Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 17, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-34643 | |
Entity Registrant Name | AYRO, INC. | |
Entity Central Index Key | 0001086745 | |
Entity Tax Identification Number | 98-0204758 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 900 E. Old Settlers Boulevard | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Round Rock | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78664 | |
City Area Code | (512) | |
Local Phone Number | 994-4917 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Trading Symbol | AYRO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,890,137 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,287,902 | $ 39,096,562 |
Restricted Cash | 10,000,000 | |
Marketable securities | 34,627,782 | 9,848,804 |
Accounts receivable, net | 143,990 | 510,071 |
Inventory, net | 4,346,610 | 970,381 |
Prepaid expenses and other current assets | 3,085,303 | 1,478,845 |
Total current assets | 55,491,588 | 51,904,663 |
Property and equipment, net | 3,499,299 | 2,192,337 |
Operating lease – right-of-use asset | 716,957 | 819,401 |
Deposits and other assets | 90,642 | 73,683 |
Total assets | 59,798,486 | 54,990,084 |
Current liabilities: | ||
Accounts payable | 826,924 | 1,107,215 |
Accrued expenses | 992,966 | 964,937 |
Current portion lease obligation – operating lease | 192,170 | 165,767 |
Total current liabilities | 2,012,060 | 2,237,919 |
Derivative liability | 1,931,000 | |
Warrant liability | 20,065,440 | |
Lease obligation - operating lease, net of current portion | 552,728 | 693,776 |
Total liabilities | 24,561,228 | 2,931,695 |
Commitments and contingencies | ||
Series H-7 Convertible redeemable preferred stock, ($0.0001 par value and $1,000 face value, 22,000 shares authorized; 22,000 shares issued and outstanding at September 30, 2023, and 0 shares at December 31, 2022, respectively). Liquidation preference of $22,244,000 as of September 30, 2023 | 7,925,309 | |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, value | ||
Common Stock, $0.0001 par value; authorized – 200,000,000 shares; issued and outstanding – 4,890,137 and 4,655,205 as of September 30, 2023 and December 31, 2022, respectively) | 489 | 466 |
Additional paid-in capital | 132,549,618 | 133,227,507 |
Accumulated deficit | (105,238,158) | (81,169,584) |
Total stockholders’ equity | 27,311,949 | 52,058,389 |
Total liabilities, mezzanine equity and stockholders’ equity | 59,798,486 | 54,990,084 |
Convertible Preferred Stock Series H [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, value | ||
Convertible Preferred Stock Series H-3 [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, value | ||
Convertible Preferred Stock Series H-6 [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 4,890,137 | 4,655,205 |
Common stock, shares outstanding | 4,890,137 | 4,655,205 |
Series H-7 Convertible Preferred Stock [Member] | ||
Temporary stock, par value | $ 0.0001 | |
Temporary stock, face value | $ 1,000 | |
Temporary stock, shares authorized | 22,000 | |
Temporary stock, shares issued | 22,000 | 0 |
Temporary stock, shares outstanding | 22,000 | 0 |
Temporary stock, liquidation preference | $ 22,244,000 | |
Convertible Preferred Stock Series H [Member] | ||
Preferred stock, shares authorized | 8,500 | 8,500 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 8 | 8 |
Preferred stock, shares outstanding | 8 | 8 |
Convertible Preferred Stock Series H-3 [Member] | ||
Preferred stock, shares authorized | 8,461 | 8,461 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 1,234 | 1,234 |
Preferred stock, shares outstanding | 1,234 | 1,234 |
Convertible Preferred Stock Series H-6 [Member] | ||
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 50 | 50 |
Preferred stock, shares outstanding | 50 | 50 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 88,395 | $ 373,186 | $ 341,023 | $ 2,381,592 |
Cost of goods sold | 231,837 | 955,003 | 783,656 | 4,959,660 |
Gross loss | (143,441) | (581,817) | (442,633) | (2,578,068) |
Operating expenses: | ||||
Research and development | 1,335,167 | 1,837,510 | 5,870,555 | 3,749,714 |
Sales and marketing | 390,684 | 384,748 | 1,529,637 | 1,566,790 |
General and administrative | 4,370,684 | 3,000,156 | 10,461,733 | 8,446,785 |
Total operating expenses | 6,096,535 | 5,222,414 | 17,861,925 | 13,763,289 |
Loss from operations | (6,239,976) | (5,804,231) | (18,304,558) | (16,341,357) |
Other income(expense): | ||||
Interest Income | 35,557 | 51,792 | 370,387 | 71,389 |
Change in FV-Warrant Liability | (10,095,960) | (10,095,960) | ||
Change in FV-Derivative Liability | 3,216,000 | 3,216,000 | ||
Unrealized gain (loss) on marketable securities | 403,996 | (32,135) | 602,211 | (75,204) |
Realized gain on marketable securities | 90,812 | 103,000 | 143,344 | 110,490 |
Other income (expense), net | (6,349,596) | 122,657 | (5,764,018) | 106,675 |
Net loss | (12,589,572) | (5,681,574) | (24,068,576) | (16,234,682) |
Preferred stock dividends | (244,000) | (244,000) | ||
Accretion of discounts to redemption value of H-7 convertible preferred stock | (1,165,635) | (1,165,635) | ||
Deemed Dividend (Series H-5 warrants) | (199,000) | (199,000) | ||
Net loss attributable to Common Stockholders | $ (14,198,207) | $ (5,681,574) | $ (25,677,211) | $ (16,234,682) |
Net loss per share, basic | $ (2.99) | $ (1.23) | $ (5.47) | $ (3.51) |
Net loss per share, diluted | $ (2.99) | $ (1.23) | $ (5.47) | $ (3.51) |
Weighted average common stock outstanding, basic | 4,744,229 | 4,636,829 | 4,698,104 | 4,624,437 |
Weighted average common stock outstanding, diluted | 4,744,229 | 4,636,829 | 4,698,104 | 4,624,437 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity - USD ($) | Series H 7 Preferred Stock [Member] Preferred Stock [Member] | Series H Preferred Stock [Member] Preferred Stock [Member] | Series H-3 Preferred Stock [Member] Preferred Stock [Member] | Series H-6 Preferred Stock [Member] Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance, value at Dec. 31, 2021 | $ 461 | $ 131,658,002 | $ (58,234,231) | $ 73,424,232 | ||||
Temporary equity, balance, shares at Dec. 31, 2021 | ||||||||
Balance, shares at Dec. 31, 2021 | 8 | 1,234 | 50 | 4,608,370 | ||||
Stock based compensation | 288,110 | 288,110 | ||||||
Vested Restricted Stock | $ 1 | 329,380 | 329,381 | |||||
Vesting of Restricted Stock , shares | 5,375 | |||||||
Net Loss | (4,578,660) | (4,578,660) | ||||||
Balance, value at Mar. 31, 2022 | $ 462 | 132,275,492 | (62,812,891) | 69,463,063 | ||||
Temporary equity, balance, shares at Mar. 31, 2022 | ||||||||
Balance, shares at Mar. 31, 2022 | 8 | 1,234 | 50 | 4,613,745 | ||||
Balance, value at Dec. 31, 2021 | $ 461 | 131,658,002 | (58,234,231) | 73,424,232 | ||||
Temporary equity, balance, shares at Dec. 31, 2021 | ||||||||
Balance, shares at Dec. 31, 2021 | 8 | 1,234 | 50 | 4,608,370 | ||||
Net Loss | (16,234,682) | |||||||
Balance, value at Sep. 30, 2022 | $ 464 | 132,911,224 | (74,468,913) | 58,442,775 | ||||
Temporary equity, balance, shares at Sep. 30, 2022 | ||||||||
Temporary equity, balance at Sep. 30, 2022 | ||||||||
Balance, shares at Sep. 30, 2022 | 8 | 1,234 | 50 | 4,641,423 | ||||
Balance, value at Mar. 31, 2022 | $ 462 | 132,275,492 | (62,812,891) | 69,463,063 | ||||
Temporary equity, balance, shares at Mar. 31, 2022 | ||||||||
Balance, shares at Mar. 31, 2022 | 8 | 1,234 | 50 | 4,613,745 | ||||
Stock based compensation | 303,553 | 303,553 | ||||||
Vested Restricted Stock | $ 1 | (1) | ||||||
Vesting of Restricted Stock , shares | 13,820 | |||||||
Net Loss | (5,974,448) | (5,974,448) | ||||||
Balance, value at Jun. 30, 2022 | $ 463 | 132,579,044 | (68,787,339) | 63,792,168 | ||||
Temporary equity, balance, shares at Jun. 30, 2022 | ||||||||
Balance, shares at Jun. 30, 2022 | 8 | 1,234 | 50 | 4,627,565 | ||||
Stock based compensation | 332,181 | 332,181 | ||||||
Vested Restricted Stock | $ 1 | (1) | ||||||
Vesting of Restricted Stock , shares | 13,858 | |||||||
Net Loss | (5,681,574) | (5,681,574) | ||||||
Balance, value at Sep. 30, 2022 | $ 464 | 132,911,224 | (74,468,913) | 58,442,775 | ||||
Temporary equity, balance, shares at Sep. 30, 2022 | ||||||||
Temporary equity, balance at Sep. 30, 2022 | ||||||||
Balance, shares at Sep. 30, 2022 | 8 | 1,234 | 50 | 4,641,423 | ||||
Balance, value at Dec. 31, 2022 | $ 466 | 133,227,507 | (81,169,584) | 52,058,389 | ||||
Temporary equity, balance, shares at Dec. 31, 2022 | ||||||||
Temporary equity, balance at Dec. 31, 2022 | ||||||||
Balance, shares at Dec. 31, 2022 | 8 | 1,234 | 50 | 4,655,205 | ||||
Stock based compensation | 20,116 | 20,116 | ||||||
Vested Restricted Stock | $ 1 | 246,624 | 246,625 | |||||
Vesting of Restricted Stock , shares | 13,858 | |||||||
Net Loss | (5,475,769) | (5,475,769) | ||||||
Balance, value at Mar. 31, 2023 | $ 467 | 133,494,247 | (86,645,353) | 46,849,361 | ||||
Temporary equity, balance, shares at Mar. 31, 2023 | ||||||||
Temporary equity, balance at Mar. 31, 2023 | ||||||||
Balance, shares at Mar. 31, 2023 | 8 | 1,234 | 50 | 4,669,063 | ||||
Balance, value at Dec. 31, 2022 | $ 466 | 133,227,507 | (81,169,584) | 52,058,389 | ||||
Temporary equity, balance, shares at Dec. 31, 2022 | ||||||||
Temporary equity, balance at Dec. 31, 2022 | ||||||||
Balance, shares at Dec. 31, 2022 | 8 | 1,234 | 50 | 4,655,205 | ||||
Net Loss | (24,068,576) | |||||||
Balance, value at Sep. 30, 2023 | $ 7,925,309 | $ 489 | 132,549,618 | (105,238,158) | 27,311,949 | |||
Temporary equity, balance, shares at Sep. 30, 2023 | 22,000 | |||||||
Temporary equity, balance at Sep. 30, 2023 | $ 7,925,309 | 7,925,309 | ||||||
Balance, shares at Sep. 30, 2023 | 8 | 1,234 | 50 | 4,890,137 | ||||
Balance, value at Mar. 31, 2023 | $ 467 | 133,494,247 | (86,645,353) | 46,849,361 | ||||
Temporary equity, balance, shares at Mar. 31, 2023 | ||||||||
Temporary equity, balance at Mar. 31, 2023 | ||||||||
Balance, shares at Mar. 31, 2023 | 8 | 1,234 | 50 | 4,669,063 | ||||
Stock based compensation | 11,417 | 11,417 | ||||||
Vested Restricted Stock | $ 2 | 230,711 | 230,713 | |||||
Vesting of Restricted Stock , shares | 23,568 | |||||||
Net Loss | (6,003,233) | (6,003,233) | ||||||
Balance, value at Jun. 30, 2023 | $ 469 | 133,736,375 | (92,648,586) | 41,088,258 | ||||
Temporary equity, balance, shares at Jun. 30, 2023 | ||||||||
Temporary equity, balance at Jun. 30, 2023 | ||||||||
Balance, shares at Jun. 30, 2023 | 8 | 1,234 | 50 | 4,692,632 | ||||
Stock based compensation | 15,165 | 15,165 | ||||||
Vested Restricted Stock | $ 3 | 207,730 | 207,733 | |||||
Vesting of Restricted Stock , shares | 23,975 | |||||||
Net Loss | (12,589,572) | (12,589,572) | ||||||
Sale of preferred shares | ||||||||
Issuance of convertible preferred stock, net of discounts and transaction costs | $ 6,515,674 | |||||||
Temporary equity, issuance of convertible preferred stock, net of discounts and transaction costs, shares | 22,000 | |||||||
Temporary equity, issuance of convertible preferred stock, net of discounts and transaction costs | $ 6,515,674 | |||||||
Issuance of rounded shares as a result of the reverse stock split. | $ 17 | (17) | ||||||
Issuance of rounded shares as a result of the reverse stock split, shares | 173,530 | |||||||
Dividends (Accrued Series H-7 Preferred) | 244,000 | (244,000) | (244,000) | |||||
Temporary equity, balance, shares | 244,000 | |||||||
Deemed Dividend (Series H-5 warrants) | ||||||||
Accretion of discounts to redemption value of H-7 convertible preferred stock | 1,165,635 | (1,165,635) | (1,165,635) | |||||
Temporary equity, accretion of discounts to redemption value of H-7 convertible preferred stock | 1,165,635 | |||||||
Balance, value at Sep. 30, 2023 | $ 7,925,309 | $ 489 | $ 132,549,618 | $ (105,238,158) | 27,311,949 | |||
Temporary equity, balance, shares at Sep. 30, 2023 | 22,000 | |||||||
Temporary equity, balance at Sep. 30, 2023 | $ 7,925,309 | $ 7,925,309 | ||||||
Balance, shares at Sep. 30, 2023 | 8 | 1,234 | 50 | 4,890,137 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (12,589,572) | $ (5,681,574) | $ (24,068,576) | $ (16,234,682) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 781,852 | 442,890 | ||
Stock-based compensation | 731,768 | 923,844 | ||
Change in FV-Derivative Liability | (3,216,000) | (3,216,000) | ||
Change in FV-Warrant Liability | 10,095,960 | 10,095,960 | ||
Amortization of right-of-use asset | 123,885 | 155,308 | ||
Bad debt expense | 2,136 | 292,010 | 2,136 | |
Unrealized gain on marketable securities | (403,996) | 32,135 | (602,211) | 75,204 |
Realized gain on marketable securities | (90,812) | (103,000) | (143,344) | (110,490) |
Impairment of inventory and prepaid | 2,351,947 | |||
Change in operating assets and liabilities: | ||||
Accounts receivable | 74,072 | 510,922 | ||
Inventory | (3,376,229) | 462,025 | ||
Prepaid expenses and other current assets | (1,606,457) | (1,430,565) | ||
Deposits and other assets | (500) | 18,798 | ||
Accounts payable | (280,291) | 516,347 | ||
Accrued expenses | 28,029 | (473,953) | ||
Lease obligations - operating leases | (136,086) | (168,935) | ||
Net cash used in operating activities | (21,302,119) | (12,959,204) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchase of property and equipment | (2,076,070) | (970,557) | ||
Change in marketable securities | (24,033,422) | (15,755,310) | ||
Purchase of intangible assets | (29,204) | (46,546) | ||
Net cash used in by investing activities | (26,138,696) | (16,772,413) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from private placement of preferred stock, net of transaction costs | 21,632,156 | |||
Net cash provided by financing activities | 21,632,156 | |||
Net change in cash, cash equivalents and restricted cash | (25,808,660) | (29,731,616) | ||
Cash, cash equivalents and restricted cash, beginning of period | 39,096,562 | 69,160,466 | ||
Cash, cash equivalents and restricted cash, end of period | 13,287,902 | 39,428,850 | 13,287,902 | 39,428,850 |
Supplemental disclosure of cash and non-cash transactions: | ||||
Accrual of Series H-7 Convertible Preferred Stock Dividends | 244,000 | |||
Restricted Stock issued previously accrued | 329,381 | |||
Initial fair value of warrant liability | 9,969,480 | |||
Initial fair value of derivative liability | 5,147,000 | |||
Deemed Dividend H-5 Warrants | 199,000 | |||
Accretion of discounts to redemption value of H-7 convertible preferred stock | 1,165,635 | 1,165,635 | ||
Accrued fixed assets | 193,053 | |||
Supplemental disclosure of restricted cash: | ||||
Cash and cash equivalents | 3,287,902 | 39,428,850 | 3,287,902 | 39,428,850 |
Restricted Cash | 10,000,000 | 10,000,000 | ||
Total cash, cash equivalents and restricted cash | $ 13,287,902 | $ 39,428,850 | $ 13,287,902 | $ 39,428,850 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS AYRO, Inc. (“AYRO” or the “Company”), a Delaware corporation formerly known as DropCar, Inc. (“DropCar”), a corporation headquartered outside Austin, Texas, is the merger successor discussed below of AYRO Operating Company, Inc. (“AYRO Operating”), which was formed under the laws of the State of Texas on May 17, 2016 as Austin PRT Vehicle, Inc. and subsequently changed its name to Austin EV, Inc. under an Amended and Restated Certificate of Formation filed with the State of Texas on March 9, 2017. On July 24, 2019, the Company changed its name to AYRO, Inc. and converted its corporate domicile to Delaware. The Company was founded on the basis of promoting resource sustainability. The Company, and its wholly owned subsidiaries, are principally engaged in manufacturing and sales of environmentally conscious, minimal-footprint electric vehicles. The all-electric vehicles are typically sold both directly to customers and to dealers in the United States. Reverse Stock Split On September 15, 2023, the Company effected a one-for-eight reverse stock split of the Company’s common stock (the “Reverse Stock Split”). All share and per share information in this quarterly report have been retroactively adjusted to reflect the Reverse Stock Split. Strategic Review Following the hiring of the Company’s current Chief Executive Officer in the third quarter of 2021, AYRO initiated a strategic review of its product development strategy, as AYRO focused on creating value within the electric vehicle, last-mile delivery, smart payload and enabling infrastructure markets. In connection with the strategic review by the Company, AYRO cancelled development of its planned next-generation three-wheeled high-speed vehicle. For the past several years, AYRO’s primary supplier has been Cenntro Automotive Group, Ltd. (“Cenntro”), which operates a large electric vehicle factory in the automotive district in Hangzhou, China. As a result of rising shipping costs, quality issues with certain components and persistent delays, the Company ceased production of the AYRO 411x from Cenntro in September 2022 in order to focus its resources on the development and launch of the new 411 fleet vehicle model year 2023 refresh (the “Vanish”). In December of 2021, the Company began research and development on the Vanish, including updates on its supply chain evolution, offshoring/onshoring mix, manufacturing strategy, and annual model year refresh program. The Company commenced low-rate initial production of the Vanish in the second quarter of 2023 and commenced initial sales and delivery of the Vanish in the third quarter of 2023. |
LIQUIDITY AND OTHER UNCERTAINTI
LIQUIDITY AND OTHER UNCERTAINTIES | 9 Months Ended |
Sep. 30, 2023 | |
Liquidity And Other Uncertainties | |
LIQUIDITY AND OTHER UNCERTAINTIES | NOTE 2. LIQUIDITY AND OTHER UNCERTAINTIES Liquidity and Other Uncertainties The unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”), which contemplates continuation of the Company as a going concern. The Company is subject to a number of risks similar to those of earlier stage commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the potential need to obtain additional capital, competition from larger companies, other technology companies and other technologies. The Company has a limited operating history and the sales and income potential of its business and market are unproven. The Company incurred net losses of $ 24,068,576 21,302,119 3,287,902 34,627,782 10,000,000 3,812,783 On August 7, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”), pursuant to which it agreed to sell to certain existing investors (the “Investors”) in a private placement (the “Private Placement”) (i) an aggregate of 22,000 0.0001 1,000 2,750,000 22 The certificate of designations for the Series H-7 Preferred Shares (the “Certificate of Designations”) contains certain restrictive provisions, including (i) a requirement to maintain unencumbered, unrestricted cash and cash equivalents on hand in an amount equal to (a) until December 31, 2023, at least $20,000,000 plus the net proceeds from the sale of the Series H-7 Preferred Shares pursuant to the Purchase Agreement, and (b) from January 1, 2024 and until an aggregate of eighty percent (80%) of the Series H-7 Preferred Shares have been converted into shares of common stock, at least $21,000,000, and (ii) a requirement to deposit an amount equal to $ 10,000,000 The Purchase Agreement contains certain representations and warranties, covenants, and indemnities customary for similar transactions. The representations, warranties and covenants contained in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement and may be subject to limitations agreed upon by the contracting parties. Among other covenants, the Purchase Agreement requires the Company to hold a meeting of its stockholders no later than November 5, 2023, to seek approval under Nasdaq Stock Market Rule 5635(d) (the “Stockholder Approval”) for the issuance of shares of common stock at prices below the “Minimum Price” (as defined in Rule 5635 of the Rules of the Nasdaq Stock Market) on the date of the Purchase Agreement pursuant to the terms of the Preferred Stock and the Warrants. Such Stockholder Approval was obtained at a Special Meeting held on September 14, 2023. The Company may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials, including lithium-ion battery cells, semiconductors, and integrated circuits. Any such increase or supply interruption could materially and negatively impact the Company’s business, prospects, financial condition, and operating results. Currently, the Company is experiencing supply chain shortages, including with respect to lithium-ion battery cells, integrated circuits, vehicle control chips, and displays. Certain production-ready components may be delayed in shipment to Company facilities which has and may continue to cause delays in validation and testing for these components, which would in turn create a delay in the availability of saleable vehicles. The Company uses various raw materials, including aluminum, steel, carbon fiber, non-ferrous metals (such as copper), and cobalt. The prices for these raw materials fluctuate depending on market conditions, and global demand and could adversely affect business and operating results. For instance, the Company is exposed to multiple risks relating to price fluctuations for lithium-ion cells. These risks include: ● the inability or unwillingness of current battery manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium-ion cells required to support the growth of the electric vehicle industry as demand for such cells increases; ● disruption in the supply of cells due to quality issues or recalls by the battery cell manufacturers; and ● an increase in the cost of raw materials, such as cobalt, used in lithium-ion cells. Any disruption in the supply of lithium-ion battery cells, semiconductors, or integrated circuits could temporarily disrupt production of the Company’s vehicles until a different supplier is fully qualified. Moreover, battery cell manufacturers may refuse to supply electric vehicle manufacturers if they determine that the vehicles are not sufficiently safe. Furthermore, fluctuations or shortages in petroleum and other economic conditions may cause the Company to experience significant increases in freight charges and raw material costs. Substantial increases in the prices for our raw materials would increase operating costs and could reduce our margins if the increased costs cannot be recouped through increased electric vehicle prices. There can be no assurance that the Company will be able to recoup the increasing costs of raw materials by increasing vehicle prices. We have made certain indemnities, under which we may be required to make payments to an indemnified party, in relation to certain transactions. We indemnify our directors and officers to the maximum extent permitted under the laws of the State of Delaware. In connection with our facility leases, we have indemnified our lessors for certain claims arising from the use of the facilities. The duration of the indemnities vary and, in many cases, are indefinite. These indemnities do not provide for any limitation of the maximum potential future payments we could be obligated to make. Historically, we have not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2023, may not be indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2023, as amended on May 1, 2023. Use of Estimates The preparation of the unaudited condensed consolidated financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s most significant estimates include marketable securities, revenue recognition, the measurement of stock-based compensation expenses, fair value measurements of warrant and derivative liabilities and accretion of preferred stock. Actual results could differ from these estimates. Restricted Cash As of September 30, 2023, cash of $ 10 Marketable Securities Marketable securities include investment in fixed income bonds and U.S. Treasury securities that are considered to be highly liquid and easily tradeable. The marketable securities are considered trading securities and are measured at fair value and are accounted for in accordance with ASC 320. The marketable securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy. The Company held $ 34,627,782 9,848,804 Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. Nature of goods and services The following is a description of the Company’s products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: Product revenue Product revenue from customer contracts is recognized on the sale of each electric vehicle as vehicles are shipped to customers. The majority of the Company’s vehicle sales orders generally have only one performance obligation: sale and delivery of complete vehicles. Ownership and risk of loss transfers to the customer based on FOB shipping point and freight charges are the responsibility of the customer. Revenue is typically recognized at the point control transfers or in accordance with payment terms customary to the business. The Company provides product warranties to assure that the product assembly complies with agreed upon specifications. The Company’s product warranty is similar in all material respects to the product warranties provided by the Company’s suppliers, therefore minimizing the warranty liability to the standard labor rates associated with the defective part replacement. Customers do not have the option to purchase a warranty separately; as such, warranty is not accounted for as a separate performance obligation. The Company’s policy is to exclude taxes collected from a customer from the transaction price of automotive contracts. Shipping revenue Amounts billed to customers related to shipping and handling are classified as shipping revenue. The Company has elected to recognize the cost for freight and shipping when control over vehicles has transferred to the customer as an operating expense. The Company has reported shipping expenses of $ 15,148 79,767 56,482 335,812 Services and other revenue Services and other revenue consist of non-warranty after-sales vehicle services. Revenue is typically recognized at a point in time when services and replacement parts are provided. Miscellaneous income Miscellaneous income consists of late fees charged for receivables not paid within the terms of the customer agreement based upon the outstanding customer receivable balance. This revenue is earned when a customer’s receivable balance becomes delinquent, and its collection is reasonably assured and is calculated using a stated late fee rate multiplied by the outstanding balance that is subject to a late fee charge. Derivative Financial Instruments The Company evaluates all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s balance sheet. These particular derivatives are assessed under ASC 480 and ASC 815. Fair Value Measurements In accordance with ASC 820 (Topic 820, Fair Value Measurements and Disclosures), the company uses a three-level hierarchy for fair value measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into three levels based on the source of inputs as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. The Company recognizes all employee and non-employee share-based compensation as an expense in the financial statements on a straight-line basis over the requisite service period, based on the terms of the awards. Equity-classified awards principally related to stock options, restricted stock awards (“RSAs”) and equity-based compensation, are measured at the grant date fair value of the award. The Company determines grant date fair value of stock option awards using the Black-Scholes option-pricing model. The fair value of RSAs is determined using the closing price of the Company’s common stock on the grant date. For service based vesting grants, expense is recognized ratably over the requisite service period based on the number of options or shares. For value-based vesting grants, expense is recognized via straight line expense over the expected period per grant as determined by outside valuation experts. Stock-based compensation is reversed for forfeitures in the period of forfeiture. The Company estimates the fair value of stock-based and cash unit awards containing a market condition using a Monte Carlo simulation model. Key inputs and assumptions used in the Monte Carlo simulation model include the stock price of the award on the grant date, the expected term, the risk-free interest rate over the expected term, the expected annual dividend yield, and the expected stock price volatility. The expected volatility is based on a combination of the historical and implied volatility of the Company’s publicly traded, near-the-money stock options, and the valuation period is based on the vesting period of the awards. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant and, since the Company does not currently pay or plan to pay a dividend on its common stock, the expected dividend yield was zero. Stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the underlying equity instrument. The attribution of the fair value of the equity instrument is charged directly to compensation expense over the period during which services are rendered. Basic and Diluted Loss Per Share Basic and diluted net loss per share is determined by dividing net loss by the weighted average ordinary shares outstanding during the period. For all periods presented with a net loss, the shares underlying the ordinary share options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares outstanding used to calculate both basic and diluted loss per share is the same for periods with a net loss. In accordance with ASC 260, warrants that are accounted for as liabilities which are potentially dilutive have not been included in diluted earnings per share as they would have been anti-dilutive during the three and nine months ended September 30, 2023. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Options to purchase common stock 38,696 98,178 38,696 98,178 Restricted stock unvested 116,293 96,353 116,293 96,353 Warrants outstanding 11,605,759 763,253 11,605,759 763,253 Preferred stock outstanding 11,122,696 309 11,122,696 309 Totals 22,883,444 958,093 22,883,444 958,093 Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, which reduces the number of accounting models for convertible instruments, amends diluted earnings per share calculations for convertible instruments and allows more contracts to qualify for equity classification. ASU 2020-06 was effective for interim and annual periods beginning after December 15, 2021. The Company adopted ASU 2020-06 as of January 1, 2023. The adoption did not result in a material change to these unaudited condensed consolidated financial statements. Inflation Risk The Company does not believe that inflation has had a material effect on its business, financial condition, or results of operations. If costs were to become subject to significant inflationary pressures, the Company may not be able to fully offset such higher costs through price increases. The Company’s inability or failure to do so could harm the business, financial condition, and results of operations. |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 4. REVENUES Disaggregation of Revenue Revenue by type was as follows: SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenue type Product revenue $ 80,475 $ 332,792 $ 327,863 $ 2,170,943 Shipping revenue 7,920 35,507 3,770 165,762 Miscellaneous income - 4,887 9,390 44,887 Total Revenue $ 88,395 $ 373,186 $ 341,023 $ 2,381,592 Warranty Reserve The Company records a reserve for warranty repairs upon the initial delivery of vehicles to its dealer network. The Company provides a product warranty on each vehicle including powertrain, battery pack and electronics package. Such warranty matches the product warranty provided by its supply chain for warranty parts for all unaltered vehicles and is not considered a separate performance obligation. The supply chain warranty does not cover warranty-based labor needed to replace a part under warranty. Warranty reserves include management’s best estimate of the projected cost of labor to repair/replace all items under warranty. The Company reserves a percentage of all dealer-based sales to cover an industry-standard warranty fund to support dealer labor warranty repairs. Such percentage is recorded as a component of cost of revenues in the statement of operations. As of September 30, 2023, and December 31, 2022, warranty reserves were recorded within accrued expenses of $ 395,071 410,017 |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 5. ACCOUNTS RECEIVABLE, NET Accounts receivable, net, consists of amounts due from invoiced customers and product deliveries and were as follows: SCHEDULE OF ACCOUNTS RECEIVABLE September 30, December 31, 2023 2022 Trade receivables $ 143,990 $ 512,420 Less: Allowance for doubtful accounts - (2,349 ) Accounts receivable, net $ 143,990 $ 510,071 The Company reduced allowance for doubtful accounts by $ 2,349 292,010 2,136 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 6. INVENTORY Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, December 31, 2023 2022 Raw materials $ 3,889,979 $ 330,931 Work-in-progress - - Finished goods 456,631 639,450 Total $ 4,346,610 $ 970,381 For the three months ended September 30, 2023, and 2022, depreciation for fleet inventory was $ 0 23,886 0 71,661 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, December 31, 2023 2022 Prepayments for inventory $ 2,623,760 $ 1,174,466 Prepayments for insurance 222,006 118,434 Prepayments on advances on design - 75,000 Prepayments on software 150,468 103,851 Prepaid other 89,069 7,094 Total Prepaid Expenses and Other Current Assets $ 3,085,303 $ 1,478,845 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET September 30, December 31, 2023 2022 Computer and equipment $ 3,639,357 $ 1,970,001 Furniture and fixtures 395,705 323,789 Lease improvements 1,275,050 952,952 Computer software 468,575 455,875 Property and equipment, gross 5,778,687 3,702,617 Less: Accumulated depreciation (2,279,388 ) (1,510,280 ) Property and equipment, net $ 3,499,299 $ 2,192,337 Depreciation expense for the three months ended September 30, 2023, and 2022 was $ 324,052 151,980 769,108 335,385 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 9. ACCRUED EXPENSES SCHEDULE OF ACCRUED EXPENSES September 30, December 31, 2023 2022 Accrued professional and consulting fees $ 97,900 $ 410,711 Accrued payroll 464,166 6,000 Accrued warranty reserve 395,071 410,017 Accrued expenses other 35,829 138,209 Total accrued expenses $ 992,966 $ 964,937 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 10. STOCKHOLDERS’ EQUITY Restricted Stock On February 1, 2023, pursuant to the AYRO, Inc. 2020 Long-Term Incentive Plan, the Company granted 95,087 6.00 47,542 On February 1, 2022, pursuant to the AYRO, Inc. 2020 Long-Term Incentive Plan, the Company issued 55,282 10.32 13,858 On February 24, 2021, pursuant to the AYRO, Inc. 2020 Long-Term Incentive Plan, the Company issued 21,500 61.28 5,375 Share Increase Amendment On September 14, 2023, the Company amended its certificate of incorporation to increase the number of authorized shares of common stock from 100,000,000 200,000,000 Series H Convertible Preferred Stock SCHEDULE OF PAYMENT OF PREFERRED STOCK Number of Series H Preferred Stock outstanding as of September 30, 2023 8 Multiplied by the stated value $ 154 Equals the gross stated value $ 1,232 Divided by the conversion price $ 1,478.40 Equals the convertible shares of Company Common Stock 1 Multiplied by the fair market value of Company Common Stock as of September 30, 2023 $ 2.34 Equals the payment $ 2 Series H-3 Convertible Preferred Stock SCHEDULE OF PAYMENT OF PREFERRED STOCK Number of Series H-3 Preferred Stock outstanding as of September 30, 2023 1,234 Multiplied by the stated value $ 138 Equals the gross stated value $ 170,292 Divided by the conversion price $ 1,324.80 Equals the convertible shares of Company Common Stock 129 Multiplied by the fair market value of Company Common Stock as of September 30, 2023 $ 2.34 Equals the payment $ 302 Series H-6 Convertible Preferred Stock SCHEDULE OF PAYMENT OF PREFERRED STOCK Number of Series H-6 Preferred Stock outstanding as of September 30, 2023 50 Number of Series H Preferred Stock outstanding as of September 30, 2023 50 Multiplied by the stated value $ 72 Equals the gross stated value $ 3,600 Divided by the conversion price $ 5.76 Equals the convertible shares of Company Common Stock 6.25 Multiplied by the fair market value of Company Common Stock as of September 30, 2023 $ 2.34 Equals the payment $ 1,053 August 2023 Private Placement On August 7, 2023, the Company entered into the Purchase Agreement with the Investors, pursuant to which it agreed to sell to the Investors (i) an aggregate of 22,000 Series H-7 Preferred Shares with a stated value of $ 1,000 per share, initially convertible into up to 2,750,000 shares of the Company’s common stock at a conversion price of $ 8.00 per share, and (ii) Warrants initially exercisable for up to an aggregate of 2,750,000 shares of common stock in the Private Placement. In connection with the Private Placement, pursuant to an Engagement Letter, dated August 7, 2023, between the Company and Palladium Capital Group, LLC (the “Placement Agent”), the Company agreed to pay the Placement Agent (i) a cash fee equal to 6 2 8.00 2.00 five The Series H-7 Preferred Shares are convertible into common stock (the “Conversion Shares”) at the election of the holder at any time at an initial conversion price of $ 8.00 The amortization payments due upon such redemption are payable, at the Company’s election, in cash at 105% of the Installment Redemption Amount (as defined in the Certificate of Designations), or subject to certain limitations, in shares of common stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the Company’s common stock during the thirty consecutive trading day period immediately prior to the date the amortization payment is due and (B) $0.0744 (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) or, in any case, such lower amount as permitted, from time to time, by the Nasdaq Stock Market. The holders of the Series H-7 Preferred Shares have the option to defer amortization payments or, subject to certain limitations as specified in the Certificate of Designations, can elect to accelerate installment conversion amounts. The holders of the Series H-7 Preferred Shares are entitled to dividends of 8.0% per annum, compounded monthly, which are payable in cash or shares of common stock at the Company’s option, in accordance with the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series H-7 Preferred Shares will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, the holders of the Series H-7 Preferred Shares are also entitled to receive a dividend make-whole payment. The holders of Series H-7 Preferred Shares are entitled to vote with the holders of the common stock on all matters that such common stockholders are entitled to vote upon. Notwithstanding the foregoing, the Company’s ability to settle conversions and make amortization and dividend make-whole payments using shares of common stock is subject to certain limitations set forth in the Certificate of Designations. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of, or as part of any amortization payment or dividend make-whole payment under, the Certificate of Designations or Warrants. The Certificate of Designations includes certain Triggering Events including, among other things, the suspension from trading or the failure of the common stock to be trading or listed (as applicable) on an eligible market for a period of five (5) consecutive trading days, the Company’s failure to pay any amounts due to the holders of the Series H-7 Preferred Shares when due. In connection with a Triggering Event, each holder of Series H-7 Preferred Shares will be able to require the Company to redeem in cash any or all of the holder’s Series H-7 Preferred Shares at a premium set forth in the Certificate of Designations. The Series H-7 Preferred Shares were determined to be more akin to a debt-like host than an equity-like host. The Company identified the following embedded features that are not clearly and closely related to the debt host instrument: 1) make-whole interest upon a contingent redemption event, 2) make-whole interest upon a conversion event, 3) an installment redemption upon an Equity Conditions Failure (as defined in the Certificate of Designations), and 4) variable share-settled installment conversion. These features were bundled together, assigned probabilities of being effected and measured at fair value. Subsequent changes in fair value of these features are recognized in the Consolidated Statement of Operations. The Company estimated the $ 5.1 75.0 1.48 12.2 8.0 15.0 14.8 The discount to the fair value is included as a reduction to the carrying value of the Series H-7 Preferred Shares. During the three months ended September 30, 2023, the Company recorded a total discount of approximately $ 15.5 5.1 0.6 9.8 1.2 Following the Reverse Stock Split, as discussed in Note 1 above, the Conversion Price was reduced to $2.00 per share pursuant to the terms of the Certificate of Designation. During each of the three and nine months ended September 30, 2023, the Company recorded a gain of approximately $ 3.2 0 1.9 76.0 1.33 14.93 8.0 15.0 14.53 Common Stock Warrants Pursuant to the Private Placement, the Company issued to Investors Warrants initially exercisable for 2,750,000 55,000 The Warrants are entitled to certain anti-dilution adjustments if the Company issues shares of its common stock at a lower price per share than the applicable exercise price. The Warrants are also entitled to certain adjustments following any stock split, stock dividend, stock combination, reverse stock split, recapitalization or other similar transaction involving the outstanding Common Stock. Such adjustments were triggered as a result of the Reverse Stock Split, resulting in an adjusted exercise price per share from $ 8.00 2.00 8,415,000 2.00 The Warrants were determined to be subject to liability classification as they are considered to be indexed to the Company’s own stock but fail to meet the requirements for equity classification in accordance with ASC 815. As such, the Company recorded the Warrants as a liability at fair value with subsequent changes in fair value recognized in earnings. The Company utilized the Black Scholes Model to calculate the value of these warrants issued during the three months ended September 30, 2023. The fair value of the Warrants of approximately $ 10.0 5.20 8.00 0 5.0 96.0 4.21 Transaction costs incurred attributable to the issuance of the Warrants of $ 1.2 During each of the three and nine months ended September 30, 2023, and 2022, the Company recorded a loss of approximately $ 10.0 0 20.0 2.34 2.00 0 4.86 96.5 4.61 The H-5 Warrants are entitled to certain anti-dilution adjustments if the Company issues shares of its common stock at a lower price per share than the applicable exercise price (subject to a floor price of $ 6.336 20.00 8.00 8.00 6.336 93,940 6.336 The Company considers the change in exercise price due to the anti-dilution trigger related to the Series H-5 Warrants to be of an equity nature, as the issuance allowed the warrant holders to exercise warrants in exchange for common stock, which represents an equity for equity exchange. Therefore, the change in the fair value before and after the effect of the anti-dilution triggering event and the fair value of the Series H-5 warrants will be treated as a deemed dividend in the amount of $ 199,000 165,000 21,000 141,000 86,000 The warrants were valued using the Black-Scholes option pricing model on the date of the modification and issuance using the following assumptions for the initial deemed dividend: (a) fair value of common stock of $ 5.20 76.00 0 4.91 1.82 3.90 76.00 0 5.13 1.73 A summary of the Company’s warrants to purchase common stock activity is as follows: SCHEDULE OF WARRANT ACTIVITY Weighted Average Shares Weighted Average Remaining Warrants Exercise Price (in years) Outstanding at December 31, 2022 763,253 $ 58.40 1.32 Granted 11,313,940 2.00 - Exercised - - - Expired (471,435 ) 58.40 - Outstanding at September 30, 2023 11,605,758 $ 3.42 4.77 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11. STOCK-BASED COMPENSATION AYRO 2020 Long Term Incentive Plan The Company has reserved a total of 1,229,956 822,843 Stock-based compensation, including restricted stock awards and stock options is included in the unaudited condensed consolidated statement of operations as follows: SCHEDULE OF STOCK - BASED COMPENSATION 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Research and development $ 6,219 $ 5,269 $ 18,017 $ 15,069 Sales and marketing 1,999 6,001 7,488 19,816 General and administrative 214,681 320,911 706,263 888,959 Total $ 222,899 $ 332,181 $ 731,768 $ 923,844 Options The following table reflects a summary of stock option activity: SCHEDULE OF STOCK-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY Weighted Average Contractual Life Number of Shares Exercise Price (Years) Outstanding at December 31, 2022 97,240 $ 49.20 7.56 Forfeitures (58,544 ) 7.76 Outstanding at September 30, 2023 38,696 $ 87.67 6.79 Of the outstanding options, 27,460 0 The Company recognized $ 15,165 18,821 46,698 44,899 53,321 a Restricted Stock SCHEDULE OF RESTRICTED STOCK ACTIVITY Weighted Number of Average Grant Shares Price Outstanding at December 31, 2022 82,570 $ 15.28 Granted 95,087 6.00 Vested (61,364 ) 5.95 Outstanding at September 30, 2023 116,293 $ 8.58 On February 1, 2023, pursuant to the AYRO, Inc. 2020 Long-Term Incentive Plan, the Company granted 95,087 6.00 no 116,290 The Company recognized compensation expense related to all restricted stock during the three months ended September 30, 2023, and 2022 of $ 207,716 313,360 686,869 878,945 220,741 |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND CREDIT RISK | NOTE 12. CONCENTRATIONS AND CREDIT RISK Revenues One customer accounted for approximately 65 12 100 36 31 12 95 Accounts Receivable As of September 30, 2023, two customers accounted for 85 14 100 Purchasing The Company places orders with various suppliers. Certain suppliers accounted for more than 10 % of the Company’s raw materials purchased for the three months ended September 30, 2023, including, one for 16 %, one for 14 %, one for 12 10 %. During the nine months ended September 30, 2023, no suppliers accounted for more than 10% of the Company’s raw materials. During the nine months ended September 30, 2022, one supplier accounted for approximately 57 12 49 17 13 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13. COMMITMENTS AND CONTINGENCIES Manufacturing Agreements On July 28, 2022, the Company partnered with Linamar Corporation (“Linamar”) a Canadian manufacturer, in a manufacturing agreement (the “Linamar MLA”) to provide certain sub assembly and assembly parts, including the cabin frame and skate for the Vanish (collectively, the “Products”). During the term of the Linamar MLA, Linamar has the exclusive right to supply the Products to the Company, subject to certain exceptions. The Linamar MLA has an initial term of three years and will automatically renew for successive two-year terms unless either party has given at least 12 months’ written notice of nonrenewal. Either party may terminate the Linamar MLA at any time upon 12 months’ written notice, and in the event of a change in control of the Company prior to the end of the initial term, the Company may terminate upon written notice within three days of completion of such change in control. In the event the Company terminates the Linamar MLA prior to its expiration, whether following a change in control or otherwise, the Company must purchase any remaining raw material inventory, finished goods inventory and work in progress and any unamortized capital equipment used in production and testing of the Products and pay a termination fee of $ 750,000 Supply Chain Agreements In 2017, the Company executed a supply chain contract with Cenntro, which has historically been the Company’s primary supplier. Cenntro was previously a significant stockholder in AYRO Operating. Cenntro owns the design of the AYRO 411 Fleet vehicles and has granted the Company an exclusive license to purchase the AYRO 411 Fleet vehicles for sale in North America. The Company purchased 100% of its vehicle chassis, cabs, and wheels for AYRO 411 Fleet Vehicles through this supply chain relationship with Cenntro. The Company must sell a minimum number of units in order to maintain its exclusive supply chain contract. As of December 31, 2021, the net balance between prepaid expenses and accrued expenses with Cenntro was a prepaid balance of $ 602,016 zero 621,097 1,317,289 The Company has canceled all purchase orders and future builds with Cenntro and currently intends to only order replacement parts from Cenntro in the future. Litigation The Company is subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, that it believes are incidental to the operation of its business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on its results of operations, financial positions, or cash flows. On March 23, 2018, DropCar was made aware of an audit being conducted by the New York State Department of Labor (“DOL”) regarding a claim filed by an employee. The DOL is investigating whether DropCar properly paid overtime for which DropCar has raised several defenses. In addition, the DOL is conducting its audit to determine whether the Company owes spread of hours pay (non-exempt worker whose workday is longer than ten hours must receive an extra hour of pay at the basic minimum hourly rate). Management believes the case has no merit. DropCar was audited by the New York State Department of Taxation and Finance (“DOTF”) for its sales tax paid over the period of 2017 – 2020. The DOTF believes DropCar owes additional sales tax plus interest. Management is investigating the details of this audit. As of December 31, 2021, the Company has accrued $ 476,280 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 14. FAIR VALUE MEASUREMENTS Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the nine months ended September 30, 2023. The carrying amounts of cash equivalents, accounts receivable, other current assets, other assets, accounts payable, and accrued expenses approximated their fair values as of September 30, 2023, due to their short-term nature. The fair value of the bifurcated embedded derivative related to the convertible preferred stock was estimated using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and traded volume volatility of our common stock, the time to maturity of the convertible preferred stock, the risk-free interest rate for a period that approximates the time to maturity, dividend rate, a penalty dividend rate, and our probability of default. The fair value of the warrant liability was estimated using the Black Scholes Model which uses as inputs the following weighted average assumptions, as noted above: dividend yield, expected term in years, equity volatility, and risk-free interest rate. Fair Value on a Recurring Basis The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The estimated fair value of the warrant liability and bifurcated embedded derivatives represent Level 3 measurements. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: The following table sets forth a summary of the change in the fair value of the warrant liability that is measured at fair value on a recurring basis: SUMMARY OF CHANGE IN FAIR VALUE WARRANT LIABILITY At Inception September 30, August 10, Description Level 2023 2023 Liabilities: Warrant liability (see Note 10) 3 $ 20,065,440 $ 9,969,480 Bifurcated embedded derivative liability (see Note 10) 3 $ 1,931,000 $ 5,147,000 Fair value of liability 3 $ 1,931,000 5,147,000 The following table sets forth a summary of the change in the fair value of the bifurcated embedded derivative liability that is measured at fair value on a recurring basis: SUMMARY OF CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY September 30, 2023 Balance on December 31, 2022 $ - Issuance of warrants 9,969,480 Issuance of convertible preferred stock with bifurcated embedded derivative Change in fair value of warrant liability 10,095,960 Change in fair value of bifurcated embedded derivative Balance on September 30, 2023 $ 20,065,440 The following table sets forth a summary of the change in the fair value of the bifurcated embedded derivative liability that is measured at fair value on a recurring basis: September 30, 2023 Balance on December 31, 2022 $ - Issuance of convertible preferred stock with bifurcated embedded derivative 5,147,000 Change in fair value of bifurcated embedded derivative (3,216,000 ) Balance on September 30, 2023 $ 1,931,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15. SUBSEQUENT EVENTS On October 20, 2023, Club Car filed a complaint against the Company in the Superior Court of Columbia County, Georgia (Civil Action File No. 2023ECV0838) (the “Club Car Complaint”), alleging that the Company had breached its contractual obligations to Club Car under the Company’s master procurement agreement with Club Car (the “MPA”) due to alleged defects in the vehicles sold to Club Car and the Company’s termination of warranty support following termination of the MPA. Club Car seeks unspecified damages and indemnification for past and future customer claims with respect to the vehicles sold to Club Car under the MPA. The Company intends to vigorously contest these allegations. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2023, may not be indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2023, as amended on May 1, 2023. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s most significant estimates include marketable securities, revenue recognition, the measurement of stock-based compensation expenses, fair value measurements of warrant and derivative liabilities and accretion of preferred stock. Actual results could differ from these estimates. |
Restricted Cash | Restricted Cash As of September 30, 2023, cash of $ 10 |
Marketable Securities | Marketable Securities Marketable securities include investment in fixed income bonds and U.S. Treasury securities that are considered to be highly liquid and easily tradeable. The marketable securities are considered trading securities and are measured at fair value and are accounted for in accordance with ASC 320. The marketable securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy. The Company held $ 34,627,782 9,848,804 |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. Nature of goods and services The following is a description of the Company’s products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: Product revenue Product revenue from customer contracts is recognized on the sale of each electric vehicle as vehicles are shipped to customers. The majority of the Company’s vehicle sales orders generally have only one performance obligation: sale and delivery of complete vehicles. Ownership and risk of loss transfers to the customer based on FOB shipping point and freight charges are the responsibility of the customer. Revenue is typically recognized at the point control transfers or in accordance with payment terms customary to the business. The Company provides product warranties to assure that the product assembly complies with agreed upon specifications. The Company’s product warranty is similar in all material respects to the product warranties provided by the Company’s suppliers, therefore minimizing the warranty liability to the standard labor rates associated with the defective part replacement. Customers do not have the option to purchase a warranty separately; as such, warranty is not accounted for as a separate performance obligation. The Company’s policy is to exclude taxes collected from a customer from the transaction price of automotive contracts. Shipping revenue Amounts billed to customers related to shipping and handling are classified as shipping revenue. The Company has elected to recognize the cost for freight and shipping when control over vehicles has transferred to the customer as an operating expense. The Company has reported shipping expenses of $ 15,148 79,767 56,482 335,812 Services and other revenue Services and other revenue consist of non-warranty after-sales vehicle services. Revenue is typically recognized at a point in time when services and replacement parts are provided. Miscellaneous income Miscellaneous income consists of late fees charged for receivables not paid within the terms of the customer agreement based upon the outstanding customer receivable balance. This revenue is earned when a customer’s receivable balance becomes delinquent, and its collection is reasonably assured and is calculated using a stated late fee rate multiplied by the outstanding balance that is subject to a late fee charge. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s balance sheet. These particular derivatives are assessed under ASC 480 and ASC 815. |
Fair Value Measurements | Fair Value Measurements In accordance with ASC 820 (Topic 820, Fair Value Measurements and Disclosures), the company uses a three-level hierarchy for fair value measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into three levels based on the source of inputs as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. The Company recognizes all employee and non-employee share-based compensation as an expense in the financial statements on a straight-line basis over the requisite service period, based on the terms of the awards. Equity-classified awards principally related to stock options, restricted stock awards (“RSAs”) and equity-based compensation, are measured at the grant date fair value of the award. The Company determines grant date fair value of stock option awards using the Black-Scholes option-pricing model. The fair value of RSAs is determined using the closing price of the Company’s common stock on the grant date. For service based vesting grants, expense is recognized ratably over the requisite service period based on the number of options or shares. For value-based vesting grants, expense is recognized via straight line expense over the expected period per grant as determined by outside valuation experts. Stock-based compensation is reversed for forfeitures in the period of forfeiture. The Company estimates the fair value of stock-based and cash unit awards containing a market condition using a Monte Carlo simulation model. Key inputs and assumptions used in the Monte Carlo simulation model include the stock price of the award on the grant date, the expected term, the risk-free interest rate over the expected term, the expected annual dividend yield, and the expected stock price volatility. The expected volatility is based on a combination of the historical and implied volatility of the Company’s publicly traded, near-the-money stock options, and the valuation period is based on the vesting period of the awards. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant and, since the Company does not currently pay or plan to pay a dividend on its common stock, the expected dividend yield was zero. Stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the underlying equity instrument. The attribution of the fair value of the equity instrument is charged directly to compensation expense over the period during which services are rendered. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share Basic and diluted net loss per share is determined by dividing net loss by the weighted average ordinary shares outstanding during the period. For all periods presented with a net loss, the shares underlying the ordinary share options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares outstanding used to calculate both basic and diluted loss per share is the same for periods with a net loss. In accordance with ASC 260, warrants that are accounted for as liabilities which are potentially dilutive have not been included in diluted earnings per share as they would have been anti-dilutive during the three and nine months ended September 30, 2023. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Options to purchase common stock 38,696 98,178 38,696 98,178 Restricted stock unvested 116,293 96,353 116,293 96,353 Warrants outstanding 11,605,759 763,253 11,605,759 763,253 Preferred stock outstanding 11,122,696 309 11,122,696 309 Totals 22,883,444 958,093 22,883,444 958,093 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, which reduces the number of accounting models for convertible instruments, amends diluted earnings per share calculations for convertible instruments and allows more contracts to qualify for equity classification. ASU 2020-06 was effective for interim and annual periods beginning after December 15, 2021. The Company adopted ASU 2020-06 as of January 1, 2023. The adoption did not result in a material change to these unaudited condensed consolidated financial statements. |
Inflation Risk | Inflation Risk The Company does not believe that inflation has had a material effect on its business, financial condition, or results of operations. If costs were to become subject to significant inflationary pressures, the Company may not be able to fully offset such higher costs through price increases. The Company’s inability or failure to do so could harm the business, financial condition, and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE | The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Options to purchase common stock 38,696 98,178 38,696 98,178 Restricted stock unvested 116,293 96,353 116,293 96,353 Warrants outstanding 11,605,759 763,253 11,605,759 763,253 Preferred stock outstanding 11,122,696 309 11,122,696 309 Totals 22,883,444 958,093 22,883,444 958,093 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE | Revenue by type was as follows: SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenue type Product revenue $ 80,475 $ 332,792 $ 327,863 $ 2,170,943 Shipping revenue 7,920 35,507 3,770 165,762 Miscellaneous income - 4,887 9,390 44,887 Total Revenue $ 88,395 $ 373,186 $ 341,023 $ 2,381,592 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable, net, consists of amounts due from invoiced customers and product deliveries and were as follows: SCHEDULE OF ACCOUNTS RECEIVABLE September 30, December 31, 2023 2022 Trade receivables $ 143,990 $ 512,420 Less: Allowance for doubtful accounts - (2,349 ) Accounts receivable, net $ 143,990 $ 510,071 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, December 31, 2023 2022 Raw materials $ 3,889,979 $ 330,931 Work-in-progress - - Finished goods 456,631 639,450 Total $ 4,346,610 $ 970,381 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, December 31, 2023 2022 Prepayments for inventory $ 2,623,760 $ 1,174,466 Prepayments for insurance 222,006 118,434 Prepayments on advances on design - 75,000 Prepayments on software 150,468 103,851 Prepaid other 89,069 7,094 Total Prepaid Expenses and Other Current Assets $ 3,085,303 $ 1,478,845 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET September 30, December 31, 2023 2022 Computer and equipment $ 3,639,357 $ 1,970,001 Furniture and fixtures 395,705 323,789 Lease improvements 1,275,050 952,952 Computer software 468,575 455,875 Property and equipment, gross 5,778,687 3,702,617 Less: Accumulated depreciation (2,279,388 ) (1,510,280 ) Property and equipment, net $ 3,499,299 $ 2,192,337 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | SCHEDULE OF ACCRUED EXPENSES September 30, December 31, 2023 2022 Accrued professional and consulting fees $ 97,900 $ 410,711 Accrued payroll 464,166 6,000 Accrued warranty reserve 395,071 410,017 Accrued expenses other 35,829 138,209 Total accrued expenses $ 992,966 $ 964,937 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Class of Stock [Line Items] | |
SCHEDULE OF WARRANT ACTIVITY | A summary of the Company’s warrants to purchase common stock activity is as follows: SCHEDULE OF WARRANT ACTIVITY Weighted Average Shares Weighted Average Remaining Warrants Exercise Price (in years) Outstanding at December 31, 2022 763,253 $ 58.40 1.32 Granted 11,313,940 2.00 - Exercised - - - Expired (471,435 ) 58.40 - Outstanding at September 30, 2023 11,605,758 $ 3.42 4.77 |
Convertible Preferred Stock Series H [Member] | |
Class of Stock [Line Items] | |
SCHEDULE OF PAYMENT OF PREFERRED STOCK | SCHEDULE OF PAYMENT OF PREFERRED STOCK Number of Series H Preferred Stock outstanding as of September 30, 2023 8 Multiplied by the stated value $ 154 Equals the gross stated value $ 1,232 Divided by the conversion price $ 1,478.40 Equals the convertible shares of Company Common Stock 1 Multiplied by the fair market value of Company Common Stock as of September 30, 2023 $ 2.34 Equals the payment $ 2 |
Convertible Preferred Stock Series H-3 [Member] | |
Class of Stock [Line Items] | |
SCHEDULE OF PAYMENT OF PREFERRED STOCK | SCHEDULE OF PAYMENT OF PREFERRED STOCK Number of Series H-3 Preferred Stock outstanding as of September 30, 2023 1,234 Multiplied by the stated value $ 138 Equals the gross stated value $ 170,292 Divided by the conversion price $ 1,324.80 Equals the convertible shares of Company Common Stock 129 Multiplied by the fair market value of Company Common Stock as of September 30, 2023 $ 2.34 Equals the payment $ 302 |
Convertible Preferred Stock Series H-6 [Member] | |
Class of Stock [Line Items] | |
SCHEDULE OF PAYMENT OF PREFERRED STOCK | SCHEDULE OF PAYMENT OF PREFERRED STOCK Number of Series H-6 Preferred Stock outstanding as of September 30, 2023 50 Number of Series H Preferred Stock outstanding as of September 30, 2023 50 Multiplied by the stated value $ 72 Equals the gross stated value $ 3,600 Divided by the conversion price $ 5.76 Equals the convertible shares of Company Common Stock 6.25 Multiplied by the fair market value of Company Common Stock as of September 30, 2023 $ 2.34 Equals the payment $ 1,053 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK - BASED COMPENSATION | Stock-based compensation, including restricted stock awards and stock options is included in the unaudited condensed consolidated statement of operations as follows: SCHEDULE OF STOCK - BASED COMPENSATION 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Research and development $ 6,219 $ 5,269 $ 18,017 $ 15,069 Sales and marketing 1,999 6,001 7,488 19,816 General and administrative 214,681 320,911 706,263 888,959 Total $ 222,899 $ 332,181 $ 731,768 $ 923,844 |
SCHEDULE OF STOCK-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY | The following table reflects a summary of stock option activity: SCHEDULE OF STOCK-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY Weighted Average Contractual Life Number of Shares Exercise Price (Years) Outstanding at December 31, 2022 97,240 $ 49.20 7.56 Forfeitures (58,544 ) 7.76 Outstanding at September 30, 2023 38,696 $ 87.67 6.79 |
SCHEDULE OF RESTRICTED STOCK ACTIVITY | SCHEDULE OF RESTRICTED STOCK ACTIVITY Weighted Number of Average Grant Shares Price Outstanding at December 31, 2022 82,570 $ 15.28 Granted 95,087 6.00 Vested (61,364 ) 5.95 Outstanding at September 30, 2023 116,293 $ 8.58 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
SUMMARY OF CHANGE IN FAIR VALUE WARRANT LIABILITY | The following table sets forth a summary of the change in the fair value of the warrant liability that is measured at fair value on a recurring basis: SUMMARY OF CHANGE IN FAIR VALUE WARRANT LIABILITY At Inception September 30, August 10, Description Level 2023 2023 Liabilities: Warrant liability (see Note 10) 3 $ 20,065,440 $ 9,969,480 Bifurcated embedded derivative liability (see Note 10) 3 $ 1,931,000 $ 5,147,000 Fair value of liability 3 $ 1,931,000 5,147,000 |
SUMMARY OF CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY | The following table sets forth a summary of the change in the fair value of the bifurcated embedded derivative liability that is measured at fair value on a recurring basis: SUMMARY OF CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY September 30, 2023 Balance on December 31, 2022 $ - Issuance of warrants 9,969,480 Issuance of convertible preferred stock with bifurcated embedded derivative Change in fair value of warrant liability 10,095,960 Change in fair value of bifurcated embedded derivative Balance on September 30, 2023 $ 20,065,440 The following table sets forth a summary of the change in the fair value of the bifurcated embedded derivative liability that is measured at fair value on a recurring basis: September 30, 2023 Balance on December 31, 2022 $ - Issuance of convertible preferred stock with bifurcated embedded derivative 5,147,000 Change in fair value of bifurcated embedded derivative (3,216,000 ) Balance on September 30, 2023 $ 1,931,000 |
LIQUIDITY AND OTHER UNCERTAIN_2
LIQUIDITY AND OTHER UNCERTAINTIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||||
Aug. 10, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 07, 2023 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||
Net losses | $ 12,589,572 | $ 6,003,233 | $ 5,475,769 | $ 5,681,574 | $ 5,974,448 | $ 4,578,660 | $ 24,068,576 | $ 16,234,682 | |||
Cash flows from operations | 21,302,119 | 12,959,204 | |||||||||
Cash and cash equivalents, at carrying value | 3,287,902 | 39,428,850 | 3,287,902 | 39,428,850 | $ 39,096,562 | ||||||
Marketable securities, current | 34,627,782 | 34,627,782 | 9,848,804 | ||||||||
Restricted cash | 10,000,000 | 10,000,000 | |||||||||
Working capital | $ 3,812,783 | 3,812,783 | |||||||||
Proceeds from sale of convertible preferred stock | $ 21,632,156 | ||||||||||
Purchase agreement description | The certificate of designations for the Series H-7 Preferred Shares (the “Certificate of Designations”) contains certain restrictive provisions, including (i) a requirement to maintain unencumbered, unrestricted cash and cash equivalents on hand in an amount equal to (a) until December 31, 2023, at least $20,000,000 plus the net proceeds from the sale of the Series H-7 Preferred Shares pursuant to the Purchase Agreement, and (b) from January 1, 2024 and until an aggregate of eighty percent (80%) of the Series H-7 Preferred Shares have been converted into shares of common stock, at least $21,000,000, and (ii) a requirement to deposit an amount equal to $10,000,000 from the Private Placement proceeds into a newly established segregated deposit account of the Company (“Segregated Cash”), and to use such Segregated Cash solely for the purpose of performing the Company’s monetary obligations to the holders of the Series H-7 Preferred Shares, provided, however, that the Company may use the Segregated Cash for any purpose, including general corporate purposes, with the prior written consent of holders of at least 75% of the outstanding Series H-7 Preferred Shares. As of September 30, 2023, the Company was not in compliance with the restrictive provisions discussed above. The Company has regained compliance subsequent to September 30, 2023. | ||||||||||
Series H-7 Convertible Preferred Stock [Member] | |||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||
Temporary equity shares issued | 22,000 | 22,000 | 0 | ||||||||
Temporary equity stated value | $ 1,000 | $ 1,000 | |||||||||
Securities Purchase Agreement [Member] | |||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||
Deposit amount | $ 10,000,000 | ||||||||||
Securities Purchase Agreement [Member] | Series H-7 Convertible Preferred Stock [Member] | |||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||
Temporary equity shares issued | 22,000 | ||||||||||
Preferred stock, shares par value | $ 0.0001 | ||||||||||
Temporary equity stated value | $ 1,000 | ||||||||||
Aggregate exercisable shares of coomon stock | 2,750,000 | ||||||||||
Proceeds from sale of convertible preferred stock | $ 22,000,000 |
SCHEDULE OF ANTIDILUTIVE SECURI
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Totals | 22,883,444 | 958,093 | 22,883,444 | 958,093 |
Share-Based Payment Arrangement, Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Totals | 38,696 | 98,178 | 38,696 | 98,178 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Totals | 116,293 | 96,353 | 116,293 | 96,353 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Totals | 11,605,759 | 763,253 | 11,605,759 | 763,253 |
Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Totals | 11,122,696 | 309 | 11,122,696 | 309 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Restricted cash | $ 10,000,000 | $ 10,000,000 | |||
Marketable securities | 34,627,782 | 34,627,782 | $ 9,848,804 | ||
General and Administrative Expense [Member] | |||||
Shipping expenses | $ 15,148 | $ 79,767 | $ 56,482 | $ 335,812 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 88,395 | $ 373,186 | $ 341,023 | $ 2,381,592 |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 80,475 | 332,792 | 327,863 | 2,170,943 |
Shipping and Handling [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 7,920 | 35,507 | 3,770 | 165,762 |
Miscellaneous Income [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 4,887 | $ 9,390 | $ 44,887 |
REVENUES (Details Narrative)
REVENUES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Warranty reserves | $ 395,071 | $ 410,017 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Credit Loss [Abstract] | ||
Trade receivables | $ 143,990 | $ 512,420 |
Less: Allowance for doubtful accounts | (2,349) | |
Accounts receivable, net | $ 143,990 | $ 510,071 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Credit Loss [Abstract] | ||||
Reduction in allowance for doubtful accounts receivable | $ 2,349 | $ 2,349 | ||
Bed debt expense | $ 2,136 | $ 292,010 | $ 2,136 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,889,979 | $ 330,931 |
Work-in-progress | ||
Finished goods | 456,631 | 639,450 |
Total | $ 4,346,610 | $ 970,381 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Inventory [Line Items] | ||||
Depreciation for fleet inventory | $ 324,052 | $ 151,980 | $ 769,108 | $ 335,385 |
Fleet Inventory [Member] | ||||
Inventory [Line Items] | ||||
Depreciation for fleet inventory | $ 0 | $ 23,886 | $ 0 | $ 71,661 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepayments for inventory | $ 2,623,760 | $ 1,174,466 |
Prepayments for insurance | 222,006 | 118,434 |
Prepayments on advances on design | 75,000 | |
Prepayments on software | 150,468 | 103,851 |
Prepaid other | 89,069 | 7,094 |
Total Prepaid Expenses and Other Current Assets | $ 3,085,303 | $ 1,478,845 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,778,687 | $ 3,702,617 |
Less: Accumulated depreciation | (2,279,388) | (1,510,280) |
Property and equipment, net | 3,499,299 | 2,192,337 |
Computer and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,639,357 | 1,970,001 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 395,705 | 323,789 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,275,050 | 952,952 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 468,575 | $ 455,875 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 324,052 | $ 151,980 | $ 769,108 | $ 335,385 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued professional and consulting fees | $ 97,900 | $ 410,711 |
Accrued payroll | 464,166 | 6,000 |
Accrued warranty reserve | 395,071 | 410,017 |
Accrued expenses other | 35,829 | 138,209 |
Total accrued expenses | $ 992,966 | $ 964,937 |
SCHEDULE OF PAYMENT OF PREFERRE
SCHEDULE OF PAYMENT OF PREFERRED STOCK (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Multiplied by the fair market value of Company Common Stock as of September 30, 2023 | $ 2 | |
Convertible Preferred Stock Series H [Member] | ||
Class of Stock [Line Items] | ||
Number of Series H Preferred Stock outstanding as of September 30, 2023 | 8 | 8 |
Multiplied by the stated value | $ 154 | |
Equals the gross stated value | $ 1,232 | |
Divided by the conversion price | $ 1,478.40 | |
Equals the convertible shares of Company Common Stock | 1 | |
Multiplied by the fair market value of Company Common Stock as of September 30, 2023 | $ 2.34 | |
Equals the payment | $ 2 | |
Convertible Preferred Stock Series H-3 [Member] | ||
Class of Stock [Line Items] | ||
Number of Series H Preferred Stock outstanding as of September 30, 2023 | 1,234 | 1,234 |
Multiplied by the stated value | $ 138 | |
Equals the gross stated value | $ 170,292 | |
Divided by the conversion price | $ 1,324.80 | |
Equals the convertible shares of Company Common Stock | 129 | |
Multiplied by the fair market value of Company Common Stock as of September 30, 2023 | $ 2.34 | |
Equals the payment | $ 302 | |
Convertible Preferred Stock Series H-6 [Member] | ||
Class of Stock [Line Items] | ||
Number of Series H Preferred Stock outstanding as of September 30, 2023 | 50 | 50 |
Multiplied by the stated value | $ 72 | |
Equals the gross stated value | $ 3,600 | |
Divided by the conversion price | $ 5.76 | |
Equals the convertible shares of Company Common Stock | 6.25 | |
Multiplied by the fair market value of Company Common Stock as of September 30, 2023 | $ 2.34 | |
Equals the payment | $ 1,053 |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Shares Underlying Warrants Outstanding, Beginning balance | 763,253 | |
Weighted Average Exercise Price, Beginning balance | $ 58.40 | |
Weighted Average Remaining Contractual Life | 4 years 9 months 7 days | 1 year 3 months 25 days |
Shares Underlying Warrants Granted | 11,313,940 | |
Weighted Average Exercise Price Granted | $ 2 | |
Shares Underlying Warrants Exercised | ||
Weighted Average Exercise Price Exercised | ||
Shares Underlying Warrants Expired | (471,435) | |
Weighted Average Exercise Price Expired | $ 58.40 | |
Shares Underlying Warrants Outstanding, Ending balance | 11,605,758 | 763,253 |
Weighted Average Exercise Price, Ending balance | $ 3.42 | $ 58.40 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||||||
Aug. 07, 2023 USD ($) $ / shares shares | Feb. 01, 2023 $ / shares shares | Feb. 01, 2022 $ / shares shares | Feb. 24, 2021 $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | Sep. 15, 2023 shares | Sep. 14, 2023 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares | |
Class of Stock [Line Items] | ||||||||||||
Price per share were issued | $ / shares | $ 2 | $ 2 | ||||||||||
Common stock, shares authorized | shares | 200,000,000 | 200,000,000 | 200,000,000 | 100,000,000 | 200,000,000 | |||||||
Warrants to purchase common stock | shares | 8,415,000 | 8,415,000 | ||||||||||
Derivative, gain on derivative | $ | $ 10,095,960 | $ 10,095,960 | ||||||||||
Deemed dividend | $ | 244,000 | 244,000 | ||||||||||
Derivative, gain on derivative | $ | 3,216,000 | 3,216,000 | ||||||||||
Deemed dividend | $ | 199,000 | |||||||||||
Warrant [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Transaction cost | $ | 1,200,000 | |||||||||||
Derivative, gain on derivative | $ | $ 10,000,000 | 0 | 10,000,000 | 0 | ||||||||
Fair value of warrants | $ | $ 10,000,000 | $ 20,000,000 | ||||||||||
Stock price | $ / shares | $ 5.20 | $ 2.34 | $ 2.34 | |||||||||
Exercise price | $ / shares | $ 8 | $ 2 | ||||||||||
Dividend yield | 0% | 0% | ||||||||||
Expected life (years) | 5 years | 4 years 10 months 9 days | ||||||||||
Equity volatility | 96% | 96.50% | ||||||||||
Risk-free interest | 4.21% | 4.61% | ||||||||||
Series H5 Warrants [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | 6.336 | $ 6.336 | ||||||||||
Maximum [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | 8 | 8 | ||||||||||
Maximum [Member] | Series H5 Warrants [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | 20 | 20 | ||||||||||
Minimum [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | 2 | 2 | ||||||||||
Minimum [Member] | Series H5 Warrants [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | $ 8 | $ 8 | ||||||||||
Series H-7 Convertible Preferred Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Temporary Equity, Shares Issued | shares | 22,000 | 22,000 | 0 | |||||||||
Temporary stock, par value | $ / shares | $ 1,000 | $ 1,000 | ||||||||||
Estimated fair value of derivative | $ | $ 5,100,000 | $ 1,900,000 | $ 1,900,000 | |||||||||
Common stock, discount on shares | $ | 15,500,000 | 15,500,000 | ||||||||||
Transaction cost | $ | 600,000 | |||||||||||
Derivative, gain on derivative | $ | 9,800,000 | |||||||||||
Deemed dividend | $ | 1,200,000 | 1,200,000 | ||||||||||
Derivative, gain on derivative | $ | 3,200,000 | $ 0 | 3,200,000 | $ 0 | ||||||||
Series H-7 Convertible Preferred Stock [Member] | Measurement Input, Option Volatility [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Estimated fair value of derivative | $ | $ 5,100,000 | $ 5,100,000 | ||||||||||
Derivative liability measurement input | 75 | 76 | 76 | |||||||||
Series H-7 Convertible Preferred Stock [Member] | Measurement Input, Expected Term [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Derivative liability term | 1 year 5 months 23 days | 1 year 3 months 29 days | ||||||||||
Series H-7 Convertible Preferred Stock [Member] | Measurement Input, Discount Rate [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Derivative liability measurement input | 12.2 | 14.93 | 14.93 | |||||||||
Series H-7 Convertible Preferred Stock [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Derivative liability measurement input | 8 | 8 | 8 | |||||||||
Series H-7 Convertible Preferred Stock [Member] | Measurement Input Penalty Dividend Rate [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Derivative liability measurement input | 15 | 15 | 15 | |||||||||
Series H-7 Convertible Preferred Stock [Member] | Measurement Input, Default Rate [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Derivative liability measurement input | 14.8 | 14.53 | 14.53 | |||||||||
Series H 7 Preferred Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Price per share were issued | $ / shares | $ 6.336 | $ 6.336 | ||||||||||
Warrants to purchase common stock | shares | 93,940 | 93,940 | ||||||||||
Series H 7 Preferred Stock [Member] | Maximum [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | $ 8 | $ 8 | ||||||||||
Series H 7 Preferred Stock [Member] | Minimum [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Exercise price per share | $ / shares | $ 6.336 | $ 6.336 | ||||||||||
Series H Five Warrants [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Deemed dividend | $ | $ 199,000 | $ 199,000 | ||||||||||
Initial deemed dividend | $ | 165,000 | |||||||||||
Award prior modification deemed dividend | $ | 21,000 | |||||||||||
Second deemed dividend | $ | 141,000 | |||||||||||
Second award prior modification deemed dividend | $ | $ 86,000 | |||||||||||
Securities Purchase Agreement [Member] | Series H-7 Convertible Preferred Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Temporary Equity, Shares Issued | shares | 22,000 | |||||||||||
Temporary stock, par value | $ / shares | $ 1,000 | |||||||||||
Preferred Stock, Convertible, Shares Issuable | shares | 2,750,000 | |||||||||||
Conversion price | $ / shares | $ 8 | |||||||||||
Warrants to purchase common stock | shares | 2,750,000 | |||||||||||
Stock redemption terms | The amortization payments due upon such redemption are payable, at the Company’s election, in cash at 105% of the Installment Redemption Amount (as defined in the Certificate of Designations), or subject to certain limitations, in shares of common stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the Company’s common stock during the thirty consecutive trading day period immediately prior to the date the amortization payment is due and (B) $0.0744 (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) or, in any case, such lower amount as permitted, from time to time, by the Nasdaq Stock Market. The holders of the Series H-7 Preferred Shares have the option to defer amortization payments or, subject to certain limitations as specified in the Certificate of Designations, can elect to accelerate installment conversion amounts. | |||||||||||
Dividend payment terms | The holders of the Series H-7 Preferred Shares are entitled to dividends of 8.0% per annum, compounded monthly, which are payable in cash or shares of common stock at the Company’s option, in accordance with the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series H-7 Preferred Shares will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, the holders of the Series H-7 Preferred Shares are also entitled to receive a dividend make-whole payment. The holders of Series H-7 Preferred Shares are entitled to vote with the holders of the common stock on all matters that such common stockholders are entitled to vote upon. | |||||||||||
Initial Deemed Dividend [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividend yield | 0% | |||||||||||
Expected life (years) | 1 year 9 months 25 days | |||||||||||
Equity volatility | 76% | |||||||||||
Risk-free interest | 4.91% | |||||||||||
Fair value of common stock | $ / shares | $ 5.20 | $ 5.20 | ||||||||||
Second Deemed Dividend [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividend yield | 0% | |||||||||||
Expected life (years) | 1 year 8 months 23 days | |||||||||||
Equity volatility | 76% | |||||||||||
Risk-free interest | 5.13% | |||||||||||
Fair value of common stock | $ / shares | $ 3.90 | $ 3.90 | ||||||||||
Non-Executive Directors [Member] | Restricted Stock [Member] | 2020 Long-Term Incentive Plan [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Number of restricted stock units | shares | 95,087 | 55,282 | 21,500 | |||||||||
Price per share were issued | $ / shares | $ 6 | $ 10.32 | $ 61.28 | |||||||||
Shares vested and common stock issued | shares | 47,542 | |||||||||||
Common stock unissued | shares | 13,858 | 5,375 | ||||||||||
Placement Agent [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Cash fee percentage | 6% | |||||||||||
Preferred shares convertible percentage | 2% | |||||||||||
Exercise price per share | $ / shares | $ 8 | |||||||||||
Reduced in warrant exercise price | $ / shares | $ 2 | |||||||||||
Warrant term | 5 years | |||||||||||
Investors [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Warrants to purchase common stock | shares | 2,750,000 | 2,750,000 | ||||||||||
Placement Agent Warrants [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Warrants to purchase common stock | shares | 55,000 | 55,000 |
SCHEDULE OF STOCK - BASED COMPE
SCHEDULE OF STOCK - BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | $ 222,899 | $ 332,181 | $ 731,768 | $ 923,844 |
Research and Development Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | 6,219 | 5,269 | 18,017 | 15,069 |
Selling and Marketing Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | 1,999 | 6,001 | 7,488 | 19,816 |
General and Administrative Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | $ 214,681 | $ 320,911 | $ 706,263 | $ 888,959 |
SCHEDULE OF STOCK-BASED COMPENS
SCHEDULE OF STOCK-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Stock options outstanding, Beginning balance | 97,240 | |
Weighted Average Exercise Price Outstanding, Beginning balance | $ 49.20 | |
Weighted average remaining contractual life | 6 years 9 months 14 days | 7 years 6 months 21 days |
Number of Stock options, Forfeitures | (58,544) | |
Weighted Average Exercise Price Outstanding, Forfeitures | $ 7.76 | |
Number of Stock options outstanding, Ending balance | 38,696 | 97,240 |
Weighted Average Exercise Price Outstanding, Ending balance | $ 87.67 | $ 49.20 |
SCHEDULE OF RESTRICTED STOCK AC
SCHEDULE OF RESTRICTED STOCK ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares, Outstanding, Beginning balance | shares | 82,570 |
Weighted Average Grant Price, Outstanding, Beginning balance | $ / shares | $ 15.28 |
Number of shares, Granted | shares | 95,087 |
Weighted Average Grant Price, Granted | $ / shares | $ 6 |
Number of shares, Vested | shares | (61,364) |
Weighted Average Grant Price, Vested | $ / shares | $ 5.95 |
Number of shares, Outstanding, Ending balance | shares | 116,293 |
Weighted Average Grant Price, Outstanding, Ending balance | $ / shares | $ 8.58 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Feb. 01, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock compensation expense | $ 222,899 | $ 332,181 | $ 731,768 | $ 923,844 | |
Share price | $ 2 | $ 2 | |||
Share-Based Payment Arrangement, Option [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of stock options vested and exercisable | 27,460 | ||||
Aggregate intrinsic value of stock options vested and exercisable | $ 0 | $ 0 | |||
Stock compensation expense | 15,165 | 18,821 | 46,698 | 44,899 | |
Unrecognized compensation expense | 53,321 | 53,321 | |||
Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock compensation expense | $ 207,716 | $ 313,360 | $ 686,869 | $ 878,945 | |
Unvested and unissued restricted stock | 116,290 | 116,290 | |||
Unrecognized compensation expense | $ 220,741 | $ 220,741 | |||
Restricted Stock [Member] | Director [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of restricted stock units | 95,087 | ||||
Share price | $ 6 | ||||
2020 Long-Term Incentive Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of shares reserved | 1,229,956 | 1,229,956 | |||
Number of stock options available for grants | 822,843 | 822,843 | |||
2020 Long-Term Incentive Plan [Member] | Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of restricted shares vested and unissued shares | 0 |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 65% | 36% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 12% | 31% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Club Car [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 100% | 95% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 12% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 85% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 14% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Club Car [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 100% | ||||
Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10% | ||||
Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | One Supplier [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 16% | 49% | 57% | ||
Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Two Supplier [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 14% | 17% | 12% | ||
Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Three Supplier [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 13% | 12% | |||
Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Four Supplier [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Termination fee | $ 750,000 | |||||
Accrued expenses | $ 992,966 | 992,966 | $ 964,937 | |||
Cost of goods sold | $ 231,837 | $ 955,003 | $ 783,656 | $ 4,959,660 | ||
Cenntro Automotive Group Ltd [Member] | ||||||
Prepaid expenses | 0 | $ 602,016 | ||||
Accrued expenses | 0 | 602,016 | ||||
Cost of goods sold | 621,097 | |||||
Inventory written-off | $ 1,317,289 | |||||
DropCar Operating, Inc. [Member] | ||||||
Accrued expense | $ 476,280 |
SUMMARY OF CHANGE IN FAIR VALUE
SUMMARY OF CHANGE IN FAIR VALUE WARRANT LIABILITY (Details) - USD ($) | Sep. 30, 2023 | Aug. 10, 2023 | Dec. 31, 2022 |
Warrant Liability [Member] | |||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | |||
Fair value of liability | $ 20,065,440 | $ 9,969,480 | |
Embedded Derivative [Member] | |||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | |||
Fair value of liability | $ 1,931,000 | $ 5,147,000 |
SUMMARY OF CHANGE IN FAIR VAL_2
SUMMARY OF CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Warrant Liability [Member] | |
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | |
Balance on December 31, 2022 | |
Issuance of warrants | 9,969,480 |
Change in fair value of warrant liability | 10,095,960 |
Balance on September 30, 2023 | 20,065,440 |
Embedded Derivative [Member] | |
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | |
Balance on December 31, 2022 | |
Issuance of convertible preferred stock with bifurcated embedded derivative | 5,147,000 |
Change in fair value of bifurcated embedded derivative | (3,216,000) |
Balance on September 30, 2023 | $ 1,931,000 |