Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 12, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | 374WATER INC. | |
Entity Central Index Key | 0000933972 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2024 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Entity Common Stock Shares Outstanding | 132,725,652 | |
Entity File Number | 001-41420 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 88-0271109 | |
Entity Address Address Line 1 | 701 W Main Street | |
Entity Address Address Line 2 | Suite 410 | |
Entity Address City Or Town | Durham | |
Entity Address State Or Province | NC | |
Entity Address Postal Zip Code | 27701 | |
City Area Code | 440 | |
Local Phone Number | 601-9677 | |
Security 12b Title | Common Stock, par value $0.0001 | |
Trading Symbol | SCWO | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash | $ 5,083,482 | $ 10,445,404 |
Accounts receivable, net of allowance | 57,437 | 64,792 |
Other accounts receivable | 24,801 | 39,749 |
Unbilled accounts receivable | 1,771,609 | 1,494,553 |
Inventory, net | 1,016,231 | 2,276,677 |
Prepaid expenses | 856,580 | 581,085 |
Total Current Assets | 8,810,140 | 14,902,260 |
Property and equipment, net | 260,154 | 230,971 |
Equipment-in-process | 2,148,062 | 0 |
Intangible asset, net | 981,335 | 988,029 |
Other assets | 15,709 | 0 |
Total Long-Term Assets | 3,405,260 | 1,219,000 |
Total Assets | 12,215,400 | 16,121,260 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 892,275 | 572,297 |
Accrued contract loss provision | 600,000 | 500,000 |
Accrued legal settlement | 0 | 135,000 |
Unearned revenue | 32,768 | 130,000 |
Other liabilities | 11,743 | 36,787 |
Total Current Liabilities | 1,536,786 | 1,374,084 |
Total Liabilities | 1,536,786 | 1,374,084 |
Stockholders Equity | ||
Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 132,932,335 and 132,667,107 shares outstanding at June 30, 2024 and December 31, 2023, respectively | 13,292 | 13,266 |
Additional paid-in capital | 31,573,140 | 30,684,943 |
Accumulated deficit | (20,910,289) | (15,953,504) |
Accumulated other income | 2,471 | 2,471 |
Total Stockholders Equity | 10,678,614 | 14,747,176 |
Total Liabilities & Stockholders Equity | $ 12,215,400 | $ 16,121,260 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares issued | 132,932,335 | 132,667,107 |
Common Stock, Shares Outstanding | 132,932,335 | 132,667,107 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Condensed Consolidated Statements of Operations (Unaudited) | ||||
Revenue | $ 36,821 | $ 49,863 | $ 352,099 | $ 851,321 |
Cost of goods sold | 43,543 | 45,257 | 660,841 | 765,403 |
Gross margin | (6,722) | 4,606 | (308,742) | 85,918 |
Operating Expenses | ||||
Research and development | 566,568 | 271,964 | 1,101,715 | 627,869 |
Compensation and related expenses | 777,825 | 733,121 | 1,429,429 | 1,451,881 |
Professional fees | 615,987 | 92,285 | 868,692 | 191,857 |
General and administrative | 1,051,998 | 676,333 | 1,511,725 | 1,261,995 |
Total Operating Expenses | 3,012,378 | 1,773,703 | 4,911,561 | 3,533,602 |
Loss from Operations | (3,019,100) | (1,769,097) | (5,220,303) | (3,447,684) |
Interest income | 74,192 | 74,967 | 178,812 | 112,826 |
Other income | 12,588 | 43,553 | 84,706 | 43,938 |
Total Other Income | 86,780 | 118,520 | 263,518 | 156,764 |
Net Loss before Income Taxes | (2,932,320) | (1,650,577) | (4,956,785) | (3,290,920) |
Provision for Income Taxes | 0 | 0 | 0 | 0 |
Net Loss | $ (2,932,320) | $ (1,650,577) | $ (4,956,785) | $ (3,290,920) |
Net Loss per Share - Basic and Diluted | $ (0.02) | $ (0.01) | $ (0.04) | $ (0.03) |
Weighted Average Common Shares Outstanding | 132,801,137 | 129,389,098 | 132,735,552 | 128,274,091 |
Comprehensive loss: | ||||
Net Loss | $ (2,932,320) | $ (1,650,577) | $ (4,956,785) | $ (3,290,920) |
Change in foreign currency translation | 0 | 4,943 | 0 | 5,438 |
Total comprehensive loss | $ (2,932,320) | $ (1,645,634) | $ (4,956,785) | $ (3,285,482) |
Condensed Consolidated Changes
Condensed Consolidated Changes in Stockholders' Equity (Unaudited) - USD ($) | Total | Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Other Comprehensive Income |
Balance, shares at Dec. 31, 2022 | 126,702,545 | |||||
Balance, amount at Dec. 31, 2022 | $ 8,253,612 | $ 0 | $ 12,669 | $ 16,110,221 | $ (7,849,982) | $ (19,296) |
Issuance of shares of common stock, shares | 2,137,876 | |||||
Issuance of shares of common stock, amount | 8,294,708 | 0 | $ 214 | 8,294,494 | 0 | |
Stock-based compensation | 214,924 | 0 | 0 | 214,924 | 0 | 0 |
Foreign currency gain | 824 | 0 | 0 | 0 | 0 | 824 |
Unrealized gain (loss) on investments | 18,967 | 0 | 0 | 0 | 0 | 18,967 |
Net loss | (1,640,343) | 0 | $ 0 | 0 | (1,640,343) | 0 |
Balance, shares at Mar. 31, 2023 | 128,840,421 | |||||
Balance, amount at Mar. 31, 2023 | 15,142,692 | 0 | $ 12,883 | 24,619,639 | (9,490,325) | 495 |
Balance, shares at Dec. 31, 2022 | 126,702,545 | |||||
Balance, amount at Dec. 31, 2022 | 8,253,612 | 0 | $ 12,669 | 16,110,221 | (7,849,982) | (19,296) |
Net loss | (3,290,920) | |||||
Balance, shares at Jun. 30, 2023 | 130,679,012 | |||||
Balance, amount at Jun. 30, 2023 | 18,981,318 | 0 | $ 13,067 | 30,103,715 | (11,140,902) | 5,438 |
Balance, shares at Mar. 31, 2023 | 128,840,421 | |||||
Balance, amount at Mar. 31, 2023 | 15,142,692 | 0 | $ 12,883 | 24,619,639 | (9,490,325) | 495 |
Issuance of shares of common stock, shares | 1,628,546 | |||||
Issuance of shares of common stock, amount | 5,146,730 | 0 | $ 163 | 5,146,567 | 0 | 0 |
Stock-based compensation | 228,812 | 0 | 0 | 228,812 | 0 | 0 |
Foreign currency gain | 4,943 | 0 | 0 | 0 | 0 | 4,943 |
Net loss | (1,650,577) | 0 | $ 0 | 0 | (1,650,577) | 0 |
Issuance of restricted stock, shares | 20,000 | |||||
Issuance of restricted stock, amount | 71,200 | 0 | $ 2 | 71,198 | 0 | 0 |
Exercised of stock options, shares | 175,045 | |||||
Exercised of stock options, amount | 18 | 0 | $ 18 | 0 | 0 | 0 |
Exercised of warrants, shares | 15,000 | |||||
Exercised of warrants, amount | 37,500 | 0 | $ 1 | 37,499 | 0 | 0 |
Balance, shares at Jun. 30, 2023 | 130,679,012 | |||||
Balance, amount at Jun. 30, 2023 | 18,981,318 | 0 | $ 13,067 | 30,103,715 | (11,140,902) | 5,438 |
Balance, shares at Dec. 31, 2023 | 132,667,107 | |||||
Balance, amount at Dec. 31, 2023 | 14,747,176 | 0 | $ 13,266 | 30,684,943 | (15,953,504) | 2,471 |
Issuance of shares of common stock, shares | 3,339 | |||||
Issuance of shares of common stock, amount | 4,500 | 0 | $ 0 | 4,500 | 0 | 0 |
Stock-based compensation | 183,200 | 0 | 0 | 183,200 | 0 | 0 |
Net loss | (2,024,465) | 0 | $ 0 | 0 | (2,024,465) | 0 |
Balance, shares at Mar. 31, 2024 | 132,670,446 | |||||
Balance, amount at Mar. 31, 2024 | 12,910,411 | 0 | $ 13,266 | 30,872,643 | (17,977,969) | 2,471 |
Balance, shares at Dec. 31, 2023 | 132,667,107 | |||||
Balance, amount at Dec. 31, 2023 | 14,747,176 | 0 | $ 13,266 | 30,684,943 | (15,953,504) | 2,471 |
Net loss | (4,956,785) | |||||
Balance, shares at Jun. 30, 2024 | 132,932,335 | |||||
Balance, amount at Jun. 30, 2024 | 10,678,614 | 0 | $ 13,292 | 31,573,140 | (20,910,289) | 2,471 |
Balance, shares at Mar. 31, 2024 | 132,670,446 | |||||
Balance, amount at Mar. 31, 2024 | 12,910,411 | 0 | $ 13,266 | 30,872,643 | (17,977,969) | 2,471 |
Issuance of shares of common stock, shares | 243,415 | |||||
Issuance of shares of common stock, amount | 338,100 | 0 | $ 24 | 338,076 | 0 | 0 |
Stock-based compensation | 275,384 | 0 | 0 | 275,384 | 0 | 0 |
Net loss | (2,932,320) | 0 | 0 | 0 | (2,932,320) | 0 |
Stock options issued for legal settlement | 112,697 | 0 | $ 0 | 112,697 | 0 | 0 |
Issuance of shares of common stock for cash , net of issuance costs, shares | 18,474 | |||||
Issuance of shares of common stock for cash , net of issuance costs, amount | (25,658) | 0 | $ 2 | (25,660) | 0 | 0 |
Balance, shares at Jun. 30, 2024 | 132,932,335 | |||||
Balance, amount at Jun. 30, 2024 | $ 10,678,614 | $ 0 | $ 13,292 | $ 31,573,140 | $ (20,910,289) | $ 2,471 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (4,956,785) | $ (3,290,920) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 50,953 | 44,281 |
Issuance of common stock for services | 342,600 | 0 |
Stock-based compensation | 458,584 | 514,934 |
Change in foreign currency translation | 0 | 5,767 |
Gain on legal settlement | (22,303) | 0 |
Inventory reserve | 50,000 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,355 | (17,526) |
Other accounts receivable | 14,948 | 0 |
Unbilled accounts receivable | (277,056) | (790,863) |
Inventory | (608,838) | (143,785) |
Prepaid expenses | (275,495) | (52,998) |
Other assets | (15,709) | 0 |
Accounts payable and accrued expenses | 319,978 | (1,115,353) |
Accrued contract loss provision | 100,000 | 0 |
Unearned revenue | (97,232) | (17,048) |
Other liabilities | (25,044) | (13,528) |
Net cash used in operating activities | (4,934,044) | (4,877,039) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (46,093) | (7,303) |
Purchases of equipment-in-process | (328,778) | 0 |
Increase in intangible assets | (27,349) | (5,623) |
Proceeds from the sale of investments | 0 | 1,963,430 |
Net cash provided by (used in) investing activities | (402,220) | 1,950,504 |
Net (issuance costs) proceeds from the sale of common stock | (25,658) | 13,478,959 |
Net cash provided by (used in) financing activities | (25,658) | 13,478,959 |
Net increase (decrease) in cash | (5,361,922) | 10,552,424 |
Cash, beginning of period | 10,445,404 | 4,046,937 |
Cash, end of period | 5,083,482 | 14,599,361 |
Supplemental cash flow disclosures | ||
Cash paid for interest | 0 | 0 |
Cash paid for taxes | 0 | 0 |
Supplemental disclsoure investing activities | ||
Reclassification of inventory to equipment-in-process | $ 1,819,284 | $ 0 |
Nature of Business and Presenta
Nature of Business and Presentation of Financial Statements | 6 Months Ended |
Jun. 30, 2024 | |
Nature of Business and Presentation of Financial Statements | |
Nature of Business and Presentation of Financial Statements | Note 1 – Nature of Business and Presentation of Financial Statements Description of the Company 374Water Inc. (the “Company”, “374Water”, “we”, “us”, or “our”) is a Delaware corporation which was formed in September 2005 as PowerVerde, Inc. At that time, the Company was focused on developing, commercializing, and marketing a series of unique electric generating power systems designed to produce electrical power with zero emissions or waste byproducts, based on a pressure-driven expander motor and related organic rankine cycle technology. On April 16, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger”) with 374Water Inc., a privately held company based in Durham, North Carolina (“374Water Private Company”), and 374Water Acquisition Corp., a newly-formed wholly-owned subsidiary of PowerVerde. Following the Merger, 374Water is developing a technology that transforms wet wastes such as sewage sludge, biosolids, food waste, hazardous and non-hazardous waste, and forever chemicals (e.g., “per-and polyfluoroalkyl substances” or “PFAS”) into recoverable resources by focusing on waste as a valuable resource for water, energy, and minerals. We are in the process of developing AirSCWO, a proprietary waste treatment system based on “supercritical water oxidation.” We continue making progress towards commercializing our AirSCWO systems to provide the market with advanced clean and sustainable organic waste destruction technologies and solutions. Presentation of Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial information. It is management’s opinion that the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q and include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Annual Report on Form 10-K of 374Water Inc. as of and for the year ended December 31, 2023 filed with the SEC on March 29, 2024. The results of operations for the six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the full year or for future periods. The condensed consolidated financial statements include the accounts of 374Water Inc., 374Water Systems Inc, and 374Water Sustainability Israel LTD (currently inactive), each a wholly-owned subsidiary of 374Water Inc. Intercompany balances and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company held $5,083,482 and $10,445,404 in cash and cash equivalents as of June 30, 2024 and December 31, 2023, respectively. Accounts Receivable and Unbilled Accounts Receivable Accounts receivables consist of balances due from service revenues. Unbilled accounts receivables are from revenues earned but not yet billed and relate to one customer contract. The Company monitors accounts receivable and provides allowances when considered necessary. At June 30, 2024 and December 31, 2023, accounts receivable were considered to be fully collectible but in accordance with the allowance for credit losses, the Company recorded an allowance for bad debt based on a reserve of current and aged receivables which was not significant at June 30, 2024 and December 31, 2023. Other Accounts Receivable Other accounts receivable consist of accrued interest income from the cash held in an interest bearing money market account with a financial institution. We typically receive payment for accrued interest one month in arrears. Inventory, Net Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The majority of our inventory is raw materials and work in progress. Net realizable value is the value of an asset that can be realized upon the sale of the asset, less a reasonable estimate of the costs associated with either the eventual sale or the disposal of the asset in question. Costs associated with fabrication, and other costs associated with the manufacturing of products, are recorded as inventory. We periodically evaluate the carrying value of our inventories in relation to estimated forecasts of product demand, which takes into consideration the life cycle of product releases. When quantities on hand exceed estimated sales or usage forecasts, we perform an analysis to determine if a write-down for such excess inventories is required. Once inventory has been written down, it creates a new cost basis for inventory. Inventories are classified as current assets in accordance with recognized industry practice. Based on our evaluation, we estimated an inventory allowance of $50,000 and $0 at June 30, 2024 and December 31, 2023, respectively. Property and Equipment, Net Property and Equipment is recorded at cost. Depreciation is computed using the straight-line method and an estimated useful life of three years. Expenses for maintenance and repairs are charged to expense as incurred. The following table represents property and equipment as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Computers $ 19,977 $ 16,489 Equipment 218,557 190,748 Vehicles 59,305 44,510 Total property and equipment 297,839 251,747 Less: accumulated depreciation (37,685 ) (20,776 ) Total property and equipment, net $ 260,154 $ 230,971 Property and equipment is recorded at cost. Depreciation is computed using the straight-line method and estimated useful lives of three to five years. Expenses for maintenance and repairs are charged to expense as incurred. Depreciation expense for the three months ended June 30, 2024 and 2023, was $9,278 and $892, respectively. Depreciation expense for the six months ended June 30, 2024 and 2023, was $16,910 and $10,417, respectively. Equipment In-Process We are in the process of manufacturing and fabricating one of our AirSCWO systems that we plan to use for water treatment demonstration purposes (“Demo System”). We have capitalized the material and labor costs incurred to develop this Demo System, and had previously classified these costs within inventory. In the first quarter of 2024, we executed a contract with the City of Orlando, Florida to deploy a Demo System as part of a full-scale demonstration, which we expect to begin in the third quarter of 2024. Therefore, as of June 30, 2024, we have presented these costs in long-term assets, equipment-in-process which will be depreciated over an estimated useful life of ten years once the Demo System is deployed and in use. We will likely continue to develop and enhance this unit as we perform our demonstrations and continue progressing towards commercialization. Expenses incurred deemed to be maintenance and repairs will be expensed as incurred. Upgrades and enhancements that will improve the operational efficiency of the unit itself will be capitalized. Intangible Assets, Net Intangible assets are subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment.” Intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. At June 30, 2024 and December 31, 2023, there was no impairment. Long-Lived Assets The Company reviews long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses an estimate of the undiscounted cash flows over the remaining life of its long-lived assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. Recoverability of assets held and used is measured by a comparison of the carrying amount to the future undiscounted expected net cash flows to be generated by the asset. At June 30, 2024 and December 31, 2023, there were no impairments. Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and customer concentrations. Deposits with financial institutions are insured, up to certain limits, by the Federal Deposit Insurance Corporation (“FDIC”). The Company’s cash deposits often exceed the FDIC insurance limit; however, all deposits are maintained with high credit quality institutions and the Company has not experienced any losses in such accounts. The financial condition of financial institutions is periodically reassessed, and the Company believes the risk of any loss is minimal. The Company believes the risk of any loss on cash due to credit risk is minimal. Furthermore, the Company performs ongoing credit evaluations of its customers and generally does not require collateral. Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases. One customer made up approximately 87% and over 90% of revenue for the six month periods ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024 and 2023, the Company purchased a substantial portion of fabrication and manufacturing services from one related party vendor, Merrell Bros Fabrication, LLC (“Merrell Bros.”) (see Note 8). Refer to Note 9 for a license agreement we have with Duke University for the SCWO technology used in our systems. Revenue Recognition The Company follows the revenue standards of Codification (ASC) Topic 606: “Revenue from Contracts with Customers (Topic 606).” The core principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized in accordance with that core principle by applying the following five steps: 1) identify the contracts with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation using the input method. The Company generates revenue from the sale of equipment (AirSCWO systems) and services, specifically the completion of treatability services of various types of waste streams. In the case of revenues from AirSCWO systems, the Company’s performance obligations are satisfied over time over the life of the contract, which is currently a long-term fixed price contracts. Revenue is recognized over time by measuring the progress toward complete satisfaction of the performance obligation using specific milestones. These milestones within the contract are assigned revenue recognition percentages, based on overall expected cost-plus margin estimates of those milestones compared to the total cost of the contract. Equipment sale related contract revenues are recognized in proportion to the contract costs incurred compared to total estimated costs to complete. This method is used because management considers the input method to be the best available measure of progress on these contracts. Changes in our overall expected cost estimates are recognized as a cumulative adjustment for the inception-to-date effective of such change. If these changes in estimates result in a possible loss being incurred on the contract, we accrue for such a loss in the period such an outcome becomes probable. Services revenues are recognized when all five revenue recognition criteria have been completed which is generally when the Company has delivered a completed treatability study report to the customer. Contract costs include all direct material, labor and subcontractor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation. General, selling, and administrative costs are charged to expenses as incurred. Revenues for the three-month period ended June 30, 2024 in the amount of $9,773 was generated from the progress towards completion of the AirSCWO system and $27,048 was generated from the sale of treatability services. Revenues for the three-month period ended June 30, 2023 in the amount of $49,863 were generated from the progress towards completion of the AirSCWO system and $0 was generated from the sale of treatability services. Revenues for the six-month period ended June 30, 2024 in the amount of $305,869 was generated from the progress towards completion of the AirSCWO system and $46,230 was generated from the sale of treatability services. Revenues for the six-month period ended June 30, 2023 in the amount of $843,321 were generated from the progress towards completion of the AirSCWO system, and $8,000 was generated from the sale of treatability services. Accrued Contract Loss Provision and Onerous Contracts Onerous contracts are those where the costs to fulfill a contract exceed the consideration expected to be received under the contract. The revenue standard does not provide guidance on the accounting for onerous contracts or onerous performance obligations. US GAAP contains other applicable guidance on the accounting for onerous contracts, and those requirements should be used to identify and measure onerous contracts. The Company's outstanding equipment manufacturing contract is a fixed price contract. Due to the nature of the contract, including customer specific equipment design, we applied ASC 605-35, Revenue Recognition—Provision for Losses on Construction-Type and Production-Type Contract (ASC 605-35). At June 30, 2024 and December 31, 2023, the Company evaluated the total costs incurred on this contract to date and the estimated costs it anticipates incurring to complete the contract. Based on this analysis, we accrued a total accrued loss provision of $600,000 and $500,000 at June 30, 2024 and December 31, 2023, respectively, which has been presented on the accompanying unaudited condensed consolidated balance sheets and is recorded within cost of revenues on the accompanying unaudited condensed consolidated statements of operations. Stock-based Compensation and Change in Accounting Policy The Company accounts for stock-based compensation under the provisions of ASC Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. Prior to January 1, 2024, the Company had elected to estimate options granted for which the requisite service period would not be rendered, due to the option being forfeited or expiring. The forfeiture rate estimate was based on the percentage of cumulative forfeitures to the total award grants. During the quarter ended December 31, 2023, the Company compared its actual forfeiture rate to its estimated forfeiture rate and made a cumulative adjustment of approximately $55,000 in the quarter ended December 31, 2023 to reduce its forfeiture rate estimate to approximately 5% of the total stock-based compensation recognized during the year. Effective January 1, 2024, the Company made a change in its accounting policy to recognize forfeitures on service-based stock award instruments as they occur. Due to the lack of history available to adequately estimate its forfeiture rate and the fact that the majority of its serviced based options include a one-year cliff vesting and monthly vesting after, the Company believes recognizing forfeitures as they occur will result in more accurate financial reporting. The change in this accounting policy did not have a significant impact on the current or prior period financial statements. Income Tax Policy The Company accounts for income taxes 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. Accounting for Uncertainty in Income Taxes The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There were no uncertain tax positions at June 30, 2024 and December 31, 2023. Research and Development Costs The Company’s research and development costs are expensed in the period in which they are incurred. Such expenditures amounted to $1,101,715 and $627,869 for the six months ended June 30, 2024, and 2023, respectively, and $566,568 and $271,964, for the three months ended June 30, 2024, and 2023, respectively, Earnings (Loss) Per Share Loss per share is computed in accordance with ASC Topic 260, “Earnings per Share.” Basic weighted-average number of shares of common stock outstanding for the six-months ended June 30, 2024 and 2023 include the shares of the Company issued and outstanding during such periods, each on a weighted average basis. The basic weighted average number of shares of common stock outstanding excludes common stock equivalent incremental shares, while diluted weighted average number of shares outstanding includes such incremental shares. However, as the Company was in a loss position for all periods presented, basic and diluted weighted average shares outstanding are the same, as the inclusion of the incremental shares would be anti-dilutive. At of June 30, 2024, there were the following potentially dilutive securities that were excluded from diluted net loss per share because their effect would be antidilutive: options for 15,999,370 shares of common stock, 1,235,000 warrants, and unvested restricted stock awards of 2,962,000. At June 30, 2023, there were the following potentially dilutive securities that were excluded from diluted net loss per share because their effect would be antidilutive: options for 12,855,467 shares of common stock and 1,235,000 warrants. Financial Instruments The Company carries cash, accounts receivable, accounts payable and accrued expenses, at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values / useful lives of equipment and intangible assets due to their current nature. Use of Estimates The preparation of 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the fair value of equity-based compensation, reserve for obsolete inventory, accrued contract loss provisions, total estimated costs to be incurred on long-term contracts, and valuation allowance against deferred tax assets. Recent Accounting Pronouncements - Not Yet Adopted In December 2023 FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures. The ASU will now require public entities to disclose its significant segment expenses categories and amounts for each reportable segment. Under the ASU, a significant segment expense is an expense that is: · significant to the segment, · regularly provided to or easily computed from information regularly provided to the chief operating decision maker (CODM), and · included in the reported measure of segment ,profit or loss. The ASU is effective for public entities for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024 (calendar year public entity will adopt the ASU in its 2024 Form 10 K). The ASU should be adopted retrospectively unless it’s impracticable to do so. Early adoption of the ASU is permitted, including in an interim period. The adoption of ASU 2023-07 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s financial statements. |
Liquidity Capital Resources and
Liquidity Capital Resources and Going Concern | 6 Months Ended |
Jun. 30, 2024 | |
Liquidity Capital Resources and Going Concern | |
Liquidity, Capital Resources and Going Concern | Note 3 – Liquidity, Capital Resources and Going Concern In accordance with ASU No. 2014-15 Presentation of Financial Statements – Going Concern (subtopic 205-40), the Company’s management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. At June 30, 2024, the Company had working capital of $7,273,354. At June 30, 2024, the Company had an accumulated deficit of $20,910,289. For the six months ended June 30, 2024, the Company had a net loss of $4,956,785 and used $4,934,044 of net cash in operations for the period. Further, we expect to incur substantial losses until we can successfully commercialize and market our AirSCWO systems, as to which there can be no assurance that this will occur. These conditions raise substantial doubt regarding our ability to continue as a going concern as the Company will need additional debt or equity financing or a combination of both to continue its operations and meet its financial obligations for twelve months from the date these condensed consolidated financial statements were issued. Presently, the Company will need additional debt or equity financing or a combination of both to continue its operations and meet its financial obligations for at least the next twelve months from the date these condensed consolidated financial statements were issued and beyond. We may consume available resources more rapidly than currently anticipated, resulting in the need for additional funding. We expect to incur continuing losses and negative cash flows from operations for the foreseeable future. Since inception, we have financed our operations principally through the sale of debt and equity securities and operating cash flows. We have an at-the-market (ATM) equity offering under which we may issue up to $100 million of common stock, subject to applicable law, which is currently inactive. During the six months ended June 30, 2024 and year end December 31, 2023, we raised approximately $0 and $13.4 million, respectively, of net proceeds through this ATM which is currently inactive. The Company is evaluating strategies to obtain the required additional funding for future operations. Any additional debt or equity financing that the Company obtains may substantially dilute the ownership held by our existing stockholders. The economic dilution to our shareholders will be significant if our stock price does not materially increase, or if the effective price of any sale is below the price paid by a particular investor. The Company may be unable to access further equity or debt financing when needed or obtain additional financing under acceptable terms, if at all. We may decide to raise additional capital through a variety of sources in the short-term and in the long-term, including but not limited to: · the public equity markets; · private equity financings; · collaborative arrangements; · asset sales; and/or · public or private debt. If the Company is unable to raise additional capital, there is a risk that the Company could be required to discontinue or significantly reduce the scope of its operations. These condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2024 | |
Inventory | |
Inventory | Note 4 – Inventory Inventory consists of: Name Balance at June 30, 2024 Balance at December 31, 2023 Raw materials $ 1,066,231 $ 457,393 Work-in-process - 1,819,284 Less: inventory reserves (50,000 ) — Total $ 1,016,231 $ 2,276,677 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2024 | |
Intangible Assets | |
Intangible Assets | Note 5 – Intangible Assets Intangible assets, net, are comprised of the following at June 30, 2024 and December 31, 2023: Name Estimated Life Balance at December 31, 2023 Additions Amortization Balance at June 30, 2024 License agreement 17 Years $ 901,929 $ - $ (31,464 ) $ 870,465 Patents 20 Years 86,100 27,349 (2,579 ) 110,870 Total $ 988,029 $ 27,349 $ (34,043 ) $ 981,335 Amortization expense for the three months ended June 30, 2024 and 2023, was $17,115 and $16,954, respectively, which is included in general and administrative expenses on the condensed consolidated statements of operations. Amortization expense for the six months ended June 30, 2024 and 2023, was $34,043 and $33,864, respectively, which is included in general and administrative expenses on the condensed consolidated statements of operations. Estimated future amortization expense for the years ended December 31,: Amount 2024 (remaining) $ 34,629 2025 69,257 2026 69,257 2027 69,257 2028 69,257 Thereafter 669,678 Intangible assets, Net $ 981,335 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2024 | |
Revenue | |
Revenue | Note 6 – Revenue The following is a summary of our revenues by type for the three and six-month periods ended June 30, 2024 and June 30, 2023: Three Months Ended Six Months Ended Name June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Equipment revenue $ 9,773 27 % $ 49,863 100 % $ 305,869 87 % $ 843,321 99 % Service revenue 27,048 73 % - 0 % 46,230 13 % 8,000 1 % Total $ 36,821 100 % $ 49,863 100 % $ 352,099 100 % $ 851,321 100 % Unearned Revenue The following is a summary of our unearned revenue activity for the period ended June 30, 2024 and year ended December 31, 2023: Name Balance at June 30, 2024 Balance at December 31, 2023 Unearned revenue at beginning of year $ 130,000 $ 200,109 Billings deferred 2,768 58,000 Refundable deposit returned (100,000 ) - Recognition of prior unearned revenue - (128,109 ) Unearned revenue at end of year $ 32,768 $ 130,000 Unbilled Accounts Receivable The following is a summary of our unbilled accounts receivable activity for the period ended June 30, 2024 and the year ended December 31, 2023: Name Balance at June 30, 2024 Balance at December 31, 2023 Unbilled accounts receivable at beginning of year $ 1,494,553 $ 918,164 Services performed but unbilled 296,056 1,061,612 Services billed (19,040 ) (485,223 ) Unbilled accounts receivable at end of period $ 1,771,609 $ 1,494,553 |
Stockholder Equity
Stockholder Equity | 6 Months Ended |
Jun. 30, 2024 | |
Stockholder Equity | |
Stockholder' Equity | Note 7 – Stockholders’ Equity The Company is authorized to issue 50,000,000 shares of preferred stock and 200,000,000 shares of common stock both with a par value of $0.0001. Preferred Stock On October 30, 2020, the Company designated 1,000,000 shares of preferred stock as Series D Convertible Preferred Stock with a par value of $0.0001. As of June 30, 2024, there were no shares of preferred stock issued and outstanding. Common Stock The holders of common stock are entitled to one vote per share on all matters submitted to a vote of shareholders, including the directors’ election. There is no right to cumulative voting in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the board of directors out of funds legally available for payment of dividends, subject to the prior rights of holders of preferred stock and any contractual restrictions the Company has against the payment of dividends on common stock. In the event of liquidation or dissolution of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no pre-emptive rights and have no right to convert their common stock into any other securities. At June 30, 2024, there were 132,932,335 shares of common stock issued and outstanding. Common Stock Sales In December 2022, the Company entered into an open market sale agreement with a sales agent pursuant to which the Company may offer and sell shares of its common stock from time to time through the sales agent. Sales of common stock, if any, will be made at market prices by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The Company has no obligation to sell any shares of common stock under the open market sale agreement and may at any time suspend offers under the open sale market agreement, in whole or in part, or terminate the open market sale agreement. During the three and six months ended June 30, 2024, a total of 18,474 shares of common stock were sold pursuant to the open market sale agreement resulting in gross proceeds of approximately $24,000, and issuance costs consisting of approximately $600 in commission fees and approximately $49,100 of accounting and legal fees for net equity issuance costs of approximately $25,700. As of the date of this filing, the “at-the-market” offering is inactive. During the six months ended June 30, 2023, a total of 3,766,422 shares of common stock were sold pursuant to the open market sale agreement, resulting in net proceeds of $13,441,000 in proceeds, net of $230,000 of commission fees and $110,000 of accounting and legal fees. At June 30, 2024, a total of 3,784,896 shares of common stock have been sold pursuant to the open market sale agreement and approximately $86,193,000 shares of common stock remain available to be sold in the Company’s at-the-market offerings, subject to various limitations. Common Stock for Services During the three months ended March 31, 2024 and June 30, 2024, we issued 3,339 and 3,415, respectively, fully vested shares of common stock to a service provider each with a fair value of $4,500 each based on the market price of our common stock on date of grant. During the three and six months ended June 30, 2024, we issued an aggregate of 240,000 fully vested shares of restricted common stock to our board of directors with a fair value of $333,600 based on the market price of our common stock on the date of grant. During the three and six months ended June 30, 2024, aggregate expense associated with shares of common stock issued for services was $338,100 and $342,600, respectively, which has been included in general and administrative expenses on the condensed unaudited consolidated statements of operations. During the six months ended June 30, 2023, we issued 20,000 fully vested shares of restricted common stock to two former employees with a fair value of $71,200 based on the market price of our common stock on date of grant. Stock-Based Compensation During the three months ended June 30, 2024 and 2023, the Company recorded stock-based compensation of $275,384 and $300,012, respectively, for restricted stock units and options granted to employees and various consultants of the Company. During the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation of $183,200 and $214,924 respectively, for restricted stock units and options granted to employees and various consultants of the Company. For the six months ended June 30, 2024, $363,766 of the stock-based compensation was charged as general and administrative expenses and $90,318 as research and development expenses in the accompanying unaudited condensed consolidated statements of operations. For the six months ended June 30, 2023, $458,540 was charged as general and administrative expenses and $56,394 as research and development expenses in the accompanying unaudited condensed consolidated statements of operations. Stock Options Stock options issued under the Company’s 2021 Equity Incentive Plan, as amended (the “2021 Plan”), as amended, which initially reserved and authorized a total of 10,000,000 shares of our common stock for issuance under the 2021 Plan. At the 2024 Annual Meeting of Stockholders held on June 13, 2024, the Company’s stockholders approved an amendment to the Company’s 2021 Plan to increase the number of shares of common stock authorized and issuable pursuant to the 2021 Plan by 14,000,000 shares for a total of 24,000,000 shares. Stock option activity for the six months ended June 30, 2024 is summarized as follows: Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (Years) Options outstanding at December 31, 2023 10,828,174 * $ 0.83 $ 6,374,433 4.66 Granted 50,000 1.40 - - Exercised - - - - Expired/forfeit (137,924 ) 2.65 - - Options outstanding at March 31, 2024 10,740,250 * 0.81 4,826,248 4.35 Granted 6,287,000 1.26 - - Exercised - - - - Expired/forfeit (1,027,880 ) 1.86 - - Options outstanding at June 30, 2024 15,999,370 * 0.92 $ 4,499,098 9.07 Options exercisable at June 30, 2024 8,364,023 $ 0.47 $ 6,117,342 3.30 *Includes 6,700,000 options granted in connection with the Merger (see Note 1) and were not granted under the 2021 Plan. During the three months ended June 30, 2024, the option grants primarily consisted of 5,250,000 options granted to the Company's Chief Executive Officer (“CEO”, see Note 9), 231,000 options granted to the Company's Chief Operating Officer (“COO”, see Note 9), 481,000 options granted to a key employee pursuant to an employment agreements and 50,000 granted to two new employees. Further, 275,000 options were granted pursuant to a legal settlement (see Note 9). The average grant-date fair value of the granted options was $0.47. Of the total options granted during the three months ended June 30, 2024, 3,106,000 of the options included performance conditions in which 50% of the stock options vest upon the achievement of Operating Profit, as defined in the employment agreements. The remaining 50% vest based on the achievement of a revenue target of $100 million by the end of fiscal year 2029. The stock options with the revenue target begin vesting once the Company achieves $15 million in revenue for a fiscal year. Vesting will occur on January 31 of each year through 2028. The number of options that vest is based on the proportionate percentage of each fiscal year’s revenue to the $100 million target. For example, if the Company's annual revenue for fiscal year 2026 is $20 million, 20% of the options with the revenue performance condition will vest on January 31, 2027. The aggregate grant-date fair value of these performance-based options is $1,459,820. During the six months ended June 30, 2024, the Company did not recognize any stock-based compensation associated with these options as the probability of the performance conditions being met was deemed remote. Total unrecognized compensation associated with unvested time-based options is approximately $2,502,558 which will be recognized based on the options associated vesting schedules over a period of approximately 3.30 years. During the six months ended June 30, 2024, $385,244 of our stock-based compensation was associated with the time-based stock options. The fair value of these options granted were estimated on the date of grant, using the Black-Scholes option-pricing model with the following assumptions. This does not include options related to a settlement which were issued during the year and will be discussed in Footnote 9 - Commitments: June 30, 2024 June 30, 2023 Dividend yield 0.00 % 0.00 % Expected life 6.25 Years 5.45 – 6.53 Years Expected volatility 26.21.-26.38% 30.00-35.88% Risk-free interest rate 4.09-4.65% 3.57-3.97% Restricted Stock Units During the three and six months ended June 30, 2024, the Company granted an aggregate of 2,962,000 unvested restricted stock units under the 2021 Plan as follows: 2,250,000 our Chief Executive Officer ( Note 9), 231,000 to our Chief Operating Officer (Note 9), and 481,000 to a key employee pursuant to employment agreements. These unvested restricted stock units consist of 1,356,000 units with time-based vesting provisions and 1,606,000 units with performance-based vesting provisions. The performance-based units vest as follows: 50% vest upon the achievement of Operating Profit, as defined in the employment agreements, and 50% upon the achievement of a revenue target of $100 million by the end of fiscal year 2028. The restricted stock units with the revenue target begin vesting once the Company achieves $15 million in revenue for a fiscal year. Vesting will occur on January 31 of each year through January 31, 2029. The number of restricted stock units that vest is based on the proportionate percentage of each fiscal year’s revenue to the $100 million target. For example, if our annual revenue for fiscal year 2026 is $20 million, 20% of the restricted stock units with the revenue performance condition will vest on January 31, 2027. The grant-date fair value of the restricted stock units was determined using the market price of our common stock on the date of grant which ranged from $1.25 to $1.50. At June 30, 2024, we have $2,025,300 of unrecognized stock-based compensation associated with the restricted stock units with a performance condition. At June 30, 2024, the Company had $1,459,820 of unrecognized stock-based compensation associated with the time vesting restricted stock units which will be recognized over a period of approximately 3.75 years. During the three months ended June 30, 2024, $73,340 of our stock-based compensation was associated with the time-based restricted stock units. A summary of our outstanding nonvested restricted stock units is as follows: Weighted-Average Grant Date Amount Fair Value Nonvested, beginning of the period - $ - Granted 2,962,000 1.26 Vested - - Forfeited - - Nonvested,end of the period 2,962,000 $ 1.26 Stock Warrants At June 30, 2024, there were 1,235,000 warrants outstanding which relate to a private placement offering consummated in December 2022, where investors were offered a warrant for every two common shares purchased during the offering at an exercise price of $2.50 per share. These warrants will expire in December of 2024. At June 30, 2024, the intrinsic value was nil based on the market price of our common stock. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions | |
Related Party Transactions | Note 8 - Related Party Transactions On July 7, 2021, we entered into a manufacturing and services agreement (the “Original M&S Agreement”) to fabricate and manufacture the AirSCWO systems with Merrell Bros. Fabrication, LLC (“Merrell Bros.”). As part of the agreement, the Company appointed Terry Merrell, one of the owners of Merrell Bros., to its board of directors. At June 30, 2024, Merrell Bros. or their affiliates own stock below 5% of the outstanding common stock. For the six-month period ending June 30, 2024, the Company incurred $272,031 in related party expenses, all of which was related to non-recurring labor and other operating costs associated with the manufacturing of our AirSCWO systems. At June 30, 2024, accounts payable and accrued expenses include $68,691 due to Merrell Bros. for manufacturing related services provided. On March 27, 2024, we executed a supplemental manufacturing and services agreement (the “Supplemental M&S Agreement”) with Merrell Bros. as Merrell Bros. indicated to us their intent to not renew the Original M&S Agreement and we have indicated our desire to relocate to a larger manufacturer facility with more square footage dedicated to expanding our manufacturing operations. Simultaneous to executing the Supplement M&S Agreement, Merrell Bros. provided us with a written non-renewal notice. Accordingly, the Original M&S Agreement terminated on its original expiration date of July 7, 2024. The Supplemental M&S Agreement became effective on July 7, 2024 and replaced the Original M&S Agreement. Under the Supplemental M&S Agreement, our relationship and the manufacturing services provided by Merrell Bros. will continue an as needed basis based on statements of work to be agreed upon by both parties to fulfill future and current manufacturing orders. The term of the Supplemental M&S Agreement is one year from July 7, 2024 with a one-year renewal upon a mutually executed written extension. Either party may terminate this Supplement M&S Agreement upon written notice of such a termination, specifying the extent to which performance of work is terminated and the effective date of termination. Merrell Bros. agreed to extend the expiration date of the Original M&S Agreement through July 31, 2024 to allow for our transition and move to our own facility. See subsequent events Note 10. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2024 | |
Commitments | |
Commitments | Note 9 - Commitments License Agreement The patented technology underlying 374Water’s supercritical water oxidation (SCWO) system, which was developed principally through the efforts of Messrs. Nagar, our former chief executive officer, and Dr. Marc Deshusses at the facilities of Duke University, Durham, North Carolina (“Duke”), where Dr. Deshusses, the Company’s Head of Technology and a member of its board of directors, is a tenured professor. The SCWO technology is licensed to 374Water pursuant to a non-exclusive worldwide license agreement with Duke executed on April 16, 2021 (the “License Agreement”). In connection with the License Agreement, 374Water also executed an equity transfer agreement with Duke pursuant to which Duke received a small number of common stock of the Company (See Notes 5 and 7). Under the terms of the License Agreement, the Company is required to make royalty payments based on a percentage of licensed product sales, as defined in the License Agreement which is triggered by the sale of licensed products. Further, the Company is also required to pay royalties on a percentage of sublicensing fees. The Company will reimburse Duke for any ongoing patent expenses incurred. During the six-month period ending June 30, 2024, the Company has not incurred any expenses in connection with this License Agreement. The Company may terminate the license agreement anytime by providing Duke 60 days’ written notice. Legal Settlement In 2023, the Company was named in a lawsuit filed against its former stock transfer agent (“Former TA”) by certain unrelated individuals asserting claims for negligence, conversion, and various breaches. The Former TA issued 175,000 shares of Company common stock to the State of Delaware in accordance with escheat laws after the Former TA was unable to issue the shares of common stock to the individuals. While the Company was not at fault in the matter, due to certain indemnification clauses between the Company and the Former TA, the Company was part of the settlement with the individuals. This matter was fully settled on May 31, 2024 with an aggregate of 275,000 fully vested common stock options granted to the unrelated individuals. These stock options were granted outside of the 2021 Plan. The stock options have an exercise price of $1.25, equal to the market price of our common stock on the settlement date, and an exercise period of five years. At December 31, 2023, the Company had accrued $135,000 as an estimated legal settlement for this pending matter based on the estimated grant-date fair value of these options using a Black-Scholes valuation model and the following assumptions: stock price and exercise price of $1.33, risk free rate 4.43%, expected term five years, and volatility of 26.36%. Upon the matter being formally settled on May 31, 2024, we determined the grant-date fair value of the options using a Black-Scholes valuation model to be $112,697 and the following assumptions: stock price and exercise price of $1.25, risk free rate 4.52%, expected term five years, and volatility of 27.43%. The Company recognized a gain of $22,303 upon the settlement of this legal matter which is reflected in professional fees on the unaudited condensed statements of operations. In the ordinary course of business, the Company may be the subject of, or party to, various pending or threatened legal actions which could result in a material adverse outcome for which the related damages may not be estimable. The Company does not believe any legal action would have a significant impact on the financials other than the matter disclosed above. However, there is inherent uncertainty regarding such matters. Employment Agreements CEO On April 19, 2024, the Company entered into an employment agreement with Christian Gannon (the “Employment Agreement”), for Mr. Gannon to serve as President and Chief Executive Officer (“CEO”) of the Company effective April 22, 2024 (the “Start Date”). The Employment Agreement provides for an initial annual salary for Mr. Gannon of $450,000. Mr. Gannon is also eligible to earn an annual fiscal year performance bonus for each whole or partial fiscal year of his employment period with the Company; for the initial year under the Employment Agreement in accordance with certain milestones set forth by the Company, and thereafter as determined by the compensation Committee of the Company and the Board of Directors of the Company. Mr. Gannon is eligible to earn a performance bonus up to 125% of Mr. Gannon's then-current base salary (the “Annual Bonus”) if certain milestones are met as defined in the Employment Agreement. Under the Employment Agreement and subject to the terms of the Company's 2021 Plan, Mr. Gannon was granted up to 2,250,000 Restricted Stock Units (as defined in the Plan) under the Plan, vesting as follows: (a) 250,000, on the first annual anniversary of the Start Date; (b) 750,000, in equal increments on the last day of every month thereafter over the following 36 months, subject to Mr. Gannon's continued employment with the Company on each vesting date; and (c) 1,250,000, pursuant to certain performance related milestones set forth by the Company and defined in the Employment Agreement (collectively, the “Gannon Restricted Stock Units”). Additionally, pursuant to the Employment Agreement and the terms of the 2021 Plan, Mr. Gannon was granted 5,250,000 Options (as defined in the 2021 Plan) under the 2021 Plan vesting as follows: (a) 625,000, on the first annual anniversary of the Start Date; (b) 1,875,000, in equal installments on the last day of every month thereafter over the following 36 months subject to Mr. Gannon's continued employment with the Company on each vesting date; and (c) 2,750,000, pursuant to certain performance related milestones set forth by the Company and defined in the Employment Agreement (collectively, the “Gannon Options”, and together with the Gannon Restricted Stock Units, the “Gannon Equity Awards”). See Note 7 for further disclosures on the vesting performance related milestones. If the Employment Agreement is terminated by the Company without “Cause” or by Mr. Gannon for “Good Reason” (each as defined in the Employment Agreement, subject to the Company’s right to cure), he will be entitled to termination benefits, pursuant to which the Company will be obligated to (i) pay Mr. Gannon 100% of his then-current annual base salary in 12 equal installments; (ii) any earned but unpaid Annual Bonus; (iii) coverage to Mr. Gannon and his dependents under the Company’s then current medical, health, and vision insurance plans for 12 months; and (iv) if such separation occurs on the day of Mr. Gannon’s first year anniversary of employment or after the first anniversary of the Start Date, (x) a pro-rated Annual Bonus for the fiscal year in which the employment is terminated equal to the pro-rated Annual Bonus that Mr. Gannon would have received based on actual performance for such fiscal year if Mr. Gannon was employed by the Company, and (y) accelerated vesting with respect to the Gannon Equity Awards as if Mr. Gannon had remained employed by the Company through the first anniversary of the date of such separation. The Employment Agreement contains covenants for the benefit of the Company relating to the protection of the Company’s confidential information and standard Company indemnification obligations. COO On May 16, 2024 (the "Meyers Effective Date"), we entered into an employment agreement with Brad Meyers (the “COO Employment Agreement”), for Mr. Meyers to continue to serve as Chief Operating Officer (“COO”) of the Company, a position he has held since November 6, 2023. The COO Employment Agreement provides for an initial annual base salary for Mr. Meyers of $300,000. Mr. Meyers is also eligible to earn an annual fiscal year performance bonus with a target amount equal to 50% of Mr. Meyers' then base-salary (the "Meyers Annual Bonus"). Under the COO Employment Agreement and subject to the terms of the 2021 Plan , Mr. Meyers is eligible to receive up to 231,000 Restricted Stock (as defined in the 2021 Plan) and 231,000 Options (as defined in the 2021 Plan, and collectively, the "Meyers Equity Awards"), vesting as follows: (a) with respect to 115,500 Restricted Stock and 115,500 Options, 25% shall vest on the first anniversary of the Effective Date, and the remaining 75% shall vest in equal increments over the following 36 months; and (b) with respect to the remaining 115,500 Restricted Stock and 115,000 Options, each shall vest in accordance with a performance based milestones set forth by the Company and defined in the COO Employment Agreement. See Note 7 for further disclosures on the vesting performance related milestones. If the COO Employment Agreement is terminated by the Company without “Cause” or by Mr. Meyers for “Good Reason” (each as defined in the COO Employment Agreement, subject to the Company’s right to cure), he will be entitled to termination benefits, pursuant to which the Company will be obligated to (i) pay Mr. Meyers six months of his then-current annual base salary in six equal installments; (ii) any earned but unpaid Meyer’s Annual Bonus; (iii) coverage to Mr. Meyers and his dependents under the Company’s then current medical, health, and vision insurance plans for six months; and (iv) if such separation occurs on the day of Mr. Meyers’s first year anniversary of employment or after the first anniversary of the Meyers Effective Date, (x) a pro-rated Annual Bonus for the fiscal year in which the employment is terminated equal to the pro-rated Annual Bonus that Mr. Meyers would have received based on actual performance for such fiscal year if Mr. Meyers was employed by the Company, and (y) accelerated vesting with respect to the Meyers Equity Awards as if Mr. Meyers had remained employed by the Company through the six-month anniversary of the date of such separation. The Employment Agreement contains covenants for the benefit of the Company relating to protection of the Company’s confidential information and standard Company indemnification obligations. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events | |
Subsequent Events | Note 10 – Subsequent Events As disclosed in Note 8, the Original M&S Agreement with Merrell Bros. ended in July 2024. As we continue to search for a suitable long-term facility, we have executed a short-term lease for a manufacturing facility in Rockledge, Florida which requires monthly rent payments of $4,725. The initial term of the lease is three-months with six one-month renewal options. Subsequent to June 30, 2024, the Company sold 32,036 shares of our common stock via its open market sale agreement for net proceeds of $37,570. As of the date of this filing, the Company has currently ceased sales under its open market sale agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies | |
Cash and Cash Equivalents | The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company held $5,083,482 and $10,445,404 in cash and cash equivalents as of June 30, 2024 and December 31, 2023, respectively. |
Accounts Receivable and Unbilled Accounts Receivable | Accounts receivables consist of balances due from service revenues. Unbilled accounts receivables are from revenues earned but not yet billed and relate to one customer contract. The Company monitors accounts receivable and provides allowances when considered necessary. At June 30, 2024 and December 31, 2023, accounts receivable were considered to be fully collectible but in accordance with the allowance for credit losses, the Company recorded an allowance for bad debt based on a reserve of current and aged receivables which was not significant at June 30, 2024 and December 31, 2023. |
Other Accounts Receivable | Other accounts receivable consist of accrued interest income from the cash held in an interest bearing money market account with a financial institution. We typically receive payment for accrued interest one month in arrears. |
Inventory, Net | Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The majority of our inventory is raw materials and work in progress. Net realizable value is the value of an asset that can be realized upon the sale of the asset, less a reasonable estimate of the costs associated with either the eventual sale or the disposal of the asset in question. Costs associated with fabrication, and other costs associated with the manufacturing of products, are recorded as inventory. We periodically evaluate the carrying value of our inventories in relation to estimated forecasts of product demand, which takes into consideration the life cycle of product releases. When quantities on hand exceed estimated sales or usage forecasts, we perform an analysis to determine if a write-down for such excess inventories is required. Once inventory has been written down, it creates a new cost basis for inventory. Inventories are classified as current assets in accordance with recognized industry practice. Based on our evaluation, we estimated an inventory allowance of $50,000 and $0 at June 30, 2024 and December 31, 2023, respectively. |
Property and Equipment, Net | Property and Equipment is recorded at cost. Depreciation is computed using the straight-line method and an estimated useful life of three years. Expenses for maintenance and repairs are charged to expense as incurred. The following table represents property and equipment as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Computers $ 19,977 $ 16,489 Equipment 218,557 190,748 Vehicles 59,305 44,510 Total property and equipment 297,839 251,747 Less: accumulated depreciation (37,685 ) (20,776 ) Total property and equipment, net $ 260,154 $ 230,971 Property and equipment is recorded at cost. Depreciation is computed using the straight-line method and estimated useful lives of three to five years. Expenses for maintenance and repairs are charged to expense as incurred. Depreciation expense for the three months ended June 30, 2024 and 2023, was $9,278 and $892, respectively. Depreciation expense for the six months ended June 30, 2024 and 2023, was $16,910 and $10,417, respectively. |
Equipment In-Process | We are in the process of manufacturing and fabricating one of our AirSCWO systems that we plan to use for water treatment demonstration purposes (“Demo System”). We have capitalized the material and labor costs incurred to develop this Demo System, and had previously classified these costs within inventory. In the first quarter of 2024, we executed a contract with the City of Orlando, Florida to deploy a Demo System as part of a full-scale demonstration, which we expect to begin in the third quarter of 2024. Therefore, as of June 30, 2024, we have presented these costs in long-term assets, equipment-in-process which will be depreciated over an estimated useful life of ten years once the Demo System is deployed and in use. We will likely continue to develop and enhance this unit as we perform our demonstrations and continue progressing towards commercialization. Expenses incurred deemed to be maintenance and repairs will be expensed as incurred. Upgrades and enhancements that will improve the operational efficiency of the unit itself will be capitalized. |
Intangible Assets, Net | Intangible assets are subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment.” Intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. At June 30, 2024 and December 31, 2023, there was no impairment. |
Long-lived Assets | The Company reviews long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses an estimate of the undiscounted cash flows over the remaining life of its long-lived assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. Recoverability of assets held and used is measured by a comparison of the carrying amount to the future undiscounted expected net cash flows to be generated by the asset. At June 30, 2024 and December 31, 2023, there were no impairments. |
Concentrations of Credit Risk | Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and customer concentrations. Deposits with financial institutions are insured, up to certain limits, by the Federal Deposit Insurance Corporation (“FDIC”). The Company’s cash deposits often exceed the FDIC insurance limit; however, all deposits are maintained with high credit quality institutions and the Company has not experienced any losses in such accounts. The financial condition of financial institutions is periodically reassessed, and the Company believes the risk of any loss is minimal. The Company believes the risk of any loss on cash due to credit risk is minimal. Furthermore, the Company performs ongoing credit evaluations of its customers and generally does not require collateral. Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases. One customer made up approximately 87% and over 90% of revenue for the six month periods ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024 and 2023, the Company purchased a substantial portion of fabrication and manufacturing services from one related party vendor, Merrell Bros Fabrication, LLC (“Merrell Bros.”) (see Note 8). Refer to Note 9 for a license agreement we have with Duke University for the SCWO technology used in our systems. |
Revenue Recognition | The Company follows the revenue standards of Codification (ASC) Topic 606: “Revenue from Contracts with Customers (Topic 606).” The core principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized in accordance with that core principle by applying the following five steps: 1) identify the contracts with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation using the input method. The Company generates revenue from the sale of equipment (AirSCWO systems) and services, specifically the completion of treatability services of various types of waste streams. In the case of revenues from AirSCWO systems, the Company’s performance obligations are satisfied over time over the life of the contract, which is currently a long-term fixed price contracts. Revenue is recognized over time by measuring the progress toward complete satisfaction of the performance obligation using specific milestones. These milestones within the contract are assigned revenue recognition percentages, based on overall expected cost-plus margin estimates of those milestones compared to the total cost of the contract. Equipment sale related contract revenues are recognized in proportion to the contract costs incurred compared to total estimated costs to complete. This method is used because management considers the input method to be the best available measure of progress on these contracts. Changes in our overall expected cost estimates are recognized as a cumulative adjustment for the inception-to-date effective of such change. If these changes in estimates result in a possible loss being incurred on the contract, we accrue for such a loss in the period such an outcome becomes probable. Services revenues are recognized when all five revenue recognition criteria have been completed which is generally when the Company has delivered a completed treatability study report to the customer. Contract costs include all direct material, labor and subcontractor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation. General, selling, and administrative costs are charged to expenses as incurred. Revenues for the three-month period ended June 30, 2024 in the amount of $9,773 was generated from the progress towards completion of the AirSCWO system and $27,048 was generated from the sale of treatability services. Revenues for the three-month period ended June 30, 2023 in the amount of $49,863 were generated from the progress towards completion of the AirSCWO system and $0 was generated from the sale of treatability services. Revenues for the six-month period ended June 30, 2024 in the amount of $305,869 was generated from the progress towards completion of the AirSCWO system and $46,230 was generated from the sale of treatability services. Revenues for the six-month period ended June 30, 2023 in the amount of $843,321 were generated from the progress towards completion of the AirSCWO system, and $8,000 was generated from the sale of treatability services. |
Accrued Contract Loss Provision and Onerous Contracts | Onerous contracts are those where the costs to fulfill a contract exceed the consideration expected to be received under the contract. The revenue standard does not provide guidance on the accounting for onerous contracts or onerous performance obligations. US GAAP contains other applicable guidance on the accounting for onerous contracts, and those requirements should be used to identify and measure onerous contracts. The Company's outstanding equipment manufacturing contract is a fixed price contract. Due to the nature of the contract, including customer specific equipment design, we applied ASC 605-35, Revenue Recognition—Provision for Losses on Construction-Type and Production-Type Contract (ASC 605-35). At June 30, 2024 and December 31, 2023, the Company evaluated the total costs incurred on this contract to date and the estimated costs it anticipates incurring to complete the contract. Based on this analysis, we accrued a total accrued loss provision of $600,000 and $500,000 at June 30, 2024 and December 31, 2023, respectively, which has been presented on the accompanying unaudited condensed consolidated balance sheets and is recorded within cost of revenues on the accompanying unaudited condensed consolidated statements of operations. |
Stock-based Compensation and Change in Accounting Policy | The Company accounts for stock-based compensation under the provisions of ASC Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. Prior to January 1, 2024, the Company had elected to estimate options granted for which the requisite service period would not be rendered, due to the option being forfeited or expiring. The forfeiture rate estimate was based on the percentage of cumulative forfeitures to the total award grants. During the quarter ended December 31, 2023, the Company compared its actual forfeiture rate to its estimated forfeiture rate and made a cumulative adjustment of approximately $55,000 in the quarter ended December 31, 2023 to reduce its forfeiture rate estimate to approximately 5% of the total stock-based compensation recognized during the year. Effective January 1, 2024, the Company made a change in its accounting policy to recognize forfeitures on service-based stock award instruments as they occur. Due to the lack of history available to adequately estimate its forfeiture rate and the fact that the majority of its serviced based options include a one-year cliff vesting and monthly vesting after, the Company believes recognizing forfeitures as they occur will result in more accurate financial reporting. The change in this accounting policy did not have a significant impact on the current or prior period financial statements. |
Income Tax Policy | The Company accounts for income taxes 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. |
Accounting for Uncertainty in Income Taxes | The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There were no uncertain tax positions at June 30, 2024 and December 31, 2023. |
Research And Development Costs | The Company’s research and development costs are expensed in the period in which they are incurred. Such expenditures amounted to $1,101,715 and $627,869 for the six months ended June 30, 2024, and 2023, respectively, and $566,568 and $271,964, for the three months ended June 30, 2024, and 2023, respectively, |
Earnings (Loss) Per Share | Loss per share is computed in accordance with ASC Topic 260, “Earnings per Share.” Basic weighted-average number of shares of common stock outstanding for the six-months ended June 30, 2024 and 2023 include the shares of the Company issued and outstanding during such periods, each on a weighted average basis. The basic weighted average number of shares of common stock outstanding excludes common stock equivalent incremental shares, while diluted weighted average number of shares outstanding includes such incremental shares. However, as the Company was in a loss position for all periods presented, basic and diluted weighted average shares outstanding are the same, as the inclusion of the incremental shares would be anti-dilutive. At of June 30, 2024, there were the following potentially dilutive securities that were excluded from diluted net loss per share because their effect would be antidilutive: options for 15,999,370 shares of common stock, 1,235,000 warrants, and unvested restricted stock awards of 2,962,000. At June 30, 2023, there were the following potentially dilutive securities that were excluded from diluted net loss per share because their effect would be antidilutive: options for 12,855,467 shares of common stock and 1,235,000 warrants. |
Financial Instruments | The Company carries cash, accounts receivable, accounts payable and accrued expenses, at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values / useful lives of equipment and intangible assets due to their current nature. |
Use Of Estimates | The preparation of 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the fair value of equity-based compensation, reserve for obsolete inventory, accrued contract loss provisions, total estimated costs to be incurred on long-term contracts, and valuation allowance against deferred tax assets. |
Recent Accounting Pronouncements - Not Yet Adopted | In December 2023 FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 (calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures. The ASU will now require public entities to disclose its significant segment expenses categories and amounts for each reportable segment. Under the ASU, a significant segment expense is an expense that is: · significant to the segment, · regularly provided to or easily computed from information regularly provided to the chief operating decision maker (CODM), and · included in the reported measure of segment ,profit or loss. The ASU is effective for public entities for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024 (calendar year public entity will adopt the ASU in its 2024 Form 10 K). The ASU should be adopted retrospectively unless it’s impracticable to do so. Early adoption of the ASU is permitted, including in an interim period. The adoption of ASU 2023-07 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment | June 30, 2024 December 31, 2023 Computers $ 19,977 $ 16,489 Equipment 218,557 190,748 Vehicles 59,305 44,510 Total property and equipment 297,839 251,747 Less: accumulated depreciation (37,685 ) (20,776 ) Total property and equipment, net $ 260,154 $ 230,971 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory | |
Schedule Of Inventory | Name Balance at June 30, 2024 Balance at December 31, 2023 Raw materials $ 1,066,231 $ 457,393 Work-in-process - 1,819,284 Less: inventory reserves (50,000 ) — Total $ 1,016,231 $ 2,276,677 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Intangible Assets | |
Schedule Of Intangible Assets | Name Estimated Life Balance at December 31, 2023 Additions Amortization Balance at June 30, 2024 License agreement 17 Years $ 901,929 $ - $ (31,464 ) $ 870,465 Patents 20 Years 86,100 27,349 (2,579 ) 110,870 Total $ 988,029 $ 27,349 $ (34,043 ) $ 981,335 |
Schedule Of Future Amortization Expense | Amount 2024 (remaining) $ 34,629 2025 69,257 2026 69,257 2027 69,257 2028 69,257 Thereafter 669,678 Intangible assets, Net $ 981,335 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue | |
Schedule Of revenue by type | Three Months Ended Six Months Ended Name June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Equipment revenue $ 9,773 27 % $ 49,863 100 % $ 305,869 87 % $ 843,321 99 % Service revenue 27,048 73 % - 0 % 46,230 13 % 8,000 1 % Total $ 36,821 100 % $ 49,863 100 % $ 352,099 100 % $ 851,321 100 % |
Schedule Of unearned revenue activity | Name Balance at June 30, 2024 Balance at December 31, 2023 Unearned revenue at beginning of year $ 130,000 $ 200,109 Billings deferred 2,768 58,000 Refundable deposit returned (100,000 ) - Recognition of prior unearned revenue - (128,109 ) Unearned revenue at end of year $ 32,768 $ 130,000 |
Schedule Of unbilled accounts receivable | Name Balance at June 30, 2024 Balance at December 31, 2023 Unbilled accounts receivable at beginning of year $ 1,494,553 $ 918,164 Services performed but unbilled 296,056 1,061,612 Services billed (19,040 ) (485,223 ) Unbilled accounts receivable at end of period $ 1,771,609 $ 1,494,553 |
Stockholder Equity (Tables)
Stockholder Equity (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stockholder Equity | |
Schedule of stock option activity | Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (Years) Options outstanding at December 31, 2023 10,828,174 * $ 0.83 $ 6,374,433 4.66 Granted 50,000 1.40 - - Exercised - - - - Expired/forfeit (137,924 ) 2.65 - - Options outstanding at March 31, 2024 10,740,250 * 0.81 4,826,248 4.35 Granted 6,287,000 1.26 - - Exercised - - - - Expired/forfeit (1,027,880 ) 1.86 - - Options outstanding at June 30, 2024 15,999,370 * 0.92 $ 4,499,098 9.07 Options exercisable at June 30, 2024 8,364,023 $ 0.47 $ 6,117,342 3.30 |
Schedule of stock option assumtion | June 30, 2024 June 30, 2023 Dividend yield 0.00 % 0.00 % Expected life 6.25 Years 5.45 – 6.53 Years Expected volatility 26.21.-26.38% 30.00-35.88% Risk-free interest rate 4.09-4.65% 3.57-3.97% |
Schedule of warrant activity | Weighted-Average Grant Date Amount Fair Value Nonvested, beginning of the period - $ - Granted 2,962,000 1.26 Vested - - Forfeited - - Nonvested,end of the period 2,962,000 $ 1.26 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Total Property Plant And Equipment | $ 297,839 | $ 251,747 |
Less: accumulated depreciations | (37,685) | (20,776) |
Total property and equipment, net | 260,154 | 230,971 |
Computers [Member] | ||
Total property and equipment, net | 19,977 | 16,489 |
Vehicles [Member] | ||
Total property and equipment, net | 59,305 | 44,510 |
Equipment [Member] | ||
Total property and equipment, net | $ 218,557 | $ 190,748 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Depreciation expense | $ 9,278 | $ 892 | $ 16,910 | $ 10,417 | |
Research and Development Cost | 566,568 | 271,964 | 1,101,715 | 627,869 | |
Cash and cash equivalents | 5,083,482 | 5,083,482 | $ 10,445,404 | ||
Revenues from sale of treatability services | 27,048 | 0 | 46,230 | 8,000 | |
Revenues from sales | $ 9,773 | $ 49,863 | 305,869 | $ 843,321 | |
Inventory allowance | 50,000 | 0 | |||
Contract loss provision | $ 600,000 | $ 500,000 | |||
Share based description | cumulative adjustment of approximately $55,000 in the quarter ended December 31, 2023 to reduce its forfeiture rate estimate to approximately 5% of the total stock-based compensation recognized during the year | ||||
Options [Member] | |||||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 15,999,370 | 12,855,467 | |||
Unvested Restricted Stock [Member] | |||||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 2,962,000 | ||||
Warrants [Member] | |||||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 1,235,000 | 1,235,000 | |||
One Customer [Member] | Revenue [Member] | |||||
Concentrations of Credit Risk | 87% | 90% |
Liquidity Capital Resources a_2
Liquidity Capital Resources and Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Accumulated Deficit | $ (20,910,289) | $ (20,910,289) | $ (15,953,504) | ||||
Net Income (loss) | (2,932,320) | $ (2,024,465) | $ (1,650,577) | $ (1,640,343) | (4,956,785) | $ (3,290,920) | |
Net Cash Used In Operations | 4,934,044 | ||||||
Working Capital | $ 7,273,354 | 7,273,354 | |||||
Net proceeds | $ 0 | $ 13,400,000 | |||||
Common Stock, Shares issued | 132,932,335 | 132,932,335 | 132,667,107 | ||||
ATM [Member] | |||||||
Common Stock, Shares issued | 100,000,000 | 100,000,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory | ||
Raw materials | $ 1,066,231 | $ 457,393 |
Work-in-process | 0 | 1,819,284 |
Less: inventory reserves | (50,000) | 0 |
Total | $ 1,016,231 | $ 2,276,677 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Intangible Assets, Net, Beginning balance | $ 988,029 | |||
Additions | 27,349 | |||
Amortization | $ (17,115) | $ (16,954) | (34,043) | $ (33,864) |
Intangible Assets, Net, Ending balance | 981,335 | 981,335 | ||
License Agreement [Member] | ||||
Intangible Assets, Net, Beginning balance | 901,929 | |||
Additions | 0 | |||
Amortization | (31,464) | |||
Intangible Assets, Net, Ending balance | 870,465 | $ 870,465 | ||
Estimated Life | 17 years | |||
Patents [Member] | ||||
Intangible Assets, Net, Beginning balance | $ 86,100 | |||
Additions | 27,349 | |||
Amortization | (2,579) | |||
Intangible Assets, Net, Ending balance | $ 110,870 | $ 110,870 | ||
Estimated Life | 20 years |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Intangible Assets | ||
2024 (remaining) | $ 34,629 | |
2025 | 69,257 | |
2026 | 69,257 | |
2027 | 69,257 | |
2028 | 69,257 | |
Thereafter | 669,678 | |
Intangible Assets, Net | $ 981,335 | $ 988,029 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Intangible Assets | ||||
Amortization expense | $ 17,115 | $ 16,954 | $ 34,043 | $ 33,864 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue | $ 36,821 | $ 49,863 | $ 352,099 | $ 851,321 |
Revenue percentage | 100% | 100% | 100% | 100% |
Equipment revenue [Member] | ||||
Revenue | $ 9,773 | $ 49,863 | $ 305,869 | $ 843,321 |
Revenue percentage | 27% | 100% | 87% | 99% |
Service revenue [Member] | ||||
Revenue | $ 27,048 | $ 0 | $ 46,230 | $ 8,000 |
Revenue percentage | 73% | 0% | 13% | 1% |
Revenue (Details 1)
Revenue (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Revenue | ||
Unearned revenue at beginning of the period | $ 130,000 | $ 200,109 |
Billings deferred | 2,768 | 58,000 |
Refundable deposit returned | (100,000) | 0 |
Recognition of prior unearned revenue | 0 | (128,109) |
Unearned revenue at end of period | $ 32,768 | $ 130,000 |
Revenue (Details 2)
Revenue (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Revenue | ||
Unbilled accounts receivable at beginning of year | $ 1,494,553 | $ 918,164 |
Services performed but unbilled | 296,056 | 1,061,612 |
Services billed | (19,040) | (485,223) |
Unbilled accounts receivable at end of year | $ 1,771,609 | $ 1,494,553 |
Stockholder Equity (Details)
Stockholder Equity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2024 | |
Granted | 2,962,000 | ||
Weighted Average Exercise Price, beginning balance | $ 0 | $ 0 | |
Options [Member] | |||
Options Outstanding, beginning balance | 10,740,250 | 10,828,174 | 10,828,174 |
Granted | 6,287,000 | 50,000 | |
Expired/forfeited | (1,027,880) | (137,924) | |
Options Outstanding, ending balance | 15,999,370 | 10,740,250 | 15,999,370 |
Option Exercisable, ending balance | 8,364,023 | 8,364,023 | |
Weighted Average Exercise Price, beginning balance | $ 0.81 | $ 0.83 | $ 0.83 |
Weighted Average Exercise Price, Granted | 1.26 | 1.40 | |
Weighted Average Exercise Price, Exercised | 0 | 0 | |
Weighted Average Exercise Price, Expired/forfeit | 1.86 | 2.65 | |
Weighted Average Exercise Price, ending balance | 0.92 | $ 0.81 | 0.92 |
Weighted Average Exercise Price, Exercisable, ending balance | $ 0.47 | $ 0.47 | |
Aggregate Intrinsic Value, beginning balance | $ 4,826,248 | $ 6,374,433 | $ 6,374,433 |
Aggregate Intrinsic Value, ending balance | 4,499,098 | $ 4,826,248 | 4,499,098 |
Aggregate Intrinsic Value, Exercisable, ending balance | $ 6,117,342 | $ 6,117,342 | |
Weighted Average Remaining Contractual Life (years) Beginning | 4 years 4 months 6 days | 4 years 7 months 28 days | |
Weighted Average Remaining Contractual Life (years) Ending | 9 years 25 days | 4 years 4 months 6 days | |
Weighted Average Remaining Contractual Life (years), Exercisable at June 30, 2024 | 3 years 3 months 18 days |
Stockholder Equity (Details 1)
Stockholder Equity (Details 1) - Options [Member] | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Dividend Yield | 0% | 0% |
Expected Life | 6 years 3 months | |
Minimum [Member] | ||
Expected Life | 5 years 5 months 12 days | |
Expected Volatility | 26.21% | 35.88% |
Risk-free Interest Rate | 4.65% | 3.97% |
Maximum [Member] | ||
Expected Life | 6 years 6 months 10 days | |
Expected Volatility | 26.38% | 30% |
Risk-free Interest Rate | 4.09% | 3.57% |
Stockholder Equity (Details 2)
Stockholder Equity (Details 2) | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Stockholder Equity | |
Shares Granted | shares | 2,962,000 |
Shares Exercised | shares | 0 |
Balance At Ending balance | shares | 2,962,000 |
Weighted Average Exercise Price, beginning balance | $ / shares | $ 0 |
Weighted Average Exercise Price granted | $ / shares | 1.26 |
Weighted Average Exercise Price, ending balance | $ / shares | $ 1.26 |
Stockholder Equity (Details Nar
Stockholder Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Oct. 30, 2020 | |
General and administrative expenses | $ 1,051,998 | $ 676,333 | $ 1,511,725 | $ 1,261,995 | ||||
Restricted stock units granted | 2,962,000 | |||||||
Preferred stock shares authorized | 50,000,000 | 50,000,000 | ||||||
Common stock shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||
Preferred stock, shares designated | 1,000,000 | |||||||
Warrants outstanding | 2,962,000 | 2,962,000 | ||||||
Warrant exercise Price | $ 2.50 | $ 2.50 | ||||||
Options granted | 6,700,000 | |||||||
Preferred stock, par value | $ 0.0001 | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issue | 132,932,335 | 132,932,335 | 132,667,107 | |||||
Stock-based Compensation | $ 275,384 | $ 183,200 | 228,812 | $ 214,924 | ||||
Common stock, shares outstanding | 132,932,335 | 132,932,335 | 132,667,107 | |||||
Research and development [Member] | ||||||||
Stock-based compensation | $ 90,318 | 56,394 | ||||||
General and administrative [Member] | ||||||||
Stock-based compensation | $ 363,766 | $ 458,540 | ||||||
Common Stock for Services [Member] | ||||||||
Common stock issued for services | 3,339 | 3,415 | ||||||
Fair value of common share | $ 4,500 | |||||||
General and administrative expenses | $ 338,100 | $ 342,600 | ||||||
Open market sale agreement [Member] | ||||||||
Sale of common stock shares | 3,784,896 | |||||||
Remaining number of share for market public facility | 86,193,000 | 86,193,000 | ||||||
Private Placement Offering [Member] | ||||||||
Warrants outstanding | 1,235,000 | 1,235,000 | ||||||
Equity Distribution Agreement [Member] | ||||||||
Sale of common stock shares | 18,474 | 3,766,422 | ||||||
Gross process from private placement of stocks | $ 24,000 | |||||||
Net proceeds | $ 13,441,000 | |||||||
Commission fees | 600 | 230,000 | ||||||
Legal fees | 49,100 | $ 110,000 | ||||||
Net equity issuance costs | $ 25,700 | $ 25,700 | ||||||
Equity Incentive Plan 2021 [Member] | ||||||||
Common stock, shares issue | 10,000,000 | 10,000,000 | ||||||
Legal settlement [Member] | ||||||||
Options granted | 275,000 | |||||||
Chief Executive Officer [Member] | ||||||||
Options granted | 5,250,000 | |||||||
Chief Operating Officer [Member] | ||||||||
Options granted | 231,000 | |||||||
key employee [Member] | ||||||||
Options granted | 481,000 | |||||||
Average grant-date fair value | $ 0.47 | |||||||
New Employees [Member] | ||||||||
Options granted | 50,000 | |||||||
Restricted Stock Units RSU Member | ||||||||
Restricted stock units granted | 2,962,000 | 2,962,000 | ||||||
unvested restricted stock units | 1,356,000 | |||||||
Performance based restricted stock units | 1,606,000 | |||||||
Vesting restricted stock units recognized period | 3 years 9 months | |||||||
Unrecognized compensation | $ 1,459,820 | $ 1,459,820 | ||||||
Performance-based vesting conditions for restricted stock units | performance-based units vest as follows: 50% vest upon the achievement of Operating Profit, as defined in the employment agreements, and 50% upon the achievement of a revenue target of $100 million by the end of fiscal year 2028. The restricted stock units with the revenue target begin vesting once the Company achieves $15 million in revenue for a fiscal year. Vesting will occur on January 31 of each year through January 31, 2029. The number of restricted stock units that vest is based on the proportionate percentage of each fiscal year’s revenue to the $100 million target. For example, if our annual revenue for fiscal year 2026 is $20 million, 20% of the restricted stock units with the revenue performance condition will vest on January 31, 2027 | |||||||
Stock-based Compensation | $ 73,340 | |||||||
Restricted Stock Units RSU Member | Chief Executive Officer [Member] | ||||||||
Options granted | 2,250,000 | |||||||
Restricted Stock Units RSU Member | Chief Operating Officer [Member] | ||||||||
Options granted | 231,000 | |||||||
Restricted Stock Units RSU Member | key employee [Member] | ||||||||
Options granted | 481,000 | |||||||
Restricted Stock Member | Director [Member] | ||||||||
Common stock issued for services | 240,000 | 24,000,000 | ||||||
Fair value of common share | $ 333,600 | |||||||
Restricted Stock Member | Former employees [Member] | ||||||||
Common stock issued for services | 20,000 | |||||||
Fair value of common share | $ 71,200 | |||||||
Stock Option [Member] | ||||||||
Description stock options granted with performance conditions | options granted during the three months ended June 30, 2024, 3,106,000 of the options included performance conditions in which 50% of the stock options vest upon the achievement of Operating Profit, as defined in the employment agreements. The remaining 50% vest based on the achievement of a revenue target of $100 million by the end of fiscal year 2029. The stock options with the revenue target begin vesting once the Company achieves $15 million in revenue for a fiscal year. Vesting will occur on January 31 of each year through 2028 | |||||||
Aggregate grant-date fair value of these performance-based options | $ 1,459,820 | |||||||
Unrecognized compensation | $ 2,502,558 | $ 2,502,558 | ||||||
Vesting schedules | 3 years 3 months 18 days | |||||||
Stock-based compensation | $ 385,244 | |||||||
Restricted Stock Units [Member] | ||||||||
Unrecognized compensation | $ 2,025,300 | $ 2,025,300 | ||||||
Restricted Stock Units [Member] | Minimum [Member] | ||||||||
Grant-date fair value of the restricted stock | $ 1.25 | $ 1.25 | ||||||
Restricted Stock Units [Member] | Maximum [Member] | ||||||||
Grant-date fair value of the restricted stock | $ 1.50 | $ 1.50 | ||||||
Consultant [Member] | ||||||||
Stock-based compensation | $ 275,384 | $ 183,200 | $ 300,012 | $ 214,924 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Related Party Transactions | |
Related Party Transaction, Expenses from Transactions with Related Party | $ 272,031 |
Related Party Cost | $ 68,691 |
Stock In Excess Percentage Of Outstanding Share | 5% |
Commitments (Details Narrative)
Commitments (Details Narrative) - Legal Settlement [Member] - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
May 31, 2024 | May 16, 2024 | Apr. 19, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Legal settlement upon issuance of common stock | 275,000 | ||||
Stock issued during period | 175,000 | ||||
Accrued legal settlement | $ 112,697 | $ 135,000 | |||
Gain on legal settlement | $ 22,303 | ||||
Stock price | $ 1.33 | ||||
Exercise price | $ 1.25 | ||||
Risk free rate | 4.52% | 4.43% | |||
Volatility | 27.43% | 26.36% | |||
Chief Executive Officer [Member] | |||||
Initial annual salary | $ 450,000 | ||||
Chief Executive Officer [Member] | RSU 2021 Plan [Member] | |||||
Description related to grant of restricted stock units and stock options | Mr. Gannon was granted up to 2,250,000 Restricted Stock Units (as defined in the Plan) under the Plan, vesting as follows: (a) 250,000, on the first annual anniversary of the Start Date; (b) 750,000, in equal increments on the last day of every month thereafter over the following 36 months, subject to Mr. Gannon's continued employment with the Company on each vesting date; and (c) 1,250,000, pursuant to certain performance related milestones set forth by the Company and defined in the Employment Agreement (collectively, the “Gannon Restricted Stock Units”). Additionally, pursuant to the Employment Agreement and the terms of the 2021 Plan, Mr. Gannon was granted 5,250,000 Options (as defined in the 2021 Plan) under the 2021 Plan vesting as follows: (a) 625,000, on the first annual anniversary of the Start Date; (b) 1,875,000, in equal installments on the last day of every month thereafter over the following 36 months subject to Mr. Gannon's continued employment with the Company on each vesting date; and (c) 2,750,000, pursuant to certain performance related milestones set forth by the Company and defined in the Employment Agreement (collectively, the “Gannon Options”, and together with the Gannon Restricted Stock Units, the “Gannon Equity Awards”) | ||||
Chief Operating Officer [Member] | COO Employment Agreement [Member] | |||||
Initial annual salary | $ 300,000 | ||||
Description related to grant of restricted stock units and stock options | Mr. Meyers is eligible to receive up to 231,000 Restricted Stock (as defined in the 2021 Plan) and 231,000 Options (as defined in the 2021 Plan, and collectively, the "Meyers Equity Awards"), vesting as follows: (a) with respect to 115,500 Restricted Stock and 115,500 Options, 25% shall vest on the first anniversary of the Effective Date, and the remaining 75% shall vest in equal increments over the following 36 months; and (b) with respect to the remaining 115,500 Restricted Stock and 115,000 Options, each shall vest in accordance with a performance based milestones set forth by the Company and defined in the COO Employment Agreement |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Aug. 14, 2024 | Jul. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Net proceeds from sale of common stock | $ (25,658) | $ 13,478,959 | ||
Monthly rent payment | $ 4,725 | |||
Subsequent Events [Member] | ||||
Sale of common stock via open market | 32,036 | |||
Net proceeds from sale of common stock | $ 37,570 |
Insider Trading Arrangements (D
Insider Trading Arrangements (Details Narrative) | 6 Months Ended |
Jun. 30, 2024 | |
Insider Trading Arrangements (Details Narrative) | |
Rule 10b5-1 Arrangement Terminated | termination |
Non-Rule 10b5-1 Arrangement Adopted | none |
Rule 10b5-1 Arrangement Adopted | adoption |
Non-Rule 10b5-1 Arrangement Terminated | non-Rule 10b5-1 |