Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 11, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-11602 | ||
Entity Registrant Name | Nano Magic Inc. | ||
Entity Central Index Key | 0000891417 | ||
Entity Tax Identification Number | 47-1598792 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 31601 Research Park Drive | ||
Entity Address, City or Town | Madison Heights | ||
Entity Address, State or Province | MI | ||
Entity Address, Postal Zip Code | 48071 | ||
City Area Code | (844) | ||
Local Phone Number | 273-6462 | ||
Title of 12(b) Security | Common Stock, $0.0001 par value | ||
Trading Symbol | NMGX | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,124,627 | ||
Entity Common Stock, Shares Outstanding | 10,790,980 | ||
Documents Incorporated by Reference | No documents are incorporated by reference into this annual report on Form 10-K. | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 1195 | ||
Auditor Name | UHY LLP | ||
Auditor Location | Sterling Heights, Michigan |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash | $ 259,223 | $ 197,932 |
Accounts receivable, net | 348,565 | 293,229 |
Inventory, net | 1,120,073 | 1,379,005 |
Prepaid expenses | 132,997 | 212,127 |
Current portion of note receivable | 40,000 | |
Current assets of discontinued operations | 74,373 | |
Total Current Assets | 1,900,858 | 2,156,666 |
Operating lease right-of-use assets | 1,037,749 | 1,219,061 |
Property, plant and equipment, net | 525,809 | 633,187 |
Note receivable, non-current | 375,983 | |
Non-marketable equity investment in subsidiary | 250,146 | |
Non-current assets of discontinued operations | 97,687 | |
Total Assets | 4,090,545 | 4,106,601 |
CURRENT LIABILITIES: | ||
Accounts payable | 762,524 | 174,156 |
Accounts payable - related parties | 87,119 | 21,066 |
Accrued expenses and other current liabilities | 276,132 | 57,040 |
Current portion of notes payable | 26,629 | |
Current portion of finance leases | 39,005 | 87,567 |
Advances from related parties | 42,887 | 113,952 |
Current portion of operating lease liabilities | 142,173 | 123,988 |
Current liabilities of discontinued operations | 575,770 | |
Total Current Liabilities | 1,376,469 | 1,153,539 |
Notes payable, net of current portion | 350,000 | |
Finance leases, net of current portion | 24,194 | 61,045 |
Operating lease liabilities, net of current portion | 722,420 | 864,593 |
Non-current liabilities of discontinued operations | 111,607 | |
Total Liabilities | 2,473,083 | 2,190,784 |
Commitments and Contingencies (See Note 15) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding | ||
Common stock: $0.0001 par value, 30,000,000 shares authorized; 10,722,431 and 9,702,680 issued and outstanding at December 31, 2022 and 2021, respectively | 1,072 | 970 |
Additional paid-in capital | 13,763,143 | 11,960,011 |
Accumulated deficit | (12,146,753) | (10,045,164) |
Total Stockholders’ Equity | 1,617,462 | 1,915,817 |
Total Liabilities and Stockholders’ Equity | $ 4,090,545 | $ 4,106,601 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 10,722,431 | 9,702,680 |
Common stock, shares outstanding | 10,722,431 | 9,702,680 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
NET REVENUES | $ 2,577,332 | $ 4,313,443 |
COST OF SALES | 2,481,110 | 2,651,325 |
GROSS PROFIT | 96,222 | 1,662,118 |
OTHER OPERATING INCOME | 95,701 | 632,069 |
OPERATING EXPENSES: | ||
Selling and marketing expenses | 389,391 | 161,194 |
Salaries, wages and related benefits | 1,520,970 | 2,244,832 |
Research and development | 16,777 | 34,875 |
Professional fees | 788,641 | 707,938 |
General and administrative expenses | 829,841 | 774,039 |
Total Operating Expense | 3,545,620 | 3,922,878 |
LOSS FROM OPERATIONS | (3,353,697) | (1,628,691) |
OTHER INCOME | ||
Loan forgiveness | 130,900 | |
Income from investment in subsidiary | 57,289 | |
Government grant | 61,448 | |
Interest expense | (33,767) | (17,737) |
Other income | 17,613 | 10 |
Total Other Income | 102,583 | 113,173 |
LOSS FROM CONTINUING OPERATIONS | (3,251,114) | (1,515,518) |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS | ||
Income (loss) from discontinued operations | 1,300 | (59,046) |
Gain on sale of discontinued operations | 1,148,225 | |
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS | 1,149,525 | (59,046) |
NET LOSS | $ (2,101,589) | $ (1,574,564) |
NET INCOME (LOSS) PER SHARE - BASIC: | ||
Continuing operations | $ (0.32) | $ (0.16) |
Discontinued operations | 0.11 | (0.01) |
NET INCOME (LOSS) PER SHARE - BASIC: | (0.21) | (0.17) |
NET INCOME (LOSS) PER SHARE - DILUTED: | ||
Continuing operations | (0.32) | (0.16) |
Discontinued operations | 0.11 | (0.01) |
NET INCOME (LOSS) PER SHARE - DILUTED: | $ (0.21) | $ (0.17) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic | 10,264,381 | 9,475,560 |
Diluted | 10,264,381 | 9,475,560 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] Common Class A [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2020 | $ 846 | $ 9,867,174 | $ (8,470,600) | $ 1,397,420 |
Balance, Shares at Dec. 31, 2020 | 8,459,995 | |||
Common stock issued for cash, net of issuance costs | $ 115 | 1,442,962 | 1,443,077 | |
Common stock issued for cash, net of issuance costs, shares | 1,154,462 | |||
Common stock issued for services | $ 9 | 74,991 | 75,000 | |
Common stock issued for services, shares | 88,223 | |||
Stock-based compensation | 517,161 | 517,161 | ||
Warrants and options on private placement | 57,723 | 57,723 | ||
Net loss | (1,574,564) | (1,574,564) | ||
Balance at Dec. 31, 2021 | $ 970 | 11,960,011 | (10,045,164) | 1,915,817 |
Balance, Shares at Dec. 31, 2021 | 9,702,680 | |||
Common stock issued for cash, net of issuance costs | $ 85 | 1,425,436 | 1,425,521 | |
Common stock issued for cash, net of issuance costs, shares | 843,751 | |||
Common stock issued for services | $ 17 | 131,983 | 132,000 | |
Common stock issued for services, shares | 176,000 | |||
Stock-based compensation | 206,594 | 206,594 | ||
Warrants and options on private placement | 39,119 | 39,119 | ||
Net loss | (2,101,589) | (2,101,589) | ||
Balance at Dec. 31, 2022 | $ 1,072 | $ 13,763,143 | $ (12,146,753) | $ 1,617,462 |
Balance, Shares at Dec. 31, 2022 | 10,722,431 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss from continuing operations | $ (3,251,114) | $ (1,515,518) |
Net income (loss) from discontinued operations | 1,149,525 | (59,046) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Change in inventory obsolescence reserve | 119,136 | (48,924) |
Depreciation and amortization expense | 112,288 | 105,005 |
Gain on forgiveness of loan | (130,900) | |
Bad debt expense | 43,098 | (18,251) |
Stock-based compensation | 338,594 | 592,161 |
Income from investment in subsidiary | (57,289) | |
Change in operating assets and liabilities: | ||
Accounts receivable | (46,006) | 923,441 |
ERTC Receivable | (43,413) | |
Inventory | 139,796 | (488,388) |
Prepaid expenses and contract assets | 79,130 | (22,363) |
Accounts payable | 588,366 | (556,935) |
Accounts payable - related party | 66,053 | (12,000) |
Operating lease liabilities | 57,321 | 64,628 |
Accrued expenses | 217,920 | (174,508) |
Total adjustments | 1,614,994 | 232,966 |
Net cash used by continuing operating activities | (1,636,120) | (1,282,553) |
Net cash used by discontinued operating activities | (72,245) | (94,503) |
NET CASH USED BY OPERATING ACTIVITIES | (1,708,365) | (1,377,056) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from note receivable | 25,000 | |
Purchases of property and equipment | (4,910) | (127,014) |
Net cash provided (used) by continuing investing activities | 20,090 | (127,014) |
Net cash used by discontinued investing activities | (243) | |
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES | 20,090 | (127,257) |
CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES | ||
Proceeds from sale of common stock and warrants | 1,464,641 | 1,500,800 |
Proceeds from issuance of convertible debt | 375,000 | |
Repayment of bank loans | (37,452) | (43,111) |
Repayment of finance leases | (46,100) | (43,906) |
Repayment of advances from related parties | (71,065) | (31,435) |
Net cash provided by continuing financing activities | 1,685,024 | 1,382,348 |
Net cash provided by discontinued financing activities | 20,000 | 76,305 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,705,024 | 1,458,653 |
NET INCREASE (DECREASE) IN CASH | 16,749 | (45,660) |
CASH in continuing operations, beginning of year | 197,932 | 260,145 |
CASH in discontinued operations, beginning of year | 44,542 | 27,989 |
CASH, end of period | 259,223 | 242,474 |
Less: CASH in discontinued operations, end of period | 44,542 | |
CASH in continuing operations, end of period | 259,223 | 197,932 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid during the period for interest | $ 33,767 | $ 17,737 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION Organization Nano Magic Inc. (“we”, “us”, “our”, “Nano Magic” or the “Company”), a Delaware corporation, develops and sells a portfolio of nano-layer coatings, nano-based cleaners, and nano-composite products based on its proprietary technology. On December 31, 2022, our wholly-owned subsidiary Nano Magic LLC was merged into the parent company and we changed our name to Nano Magic Inc. We develop, manufacture and sell consumer and institutional products using nanotechnology to deliver unique performance attributes at the surfaces of a wide variety of substrates. These products are marketed internationally primarily to customers in the optical industry. Effective May 31, 2022, we sold a 70% 30% Going Concern These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the consolidated financial statements, the Company had losses from continuing operations and net cash used by continuing operations of $ 3,251,114 1,636,120 524,389 259,223 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates for the years ended December 31, 2022 and 2021 include estimates for allowance for doubtful accounts on accounts receivable, the estimates for obsolete inventory, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, and the fair value of equity incentives. Cash, Cash Equivalents and Restricted Cash For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. Accounts Receivable The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the average cost method based on prices paid for inventory items. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as sales to individual customers and expected recoverable values. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to ten years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in other income or expense in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charge for the year ended December 31, 2022 and 2021. Leases Operating leases are reflected on our balance sheet within operating lease Right-of-use (ROU) assets and the related current and non-current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from lease agreement. Operating lease ROU assets and liabilities are recognized at the commencement date, the date on which the lessor began making the underlying asset customizable for our use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred. Lease Term The Company calculates the term for each lease agreement to include the noncancelable period specified in the agreement together with (1) the periods covered by options to extend the lease if the Company is reasonably certain to exercise that option, (2) periods covered by an option to terminate if the Company is reasonably certain not to exercise that option and (3) period covered by an option to extend (or not terminate) if controlled by the lessor. The assessment of whether the Company is reasonably certain to exercise an option to extend a lease requires significant judgement surrounding contract-based factors, asset-based factors, entity-based factors and market-based factors. Lease Payments Lease payments consist of fixed payments, less any lease incentives paid or payable to the lessee related to the use of the underlying asset during the lease term. Incremental Borrowing Rate The ROU asset and related lease liabilities recorded based on the present value of the lease payments using (1) the rate implicit in the lease or (2) the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Revenue Recognition We adopted ASC Topic 606, Revenue from Contracts with Customers Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. The Company generally ships products to customers and does not have multiple performance obligations in its revenue stream and therefore does not allocate transaction prices to multiple performance obligations. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. Sales discounts applied on orders are treated as a reduction of revenues, as are any rebates provided under customer contracts. Disaggregation of Revenue A limited number of key customers historically accounted for a majority of our revenue. In 2022, two customers accounted for 44 58 Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. Cost of Sales Cost of sales includes inventory costs, materials and supplies costs, internal labor and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs incurred. Government Loan Forgiveness and Grants In the year ended December 31, 2021 the Company had $ 130,900 61,448 Shipping and Handling Costs Shipping and handling costs incurred relating to the purchase of inventory are included in inventory which is charged to cost of sales as products are sold. Shipping and handling costs incurred for product shipped to customers are included in cost of sales. For the years ended December 31, 2022 and 2021 shipping and handling costs amounted to $ 180,369 187,154 Research and Development Research and development costs incurred in the development of the Company’s products and under other Company sponsored research and development projects are expensed as incurred. Costs such as direct labor, direct costs, and other allocated costs incurred to perform research and development service pursuant to government and private research projects are in included in cost of sales. Research and development costs incurred in the development of the Company’s products for the years ended December 31, 2022 and 2021 were $ 16,777 34,875 Advertising Costs The Company participates in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. Advertising costs charged to operations for the years ended December 31, 2022 and 2021 were $ 247,073 40,459 Federal and State Income Taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company adopted ASU No. 2017-09 in 2018; its adoption did not have a material impact on its consolidated financial statements. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Earnings (Loss) Per Share of Common Stock ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Additionally, potentially dilutive common shares consist of common stock options and warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future . SCHEDULE OF ANTI-DILUTIVE PER SHARE INFORMATION December 31, 2022 December 31, 2021 Stock options 2,760,991 3,123,702 Stock warrants 7,440,639 6,597,178 Total 10,201,630 9,720,880 Net income (loss) per share of common stock is as follows: SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED NET INCOME LOSS Net income (loss) per common shares outstanding: Year Ended Year Ended Common stock $ (0.21 ) $ (0.17 ) Weighted average shares outstanding: Total weighted average common shares outstanding 10,264,381 9,475,560 Recently Adopted Accounting Pronouncements The Company does not believe there are any other recently issued and effective, or not yet effective pronouncements that would have or are expected to have any significant effect on the Company’s financial position, results of operations or cash flows. There have been no changes to our significant accounting policies described in Note 2 to our Annual Report on Form 10-K for the year ended December 31, 2022, that have had a material impact on our Consolidated Financial Statements and related notes. Reclassifications Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statements. None of the reclassifications had any impact on the net loss reported in 2021. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 3 – DISCONTINUED OPERATIONS Effective May 31, 2022, we sold a 70% 450,000 7% 20,000 25,000 30,000 80,000 415,983 40,000 375,983 1,148,225 1,300 59,046 In connection with the sale, the capital structure of Applied Nanotech was changed to give the Company, as the holder of Class B common stock of Applied Nanotech, a 30% economic interest, certain information rights, special consent rights, and tag-along rights, as well as the obligation to sell our stock under certain circumstances if other stockholders are selling. The Class A stock acquired by the buyers was pledged to secure the promissory note given in payment of the purchase price. The Company plans to hold its remaining shares in ANI for an indefinite period and treats its investment in ANI as an equity investment. The following includes the detail of major classes of assets and liabilities of discontinued operations summarized on the accompanying unaudited consolidated financial statements: SCHEDULE OF DISPOSAL GROUPS ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS SUMMARIZED December 31 2021 ASSETS CURRENT ASSETS: Cash and investments $ 55,258 Accounts receivable, net 19,115 Total Current Assets 74,373 Operating lease right-of-use assets 90,852 Property, plant and equipment, net 945 Other assets 5,890 Total Assets $ 172,060 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 475,283 Accrued expenses and other current liabilities 12,434 Current portion of lease liabilities 42,291 Contract liabilities 45,762 Total Current Liabilities 575,770 Notes Payable, net of current portion 54,883 Lease liabilities, net of current portion 56,724 Total Liabilities $ 687,377 The following is the detail of major line items that constitute income from discontinued operations: SCHEDULE OF INCOME (LOSS) FROM DISCONTINUED OPERATIONS 2022 2021 For the Year Ended December 31, 2022 2021 Net Revenues $ 258,444 $ 726,170 Cost of Sales 211,029 696,597 Gross Profit 47,415 29,573 Salaries, wages and related benefits 23,573 85,603 General and administrative expenses 21,961 64,407 Professional fees - 16,817 Other income - (79,305 ) Interest and other expense 581 1,097 Income (loss) from discontinued operations 1,300 (59,046 ) Gain on sale of discontinued operations 1,148,225 - Net income (loss) from discontinued operations $ 1,149,525 $ (59,046 ) In the second quarter of 2022, the gain on the sale of 70 SCHEDULE OF SALE OF STOCK BY SUBSIDIARY Fair value of consideration received $ 450,000 Fair value of retained interest 192,857 Less carrying value of subsidiary sold (505,368 ) Gain on sale of subsidiary $ 1,148,225 |
INVESTMENT IN SUBSIDIARY
INVESTMENT IN SUBSIDIARY | 12 Months Ended |
Dec. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
INVESTMENT IN SUBSIDIARY | NOTE 4 – INVESTMENT IN SUBSIDIARY The Company is accounting for its 30% ownership interest in ANI by the equity method of accounting under which the Company’s share of the net income (loss) of ANI is recognized as income (loss) in the Company’s statement of operations classified as income from investment in subsidiary. Any dividends received from ANI as well as periodic losses for the Company’s 30% share will be treated as a reduction of the investment account. Any income from ANI for the Company’s 30 57,289 At December 31, 2022, a balance of $ 250,146 SCHEDULE OF EQUITY EQUITY INVESTMENT IN SUBSIDIARY Investment in ANI $ 192,857 Income from investment in subsidiary 57,289 Non-marketable equity investment in subsidiary $ 250,146 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 5 – ACCOUNTS RECEIVABLE At December 31, 2022 and 2021, accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE December 31, December 31, Accounts receivable $ 377,940 $ 335,555 Less: allowance for doubtful accounts (29,375 ) (42,326 ) Accounts receivable, net $ 348,565 $ 293,229 Bad debt expense (recoveries) was $ 43,098 18,251 |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 6 – INVENTORY At December 31, 2022 and 2021, inventory consisted of the following: SCHEDULE OF INVENTORY December 31, December 31, Raw materials $ 695,774 $ 673,518 Work in progress 256,095 314,461 Finished goods 353,082 456,768 Inventory, gross 1,304,951 1,444,747 Less: reserve for obsolescence (184,878 ) (65,742 ) Inventory, net $ 1,120,073 $ 1,379,005 |
OPERATING LEASE
OPERATING LEASE | 12 Months Ended |
Dec. 31, 2022 | |
Operating Lease | |
OPERATING LEASE | NOTE 7 – OPERATING LEASE Effective May 31, 2020, we entered into a lease with a related party for a 29,220 The lease has an initial term of seven years with a renewal option at the end of the initial term for an additional 3-year term, and a second renewal option thereafter for an additional 5-year term. The renewal term is not included in the calculation of the operating lease liability. As the sole tenant, we are responsible for all taxes, ordinary maintenance, snow removal and other ordinary operating expenses. Rent is $6.50 per square foot, increasing by $0.25 per year. During the first three years we also have the right to buy up to a 49% interest in Magic Research LLC for a price equal to 49% of the contributions received from other members. 311,718 57,119 For operating leases, we calculated ROU assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. SCHEDULE OF REMAINING LEASE PAYMENTS December 31, 2022 December 31, 2021 Operating lease liabilities $ 864,593 $ 988,581 Right-of-use assets $ 1,037,749 $ 1,219,061 Future payments on the operating lease are: SCHEDULE OF FUTURE PAYMENTS ON OPERATING LEASE Operating Leases 2023 $ 206,373 2024 213,681 2025 220,989 2026 228,297 2027 175,334 Less: impact of discounting (180,081 ) Present value of lease liabilities 864,593 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 8 - PROPERTY AND EQUIPMENT At December 31, 2022 and 2021, property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Useful Life December 31, December 31, Machinery and equipment 5 10 $ 2,613,387 $ 2,613,387 Furniture and office equipment 3 7 480,784 475,874 Leasehold improvements 2 15 140,678 140,678 Property and equipment, gross Less: accumulated depreciation (2,709,040 ) (2,596,752 ) Property and equipment, net $ 525,809 $ 633,187 For the years ended December 31, 2022 and 2021, depreciation and amortization expense amounted to $ 112,288 105,005 |
NOTES PAYABLE AND FINANCE LEASE
NOTES PAYABLE AND FINANCE LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable And Finance Leases | |
NOTES PAYABLE AND FINANCE LEASES | NOTE 9 – NOTES PAYABLE AND FINANCE LEASES Notes Payable On January 7, 2022, the Company sold to one investor a $ 100,000 March 31, 2025 50,000 50,000 March 31, 2026 8 1.75 On July 27, 2022, the Company sold two convertible notes, one for $ 50,000 25,000 25,000 March 31, 2026 8 1.75 On October 26, 2022, the Company sold to an investor a $ 25,000 October 31, 2023 8 1.75 On December 18, 2022, the Company issued a convertible promissory note for $ 50,000 8% 1.75 The convertible promissory notes have not been included in diluted earnings per share as they would be anti-dilutive. On February 10, 2015, Nano Magic entered into a $ 373,000 June 10, 2020 4.35% April 10, 2022 6.29% 4,053 December 10, 2022 6.29% 4,053 1,629 Finance leases On August 11, 2020, we entered into a finance lease for furniture used in the Michigan facility. We financed $ 60,684 36 1,972 13,335 2,091 On September 24, 2020, we entered into a finance lease with Raymond Leasing Corporation for a forklift. We financed $ 14,250 36 425 3,755 In December 2020, we entered into a finance lease for production equipment. We financed $ 85,000 48 2,135 46,109 21,915 24,194 For finance leases, we calculate ROU assets and lease liabilities based on the present value of the remaining lease payments as of the date of lease commencement. The ROU assets for finance leases are depreciated in accordance with the Company’s depreciation policies for those asset groupings. Finance lease liabilities were $ 63,199 106,935 12,594 12,346 Maturities Future minimum lease payments under leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2022, are as follows: SCHEDULE OF FUTURE MINIMUM FINANCE LEASE PAYMENTS Finance Leases 2023 $ 39,005 2024 25,620 Less: impact of discounting (1,426 ) Present value of lease liabilities 63,199 |
BANK LOANS
BANK LOANS | 12 Months Ended |
Dec. 31, 2022 | |
Bank Loans | |
BANK LOANS | NOTE 10 – BANK LOANS On May 8, 2020, Nano Magic LLC obtained a loan from Fifth Third Bank for $ 130,900 1.00% 7,330 |
ACCOUNTS RECEIVABLE FACTORING
ACCOUNTS RECEIVABLE FACTORING | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable Factoring | |
ACCOUNTS RECEIVABLE FACTORING | NOTE 11 – ACCOUNTS RECEIVABLE FACTORING On September 1, 2020, Nano Magic LLC entered an agreement with NOWaccount ® $47 11,337 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS Advances from related parties aggregating $ 130,006 42,887 92,887 16,000 124,150 167,350 Mr. Ron Berman and Mr. Tom Berman are the managers of the limited liability company that is the manager of PEN Comeback, LLC, PEN Comeback 2, LLC, Magic Growth, LLP, Magic Growth 2 LLC and Magic Growth 3 LLC. These five limited liability companies purchased shares of common stock and derivative securities from us in 2018, 2019, 2020, 2021, and 2022. See the subsection on Sales of Stock under Issuances of Common Stock in Note 11 and in Note 16 Subsequent Events. In addition, Mr. Tom Berman and Mr. Ron Berman are two of three individuals who share voting power of the sole manager of the limited liability company that is our landlord in Michigan. Together, Tom and Ron Berman hold, in the aggregate, a 5% economic interest in the landlord entity. The lease for the Michigan facility gives us the right, during the first three years of the lease, to buy up to a 49% interest in the landlord for a price equal to 49% of the contributions received from other members. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 13 - STOCKHOLDERS’ EQUITY Description of Preferred and Common Stock Preferred Stock The preferred stock may be issued in one or more series. The Company’s board of directors are authorized to issue the shares of preferred stock in such series and to fix from time to time before issuance thereof the number of shares to be included in any such series and the designation, powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of such series. Common Stock The rights of each share of common are the same with respect to dividends, distributions and rights upon liquidation. Holders of common stock each have one vote per share in the election of directors and other matters submitted to a vote of the stockholders Issuances of Common Stock Common Stock Issued for Services and Stock Appreciation Rights Pursuant to the agreement entered into on October 20, 2020, with the holder of substantially all the outstanding stock appreciation rights, on March 2, 2021, we issued 5,000 shares of common stock at value of $ 1.00 in partial settlement of that holder’s stock appreciation rights. On March 2, 2021, we issued an aggregate of 37,890 0.95 36,000 On December 15, 2021, we issued an aggregate of 45,333 0.75 34,000 On December 6, 2022, we issued an aggregate of 176,000 0.75 132,000 Sales of Common Stock On February 16, 2021, the Company sold to Magic Growth 2 LLC, 769,231 961,538 769,225 38,463 2.00 On March 17, 2021, the Company sold to Magic Growth 2 LLC, 385,231 481,539 385,225 19,260 2.00 On January 11, 2022, the Company sold to Magic Growth 3 LLC 222,223 388,887 222,195 11,114 four years 2.25 On February 22, 2022, the Company sold to Magic Growth 3 LLC 152,778 267,362 152,770 7,638 four years 2.25 On April 14, 2022, the Company sold to Magic Growth 3 LLC 69,445 121,529 69,425 3,471 four years 2.25 On May 27, 2022, the Company sold to Magic Growth 3 LLC 213,889 374,305 213,885 10,694 four years 2.25 On August 29, 2022, the Company sold to Magic Growth 3 LLC 69,445 121,529 69,425 3,471 four years 2.25 On October 31, 2022, the Company sold to Magic Growth 3 LLC 13,889 24,306 13,885 694 four years 2.25 In December 2022, the Company sold 102,082 127,603 101,875 2,037 1.75 All of these sales of stock and warrants were sold in private placements exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Stock Options Stock options outstanding are to purchase common stock. Stock option activities for the years ended December 31, 2022 and 2021 are summarized as follows: SCHEDULE OF STOCK OPTION PLAN ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding, December 31, 2020 502,892 $ 0.89 3.23 $ - Exercised - Forfeited or expired (116,690 ) 1.83 Granted 2,747,500 0.80 Balance Outstanding, December 31, 2021 3,133,702 $ 0.77 4.93 $ - Exercised - Forfeited or expired (518,411 ) 1.03 Granted 145,700 0.80 Balance Outstanding, December 31, 2022 2,760,991 $ 0.72 4.09 $ - Exercisable, December 31, 2022 1,269,386 $ 0.69 3.08 $ - Options Issued Outside of a Plan On April 3, 2019, we issued to our CEO and President, Tom Berman, options to purchase up to 550,000 0.55 100,000 450,000 On March 2, 2021, in connection with the three-year extension of the contract with our President and Chief Executive Officer, Mr. Tom Berman was granted an option to purchase up to 1,350,000 0.75 SCHEDULE OF STOCK OPTIONS VESTING The right to purchase: Consisting of: Vesting: Tranche 1 150,000 Vested on June 30, 2021 Tranche 2 150,000 Vested on December 31, 2021 Tranche 3 150,000 Vested on June 30, 2022 Tranche 4 150,000 Vested on December 31, 2022 Tranche 5 150,000 Will vest on June 30, 2023 Tranche 6 150,000 Will vest on December 31, 2023 Tranche 7 Up to 150,000 Forfeited because sales bonus for 2021 did not reach cap Tranche 8 Up to 150,000 Forfeited because sales bonus for 2021 did not reach cap Tranche 9 Up to 150,000 Will vest if the aggregate sales bonus payable for 2023 exceeds $300,000 Tranche 10 Up to 1 If a profit bonus is payable under the employment contract and the Board determines to pay some or all of it with options, the number vested as determined by the Board On March 2, 2021, we granted an option to Ronald J. Berman as part of his consulting contract. Based on sales revenue in 2021, he vested in options to purchase 37,500 0.75 In December 2022, the options held by Tom Berman and Ron Berman were amended so that, in the event of their death or disability, their personal representative has the same rights as the original holder to exercise the vested options during their term. The fair value of the options awarded outside of any plan was calculated using the Black-Scholes method. The assumptions used in the calculations are shown below. The expected term represents the period of time that the options are expected to be outstanding. Below is a summary of terms for options issued during 2021 outside of the plan. SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS Exercise price per option $ 0.75 Fair value per option at grant date $ 0.60 0.84 Expected term 5 Expected volatility 130 335 % Expected dividend yield 0 % Risk-free interest rate 0.19 1.18 % Expense in period $ 147,646 Unearned expense $ 314,980 2015 Equity Incentive Plan On November 30, 2015, the Board of Directors authorized the 2015 Equity Incentive Plan. On January 31, 2020 we granted an option to purchase 100,000 50,000 2021 Equity Incentive Plan On March 2, 2021, our Board adopted the 2021 Nano Magic 2021 Equity Incentive Plan (the “Plan”) to allow equity compensation for those who provide services to the Company and to encourage ownership in the Company by personnel whose service to the Company is important to its continued progress, to encourage recipients to act as owners and thereby in the stockholders’ interest and to enable recipients to share in the Company’s success. Initially, 85,000 2,500 2,500 200,000 100,000 100,000 On August 10, 2021, we issued the option to purchase up to 100,000 On February 16, 2022, the Board increased the number of options available for issuance under the 2021 Equity Plan and issued 110,700 15,000 The fair value of the options awarded to employees and service providers under the 2021 Equity Plan were calculated using the Black-Scholes method and were tied to service conditions for purposes of vesting. The assumptions used in the calculations are shown below. The expected term represents the period of time that the options are expected to be outstanding. During the year ended December 31, 2021, 43,385 options vested and compensation expense related to them for the year-ending 2021 was $ 42,320 with unearned expense of $ 23,301 . During the year ended December 31, 2022, 100,163 54,616 22,627 SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS Exercise price per option $ 0.75 Fair value per option at grant date $ 0.60 Expected term 5 Expected volatility 243 244 % Expected dividend yield 0 % Risk-free interest rate 1.40 3.00 % Warrants As of December 31, 2022, there were outstanding and exercisable warrants to purchase 7,440,639 1.72 61.12 As of December 31, 2021, there were outstanding and exercisable warrants to 6,597,178 1.66 24.9 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 – INCOME TAXES The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of the attainment of future taxable income. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2022 and 2021 were as follows: SCHEDULE OF EFFECTIVE STATUTORY RATE OF INCOME TAXES 2022 2021 Years Ended December 31, 2022 2021 Income tax provision (benefit) at U.S. statutory rate of 21% $ 441,000 $ 331,000 Government grant 13,000 - Payroll Protection Program loan forgiveness - 44,000 Change in valuation allowance (454,000 ) (375,000 ) Revaluation of deferred tax asset (327,000 ) 441,000 Revaluation of valuation allowance - (441,000 ) Revaluation of valuation allowance due to return to provision 85,000 - Revaluation of valuation allowance due to ANI sale 242,000 - Total provision for income tax $ - $ - The Company’s approximate net deferred tax assets as of December 31, 2022 and 2021 were as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES December 31, December 31, Deferred Tax Assets: Net operating loss carryforward $ 3,392,000 $ 3,355,000 Stock-based compensation 109,000 66,000 Allowance for inventory obsolescence 39,000 14,000 Accrued compensation 6,000 1,000 Other 56,000 39,000 Total deferred tax assets 3,602,000 3,475,000 Valuation allowance (3,602,000 ) (3,475,000 ) Net deferred tax assets $ - - The gross estimated net operating loss carryforward was approximately $ 16,150,000 The potential tax benefit arising from tax loss carryforwards prior to 2017 will expire between 2022 and 2038, while the potential tax benefits arising after 2017 currently have no expiration date In accordance with Section 382 of the Internal Revenue Code, the usage of the Company’s net operating loss carry forwards are subject to annual limitations due to greater than 50% The Company’s 2019, 2020, 2021 and 2022 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 - COMMITMENTS AND CONTINGENCIES Litigation The Company may be, from time to time, subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are not currently a defendant in any proceedings. Our policy is to accrue costs for contingent liabilities, including legal proceedings or unasserted claims that may result in legal proceedings, when a liability is probable and the amount can be reasonably estimated. As of December 31, 2022, the Company has no |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 16 – CONCENTRATIONS Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash deposits and investments in cash equivalent instruments. Customer Concentrations Customer concentrations for the years ended December 31, 2022 and 2021 are as follows: SCHEDULE OF CONCENTRATION RISK, CUSTOMER For the Years Ended December 31, 2022 2021 Customer A 33 % 13 % Customer B 11 % - % Customer C - % 13 % Customer D - % 18 % Customer E - % 14 % Total 44 % 58 % * Less than 10% Accounts receivable balances for these customers at December 31, 2022 and 2021 were $ 104,315 13,326 Geographic Concentrations of Sales For the years ended December 31, 2022 and 2021, total sales in the United States represent approximately 95 76 0 14 Vendor Concentrations Vendor concentrations for inventory purchases for the years ended December 31, 2022 and 2021 are: SCHEDULE OF CONCENTRATION RISK, CUSTOMER For the Years Ended December 31, 2022 2021 Vendor A 13 % - * % Vendor B 11 - Vendor C - 41 Total 24 % 41 % * Less than 10% The vendors above are used for raw material purchases used primarily in the production of lens care and anti-fog products. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS In January 2023, the Company sold 15,749 19,686 15,688 314 1.75 In February 2023, we reached an agreement with the landlord of our Michigan facility to accept $ 66,000 1.25 8,056 10,983 On March 23, 2023, the Company sold 39,371 49,214 39,313 786 1.75 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates for the years ended December 31, 2022 and 2021 include estimates for allowance for doubtful accounts on accounts receivable, the estimates for obsolete inventory, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, and the fair value of equity incentives. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. |
Accounts Receivable | Accounts Receivable The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the average cost method based on prices paid for inventory items. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as sales to individual customers and expected recoverable values. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to ten years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in other income or expense in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charge for the year ended December 31, 2022 and 2021. |
Leases | Leases Operating leases are reflected on our balance sheet within operating lease Right-of-use (ROU) assets and the related current and non-current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from lease agreement. Operating lease ROU assets and liabilities are recognized at the commencement date, the date on which the lessor began making the underlying asset customizable for our use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred. Lease Term The Company calculates the term for each lease agreement to include the noncancelable period specified in the agreement together with (1) the periods covered by options to extend the lease if the Company is reasonably certain to exercise that option, (2) periods covered by an option to terminate if the Company is reasonably certain not to exercise that option and (3) period covered by an option to extend (or not terminate) if controlled by the lessor. The assessment of whether the Company is reasonably certain to exercise an option to extend a lease requires significant judgement surrounding contract-based factors, asset-based factors, entity-based factors and market-based factors. Lease Payments Lease payments consist of fixed payments, less any lease incentives paid or payable to the lessee related to the use of the underlying asset during the lease term. Incremental Borrowing Rate The ROU asset and related lease liabilities recorded based on the present value of the lease payments using (1) the rate implicit in the lease or (2) the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. |
Revenue Recognition | Revenue Recognition We adopted ASC Topic 606, Revenue from Contracts with Customers Identification of the contract, or contracts, with a customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. When a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods or services to our customer. The Company generally ships products to customers and does not have multiple performance obligations in its revenue stream and therefore does not allocate transaction prices to multiple performance obligations. We estimate any variable consideration included in the transaction price using the expected value method that requires the use of significant estimates for discounts, cancellation periods, refunds and returns. Sales discounts applied on orders are treated as a reduction of revenues, as are any rebates provided under customer contracts. Disaggregation of Revenue A limited number of key customers historically accounted for a majority of our revenue. In 2022, two customers accounted for 44 58 |
Principal versus Agent Considerations | Principal versus Agent Considerations When another party is involved in providing goods or services to our customer, we apply the principal versus agent guidance in ASC Topic 606 to determine if we are the principal or an agent to the transaction. When we control the specified goods or services before they are transferred to our customer, we report revenue gross, as principal. If we do not control the goods or services before they are transferred to our customer, revenue is reported net of the fees paid to the other party, as agent. Our evaluation to determine if we control the goods or services within ASC Topic 606 includes the following indicators: We are primarily responsible for fulfilling the promise to provide the specified good or service. When we are primarily responsible for providing the goods and services, such as when the other party is acting on our behalf, we have indication that we are the principal to the transaction. We consider if we may terminate our relationship with the other party at any time without penalty or without permission from our customer. We have inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer. We may commit to obtaining the services of another party with or without an existing contract with our customer. In these situations, we have risk of loss as principal for any amount due to the other party regardless of the amount(s) we earn as revenue from our customer. The entity has discretion in establishing the price for the specified good or service. We have discretion in establishing the price our customer pays for the specified goods or services. |
Cost of Sales | Cost of Sales Cost of sales includes inventory costs, materials and supplies costs, internal labor and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs incurred. |
Government Loan Forgiveness and Grants | Government Loan Forgiveness and Grants In the year ended December 31, 2021 the Company had $ 130,900 61,448 |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs incurred relating to the purchase of inventory are included in inventory which is charged to cost of sales as products are sold. Shipping and handling costs incurred for product shipped to customers are included in cost of sales. For the years ended December 31, 2022 and 2021 shipping and handling costs amounted to $ 180,369 187,154 |
Research and Development | Research and Development Research and development costs incurred in the development of the Company’s products and under other Company sponsored research and development projects are expensed as incurred. Costs such as direct labor, direct costs, and other allocated costs incurred to perform research and development service pursuant to government and private research projects are in included in cost of sales. Research and development costs incurred in the development of the Company’s products for the years ended December 31, 2022 and 2021 were $ 16,777 34,875 |
Advertising Costs | Advertising Costs The Company participates in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. Advertising costs charged to operations for the years ended December 31, 2022 and 2021 were $ 247,073 40,459 |
Federal and State Income Taxes | Federal and State Income Taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company adopted ASU No. 2017-09 in 2018; its adoption did not have a material impact on its consolidated financial statements. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Earnings (Loss) Per Share of Common Stock | Earnings (Loss) Per Share of Common Stock ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Additionally, potentially dilutive common shares consist of common stock options and warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future . SCHEDULE OF ANTI-DILUTIVE PER SHARE INFORMATION December 31, 2022 December 31, 2021 Stock options 2,760,991 3,123,702 Stock warrants 7,440,639 6,597,178 Total 10,201,630 9,720,880 Net income (loss) per share of common stock is as follows: SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED NET INCOME LOSS Net income (loss) per common shares outstanding: Year Ended Year Ended Common stock $ (0.21 ) $ (0.17 ) Weighted average shares outstanding: Total weighted average common shares outstanding 10,264,381 9,475,560 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company does not believe there are any other recently issued and effective, or not yet effective pronouncements that would have or are expected to have any significant effect on the Company’s financial position, results of operations or cash flows. There have been no changes to our significant accounting policies described in Note 2 to our Annual Report on Form 10-K for the year ended December 31, 2022, that have had a material impact on our Consolidated Financial Statements and related notes. |
Reclassifications | Reclassifications Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statements. None of the reclassifications had any impact on the net loss reported in 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ANTI-DILUTIVE PER SHARE INFORMATION | These common stock equivalents may be dilutive in the future . SCHEDULE OF ANTI-DILUTIVE PER SHARE INFORMATION December 31, 2022 December 31, 2021 Stock options 2,760,991 3,123,702 Stock warrants 7,440,639 6,597,178 Total 10,201,630 9,720,880 |
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED NET INCOME LOSS | Net income (loss) per share of common stock is as follows: SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED NET INCOME LOSS Net income (loss) per common shares outstanding: Year Ended Year Ended Common stock $ (0.21 ) $ (0.17 ) Weighted average shares outstanding: Total weighted average common shares outstanding 10,264,381 9,475,560 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF DISPOSAL GROUPS ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS SUMMARIZED | The following includes the detail of major classes of assets and liabilities of discontinued operations summarized on the accompanying unaudited consolidated financial statements: SCHEDULE OF DISPOSAL GROUPS ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS SUMMARIZED December 31 2021 ASSETS CURRENT ASSETS: Cash and investments $ 55,258 Accounts receivable, net 19,115 Total Current Assets 74,373 Operating lease right-of-use assets 90,852 Property, plant and equipment, net 945 Other assets 5,890 Total Assets $ 172,060 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 475,283 Accrued expenses and other current liabilities 12,434 Current portion of lease liabilities 42,291 Contract liabilities 45,762 Total Current Liabilities 575,770 Notes Payable, net of current portion 54,883 Lease liabilities, net of current portion 56,724 Total Liabilities $ 687,377 |
SCHEDULE OF INCOME (LOSS) FROM DISCONTINUED OPERATIONS | The following is the detail of major line items that constitute income from discontinued operations: SCHEDULE OF INCOME (LOSS) FROM DISCONTINUED OPERATIONS 2022 2021 For the Year Ended December 31, 2022 2021 Net Revenues $ 258,444 $ 726,170 Cost of Sales 211,029 696,597 Gross Profit 47,415 29,573 Salaries, wages and related benefits 23,573 85,603 General and administrative expenses 21,961 64,407 Professional fees - 16,817 Other income - (79,305 ) Interest and other expense 581 1,097 Income (loss) from discontinued operations 1,300 (59,046 ) Gain on sale of discontinued operations 1,148,225 - Net income (loss) from discontinued operations $ 1,149,525 $ (59,046 ) |
SCHEDULE OF SALE OF STOCK BY SUBSIDIARY | In the second quarter of 2022, the gain on the sale of 70 SCHEDULE OF SALE OF STOCK BY SUBSIDIARY Fair value of consideration received $ 450,000 Fair value of retained interest 192,857 Less carrying value of subsidiary sold (505,368 ) Gain on sale of subsidiary $ 1,148,225 |
INVESTMENT IN SUBSIDIARY (Table
INVESTMENT IN SUBSIDIARY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
SCHEDULE OF EQUITY EQUITY INVESTMENT IN SUBSIDIARY | SCHEDULE OF EQUITY EQUITY INVESTMENT IN SUBSIDIARY Investment in ANI $ 192,857 Income from investment in subsidiary 57,289 Non-marketable equity investment in subsidiary $ 250,146 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | At December 31, 2022 and 2021, accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE December 31, December 31, Accounts receivable $ 377,940 $ 335,555 Less: allowance for doubtful accounts (29,375 ) (42,326 ) Accounts receivable, net $ 348,565 $ 293,229 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | At December 31, 2022 and 2021, inventory consisted of the following: SCHEDULE OF INVENTORY December 31, December 31, Raw materials $ 695,774 $ 673,518 Work in progress 256,095 314,461 Finished goods 353,082 456,768 Inventory, gross 1,304,951 1,444,747 Less: reserve for obsolescence (184,878 ) (65,742 ) Inventory, net $ 1,120,073 $ 1,379,005 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating Lease | |
SCHEDULE OF REMAINING LEASE PAYMENTS | For operating leases, we calculated ROU assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. SCHEDULE OF REMAINING LEASE PAYMENTS December 31, 2022 December 31, 2021 Operating lease liabilities $ 864,593 $ 988,581 Right-of-use assets $ 1,037,749 $ 1,219,061 |
SCHEDULE OF FUTURE PAYMENTS ON OPERATING LEASE | Future payments on the operating lease are: SCHEDULE OF FUTURE PAYMENTS ON OPERATING LEASE Operating Leases 2023 $ 206,373 2024 213,681 2025 220,989 2026 228,297 2027 175,334 Less: impact of discounting (180,081 ) Present value of lease liabilities 864,593 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | At December 31, 2022 and 2021, property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Useful Life December 31, December 31, Machinery and equipment 5 10 $ 2,613,387 $ 2,613,387 Furniture and office equipment 3 7 480,784 475,874 Leasehold improvements 2 15 140,678 140,678 Property and equipment, gross Less: accumulated depreciation (2,709,040 ) (2,596,752 ) Property and equipment, net $ 525,809 $ 633,187 |
NOTES PAYABLE AND FINANCE LEA_2
NOTES PAYABLE AND FINANCE LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable And Finance Leases | |
SCHEDULE OF FUTURE MINIMUM FINANCE LEASE PAYMENTS | Future minimum lease payments under leases that had initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2022, are as follows: SCHEDULE OF FUTURE MINIMUM FINANCE LEASE PAYMENTS Finance Leases 2023 $ 39,005 2024 25,620 Less: impact of discounting (1,426 ) Present value of lease liabilities 63,199 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
SCHEDULE OF STOCK OPTION PLAN ACTIVITY | Stock options outstanding are to purchase common stock. Stock option activities for the years ended December 31, 2022 and 2021 are summarized as follows: SCHEDULE OF STOCK OPTION PLAN ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding, December 31, 2020 502,892 $ 0.89 3.23 $ - Exercised - Forfeited or expired (116,690 ) 1.83 Granted 2,747,500 0.80 Balance Outstanding, December 31, 2021 3,133,702 $ 0.77 4.93 $ - Exercised - Forfeited or expired (518,411 ) 1.03 Granted 145,700 0.80 Balance Outstanding, December 31, 2022 2,760,991 $ 0.72 4.09 $ - Exercisable, December 31, 2022 1,269,386 $ 0.69 3.08 $ - |
SCHEDULE OF STOCK OPTIONS VESTING | SCHEDULE OF STOCK OPTIONS VESTING The right to purchase: Consisting of: Vesting: Tranche 1 150,000 Vested on June 30, 2021 Tranche 2 150,000 Vested on December 31, 2021 Tranche 3 150,000 Vested on June 30, 2022 Tranche 4 150,000 Vested on December 31, 2022 Tranche 5 150,000 Will vest on June 30, 2023 Tranche 6 150,000 Will vest on December 31, 2023 Tranche 7 Up to 150,000 Forfeited because sales bonus for 2021 did not reach cap Tranche 8 Up to 150,000 Forfeited because sales bonus for 2021 did not reach cap Tranche 9 Up to 150,000 Will vest if the aggregate sales bonus payable for 2023 exceeds $300,000 Tranche 10 Up to 1 If a profit bonus is payable under the employment contract and the Board determines to pay some or all of it with options, the number vested as determined by the Board |
SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS | The fair value of the options awarded outside of any plan was calculated using the Black-Scholes method. The assumptions used in the calculations are shown below. The expected term represents the period of time that the options are expected to be outstanding. Below is a summary of terms for options issued during 2021 outside of the plan. SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS Exercise price per option $ 0.75 Fair value per option at grant date $ 0.60 0.84 Expected term 5 Expected volatility 130 335 % Expected dividend yield 0 % Risk-free interest rate 0.19 1.18 % Expense in period $ 147,646 Unearned expense $ 314,980 |
2021 Equity Incentive Plan [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS | SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS Exercise price per option $ 0.75 Fair value per option at grant date $ 0.60 Expected term 5 Expected volatility 243 244 % Expected dividend yield 0 % Risk-free interest rate 1.40 3.00 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF EFFECTIVE STATUTORY RATE OF INCOME TAXES | The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2022 and 2021 were as follows: SCHEDULE OF EFFECTIVE STATUTORY RATE OF INCOME TAXES 2022 2021 Years Ended December 31, 2022 2021 Income tax provision (benefit) at U.S. statutory rate of 21% $ 441,000 $ 331,000 Government grant 13,000 - Payroll Protection Program loan forgiveness - 44,000 Change in valuation allowance (454,000 ) (375,000 ) Revaluation of deferred tax asset (327,000 ) 441,000 Revaluation of valuation allowance - (441,000 ) Revaluation of valuation allowance due to return to provision 85,000 - Revaluation of valuation allowance due to ANI sale 242,000 - Total provision for income tax $ - $ - |
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES | The Company’s approximate net deferred tax assets as of December 31, 2022 and 2021 were as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES December 31, December 31, Deferred Tax Assets: Net operating loss carryforward $ 3,392,000 $ 3,355,000 Stock-based compensation 109,000 66,000 Allowance for inventory obsolescence 39,000 14,000 Accrued compensation 6,000 1,000 Other 56,000 39,000 Total deferred tax assets 3,602,000 3,475,000 Valuation allowance (3,602,000 ) (3,475,000 ) Net deferred tax assets $ - - |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Customer Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
SCHEDULE OF CONCENTRATION RISK, CUSTOMER | Customer concentrations for the years ended December 31, 2022 and 2021 are as follows: SCHEDULE OF CONCENTRATION RISK, CUSTOMER For the Years Ended December 31, 2022 2021 Customer A 33 % 13 % Customer B 11 % - % Customer C - % 13 % Customer D - % 18 % Customer E - % 14 % Total 44 % 58 % * Less than 10% |
Vendor Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
SCHEDULE OF CONCENTRATION RISK, CUSTOMER | Vendor concentrations for inventory purchases for the years ended December 31, 2022 and 2021 are: SCHEDULE OF CONCENTRATION RISK, CUSTOMER For the Years Ended December 31, 2022 2021 Vendor A 13 % - * % Vendor B 11 - Vendor C - 41 Total 24 % 41 % * Less than 10% |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
May 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Losses from operations | $ 3,251,114 | |||
Net cash used by continuing operations | 1,636,120 | $ 1,282,553 | ||
Working capital | 524,389 | |||
Cash | $ 259,223 | $ 197,932 | ||
Parent [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Ownership percentage | 30% | |||
Applied Nano tech Inc [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Sale of interest in subsidiary | 70% | 70% | 30% |
SCHEDULE OF ANTI-DILUTIVE PER S
SCHEDULE OF ANTI-DILUTIVE PER SHARE INFORMATION (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 10,201,630 | 9,720,880 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,760,991 | 3,123,702 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 7,440,639 | 6,597,178 |
SCHEDULE OF RECONCILIATION OF B
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED NET INCOME LOSS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common stock | $ (0.21) | $ (0.17) |
Total weighted average common shares outstanding | 10,264,381 | 9,475,560 |
Common Stock [Member] | ||
Common stock | $ (0.21) | $ (0.17) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||
Loan forgiveness | $ 130,900 | |
Government grant | 61,448 | |
Shipping and handling costs | 180,369 | 187,154 |
Research and development expense | 16,777 | 34,875 |
Advertising expense | 247,073 | 40,459 |
Payroll Protection Program [Member] | ||
Product Information [Line Items] | ||
Loan forgiveness | $ 130,900 | |
Employee Retention Tax Credits [Member] | ||
Product Information [Line Items] | ||
Government grant | $ 61,448 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 44% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Four Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 58% |
SCHEDULE OF DISPOSAL GROUPS ASS
SCHEDULE OF DISPOSAL GROUPS ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS SUMMARIZED (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and investments | $ 55,258 | |
Accounts receivable, net | 19,115 | |
Total Current Assets | 74,373 | |
Operating lease right-of-use assets | 90,852 | |
Property, plant and equipment, net | 945 | |
Other assets | 5,890 | |
Total Assets | 172,060 | |
CURRENT LIABILITIES: | ||
Accounts payable | 475,283 | |
Accrued expenses and other current liabilities | 12,434 | |
Current portion of lease liabilities | 42,291 | |
Contract liabilities | 45,762 | |
Total Current Liabilities | 575,770 | |
Notes Payable, net of current portion | 54,883 | |
Lease liabilities, net of current portion | 56,724 | |
Total Liabilities | $ 687,377 |
SCHEDULE OF INCOME (LOSS) FROM
SCHEDULE OF INCOME (LOSS) FROM DISCONTINUED OPERATIONS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net Revenues | $ 258,444 | $ 726,170 | |
Cost of Sales | 211,029 | 696,597 | |
Gross Profit | 47,415 | 29,573 | |
Salaries, wages and related benefits | 23,573 | 85,603 | |
General and administrative expenses | 21,961 | 64,407 | |
Professional fees | 16,817 | ||
Other income | (79,305) | ||
Interest and other expense | 581 | 1,097 | |
Income (loss) from discontinued operations | 1,300 | (59,046) | |
Gain on sale of discontinued operations | $ 1,148,225 | 1,148,225 | |
Net income (loss) from discontinued operations | $ 1,149,525 | $ (59,046) |
SCHEDULE OF SALE OF STOCK BY SU
SCHEDULE OF SALE OF STOCK BY SUBSIDIARY (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
May 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of consideration received | $ 450,000 | |||
Fair value of retained interest | 192,857 | |||
Carrying value of subsidiary sold | (505,368) | |||
Gain on sale of subsidiary | $ 1,148,225 | $ 1,148,225 | ||
Applied Nano tech Inc [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Sale of interest in subsidiary | 70% | 70% | 30% |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
May 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Current portion of note receivable | $ 415,983 | |||
Current portion of note receivable | 40,000 | |||
Note receivable, non-current | 375,983 | |||
Income (loss) from discontinued operations | 1,300 | (59,046) | ||
Income (loss) from discontinued operations | $ (1,300) | $ 59,046 | ||
Applied Nano tech Inc [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Sale of interest in subsidiary | 70% | 70% | 30% | |
Debt instrument face amount | $ 450,000 | |||
Debt instrument bear interest | 7% | |||
Debt instrument, periodic payment, principal | $ 20,000 | |||
Balloon payment | 80,000 | |||
Gain on sale of discontinued operations | 1,148,225 | |||
Applied Nano tech Inc [Member] | May 2024 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Debt instrument, periodic payment, principal | 25,000 | |||
Applied Nano tech Inc [Member] | May 2026 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Debt instrument, periodic payment, principal | $ 30,000 |
SCHEDULE OF EQUITY EQUITY INVES
SCHEDULE OF EQUITY EQUITY INVESTMENT IN SUBSIDIARY (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, All Other Investments [Abstract] | ||
Investment in ANI | $ 192,857 | |
Income from investment in subsidiary | 57,289 | |
Non-marketable equity investment in subsidiary | $ 250,146 |
INVESTMENT IN SUBSIDIARY (Detai
INVESTMENT IN SUBSIDIARY (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
May 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Income from investment in subsidiary | $ 57,289 | |||
Equity Method Investments | $ 250,146 | |||
Applied Nano tech Inc [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Sale of interest in subsidiary | 70% | 70% | 30% |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable | $ 377,940 | $ 335,555 |
Less: allowance for doubtful accounts | (29,375) | (42,326) |
Accounts receivable, net | $ 348,565 | $ 293,229 |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Bad debt expense (recoveries) | $ 43,098 | $ 18,251 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 695,774 | $ 673,518 |
Work in progress | 256,095 | 314,461 |
Finished goods | 353,082 | 456,768 |
Inventory, gross | 1,304,951 | 1,444,747 |
Less: reserve for obsolescence | (184,878) | (65,742) |
Inventory, net | $ 1,120,073 | $ 1,379,005 |
SCHEDULE OF REMAINING LEASE PAY
SCHEDULE OF REMAINING LEASE PAYMENTS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease | ||
Operating lease liabilities | $ 864,593 | $ 988,581 |
Right-of-use assets | $ 1,037,749 | $ 1,219,061 |
SCHEDULE OF FUTURE PAYMENTS ON
SCHEDULE OF FUTURE PAYMENTS ON OPERATING LEASE (Details) | Dec. 31, 2022 USD ($) |
Operating Lease | |
2023 | $ 206,373 |
2024 | 213,681 |
2025 | 220,989 |
2026 | 228,297 |
2027 | 175,334 |
Less: impact of discounting | (180,081) |
Present value of lease liabilities | $ 864,593 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) | 12 Months Ended | |
May 31, 2020 USD ($) ft² | Dec. 31, 2022 USD ($) | |
Operating Lease | ||
Lease with related party | ft² | 29,220 | |
Lessee operating lease description | The lease has an initial term of seven years with a renewal option at the end of the initial term for an additional 3-year term, and a second renewal option thereafter for an additional 5-year term. The renewal term is not included in the calculation of the operating lease liability. As the sole tenant, we are responsible for all taxes, ordinary maintenance, snow removal and other ordinary operating expenses. Rent is $6.50 per square foot, increasing by $0.25 per year. During the first three years we also have the right to buy up to a 49% interest in Magic Research LLC for a price equal to 49% of the contributions received from other members. | |
Fair value of warrants | $ 311,718 | |
Payments for rent | $ 57,119 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (2,709,040) | $ (2,596,752) |
Property and equipment, net | 525,809 | 633,187 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,613,387 | 2,613,387 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment Useful Life | 5 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment Useful Life | 10 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 480,784 | 475,874 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment Useful Life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment Useful Life | 7 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 140,678 | $ 140,678 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment Useful Life | 2 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment Useful Life | 15 years |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 112,288 | $ 105,005 |
SCHEDULE OF FUTURE MINIMUM FINA
SCHEDULE OF FUTURE MINIMUM FINANCE LEASE PAYMENTS (Details) | Dec. 31, 2022 USD ($) |
Notes Payable And Finance Leases | |
2023 | $ 39,005 |
2024 | 25,620 |
Less: impact of discounting | (1,426) |
Present value of lease liabilities | $ 63,199 |
NOTES PAYABLE AND FINANCE LEA_3
NOTES PAYABLE AND FINANCE LEASES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||||
Oct. 26, 2022 | Aug. 22, 2022 | May 02, 2022 | Feb. 14, 2022 | Jan. 31, 2022 | Jan. 26, 2022 | Jan. 07, 2022 | Sep. 24, 2020 | Aug. 11, 2020 | Jun. 18, 2019 | Feb. 10, 2015 | Dec. 18, 2022 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 27, 2022 | |
Convertible debt | $ 100,000 | |||||||||||||||
Proceeds from convertible debt | $ 375,000 | |||||||||||||||
Finance lease, current liabilities | 39,005 | 87,567 | ||||||||||||||
Finance lease, long term liabilities | 24,194 | 61,045 | ||||||||||||||
Short Term Debt And Long Term Debt [Member] | ||||||||||||||||
Finance lease, liabilities | 63,199 | 106,935 | ||||||||||||||
Finance lease, interest expense | 12,594 | $ 12,346 | ||||||||||||||
Raymond Leasing Corporation [Member] | ||||||||||||||||
Finance lease, liabilities | $ 14,250 | |||||||||||||||
Lessee, finance lease, term of contract | 36 months | |||||||||||||||
Finance lease, principal payments | $ 425 | |||||||||||||||
Furniture [Member] | ||||||||||||||||
Finance lease, liabilities | $ 46,109 | |||||||||||||||
Finance lease, current liabilities | $ 3,755 | 21,915 | 13,335 | |||||||||||||
Finance lease, long term liabilities | 24,194 | 2,091 | ||||||||||||||
Production Equipment [Member] | ||||||||||||||||
Finance lease, liabilities | $ 85,000 | |||||||||||||||
Lessee, finance lease, term of contract | 48 months | |||||||||||||||
Finance lease, principal payments | $ 2,135 | |||||||||||||||
Michigan Facility [Member] | ||||||||||||||||
Finance lease, liabilities | $ 60,684 | |||||||||||||||
Lessee, finance lease, term of contract | 36 months | |||||||||||||||
Finance lease, principal payments | $ 1,972 | |||||||||||||||
Equipment Note [Member] | ||||||||||||||||
Debt instrument, maturity date | Dec. 10, 2022 | |||||||||||||||
Debt instrument, interest rate, stated percentage | 6.29% | |||||||||||||||
Debt instrument, periodic payment | $ 4,053 | |||||||||||||||
Nano Magic LLC [Member] | Equipment Note [Member] | ||||||||||||||||
Debt instrument, maturity date | Apr. 10, 2022 | Jun. 10, 2020 | ||||||||||||||
Debt instrument, interest rate, stated percentage | 6.29% | 4.35% | ||||||||||||||
Debt instrument, face amount | $ 373,000 | $ 1,629 | ||||||||||||||
Debt instrument, periodic payment | $ 4,053 | |||||||||||||||
Convertible Promissory Notes [Member] | ||||||||||||||||
Debt instrument conversion price | $ 1.75 | |||||||||||||||
Proceeds from convertible debt | $ 50,000 | |||||||||||||||
Debt instrument, interest rate, stated percentage | 8% | |||||||||||||||
Investors One [Member] | ||||||||||||||||
Convertible debt | $ 50,000 | |||||||||||||||
Investors Two [Member] | ||||||||||||||||
Convertible debt | $ 50,000 | |||||||||||||||
Investors Three [Member] | ||||||||||||||||
Convertible debt | $ 50,000 | |||||||||||||||
Several Investors [Member] | ||||||||||||||||
Debt instrument, maturity date | Mar. 31, 2026 | |||||||||||||||
Investors [Member] | ||||||||||||||||
Proceeds from convertible debt | $ 25,000 | |||||||||||||||
Convertible Debt [Member] | ||||||||||||||||
Convertible debt | $ 25,000 | $ 50,000 | ||||||||||||||
Debt instrument, maturity date | Oct. 31, 2023 | Mar. 31, 2025 | ||||||||||||||
Annual payable interest percentage | 8% | 8% | ||||||||||||||
Debt instrument conversion price | $ 1.75 | $ 1.75 | ||||||||||||||
Convertible Debt One [Member] | ||||||||||||||||
Convertible debt | $ 50,000 | $ 25,000 | ||||||||||||||
Debt instrument, maturity date | Mar. 31, 2026 | |||||||||||||||
Annual payable interest percentage | 8% | |||||||||||||||
Debt instrument conversion price | $ 1.75 | |||||||||||||||
Convertible Debt Two [Member] | ||||||||||||||||
Convertible debt | $ 50,000 | |||||||||||||||
Debt instrument, maturity date | Mar. 31, 2026 | |||||||||||||||
Annual payable interest percentage | 8% | |||||||||||||||
Debt instrument conversion price | $ 1.75 | |||||||||||||||
Convertible Debt Three [Member] | ||||||||||||||||
Convertible debt | $ 50,000 | |||||||||||||||
Debt instrument, maturity date | Mar. 31, 2026 | |||||||||||||||
Annual payable interest percentage | 8% | |||||||||||||||
Debt instrument conversion price | $ 1.75 |
BANK LOANS (Details Narrative)
BANK LOANS (Details Narrative) - Small Business Administration Paycheck Protection Program [Member] | May 08, 2020 USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Loan amount | $ 130,900 |
Loan interest rate | 1% |
Installment amount | $ 7,330 |
ACCOUNTS RECEIVABLE FACTORING (
ACCOUNTS RECEIVABLE FACTORING (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable Factoring | ||
Receivables, net, current | $ 47 | $ 11,337 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Advances fron related party | $ 130,006 | |
Ron Berman [Member] | ||
Related Party Transaction [Line Items] | ||
Legal and consulting fees | $ 124,150 | $ 167,350 |
Tom Berman and Ron Berman [Member] | ||
Related Party Transaction [Line Items] | ||
Contribution description | The lease for the Michigan facility gives us the right, during the first three years of the lease, to buy up to a 49% interest in the landlord for a price equal to 49% of the contributions received from other members. | |
MrRicker And MsRickert [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties current | $ 42,887 | 92,887 |
Accrued payroll taxes | $ 16,000 | $ 16,000 |
SCHEDULE OF STOCK OPTION PLAN A
SCHEDULE OF STOCK OPTION PLAN ACTIVITY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Number of Options, Outstanding, Beginning balance | 3,133,702 | 502,892 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.77 | $ 0.89 | |
Weighted Average Remaining Contractual Terms (Years), Outstanding, Ending | 4 years 1 month 2 days | 4 years 11 months 4 days | 3 years 2 months 23 days |
Aggregate Intrinsic Value, Share Outstanding, Ending balance | |||
Number of Options, Exercised | |||
Number of Options, Forfeited | (518,411) | (116,690) | |
Number of Options, Forfeited or expired | $ 1.03 | $ 1.83 | |
Number of Options, Granted | 145,700 | 2,747,500 | |
Weighted Average Exercise Price, Granted | $ 0.80 | $ 0.80 | |
Number of Options, Outstanding, Ending balance | 2,760,991 | 3,133,702 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.72 | $ 0.77 | |
Aggregate Intrinsic Value, Ending balance | |||
Number of Options, Exercisable, Ending balance | 1,269,386 | ||
Weighted Average Exercise Price, Exercisable Ending balance | $ 0.69 | ||
Weighted Average Remaining Contractual Term (Years), Exercisable | 3 years 29 days | ||
Aggregate Intrinsic Value, Exercisable |
SCHEDULE OF STOCK OPTIONS VESTI
SCHEDULE OF STOCK OPTIONS VESTING (Details) - President and Chief Executive Officer [Member] - shares | Mar. 03, 2021 | Mar. 02, 2021 |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 1,350,000 | |
Tranche One [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Stock options vesting period, description | Vested on June 30, 2021 | |
Tranche Two [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Stock options vesting period, description | Vested on December 31, 2021 | |
Tranche Three [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Stock options vesting period, description | Vested on June 30, 2022 | |
Tranche Four [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Stock options vesting period, description | Vested on December 31, 2022 | |
Tranche Five [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Stock options vesting period, description | Will vest on June 30, 2023 | |
Tranche Six [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Stock options vesting period, description | Will vest on December 31, 2023 | |
Tranche Seven [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Stock options vesting period, description | Forfeited because sales bonus for 2021 did not reach cap | |
Tranche Seven [Member] | Maximum [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Tranche Eight [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Stock options vesting period, description | Forfeited because sales bonus for 2021 did not reach cap | |
Tranche Eight [Member] | Maximum [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Tranche Nine [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Stock options vesting period, description | Will vest if the aggregate sales bonus payable for 2023 exceeds $300,000 | |
Tranche Nine [Member] | Maximum [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 150,000 | |
Tranche Ten [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Stock options vesting period, description | If a profit bonus is payable under the employment contract and the Board determines to pay some or all of it with options, the number vested as determined by the Board | |
Tranche Ten [Member] | Maximum [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Number of stock options, vested | 1,000,000 |
SCHEDULE OF FAIR VALUE OF OPTIO
SCHEDULE OF FAIR VALUE OF OPTION AWARD VALUATION ASSUMPTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Exercise price per option | $ 0.75 | |
Expected term | 5 years | |
Expected dividend yield | 130% | |
Expected volatility, maximum | 335% | |
Expected dividend yield | 0% | |
Expense in period | $ 147,646 | |
Unearned expense | $ 314,980 | |
2021 Equity Incentive Plan [Member] | ||
Exercise price per option | $ 0.75 | |
Expected term | 5 years | |
Expected dividend yield | 0% | |
Unearned expense | $ 22,627 | $ 23,301 |
Minimum [Member] | ||
Fair value per option at grant date | $ 0.60 | |
Risk-free interest rate | 0.19% | |
Minimum [Member] | 2021 Equity Incentive Plan [Member] | ||
Exercise price per option | $ 0.60 | |
Expected dividend yield | 243% | |
Risk-free interest rate | 1.40% | |
Maximum [Member] | ||
Fair value per option at grant date | $ 0.84 | |
Risk-free interest rate | 1.18% | |
Maximum [Member] | 2021 Equity Incentive Plan [Member] | ||
Expected dividend yield | 244% | |
Risk-free interest rate | 3% |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Dec. 06, 2022 | Oct. 31, 2022 | Aug. 29, 2022 | Aug. 17, 2022 | May 27, 2022 | Apr. 14, 2022 | Feb. 22, 2022 | Feb. 16, 2022 | Jan. 11, 2022 | Dec. 15, 2021 | Jun. 21, 2021 | Apr. 08, 2021 | Mar. 17, 2021 | Mar. 02, 2021 | Feb. 16, 2021 | Oct. 20, 2020 | Apr. 03, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 10, 2021 | Jan. 31, 2020 | |
Class of Stock [Line Items] | ||||||||||||||||||||||||
Common stock, voting rights | The rights of each share of common are the same with respect to dividends, distributions and rights upon liquidation. Holders of common stock each have one vote per share in the election of directors and other matters submitted to a vote of the stockholders | |||||||||||||||||||||||
Common stock issued for services | $ 132,000 | $ 75,000 | ||||||||||||||||||||||
Sale of stock, number of shares issued in transaction | 102,082 | |||||||||||||||||||||||
Proceeds from issuance of warrants | $ 2,037 | |||||||||||||||||||||||
Exercise price per share | $ 1.75 | $ 1.66 | $ 1.75 | $ 1.66 | ||||||||||||||||||||
Sale of stock, consideration received on transaction | $ 127,603 | |||||||||||||||||||||||
Exercisable warrants | 101,875 | 101,875 | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 518,411 | 116,690 | ||||||||||||||||||||||
Number of stock options granted | 145,700 | 2,747,500 | ||||||||||||||||||||||
Share based compensation unearned expense | $ 314,980 | |||||||||||||||||||||||
Weighted average remaining contractual term | 24 months 27 days | |||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Exercise price per share | $ 1.72 | $ 1.72 | ||||||||||||||||||||||
Warrants outstanding and exercisable warrants | 7,440,639 | |||||||||||||||||||||||
Weighted average remaining contractual term | 61 months 3 days | |||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Exercisable warrants | 6,597,178 | 6,597,178 | ||||||||||||||||||||||
2015 Equity Incentive Plan [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Number of option granted | 50,000 | 100,000 | ||||||||||||||||||||||
2021 Equity Incentive Plan [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based payment award, options, vested, number of shares | 15,000 | 110,700 | 100,163 | 43,385 | ||||||||||||||||||||
Number of shares available for issuance | 2,500 | 85,000 | ||||||||||||||||||||||
Number of stock options granted | 2,500 | |||||||||||||||||||||||
Number of shares available for future issuance | 200,000 | |||||||||||||||||||||||
Number of share options, granted and forfeited | 100,000 | |||||||||||||||||||||||
Share-Based Payment Arrangement, Expense | $ 54,616 | $ 42,320 | ||||||||||||||||||||||
Share based compensation unearned expense | $ 22,627 | $ 23,301 | ||||||||||||||||||||||
Consulting Agreement [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Number of option granted | 100,000 | |||||||||||||||||||||||
Consulting Agreement [Member] | 2021 Equity Incentive Plan [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Number of option granted | 100,000 | |||||||||||||||||||||||
Share-Based Payment Arrangement, Tranche One [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 100,000 | 450,000 | ||||||||||||||||||||||
Magic Growth LLC [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Sale of stock, number of shares issued in transaction | 13,889 | 69,445 | 213,889 | 69,445 | 152,778 | 222,223 | 385,231 | 769,231 | ||||||||||||||||
Proceeds from issuance of private placement | $ 481,539 | $ 961,538 | ||||||||||||||||||||||
Warrants issued to purchase the additional shares | 385,225 | 769,225 | ||||||||||||||||||||||
Proceeds from issuance of warrants | $ 694 | $ 3,471 | $ 10,694 | $ 3,471 | $ 7,638 | $ 11,114 | $ 19,260 | $ 38,463 | ||||||||||||||||
Exercise price per share | $ 2.25 | $ 2.25 | $ 2.25 | $ 2.25 | $ 2.25 | $ 2.25 | $ 2 | $ 2 | ||||||||||||||||
Sale of stock, consideration received on transaction | $ 24,306 | $ 121,529 | $ 374,305 | $ 121,529 | $ 267,362 | $ 388,887 | ||||||||||||||||||
Exercisable warrants | 13,885 | 69,425 | 213,885 | 69,425 | 152,770 | 222,195 | ||||||||||||||||||
Warrants and rights outstanding, term | 4 years | 4 years | 4 years | 4 years | 4 years | 4 years | ||||||||||||||||||
President and Chief Executive Officer [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Shares issued price per share | $ 0.75 | |||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based payment award, options, vested, number of shares | 1,350,000 | |||||||||||||||||||||||
Ron Berman [Member] | Consulting Agreement [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Number of option granted | 37,500 | |||||||||||||||||||||||
President and CEO [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Shares issued price per share | $ 0.75 | |||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Common stock issued for services, shares | 5,000 | |||||||||||||||||||||||
Shares issued price per share | $ 1 | $ 0.55 | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 550,000 | |||||||||||||||||||||||
Common Stock [Member] | Director [Member] | ||||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||||
Common stock issued for services, shares | 176,000 | 45,333 | 37,890 | |||||||||||||||||||||
Shares issued price per share | $ 0.75 | $ 0.75 | $ 0.95 | |||||||||||||||||||||
Common stock issued for services | $ 132,000 | $ 34,000 | $ 36,000 |
SCHEDULE OF EFFECTIVE STATUTORY
SCHEDULE OF EFFECTIVE STATUTORY RATE OF INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision (benefit) at U.S. statutory rate of 21% | $ 441,000 | $ 331,000 |
Government grant | 13,000 | |
Payroll Protection Program loan forgiveness | 44,000 | |
Change in valuation allowance | (454,000) | (375,000) |
Revaluation of deferred tax asset | (327,000) | 441,000 |
Revaluation of valuation allowance | (441,000) | |
Revaluation of valuation allowance due to return to provision | 85,000 | |
Revaluation of valuation allowance due to ANI sale | 242,000 | |
Total provision for income tax |
SCHEDULE OF EFFECTIVE STATUTO_2
SCHEDULE OF EFFECTIVE STATUTORY RATE OF INCOME TAXES (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Statutory income tax rate | 21% |
SCHEDULE OF COMPONENTS OF DEFER
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 3,392,000 | $ 3,355,000 |
Stock-based compensation | 109,000 | 66,000 |
Allowance for inventory obsolescence | 39,000 | 14,000 |
Accrued compensation | 6,000 | 1,000 |
Other | 56,000 | 39,000 |
Total deferred tax assets | 3,602,000 | 3,475,000 |
Valuation allowance | (3,602,000) | (3,475,000) |
Net deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards | $ 16,150,000 |
Tax credit carryforward description | The potential tax benefit arising from tax loss carryforwards prior to 2017 will expire between 2022 and 2038, while the potential tax benefits arising after 2017 currently have no expiration date |
Ownership Interests | 50% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement | $ 0 |
SCHEDULE OF CONCENTRATION RISK,
SCHEDULE OF CONCENTRATION RISK, CUSTOMER (Details) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | |||
Customer Concentration Risk [Member] | Product Revenues [Member] | Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 33% | 13% | ||
Customer Concentration Risk [Member] | Product Revenues [Member] | Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 11% | |||
Customer Concentration Risk [Member] | Product Revenues [Member] | Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | (0.00%) | [1] | 13% | |
Customer Concentration Risk [Member] | Product Revenues [Member] | Customer D [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 18% | |||
Customer Concentration Risk [Member] | Product Revenues [Member] | Customer E [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | [1] | 14% | ||
Customer Concentration Risk [Member] | Product Revenues [Member] | Customer [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 44% | 58% | ||
Vendor Concentration Risk [Member] | Inventory Purchases [Member] | Vendor A [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 13% | |||
Vendor Concentration Risk [Member] | Inventory Purchases [Member] | Vendor B [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 11% | |||
Vendor Concentration Risk [Member] | Inventory Purchases [Member] | Vendor C [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 41% | |||
Vendor Concentration Risk [Member] | Inventory Purchases [Member] | Vendor [Member] | ||||
Concentration Risk [Line Items] | ||||
Total | 24% | 41% | ||
[1]Less than 10% |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||
Accounts receivable | $ 348,565 | $ 293,229 |
Customers [Member] | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $ 104,315 | $ 13,326 |
Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED STATES | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 95% | 76% |
Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | GERMANY | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 0% | 14% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Mar. 23, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | Jan. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | ||||||||
Number of shares sold, shares | 102,082 | |||||||
Proceed from issuance of common stock | $ 1,464,641 | $ 1,500,800 | ||||||
Purchase of warrant | 101,875 | 101,875 | ||||||
Proceeds from issuance of warrants | $ 2,037 | |||||||
Warrant exercise price | $ 1.75 | $ 1.66 | $ 1.75 | $ 1.66 | ||||
Deferred tax assets, tax deferred expense, compensation and benefits | $ 109,000 | $ 66,000 | $ 109,000 | $ 66,000 | ||||
Cash | $ 259,223 | $ 197,932 | 259,223 | $ 197,932 | ||||
Payments for rent | $ 57,119 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of shares sold, shares | 39,371 | 15,749 | ||||||
Proceed from issuance of common stock | $ 19,686 | |||||||
Purchase of warrant | 39,313 | 15,688 | ||||||
Proceeds from issuance of warrants | $ 786 | $ 314 | ||||||
Warrant exercise price | $ 1.75 | $ 1.75 | ||||||
Deferred tax assets, tax deferred expense, compensation and benefits | $ 66,000 | |||||||
Shares issued, price per share | $ 1.25 | |||||||
Cash | $ 8,056 | |||||||
Payments for rent | $ 10,983 | |||||||
Proceeds from warrants ecercises | $ 49,214 |