Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 01, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | Zivo Bioscience, Inc. | |
Entity Central Index Key | 0001101026 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 10,449,660 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40449 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 87-0699977 | |
Entity Address Address Line 1 | 21 E. Long Lake Road, Suite 100 | |
Entity Address City Or Town | Bloomfield Hills | |
Entity Address State Or Province | MI | |
Entity Address Postal Zip Code | 48304 | |
City Area Code | 248 | |
Local Phone Number | 452 9866 | |
Security 12b Title | Common Stock, par value | |
Trading Symbol | ZIVO | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash | $ 21,067 | $ 1,799,263 |
Prepaid expenses | 509,008 | 102,416 |
Total current assets | 530,075 | 1,901,679 |
ACCOUNTS RECEIVABLE | 2,956 | 0 |
PROPERTY AND EQUIPMENT, NET | 0 | 0 |
OTHER ASSETS | ||
Operating lease - right of use asset | 145,241 | 189,282 |
Security deposit | 32,058 | 32,058 |
Total other assets | 177,299 | 221,340 |
TOTAL ASSETS | 710,330 | 2,123,019 |
CURRENT LIABILITIES: | ||
Accounts payable | 1,273,437 | 490,670 |
Current portion of long-term operating lease | 106,687 | 99,259 |
Convertible debentures payable | 240,000 | 240,000 |
Deferred R&D obligations - participation agreements | 200,141 | 525,904 |
Deferred R&D obligations - participation agreements related parties | 66,762 | 175,427 |
Short term loans payable, net of discount | 1,111,765 | 0 |
Accrued interest | 123,540 | 98,286 |
Accrued liabilities - payroll and directors fees | 681,910 | 398,176 |
Total Current Liabilities | 3,804,242 | 2,027,722 |
LONG-TERM LIABILITIES: | ||
Long-term operating lease, net of current portion | 50,920 | 105,919 |
Total long-term liabilities | 50,920 | 105,919 |
TOTAL LIABILITIES | 3,855,162 | 2,133,641 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 150,000,000 shares authorized; 9,419,660 and 9,419,660 issued and outstanding at June 30, 2023 and December 31, 2022 | 9,420 | 9,420 |
Additional paid-in capital | 116,693,992 | 115,784,488 |
Accumulated deficit | (119,848,244) | (115,804,530) |
Total stockholders' equity | (3,144,832) | (10,622) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 710,330 | $ 2,123,019 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEET | ||
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares Issued | 9,419,660 | 9,419,660 |
Common Stock, Shares Outstanding | 9,419,660 | 9,419,660 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
REVENUES: | ||||
Product revenue | $ 4,050 | $ 0 | $ 4,050 | $ 0 |
Total revenues | 4,050 | 0 | 4,050 | 0 |
Product and other costs | 701 | 0 | 701 | 0 |
Total cost of goods sold | 701 | 0 | 701 | 0 |
GROSS MARGIN | 3,349 | 0 | 3,349 | 0 |
COSTS AND EXPENSES: | ||||
General and Administrative | 1,385,102 | 1,629,553 | 2,953,478 | 2,976,295 |
Research and Development | 442,113 | 438,048 | 843,910 | 1,117,821 |
Total costs and expenses | 1,827,215 | 2,067,601 | 3,797,388 | 4,094,116 |
LOSS FROM OPERATIONS | (1,823,866) | (2,067,601) | (3,794,039) | (4,094,116) |
OTHER EXPENSE: | ||||
Interest expense | 31,793 | 4,238 | 34,762 | 6,043 |
Amortization of debt discount | 0 | 214,913 | 0 | |
Total other expense | 246,706 | 4,238 | 249,675 | 6,043 |
NET LOSS | $ (2,070,572) | $ (2,071,839) | $ (4,043,714) | $ (4,100,159) |
BASIC AND DILUTED LOSS PER SHARE | $ (0.22) | $ (0.22) | $ (0.43) | $ (0.44) |
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING | 9,419,660 | 9,419,660 | 9,419,660 | 9,419,660 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) (UNAUDITED) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Dec. 31, 2021 | 9,419,660 | |||
Balance, amount at Dec. 31, 2021 | $ 6,042,209 | $ 9,420 | $ 114,259,830 | $ (108,227,041) |
Employee and director equity based compensation | 1,068,373 | 0 | 1,068,373 | 0 |
Net loss | (4,100,159) | $ 0 | 0 | (4,100,159) |
Balance, shares at Jun. 30, 2022 | 9,419,660 | |||
Balance, amount at Jun. 30, 2022 | 3,010,423 | $ 9,420 | 115,328,203 | (112,327,200) |
Balance, shares at Mar. 31, 2022 | 9,419,660 | |||
Balance, amount at Mar. 31, 2022 | 4,584,518 | $ 9,420 | 114,830,459 | (110,255,361) |
Employee and director equity based compensation | 497,744 | 0 | 497,744 | 0 |
Net loss | (2,071,839) | $ 0 | 0 | (2,071,839) |
Balance, shares at Jun. 30, 2022 | 9,419,660 | |||
Balance, amount at Jun. 30, 2022 | 3,010,423 | $ 9,420 | 115,328,203 | (112,327,200) |
Balance, shares at Dec. 31, 2022 | 9,419,660 | |||
Balance, amount at Dec. 31, 2022 | (10,622) | $ 9,420 | 115,784,488 | (115,804,530) |
Employee and director equity based compensation | 469,911 | 0 | 469,911 | 0 |
Net loss | (4,043,714) | 0 | 0 | (4,043,714) |
Warrants issued with related party note | 439,593 | $ 0 | 439,593 | 0 |
Balance, shares at Jun. 30, 2023 | 9,419,660 | |||
Balance, amount at Jun. 30, 2023 | (3,144,832) | $ 9,420 | 116,693,992 | (119,848,244) |
Balance, shares at Mar. 31, 2023 | 9,419,660 | |||
Balance, amount at Mar. 31, 2023 | (1,741,662) | $ 9,420 | 116,026,590 | (117,777,672) |
Employee and director equity based compensation | 227,808 | 0 | 227,808 | 0 |
Net loss | (2,070,572) | 0 | 0 | (2,070,572) |
Warrants issued with related party note | 439,594 | $ 0 | 439,594 | 0 |
Balance, shares at Jun. 30, 2023 | 9,419,660 | |||
Balance, amount at Jun. 30, 2023 | $ (3,144,832) | $ 9,420 | $ 116,693,992 | $ (119,848,244) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows for Operating Activities: | ||
Net loss | $ (4,043,714) | $ (4,100,159) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Non cash lease expense | 44,041 | 41,297 |
Amortization of deferred R&D obligations participation agreements | (434,430) | (407,085) |
Amortization of debt discount | 214,913 | 0 |
Employee and director equity compensations | 469,911 | 1,068,373 |
Changes in assets and liabilities: | ||
Prepaid expenses | (406,592) | (459,036) |
Accounts payable | 474,325 | (246,495) |
Lease liabilities | (47,570) | (17,598) |
Security deposits | 0 | (29,058) |
Accounts receivable | (2,956) | 0 |
Accrued liabilities | 617,432 | (17,616) |
Net cash (used in) operating activities | (3,114,640) | (4,167,377) |
Cash Flows from Investing Activities: | ||
Net cash from by investing activities | 0 | 0 |
Cash Flow from Financing Activities: | ||
Proceeds of notes payable, other | 605,600 | 628,600 |
Payments of notes payable, other | (269,156) | (279,378) |
Proceeds of note payable, related party | 1,000,000 | 0 |
Net cash provided by financing activities | 1,336,444 | 349,222 |
Increase/(Decrease) in Cash | (1,778,196) | (3,818,155) |
Cash at Beginning of Period | 1,799,263 | 8,901,875 |
Cash at End of Period | 21,067 | 5,083,720 |
Cash paid during the period for: | ||
Interest | 7,131 | 4,853 |
Income Taxes | $ 0 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements include the accounts of Zivo Bioscience, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “ZIVO”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the notes thereto, included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 14, 2023. Going Concern The Company has incurred net losses since inception, experienced negative cash flows from operations for the three months ended June 30, 2023, and has an accumulated deficit of $119,848,244. The Company has historically financed its operations primarily through the issuance of common stock, warrants, and debt. The Company expects to continue to incur operating losses and net cash outflows until such time as it generates a level of revenue to support its cost structure. There is no assurance that the Company will achieve profitable operations, and, if achieved, whether it will be sustained on a continued basis. The Company intends to fund ongoing activities by utilizing its current cash on hand and by raising additional capital through equity or debt financings. There can be no assurance that the Company will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, the Company may be compelled to reduce the scope of its operations and planned capital expenditures. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business; no adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION | |
NEW ACCOUNTING STANDARDS | NOTE 2 - NEW ACCOUNTING STANDARDS In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The Company adopted ASU 2020-06 effective January 1, 2023, using the modified retrospective approach. The adoption of AASU 2020-06 did not have an impact on any amounts recorded the Company's condensed consolidated financial statements. In addition, the adoption requires the use of the if-converted method for all convertible notes in the diluted net income (loss) per share calculation and the inclusion of the effect of potential share settlement of the convertible notes, if the effect is more dilutive. There was no impact to diluted earnings per share for the three and six months ended June 30, 2023, as the convertible debentures were not in the money during the period. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Stock Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, Compensation - Stock Compensation. Under the provisions of FASB ASC 718, stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized as expense over the requisite service period. The Company, from time to time, issues common stock or grants common stock options to its employees, consultants and board members. At the date of grant, the Company determines the fair value of the stock option award and recognizes compensation expense over the requisite service period. Issuances of common stock are valued at the closing market price on the date of issuance and the fair value of any stock option or warrant awards is calculated using the Black Scholes option pricing model and employing the simplified term method as the Company does not have a historical basis to determine the term. The Company records forfeiture of options when they occur. During the three months ended June 30, 2023, 65,268 options were granted to directors of the Company. During the three months ended June 30, 2022 no options were granted. The Company recorded compensation expense for issued grants during the three months ended June 30, 2023 and for previous grants in the amount of $227,808 and $497,744 for these periods, respectively. During the six months ended June 30, 2023 and 2022, 65,268 and 165,000 stock options, respectively were granted to directors and employees of the Company. As a result of these and previous grants, the Company recorded compensation expense of $469,911 and 1,068,374 for these periods, respectively. The fair value of stock options was estimated on the date of grant using the Black-Scholes option-pricing model based on the following weighted average assumptions: Three Months Ended June 30, 2023 2022 Expected volatility 112.28 % - Expected dividends 0 - Expected term 5.3 years - Risk free rate 3.88 % - Six Months Ended June 30, 2023 2022 Expected volatility 112.28 % 130.18 % Expected dividends 0 0 Expected term 5.3 years 5.8 years Risk free rate 3.88 % 1.88 % The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility. In considering the expected term of the options, the Company employs the simplified method. The Company uses this method as it does not have a history of option exercises to establish a robust estimated term based on experience. The simplified term is used for the determination of expected volatility as well as the identification of the risk-free rate. Warrants The Company accounts for warrants in accordance with FASB ASC 815 – Derivatives and Hedging. The fair value of the Company’s warrants is determined at the time of issuance using the Black Scholes option valuation model based on a market price and the remaining term of the warrant obligation. The warrants are not subject to remeasurement through the term. For the Company’s outstanding warrants, the number of shares and the exercise price shall be adjusted for standard anti-dilution events such as stock splits, combinations, reorganizations, or issue shares as part of a stock dividend. Upon a change of control, the warrant holder will have the right to receive securities, cash or other properties it would have been entitled to receive had the warrant been exercised. The Warrants (as defined below) issued in conjunction with the Subscription Agreement resulted in an allocation of the pro rata share of fair value to the proceeds between the loan and the warrants (within stockholders’ equity), resulting in discount on the term loan to be amortized to interest expense over the term of the loan (see Note 5 DEBT Payne Bridge Loan). Fair Value of Financial Instruments ASC 820, Fair Value Measurements, (“ASC 820”) provides guidance on the development and disclosure of fair value measurements. Pursuant to ASC 820, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little, or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period. This determination requires significant judgments to be made by the Company. As of June 30, 2023 and December 31, 2022, the recorded values of cash and cash equivalents, prepaid expenses, accounts payable, and accrued expenses and other liabilities approximate their fair values due to the short-term nature of these items. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
LEASES | |
LEASES | NOTE 4 - LEASES On December 17, 2020, the Company entered into a 25 ½ month lease agreement for a facility that contains office, warehouse, lab and research and development space in Ft. Myers, Florida. The lease agreement commenced on December 17, 2020 and ends on January 31, 2023. The agreement provided for a total rent of $54,993 over the period. Occupancy of the property commenced on December 17, 2020, there was a 6-week rent holiday and a commencement date of February 1, 2021. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Rent is $3,291 per month from January 15, 2021 to January 31, 2022 and $1,154 from February 1, 2022 to January 31, 2023. On June 5, 2022, the Company exercised an option to extend the lease through December 31, 2024. The lease extension rent is $2,261 per month for calendar year 2023, and $2,300 per month for calendar year 2024, and totals an additional rent obligation of $54,743 of rent over the extension period. On January 14, 2022, the Company entered into a 34-month sublease agreement for a office in Bloomfield Hills, Michigan. The Company moved its headquarters to this location. The agreement commenced on January 29, 2022 and ends on November 30, 2024. The agreement provided for a total rent of $232,464. Occupancy of the property commenced on January 29, 2022, there was a three-month rent holiday with a rent commencement date of April 29, 2022. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Rent is $7,265 per month from commencement to November 30, 2022, $7,466 from November 30, 2022 to November 30, 2023, and $7,668 from November 30, 2023 to the lease end date. The balances for our operating lease where we are the lessee are presented as follows within our condensed consolidated balance sheet: Operating leases: For the Six Months Ended For the Year Ended Assets: June 30, 2023 December 31, 2022 Operating lease right-of-use asset $ 145,241 $ 189,282 Liabilities: Current portion of long-term operating lease $ 106,687 $ 99,259 Long-term operating lease, net of current portion 50,920 105,918 $ 157,607 $ 205,177 The components of lease expense are as follows within our condensed consolidated statement of operations: For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Operating lease expense $ 27,236 $ 27,147 $ 54,471 $ 47,291 Other information related to leases where we are the lessee is as follows: For the For the Six Months Ended Year Ended June 30, 2023 December 31, 2022 Weighted-average remaining lease term: Operating leases 1.47 Years 1.94 Years Discount rate: Operating leases 11.00 % 11.00 % Supplemental cash flow information related to leases where we are the lessee is as follows: For the For the Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: $ 57,433 $ 23,592 Non-cash investment in ROU asset $ - $ 241,694 As of June 30, 2023, the maturities of our operating lease liability are as follows: Year Ended: Operating Lease December 31, 2023 58,776 December 31, 2024 112,407 Total minimum lease payments 171,183 Less: Interest (13,576 ) Present value of lease obligations 157,607 Less: Current portion (106,687 ) Long-term portion of lease obligations $ 50,920 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
DEBT | |
DEBT | NOTE 5 - DEBT Short Term Loan On February 14, 2023, the Company entered into a short-term, unsecured loan agreement to finance a portion of the Company’s directors’ and officers’, and employment practices liability insurance premiums. The note in the amount of $605,600 carries a 8.4% annual percentage rate and will be paid down equal monthly payments of $69,666, which payment began March 10, 2023. The principal balance of June 30, 2023 was $336,444. Payne Bridge Loan On April 3, 2023, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with the Company’s Chief Executive Officer (the“Subscriber”), pursuant to which the Company, in a private placement (the “Private Placement”), agreed to issue and sell to the Subscriber a 10% promissory note with a principal amount of $1 million (the “Note”) and a warrant (the “Warrant”) to purchase 390,000 shares of the Company’s common stock, par value $0.001 per share. The Note will mature on October 2, 2023 and bear interest at an annual rate of 10.0%. The Company may prepay all or a portion of the outstanding Note principal and accrued and unpaid interest without any prepayment fee. The Company recorded $238,978 of interest expense related to the Note, which included $214,914 of non-cash interest of amortization of the loan discount. Each warrant is exercisable for a period of three years from issuance at a per-share exercise price equal to $2.91. The exercise price and number of the shares of our Common Stock issuable upon exercising the Warrant will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. The Warrants, which met equity classification, were recognized as a component of permanent stockholders’ equity within additional paid-in-capital on the condensed balance sheets and were recorded at the issuance date using a relative fair value allocation method. The Company valued the Warrants at issuance, which resulted in a discount on the Note, and allocated the proceeds from the loan proportionately to the Note and to the Warrants, of which $433,594 was allocated to the Warrants. The Company determined the fair value of the Warrants as of April 3, 2023 using the Black-Scholes option pricing model and applying the following assumptions: Fair value of common stock $ 3.11 Expected term (in years) 3 Risk-free interest rate 3.73 % Dividend yield — Volatility 99.89 % The effective interest rate on the Note, including the amortization of the discount was 48.96% as of June 30, 2023. Balance sheet information related to the Note is as follows: Quarter Ended June 30, 2023 Short Term Loan $ 1,000,000 Less: Unamortized debt discount (224,680 ) Carrying value of Term Loan $ 775,320 |
STOCKHOLDERS EQUITY (DEFICIT)
STOCKHOLDERS EQUITY (DEFICIT) | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS EQUITY (DEFICIT) | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 6 - STOCKHOLDERS’ EQUITY (DEFICIT) 2021 Equity Incentive Plan On October 12, 2021, after approval from the stockholders at the Company’s 2021 annual meeting of stockholders, the Company adopted the 2021 Plan for the purpose of enhancing the Company’s ability to attract and retain highly qualified directors, officers, key employees and other persons and to motivate such persons to improve the business results and earnings of the Company by providing an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. The 2021 Plan is administered by the compensation committee of the Board who will, amongst other duties, have full power and authority to take all actions and to make all determinations required or provided for under the 2021 Plan. Pursuant to the 2021 Plan, the Company may grant options, share appreciation rights, restricted shares, restricted share units, unrestricted shares and dividend equivalent rights. The 2021 Plan has a duration of 10 years. Subject to adjustment as described in the 2021 Plan, the aggregate number of shares of common stock available for issuance under the 2021 Plan is initially set at 1,000,000 shares; this number is automatically increased each January 1st by an amount equal to 5% of the number of common stock shares outstanding at that date, resulting in an increase in available shares under the 2021 Plan at January 1, 2023 of 470,893. As of June 30, 2023, 1,392,675 options have been issued under the 2021 Plan, and 549,291 shares remained available for issuance. 2019 Omnibus Long-Term Incentive Plan Prior to the adoption of the 2021 Equity Incentive Plan, the Company maintained a 2019 Omnibus Long-Term Incentive Plan (the “2019 Plan”). Following the approval by the shareholders of the 2021 Plan, no additional awards have been or will be made under the 2019 Plan. As of June 30, 2023, 781,250 stock options had been issued under the 2019 Plan with terms between 5 years and 10 years, of which 365,625 remained outstanding. Common Stock Options A summary of the status of the Company’s options issued under the Company’s equity incentive plans is presented below. As of June 30, 2023 there is no intrinsic value in any of the Company's outstanding options as the market price of the Company's common stock is in all cases lower than the exercise price of options: June 30, 2023 June 30, 2022 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of year 1,689,907 $ 6.05 1,721,074 $ 7.38 Forfeited - - (761,625 ) 6.81 Issued 65,268 2.79 172,500 5.50 Outstanding, end of period 1,755,175 $ 5.93 1,131,949 $ 7.48 Options outstanding and exercisable by price range as of June 30, 2023, were as follows: Outstanding Options Exercisable Options Range of Exercise Price Number Average Weighted Remaining Contractual Life in Years Range of Exercise Price Number Weighted Average Exercise Price $ 2.00-2.99 408,460 7.96 $ 2.00-2.99 375,826 $ 2.76 3.00-3.99 220,391 9.15 3.00-3.99 78,794 3.79 4.00-4.99 53,324 8.29 4.00-4.99 53,324 4.48 5.00-5.99 710,500 8.39 5.00-5.99 485,250 5.50 8.00-8.99 6,250 2.04 8.00-8.99 6,250 8.80 9.00-9.99 25,000 2.13 9.00-9.99 25,000 9.60 11.00-11.99 162,500 7.31 11.00-11.99 100,000 11.20 12.00-12.99 168,750 1.64 12.00-12.99 168,750 12.80 1,755,175 7.52 1,293,194 $ 6.05 Common Stock Warrants - Unregistered A summary of the status of the Company’s unregistered warrants is presented below: June 30, 2023 June 30, 2022 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Outstanding, beginning of year 1,602,198 $ 7.85 2,553,635 $ 7.57 Issued 390,000 2.91 - - Exercised - - - - Cancelled - - - - Expired (598,518 ) $ 7.70 (28,591 ) 6.45 Outstanding, end of period 1,393,680 $ 6.53 2,525,044 $ 7.57 Unregistered warrants outstanding and exercisable by price range as of June 30, 2023, were as follows: Outstanding Warrants Exercisable Warrants Exercise Price Number Average Weighted Remaining Contractual Life in Years Exercise Price Number Weighted Average Exercise Price $ 2.00-2.99 390,000 2.76 $ 2.00-2.99 390,000 $ 2.91 5.00-5.99 220,800 2.93 5.00-5.99 220,800 5.50 6.00-6.99 31,875 1.25 6.00-6.99 31,875 6.40 8.00-8.99 476,566 0.69 8.00-8.99 476,566 8.03 9.00-9.99 231,938 2.20 9.00-9.99 231,938 9.60 10.00-10.99 1,688 2.87 10.00-10.99 1,688 10.40 11.00-11.99 35,813 0.50 11.00-11.99 35,813 11.20 14.00-14.99 5,000 1.50 14.00-14.99 5,000 14.40 1,393,680 1.89 1,393,680 $ 6.53 Common Stock Warrants - Registered A summary of the status of the Company’s registered warrants is presented below: June 30, 2023 June 30, 2022 Number of Registered Warrants Weighted Average Exercise Price Number of Registered Warrants Weighted Average Exercise Price Outstanding, beginning of year 2,975,497 $ 5.50 2,975,497 $ 5.50 Issued - - - - Exercised - - - - Cancelled - - - - Expired - - - - Outstanding, end of period 2,975,497 $ 5.50 2,975,497 $ 5.50 Registered warrants outstanding and exercisable by price range as of June 30, 2023, were as follows: Outstanding Registered Warrants Exercisable Registered Warrants Exercise Price Number Average Weighted Remaining Contractual Life in Years Exercise Price Number Weighted Average Exercise Price $ 5.50 2,975,497 2.93 $ 5.50 2,975,497 5.50 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments And Contingencies Disclosure Abstract | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 - COMMITMENTS AND CONTINGENCIES Employment Agreements As of June 20, 2023, the Company had compensation agreements with its President / Chief Executive Officer, and Chief Financial Officer. Legal Contingencies On April 13, 2022, AEGLE Partners, 2 LLC (“AEGLE”) initiated an arbitration in Michigan against the Company with the American Arbitration Association. AEGLE asserted claims related to a certain Supply Chain Consulting Agreement entered into between AEGLE and the Company in 2019 (as amended from time to time, the “Supply Chain Consulting Agreement”), and a disagreement between AEGLE and the Company regarding whether AEGLE is entitled to payment of certain fees and warrants pursuant to the Supply Chain Consulting Agreement. AEGLE's complaint seeks, among other things, three times the payment of such alleged fees and warrants and recovery of AEGLE's costs and expenses. On April 20, 2023, the Company and AEGLE settled the pending arbitration matter for an immaterial amount. The Company may become a party to litigation in the normal course of business. In the opinion of management, other than the item above, there are no legal matters involving the Company that would have a material adverse effect upon the Company’s financial condition, results of operation or cash flows. |
INCOME TAX
INCOME TAX | 6 Months Ended |
Jun. 30, 2023 | |
INCOME TAX | |
INCOME TAX | NOTE 8 - INCOME TAX The Company and its subsidiaries are subject to US federal and state income taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of Management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The Company does not expect to realize the net deferred tax asset and as such has recorded a full valuation allowance. Income tax expense for the three and six months ended June 30, 2023 and 2022 is based on the estimated annual effective tax rate. Based on the Company’s effective tax rate and full valuation allowance, tax expense is expected to be $0 for 2023. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS June 2023 Registered Direct Offering On June 30, 2023, the Company sold 1,030,000 shares of common stock, par value $0.001 per share, at an offering price of $2.67 per share, and pre-funded warrants at an offering of $2.6699 per pre-funded warrant to purchase up to an aggregate of 468,130 shares of Common Stock, to a single institutional investor. In a concurrent private placement, the Company also directly sold to the purchaser Series A Common Warrants to purchase up to an aggregate of 1,498,130 shares of Common Stock, at an exercise price of $2.80 per share and Series B Common Warrants to purchase up to an aggregate of 1,498,130 shares of Common Stock, at an exercise price of $2.80 per share. The Series A Common Warrants are immediately exercisable, subject to a beneficial ownership limitation of the holder provided in the Series A Common Warrants, at any time on or after the date of issuance and will expire two years from the initial exercise date. The Series B Common Warrants are immediately exercisable, subject to a beneficial ownership limitation of the holder provided in the Series B Common Warrants, at any time on or after the date of issuance and will expire five years from the initial exercise date. These financings closed on July 5, 2023 with gross proceeds to the Company from the registered direct offering and concurrent private placement were approximately $4,000,000.00 (before deducting the placement agent’s fees and other estimated offering expenses payable by the Company). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION | |
Stock Based Compensation | The Company accounts for stock-based compensation in accordance with FASB ASC 718, Compensation - Stock Compensation. Under the provisions of FASB ASC 718, stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized as expense over the requisite service period. The Company, from time to time, issues common stock or grants common stock options to its employees, consultants and board members. At the date of grant, the Company determines the fair value of the stock option award and recognizes compensation expense over the requisite service period. Issuances of common stock are valued at the closing market price on the date of issuance and the fair value of any stock option or warrant awards is calculated using the Black Scholes option pricing model and employing the simplified term method as the Company does not have a historical basis to determine the term. The Company records forfeiture of options when they occur. During the three months ended June 30, 2023, 65,268 options were granted to directors of the Company. During the three months ended June 30, 2022 no options were granted. The Company recorded compensation expense for issued grants during the three months ended June 30, 2023 and for previous grants in the amount of $227,808 and $497,744 for these periods, respectively. During the six months ended June 30, 2023 and 2022, 65,268 and 165,000 stock options, respectively were granted to directors and employees of the Company. As a result of these and previous grants, the Company recorded compensation expense of $469,911 and 1,068,374 for these periods, respectively. The fair value of stock options was estimated on the date of grant using the Black-Scholes option-pricing model based on the following weighted average assumptions: Three Months Ended June 30, 2023 2022 Expected volatility 112.28 % - Expected dividends 0 - Expected term 5.3 years - Risk free rate 3.88 % - Six Months Ended June 30, 2023 2022 Expected volatility 112.28 % 130.18 % Expected dividends 0 0 Expected term 5.3 years 5.8 years Risk free rate 3.88 % 1.88 % The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility. In considering the expected term of the options, the Company employs the simplified method. The Company uses this method as it does not have a history of option exercises to establish a robust estimated term based on experience. The simplified term is used for the determination of expected volatility as well as the identification of the risk-free rate. |
Warrants | The Company accounts for warrants in accordance with FASB ASC 815 – Derivatives and Hedging. The fair value of the Company’s warrants is determined at the time of issuance using the Black Scholes option valuation model based on a market price and the remaining term of the warrant obligation. The warrants are not subject to remeasurement through the term. For the Company’s outstanding warrants, the number of shares and the exercise price shall be adjusted for standard anti-dilution events such as stock splits, combinations, reorganizations, or issue shares as part of a stock dividend. Upon a change of control, the warrant holder will have the right to receive securities, cash or other properties it would have been entitled to receive had the warrant been exercised. The Warrants (as defined below) issued in conjunction with the Subscription Agreement resulted in an allocation of the pro rata share of fair value to the proceeds between the loan and the warrants (within stockholders’ equity), resulting in discount on the term loan to be amortized to interest expense over the term of the loan (see Note 5 DEBT Payne Bridge Loan). ASC 820, Fair Value Measurements, (“ASC 820”) provides guidance on the development and disclosure of fair value measurements. Pursuant to ASC 820, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little, or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period. This determination requires significant judgments to be made by the Company. As of June 30, 2023 and December 31, 2022, the recorded values of cash and cash equivalents, prepaid expenses, accounts payable, and accrued expenses and other liabilities approximate their fair values due to the short-term nature of these items. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION | |
Schedule Of Stock Based Compensation | Three Months Ended June 30, 2023 2022 Expected volatility 112.28 % - Expected dividends 0 - Expected term 5.3 years - Risk free rate 3.88 % - Six Months Ended June 30, 2023 2022 Expected volatility 112.28 % 130.18 % Expected dividends 0 0 Expected term 5.3 years 5.8 years Risk free rate 3.88 % 1.88 % |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LEASES | |
Schedule of operating lease | For the Six Months Ended For the Year Ended Assets: June 30, 2023 December 31, 2022 Operating lease right-of-use asset $ 145,241 $ 189,282 Liabilities: Current portion of long-term operating lease $ 106,687 $ 99,259 Long-term operating lease, net of current portion 50,920 105,918 $ 157,607 $ 205,177 |
Schedule of Components of lease expense | For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Operating lease expense $ 27,236 $ 27,147 $ 54,471 $ 47,291 |
Summary of other information related to leases | For the For the Six Months Ended Year Ended June 30, 2023 December 31, 2022 Weighted-average remaining lease term: Operating leases 1.47 Years 1.94 Years Discount rate: Operating leases 11.00 % 11.00 % |
Schedule of Supplemental cash flow information | For the For the Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: $ 57,433 $ 23,592 Non-cash investment in ROU asset $ - $ 241,694 |
Schedule of maturities of operating lease liability | Year Ended: Operating Lease December 31, 2023 58,776 December 31, 2024 112,407 Total minimum lease payments 171,183 Less: Interest (13,576 ) Present value of lease obligations 157,607 Less: Current portion (106,687 ) Long-term portion of lease obligations $ 50,920 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DEBT | |
Schedule of fair value of Warrants | Fair value of common stock $ 3.11 Expected term (in years) 3 Risk-free interest rate 3.73 % Dividend yield — Volatility 99.89 % |
Schedule of Components of balance sheet information | Quarter Ended June 30, 2023 Short Term Loan $ 1,000,000 Less: Unamortized debt discount (224,680 ) Carrying value of Term Loan $ 775,320 |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS EQUITY (DEFICIT) | |
Summary of the status of the Company's Options related to the 2019 Incentive Plan | June 30, 2023 June 30, 2022 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of year 1,689,907 $ 6.05 1,721,074 $ 7.38 Forfeited - - (761,625 ) 6.81 Issued 65,268 2.79 172,500 5.50 Outstanding, end of period 1,755,175 $ 5.93 1,131,949 $ 7.48 |
Schedule of Options outstanding and exercisable | Outstanding Options Exercisable Options Range of Exercise Price Number Average Weighted Remaining Contractual Life in Years Range of Exercise Price Number Weighted Average Exercise Price $ 2.00-2.99 408,460 7.96 $ 2.00-2.99 375,826 $ 2.76 3.00-3.99 220,391 9.15 3.00-3.99 78,794 3.79 4.00-4.99 53,324 8.29 4.00-4.99 53,324 4.48 5.00-5.99 710,500 8.39 5.00-5.99 485,250 5.50 8.00-8.99 6,250 2.04 8.00-8.99 6,250 8.80 9.00-9.99 25,000 2.13 9.00-9.99 25,000 9.60 11.00-11.99 162,500 7.31 11.00-11.99 100,000 11.20 12.00-12.99 168,750 1.64 12.00-12.99 168,750 12.80 1,755,175 7.52 1,293,194 $ 6.05 |
Summary of unregistered warrants | June 30, 2023 June 30, 2022 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Outstanding, beginning of year 1,602,198 $ 7.85 2,553,635 $ 7.57 Issued 390,000 2.91 - - Exercised - - - - Cancelled - - - - Expired (598,518 ) $ 7.70 (28,591 ) 6.45 Outstanding, end of period 1,393,680 $ 6.53 2,525,044 $ 7.57 |
Schedule of unregistered warrants outstanding and exercisable by price range | Outstanding Warrants Exercisable Warrants Exercise Price Number Average Weighted Remaining Contractual Life in Years Exercise Price Number Weighted Average Exercise Price $ 2.00-2.99 390,000 2.76 $ 2.00-2.99 390,000 $ 2.91 5.00-5.99 220,800 2.93 5.00-5.99 220,800 5.50 6.00-6.99 31,875 1.25 6.00-6.99 31,875 6.40 8.00-8.99 476,566 0.69 8.00-8.99 476,566 8.03 9.00-9.99 231,938 2.20 9.00-9.99 231,938 9.60 10.00-10.99 1,688 2.87 10.00-10.99 1,688 10.40 11.00-11.99 35,813 0.50 11.00-11.99 35,813 11.20 14.00-14.99 5,000 1.50 14.00-14.99 5,000 14.40 1,393,680 1.89 1,393,680 $ 6.53 |
Schedule of Common Stock Warrants - Registered | June 30, 2023 June 30, 2022 Number of Registered Warrants Weighted Average Exercise Price Number of Registered Warrants Weighted Average Exercise Price Outstanding, beginning of year 2,975,497 $ 5.50 2,975,497 $ 5.50 Issued - - - - Exercised - - - - Cancelled - - - - Expired - - - - Outstanding, end of period 2,975,497 $ 5.50 2,975,497 $ 5.50 |
Schedule of registered warrants outstanding and exercisable by price range | Outstanding Registered Warrants Exercisable Registered Warrants Exercise Price Number Average Weighted Remaining Contractual Life in Years Exercise Price Number Weighted Average Exercise Price $ 5.50 2,975,497 2.93 $ 5.50 2,975,497 5.50 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) | Jun. 30, 2023 USD ($) |
BASIS OF PRESENTATION | |
Accumulated Deficit | $ 119,848,244 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | 6 Months Ended | |||
Apr. 03, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
BASIS OF PRESENTATION | |||||
Expected Volatility | 112.28% | 0% | 112.28% | 130.18% | |
Expected Dividends | 99.89% | 0% | 0% | 0% | 0% |
Expected Term | 5 years 3 months 18 days | 5 years 3 months 18 days | 5 years 9 months 18 days | ||
Risk Free Rate | 3.88% | 0% | 3.88% | 1.88% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
BASIS OF PRESENTATION | ||||
Share based compensation expenses, grant in period | $ 227,808 | $ 497,744 | $ 469,911 | $ 1,068,374 |
Options Granted To Employees | 65,268 | 65,268 | 165,000 |
LEASES (Details)
LEASES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
LEASES | ||
Operating Lease Right-of-use Asset | $ 145,241 | $ 189,282 |
Current Portion Of Long-term Operating Lease | 106,687 | 99,259 |
Long-term Operating Lease, Net Of Current Portion | 50,920 | 105,918 |
Operating Leases | $ 157,607 | $ 205,177 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
LEASES | ||||
Operating Lease Expense | $ 27,236 | $ 27,147 | $ 54,471 | $ 47,291 |
LEASES (Details 2)
LEASES (Details 2) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
LEASES | ||
Operating Leases Weighted-average Remaining Lease Term | 1 year 5 months 19 days | 1 year 11 months 8 days |
Discount Rate Operating Leases | 11% | 11% |
LEASES (Details 3)
LEASES (Details 3) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
LEASES | ||
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities | $ 57,433 | $ 23,592 |
Non-cash investment in ROU asset | $ 0 | $ 241,694 |
LEASES (Details 4)
LEASES (Details 4) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
LEASES | ||
December 31, 2023 | $ 58,776 | |
December 31, 2024 | 112,407 | |
Total Minimum Lease Payments | 171,183 | |
Less: Interest | (13,576) | |
Present Value Of Lease Obligations | 157,607 | |
Less: Current Portion | 106,687 | $ 99,259 |
Long-term Portion Of Lease Obligations | $ 50,920 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 1 Months Ended | |
Jan. 14, 2022 | Dec. 17, 2020 | |
LEASES | ||
Operating Lease Rent Expense | $ 232,464 | $ 54,993 |
Lease agreement term | 34-month | 25 ½ month |
Operating Lease Commencement Date | Apr. 29, 2022 | Feb. 01, 2021 |
Rent Description | Rent is $7,265 per month from commencement to November 30, 2022, $7,466 from November 30, 2022 to November 30, 2023, and $7,668 from November 30, 2023 to the lease end date. | Rent is $3,291 per month from January 15, 2021 to January 31, 2022 and $1,154 from February 1, 2022 to January 31, 2023. On June 5, 2022, the Company exercised an option to extend the lease through December 31, 2024. The lease extension rent is $2,261 per month for calendar year 2023, and $2,300 per month for calendar year 2024, and totals an additional rent obligation of $54,743 of rent over the extension period. |
DEBT (Details)
DEBT (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||
Apr. 03, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
DEBT | |||||
Fair value of common stock | $ 3.11 | ||||
Risk-free interest rate | 3.73% | ||||
Expected term (in years) | 3 years | ||||
Dividend yield | 99.89% | 0% | 0% | 0% | 0% |
DEBT (Details 1)
DEBT (Details 1) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
DEBT | |
Short Term Loan | $ 1,000,000 |
Less: Unamortized debt discount | (224,680) |
Carrying value of Term Loan | $ 775,320 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 1 Months Ended | ||
Apr. 03, 2023 | Feb. 14, 2023 | Jun. 30, 2023 | |
Payne Bridge Loan [Member] | |||
Annual interest rate | 10% | ||
Promissory note principal amount | $ 1,000,000 | ||
Purchase of common stock | 390,000 | ||
Purchase oc common shares price per shares | $ 0.001 | ||
Debt instrument interest expense | $ 238,978 | ||
Non-cash interest of amortization of loan discount | $ 214,914 | ||
Issuance per-share exercise price | $ 2.91 | ||
Allocated of warrants | $ 433,594 | ||
Amortization of discount rate | 48.96% | ||
Short Term Debt [Member] | |||
Principal amount | $ 336,444,000,000 | ||
Monthly down payment | $ 69,666,000,000 | ||
Short term laon | $ 605,600,000,000 | ||
Annual interest rate | 8.40% |
STOCKHOLDERS EQUITY (DEFICIT)_2
STOCKHOLDERS EQUITY (DEFICIT) (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Unregistered Warrant [Member] | ||
Number of options outstanding, beginning | 1,602,198 | 2,553,635 |
Number of options issued | 390,000 | |
Number of options outstanding, ending | 1,393,680 | 2,525,044 |
Weighted average exercise price outstanding, beginning | $ 7.85 | $ 7.57 |
Weighted average exercise price issued | 2.91 | 0 |
Weighted average exercise price Forfeited | 0 | 0 |
Weighted average exercise price outstanding, ending | $ 6.53 | $ 7.57 |
Number of options expired | (598,518) | (28,591) |
Weighted average exercise price exercised | $ 0 | $ 0 |
Weighted average exercise price expired | $ 7.70 | $ 6.45 |
Registered Warrant | ||
Number of options outstanding, beginning | 2,975,497 | 2,975,497 |
Number of options outstanding, ending | 2,975,497 | 2,975,497 |
Weighted average exercise price outstanding, beginning | $ 5.50 | $ 5.50 |
Weighted average exercise price issued | 0 | 0 |
Weighted average exercise price Forfeited | 0 | 0 |
Weighted average exercise price outstanding, ending | 5.50 | 5.50 |
Weighted average exercise price exercised | 0 | |
Weighted average exercise price expired | $ 0 | $ 0 |
2019 Stock Incentive Plan | ||
Number of options outstanding, beginning | 1,689,907 | 1,721,074 |
Number of options Forfeited | (761,625) | |
Number of options issued | 65,268 | 172,500 |
Number of options outstanding, ending | 1,755,175 | 1,131,949 |
Weighted average exercise price outstanding, beginning | $ 6.05 | $ 7.38 |
Weighted average exercise price issued | 2.79 | 5.50 |
Weighted average exercise price Forfeited | 0 | 6.81 |
Weighted average exercise price outstanding, ending | $ 5.93 | $ 7.48 |
STOCKHOLDERS EQUITY (DEFICIT)_3
STOCKHOLDERS EQUITY (DEFICIT) (Details 1) - 2019 Stock Incentive Plan - $ / shares | 6 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Number of options outstanding | 1,755,175 | 1,689,907 | 1,131,949 | 1,721,074 |
Weighted average remaining contractual life (in years) | 7 years 6 months 7 days | |||
Number of exercisable options | 1,293,194 | |||
Weighted average exercise price exercisable | $ 6.05 | |||
2.00-2.99 | ||||
Number of options outstanding | 408,460 | |||
Weighted average remaining contractual life (in years) | 7 years 11 months 15 days | |||
Number of exercisable options | 375,826 | |||
Weighted average exercise price exercisable | $ 2.76 | |||
Exercise price range | 2.00-2.99 | |||
3.00-3.99 | ||||
Number of options outstanding | 220,391 | |||
Weighted average remaining contractual life (in years) | 9 years 1 month 24 days | |||
Number of exercisable options | 78,794 | |||
Weighted average exercise price exercisable | $ 3.79 | |||
Exercise price range | 3.00-3.99 | |||
4.00-4.99 | ||||
Number of options outstanding | 53,324 | |||
Weighted average remaining contractual life (in years) | 8 years 3 months 14 days | |||
Number of exercisable options | 53,324 | |||
Weighted average exercise price exercisable | $ 4.48 | |||
Exercise price range | 4.00-4.99 | |||
5.00-5.99 | ||||
Number of options outstanding | 710,500 | |||
Weighted average remaining contractual life (in years) | 8 years 4 months 20 days | |||
Number of exercisable options | 485,250 | |||
Weighted average exercise price exercisable | $ 5.50 | |||
Exercise price range | 5.00-5.99 | |||
8.00-8.99 | ||||
Number of options outstanding | 6,250 | |||
Weighted average remaining contractual life (in years) | 2 years 14 days | |||
Number of exercisable options | 6,250 | |||
Weighted average exercise price exercisable | $ 8.80 | |||
Exercise price range | 8.00-8.99 | |||
9.00-9.99 | ||||
Number of options outstanding | 25,000 | |||
Weighted average remaining contractual life (in years) | 2 years 1 month 17 days | |||
Number of exercisable options | 25,000 | |||
Weighted average exercise price exercisable | $ 9.60 | |||
Exercise price range | 9.00-9.99 | |||
11.00-11.99 | ||||
Number of options outstanding | 162,500 | |||
Weighted average remaining contractual life (in years) | 7 years 3 months 21 days | |||
Number of exercisable options | 100,000 | |||
Weighted average exercise price exercisable | $ 11.20 | |||
Exercise price range | 11.00-11.99 | |||
12.00-12.99 | ||||
Number of options outstanding | 168,750 | |||
Weighted average remaining contractual life (in years) | 1 year 7 months 20 days | |||
Number of exercisable options | 168,750 | |||
Weighted average exercise price exercisable | $ 12.80 | |||
Exercise price range | 12.00-12.99 |
STOCKHOLDERS EQUITY (DEFICIT)_4
STOCKHOLDERS EQUITY (DEFICIT) (Details 2) - Unregistered Warrant [Member] - $ / shares | 6 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Number of options outstanding | 1,393,680 | 1,602,198 | 2,525,044 | 2,553,635 |
Average weighted remaining contructual life in years | 1 year 10 months 20 days | |||
Number of exercisable options | 1,393,680 | |||
Weighted average exercise price exercisable | $ 6.53 | |||
5.00-5.99 | ||||
Number of options outstanding | 220,800 | |||
Average weighted remaining contructual life in years | 2 years 11 months 4 days | |||
Number of exercisable options | 220,800 | |||
Weighted average exercise price exercisable | $ 5.50 | |||
11.00-11.99 | ||||
Number of options outstanding | 31,875 | |||
Average weighted remaining contructual life in years | 1 year 3 months | |||
Number of exercisable options | 31,875 | |||
Weighted average exercise price exercisable | $ 6.40 | |||
8.00-8.99 | ||||
Number of options outstanding | 476,566 | |||
Average weighted remaining contructual life in years | 8 months 8 days | |||
Number of exercisable options | 476,566 | |||
Weighted average exercise price exercisable | $ 8.03 | |||
9.00-9.99 | ||||
Number of options outstanding | 231,938 | |||
Average weighted remaining contructual life in years | 2 years 2 months 12 days | |||
Number of exercisable options | 231,938 | |||
Weighted average exercise price exercisable | $ 9.60 | |||
10.00-10.99 | ||||
Number of options outstanding | 1,688 | |||
Average weighted remaining contructual life in years | 2 years 10 months 13 days | |||
Number of exercisable options | 1,688 | |||
Weighted average exercise price exercisable | $ 10.40 | |||
14.00-14.99 | ||||
Number of options outstanding | 5,000 | |||
Average weighted remaining contructual life in years | 1 year 6 months | |||
Number of exercisable options | 5,000 | |||
Weighted average exercise price exercisable | $ 14.40 | |||
2.00-2.99 | ||||
Number of options outstanding | 390,000 | |||
Average weighted remaining contructual life in years | 2 years 9 months 3 days | |||
Number of exercisable options | 390,000 | |||
Weighted average exercise price exercisable | $ 2.91 | |||
11.00-11.99 | ||||
Number of options outstanding | 35,813 | |||
Average weighted remaining contructual life in years | 6 months | |||
Number of exercisable options | 35,813 | |||
Weighted average exercise price exercisable | $ 11.20 |
STOCKHOLDERS EQUITY (DEFICIT)_5
STOCKHOLDERS EQUITY (DEFICIT) (Details 3) - Registered Warrant - 5.50 | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Exercise price range | 5.50 |
Number of exercisable Register warrant | 2,975,497 |
Number of exercisable options | 2,975,497 |
Weighted average exercise price exercisable term | 2 years 11 months 4 days |
Exercise price Exercisable range | 5.50 |
Weighted average exercise price exercisable | $ / shares | $ 5.50 |
STOCKHOLDERS EQUITY (DEFICIT)_6
STOCKHOLDERS EQUITY (DEFICIT) (Details Narative) - USD ($) | 6 Months Ended | ||
Oct. 12, 2021 | Jun. 30, 2023 | Jan. 01, 2023 | |
2019 Incentive Plan [Member] | |||
Remaining shares | 365,625 | ||
Option issued | 781,250 | ||
2021 Incentive Plan [Member] | |||
Shares available for issuance, shares | 1,000,000 | ||
Increase (decrease) in shares available for issuance | $ 470,893 | ||
Stock options, issued | 1,392,675 | ||
Remining shares available for issuance | 549,291 | ||
Plan term | 10 years | ||
Minimum [Member] | |||
Plan term | 5 years | ||
Maximum [Member] | |||
Plan term | 10 years |
INCOME TAX (Details narrative)
INCOME TAX (Details narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
INCOME TAX | ||
Income tax expense | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details narr
SUBSEQUENT EVENTS (Details narrative) shares in Millions | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Description of sale of common stock | Company sold 1,030,000 shares of common stock, par value $0.001 per share, at an offering price of $2.67 per share, and pre-funded warrants at an offering of $2.6699 per pre-funded warrant to purchase up to an aggregate of 468,130 shares of Common Stock, to a single institutional investor |
Series A [Member] | |
Warrants To Purchase Shares Of Common Stock | shares | 1,498,130 |
Warrants To Purchase Shares Of Common Stock, Exercise Price Per Share | $ / shares | $ 2.80 |
Series B [Member] | |
Warrants To Purchase Shares Of Common Stock | shares | 1,498,130 |
Warrants To Purchase Shares Of Common Stock, Exercise Price Per Share | $ / shares | $ 2.80 |