500 | 1,956,476 |
Net Increase In Cash | 3,279,443 | 659,049 |
Cash - Beginning of Period | 8,880,140 | 108,857 |
Cash - End of Period | 12,159,583 | 767,906 |
Cash paid during the period for: | ||
Interest | 735 | 2,824 |
Income taxes | 0 | |
Non-cash investing and financing activities: | ||
Right of use asset for lease liability | 814,817 | 0 |
Beneficial conversion feature on Series D convertible preferred stock | 2,624,326 | |
Common stock issued as a commitment fee for the SEDA agreement | 63,259 | |
Deferred offering costs reclassified to equity | 13,042 | |
Original issuance discount on note payable | 90,000 | |
Common stock issued for repayment of note payable | 141,000 | |
Subscriptions receivable for accrued issuable equity | 220,000 | |
Series B Convertible Preferred Stock | ||
Non-cash investing and financing activities: | ||
Common stock issued upon conversion | 70 | 0 |
Series D Convertible Preferred Stock | ||
Non-cash investing and financing activities: | ||
Beneficial conversion feature on Series D convertible preferred stock | 2,624,326 | 0 |
Common stock issued upon conversion | $ 317 | $ 0 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2021 | |
ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION | |
ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1 ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION 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 high performance aerospace and Department of Defense ("DOD") applications, such as satellite communications, directed energy systems and hypersonic vehicles, and applying them to mass market commercial applications, such as lithium-ion battery energy storage, electrical vehicles, 5G communication, cloud computer infrastructure, and consumer and industrial devices. 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 June 30, 2021 and for the three and six months ended June 30, 2021 and 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 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, 2020 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on March 19, 2021. Risks and Uncertainties In March 2020, the World Health Organization declared COVID-19, a novel strain coronavirus, a pandemic. During 2020 and continuing into 2021, the global economy has been, and continues to be, affected by COVID-19. While the Company continues to see signs of economic recovery as certain governments begin to gradually ease restrictions, provide economic stimulus and accelerate vaccine distribution, the rate of recovery on a global basis has been affected by resurgence of the virus or its variants in certain jurisdictions. The Company continues to monitor the impact of COVID-19 on its business and operational assumptions and estimates and has determined there were no material adverse impacts on the Company’s results of operations and financial position at June 30, 2021. The full extent of the future impact of COVID-19 on the Company’s operations and financial condition is uncertain. Accordingly, COVID-19 could have a material adverse effect on the Company’s business, results of operations, financial condition and prospects during 2021 and beyond, including the demand for its products, interruptions to supply chains, ability to maintain regular research and development and manufacturing schedules as well as the capability to meet customer demands in a timely manner. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the date of the Annual Report on Form 10-K for the year ended December 31, 2020, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. Liquidity During the six months ended June 30, 2021, the Company raised gross proceeds of $6,500,000 in connection with the sale of preferred stock and warrants, and raised proceeds of $3,712,500 in connection with the exercise of warrants to purchase common stock. During the six months ended June 30, 2021, the Company repaid outstanding notes payable in the amount of $2,450,000. As of June 30, 2021, the Company had cash of $12,159,583 and working capital of $12,194,403. While the Company anticipates it will continue to incur operating losses and use cash in operating activities for the foreseeable future, the Company believes that its current working capital is sufficient in comparison to its anticipated cash usage for a period of at least twelve months subsequent to the filing date of these financial statements. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, accounts receivable, revenue and accounts payable. Cash Concentrations 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 $11,833,906 and $8,513,010 as of June 30, 2021 and December 31, 2020, respectively. Customer and Revenue Concentrations The Company had certain customers whose revenue individually represented 10% or more of the Company's total revenue, or whose accounts receivable balances individually represented 10% or more of the Company's total accounts receivable, as follows: Revenues Accounts Receivable For the Three Months Ended For the Six Months Ended June 30, June 30, As of As of 2021 2020 2021 2020 June 30, 2021 December 31, 2020 Customer A 20 % * 14 % * 35 % * Customer B * * * * * 70 % Customer C * 25 % * 18 % * * Customer D * * * * * 19 % Customer E * * * * * 10 % Customer F 69 % * 62 % * 56 % * Customer G * * 12 % * * * Customer H * 44 % * 48 % * * Total 89 % 69 % 88 % 66 % 91 % 99 % * Less than 10% 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 Vendor concentrations are as follows for the three and six months ended June 30, 2021 and 2020: For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Vendor A 13 % * 14 % * Vendor B * 20 % * 17 % Vendor C 11 % 17 % * 19 % Vendor D 10 % * * * 34 % 37 % 14 % 36 % * Less than 10% Inventory Inventory is comprised of carbon fiber velvet ("CFV") thermal interface solutions and internal short circuit batteries, which are available for sale. Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The cost of inventory that is sold to third parties is included within cost of sales and the cost of inventory that is given as samples is included within operating expenses. The Company periodically reviews for slow-moving, excess or obsolete inventories. Products that are determined to be obsolete, if any, are written down to net realizable value. As of June 30, 2021 and December 31, 2020, the Company's inventory was comprised solely of finished goods. 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 the core principle of ASC 606: ● 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 the services are fulfilled and/or accepted by the customer. The following table summarizes the Company's revenue recognized during the three and six months ended June 30, 2021 and 2020: For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Product sales $ 577,360 $ 67,130 $ 755,609 $ 99,130 Contract services 50,884 133,998 290,540 179,498 Total revenue $ 628,244 $ 201,128 $ 1,046,149 $ 278,628 As of June 30, 2021 and December 31, 2020, the Company had $29,229 and $20,000 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., or the customers have not officially accepted the goods or services provided under the contract. During the three and six months ended June 30, 2021 and 2020, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. As of June 30, 2021 and December 2020, the Company had $109,735 and $31,212, respectively, of deferred labor costs, which is included in prepaid expenses and other current assets in the Company's condensed consolidated balance sheets. Deferred labor costs represent costs to fulfill the Company's contract service revenue. The Company will recognize the deferred labor costs as cost of revenues at the point in time that the Company satisfies its performance obligation under the respective contract, which is generally at the time the services are fulfilled and/or accepted by the customer. Shipping and Handling Costs Amounts billed to a customer in a sales transaction related to shipping and handling are recorded as revenue. Costs incurred for shipping and handling are included as cost of revenues on the accompanying condensed consolidated statements of operations. 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 and dilutive common-equivalent shares outstanding during each period. Dilutive common-equivalent shares consist of shares of non-vested restricted stock, if not anti-dilutive. The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: June 30, 2021 2020 Series B Convertible Preferred Stock — 724,350 Series C Convertible Preferred Stock — 240,100 Unvested restricted stock 2,475,000 — Market-based equity awards 3,000,000 — Options 540,000 395,000 Warrants 6,387,911 210,025 Total 12,402,911 1,569,475 Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the "FASB") issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective January 1, 2021 and its adoption did not have a material impact on the Company's condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Earnings per Share On May 3, 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company is evaluating this new standard. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3 PREPAID EXPENSES AND OTHER CURRENT ASSETS As of June 30, 2021 and December 31, 2020, prepaid expenses and other current assets consisted of the following: June 30, December 31, 2021 2020 Deferred labor costs $ 109,735 $ 31,212 Deferred inventory costs 18,409 — Filing 4,139 9,944 Insurance 88,292 16,035 Marketing 187,599 56,853 Other 16,271 25,820 Professional fees 64,093 10,604 Total prepaid expenses $ 488,538 $ 150,468 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 4 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of June 30, 2021 and December 31, 2020, accrued expenses and other current liabilities consisted of the following: June 30, December 31, 2021 2020 Payroll and vacation $ 177,353 $ 278,854 Legal and professional fees 118,150 81,902 Other 47,523 34,256 Total accrued expenses and other current liabilities $ 343,026 $ 395,012 |
ACCRUED ISSUABLE EQUITY
ACCRUED ISSUABLE EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
ACCRUED ISSUABLE EQUITY. | |
ACCRUED ISSUABLE EQUITY | NOTE 5 ACCRUED ISSUABLE EQUITY A summary of the accrued issuable equity activity during the six months ended June 30, 2021 is presented below. Balance, January 1, 2021 $ 128,380 Additions 183,639 Reclassifications to equity (74,800) Mark-to market 111,874 Balance, June 30, 2021 $ 349,093 During the six months ended June 30, 2021, the Company entered into certain contractual arrangements for services in exchange for a fixed number of shares of common stock of the Company, having an aggregate grant date value of $183,639, and settled certain of its accrued issuable equity obligations through the issuance of an aggregate of 40,000 shares with an aggregate fair value of $74,800. During the three and six months ended June 30, 2021, the Company recorded income (loss) of $20,703 and ($111,874), respectively, related to the change in fair value of accrued issuable equity. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2021 | |
LEASES | |
LEASES | NOTE 6 LEASES On April 5, 2021, the Company entered into a new lease agreement for office space in San Diego, California, effective June 1, 2021. The intital lease term is three years and there is an option The Company determined that that value of the lease liability and the related right-of-use asset at inception was $814,817, using an estimated incremental borrowing rate of 5%. The Company also rents office space in San Diego, California on a month-to-month basis, at monthly rent of $5,127, which is comprised of $4,572 of base rent plus $555 of association fees. During the three and six months ended June 30, 2021, aggregate operating lease expense was $39,805 and $55,207, respectively. For the three and six months ended June 30, 2020, operating lease expense was $17,200 and $27,216, respectively. As of June 30, 2021, the Company did not have any financing leases. Maturities of lease liabilities as of June 30, 2021 were as follows: Maturity Date Remaining six months ending December 31, 2021 $ 142,722 2022 289,981 2023 297,917 2024 125,530 Total lease payments 856,150 Less: Imputed interest (61,725) Present value of lease liabilities 794,425 Less: current portion (252,081) Lease liabilities, non-current portion $ 542,344 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2021 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 7 NOTES PAYABLE A summary of notes payable activity during the six months ended June 30, 2021 is presented below: Notes Debt Payable Discount Total Balance, January 1, 2021 $ 2,450,000 $ (128,198) $ 2,321,802 Repayments in cash (2,450,000) — (2,450,000) Amortization of debt discount — 128,198 128,198 Outstanding, June 30, 2021 $ — $ — $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 8 RELATED PARTY TRANSACTIONS Accounts Payable – Related Party Accounts payable – related party consisted of a liability of $2,628 and $2,628, as of June 30, 2021 and December 31, 2020, 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. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 9 STOCKHOLDERS’ EQUITY Series D Preferred Stock On May 19, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with an investor, pursuant to which the Company agreed to issue to the investor an aggregate of 650 shares of Series D convertible preferred stock (the “Series D Preferred”) pursuant to a new designation of preferred stock, and one-year warrants to purchase 2,600,000 shares of common stock (the “Warrants”) at a price of $2.50 per share, for aggregate gross proceeds of $6,500,000 (the “Offering”). The Company also agreed to pay the investor a commitment fee of 1,300,000 shares of common stock at the closing of the Offering. The closing of the Offering occurred on May 20, 2021. In connection with the closing of the financing, the Company repaid in full its aggregate remaining notes payable obligation of $1,400,000. The Series D Preferred have a fixed conversion price of $2.05, are convertible into an aggregate of 3,170,732 shares of common stock and have the right to vote on an as-converted basis. Holders of the Series D Preferred shall be entitled to receive cumulative dividends annually at an annual rate equal to ten percent (10%). Dividends shall be payable in cash or, at the option of the holder of the Series D Preferred, converted into shares of common stock as provided in the certificate of designation for the Series D Preferred. Provided that the shares of common stock issuable upon conversion of the Series D Preferred is registered pursuant to an effective registration statement, the Company shall have the option, but not the obligation, to redeem, in cash, all or part of the Series D Preferred. The Company determined that the Series D Preferred was permanent equity given that there was no redemption provision at the holder’s option and it was determined that the conversion option was clearly and closely related to the equity host, so it didn’t need to be bifurcated. The Company further determined that the $10,000 cash structuring fee paid to the investor, would be accounted for as a reduction of the $6,500,000 of gross proceeds. The remaining proceeds of $6,490,000 were allocated on a relative fair value basis to the Series D Preferred ($3,875,675), the commitment shares ($1,339,582) and the Warrant ($1,274,743). The Company used the Black-Scholes option pricing model to determine the fair value of the Warrant using the following assumptions: exercise price of $2.50 per share, market price of $2.05 per share, expected term of 1.0 year, volatility of 142% and a risk-free interest rate of 0.05%. Finally, the Company determined that the Series D Preferred had a beneficial conversion feature equal to $2,624,326 which is a deemed dividend and represents an adjustment to the numerator in the loss per share calculation. The cash issuance costs of $365,000 (inclusive of the $10,000 cash structuring fee) were charged to additional paid-in-capital. On June 17, 2021, all of the outstanding shares of Series D Preferred were converted into common stock. See “Common Stock”, below. Common Stock On May 20, 2021, the Company issued 1,300,000 shares of common stock with an issuance date value of $2,665,000 as a commitment fee to the investor, for the purchase of Series D Preferred. The value of the shares of common stock issued was accounted for as a reduction of the proceeds from the sale of the Series D Preferred. On June 17, 2021, the Company issued 3,170,730 shares of common stock upon the conversion of 650 shares of Series D Preferred, after which no Series D Preferred shares remained outstanding. During the three months ended June 30, 2021, the Company issued 3,000,000 shares of common stock upon the exercise of warrants for proceeds of $3,712,500. Stock-Based Compensation During the three month and six months ended June 30, 2021, the Company recognized stock-based compensation expense of $1,085,891 and $1,473,863, respectively of which $7,785 and $15,190, respectively, is included in research and development expenses, and $1,078,106 and $1,458,673, respectively, is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. During the three and six months ended June 30, 2020, the Company recognized stock-based compensation expense of $82,088 and $94,816, respectively, of which $2,163 and $10,275, respectively was charged to research and development expense and $79,925 and $84,541, respectively is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. The following table presents information related to stock-based compensation for the three months and six months ended June 30, 2021 and 2020: For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Common stock issued for services $ 110,000 $ 30,000 $ 159,800 $ 30,000 Amortization of restricted common stock 433,689 — 560,314 — Amortization of market-based awards 489,774 — 620,019 — Stock options 15,779 9,588 24,891 20,116 Accrued issuable equity (1) 36,649 42,500 108,839 44,700 Total $ 1,085,891 $ 82,088 $ 1,473,863 $ 94,816 (1) See Note 5 - Accrued Issuable Equity, for additional details. Common Stock Issued for Services On February 26, 2021, the Company issued 20,000 shares of immediately vested common stock with an aggregate grant date value of $49,800 for consulting services provided during January 2021 and February 2021. On April 7, 2021, the Company issued 20,000 shares of immediately vested common stock with an aggregate grant date value of $25,000 for consulting services. On June 11, 2021, the Company issued 35,000 shares of immediately vested common stock with an aggregate grant date value of $85,000 for services rendered during May and June 2021. Restricted Common Stock On March 1, 2021, the Company issued 2,000,000 shares of restricted common stock (the “COO Shares”) with an aggregate grant date value of $5,220,000 in connection with the appointment of the Company’s Chief Operating Officer. The shares vest in four equal annual installments beginning on March 1, 2022. During May 2021, the Company issued 80,000 shares of restricted common stock with an aggregate grant date value of $164,000 in connection with the appointment of the Company's Vice President of Operations and granted 50,000 shares of restricted common stock with an aggregate grant date value of $99,500 in connection with the appointment of the Company's Senior Director of Product Development. The shares vest in four equal annual installments beginning in May 2022. On June 1, 2021, the Company issued 25,000 shares of restricted common stock with an aggregate grant date value of $51,750 for services rendered pursuant to a consulting agreement. The shares vest on the one year anniversary of the grant date. On June 7, 2021, the Company issued an aggregate of 60,000 shares of restricted common stock with an aggregate grant date value of $156,000 as compensation to three recently elected board members. The shares vest in 15,000 share increments every three months beginning on September 7, 2021. On June 10, 2021, the Company issued 200,000 shares of restricted common stock with an aggregate grant date value of $524,000 in connection with the appointment of the Company’s Vice President of Sales and Marketing. The shares vest in four equal annual installments beginning June 9, 2022. The grant date value of the above awards is recognized ratably over the respective vesting periods. During the three and six months ended June 30, 2021, the Company recorded stock-based compensation of $433,689 and $560,314, respectively, in connection with the amortization of restricted stock. As of June 30, 2021, there was $5,731,264 of unrecognized stock-based compensation related to restricted stock awards which will be amortized over the weighted average remaining vesting period of 3.6 years. Stock Options On March 12, 2021, in connection with the hire of its Senior Director of Product Development, the Company granted a five-year option to purchase 100,000 shares of common stock pursuant to the 2018 Plan. The option is exercisable at an exercise price of $2.44 per share. 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 $57,819 which is recognized over the vesting period. On May 17, 2021, the Company granted five-year options to purchase a total of 10,000 shares of common stock at an exercise price of $2.08 per share to an employee pursuant to the 2018 Plan. One-fourth of the options will vest on the six-month anniversary of the grant date and the remaining options vest annually over three years. The options had an aggregate grant date value of $5,878 which is recognized over the vesting period. On May 26, 2021, the Company granted five-year options to purchase a total of 10,000 shares of common stock at an exercise price of $1.99 per share to an employee pursuant to the 2018 Plan. One-fourth of the options will vest on the six-month anniversary of the grant date and the remaining options vest annually over three years. The options had an aggregate grant date value of $5,805 which is recognized over the vesting period. On June 1, 2021, the Company granted two five-year options to purchase a total of 20,000 shares of common stock at an exercise price of $2.03 per share to certain employees pursuant to the 2018 Plan. One-fourth of the options will vest on the six-month anniversary of the grant date and the remaining options vest annually over three years. The options had an aggregate grant date value of $12,145 which is recognized over the vesting period. On June 17, 2021, the Company granted five-year options to purchase a total of 30,000 shares of common stock at an exercise price of $2.27 per share to an employee pursuant to the 2018 Plan. One-fourth of the options will vest on the six-month anniversary of the grant date and the remaining options vest annually over three years. The options had an aggregate grant date value of $16,726 which is recognized over the vesting period. As of June 30, 2021 there was $120,504 of unrecognized stock-based compensation expense related to stock options, which will be recognized over the weighted average remaining vesting period of 3.3 years. The Company has computed the fair value of stock options granted using the Black-Scholes option pricing model. In applying the Black-Scholes option pricing model, the Company used the following assumptions: For the Six Months Ended June 30, 2021 2020 Risk free interest rate 0.33% - 0.85 % 1.58 % Expected term (years) 2.5 - 3.5 2.50 Expected volatility 93% - 109 % 93 % Expected dividends 0 % 0 % A summary of options activity during the six months ended June 30, 2021 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 370,000 $ 0.66 Granted 170,000 2.31 Exercised — — Expired — — Forfeited — — Outstanding, June 30, 2021 540,000 $ 0.90 3.5 $ 672,700 Exercisable, June 30, 2021 293,173 $ 0.66 2.6 $ 530,642 The following table presents information related to stock options as of June 30, 2021: Exercisable Options Weighted Outstanding Average Exercise Number of Remaining Life Number of Price Options In Years Options $ 0.66 370,000 2.6 293,173 $ 1.99 10,000 — — $ 2.03 20,000 — — $ 2.08 10,000 — — $ 2.27 30,000 — — $ 2.44 100,000 — — 540,000 2.6 293,173 See Market-Based Awards below for an additional option issuance. Market-Based Awards On March 1, 2021, in connection with the appointment of the Company’s Chief Operating Officer (the “COO”), the COO became eligible to receive of up to 1,500,000 shares of the Company’s common stock which will be earned based upon achieving certain market capitalization milestones up to $4 billion. The grant date value of this award of $2,911,420 was determined using a Monte Carlo valuation model for market-based vesting awards and will be amortized over each of the tranches’ prospective derived service period. On June 10, 2021, the Chief Executive Officer (the “CEO”) received an option for the purchase of up to 1,500,000 shares of the Company’s common stock at an exercise price of $2.60, which will be earned based upon achieving certain market capitalization milestones up to $4 billion. The grant date value of this award of $2,579,000 was determined using a Monte Carlo valuation model for market-based vesting awards and will be amortized over each of the tranches’ prospective derived service period. The following assumptions were used in applying the Monte Carlo valuation model to the Company’s market-based awards described above. March 1, June 10, 2021 2021 Risk free interest rate 0.71 % 0.73 % Expected volatility 98.9 % 98.5 % Expected dividend yield 0 % 0 % Expected term 2.1 years 2.2 years Fair value of common stock on date of grant $ 2.61 $ 2.62 As of June 30, 2021, there was $4,870,402 of unrecognized stock-based compensation expense related to market-based awards which will be amortized over the remaining weighted average vesting period of 2.1 years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 COMMITMENTS AND CONTINGENCIES Technology Development and Sponsorship Agreement On March 31, 2021, the Company entered into a multi-year technology development and sponsorship agreement, pursuant to which the Company has committed to spend an aggregate of $1,650,000 in three installments which are due on April 1, 2021, January 1, 2022, and January 1, 2023. The Company paid $250,000 on April 1, 2021, which was recorded as a prepaid expense and will be amortized over the performance period. During the six months ended June 30, 2021, $83,333 of expense was recognized related to the agreement. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 11 SUBSEQUENT EVENTS Common Stock During July 2021, the Company issued an aggregate of 1,133,333 shares of common stock in connection with exercises of outstanding warrants pursuant to which we received an aggregate of $1,416,666 of gross proceeds. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Liquidity | Liquidity During the six months ended June 30, 2021, the Company raised gross proceeds of $6,500,000 in connection with the sale of preferred stock and warrants, and raised proceeds of $3,712,500 in connection with the exercise of warrants to purchase common stock. During the six months ended June 30, 2021, the Company repaid outstanding notes payable in the amount of $2,450,000. As of June 30, 2021, the Company had cash of $12,159,583 and working capital of $12,194,403. While the Company anticipates it will continue to incur operating losses and use cash in operating activities for the foreseeable future, the Company believes that its current working capital is sufficient in comparison to its anticipated cash usage for a period of at least twelve months subsequent to the filing date of these financial statements. |
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, accounts receivable, revenue and accounts payable. Cash Concentrations 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 $11,833,906 and $8,513,010 as of June 30, 2021 and December 31, 2020, respectively. Customer and Revenue Concentrations The Company had certain customers whose revenue individually represented 10% or more of the Company's total revenue, or whose accounts receivable balances individually represented 10% or more of the Company's total accounts receivable, as follows: Revenues Accounts Receivable For the Three Months Ended For the Six Months Ended June 30, June 30, As of As of 2021 2020 2021 2020 June 30, 2021 December 31, 2020 Customer A 20 % * 14 % * 35 % * Customer B * * * * * 70 % Customer C * 25 % * 18 % * * Customer D * * * * * 19 % Customer E * * * * * 10 % Customer F 69 % * 62 % * 56 % * Customer G * * 12 % * * * Customer H * 44 % * 48 % * * Total 89 % 69 % 88 % 66 % 91 % 99 % * Less than 10% 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 Vendor concentrations are as follows for the three and six months ended June 30, 2021 and 2020: For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Vendor A 13 % * 14 % * Vendor B * 20 % * 17 % Vendor C 11 % 17 % * 19 % Vendor D 10 % * * * 34 % 37 % 14 % 36 % * Less than 10% |
Inventory | Inventory Inventory is comprised of carbon fiber velvet ("CFV") thermal interface solutions and internal short circuit batteries, which are available for sale. Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The cost of inventory that is sold to third parties is included within cost of sales and the cost of inventory that is given as samples is included within operating expenses. The Company periodically reviews for slow-moving, excess or obsolete inventories. Products that are determined to be obsolete, if any, are written down to net realizable value. As of June 30, 2021 and December 31, 2020, the Company's inventory was comprised solely of finished goods. |
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 the core principle of ASC 606: ● 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 the services are fulfilled and/or accepted by the customer. The following table summarizes the Company's revenue recognized during the three and six months ended June 30, 2021 and 2020: For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Product sales $ 577,360 $ 67,130 $ 755,609 $ 99,130 Contract services 50,884 133,998 290,540 179,498 Total revenue $ 628,244 $ 201,128 $ 1,046,149 $ 278,628 As of June 30, 2021 and December 31, 2020, the Company had $29,229 and $20,000 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., or the customers have not officially accepted the goods or services provided under the contract. During the three and six months ended June 30, 2021 and 2020, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. As of June 30, 2021 and December 2020, the Company had $109,735 and $31,212, respectively, of deferred labor costs, which is included in prepaid expenses and other current assets in the Company's condensed consolidated balance sheets. Deferred labor costs represent costs to fulfill the Company's contract service revenue. The Company will recognize the deferred labor costs as cost of revenues at the point in time that the Company satisfies its performance obligation under the respective contract, which is generally at the time the services are fulfilled and/or accepted by the customer. |
Shipping and Handling Costs | Shipping and Handling Costs Amounts billed to a customer in a sales transaction related to shipping and handling are recorded as revenue. Costs incurred for shipping and handling are included as cost of revenues on the accompanying condensed consolidated statements of operations. |
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 and dilutive common-equivalent shares outstanding during each period. Dilutive common-equivalent shares consist of shares of non-vested restricted stock, if not anti-dilutive. The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: June 30, 2021 2020 Series B Convertible Preferred Stock — 724,350 Series C Convertible Preferred Stock — 240,100 Unvested restricted stock 2,475,000 — Market-based equity awards 3,000,000 — Options 540,000 395,000 Warrants 6,387,911 210,025 Total 12,402,911 1,569,475 |
Reclassifications | Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the "FASB") issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective January 1, 2021 and its adoption did not have a material impact on the Company's condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Earnings per Share On May 3, 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company is evaluating this new standard. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of concentrations of credit risk | Revenues Accounts Receivable For the Three Months Ended For the Six Months Ended June 30, June 30, As of As of 2021 2020 2021 2020 June 30, 2021 December 31, 2020 Customer A 20 % * 14 % * 35 % * Customer B * * * * * 70 % Customer C * 25 % * 18 % * * Customer D * * * * * 19 % Customer E * * * * * 10 % Customer F 69 % * 62 % * 56 % * Customer G * * 12 % * * * Customer H * 44 % * 48 % * * Total 89 % 69 % 88 % 66 % 91 % 99 % * Less than 10% For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Vendor A 13 % * 14 % * Vendor B * 20 % * 17 % Vendor C 11 % 17 % * 19 % Vendor D 10 % * * * 34 % 37 % 14 % 36 % * Less than 10% |
Schedule of revenue recognized | For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Product sales $ 577,360 $ 67,130 $ 755,609 $ 99,130 Contract services 50,884 133,998 290,540 179,498 Total revenue $ 628,244 $ 201,128 $ 1,046,149 $ 278,628 |
Schedule of weighted average dilutive common shares because their inclusion would have been anti-dilutive | June 30, 2021 2020 Series B Convertible Preferred Stock — 724,350 Series C Convertible Preferred Stock — 240,100 Unvested restricted stock 2,475,000 — Market-based equity awards 3,000,000 — Options 540,000 395,000 Warrants 6,387,911 210,025 Total 12,402,911 1,569,475 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | June 30, December 31, 2021 2020 Deferred labor costs $ 109,735 $ 31,212 Deferred inventory costs 18,409 — Filing 4,139 9,944 Insurance 88,292 16,035 Marketing 187,599 56,853 Other 16,271 25,820 Professional fees 64,093 10,604 Total prepaid expenses $ 488,538 $ 150,468 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | June 30, December 31, 2021 2020 Payroll and vacation $ 177,353 $ 278,854 Legal and professional fees 118,150 81,902 Other 47,523 34,256 Total accrued expenses and other current liabilities $ 343,026 $ 395,012 |
ACCRUED ISSUABLE EQUITY (Tables
ACCRUED ISSUABLE EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
ACCRUED ISSUABLE EQUITY. | |
Schedule of accrued issuable equity | Balance, January 1, 2021 $ 128,380 Additions 183,639 Reclassifications to equity (74,800) Mark-to market 111,874 Balance, June 30, 2021 $ 349,093 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
LEASES | |
Schedule of maturities of lease liabilities | Maturity Date Remaining six months ending December 31, 2021 $ 142,722 2022 289,981 2023 297,917 2024 125,530 Total lease payments 856,150 Less: Imputed interest (61,725) Present value of lease liabilities 794,425 Less: current portion (252,081) Lease liabilities, non-current portion $ 542,344 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
NOTES PAYABLE | |
Summary of notes payable activity | Notes Debt Payable Discount Total Balance, January 1, 2021 $ 2,450,000 $ (128,198) $ 2,321,802 Repayments in cash (2,450,000) — (2,450,000) Amortization of debt discount — 128,198 128,198 Outstanding, June 30, 2021 $ — $ — $ — |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Schedule of Information relating to stock based compensation | For the Three Months Ended For the Six Months Ended June 30, June 30, 2021 2020 2021 2020 Common stock issued for services $ 110,000 $ 30,000 $ 159,800 $ 30,000 Amortization of restricted common stock 433,689 — 560,314 — Amortization of market-based awards 489,774 — 620,019 — Stock options 15,779 9,588 24,891 20,116 Accrued issuable equity (1) 36,649 42,500 108,839 44,700 Total $ 1,085,891 $ 82,088 $ 1,473,863 $ 94,816 (1) See Note 5 - Accrued Issuable Equity, for additional details. |
Schedule of stock option activity outstanding and exercisable | A summary of options activity during the six months ended June 30, 2021 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 370,000 $ 0.66 Granted 170,000 2.31 Exercised — — Expired — — Forfeited — — Outstanding, June 30, 2021 540,000 $ 0.90 3.5 $ 672,700 Exercisable, June 30, 2021 293,173 $ 0.66 2.6 $ 530,642 The following table presents information related to stock options as of June 30, 2021: Exercisable Options Weighted Outstanding Average Exercise Number of Remaining Life Number of Price Options In Years Options $ 0.66 370,000 2.6 293,173 $ 1.99 10,000 — — $ 2.03 20,000 — — $ 2.08 10,000 — — $ 2.27 30,000 — — $ 2.44 100,000 — — 540,000 2.6 293,173 |
Stock options | |
Schedule of stock options granted | For the Six Months Ended June 30, 2021 2020 Risk free interest rate 0.33% - 0.85 % 1.58 % Expected term (years) 2.5 - 3.5 2.50 Expected volatility 93% - 109 % 93 % Expected dividends 0 % 0 % |
Market-Based Awards | |
Schedule of stock options granted | March 1, June 10, 2021 2021 Risk free interest rate 0.71 % 0.73 % Expected volatility 98.9 % 98.5 % Expected dividend yield 0 % 0 % Expected term 2.1 years 2.2 years Fair value of common stock on date of grant $ 2.61 $ 2.62 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer concentrations (Details) - Customer Concentration Risk [Member] | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Revenues [Member] | Customer [Member] | ||||||
Concentration Risk, Percentage | 89.00% | 69.00% | 88.00% | 66.00% | ||
Revenues [Member] | Customer A [Member] | ||||||
Concentration Risk, Percentage | 20.00% | 14.00% | ||||
Revenues [Member] | Customer C [Member] | ||||||
Concentration Risk, Percentage | 25.00% | 18.00% | ||||
Revenues [Member] | Customer F [Member] | ||||||
Concentration Risk, Percentage | 69.00% | 62.00% | ||||
Revenues [Member] | Customer G [Member] | ||||||
Concentration Risk, Percentage | 12.00% | |||||
Revenues [Member] | Customer H [Member] | ||||||
Concentration Risk, Percentage | 44.00% | 48.00% | ||||
Accounts Receivable [Member] | Customer [Member] | ||||||
Concentration Risk, Percentage | 91.00% | 99.00% | ||||
Accounts Receivable [Member] | Customer A [Member] | ||||||
Concentration Risk, Percentage | 35.00% | |||||
Accounts Receivable [Member] | Customer B [Member] | ||||||
Concentration Risk, Percentage | 70.00% | |||||
Accounts Receivable [Member] | Customer D [Member] | ||||||
Concentration Risk, Percentage | 19.00% | |||||
Accounts Receivable [Member] | Customer E [Member] | ||||||
Concentration Risk, Percentage | 10.00% | |||||
Accounts Receivable [Member] | Customer F [Member] | ||||||
Concentration Risk, Percentage | 56.00% | |||||
Accounts Payable [Member] | Vendor [Member] | ||||||
Concentration Risk, Percentage | 34.00% | 37.00% | 14.00% | 36.00% | ||
Accounts Payable [Member] | Vendor A [Member] | ||||||
Concentration Risk, Percentage | 13.00% | 14.00% | ||||
Accounts Payable [Member] | Vendor B [Member] | ||||||
Concentration Risk, Percentage | 20.00% | 17.00% | ||||
Accounts Payable [Member] | Vendor C [Member] | ||||||
Concentration Risk, Percentage | 11.00% | 17.00% | 19.00% | |||
Accounts Payable [Member] | Vendor D [Member] | ||||||
Concentration Risk, Percentage | 10.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - consolidated statements of operations: (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 628,244 | $ 201,128 | $ 1,046,149 | $ 278,628 |
Product sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 577,360 | 67,130 | 755,609 | 99,130 |
Contract services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 50,884 | $ 133,998 | $ 290,540 | $ 179,498 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - weighted average dilutive common shares (Details) - shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 12,402,911 | 1,569,475 |
Series B Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 724,350 | |
Series C Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 240,100 | |
Unvested Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,475,000 | |
Market-based equity award | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,000,000 | |
options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 540,000 | 395,000 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,387,911 | 210,025 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Gross proceeds | $ 6,500,000 | ||||
Amount raised on convertible preferred financing agreement | 3,712,500 | ||||
Repayments of note payable | 2,450,000 | $ 225,000 | |||
Cash | $ 12,159,583 | 12,159,583 | $ 8,880,140 | ||
Working capital | 12,194,403 | 12,194,403 | |||
Cash, FDIC Insured Amount | 250,000 | 250,000 | |||
Uninsured cash | 11,833,906 | 11,833,906 | 8,513,010 | ||
Deferred revenue | 29,229 | 29,229 | 20,000 | ||
Revenue Recognized | 0 | $ 0 | 0 | $ 0 | |
Deferred labor costs | $ 109,735 | $ 109,735 | $ 31,212 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Deferred labor costs | $ 109,735 | $ 31,212 |
Deferred inventory costs | 18,409 | |
Filing | 4,139 | 9,944 |
Insurance | 88,292 | 16,035 |
Marketing | 187,599 | 56,853 |
Other | 16,271 | 25,820 |
Professional | 64,093 | 10,604 |
Total prepaid expenses and other current assets | $ 488,538 | $ 150,468 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Payroll and vacation | $ 177,353 | $ 278,854 |
Legal and professional fees | 118,150 | 81,902 |
Other | 47,523 | 34,256 |
Total accrued expenses and other current liabilities | $ 343,026 | $ 395,012 |
ACCRUED ISSUABLE EQUITY (Detail
ACCRUED ISSUABLE EQUITY (Details) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Movements In Accrued Issuable Equity For Services, Current [Roll Forward] | |
Beginning balance | $ 128,380 |
Additions | 183,639 |
Reclassifications to equity | (74,800) |
Mark-to market | 111,874 |
Ending balance | $ 349,093 |
ACCRUED ISSUABLE EQUITY - Addit
ACCRUED ISSUABLE EQUITY - Additional information (Details) - USD ($) | Jun. 11, 2021 | Apr. 07, 2021 | Feb. 26, 2021 | Jun. 30, 2021 | Jun. 30, 2021 |
ACCRUED ISSUABLE EQUITY. | |||||
Value of services | $ 183,639 | ||||
Shares issued in exchange for services, number | 35,000 | 20,000 | 20,000 | 40,000 | |
Shares issued in exchange for services, aggregate fair value | $ 74,800 | ||||
Gains (losses) related to the change in fair value | $ 20,703 | $ (111,874) |
LEASES - Maturity (Details)
LEASES - Maturity (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
LEASES | ||
Remaining six months ending December 31, 2021 | $ 142,722 | |
2022 | 289,981 | |
2023 | 297,917 | |
2024 | 125,530 | |
Total lease payments | 856,150 | |
Less: Imputed interest | (61,725) | |
Present value of lease liabilities | 794,425 | |
Less: current portion | (252,081) | $ 0 |
Lease liabilities, non-current portion | $ 542,344 | $ 0 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | Jun. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Lessee, Lease, Description [Line Items] | |||||
Right of use asset for lease liability | $ 814,817 | $ 0 | |||
Estimated incremental borrowing rate | 5.00% | 5.00% | |||
Operating lease expense | $ 39,805 | $ 17,200 | $ 55,207 | $ 27,216 | |
New lease agreement for office space in San Diego, California | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease term (in years) | 3 years | ||||
Option to extend | true | ||||
Renewal Term | 5 years | ||||
Monthly lease rental | $ 23,787 | ||||
Lease base rent | 18,518 | ||||
Common area maintenance fees included in monthly lease rental | $ 5,268 | ||||
Lease annual escalation rate | 3.50% | ||||
Security deposit | $ 50,213 | ||||
Monthly rent | 5,127 | ||||
Monthly rent base | 4,572 | ||||
Association fees included in monthly lease rental | $ 555 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Movements In Notes Payable Current, Gross [Roll Forward] | |
Beginning balance | $ 2,450,000 |
Repayments in cash | (2,450,000) |
Movements In Debt Instrument, Unamortized Discount, Current [Roll Forward] | |
Beginning balance | (128,198) |
Amortization of debt discount | 128,198 |
Ending balance | 0 |
Movements In Notes Payable Current [Roll Forward] | |
Beginning balance | 2,321,802 |
Repayments in cash | (2,450,000) |
Amortization of debt discount | 128,198 |
Ending balance | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||
Accounts payable - related party | $ 2,628 | $ 2,628 |
Chief Technology Officer CTO [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable - related party | $ 2,628 | $ 2,628 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) | Jun. 17, 2021USD ($)$ / sharesshares | Jun. 11, 2021USD ($)shares | Jun. 10, 2021USD ($)$ / sharesshares | Jun. 07, 2021USD ($)directorshares | Jun. 01, 2021USD ($)$ / sharesshares | May 26, 2021USD ($)$ / sharesshares | May 20, 2021USD ($)shares | May 19, 2021USD ($)$ / sharesshares | May 17, 2021USD ($)$ / sharesshares | Apr. 07, 2021USD ($)shares | Mar. 12, 2021USD ($)$ / sharesshares | Mar. 01, 2021USD ($)shares | Feb. 26, 2021USD ($)shares | May 31, 2021USD ($)itemshares | Jun. 30, 2021USD ($)itemRateY$ / sharesshares | Mar. 31, 2021USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)itemRateY$ / sharesshares | Jun. 30, 2020USD ($) | Dec. 31, 2020shares |
Common stock, shares issued | shares | 1,300,000 | 3,170,730 | 100,567,930 | 100,567,930 | 89,908,600 | |||||||||||||||
Structuring fee paid to investor | $ 10,000 | |||||||||||||||||||
Gross proceeds | 6,500,000 | |||||||||||||||||||
Remaining proceeds | 6,490,000 | |||||||||||||||||||
Relative fair value of Series D Preferred Stock | $ 3,875,675 | 3,875,675 | ||||||||||||||||||
Commitment shares issued in connection with sale of Series D Preferred Stock | $ 2,665,000 | 1,339,582 | ||||||||||||||||||
Relative fair value of warrants | 1,274,743 | 1,274,743 | ||||||||||||||||||
Deemed dividend | 2,624,326 | $ 0 | 2,624,326 | |||||||||||||||||
Beneficial conversion feature on Series D convertible preferred stock | 2,624,326 | |||||||||||||||||||
Cash issuance costs | $ 365,000 | 365,000 | ||||||||||||||||||
Aggregate gross proceeds | 3,712,500 | |||||||||||||||||||
Repayments of remaining note payable | $ 2,450,000 | $ 225,000 | ||||||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | shares | 3,000,000 | 3,000,000 | ||||||||||||||||||
Common stock authorized | shares | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||||||||||
Allocated Share-based Compensation Expense | $ 1,085,891 | 82,088 | $ 1,473,863 | 94,816 | ||||||||||||||||
Stock-based compensation | 1,473,863 | 94,816 | ||||||||||||||||||
Grant date value of stock | $ 156,000 | |||||||||||||||||||
Restricted common stock issued (in shares) | shares | 60,000 | |||||||||||||||||||
Aggregate proceeds | $ 85,000 | $ 25,000 | $ 49,800 | 757,695 | $ 0 | 757,695 | ||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | shares | 3,000,000 | 3,000,000 | ||||||||||||||||||
Convertible Preferred Stock, Shares Reserved for Future Issuance | shares | 3,712,500 | 3,712,500 | ||||||||||||||||||
Number of board members | director | 3 | |||||||||||||||||||
Unrecognized stock-based compensation expense | $ 5,731,264 | $ 5,731,264 | ||||||||||||||||||
Weighted average remaining vesting period | 3 years 7 months 6 days | |||||||||||||||||||
Shares of common stock issued related to consulting services provided | shares | 35,000 | 20,000 | 20,000 | 40,000 | ||||||||||||||||
Grant date value of common stock issued related to consulting services provided | $ 110,000 | $ 49,800 | ||||||||||||||||||
Options Outstanding, Exercise Price | $ / shares | $ 0.66 | $ 0.66 | ||||||||||||||||||
Exercise price | ||||||||||||||||||||
Warrant measurement input | item | 2.50 | 2.50 | ||||||||||||||||||
Market price per share | ||||||||||||||||||||
Warrant measurement input | item | 2.05 | 2.05 | ||||||||||||||||||
Expected term | ||||||||||||||||||||
Warrant measurement input | Y | 1 | 1 | ||||||||||||||||||
Volatility | ||||||||||||||||||||
Warrant measurement input | item | 142 | 142 | ||||||||||||||||||
Risk-free interest rate | ||||||||||||||||||||
Warrant measurement input | Rate | 0.05 | 0.05 | ||||||||||||||||||
Research and development expenses | ||||||||||||||||||||
Allocated Share-based Compensation Expense | $ 7,785 | 2,163 | $ 15,190 | 10,275 | ||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||
Allocated Share-based Compensation Expense | 1,078,106 | $ 79,925 | 1,458,673 | 84,541 | ||||||||||||||||
Common stock | ||||||||||||||||||||
Stock-based compensation | 433,689 | 560,314 | ||||||||||||||||||
Grant date value of stock | $ 524,000 | $ 51,750 | ||||||||||||||||||
Restricted common stock issued (in shares) | shares | 200,000 | 25,000 | ||||||||||||||||||
Number of annual vesting installments | item | 4 | |||||||||||||||||||
Incremental shares vested | $ 15,000 | |||||||||||||||||||
Stock options | ||||||||||||||||||||
Unrecognized stock-based compensation expense | 120,504 | $ 120,504 | ||||||||||||||||||
Weighted average remaining vesting period | 3 years 3 months 18 days | |||||||||||||||||||
Shares of common stock issued related to consulting services provided | shares | 30,000 | 20,000 | 10,000 | 10,000 | 100,000 | |||||||||||||||
Options Outstanding, Exercise Price | $ / shares | $ 2.27 | $ 2.03 | $ 1.99 | $ 2.08 | $ 2.44 | |||||||||||||||
Share based Compensation Arrangement By Share based Payment Award Options Non vested Weighted Average Aggregate Grant Date Fair Value | $ 16,726 | $ 12,145 | $ 5,805 | $ 5,878 | $ 57,819 | |||||||||||||||
Market-Based Awards | ||||||||||||||||||||
Common stock authorized | shares | 1,500,000 | 1,500,000 | ||||||||||||||||||
Grant date value of stock | $ 2,579,000 | $ 2,911,420 | ||||||||||||||||||
Market Cap | $ 4,000,000,000 | 4,000,000,000 | ||||||||||||||||||
Unrecognized stock-based compensation expense | 4,870,402 | $ 4,870,402 | ||||||||||||||||||
Weighted average remaining vesting period | 2 years 1 month 6 days | |||||||||||||||||||
Options Outstanding, Exercise Price | $ / shares | $ 2.60 | |||||||||||||||||||
Chief Operating Officer | Common stock | ||||||||||||||||||||
Grant date value of stock | $ 5,220,000 | |||||||||||||||||||
Restricted common stock issued (in shares) | shares | 2,000,000 | |||||||||||||||||||
Vice President of Operations | Common stock | ||||||||||||||||||||
Grant date value of stock | $ 164,000 | |||||||||||||||||||
Restricted common stock issued (in shares) | shares | 80,000 | |||||||||||||||||||
Senior Director of Product Development | Common stock | ||||||||||||||||||||
Grant date value of stock | $ 99,500 | |||||||||||||||||||
Restricted common stock issued (in shares) | shares | 50,000 | |||||||||||||||||||
Common stock | ||||||||||||||||||||
Allocated Share-based Compensation Expense | $ 433,689 | $ 560,314 | ||||||||||||||||||
Restricted common stock issued (in shares) | shares | 415,000 | 2,000,000 | ||||||||||||||||||
Period for vesting of incremental shares (in months) | 3 months | |||||||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | shares | 3,170,730 | |||||||||||||||||||
Shares of common stock issued related to consulting services provided | shares | 55,000 | 20,000 | ||||||||||||||||||
Grant date value of common stock issued related to consulting services provided | $ 6 | $ 2 | ||||||||||||||||||
Series D Convertible Preferred Stock | ||||||||||||||||||||
Beneficial conversion feature on Series D convertible preferred stock | $ 2,624,326 | $ 0 | ||||||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | shares | 650 | |||||||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | shares | 650 | |||||||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | shares | (650) | |||||||||||||||||||
Series D Convertible Preferred Stock | Securities Purchase Agreement | ||||||||||||||||||||
Common stock issued for cash, net of issuance costs (in shares) | shares | 650 | |||||||||||||||||||
Warrants to purchase common shares issued | shares | 2,600,000 | |||||||||||||||||||
Term of warrants | 1 year | |||||||||||||||||||
Shares issued price (in dollars per share) | $ / shares | $ 2.50 | |||||||||||||||||||
Aggregate gross proceeds | $ 6,500,000 | |||||||||||||||||||
Commitment fee shares of common stock | shares | 1,300,000 | |||||||||||||||||||
Repayments of remaining note payable | $ 1,400,000 | |||||||||||||||||||
Fixed conversion price | $ / shares | $ 2.05 | |||||||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | shares | 3,170,732 | |||||||||||||||||||
Cumulative dividends annual rate percentage | 10.00% | |||||||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | shares | 3,170,732 |
STOCKHOLDERS' EQUITY - Stock-Ba
STOCKHOLDERS' EQUITY - Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Allocated Share-based Compensation Expense | $ 1,085,891 | $ 82,088 | $ 1,473,863 | $ 94,816 | |
Common Stock Issued For Services | |||||
Allocated Share-based Compensation Expense | 110,000 | 30,000 | 159,800 | 30,000 | |
Common stock | |||||
Allocated Share-based Compensation Expense | 433,689 | 560,314 | |||
Market-Based Awards | |||||
Allocated Share-based Compensation Expense | 489,774 | 620,019 | |||
Stock options | |||||
Allocated Share-based Compensation Expense | 15,779 | 9,588 | 24,891 | 20,116 | |
Accrued Issuable Equity Common Stock | |||||
Allocated Share-based Compensation Expense | [1] | $ 36,649 | $ 42,500 | $ 108,839 | $ 44,700 |
[1] | See Note 5 - Accrued Issuable Equity, for additional details. |
STOCKHOLDERS' EQUITY - Option p
STOCKHOLDERS' EQUITY - Option pricing model (Details) - $ / shares | Jun. 10, 2021 | Mar. 01, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Risk free interest rate (as a percent) | 1.58% | |||
Expected term (years) | 2 years 6 months | |||
Expected volatility (as a percent) | 93.00% | |||
Expected dividends (as a percent) | 0.00% | 0.00% | ||
Minimum | ||||
Risk free interest rate (as a percent) | 0.33% | |||
Expected term (years) | 2 years 6 months | |||
Expected volatility (as a percent) | 93.00% | |||
Maximum | ||||
Risk free interest rate (as a percent) | 0.85% | |||
Expected term (years) | 3 years 6 months | |||
Expected volatility (as a percent) | 109.00% | |||
Market-Based Awards | ||||
Risk free interest rate (as a percent) | 0.73% | 0.71% | ||
Expected term (years) | 2 years 2 months 12 days | 2 years 1 month 6 days | ||
Expected volatility (as a percent) | 98.50% | 98.90% | ||
Expected dividends (as a percent) | 0.00% | 0.00% | ||
Fair value of common stock on date of grant | 2.62 | 2.61 |
STOCKHOLDERS' EQUITY - Stock ac
STOCKHOLDERS' EQUITY - Stock activity (Details) | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
STOCKHOLDERS' EQUITY | |
Number of Options, Outstanding | shares | 370,000 |
Number of Options, Granted | shares | 170,000 |
Number of Options, Outstanding | shares | 540,000 |
Number of Options, Exercisable | shares | 293,173 |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 0.66 |
Weighted Average Exercise Price, Granted | $ / shares | 2.31 |
Weighted Average Exercise Price Outstanding | $ / shares | 0.90 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 0.66 |
Weighted Average Remaining Term, Outstanding | 3 years 6 months |
Weighted Average Remaining Term, Exercisable | 2 years 7 months 6 days |
Number of Options Intrinsic Value, Outstanding | $ | $ 672,700 |
Number of Options Intrinsic Value, Exercisable | $ | $ 530,642 |
STOCKHOLDERS' EQUITY - Stock op
STOCKHOLDERS' EQUITY - Stock options (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Options Outstanding, Exercise Price | $ 0.66 | |
Options Outstanding, Number of Options | 540,000 | 370,000 |
Options Exercisable, Weighted Average Remaining Life | 2 years 7 months 6 days | |
Options Exercisable Number of Options | 293,173 | |
0.66 Exercise Price | ||
Options Outstanding, Exercise Price | $ 0.66 | |
Options Outstanding, Number of Options | 370,000 | |
Options Exercisable, Weighted Average Remaining Life | 2 years 7 months 6 days | |
Options Exercisable Number of Options | 293,173 | |
1.99 Exercise Price | ||
Options Outstanding, Exercise Price | $ 1.99 | |
Options Outstanding, Number of Options | 10,000 | |
Options Exercisable, Weighted Average Remaining Life | 0 years | |
2.03 Exercise Price | ||
Options Outstanding, Exercise Price | $ 2.03 | |
Options Outstanding, Number of Options | 20,000 | |
Options Exercisable, Weighted Average Remaining Life | 0 years | |
2.08 Exercise Price | ||
Options Outstanding, Exercise Price | $ 2.08 | |
Options Outstanding, Number of Options | 10,000 | |
Options Exercisable, Weighted Average Remaining Life | 0 years | |
2.27 Exercise Price | ||
Options Outstanding, Exercise Price | $ 2.27 | |
Options Outstanding, Number of Options | 30,000 | |
Options Exercisable, Weighted Average Remaining Life | 0 years | |
2.44 Exercise Price | ||
Options Outstanding, Exercise Price | $ 2.44 | |
Options Outstanding, Number of Options | 100,000 | |
Options Exercisable, Weighted Average Remaining Life | 0 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Technology Development and Sponsorship Agreement | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Apr. 01, 2021USD ($) | Mar. 31, 2021USD ($)installment | |
Aggregate amount spend on agreement | $ 1,650,000 | ||
Number of installments. | installment | 3 | ||
Prepaid expenses | $ 250,000 | ||
Expense recognized | $ 83,333 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Jun. 11, 2021 | Apr. 07, 2021 | Feb. 26, 2021 | Jul. 31, 2021 | Jun. 30, 2021 |
Subsequent Event [Line Items] | |||||
Shares issued in exchange for services, number | 35,000 | 20,000 | 20,000 | 40,000 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Shares issued in exchange for services, number | 1,133,333 | ||||
Legal Fees | $ 1,416,666 |