Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 28, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | WRAP TECHNOLOGIES, INC. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Entity Central Index Key | 0001702924 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 37,948,413 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-55838 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 2,000 | $ 16,647 |
Short-term investments | 35,000 | 24,994 |
Accounts receivable, net | 2,212 | 1,871 |
Inventories, net | 3,580 | 2,655 |
Prepaid expenses and other current assets | 769 | 760 |
Total current assets | 43,561 | 46,927 |
Property and equipment, net | 463 | 357 |
Operating lease right-of-use asset, net | 114 | 139 |
Intangible assets, net | 1,404 | 1,397 |
Other assets, net | 8 | 13 |
Total assets | 45,550 | 48,833 |
Current Liabilities: | ||
Accounts payable | 2,400 | 1,232 |
Accrued liabilities | 593 | 721 |
Customer deposits | 5 | 2 |
Deferred revenue | 172 | 16 |
Operating lease liability - short term | 91 | 94 |
Note payable to bank - short term | 175 | 275 |
Total current liabilities | 3,436 | 2,340 |
Operating lease liability - long term | 32 | 56 |
Business acquisition liability - long term | 23 | 23 |
Total long-term liabilities | 55 | 79 |
Total liabilities | 3,491 | 2,419 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock - 5,000,000 authorized; par value $0.0001 per share; none issued and outstanding | 0 | 0 |
Common stock - 150,000,000 authorized; par value $0.0001 per share; 37,711,698 and 37,554,162 shares issued and outstanding each period, respectively | 4 | 4 |
Additional paid-in capital | 72,777 | 71,705 |
Accumulated deficit | (30,739) | (25,310) |
Accumulated other comprehensive gain | 17 | 15 |
Total stockholders' equity | 42,059 | 46,414 |
Total liabilities and stockholders' equity | $ 45,550 | $ 48,833 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, par value | $ .0001 | $ .0001 |
Common stock, issued | 37,711,698 | 37,554,162 |
Common stock, outstanding | 37,711,698 | 37,554,162 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Total revenues | $ 1,542 | $ 690 |
Cost of revenues | 937 | 406 |
Gross profit | 605 | 284 |
Operating expenses: | ||
Selling, general and administrative | 4,978 | 2,140 |
Research and development | 1,065 | 534 |
Total operating expenses | 6,043 | 2,674 |
Loss from operations | (5,438) | (2,390) |
Other income (expense): | ||
Interest income | 2 | 44 |
Other | 7 | 0 |
Other income (expense) | 9 | 44 |
Net loss | $ (5,429) | $ (2,346) |
Net loss per basic common share | $ (0.14) | $ (0.08) |
Weighted average common shares used to compute net loss per basic common share | 37,618,629 | 29,976,825 |
Comprehensive loss: | ||
Net loss | $ (5,429) | $ (2,346) |
Net unrealized gain on short-term investments | 2 | 0 |
Comprehensive loss | (5,427) | (2,346) |
Product Sales | ||
Revenues: | ||
Total revenues | 1,427 | 675 |
Other Revenue | ||
Revenues: | ||
Total revenues | $ 115 | $ 15 |
Condensed Statements of Stockho
Condensed Statements of Stockholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain | Total |
Beginning balance, shares at Dec. 31, 2019 | 29,829,916 | ||||
Beginning balance, amount at Dec. 31, 2019 | $ 3 | $ 31,923 | $ (12,730) | $ 0 | $ 19,196 |
Common shares issued upon exercise of warrants at $3.00 per share, shares | 11,783 | ||||
Common shares issued upon exercise of warrants at $3.00 per share, amount | $ 0 | 35 | 35 | ||
Common shares issued upon exercise of warrants at $5.00 per share, shares | 119,400 | ||||
Common shares issued upon exercise of warrants at $5.00 per share, amount | $ 0 | 597 | 597 | ||
Common shares issued upon exercise of stock options, shares | 112,625 | ||||
Common shares issued upon exercise of stock options, amount | $ 0 | 169 | 169 | ||
Common shares issued for services, amount | 0 | ||||
Share-based compensation expense | 467 | 467 | |||
Net unrealized gain on short-term investments | 0 | ||||
Net loss for the period | (2,346) | (2,346) | |||
Ending balance, shares at Mar. 31, 2020 | 30,073,724 | ||||
Ending balance, amount at Mar. 31, 2020 | $ 3 | 33,191 | (15,076) | 0 | 18,118 |
Beginning balance, shares at Dec. 31, 2020 | 37,554,162 | ||||
Beginning balance, amount at Dec. 31, 2020 | $ 4 | 71,705 | (25,310) | 15 | 46,414 |
Common shares issued upon exercise of stock options, shares | 75,000 | ||||
Common shares issued upon exercise of stock options, amount | $ 0 | 113 | 113 | ||
Common shares issued upon vesting of restricted stock units, shares | 64,660 | ||||
Common shares issued upon vesting of restricted stock units, amount | $ 0 | 0 | |||
Common shares issued for services, shares | 17,876 | ||||
Common shares issued for services, amount | $ 0 | 100 | 100 | ||
Share-based compensation expense | 859 | 859 | |||
Net unrealized gain on short-term investments | 2 | 2 | |||
Net loss for the period | (5,429) | (5,429) | |||
Ending balance, shares at Mar. 31, 2021 | 37,711,698 | ||||
Ending balance, amount at Mar. 31, 2021 | $ 4 | $ 72,777 | $ (30,739) | $ 17 | $ 42,059 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (5,429) | $ (2,346) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 104 | 25 |
Gain on sale of assets | (1) | 0 |
Warranty provision | (2) | 14 |
Non-cash lease expense | 25 | 30 |
Share-based compensation | 859 | 467 |
Common shares issued for services | 100 | 0 |
Provision for doubtful accounts | 0 | 10 |
Changes in assets and liabilities: | ||
Accounts receivable | (341) | (198) |
Inventories | (924) | (44) |
Prepaid expenses and other current assets | (9) | (94) |
Accounts payable | 1,168 | 43 |
Operating lease liability | (26) | (31) |
Customer deposits | 3 | (149) |
Accrued liabilities and other | (136) | 35 |
Warranty settlement | 9 | 0 |
Deferred revenue | 156 | 0 |
Net cash used in operating activities | (4,444) | (2,238) |
Cash Flows From Investing Activities: | ||
Purchase of short-term investments | (25,003) | 0 |
Proceeds from maturities of short-term investments | 15,000 | 0 |
Capital expenditures for property and equipment | (160) | (20) |
Investment in patents and trademarks | (56) | (34) |
Proceeds from long-term deposits | 3 | 0 |
Net cash used in investing activities | (10,216) | (54) |
Cash Flows From Financing Activities: | ||
Proceeds from exercise of warrants | 0 | 632 |
Proceeds from exercise of stock options | 113 | 169 |
Repayment of debt | (100) | 0 |
Net cash provided by financing activities | 13 | 801 |
Net decrease in cash and cash equivalents | (14,647) | (1,491) |
Cash and cash equivalents, beginning of period | 16,647 | 16,984 |
Cash and cash equivalents, end of period | $ 2,000 | $ 15,493 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Organization and Business Description Wrap Technologies, Inc., a Delaware corporation (the “ Company we us our Common Stock Nasdaq Basis of Presentation The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“ SEC Where necessary, the prior year’s information has been reclassified to conform to the current year presentation. Principles of Consolidation The Company has one wholly-owned subsidiary, Wrap Reality, Inc., formed in December 2020, and has commenced selling its virtual reality training system primarily targeting law enforcement and security agencies. The condensed consolidated financial statements include the accounts of this subsidiary after elimination of intercompany transactions and accounts. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (e.g., stock-based compensation valuation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty reserve, accrued costs and recognition and measurement of contingencies) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Loss per Share Basic loss per common share is computed by dividing net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential common stock instruments outstanding to be antidilutive. Stock options, restricted stock units and warrants exercisable or issuable for a total of 8,031,842 shares of Common Stock were outstanding at March 31, 2021. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company. Recent Issued Accounting Guidance Adopted the First Quarter of 2021: In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic ): Simplifying the Accounting for Income Taxes ASU 2019-12 Other Pronouncements: In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity “(Subtopic 815-40”): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity The Company has reviewed other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations. |
REVENUE AND PRODUCT COSTS
REVENUE AND PRODUCT COSTS | 3 Months Ended |
Mar. 31, 2021 | |
Revenues: | |
REVENUE AND PRODUCT COSTS | On January 1, 2018, the Company adopted FASB ASC Topic 606, Revenue from contracts with customers (“Topic 606”) The Company enters into contracts that include various combinations of products, accessories, software and services, each of which are generally distinct and are accounted for as separate performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account in Topic 606. For contracts with a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts with multiple performance obligations, the Company allocates the contract transaction price to each performance obligation using the Company’s estimate of the standalone selling price (“ SSP SSP Most of the Company’s products and accessories are sold through domestic and international distributors. Performance obligations to deliver products and accessories are generally satisfied at the point in time the Company ships the product, as this is when the customer obtains control of the asset under our standard terms and conditions. Periodically, certain customers request bill and hold transactions for future delivery as scheduled and designated by them. In such cases, revenue is not recognized until after control, title and risk of ownership has transferred which is generally when the customer has requested such transaction under normal billing and payment terms and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed quality control inspections, and (iii) has been tagged and packed for shipment, separated from other inventory and ready for physical transfer to the customer. The value associated with custodial storage services is deemed immaterial in the context of such contracts and in total, and accordingly, none of the transaction price is allocated to such service. The Company has elected to recognize shipping costs as an expense in cost of revenue when control has transferred to the customer. Time-based virtual reality system contracts generally include setup, training and the use of software and hardware for a fixed term, generally one to five years and support and upgrade services during the same period. The Company does not sell time-based arrangements without setup, training and support services and therefore revenues for the entire arrangement are recognized on a straight-line basis over the term. When hardware is bundled and not sold separately the Company allocates the contract transaction price to each performance obligation using the SSP of each distinct good and service in the contract. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally has an unconditional right to consideration when customers are invoiced and a receivable is recorded. A contract asset is recognized when revenue is recognized prior to invoicing, or a contract liability (deferred revenue) when revenue will be recognized subsequent to invoicing. At March 31, 2021 the Company’s deferred revenue totaled $172, of which $137 related to virtual reality training and $35 related to extended product warranties. At December 31, 2020 the Company’s deferred revenue totaled $16, of which $14 related to virtual reality training and $2 related to extended product warranties. The Company may also receive consideration, per terms of a contract, from customers prior to transferring goods to the customer. The Company records customer deposits as a contract liability. The Company recognizes an asset if there are incremental costs of obtaining a contract with a customer such as commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract and amortized consistent with the recognition timing of the revenue for any such underlying performance obligations. The Company had no such assets at March 31, 2021 and December 31, 2020. The Company applies the practical expedient to expense any sales commissions related to performance obligations with an amortization of one year or less when incurred within selling, general and administrative expense. Estimated costs for the Company’s standard one-year warranty are charged to cost of products sold when revenue is recorded for the related product. Royalties are also charged to cost of products sold. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
FAIR VALUE MEASUREMENTS | Assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets and assets and liabilities measured at fair value on a non-recurring basis or disclosed at fair value, are categorized based upon the level of judgment associated with inputs used to measure their fair values. The accounting guidance for fair value provides a framework for measuring fair value and requires certain disclosures about how fair value is determined. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance also establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1 Level 2— Level 3— Instruments Measured at Fair Value on a Recurring Basis The Company’s cash equivalent Money Market Funds and short-term investments consisting of U.S. Treasury bill securities are classified as Level 1 because they are valued using quoted market prices. The following table shows the Company’s cash and cash equivalents, Money Market Funds and short-term investments by significant investment category as of March 31, 2021 and December 31, 2020. As of March 31, 2021 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 1,035 $ - $ - $ 1,035 U.S. Treasury securities considered cash equivalents - - - - U.S. Treasury securities in short-term investments 34,983 17 - 35,000 Total Financial Assets $ 36,018 $ 17 $ - $ 36,035 As of December 31, 2020 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 6,035 $ - $ - $ 6,035 U.S. Treasury securities considered cash equivalents 9,998 - - 9,998 U.S. Treasury securities in short-term investments 24,979 15 - 24,994 Total Financial Assets $ 41,012 $ 15 $ - $ 41,027 Unrealized gains or losses resulting from our short-term investments are recorded in accumulated other comprehensive gain or loss. As of March 31, 2021, $17 was recorded to accumulated other comprehensive gain. Our financial instruments also include accounts receivable, accounts payable, accrued liabilities and business acquisition liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | Inventory is recorded at the lower of cost or net realizable value. The cost of substantially all the Company’s inventory is determined by the FIFO cost method. Inventories consisted of the following: March 31, December 31, 2021 2020 Finished goods $ 1,688 $ 1,249 Work in process 26 64 Raw materials 1,866 1,342 Inventories, net $ 3,580 $ 2,655 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Property and equipment consisted of the following: March 31, December 31, 2021 2020 Production and lab equipment $ 148 $ 148 Tooling 173 81 Computer equipment 249 180 Furniture, fixtures and improvements 160 165 730 574 Accumulated depreciation (267 ) (217 ) Property and equipment, net $ 463 $ 357 Depreciation expense was $56 and $22 for the three months ended March 31, 2021 and 2020, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | Intangible assets consisted of the following: March 31, December 31, 2021 2020 Amortizable intangible assets: Patents $ 304 $ 280 Trademarks 115 84 Purchased software 662 662 Other 50 50 1,131 1,076 Accumulated amortization (71 ) (23 ) Total amortizable 1,060 1,053 Indefinite life assets (non-amortizable) 344 344 Total intangible assets, net $ 1,404 $ 1,397 Amortization expense was $48 and $3 for the three months ended March 31, 2021 and 2020, respectively. At March 31, 2021, future amortization expense is as follows: 2021 (9 months) $ 139 2022 152 2023 147 2024 147 2025 147 Thereafter 328 Total estimated amortization expense $ 1,060 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | Accounts payable includes $104 and $53 due to related party Syzygy Licensing, LLC (“ Syzygy Accrued liabilities consist of the following: March 31, December 31, 2021 2020 Patent and legal costs $ 70 $ 65 Accrued compensation 443 563 Warranty costs 58 48 Consulting costs - 2 Taxes and other 22 43 Accrued liabilities $ 593 $ 721 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
LEASES | The Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2019 using the modified retrospective approach. The Company has elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. Amortization of Right of Use operating lease assets was $25 and $30 for the three months ended March 31, 2021 and 2020, respectively. Operating lease expense for capitalized operating leases included in operating activities was $28 and $31 for the three months ended March 31, 2021 and 2020, respectively. Operating lease obligations recorded on the balance sheet at March 31, 2021 are: Operating lease liability- short term $ 91 Operating lease liability - long term 32 Total Operating Lease Liability $ 123 Future lease payments included in the measurement of lease liabilities on the balance sheet at March 31, 2021 for future periods are as follows: 2021 (9 months) 72 2022 57 Total future minimum lease payments 129 Less imputed interest (6 ) Total $ 123 The weighted average remaining lease term is 1.33 years and the weighted average discount rate is 7.0%. The Company does not have any finance leases. |
OTHER LIABILITIES
OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | The Company’s other liabilities at March 31, 2021 and December 31, 2020 included operating lease liabilities (see Note 8) and business acquisition liabilities totaling $198 of which $175 related to short term business liabilities and $23 related to contingent consideration recorded as a long-term business acquisition liability on our balance sheet. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' equity: | |
STOCKHOLDERS' EQUITY | The Company’s authorized capital consists of 150,000,000 shares of Common Stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share (“ Preferred Stock Summary of Stock Purchase Warrants The following table summarizes warrant activity during the three months ended March 31, 2021: Number Average Purchase Price Per Share Shares purchasable under outstanding warrants at December 31, 2020 3,206,910 $ 6.36 Stock purchase warrants issued - - Stock purchase warrants exercised - - Shares purchasable under outstanding warrants at March 31, 2021 3,206,910 $ 6.36 The Company has outstanding Common Stock purchase warrants as of March 31, 2021 as follows: Number of Exercise Price Description Common Shares Per Share Expiration Date Purchase Warrants 1,661,397 $ 6.50 June 18, 2021 Agent Warrants 153,846 $ 8.125 June 18, 2021 Purchase Warrants 1,391,667 $ 6.00 June 1, 2022 3,206,910 Subsequent Stock Issuance In April 2021 the Company issued 25,000 shares valued at $139 for payment of legal services included in accounts payable at March 31, 2021. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | On March 31, 2017, the Company adopted, and the stockholders approved, the 2017 Stock Incentive Plan (the “ Plan In April 2021, the Board of the Company approved, subject to stockholder ratification, an increase in the Plan authorizing an additional 1,500,000 shares of Common Stock to a total of 7,500,000 shares. The Company generally recognizes stock-based compensation expense on the grant date and over the period of vesting or period that services will be provided. Stock Options The following table summarizes stock option activity for the three months ended March 31, 2021: Weighted Average Options on Remaining Aggregate Common Exercise Contractual Intrinsic Shares Price Term Value Outstanding December 31, 2020 3,931,586 $ 4.41 4.80 Granted 577,500 $ 5.28 Exercised (75,000 ) $ 1.50 Forfeited, cancelled, expired (10,000 ) $ 5.42 Outstanding March 31, 2021 4,424,086 $ 4.57 5.39 $ 5,533,110 Exercisable March 31, 2021 2,116,917 $ 2.86 2.49 $ 5,181,463 Options outstanding at December 31, 2020 and March 31, 2021 include 100,000 of performance-based options exercisable at $5.46 per share with vesting based on achieving certain virtual reality revenue targets by December 1, 2024. The Company has not recorded share-based compensation expense related to these options. All other options are service-based. The Company uses the Black-Scholes option pricing model to determine the fair value of the options granted. The following table summarizes the assumptions used to compute the fair value of options granted to employees and non-employees: For the Three Months Ended March 31, 2021 2020 Expected stock price volatility 50 % n/a Risk-free interest rate 0.89 % n/a Forfeiture rate 0 % n/a Expected dividend yield 0 % n/a Expected life of options - years 5.70 n/a Weighted-average fair value of options granted $ 2.42 n/a Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of awards. The Company’s estimated volatility was based on an average of the historical volatility of peer entities whose stock prices were publicly available. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. The Company calculates the expected life of the options using the Simplified Method for the employee stock options as the Company does not have sufficient historical data. Restricted Stock Units The Plan provides for the grant of restricted stock units (“ RSUs” Weighted Average Weighted Average Service-Based Grant Date Vesting RSU's Fair Value Period Unvested at December 31, 2020 428,006 $ 6.13 Granted - service based 37,500 $ 5.38 Vested (64,660 ) $ 4.72 Forfeited and cancelled - Unvested at March 31, 2021 400,846 $ 6.29 2.18 Years Subsequent Stock Awards In April 2021 the Board of Directors granted a stock award pursuant to the Plan of 31,250 shares to each of its five directors with a grant date value of $5.56 per share for prior services. Stock expense of $869 will be recognized as of the grant date. In April 2021 the Board of Directors granted each of its four non-executive directors an RSU grant of 10,882 shares vesting during the balance of 2021 with a grant date value of $5.56 per share. The $242 total stock compensation expense will be recognized over the 2021 vesting period. Also, in April 2021 the Board of Directors granted Scot Cohen, the Company’s Executive Chairman, a ten-year stock option exercisable for 100,000 shares of Common Stock at an exercise price of $5.56 per share vesting during the balance of 2021. The $254 stock compensation expense will be recognized over the 2021 vesting period. Upon the appointment of four additional new directors in April 2021 the Board of Directors granted each new director a stock option exercisable for 30,000 shares of Common Stock at an exercise price of $5.04 per share vesting over two years. The $292 total stock compensation expense will be recognized over the two-year vesting period. Each new director was also granted an RSU grant of 8,403 shares vesting during the balance of 2021 with a grant date value of $5.04 per share. The $169 total stock compensation expense will be recognized over the 2021vesting period. Share-Based Compensation Expense The Company recorded share-based compensation for options and RSUs in its statements of operations for the relevant periods as follows: Three Months Ended March 31, 2021 2020 Selling, general and administrative $ 602 $ 429 Research and development 257 38 Total share-based expense $ 859 $ 467 As of March 31, 2021, total estimated compensation cost of stock options granted and outstanding but not yet vested was $5,419 which is expected to be recognized over the weighted average period of 2.7 years. As of March 31, 2021, total estimated compensation cost of RSUs granted and outstanding but not yet vested was $2,027 which is expected to be recognized over the weighted average period of 2.2 years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Facility Leases See Note 8. Related Party Technology License Agreement The Company is obligated to pay royalties and pay development and patent costs pursuant to that certain exclusive Amended and Restated Intellectual Property License Agreement dated as of September 30, 2016, by and between the Company and Syzygy (the “ Syzygy Agreement Purchase Commitments At March 31, 2021 the Company was committed for approximately $1,380 for future component deliveries and contract services that are generally subject to modification or rescheduling in the normal course of business. Securities Litigation On September 23, 2020, Carone Cobden filed a putative class action complaint against the Company, former Chief Executive Officer David Norris (“ Norris Barnes Smith Cobden Complaint BolaWrap Pilot Program On October 1, 2020, Joseph Mercurio filed a second putative class action complaint against the Company, Norris, Smith, and Barnes in the same court, which contains substantially the same factual allegations and legal claims as set forth in the Cobden Complaint, and is docketed as Case No. 2-20-cv-09030-DMG-PVCx (the “ Mercurio Complaint Thomas Earley Complaint On November 3, 2020, the Hon. Dolly M. Gee consolidated the three above-mentioned cases under the caption In re Wrap Technologies, Inc. Securities Exchange Act Litigation Securities Action Shareholder Derivative Litigation On November 13, 2020, Naresh Rammohan filed a shareholder derivative action in the United States District Court for the Central District of California against Smith, Barnes, Rothans, Thomas, Norris, and Messrs. Scot Cohen, Patrick Kinsella, Michael Parris, and Wayne Walker, alleging unjust enrichment, breach of fiduciary duty, waste of corporate assets, and contribution claims under the Securities Exchange Act of 1934, docketed as Case No. 2:20-cv-10444-DMG-PVCx (the “ Rammohan Complaint Westerman Complaint Lowe Complaint The above-mentioned derivative cases were each been transferred to Judge Gee as cases related to the Securities Action. On February 16, 2021, Judge Gee issued an order consolidating these cases under the caption In re Wrap Technologies, Inc. Shareholder Derivative Litigation Derivative Action Other Legal Information The Company may at times be involved in other litigation in the ordinary course of business. The Company will, from time to time, when appropriate in management’s estimation, record adequate reserves in the Company’s consolidated financial statements for pending litigation. Currently, other than described above there are no other pending material legal proceedings to which the Company is a party or to which any of its property is subject. At March 31, 2021 the Company had no provision for liability under existing litigation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Commencing in October 2017 the Company began reimbursing Mr. Elwood Norris, an officer and stockholder of the Company, $1.5 per month on a month-to-month basis for laboratory facility costs, for an aggregate of $4.5 during the three months ended March 31, 2021 and 2020, respectively. See Notes 7, 11 and 12 for additional information on related party transactions and obligations. |
MAJOR CUSTOMERS AND RELATED INF
MAJOR CUSTOMERS AND RELATED INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
MAJOR CUSTOMERS AND RELATED INFORMATION | For the three months ended March 31, 2021, revenues from three distributors accounted for approximately 28%, 22% and 10% of revenues with no other single customer accounting for more than 10% of total revenues. At March 31, 2021, accounts receivable from three distributors accounted for 37%, 17% and 16% of accounts receivable with no other single customer accounting for more than 10% of the accounts receivable balance. For the three months ended March 31, 2020, revenues from two distributors accounted for approximately 43% and 37% of revenues with no other single customer accounting for more than 10% of total revenues. These distributors accounted for 18% and 33% of accounts receivable at March 31, 2020. The following table summarizes revenues by geographic region. Revenues are attributed to countries based on customer’s delivery location. For the Three Months Ended March 31, 2021 2020 Americas $ 626 $ 109 Europe, Middle East and Africa 877 309 Asia Pacific 39 272 $ 1,542 $ 690 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | See Notes 10 and 11 for subsequent stock and stock plan information. The Company evaluated other subsequent events for their potential impact on the financial statements and disclosures through the date the financial statements were available to be issued, and determined that, except as disclosed herein, no subsequent events occurred that were reasonably expected to impact the financial statements presented herein. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Description | Wrap Technologies, Inc., a Delaware corporation (the “ Company we us our Common Stock Nasdaq |
Basis of Presentation | The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“ SEC Where necessary, the prior year’s information has been reclassified to conform to the current year presentation. |
Principles of Consolidation | The Company has one wholly-owned subsidiary, Wrap Reality, Inc., formed in December 2020, and has commenced selling its virtual reality training system primarily targeting law enforcement and security agencies. The condensed consolidated financial statements include the accounts of this subsidiary after elimination of intercompany transactions and accounts. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (e.g., stock-based compensation valuation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty reserve, accrued costs and recognition and measurement of contingencies) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
Loss per share | Basic loss per common share is computed by dividing net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential common stock instruments outstanding to be antidilutive. Stock options, restricted stock units and warrants exercisable or issuable for a total of 8,031,842 shares of Common Stock were outstanding at March 31, 2021. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company. |
Recent Issued Accounting Guidance | Adopted the First Quarter of 2021: In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic ): Simplifying the Accounting for Income Taxes ASU 2019-12 Other Pronouncements: In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity “(Subtopic 815-40”): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity The Company has reviewed other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Financial instruments | As of March 31, 2021 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 1,035 $ - $ - $ 1,035 U.S. Treasury securities considered cash equivalents - - - - U.S. Treasury securities in short-term investments 34,983 17 - 35,000 Total Financial Assets $ 36,018 $ 17 $ - $ 36,035 As of December 31, 2020 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 6,035 $ - $ - $ 6,035 U.S. Treasury securities considered cash equivalents 9,998 - - 9,998 U.S. Treasury securities in short-term investments 24,979 15 - 24,994 Total Financial Assets $ 41,012 $ 15 $ - $ 41,027 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | March 31, December 31, 2021 2020 Finished goods $ 1,688 $ 1,249 Work in process 26 64 Raw materials 1,866 1,342 Inventories, net $ 3,580 $ 2,655 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | March 31, December 31, 2021 2020 Production and lab equipment $ 148 $ 148 Tooling 173 81 Computer equipment 249 180 Furniture, fixtures and improvements 160 165 730 574 Accumulated depreciation (267 ) (217 ) Property and equipment, net $ 463 $ 357 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | March 31, December 31, 2021 2020 Amortizable intangible assets: Patents $ 304 $ 280 Trademarks 115 84 Purchased software 662 662 Other 50 50 1,131 1,076 Accumulated amortization (71 ) (23 ) Total amortizable 1,060 1,053 Indefinite life assets (non-amortizable) 344 344 Total intangible assets, net $ 1,404 $ 1,397 |
Future amortization expense | 2021 (9 months) $ 139 2022 152 2023 147 2024 147 2025 147 Thereafter 328 Total estimated amortization expense $ 1,060 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | March 31, December 31, 2021 2020 Patent and legal costs $ 70 $ 65 Accrued compensation 443 563 Warranty costs 58 48 Consulting costs - 2 Taxes and other 22 43 Accrued liabilities $ 593 $ 721 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Operating lease liabilities | Operating lease liability- short term $ 91 Operating lease liability - long term 32 Total Operating Lease Liability $ 123 |
Future lease payments | 2021 (9 months) 72 2022 57 Total future minimum lease payments 129 Less imputed interest (6 ) Total $ 123 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' equity: | |
Warrant activity | Number Average Purchase Price Per Share Shares purchasable under outstanding warrants at December 31, 2020 3,206,910 $ 6.36 Stock purchase warrants issued - - Stock purchase warrants exercised - - Shares purchasable under outstanding warrants at March 31, 2021 3,206,910 $ 6.36 |
Stock purchase warrants | Number of Exercise Price Description Common Shares Per Share Expiration Date Purchase Warrants 1,661,397 $ 6.50 June 18, 2021 Agent Warrants 153,846 $ 8.125 June 18, 2021 Purchase Warrants 1,391,667 $ 6.00 June 1, 2022 3,206,910 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity | Weighted Average Options on Remaining Aggregate Common Exercise Contractual Intrinsic Shares Price Term Value Outstanding December 31, 2020 3,931,586 $ 4.41 4.80 Granted 577,500 $ 5.28 Exercised (75,000 ) $ 1.50 Forfeited, cancelled, expired (10,000 ) $ 5.42 Outstanding March 31, 2021 4,424,086 $ 4.57 5.39 $ 5,533,110 Exercisable March 31, 2021 2,116,917 $ 2.86 2.49 $ 5,181,463 |
Assumptions used to to determine the fair value of the options granted | For the Three Months Ended March 31, 2021 2020 Expected stock price volatility 50 % n/a Risk-free interest rate 0.89 % n/a Forfeiture rate 0 % n/a Expected dividend yield 0 % n/a Expected life of options - years 5.70 n/a Weighted-average fair value of options granted $ 2.42 n/a |
Service-based RSU activity | Weighted Average Weighted Average Service-Based Grant Date Vesting RSU's Fair Value Period Unvested at December 31, 2020 428,006 $ 6.13 Granted - service based 37,500 $ 5.38 Vested (64,660 ) $ 4.72 Forfeited and cancelled - Unvested at March 31, 2021 400,846 $ 6.29 2.18 Years |
Stock-based compensation | Three Months Ended March 31, 2021 2020 Selling, general and administrative $ 602 $ 429 Research and development 257 38 Total share-based expense $ 859 $ 467 |
MAJOR CUSTOMERS AND RELATED I_2
MAJOR CUSTOMERS AND RELATED INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues by geographic region | For the Three Months Ended March 31, 2021 2020 Americas $ 626 $ 109 Europe, Middle East and Africa 877 309 Asia Pacific 39 272 $ 1,542 $ 690 |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended |
Mar. 31, 2021shares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Stock options, restricted stock units and warrants exercisable or issuable | 8,031,842 |
REVENUE AND PRODUCT COSTS (Deta
REVENUE AND PRODUCT COSTS (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 30, 2020 |
Deferred revenue | $ 172 | $ 16 | |
Virtual Reality Training | |||
Deferred revenue | 137 | $ 14 | |
Extended Product Warranties | |||
Deferred revenue | $ 35 | $ 2 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Level 1 - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Adjusted cost | $ 36,018 | $ 41,012 |
Unrealized gains | 17 | 15 |
Unrealized losses | 0 | 0 |
Market value | 36,035 | 41,027 |
Money Market Funds | ||
Adjusted cost | 1,035 | 6,035 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Market value | 1,035 | 6,035 |
U.S. Treasury Securities Considered Cash Equivalents | ||
Adjusted cost | 0 | 9,998 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Market value | 0 | 9,998 |
U.S. Treasury Securities in Short-term Investments | ||
Adjusted cost | 34,983 | 24,979 |
Unrealized gains | 17 | 15 |
Unrealized losses | 0 | 0 |
Market value | $ 35,000 | $ 24,994 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Unrealized gains/losses on short-term investments | $ 17 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,688 | $ 1,249 |
Work in process | 26 | 64 |
Raw materials | 1,866 | 1,342 |
Inventory, net | $ 3,580 | $ 2,655 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property and equipment, gross | $ 730 | $ 574 |
Accumulated depreciation | (267) | (217) |
Property and equipment, net | 463 | 357 |
Laboratory Equipment | ||
Property and equipment, gross | 148 | 148 |
Tooling | ||
Property and equipment, gross | 173 | 81 |
Computer Equipment | ||
Property and equipment, gross | 249 | 180 |
Furniture, Fixtures and Improvements | ||
Property and equipment, gross | $ 160 | $ 165 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 56 | $ 22 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Intangible assets, gross | $ 1,131 | $ 1,076 |
Accumulated amortization | (71) | (23) |
Total amortizable | 1,060 | 1,053 |
Indefinite life assets (non-amortizable) | 344 | 344 |
Intangible assets, net | 1,404 | 1,397 |
Patents | ||
Intangible assets, gross | 304 | 280 |
Trademarks | ||
Intangible assets, gross | 115 | 84 |
Purchased Software | ||
Intangible assets, gross | 6,652 | 662 |
Other | ||
Intangible assets, gross | $ 50 | $ 50 |
INTANGIBLE ASSETS, NET (Detai_2
INTANGIBLE ASSETS, NET (Details 1) | Mar. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 (9 months) | $ 139 |
2022 | 152 |
2023 | 147 |
2024 | 147 |
2025 | 147 |
Thereafter | 328 |
Total estimated amortization expense | $ 1,060 |
INTANGIBLE ASSETS, NET (Detai_3
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 48 | $ 3 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Patent and legal costs | $ 70 | $ 65 |
Accrued compensation | 443 | 563 |
Warranty costs | 58 | 48 |
Consulting costs | 0 | 2 |
Taxes and other | 22 | 43 |
Accrued liabilities | $ 593 | $ 721 |
LEASES (Details)
LEASES (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease liability - short term | $ 91 | $ 94 |
Operating lease liability - long term | 32 | $ 56 |
Total operating lease liability | $ 123 |
LEASES (Details 1)
LEASES (Details 1) | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 (nine months) | $ 72 |
2022 | 57 |
Total future minimum lease payments | 129 |
Less imputed interest | (6) |
Total | $ 123 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Amortization of ROU operating lease assets | $ 25 | $ 30 |
Operating lease expense | $ 28 | $ 31 |
Weighted average remaining lease term | 1 year 3 months 29 days | |
Weighted average discount rate | 7.00% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Stockholders' equity: | |
Warrants outstanding, beginning | shares | 3,206,910 |
Issued | shares | 0 |
Exercised | shares | 0 |
Warrants outstanding, ending | shares | 3,206,910 |
Average purchase price per share outstanding, beginning | $ / shares | $ 6.36 |
Issued | $ / shares | .00 |
Exercised | $ / shares | .00 |
Average purchase price per share outstanding, ending | $ / shares | $ 6.36 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / shares | |
Number of common shares | $ 3,206,910 |
Purchase Warrants | |
Number of common shares | $ 1,661,397 |
Exercise price per share | $ / shares | $ 6.500 |
Expiration Date | Jun. 18, 2021 |
Agent Warrants | |
Number of common shares | $ 153,846 |
Exercise price per share | $ / shares | $ 8.125 |
Expiration Date | Jun. 18, 2021 |
Purchase Warrants | |
Number of common shares | $ 1,391,667 |
Exercise price per share | $ / shares | $ 6 |
Expiration Date | Jun. 1, 2022 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Stockholders' equity: | ||
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, par value | $ .0001 | $ .0001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of options outstanding, beginning | shares | 3,931,586 |
Granted | shares | 577,500 |
Exercised | shares | (75,000) |
Forfeited/cancelled/expired | shares | (10,000) |
Number of options outstanding, ending | shares | 4,424,086 |
Number of options vested and exercisable | shares | 2,116,917 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 4.41 |
Granted | $ / shares | 5.28 |
Exercised | $ / shares | 1.50 |
Forfeited/cancelled/expired | $ / shares | 5.42 |
Weighted average exercise price outstanding, ending | $ / shares | 4.57 |
Weighted average exercise price vested and exercisable | $ / shares | $ 2.86 |
Weighted average remaining contractual term outstanding, beginning | 4 years 9 months 18 days |
Weighted average remaining contractual term outstanding, ending | 5 years 4 months 20 days |
Weighted average remaining contractual term vested and exercisable | 2 years 5 months 26 days |
Aggregate intrinsic value outstanding | $ | $ 5,533,110 |
Aggregate intrinsic value vested and exercisable | $ | $ 5,181,463 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) | 3 Months Ended |
Mar. 31, 2021$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Expected stock price volatility | 50.00% |
Risk-free interest rate | 0.89% |
Forfeiture rate | 0.00% |
Expected dividend yield | 0.00% |
Expected life of options - years | 5 years 8 months 12 days |
Weighted-average fair value of options granted | $ 2.42 |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 2) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Unvested service-based RSUs outstanding, beginning | shares | 428,006 |
Vested | shares | (64,660) |
Forfeited and cancelled | shares | 0 |
Unvested service-based RSUs outstanding, ending | shares | 400,846 |
Grant date fair value, beginning | $ / shares | $ 6.13 |
Vested | $ / shares | 4.72 |
Forfeited and cancelled | $ / shares | .00 |
Grant date fair value, ending | $ / shares | $ 6.29 |
Vesting period | 2 months 5 days |
Service Based | |
Granted | shares | 37,500 |
Granted | $ / shares | $ 5.38 |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details 3) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock-based compensation | $ 859 | $ 467 |
Selling, General and Administrative | ||
Stock-based compensation | 602 | 429 |
Research and Development | ||
Stock-based compensation | $ 257 | $ 38 |
STOCK-BASED COMPENSATION (Det_5
STOCK-BASED COMPENSATION (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Estimated compensation cost of stock options and RSUs granted but not yet vested | $ 5,419 |
Estimated compensation cost of stock options and RSUs granted but not yet vested, recognition period | 2 years 8 months 12 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Royalties | $ 51 | $ 25 |
Purchase commitment | $ 1,380 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Payment to related party during period | $ 4,500 | $ 4,500 |
MAJOR CUSTOMERS AND RELATED I_3
MAJOR CUSTOMERS AND RELATED INFORMATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue by geographic region | $ 1,542 | $ 690 |
Americas | ||
Revenue by geographic region | 626 | 109 |
Europe, Middle East and Africa | ||
Revenue by geographic region | 877 | 309 |
Asia Pacific | ||
Revenue by geographic region | $ 39 | $ 272 |
MAJOR CUSTOMERS AND RELATED I_4
MAJOR CUSTOMERS AND RELATED INFORMATION (Details Narrative) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Distributor 1 | Accounts receivable | ||
Concentration risk | 37.00% | 18.00% |
Distributor 1 | Revenues | ||
Concentration risk | 28.00% | 43.00% |
Distributor 2 | Accounts receivable | ||
Concentration risk | 17.00% | 33.00% |
Distributor 2 | Revenues | ||
Concentration risk | 22.00% | 37.00% |
Distributor 3 | Accounts receivable | ||
Concentration risk | 16.00% | |
Distributor 3 | Revenues | ||
Concentration risk | 10.00% |