Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 09, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Entity File Number | 001-40454 | ||
Entity Registrant Name | KULR TECHNOLOGY GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-1004273 | ||
Entity Address, Address Line One | 4863 Shawline Street | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92111 | ||
City Area Code | 408 | ||
Local Phone Number | 663-5247 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | KULR | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 172,869,307 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum LLP | ||
Auditor Location | Los Angeles, CA | ||
Entity Public Float | $ 51,483,022 | ||
Entity Central Index Key | 0001662684 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash | $ 1,194,764 | $ 10,333,563 |
Accounts receivable | 901,672 | 1,542,118 |
Inventory | 1,149,047 | 1,962,035 |
Inventory deposits | 27,500 | 285,260 |
Prepaid expenses and other current assets | 631,361 | 1,613,008 |
Total Current Assets | 3,904,344 | 15,735,984 |
Property and equipment, net | 4,698,144 | 3,193,041 |
Equipment deposits | 1,332,436 | 3,514,937 |
Security deposits | 10,228 | 60,441 |
Intangible assets, net | 719,395 | 720,768 |
Right of use asset, net | 129,202 | 328,941 |
Deferred financing costs, net | 70,607 | 71,818 |
Total Assets | 10,864,356 | 23,625,930 |
Current Liabilities: | ||
Accounts payable | 2,769,544 | 1,408,017 |
Accrued expenses and other current liabilities | 3,463,344 | 2,142,277 |
Accrued issuable equity | 13,002 | 227,956 |
Lease liability, current portion | 102,186 | 223,645 |
Prepaid advance liability, net of discount, current portion | 0 | 5,655,612 |
Deferred revenue | 551,021 | 23,000 |
Total Current Liabilities | 6,899,097 | 9,680,507 |
Notes payable, non-current portion | 250,000 | |
Lease liability, non-current portion | 97,958 | |
Prepaid advance liability, net of discount, non-current portion | 5,892,056 | 3,196,678 |
Accrued interest, non-current | 5,899 | 157,054 |
Total Liabilities | 13,047,052 | 13,132,197 |
Commitments and contingencies (Note 16) | ||
Stockholders' (Deficit) Equity | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 134,031,669 and 133,900,507 shares issued and outstanding at December 31, 2023, respectively; 113,202,749 and 113,071,587 shares issued and outstanding at December 31, 2022, respectively | 13,403 | 11,320 |
Treasury stock, at cost; 131,162 shares held at December 31, 2023 and 2022. | (296,222) | (296,222) |
Additional paid-in capital | 64,387,717 | 53,372,673 |
Accumulated deficit | (66,287,594) | (42,594,038) |
Total Stockholders' (Deficit) Equity | (2,182,696) | 10,493,733 |
Total Liabilities and Stockholders' (Deficit) Equity | 10,864,356 | 23,625,930 |
Series A Preferred Stock | ||
Stockholders' (Deficit) Equity | ||
Preferred stock | ||
Series B Convertible Preferred Stock | ||
Stockholders' (Deficit) Equity | ||
Preferred stock | ||
Series C Preferred Stock | ||
Stockholders' (Deficit) Equity | ||
Preferred stock | ||
Series D Preferred Stock | ||
Stockholders' (Deficit) Equity | ||
Preferred stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 | May 05, 2018 |
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 | 134,031,669 | 113,202,749 | |
Common stock, shares outstanding | 133,900,507 | 113,071,587 | |
Treasury stock, shares held | 131,162 | 131,162 | |
Series A Preferred Stock | |||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 0 | 0 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 0 | |
Series B Convertible Preferred Stock | |||
Preferred stock, shares authorized | 31,000 | 31,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
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 | |||
Preferred stock, shares authorized | 650 | 650 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 9,830,166 | $ 3,994,634 |
Cost of revenue | 6,164,310 | 1,630,527 |
Gross Profit | 3,665,856 | 2,364,107 |
Operating Expenses | ||
Research and development | 6,195,400 | 4,196,313 |
Selling, general, and administrative | 19,882,402 | 16,453,776 |
Total Operating Expenses | 26,077,802 | 20,650,089 |
Loss From Operations | (22,411,946) | (18,285,982) |
Other (Expense) Income | ||
Interest expense | (718,420) | (935,874) |
Gain on forgiveness of PPP loan and interest | 158,675 | |
Amortization of debt discount | (730,230) | (511,825) |
Loss on debt extinguishment | (8,508) | |
Change in fair value of accrued issuable equity | 167,040 | 147,035 |
Total Other Expense, net | (1,281,610) | (1,150,497) |
Net Loss | (23,693,556) | (19,436,479) |
Net Loss Per Share | $ (23,693,556) | $ (19,436,479) |
Net Loss Per Share - Basic (in dollars per share) | $ (0.20) | $ (0.18) |
Net Loss Per Share - Diluted (In dollars per share) | $ (0.20) | $ (0.18) |
Weighted Average Number of Common Shares Outstanding - Basic (In Shares) | 117,820,740 | 105,655,773 |
Weighted Average Number of Common Shares Outstanding - Diluted (In Shares) | 117,820,740 | 105,655,773 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital Common Stock | Additional Paid-In Capital Amortization of restricted stock units | Additional Paid-In Capital Stock options | Additional Paid-In Capital Market-based awards | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit Amortization of restricted stock units | Accumulated Deficit | Common Stock | Amortization of restricted stock units | Stock options | Market-based awards | Total |
Balance at beginning at Dec. 31, 2021 | $ 10,479 | $ 39,512,122 | $ 0 | $ (23,157,559) | $ 16,365,042 | |||||||||
Balance (in shares) at Dec. 31, 2021 | 104,792,072 | |||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | 6,440,843 | |||||||||||||
Treasury stock held upon the vesting of restricted common stock | $ (439,728) | (439,728) | ||||||||||||
Treasury stock held upon the vesting of restricted common stock (in shares) | 194,704 | |||||||||||||
Treasury stock issued upon the exercise of options | (95,124) | $ 143,506 | 48,382 | |||||||||||
Treasury stock issued upon the exercise of options (in shares) | (63,542) | |||||||||||||
Common stock issued upon the exercise of warrants | $ 242 | 3,020,594 | 3,020,836 | |||||||||||
Common stock issued upon the exercise of warrants (in shares) | 2,416,668 | |||||||||||||
Common stock issued upon the exercise of options | 5,075 | 5,075 | ||||||||||||
Common stock issued upon the exercise of options (in shares) | 2,500 | |||||||||||||
Common stock issued pursuant to the SEPA and supplemental SEPA agreements, For cash, net of issuance costs | $ 16 | 249,002 | 249,018 | |||||||||||
Common stock issued pursuant to the SEPA and supplemental SEPA agreements, For cash, net of issuance costs (in shares) | 160,782 | |||||||||||||
Common stock issued pursuant to the SEPA and supplemental SEPA agreements, In satisfaction of notes payable | $ 9 | 149,991 | 150,000 | |||||||||||
Common stock issued pursuant to the SEPA and supplemental SEPA agreements, In satisfaction of notes payable (in shares) | 94,458 | |||||||||||||
Common stock issued pursuant to the SEPA and supplemental SEPA agreements, For the repayment of prepaid advances | $ 538 | 6,440,305 | 6,440,843 | |||||||||||
Common stock issued pursuant to the SEPA agreement, For the repayment of prepaid advances (in shares) | 5,375,269 | |||||||||||||
Restricted stock awards granted | $ 31 | (31) | ||||||||||||
Restricted stock awards granted (in shares) | 310,000 | |||||||||||||
Common stock issued for services | $ 5 | 109,845 | 109,850 | |||||||||||
Common stock issued for services (in shares) | 51,000 | |||||||||||||
Amortization | $ 1,945,272 | $ 103,220 | $ 1,932,402 | $ 1,945,272 | $ 103,220 | $ 1,932,402 | ||||||||
Net Income (Loss) | (19,436,479) | (19,436,479) | ||||||||||||
Balance at ending at Dec. 31, 2022 | $ 11,320 | 53,372,673 | $ (296,222) | (42,594,038) | 10,493,733 | |||||||||
Balance (in shares) at Dec. 31, 2022 | 113,202,749 | 131,162 | ||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices ( in shares) | 4,078,971 | |||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | $ 408 | 4,466,219 | 4,466,627 | |||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ( in shares) | 905,833 | |||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices | $ 90 | 165,036 | 165,126 | |||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual | 113,531 | |||||||||||||
Common stock issued pursuant to the equity financing for cash, net of issuance costs (2) | $ 1,339 | 3,062,631 | $ 3,063,970 | |||||||||||
Common stock issued pursuant to the equity financing for cash, net of issuance costs (2) (in shares) | 13,389,285 | 40,276,430 | ||||||||||||
Shares repurchased for payroll taxes and canceled | $ (17) | (229,232) | $ (229,249) | |||||||||||
Shares repurchased for payroll taxes and canceled (in shares) | (175,000) | |||||||||||||
Restricted stock awards granted | $ 222 | (222) | ||||||||||||
Restricted stock awards granted (in shares) | (2,218,508) | |||||||||||||
Unvested restricted stock awards canceled | $ (14) | 14 | ||||||||||||
Unvested restricted stock awards canceled (in shares) | (140,000) | |||||||||||||
Common stock issued for services | $ 55 | $ 157,659 | 268,765 | $ 157,659 | 268,820 | |||||||||
Common stock issued for services (in shares) | 551,323 | |||||||||||||
Amortization | $ 3,124,174 | $ 3,124,174 | ||||||||||||
Net Income (Loss) | $ (23,693,556) | $ (23,693,556) | (23,693,556) | |||||||||||
Balance at ending at Dec. 31, 2023 | $ 13,403 | $ 64,387,717 | $ (296,222) | $ (66,287,594) | $ (2,182,696) | |||||||||
Balance (in shares) at Dec. 31, 2023 | 134,031,669 | 131,162 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Proceeds from equity financing | $ 3,910,000 | |
Issuance costs on equity financing | 453,050 | |
Common Stock | ||
Proceeds from equity financing | 3,910,000 | $ 6,693,976 |
Equity financing, issuance costs | 253,133 | |
Gross proceeds of common stock issued pursuant to the SEDA agreement | 166,337 | 250,000 |
Issuance costs on equity financing | 846,030 | |
Amortization of issuance costs | $ 1,211 | $ 982 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities: | |||
Net Income (Loss) | $ (23,693,556) | $ (19,436,479) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization of debt discount | 730,230 | 511,825 | |
Non-cash lease expense | 250,893 | 193,106 | |
Loss on debt extinguishment | 8,508 | ||
Depreciation and amortization expense | 2,214,095 | 259,399 | |
Gain on forgiveness of PPP loan and interest | (158,675) | ||
Change in fair value of accrued issuable equity | (167,040) | (147,035) | |
Non-cash interest expense | 576,932 | ||
Stock-based compensation | 3,502,736 | 4,175,014 | |
Provision for credit losses | 16,978 | 15,026 | |
Inventory write down | 293,941 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 623,473 | (1,420,818) | |
Inventory | 519,047 | (1,770,724) | |
Inventory deposits | 257,760 | (3,072) | |
Prepaid expenses and other current assets | 981,647 | (1,324,836) | |
Security deposits | 50,213 | (1,500) | |
Accounts payable | 754,056 | 658,715 | |
Accrued expenses and other current liabilities | 1,442,690 | 824,826 | |
Lease liability | (270,571) | (205,034) | |
Deferred revenue | 528,021 | (109,303) | |
Total Adjustments | 11,728,169 | 2,082,354 | |
Net Cash Used In Operating Activities | (11,965,387) | (17,354,125) | |
Cash Flows From Investing Activities: | |||
Deposits for purchase of property and equipment | (644,963) | (1,421,432) | |
Purchases of property and equipment | (266,150) | (2,682,970) | |
Acquisition of intangible assets | (135,000) | (543,572) | |
Net Cash Used In Investing Activities | (1,046,113) | (4,647,974) | |
Cash Flows from Financing Activities: | |||
Proceeds from equity financing | 3,910,000 | ||
Issuance costs on equity financing | (453,050) | ||
Proceeds from the SEPA | 250,000 | ||
Proceeds from prepaid advance liability | 2,000,000 | 10,573,068 | |
Issuance costs on prepaid advance liability | (30,000) | (85,000) | |
Repayments of prepaid advance liability | (1,575,000) | ||
Proceeds from notes payable | 250,000 | 4,750,000 | |
Issuance costs on notes payable | (17,200) | ||
Repayments of note payable | (1,000,000) | ||
Payment of financing costs incurred in connection with the SEPA | (72,800) | ||
Repurchase of common stock | (229,249) | ||
Proceeds from the exercise of stock options | 53,457 | ||
Proceeds from the exercise of warrants | 3,020,836 | ||
Net Cash Provided By Financing Activities | 3,872,701 | 17,472,361 | |
Net Decrease In Cash | (9,138,799) | (4,529,738) | |
Cash - Beginning of Year | 10,333,563 | 14,863,301 | |
Cash - End of Year | 1,194,764 | 10,333,563 | $ 14,863,301 |
Cash paid during the period for: | |||
Interest | 314,731 | 86,062 | |
Non-cash investing and financing activities: | |||
Right of use asset for lease liability | 51,154 | $ 814,817 | |
Common stock held in treasury upon the vesting of restricted common stock | 439,728 | ||
Original issue discount on prepaid advance liability | 105,263 | 789,474 | |
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | 4,466,627 | 6,440,843 | |
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices | 165,126 | ||
Prepaid advance for repayment of note payable | 3,850,000 | ||
Shares issued in satisfaction of note payable | 150,000 | ||
Deposits applied to purchases of property and equipment | 2,827,464 | 60,445 | |
Additions to property and equipment included in accounts payable | 489,211 | 294,794 | |
Common stock issued in satisfaction of accrued issuable equity | 206,047 | ||
Accrual of equity financing issuance costs | 392,980 | ||
Deferred financing costs charged to additional paid in capital | $ 1,211 | $ 982 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - Promissory Note | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Initial principal amount | $ 5,000,000 |
Original issuance discount | $ 250,000 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES | |
ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES | NOTE 1 - ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES Organization and Operations KULR Technology Group, Inc. was incorporated on December 11, 2015 under the laws of the State of Delaware as KT High-Tech Marketing, Inc. Effective August 30, 2018, KT High-Tech Marketing, Inc. changed its name to KULR Technology Group, Inc. 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 both high performance aerospace and Department of Defense (“DOD”) applications, such as space exploration, satellite communications, and underwater vehicles, and applying them to mass market commercial applications, such as lithium-ion battery energy storage, electric vehicles, 5G communication, cloud computer infrastructure, consumer and industrial devices. Risks and Uncertainties The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements of the Company include the accounts of KULR Technology Group, Inc. and its wholly-owned subsidiary, KULR Technology Corporation. All significant intercompany transactions have been eliminated in the consolidation. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Going Concern and Management’s Liquidity Plans As of December 31, 2023, the Company had cash of $1,194,764 and working capital deficit of $2,994,753. During the year ended December 31, 2023, the Company incurred a net loss in the amount of $23,693,556 and used cash in operations of $11,965,387. The Company’s primary source of liquidity has historically been cash generated from equity and debt offerings along with cash flows from revenue. Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet future financial obligations as they become due within one year after the date that these financial statements are issued. The accompanying consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. However, since the Company’s inception we have had a history of recurring net losses from operations, recurring use of cash in operating activities and working capital deficits. Future cash requirements for our current liabilities include $6,232,888 for accounts payable and accrued expenses, $1,609,200 for merchant cash advances (see Note 18 – Subsequent Events – Merchant Cash Advance Agreement), $1,323,963 for capital expenditures and $102,186 for future payments under operating leases. Future cash requirements for long-term liabilities include $250,000 for promissory notes. See Note 14 – Notes Payable for additional information. The non-current Prepaid Advance Liability balance (see Note 11 – Prepaid Advance Liability) of $5,892,056 was paid in full subsequent to December 31, 2023 from proceeds raised from the Company’s subsequent equity issuances. On December 20, 2023, the Company received a notice of noncompliance from NYSE Regulation (“NYSE”) stating it is not in compliance with Section 1003(a)(iii) in the NYSE American Company Guide (the “Company Guide”) since the Company reported stockholders’ equity of $1,200,172 at September 30, 2023, and losses from continuing operations and/or net losses in its five most recent fiscal years. On February 12, 2024, the Company received a second notice letter from NYSE stating it is not in compliance with Section 1003 (f)(v) of the Company guide since the Company’s securities were trading at an average of less than $0.20 per share for 30 days. The factors above raise substantial doubt about the Company’s ability to meet its obligations as they become due within the twelve months from the date these condensed consolidated financial statements are issued. Management’s plans to mitigate the factors which raise substantial doubt include (i) revenue growth, (ii) reducing operating expenses through careful cost management, (iii) raising additional funds through future financings, and (iv) negotiating an extension and/or conversion to equity of the Company’s prepaid advance liability (see Note 11 – Prepaid Advance Liability). The Company’s ability to continue as a going concern is dependent upon its ability to successfully execute the aforementioned initiatives. Subsequent to December 31, 2023, the Company issued 40,276,430 shares of common stock, at purchase prices per share ranging from $0.13 to $0.41, pursuant to Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $8,326,457. Of the gross proceeds, $2,610,650 was retained by the Company to help fund operations. The remaining proceeds were applied against the remaining principal and accrued interest owed in connection with the Prepaid Advance Liability. See Note 11 – Prepaid Advance Liability and Note 15 – Stockholders’ (Deficit) Equity for additional information. During the first quarter of 2024, the Company entered into two agreements whereby the Company received $1,007,100 of cash (net of underwriting fees of $72,900) with the obligation to repay a total of $1,609,200 over a total of thirty-two weekly payments. See Note 18 – Subsequent Events – Merchant Cash Advance Agreement for additional details. On January 9, 2024, the Company announced that it had completed a reduction of its total workforce of approximately 15% in an effort to allocate its resources to key business priorities to focus on improving the profitability of commercial customer engagements. On April 2, 2024, the Company received cash proceeds of $440,000 related to a Promissory Note comprised of an initial principal amount of $500,000 and discount of $60,000. The Promissory Note carries an annual interest rate of 0% and increases to 15% in the event of default, and shall be repaid in cash representing all outstanding principal and accrued and unpaid interest due on October 2, 2024, as defined by the terms of the agreement. See Note 18 – Subsequent Events – Promissory Notes for additional information. On April 9, 2024, the Company received cash proceeds of $200,000 related to a Promissory Note which matures on the first anniversary of its issuance and carries an annual interest rate of 16%. In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12% of the prepayment amount. See Note 18 – Subsequent Events – Promissory Notes for additional information. As of the date of the issuance of these consolidated financial statements, the Company has no additional commitments to obtain additional funding through future debt or equity financings, or that the Company will be able to obtain additional funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The aforementioned factors indicate that management’s plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, fair value calculations for intangible assets, equity securities, stock-based compensation and the valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash and accounts receivable. The Company’s concentrations of credit risk also include concentrations from key customers and vendors. 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 were uninsured balances of $694,763 and $9,833,541 as of December 31, 2023 and 2022, 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: Revenue Accounts Receivable For the Years Ended As of As of December 31, December 31, December 31, 2023 2022 2023 2022 Customer A 51 % 32 % * 61 % Customer B 9 % * * * Customer C * * 14 % * Customer D * 13 % 52 % 34 % Customer E * * 20 % * Customer F * 42 % * * Total 60 % 87 % 86 % 95 % * Less than 10% There is no assurance the Company will continue to receive significant revenue 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 The Company had vendors whose purchases of inventory individually represented 10% or more of the Company’s total purchases of inventory, as follows: For the Years Ended December 31, 2023 2022 Vendor A 23 % * Vendor B 15 % * 38 % 0 % * Accounts Receivable Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of December 31, 2023 and 2022, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted. Inventory The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized. These costs consist of finished goods, raw materials, manufacturing – related costs, transportation and freight, and other indirect overhead costs. Inventory is comprised of carbon fiber velvet (“CFV”) thermal interface solutions and internal short circuit batteries, which are available for sale, as well as raw materials and work in process related primarily to the manufacture of safe cases. Safe cases provide a safe and cost-effective solution to commercially store and transport lithium batteries and mitigate the impacts of cell-to-cell thermal runway propagation. 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. During the year ended December 31, 2023, certain inventory was written down to its net realizable value by taking a charge to cost of revenue of $293,941. On occasion, the Company pays for inventory prior to receiving the goods. These payments are recorded as inventory deposits until the goods are received and these costs are included in the current asset section of the consolidated balance sheet. As of December 31, 2023 and 2022, inventory deposits were $27,500 and $285,260, respectively. Finished goods inventory is held on-site at the San Diego, California and Webster, Texas locations. Certain raw materials are held off-site with certain contract manufacturers. Inventory at December 31, 2023 and 2022 consisted of the following: December 31, December 31, 2023 2022 Raw materials $ 322,111 $ 1,075,310 Work-in-process — 2,977 Finished goods 826,936 883,748 Total inventory $ 1,149,047 $ 1,962,035 Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which range from 3 to 7 years (see Note 6 – Property and Equipment for additional details). Leasehold improvements are amortized over the shorter of (a) the useful life of the asset; or (b) the remaining lease term. Maintenance and repairs are charged to operations as incurred. The Company capitalizes costs attributable to the betterment of property and equipment when such betterment extends the useful life of the assets. Vendor deposits toward the purchase of property and equipment are reflected as equipment deposits on the accompanying balance sheets. The Company reviews property and equipment assets for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. As of December 31, 2023 and December 2022, the Company determined there was no impairment of property and equipment. Intangibles Intangible assets are stated at cost as of the date acquired, less accumulated amortization. Amortization is calculated based on the estimated useful lives of the assets, using the straight-line method or another method that more fairly represents the utilization of the assets, as follows: Estimated Useful Life Patent 17.3 years Intellectual property 5.0 years Technology license 10.0 years The Company periodically evaluates the remaining useful lives of our intangible assets to determine whether events or circumstances warrant a revision to the remaining periods of amortization. In the event that the estimate of an intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. If it is determined that an intangible asset has an indefinite useful life, that intangible asset would be subject to impairment testing annually or whenever events or circumstances indicate that its carrying value may not, based on future undiscounted cash flows or market factors, be recoverable. An impairment loss, the recorded amount of which would be based on the fair value of the intangible asset at the measurement date, would be recorded in the period in which the impairment determination was made. As of December 31, 2023 and December 31, 2022, the Company determined there was no impairment of intangible assets. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accrued expenses and other current liabilities, notes payable and Prepaid Advance Liability approximate fair values due to the short-term nature of these instruments. Treasury Stock The Company records repurchases of its own common stock at cost. Repurchased common stock is presented as a reduction of equity in the consolidated balance sheets. Subsequent reissuances of treasury stock are accounted for on a weighted average cost basis. Gains resulting from differences between the cost of treasury stock and the re-issuance proceeds are credited to additional paid-in capital. Losses resulting from differences between the cost of treasury stock and the re-issuance proceeds are debited to additional paid-in capital. Convertible Instruments The Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If an embedded derivative is bifurcated from share-settled convertible debt, the Company records the debt component at cost less a debt discount equal to the bifurcated derivative’s fair value. If the conversion feature is not required to be accounted for separately as an embedded derivative, the convertible debt instrument is accounted for wholly as debt. The Company amortizes the debt discount over the life of the debt instrument as additional non-cash interest expense utilizing the effective interest method. Debt issuance and offering costs are recorded as debt discount, reducing the carrying value of the debt instrument, and are amortized as interest expense over the term of the convertible debt instrument using the effective interest method. Accrued Issuable Equity The Company records accrued issuable equity when it is contractually obligated to issue shares and there has been a delay in the issuance of such shares. Accrued issuable equity is recorded and carried at fair value with changes in its fair value recognized in the Company’s consolidated statements of operations. Once the underlying shares of common stock are issued, the accrued issuable equity is reclassified to equity as of the share issuance date at the then current fair value of the common stock. Deferred Financing Costs Direct, incremental fees incurred in connection with a debt or equity financing, are capitalized as deferred financing costs (a non-current asset) on the balance sheet. Once the financing closes, the Company reclassifies such costs as either discounts to notes payable or as a reduction of proceeds received from equity transactions so that such costs are recorded as a reduction of additional paid-in capital. If the completion of a contemplated financing was deemed to be no longer probable, the related deferred financing costs would be charged to general and administrative expense in the consolidated financial statements. 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 pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract. Contract services revenue that is recognized over time, may be recognized using the input method, based on labor hours expended, or using the output method based on milestones achieved, depending on the contract. The following table summarizes the Company’s revenue recognized in its consolidated statements of operations: For the Years Ended December 31, 2023 2022 Revenues Recognized at a Point in Time: Product sales $ 6,903,988 $ 2,643,325 Contract services 1,167,391 1,351,309 Total 8,071,379 3,994,634 Revenues Recognized Over Time: Contract services 1,758,787 — Total Revenues $ 9,830,166 $ 3,994,634 Deferred Revenue As of December 31, 2023 and 2022, the Company had $551,021 and $23,000 of deferred revenue, respectively, from contracts with customers. The contract liabilities included in deferred revenue 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. The Company expects to satisfy the remaining performance obligations and recognize the revenue related to its deferred revenue balance within the next twelve months. During the year ended December 31, 2023, $3,000 was recognized for performance obligations satisfied in previous periods. During the year ended December 31, 2022, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. Deferred Labor Costs As of December 31, 2023 and 2022, the Company had $41,625 and $34,402, respectively, of deferred labor costs, which is included in prepaid expenses and other current assets in the Company’s consolidated balance sheets. Deferred labor costs represent costs incurred to fulfill the Company’s deferred contract service revenue. The Company will recognize the deferred labor costs as cost of revenue 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 fees billed to a customer in a sales transaction related are recorded as revenue. The Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation. Costs incurred for shipping and handling are included as cost of revenue on the accompanying consolidated statements of operations. Research and Development Research and development include compensation and other expenses incurred in connection with the research and development of our CFV thermal management solution, high-areal-capacity battery electrodes, 3D engineering for a rechargeable battery, including non-cash stock-based compensation expenses. Research and development expenses are recognized as incurred. Advertising Costs Advertising costs are expensed in the period incurred. Advertising costs charged to operations for the years ended December 31, 2023 and 2022 were $1,801,144 and $874,398, respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations. Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award since the fair value of the award is more readily determinable than the value of the services. The fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Upon the exercise of an award, the Company generally issues new shares of common stock out of its authorized shares, but may issue treasury stock when available. 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, if applicable, is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. The following table presents the computation of basic and diluted net loss per common share: For the Years Ended December 31, 2023 2022 Numerator: Net loss attributable to common stockholders $ (23,693,556) $ (19,436,479) Denominator (weighted average quantities): Common shares issued 120,756,776 107,683,574 Less: Treasury shares purchased (131,162) (125,015) Less: Unvested restricted shares (3,079,374) (2,005,109) Add: Accrued issuable equity 274,500 102,323 Denominator for basic and diluted net loss per share 117,820,740 105,655,773 Basic and diluted net loss per common share $ (0.20) $ (0.18) The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: December 31, 2023 2022 Prepaid advance (1) 28,015,465 6,867,791 Unvested restricted stock awards 3,381,008 5,042,500 Restricted stock units 2,250,000 — Options 722,716 640,216 Warrants 2,524,410 2,524,410 Total 36,893,599 15,074,917 (1) Shares to be issued if the Company defaults on any of its cash payment obligations. The shares are estimated using the effective floor price at the end of each period (see Note 11 – Prepaid Advance Liability). Operating Leases The Company leases properties under operating leases. For leases in effect upon adoption of Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” at January 1, 2020 and for any leases commencing thereafter, the Company recognizes a liability to make lease payments, the “lease liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”. The lease liability is measured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing rate. The right-of-use asset is measured at the amount of the lease liability adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the right-of-use-asset. Operating lease expense consists of a single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2023 and 2022. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, general and administrative expenses in the consolidated statements of operations. Reclassifications 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. Subsequent Events The Company has evaluated subsequent events through the date on which the consolidated financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed in Note 18 – Subsequent Events. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023 – 09 are effective for the Company on December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption to have any material effects on its financial condition, results of operation or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023–09. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while mai |
ASSET ACQUISITION
ASSET ACQUISITION | 12 Months Ended |
Dec. 31, 2023 | |
ASSET ACQUISITION | |
ASSET ACQUISITION | NOTE 3 – ASSET ACQUISITION On October 6, 2022 (the “Asset Purchase Date”), KULR Technology Group, Inc. (the “Company”) entered into an agreement (the “Asset Purchase Agreement”) with a seller (the “Seller”), pursuant to which the Company purchased all of the assets, including intellectual property, of the Seller (the “Acquired Assets”) for consideration of $3,500,000 (the “Total Consideration”), of which, $2,000,000 (the “Cash Consideration”) will be paid in cash, and the Company will issue shares of common stock with an aggregate fair value of $1,500,000, valued as of the Asset Purchase Date (the “Equity Consideration”). The Asset Purchase Agreement includes customary representations, warranties and covenants of the Company and the Seller. The Purchase Agreement also contains post-closing indemnification provisions pursuant to which the parties have agreed to indemnify each other against losses resulting from certain events, including breaches of representations and warranties, covenants and certain other matters. The Company paid the Cash Consideration of $1,000,000 on October 6, 2022, $500,000 on April 5, 2023 and $500,000 on October 5, 2023. In addition to total consideration, the seller has been employed by the Company with an annual salary of $216,000. If the Seller terminates his employment with the Company less than four years after the Asset Purchase Date for reasons other than severe health problems or other extenuating circumstances that would render the Seller unable to perform his employment obligations, the Seller is required to pay back to the Company a pro rata portion of the Cash Consideration (the “Clawback”), based upon the length of the Seller’s employment as percentage of the four year employment requirement. A partial year is considered a full year for purposes of calculating the Clawback amount. The Company will issue the Equity Consideration in four equal installments of 279,852 common shares, valued as of the Asset Purchase Date at $1.34 per share, on the following dates: (i) October 5, 2023, (ii) October 5, 2024, (iii) October 5, 2025, and (iv) October 5, 2026, provided that the Seller has not terminated his employment with the Company as of the date of payment. All of the Equity Consideration is contingent upon the continued employment of the Seller; further, 75% of the Cash Consideration is subject to Clawback, based on the term of the Seller’s employment by the Company. As such, an aggregate of $3,000,000 of the Total Consideration is accounted for as compensation, which will be recognized on a pro rata basis over the employment term requirement. During the years ended December 31, 2023 and 2022, the Company recognized compensation expense of $500,000 and $125,000, respectively, which are included within the research and development expenses in the consolidated statements of operations. The remaining $500,000 of Total Consideration was accounted for as consideration for the Acquired Assets. Management determined that the remaining $500,000 of consideration attributable to fair value of the Acquired Assets was concentrated into a single identifiable asset, namely, intellectual property. As a result, this transaction was accounted for as an asset acquisition. The Company incurred legal costs in connection with the execution of the Asset Purchase Agreement, in the aggregate amount of $43,572. The total cost of the intellectual property acquired of $543,572 is included in intangible assets on the accompanying consolidated balance sheet and is being amortized over its estimated useful life of 5 years (see Note 7 – Intangible Assets for additional details). On May 4, 2023, the Company entered into an agreement (the “Asset Purchase Agreement”) with a seller (the “Seller”), pursuant to which the Company purchased all of the assets, primarily intellectual property, of the Seller (the “Acquired Assets”) for consideration of $75,000 (the “Total Consideration”), which was paid in cash on May 11, 2023. In addition, the Seller has been employed by the Company. The total cost of the intellectual property acquired of $75,000 is included in intangible assets on the accompanying consolidated balance sheet and is being amortized over its estimated useful life of 5 years. The Asset Purchase Agreement includes customary representations, warranties and covenants of the Company and the Seller. The Asset Purchase Agreement also contains post-closing indemnification provisions pursuant to which the parties have agreed to indemnify each other against losses resulting from certain events, including breaches of representations and warranties, covenants and certain other matters. The Company determined that the transaction should be accounted for as an asset acquisition because substantially all of the fair value of the Acquired Assets is concentrated in a single asset. The total cost of the intellectual property acquired of $75,000 is included in intangible assets on the accompanying consolidated balance sheet and is being amortized over its estimated useful life of 5 years (see Note 7 – Intangible Assets for additional details). |
INVENTORY DEPOSITS
INVENTORY DEPOSITS | 12 Months Ended |
Dec. 31, 2023 | |
INVENTORY DEPOSITS | |
INVENTORY DEPOSITS | NOTE 4 – INVENTORY DEPOSITS Inventory deposits consist of amounts paid in advance to vendors to secure future deliveries of specific finished goods and raw materials which will be received and sold in future periods. As of December 31, 2023 and December 31,2022, the Company had outstanding inventory deposits of $27,500 and $285,260, respectively. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS As of December 31, 2023 and 2022, prepaid expenses and other current assets consisted of the following: As of December 31, 2023 2022 Compensation costs $ 375,000 $ 375,000 Deferred expenses 59,089 34,402 Security deposits 55,308 — Dues and subscriptions 50,689 75,889 Insurance 32,606 12,776 Professional fees 24,125 25,787 Conferences and seminars 19,338 — Vendor receivables 1,995 368,069 Marketing and sponsorships 1,512 574,636 Research and development — 62,329 Other 11,699 84,120 Total prepaid expenses and other current assets $ 631,361 $ 1,613,008 Prepaid marketing and sponsorship costs as of December 31, 2022, primarily consist of two sponsorship agreements with a marketing partner whereby the Company is required to make upfront payments which were amortized over the respective service periods of the agreements. As of December 31, 2023, the sponsorship costs were fully amortized. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT As of December 31, 2023 and 2022, property and equipment consisted of the following: December 31, 2023 2022 Estimated Useful Life Construction in progress $ 408,076 $ 1,428,217 Machinery & equipment 3,864,009 1,374,293 5 – Leasehold improvements 2,043,672 345,709 Lesser of the useful life of the asset or remaining life of the lease Computer equipment 212,616 152,699 3 years Software 314,932 127,193 3 years Research and development equipment 167,517 100,939 3 years Research and development laboratory 101,053 — 10 years Furniture and fixtures 6,968 6,968 5 years 7,118,843 3,536,018 Less: accumulated deprecation (2,420,699) (342,977) Property and equipment, net $ 4,698,144 $ 3,193,041 Depreciation expense amounted to $2,077,722 and $219,643 for the years ended December 31, 2023 and 2022, respectively, which is included in cost of revenue, selling, general and administrative and research and development expenses in the consolidated statements of operations. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 7 – INTANGIBLE ASSETS The Company’s intangible assets consist of the following: December 31, 2023 2022 Patent $ 218,000 $ 218,000 Intellectual property 618,572 543,572 Technology license 60,000 — 896,572 761,572 Less: accumulated amortization (177,177) (40,804) Intangible assets, net $ 719,395 $ 720,768 On October 5, 2022, the Company acquired intellectual property with an aggregate cost of $543,572 (see Note 3 – Asset Acquisition). This long-lived intangible asset has a useful life of 5 years and is being amortized on a straight-line basis and tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. In February 2023, the Company entered into an agreement and paid $60,000 for exclusive use of a technology license. This long-lived asset has a useful life of ten years and is being amortized on a straight-line basis and tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. On May 4, 2023, the Company acquired intellectual property with an aggregate cost of $75,000 (see Note 3 – Asset Purchase). This long-lived intangible asset has a useful life of 5 years and is being amortized on a straight-line basis and tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. During the years ended December 31, 2023 and 2022, the Company recognized amortization expense related to intangible assets of $136,373 and $39,756, respectively. The weighted average remaining amortization period of the Company’s intangible assets is 7.3 years. Future amortization of intangible assets is as follows: For the Years Ending December 31, 2024 $ 142,293 2025 142,293 2026 142,293 2027 115,113 2028 23,579 Thereafter 153,824 $ 719,395 |
EQUIPMENT DEPOSITS
EQUIPMENT DEPOSITS | 12 Months Ended |
Dec. 31, 2023 | |
EQUIPMENT DEPOSITS | |
EQUIPMENT DEPOSITS | NOTE 8 EQUIPMENT DEPOSITS The Company entered into agreements with third party contractors for the design and construction of a battery packaging and inspection automation system, and automated robotic tending system. As of December 31, 2023 and 2022, the Company had outstanding deposits of $1,332,436 and $3,514,937, respectively, in connection with these agreements. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 9 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of December 31, 2023 and 2022, accrued expenses and other current liabilities consisted of the following: December 31, December 31, 2023 2022 Professional fees $ 1,875,000 $ 1,180,000 Payroll and vacation 504,748 464,453 Research and development 441,192 196,409 Refund due to customer 171,960 — Inventory 145,949 58,804 Legal fees 117,640 2,000 Tools and supplies 28,663 — Board compensation 23,750 122,500 Royalties 17,505 3,861 Marketing and advertising fees — 3,999 Subscriptions — 65,000 Other 136,937 45,251 Total accrued expenses and other current liabilities 3,463,344 2,142,277 Add: Accrued interest, non-current 5,899 157,054 Total $ 3,469,243 $ 2,299,331 |
ACCRUED ISSUABLE EQUITY
ACCRUED ISSUABLE EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED ISSUABLE EQUITY | |
ACCRUED ISSUABLE EQUITY | NOTE 10 ACCRUED ISSUABLE EQUITY A summary of the accrued issuable equity activity during the years ended December 31, 2023 and 2022, is presented below: For the Years Ended As of December 31, 2023 2022 Fair value at January 1 $ 227,956 $ 290,721 Additions 158,133 176,270 Cancellation of accrued issuable equity — (92,000) Mark-to-market (167,040) (147,035) Shares issued in satisfaction of accrued issuable equity (206,047) — Fair value at December 31 $ 13,002 $ 227,956 During the years ended December 31, 2023 and 2022, the Company entered into certain contractual arrangements for consulting services in exchange for a fixed number of shares of common stock of the Company. On the respective dates the contracts were entered into, the estimated fair value of the shares to be issued was an aggregate of $158,133 and $176,270, respectively, based on the quoted market prices of the shares. During the year ended December 31, 2022, the Company cancelled certain of its accrued issuable equity obligations of an aggregate of 33,333 of its shares with an aggregate fair value of $92,000, due to a reduction in investor relation services. During the year ended December 31, 2023, the Company settled certain of its accrued issuable equity obligations through the issuance of an aggregate of 409,723 of its shares with an aggregate fair value of $206,047, remeasured as of the date of settlement based on the quoted market prices of the shares. During the years ended December 31, 2023 and 2022, the Company recorded gains (losses) in the aggregate amount of $167,040 and $147,035, respectively, related to the changes in fair value of accrued issuable equity (see Note 16 – Stockholders’ (Deficit) Equity, Stock-Based Compensation for additional details). The fair value of the accrued but unissued shares as of December 31, 2023 was $13,002, based on Level 1 inputs, which consist of quoted prices for the Company’s common stock in active markets. |
PREPAID ADVANCE LIABILITY
PREPAID ADVANCE LIABILITY | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID ADVANCE LIABILITY. | |
PREPAID ADVANCE LIABILITY | NOTE 11 – PREPAID ADVANCE LIABILITY The Company’s prepaid advance liability consists of the following: Gross Amount of Less: Prepaid Advance Prepaid Advance Debt Liability, Liability Discount net of discount Balance, January 1, 2022 $ — $ — $ — Proceeds from prepaid advance 15,000,000 15,000,000 Original issue discount on prepaid advance 789,474 (789,474) — Legal fees — (85,000) (85,000) Repayments in cash — — — Repayments pursuant to Investor Notices (6,315,843) — (6,315,843) Amortization of debt discount — 253,133 253,133 Balance, December 31, 2022 9,473,631 (621,341) 8,852,290 (1) Proceeds from prepaid advance 2,000,000 — 2,000,000 Original issue discount on prepaid advance 105,263 (105,263) — Legal fees — (30,000) (30,000) Repayments in cash (1,575,000) — (1,575,000) Repayments pursuant to Advance Notices (52,806) — (52,806) Repayments pursuant to Investor Notices (4,032,658) — (4,032,658) Amortization of debt discount — 730,230 730,230 Balance, December 31, 2023 $ 5,918,430 $ (26,374) $ 5,892,056 (2) (1) The current portion of this liability was $5,655,612 as of December 31, 2022. (2) The current portion of this liability was $0 as of December 31, 2023. On September 23, 2022, the Company entered into a Supplemental Agreement (the “Supplemental Agreement”) to its Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”). Under the Supplemental Agreement, the Company may from time-to-time request advances of up to $15,000,000 (each, a “Prepaid Advance”) from Yorkville with a limitation on the aggregate amount of such advances of $50,000,000. At any time that there is a balance outstanding under a Prepaid Advance, the Company is not permitted to deliver Advance Notices (as defined in Note 16, Stockholders’ (Deficit) Equity) under the SEPA, without prior consent from Yorkville. Pursuant to the terms of the Supplemental Agreement, Yorkville has the right to receive shares to pay down Prepaid Advances, and may select the timing and delivery of such shares (via an “Investor Notice”), in an amount up to the balance of the Prepaid Advance at a price equal to the lower of (a) 135% of the volume weighted average price (“VWAP”) of the Company’s common stock on the day immediately prior the closing of the Prepaid Advance, or (b) 95% of the lowest VWAP during the three days immediately prior to the Investor Notice. Each Prepaid Advance accrues interest at 10% per annum, subject to an increase to 15% per annum upon events of default as defined and matures 12 months after the date of the closing of such advance. Any advance balance that remains outstanding at maturity must be repaid in cash. On September 23, 2022, the Company recorded an initial Prepaid Advance liability in the amount of $15,789,474, which consisted of $15,000,000 of gross cash proceeds (the “Initial Advance”), plus an original issue discount of $789,474. Of the $15,000,000 Initial Advance amount, $3,850,000 was used to repay amounts due under a Note Purchase Agreement with Yorkville. The Company incurred $85,000 of legal and professional fees in connection with its entry into the Supplemental Agreement. The original issue discount and legal and professional fees incurred were recorded as a debt discount, which is being amortized ratably over the term of the Initial Advance. On March 10, 2023, the Company and Yorkville agreed and closed on a second Prepaid Advance (the “Second Advance”). The Company recorded additional prepaid advance liability in the amount of $2,105,263, which consisted of $2,000,000 cash proceeds received, plus an original issue discount of $105,263. Interest accrues on the outstanding balance of each Prepaid Advance at an annual rate of 10%, subject to an increase to 15% upon events of default, as defined. On September 18, 2023, the Company repaid an aggregate amount of $1,839,731, consisting of a principal amount of $1,500,000, accrued interest in the amount of $264,731 and a payment premium in the amount of $75,000. During the year ended December 31, 2023, the Company issued 4,078,971 shares of common stock, at purchase prices per share ranging from $0.57 to $1.20, pursuant to Investor Notices submitted by Yorkville for aggregate proceeds of $4,466,627. The proceeds were applied against the principal and interest due for the Prepaid Advance Liability in the aggregate amounts of $4,032,657 and $433,970, respectively. During the year ended December 31, 2023, the Company recorded interest expense in the amount of $728,318 and recorded amortization of debt discount in the amount of $730,230 in connection with the Prepaid Advance liability. On August 16, 2023, as amended on August 23, 2023, August 30, 2023, November 6, 2023 and December 19, 2023, the Company and Yorkville entered into letter agreements (the “Letter Agreement”), intended to supplement and modify the Supplemental Agreement to extend the repayment date of the Prepaid Advance Liability balance as follows: (i) an initial payment of $1,000,000 plus accrued interest as well as a 5% cash payment premium on or before December 31, 2023 or the date of the closing of any financing conducted by the Company (the “December Payment”); (ii) $2,000,000 on or before February 29, 2024 plus accrued interest as well as a 5% cash payment premium (the “February Payment”); (iii) the remaining principal amount of the Prepaid Advance Liability of $2,597,194 plus accrued interest as well as a 5% cash payment premium on or before April 30, 2024 (the “April Payment”). On January 9, 2024, the Company entered into a letter agreement with Yorkville to defer the Company’s December 31, 2023 (the “December Payment”) payment of $2,000,000 plus accrued interest and a 5% cash payment premium until February 29, 2024. On February 13, 2024, the Company and Yorkville entered into another agreement to extend all payment due dates and defer all payment obligations to December 31, 2024. See Note 18 – Subsequent Events – Prepaid Advance Liability for additional details. As of March 27, 2024, all remaining principal and accrued interest balances related to the Prepaid Advance Liability were repaid in full through the issuance of common stock (see Note 18 – Subsequent Events – Prepaid Advance Liability). Consequently, the outstanding balance as of December 31, 2023 is classified as non-current. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | NOTE 12 – LEASES On January 18, 2023, the Company entered into a new lease agreement for office space in Webster, Texas. The initial lease term is twelve On April 5, 2021, the Company entered into a new lease agreement for office space in San Diego, California, effective June 1, 2021. The initial lease term is three years and there is an option to renew for an additional five years. Management does not expect to exercise its option to renew. Monthly rental payments under the new lease begin at $23,787, which is comprised of $18,518 of base rent plus $5,268 of common area maintenance fees, with annual escalation of 3.5% (see Note 18 – Subsequent Events – Leases for information related to the lease extension entered into subsequent to December 31, 2023). The Company determined that the 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% based on information available at the commencement date of the lease. During the years ended December 31, 2023 and 2022, operating lease expense was $265,457 and $231,116 respectively. As of December 31, 2023, the Company did not have any financing leases. Lease liabilities mature during the year ended December 31, 2024, as follows: Amount Total future minimum lease payments $ 103,432 Less: amount representing imputed interest (1,246) Present value of lease liabilities $ 102,186 The Company paid a security deposit of $50,213 in connection with the San Diego lease agreement which is recorded within the prepaid expenses and other current assets section of the balance sheet as of December 31, 2023. Supplemental cash flow information related to the lease was as follows: For the Years Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating activities $ 270,570 $ 205,034 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 51,154 $ — Weighted Average Remaining Lease Term (Years) Operating leases 0.4 years 1.4 years Weighted Average Discount Rate Operating leases 5.0 % — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS Effective August 26, 2022, the Company entered into an eight-month consulting agreement with the father of the Company’s Chief Technology Officer (the “Related Consultant”), which shall automatically renew for an additional four months unless otherwise terminated. During the years ended December 31, 2023 and 2022, expense recognized for services provided by the Related Consultant were $32,055 and $16,290, respectively, and is included within selling, general and administrative expenses in the consolidated statements of operations. On July 24, 2023, the Related Consultant accepted an employment offer by the Company, which became effective on August 7, 2023. As of December 31, 2023 and December 31, 2022, the Company did not have material accounts payable outstanding with related parties. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 14 – NOTES PAYABLE On November 29, 2023, the Company entered into an agreement (the “Promissory Note 1”) with an individual investor (the “Investor 1”), pursuant to which the Investor purchased a five-year six months issue discount On December 6, 2023, the Company entered into an agreement (the “Promissory Note 2”) with an individual investor (the “Investor 2”), pursuant to which the Investor purchased a five-year Promissory Note with a principal amount of $100,000. The Promissory Note carries an interest rate of 15% per annum, with the first interest payment due on the one-year anniversary of the Promissory Note, and then every six months thereafter. The Company is required to repay the principal amount by the maturity date of December 6, 2028. There were no legal fees or issue discount See Note 18 – Subsequent Events – Promissory Notes for information related to notes payable issued subsequent to December 31, 2023. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 15 – INCOME TAXES The income tax provision (benefit) for the years ended December 31, 2023 and 2022 consists of the following: For The Years Ended December 31, 2023 2022 Federal Current $ — $ — Deferred (4,772,247) (3,967,600) State and Local Current — — Deferred (405,473) (1,133,600) (5,177,720) (5,101,200) Change in valuation allowance 5,177,720 5,101,200 Income tax provision $ — $ — A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: For The Years Ended December 31, 2023 2022 Tax benefit at federal statutory rate (21.0) % (21.0) % State income taxes, net of federal benefit (3.5) % (6.0) % Permanent differences 0.9 % (0.1) % Other and prior year true-ups 2.3 % 0.9 % Rate and apportionment changes (0.6) % 0.0 % Change in valuation allowance 21.9 % 26.2 % Effective income tax rate (0.0) % 0.0 % The Company has determined that a valuation allowance for the entire net deferred tax asset is required. A valuation allowance is required if, based on the weight of evidence, it is more likely than not that some or the entire portion of the deferred tax asset will not be realized. After consideration of all the evidence, management has determined that a full valuation allowance is necessary to reduce the deferred tax asset to zero. The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below: For The Years Ended December 31, 2023 2022 Deferred Tax Assets (Liabilities): Net operating loss carryforwards $ 12,665,029 $ 9,078,972 Research and development credit carryforwards 101,422 101,422 Capitalized research and development costs 1,949,748 953,675 Stock-based compensation 1,687,091 1,587,800 Property and equipment 87,018 (382,819) Intangible assets 24,945 4,320 Debt discount (1,436) (16,384) Accruals and other 50,149 59,260 Gross deferred tax assets 16,563,966 11,386,246 Valuation allowance (16,563,966) (11,386,246) Deferred tax asset, net of valuation allowance $ — $ — Changes in valuation allowance $ 5,177,720 $ 5,101,200 At December 31, 2023 and 2022, the Company had federal net operating loss carry forwards of approximately $49.0 million and $32.3 million, respectively. At December 31, 2023, approximately $3.3 million of federal net operating losses will expire from 2033 to 2037, and approximately $45.7 million will have no expiration. At December 31, 2023 and 2022, the Company had state net operating loss carry forwards of approximately $33.3 million and $33.6 million, respectively, which will begin to expire in 2024. The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. The amount of the limitation would be determined based on the value of the company immediately prior to the ownership change and subsequent ownership changes could further impact the amount of the annual limitation. An ownership change pursuant to Section 382 may have occurred in the past or could happen in the future, such that the NOLs available for utilization could be significantly limited. No tax audits were commenced or were in process during the years ended December 31, 2023 and 2022. No tax related interest or penalties were incurred during the years ended December 31, 2023 and 2022. The Company’s federal and state income tax returns beginning with the year ended December 31, 2020 remain subject to examination. |
STOCKHOLDERS' (DEFICIT) EQUITY
STOCKHOLDERS' (DEFICIT) EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
STOCKHOLDERS' (DEFICIT) EQUITY | |
STOCKHOLDERS' (DEFICIT) EQUITY | NOTE 16 – STOCKHOLDERS’ (DEFICIT) EQUITY Authorized Capital The Company is authorized to issue 500,000,000 shares of common stock, par value of $0.0001 per share, and 20,000,000 shares of preferred stock, par value of $0.0001 per share. The holders of the Company’s common stock are entitled to one vote per share. The preferred stock is designated as follows: 1,000,000 shares designated as Series A Preferred Stock, 31,000 shares designated as Series B Convertible Preferred Stock, 400 shares designated as Series C Preferred Stock, and 650 shares designated as Series D Convertible Preferred Stock. Equity Incentive Plan On August 15 and November 5, 2018, the Board of Directors and a majority of the Company’s stockholders, respectively, approved the 2018 Equity Incentive Plan (the “2018 Plan”). Under the 2018 Plan, 15,000,000 shares of common stock of the Company are authorized for issuance. The 2018 Plan provides for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants of the Company and its affiliates. The 2018 Plan requires the exercise price of stock options to be not less than the fair value of the Company’s common stock on the date of grant. As of December 31, 2023, there were 7,601,405 shares available for issuance under the 2018 Plan. Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA On May 13, 2022, the Company entered into the SEPA with Yorkville. Pursuant to the SEPA, the Company has the right, but not the obligation, to sell to Yorkville up to an aggregate of $50,000,000 of its shares of common stock, par value $0.0001 per share, at the Company’s request any time during the commitment period commencing on May 13, 2022 and terminating on the first day of the month following the 24-month Each sale (an “Advance”) that the Company requests under the SEPA (via an “Advance Notice”) may be for a number of shares of common stock with an aggregate value of up to $5,000,000. Shares are sold under the SEPA at 98.0% of the average of the VWAPs during each of the three During the year ended December 31, 2023, the Company issued 905,833 shares of common stock pursuant to Advance Notices to repay $166,337 of the Prepaid Advance Liability, of which $113,531 was applied to accrued interest, and $52,806 was applied to principal. See Note 11 – Prepaid Advance Liability, for details related to a supplemental agreement to the SEPA and Note 18 – Subsequent Events – Prepaid Advance Liability for information related to subsequent common stock issuances pursuant to Advance Notices. Series A Preferred Stock Each record holder of Series A Preferred Stock shall have the right to vote on any matter with holders of the Company’s common stock and other securities entitled to vote, if any, voting together as one class. Each record holder of Series A Preferred Stock is entitled to one-hundred votes per share of Series A Preferred Stock held by such holder. The Series A Preferred Stock is not convertible into any series or class of stock of the Company. In addition, holders of the Series A Preferred Stock shall not be entitled to receive dividends, nor do they have a right to distribution from the assets of the Company in the event of any liquidation, dissolution, or winding up of the Company. On November 5, 2018, the Company received a written consent of the majority of the stockholders to issue 1,000,000 shares of the Company’s Series A Preferred Stock to the Chief Executive Officer of the Company, if necessary, as a measure to protect the Company from an uninvited takeover. As of the date of filing, the shares of Series A Preferred Stock have not been issued. Please see Note 18 – Subsequent Events – Unregistered Sales of Equity Securities for additional information on the issuance of Series A Preferred Stock. Series B Convertible Preferred Stock Holders of shares of Series B Convertible Preferred Stock are not entitled to voting rights or dividend rights. The Series B Convertible Preferred Stock does not contain any redemption provisions or other provisions requiring cash settlement within control of the holder. Series B Convertible Preferred Stock is senior in liquidation preference to common stock. Each share of Series B Convertible Preferred Stock, after 181 days after issuance and without the payment of additional consideration, is convertible at the option of the holder into fifty (50) fully paid and non-assessable shares of common stock. There are no Series B Convertible shares outstanding or available to issue at December 31, 2023. Series C Convertible Preferred Stock Series C Convertible Preferred Stock is senior in liquidation preference to the Company’s common stock for an amount equal to the stated value per share of $10,000 (“Stated Value”). Holders of shares of Series C Convertible Preferred Stock shall vote on an as-if-converted-to-common-stock basis with the common stockholders. Holders of shares of Series C Convertible Preferred Stock are entitled to receive dividends when, as and if declared by the Board of Directors, at an annual rate of twelve percent (12)% beginning one year after each share’s issuance. The Company may elect to redeem all or part of each share of Series C Convertible Preferred Stock for the Stated Value. There are no Series C Convertible shares outstanding or available to issue at December 31, 2023. Series D Convertible Preferred Stock Holders of the Series D Preferred shall vote on an as-if-converted basis and are entitled to receive cumulative dividends annually at an annual rate equal to ten percent (10%). There are no Series D Convertible shares outstanding or available at December 31, 2023. Common Stock During the year ended December 31, 2022, the Company issued an aggregate of 51,000 shares of immediately vested common stock with a grant date value of $109,850 for legal and consulting services. During the year ended December 31, 2022, the Company issued an aggregate of 2,416,668 shares of common stock upon the exercise of warrants pursuant to which the Company received an aggregate of $3,020,836 of gross proceeds. During the year ended December 31, 2023, the Company issued an aggregate of 551,323 shares of common stock valued at $268,820 for legal and consulting services, of which 189,963 shares valued at issuance at $227,956 were accrued at January 1, 2023 for services rendered in prior years. During the year ended December 31, 2023, the Company issued an aggregate of 13,389,285 shares of common stock in public equity offerings for gross proceeds of $3,910,000 less issuance costs of $846,030. Treasury Stock As of December 31, 2023 and 2022, the Company has 131,162 shares held in treasury recorded at their cost of $296,222. Warrants A summary of warrants activity during the year ended December 31, 2023 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Warrants Price Term (Yrs) Value Outstanding, January 1, 2023 2,524,410 $ 1.02 Issued — — Exercised — — Expired — — Forfeited — — Outstanding, December 31, 2023 2,524,410 $ 1.02 2.0 $ — Exercisable, December 31, 2023 2,524,410 $ 1.02 2.0 $ — A summary of outstanding and exercisable warrants as of December 31, 2023 is presented below: Warrants Outstanding Warrants Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Warrants In Years Warrants $ 1.25 177,885 2.0 177,885 $ 1.00 2,346,525 2.0 2,346,525 2,524,410 2.0 2,524,410 The following table presents information related to stock-based compensation for the years ended December 31, 2023 and 2022: For The Years Ended December 31, 2023 2022 Common stock for services (includes accrued, unissued shares) $ 220,903 $ 194,120 Amortization of stock options 157,659 103,220 Amortization of restricted stock awards and units 3,124,174 1,945,272 Amortization of market-based awards — 1,932,402 Total $ 3,502,736 $ 4,175,014 See Note 18 – Subsequent Events – Warrants for information related to warrants issued subsequent to December 31, 2023. Stock Options A summary of options activity (excluding market-based option awards) during the year ended December 31, 2023 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2023 640,216 $ 1.72 Granted 325,000 0.87 Forfeited (242,500) 1.97 Outstanding, December 31, 2023 722,716 $ 1.26 2.6 $ — Exercisable, December 31, 2023 389,522 $ 0.74 1.2 $ — The following table presents information related to stock options (excluding market-based option awards) as of December 31, 2023: Options Outstanding Options Exercisable Weighted Range of Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $0.62 - $0.99 325,486 0.5 253,542 $1.21 - $1.50 155,000 4.0 46,250 $1.55 - $1.99 82,500 3.3 27,500 $2.05 - $2.44 159,730 2.9 62,230 722,716 1.2 389,522 For the years ended December 31, 2023 and 2022, the weighted average grant date fair value per share of options was $0.52 and $1.23, respectively. 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 range of assumptions: For The Year Ended December 31, 2023 2022 Risk free interest rate 3.92% - 5.40 % 1.18% - 4.54 % Expected term (years) 0.5 – 3.5 – Expected volatility 105% - 109 % 104% - 116 % Expected dividends 0 % 0 % Option forfeitures are accounted for at the time of occurrence. The expected term used is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of employee option grants. The Company utilizes an expected volatility figure based on the historical volatility of its common stock over a period of time equivalent to the expected term of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. As of December 31, 2023, there was $300,321 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.5 Restricted Stock Awards The following table presents information related to restricted stock awards as of December 31, 2023: Weighted Average Shares of Restricted Grant Date Common Stock Fair Value Non-vested RSAs, January 1, 2023 2,042,500 $ 2.50 Granted 2,218,508 0.96 Vested (740,000) 2.41 Forfeited (140,000) 2.06 Non-vested RSAs, December 31, 2023 3,381,008 $ 1.53 On March 31, 2021, the Company granted 2,000,000 restricted shares of common stock to the Company’s President and Chief Operating Officer with a grant date fair value of $5,220,000. The restricted shares vest in four (4) equal annual installments, the first installment of which vested on March 1, 2023. On March 31, 2023, and effective as of March 1, 2023, the Company withheld and cancelled 175,000 shares of its common stock to satisfy an aggregate of $229,249 of payroll tax withholdings and remittance obligations in connection with vesting of 500,000 shares of restricted stock, resulting in a net settlement of 325,000 shares. The withholding and cancellation of the 175,000 shares represented a retirement of shares at a price per share equal to $1.31, the closing price per share of our common stock on the trading day prior to the March 1, 2023, the effective date of the share cancellation. During the year ended December 31, 2022, the Company issued as incentive shares to its employees, an aggregate of 250,000 shares of restricted common stock, of which, 75,000 shares were cancelled. On March 31, 2023, the Company granted 1,500,000 restricted shares of common stock with a grant date fair value of $1,380,000 to the Company’s Chief Financial Officer. The restricted shares vest in five (5) equal annual installments. During the year ended December 31, 2023, the Company granted RSAs of 668,508 restricted shares of common stock with an aggregate grant date fair value of $685,400 to employees which vest in four (4) equal annual installments. During the year ended December 31, 2023, the Company issued 50,000 shares of restricted common stock for marketing services subject to a 180-day lock-up period. As of December 31, 2023, there was $3,642,659 of unrecognized stock-based compensation expense related to restricted stock that will be recognized over the weighted average remaining vesting period of 2.75 years. Restricted Stock Units The following table presents information related to restricted stock units (“RSUs”) as of December 31, 2023: Weighted Average Restricted Grant Date Stock Units Fair Value Non-vested RSUs, January 1, 2023 3,000,000 $ 2.05 Granted — — Vested (750,000) — Forfeited — — Non-vested RSUs, December 31, 2023 2,250,000 $ 2.05 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 would be earned based upon achieving certain market capitalization milestones up to $4 billion (the “Market-based RSU Award”). The grant date fair value of this award of $2,911,420 was determined using a Monte Carlo valuation model for market-based vesting awards, and was amortizable 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 per share (the “Market-based Option Award”, and together with the Market-based RSU Award, the “Market-based Awards”), which would be earned based upon achieving certain market capitalization milestones up to $4 billion. The grant date fair value of this award of $2,579,000 was determined using a Monte Carlo valuation model for market-based vesting awards, and was amortizable over each of the tranches’ prospective derived service period. On November 1, 2022 (the “Modification Date”), the Board approved the termination of the Market-Based Awards and approved the grant of 1,500,000 restricted stock units (the “RSUs”) with a grant date fair value of $3,075,000, to each of the COO and CEO (the “Grantees”). The grant date value was determined using the stock price per share immediately preceding the Board approval of the grant. The RSUs will vest in four equal installments over the course of four years, the first of which vested on November 1, 2023. The exchange of RSUs for the Market-based Awards was accounted for as a modification of stock awards; as such, the amortizable value of the RSUs was determined to be $4,226,175, which represents the unrecognized grant-date fair value of the Market-based awards of $1,446,175, plus $2,780,000 representing the incremental fair value of the RSUs over the fair value of the Market Based Awards at the modification date. The following assumptions were used in applying the Monte Carlo valuation model to the Company’s market-based awards on each of the measurement dates described above. November 1, March 1, June 10, 2022 2021 2021 Risk free interest rate 4.33 % 0.71 % 0.73 % Expected volatility 100.0 % 98.9 % 98.5 % Expected dividend yield 0 % 0 % 0 % Expected term 3.3 years 2.1 years 2.2 years As of December 31, 2023, there was $2,970,061 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 3.09 years. Stock-Based Compensation During the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $3,502,736 and $4,175,014, respectively, related to restricted stock awards, restricted stock units, warrants and stock options, of which $3,227,782 and $4,136,494, respectively, are included within selling, general and administrative expenses, and $274,954 and $38,520, respectively are included within research and development expenses in the consolidated statements of operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 – COMMITMENTS AND CONTINGENCIES Patent License Agreement During April 2023, the Company entered into a licensing agreement whereby the Company obtained an exclusive license to commercialize its patented Format Fractional Thermal Runaway Calorimeter. The agreement is effective as long as the licensed patents are enforceable, subject to certain early termination provisions specified in the agreement. In consideration, the Company agreed to pay the following: (i) a cash payment of $60,000 payable upon the execution of the agreement (which was capitalized as an intangible asset and is being amortized over its useful life), and (ii) royalties of 5.5% on the net sales price of royalty-based products and services for each accounting period, as defined in the agreement, with minimum annual royalty payments of $20,000 beginning in the 2024 calendar year. Appointment of Vice President, Sales On January 16, 2023, the Company appointed a Vice President of Sales (the “VP of Sales”), and issued the VP of Sales 298,507 shares of restricted common stock. The restricted common stock had a grant date fair value of $400,000, and vests in four equal annual installments beginning January 16, 2024 based solely on continued service. The grant date fair value is being amortized ratably over the vesting period. In addition, the Company committed to a severance package of $250,000 and one-year of family health insurance if the VP of Sales is terminated without cause (as defined) within one year of hire. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS Prepaid Advance Liability Subsequent to December 31, 2023, the Company issued 40,276,430 shares of common stock, at a purchase price per share ranging from $0.13 to $0.41, pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $8,326,457. Of the gross proceeds, $2,610,650 was retained by the Company to fund operations. The remaining proceeds were applied against the principal and interest owed in connection with the Prepaid Advance Liability. As of March 27, 2024, the Prepaid Advance Liability and related accrued interest has been repaid in full. See Note 11 – Prepaid Advance Liability for additional information. On January 9, 2024, the Company had entered into a letter agreement with Yorkville to defer the Company’s December 31, 2023 (the “December Payment”) payment of $2,000,000 plus accrued interest and a 5% cash payment premium until February 29, 2024. On February 13, 2024, the Company entered into a letter agreement (the “Amendment Agreement”) with Yorkville to extend all payment due dates (including the December 2023, February 2024 and April 2024 payments) and to defer all payment obligations to December 31, 2024. Under the terms of the Supplemental Agreement, the aggregate number of shares purchased under the SEPA could not initially exceed 19.9% of the Company’s outstanding common stock as of the date of the SEPA. Pursuant to its obligations under the agreement, on February 9, 2024, the Company obtained stockholder approval for the issuance of shares of common stock to Yorkville beyond the Exchange Cap. Merchant Cash Advance Agreement On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) whereby the Company received $504,900 of cash (net of underwriting fees of $35,100), and paid finder’s fees in cash of $21,600 and finder’s fees to be issued in equity with an aggregate value of $16,200,with the obligation to repay a total of $804,600 over thirty-two weekly payments of $25,143.75, beginning January 30, 2024. On February 26, 2024, the parties added an addendum to the agreement for an early payoff discount whereby the Company will owe $756,000 if paid by March 22, 2024, or $783,000 if paid by April 22, 2024. On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the lender mentioned above whereby the Company received $502,200 of cash (net of underwriting fees of $37,800), and paid finder’s fees in cash of $21,600 and finder’s fees to be issued in equity with an aggregate value of $16,200, with the obligation to repay a total of $804,600 over thirty weekly payments of $26,820, beginning February 29, 2024. Unregistered Sales of Equity Securities On January 26, 2024, the Board of Directors (“Board”), approved, authorized, and ratified the issuance of 730,000 shares of previously designated Non-convertible Series A Voting Preferred Stock to the Chairman and Chief Executive Officer of the Company, Michael Mo, for no consideration, subject to the Board reserving the full and unequivocal right to revoke, rescind, transfer or otherwise cancel the issued Non-convertible Series A Voting Preferred Stock in the event Michael Mo is removed from any position with the Company or resigns from all positions with the Company. The issuance of up to 1,000,000 shares of Non-convertible Series A Voting Preferred Stock was previously approved and authorized by a vote of the majority stockholders of the Company and reinforces and enhances the Company’s flexibility to optimize the Company’s negotiating position in any potential current and/or future engagements with commercial, financial, and/or strategic parties, and to provide defenses against potential hostile third-party actions. Leases On January 25, 2024, the Company entered into an amendment to the lease dated April 5, 2021 for the facility located at 4863 Shawline Street, San Diego, CA 92111. Pursuant to the amendment, the lease is extended for a period of eighteen months commencing June 1, 2024, and terminating November 30, 2025. Monthly rental payments under the amendment are $29,337.30. On January 27, 2024, the Company entered into a new lease agreement for office space in Webster, Texas. The initial lease term is 63 months. Monthly rental payments under the new lease are $30,086, which is comprised of $21,950 of base rent and $11,136 of common area maintenance fees. No cash payments are due for the first three months of the lease. Promissory Notes On April 2, 2024, the Company entered into an agreement (the “Promissory Note”), with a lender (the “Lender”), pursuant to which the Lender purchased a promissory note with an initial principal amount of $500,000. The Company received cash proceeds of $440,000, resulting in a discount of $60,000, made up of an original issue discount of $50,000 and debt issuance costs of $10,000. The Promissory Note carries an annual interest rate of 0%, which shall increase to 15% in the event of default, and has a maturity date of October 2, 2024, after which all outstanding principal and accrued interest will become immediately due. On April 9, 2024, the Company entered into a note purchase agreement pursuant to which the Company issued a promissory note with an initial principal amount of $200,000 and which matures on the first anniversary of its issuance. The Company received cash proceeds of $200,000. The promissory note carries an annual interest rate of 16%. In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12% of the prepayment amount. Warrants As part of the January 2024 and February 2024 Merchant Cash Advance Agreements (see Merchant Cash Advance Agreement above), on April 9, 2024, the Company issued and delivered a total of 190,177 warrants to the FINRA-registered financial advisor that assisted with arranging the facility. The warrants grant the advisor the right to purchase one share of common stock for each warrant, at prices ranging from $0.14 per share to $0.19 per share, with a final expiration date of February 26, 2027. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements of the Company include the accounts of KULR Technology Group, Inc. and its wholly-owned subsidiary, KULR Technology Corporation. All significant intercompany transactions have been eliminated in the consolidation. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Going Concern and Management's Liquidity Plans | Going Concern and Management’s Liquidity Plans As of December 31, 2023, the Company had cash of $1,194,764 and working capital deficit of $2,994,753. During the year ended December 31, 2023, the Company incurred a net loss in the amount of $23,693,556 and used cash in operations of $11,965,387. The Company’s primary source of liquidity has historically been cash generated from equity and debt offerings along with cash flows from revenue. Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet future financial obligations as they become due within one year after the date that these financial statements are issued. The accompanying consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. However, since the Company’s inception we have had a history of recurring net losses from operations, recurring use of cash in operating activities and working capital deficits. Future cash requirements for our current liabilities include $6,232,888 for accounts payable and accrued expenses, $1,609,200 for merchant cash advances (see Note 18 – Subsequent Events – Merchant Cash Advance Agreement), $1,323,963 for capital expenditures and $102,186 for future payments under operating leases. Future cash requirements for long-term liabilities include $250,000 for promissory notes. See Note 14 – Notes Payable for additional information. The non-current Prepaid Advance Liability balance (see Note 11 – Prepaid Advance Liability) of $5,892,056 was paid in full subsequent to December 31, 2023 from proceeds raised from the Company’s subsequent equity issuances. On December 20, 2023, the Company received a notice of noncompliance from NYSE Regulation (“NYSE”) stating it is not in compliance with Section 1003(a)(iii) in the NYSE American Company Guide (the “Company Guide”) since the Company reported stockholders’ equity of $1,200,172 at September 30, 2023, and losses from continuing operations and/or net losses in its five most recent fiscal years. On February 12, 2024, the Company received a second notice letter from NYSE stating it is not in compliance with Section 1003 (f)(v) of the Company guide since the Company’s securities were trading at an average of less than $0.20 per share for 30 days. The factors above raise substantial doubt about the Company’s ability to meet its obligations as they become due within the twelve months from the date these condensed consolidated financial statements are issued. Management’s plans to mitigate the factors which raise substantial doubt include (i) revenue growth, (ii) reducing operating expenses through careful cost management, (iii) raising additional funds through future financings, and (iv) negotiating an extension and/or conversion to equity of the Company’s prepaid advance liability (see Note 11 – Prepaid Advance Liability). The Company’s ability to continue as a going concern is dependent upon its ability to successfully execute the aforementioned initiatives. Subsequent to December 31, 2023, the Company issued 40,276,430 shares of common stock, at purchase prices per share ranging from $0.13 to $0.41, pursuant to Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $8,326,457. Of the gross proceeds, $2,610,650 was retained by the Company to help fund operations. The remaining proceeds were applied against the remaining principal and accrued interest owed in connection with the Prepaid Advance Liability. See Note 11 – Prepaid Advance Liability and Note 15 – Stockholders’ (Deficit) Equity for additional information. During the first quarter of 2024, the Company entered into two agreements whereby the Company received $1,007,100 of cash (net of underwriting fees of $72,900) with the obligation to repay a total of $1,609,200 over a total of thirty-two weekly payments. See Note 18 – Subsequent Events – Merchant Cash Advance Agreement for additional details. On January 9, 2024, the Company announced that it had completed a reduction of its total workforce of approximately 15% in an effort to allocate its resources to key business priorities to focus on improving the profitability of commercial customer engagements. On April 2, 2024, the Company received cash proceeds of $440,000 related to a Promissory Note comprised of an initial principal amount of $500,000 and discount of $60,000. The Promissory Note carries an annual interest rate of 0% and increases to 15% in the event of default, and shall be repaid in cash representing all outstanding principal and accrued and unpaid interest due on October 2, 2024, as defined by the terms of the agreement. See Note 18 – Subsequent Events – Promissory Notes for additional information. On April 9, 2024, the Company received cash proceeds of $200,000 related to a Promissory Note which matures on the first anniversary of its issuance and carries an annual interest rate of 16%. In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12% of the prepayment amount. See Note 18 – Subsequent Events – Promissory Notes for additional information. As of the date of the issuance of these consolidated financial statements, the Company has no additional commitments to obtain additional funding through future debt or equity financings, or that the Company will be able to obtain additional funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The aforementioned factors indicate that management’s plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, fair value calculations for intangible assets, equity securities, stock-based compensation and the valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash and accounts receivable. The Company’s concentrations of credit risk also include concentrations from key customers and vendors. 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 were uninsured balances of $694,763 and $9,833,541 as of December 31, 2023 and 2022, 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: Revenue Accounts Receivable For the Years Ended As of As of December 31, December 31, December 31, 2023 2022 2023 2022 Customer A 51 % 32 % * 61 % Customer B 9 % * * * Customer C * * 14 % * Customer D * 13 % 52 % 34 % Customer E * * 20 % * Customer F * 42 % * * Total 60 % 87 % 86 % 95 % * Less than 10% There is no assurance the Company will continue to receive significant revenue 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 The Company had vendors whose purchases of inventory individually represented 10% or more of the Company’s total purchases of inventory, as follows: For the Years Ended December 31, 2023 2022 Vendor A 23 % * Vendor B 15 % * 38 % 0 % * |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of December 31, 2023 and 2022, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted. |
Inventory | Inventory The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized. These costs consist of finished goods, raw materials, manufacturing – related costs, transportation and freight, and other indirect overhead costs. Inventory is comprised of carbon fiber velvet (“CFV”) thermal interface solutions and internal short circuit batteries, which are available for sale, as well as raw materials and work in process related primarily to the manufacture of safe cases. Safe cases provide a safe and cost-effective solution to commercially store and transport lithium batteries and mitigate the impacts of cell-to-cell thermal runway propagation. 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. During the year ended December 31, 2023, certain inventory was written down to its net realizable value by taking a charge to cost of revenue of $293,941. On occasion, the Company pays for inventory prior to receiving the goods. These payments are recorded as inventory deposits until the goods are received and these costs are included in the current asset section of the consolidated balance sheet. As of December 31, 2023 and 2022, inventory deposits were $27,500 and $285,260, respectively. Finished goods inventory is held on-site at the San Diego, California and Webster, Texas locations. Certain raw materials are held off-site with certain contract manufacturers. Inventory at December 31, 2023 and 2022 consisted of the following: December 31, December 31, 2023 2022 Raw materials $ 322,111 $ 1,075,310 Work-in-process — 2,977 Finished goods 826,936 883,748 Total inventory $ 1,149,047 $ 1,962,035 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which range from 3 to 7 years (see Note 6 – Property and Equipment for additional details). Leasehold improvements are amortized over the shorter of (a) the useful life of the asset; or (b) the remaining lease term. Maintenance and repairs are charged to operations as incurred. The Company capitalizes costs attributable to the betterment of property and equipment when such betterment extends the useful life of the assets. Vendor deposits toward the purchase of property and equipment are reflected as equipment deposits on the accompanying balance sheets. The Company reviews property and equipment assets for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. As of December 31, 2023 and December 2022, the Company determined there was no impairment of property and equipment. |
Intangibles | Intangibles Intangible assets are stated at cost as of the date acquired, less accumulated amortization. Amortization is calculated based on the estimated useful lives of the assets, using the straight-line method or another method that more fairly represents the utilization of the assets, as follows: Estimated Useful Life Patent 17.3 years Intellectual property 5.0 years Technology license 10.0 years The Company periodically evaluates the remaining useful lives of our intangible assets to determine whether events or circumstances warrant a revision to the remaining periods of amortization. In the event that the estimate of an intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. If it is determined that an intangible asset has an indefinite useful life, that intangible asset would be subject to impairment testing annually or whenever events or circumstances indicate that its carrying value may not, based on future undiscounted cash flows or market factors, be recoverable. An impairment loss, the recorded amount of which would be based on the fair value of the intangible asset at the measurement date, would be recorded in the period in which the impairment determination was made. As of December 31, 2023 and December 31, 2022, the Company determined there was no impairment of intangible assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accrued expenses and other current liabilities, notes payable and Prepaid Advance Liability approximate fair values due to the short-term nature of these instruments. |
Treasury Stock | Treasury Stock The Company records repurchases of its own common stock at cost. Repurchased common stock is presented as a reduction of equity in the consolidated balance sheets. Subsequent reissuances of treasury stock are accounted for on a weighted average cost basis. Gains resulting from differences between the cost of treasury stock and the re-issuance proceeds are credited to additional paid-in capital. Losses resulting from differences between the cost of treasury stock and the re-issuance proceeds are debited to additional paid-in capital. |
Convertible Instruments | Convertible Instruments The Company evaluates embedded conversion features within convertible debt to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If an embedded derivative is bifurcated from share-settled convertible debt, the Company records the debt component at cost less a debt discount equal to the bifurcated derivative’s fair value. If the conversion feature is not required to be accounted for separately as an embedded derivative, the convertible debt instrument is accounted for wholly as debt. The Company amortizes the debt discount over the life of the debt instrument as additional non-cash interest expense utilizing the effective interest method. Debt issuance and offering costs are recorded as debt discount, reducing the carrying value of the debt instrument, and are amortized as interest expense over the term of the convertible debt instrument using the effective interest method. |
Accrued Issuable Equity | Accrued Issuable Equity The Company records accrued issuable equity when it is contractually obligated to issue shares and there has been a delay in the issuance of such shares. Accrued issuable equity is recorded and carried at fair value with changes in its fair value recognized in the Company’s consolidated statements of operations. Once the underlying shares of common stock are issued, the accrued issuable equity is reclassified to equity as of the share issuance date at the then current fair value of the common stock. |
Deferred Financing Costs | Deferred Financing Costs Direct, incremental fees incurred in connection with a debt or equity financing, are capitalized as deferred financing costs (a non-current asset) on the balance sheet. Once the financing closes, the Company reclassifies such costs as either discounts to notes payable or as a reduction of proceeds received from equity transactions so that such costs are recorded as a reduction of additional paid-in capital. If the completion of a contemplated financing was deemed to be no longer probable, the related deferred financing costs would be charged to general and administrative expense in the consolidated financial statements. |
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 pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract. Contract services revenue that is recognized over time, may be recognized using the input method, based on labor hours expended, or using the output method based on milestones achieved, depending on the contract. The following table summarizes the Company’s revenue recognized in its consolidated statements of operations: For the Years Ended December 31, 2023 2022 Revenues Recognized at a Point in Time: Product sales $ 6,903,988 $ 2,643,325 Contract services 1,167,391 1,351,309 Total 8,071,379 3,994,634 Revenues Recognized Over Time: Contract services 1,758,787 — Total Revenues $ 9,830,166 $ 3,994,634 |
Deferred Revenue | Deferred Revenue As of December 31, 2023 and 2022, the Company had $551,021 and $23,000 of deferred revenue, respectively, from contracts with customers. The contract liabilities included in deferred revenue 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. The Company expects to satisfy the remaining performance obligations and recognize the revenue related to its deferred revenue balance within the next twelve months. During the year ended December 31, 2023, $3,000 was recognized for performance obligations satisfied in previous periods. During the year ended December 31, 2022, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. |
Deferred Labor Costs | Deferred Labor Costs As of December 31, 2023 and 2022, the Company had $41,625 and $34,402, respectively, of deferred labor costs, which is included in prepaid expenses and other current assets in the Company’s consolidated balance sheets. Deferred labor costs represent costs incurred to fulfill the Company’s deferred contract service revenue. The Company will recognize the deferred labor costs as cost of revenue 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 Shipping and handling fees billed to a customer in a sales transaction related are recorded as revenue. The Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation. Costs incurred for shipping and handling are included as cost of revenue on the accompanying consolidated statements of operations. |
Research and Development | Research and Development Research and development include compensation and other expenses incurred in connection with the research and development of our CFV thermal management solution, high-areal-capacity battery electrodes, 3D engineering for a rechargeable battery, including non-cash stock-based compensation expenses. Research and development expenses are recognized as incurred. |
Advertising Costs | Advertising Costs Advertising costs are expensed in the period incurred. Advertising costs charged to operations for the years ended December 31, 2023 and 2022 were $1,801,144 and $874,398, respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award since the fair value of the award is more readily determinable than the value of the services. The fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Upon the exercise of an award, the Company generally issues new shares of common stock out of its authorized shares, but may issue treasury stock when available. |
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, if applicable, is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. The following table presents the computation of basic and diluted net loss per common share: For the Years Ended December 31, 2023 2022 Numerator: Net loss attributable to common stockholders $ (23,693,556) $ (19,436,479) Denominator (weighted average quantities): Common shares issued 120,756,776 107,683,574 Less: Treasury shares purchased (131,162) (125,015) Less: Unvested restricted shares (3,079,374) (2,005,109) Add: Accrued issuable equity 274,500 102,323 Denominator for basic and diluted net loss per share 117,820,740 105,655,773 Basic and diluted net loss per common share $ (0.20) $ (0.18) The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: December 31, 2023 2022 Prepaid advance (1) 28,015,465 6,867,791 Unvested restricted stock awards 3,381,008 5,042,500 Restricted stock units 2,250,000 — Options 722,716 640,216 Warrants 2,524,410 2,524,410 Total 36,893,599 15,074,917 (1) Shares to be issued if the Company defaults on any of its cash payment obligations. The shares are estimated using the effective floor price at the end of each period (see Note 11 – Prepaid Advance Liability). |
Operating Leases | Operating Leases The Company leases properties under operating leases. For leases in effect upon adoption of Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” at January 1, 2020 and for any leases commencing thereafter, the Company recognizes a liability to make lease payments, the “lease liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”. The lease liability is measured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing rate. The right-of-use asset is measured at the amount of the lease liability adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the right-of-use-asset. Operating lease expense consists of a single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2023 and 2022. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, general and administrative expenses in the consolidated statements of operations. |
Reclassifications | Reclassifications 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. |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the date on which the consolidated financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed in Note 18 – Subsequent Events. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023 – 09 are effective for the Company on December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption to have any material effects on its financial condition, results of operation or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023–09. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for the Company in financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. Management does not expect the adoption of this pronouncement will have a material effect on the Company’s financial statements. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU on January 1, 2023, using the modified retrospective approach and it did not have a material impact on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of concentrations of credit risk | Revenue Accounts Receivable For the Years Ended As of As of December 31, December 31, December 31, 2023 2022 2023 2022 Customer A 51 % 32 % * 61 % Customer B 9 % * * * Customer C * * 14 % * Customer D * 13 % 52 % 34 % Customer E * * 20 % * Customer F * 42 % * * Total 60 % 87 % 86 % 95 % * Less than 10% The Company had vendors whose purchases of inventory individually represented 10% or more of the Company’s total purchases of inventory, as follows: For the Years Ended December 31, 2023 2022 Vendor A 23 % * Vendor B 15 % * 38 % 0 % * |
Schedule of inventory | December 31, December 31, 2023 2022 Raw materials $ 322,111 $ 1,075,310 Work-in-process — 2,977 Finished goods 826,936 883,748 Total inventory $ 1,149,047 $ 1,962,035 |
Schedule of estimated useful life of intangible assets | Estimated Useful Life Patent 17.3 years Intellectual property 5.0 years Technology license 10.0 years |
Schedule of revenue recognized | For the Years Ended December 31, 2023 2022 Revenues Recognized at a Point in Time: Product sales $ 6,903,988 $ 2,643,325 Contract services 1,167,391 1,351,309 Total 8,071,379 3,994,634 Revenues Recognized Over Time: Contract services 1,758,787 — Total Revenues $ 9,830,166 $ 3,994,634 |
Schedule of of basic and diluted net loss per common share | For the Years Ended December 31, 2023 2022 Numerator: Net loss attributable to common stockholders $ (23,693,556) $ (19,436,479) Denominator (weighted average quantities): Common shares issued 120,756,776 107,683,574 Less: Treasury shares purchased (131,162) (125,015) Less: Unvested restricted shares (3,079,374) (2,005,109) Add: Accrued issuable equity 274,500 102,323 Denominator for basic and diluted net loss per share 117,820,740 105,655,773 Basic and diluted net loss per common share $ (0.20) $ (0.18) |
Schedule of shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive | December 31, 2023 2022 Prepaid advance (1) 28,015,465 6,867,791 Unvested restricted stock awards 3,381,008 5,042,500 Restricted stock units 2,250,000 — Options 722,716 640,216 Warrants 2,524,410 2,524,410 Total 36,893,599 15,074,917 (1) Shares to be issued if the Company defaults on any of its cash payment obligations. The shares are estimated using the effective floor price at the end of each period (see Note 11 – Prepaid Advance Liability). |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | As of December 31, 2023 2022 Compensation costs $ 375,000 $ 375,000 Deferred expenses 59,089 34,402 Security deposits 55,308 — Dues and subscriptions 50,689 75,889 Insurance 32,606 12,776 Professional fees 24,125 25,787 Conferences and seminars 19,338 — Vendor receivables 1,995 368,069 Marketing and sponsorships 1,512 574,636 Research and development — 62,329 Other 11,699 84,120 Total prepaid expenses and other current assets $ 631,361 $ 1,613,008 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | December 31, 2023 2022 Estimated Useful Life Construction in progress $ 408,076 $ 1,428,217 Machinery & equipment 3,864,009 1,374,293 5 – Leasehold improvements 2,043,672 345,709 Lesser of the useful life of the asset or remaining life of the lease Computer equipment 212,616 152,699 3 years Software 314,932 127,193 3 years Research and development equipment 167,517 100,939 3 years Research and development laboratory 101,053 — 10 years Furniture and fixtures 6,968 6,968 5 years 7,118,843 3,536,018 Less: accumulated deprecation (2,420,699) (342,977) Property and equipment, net $ 4,698,144 $ 3,193,041 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS | |
Schedule of company's intangible assets | December 31, 2023 2022 Patent $ 218,000 $ 218,000 Intellectual property 618,572 543,572 Technology license 60,000 — 896,572 761,572 Less: accumulated amortization (177,177) (40,804) Intangible assets, net $ 719,395 $ 720,768 |
Schedule of future amortization intangible assets | For the Years Ending December 31, 2024 $ 142,293 2025 142,293 2026 142,293 2027 115,113 2028 23,579 Thereafter 153,824 $ 719,395 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | December 31, December 31, 2023 2022 Professional fees $ 1,875,000 $ 1,180,000 Payroll and vacation 504,748 464,453 Research and development 441,192 196,409 Refund due to customer 171,960 — Inventory 145,949 58,804 Legal fees 117,640 2,000 Tools and supplies 28,663 — Board compensation 23,750 122,500 Royalties 17,505 3,861 Marketing and advertising fees — 3,999 Subscriptions — 65,000 Other 136,937 45,251 Total accrued expenses and other current liabilities 3,463,344 2,142,277 Add: Accrued interest, non-current 5,899 157,054 Total $ 3,469,243 $ 2,299,331 |
ACCRUED ISSUABLE EQUITY (Tables
ACCRUED ISSUABLE EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED ISSUABLE EQUITY | |
Schedule of accrued issuable equity | For the Years Ended As of December 31, 2023 2022 Fair value at January 1 $ 227,956 $ 290,721 Additions 158,133 176,270 Cancellation of accrued issuable equity — (92,000) Mark-to-market (167,040) (147,035) Shares issued in satisfaction of accrued issuable equity (206,047) — Fair value at December 31 $ 13,002 $ 227,956 |
PREPAID ADVANCE LIABILITY (Tabl
PREPAID ADVANCE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID ADVANCE LIABILITY. | |
Summary of prepaid advance liability | Gross Amount of Less: Prepaid Advance Prepaid Advance Debt Liability, Liability Discount net of discount Balance, January 1, 2022 $ — $ — $ — Proceeds from prepaid advance 15,000,000 15,000,000 Original issue discount on prepaid advance 789,474 (789,474) — Legal fees — (85,000) (85,000) Repayments in cash — — — Repayments pursuant to Investor Notices (6,315,843) — (6,315,843) Amortization of debt discount — 253,133 253,133 Balance, December 31, 2022 9,473,631 (621,341) 8,852,290 (1) Proceeds from prepaid advance 2,000,000 — 2,000,000 Original issue discount on prepaid advance 105,263 (105,263) — Legal fees — (30,000) (30,000) Repayments in cash (1,575,000) — (1,575,000) Repayments pursuant to Advance Notices (52,806) — (52,806) Repayments pursuant to Investor Notices (4,032,658) — (4,032,658) Amortization of debt discount — 730,230 730,230 Balance, December 31, 2023 $ 5,918,430 $ (26,374) $ 5,892,056 (2) |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of maturities of lease liabilities | Amount Total future minimum lease payments $ 103,432 Less: amount representing imputed interest (1,246) Present value of lease liabilities $ 102,186 |
Schedule of supplemental cash flow information related to the leases | For the Years Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating activities $ 270,570 $ 205,034 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 51,154 $ — Weighted Average Remaining Lease Term (Years) Operating leases 0.4 years 1.4 years Weighted Average Discount Rate Operating leases 5.0 % — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of Components of Income Tax Expense (Benefit) | For The Years Ended December 31, 2023 2022 Federal Current $ — $ — Deferred (4,772,247) (3,967,600) State and Local Current — — Deferred (405,473) (1,133,600) (5,177,720) (5,101,200) Change in valuation allowance 5,177,720 5,101,200 Income tax provision $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | For The Years Ended December 31, 2023 2022 Tax benefit at federal statutory rate (21.0) % (21.0) % State income taxes, net of federal benefit (3.5) % (6.0) % Permanent differences 0.9 % (0.1) % Other and prior year true-ups 2.3 % 0.9 % Rate and apportionment changes (0.6) % 0.0 % Change in valuation allowance 21.9 % 26.2 % Effective income tax rate (0.0) % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | For The Years Ended December 31, 2023 2022 Deferred Tax Assets (Liabilities): Net operating loss carryforwards $ 12,665,029 $ 9,078,972 Research and development credit carryforwards 101,422 101,422 Capitalized research and development costs 1,949,748 953,675 Stock-based compensation 1,687,091 1,587,800 Property and equipment 87,018 (382,819) Intangible assets 24,945 4,320 Debt discount (1,436) (16,384) Accruals and other 50,149 59,260 Gross deferred tax assets 16,563,966 11,386,246 Valuation allowance (16,563,966) (11,386,246) Deferred tax asset, net of valuation allowance $ — $ — Changes in valuation allowance $ 5,177,720 $ 5,101,200 |
STOCKHOLDERS' (DEFICIT) EQUITY
STOCKHOLDERS' (DEFICIT) EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
STOCKHOLDERS' (DEFICIT) EQUITY | |
Schedule of warrants activity | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Warrants Price Term (Yrs) Value Outstanding, January 1, 2023 2,524,410 $ 1.02 Issued — — Exercised — — Expired — — Forfeited — — Outstanding, December 31, 2023 2,524,410 $ 1.02 2.0 $ — Exercisable, December 31, 2023 2,524,410 $ 1.02 2.0 $ — |
Schedule of outstanding and exercisable warrants | A summary of outstanding and exercisable warrants as of December 31, 2023 is presented below: Warrants Outstanding Warrants Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Warrants In Years Warrants $ 1.25 177,885 2.0 177,885 $ 1.00 2,346,525 2.0 2,346,525 2,524,410 2.0 2,524,410 |
Schedule of Information relating to stock based compensation | For The Years Ended December 31, 2023 2022 Common stock for services (includes accrued, unissued shares) $ 220,903 $ 194,120 Amortization of stock options 157,659 103,220 Amortization of restricted stock awards and units 3,124,174 1,945,272 Amortization of market-based awards — 1,932,402 Total $ 3,502,736 $ 4,175,014 |
Schedule of stock option activity outstanding and exercisable | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2023 640,216 $ 1.72 Granted 325,000 0.87 Forfeited (242,500) 1.97 Outstanding, December 31, 2023 722,716 $ 1.26 2.6 $ — Exercisable, December 31, 2023 389,522 $ 0.74 1.2 $ — The following table presents information related to stock options (excluding market-based option awards) as of December 31, 2023: Options Outstanding Options Exercisable Weighted Range of Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $0.62 - $0.99 325,486 0.5 253,542 $1.21 - $1.50 155,000 4.0 46,250 $1.55 - $1.99 82,500 3.3 27,500 $2.05 - $2.44 159,730 2.9 62,230 722,716 1.2 389,522 |
Schedule of restricted stock awards and restricted stock units (excluding Market-Based RSU Awards) | Weighted Average Shares of Restricted Grant Date Common Stock Fair Value Non-vested RSAs, January 1, 2023 2,042,500 $ 2.50 Granted 2,218,508 0.96 Vested (740,000) 2.41 Forfeited (140,000) 2.06 Non-vested RSAs, December 31, 2023 3,381,008 $ 1.53 |
Schedule of RSUs will vest in four equal installments | Weighted Average Restricted Grant Date Stock Units Fair Value Non-vested RSUs, January 1, 2023 3,000,000 $ 2.05 Granted — — Vested (750,000) — Forfeited — — Non-vested RSUs, December 31, 2023 2,250,000 $ 2.05 |
Stock options | |
STOCKHOLDERS' (DEFICIT) EQUITY | |
Schedule of stock options granted | For The Year Ended December 31, 2023 2022 Risk free interest rate 3.92% - 5.40 % 1.18% - 4.54 % Expected term (years) 0.5 – 3.5 – Expected volatility 105% - 109 % 104% - 116 % Expected dividends 0 % 0 % |
Market-based awards | |
STOCKHOLDERS' (DEFICIT) EQUITY | |
Schedule of stock options granted | November 1, March 1, June 10, 2022 2021 2021 Risk free interest rate 4.33 % 0.71 % 0.73 % Expected volatility 100.0 % 98.9 % 98.5 % Expected dividend yield 0 % 0 % 0 % Expected term 3.3 years 2.1 years 2.2 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer, Revenue and Vendor Concentrations (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue | Total Customers | Revenue Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 60% | 87% |
Revenue | Customer A | Revenue Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 51% | 32% |
Revenue | Customer B | Revenue Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 9% | |
Revenue | Customer D | Revenue Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 13% | |
Revenue | Customer F | Revenue Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 42% | |
Account Receivables | Total Customers | Customer Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 86% | 95% |
Account Receivables | Customer A | Customer Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 61% | |
Account Receivables | Customer C | Customer Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 14% | |
Account Receivables | Customer D | Customer Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 52% | 34% |
Account Receivables | Customer E | Customer Concentrations | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 20% | |
Accounts Payable | Vendor Concentrations | Total Vendors | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 38% | 0% |
Accounts Payable | Vendor Concentrations | Vendor A | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 23% | |
Accounts Payable | Vendor Concentrations | Vendor B | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Concentration risk percentage | 15% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 322,111 | $ 1,075,310 |
Work-in-process | 2,977 | |
Finished goods | 826,936 | 883,748 |
Total inventory | $ 1,149,047 | $ 1,962,035 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangibles (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 0 | $ 0 |
Patent | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 17 years 3 months 18 days | |
Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Technology license | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Company's revenue recognized in its consolidated statements of operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | $ 9,830,166 | $ 3,994,634 |
Revenues Recognized at a Point in Time | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 8,071,379 | 3,994,634 |
Revenues Recognized at a Point in Time | Product sales | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 6,903,988 | 2,643,325 |
Revenues Recognized at a Point in Time | Contract services | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 1,167,391 | 1,351,309 |
Revenues Recognized Over Time | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 9,830,166 | $ 3,994,634 |
Revenues Recognized Over Time | Contract services | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | $ 1,758,787 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of basic and diluted net loss per common share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net loss attributable to common stockholders | $ (23,693,556) | $ (19,436,479) |
Denominator (weighted average quantities): | ||
Common shares issued | 120,756,776 | 107,683,574 |
Less: Treasury shares purchased | (131,162) | (125,015) |
Less: Unvested restricted shares | (3,079,374) | (2,005,109) |
Add: Accrued issuable equity | 274,500 | 102,323 |
Denominator for basic net loss per share | 117,820,740 | 105,655,773 |
Denominator for diluted net loss per share | 117,820,740 | 105,655,773 |
Basic net loss per common share (In dollars per share) | $ (0.20) | $ (0.18) |
Diluted net loss per common share (In dollars per share) | $ (0.20) | $ (0.18) |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 36,893,599 | 15,074,917 |
Prepaid advance | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 28,015,465 | 6,867,791 |
Unvested restricted stock awards | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 3,381,008 | 5,042,500 |
Restricted stock units | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 2,250,000 | |
Employee Stock Option | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 722,716 | 640,216 |
Warrants | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 2,524,410 | 2,524,410 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||
Apr. 09, 2024 USD ($) | Apr. 02, 2024 USD ($) | Feb. 26, 2024 USD ($) | Jan. 22, 2024 USD ($) | Jan. 09, 2024 | Jan. 01, 2024 USD ($) $ / shares shares | Sep. 18, 2023 USD ($) | Mar. 31, 2024 USD ($) agreement | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Feb. 12, 2024 $ / shares | Sep. 30, 2023 USD ($) | Aug. 16, 2023 USD ($) | Dec. 31, 2021 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Cash | $ 1,194,764 | $ 10,333,563 | ||||||||||||
Net Income (Loss) | (23,693,556) | (19,436,479) | ||||||||||||
Cash in operations | 11,965,387 | 17,354,125 | ||||||||||||
Current liabilities include accounts payable and accrued expenses | 6,232,888 | |||||||||||||
Prepaid advance liability, net of discount, current portion | 0 | 5,655,612 | ||||||||||||
Merchant cash advances | 1,609,200 | |||||||||||||
Capital Expenditure, Current | 1,323,963 | |||||||||||||
Lease liability, current portion | 102,186 | 223,645 | ||||||||||||
Promissory notes payable, non current | 250,000 | |||||||||||||
Prepaid advance liability, net of discount, non-current portion | 5,892,056 | 3,196,678 | ||||||||||||
Stockholders' equity | $ (2,182,696) | 10,493,733 | $ 1,200,172 | $ 16,365,042 | ||||||||||
Underwritten limited public offering, common stock issued | shares | 40,276,430 | |||||||||||||
Underwritten limited public offering, gross proceeds | $ 3,910,000 | |||||||||||||
Uninsured cash | 694,763 | 9,833,541 | ||||||||||||
Inventory write down | 293,941 | |||||||||||||
Inventory deposits | 27,500 | 285,260 | ||||||||||||
Impairment of property and equipment | 0 | 0 | ||||||||||||
Deferred revenue | 551,021 | 23,000 | ||||||||||||
Revenue recognized from performance obligations | 3,000 | 0 | ||||||||||||
Deferred Labor Costs | 41,625 | 34,402 | ||||||||||||
Advertising costs | 1,801,144 | 874,398 | ||||||||||||
Working capital deficit | 2,994,753 | |||||||||||||
Net cash proceeds | $ 250,000 | $ 4,750,000 | ||||||||||||
Subsequent event | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Average trading price per share | $ / shares | $ 0.20 | |||||||||||||
Underwritten limited public offering, gross proceeds | $ 2,610,650 | |||||||||||||
Share issued for repayment of prepaid advance liabilities | shares | 40,276,430 | |||||||||||||
Prepaid Advance Liability Repayments In Common Stock | $ 8,326,457 | |||||||||||||
Gross proceeds retained | $ 2,610,650 | |||||||||||||
Number of agreements entered by company | agreement | 2 | |||||||||||||
Proceeds from Cash Advance | $ 502,200 | $ 504,900 | $ 1,007,100 | |||||||||||
Underwriting fees | 37,800 | 35,100 | 72,900 | |||||||||||
Total cash advance payable. | $ 804,600 | $ 804,600 | $ 1,609,200 | |||||||||||
Percentage of Workforce Reduction | 15% | |||||||||||||
Yorkville | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Percentage of cash payment premium payable on or before February 29, 2024 | 5% | |||||||||||||
Aggregate amount of prepaid advance liability repaid | $ 1,839,731 | |||||||||||||
Principal amount of prepaid advance liability repaid | 1,500,000 | |||||||||||||
Accrued amount of interest on prepaid advance liability paid | 264,731 | |||||||||||||
Payment premium on prepaid advance liability paid | $ 75,000 | |||||||||||||
Share issued for repayment of prepaid advance liabilities | shares | 4,078,971 | |||||||||||||
Prepaid Advance Liability Month One | $ 2,000,000 | |||||||||||||
Prepaid Advance Liability Month Two | $ 2,597,194 | |||||||||||||
Prepaid Advance Liability, Cash Payment Premium Payable, Month Two, Percentage Prepaid Advance Liability, Cash Payment Premium Payable, Month Two, Percentage | 5% | |||||||||||||
Promissory Note | Subsequent event | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Net cash proceeds | $ 200,000 | $ 440,000 | ||||||||||||
Initial principal amount | $ 200,000 | 500,000 | ||||||||||||
Cash proceeds on discount | $ 60,000 | |||||||||||||
Annual interest rate (percentage) | 16% | |||||||||||||
Principal and cash payment interest rate | 12% | |||||||||||||
Minimum | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Property and equipment useful life | 3 years | |||||||||||||
Minimum | Subsequent event | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Underwritten limited public offering, shares issued, price per share | $ / shares | $ 0.13 | |||||||||||||
Purchase price per share | $ / shares | 0.13 | |||||||||||||
Minimum | Yorkville | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Underwritten limited public offering, shares issued, price per share | $ / shares | $ 0.57 | |||||||||||||
Purchase price per share | $ / shares | $ 0.57 | |||||||||||||
Minimum | Promissory Note | Subsequent event | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Annual interest rate (percentage) | 0% | |||||||||||||
Maximum | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Property and equipment useful life | 7 years | |||||||||||||
Maximum | Subsequent event | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Underwritten limited public offering, shares issued, price per share | $ / shares | 0.41 | |||||||||||||
Purchase price per share | $ / shares | $ 0.41 | |||||||||||||
Maximum | Yorkville | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Underwritten limited public offering, shares issued, price per share | $ / shares | $ 1.20 | |||||||||||||
Purchase price per share | $ / shares | $ 1.20 | |||||||||||||
Maximum | Promissory Note | Subsequent event | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Annual interest rate (percentage) | 15% |
ASSET ACQUISITION (Details)
ASSET ACQUISITION (Details) - USD ($) | 12 Months Ended | |||||
Oct. 05, 2023 | May 04, 2023 | Apr. 05, 2023 | Oct. 06, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
ASSET PURCHASE | ||||||
Total consideration | $ 3,500,000 | |||||
Cash consideration | 1,000,000 | $ 2,000,000 | ||||
Aggregate fair value | $ 1,500,000 | |||||
Total consideration to seller | $ 216,000 | |||||
Shares issuable | 279,852 | |||||
Prepaid advance liability | $ 1.34 | |||||
Percentage of assets acquisition | 75% | |||||
Total aggregate assets consideration | $ 3,000,000 | |||||
Compensation expense | 500,000 | $ 125,000 | ||||
Remaining fair value of assets consideration acquired | 500,000 | |||||
Legal fees | 43,572 | |||||
Intangible assets acquired | 719,395 | $ 720,768 | ||||
Intellectual property | ||||||
ASSET PURCHASE | ||||||
Intangible assets acquired | $ 75,000 | $ 543,572 | ||||
Estimated useful life of intangible assets amortization | 5 years | 5 years | ||||
Estimated useful life | 5 years | |||||
Intellectual property | Asset purchase agreement | ||||||
ASSET PURCHASE | ||||||
Assets acquisition contingent consideration | $ 75,000 | $ 75,000 | ||||
Asset acquisition, consideration transferred | $ 75,000 | |||||
Estimated useful life | 5 years | 5 years | ||||
First installments | ||||||
ASSET PURCHASE | ||||||
Cash consideration | $ 500,000 | |||||
Second installments | ||||||
ASSET PURCHASE | ||||||
Cash consideration | $ 500,000 |
INVENTORY DEPOSITS (Details)
INVENTORY DEPOSITS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
INVENTORY DEPOSITS | ||
Inventory deposits | $ 27,500 | $ 285,260 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) agreement | Dec. 31, 2023 USD ($) | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Compensation costs | $ 375,000 | $ 375,000 |
Deferred expenses | 34,402 | 59,089 |
Security deposits | 55,308 | |
Dues and subscriptions | 75,889 | 50,689 |
Insurance | 12,776 | 32,606 |
Professional fees | 25,787 | 24,125 |
Conferences and seminars | 19,338 | |
Vendor receivables | 368,069 | 1,995 |
Marketing and sponsorships | 574,636 | 1,512 |
Research and development | 62,329 | |
Other | 84,120 | 11,699 |
Total prepaid expenses and other current assets | $ 1,613,008 | $ 631,361 |
Sponsorship agreement | agreement | 2 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 7,118,843 | $ 3,536,018 |
Less: accumulated deprecation | (2,420,699) | (342,977) |
Property and equipment, net | $ 4,698,144 | 3,193,041 |
Minimum | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Estimated Useful Life | 3 years | |
Maximum | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Estimated Useful Life | 7 years | |
Construction in progress | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 408,076 | 1,428,217 |
Machinery & equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 3,864,009 | 1,374,293 |
Machinery & equipment | Minimum | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Estimated Useful Life | 5 years | |
Machinery & equipment | Maximum | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Estimated Useful Life | 7 years | |
Leasehold improvements | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 2,043,672 | 345,709 |
Computer equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 212,616 | 152,699 |
Property and equipment, Estimated Useful Life | 3 years | |
Software | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 314,932 | 127,193 |
Property and equipment, Estimated Useful Life | 3 years | |
Research and development equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 167,517 | 100,939 |
Property and equipment, Estimated Useful Life | 3 years | |
Research and development laboratory | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 101,053 | |
Property and equipment, Estimated Useful Life | 10 years | |
Furniture and fixtures | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, Gross | $ 6,968 | $ 6,968 |
Property and equipment, Estimated Useful Life | 5 years |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 2,077,722 | $ 219,643 |
INTANGIBLE ASSETS - Company's i
INTANGIBLE ASSETS - Company's intangible assets (Details) - USD ($) | Dec. 31, 2023 | May 04, 2023 | Dec. 31, 2022 | Oct. 05, 2022 |
INTANGIBLE ASSETS | ||||
Intangible assets, gross | $ 896,572 | $ 761,572 | ||
Less: accumulated amortization | (177,177) | (40,804) | ||
Intangible assets, net | 719,395 | 720,768 | ||
Patent | ||||
INTANGIBLE ASSETS | ||||
Intangible assets, gross | 218,000 | 218,000 | $ 543,572 | |
Intellectual property | ||||
INTANGIBLE ASSETS | ||||
Intangible assets, gross | 618,572 | $ 543,572 | ||
Intangible assets, net | 543,572 | $ 75,000 | ||
Technology license | ||||
INTANGIBLE ASSETS | ||||
Intangible assets, gross | $ 60,000 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | May 04, 2023 | Oct. 05, 2022 | |
INTANGIBLE ASSETS | |||||
Intangible assets, gross | $ 896,572 | $ 761,572 | |||
Intangible assets acquired | 719,395 | 720,768 | |||
Payments to acquire intangible assets | 135,000 | 543,572 | |||
Amortization of intangible assets | $ 136,373 | 39,756 | |||
Weighted average remaining amortization period | 7 years 3 months 18 days | ||||
Patent | |||||
INTANGIBLE ASSETS | |||||
Intangible assets, gross | $ 218,000 | 218,000 | $ 543,572 | ||
Useful life | 5 years | ||||
Intellectual property | |||||
INTANGIBLE ASSETS | |||||
Intangible assets, gross | $ 618,572 | $ 543,572 | |||
Useful life | 5 years | 5 years | |||
Intangible assets acquired | $ 543,572 | $ 75,000 | |||
Technology license | |||||
INTANGIBLE ASSETS | |||||
Intangible assets, gross | $ 60,000 | ||||
Useful life | 10 years | ||||
Payments to acquire intangible assets | $ 60,000 |
INTANGIBLE ASSETS - Future amor
INTANGIBLE ASSETS - Future amortization of intangible asset (Details) | Dec. 31, 2023 USD ($) |
INTANGIBLE ASSETS | |
2024 | $ 142,293 |
2025 | 142,293 |
2026 | 142,293 |
2027 | 115,113 |
2028 | 23,579 |
Thereafter | 153,824 |
Future amortization of intangible asset, net | $ 719,395 |
EQUIPMENT DEPOSITS (Details)
EQUIPMENT DEPOSITS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
EQUIPMENT DEPOSITS | ||
Equipment deposits | $ 1,332,436 | $ 3,514,937 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Professional fees | $ 1,875,000 | $ 1,180,000 |
Payroll and vacation | 504,748 | 464,453 |
Research and development | 441,192 | 196,409 |
Refund due to customer | 171,960 | |
Inventory | 145,949 | 58,804 |
Legal fees | 117,640 | 2,000 |
Tools and supplies | 28,663 | |
Board compensation | 23,750 | 122,500 |
Royalties | 17,505 | 3,861 |
Marketing and advertising fees | 3,999 | |
Subscriptions | 65,000 | |
Other | 136,937 | 45,251 |
Total accrued expenses and other current liabilities | 3,463,344 | 2,142,277 |
Add: Accrued interest, non-current | 5,899 | 157,054 |
Total | $ 3,469,243 | $ 2,299,331 |
ACCRUED ISSUABLE EQUITY (Detail
ACCRUED ISSUABLE EQUITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
ACCRUED ISSUABLE EQUITY | ||
Fair value at January 1 | $ 227,956 | $ 290,721 |
Additions | 158,133 | 176,270 |
Cancellation of accrued issuable equity | (92,000) | |
Mark-to-market | (167,040) | (147,035) |
Shares issued in satisfaction of accrued issuable equity | (206,047) | |
Fair value at December 31 | $ 13,002 | $ 227,956 |
ACCRUED ISSUABLE EQUITY - Addit
ACCRUED ISSUABLE EQUITY - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
ACCRUED ISSUABLE EQUITY | ||
Estimated fair value of shares | $ 158,133 | $ 176,270 |
Aggregate amount of mark-to market related to changes in fair value of accrued issuable equity | 167,040 | 147,035 |
Shares issued in exchange for services, aggregate fair value | $ 206,047 | $ 92,000 |
Shares issued in exchange for certain services, aggregate shares | 409,723 | 33,333 |
Fair value of unissued share | $ 13,002 |
PREPAID ADVANCE LIABILITY - Pre
PREPAID ADVANCE LIABILITY - Prepaid advance liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
PREPAID ADVANCE LIABILITY | ||
Prepaid advance liability, net of discount, current portion | $ 0 | $ 5,655,612 |
Gross Amount of Prepaid Advance Liability | ||
PREPAID ADVANCE LIABILITY | ||
Beginning balance | 9,473,631 | |
Proceeds from prepaid advance | 2,000,000 | 15,000,000 |
Original issue discount on prepaid advance | 105,263 | 789,474 |
Repayments in cash | (1,575,000) | |
Repayments pursuant to Investor Notices | (52,806) | (6,315,843) |
Repayments pursuant to Advance Notices | (4,032,658) | |
Ending balance | 5,918,430 | 9,473,631 |
Less: Debt Discount | ||
PREPAID ADVANCE LIABILITY | ||
Beginning balance | (621,341) | |
Original issue discount on prepaid advance | (105,263) | (789,474) |
Legal fees | (30,000) | (85,000) |
Amortization of debt discount | 730,230 | 253,133 |
Ending balance | (26,374) | (621,341) |
Prepaid Advance Liability, net of discount | ||
PREPAID ADVANCE LIABILITY | ||
Beginning balance | 8,852,290 | |
Proceeds from prepaid advance | 2,000,000 | 15,000,000 |
Legal fees | (30,000) | (85,000) |
Repayments in cash | (1,575,000) | |
Repayments pursuant to Investor Notices | (52,806) | (6,315,843) |
Repayments pursuant to Advance Notices | (4,032,658) | |
Amortization of debt discount | 730,230 | 253,133 |
Ending balance | $ 5,892,056 | $ 8,852,290 |
PREPAID ADVANCE LIABILITY - Add
PREPAID ADVANCE LIABILITY - Additional Information (Details) - USD ($) | 12 Months Ended | |||||||
Jan. 01, 2024 | Sep. 18, 2023 | Mar. 10, 2023 | Sep. 23, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 09, 2024 | Aug. 16, 2023 | |
PREPAID ADVANCE LIABILITY | ||||||||
Repayments of notes payable | $ 1,000,000 | |||||||
Legal fees and professional fees in connection with supplemental agreement | $ 85,000 | |||||||
Interest expense | $ 728,318 | |||||||
Amortization of debt discount connection with prepaid advance liability | $ 730,230 | |||||||
Subsequent event | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Number of stock issued | 40,276,430 | |||||||
Maximum | Subsequent event | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Purchase price per share | $ 0.41 | |||||||
Minimum | Subsequent event | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Purchase price per share | $ 0.13 | |||||||
Yorkville | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Prepaid advance | 15,000,000 | |||||||
Maximum prepaid advance | $ 50,000,000 | |||||||
Percentage of VWAP of common stock | 135% | |||||||
Percentage of lowest VWAP of prepaid advance liability | 95% | |||||||
Period for calculating VWAP | 3 days | |||||||
Percentage of interest rate per annum | 10% | 10% | ||||||
Percentage of interest rate upon default per annum | 15% | 15% | ||||||
Prepaid advance, maturity period after the date of closing of advance | 12 months | |||||||
Initial advance | $ 15,000,000 | |||||||
Original issue discount on prepaid advance | $ 105,263 | 789,474 | ||||||
Repayments of notes payable | 3,850,000 | |||||||
Prepaid second advance liability | 2,105,263 | |||||||
Proceeds from prepaid advance | $ 2,000,000 | |||||||
Aggregate amount of prepaid advance liability repaid | $ 1,839,731 | |||||||
Principal amount of prepaid advance liability repaid | 1,500,000 | |||||||
Accrued amount of interest on prepaid advance liability paid | 264,731 | |||||||
Payment premium on prepaid advance liability paid | $ 75,000 | |||||||
Number of stock issued | 4,078,971 | |||||||
Proceeds from issuance of common stock | $ 4,466,627 | |||||||
Debt instrument principal amount | 4,032,657 | |||||||
Debt instrument interest amount | $ 433,970 | |||||||
Initial payment payable on or before December 31, 2023 | $ 1,000,000 | |||||||
Percentage of cash payment premium payable on or before December 31, 2023 | 5% | |||||||
Prepaid advance payable on or before February 29, 2024 | $ 2,000,000 | |||||||
Percentage of cash payment premium payable on or before February 29, 2024 | 5% | |||||||
Prepaid advance payable on or before April 30, 2024 | $ 2,597,194 | |||||||
Percentage of cash payment premium payable on or before April 30, 2024 | 5% | |||||||
Yorkville | Purchase Agreement [Member] | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Prepaid advance | $ 15,789,474 | |||||||
Yorkville | Subsequent event | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Initial payment payable on or before December 31, 2023 | $ 2,000,000 | |||||||
Percentage of cash payment premium payable on or before December 31, 2023 | 5% | |||||||
Yorkville | Maximum | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Purchase price per share | $ 1.20 | |||||||
Yorkville | Minimum | ||||||||
PREPAID ADVANCE LIABILITY | ||||||||
Purchase price per share | $ 0.57 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Jan. 18, 2023 | Jun. 01, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | |||||
Lease term (in years) | 1 year 13 days | ||||
Right of use asset for lease liability | $ 51,154 | $ 814,817 | |||
Estimated incremental borrowing rate | 5% | 5% | |||
Operating lease expense | 265,457 | $ 231,116 | |||
Security deposit | 55,308 | ||||
New lease agreement for office space in San Diego, California | |||||
LEASES | |||||
Lease term (in years) | 3 years | ||||
Monthly lease rental | $ 5,047 | $ 23,787 | |||
Lease base rent | 4,245 | 18,518 | |||
Common area maintenance fees included in monthly lease rental | 802 | $ 5,268 | |||
Lease annual escalation rate | 3.50% | ||||
Right of use asset for lease liability | $ 51,154 | ||||
Security deposit | $ 50,213 | ||||
Renewal term | 5 years |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) | Dec. 31, 2023 USD ($) |
LEASES | |
Total future minimum lease payments | $ 103,432 |
Less: amount representing imputed interest | (1,246) |
Present value of lease liabilities | $ 102,186 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information related to the leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows used in operating activities | $ 270,570 | $ 205,034 | |
Right-of-use assets obtained in exchange for lease obligations | |||
Operating leases | $ 51,154 | $ 814,817 | |
Weighted Average Remaining Lease Term (Years) | |||
Operating leases | 4 months 24 days | 1 year 4 months 24 days | |
Weighted Average Discount Rate | |||
Operating leases | 5% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | ||
Related party expenses | $ 32,055 | $ 16,290 |
Accounts payable | 2,769,544 | 1,408,017 |
Related Party | Consulting Agreements | ||
RELATED PARTY TRANSACTIONS | ||
Accounts payable | $ 0 | $ 0 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 12 Months Ended | ||
Dec. 06, 2023 | Nov. 29, 2023 | Dec. 31, 2023 | |
NOTES PAYABLE | |||
Legal fees | $ 43,572 | ||
Promissory Note Two | |||
NOTES PAYABLE | |||
Maturity term | 5 years | ||
Debt principal amount | $ 100,000 | ||
Interest rate per annum (in percentage) | 15% | ||
first interest payment due | 1 year | ||
Promissory note due date | 6 months | ||
Legal fees | $ 0 | ||
Original issuance discount on note payable | $ 0 | ||
Promissory Note One | |||
NOTES PAYABLE | |||
Maturity term | 5 years | ||
Debt principal amount | $ 150,000 | ||
Interest rate per annum (in percentage) | 15% | ||
first interest payment due | 1 year | ||
Promissory note due date | 6 months | ||
Legal fees | $ 0 | ||
Original issuance discount on note payable | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Federal | ||
Deferred | $ (4,772,247) | $ (3,967,600) |
State and local | ||
Deferred | (405,473) | (1,133,600) |
Income Tax Expense Benefit, Federal, State And local, Net | (5,177,720) | (5,101,200) |
Change in valuation allowance | $ 5,177,720 | $ 5,101,200 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the statutory federal income tax rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAXES | ||
Tax benefit at federal statutory rate | (21.00%) | (21.00%) |
State income taxes, net of federal benefit | (3.50%) | (6.00%) |
Permanent differences | 0.90% | (0.10%) |
Other and prior year true-ups | 2.30% | 0.90% |
Rate and apportionment changes | (0.60%) | (0.00%) |
Change in valuation allowance | 21.90% | 26.20% |
Effective income tax rate | (0.00%) | (0.00%) |
INCOME TAXES - Tax effects (Det
INCOME TAXES - Tax effects (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Tax Assets (Liabilities): | ||
Net operating loss carryforwards | $ 12,665,029 | $ 9,078,972 |
Research and development credit carryforwards | 101,422 | 101,422 |
Capitalized research and development costs | 1,949,748 | 953,675 |
Stock-based compensation | 1,687,091 | 1,587,800 |
Property and equipment | 87,018 | (382,819) |
Intangible assets | 24,945 | 4,320 |
Debt discount | (1,436) | (16,384) |
Accruals and other | 50,149 | 59,260 |
Gross deferred tax assets | 16,563,966 | 11,386,246 |
Valuation allowance | (16,563,966) | (11,386,246) |
Changes in valuation allowance | $ 5,177,720 | $ 5,101,200 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAXES | ||
Operating loss carryforwards | $ 49,000,000 | $ 32,300,000 |
Federal net operating losses | 3,300,000 | |
Deferred tax assets, Operating loss carryforwards not subject to expiration | 45,700,000 | |
Net operating loss carry forwards | $ 33,300,000 | 33,600,000 |
Operating loss carryforwards limitations on use | The net operating loss carryovers may be subject to annual limitations under Internal Revenue Code Section 382, and similar state provisions, should there be a greater than 50% ownership change as determined under the applicable income tax regulations. | |
Operating loss carry forwards expiration year | net operating losses will expire from 2033 to 2037 | |
Tax related interest or penalties | $ 0 | $ 0 |
STOCKHOLDERS' (DEFICIT) EQUIT_2
STOCKHOLDERS' (DEFICIT) EQUITY - Additional Information (Details) | 12 Months Ended | |||||||||||
Dec. 31, 2023 USD ($) installment $ / shares shares | Mar. 31, 2023 USD ($) installment shares | Jan. 16, 2023 USD ($) shares | Nov. 01, 2022 USD ($) installment shares | May 13, 2022 USD ($) $ / shares | Jun. 10, 2021 USD ($) $ / shares shares | May 19, 2021 | Mar. 31, 2021 USD ($) shares | Dec. 31, 2023 USD ($) Vote $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Nov. 05, 2018 shares | Aug. 15, 2018 shares | |
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Common stock issued for prepayment of principal pursuant to advance notices | $ | $ 52,806 | |||||||||||
Underwritten limited public offering, common stock issued | 40,276,430 | |||||||||||
Common stock, shares issued | 134,031,669 | 134,031,669 | 113,202,749 | |||||||||
Underwritten limited public offering, gross proceeds | $ | $ 3,910,000 | |||||||||||
Proceeds from the exercise of warrants | $ | $ 3,020,836 | |||||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Payments of stock issuance costs | $ | $ 453,050 | |||||||||||
Common stock authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||
Options Outstanding, Exercise Price | $ / shares | $ 0.74 | $ 0.74 | ||||||||||
Number of Options, Granted | 325,000 | |||||||||||
Grant date value of common stock issued related to consulting services provided | $ | $ 268,820 | $ 109,850 | ||||||||||
Weighted average grant date fair value per share | $ / shares | $ 0.52 | $ 1.23 | ||||||||||
Number of votes per common stock | Vote | 1 | |||||||||||
Stock issued value | $ | $ 3,063,970 | |||||||||||
Partial payment of principal balance on promissory note | $ | $ 1,000,000 | |||||||||||
Treasury stock, shares held | 131,162 | 131,162 | 131,162 | |||||||||
Grant date value of stock | $ | $ 3,020,836 | |||||||||||
Series C Convertible Preferred Stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | ||||||||||
Cumulative dividends annual rate percentage | 12% | |||||||||||
Liquidation Preference, Value | $ | $ 10,000 | $ 10,000 | ||||||||||
Series D Convertible Preferred Stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Preferred stock, shares authorized | 650 | 650 | ||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | ||||||||||
Series B Convertible Preferred Stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Preferred stock, shares authorized | 31,000 | 31,000 | 31,000 | |||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | 0 | |||||||||
Preferred stock conversion terms | 181 days | |||||||||||
Shares of common stock issued upon conversion | 50 | 50 | ||||||||||
2018 Group Equity Incentive Plan | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Number of awards authorized | 7,601,405 | 7,601,405 | 15,000,000 | 15,000,000 | ||||||||
SEPA | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Commitment period (in months) | 24 months | |||||||||||
Number of consecutive days | 3 days | |||||||||||
Threshold ownership percentage | 4.99% | |||||||||||
Exchange Cap (in percent) | 19.90% | |||||||||||
Aggregate value of common stock shares outstanding | $ | $ 50,000,000 | |||||||||||
Percentage Of Shares Sold | 98% | |||||||||||
Securities Purchase Agreement | Series D Convertible Preferred Stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Cumulative dividends annual rate percentage | 10% | |||||||||||
Legal and consulting services | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Shares of common stock issued related to consulting services provided | 51,000 | |||||||||||
Shares issued for shares in prior services | 189,963 | |||||||||||
Shares issued for services in prior services, value | $ | $ 227,956 | |||||||||||
Grant date value of common stock issued related to consulting services provided | $ | $ 109,850 | |||||||||||
Restricted common stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Vesting (in shares) | 500,000 | |||||||||||
Number of shares, granted | 2,218,508 | |||||||||||
Number of Options, Granted | 1,500,000 | |||||||||||
Unrecognized stock-based compensation expense | $ | $ 4,226,175 | |||||||||||
Vest equal installments | installment | 4 | |||||||||||
Warrants at grant date value | $ | $ 3,075,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||||
Share based compensation unrecognized grant date fair value | $ | $ 1,446,175 | |||||||||||
Share based compensation incremental cost | $ | $ 2,780,000 | |||||||||||
Restricted common stock | CEO | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock grant date value | $ | $ 5,220,000 | |||||||||||
Stock options | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Grant date value of common stock issued related to consulting services provided | $ | $ 157,659 | |||||||||||
Unrecognized stock-based compensation expense | $ | $ 300,321 | 300,321 | ||||||||||
Restricted Stock Units | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Unrecognized stock-based compensation expense | $ | $ 2,970,061 | $ 2,970,061 | ||||||||||
Weighted average remaining vesting period | 3 years 1 month 2 days | |||||||||||
Market-Based Awards | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock authorized | 1,500,000 | |||||||||||
Options Outstanding, Exercise Price | $ / shares | $ 2.60 | |||||||||||
Weighted average remaining vesting period | 3 years 1 month | |||||||||||
Grant date value of stock | $ | $ 2,579,000 | $ 2,911,420 | ||||||||||
Market capitalization milestone amount | $ | $ 4,000,000,000 | |||||||||||
Market-Based Awards | COO | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock authorized | 1,500,000 | |||||||||||
Market capitalization milestone amount | $ | $ 4,000,000,000 | |||||||||||
Common Stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ( in shares) | 905,833 | |||||||||||
Common stock issued pursuant repayment of accrued interest pursuant to advance notices | $ | $ 166,337 | |||||||||||
Underwritten limited public offering, common stock issued | 13,389,285 | |||||||||||
Underwritten limited public offering, gross proceeds | $ | $ 3,910,000 | $ 6,693,976 | ||||||||||
Payments of stock issuance costs | $ | $ 846,030 | |||||||||||
Shares of common stock issued related to consulting services provided | 551,323 | 51,000 | ||||||||||
Grant date value of common stock issued related to consulting services provided | $ | $ 55 | $ 5 | ||||||||||
Stock issued value | $ | $ 1,339 | |||||||||||
Warrants exercised | 268,820 | 268,820 | ||||||||||
Common Stock | Employee | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Number of shares, granted | 668,508 | |||||||||||
Common stock grant date value | $ | $ 685,400 | |||||||||||
Equal annual installments | installment | 4 | |||||||||||
Common Stock | CEO | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Number of shares, granted | 2,000,000 | |||||||||||
Withheld and cancelled shares | 175,000 | |||||||||||
Aggregate value | $ | $ 229,249 | |||||||||||
Net settlement of shares | 325,000 | |||||||||||
Closing price per share | $ / shares | $ 1.31 | $ 1.31 | ||||||||||
Common Stock | CFO | Employee | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Number of shares, granted | 1,500,000 | |||||||||||
Common stock grant date value | $ | $ 1,380,000 | |||||||||||
Equal annual installments | installment | 5 | |||||||||||
Common Stock | SEPA | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Stock issued value | $ | $ 5,000,000 | |||||||||||
Common Stock | Legal and consulting services | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Common stock, shares issued | 2,416,668 | |||||||||||
Shares of common stock issued related to consulting services provided | 551,323 | |||||||||||
Common Stock | Restricted common stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Number of Options, Granted | 250,000 | |||||||||||
Withheld and cancelled shares | 75,000 | |||||||||||
Unrecognized stock-based compensation expense | $ | $ 3,642,659 | $ 3,642,659 | ||||||||||
Weighted average remaining vesting period | 2 years 9 months | |||||||||||
Common Stock | Restricted common stock | Marketing Services | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Number of shares, granted | 50,000 | |||||||||||
Lockup Period | 180 years | |||||||||||
Common Stock | Restricted Stock Units | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Aggregate value | $ | $ 400,000 | |||||||||||
Net settlement of shares | 298,507 | |||||||||||
Warrants | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Warrants exercised | 2,524,410 | 2,524,410 | 2,524,410 | |||||||||
Treasury Stock | ||||||||||||
STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||||
Treasury stock, shares held | 131,162 | 131,162 | 131,162 | |||||||||
Treasury stock value | $ | $ 296,222 | $ 296,222 | $ 296,222 |
STOCKHOLDERS' (DEFICIT) EQUIT_3
STOCKHOLDERS' (DEFICIT) EQUITY - Summary of warrants activity (Details) - Warrants | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
STOCKHOLDERS' EQUITY | |
Number of Warrants, Outstanding at the beginning | shares | 2,524,410 |
Number of Warrants, Outstanding at the end | shares | 2,524,410 |
Number of Warrants, Exercisable at the end | shares | 2,524,410 |
Weighted Average Exercise Price, Outstanding, Beginning (in dollars per share) | $ / shares | $ 1.02 |
Weighted Average Exercise Price, Outstanding, Ending (in dollars per share) | $ / shares | 1.02 |
Weighted Average Exercise Price, Exercisable at the end (in dollars per share) | $ / shares | $ 1.02 |
Weighted Average Remaining Term, Outstanding at the end (in years) | 2 years |
Weighted Average Remaining Term, Exercisable at the end (in years) | 2 years |
STOCKHOLDERS' (DEFICIT) EQUIT_4
STOCKHOLDERS' (DEFICIT) EQUITY - Outstanding and exercisable warrants (Details) - Warrants | Dec. 31, 2023 $ / shares shares |
STOCKHOLDERS' EQUITY | |
Warrants exercised | 2,524,410 |
Exercisable, Weighted Average Remaining Life (in years) | 2 years |
Exercisable, Number of Warrants | 2,524,410 |
Exercise price, 1.25 | |
STOCKHOLDERS' EQUITY | |
Exercise Price of Warrants Outstanding (in dollars per share) | $ / shares | $ 1.25 |
Warrants exercised | 177,885 |
Exercisable, Weighted Average Remaining Life (in years) | 2 years |
Exercisable, Number of Warrants | 177,885 |
Exercise price, 1.00 | |
STOCKHOLDERS' EQUITY | |
Exercise Price of Warrants Outstanding (in dollars per share) | $ / shares | $ 1 |
Warrants exercised | 2,346,525 |
Exercisable, Weighted Average Remaining Life (in years) | 2 years |
Exercisable, Number of Warrants | 2,346,525 |
STOCKHOLDERS' (DEFICIT) EQUIT_5
STOCKHOLDERS' (DEFICIT) EQUITY - Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | ||
Stock-based compensation expense | $ 3,502,736 | $ 4,175,014 |
Stock-based compensation | 3,502,736 | 4,175,014 |
Selling, general and administrative expenses | ||
STOCKHOLDERS' EQUITY | ||
Stock-based compensation expense | 3,227,782 | 4,136,494 |
Research and development expenses | ||
STOCKHOLDERS' EQUITY | ||
Stock-based compensation expense | 274,954 | 38,520 |
Common stock for services | ||
STOCKHOLDERS' EQUITY | ||
Stock-based compensation | 220,903 | 194,120 |
Amortization of stock options | ||
STOCKHOLDERS' EQUITY | ||
Stock-based compensation | 157,659 | 103,220 |
Market-based awards | ||
STOCKHOLDERS' EQUITY | ||
Stock-based compensation | 1,932,402 | |
Amortization of restricted stock awards and units | ||
STOCKHOLDERS' EQUITY | ||
Stock-based compensation | $ 3,124,174 | $ 1,945,272 |
STOCKHOLDERS' (DEFICIT) EQUIT_6
STOCKHOLDERS' (DEFICIT) EQUITY - Summary of options activity (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
STOCKHOLDERS' (DEFICIT) EQUITY | |
Number of Options, Outstanding | shares | 640,216 |
Number of Options, Granted | shares | 325,000 |
Number of Options, Forfeited | shares | (242,500) |
Number of Options, Outstanding | shares | 722,716 |
Number of Options, Exercisable | shares | 389,522 |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 1.72 |
Weighted Average Exercise Price, Granted | $ / shares | 0.87 |
Weighted Average Exercise Price, Forfeited | $ / shares | 1.97 |
Weighted Average Exercise Price Outstanding | $ / shares | 1.26 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.74 |
Weighted Average Remaining Term, Outstanding | 2 years 7 months 6 days |
Weighted Average Remaining Term, Exercisable | 1 year 2 months 12 days |
STOCKHOLDERS' (DEFICIT) EQUIT_7
STOCKHOLDERS' (DEFICIT) EQUITY - Stock options (excluding market-based option awards) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 0.74 | |
Options Outstanding, Number of Options | 722,716 | 640,216 |
Options Exercisable, Weighted Average Remaining Term (In Years) | 1 year 2 months 12 days | |
Options Exercisable Number of Options | 389,522 | |
$0.62 - $0.99 | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Number of Options | 325,486 | |
Options Exercisable, Weighted Average Remaining Term (In Years) | 6 months | |
Options Exercisable Number of Options | 253,542 | |
$0.62 - $0.99 | Minimum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 0.62 | |
$0.62 - $0.99 | Maximum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 0.99 | |
$1.21 - $1.50 | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Number of Options | 155,000 | |
Options Exercisable, Weighted Average Remaining Term (In Years) | 4 years | |
Options Exercisable Number of Options | 46,250 | |
$1.21 - $1.50 | Minimum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 1.21 | |
$1.21 - $1.50 | Maximum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 1.50 | |
$1.55 - $1.99 | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Number of Options | 82,500 | |
Options Exercisable, Weighted Average Remaining Term (In Years) | 3 years 3 months 18 days | |
Options Exercisable Number of Options | 27,500 | |
$1.55 - $1.99 | Minimum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 1.55 | |
$1.55 - $1.99 | Maximum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 1.99 | |
$2.05 - $2.44 | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Number of Options | 159,730 | |
Options Exercisable, Weighted Average Remaining Term (In Years) | 2 years 10 months 24 days | |
Options Exercisable Number of Options | 62,230 | |
$2.05 - $2.44 | Minimum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 2.05 | |
$2.05 - $2.44 | Maximum | ||
STOCKHOLDERS' EQUITY | ||
Options Outstanding, Exercise Price | $ 2.44 |
STOCKHOLDERS' (DEFICIT) EQUIT_8
STOCKHOLDERS' (DEFICIT) EQUITY - Fair value of stock options granted using the Black-Scholes options and Monte Carlo valuation model (Details) | 12 Months Ended | ||||||
Nov. 01, 2022 | Jun. 10, 2022 | Mar. 01, 2022 | Jun. 10, 2021 | Mar. 01, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |||||||
Expected dividends | 0% | 0% | |||||
Market-Based Awards | |||||||
STOCKHOLDERS' EQUITY | |||||||
Risk free interest rate | 0.0433% | 0.0073% | 0.0071% | ||||
Expected term (years) | 3 years 3 months 18 days | 2 years 2 months 12 days | 2 years 1 month 6 days | ||||
Expected volatility | 1% | 0.985% | 0.989% | ||||
Expected dividends | 0% | 0% | 0% | ||||
Minimum | |||||||
STOCKHOLDERS' EQUITY | |||||||
Risk free interest rate | 3.92% | 1.18% | |||||
Expected term (years) | 6 months | 3 years 6 months | |||||
Expected volatility | 105% | 104% | |||||
Maximum | |||||||
STOCKHOLDERS' EQUITY | |||||||
Risk free interest rate | 5.40% | 4.54% | |||||
Expected term (years) | 3 years 6 months | 3 years 10 months 24 days | |||||
Expected volatility | 109% | 116% |
STOCKHOLDERS' (DEFICIT) EQUIT_9
STOCKHOLDERS' (DEFICIT) EQUITY - Restricted stock awards and restricted stock units (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Restricted common stock | |
Shares of Restricted Common Stock | |
Non-vested RSAs, January 1, 2023 | 2,042,500 |
Granted | 2,218,508 |
Vested | (740,000) |
Forfeited | (140,000) |
Non-vested RSAs, December 31, 2023 | 3,381,008 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested RSAs, January 1, 2023 (in dollars per share) | $ / shares | $ 2.50 |
Granted (in dollars per share) | $ / shares | 0.96 |
Vested (in dollars per share) | $ / shares | 2.41 |
Forfeited (in dollars per share) | $ / shares | 2.06 |
Non-vested RSAs, December 31, 2023 (in dollars per share) | $ / shares | $ 1.53 |
Restricted stock units | |
Shares of Restricted Common Stock | |
Non-vested RSAs, January 1, 2023 | 3,000,000 |
Vested | (750,000) |
Non-vested RSAs, December 31, 2023 | 2,250,000 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested RSAs, January 1, 2023 (in dollars per share) | $ / shares | $ 2.05 |
Non-vested RSAs, December 31, 2023 (in dollars per share) | $ / shares | $ 2.05 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) | 1 Months Ended | |
Jan. 16, 2023 USD ($) item shares | Apr. 30, 2023 USD ($) | |
Patent License Agreement | ||
Commitments and Contingencies | ||
Consideration payable | $ 60,000 | |
Percentage of royalty on net sale price | 5.50% | |
Minimum amount of annual royalty payment | $ 20,000 | |
Common Stock | ||
Commitments and Contingencies | ||
Guaranteed commission (in years) | 1 year | |
Number of installments | item | 4 | |
Severance package | $ 250,000 | |
Restricted Stock Units | Common Stock | ||
Commitments and Contingencies | ||
Shares issued during period shares other | shares | 298,507 | |
Shares issued other value | $ 400,000 |
SUBSEQUENT EVENTS - Prepaid Adv
SUBSEQUENT EVENTS - Prepaid Advance Liability and Workforce Reduction (Details) - USD ($) | 12 Months Ended | ||||
Jan. 09, 2024 | Jan. 01, 2024 | Mar. 28, 2023 | May 13, 2022 | Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |||||
Common stock issued pursuant to the equity financing for cash, net of issuance costs (2) (in shares) | 40,276,430 | ||||
Proceeds from equity financing | $ 3,910,000 | ||||
Balance on the Initial Advance | $ 11 | ||||
Minimum | |||||
SUBSEQUENT EVENTS | |||||
Purchase prices (in dollars per share) | $ 0.13 | ||||
Maximum | |||||
SUBSEQUENT EVENTS | |||||
Purchase prices (in dollars per share) | $ 0.41 | ||||
SEPA | |||||
SUBSEQUENT EVENTS | |||||
Exchange Cap (in percent) | 19.90% | ||||
Yorkville | SEPA | |||||
SUBSEQUENT EVENTS | |||||
Exchange Cap (in percent) | 19.90% | ||||
Subsequent event | |||||
SUBSEQUENT EVENTS | |||||
Proceeds from equity financing | $ 2,610,650 | ||||
Gross proceeds retained | 2,610,650 | ||||
Percentage of Workforce Reduction | 15% | ||||
Subsequent event | Yorkville | |||||
SUBSEQUENT EVENTS | |||||
Proceeds from equity financing | $ 8,326,457 | ||||
Prepaid Advance Liability Deferred | $ 2,000,000 | ||||
Cash payment premium payable | 5% |
SUBSEQUENT EVENTS - Merchant Ca
SUBSEQUENT EVENTS - Merchant Cash Advance Agreement and Unregistered Sales of Equity Securities (Details) - USD ($) | 3 Months Ended | |||||
Feb. 26, 2024 | Jan. 22, 2024 | Mar. 31, 2024 | Jan. 26, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
SUBSEQUENT EVENTS | ||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | ||||
Series A Preferred Stock | ||||||
SUBSEQUENT EVENTS | ||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||
Subsequent event | ||||||
SUBSEQUENT EVENTS | ||||||
Proceeds from Cash Advance | $ 502,200 | $ 504,900 | $ 1,007,100 | |||
Underwriting fees | 37,800 | 35,100 | 72,900 | |||
Finder's fees | 21,600 | 21,600 | ||||
Finder's fee issued in equity aggregate value | 16,200 | 16,200 | ||||
Total cash advance payable. | 804,600 | 804,600 | $ 1,609,200 | |||
Periodic payments on cash advances. | 26,820 | $ 25,143.75 | ||||
Subsequent event | Series A Preferred Stock | CEO | ||||||
SUBSEQUENT EVENTS | ||||||
Preferred stock, shares authorized | 730,000 | |||||
Subsequent event | Series A Preferred Stock | Maximum | ||||||
SUBSEQUENT EVENTS | ||||||
Preferred stock, shares authorized | 1,000,000 | |||||
Subsequent event | If Cash Advance Repaid by March 22, 2024 | ||||||
SUBSEQUENT EVENTS | ||||||
Total cash advance payable. | 756,000 | |||||
Subsequent event | If Cash Advance Repaid by April 22, 2024 | ||||||
SUBSEQUENT EVENTS | ||||||
Total cash advance payable. | $ 783,000 |
SUBSEQUENT EVENTS - Leases and
SUBSEQUENT EVENTS - Leases and Compliance with NYSE American Continued Listing Requirements (Details) - USD ($) | 12 Months Ended | ||||
Jan. 27, 2024 | Jan. 25, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 18, 2023 | |
SUBSEQUENT EVENTS | |||||
Lease term | 1 year 13 days | ||||
Monthly rental cash payments | $ 270,570 | $ 205,034 | |||
Lease Facility Located At 4863 Shawline Street, San Diego, CA 92111 | Subsequent event | |||||
SUBSEQUENT EVENTS | |||||
Lease agreement renewal term | 18 months | ||||
Monthly lease rental | $ 29,337.30 | ||||
Lease agreement for office space in webster, texas | Subsequent event | |||||
SUBSEQUENT EVENTS | |||||
Monthly lease rental | $ 30,086 | ||||
Lease term | 63 months | ||||
Lease base rent | $ 21,950 | ||||
Common area maintenance fees included in monthly lease rental | 11,136 | ||||
Monthly rental cash payments | $ 0 |
SUBSEQUENT EVENTS - Promissory
SUBSEQUENT EVENTS - Promissory Notes (Details) - USD ($) | 12 Months Ended | |||
Apr. 09, 2024 | Apr. 02, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Net cash proceeds | $ 250,000 | $ 4,750,000 | ||
Promissory Note | ||||
Subsequent Event [Line Items] | ||||
Original Issuance Discount on Notes Payable | $ 250,000 | |||
Subsequent event | Promissory Note | ||||
Subsequent Event [Line Items] | ||||
Initial principal amount | $ 200,000 | $ 500,000 | ||
Net cash proceeds | $ 200,000 | 440,000 | ||
Cash proceeds on discount | 60,000 | |||
Original Issuance Discount on Notes Payable | 50,000 | |||
Debt issuance cost | $ 10,000 | |||
Annual interest rate (percentage) | 16% | |||
Debt Instrument Principal And Cash Payment Interest | 12% | |||
Subsequent event | Maximum | Promissory Note | ||||
Subsequent Event [Line Items] | ||||
Annual interest rate (percentage) | 15% |
SUBSEQUENT EVENTS - Warrants (D
SUBSEQUENT EVENTS - Warrants (Details) - Subsequent event | Apr. 09, 2024 $ / shares shares |
Subsequent Event [Line Items] | |
Warrants to purchase common shares issued | shares | 190,177 |
Warrants expiration date | Feb. 26, 2027 |
Maximum | |
Subsequent Event [Line Items] | |
Exercise price (in dollars per share) | $ 0.19 |
Minimum | |
Subsequent Event [Line Items] | |
Exercise price (in dollars per share) | $ 0.14 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (23,693,556) | $ (19,436,479) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |