Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 27, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-40867 | ||
Entity Registrant Name | Volcon, Inc. | ||
Entity Central Index Key | 0001829794 | ||
Entity Tax Identification Number | 84-4882689 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 3121 Eagles Nest Street | ||
Entity Address, Address Line Two | Suite 120 | ||
Entity Address, City or Town | Round Rock | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78665 | ||
City Area Code | (512) | ||
Local Phone Number | 400-4271 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | VLCN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13,419,273 | ||
Entity Common Stock, Shares Outstanding | 18,748,955 | ||
Documents Incorporated by Reference [Text Block] | Portions of the registrant’s proxy statement related to its 2024 Annual Stockholders’ Meeting to be filed subsequently are incorporated by reference into Part II of this Form 10-K. Except as expressly incorporated by reference, the registrant’s proxy statement shall not be deemed to be part of this report. | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 206 | ||
Auditor Name | MaloneBailey, LLP | ||
Auditor Location | Houston, Texas |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 7,983,346 | $ 10,986,592 |
Restricted cash | 210,000 | 551,250 |
Accounts receivable, net of allowance for doubtful accounts of $70,359 and $62,451 at December 31, 2023 and 2022, respectively | 203,303 | 864,957 |
Inventory | 8,973,134 | 5,645,883 |
Inventory deposits | 258,316 | 427,662 |
Prepaid expenses and other current assets | 1,904,197 | 1,850,666 |
Total current assets | 19,532,296 | 20,327,010 |
Long-term assets: | ||
Property and equipment, net | 1,258,607 | 601,766 |
Intangible assets, net | 0 | 5,813 |
Other long-term assets | 199,281 | 285,037 |
Right-of-use asset - operating lease | 1,136,213 | 1,505,987 |
Total assets | 22,126,397 | 22,725,613 |
Current liabilities: | ||
Accounts payable | 831,184 | 1,036,628 |
Accrued liabilities | 3,128,906 | 2,045,239 |
Accrued purchase commitments | 0 | 28,600 |
Current portion of notes payable | 15,278 | 18,670 |
Convertible notes, net of issuance costs | 30,149,579 | 17,353,748 |
Warrant liabilities | 5,971,067 | 0 |
Right-of-use operating lease liability, short-term | 399,611 | 391,117 |
Customer deposits | 417,485 | 23,471 |
Total current liabilities | 40,913,110 | 20,897,472 |
Notes payable, net of discount and current portion | 69,138 | 50,116 |
Right-of-use operating lease liability, long-term | 775,170 | 1,143,011 |
Total liabilities | 41,757,418 | 22,090,599 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders’ equity (deficit): | ||
Preferred stock: $0.00001 par value, 5,000,000 shares authorized, no shares outstanding | 0 | 0 |
Common stock: $0.00001 par value, 250,000,000 shares authorized, 1,030,070 shares issued and outstanding as of December 31, 2023, 108,562 shares issued and outstanding as of December 31, 2022 | 10 | 1 |
Additional paid-in capital | 101,175,107 | 76,369,939 |
Accumulated deficit | (120,806,138) | (75,734,927) |
Total stockholders’ equity (deficit) | (19,631,021) | 635,013 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 22,126,397 | $ 22,725,613 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 70,359 | $ 62,451 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 1,030,070 | 108,562 |
Common stock, shares outstanding | 1,030,070 | 108,562 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue: | $ 3,260,988 | $ 4,546,686 |
Cost of goods sold | 11,391,040 | 13,412,820 |
Gross margin | (8,130,052) | (8,866,134) |
Operating expenses: | ||
Sales and marketing | 7,405,705 | 5,694,556 |
Product development | 7,868,985 | 8,456,157 |
General and administrative expenses | 6,388,007 | 9,046,778 |
Total operating expenses | 21,662,697 | 23,197,491 |
Loss from operations | (29,792,749) | (32,063,625) |
Other income (expense) | (40,555) | 87,765 |
Interest expense | (4,969,590) | (2,259,545) |
Loss from extinguishment | (22,296,988) | 0 |
Issuance costs | (1,444,547) | 0 |
Gain on derivative liabilities and warrant liabilities | 13,473,218 | 0 |
Total other expense | (15,278,462) | (2,171,780) |
Loss before provision for income taxes | (45,071,211) | (34,235,405) |
Provision for income taxes | 0 | 0 |
Net loss | $ (45,071,211) | $ (34,235,405) |
Net loss per common share – basic | $ (234.37) | $ (325.20) |
Net loss per common share – diluted | $ (234.37) | $ (325.20) |
Weighted average common shares outstanding – basic | 192,312 | 105,275 |
Weighted average common shares outstanding – diluted | 192,312 | 105,275 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 1 | $ 47,803,770 | $ (41,499,522) | $ 6,304,249 |
Beginning balance, shares at Dec. 31, 2021 | 77,260 | |||
Issuance of common stock for public offering, net of issuance costs of $1,910,816 | 18,089,184 | 18,089,184 | ||
Beginning balance, shares | 29,630 | |||
Issuance of common stock for cashless exercise of warrants | ||||
Beginning balance, shares | 375 | |||
Issuance of common stock for exercise of stock options and restricted shares | 40,000 | 40,000 | ||
Beginning balance, shares | 1,068 | |||
Reclassification of derivative liabilities to equity | 0 | |||
Stock-based compensation | 3,259,009 | 3,259,009 | ||
Beginning balance, shares | 243 | |||
Forfeiture of performance shares | ||||
Beginning balance, shares | (14) | |||
Issuance of note warrants and underwriter warrants, net of issuance costs of $1,003,513 | 7,177,976 | 7,177,976 | ||
Net loss | (34,235,405) | (34,235,405) | ||
Ending balance, value at Dec. 31, 2022 | $ 1 | 76,369,939 | (75,734,927) | 635,013 |
Beginning balance, shares at Dec. 31, 2022 | 108,562 | |||
Issuance of common stock for public offering, net of issuance costs of $1,910,816 | 4,570,085 | 4,570,085 | ||
Beginning balance, shares | 32,889 | |||
Issuance of common stock for exercise of stock options and vesting of restricted stock units | 25,000 | 25,000 | ||
[custom:IssuanceOfCommonStockForExerciseOfStockOptionsAndVestingOfRestrictedStockUnitsShares] | 314 | |||
Issuance of common stock units in public offering, net of issuance costs of $28,777 | $ 1 | 255,504 | 255,505 | |
Stock Issued During Period, Shares, Other | 73,913 | |||
Issuance of pre-funded warrant units, net of issuance costs of $342,071 | 3,037,121 | 3,037,121 | ||
Issuance of common stock for exercise of pre-funded warrants | $ 8 | 8 | ||
[custom:IssuanceOfCommonStockForExerciseOfPrefundedWarrantsShares] | 804,618 | |||
Issuance of common stock for cashless exercise of warrants | 680,978 | 680,978 | ||
Beginning balance, shares | 9,156 | |||
Proceeds received for reduction of warrant exercise price | 346,500 | 346,500 | ||
Reclassification of derivative liabilities to equity | 13,262,055 | 13,262,055 | ||
Stock-based compensation | 2,627,925 | 2,627,925 | ||
Beginning balance, shares | 618 | |||
Net loss | (45,071,211) | (45,071,211) | ||
Ending balance, value at Dec. 31, 2023 | $ 10 | $ 101,175,107 | $ (120,806,138) | $ (19,631,021) |
Beginning balance, shares at Dec. 31, 2023 | 1,030,070 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Securities Financing Transaction [Line Items] | ||
Payment of stock issuance costs | $ 629,900 | $ 1,910,816 |
Public Offering [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payment of stock issuance costs | 28,777 | |
Pre Funded Warrants [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payment of stock issuance costs | $ 342,071 | |
Warrants And Underwriter Warrants [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payment of stock issuance costs | $ 1,003,513 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flow from operating activities: | ||
Net loss | $ (45,071,211) | $ (34,235,405) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on debt extinguishment | 22,296,988 | 0 |
Gain on change in fair value of financial derivatives and warrant liabilities | (13,473,218) | 0 |
Non-cash interest expense | 4,955,660 | 2,231,403 |
Loss on write down of inventory and inventory deposits | 4,282,321 | 1,692,217 |
Stock-based compensation | 2,627,925 | 3,259,009 |
Bad debt expense | 105,688 | 0 |
Loss on lease terminations | 85,756 | 378,176 |
Loss on write-off of property & equipment | 56,509 | 250,369 |
Write-off of intangible assets | 0 | 6,427 |
Amortization of right-of-use asset | 369,774 | 430,644 |
Depreciation and amortization | 249,207 | 762,826 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 555,967 | (839,372) |
Inventory | (7,609,564) | (5,129,085) |
Inventory deposits | 169,346 | 1,553,735 |
Prepaid assets and other current assets | (53,531) | (740,059) |
Other assets | 0 | (37,414) |
Accounts payable | (205,444) | (417,475) |
Accrued liabilities | 1,055,067 | (204,769) |
Right-of-use liabilities - operating lease | (359,347) | (354,340) |
Customer deposits | 394,014 | (2,254,136) |
Net cash provided by (used in) operating activities | (29,568,092) | (33,647,249) |
Cash flow from investing activities: | ||
Purchase of property and equipment | (949,722) | (799,412) |
Proceeds from sale of vehicles | 89,000 | 0 |
Net cash used by investing activities | (860,722) | (799,412) |
Cash flow from financing activities: | ||
Repayment of notes payable | (80,394) | (17,201) |
Proceeds from issuance of common stock from public offerings, net of issuance costs of $629,900 | 4,570,085 | 0 |
Proceeds from issuance of convertible notes and warrants, net of issuance costs of $586,968 | 3,913,033 | 0 |
Proceeds from issuance of common stock units, net of issuance costs of $28,777 | 255,505 | 0 |
Proceeds from issuance of pre-funded warrant units, net of issuance costs of $342,071 | 3,037,121 | 0 |
Proceeds for issuance of Series A and Series B warrants issued with common stock and pre-funded warrant units | 14,336,490 | 0 |
Proceeds from exercise of warrants | 680,978 | 0 |
Proceeds from reduction of exercise price of warrants | 346,500 | 0 |
Proceeds from issuance of common stock from public offering, net of issuance costs of $1,910,816 | 0 | 18,089,184 |
Proceeds from issuance of convertible notes, net of issuance costs of $2,312,895 | 0 | 15,122,345 |
Proceeds from issuance of warrants to convertible note holders, net of issuance costs of $1,003,513 | 0 | 7,177,976 |
Proceeds from exercise of stock options | 25,000 | 40,000 |
Net cash provided by financing activities | 27,084,318 | 40,412,304 |
NET CHANGE IN CASH AND RESTRICTED CASH | (3,344,496) | 5,965,643 |
CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD | 11,537,842 | 5,572,199 |
CASH AND RESTRICTED CASH AT END OF PERIOD | 8,193,346 | 11,537,842 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 15,935 | 6,483 |
Cash paid for income taxes | 0 | 0 |
Non-cash transactions | ||
Recognition of initial right-of-use asset - operating lease | 0 | 1,128,609 |
Acquisition of property and equipment with note payable | 96,024 | 0 |
Reclassification of derivative liabilities to equity | $ 13,262,055 | $ 0 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Securities Financing Transaction [Line Items] | ||
Payments of Stock Issuance Costs | $ 629,900 | $ 1,910,816 |
Convertible Notes And Warrants [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payments of Stock Issuance Costs | 586,968 | |
Common Stock Units [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payments of Stock Issuance Costs | 28,777 | |
Pre Funded Warrant [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payments of Stock Issuance Costs | $ 342,071 | |
Convertible Notes [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payments of Stock Issuance Costs | 2,312,895 | |
Convertible Note Holders [Member] | ||
Securities Financing Transaction [Line Items] | ||
Payments of Stock Issuance Costs | $ 1,003,513 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) Attributable to Parent | $ (45,071,211) | $ (34,235,405) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
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 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN Volcon, Inc. (“Volcon” or the “Company”) was formed on February 21, 2020, as a Delaware corporation, under the name Frog ePowersports, Inc. The Company was renamed Volcon, Inc. on October 1, 2020. Volcon designs and sells all-electric off-road powersport vehicles. On January 5, 2021, the Company created Volcon ePowersports, LLC (“Volcon LLC”), a Colorado wholly-owned subsidiary of the Company, to sell Volcon vehicles and accessories in the U.S. Volcon LLC is no longer used for selling vehicles and accessories. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and has generated negative cash flows from operations since inception. In August 2022, the Company received net proceeds of approximately $ 22.3 The Company received net proceeds of approximately $ 3.9 In May 2023, the Company received net proceeds of approximately $ 4 26,667 168.75 On September 14, 2023, the holders of the New Notes and Exchange Notes (collectively the “May 2023 Notes”) entered into an agreement to modify the terms to extend the due date to January 31, 2025. In addition, the requirement to have unrestricted and unencumbered cash on deposit of $10 million if the outstanding principal (and interest, if any) of the Exchange Notes is $15 million or greater as of December 31, 2023 was amended to reduce the unrestricted and unencumbered cash on deposit to $5 million if the outstanding principal (and interest, if an) of the Exchange Notes is $15 million or greater as of June 30, 2024. The cash on deposit requirement is reduced dollar for dollar to the extent the outstanding principal (and interest, if any) of the Exchange Notes is less than $15 million on this date. The Company may factor up to $10 million of its accounts receivables provided the factoring lender executed a subordination and intercreditor agreement on terms acceptable to the holders of the May 2023 Notes, which was completed on October 17, 2023. The Company was also required to perfect a security interest in the assets of the Company no later than September 22, 2023, which the Company has completed. On September 18, 2023, the Company received net proceeds of approximately $ 571,400 6,222 112.50 In a series of warrant inducement transactions from September 29, 2023 to October 30, 2023, as more fully discussed below, the Company raised $ 1,027,478 On November 17, 2023, received net proceeds of approximately $ 16.2 73,913 878,469 In February and March 2024, certain holders of the May 2023 Convertible Notes issued in May 2023 converted approximately $ 7.4 24.7 1,000 1.33 2.3 1.7 Management anticipates that our cash on hand as of December 31, 2023 plus cash expected to be generated from operations will not be sufficient to fund planned operations beyond one year from the date of the issuance of the financial statements as of and for the year ended December 31, 2023. There can be no assurance that additional funding, if needed, would be available to the Company on acceptable terms, or at all. These factors raise substantial doubt regarding our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern. Nasdaq Compliance On July 5, 2023, the Company received a notice from Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5550(b)(2), which requires that it maintain a market value of listed securities (“MVLS”) of $35 million. MVLS is calculated by multiplying the Company’s shares outstanding by the closing price of its common stock. On July 6, 2023, the Company received a notice from Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5550(a)(2), as the minimum bid price of its common stock had been below $1.00 per share for 30 consecutive business days. On October 13, 2023, the Company completed a 1 for 5 reverse stock split and the Company’s common stock price increased to over $1.00. On October 30, 2023, the Company received a notice from Nasdaq that it had regained compliance with Rule 5550(a)(2), as the minimum bid price of its common stock was above $1.00 for 10 consecutive business days. On December 19, 2023, the Company received a notice from Nasdaq that it was again not in compliance with Nasdaq’s Listing Rule 5550(a)(2), as the minimum bid price of its common stock had been below $1.00 per share for 30 consecutive business days. On December 26, 2023, the Company was notified by Nasdaq that it is not in compliance with Nasdaq’s Listing Rule 5810(c)(3)(A)(iii) as the closing bid price of our common stock had been below $0.10 for ten consecutive trading days from December 11, 2023 through December 22, 2023 and was subject to delisting on January 2, 2024. On January 4, 2024, the Company received notice from Nasdaq that we did not meet the MVLS requirement and we were subject to delisting. The Company submitted a hearing request to Nasdaq’s Hearings Department for both of these matters, which stayed the suspension of the Company’s common stock. The Company participated in a hearing with Nasdaq;s Hearings Department on March 26, 2024 and they informed the Company that it could receive a decision within two weeks from the hearing date, although the timing of the decision is at the discretion of Nasdaq. Impact of Russia and Ukraine Conflict On February 24, 2022, Russia invaded Ukraine. The conflict between Russia and Ukraine could impact the availability of nickel, an element used in the production of lithium-ion cells used in batteries that power our vehicles. The shortage of these cells could have an impact on our ability to produce vehicles to meet our customers’ demands. In addition, sanctions against Russia could impact the price of elements, including nickel, which are used in the production of batteries which would result in higher costs to produce our vehicles. These sanctions have also impacted the U.S. and global economies and could result in an economic recession which could cause a broader disruption to the Company’s supply chain and distribution network and customer demand for our products. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed in the preparation of the consolidated financial statements are as follows: Basis of Presentation The basis of accounting applied is the United States Generally Accepted Accounting Principles (U.S. GAAP). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts, transactions and balances have been eliminated in consolidation. As discussed in Notes 9 and 14, the Company completed a reverse 1 for 5 stock split on October 13, 2023 and a reverse 1 for 45 stock split on February 2, 2024, all share and per share amounts have been adjusted to reflect the impact of these reverse stock splits. Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities as of the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. There were no Revenue Recognition For sales to dealers or distributors revenue is recognized when transfer of control of the product is made as there is no acceptance period or right of return. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring control of vehicles, parts, and accessories. Beginning in February 2023 the Company began selling the Brat E-Bike and Volcon Youth motorcycles directly to consumers in addition to dealers. Revenue for direct to consumer sales is recognized when transfer of control of the product is made to the consumer. Consideration that is received in advance of the transfer of goods is recorded as customer deposits until delivery has occurred or the customer cancels their order, and the consideration is returned to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s sales do not presently have a financing component. Sales promotions and incentives. Shipping and handling charges and costs. Product Warranties The Company provides a one-year warranty on vehicles, and a two-year warranty on the battery pack. The Company accrues warranty reserves at the time revenue is recognized. Warranty reserves include the Company’s best estimate of the projected cost to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the evaluation of historical data. The Company reviews its reserves quarterly to ensure that the accruals are adequate to meet expected future warranty obligations and will adjust estimates as needed. Factors that could have an impact on the warranty reserve include the following: changes in manufacturing quality, shifts in product mix, changes in warranty coverage periods, product recalls and changes in sales volume. Warranty expense is recorded as a component of cost of goods sold in the statement of operations and is recognized as a current liability. Inventory and Inventory Deposits Inventories and prepaid inventory deposits are stated at the lower of cost (first-in, first-out method) or net realizable value. Certain vendors require the Company to pay an upfront deposit before they manufacture and ship the Company’s parts or accessories. These payments are classified as prepaid inventory deposits on the balance sheet until title and risk of loss transfers to the Company, at which time they are classified as inventory. Raw materials inventory costs include the cost of parts, including duties, tariffs, and shipping. Work-in-process and finished goods include the cost of parts, labor and manufacturing overhead costs associated with the assembly of the vehicle. Finished goods also include accessories for the vehicle and branded merchandise such as hats and shirts. Through August 2022 the Company assembled the Grunt motorcycle in a leased facility. The Company ceased assembly operations at the end of August and outsourced the assembly of the Grunt to a third part y. In May 2023, Property and Equipment Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Schedule of estimated useful lives of the assets Category Estimated Machinery, tooling and equipment 3 7 Vehicles 5 Internal use manufactured vehicles 1 Furniture & Fixtures 5 Computers 3 Leasehold improvements are depreciated over the shorter period of their estimated useful life or term of the lease. Long-Lived Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical carrying cost value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to the carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Leases Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expenses for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component. ASC 842 defines initial direct costs as only the incremental costs of signing a lease. Initial direct costs related to leasing that are not incremental are expensed as general and administrative expenses in our statements of operations. The Company’s operating lease agreements primarily consist of leased real estate and are included within ROU assets – operating leases and ROU lease liabilities – operating leases on the balance sheets. The Company’s lease agreements may include options to extend the lease, which are not included in minimum lease payments unless they are reasonably certain to be exercised at lease commencement. The Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Research and Development Expenses The Company records research and development expenses in the period in which they are incurred as a component of product development expenses. Income Taxes Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on the differences between financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to an asset or liability based on the expected reversal dates of the specific temporary differences. Fair Value of Financial Instruments ASC Topic 820 Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: · Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. · Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 — Inputs that are unobservable for the asset or liability. The following section describes the valuation methodologies that the Company used to measure different financial instruments at fair value. Debt The fair value of the Company’s debt approximated the carrying value of the Company’s debt as of December 31, 2023 and 2022. Factors that the Company considered when estimating the fair value of its debt included market conditions, and term of the debt. The level of the debt would be considered as Level 2. The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity The Company accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as a liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement - Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. The Monte Carlo simulation is used to determine the fair value of derivatives for instruments with embedded conversion features and for free standing warrants as discussed further in Note 7. Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts receivable, inventory, other assets, and accounts payable and accrued expenses approximate their fair value due to the short-term maturity of those items. Warrant Liabilities and Convertible Liabilities The fair value of the derivative liabilities and warrant liabilities is classified as Level 3 within the Company’s fair value hierarchy. Refer to Note 7, Derivative Instruments, for further discussion of the measurement of fair value of the derivatives and their underlying assumptions. Stock-Based Compensation The Company has a stock-based incentive award plan for employees, consultants and directors. The Company measures stock-based compensation at the estimated fair value on the grant date and recognizes the amortization of stock-based compensation expense on a straight-line basis over the requisite service period, or when it is probable criteria will be achieved for performance-based awards. Fair value is determined based on assumptions related to the fair value of the Company common stock, stock volatility and risk-free rate of return. The Company has elected to recognize forfeitures when realized. Concentration Risk The Company outsources certain portions of product design and development for its vehicles to third parties. In addition, the Company has outsourced the manufacturing of all of its vehicles to third party manufacturers, including one manufacturer for two of its vehicles, the Stag and Grunt EVO, and this third party is also performing product design and development services on the Stag. One supplier provides the battery and drivetrain components for the Company’s utility terrain vehicle, the Stag. The components are critical to the operation of the Stag. The Company also sources some of the other components from third party suppliers and the third party manufacturer sources other components from third party suppliers or fabricates them from materials sourced from third parties. On January 8, 2024, the Company notified the manufacturer of the Volcon Youth motorcycles that it was terminating the co-branding and distribution agreement with them due to lower than anticipated sales of these units. In March 2024, the Company agreed to allow the manufacturer to keep all fully paid for units manufactured and held by the manufacturer and pay cash of $ 2,070,000 Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023. The Company determined that the update applied to trade receivables, but that there was no material impact to the consolidated financial statements from the adoption of ASU 2016-13. From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consists of the following: Schedule of inventory December 31, 2023 December 31, 2022 Raw materials $ 6,770,892 $ 3,060,160 Work-in-process – 439,839 Finished goods 2,202,242 2,145,884 Total inventory $ 8,973,134 $ 5,645,883 In June 2023, the Company wrote down all remaining Torrot branded inventory in the amount of $ 84,000 2,674,352 The Company also wrote down all remaining Grunt inventory of $ 1,564,643 $ 1,894,842 |
LONG _ LIVED ASSETS
LONG – LIVED ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
LONG – LIVED ASSETS | NOTE 4 – LONG – LIVED ASSETS Property and Equipment Property and equipment consist of the following: Schedule of property and equipment December 31, 2023 December 31, 2022 Machinery, tooling and equipment $ 1,015,568 $ 352,137 Vehicles 213,528 156,648 Internal use manufactured vehicles 22,906 274,385 Fixtures & furniture 90,768 50,768 Leasehold improvements 44,663 44,663 Computers 221,571 228,671 1,609,004 1,107,272 Less: Accumulated depreciation (350,397 ) (505,506 ) Total property and equipment $ 1,258,607 $ 601,766 Depreciation expense for the year ended December 31, 2023 and 2022 w as $ 243,394 $ 757,013 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE In December 2020, the Company entered into a financing arrangement for $ 75,702 8.64 1,211 72 30,942 7.64 753 48 In March 2023, the Company entered into two financing arrangements to purchase two vehicles. The total principal of these arrangements is $ 96,024 11.44 8.63 1,923 The following table provides the maturities of notes payable as of December 31, 2023: Schedule of maturities for notes payable 2024 $ 23,073 2025 23,073 2026 23,073 2027 23,073 2028 12,927 2029 1,816 Total future payments 107,035 Less: Interest (22,619 ) Total notes payable 84,416 Less current portion (15,278 ) Long-term notes payable $ 69,138 |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 12 Months Ended |
Dec. 31, 2023 | |
Convertible Notes | |
CONVERTIBLE NOTES | NOTE 6 - CONVERTIBLE NOTES On August 24, 2022, the Company issued senior convertible notes with an aggregate principal amount of $ 27,173,913 506.25 53,677 8.0 10 40,260 641.25 22,300,321 Company allocated the net proceeds received from the issuance of the Convertible Notes and Note Warrants based on the relative fair values of each resulting in net proceeds of $ 15,122,345 6,561,247 39.6 3,316,409 616,730 to the placement agent of the Convertible Notes as further described in Note 9. These debt issuance costs were amortized as additional interest expense through May 24, 2023. 2,913,632 2,231,403 On May 24, 2023, the Company issued additional senior convertible notes (“New Notes”) with an aggregate principal amount of $ 4,934,783 571.50 8.8 The holders of the New Notes also received fully vested warrants (the “New Warrants”) to purchase 24,155 245.25 Concurrent with the issuance of the New Notes, the Company exchanged the Convertible Notes into two new notes, Series A Notes and Series B Notes both due February 24, 2024 (collectively the “Exchange Notes” and collectively with the New Notes the “May 2023 Notes”). The aggregate principal amount of Series A Notes is $ 3,690,422 168.75 21,870 23,483,491 245.25 95,754 168.75 139,162 The Company also exchanged the 40,258 75,814 In September 2023, the Company completed a public offering and sold 6,223 112.50 112.50 In September 2023, the holders of the May 2023 Notes agreed to modify the due date of these notes to January 31, 2025. See discussion of further modifications below. The Company also executed a security interest to the holders for substantially all of the assets of the Company. The May 2023 Notes contain certain conversion limitations, providing that no conversion may be made if, after giving effect to the conversion, the holder, together with any of its affiliates, would own in excess of 9.99% of the Company’s outstanding shares of common stock after giving effect to such conversion. The Company can force conversion of the Series A and Series B Notes at any time if the weighted average price of the Company’s common stock for ten consecutive trading days equals or exceeds $263.25 or $380.25, respectively, subject to the share limitations described above. In addition to default interest of 10% accruing on the May 2023 Notes, the holders may require the Company to redeem a portion or all of the outstanding May 2023 Notes. Events of default for the May 2023 Notes are defined in the note agreements and include the following: · Failure of the Company to file a registration statement, and have declared effective to register the shares of the Company’s common stock within a specified period (the Company has met this requirement as of September 28, 2023) · Suspension of trading, or failure to be listed, of the Company’s common stock on an eligible market, as defined, for a period of two consecutive trading days or an aggregate of ten trading days in a 365 day period · Failure to deliver shares of the Company’s common stock within five days following a conversion notification · Failure to reserve shares of the Company’s common stock for the conversion of the May 2023 Notes and May 2023 Warrants · Any acceleration prior to maturity of any indebtedness of the Company, declaration of bankruptcy, or court ordered bankruptcy · Final judgment or judgments for payment aggregating in excess of $250,000 are rendered against the Company not covered by insurance or indemnity and are not discharged or stayed pending appeal within 60 days of judgment · Breach of any representation, warranty or covenant by the Company to the transaction documents of the May 2023 Notes and Exchange Warrants · Any material damage to, or loss, theft or destruction of a material amount of the property of the Company · Failure to remove any restrictive legends on any shares of the Company’s common stock issued to the holders of the May 2023 Notes · Electronic transfer of shares of the Company’s common stock is not available As of December 31, 2023, the Company was in compliance with the above covenants. The May 2023 Notes originally required the Company to have unrestricted and unencumbered cash on deposit of $10 million if the outstanding principal (and interest, if any) of the May 2023 Notes is $15 million or greater as of December 31, 2023. The cash on deposit requirement is reduced dollar for dollar to the extent that the outstanding principal (and interest, if any) of the May 2023 Notes is less than $15 million on December 31, 2023. In September 2023, the note holders modified this requirement to change the date from December 31, 2023 to June 30, 2024 and reduced the cash on deposit requirement to $ 5 As discussed in Note 9, the Company completed a 1 for 5 reverse stock split 61.605 The conversion prices of the Exchange Notes, and the exercise prices of the New f $0.22 per share 6,824 6,824 112.50 August 24, 2027 216,855 Holders of the May 2023 Notes, the May 2023 Warrants and Reload Warrants (collectively the “Holders”) do not have voting rights to the extent they have not converted their notes or exercised their warrants. The May 2023 Warrants and Reload Warrants contain certain conversion limitations, providing that a holder thereof may not exercise such warrants to the extent that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such exercise. The May 2023 Warrants and Reload Warrants provide the holders the right to exercise these warrants on a non-cash basis if the Company does not have an effective registration statement for the underlying shares of common stock. The Company has evaluated the issuance of the New Notes and Exchange Notes and related warrants and determined that the Convertible Notes were extinguished based on the conclusion that the terms of the New Notes and Exchange Notes are substantially different from the Convertible Notes in accordance with ASC 470, Debt 22,296,988 1,330,296 14.9% Schedule of convertible notes Fair Value Principal Amount New Notes $ 4,410,058 $ 4,934,783 Series A Exchange Notes 3,298,012 3,690,422 Series B Exchange Notes 20,986,449 23,483,891 Total May 2023 Notes $ 28,694,519 $ 32,109,096 The Company recognized interest expense o f $ 1,739,123 The Company estimated the fair value of the conversion features of the New Notes, Exchange Notes, New Warrants and Exchange Warrants as of May 24, 2023 as discussed in Note 7 below. The Company incurred debt issuance costs of $ 586,968 of $ 302,955 As of December 31, 2023, there were no conversions of the May 2023 Notes. As discussed in Note 14, on March 4, 2024, the Company exchanged the May 2023 Notes for Series A preferred stock. As a result, there are no remaining covenants related to the May 2023 Notes that the Company must comply with and the security interest on the assets of the Company has been released by the noteholders. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES | NOTE 7 - DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES May 2023 Notes and May 2023 Warrants As discussed in Note 6, the Company recognized a loss on the extinguishment of the Convertible Notes based on the fair values of the May 2023 Notes including the conversion feature, and the May 2023 Warrants. The Company determined that there was a derivative liability associated with the conversion features in the May 2023 Notes due to the conversion price being subject to stockholder approval in the conversion feature. Therefore, the Company has separated conversion features from the May 2023 Notes and has recorded them at fair value and will continue to adjust them to fair value until shareholder approval is received as the conversion price is then only adjusted based on anti-dilutive provisions. The Company has also determined that the May 2023 Warrants are derivative liabilities due to the potential adjustment in the exercise prices being subject to stockholder approval. Once shareholder approval is received, the exercise price of the warrants only adjusts based on anti-dilutive provisions. The fair value of the conversion features and warrant liabilities were calculated using a Monte Carlo simulation and the following assumptions and methodologies: Schedule of assumptions May 24, 2023 August 3, 2023 Conversion Feature Liabilities Company stock price on valuation date $ 157.50 $ 123.975 Volatility (closing prices of guideline comparable public companies) 86.3% 84.1% Conversion price per share $ 168.75 $ 168.75 Note term (years) 0.76 0.56 Risk free interest rate 5.1% 5.4% Warrant Liabilities Company stock price on valuation date $ 157.50 $ 123.975 Volatility (closing prices of guideline comparable public companies) 119.2% 115.0% Conversion price per share $ 168.75 $ 168.75 Warrant term (years) 4.25 4.06 Risk free interest rate 3.8% 4.3% In addition to the above factors, the Company also used a probability assessment for the initial and August 3, 2023 valuation to evaluate whether stockholder approval would be received to lower the conversion and exercise prices. The Company utilized a 50/50 assessment that stockholders would or would not approve the lower conversion and exercise price. Management notes that at the time of the assessment, the stockholder vote had not yet started therefore there was no data to determine whether one scenario was more likely than another. Since the stockholders approved the lower conversion and exercise price on August 3, 2023, no probability assessment was used. Based on the above factors, the estimated fair value of the Company’s financial derivative liabilities carried at fair value at May 24, 2023 and August 2, 2023 is as follows: Schedule of fair value of derivative liabilities May 24, 2023 August 3, 2023 Conversion Feature - New Notes $ 663,096 $ 557,168 Conversion Feature - Series A Exchange Notes 970,805 416,672 Conversion Feature - Series B Exchange Notes 4,324,792 2,651,436 New Warrants 3,123,682 2,445,244 Exchange Warrants 9,287,474 7,191,535 Total $ 18,369,849 $ 13,262,055 On August 3, 2023, stockholders approved the adjustment of the conversion price of the New Notes and Exchange Notes and the exercise price of the New Warrants and Exchange Warrants. The conversion and exercise prices can adjust to a floor of $0.22 per share based on certain events defined in the agreements related to these instruments. The Company has concluded that as of August 3, 2023, the conversion feature of the May 2023 Notes and the May 2023 Warrants are no longer derivative liabilities and reclassified them to equity. The Company recognized a gain of 5,107,794 Series A and Series B Warrants As discussed in Note 9 below, the Company issued Series A and Series B Warrants (the “November 2023 Warrants”) in connection with the sale of common units and pre-funded warrant units. Under the terms of the November 2023 Warrants, the number and exercise price are subject to adjustment if the Company completes certain transactions specified in these warrant agreements. Such adjustments are subject to shareholder approval, and some will result in a change in the exercise price and number of warrants, and others will only result in the change in exercise price due to standard anti-dilution provisions. The Company has determined that these warrants should be classified as liabilities and has used a Monte Carlo simulation to estimate the fair values until shareholder approval is received and the number of warrants becomes fixed. The following assumptions were used in the valuations: Schedule of warrants assumptions November 17, 2023 December 31, 2023 Company stock price on valuation date $ 9.864 $ 4.46 Volatility 138.2% 141.4% Risk free interest rate 4.33% 3.78% Dividend yield 0.00% 0.00% Warrant term (years) 5.0 4.9 Time to future transaction (years) 0.75 0.63 Future transaction probability 75% 75% In addition to the above factors, the Company also used a probability assessment for the initial and December 31, 2023 valuation to evaluate whether stockholder approval would be received on January 12, 2024 to lower the conversion and exercise prices. Management notes that at the time of the assessment, the stockholder vote had not yet started but there was a requirement in the offering that the board of directors, management, and a significant shareholder vote in favor of these adjustments which included approximately 20.1% of the shares outstanding as of the transaction date. Further, significant investors in the transaction held shares acquired prior to the record date for eligible shareholders to vote. Although these same investors could not vote the shares received in the November 17, 2023 offering, they could abstain from voting those shares for the shareholder vote and such shares would count towards whether a quorum of shares was received to hold the special meeting for the shareholder approval. Finally, management notes that approval was overwhelmingly positive to adjust the conversion price for the May 2023 Notes and May 2023 Warrants and exercise prices. The Company concluded that it was 100% likely that stockholders would approve the provisions to adjust the number of warrants and exercise price. Based on the above factors, the estimated fair value of the Series A and Series B Warrant liabilities at November 17, 2023 and December 31, 2023 is as follows: Schedule of estimated fair value November 17, 2023 December 31, 2023 Series A Warrant $ 0.6576 $ 0.2970 Series B Warrant $ 0.1996 $ 0.0799 The estimated fair values as of November 17, 2023 were used to allocate the gross proceeds from the issuance of the common units and pre-funded warrant units resulting in a value of $ 10,990,530 3,345,961 1,451,249 Based on the above factors, the estimated fair value of the Company’s warrant liabilities carried at fair value at November 17, 2023 and December 31, 2023 is as follows: Schedule of warrant liabilities at fair value November 17, 2023 December 31, 2023 Series A Warrants $ 10,990,530 $ 4,705,245 Series B Warrants 3,345,961 1,265,822 Total $ 14,336,491 $ 5,971,067 Based on the change in the estimated fair value of the Series A and Series B warrants from November 17, 2023 to December 31, 2023, the Company recorded a gain of $ 8,365,424 The following represents the activity associated with the May 2023 Notes, May 2023 Warrants and Series A and Series B Warrants for the year ended December 31, 2023: Schedule of derivative activity May 2023 Notes and May 2023 Warrants Series A and Series B Warrants Fair value on issuance date $ 18,369,849 14,336,491 Gain on changes in fair value (5,107,794 ) (8,365,424 ) Reclassification to equity (13,262,055 ) – Balance at December 31, 2023 $ – $ 5,971,067 The total gain on the changes in fair value of $ 13,473,218 |
Derivative Financial Instrume_2
Derivative Financial Instruments - USD ($) | 8 Months Ended | ||
Dec. 31, 2023 | Nov. 17, 2023 | May 01, 2023 | |
Offsetting Assets [Line Items] | |||
Derivative fair value | $ 5,971,067 | $ 14,336,491 | |
May 2023 Notes And May 2023 Warrants [Member] | |||
Offsetting Assets [Line Items] | |||
Derivative fair value | 0 | $ 18,369,849 | |
Gain on changes in fair value | (5,107,794) | ||
Reclassification to equity | (13,262,055) | ||
Reclassifications of Temporary to Permanent Equity | 13,262,055 | ||
Series A And Series B Warrants [Member] | |||
Offsetting Assets [Line Items] | |||
Derivative fair value | 5,971,067 | $ 14,336,491 | |
Gain on changes in fair value | (8,365,424) | ||
Reclassification to equity | 0 | ||
Reclassifications of Temporary to Permanent Equity | $ 0 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS During 2022, the Company issued purchase orders and made prepayments for prototype parts o f $ 21,860 December 31, 2023 In November 2020, the Company entered into an operating lease with an entity controlled by the Company’s two founders for its future headquarters and production facility in Liberty Hill, Texas. The lease had a lease term of 5 years, and monthly payments ranging from approximately $15,000 per month to $17,000 per month over the lease term and gave the Company access to the land for use in testing its vehicles prior to the construction of any facilities. In February 2021, the Company entered into an amendment of the lease related to its future headquarters to expand the leased premises. The Company paid an additional security deposit of $139,230 and additional prepaid rent of $315,588. The total minimum lease payments under the amended lease totaled approximately $3,930,170. In October 2021, the Company began discussions for an additional amendment to the lease, in anticipation of manufacturing the Stag at this location, which would have resulted in the monthly payment increasing to $100,000 for the first year of the lease and increasing annually throughout the term of the lease to $107,000 in the final year. Monthly payments for the initial lease and the amended agreement would have begun at the time a certificate of occupancy was received by the landlord. The Company evaluated the cost of this facility in relation to other lower cost options, including having a third party manufacturer the Stag, and determined that it would be in the best interest of the Company to terminate this lease. On April 27, 2022, the Company informed the landlord that it would be terminating the lease. On May 27, 2022, the landlord notified the Company that the landlord would refund $85,756 of the prepaid rent and security deposit balance of $601,818 paid by the Company. The unrefunded portion of the prepaid rent and security deposit related to some survey, architecture and construction design costs that were incurred by the landlord prior to the Company terminating the lease. In September and October 2023, the landlord notified the Company that there were additional costs that exceeded the amount of the refund and the landlord released the Company from paying any amounts in excess of the original expected refund. The landlord also released the Company from any remaining obligations under the lease and amendments. The Company has recognized a loss on the termination of this lease of $ 85,756 247,525 Total amortization expense for the right-of-use asset recorded for the initial lease for the year ended December 31, 2022 was $ 61,709 . There was no In June 2021, the Company entered into an agreement with a company controlled by the Company’s Chairman and co-founder to lease office space for $2,000 per month for a period of one year. In May 2022, the Company informed the landlord that it would terminate this lease, and the landlord confirmed that the lease terminated effective September 1, 2022. Total expense recorded for this lease for the three and nine months ended September 30, 2022 was $ 4,000 16,000 On August 28, 2020, the Company entered into three-year consulting agreements with Pink Possum, and Highbridge Consultants, LLC (“Highbridge”), an entity controlled by Mr. Adrian James, a co-founder of the Company, pursuant to which Messrs. Okonsky and James provide the Company with services. In consideration for entering into the consulting agreements, the Company issued the two entities ten-year warrants to purchase the Company’s common stock at an exercise price of $0.90 per share. The number of shares of common stock issuable pursuant to the warrants was based on the number of shares of the Company’s common stock outstanding at the time of exercise and provided that Pink Possum and Highbridge would receive 18.75% and 25%, respectively, of the Company’s shares of common stock outstanding at the time of exercise on a fully diluted basis. On March 26, 2021 and March 25, 2021, respectively, Pink Possum and Highbridge entered into amendments to the consulting agreements agreeing to exchange the original warrants for new ten-year warrants to purchase 21,112 27,778 5.6 million 7.4 million 24,479 In addition, pursuant to the consulting agreements, upon the occurrence of a Fundamental Transaction (as defined below) for an aggregate gross sales price of $100.0 million or more, each entity will receive a cash payment equal to 1% of such gross sales price. For the purposes of the consulting agreements, “Fundamental Transaction” means any of the following: (i) a consolidation or merger involving the Company if the holders of the voting securities of the Company that are outstanding immediately prior to the consummation of such consolidation or merger do not, immediately after the consummation of such consolidation or merger, hold voting securities that collectively possess at least a majority of the voting power of all the outstanding securities of the surviving entity of such consolidation or merger or such surviving entity’s parent entity; (ii) a transfer or issuance (in a single transaction or series of related transactions) by one or more of the Company and its stockholders to one person or to any group of persons acting in concert, of shares of the Company’s capital stock then collectively possessing 50% or more of the voting power of all then outstanding shares of the Company’s capital stock (computed on an as-converted to common stock basis); or (iii) any sale, license, lease, assignment or other disposition of all or substantially all of the assets of the Company. Furthermore, commencing upon the completion of the Company’s initial public offering of the shares of our common stock, if the Company’s market capitalization exceeds $300.0 million for a period of 21 consecutive trading days, each of the entities will receive an additional cash payment equal to $15.0 million; provided that the Company will have the right, in its sole discretion, to make the foregoing $15.0 million payment by the issuance of shares of the Company’s common stock. The foregoing amounts will be payable to the entities if the above milestones occur any time prior to the ten-year anniversary of the original consulting agreements, or August 28, 2030. In December 2022, the Company entered into an employment agreement with Mr. Okonsky whereby Mr. Okonsky became an employee on January 2, 2023 and the consulting agreement with Pink Possum was terminated. However, the warrants to Pink Possum, and the provisions for a Fundamental Transaction and the market capitalization thresholds and related payments owed to Pink Possum if these were to occur remain in effect subsequent to the employment agreement. Mr. Okonsky informed the Company on January 27, 2024 that he would forfeit his salary and benefits effective February 1, 2024. In March 2024, the Company entered into a consulting agreement with Mr. Okonsky and he is entitled to a monthly fee of $5,000 and payment of 1% of the gross proceeds from any merger, sale or change of control transaction (as determined by the board of directors) entered by the Company for a period of up to 6 months following the termination of the consulting agreement. This consulting agreement terminates any remaining provisions of the Pink Possum agreement noted above other than the warrants remain outstanding. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY On June 14, 2023, the Company’s stockholders approved an increase in the Company’s authorized shares of common stock from 100,000,000 to 250,000,000 5,000,000 0.00001 Common stock On February 1, 2022, the Company sold 29,630 675.00 18,089,184 1,910,816 1,482 843.75 5 On May 24, 2023, the Company sold 26,667 168.75 3,998,685 501,300 On September 18, 2023, the Company sold 6,222 112.50 571,400 128,600 1,245 140.625 5.5 As discussed in Note 6 above, on May 24, 2023, the Company issued the May 2023 Notes and May 2023 Warrants, along with the warrants to the placement agent in August 2022 with the issuance of the Convertible Notes. The Company received consent from the underwriter to issue such securities. In addition, the Company was required to reserve 480,516 2,684 November 2023 Common Units and Pre-Funded Warrant Units On November 17, 2023, the Company sold (i) 73,913 878,469 804,618 In addition, the Company granted the underwriter a 45-day option to purchase additional 142,858 shares of common stock and/or Pre-Funded Warrants, representing up to 15% of the number of common stock and Pre-Funded Warrants sold in the Public Offering, and/or additional 18,724 Series A Warrants representing up to 15% of the Series A Warrants sold in the Public Offering, and/or additional 18,724 Series B Warrants representing up to 15% of the Series B Warrants sold in the Public Offering solely to cover over-allotments, if any. The underwriter partially exercised its over-allotment option with respect to 18,724 Series A Warrants and Series B Warrants. A total of 352,057 16.2 million 1,444,547 Series A Warrants Each Series A Warrant has an initial exercise price per share equal to $ 24.75 November 17, 2028 Share Combination Event Adjustments Conditioned upon the receipt of the Warrant Stockholder Approval at a required special meeting of stockholders (“Special Meeting”), if at any time on or after the date of issuance there occurs any share split, share dividend, share combination, recapitalization or other similar transaction involving the Company’s common stock (collectively a “Share Event”) and the lowest daily VWAP during the five consecutive trading days prior to the date of such event and the five consecutive trading days after the date of such event is less than the exercise price then in effect, then the exercise price of the Series A Warrant shall be reduced to the lowest daily VWAP during such period and the number of warrant shares issuable shall be increased such that the aggregate exercise price payable thereunder, after taking into account the decrease in the exercise price, shall be equal to the aggregate exercise price on the date of issuance. As discussed in Note 14 below, approval of this adjustment by the stockholders was made on January 12, 2024. Cashless Exercise If at the time a holder exercises its Series A Warrants, a registration statement registering the issuance of the shares of common stock underlying the Series A Warrants under the Securities Act is not then effective or available and an exemption from registration under the Securities Act is not available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the Series A Warrants. Conditioned upon the receipt of the Warrant Stockholder Approval at a required Special Meeting, a holder of Series A Warrants may also provide notice and elect an “alternative cashless exercise” pursuant to which they would receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cash exercise of the Series A Warrant and (y) 3.0. As discussed in Note 14 below, approval of this adjustment by the stockholders was made on January 12, 2024. Adjustments and Activity Subsequent to December 31, 2023 As discussed in Note 14, the Company completed a 1 for 45 reverse stock split on February 2, 2024. Prior to this reverse split, 18,941 Series A Warrants were exercised under the alternative cashless exercise provision in the period from January 1, 2024 to February 2, 2024. As a result of the reverse stock split, the total number of Series A Warrants and exercise price for the remaining warrants was adjusted per the provisions of a Share Event and the total number of Series A Warrants became 3,979,955 and the exercise price became $1.8646. A total of 3,937,910 of the Series A Warrants were exercised under the alternative cashless exercise provision and 42,045 remain outstanding as of March 27, 2024. Series B Warrants Each Series B Warrant offered has an initial exercise price per share equal to $ 37.80 November 17, 2028 Anti-Dilution Provisions Subject to certain exemptions outlined in the Series B Warrant, for the life of the warrant, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or grants any right to reprice, or otherwise disposes of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any common stock or convertible security, at an effective price per share less than the exercise price of the Series B Warrant then in effect (a “Dilutive Issuance”), the exercise price of the Series B Warrant will be reduced to an amount equal to the lowest daily VWAP during the period commencing five consecutive trading days following the Dilutive Issuance, subject to a floor price of $0.13; provided that upon the receipt of the Warrant Stockholder Approval at a required Special Meeting, the floor price will be removed and, upon a Dilutive Issuance, the number of shares issuable upon exercise of the Series B Warrant shall be proportionally adjusted so that the aggregate exercise price of the Series B Warrant shall remain unchanged. As discussed in Note 14 below, approval of this adjustment by the stockholders was made on January 12, 2024. In addition, conditioned upon the receipt of the Warrant Stockholder Approval at the Special Meeting, for the life of the Series B Warrant, the Company may voluntarily reduce the exercise price of the Series B Warrant. The Company refers to this price adjustment feature as the “Voluntary Adjustment Provision”. As discussed in Note 14 below, approval of this adjustment by the stockholders was made on January 12, 2024. Share Combination Event Adjustments Conditioned upon the receipt of the Warrant Stockholder Approval, if at any time on or after the date of issuance there occurs any share split, share dividend, share combination, recapitalization or other similar transaction involving the Company’s common stock (collectively a “Share Event”) and the lowest daily VWAP during the five consecutive trading days prior to the date of such event and the five consecutive trading days after the date of such event is less than the exercise price then in effect, then the exercise price of the Series B Warrant shall be reduced to the lowest daily VWAP during such period and the number of warrant shares issuable shall be increased such that the aggregate exercise price payable thereunder, after taking into account the decrease in the exercise price, shall be equal to the aggregate exercise price on the date of issuance. As discussed in Note 14 below, approval of this adjustment by the stockholders was made on January 12, 2024. Adjustments and Activity Subsequent to December 31, 2023 As discussed in Note 14, the Company completed a 1 for 45 reverse stock split on February 2, 2024. Prior to this reverse split, no Series B Warrants had been exercised. As a result of the reverse stock split, the total number of Series B Warrants and exercise price for the remaining warrants was adjusted per the provisions of a Share Event and the total number of Series B Warrants became 7,137,082 and the exercise price became $1.8646. A total of 70,000 of the Series B Warrants were exercised and 7,067,062 remained outstanding as of March 4, 2024, when the Company exchanged the May 2023 Notes for Series A Convertible Preferred Stock with a conversion price of $1.33 per share, as discussed further in Note 14. As a result of this exchange, the Series B Warrant amounts and exercise price were further adjusted based on the Anti-Dilution Provisions and the new number of Series B Warrants is 14,546,024 and the exercise price is $0.9059. As of March 27, 2024, 14,546,024 of the Series B Warrants remain outstanding. Other Warrants As discussed in Note 6, the Company issued the Note Warrants, which were fully vested, to purchase 40,258 641.25 August 24, 2027 2,684 801.5625 February 24, 2028 The Company valued all of these warrants using the closing price of the Company’s common stock on August 24, 2022 of $549.00, volatility of 79.81% based on peer companies, risk free interest rate of 3.03%, no dividends and an estimated life of 2.5 years. In May 2023, all of the Note Warrants to purchase 40,258 75,814 August 24, 2027 24,157 As noted below, 6,824 of the Exchange Warrants were exercised at a price of $78.75 per share and 6,824 Reload Warrants were issued with an exercise price of $ 112.50 On October 11, 2023, the Company entered into an amendment (the “Amendment”) to its Stag UTV development and Stag supplier agreements with GLV Ventures (“GLV”). Pursuant to the Amendment, GLV agreed to provide the Company with extended payment terms and provide the Company with credit against new vehicles for the value of certain parts purchased by the Company. In consideration for entering into the Amendment No. 1, the Company agreed to issue GLV (or its designee) five-year warrants to purchase 8,889 shares of Company common stock with an exercise price of $94.50 per share, which was equal to the closing price of the Company’s common stock on the date of the Amendment No. 1, 4,445 shares were fully vested upon issuance and the remaining warrants vested 45 days from the issuance date. Warrant Inducements On October 13, 2023, the Company entered into an inducement offer letter agreement (the “Inducement Letter”) with the three holders (each, a “Holder”) of the May 2023 Warrants. The Company agreed to reduce the exercise price of up to 21,623 to the lesser of (i) $78.75 (after giving effect to the 1:5 reverse stock split that went into effect on October 13, 2023) and (ii) the exercise price in effect at the time of exercise of the Existing Warrants if further adjusted in accordance with the terms of the May 2023 Warrants ($61.605 per share after adjustment for the lowest day’s VWAP for the five days following the reverse stock split). The reduction of the exercise price of such Existing Warrants remained in effect until October 27, 2023 (the “Inducement Period”). The exercise price for any Warrants not exercised prior to the end of the Inducement Period would not result in a change in the exercise price under the original terms of the Existing Warrants. The Holders exercised 6,824 warrants of the 21,623 warrants available for exercise. Due to the exchange of the May 2023 Notes for Series A convertible preferred stock as discussed further in Note 14 below, the exercise price of the warrants issued for those exercised in the Inducement Period were adjusted to $1.33. In addition, pursuant to the Inducement Letter, the Holders who exercise such Existing Warrants for cash on or prior to October 27, 2023 would receive a new warrant (“Reload Warrant”) to purchase a number of shares of common stock equal to the number of shares of common stock exercised under the Existing Warrants. The exercise price of the Reload Warrants was determined based on the terms of the Existing Warrants, which was $61.605 per share. On October 20, 2023, the Holders exercised 2,332 warrants at $61.605 per share. Due to the exchange of the May 2023 Notes for Series A convertible preferred stock as discussed further in Note 14 below, the exercise price of the Reload Warrants was adjusted to $1.33. On October 29, 2023, in an effort to raise cash, the Company entered into an inducement offer letter agreement (the “Inducement Reprice Letter”) with the Holders of the Company’s May 2023 Warrants. Pursuant to the Inducement Reprice Letter, in exchange for an aggregate cash payment of $ 346,500 The following is the activity related to common stock warrants during the year ended December 31, 2023: Schedule of warrants activity Common Stock Warrants Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2023 67,060 $ 524.97 Granted (1) 6,399,061 $ 4.71 Canceled – $ – Exchanged (40,260 ) $ 641.25 Expired – $ – Exercised (813,774 ) $ 19.38 Outstanding at December 31, 2023 5,612,087 $ 7.04 4.87 $ 0 Exercisable at December 31, 2023 5,612,087 $ 7.04 4.87 $ 0 (1) The number of warrants granted and the weighted average exercise price is based on the adjustment to certain warrants as of February 2, 2024, the date of the Company’s 1 for 45 reverse stock split. As discussed above, further adjustments occurred based on the change in the change in the VWAP of the Company’s common stock from February 2, 2024 and due to the exchange of the May 2023 Notes for Series A convertible preferred stock on March 4, 2024. During the years ended December 31, 2023 and 2022, the Company recognized expense of $ 412,000 7,302 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 10 – STOCK-BASED COMPENSATION In January 2021, the Company’s board of directors adopted the Volcon, Inc. 2021 Stock Plan, (the “2021 Plan”). The 2021 Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, and restricted stock unit awards to employees, members of the board of directors and consultants (including restricted stock units issued prior to the adoption of the plan as further discussed below). The Company initially reserved a total of 13,334 17,778 e 8,752 . Awards vest according to each agreement and as long as the employee remains employed with the Company or the consultant continues to provide services in accordance with the terms of the agreement. Restricted Stock Units The following is the restricted stock unit activity for the year ended December 31, 2023 Schedule of restricted stock unit activity Outstanding January 1, 2023 336 Granted – Vested (1) (204 ) Canceled (132 ) Outstanding December 31, 2023 – (1) 112 RSUs were subject to cancellation due to termination of employment. However, the Company entered into a modification to allow the employee to fully vest in these RSUs as part of a severance agreement. The Company recorded additional expense of $31,487 during the year ended December 31, 2023 related to this modification. In January 2022, the Company modified the vesting terms of 445 RSUs that had vested as of December 31, 2021 to extend the vesting through May 15, 2022. The Company granted an additional 112 RSUs to the holders of these RSUs that vesting was extended and these additional RSUs vested as of May 15, 2022. The Company recorded an additional expense of $1,126,250 during 2022 related to these modifications. For the years ended December 31, 2023 and 2022, the Company recognized expenses for RSUs of $ 61,623 1,267,550 Performance Shares On March 1, 2022, the Compensation Committee of the board of directors approved a grant of 199 82,050 14 In 2022 the compensation committee approved reserving 1,112 689 618 3 68 257,717 423 In addition, the compensation committee also approved reserving 1,112 Stock Options The following is the common stock options to employees and consultants for services during the year ended December 31, 2023: Schedule of stock options activity Common Stock Options Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2023 14,694 $ 694.31 Granted 11,256 $ 169.08 Forfeited (6,772 ) $ 635.63 Exercised (112 ) $ 225.00 Outstanding at December 31, 2023 19,066 $ 407.97 8.72 $ – Exercisable at December 31, 2023 8,263 $ 594.62 8.13 $ – The Company valued the options using the closing stock price of the Company’s common stock on the date of grant and the following assumptions: Schedule of assumptions 2023 2022 Volatility (based on peer companies) 79 83 71 105 Risk free interest rate 3.54 4.77 0.77 0.85 Dividends None None Estimated life in years 6 6 During the years ended December 31, 2023 and 2022, the Company recognized share-based compensation expenses of $ 1,896,585 1,966,958 661,734 Total stock-based compensation recorded for the years ended December 31, 2023 and 2022 for all stock based compensation awards, including warrants, has been recorded as follows: Schedule of stock-based compensation expense 2023 2022 Cost of Goods Sold $ 211,981 $ 578,552 Sales and Marketing 693,559 764,517 Product Development 837,271 704,152 General and Administrative 885,114 1,211,788 Total $ 2,627,925 $ 3,259,009 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | NOTE 11 – LOSS PER COMMON SHARE The basic net loss per common share is calculated by dividing the Company’s net loss available to common stockholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. Schedule of loss per common share Year ended Year ended December 31, 2023 December 31, 2022 Numerator: Net loss $ (45,071,210 ) $ (34,235,405 ) Denominator: Denominator for basic and diluted net loss per common share - weighted average of common shares 192,312 105,275 Basic and diluted net loss per common share $ (234.37 ) $ (325.20 ) Common shares consisting of shares potentially dilutive as of December 31, 2023 and 2022 are as follows: Schedule of common shares consisting of shares potentially dilutive 2023 2022 Convertible Notes 521,206 53,677 Warrants 5,612,087 67,060 Stock options 19,066 14,694 Restricted stock units – 336 Total 6,152,359 135,767 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 – INCOME TAXES Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company’s financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. Due to losses since inception and for all periods presented, no income tax benefit or expense has been recognized as a full valuation allowance has been established for any tax benefit that would have been recognized for the loss in any period presented. The components of income tax expense (benefit) for the years ended December 31, 2023 and 2022 are as follows: Schedule of components of income tax expense (benefit) 2023 2022 Expected federal income tax benefit at statutory rate $ 9,464,954 $ 7,184,840 Non-deductible expenses 1,183,767 (288,249 ) Research and development credit – 595,244 Return to provision true up 108,959 93,285 Change in valuation allowance (10,757,680 ) (7,585,120 ) Income tax benefit $ – $ – Significant components of the Company’s deferred tax assets and liabilities at December 31, 2023 and 2022 are as follows: Schedule of deferred tax assets and liabilities 2023 2022 Deferred tax assets Net operating losses $ 15,468,757 $ 9,106,430 Debt basis difference 5,121,397 – Depreciation and amortization 1,701,768 1,502,868 Research & development credit 1,099,535 1,308,956 Lease liability 246,704 322,167 Stock-based compensation 3,235,732 3,103,037 Inventory 152,749 1,290,968 Accrued expenses 66,909 233,284 Capital loss carryover 176,950 261,922 Dealer rebates 459,713 161,469 Other 21,828 15,605 Total 27,752,042 17,306,705 Valuation allowance (27,171,016 ) (16,661,612 ) Net deferred tax asset 581,026 645,093 Deferred tax liabilities Prepaid expenses (342,421 ) (328,836 ) Right-of-use assets (238,605 ) (316,257 ) Total net deferred taxes Deferred tax liabilities $ – $ – Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences will not be realized in the foreseeable future. The utilization of the Company’s net operating losses and credit carryovers may be subject to limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code. The Company’s cumulative net operating loss carry forward of $ 73.7 The Company has recorded no liability for income taxes associated with unrecognized tax benefits and has not recorded any liability associated with unrecognized tax benefits. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
LEASES | NOTE 13 – LEASES The components of lease cost for operating leases for the years ended December 31, 2023 and 2022 are as follows: Schedule of lease cost for operating leases 2023 2022 Lease Cost Operating lease cost $ 468,997 $ 524,036 Short-term lease cost 215,289 263,277 Variable lease cost – – Sublease income – – Total lease cost $ 684,286 $ 787,313 Supplemental cash flow information related to leases for the years ended December 31, 2023 and 2022 are as follows: Schedule of supplemental cash flow information related to leases 2023 2022 Other Lease Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 359,347 $ 354,340 Amortization of right-of-use assets $ 369,774 $ 430,644 The following table summarizes the lease-related assets and liabilities recorded on the balance sheet at December 31, 2022 and 2021: Schedule of lease-related assets and liabilities 2023 2022 Lease Position Operating Leases Operating lease right-of-use assets $ 1,136,213 $ 1,505,987 Right-of-use liability operating lease - short- term 399,611 391,117 Right-of-use liability operating lease - long-term 775,170 1,143,011 Total operating lease liabilities $ 1,174,781 $ 1,534,128 The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company did not recognize any initial right-of-use asset and lease liabilities during the year ended December 31, 2022. Schedule of right-of-use asset and lease liabilities December 31, 2023 Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 2.7 Weighted-average discount rate Operating leases 6.82 The following table provides the maturities of lease liabilities at Dece mber 31, 2023: Schedule of maturities of lease liabilities Operating Leases 2024 $ 471,638 2025 485,702 2026 340,591 Total future undiscounted lease payments 1,297,931 Less: Interest (123,148 ) Present value of lease liabilities $ 1,174,783 The Company closed its Denver, Colorado, store location (the Company’s only store) in June 2022 and entered into a lease termination agreement in July 2022 to relieve the Company of its future obligations under the lease. The Company has recorded a loss of $ 148,322 46,289 In July 2022, the Company entered into a new lease agreement for office space in Round Rock, Texas with the landlord of its current Round Rock facilities. The lease began in August 2022 and terminates in August 2026. In connection with signing this lease, the landlord has agreed to terminate the lease on one of the current facilities that would have expired in December 2023. The additional monthly rent after consideration of the rent on the facility being canceled is not significant. As discussed in Note 7 above, the Company terminated the lease, and related amendment, as of September 30, 2022 for a leased warehouse facility in conjunction with entering into the lease agreement for office space and the above does not include any amounts related to that lease. There was an insignificant impact to the Company’s operations for the year ended December 31, 2022 due to the termination of this lease. The total loss on lease terminations for the years ended December 31, 2023 and 2022 was $ 85,756 378,176 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 - SUBSEQUENT EVENTS Special Stockholder Meeting On January 12, 2024, the Company held a special stockholder meeting and the following proposals were approved by stockholders: A proposal to allow the board of directors of the Company to complete a reverse stock split between 1 for 2 shares outstanding, up to 1 for 45 shares outstanding. A proposal to approve adjustments to certain terms of the Series A and Series B warrants (as more fully described in Note 9) issued in the November 2023 Offering as follows: Series A Warrants · Approval of the share combination adjustment provision · Approval of the alternative cashless exercise provision Series B Warrants · Approval of the anti-dilution adjustment provision · Approval of the voluntary adjustment provision · Approval of the share combination adjustment provision Reverse Stock Split On January 27, 2024, the board of directors approved a reverse 1 for 45 stock split effective at 4:01pm U.S. Eastern Standard Time. Any fractional shares as a result of the reverse stock split were rounded up to one full share of common stock. As discussed in Note 6, the conversion price of the May 2023 Notes and exercise price of the May 2023 Warrants were subject to adjustment to the lowest day’s VWAP in the five-day period following the reverse split, which was $1.8646 per share. As discussed below, some of the May 2023 Notes were converted subsequent to December 31, 2023 and the remainder were exchanged for Series A convertible Preferred Stock. As discussed in Note 9, the November 2023 Warrants were subject to adjustment to the lowest day’s VWAP in the five days prior to and five days following the reverse split. The lowest VWAP during this period was $1.8646. Employment Matters On January 13, 2024, the Company’s Chief Executive Officer (“CEO”), Jordan Davis, resigned his employment with the Company effective February 2, 2024. The Company entered into a 30-day consulting agreement with Mr. Davis and paid him $12,500. On January 27, 2024, the Company’s founder, Chief Technology Officer (“CTO”) and Chairman of the Board of Directors, Christian Okonsky, resigned as CTO effective February 1, 2024. Mr. Okonsky will remain as Chairman of the Board of Directors. He also entered into a consulting agreement as further discussed in Note 8, and to be paid a monthly fee of $5,000. On January 30, 2024, John Kim, an independent board member of the Company signed an employment agreement with the Company to become the CEO effective February 3, 2024. Mr. Kim’s salary will be $800,000 and he will have an annual bonus of $250,000. Mr. Kim will also receive 5% of the gross proceeds or other consideration if the Company completes a sale of substantially all of its assets or otherwise enters into a change of control transaction. Mr. Kim is also entitled to an equity award equal to 10% of the Company’s fully diluted equity, subject to stockholder approval of an increase in the shares available under the 2021 Plan or a new equity plan. On January 30, 2024, Greg Endo, the Company’s Chief Financial Officer, signed a new employment agreement with the Company. Mr. Endo’s salary will be increased to $300,000 and he will have an annual bonus of up to 50% of his salary as determined by the compensation committee of the board of directors. Mr. Endo has agreed to a reduction in the salary to $238,500 through the end of 2024. Mr. Endo will also receive 5% of the gross proceeds or other consideration if the Company completes a sale of substantially all of its assets or otherwise enters into a change of control transaction. Mr. Endo is also entitled to an equity award equal to 4% of the Company’s fully diluted equity, subject to stockholder approval of an increase in the shares available under the 2021 Plan or a new equity plan. On February 23, 2024, Katherine Hale resigned her position as Chief Marketing Officer. Ms. Hale was provided a severance amount of $112,500 which will be paid out over three monthly installments beginning in March 2024. Conversion and Exchange of May 2023 Notes for Preferred Stock Subsequent to December 31, 2023 through March 1, 2024, holders of the May 2023 Notes converted principal of $7,414,025 to common stock at a conversion price of $1.8646. On March 4, 2024, the Company designated 25,000 shares of preferred stock as Series A Convertible Preferred Stock (“Preferred Stock”) with a par value of $0.00001 per share and exchanged the remaining May 2023 Notes (principal of $24,694,670) for Preferred Stock . For each $1,000 of May 2023 Note principal, one share of Preferred Stock was issued and any principal held by an investor below $1,000 was granted one additional share of Preferred Stock. A total of 24,698 shares were issued in connection with the exchange. The Preferred Stock is initially convertible into share of the Company’s common stock at $1.33 per share. Conversion of Preferred Stock to common stock of the Company by the holders of the Preferred Stock is limited based on ownership restrictions of either 4.99% or 9.99%. The conversion price is subject to adjustment for anti-dilution provisions with an initial floor of $0.98 per share, subject to adjustment to $0.50 per share if shareholder approval is received. The Company will include a proposal for shareholders to approve this adjustment in its 2024 annual meeting proposals. Such meeting is expected to be held on May 17, 2024. As discussed further in Note 9, as a result of this exchange, the Series B Warrants exercise price was adjusted to the lowest VWAP in the five-day period following this exchange which resulted in the exercise price of $0.9059 and additional Series B warrants being issued. Through March 27, 2024, certain Preferred Stockholders converted $2,287,600 of their shares for 1,720,000 shares of common stock. The total number of shares of common stock issuable for the conversion of the remaining Preferred Stock is 16,847,424 based on the $1.33 conversion price. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The basis of accounting applied is the United States Generally Accepted Accounting Principles (U.S. GAAP). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts, transactions and balances have been eliminated in consolidation. As discussed in Notes 9 and 14, the Company completed a reverse 1 for 5 stock split on October 13, 2023 and a reverse 1 for 45 stock split on February 2, 2024, all share and per share amounts have been adjusted to reflect the impact of these reverse stock splits. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities as of the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. There were no |
Revenue Recognition | Revenue Recognition For sales to dealers or distributors revenue is recognized when transfer of control of the product is made as there is no acceptance period or right of return. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring control of vehicles, parts, and accessories. Beginning in February 2023 the Company began selling the Brat E-Bike and Volcon Youth motorcycles directly to consumers in addition to dealers. Revenue for direct to consumer sales is recognized when transfer of control of the product is made to the consumer. Consideration that is received in advance of the transfer of goods is recorded as customer deposits until delivery has occurred or the customer cancels their order, and the consideration is returned to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s sales do not presently have a financing component. Sales promotions and incentives. Shipping and handling charges and costs. |
Product Warranties | Product Warranties The Company provides a one-year warranty on vehicles, and a two-year warranty on the battery pack. The Company accrues warranty reserves at the time revenue is recognized. Warranty reserves include the Company’s best estimate of the projected cost to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the evaluation of historical data. The Company reviews its reserves quarterly to ensure that the accruals are adequate to meet expected future warranty obligations and will adjust estimates as needed. Factors that could have an impact on the warranty reserve include the following: changes in manufacturing quality, shifts in product mix, changes in warranty coverage periods, product recalls and changes in sales volume. Warranty expense is recorded as a component of cost of goods sold in the statement of operations and is recognized as a current liability. |
Inventory and Inventory Deposits | Inventory and Inventory Deposits Inventories and prepaid inventory deposits are stated at the lower of cost (first-in, first-out method) or net realizable value. Certain vendors require the Company to pay an upfront deposit before they manufacture and ship the Company’s parts or accessories. These payments are classified as prepaid inventory deposits on the balance sheet until title and risk of loss transfers to the Company, at which time they are classified as inventory. Raw materials inventory costs include the cost of parts, including duties, tariffs, and shipping. Work-in-process and finished goods include the cost of parts, labor and manufacturing overhead costs associated with the assembly of the vehicle. Finished goods also include accessories for the vehicle and branded merchandise such as hats and shirts. Through August 2022 the Company assembled the Grunt motorcycle in a leased facility. The Company ceased assembly operations at the end of August and outsourced the assembly of the Grunt to a third part y. In May 2023, |
Property and Equipment | Property and Equipment Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Schedule of estimated useful lives of the assets Category Estimated Machinery, tooling and equipment 3 7 Vehicles 5 Internal use manufactured vehicles 1 Furniture & Fixtures 5 Computers 3 Leasehold improvements are depreciated over the shorter period of their estimated useful life or term of the lease. |
Long-Lived Assets | Long-Lived Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical carrying cost value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to the carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. |
Leases | Leases Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expenses for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component. ASC 842 defines initial direct costs as only the incremental costs of signing a lease. Initial direct costs related to leasing that are not incremental are expensed as general and administrative expenses in our statements of operations. The Company’s operating lease agreements primarily consist of leased real estate and are included within ROU assets – operating leases and ROU lease liabilities – operating leases on the balance sheets. The Company’s lease agreements may include options to extend the lease, which are not included in minimum lease payments unless they are reasonably certain to be exercised at lease commencement. The Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. |
Research and Development Expenses | Research and Development Expenses The Company records research and development expenses in the period in which they are incurred as a component of product development expenses. |
Income Taxes | Income Taxes Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on the differences between financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to an asset or liability based on the expected reversal dates of the specific temporary differences. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820 Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: · Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. · Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 — Inputs that are unobservable for the asset or liability. The following section describes the valuation methodologies that the Company used to measure different financial instruments at fair value. Debt The fair value of the Company’s debt approximated the carrying value of the Company’s debt as of December 31, 2023 and 2022. Factors that the Company considered when estimating the fair value of its debt included market conditions, and term of the debt. The level of the debt would be considered as Level 2. The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity The Company accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as a liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement - Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. The Monte Carlo simulation is used to determine the fair value of derivatives for instruments with embedded conversion features and for free standing warrants as discussed further in Note 7. Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts receivable, inventory, other assets, and accounts payable and accrued expenses approximate their fair value due to the short-term maturity of those items. Warrant Liabilities and Convertible Liabilities The fair value of the derivative liabilities and warrant liabilities is classified as Level 3 within the Company’s fair value hierarchy. Refer to Note 7, Derivative Instruments, for further discussion of the measurement of fair value of the derivatives and their underlying assumptions. |
Stock-Based Compensation | Stock-Based Compensation The Company has a stock-based incentive award plan for employees, consultants and directors. The Company measures stock-based compensation at the estimated fair value on the grant date and recognizes the amortization of stock-based compensation expense on a straight-line basis over the requisite service period, or when it is probable criteria will be achieved for performance-based awards. Fair value is determined based on assumptions related to the fair value of the Company common stock, stock volatility and risk-free rate of return. The Company has elected to recognize forfeitures when realized. |
Concentration Risk | Concentration Risk The Company outsources certain portions of product design and development for its vehicles to third parties. In addition, the Company has outsourced the manufacturing of all of its vehicles to third party manufacturers, including one manufacturer for two of its vehicles, the Stag and Grunt EVO, and this third party is also performing product design and development services on the Stag. One supplier provides the battery and drivetrain components for the Company’s utility terrain vehicle, the Stag. The components are critical to the operation of the Stag. The Company also sources some of the other components from third party suppliers and the third party manufacturer sources other components from third party suppliers or fabricates them from materials sourced from third parties. On January 8, 2024, the Company notified the manufacturer of the Volcon Youth motorcycles that it was terminating the co-branding and distribution agreement with them due to lower than anticipated sales of these units. In March 2024, the Company agreed to allow the manufacturer to keep all fully paid for units manufactured and held by the manufacturer and pay cash of $ 2,070,000 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023. The Company determined that the update applied to trade receivables, but that there was no material impact to the consolidated financial statements from the adoption of ASU 2016-13. From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of the assets | Schedule of estimated useful lives of the assets Category Estimated Machinery, tooling and equipment 3 7 Vehicles 5 Internal use manufactured vehicles 1 Furniture & Fixtures 5 Computers 3 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Schedule of inventory December 31, 2023 December 31, 2022 Raw materials $ 6,770,892 $ 3,060,160 Work-in-process – 439,839 Finished goods 2,202,242 2,145,884 Total inventory $ 8,973,134 $ 5,645,883 |
LONG _ LIVED ASSETS (Tables)
LONG – LIVED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment December 31, 2023 December 31, 2022 Machinery, tooling and equipment $ 1,015,568 $ 352,137 Vehicles 213,528 156,648 Internal use manufactured vehicles 22,906 274,385 Fixtures & furniture 90,768 50,768 Leasehold improvements 44,663 44,663 Computers 221,571 228,671 1,609,004 1,107,272 Less: Accumulated depreciation (350,397 ) (505,506 ) Total property and equipment $ 1,258,607 $ 601,766 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of maturities for notes payable | Schedule of maturities for notes payable 2024 $ 23,073 2025 23,073 2026 23,073 2027 23,073 2028 12,927 2029 1,816 Total future payments 107,035 Less: Interest (22,619 ) Total notes payable 84,416 Less current portion (15,278 ) Long-term notes payable $ 69,138 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Convertible Notes | |
Schedule of convertible notes | Schedule of convertible notes Fair Value Principal Amount New Notes $ 4,410,058 $ 4,934,783 Series A Exchange Notes 3,298,012 3,690,422 Series B Exchange Notes 20,986,449 23,483,891 Total May 2023 Notes $ 28,694,519 $ 32,109,096 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of assumptions | Schedule of assumptions May 24, 2023 August 3, 2023 Conversion Feature Liabilities Company stock price on valuation date $ 157.50 $ 123.975 Volatility (closing prices of guideline comparable public companies) 86.3% 84.1% Conversion price per share $ 168.75 $ 168.75 Note term (years) 0.76 0.56 Risk free interest rate 5.1% 5.4% Warrant Liabilities Company stock price on valuation date $ 157.50 $ 123.975 Volatility (closing prices of guideline comparable public companies) 119.2% 115.0% Conversion price per share $ 168.75 $ 168.75 Warrant term (years) 4.25 4.06 Risk free interest rate 3.8% 4.3% |
Schedule of fair value of derivative liabilities | Schedule of fair value of derivative liabilities May 24, 2023 August 3, 2023 Conversion Feature - New Notes $ 663,096 $ 557,168 Conversion Feature - Series A Exchange Notes 970,805 416,672 Conversion Feature - Series B Exchange Notes 4,324,792 2,651,436 New Warrants 3,123,682 2,445,244 Exchange Warrants 9,287,474 7,191,535 Total $ 18,369,849 $ 13,262,055 |
Schedule of warrants assumptions | Schedule of warrants assumptions November 17, 2023 December 31, 2023 Company stock price on valuation date $ 9.864 $ 4.46 Volatility 138.2% 141.4% Risk free interest rate 4.33% 3.78% Dividend yield 0.00% 0.00% Warrant term (years) 5.0 4.9 Time to future transaction (years) 0.75 0.63 Future transaction probability 75% 75% |
Schedule of estimated fair value | Schedule of estimated fair value November 17, 2023 December 31, 2023 Series A Warrant $ 0.6576 $ 0.2970 Series B Warrant $ 0.1996 $ 0.0799 |
Schedule of warrant liabilities at fair value | Schedule of warrant liabilities at fair value November 17, 2023 December 31, 2023 Series A Warrants $ 10,990,530 $ 4,705,245 Series B Warrants 3,345,961 1,265,822 Total $ 14,336,491 $ 5,971,067 |
Schedule of derivative activity | Schedule of derivative activity May 2023 Notes and May 2023 Warrants Series A and Series B Warrants Fair value on issuance date $ 18,369,849 14,336,491 Gain on changes in fair value (5,107,794 ) (8,365,424 ) Reclassification to equity (13,262,055 ) – Balance at December 31, 2023 $ – $ 5,971,067 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of warrants activity | Schedule of warrants activity Common Stock Warrants Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2023 67,060 $ 524.97 Granted (1) 6,399,061 $ 4.71 Canceled – $ – Exchanged (40,260 ) $ 641.25 Expired – $ – Exercised (813,774 ) $ 19.38 Outstanding at December 31, 2023 5,612,087 $ 7.04 4.87 $ 0 Exercisable at December 31, 2023 5,612,087 $ 7.04 4.87 $ 0 (1) The number of warrants granted and the weighted average exercise price is based on the adjustment to certain warrants as of February 2, 2024, the date of the Company’s 1 for 45 reverse stock split. As discussed above, further adjustments occurred based on the change in the change in the VWAP of the Company’s common stock from February 2, 2024 and due to the exchange of the May 2023 Notes for Series A convertible preferred stock on March 4, 2024. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of restricted stock unit activity | Schedule of restricted stock unit activity Outstanding January 1, 2023 336 Granted – Vested (1) (204 ) Canceled (132 ) Outstanding December 31, 2023 – (1) 112 RSUs were subject to cancellation due to termination of employment. However, the Company entered into a modification to allow the employee to fully vest in these RSUs as part of a severance agreement. The Company recorded additional expense of $31,487 during the year ended December 31, 2023 related to this modification. |
Schedule of stock options activity | Schedule of stock options activity Common Stock Options Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2023 14,694 $ 694.31 Granted 11,256 $ 169.08 Forfeited (6,772 ) $ 635.63 Exercised (112 ) $ 225.00 Outstanding at December 31, 2023 19,066 $ 407.97 8.72 $ – Exercisable at December 31, 2023 8,263 $ 594.62 8.13 $ – |
Schedule of assumptions | Schedule of assumptions 2023 2022 Volatility (based on peer companies) 79 83 71 105 Risk free interest rate 3.54 4.77 0.77 0.85 Dividends None None Estimated life in years 6 6 |
Schedule of stock-based compensation expense | Schedule of stock-based compensation expense 2023 2022 Cost of Goods Sold $ 211,981 $ 578,552 Sales and Marketing 693,559 764,517 Product Development 837,271 704,152 General and Administrative 885,114 1,211,788 Total $ 2,627,925 $ 3,259,009 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of loss per common share | Schedule of loss per common share Year ended Year ended December 31, 2023 December 31, 2022 Numerator: Net loss $ (45,071,210 ) $ (34,235,405 ) Denominator: Denominator for basic and diluted net loss per common share - weighted average of common shares 192,312 105,275 Basic and diluted net loss per common share $ (234.37 ) $ (325.20 ) |
Schedule of common shares consisting of shares potentially dilutive | Schedule of common shares consisting of shares potentially dilutive 2023 2022 Convertible Notes 521,206 53,677 Warrants 5,612,087 67,060 Stock options 19,066 14,694 Restricted stock units – 336 Total 6,152,359 135,767 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | Schedule of components of income tax expense (benefit) 2023 2022 Expected federal income tax benefit at statutory rate $ 9,464,954 $ 7,184,840 Non-deductible expenses 1,183,767 (288,249 ) Research and development credit – 595,244 Return to provision true up 108,959 93,285 Change in valuation allowance (10,757,680 ) (7,585,120 ) Income tax benefit $ – $ – |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities 2023 2022 Deferred tax assets Net operating losses $ 15,468,757 $ 9,106,430 Debt basis difference 5,121,397 – Depreciation and amortization 1,701,768 1,502,868 Research & development credit 1,099,535 1,308,956 Lease liability 246,704 322,167 Stock-based compensation 3,235,732 3,103,037 Inventory 152,749 1,290,968 Accrued expenses 66,909 233,284 Capital loss carryover 176,950 261,922 Dealer rebates 459,713 161,469 Other 21,828 15,605 Total 27,752,042 17,306,705 Valuation allowance (27,171,016 ) (16,661,612 ) Net deferred tax asset 581,026 645,093 Deferred tax liabilities Prepaid expenses (342,421 ) (328,836 ) Right-of-use assets (238,605 ) (316,257 ) Total net deferred taxes Deferred tax liabilities $ – $ – |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of lease cost for operating leases | Schedule of lease cost for operating leases 2023 2022 Lease Cost Operating lease cost $ 468,997 $ 524,036 Short-term lease cost 215,289 263,277 Variable lease cost – – Sublease income – – Total lease cost $ 684,286 $ 787,313 |
Schedule of supplemental cash flow information related to leases | Schedule of supplemental cash flow information related to leases 2023 2022 Other Lease Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 359,347 $ 354,340 Amortization of right-of-use assets $ 369,774 $ 430,644 |
Schedule of lease-related assets and liabilities | Schedule of lease-related assets and liabilities 2023 2022 Lease Position Operating Leases Operating lease right-of-use assets $ 1,136,213 $ 1,505,987 Right-of-use liability operating lease - short- term 399,611 391,117 Right-of-use liability operating lease - long-term 775,170 1,143,011 Total operating lease liabilities $ 1,174,781 $ 1,534,128 |
Schedule of right-of-use asset and lease liabilities | Schedule of right-of-use asset and lease liabilities December 31, 2023 Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 2.7 Weighted-average discount rate Operating leases 6.82 |
Schedule of maturities of lease liabilities | Schedule of maturities of lease liabilities Operating Leases 2024 $ 471,638 2025 485,702 2026 340,591 Total future undiscounted lease payments 1,297,931 Less: Interest (123,148 ) Present value of lease liabilities $ 1,174,783 |
ORGANIZATION, NATURE OF OPERA_2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Nov. 17, 2023 | Sep. 18, 2023 | Mar. 31, 2024 | Feb. 28, 2024 | Oct. 30, 2023 | May 31, 2023 | Aug. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||||
Proceeds from convertible debt | $ 3,913,033 | $ 0 | |||||||
Net proceeds from issuance of stock | $ 571,400 | $ 4,000,000 | 255,505 | 0 | |||||
Number of shares issued | 6,222 | 26,667 | |||||||
Stock price per share | $ 112.50 | $ 168.75 | |||||||
Proceeds from warrant inducement transactions | $ 1,027,478 | $ 14,336,490 | $ 0 | ||||||
Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal to common stock | $ 7,400,000 | $ 7,400,000 | |||||||
Remaining convertible notes | $ 24,700,000 | ||||||||
Per share | $ 1,000 | ||||||||
Initial conversation price | $ 1.33 | ||||||||
Remaining convertible notes, value | $ 2,300,000 | ||||||||
Remaining convertible notes, shares | 1,700,000 | ||||||||
Common Units And Pre Funded Units [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from the issuance of equity | $ 16,200,000 | ||||||||
Common Units [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares issued | 73,913 | ||||||||
Pre Funded Units [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares issued | 878,469 | ||||||||
Convertible Notes And Warrants [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from convertible debt | $ 22,300,000 | ||||||||
New Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from convertible debt | $ 3,900,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Dec. 31, 2023 |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 7 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Internal Use Manufactured Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 1 year |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Cash equivalents | $ 0 | $ 0 | |
Volcon Youth Motorcycles [Member] | Subsequent Event [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Payment for manufacturing units | $ 2,070,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,770,892 | $ 3,060,160 |
Work-in-process | 0 | 439,839 |
Finished goods | 2,202,242 | 2,145,884 |
Total inventory | $ 8,973,134 | $ 5,645,883 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2023 | |
Future Payments For Inventory [Member] | ||
Inventory [Line Items] | ||
Contractual Obligation | $ 1,894,842 | |
Torrot Branded Inventory [Member] | ||
Inventory [Line Items] | ||
Inventory Write-down | $ 84,000 | |
Volcon Co Branded Torrot Youth Motorcycles [Member] | ||
Inventory [Line Items] | ||
Inventory Write-down | 2,674,352 | |
Grunt Inventory [Member] | ||
Inventory [Line Items] | ||
Inventory Write-down | $ 1,564,643 |
LONG - LIVED ASSETS (Details -
LONG - LIVED ASSETS (Details - Property and Equipment) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,609,004 | $ 1,107,272 |
Less: Accumulated depreciation | (350,397) | (505,506) |
Total property and equipment | 1,258,607 | 601,766 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,015,568 | 352,137 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 213,528 | 156,648 |
Internal Use Manufactured Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 22,906 | 274,385 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 90,768 | 50,768 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 44,663 | 44,663 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 221,571 | $ 228,671 |
LONG _ LIVED ASSETS (Details Na
LONG – LIVED ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 243,394 | $ 757,013 |
NOTES PAYABLE (Details - Debt m
NOTES PAYABLE (Details - Debt maturities) | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 23,073 |
2025 | 23,073 |
2026 | 23,073 |
2027 | 23,073 |
2028 | 12,927 |
2029 | 1,816 |
Total future payments | 107,035 |
Less: Interest | (22,619) |
Total notes payable | 84,416 |
Less current portion | (15,278) |
Long-term notes payable | $ 69,138 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | ||
Mar. 31, 2023 | Apr. 30, 2021 | Dec. 31, 2020 | |
Financing Arrangement [Member] | Vehicles [Member] | |||
Debt Instrument [Line Items] | |||
Monthly payments | $ 1,923 | ||
Principal amount | $ 96,024 | ||
Financing Arrangement [Member] | Vehicles [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 11.44% | ||
Financing Arrangement [Member] | Vehicles [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 8.63% | ||
Vehicle Financing [Member] | |||
Debt Instrument [Line Items] | |||
Financing arrangement | $ 75,702 | ||
Interest rate | 8.64% | ||
Monthly payments | $ 1,211 | ||
Debt payment term | 72 months | ||
Vehicle Financing 1 [Member] | |||
Debt Instrument [Line Items] | |||
Financing arrangement | $ 30,942 | ||
Interest rate | 7.64% | ||
Monthly payments | $ 753 | ||
Debt payment term | 48 months |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) | Dec. 31, 2023 | May 24, 2023 |
New Notes [Member] | ||
Debt Instrument [Line Items] | ||
Fair value | $ 4,410,058 | |
Principal amount | 4,934,783 | $ 4,934,783 |
Series A Exchange Notes [Member] | ||
Debt Instrument [Line Items] | ||
Fair value | 3,298,012 | |
Principal amount | 3,690,422 | |
Series B Exchange Notes [Member] | ||
Debt Instrument [Line Items] | ||
Fair value | 20,986,449 | |
Principal amount | 23,483,891 | |
Total May 2023 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Fair value | 28,694,519 | |
Principal amount | $ 32,109,096 |
CONVERTIBLE NOTES (Details Narr
CONVERTIBLE NOTES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Oct. 13, 2023 | Aug. 03, 2023 | May 24, 2023 | Aug. 24, 2022 | Sep. 30, 2023 | May 31, 2023 | Aug. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Oct. 20, 2023 | |
Offsetting Assets [Line Items] | ||||||||||
Interest rate | 10% | |||||||||
Net proceeds from convertible notes | $ 3,913,033 | $ 0 | ||||||||
Reverse stock split | 1 for 5 reverse stock split | |||||||||
Stock issuance costs | 629,900 | 1,910,816 | ||||||||
Gain (loss) on extinguishment of debt | $ 22,296,988 | 0 | ||||||||
Measurement Input, Discount Rate [Member] | May 2023 Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Determination of fair value | 14.9% | |||||||||
Convertible Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Gain (loss) on extinguishment of debt | $ 22,296,988 | |||||||||
Convertible Notes [Member] | Unamortized Issuance Costs [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Gain (loss) on extinguishment of debt | 1,330,296 | |||||||||
Exchange Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Shares converted, shares issued | 75,814 | |||||||||
Warrants and Rights Outstanding, Maturity Date | Aug. 24, 2027 | |||||||||
Warrant Inducement Agreement [Member] | Exchange Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Shares converted | 6,824 | |||||||||
Warrant Inducement Agreement [Member] | Reload Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Exercise price | $ 112.50 | |||||||||
Shares converted, shares issued | 6,824 | |||||||||
Warrants and Rights Outstanding, Maturity Date | Aug. 24, 2027 | |||||||||
Stock issuance costs | $ 216,855 | |||||||||
IPO [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Sale of stock, shares | 6,223 | |||||||||
Sale of stock, price per share | $ 112.50 | |||||||||
Note Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Shares converted | 40,258 | |||||||||
Exchange Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Shares converted, shares issued | 75,814 | |||||||||
Note Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Warrants issued | 40,260 | |||||||||
Exercise price | $ 641.25 | |||||||||
Debt issuance costs | 22,300,321 | |||||||||
New Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Exercise price | $ 245.25 | |||||||||
Warrants issued shares | 24,155 | |||||||||
New Warrants And Exchange Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Exercise price | $ 61.605 | |||||||||
Senior Convertible Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Aggregate principal amount | $ 27,173,913 | |||||||||
Conversion price | $ 506.25 | |||||||||
Number of shares issued if converted | 53,677 | |||||||||
Interest rate | 8% | |||||||||
Convertible Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Interest rate | 39.60% | |||||||||
Net proceeds from convertible notes | $ 15,122,345 | |||||||||
Debt issuance costs | 3,316,409 | |||||||||
Interest expense | 2,913,632 | $ 2,231,403 | ||||||||
Convertible Notes [Member] | Note Warrants [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Net proceeds from convertible notes | 6,561,247 | |||||||||
Debt issuance costs | $ 616,730 | |||||||||
New Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Aggregate principal amount | $ 4,934,783 | 4,934,783 | ||||||||
Conversion price | $ 571.50 | |||||||||
Net proceeds from convertible notes | $ 3,900,000 | |||||||||
Debt issuance costs | 586,968 | |||||||||
Interest expense | 302,955 | |||||||||
Original issue discount | 8.80% | |||||||||
Series A Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Aggregate principal amount | $ 3,690,422 | |||||||||
Conversion price | $ 168.75 | |||||||||
Number of shares issued if converted | 21,870 | |||||||||
Series B Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Aggregate principal amount | $ 23,483,491 | |||||||||
Conversion price | $ 168.75 | $ 245.25 | ||||||||
Number of shares issued if converted | 95,754 | |||||||||
Number of shares issued if converted | 139,162 | |||||||||
May 2023 Notes [Member] | ||||||||||
Offsetting Assets [Line Items] | ||||||||||
Exercise price | $ 112.50 | |||||||||
Interest expense | $ 1,739,123 | |||||||||
Cash on deposit requirement | $ 5,000,000 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES (Details - Assumptions) | Aug. 03, 2023 | May 24, 2023 |
Conversion Feature Liabilities [Member] | Measurement Input, Share Price [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 123.975 | 157.50 |
Conversion Feature Liabilities [Member] | Measurement Input, Price Volatility [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 84.1% | 86.3% |
Conversion Feature Liabilities [Member] | Measurement Input, Conversion Price [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 168.75 | 168.75 |
Conversion Feature Liabilities [Member] | Measurement Input, Expected Term [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 0.56 | 0.76 |
Conversion Feature Liabilities [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 5.4% | 5.1% |
Warrant Liabilities [Member] | Measurement Input, Share Price [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 123.975 | 157.50 |
Warrant Liabilities [Member] | Measurement Input, Price Volatility [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 115.0% | 119.2% |
Warrant Liabilities [Member] | Measurement Input, Conversion Price [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 168.75 | 168.75 |
Warrant Liabilities [Member] | Measurement Input, Expected Term [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 4.06 | 4.25 |
Warrant Liabilities [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Debt Conversion [Line Items] | ||
Fair value measurement input | 4.3% | 3.8% |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES (Details - Fair value of derivatives) - USD ($) | Dec. 31, 2023 | Nov. 17, 2023 | Aug. 03, 2023 | May 24, 2023 |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Financial derivative liabilities | $ 13,262,055 | $ 18,369,849 | ||
Total | $ 5,971,067 | $ 14,336,491 | ||
Conversion Feature New Notes [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Financial derivative liabilities | 557,168 | 663,096 | ||
Conversion Feature Series A Exchange Notes [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Financial derivative liabilities | 416,672 | 970,805 | ||
Conversion Feature Series B Exchange Notes [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Financial derivative liabilities | 2,651,436 | 4,324,792 | ||
New Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Financial derivative liabilities | 2,445,244 | 3,123,682 | ||
Exchange Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Financial derivative liabilities | $ 7,191,535 | $ 9,287,474 | ||
Series A Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total | 4,705,245 | 10,990,530 | ||
Series B Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total | $ 1,265,822 | $ 3,345,961 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES (Details - Warrants assumptions) - Series A And Series B Warrants [Member] | Dec. 31, 2023 | Nov. 17, 2023 |
Measurement Input, Share Price [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 4.46 | 9.864 |
Measurement Input, Price Volatility [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 141.4% | 138.2% |
Measurement Input, Risk Free Interest Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 3.78% | 4.33% |
Measurement Input, Expected Dividend Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 0.00% | 0.00% |
Measurement Input, Expected Term [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 4.9 | 5.0 |
Measurement Input Future Term [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 0.63 | 0.75 |
Measurement Input Probability Rate [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value measurement input | 75% | 75% |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES (Details - Estimated fair value) - $ / shares | Dec. 31, 2023 | Nov. 17, 2023 |
Series A Warrant [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Estimated fair value | $ 0.2970 | $ 0.6576 |
Series B Warrant [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Estimated fair value | $ 0.0799 | $ 0.1996 |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND WARRANT LIABILITIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 17, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Stock issuance costs | $ 629,900 | $ 1,910,816 | ||
Other Income Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain on derivative | 13,473,218 | |||
Series A And Series B Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Change in estimated fair value | $ 8,365,424 | |||
Series A And B Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Stock issuance costs | $ 1,451,249 | |||
Series A Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gross proceeds from issuance of equity | 10,990,530 | |||
Series B Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gross proceeds from issuance of equity | $ 3,345,961 | |||
May 2023 Warrants [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain on fair value of conversion features | $ 5,107,794 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Dec. 20, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 26, 2021 | Mar. 25, 2021 | |
Related Party Transaction [Line Items] | ||||||||
Loss on termination of lease | $ 85,756 | $ 378,176 | ||||||
Amortization of leased asset | 0 | 61,709 | ||||||
Share based compensation | 2,627,925 | 3,259,009 | ||||||
Stag Lease [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loss on termination of lease | $ 85,756 | 247,525 | ||||||
Related Party Office Space [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating Lease, Expense | $ 4,000 | $ 16,000 | ||||||
Pink Possum [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Purchase orders and prepayments | $ 21,860 | |||||||
Warrants issued, shares | 21,112 | |||||||
Share based compensation | $ 5,600,000 | |||||||
Highbridge [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Warrants issued, shares | 27,778 | |||||||
Share based compensation | $ 7,400,000 | |||||||
Number of shares issued | 24,479 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - Common Stock Warrants [Member] | 12 Months Ended | |
Dec. 31, 2023 USD ($) $ / shares shares | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares outstanding, Beginning | 67,060 | |
Weighted average exercise price outstanding, Beginning | $ / shares | $ 524.97 | |
Shares, Granted | 6,399,061 | [1] |
Weighted average exercise price, Granted | $ / shares | $ 4.71 | [1] |
Shares, Cancelled | 0 | |
Shares, Exchanged | (40,260) | |
Weighted average exercise price, Exchanged | $ / shares | $ 641.25 | |
Shares, Expired | 0 | |
Shares, Exercised | (813,774) | |
Weighted average exercise price, Exercised | $ / shares | $ 19.38 | |
Shares outstanding, Ending | 5,612,087 | |
Weighted average exercise price outstanding, Ending | $ / shares | $ 7.04 | |
Weighted average remaining life in years, Outstanding | 4 years 10 months 13 days | |
Intrinsic value, Outstanding | $ | $ 0 | |
Shares, Exercisable | 5,612,087 | |
Weighted average exercise price, Exercisable | $ / shares | $ 7.04 | |
Weighted average remaining life in years, Exercisable | 4 years 10 months 13 days | |
Intrinsic value, Exercisable | $ | $ 0 | |
[1]The number of warrants granted and the weighted average exercise price is based on the adjustment to certain warrants as of February 2, 2024, the date of the Company’s 1 for 45 reverse stock split. As discussed above, further adjustments occurred based on the change in the change in the VWAP of the Company’s common stock from February 2, 2024 and due to the exchange of the May 2023 Notes for Series A convertible preferred stock on March 4, 2024. |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||||||
Nov. 17, 2023 | Oct. 29, 2023 | Sep. 18, 2023 | May 24, 2023 | Feb. 01, 2022 | Dec. 31, 2023 | May 31, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 24, 2024 | Jun. 14, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||
Stock Issued During Period, Shares, New Issues | 6,222 | 26,667 | ||||||||||
Proceeds from Issuance of Common Stock | $ 571,400 | $ 4,000,000 | $ 255,505 | $ 0 | ||||||||
Payments of Stock Issuance Costs | 629,900 | 1,910,816 | ||||||||||
Payment of inducement | $ 346,500 | |||||||||||
Other expense | $ 2,627,925 | $ 3,259,009 | ||||||||||
Reload Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Exercise price | 112.50 | 112.50 | $ 112.50 | |||||||||
Common Stock Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Exercise price | 7.04 | 7.04 | $ 7.04 | $ 524.97 | ||||||||
Other expense | $ 412,000 | $ 7,302 | ||||||||||
Series A Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Exercise price | $ 24.75 | $ 24.75 | $ 24.75 | |||||||||
Warrant maturity date | Nov. 17, 2028 | Nov. 17, 2028 | Nov. 17, 2028 | |||||||||
Series B Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Exercise price | $ 37.80 | $ 37.80 | $ 37.80 | |||||||||
Warrant maturity date | Nov. 17, 2028 | Nov. 17, 2028 | Nov. 17, 2028 | |||||||||
Series A And Series B Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Payment of Financing and Stock Issuance Costs | $ 1,444,547 | |||||||||||
Note Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Warrants issued | 40,258 | |||||||||||
Exercise price | $ 641.25 | |||||||||||
Warrant maturity date | Aug. 24, 2027 | |||||||||||
Conversion of Stock, Shares Converted | 40,258 | |||||||||||
Exchange Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Warrant maturity date | Aug. 24, 2027 | |||||||||||
Conversion of Stock, Shares Issued | 75,814 | |||||||||||
New Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Warrants issued | 24,157 | |||||||||||
Common Units [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 73,913 | |||||||||||
Pre Funded Units [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 878,469 | |||||||||||
Pre Funded Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
[custom:WarrantsExercised] | 804,618 | |||||||||||
Conversion Of May 2023 Notes And Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Common stock shares reserved | 480,516 | 480,516 | 480,516 | |||||||||
Exercise Of Placement Agent Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Common stock shares reserved | 2,684 | 2,684 | 2,684 | |||||||||
Underwriter [Member] | Series B Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 352,057 | |||||||||||
Underwriter [Member] | Series A And B Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Proceeds from (Repurchase of) Equity | $ 16,200,000 | |||||||||||
Placement Agent [Member] | Fully Vested Warrants [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Warrants issued | 2,684 | |||||||||||
Exercise price | $ 801.5625 | |||||||||||
Warrant maturity date | Feb. 24, 2028 | |||||||||||
Public Offering [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 6,222 | 26,667 | 29,630 | |||||||||
Sale of Stock, Price Per Share | $ 112.50 | $ 168.75 | $ 675 | |||||||||
Proceeds from Issuance of Common Stock | $ 571,400 | $ 3,998,685 | $ 18,089,184 | |||||||||
Payments of Stock Issuance Costs | $ 128,600 | $ 501,300 | $ 1,910,816 | |||||||||
Public Offering [Member] | Underwriter [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Warrants issued | 1,245 | 1,482 | ||||||||||
Exercise price | $ 140.625 | $ 843.75 | ||||||||||
Warrant term | 5 years 6 months | 5 years | ||||||||||
Common Stock [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Common stock, shares authorized | 250,000,000 | |||||||||||
Stock Issued During Period, Shares, New Issues | 32,889 | 29,630 | ||||||||||
Preferred Stock [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Preferred stock, shares authorized | 5,000,000 | |||||||||||
Preferred stock, par value | $ 0.00001 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details - Restricted stock unit activity) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended | |
Dec. 31, 2023 shares | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Outstanding, Beginning Balance | 336 | |
Granted | 0 | |
Vested | (204) | [1] |
Cancelled | (132) | |
Outstanding, Ending Balance | 0 | |
[1]112 RSUs were subject to cancellation due to termination of employment. However, the Company entered into a modification to allow the employee to fully vest in these RSUs as part of a severance agreement. The Company recorded additional expense of $31,487 during the year ended December 31, 2023 related to this modification. |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details - Stock option activity) - Equity Option [Member] | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Outstanding at beginning of period | shares | 14,694 |
Outstanding at beginning of period | $ / shares | $ 694.31 |
Granted | shares | 11,256 |
Granted | $ / shares | $ 169.08 |
Forfeited | shares | (6,772) |
Forfeited | $ / shares | $ 635.63 |
Exercised | shares | (112) |
Exercised | $ / shares | $ 225 |
Outstanding at end of period | shares | 19,066 |
Outstanding at end of period | $ / shares | $ 407.97 |
Outstanding at end of period | 8 years 8 months 19 days |
Outstanding at end of period | $ | $ 0 |
Exercisable at end of period | shares | 8,263 |
Weighted average exercise price, Exercisable | $ / shares | $ 594.62 |
Weighted average remaining life in years, exercisable | 8 years 1 month 17 days |
Intrinsic value, exercisable | $ | $ 0 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details - Assumptions) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 79% | 71% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 83% | 105% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 3.54% | 0.77% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 4.77% | 0.85% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Payments | $ 0 | $ 0 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 6 years | 6 years |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details - Stock based compensation) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share based compensation | $ 2,627,925 | $ 3,259,009 |
Cost Of Goods Sold [Member] | ||
Share based compensation | 211,981 | 578,552 |
Sales And Marketing [Member] | ||
Share based compensation | 693,559 | 764,517 |
Product Development [Member] | ||
Share based compensation | 837,271 | 704,152 |
General And Administrative [Member] | ||
Share based compensation | $ 885,114 | $ 1,211,788 |
STOCK-BASED COMPENSATION (Det_5
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||
Feb. 06, 2023 | Mar. 01, 2022 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 26, 2022 | Dec. 31, 2021 | Jan. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share based compensation | $ 2,627,925 | $ 3,259,009 | ||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share based compensation | $ 61,623 | 1,267,550 | ||||||
Number of shares issued | 0 | |||||||
Performance Based Shares [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share based compensation | $ 82,050 | |||||||
Number of shares issued | 199 | |||||||
Performance Shares [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share based compensation | $ 257,717 | |||||||
Number of shares issued | 618 | |||||||
Number of shares forfeited | 3 | |||||||
Shares withheld for employee withholding taxes | 68 | |||||||
Performance Shares [Member] | Employees Employed In 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares reserved for compensation | 423 | |||||||
Equity Option [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share based compensation | $ 1,896,585 | $ 1,966,958 | ||||||
Stock based compensation | $ 661,734 | |||||||
Volcon 2021 Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common stock shares reserved | 17,778 | 13,334 | ||||||
Number of shares granted | 8,752 | |||||||
Volcon 2021 Plan [Member] | Performance Milestones For 2023 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares reserved for compensation | 1,112 | |||||||
Volcon 2021 Plan [Member] | Performance Based Shares [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares granted | 14 | |||||||
Volcon 2021 Plan [Member] | Performance Shares [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares approved for grants | 689 | |||||||
Plan 2021 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares reserved for compensation | 1,112 |
LOSS PER COMMON SHARE (Details
LOSS PER COMMON SHARE (Details - Earnings Per Share) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net loss | $ (45,071,210) | $ (34,235,405) |
Denominator: | ||
Denominator for basic net loss per common share - weighted average of common shares | 192,312 | 105,275 |
Denominator for diluted net loss per common share - weighted average of common shares | 192,312 | 105,275 |
Basic net loss per common share | $ (234.37) | $ (325.20) |
Diluted net loss per common share | $ (234.37) | $ (325.20) |
LOSS PER COMMON SHARE (Detail_2
LOSS PER COMMON SHARE (Details - Antidilutive shares) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 6,152,359 | 135,767 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 521,206 | 53,677 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 5,612,087 | 67,060 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 19,066 | 14,694 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 0 | 336 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Expected federal income tax benefit at statutory rate | $ 9,464,954 | $ 7,184,840 |
Non-deductible expenses | 1,183,767 | (288,249) |
Research and development credit | 0 | 595,244 |
Return to provision true up | 108,959 | 93,285 |
Change in valuation allowance | (10,757,680) | (7,585,120) |
Income tax benefit | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets | ||
Net operating losses | $ 15,468,757 | $ 9,106,430 |
Debt basis difference | 5,121,397 | 0 |
Depreciation and amortization | 1,701,768 | 1,502,868 |
Research & development credit | 1,099,535 | 1,308,956 |
Lease liability | 246,704 | 322,167 |
Stock-based compensation | 3,235,732 | 3,103,037 |
Inventory | 152,749 | 1,290,968 |
Accrued expenses | 66,909 | 233,284 |
Capital loss carryover | 176,950 | 261,922 |
Dealer rebates | 459,713 | 161,469 |
Other | 21,828 | 15,605 |
Total | 27,752,042 | 17,306,705 |
Valuation allowance | (27,171,016) | (16,661,612) |
Net deferred tax asset | 581,026 | 645,093 |
Deferred tax liabilities | ||
Prepaid expenses | (342,421) | (328,836) |
Right-of-use assets | (238,605) | (316,257) |
Total net deferred taxes Deferred tax liabilities | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Dec. 31, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forward | $ 73,700 |
LEASES (Details - Lease cost)
LEASES (Details - Lease cost) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lease Cost | ||
Operating lease cost | $ 468,997 | $ 524,036 |
Short-term lease cost | 215,289 | 263,277 |
Variable lease cost | 0 | 0 |
Sublease income | 0 | 0 |
Total lease cost | $ 684,286 | $ 787,313 |
LEASES (Details - Supplemental
LEASES (Details - Supplemental cash flow information related to leases) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 359,347 | $ 354,340 |
Amortization of right-of-use assets | $ 369,774 | $ 430,644 |
LEASES (Details - Lease-related
LEASES (Details - Lease-related assets and liabilities) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Operating lease right-of-use assets | $ 1,136,213 | $ 1,505,987 |
Right-of-use liability operating lease - short- term | 399,611 | 391,117 |
Right-of-use liability operating lease - long-term | 775,170 | 1,143,011 |
Total operating lease liabilities | $ 1,174,781 | $ 1,534,128 |
LEASES (Details - Other informa
LEASES (Details - Other information) | Dec. 31, 2023 |
Leases | |
Weighted-average remaining lease term Operating leases | 2 years 8 months 12 days |
Weighted-average discount rate Operating leases | 6.82% |
LEASES (Details - Maturities of
LEASES (Details - Maturities of lease liabilities) | Dec. 31, 2023 USD ($) |
Leases | |
2024 | $ 471,638 |
2025 | 485,702 |
2026 | 340,591 |
Total future undiscounted lease payments | 1,297,931 |
Less: Interest | (123,148) |
Present value of lease liabilities | $ 1,174,783 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Offsetting Assets [Line Items] | ||
Loss on lease terminations | $ 85,756 | $ 378,176 |
Denver Colorado Store Location [Member] | Write Off Of Prepaid Rent Security Deposit And Right Of Use Asset Liability [Member] | ||
Offsetting Assets [Line Items] | ||
Loss on lease terminations | 148,322 | |
Denver Colorado Store Location [Member] | Write Off Of Lease Improvements And Fixtures And Furniture [Member] | ||
Offsetting Assets [Line Items] | ||
Loss on lease terminations | $ 46,289 |