Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 13, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
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 | |
Trading Symbol | KULR | |
Security Exchange Name | NYSE | |
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 | 182,677,224 | |
Entity Shell Company | false | |
Entity Central Index Key | 0001662684 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash | $ 798,843 | $ 1,194,764 |
Accounts receivable | 983,310 | 901,672 |
Inventory | 1,052,424 | 1,149,047 |
Inventory deposits | 27,500 | 27,500 |
Prepaid expenses and other current assets | 506,532 | 631,361 |
Total Current Assets | 3,368,609 | 3,904,344 |
Property and equipment, net | 4,178,059 | 4,698,144 |
Equipment deposits | 1,332,436 | 1,332,436 |
Security deposits | 98,371 | 10,228 |
Intangible assets, net | 683,821 | 719,395 |
Right -of -use asset, net | 1,590,004 | 129,202 |
Deferred financing costs, net | 52,792 | 70,607 |
Total Assets | 11,304,092 | 10,864,356 |
Current Liabilities: | ||
Accounts payable | 2,376,742 | 2,769,544 |
Accrued expenses and other current liabilities | 3,423,925 | 3,463,344 |
Accrued issuable equity | 52,007 | 13,002 |
Lease liabilities, current portion | 435,707 | 102,186 |
Notes payable, net of discount, current portion | 744,024 | |
Deferred revenue | 243,830 | 551,021 |
Total Current Liabilities | 7,276,235 | 6,899,097 |
Notes payable, non-current portion | 250,000 | 250,000 |
Lease liabilities, non-current portion | 1,188,259 | |
Prepaid advance liability, net of discount, non-current portion | 5,892,056 | |
Accrued interest, non-current portion | 5,899 | |
Total Liabilities | 8,714,494 | 13,047,052 |
Commitments and contingencies (Note 16) | ||
Stockholders' Equity (Deficit) | ||
Preferred stock | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 173,310,469 and 173,179,307 shares issued and outstanding at March 31, 2024, respectively; 134,031,669 and 133,900,507 shares issued and outstanding at December 31, 2023, respectively | 17,331 | 13,403 |
Additional paid-in capital | 74,164,886 | 64,387,717 |
Treasury stock, at cost; 131,162 shares held at March 31, 2024 and December 31, 2023 | (296,222) | (296,222) |
Accumulated deficit | (71,296,470) | (66,287,594) |
Total Stockholders' Equity (Deficit) | 2,589,598 | (2,182,696) |
Total Liabilities and Stockholders' Equity (Deficit) | 11,304,092 | 10,864,356 |
Series A Preferred Stock | ||
Stockholders' Equity (Deficit) | ||
Preferred stock | 73 | |
Series B Convertible Preferred Stock | ||
Stockholders' Equity (Deficit) | ||
Preferred stock | ||
Series C Preferred Stock | ||
Stockholders' Equity (Deficit) | ||
Preferred stock | ||
Series D Preferred Stock | ||
Stockholders' Equity (Deficit) | ||
Preferred stock |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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 | 173,310,469 | 134,031,669 |
Common stock, shares outstanding | 173,179,307 | 133,900,507 |
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 | 730,000 | 730,000 |
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 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 1,749,104 | $ 1,759,802 |
Cost of revenue | 1,238,315 | 1,116,414 |
Gross Profit | 510,789 | 643,388 |
Operating Expenses | ||
Research and development | 954,625 | 1,805,015 |
Selling, general, and administrative | 4,212,898 | 5,099,091 |
Total Operating Expenses | 5,167,523 | 6,904,106 |
Loss From Operations | (4,656,734) | (6,260,718) |
Other (Expense) Income | ||
Interest expense | (132,702) | (159,931) |
Amortization of debt discount | (175,080) | (246,320) |
Loss on debt extinguishment | (31,358) | |
Change in fair value of accrued issuable equity | (13,002) | 64,108 |
Total Other Expense, net | (352,142) | (342,143) |
Net Loss | $ (5,008,876) | $ (6,602,861) |
Net Loss Per Share - Basic (in dollars per share) | $ (0.04) | $ (0.06) |
Net Loss Per Share - Diluted (In dollars per share) | $ (0.04) | $ (0.06) |
Weighted Average Number of Common Shares Outstanding - Basic (In Shares) | 142,361,999 | 112,877,236 |
Weighted Average Number of Common Shares Outstanding - Diluted (In Shares) | 142,361,999 | 112,877,236 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Series A Convertible Preferred Stock Convertible Preferred Stock | Common Stock Common Stock | Common Stock Amortization of restricted stock units | 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 | Treasury Stock | Accumulated Deficit | Common Stock | Amortization of restricted stock units | Stock options | Total | |
Balance at beginning 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 | ||||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | 3,750,968 | ||||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | $ 315 | 3,750,653 | 3,750,968 | ||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices (in shares) | 3,153,036 | ||||||||||||||
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 | $ 185 | (185) | |||||||||||||
Restricted stock awards granted (in shares) | 1,848,508 | ||||||||||||||
Unvested restricted stock awards canceled | $ (8) | 8 | |||||||||||||
Unvested restricted stock awards canceled (in shares) | (75,000) | ||||||||||||||
Common stock issued for services | $ 1 | $ 6,819 | $ 6,820 | ||||||||||||
Common stock issued for services (in shares) | 5,500 | ||||||||||||||
Treasury stock beginning (in shares) at Dec. 31, 2022 | 131,162 | ||||||||||||||
Treasury stock, Ending (in shares) at Mar. 31, 2023 | 131,162 | ||||||||||||||
Amortization | $ 765,100 | $ 40,605 | $ 765,100 | $ 40,605 | |||||||||||
Net Income (Loss) | (6,602,861) | (6,602,861) | |||||||||||||
Balance at ending at Mar. 31, 2023 | $ 11,796 | 57,706,441 | $ (296,222) | (49,196,899) | 8,225,116 | ||||||||||
Balance (in shares) at Mar. 31, 2023 | 117,959,793 | ||||||||||||||
Balance at beginning 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 | ||||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ( in shares) | [1] | 21,798,830 | |||||||||||||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices | [1] | $ 2,180 | 6,052,650 | 6,054,830 | |||||||||||
Common stock issued for cash pursuant to Advance Notices (in shares) | [2] | (19,228,351) | |||||||||||||
Common stock issued for cash pursuant to Advance Notices | [2] | $ 1,923 | 2,904,490 | $ 2,906,413 | |||||||||||
Common stock issued pursuant to the equity financing for cash, net of issuance costs (2) | $ 73 | (73) | |||||||||||||
Restricted stock awards exchanged for restricted stock units (in shares) | 2,168,508 | ||||||||||||||
Restricted stock awards exchanged for restricted stock units | $ (217) | 217 | |||||||||||||
Restricted stock units vested (in shares) | 384,627 | 384,627 | |||||||||||||
Restricted stock units vested | $ 38 | (38) | |||||||||||||
Common stock issued pursuant to the equity financing for cash, net of issuance costs (2) (in shares) | 730,000 | ||||||||||||||
Common stock issued for services | $ 4 | $ 6,386 | $ 6,390 | ||||||||||||
Common stock issued for services (in shares) | 35,500 | ||||||||||||||
Treasury stock beginning (in shares) at Dec. 31, 2023 | 131,162 | 131,162 | |||||||||||||
Treasury stock, Ending (in shares) at Mar. 31, 2024 | 131,162 | 131,162 | |||||||||||||
Amortization | $ 781,496 | $ 32,041 | $ 781,496 | $ 32,041 | |||||||||||
Net Income (Loss) | (5,008,876) | $ (5,008,876) | |||||||||||||
Balance at ending at Mar. 31, 2024 | $ 73 | $ 17,331 | $ 74,164,886 | $ (296,222) | $ (71,296,470) | $ 2,589,598 | |||||||||
Balance (in shares) at Mar. 31, 2024 | 730,000 | 173,310,469 | |||||||||||||
[1] (1) (2) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | |
Proceeds from issuance of common stock for repayment of prepaid advance. | $ 6,068,407 |
Equity financing, issuance costs | 4,238 |
Proceeds from equity financing | 2,910,651 |
Payments of stock issuance costs | $ 13,577 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Cash Flows From Operating Activities: | |||
Net Income (Loss) | $ (5,008,876) | $ (6,602,861) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization of debt discount | 175,080 | 246,320 | |
Non-cash lease expense | 115,117 | 61,467 | |
Loss on debt extinguishment | 31,358 | ||
Depreciation and amortization expense | 672,867 | 250,189 | |
Change in fair value of accrued issuable equity | 13,002 | (64,108) | |
Stock-based compensation | 845,930 | 920,155 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (81,638) | (112,582) | |
Inventory | 96,623 | 292,401 | |
Inventory deposits | 20,876 | ||
Prepaid expenses and other current assets | 124,829 | 474,677 | |
Security deposits | (88,143) | (5,095) | |
Accounts payable | (425,563) | (715,200) | |
Accrued expenses and other current liabilities | (16,662) | 559,944 | |
Lease liability | (54,139) | (63,363) | |
Deferred revenue | (307,191) | (21,859) | |
Total Adjustments | 1,101,470 | 1,843,822 | |
Net Cash Used In Operating Activities | (3,907,406) | (4,759,039) | |
Cash Flows From Investing Activities: | |||
Purchases of property and equipment | (13,400) | (298,490) | |
Acquisition of intangible assets | (60,000) | ||
Net Cash Used In Investing Activities | (13,400) | (358,490) | |
Cash Flows from Financing Activities: | |||
Proceeds from the SEPA | 2,910,651 | ||
Proceeds from prepaid advance liability | 2,000,000 | ||
Issuance costs on prepaid advance liability | (30,000) | ||
Net proceeds from notes payable (1) | 1,080,000 | ||
Issuance costs on notes payable | (116,100) | ||
Repayments of notes payable | (349,666) | ||
Net Cash Provided By Financing Activities | 3,524,885 | 1,970,000 | |
Net Decrease In Cash | (395,921) | (3,147,529) | |
Cash - Beginning of Period | 1,194,764 | 10,333,563 | |
Cash - End of Period | 798,843 | 7,186,034 | |
Cash paid during the period for: | |||
Interest | 314,731 | ||
Non-cash investing and financing activities: | |||
Right of use asset for lease liability | 1,575,919 | 51,154 | |
Shares repurchased for payroll taxes (not paid as of period-end) and canceled | 229,249 | ||
Restricted stock units vested | 38 | ||
Original issue discount on indebtedness | 529,200 | 105,263 | |
Common stock issued pursuant to Investor Notices in satisfaction of prepaid advance liability and interest | 3,750,968 | ||
Common stock issued pursuant to Advance Notices in satisfaction of prepaid advance liability and interest | [1] | 6,054,830 | |
Deposits applied to purchases of property and equipment | 2,276,451 | ||
Additions to property and equipment included in accounts payable | 32,765 | $ 202,554 | |
Additions to property and equipment included in accrued purchases | 71,043 | ||
Deferred financing costs charged to additional paid in capital | 17,815 | ||
Accrued underwriting fees for note payable | 18,916 | ||
Restricted Stock Awards Conversion | |||
Non-cash investing and financing activities: | |||
Restricted stock awards converted to restricted stock units | $ 217 | ||
[1] (1) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - Promissory Note | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Initial principal amount | $ 1,609,200 |
Original issuance discount | $ 529,200 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES | 3 Months Ended |
Mar. 31, 2024 | |
ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES | |
ORGANIZATION, NATURE OF OPERATIONS, AND RISKS AND UNCERTANTIES | NOTE 1 ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION Organization and Operations KULR Technology Group, Inc., through its wholly-owned subsidiary, KULR Technology Corporation (collectively referred to as “KULR” or the “Company”), develops and commercializes high-performance thermal management technologies for electronics, batteries, and other components across a range of applications. Currently, the Company is focused on targeting 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, fifth generation (“5G”) communication, cloud computer infrastructure, consumer and industrial devices. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2024, and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on April 12, 2024. The accompanying condensed consolidated balance sheet as of December 31, 2023, has been derived from the audited financial statements included in the Form 10-K. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the date of the Annual Report on Form 10-K for the year ended December 31, 2023, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. Going Concern and Management’s Liquidity Plans As of March 31, 2024, the Company had cash of $798,843 and working capital deficit of $3,907,626. For the three months ended March 31, 2024, the Company incurred a net loss of $5,008,876 and used cash in operating activities of $3,907,406. 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 condensed 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 $5,800,667 for accounts payable and accrued expenses, $1,259,534 for merchant cash advances (see Note 9 – Notes Payable), $981,371 for capital expenditures and $435,707 for future payments under operating leases. Future cash requirements for long-term liabilities include $250,000 for unsecured promissory notes. 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. On March 5, 2024, the Company received a notification from the NYSE that the Company’s plan to regain compliance with Section 1003 (a) (iii) of the Company Guide was accepted and so long as the Company meets its interim objectives, the Company will have until June 20, 2025, to regain compliance with the minimum stockholders’ equity requirement. On May 1, 2024, the Company received a notification from the NYSE stating that the Company had regained compliance with Section 1003 (f) (v) of the Company Guide given the increase in the trading price of the Company’s securities. 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, and (iii) raising additional funds through future financings. The Company’s ability to continue as a going concern is dependent upon its ability to successfully execute the aforementioned initiatives. On April 2, 2024, the Company received cash proceeds of $440,000 related to an unsecured Promissory Note comprised of an initial principal amount of $500,000 and discount of $60,000, for cash proceeds of $440,000. 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 12 – Subsequent Events – Promissory Notes for additional information. On April 9, 2024, the Company received cash proceeds of $200,000 related to an unsecured 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 12 – Subsequent Events – Promissory Notes for additional information. Subsequent to March 31, 2024, and through May 13, 2024, the Company issued a total of 9,453,767 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $4,321,479. See Note 12 – Subsequent Events – Standby Equity Purchase Agreement for additional information. As of the date of the issuance of these condensed consolidated financial statements, the Company has no additional commitments to obtain additional funding through future debt or equity financings, or assurance 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. These unaudited condensed 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 unaudited condensed consolidated 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 $298,843 and $694,763 as of March 31, 2024 and December 31, 2023, 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 Three Months Ended As of As of March 31, March 31, December 31, 2024 2023 2024 2023 Customer A 35 % * 16 % * Customer B 13 % * 23 % 52 % Customer C * 86 % * * Customer D * * 15 % * Customer E * * 13 % * Customer F * * 12 % * Customer G * * * 20 % Customer H * * * 14 % Total 48 % 86 % 79 % 86 % * Less than 10% There is no assurance the Company will continue to receive significant revenues from any of these customers. Any reduction or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects. As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers. Vendor Concentrations 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 Three Months Ended March 31, 2024 2023 Vendor A 14 % * Vendor B * 12 % 14 % 12 % * Less than 10% Accounts Receivable Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of March 31, 2024 and December 31, 2023, 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. 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 March 31, 2024 and December 31, 2023, inventory deposits were $27,500 . 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 March 31, 2024 and December 31, 2023 was comprised of the following: March 31, December 31, 2024 2023 Raw materials $ 311,091 $ 322,111 Finished goods 741,333 826,936 Total inventory $ 1,052,424 $ 1,149,047 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 by type of contract in its condensed consolidated statements of operations: For the Three Months Ended March 31, 2024 2023 Revenue Recognized at a Point in Time: Product sales $ 615,093 $ 1,629,258 Contract services 516,471 130,544 Total 1,131,564 1,759,802 Revenue Recognized Over Time: Contract services 617,540 — Total Revenue $ 1,749,104 $ 1,759,802 Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. The following table presents the computation of basic and diluted net loss per common share: For the Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (5,008,876) $ (6,602,861) Denominator (weighted average quantities): Common shares issued 143,496,225 115,055,115 Less: Treasury shares purchased (131,162) (131,162) Less: Unvested restricted shares (1,071,495) (2,170,717) Add: Accrued issuable equity 68,431 124,000 Denominator for basic and diluted net loss per share 142,361,999 112,877,236 Basic and diluted net loss per common share $ (0.04) $ (0.06) The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: March 31, 2024 2023 Unvested restricted stock awards 712,500 3,276,008 Restricted stock units 4,268,881 3,000,000 Options 670,216 765,216 Warrants 2,524,410 2,524,410 Total 8,176,007 9,565,634 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. The Company elected the accounting policy to include both the lease and non-lease components of the agreements as a single component and account for them as a lease. 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 these unaudited condensed 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 condensed consolidated financial statements, except as disclosed in Note 12 – 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 annual periods beginning after 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. Recently Adopted Accounting Pronouncements 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. The Company adopted this ASU on January 1, 2024, and the adoption did not have a material impact on its condensed consolidated financial statements. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS As of March 31, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following: March 31, December 31, 2024 2023 Compensation costs 250,000 $ 375,000 Deferred expenses 132,846 59,089 Security deposits 5,095 55,308 Professional fees 33,752 24,125 Insurance 32,584 32,606 Dues and subscriptions 16,572 50,689 Vendor receivables 8,794 1,995 Conferences and seminars 335 19,338 Investor relationships — 1,512 Other 26,554 11,699 Total prepaid expenses and other current assets $ 506,532 $ 631,361 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 4 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of March 31, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following: March 31, December 31, 2024 2023 Professional fees $ 2,003,611 $ 1,875,000 Payroll and vacation 454,599 504,748 Research and development 441,192 441,192 Refund due to customer — 171,960 Inventory purchases 217,694 145,949 Legal fees 74,638 117,640 Tools and supplies 13,455 28,663 Board compensation 47,500 23,750 Royalties 9,706 17,505 Other 161,530 136,937 Total accrued expenses and other current liabilities 3,423,925 3,463,344 Add: Accrued interest, non-current — 5,899 Total accrued expenses and other liabilities $ 3,423,925 $ 3,469,243 |
ACCRUED ISSUABLE EQUITY
ACCRUED ISSUABLE EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
ACCRUED ISSUABLE EQUITY | |
ACCRUED ISSUABLE EQUITY | NOTE 5 – ACCRUED ISSUABLE EQUITY A summary of the accrued issuable equity activity during the three months ended March 31, 2024 is presented below: For the Three Months Ended March 31, 2024 Beginning balance at January 1, 2024 $ 13,002 Additions 26,003 Mark-to-market 13,002 Fair value at March 31, 2024 $ 52,007 During the three months ended March 31, 2024, the Company entered into and settled certain contractual arrangements for 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 $26,003 based on the quoted market prices of the shares. During the three months ended March 31, 2024 and 2023, the Company recorded gains (losses) in the aggregate amount of $(13,002) and $64,108, respectively, related to changes in the fair value of accrued issuable equity (see Note 10 – Stockholders’ Equity, Stock-Based Compensation |
PREPAID ADVANCE LIABILITY
PREPAID ADVANCE LIABILITY | 3 Months Ended |
Mar. 31, 2024 | |
PREPAID ADVANCE LIABILITY. | |
PREPAID ADVANCE LIABILITY | NOTE 6 – 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, 2024 $ 5,918,430 $ (26,374) $ 5,892,056 Repayments pursuant to Advance Notices (5,918,430) — (5,918,430) Amortization of debt discount — 26,374 26,374 Balance, March 31, 2024 $ — $ — $ — 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. During the three months ended March 31, 2024, the Company issued 41,027,181 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $8,979,058. Of the shares issued pursuant to the SEPA Advance Notices, 21,798,830 shares valued at $6,068,402 were issued in satisfaction of $5,918,430 of principal and $118,614 of accrued interest owed in connection with the Company’s prepaid advance liability. The Company recorded $31,358 in extinguishment loss, and charged $13,577 of deferred financing costs to additional paid-in capital in connection with the shares issued in satisfaction of the prepaid advance liability. As of March 31, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full. The remaining 19,228,351 shares issued pursuant to the SEPA Advance Notices were issued for cash proceeds of $2,910,651, which was used to fund the operations of the Company. Deferred financing costs in the amount of $4,243 were charged to additional paid in capital in connection with the shares issued for cash. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
LEASES | NOTE 7 – LEASES On January 31, 2024, the initial lease for Webster, Texas dated January 18, 2023, expired. The Company expects to recover the security deposit of $5,095, which is included in the prepaid expenses and other current assets section of the condensed consolidated balance sheet. On January 27, 2024, the Company entered into a lease agreement for new 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. The Company determined that the value of the lease liability and related right-of-use asset at inception was $1,085,497, using an incremental borrowing rate of 10%. The Company paid a security deposit of $37,930 in connection with the Webster lease agreement which is recorded within the security deposits section of the balance sheet as of March 31, 2024. The Company also leases office space at 4863 Shawline Street, San Diego, CA 92111, pursuant to an operating lease which expires May 31, 2024 (the “San Diego Lease”). 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 (the “First Renewal”). 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. The Company determined that the value of the modified lease liability and related right-of-use asset to be $490,422, using an incremental borrowing rate of 10%. As of March 31, 2024, the Company does not have any financing leases. During the three months ended March 31, 2024 and 2023, operating lease expense was $111,902 and $65,873, respectively. Maturities of lease liabilities as of March 31, 2024, were as follows: Year 4/1/24 to 12/31/24 $ 420,634 2025 601,196 2026 280,228 2027 289,008 2028 297,788 Thereafter 101,702 Total future minimum lease payments 1,990,557 Less: amount representing imputed interest (366,591) Present value of lease liabilities 1,623,966 Less: current portion (435,707) Lease liabilities, non current portion $ 1,188,259 Supplemental cash flow information related to the lease was as follows: For the Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating activities $ 54,139 $ 63,363 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 1,575,919 $ 51,154 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS Effective August 26, 2022, the Company entered into a consulting agreement with the father of the Company’s Chief Technology Officer (the “Related Consultant”). On July 24, 2023, the Related Consultant accepted an employment offer by the Company which became effective on August 7, 2023. During the three months ended March 31, 2023, expense recognized for services provided by the Related Consultant were $10,455, and is included within selling, general and administrative expenses on the unaudited condensed consolidated statements of operations. As of March 31, 2024 and December 31, 2023, the Company did not have any accounts payable outstanding with related parties. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2024 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 9-NOTES PAYABLE A summary of the notes payable activity during the three months ended March 31, 2024, is presented below: Notes Debt Payable Discount Total Outstanding, January 1, 2024 $ — $ — — Proceeds from merchant cash advances 1,609,200 (529,200) 1,080,000 Issuance costs paid in cash — (43,200) (43,200) Issuance costs to be paid in equity (18,916) (18,916) Underwriting fees paid in cash (72,900) (72,900) Repayments in cash (349,666) — (349,666) Amortization of debt discount — 148,706 148,706 Notes payable, current-portion 1,259,534 (515,510) 744,024 Add: Notes payable, non-current portion 250,000 — 250,000 Total Notes payable as of March 31, 2024 $ 1,509,534 $ (515,510) $ 994,024 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. The difference between the total repayment amount and the net proceeds received is being accounted for as an original issue discount, and along with the finder’s fees, is being amortized over thirty-two weeks using the effective interest rate method and an annualized effective interest rate of 184%. The Cash Advance Agreement is secured by the Company’s accounts receivable and related cash receipts. 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. The Company did not take advantage of the early payoff discount and will continue making weekly payments over the original thirty-two week term. On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the same 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. The difference between the total repayment amount and the net proceeds received is being accounted for as an original issue discount, and along with the finder’s fees, is being amortized over thirty weeks using the effective interest rate method and an annualized effective interest rate of 195%. The Second Cash Advance is secured by the Company’s accounts receivable and related cash receipts. See Note 12 – Subsequent Events – Promissory Notes for information related to notes payable issued subsequent to March 31, 2024, and warrants subsequently issued to satisfy the equity obligation. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 10 - STOCKHOLDERS’ EQUITY (DEFICIT) 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 volume-weighted average price (“VWAP”) during each of the three purchase any shares that would result in it owning more than 4.99% of the Company’s outstanding common stock at the time of an Advance, or more than the amount of shares registered under the registration statement in effect at the time of the Advance. During the three months ended March 31, 2024, the Company issued 41,027,181 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $8,979,058. Of the gross proceeds, $2,910,651 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 the related accrued interest has been repaid in full. See Note 6 – Prepaid Advance Liability, for details related to a supplemental agreement to the SEPA. Common Stock During the three months ended March 31, 2024, the Company issued an aggregate of 35,500 shares of immediately vested common stock with a grant date value of $6,390 for legal services. During the three months ended March 31, 2024, the Company issued 384,627 shares of common stock upon the vesting of restricted stock units previously granted. See Note 10 - Stockholders’ Equity - Restricted Stock Awards, for details related to restricted equity grants and Note 6 - Prepaid Advance Liability for details related to additional share issuances. Preferred Stock 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. Holders of Non-convertible Series A Voting Preferred Stock shall not be entitled to dividends, shall not convert into another series or class of stock of the Company and have no rights to distributions in the event of any liquidation. Each record holder of Non-convertible Series A Voting Preferred Stock shall have that number of votes (identical in every other respect to the voting rights of the holders of Common Stock entitled to vote at any regular or special meeting of the shareholders or by written consent) equal to one-hundred (100) votes per share of Non-convertible Series A Voting Preferred Stock held by such record holder. Treasury Stock As of March 31, 2024 and December 31, 2023, the Company has 131,162 shares held in treasury recorded at their cost of $296,222. Warrants A summary of warrants activity during the three months ended March 31, 2024, is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Warrants Price Term (Yrs) Value Outstanding, January 1, 2024 2,524,410 $ 1.02 Issued — — Exercised — — Expired — — Forfeited — — Outstanding, March 31, 2024 2,524,410 $ 1.02 1.8 $ — Exercisable, March 31, 2024 2,524,410 $ 1.02 1.8 $ — A summary of outstanding and exercisable warrants as of March 31, 2024, 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 1.8 177,885 $ 1.00 2,346,525 1.8 2,346,525 2,524,410 1.8 2,524,410 Stock Options A summary of stock options activity during the three months ended March 31, 2024, is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2024 722,716 $ 1.26 Granted 10,000 0.19 Forfeited (62,500) 0.81 Outstanding, March 31, 2024 670,216 $ 1.28 2.6 $ 1,900 Exercisable, March 31, 2024 335,215 $ 0.81 1.2 $ — The following table presents information related to stock options as of March 31, 2024: Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $0.19 - $0.99 285,486 0.5 194,235 $1.21 - $1.50 145,000 3.8 36,250 $1.55 - $1.99 80,000 3.0 25,000 $2.05 - $2.44 159,730 2.7 79,730 670,216 1.2 335,215 For the three months ended March 31, 2024 and 2023, the weighted average grant date fair value per share of options was $0.14 and $0.67, 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 Three Months Ended March 31, 2024 2023 Risk free interest rate 4.27 % 3.92% - 4.52 % Expected term (years) 3.8 3.5 Expected volatility 109 % 105 % 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 March 31, 2024, there was $269,531 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.3 years. Restricted Stock Awards The following table presents information related to restricted stock awards activity during the three months ended March 31, 2024: Shares of Weighted Average Restricted Grant Date Common Stock Fair Value Non-vested RSAs, January 1, 2024 3,381,008 $ 1.53 RSAs exchanged for RSUs (2,168,508) 0.94 Granted — — Vested (500,000) 2.61 Forfeited — — Non-vested RSAs, March 31, 2024 712,500 $ 2.52 During the three months ended March 31, 2024, the Company issued 2,168,508 restricted stock units in exchange for the same quantity of restricted stock awards. The exchange of RSAs for RSUs did not result in a modification of any other terms, such as the grant date fair value and vesting period. As of March 31, 2024, there was $1,513,146 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 1.13 years. Restricted Stock Units The following table presents information related to restricted stock units (“RSUs”) activity during the three months ended March 31, 2024: Number of Weighted Average Restricted Grant Date Common Units Fair Value Non-vested RSUs, January 1, 2024 2,250,000 $ 2.05 RSAs exchanged for RSUs 2,168,508 0.94 Granted 225,000 0.14 Vested (374,627) 1.00 Forfeited — — Non-vested RSUs, March 31, 2024 4,268,881 $ 1.48 As of March 31, 2024, there was $4,348,245 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 3.0 years. Stock-Based Compensation During the three months ended March 31, 2024 and 2023, the Company recognized stock-based compensation expense of $845,930 and $920,155, respectively, related to restricted stock awards, restricted stock units and stock options, of which $808,106 and $903,995, respectively, is included within selling, general and administrative expenses, and $37,824 and $16,160, respectively is included within research and development expenses in the unaudited condensed consolidated statements of operations. The following table presents information related to stock-based compensation for the three months ended March 31, 2024 and 2023: For The Three Months Ended March 31, 2024 2023 Common stock for services (includes accrued, unissued shares) $ 32,393 $ 114,450 Amortization of stock options 32,041 40,605 Amortization of restricted stock awards and units 781,496 765,100 Total $ 845,930 $ 920,155 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES Legal Matters The Company may be involved in litigation and arbitrations from time to time in the ordinary course of business. As of March 31, 2024, the Company was not involved in any ongoing litigation. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 - SUBSEQUENT EVENTS 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 an unsecured 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 an unsecured 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. Board of Director Activities and Compensation On April 15, 2024, the Company announced the appointment of a new independent director, Donna H. Grier, to the Company’s Board of Directors (the “Board”). Ms. Grier will serve as Chair of the Audit Committee, and a member of both the Nominating and Corporate Governance, and Compensation Committees of the Board. Ms. Grier was granted cash compensation of $17,500 per quarter, and 140,000 restricted stock units of the Company’s common stock, which vest over four quarters in 35,000 share increments, beginning on June 30, 2024. Concurrent with the appointment of Ms. Grier, director Mr. Morio Kurosaki retired from the Board, and was issued immediately vested equity compensation of 15,000 shares of common stock. In addition, director Dr. Joanna Massey was issued 15,000 shares of immediately vested common stock, and 140,000 restricted stock units of the Company’s common stock, which vest over four quarters in 35,000 share increments, beginning on June 30, 2024. Standby Equity Purchase Agreement Subsequent to March 31, 2024, and through May 13, 2024, the Company issued a total of 9,453,767 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $4,321,479. Warrants Pursuant to the January 2024 and February 2024 Merchant Cash Advance Agreements (see Note 9 – Notes Payable), 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 in satisfaction of the obligation to issue equity to the advisor. 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) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Going Concern and Management's Liquidity Plans | Going Concern and Management’s Liquidity Plans As of March 31, 2024, the Company had cash of $798,843 and working capital deficit of $3,907,626. For the three months ended March 31, 2024, the Company incurred a net loss of $5,008,876 and used cash in operating activities of $3,907,406. 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 condensed 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 $5,800,667 for accounts payable and accrued expenses, $1,259,534 for merchant cash advances (see Note 9 – Notes Payable), $981,371 for capital expenditures and $435,707 for future payments under operating leases. Future cash requirements for long-term liabilities include $250,000 for unsecured promissory notes. 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. On March 5, 2024, the Company received a notification from the NYSE that the Company’s plan to regain compliance with Section 1003 (a) (iii) of the Company Guide was accepted and so long as the Company meets its interim objectives, the Company will have until June 20, 2025, to regain compliance with the minimum stockholders’ equity requirement. On May 1, 2024, the Company received a notification from the NYSE stating that the Company had regained compliance with Section 1003 (f) (v) of the Company Guide given the increase in the trading price of the Company’s securities. 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, and (iii) raising additional funds through future financings. The Company’s ability to continue as a going concern is dependent upon its ability to successfully execute the aforementioned initiatives. On April 2, 2024, the Company received cash proceeds of $440,000 related to an unsecured Promissory Note comprised of an initial principal amount of $500,000 and discount of $60,000, for cash proceeds of $440,000. 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 12 – Subsequent Events – Promissory Notes for additional information. On April 9, 2024, the Company received cash proceeds of $200,000 related to an unsecured 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 12 – Subsequent Events – Promissory Notes for additional information. Subsequent to March 31, 2024, and through May 13, 2024, the Company issued a total of 9,453,767 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $4,321,479. See Note 12 – Subsequent Events – Standby Equity Purchase Agreement for additional information. As of the date of the issuance of these condensed consolidated financial statements, the Company has no additional commitments to obtain additional funding through future debt or equity financings, or assurance 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. These unaudited condensed 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 unaudited condensed consolidated 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 $298,843 and $694,763 as of March 31, 2024 and December 31, 2023, 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 Three Months Ended As of As of March 31, March 31, December 31, 2024 2023 2024 2023 Customer A 35 % * 16 % * Customer B 13 % * 23 % 52 % Customer C * 86 % * * Customer D * * 15 % * Customer E * * 13 % * Customer F * * 12 % * Customer G * * * 20 % Customer H * * * 14 % Total 48 % 86 % 79 % 86 % * Less than 10% There is no assurance the Company will continue to receive significant revenues from any of these customers. Any reduction or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects. As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers. Vendor Concentrations 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 Three Months Ended March 31, 2024 2023 Vendor A 14 % * Vendor B * 12 % 14 % 12 % * Less than 10% Accounts Receivable Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of March 31, 2024 and December 31, 2023, 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. 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 March 31, 2024 and December 31, 2023, inventory deposits were $27,500 . 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 March 31, 2024 and December 31, 2023 was comprised of the following: March 31, December 31, 2024 2023 Raw materials $ 311,091 $ 322,111 Finished goods 741,333 826,936 Total inventory $ 1,052,424 $ 1,149,047 |
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 by type of contract in its condensed consolidated statements of operations: For the Three Months Ended March 31, 2024 2023 Revenue Recognized at a Point in Time: Product sales $ 615,093 $ 1,629,258 Contract services 516,471 130,544 Total 1,131,564 1,759,802 Revenue Recognized Over Time: Contract services 617,540 — Total Revenue $ 1,749,104 $ 1,759,802 |
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period. The following table presents the computation of basic and diluted net loss per common share: For the Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (5,008,876) $ (6,602,861) Denominator (weighted average quantities): Common shares issued 143,496,225 115,055,115 Less: Treasury shares purchased (131,162) (131,162) Less: Unvested restricted shares (1,071,495) (2,170,717) Add: Accrued issuable equity 68,431 124,000 Denominator for basic and diluted net loss per share 142,361,999 112,877,236 Basic and diluted net loss per common share $ (0.04) $ (0.06) The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: March 31, 2024 2023 Unvested restricted stock awards 712,500 3,276,008 Restricted stock units 4,268,881 3,000,000 Options 670,216 765,216 Warrants 2,524,410 2,524,410 Total 8,176,007 9,565,634 |
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. The Company elected the accounting policy to include both the lease and non-lease components of the agreements as a single component and account for them as a lease. |
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 these unaudited condensed 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 condensed consolidated financial statements, except as disclosed in Note 12 – 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 annual periods beginning after 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. Recently Adopted Accounting Pronouncements 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. The Company adopted this ASU on January 1, 2024, and the adoption did not have a material impact on its condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of concentrations of credit risk | Revenue Accounts Receivable For the Three Months Ended As of As of March 31, March 31, December 31, 2024 2023 2024 2023 Customer A 35 % * 16 % * Customer B 13 % * 23 % 52 % Customer C * 86 % * * Customer D * * 15 % * Customer E * * 13 % * Customer F * * 12 % * Customer G * * * 20 % Customer H * * * 14 % Total 48 % 86 % 79 % 86 % * Less than 10% For the Three Months Ended March 31, 2024 2023 Vendor A 14 % * Vendor B * 12 % 14 % 12 % * Less than 10% |
Schedule of inventory | March 31, December 31, 2024 2023 Raw materials $ 311,091 $ 322,111 Finished goods 741,333 826,936 Total inventory $ 1,052,424 $ 1,149,047 |
Schedule of revenue recognized | For the Three Months Ended March 31, 2024 2023 Revenue Recognized at a Point in Time: Product sales $ 615,093 $ 1,629,258 Contract services 516,471 130,544 Total 1,131,564 1,759,802 Revenue Recognized Over Time: Contract services 617,540 — Total Revenue $ 1,749,104 $ 1,759,802 |
Schedule of of basic and diluted net loss per common share | For the Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (5,008,876) $ (6,602,861) Denominator (weighted average quantities): Common shares issued 143,496,225 115,055,115 Less: Treasury shares purchased (131,162) (131,162) Less: Unvested restricted shares (1,071,495) (2,170,717) Add: Accrued issuable equity 68,431 124,000 Denominator for basic and diluted net loss per share 142,361,999 112,877,236 Basic and diluted net loss per common share $ (0.04) $ (0.06) |
Schedule of shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive | March 31, 2024 2023 Unvested restricted stock awards 712,500 3,276,008 Restricted stock units 4,268,881 3,000,000 Options 670,216 765,216 Warrants 2,524,410 2,524,410 Total 8,176,007 9,565,634 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | March 31, December 31, 2024 2023 Compensation costs 250,000 $ 375,000 Deferred expenses 132,846 59,089 Security deposits 5,095 55,308 Professional fees 33,752 24,125 Insurance 32,584 32,606 Dues and subscriptions 16,572 50,689 Vendor receivables 8,794 1,995 Conferences and seminars 335 19,338 Investor relationships — 1,512 Other 26,554 11,699 Total prepaid expenses and other current assets $ 506,532 $ 631,361 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, 2024 2023 Professional fees $ 2,003,611 $ 1,875,000 Payroll and vacation 454,599 504,748 Research and development 441,192 441,192 Refund due to customer — 171,960 Inventory purchases 217,694 145,949 Legal fees 74,638 117,640 Tools and supplies 13,455 28,663 Board compensation 47,500 23,750 Royalties 9,706 17,505 Other 161,530 136,937 Total accrued expenses and other current liabilities 3,423,925 3,463,344 Add: Accrued interest, non-current — 5,899 Total accrued expenses and other liabilities $ 3,423,925 $ 3,469,243 |
ACCRUED ISSUABLE EQUITY (Tables
ACCRUED ISSUABLE EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ACCRUED ISSUABLE EQUITY | |
Schedule of accrued issuable equity | For the Three Months Ended March 31, 2024 Beginning balance at January 1, 2024 $ 13,002 Additions 26,003 Mark-to-market 13,002 Fair value at March 31, 2024 $ 52,007 |
PREPAID ADVANCE LIABILITY (Tabl
PREPAID ADVANCE LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 $ 5,918,430 $ (26,374) $ 5,892,056 Repayments pursuant to Advance Notices (5,918,430) — (5,918,430) Amortization of debt discount — 26,374 26,374 Balance, March 31, 2024 $ — $ — $ — |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of March 31, 2024, were as follows: Year 4/1/24 to 12/31/24 $ 420,634 2025 601,196 2026 280,228 2027 289,008 2028 297,788 Thereafter 101,702 Total future minimum lease payments 1,990,557 Less: amount representing imputed interest (366,591) Present value of lease liabilities 1,623,966 Less: current portion (435,707) Lease liabilities, non current portion $ 1,188,259 |
Schedule of supplemental cash flow information related to the leases | For the Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating activities $ 54,139 $ 63,363 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 1,575,919 $ 51,154 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
NOTES PAYABLE | |
Summary of notes payable activity | Notes Debt Payable Discount Total Outstanding, January 1, 2024 $ — $ — — Proceeds from merchant cash advances 1,609,200 (529,200) 1,080,000 Issuance costs paid in cash — (43,200) (43,200) Issuance costs to be paid in equity (18,916) (18,916) Underwriting fees paid in cash (72,900) (72,900) Repayments in cash (349,666) — (349,666) Amortization of debt discount — 148,706 148,706 Notes payable, current-portion 1,259,534 (515,510) 744,024 Add: Notes payable, non-current portion 250,000 — 250,000 Total Notes payable as of March 31, 2024 $ 1,509,534 $ (515,510) $ 994,024 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Schedule of warrants activity | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Warrants Price Term (Yrs) Value Outstanding, January 1, 2024 2,524,410 $ 1.02 Issued — — Exercised — — Expired — — Forfeited — — Outstanding, March 31, 2024 2,524,410 $ 1.02 1.8 $ — Exercisable, March 31, 2024 2,524,410 $ 1.02 1.8 $ — |
Schedule of outstanding and exercisable warrants | Warrants Outstanding Warrants Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Warrants In Years Warrants $ 1.25 177,885 1.8 177,885 $ 1.00 2,346,525 1.8 2,346,525 2,524,410 1.8 2,524,410 |
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, 2024 722,716 $ 1.26 Granted 10,000 0.19 Forfeited (62,500) 0.81 Outstanding, March 31, 2024 670,216 $ 1.28 2.6 $ 1,900 Exercisable, March 31, 2024 335,215 $ 0.81 1.2 $ — Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $0.19 - $0.99 285,486 0.5 194,235 $1.21 - $1.50 145,000 3.8 36,250 $1.55 - $1.99 80,000 3.0 25,000 $2.05 - $2.44 159,730 2.7 79,730 670,216 1.2 335,215 |
Schedule of restricted stock awards and restricted stock units (excluding Market-Based RSU Awards) | Shares of Weighted Average Restricted Grant Date Common Stock Fair Value Non-vested RSAs, January 1, 2024 3,381,008 $ 1.53 RSAs exchanged for RSUs (2,168,508) 0.94 Granted — — Vested (500,000) 2.61 Forfeited — — Non-vested RSAs, March 31, 2024 712,500 $ 2.52 |
Schedule of RSUs will vest in four equal installments | Number of Weighted Average Restricted Grant Date Common Units Fair Value Non-vested RSUs, January 1, 2024 2,250,000 $ 2.05 RSAs exchanged for RSUs 2,168,508 0.94 Granted 225,000 0.14 Vested (374,627) 1.00 Forfeited — — Non-vested RSUs, March 31, 2024 4,268,881 $ 1.48 |
Schedule of Information relating to stock based compensation | For The Three Months Ended March 31, 2024 2023 Common stock for services (includes accrued, unissued shares) $ 32,393 $ 114,450 Amortization of stock options 32,041 40,605 Amortization of restricted stock awards and units 781,496 765,100 Total $ 845,930 $ 920,155 |
Stock options | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Schedule of stock options granted | For The Three Months Ended March 31, 2024 2023 Risk free interest rate 4.27 % 3.92% - 4.52 % Expected term (years) 3.8 3.5 Expected volatility 109 % 105 % Expected dividends 0 % 0 % |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer, Revenue and Vendor Concentrations (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Revenue | Total Customers | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 48% | 86% | |
Revenue | Customer A | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 35% | ||
Revenue | Customer B | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 13% | ||
Revenue | Customer C | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 86% | ||
Account Receivables | Total Customers | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 79% | 86% | |
Account Receivables | Customer A | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 16% | ||
Account Receivables | Customer B | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 23% | 52% | |
Account Receivables | Customer D | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 15% | ||
Account Receivables | Customer E | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 13% | ||
Account Receivables | Customer G | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 20% | ||
Account Receivables | Customer F | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 12% | ||
Account Receivables | Customer H | Revenue Concentrations | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 14% | ||
Accounts Payable | Vendor Concentrations | Total Vendors | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 14% | 12% | |
Accounts Payable | Vendor Concentrations | Vendor A | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 14% | ||
Accounts Payable | Vendor Concentrations | Vendor B | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration risk percentage | 12% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Raw materials | $ 311,091 | $ 322,111 |
Finished goods | 741,333 | 826,936 |
Total inventory | $ 1,052,424 | $ 1,149,047 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Company's revenue recognized in its consolidated statements of operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | $ 1,749,104 | $ 1,759,802 |
Revenues Recognized at a Point in Time | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 1,131,564 | 1,759,802 |
Revenues Recognized at a Point in Time | Product sales | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 615,093 | 1,629,258 |
Revenues Recognized at a Point in Time | Contract services | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 516,471 | 130,544 |
Revenues Recognized Over Time | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | 1,749,104 | $ 1,759,802 |
Revenues Recognized Over Time | Contract services | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Total revenue | $ 617,540 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of basic and diluted net loss per common share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss | $ 5,008,876 | $ 6,602,861 |
Denominator (weighted average quantities): | ||
Common shares issued | 143,496,225 | 115,055,115 |
Less: Treasury shares purchased | (131,162) | (131,162) |
Less: Unvested restricted shares | (1,071,495) | (2,170,717) |
Add: Accrued issuable equity | 68,431 | 124,000 |
Denominator for basic net loss per share | 142,361,999 | 112,877,236 |
Denominator for diluted net loss per share | 142,361,999 | 112,877,236 |
Basic net loss per common share (In dollars per share) | $ (0.04) | $ (0.06) |
Diluted net loss per common share (In dollars per share) | $ (0.04) | $ (0.06) |
SUMMARY OF SIGNIFICANT ACCOUN_8
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 | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 8,176,007 | 9,565,634 |
Prepaid advance | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 712,500 | 3,276,008 |
Restricted stock units | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 4,268,881 | 3,000,000 |
Employee Stock Option | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of shares were excluded from the calculation of weighted average dilutive common shares | 670,216 | 765,216 |
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 ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||||
Apr. 09, 2024 | Apr. 02, 2024 | Feb. 26, 2024 | Jan. 22, 2024 | May 13, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Feb. 12, 2024 | Dec. 31, 2023 | Nov. 07, 2023 | Dec. 31, 2022 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Cash | $ 798,843 | $ 1,194,764 | ||||||||||
Working capital deficit | (3,907,626) | |||||||||||
Net Income (Loss) | (5,008,876) | $ (6,602,861) | ||||||||||
Cash in operations | 3,907,406 | 4,759,039 | ||||||||||
Current liabilities include accounts payable and accrued expenses | 5,800,667 | |||||||||||
Merchant cash advances | 1,259,534 | |||||||||||
Lease liabilities, current portion | 435,707 | 102,186 | ||||||||||
Prepaid advance liability, net of discount, non-current portion | 5,892,056 | |||||||||||
Stockholders' equity | 2,589,598 | $ 8,225,116 | (2,182,696) | $ 10,493,733 | ||||||||
Average trading price per share | $ 0.20 | |||||||||||
Underwritten limited public offering, gross proceeds | 2,910,651 | |||||||||||
Underwritten limited public offering issuance costs | 4,238 | |||||||||||
Common stock issued for cash pursuant to Advance Notices | [1] | 2,906,413 | ||||||||||
Proceeds from Cash Advance | $ 502,200 | $ 504,900 | ||||||||||
Underwriting fees | 37,800 | 35,100 | ||||||||||
Total cash advance payable | $ 804,600 | $ 804,600 | ||||||||||
Uninsured cash | 298,843 | 694,763 | ||||||||||
Inventory deposits | 27,500 | 27,500 | ||||||||||
Deferred revenue | 243,830 | $ 551,021 | ||||||||||
Net cash proceeds | 1,080,000 | |||||||||||
Initial principal amount | 994,024 | |||||||||||
Cash proceeds on discount | $ 60,000 | (515,510) | ||||||||||
Subsequent event | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Underwritten limited public offering, gross proceeds | $ 4,321,479 | |||||||||||
Common stock issued for cash pursuant to Advance Notices | 9,453,767 | |||||||||||
Yorkville | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Stockholders' equity | 1,200,172 | |||||||||||
Underwritten limited public offering, gross proceeds | $ 8,979,058 | |||||||||||
Share issued for repayment of prepaid advance liabilities and to fund operations | 41,027,181 | |||||||||||
Yorkville | Subsequent event | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Underwritten limited public offering, gross proceeds | 4,321,479 | |||||||||||
Common stock issued for cash pursuant to Advance Notices | $ 9,453,767 | |||||||||||
Yorkville | Payable on or before November 30, 2023 | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Capital Expenditure, Current | $ 981,371 | |||||||||||
Lease liabilities, current portion | 435,707 | |||||||||||
Yorkville | Payable on or before January 31, 2024 | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Promissory notes payable, non current | $ 250,000 | |||||||||||
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 | Promissory Note | Subsequent event | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Annual interest rate (percentage) | 0% | |||||||||||
Maximum | Promissory Note | Subsequent event | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Annual interest rate (percentage) | 15% | |||||||||||
[1] (2) |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Compensation costs | $ 250,000 | $ 375,000 |
Deferred expenses | 132,846 | 59,089 |
Security deposits | 5,095 | 55,308 |
Professional fees | 33,752 | 24,125 |
Insurance | 32,584 | 32,606 |
Dues and subscriptions | 16,572 | 50,689 |
Vendor receivables | 8,794 | 1,995 |
Conferences and seminars | 335 | 19,338 |
Investor relationships | 1,512 | |
Other | 26,554 | 11,699 |
Total prepaid expenses and other current assets | $ 506,532 | $ 631,361 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Professional fees | $ 2,003,611 | $ 1,875,000 |
Payroll and vacation | 454,599 | 504,748 |
Research and development | 441,192 | 441,192 |
Refund due to customer | 171,960 | |
Inventory purchases | 217,694 | 145,949 |
Legal fees | 74,638 | 117,640 |
Tools and supplies | 13,455 | 28,663 |
Board compensation | 47,500 | 23,750 |
Royalties | 9,706 | 17,505 |
Other | 161,530 | 136,937 |
Total accrued expenses and other current liabilities | 3,423,925 | 3,463,344 |
Add: Accrued interest, non-current | 5,899 | |
Total | $ 3,423,925 | $ 3,469,243 |
ACCRUED ISSUABLE EQUITY (Detail
ACCRUED ISSUABLE EQUITY (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
ACCRUED ISSUABLE EQUITY | ||
Beginning balance at January 1, 2024 | $ 13,002 | |
Additions | 26,003 | |
Mark-to market | 13,002 | $ 64,108 |
Fair value at March 31, 2024 | $ 52,007 |
ACCRUED ISSUABLE EQUITY - Addit
ACCRUED ISSUABLE EQUITY - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
ACCRUED ISSUABLE EQUITY | ||
Estimated fair value of shares | $ 26,003 | |
Aggregate amount of mark-to market related to changes in fair value of accrued issuable equity | 13,002 | $ 64,108 |
Fair value of unissued share | $ 52,007 |
PREPAID ADVANCE LIABILITY - Pre
PREPAID ADVANCE LIABILITY - Prepaid advance liability (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
PREPAID ADVANCE LIABILITY | ||
Amortization of debt discount | $ 175,080 | $ 246,320 |
Notes Payable | ||
PREPAID ADVANCE LIABILITY | ||
Amortization of debt discount | 148,706 | |
Gross Amount of Prepaid Advance Liability | ||
PREPAID ADVANCE LIABILITY | ||
Beginning balance | 5,918,430 | |
Repayments pursuant to Advance Notices | (5,918,430) | |
Less: Debt Discount | ||
PREPAID ADVANCE LIABILITY | ||
Beginning balance | (26,374) | |
Less: Debt Discount | Notes Payable | ||
PREPAID ADVANCE LIABILITY | ||
Amortization of debt discount | 26,374 | |
Prepaid Advance Liability, net of discount | ||
PREPAID ADVANCE LIABILITY | ||
Beginning balance | 5,892,056 | |
Repayments pursuant to Advance Notices | (5,918,430) | |
Prepaid Advance Liability, net of discount | Notes Payable | ||
PREPAID ADVANCE LIABILITY | ||
Amortization of debt discount | $ 26,374 |
PREPAID ADVANCE LIABILITY - Add
PREPAID ADVANCE LIABILITY - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
May 13, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Jan. 09, 2024 | |
PREPAID ADVANCE LIABILITY | ||||
Loss on debt extinguishment | $ (31,358) | |||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | $ 3,750,968 | |||
Proceeds from equity financing | $ 2,910,651 | |||
Subsequent event | ||||
PREPAID ADVANCE LIABILITY | ||||
Proceeds from equity financing | $ 4,321,479 | |||
Yorkville | ||||
PREPAID ADVANCE LIABILITY | ||||
Prepaid advance | $ 2,000,000 | |||
Number of stock issued | 41,027,181 | |||
Percentage of cash payment premium payable on or before December 31, 2023 | 5% | |||
Loss on debt extinguishment | $ 31,358 | |||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ( in shares) | 21,798,830 | |||
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Investor Notices | $ 6,068,402 | |||
Common stock value issued for the repayment of prepaid advance liability | 5,918,430 | |||
Common stock value issued for the repayment of prepaid advance liability | $ 118,614 | |||
Common stock issued for cash pursuant to Advance Notices (in shares) | 19,228,351 | |||
Net of cash issuance costs | $ 13,577 | |||
Proceeds from equity financing | 8,979,058 | |||
Gross proceeds from common stock retained to fund operations | 2,910,651 | |||
Amount of decrease in additional paid in capital | $ 4,243 | |||
Yorkville | Subsequent event | ||||
PREPAID ADVANCE LIABILITY | ||||
Proceeds from equity financing | $ 4,321,479 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | 3 Months Ended | |||||
Jan. 27, 2024 | Jan. 25, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Jan. 31, 2024 | Dec. 31, 2023 | |
LEASES | ||||||
Right of use asset for lease liability | $ 1,575,919 | $ 51,154 | ||||
Operating lease expense | 111,902 | 65,873 | ||||
Security deposit | 5,095 | $ 55,308 | ||||
Monthly rental cash payments | 54,139 | $ 63,363 | ||||
Lease liabilities | $ 490,422 | 1,623,966 | ||||
Right -of -use asset, net | 490,422 | 1,590,004 | $ 129,202 | |||
Lease Facility Located At 4863 Shawline Street, San Diego, CA 92111 | ||||||
LEASES | ||||||
Monthly lease rental | $ 29,337 | |||||
Estimated incremental borrowing rate | 10% | |||||
Renewal term | 18 months | |||||
Lease agreement for office space in webster, texas | ||||||
LEASES | ||||||
Lease term (in years) | 63 months | |||||
Monthly lease rental | $ 30,086 | |||||
Lease base rent | 21,950 | |||||
Common area maintenance fees included in monthly lease rental | 11,136 | |||||
Right of use asset for lease liability | $ 1,085,497 | |||||
Estimated incremental borrowing rate | 10% | |||||
Security deposit | $ 37,930 | |||||
Monthly rental cash payments | $ 0 | |||||
Prepaid expenses and other current assets | ||||||
LEASES | ||||||
Security deposit | $ 5,095 |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) - USD ($) | Mar. 31, 2024 | Jan. 25, 2024 | Dec. 31, 2023 |
LEASES | |||
4/1/24 to 12/31/24 | $ 420,634 | ||
2025 | 601,196 | ||
2026 | 280,228 | ||
2027 | 289,008 | ||
2028 | 297,788 | ||
Thereafter | 101,702 | ||
Total future minimum lease payments | 1,990,557 | ||
Less: amount representing imputed interest | (366,591) | ||
Present value of lease liabilities | 1,623,966 | $ 490,422 | |
Less: current portion | (435,707) | $ (102,186) | |
Lease liabilities, non current portion | $ 1,188,259 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information related to the leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used in operating activities | $ 54,139 | $ 63,363 |
Right-of-use assets obtained in exchange for lease obligations | ||
Operating leases | $ 1,575,919 | $ 51,154 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |||
Accounts payable | $ 2,376,742 | $ 2,769,544 | |
Chief Technology Officer CTO | Consulting Agreements | |||
RELATED PARTY TRANSACTIONS | |||
Related party expenses | $ 10,455 | ||
Related Party | Consulting Agreements | |||
RELATED PARTY TRANSACTIONS | |||
Accounts payable | $ 0 | $ 0 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Feb. 26, 2024 | Jan. 22, 2024 |
NOTES PAYABLE | ||
Proceeds from Cash Advance | $ 502,200 | $ 504,900 |
Underwriting fees | 37,800 | 35,100 |
Finder's fees | 21,600 | 21,600 |
Total cash advance payable | 804,600 | 804,600 |
Finder's fee issued in equity aggregate value | 16,200 | 16,200 |
Periodic payments on cash advances | $ 26,820 | $ 25,143.75 |
Interest rate per annum (in percentage) | 195% | 184% |
If Cash Advance Repaid by March 22, 2024 | ||
NOTES PAYABLE | ||
Total cash advance payable | $ 756,000 | |
If Cash Advance Repaid by April 22, 2024 | ||
NOTES PAYABLE | ||
Total cash advance payable | $ 783,000 |
NOTES PAYABLE - Summary of the
NOTES PAYABLE - Summary of the notes payable activity (Details) - USD ($) | 3 Months Ended | |||
Apr. 02, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
NOTES PAYABLE | ||||
Proceeds from merchant cash advances - Notes payable | $ 1,609,200 | |||
Proceeds from merchant cash advances - Debt discount | (529,200) | |||
Proceeds from merchant cash advances - Total | 1,080,000 | |||
Payment of financing costs incurred in connection with the SEPA | (43,200) | |||
Issuance costs to be paid in equity | (18,916) | |||
Underwriting fees paid in cash | (72,900) | |||
Repayments of notes payable | (349,666) | |||
Amortization of debt discount | 175,080 | $ 246,320 | ||
Notes payable, current-portion - Notes payable | 1,259,534 | |||
Notes payable, current-portion - Debt discount | $ 60,000 | (515,510) | ||
Notes Payable, Current, Total | 744,024 | |||
Add: Notes payable, non-current portion - Notes payable | 250,000 | |||
Notes payable, non-current portion | 250,000 | $ 250,000 | ||
Ending balance of note payable gross | 1,509,534 | |||
Ending balance of discount on note payable | (515,510) | |||
Ending balance of note payable net | 994,024 | |||
Notes Payable | ||||
NOTES PAYABLE | ||||
Amortization of debt discount | $ 148,706 |
STOCKHOLDERS' EQUITY (DEFICIT_2
STOCKHOLDERS' EQUITY (DEFICIT) - Additional Information (Details) - USD ($) | 3 Months Ended | |||||
May 13, 2022 | Mar. 31, 2024 | Jan. 26, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||
Proceeds from equity financing | $ 2,910,651 | |||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | ||||
Treasury stock, shares held | 131,162 | 131,162 | ||||
Series A Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||
Series A Preferred Stock | CEO | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock, shares authorized | 730,000 | |||||
Series B Convertible Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock, shares authorized | 31,000 | 31,000 | ||||
Series C Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock, shares authorized | 400 | 400 | ||||
Series D Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock, shares authorized | 650 | 650 | ||||
Legal and consulting services | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Shares of common stock issued related to consulting services provided | 35,500 | |||||
Grant date value of common stock issued related to consulting services provided | $ 6,390 | |||||
Restricted common stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Unrecognized stock-based compensation expense | $ 1,513,146 | |||||
Weighted average remaining vesting period | 1 year 1 month 17 days | |||||
Stock options | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Unrecognized stock-based compensation expense | $ 269,531 | |||||
Market-Based Awards | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Weighted average remaining vesting period | 2 years 3 months 18 days | |||||
Restricted Stock Units | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Common stock issued | 2,168,508 | |||||
Unrecognized stock-based compensation expense | $ 4,348,245 | |||||
Weighted average remaining vesting period | 3 years | |||||
Common Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Number of shares issued for common stock | 384,627 | |||||
Common Stock | Restricted common stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Number of shares issued for common stock | 384,627 | |||||
Treasury Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Treasury stock, shares held | 131,162 | 131,162 | 131,162 | 131,162 | ||
Treasury stock value | $ 296,222 | $ 296,222 | ||||
Maximum | Series A Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock, shares authorized | 1,000,000 | |||||
Yorkville | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Number of stock issued | 41,027,181 | |||||
Proceeds from equity financing | $ 8,979,058 | |||||
Gross proceeds from common stock retained to fund operations | $ 2,910,651 | |||||
SEPA | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Value of shares to be issued | $ 50,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | |||||
Commitment period (in months) | 24 months | |||||
Maximum advance value of shares to be issued | $ 5,000,000 | |||||
Price per share to be issued on Market Price (in percent) | 98% | |||||
Number of consecutive days | 3 days | |||||
Threshold ownership percentage | 4.99% |
STOCKHOLDERS' EQUITY (DEFICIT_3
STOCKHOLDERS' EQUITY (DEFICIT) - Summary of warrants activity (Details) - Warrants | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
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) | 1 year 9 months 18 days |
Weighted Average Remaining Term, Exercisable at the end (in years) | 1 year 9 months 18 days |
STOCKHOLDERS' EQUITY (DEFICIT_4
STOCKHOLDERS' EQUITY (DEFICIT) - Outstanding and exercisable warrants (Details) - Warrants | Mar. 31, 2024 $ / shares shares |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Warrants exercised | 2,524,410 |
Exercisable, Weighted Average Remaining Life (in years) | 1 year 9 months 18 days |
Exercisable, Number of Warrants | 2,524,410 |
Exercise price, 1.25 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Exercise Price of Warrants Outstanding (in dollars per share) | $ / shares | $ 1.25 |
Warrants exercised | 177,885 |
Exercisable, Weighted Average Remaining Life (in years) | 1 year 9 months 18 days |
Exercisable, Number of Warrants | 177,885 |
Exercise price, 1.00 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Exercise Price of Warrants Outstanding (in dollars per share) | $ / shares | $ 1 |
Warrants exercised | 2,346,525 |
Exercisable, Weighted Average Remaining Life (in years) | 1 year 9 months 18 days |
Exercisable, Number of Warrants | 2,346,525 |
STOCKHOLDERS' EQUITY (DEFICIT_5
STOCKHOLDERS' EQUITY (DEFICIT) - Summary of options activity (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
Number of Options, Outstanding | shares | 722,716 |
Number of Options, Granted | shares | 10,000 |
Number of Options, Forfeited | shares | (62,500) |
Number of Options, Outstanding | shares | 670,216 |
Number of Options, Exercisable | shares | 335,215 |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 1.26 |
Weighted Average Exercise Price, Granted | $ / shares | 0.19 |
Weighted Average Exercise Price, Forfeited | $ / shares | 0.81 |
Weighted Average Exercise Price Outstanding | $ / shares | 1.28 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.81 |
Weighted Average Remaining Term, Outstanding | 2 years 7 months 6 days |
Weighted Average Remaining Term, Exercisable | 1 year 2 months 12 days |
Number of Options Intrinsic Value, Outstanding | $ | $ 1,900 |
STOCKHOLDERS' EQUITY (DEFICIT_6
STOCKHOLDERS' EQUITY (DEFICIT) - Options outstanding and exercisable related to stock options (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 0.81 | ||
Options Outstanding, Number of Options | 670,216 | 722,716 | |
Options Exercisable, Weighted Average Remaining Term (In Years) | 1 year 2 months 12 days | ||
Options Exercisable Number of Options | 335,215 | ||
Weighted average grant date fair value | $ 0.14 | $ 0.67 | |
$0.19 - $0.99 | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Number of Options | 285,486 | ||
Options Exercisable, Weighted Average Remaining Term (In Years) | 6 months | ||
Options Exercisable Number of Options | 194,235 | ||
$0.19 - $0.99 | Minimum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 0.19 | ||
$0.19 - $0.99 | Maximum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 0.99 | ||
$1.21 - $1.50 | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Number of Options | 145,000 | ||
Options Exercisable, Weighted Average Remaining Term (In Years) | 3 years 9 months 18 days | ||
Options Exercisable Number of Options | 36,250 | ||
$1.21 - $1.50 | Minimum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 1.21 | ||
$1.21 - $1.50 | Maximum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 1.50 | ||
$1.55 - $1.99 | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Number of Options | 80,000 | ||
Options Exercisable, Weighted Average Remaining Term (In Years) | 3 years | ||
Options Exercisable Number of Options | 25,000 | ||
$1.55 - $1.99 | Minimum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 1.55 | ||
$1.55 - $1.99 | Maximum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 1.99 | ||
$2.05 - $2.44 | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Number of Options | 159,730 | ||
Options Exercisable, Weighted Average Remaining Term (In Years) | 2 years 8 months 12 days | ||
Options Exercisable Number of Options | 79,730 | ||
$2.05 - $2.44 | Minimum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 2.05 | ||
$2.05 - $2.44 | Maximum | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Options Outstanding, Exercise Price | $ 2.44 |
STOCKHOLDERS' EQUITY (DEFICIT_7
STOCKHOLDERS' EQUITY (DEFICIT) - Fair value of stock options granted using the Black-Scholes options (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Risk free interest rate | 4.27% | |
Expected term (years) | 3 years 9 months 18 days | 3 years 6 months |
Expected volatility | 109% | 105% |
Expected dividends | 0% | 0% |
Minimum | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Risk free interest rate | 3.92% | |
Maximum | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Risk free interest rate | 4.52% |
STOCKHOLDERS' EQUITY (DEFICIT_8
STOCKHOLDERS' EQUITY (DEFICIT) - Restricted stock awards and restricted stock units (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted common stock | |
Shares of Restricted Common Stock | |
Non-vested RSAs, January 1, 2024 | shares | 3,381,008 |
RSAs exchanged for RSUs | shares | (2,168,508) |
Vested | shares | (500,000) |
Non-vested RSAs, March 31, 2024 | shares | 712,500 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested RSAs, January 1, 2024 (in dollars per share) | $ / shares | $ 1.53 |
RSAs exchanged for RSUs (in dollars per share) | $ / shares | 0.94 |
Vested (in dollars per share) | $ / shares | 2.61 |
Non-vested RSAs, March 31, 2024 (in dollars per share) | $ / shares | $ 2.52 |
Restricted stock units | |
Shares of Restricted Common Stock | |
Non-vested RSAs, January 1, 2024 | shares | 2,250,000 |
RSAs exchanged for RSUs | shares | 2,168,508 |
Granted | shares | 225,000 |
Vested | shares | (374,627) |
Non-vested RSAs, March 31, 2024 | shares | 4,268,881 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested RSAs, January 1, 2024 (in dollars per share) | $ / shares | $ 2.05 |
RSAs exchanged for RSUs (in dollars per share) | $ / shares | 0.94 |
Granted (in dollars per share) | $ / shares | 0.14 |
Vested (in dollars per share) | $ / shares | 1 |
Non-vested RSAs, March 31, 2024 (in dollars per share) | $ / shares | $ 1.48 |
STOCKHOLDERS' (DEFICIT) EQUITY
STOCKHOLDERS' (DEFICIT) EQUITY - Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Stock-based compensation expense | $ 845,930 | $ 920,155 |
Total | 845,930 | 920,155 |
Selling, general and administrative expenses | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Stock-based compensation expense | 808,106 | 903,995 |
Research and development expenses | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Stock-based compensation expense | 37,824 | 16,160 |
Common stock for services (includes accrued, unissued shares) | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Total | 32,393 | 114,450 |
Amortization of stock options | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Total | 32,041 | 40,605 |
Amortization of restricted stock awards and units | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Stock-based compensation expense | $ 781,496 | $ 765,100 |
SUBSEQUENT EVENTS - Promissory
SUBSEQUENT EVENTS - Promissory Notes (Details) - USD ($) | 3 Months Ended | ||
Apr. 09, 2024 | Apr. 02, 2024 | Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |||
Initial principal amount | $ 994,024 | ||
Net cash proceeds | 1,080,000 | ||
Cash proceeds on discount | $ 60,000 | (515,510) | |
Promissory Note | |||
SUBSEQUENT EVENTS | |||
Original issuance discount | $ 529,200 | ||
Subsequent event | Promissory Note | |||
SUBSEQUENT EVENTS | |||
Initial principal amount | $ 200,000 | 500,000 | |
Net cash proceeds | $ 200,000 | 440,000 | |
Cash proceeds on discount | 60,000 | ||
Original issuance discount | 50,000 | ||
Debt issuance cost | $ 10,000 | ||
Annual interest rate (percentage) | 16% | ||
Principal and cash payment interest rate | 12% | ||
Subsequent event | Minimum | Promissory Note | |||
SUBSEQUENT EVENTS | |||
Annual interest rate (percentage) | 0% | ||
Subsequent event | Maximum | Promissory Note | |||
SUBSEQUENT EVENTS | |||
Annual interest rate (percentage) | 15% |
SUBSEQUENT EVENTS - Board of Di
SUBSEQUENT EVENTS - Board of Director Activities and Compensation (Details) | Apr. 15, 2024 USD ($) shares |
Joanna Massey | Restricted stock units | |
SUBSEQUENT EVENTS | |
Common stock, which vest over four quarters | 35,000 |
Subsequent event | Restricted stock units | |
SUBSEQUENT EVENTS | |
Common stock, which vest over four quarters | 35,000 |
Subsequent event | Ms.Grier | |
SUBSEQUENT EVENTS | |
Cash compensation | $ | $ 17,500 |
Number of shares eligible to receive upon vesting | 140,000 |
Subsequent event | Morio Kurosaki | |
SUBSEQUENT EVENTS | |
Common stock issued for services (in shares) | 15,000 |
Subsequent event | Joanna Massey | |
SUBSEQUENT EVENTS | |
Common stock issued for services (in shares) | 15,000 |
Subsequent event | Joanna Massey | Restricted stock units | |
SUBSEQUENT EVENTS | |
Number of shares eligible to receive upon vesting | 140,000 |
SUBSEQUENT EVENTS - Standby Equ
SUBSEQUENT EVENTS - Standby Equity Purchase Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
May 13, 2024 | Mar. 31, 2024 | ||
SUBSEQUENT EVENTS | |||
Proceeds from equity financing | $ 2,910,651 | ||
Common stock issued for cash pursuant to Advance Notices | [1] | $ 2,906,413 | |
Yorkville | |||
SUBSEQUENT EVENTS | |||
Number of stock issued | 41,027,181 | ||
Proceeds from equity financing | $ 8,979,058 | ||
Subsequent event | |||
SUBSEQUENT EVENTS | |||
Proceeds from equity financing | $ 4,321,479 | ||
Common stock issued for cash pursuant to Advance Notices | 9,453,767 | ||
Subsequent event | Yorkville | |||
SUBSEQUENT EVENTS | |||
Proceeds from equity financing | 4,321,479 | ||
Common stock issued for cash pursuant to Advance Notices | $ 9,453,767 | ||
[1] (2) |
SUBSEQUENT EVENTS - Warrants (D
SUBSEQUENT EVENTS - Warrants (Details) - Subsequent event | Apr. 09, 2024 $ / shares shares |
SUBSEQUENT EVENTS | |
Warrants to purchase common shares issued | shares | 190,177 |
Warrants expiration date | Feb. 26, 2027 |
Maximum | |
SUBSEQUENT EVENTS | |
Exercise price (in dollars per share) | $ 0.19 |
Minimum | |
SUBSEQUENT EVENTS | |
Exercise price (in dollars per share) | $ 0.14 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (5,008,876) | $ (6,602,861) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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 |