Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 18, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Workhorse Group Inc. | ||
Entity Central Index Key | 0001425287 | ||
Trading Symbol | WKHS | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 64,864,154 | ||
Entity Common Stock, Shares Outstanding | 61,496,990 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,512,750 | $ 4,069,477 |
Accounts receivable, less allowance for doubtful accounts of $0 at December 31, 2018 and 2017 | 1,013,423 | |
Lease receivable current | 48,271 | 45,300 |
Inventory | 2,533,616 | 4,621,942 |
Prepaid expenses and deposits | 2,274,595 | 946,134 |
Current assets, Total | 6,369,232 | 10,696,276 |
Property, plant and equipment, net | 5,237,451 | 5,596,013 |
Lease receivable long-term | 198,090 | 212,004 |
Assets, Total | 11,804,773 | 16,504,293 |
Current liabilities: | ||
Accounts payable | 4,340,463 | 5,657,771 |
Accrued liabilities | 3,946,386 | 284,115 |
Warranty liability | 7,058,769 | 142,560 |
Warrant liability | 1,822,819 | |
Customer deposits | 406,000 | 54,405 |
Duke financing obligation | 1,340,700 | |
Current portion of long-term debt | 381,497 | |
Current liabilities, other than notes payable | 18,915,137 | 6,520,348 |
Principal amount of notes payable | 5,750,000 | |
Less unamortized discount and debt issuance costs | 987,500 | |
Notes payable less unamortized discount and debt issuance costs | 4,762,500 | |
Long-term debt | 8,312,079 | 1,709,881 |
Stockholders' equity (deficit): | ||
Series A preferred stock, par value of $.001 per share 75,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2018 and December 31, 2017 | ||
Common stock, par value of $.001 per share 100,000,000 shares authorized, 58,270,934 shares issued and outstanding at December 31, 2018 and 41,529,181 shares issued and outstanding at December 31, 2017 | 58,271 | 41,529 |
Additional paid-in capital | 126,076,782 | 107,760,036 |
Accumulated deficit | (141,557,496) | (104,290,001) |
Stockholders' equity (deficit), Total | (15,422,443) | 3,511,564 |
Liabilities and Stockholders' Equity (Deficit), Total | $ 11,804,773 | $ 16,504,293 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Series A preferred stock, par value | $ 0.001 | $ 0.001 |
Series A preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Series A preferred stock, shares issued | 0 | 0 |
Series A preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 58,270,934 | 41,529,181 |
Common stock, shares outstanding | 58,270,934 | 41,529,181 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 763,173 | $ 10,038,460 |
Cost of sales | 7,981,413 | 24,399,363 |
Warranty expense | 7,972,152 | 117,500 |
Gross loss | (15,190,392) | (14,478,403) |
Operating expenses | ||
Selling, general and administrative | 11,485,482 | 8,820,211 |
Research and development | 7,391,693 | 17,737,737 |
Total operating expenses | 18,877,175 | 26,557,948 |
Interest expense, net | 2,434,749 | 180,437 |
Net loss | (36,502,316) | (41,216,788) |
Deemed dividend - September 2017 Warrants | 765,179 | |
Net loss attributable to common stockholders | $ (37,267,495) | $ (41,216,788) |
Net loss attributable to common stockholders per share - basic and diluted | $ (0.74) | $ (1.06) |
Weighted average number of common shares outstanding | 50,377,909 | 38,755,796 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) | Common Stock | Series A Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2016 | $ 27,579 | $ 66,862,608 | $ (63,073,213) | $ 3,816,974 | |
Balance shares at Dec. 31, 2016 | 27,578,864 | ||||
Issuance of common stock | $ 12,967 | 37,029,501 | 37,042,468 | ||
Issuance of common stock, shares | 12,966,712 | ||||
Stock options and warrants exercised | $ 581 | 906,598 | 907,179 | ||
Stock options and warrants exercised, shares | 581,358 | ||||
Issuance of Common Stock in exchange for future services | $ 130 | 493,870 | 494,000 | ||
Issuance of Common Stock in exchange for future services, shares | 130,000 | ||||
Conversion of accounts payable | $ 272 | 1,034,267 | 1,034,539 | ||
Conversion of accounts payable, shares | 272,247 | ||||
Share based compensation | 1,433,192 | 1,433,192 | |||
Net loss from operations | (41,216,788) | (41,216,788) | |||
Ending Balance at Dec. 31, 2017 | $ 41,529 | 107,760,036 | (104,290,001) | 3,511,564 | |
Ending Balance, shares at Dec. 31, 2017 | 41,529,181 | ||||
Issuance of common stock | $ 14,614 | 16,105,698 | 16,120,312 | ||
Issuance of common stock, shares | 14,614,500 | ||||
Stock options and warrants exercised | $ 45 | 90,020 | 90,065 | ||
Stock options and warrants exercised, shares | 44,643 | ||||
Exchange offer - 2017 Warrants - deemed dividend | 765,179 | (765,179) | |||
Exchange offer - 2017 Warrants | $ 1,969 | (1,969) | |||
Exchange offer - 2017 Warrants, shares | 1,968,736 | ||||
Conversion of accounts payable | $ 114 | 298,236 | 298,350 | ||
Conversion of accounts payable, shares | 113,874 | ||||
Share based compensation | 1,059,582 | 1,059,582 | |||
Net loss from operations | (36,502,316) | (36,502,316) | |||
Ending Balance at Dec. 31, 2018 | $ 58,271 | $ 126,076,782 | $ (141,557,496) | $ (15,422,443) | |
Ending Balance, shares at Dec. 31, 2018 | 58,270,934 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (36,502,316) | $ (41,216,788) |
Adjustments to reconcile net loss from operations to cash used by operations: | ||
Depreciation | 348,339 | 549,973 |
Amortized discount and debt issuance costs on Senior Secured Notes | 987,500 | |
Amortization of Arosa Loan issuance cost | 3,610,589 | |
Change in fair value of common stock warrant liability | (2,683,470) | |
Stock based compensation | 1,059,582 | 1,433,192 |
Write down of inventory | 2,488,100 | |
Loss on sale of asset | 28,645 | |
Effects of changes in operating assets and liabilities: | ||
Accounts receivable | 1,024,366 | (223,133) |
Inventory | (399,774) | (2,157,107) |
Prepaid expenses and deposits | (1,328,461) | (196,971) |
Accounts payable and accrued liabilities | 2,399,877 | 3,140,313 |
Warranty | 6,916,209 | |
Accounts payable, related parties | (54,914) | (46,425) |
Customer deposits | 351,595 | 54,405 |
Net cash used by operations | (21,754,133) | (38,662,541) |
Cash flows from investing activities: | ||
Capital expenditures | (23,222) | (143,355) |
Proceeds from sale of fixed assets | 4,800 | |
Net cash used by investing activities | (18,422) | (143,355) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 4,762,500 | |
Payments on notes payable | (5,750,000) | |
Proceeds from Duke financing arrangement | 1,340,700 | |
Proceeds from advances | 26,732 | |
Proceeds from long-term debt | 17,800,000 | |
Payments on long-term debt | (9,891,378) | (76,572) |
Loan issue costs | (792,221) | |
Shareholder advances, net of repayments | ||
Issuance of common stock | 16,418,662 | 37,042,468 |
Exercise of warrants and options | 90,065 | 650,675 |
Net cash provided by financing activities | 19,215,828 | 42,405,803 |
Change in cash and cash equivalents | (2,556,727) | 3,599,907 |
Cash at the beginning of the period | 4,069,477 | 469,570 |
Cash at the end of the period | $ 1,512,750 | $ 4,069,477 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental disclosure of non-cash activities: | ||
Conversion of accounts payable | $ 298,350 | $ 1,034,539 |
Additional paid-in capital | 298,236 | |
Conversion of shareholders advances into common stock | 256,504 | |
Common stock issued in exchange of consulting services | 494,000 | |
Common stock | 114 | |
Cash paid for interest | 1,128,470 | $ 104,621 |
Marathon | ||
Supplemental disclosure of non-cash activities: | ||
Warrants to purchase common stock | 965,747 | |
Arosa | ||
Supplemental disclosure of non-cash activities: | ||
Warrants to purchase common stock | $ 3,540,542 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Principles | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING PRINCIPLES | 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING PRINCIPLES The following accounting principles and practices are set forth to facilitate the understanding of data presented in the condensed consolidated financial statements: Nature of operations and principles of consolidation Workhorse Group Inc. and its predecessor companies (“Workhorse”, the “Company”, “we”, “us” or “our”) is a technology company focused on providing sustainable and cost-effective solutions to the commercial transportation sector. As an American manufacturer, we design and build high performance battery-electric vehicles and aircraft that make movement of people and goods more efficient and less harmful to the environment. As part of our solution, we also develop cloud-based, real-time telematics performance monitoring systems that enable fleet operators to optimize energy and route efficiency. Although we operate as a single unit through our subsidiaries, we approach our development through two divisions, Automotive and Aviation. We are currently focused on our core competency of bringing the N-GEN electric cargo van to market and fulfilling our existing backlog of orders. We are also exploring other opportunities in monetizing our intellectual property which could include a sale, license or other arrangement of assets that are outside of our core focus. The Company’s wholly owned subsidiaries include Workhorse Technologies Inc., Workhorse Motor Works Inc. and Workhorse Properties Inc. Basis of presentation The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has limited revenues and a history of negative working capital and stockholders’ deficits. Our existing capital resources will be insufficient to fund our operations through the first half of 2019. Unless and until we are able to generate a sufficient amount of revenue, reduce our costs and/or enter a strategic relationship, we expect to finance future cash needs through public and/or private offerings of equity securities and /or debt financings. If we are not able to obtain additional financing and/or substantially increase revenue from sales, we will be unable to continue as a going concern. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company, which, in turn, is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and successfully carry out its future operations. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary, should the Company not continue as a going concern. The Company has continued to raise capital. Management believes the proceeds from these offerings, future offerings, and the Company’s anticipated revenue, provides an opportunity to continue as a going concern. If additional funding is required, the Company plans to obtain working capital from either debt or equity financing from the sale of common, preferred stock, and/or convertible debentures. Obtaining such working capital is not assured. The Company is currently in a production ramp up mode and placing greater emphasis on manufacturing capability. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Certain reclassifications were made to the prior year financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operation or stockholders’ equity. Financial instruments The carrying amounts of financial instruments including cash, inventory, accounts payable and short-term debt approximate fair value because of the relatively short maturity of these instruments. Accounts receivable Accounts receivable consist of collectible amounts for products and services rendered. The Company carries its accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on a history of past write-offs and collections and current credit conditions. The Company generally does not require collateral for accounts receivable. Sales to our top two customers totaled 0% and 33% for the year ended December 31, 2018 and 98% and 0% for the year ended December 31, 2017. Lease Receivable The Company’s leasing activities consist of the leasing of trucks which are classified as direct financing leases. Revenue is recognized at the inception of the lease. The leases have a term of eight years. Future payments to be received on the leases are as follows: 2019 $ 48,271 2020 41,375 2021 41,375 2022 41,375 2023 41,375 Thereafter 32,590 $ 246,361 Inventory Inventory is stated at the lower of cost or net realizable value. Manufactured inventories are valued at standard cost, and consist of raw materials, work in process and finished goods. Property, plant and equipment, net Property, plant and equipment, net is stated at cost less accumulated depreciation. Major renewals and improvements are capitalized while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. When property, plant and equipment is retired or otherwise disposed of, a gain or loss is realized for the difference between the net book value of the asset and the proceeds realized thereon. Depreciation is calculated using the straight-line method, based upon the following estimated useful lives: Buildings: 15 - 39 years Leasehold improvements: 7 years Software: 3 - 6 years Equipment: 5 years Vehicles and prototypes: 3 - 5 years Common stock On April 22, 2010, the directors of the Company approved a forward stock split of the common stock of the Company on a 14:1 basis. On May 12, 2010, the stockholders of the Company voted to approve the amendment of the certificate of incorporation resulting in a decrease of the number of shares of common stock. Management filed the certificate of amendment decreasing the authorized shares of common stock with the State of Nevada on September 8, 2010. On February 11, 2015, the Company filed a certificate of amendment to its articles of incorporation to increase the authorized shares of common stock to 50,000,000. On December 9, 2015, the Company filed a Certificate of Amendment to its Certificate of Incorporation to implement a one-for-ten reverse split of the Corporation’s issued and outstanding common stock (the “Reverse Stock Split”), as authorized by the stockholders of the Company. The Reverse Stock Split became effective at the open of trading on December 11, 2015 (the “Effective Date”). As of the Effective Date, every ten shares of issued and outstanding common stock were combined into one newly issued share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Total cash payments made by the Company to stockholders in lieu of fractional shares was not material. On August 7, 2017, the shareholders of the Company voted to increase the authorized shares of common stock to 100,000,000 and the Certificate of Amendment amending the Articles of Incorporation was filed with the State of Nevada on August 8, 2018. All references in the financial statements and MD&A to number of common shares, price per share and weighted average shares of common stock have been adjusted to reflect the Reverse Stock Split on a retroactive basis for all prior periods presented, unless otherwise noted, including reclassifying an amount equal to the reduction in par value of common stock to additional paid in capital. The capital stock of the Company is as follows: Preferred Stock - The Company has authorized 75,000,000 shares of preferred stock with a par value of $.001 per share. These shares may be issued in series with such rights and preferences as may be determined by the Board of Directors. There are no shares of preferred stock outstanding. Common Stock - The Company has authorized 100,000,000 shares of common stock with a par value of $0.001 per share as of December 31, 2018. Income taxes As no taxable income has occurred from the date of this merger to December 31, 2018 cumulative deferred tax assets of approximately $29.6 million are fully reserved, and no provision or liability for federal or state income taxes has been included in the financial statements. Carryover amounts are: Approximate net operating loss Carryover to be used against taxable 4.0 2030 6.7 2031 3.9 2032 4.6 2033 6.0 2034 8.9 2035 17.9 2036 38.5 2037 23.5 Indefinite Research and development costs The Company expenses research and development costs as they are incurred. Research and Development costs were approximately $7.4 million and $17.7 million for the years ended December 31, 2018 and 2017, respectively, consisting primarily of personnel costs for our teams in engineering and research, prototyping expense, and contract and professional services. Basic and diluted loss per share Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. For all periods, all of the Company’s common stock equivalents were excluded from the calculation of diluted loss per common share because they were anti-dilutive, due to the Company’s net losses. Stock based compensation The Company accounts for its stock-based compensation in accordance with “Share-Based Payments” (codified in FASB ASC Topic 718 and 505). The Company recognizes in its consolidated statement of operations the grant-date fair value of stock options and warrants issued to employees and non-employees over the option or warrant’s vesting period. The fair value is estimated on the date of grant using a Black-Scholes valuation model that uses assumptions concerning expected volatility, expected term, and the expected risk-free rate of return. For the awards granted, the expected volatility was estimated by management as 50% based on results from other public companies in our industry. The expected term of the awards granted was assumed to be the contract life of the option or warrant (one, two, three, five or ten years as determined in the specific arrangement). The risk-free rate of return was based on market yields in effect on the date of each grant for United States Treasury debt securities with a maturity equal to the expected term of the award. Subsequent events The company has evaluated subsequent events for potential recognition and disclosures through the date the consolidated financial statements were filed. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 2. INVENTORY As of December 31, 2018, and 2017, inventory consisted of the following: 2018 2017 Raw materials $ 4,319,637 $ 3,205,618 Work in process 702,079 1,416,324 Finished goods - - 5,021,716 - Less: Inventory reserve 2,488,100 - $ 2,533,616 $ 4,621,942 During the year ended December 31, 2018, the Company recorded an inventory reserve of approximately $2.5 million. The increase in reserve related to the Company’s strategic switch from the legacy E-GEN/E-100 platform to our N-GEN platform, which occurred in the fourth quarter of 2018. Certain raw materials and work in process were unique to the E-GEN/E-100 vehicles and cannot currently be repurposed. As such, the company recorded a reserve related to these items. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUE | 3. REVENUE Change in Accounting Principle In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). This guidance requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Beginning in January 2018, the Company adopted the provisions of ASU 2014-09 Topic 606 under the modified retrospective method, which requires a cumulative effect adjustment to the opening balance of retained earnings on the date of adoption. This approach was applied to contracts not completed as of December 31, 2017. No significant change to revenue recognition, as previously recognized, was identified. At date of adoption, there was no adjustment to retained earnings related to the adoption of ASU 2014-09. At date of adoption, there was no significant change to our past revenue recognition practices and therefore no adjustment to the opening balance of retained earnings was required. Revenue Recognition Net sales include products and shipping and handling charges, net of estimates for customer allowances. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. We recognize revenue by transferring the promised products to the customer, with the majority of revenue recognized at the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. The majority of our contracts have a single performance obligation and are short term in nature. Revenues related to repair and maintenance services are recognized over time as services are provided. Payment for used vehicles, services, and merchandise are typically received at the point when control transfers to the customer or in accordance with payment terms customary to the business. Accounts Receivable Credit is extended based upon an evaluation of the customer’s financial condition. Accounts receivable are stated at their estimated net realizable value. The allowance for doubtful accounts is based on an analysis of customer accounts and our historical experience with accounts receivable write-offs. The Company has elected the following practical expedients allowed under ASU 2014-09: ● Performance obligations are satisfied within one year from a given reporting date, consequently we omit disclosure of the transaction price apportioned to remaining performance obligations on open orders Disaggregation of Revenue Our revenues related to the following types of business were as follows for the periods ended December 31: Year Ended 2018 2017 Automotive $ 498,000 $ 10,038,460 Aviation - - Other 265,173 - Total revenues $ 763,173 $ 10,038,460 Automotive Revenue Aviation – Other |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | 4. PROPERTY, PLANT AND EQUIPMENT, NET Property, Plant and Equipment as of December 31, 2018 and 2017 consists of the following: 2018 2017 Land $ 700,000 $ 700,000 Buildings 5,900,000 5,900,000 Leasehold Improvements 19,236 19,225 Software 102,367 86,050 Equipment 836,646 829,742 Vehicles and prototypes 86,679 156,567 7,644,928 7,691,584 Less accumulated depreciation (2,407,477 ) (2,095,571 ) $ 5,237,451 $ 5,596,013 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 5. LONG-TERM DEBT Long-term debt as of December 31, 2018 and 2017 consists of the following: December 31, December 31, Marathon Tranche I Loan, due December 31, 2021, interest only quarterly payments, variable interest rate of 10.4% as of December 31, 2018 (discount is based on warrant valuation of approximately 9.7%) $ 10,000,000 $ - Marathon Credit Agreement unamortized discount and issuance costs (1,687,921 ) - Net Marathon Credit Agreement 8,312,079 Senior Secured Notes, due July 6, 2018 (discount is based on imputed interest rate of 26%) - 5,750,000 Less: unamortized discount and debt issuance costs on Senior Secured Notes - (987,500 ) Net Senior Secured Notes - 4,762,500 Secured mortgage payable, due November 2026, to Bank for 100 Commerce Drive building, interest rate 6.5%, due in monthly installments of $11,951, inclusive of principal and interest - 1,741,378 Note payable, former building owner interest payment only due in monthly installments of $1,604 interest at 5.5%. A balloon payment of $350,000 plus unpaid interest due August 2018. - 350,000 8,312,079 6,853,878 Less current portion - 5,143,997 Long-term debt $ 8,312,079 $ 1,709,881 Aggregate maturities of long-term debt are as follows: 2019 - 2020 1,000,000 2021 9,000,000 2022 - 2023 - Thereafter - 10,000,000 On December 26, 2017, as part of its initial efforts to spin-off Surefly Inc., the Company entered into a Securities Purchase Agreement with several existing institutional investors (the "Spin-Off Investors") pursuant to which the Company issued original issue discount Senior Secured Notes in the aggregate principal amount of $5,750,000 in consideration of gross proceeds of $5,000,000 paid by the Spin-Off Investors. The loan was convertible into Surefly Inc. equity upon achieving the spin-off. On June 28, 2018, the Company entered into an amendment agreement with the Spin-Off Investors. The amendment agreement provided that the Senior Secured Notes were amended to provide a maturity date of July 6, 2018. Upon the closing of the Loan Agreement with Arosa Capital Management LP ("Arosa"), the Company paid off the Senior Secured Notes. Amortization expense recorded as interest related to the debt issuance costs and unamortized discounts for the Senior Secured Notes was $987,500 for the year ended December 31, 2018. On June 7, 2018, the Company received a short-term loan in the aggregate principal amount of $550,000 from Stephen S. Burns, H. Benjamin Samuels, Gerald Budde and Ray Chess, each an executive officer and/or director of the Company (collectively, the "Related Parties"). The Company used the net proceeds from the transaction for general business and working capital purposes. To evidence the loans, the Company issued the Related Parties promissory notes (the "Related Parties Notes") in the aggregate principal amount of $550,000. The Related Parties Notes were unsecured obligations of the Company and were not convertible into equity securities of the Company. Principal and interest under the Related Parties Notes was due and payable December 6, 2018, however, in the event that the Company raised in excess of $10,000,000 in equity financing, then the Company would use part of its proceeds to pay off the Related Parties Notes. Under no circumstance were the Related Parties Notes be paid off on or prior to the 91st day following the maturity date of the Senior Secured Notes issued by the Company on December 27, 2017. Interest accrued on the Related Parties Notes at the rate of 12.0% per annum. The Related Parties Notes contained terms and events of default customary for similar transactions. On July 6, 2018, the Company received a short-term loan in the aggregate principal amount of $500,000 from accredited investors (collectively, the "Loan Parties"), which included Mr. Samuels, a director of the Company. To evidence the loans, we issued the Loan Parties promissory notes (the "Loan Parties Notes") in the aggregate principal amount of $500,000. The Loan Parties Notes were unsecured obligations of the Company and were not convertible into equity securities of our company. Principal and interest under the Loan Parties Notes was due and payable January 5, 2019, however, in the event that the Company raised in excess of $10,000,000 in equity or debt financing, the Company would use a portion of the proceeds to pay off the Loan Parties Notes. Interest accrues on the Loan Parties Notes at the rate of 12.0% per annum. The Loan Parties Notes contained terms and events of default customary for similar transactions. The Related Parties Notes and Loan Parties Notes were paid off following the closing of the August 2018 public offering. On July 6, 2018, the Company, as borrower, entered into a Loan Agreement with a fund managed by Arosa, as lender, providing for a term loan (the "Arosa Loan") in the principal amount of $6,100,000 (the "Loan Agreement"). The maturity date of the Arosa Loan was July 6, 2019 (the "Maturity Date"). The interest rate for the Arosa Loan was 8% per annum payable in quarterly installments and commenced on October 6, 2018. The Company could prepay the Arosa Loan at any time upon three days written notice. The Company used the proceeds from the Arosa Loan to satisfy the Senior Secured Loans and a loan in the amount of $350,000 payable to the former owner of the Company's facility based in Loveland, Ohio. The Loan Agreement required the Company to pay Arosa's expenses including attorney fees. The Loan Agreement also required the Company to make certain representations and warranties and other agreements that are customary in loan agreements of this type and also included covenants to raise $10,000,000 in equity prior to September 30, 2018 and to consummate a sale of Surefly, Inc., the Company's indirect wholly-owned subsidiary resulting in cash proceeds of no less than $20,000,000. The Loan Agreement also contained customary events of default, including non-payment of principal or interest, violations of covenants, bankruptcy and material judgments. The Company's subsidiaries and Arosa also entered into a Guarantee and Collateral Agreement and Intellectual Property Security Agreement providing that the Company's obligations to Arosa were secured by substantially all of the Company's assets. In addition, the Company was required to appoint to the Board of Directors a person designated in writing by Arosa for a period of no less than 12 months. In accordance with the Loan Agreement, the Company issued Arosa a warrant to purchase 5,000,358 shares of common stock of the Company at an exercise price of $2.00 per share exercisable in cash only for a period of five years. While the Arosa Loan remained outstanding, the Company was be required to issue additional warrants to purchase common stock to Arosa equal to 10% of any additional issuance excluding issuances under an approved stock plan. The additional warrants to purchase common stock have an exercise price equal to the lesser of $2.00 or a 5% premium to the price utilized in such financing. Pursuant to the warrant, Arosa may not exercise such warrant if such exercise would result in Arosa beneficially owning in excess of 9.99% of the Company's then issued and outstanding common stock. On August 2, 2018, after conducting additional due diligence on the Company's available collateral base, Arosa agreed to enter into the First Amendment to the Loan Agreement with the Company pursuant to which an additional $1,700,000 was loaned to the Company for working capital purposes and general corporate purposes. In addition, various covenants were added or amended including, but not limited to, requiring the Company to satisfy its Mortgage on its Loveland, Ohio facility no later than October 1, 2018, which we paid off in August 2018 with a payment of $1.85 million. The Company determined that the Arosa Loan and related warrants were freestanding instruments issued together and therefore should be accounted for separately. The Company determined the warrants did not qualify for equity classification and therefore has applied liability treatment to the instruments. The value of the warrants on the date of the Arosa Loan was determined to be $3,540,542, which was determined using the Black-Scholes method and was recorded as a liability with the offset being recorded as a debt discount, which will be amortized into interest expense over the life of the loan. The liability for the warrants, as well as any future warrant issuances, will be marked to marked quarterly in accordance with liability accounting. On August 14, 2018, in accordance with the Loan Agreement, we issued a warrant to acquire 1,143,200 shares of common stock at an exercise price of $1.21 warrants to Arosa following the closing of our public offering on August 13, 2018 and the related over-allotment on August 14, 2018. On October 1, 2018, we issued a warrant to acquire 108,768 shares of common stock at an exercise price of $1.60 warrants to Arosa due to our At The Market ("ATM") offerings that occurred during the third quarter of 2018. On December 31, 2018, the Company entered into a Credit Agreement (the "Credit Agreement"), among the Company, as borrower, Marathon Asset Management, LP, on behalf of certain entities it manages, as lenders (collectively, with their permitted successors and assignees, the "Lenders"), and Wilmington Trust, National Association, as the agent ("Wilmington"). The Credit Agreement provided the Company with a $10 million tranche of term loans (the "Tranche One Loans") which may not be re-borrowed following repayment and (ii) a $25 million tranche of term loans which may be re-borrowed following repayment (the "Tranche Two Loans" together with the Tranche One Loans, the "Loans"). The Company used the proceeds for the Tranche One Loans (x) to pay off a loan provided by Arosa in the principal amount of $7.8 million plus interest and (y) for working capital purposes. Draws from the Tranche Two Loans will be used in connection with vehicle production and are subject to the Company's receipt of purchase orders. In connection with the extinguishment of the Arosa loan, a loss on extinguishment of approximately $2.2 million was recognized and is recorded within interest expense in the accompanying statement of operations for the year ended December 31, 2018. The Company's ability to borrow amounts under the Credit Agreement is conditioned upon its compliance with specified covenants, including certain reporting covenants and financial covenants that, in addition to other items, require the Company to maintain (i) minimum liquidity of at least $4 million at all times on or after March 31, 2019, (ii) a maximum total leverage ratio (ratio of total debt borrowed by the Company to EBITDA for the four consecutive fiscal quarters most recently ended, subject to certain adjustments set forth in the Credit Agreement) not to exceed 4.50:1.00 on the last day of the quarter ended September 30, 2019, which total leverage ratio is adjusted for subsequent quarters as set forth in the Credit Agreement and (iii) a maximum debt service coverage ratio (ratio of EBITDA (for the four consecutive fiscal quarters most recently ended, subject to certain adjustments set forth in the Credit Agreement) to interest expense and payments for operating leases) not to exceed 1.25:1.00 on the last day of the quarter ended September 30, 2019, which debt service coverage ratio is adjusted for subsequent quarters as set forth in the Credit Agreement. In the event the Company breaches the total leverage ratio or the debt service coverage ratio covenants, the Company may cure such breach by raising capital through the sale of equity, which capital will be added on a dollar-for-dollar basis to the calculation of EBITDA for purposes of such test period to determine compliance with the financial covenant. In each consecutive four fiscal quarter period, equity cures can only be made for two fiscal quarters, and only four equity cures are allowed during the term of the Credit Agreement. The capital raised in connection with such equity cure must be used to repay the Loans. In addition, the Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, restrictions on the Company's ability to dispose of property, enter into mergers, acquisitions or other business combination transactions, incur additional indebtedness, grant liens, pay dividends and make certain other restricted payments. The Tranche One Loans, and both the drawn and undrawn portions of the Tranche Two Loan, will bear interest at a rate per annum (based on a year of 360 days) equal to LIBOR (as defined in the Credit Agreement) plus 7.625%, which interest is payable quarterly commencing March 5, 2019. The Credit Agreement contains customary events of default, including for non-payment, misrepresentation, breach of covenants, defaults under other material indebtedness, material adverse change, bankruptcy, change of control and material judgments. The Loans mature on the third anniversary of the closing date. The Company is required to repay a portion of the Tranche One Loans with $500,000 installment payments on each of June 30, 2020, December 31, 2020 and June 30, 2021. Upon the occurrence and during the continuance of an event of default, the Lenders may declare all outstanding amounts thereunder immediately due and payable and may terminate commitments to make any additional advances under the Tranche Two Loans. The Tranche Two Loans are required to be prepaid in an amount equal to the payments received from the subject purchase orders. The Company is also obligated to repay the Loans with a specified percentage of the net cash proceeds the Company receives in connection with certain dispositions of assets, casualty events, incurrences of debt and any issuances of capital stock (other than issuances of capital stock during the first 9 months after closing). The Company is required to prepay the Loans utilizing 100% of the net proceeds from any casualty event or the issuance or incurrence of debt and 50% of the net proceeds from any disposition. If the Company receives net cash proceeds from the issuance of capital stock after the nine-month anniversary of the closing date, the Company is required to prepay the Loans utilizing 35% of the net cash proceeds from such issuance. With limited exceptions, if the Company prepays any portion of the Tranche One Loans or the Tranche Two Loans (with the concomitant termination of the portion of the commitments under the Tranche Two Loans that is repaid) during the 12 months following the closing date, it is required to pay 100% of the interest that would have been due on such prepaid Loans if the prepaid amounts had been outstanding for a period of 12 months after the date of prepayment. If such prepayment occurs during the period beginning after the 12-month anniversary of the closing date and continuing through the 18-month anniversary of the closing date, the Company is required to pay 50% of the interest that would have been due on such prepaid Loans for the 12-month period following the date of such prepayment on a prorated basis. The Company, the Company's subsidiaries and Wilmington, as agent for the Lenders, entered into a Security Agreement, a Pledge Agreement and a Guarantee, among other loan documents, providing that the Company's obligations to the Lenders are secured by a first priority security interest in substantially all of the Company's and its subsidiaries' tangible and intangible assets including the Company's real property located in Loveland, Ohio and Union City, Indiana. For so long as the Credit Agreement is in effect, the Lenders holding a majority of the Loans and unused commitments for the Tranche Two Loan will be entitled to have one representative acceptable to the Company attend all meetings of the Company's board of directors (and any committees thereof), in a non-voting observer capacity, and such representative will receive copies of all notices, minutes, consents and other materials the Company provides to its directors in connection with such meeting. The Company may exclude such representative from access to any of such materials or meetings or portions thereof if it believes that any such material or portion thereof is a trade secret or similar confidential information or such exclusion is necessary to preserve the attorney-client privilege. In accordance with the Credit Agreement, the Company issued each Lender a Common Stock Purchase Warrant to purchase, in the aggregate, 8,053,390 shares of common stock of the Company at an exercise price of $1.25 per share exercisable in cash only for a period of three years and then for cash or cashless thereafter (collectively, the "Initial Warrants"). Until the later of the repayment of all obligations owed to the Lenders or two years from the closing date, the Company will be required to issue additional Common Stock Purchase Warrants (the "Additional Warrants") to the Lenders equal to 10%, in the aggregate, of any additional issuance, subject to certain exceptions, on substantially the same terms and conditions of the Initial Warrants, except that (i) the applicable expiration date thereof shall be five years from the issuance date of the applicable warrant, (ii) the initial exercise price shall be a price equal to the price per share of common stock used in the relevant issuance multiplied by 110% and (iii) the holder shall be entitled to exercise the warrant on a cashless exercise at any time the warrant is exercisable. The Company determined that the Marathon Credit Agreement and related warrants were freestanding instruments issued together and therefore should be accounted for separately. We determined the warrants did not qualify for equity classification and therefore have applied liability treatment to the instruments. The value of the warrants on the date of the Marathon Credit Agreement was determined to be $965,747, which was determined using the Black-Scholes method and was recorded as a liability with the offset being recorded as a debt discount, which will be amortized into interest expense over the life of the loan. The liability for the warrants, as well as any future warrant issuances, will be marked to marked quarterly in accordance with liability accounting. As a condition to the closing of the Credit Agreement, the Company entered into a Registration Rights Agreement with the Lenders (the "Registration Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company is required, not later than 90 days following the execution of the Credit Agreement, to file a shelf registration statement on Form S-3 with the SEC with respect to the resale of the shares of common stock issuable upon exercise of the Initial Warrants or any Additional Warrant, if any (the "Warrant Shares"). The Company is required to use its reasonable best efforts to have such registration statement declared effective as soon as reasonably practicable but in no event no later than 180 days after the closing date of the Credit Agreement. The Company is required to keep such shares registered for as long as they are deemed Registrable Securities (as defined in the Registration Rights Agreement). In addition, any holder of Registrable Securities (as defined in the Registration Rights Agreement) will have the right, subject to certain limitations, to request an underwritten takedown of any Warrant Shares. Any holder of Registrable Securities (as defined in the Registration Rights Agreement) will have the right, on up to four occasions, to demand that the Company file a registration statement with the SEC with respect to the resale of the Warrant Shares, subject to certain limitations. In addition, any holder of Registrable Securities (as defined in the Registration Rights Agreement) is entitled to unlimited piggyback registration rights with respect to the registration of any equity securities of the Company, subject to certain limitations. These registration rights are subject to customary conditions and limitations regarding cutbacks and indemnification, among others. Subject to certain exceptions, the Company is generally required to bear all expenses of such registration, other than underwriting discounts and commissions and certain travel expenses. The Company, at closing, paid a fee equal to 1.0% of the Tranche One Loans and the commitment for the Tranche Two Loans. Upon the first drawing of any Tranche Two Loans, the Company is required to pay another fee equal to 1.0% of the Tranche One Loans and the commitment for the Tranche Two Loans. In connection with entry into the Credit Agreement, the Company agreed to pay Cowen & Company, LLC a cash fee equal to 2% of the gross proceeds received from the Lenders on the earlier of the next capital raise or March 31, 2019. The closing costs associated with the Marathon Credit Agreement were allocated based on proportional value to Tranche 1, Tranche 2 and the Marathon Warrants. Costs of $722,174 allocated to Tranche 1 were recorded as a debt discount; costs of $1,830,435 allocated to Tranche 2 were recorded as a prepaid asset and will be amortized over the expected life of the loan; and costs of $69,744 allocated to the Marathon Warrants were expensed in the year ended December 31, 2018. On December 31, 2018, concurrently with the closing of the Credit Agreement and the initial borrowing of the Tranche One Loans, the Company utilized a portion of the proceeds from the Tranche One Loans to repay in full all outstanding amounts under the Company's existing Loan Agreement, dated July 6, 2018, as amended to date, by and among the Company, and Arosa, as lender (the "Existing Loan Agreement") and terminated all commitments by Arosa to extend further credit thereunder and all guarantees and security interests granted by the Company to Arosa in connection therewith. Pursuant to the Existing Loan Agreement, the Company issued Arosa a Warrant to purchase 894,821 shares of common stock exercisable at $1.25 per share. As the full amount of all outstanding amounts under the Company's Existing Loan Agreement have been repaid in full, the Company is no longer required to issue additional warrants to Arosa going forward. Principal amounts: At December 31, Principal $ 10,000,000 Unamortized debt discount and issuance costs (1) (1,687,921 ) Net debt carrying amount $ 8,312,079 Carrying amount of warrant the liability component (2) $ 965,747 (1) Includes the unamortized portion of the initial warrant liability of $965,747 and issuance costs of $722,174. (2) Includes marked to market liability of initial Marathon warrant liability. |
Duke Financing Obligation
Duke Financing Obligation | 12 Months Ended |
Dec. 31, 2018 | |
Duke Financing Obligation [Abstract] | |
DUKE FINANCING OBLIGATION | 6. DUKE FINANCING OBLIGATION On November 28, 2018, the Company entered into a Sales Agreement with Duke Energy One, Inc., a wholly-owned subsidiary of Duke Energy Corporation (NYSE: DUK) ("Duke"), pursuant to which the Company sold Duke 615,000 battery cells (the "615,000 Cells") in consideration of $1,340,700. Workhorse will continue to use the cells in the near term for the delivery of trucks to UPS and DHL. Until May 1, 2019, the Company has the right and option to require Duke to sell the 615,000 Cells back to the Company and Duke has the right and option to require the Company to purchase the 615,000 Cells at price equal to the price the 615,000 Cells were sold. On November 28, 2018, in consideration for consenting to the Company selling the Cells to Duke, which served as collateral for Arosa the Loan Agreement, the Company entered into a Limited Consent, Waiver and Release with Arosa pursuant to which the Company issued Arosa 2,000,000 shares of common stock and restruck the exercise price of warrants previously issued to Arosa to $1.25 per share. In addition, while the Arosa Loan remains outstanding, the exercise price of the Arosa Warrants will be restruck to equal the price of any equity issued by the Company, including the issuance of any common stock purchase warrants or other derivative convertible securities, if the issuing price of such securities is less than $1.25. The Duke transactions was accounted for as a financing obligation and as such, the company has recorded a $1,340,700 liability related to the transaction. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 7. INCOME TAXES For the years ended December 31, 2018 and 2017, the Company has taxable losses primarily due to operations and thus has no current tax expense recorded. The Company has recorded a full valuation allowance on its deferred tax assets and thus, for the years ended December 31, 2018 and 2017 there is no deferred tax expense recorded. The U.S. components of loss before income taxes and a reconciliation of the statutory federal income tax with the provision for income taxes follow: 2018 2017 Current Federal - - Current State & Local - - Total Current - - Deferred Federal - - Deferred State & Local - - Total Deferred - - Total - - 12/31/2018 12/31/2017 Federal tax benefit at statutory rates 21.0% 35.0% State and local tax at statutory rate 0.8% 0.6% Mark-to-Market Adjustment on Stock Warrants 1.5% 0.0% Other permanent differences and credits 0.0% (0.1)% Change in valuation allowance (23.3)% (35.5)% Total tax expense 0.0% 0.0% Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets, and accordingly a full valuation allowance has been provided on its deferred tax assets. The Company continues to maintain the underlying tax benefits to offset future taxable income and to monitor the need for a valuation allowance based on the profitability of its future operations. The valuation allowance increased by approximately $8.5 million and $8.6 million, during the years ended December 31, 2018 and 2017, respectively. Significant components of the Company’s deferred tax assets and liabilities are as follows: 2018 2017 Deferred Tax Assets: Accrued Expenses & Reserves $ 850,857 $ 308,116 Warranty Allowance 1,539,765 31,097 Non-Qualified Stock Options 1,034,261 796,999 Fixed Assets 183,917 170,072 Disallowed Interest Expense 1,118,212 - Net Operating Losses 24,818,785 19,729,451 Total Deferred Tax Assets 29,545,797 21,035,735 Valuation Allowance (29,545,797 ) (21,035,735 ) Total Deferred Tax Assets, net of valuation allowance $ - $ - At December 31, 2018 and 2017, the Company has approximately $90.6 million, of federal net operating loss (“NOL”) carry-forwards which expire through 2037. Additionally, at December 31, 2018 the Company has approximately $23.5 million of federal NOLs that carry-forward indefinitely. Additionally, at December 31, 2018 and 2017, the Company has approximately $0.9 million and $0.7 million, respectively, of state and local NOLs carry-forwards which expire through 2038. The NOL carry-forwards may be limited in certain circumstances, including ownership changes. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not yet analyzed whether it has experienced an ownership change for this purpose to determine if any of the net operating losses to date have a limitation on future deductibility. Tabular Reconciliation of unrecognized tax benefits 2018 2017 Unrecognized tax benefits - January 1 $ 1,163,282 $ 1,163,182 Gross increases - tax positions in prior period - - Gross decreases - tax positions in prior period - - Gross increases - tax positions in current period - 100 Settlement - - Lapse of statute of limitations - - Unrecognized tax benefits - December 31 $ 1,163,282 $ 1,163,282 The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018, and 2017, due to the Company’s continued losses, no amounts of interest and penalties have been recognized in the Company’s consolidated statements of operations. If the unrecognized tax benefits were reversed, a deferred tax asset and corresponding valuation allowance would be recorded, and thus the reversal would have no impact on the effective rate. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and local jurisdictions. Generally, the Company’s 2015 through 2017 tax years remain open and subject to examination by federal, state and local taxing authorities. However, federal, state, and local net operating losses from 2009 through 2017 are subject to review by taxing authorities in the year utilized. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act. This legislation makes significant change in U.S. tax law including a reduction in the corporate tax rates to 21% starting in 2018. The legislation reduced the U.S. corporate tax rate from the current rate of 35% to 21% for tax years beginning after December 31, 2017. As a result of the enacted law, the Company was required to revalue deferred tax assets and liabilities existing as of December 31, 2017 from the 35% federal rate in effect through the end of 2017, to the new 21% rate. As a result of the change in law, the company recorded a $13.5 million reduction in the deferred tax asset and corresponding valuation allowance. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | 8. STOCK BASED COMPENSATION Options to directors, officers, consultants and employees The Company maintains, as adopted by the board of directors, the 2017 Stock Incentive Plan, the 2016 Stock Incentive Plan, the 2014 Stock Incentive Plan, the 2014 Stock Compensation Plan, 2013 Incentive Stock Plan, the 2012 Incentive Stock Plan, the 2011 Incentive Stock Plan and the 2010 Stock Incentive Plan (the “Plans”) providing for the issuance of options to employees, officers, directors or consultants of the Company. Non-qualified stock options granted under the plans may only be granted with an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Awards under the plans may be either vested or unvested options. The 2017 Stock Incentive Plan authorized 5,000,000 shares with vesting in sixteen equal quarterly tranches. In addition to the Plans, the Company has granted, on various dates, stock options to directors, officers, consultants and employees to purchase common stock of the Company. The terms, exercise prices and vesting of these awards vary. The following table summarizes option activity for directors, officers, consultants and employees: Outstanding Stock Options Options Available for Grant Number of Options Weighted Weighted Weighted Balance December 31, 2016 1,045,774 2,321,782 $ 2.31 $ 1.49 43 Additional stock reserved 5,000,000 - - - - Granted (1,900,000 ) 1,900,000 5,01 3.41 72 Exercised - (74,109 ) 1.13 0.95 - Forfeited - (296,302 ) - - - Expired - - - - - Balance December 31, 2017 4,145,774 3,851,371 3.11 1.84 43 Additional stock reserved - - - - - Granted (340,000 ) 340,000 1.18 0.54 56 Exercised - (52,500 ) 1.24 0.68 - Forfeited - - - - - Expired - (271,250 ) 3.22 1.58 - Balance December 31, 2018 3,805,774 3,867,621 $ 4.05 $ 1.84 64 The Company recorded approximately $1.1 million and $1.4 million of compensation expense for stock options to directors, officers, consultants and employees for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, unrecognized compensation expense of $2.4 million is related to non-vested options granted to directors, officers, consultants and employees which is anticipated to be recognized over the next 60 months, commensurate with the vesting schedules. Warrants In addition to the stock options above and the stock warrants associated with the Arosa Loan and Marathon Credit Facility previously discussed, the Company has outstanding warrants with certain Accredited Investors. There are 2,618,307 of these warrants outstanding, which were issued in November 2015 with a five-year life and an exercise price of $5.28. These warrants were initially accounted for as equity instruments and as such, no amounts have been recorded as compensation expense or mark to market adjustment for the years ended December 31, 2018 and December 31, 2017. The Company recorded no compensation expense for stock warrants to the placement agent and consultants for the years ended December 31, 2018 and 2017, respectively. There is no unrecognized compensation expense for the placement agent warrants because they are fully vested at date of grant. |
Recent Pronouncements
Recent Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT PRONOUNCEMENTS | 9. RECENT PRONOUNCEMENTS Accounting Guidance Adopted in 2017 Effective September 30, 2017, we early-adopted FASB ASU 2017-11, “Earnings per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. Part I of ASU 2017-11 simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. Previous accounting guidance created cost and complexity for organizations that issue financial instruments with down round features by requiring, on an ongoing basis, fair value measurement of the entire instrument or conversion option. The new standard requires companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability of equity classification. Companies that provide earnings per share (“EPS”) data will adjust their diluted EPS calculation for the effect of the feature when triggered (i.e., when the exercise price of the related equity-linked financial instrument is adjusted downward because of the down round feature) and will also recognize the effect of the trigger within equity. We applied this guidance on a prospective basis. The primary impact of adoption is that equity-linked financial instruments are less likely to be liability classified than prior to the adoption of this standard. The adoption of the new standard resulted in warrants issued in September 2017 not being classified as liabilities in our Consolidated Financial Statements. Accounting Guidance Adopted in 2018 Effective January 1, 2018, we adopted FASB ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and affects the guidance in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2016-10 clarifies the following two aspects of Topic 606: evaluating whether promised goods and services are separately identifiable and determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The Company adopted ASU No. 2016-10, using the modified retrospective approach, which did not have a material impact on the Company’s condensed consolidated financial statements. Additional information is available in Note 4, “Revenue.” Effective January 1, 2018, we adopted FASB ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), and affects the guidance in ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. When another party is involved in providing goods or services to a customer, ASU No. 2014-09 requires an entity to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (that is, the entity is an agent). The amendments in ASU No. 2016-08 are intended to improve the operability and understandability of the implementation guidance in ASU No. 2014-09 on principal versus agent considerations by offering additional guidance to be considered in making the determination. The Company adopted ASU No. 2016-08, using the modified retrospective approach, which did not have a material impact on the Company’s condensed consolidated financial statements. Additional information is available in Note 4, “ Revenue. Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize in the statement of financial position a liability to make lease payments (“the lease liability”) and a right-of-use asset representing its right to use the underlying asset for the lease term, initially measured at the present value of the lease payments. When measuring assets and liabilities arising from a lease, the lessee should include payments to be made in optional periods only if the lessee is reasonably certain, as defined, to exercise an option to the lease or not to exercise an option to terminate the lease. Optional payments to purchase the underlying asset should be included if the lessee is reasonably certain it will exercise the purchase option. Most variable lease payments should be excluded except for those that depend on an index or a rate or are in substance fixed payments. A lessee shall classify a lease as a finance lease if it meets any of five listed criteria: 1) The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2) The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. 3) The lease term is for the major part of the remaining economic life of the underlying asset. 4) The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. 5) The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. For finance leases, a lessee shall recognize in the statement of comprehensive income interest on the lease liability separately from amortization of the right-of-use asset. Amortization of the right-of-use asset shall be on a straight-line basis, unless another basis is more representative of the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits. If the lease does not meet any of the five criteria, the lessee shall classify it as an operating lease and shall recognize a single lease cost on a straight-line basis over the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments in this update are to be applied using a modified retrospective approach, as defined, and are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. The Company does not expect the adoption of the new guidance to have a material impact on the consolidated financial statements. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | 11. RELATED PARTIES The Company obtains its business and casualty insurance through Assured Partners LP, which one of our directors, Gerald Budde, is the CFO of the Eastern Region. Mr. Budde did not oversee the transaction as the transaction was not in his region nor was he paid any portion of the brokerage fee. Assured Partners LP received revenue of approximately $79 thousand on insurance policies totaling approximately $658 thousand in premiums in 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS The company has evaluated subsequent events for potential recognition and disclosures through the date the consolidated financial statements were filed . Subscription Agreement Commencing February 11, 2019, the “Company entered into and closed Subscription Agreements with accredited investors (the “February 2019 Accredited Investors”) pursuant to which the February 2019 Accredited Investors purchased 1,499,684 shares of the Company’s common stock for a purchase price of $1,365,000. If, prior to the six month anniversary, the Company issues shares of its common stock for a purchase price per share less than the purchase price paid by the February 2019 Accredited Investors subject to standard carve-outs (a “Down Round”), the Company will issue additional shares of common stock (for no additional consideration) to the February 2019 Accredited Investors such that the effective purchase price per share is equal to the purchase price per share paid in the Down Round. Benjamin Samuels and Gerald Budde, directors of the Company, acquired 841,928 and 26,310 shares of common stock, respectively, as part of this offering, provided, however, their per share purchase was $0.9501, which was above the closing price the date prior to close and they did not receive the Down Round protection. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | 13. QUARTERLY FINANCIAL DATA (UNAUDITED) Sales Gross Loss Net Loss Basic and diluted loss per share 2018 First Quarter $ 560,229 $ (1,154,141 ) $ (6,417,806 ) $ (0.16 ) Second Quarter 170,684 (1,485,221 ) (6,909,297 ) (0.18 ) Third Quarter 10,997 (1,465,825 ) (5,485,553 ) (0.12 ) Fourth Quarter 21,263 (11,085,205 ) (17,689,660 ) (0.28 ) 2017 First Quarter 1,570,037 (2,742,051 ) (7,920,606 ) (0.24 ) Second Quarter 252,000 (743,925 ) (9,178,700 ) (0.26 ) Third Quarter 3,066,000 (4,492,082 ) (12,412,088 ) (0.35 ) Fourth Quarter 5,150,423 (6,500,345 ) (11,705,394 ) (0.32 ) |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Principles (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations and principles of consolidation | Nature of operations and principles of consolidation Workhorse Group Inc. and its predecessor companies (“Workhorse”, the “Company”, “we”, “us” or “our”) is a technology company focused on providing sustainable and cost-effective solutions to the commercial transportation sector. As an American manufacturer, we design and build high performance battery-electric vehicles and aircraft that make movement of people and goods more efficient and less harmful to the environment. As part of our solution, we also develop cloud-based, real-time telematics performance monitoring systems that enable fleet operators to optimize energy and route efficiency. Although we operate as a single unit through our subsidiaries, we approach our development through two divisions, Automotive and Aviation. We are currently focused on our core competency of bringing the N-GEN electric cargo van to market and fulfilling our existing backlog of orders. We are also exploring other opportunities in monetizing our intellectual property which could include a sale, license or other arrangement of assets that are outside of our core focus. The Company’s wholly owned subsidiaries include Workhorse Technologies Inc., Workhorse Motor Works Inc. and Workhorse Properties Inc. |
Basis of presentation | Basis of presentation The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has limited revenues and a history of negative working capital and stockholders’ deficits. Our existing capital resources will be insufficient to fund our operations through the first half of 2019. Unless and until we are able to generate a sufficient amount of revenue, reduce our costs and/or enter a strategic relationship, we expect to finance future cash needs through public and/or private offerings of equity securities and /or debt financings. If we are not able to obtain additional financing and/or substantially increase revenue from sales, we will be unable to continue as a going concern. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company, which, in turn, is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and successfully carry out its future operations. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary, should the Company not continue as a going concern. The Company has continued to raise capital. Management believes the proceeds from these offerings, future offerings, and the Company’s anticipated revenue, provides an opportunity to continue as a going concern. If additional funding is required, the Company plans to obtain working capital from either debt or equity financing from the sale of common, preferred stock, and/or convertible debentures. Obtaining such working capital is not assured. The Company is currently in a production ramp up mode and placing greater emphasis on manufacturing capability. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Certain reclassifications were made to the prior year financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operation or stockholders’ equity. |
Financial instruments | Financial instruments The carrying amounts of financial instruments including cash, inventory, accounts payable and short-term debt approximate fair value because of the relatively short maturity of these instruments. |
Accounts receivable | Accounts receivable Accounts receivable consist of collectible amounts for products and services rendered. The Company carries its accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on a history of past write-offs and collections and current credit conditions. The Company generally does not require collateral for accounts receivable. Sales to our top two customers totaled 0% and 33% for the year ended December 31, 2018 and 98% and 0% for the year ended December 31, 2017. |
Lease Receivable | Lease Receivable The Company’s leasing activities consist of the leasing of trucks which are classified as direct financing leases. Revenue is recognized at the inception of the lease. The leases have a term of eight years. Future payments to be received on the leases are as follows: 2019 $ 48,271 2020 41,375 2021 41,375 2022 41,375 2023 41,375 Thereafter 32,590 $ 246,361 |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Manufactured inventories are valued at standard cost, and consist of raw materials, work in process and finished goods. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment, net is stated at cost less accumulated depreciation. Major renewals and improvements are capitalized while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. When property, plant and equipment is retired or otherwise disposed of, a gain or loss is realized for the difference between the net book value of the asset and the proceeds realized thereon. Depreciation is calculated using the straight-line method, based upon the following estimated useful lives: Buildings: 15 - 39 years Leasehold improvements: 7 years Software: 3 - 6 years Equipment: 5 years Vehicles and prototypes: 3 - 5 years |
Common stock | Common stock On April 22, 2010, the directors of the Company approved a forward stock split of the common stock of the Company on a 14:1 basis. On May 12, 2010, the stockholders of the Company voted to approve the amendment of the certificate of incorporation resulting in a decrease of the number of shares of common stock. Management filed the certificate of amendment decreasing the authorized shares of common stock with the State of Nevada on September 8, 2010. On February 11, 2015, the Company filed a certificate of amendment to its articles of incorporation to increase the authorized shares of common stock to 50,000,000. On December 9, 2015, the Company filed a Certificate of Amendment to its Certificate of Incorporation to implement a one-for-ten reverse split of the Corporation’s issued and outstanding common stock (the “Reverse Stock Split”), as authorized by the stockholders of the Company. The Reverse Stock Split became effective at the open of trading on December 11, 2015 (the “Effective Date”). As of the Effective Date, every ten shares of issued and outstanding common stock were combined into one newly issued share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Total cash payments made by the Company to stockholders in lieu of fractional shares was not material. On August 7, 2017, the shareholders of the Company voted to increase the authorized shares of common stock to 100,000,000 and the Certificate of Amendment amending the Articles of Incorporation was filed with the State of Nevada on August 8, 2018. All references in the financial statements and MD&A to number of common shares, price per share and weighted average shares of common stock have been adjusted to reflect the Reverse Stock Split on a retroactive basis for all prior periods presented, unless otherwise noted, including reclassifying an amount equal to the reduction in par value of common stock to additional paid in capital. The capital stock of the Company is as follows: Preferred Stock - The Company has authorized 75,000,000 shares of preferred stock with a par value of $.001 per share. These shares may be issued in series with such rights and preferences as may be determined by the Board of Directors. There are no shares of preferred stock outstanding. Common Stock - The Company has authorized 100,000,000 shares of common stock with a par value of $0.001 per share as of December 31, 2018. |
Income taxes | Income taxes As no taxable income has occurred from the date of this merger to December 31, 2018 cumulative deferred tax assets of approximately $29.6 million are fully reserved, and no provision or liability for federal or state income taxes has been included in the financial statements. Carryover amounts are: Approximate net operating loss Carryover to be used against taxable 4.0 2030 6.7 2031 3.9 2032 4.6 2033 6.0 2034 8.9 2035 17.9 2036 38.5 2037 23.5 Indefinite |
Research and development costs | Research and development costs The Company expenses research and development costs as they are incurred. Research and Development costs were approximately $7.4 million and $18.1 million for the years ended December 31, 2018 and 2017, respectively, consisting primarily of personnel costs for our teams in engineering and research, prototyping expense, and contract and professional services. |
Basic and diluted loss per share | Basic and diluted loss per share Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. For all periods, all of the Company’s common stock equivalents were excluded from the calculation of diluted loss per common share because they were anti-dilutive, due to the Company’s net losses. |
Stock based compensation | Stock based compensation The Company accounts for its stock-based compensation in accordance with “Share-Based Payments” (codified in FASB ASC Topic 718 and 505). The Company recognizes in its consolidated statement of operations the grant-date fair value of stock options and warrants issued to employees and non-employees over the option or warrant’s vesting period. The fair value is estimated on the date of grant using a Black-Scholes valuation model that uses assumptions concerning expected volatility, expected term, and the expected risk-free rate of return. For the awards granted, the expected volatility was estimated by management as 50% based on results from other public companies in our industry. The expected term of the awards granted was assumed to be the contract life of the option or warrant (one, two, three, five or ten years as determined in the specific arrangement). The risk-free rate of return was based on market yields in effect on the date of each grant for United States Treasury debt securities with a maturity equal to the expected term of the award. |
Subsequent events | Subsequent events The company has evaluated subsequent events for potential recognition and disclosures through the date the consolidated financial statements were filed. |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Principles (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of future lease receivable | 2019 $ 48,271 2020 41,375 2021 41,375 2022 41,375 2023 41,375 Thereafter 32,590 $ 246,361 |
Schedule of estimated useful lives of property, plant and equipment | Buildings: 15 - 39 years Leasehold improvements: 7 years Software: 3 - 6 years Equipment: 5 years Vehicles and prototypes: 3 - 5 years |
Schedule of income taxes | Approximate net operating loss Carryover to be used against taxable 4.0 2030 6.7 2031 3.9 2032 4.6 2033 6.0 2034 8.9 2035 17.9 2036 38.5 2037 23.5 Indefinite |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | 2018 2017 Raw materials $ 4,319,637 $ 3,205,618 Work in process 702,079 1,416,324 Finished goods - - 5,021,716 - Less: Inventory reserve 2,488,100 - $ 2,533,616 $ 4,621,942 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of disaggregation of revenue | Year Ended 2018 2017 Automotive $ 498,000 $ 10,038,460 Aviation - - Other 265,173 - Total revenues $ 763,173 $ 10,038,460 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | 2018 2017 Land $ 700,000 $ 700,000 Buildings 5,900,000 5,900,000 Leasehold Improvements 19,236 19,225 Software 102,367 86,050 Equipment 836,646 829,742 Vehicles and prototypes 86,679 156,567 7,644,928 7,691,584 Less accumulated depreciation (2,407,477 ) (2,095,571 ) $ 5,237,451 $ 5,596,013 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | December 31, December 31, Marathon Tranche I Loan, due December 31, 2021, interest only quarterly payments, variable interest rate of 10.4% as of December 31, 2018 (discount is based on warrant valuation of approximately 9.7%) $ 10,000,000 $ - Marathon Credit Agreement unamortized discount and issuance costs (1,687,921 ) - Net Marathon Credit Agreement 8,312,079 Senior Secured Notes, due July 6, 2018 (discount is based on imputed interest rate of 26%) - 5,750,000 Less: unamortized discount and debt issuance costs on Senior Secured Notes - (987,500 ) Net Senior Secured Notes - 4,762,500 Secured mortgage payable, due November 2026, to Bank for 100 Commerce Drive building, interest rate 6.5%, due in monthly installments of $11,951, inclusive of principal and interest - 1,741,378 Note payable, former building owner interest payment only due in monthly installments of $1,604 interest at 5.5%. A balloon payment of $350,000 plus unpaid interest due August 2018. - 350,000 8,312,079 6,853,878 Less current portion - 5,143,997 Long-term debt $ 8,312,079 $ 1,709,881 |
Schedule of aggregate maturities of long-term debt | 2019 - 2020 1,000,000 2021 9,000,000 2022 - 2023 - Thereafter - 10,000,000 |
Schedule of issue additional warrants | Principal amounts: At December 31, Principal $ 10,000,000 Unamortized debt discount and issuance costs (1) (1,687,921 ) Net debt carrying amount $ 8,312,079 Carrying amount of warrant the liability component (2) $ 965,747 (1) Includes the unamortized portion of the initial warrant liability of $965,747 and issuance costs of $722,174. (2) Includes marked to market liability of initial Marathon warrant liability. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of loss before income taxes | 2018 2017 Current Federal - - Current State & Local - - Total Current - - Deferred Federal - - Deferred State & Local - - Total Deferred - - Total - - |
Schedule of reconciliation of the statutory federal income tax | 12/31/2018 12/31/2017 Federal tax benefit at statutory rates 21.0% 35.0% State and local tax at statutory rate 0.8% 0.6% Mark-to-Market Adjustment on Stock Warrants 1.5% 0.0% Other permanent differences and credits 0.0% (0.1)% Change in valuation allowance (23.3)% (35.5)% Total tax expense 0.0% 0.0% |
Schedule of deferred tax assets and liabilities | 2018 2017 Deferred Tax Assets: Accrued Expenses & Reserves $ 850,857 $ 308,116 Warranty Allowance 1,539,765 31,097 Non-Qualified Stock Options 1,034,261 796,999 Fixed Assets 183,917 170,072 Disallowed Interest Expense 1,118,212 - Net Operating Losses 24,818,785 19,729,451 Total Deferred Tax Assets 29,545,797 21,035,735 Valuation Allowance (29,545,797 ) (21,035,735 ) Total Deferred Tax Assets, net of valuation allowance $ - $ - |
Schedule of reconciliation of unrecognized tax benefits | 2018 2017 Unrecognized tax benefits - January 1 $ 1,163,282 $ 1,163,182 Gross increases - tax positions in prior period - - Gross decreases - tax positions in prior period - - Gross increases - tax positions in current period - 100 Settlement - - Lapse of statute of limitations - - Unrecognized tax benefits - December 31 $ 1,163,282 $ 1,163,282 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of summarizes of option activity | Outstanding Stock Options Options Available for Grant Number of Options Weighted Weighted Weighted Balance December 31, 2016 1,045,774 2,321,782 $ 2.31 $ 1.49 43 Additional stock reserved 5,000,000 - - - - Granted (1,900,000 ) 1,900,000 5,01 3.41 72 Exercised - (74,109 ) 1.13 0.95 - Forfeited - (296,302 ) - - - Expired - - - - - Balance December 31, 2017 4,145,774 3,851,371 3.11 1.84 43 Additional stock reserved - - - - - Granted (340,000 ) 340,000 1.18 0.54 56 Exercised - (52,500 ) 1.24 0.68 - Forfeited - - - - - Expired - (271,250 ) 3.22 1.58 - Balance December 31, 2018 3,805,774 3,867,621 $ 4.05 $ 1.84 64 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | Sales Gross Loss Net Loss Basic and diluted loss per share 2018 First Quarter $ 560,229 $ (1,154,141 ) $ (6,417,806 ) $ (0.16 ) Second Quarter 170,684 (1,485,221 ) (6,909,297 ) (0.18 ) Third Quarter 10,997 (1,465,825 ) (5,485,553 ) (0.12 ) Fourth Quarter 21,263 (11,085,205 ) (17,689,660 ) (0.28 ) 2017 First Quarter 1,570,037 (2,742,051 ) (7,920,606 ) (0.24 ) Second Quarter 252,000 (743,925 ) (9,178,700 ) (0.26 ) Third Quarter 3,066,000 (4,492,082 ) (12,412,088 ) (0.35 ) Fourth Quarter 5,150,423 (6,500,345 ) (11,705,394 ) (0.32 ) |
Summary of Business and Signi_4
Summary of Business and Significant Accounting Principles (Details) | Dec. 31, 2018USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2019 | $ 48,271 |
2020 | 41,375 |
2021 | 41,375 |
2022 | 41,375 |
2023 | 41,375 |
Thereafter | 32,590 |
Total lease receivable | $ 246,361 |
Summary of Business and Signi_5
Summary of Business and Significant Accounting Principles (Details1) | 12 Months Ended |
Dec. 31, 2018 | |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 39 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 6 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Vehicles and prototypes [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Vehicles and prototypes [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Summary of Business and Signi_6
Summary of Business and Significant Accounting Principles (Details 2) | Dec. 31, 2018USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net operating losses available for 2030 | $ 4,000,000 |
Net operating losses available for 2031 | 6,700,000 |
Net operating losses available for 2032 | 3,900,000 |
Net operating losses available for 2033 | 4,600,000 |
Net operating losses available for 2034 | 6,000,000 |
Net operating losses available for 2035 | 8,900,000 |
Net operating losses available for 2036 | 17,900,000 |
Net operating losses available for 2037 | 38,500,000 |
Net operating losses available for Indefinite | $ 23,500,000 |
Summary of Business and Signi_7
Summary of Business and Significant Accounting Principles (Details Textual) | 1 Months Ended | 12 Months Ended | |||
Apr. 22, 2010 | Dec. 31, 2018USD ($)Customer$ / sharesshares | Dec. 31, 2017USD ($)Customer$ / sharesshares | Aug. 07, 2017shares | Feb. 11, 2015shares | |
Summary of Business and Significant Accounting Principles (Textual) | |||||
Leases receivable, term | 8 years | ||||
Forward stock split | 14:1 | ||||
Number of authorized shares of common stock | 100,000,000 | 100,000,000 | |||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||
Number of authorized shares of preferred stock | 75,000,000 | 75,000,000 | |||
Cumulative deferred tax assets | $ | $ 29,600,000 | ||||
Research and development | $ | $ 7,391,693 | $ 17,737,737 | |||
Expected volatility rate of stock | 50.00% | ||||
Common Stock [Member] | |||||
Summary of Business and Significant Accounting Principles (Textual) | |||||
Number of authorized shares of common stock | 50,000,000 | ||||
Shareholders [Member] | |||||
Summary of Business and Significant Accounting Principles (Textual) | |||||
Number of authorized shares of common stock | 100,000,000 | ||||
Net sales [Member] | One Customer [Member] | |||||
Summary of Business and Significant Accounting Principles (Textual) | |||||
Concentration risk, percentage | 0.00% | 98.00% | |||
Number of customers | Customer | 2 | 2 | |||
Net sales [Member] | Two Customers [Member] | |||||
Summary of Business and Significant Accounting Principles (Textual) | |||||
Concentration risk, percentage | 33.00% | 0.00% | |||
Number of customers | Customer | 2 | 2 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Components of inventories | ||
Raw Materials | $ 4,319,637 | $ 3,205,618 |
Work in Process | 702,079 | 1,416,324 |
Finished Goods | ||
Inventory Gross | 5,021,716 | |
Less: Inventory reserve | 2,488,100 | |
Inventory, Total | $ 2,533,616 | $ 4,621,942 |
Inventory (Details Textual)
Inventory (Details Textual) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Inventory reserve | $ 2,488,100 |
Revenue (Details)
Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 763,173 | $ 10,038,460 |
Automotive [Member] | ||
Total revenues | 498,000 | 10,038,460 |
Aviation [Member] | ||
Total revenues | ||
Other [Member] | ||
Total revenues | $ 265,173 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, plant and equipment, gross | $ 7,644,928 | $ 7,691,584 |
Less accumulated depreciation | (2,407,477) | (2,095,571) |
Property, plant and equipment, net | 5,237,451 | 5,596,013 |
Land [Member] | ||
Property, plant and equipment, gross | 700,000 | 700,000 |
Buildings [Member] | ||
Property, plant and equipment, gross | 5,900,000 | 5,900,000 |
Leasehold Improvements [Member] | ||
Property, plant and equipment, gross | 19,236 | 19,225 |
Software [Member] | ||
Property, plant and equipment, gross | 102,367 | 86,050 |
Equipment [Member] | ||
Property, plant and equipment, gross | 836,646 | 829,742 |
Vehicles and prototypes [Member] | ||
Property, plant and equipment, gross | $ 86,679 | $ 156,567 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Less: unamortized discount and debt issuance costs on Senior Secured Notes | $ (987,500) | |
Net Senior Secured Notes | 5,750,000 | |
Long term debt | 8,312,079 | 6,853,878 |
Less current portion | 5,143,997 | |
Long-term debt | 8,312,079 | 1,709,881 |
Marathon Tranche I Loan [Member] | ||
Debt Instrument [Line Items] | ||
Marathon Tranche I Loan, due December 31, 2021, interest only quarterly payments, variable interest rate of 10.4% as of December 31, 2018 (discount is based on warrant valuation of approximately 9.7%) | 10,000,000 | |
Marathon Credit Agreement unamortized discount and issuance costs | (1,687,921) | |
Long term debt | 8,312,079 | |
Secured mortgage payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt | 1,741,378 | |
Note Payable, Former Building Owner [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt | 350,000 | |
Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior Secured Notes, due July 6, 2018 (discount is based on imputed interest rate of 26%) | 5,750,000 | |
Less: unamortized discount and debt issuance costs on Senior Secured Notes | (987,500) | |
Net Senior Secured Notes | $ 4,762,500 |
Long-Term Debt (Details 1)
Long-Term Debt (Details 1) | Dec. 31, 2018USD ($) |
Long-term Debt | |
2019 | |
2020 | 1,000,000 |
2021 | 9,000,000 |
2022 | |
2023 | |
Thereafter | |
Aggregate maturities of long-term debt | $ 10,000,000 |
Long-Term Debt (Details 2)
Long-Term Debt (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | ||
Principal amounts: | ||||
Principal | $ 10,000,000 | |||
Unamortized debt discount and issuance costs | (1,687,921) | [1] | $ (4,762,500) | |
Net debt carrying amount | 8,312,079 | $ 6,853,878 | ||
Carrying amount of the liability component | [2] | $ 965,747 | ||
[1] | Includes the unamortized portion of the initial warrant liability of $965,747 and issuance costs of $722,174. | |||
[2] | Includes marked to market liability of initial Marathon warrant liability. |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) | Jul. 06, 2018USD ($)$ / sharesshares | Jun. 07, 2018USD ($) | Aug. 02, 2018USD ($) | Dec. 26, 2017USD ($) | Dec. 31, 2018USD ($)Customer$ / sharesshares | Dec. 31, 2017USD ($) | Oct. 01, 2018$ / sharesshares | Aug. 14, 2018$ / sharesshares |
Long-Term Debt (Textual) | ||||||||
Aggregate principal amount | $ 10,000,000 | |||||||
Amortization expense | $ 3,610,589 | |||||||
Related parties notes, description | Assured Partners LP received revenue of approximately $79 thousand on insurance policies totaling approximately $658 thousand in premiums in 2018. | |||||||
Issuance costs | $ 70,047 | |||||||
Credit agreement, description | In addition to other items, require the Company to maintain (i) minimum liquidity of at least $4 million at all times on or after March 31, 2019, (ii) a maximum total leverage ratio (ratio of total debt borrowed by the Company to EBITDA for the four consecutive fiscal quarters most recently ended, subject to certain adjustments set forth in the Credit Agreement) not to exceed 4.50:1.00 on the last day of the quarter ended September 30, 2019, which total leverage ratio is adjusted for subsequent quarters as set forth in the Credit Agreement and (iii) a maximum debt service coverage ratio (ratio of EBITDA (for the four consecutive fiscal quarters most recently ended, subject to certain adjustments set forth in the Credit Agreement) to interest expense and payments for operating leases) not to exceed 1.25:1.00 on the last day of the quarter ended September 30, 2019, which debt service coverage ratio is adjusted for subsequent quarters as set forth in the Credit Agreement. | |||||||
Interest rate payable | 7.625% | |||||||
Value of warrants | $ (1,527,414) | |||||||
Arosa [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Warrants to purchase of common stock shares | shares | 894,821 | |||||||
Warrants exercise price | $ / shares | $ 1.25 | |||||||
Loss on extinguishment | $ 2,200,000 | |||||||
Related Parties Notes [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Debt due date | December 6, 2018 | |||||||
Aggregate principal amount | $ 550,000 | |||||||
Excess of equity financing | $ 10,000,000 | |||||||
Related parties notes, description | Under no circumstance may the Related Parties Notes be paid off on or prior to the 91st day following the maturity date of the Senior Secured Notes issued by the Company on December 27, 2017. Interest accrued on the Related Parties Notes at the rate of 12.0% per annum. | |||||||
Loan Parties Notes [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Aggregate principal amount | $ 500,000 | |||||||
Senior Secured Notes (Member) | ||||||||
Long-Term Debt (Textual) | ||||||||
Percentage of interest payable | 26.00% | |||||||
Debt due date | July 6, 2018 | |||||||
Aggregate principal amount | $ 5,750,000 | |||||||
Amortization expense | $ 987,500 | |||||||
Consideration of gross proceeds paid by spin-off investors | $ 5,000,000 | |||||||
Note Payable Former Building Owner [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Monthly installments | $ 1,604 | |||||||
Percentage of interest payable | 5.50% | |||||||
Balloon payment | $ 350,000 | |||||||
Debt due date | August 2018 | |||||||
Secured Mortgage Payable [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Number of Commerce Drive Building | Customer | 100 | |||||||
Monthly installments | $ 11,951 | |||||||
Percentage of interest payable | 6.50% | |||||||
Debt due date | November 2026 | |||||||
Loans Payable (Member) | ||||||||
Long-Term Debt (Textual) | ||||||||
Percentage of interest payable | 8.00% | |||||||
Debt due date | July 6, 2019 | |||||||
Gross proceeds | $ 10,000,000 | |||||||
Debt discount | $ 1,687,921 | |||||||
Credit Agreement [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Warrants to purchase of common stock shares | shares | 8,053,390 | |||||||
Warrants exercise price | $ / shares | $ 1.25 | |||||||
Warrants to purchase common stock, description | The Company will be required to issue additional Common Stock Purchase Warrants (the "Additional Warrants") to the Lenders equal to 10%, in the aggregate, of any additional issuance, subject to certain exceptions, on substantially the same terms and conditions of the Initial Warrants, except that (i) the applicable expiration date thereof shall be five years from the issuance date of the applicable warrant, (ii) the initial exercise price shall be a price equal to the price per share of common stock used in the relevant issuance multiplied by 110% and (iii) the holder shall be entitled to exercise the warrant on a cashless exercise at any time the warrant is exercisable. | |||||||
Value of warrants | $ 965,747 | |||||||
Percentage of fee paid equal to loan | 2.00% | |||||||
Credit Agreement [Member] | Tranche 1 [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Debt discount | $ 722,174 | |||||||
Percentage of fee paid equal to loan | 1.00% | |||||||
Credit Agreement [Member] | Tranche 2 [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Value of warrants | $ 69,744 | |||||||
Prepaid asset | $ 1,830,435 | |||||||
Percentage of fee paid equal to loan | 1.00% | |||||||
Credit Agreement [Member] | Loan Parties Notes [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Credit agreement, description | The Company is required to prepay the Loans utilizing 100% of the net proceeds from any casualty event or the issuance or incurrence of debt and 50% of the net proceeds from any disposition. If the Company receives net cash proceeds from the issuance of capital stock after the nine-month anniversary of the closing date, the Company is required to prepay the Loans utilizing 35% of the net cash proceeds from such issuance. With limited exceptions, if the Company prepays any portion of the Tranche One Loans or the Tranche Two Loans (with the concomitant termination of the portion of the commitments under the Tranche Two Loans that is repaid) during the 12 months following the closing date, it is required to pay 100% of the interest that would have been due on such prepaid Loans if the prepaid amounts had been outstanding for a period of 12 months after the date of prepayment. If such prepayment occurs during the period beginning after the 12-month anniversary of the closing date and continuing through the 18-month anniversary of the closing date, the Company is required to pay 50% of the interest that would have been due on such prepaid Loans for the 12-month period following the date of such prepayment on a prorated basis. | |||||||
Loan Agreement [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Percentage of interest payable | 8.00% | |||||||
Aggregate principal amount | $ 6,100,000 | |||||||
Debt maturity date | Jul. 6, 2019 | |||||||
Excess of equity financing | $ 10,000,000 | |||||||
Proceeds from issuance of loan | 20,000,000 | |||||||
Loan payable | $ 350,000 | $ 1,850,000 | ||||||
Warrants to purchase of common stock shares | shares | 5,000,358 | |||||||
Warrants exercise price | $ / shares | $ 2 | $ 1.60 | $ 1.21 | |||||
Warrants to purchase common stock, description | The Arosa Loan remains outstanding, the Company will be required to issue additional warrants to purchase common stock to Arosa equal to 10% of any additional issuance excluding issuances under an approved stock plan. The additional warrants to purchase common stock have an exercise price equal to the lesser of $2.00 or a 5% premium to the price utilized in such financing. Pursuant to the warrant, Arosa may not exercise such warrant if such exercise would result in Arosa beneficially owning in excess of 9.99% of the Company’s then issued and outstanding common stock. | |||||||
Loan additional amount | $ 1,700,000 | |||||||
Warrants issued | shares | 108,768 | 1,143,200 | ||||||
Credit agreement, description | The Credit Agreement provided the Company with a $10 million tranche of term loans (the "Tranche One Loans") which may not be re-borrowed following repayment and (ii) a $25 million tranche of term loans which may be re-borrowed following repayment (the "Tranche Two Loans" together with the Tranche One Loans, the "Loans"). The Company used the proceeds for the Tranche One Loans (x) to pay off a loan provided by Arosa in the principal amount of $7.8 million plus interest and (y) for working capital purposes. Draws from the Tranche Two Loans will be used in connection with vehicle production and are subject to the Company's receipt of purchase orders. | |||||||
Warrants to purchase common stock, terms | 5 years | |||||||
Loan Agreement [Member] | Arosa [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Value of warrants | $ 3,540,542 | |||||||
June 30, 2020 [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Loan payable | $ 500,000 | |||||||
December 31, 2020 [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Loan payable | 500,000 | |||||||
June 30, 2021 [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Loan payable | $ 500,000 | |||||||
January 5, 2019 [Member] | ||||||||
Long-Term Debt (Textual) | ||||||||
Excess of equity financing | $ 10,000,000 | |||||||
Interest rate, percentage | 12.00% |
Duke Financing Obligation (Deta
Duke Financing Obligation (Details) | 11 Months Ended | ||
Nov. 28, 2018USD ($)Customer$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Duke Financing Obligation (Textual) | |||
Duke financing obligation | $ 1,340,700 | ||
Arosa [Member] | |||
Duke Financing Obligation (Textual) | |||
Stock warrants exercised | shares | 2,000,000 | ||
Exercise price | $ / shares | $ 1.25 | ||
Sales Agreement [Member] | |||
Duke Financing Obligation (Textual) | |||
Sales of battery cells units | Customer | 615,000 | ||
Sales consideration | $ 1,340,700 | ||
Sales description | Until May 1, 2019, the Company has the right and option to require Duke to sell the 615,000 Cells back to the Company and Duke has the right and option to require the Company to purchase the 615,000 Cells at price equal to the price the 615,000 Cells were sold. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | ||
Current State & Local | ||
Total Current | ||
Deferred Federal | ||
Deferred State & Local | ||
Total Deferred | ||
Total |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal tax benefit at statutory rates | 21.00% | 35.00% |
State and local tax at statutory rate | 0.80% | 0.60% |
Mark-to-Market Adjustment on Stock Warrants | 1.50% | 0.00% |
Other permanent differences and credits | 0.00% | (0.10%) |
Change in valuation allowance | (23.30%) | (35.50%) |
Total tax expense | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||
Accrued Expenses & Reserves | $ 850,857 | $ 308,116 |
Warranty Allowance | 1,539,765 | 31,097 |
Non-Qualified Stock Options | 1,034,261 | 796,999 |
Fixed Assets | 183,917 | 170,072 |
Disallowed Interest Expense | 1,118,212 | |
Net Operating Losses | 24,818,785 | 19,729,451 |
Total Deferred Tax Assets | 29,545,797 | 21,035,735 |
Valuation Allowance | (29,545,797) | (21,035,735) |
Total Deferred Tax Assets, net of valuation allowance |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits - January 1 | $ 1,163,282 | $ 1,163,182 |
Gross increases - tax positions in prior period | ||
Gross decreases - tax positions in prior period | ||
Gross increases - tax positions in current period | 100 | |
Settlement | ||
Lapse of statute of limitations | ||
Unrecognized tax benefits - December 31 | $ 1,163,282 | $ 1,163,282 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation allowance | $ 13,500,000 | $ 8,500,000 | $ 8,600,000 |
Operating loss (NOL) carry-forwards | 23,500,000 | ||
U.S. federal corporate tax rate, description | This legislation makes significant change in U.S. tax law including a reduction in the corporate tax rates to 21% starting in 2018. The legislation reduced the U.S. corporate tax rate from the current rate of 35% to 21% for tax years beginning after December 31, 2017. As a result of the enacted law, the Company was required to revalue deferred tax assets and liabilities existing as of December 31, 2017 from the 35% federal rate in effect through the end of 2017, to the new 21% rate. | ||
Federal [Member] | |||
Operating loss (NOL) carry-forwards | $ 90,600,000 | 90,600,000 | |
Net operating losses expiration date | Dec. 31, 2037 | ||
State and Local [Member] | |||
Operating loss (NOL) carry-forwards | $ 900,000 | $ 700,000 | |
Net operating losses expiration date | Dec. 31, 2037 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock Options [Member] - Directors, officers consultants and employees [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options Available for Grant | ||
Options Available for Grant, Outstanding, Beginning Balance | 4,145,774 | 1,045,774 |
Options Available for Grant, Additional stock reserved | 5,000,000 | |
Options Available for Grant, Granted | (340,000) | (1,900,000) |
Options Available for Grant, Exercised | ||
Options Available for Grant, Forfeited | ||
Options Available for Grant, Expired | ||
Options Available for Grant, Outstanding, Ending Balance | 3,805,774 | 4,145,774 |
Number of Options | ||
Number of Options, Outstanding, Beginning Balance | 3,851,371 | 2,321,782 |
Number of Options, Outstanding, Additional stock reserved | ||
Number of Options, Granted | 340,000 | 1,900,000 |
Number of Options, Exercised | (52,500) | (74,109) |
Number of Options, Forfeited | (296,302) | |
Number of Options, Expired | (271,250) | |
Number of Options, Outstanding, Ending Balance | 3,867,621 | 3,851,371 |
Weighted Average Exercise Price per Option | ||
Weighted Average Exercise Price per Option, Outstanding, Beginning Balance | $ 3.11 | $ 2.31 |
Weighted Average Exercise Price per Option, Additional stock reserved | ||
Weighted Average Exercise Price per Option, Granted | 1.18 | 5.01 |
Weighted Average Exercise Price per Option, Exercised | 1.24 | 1.13 |
Weighted Average Exercise Price per Option, Forfeited | ||
Weighted Average Exercise Price per Option, Expired | 3.22 | |
Weighted Average Exercise Price per Option, Outstanding, Ending Balance | 4.05 | 3.11 |
Weighted Average Grant Date Fair Value per Option | ||
Weighted Average Grant Date Fair Value per Option, Outstanding, Beginning Balance | 1.84 | 1.49 |
Weighted Average Grant Date Fair Value per Option, Additional stock reserved | ||
Weighted Average Grant Date Fair Value per Option, Granted | 0.54 | 3.41 |
Weighted Average Grant Date Fair Value per Option, Exercised | 0.68 | 0.95 |
Weighted Average Grant Date Fair Value per Option, Forfeited | ||
Weighted Average Grant Date Fair Value per Option, Expired | 1.58 | |
Weighted Average Grant Date Fair Value per Option, Outstanding, Ending Balance | $ 1.84 | $ 1.84 |
Weighted Average Remaining Exercise Term in Months | ||
Weighted Average Remaining Exercise Term in Months, Outstanding, Beginning Balance | 43 months | 43 months |
Weighted Average Remaining Exercise Term in Months, Granted | 56 months | 72 months |
Weighted Average Remaining Exercise Term in Months, Outstanding, Ending Balance | 64 months | 43 months |
Stock Based Compensation (Det_2
Stock Based Compensation (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Based Compensation (Textual) | ||
Stock based compensation | $ 1,105,716 | $ 1,433,192 |
Warrant [Member] | ||
Stock Based Compensation (Textual) | ||
Exercise price | $ 5.28 | |
Warrants outstanding | $ 2,618,307 | |
Warrants term | 5 years | |
Stock option [Member] | ||
Stock Based Compensation (Textual) | ||
Options authorized | 5,000,000 | |
Stock Options [Member] | Directors, officers consultants and employees [Member] | ||
Stock Based Compensation (Textual) | ||
Stock based compensation | $ 1,100,000 | $ 1,400,000 |
Unrecognized compensation expense | $ 2,400,000 | |
Recognized period for non-vested warrants granted to consultants anticipated | 60 months |
Stock Offerings (Details)
Stock Offerings (Details) - USD ($) | Aug. 09, 2018 | Jun. 04, 2018 | Sep. 14, 2017 | Jun. 22, 2017 | Feb. 01, 2017 | Apr. 26, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 |
Stock Offerings (Textual) | |||||||||
Shares of common stock public offering | 6,500,000 | ||||||||
Common stock of offering value | $ 16,120,312 | $ 37,042,468 | |||||||
Public offering price per share | $ 3 | ||||||||
Purchase of common stock, shares | 975,000 | ||||||||
Gross of proceeds from issuance of initial public offering | $ 22,400,000 | ||||||||
Net of proceeds from issuance of initial public offering | $ 20,500,000 | ||||||||
Aggregate common stock in exchange for warrants | 1,968,736 | ||||||||
Deemed dividend | $ 765,179 | ||||||||
Cowen Agreement [Member] | |||||||||
Stock Offerings (Textual) | |||||||||
Common stock of offering value | $ 25,000,000 | ||||||||
Issuance shares of facility, shares | 2,855,404 | ||||||||
Issuance shares of facility | $ 7,200,000 | ||||||||
Subscription Agreements [Member] | |||||||||
Stock Offerings (Textual) | |||||||||
Purchase of common stock, shares | 531,066 | ||||||||
Common stock purchase price | $ 1,400,000 | ||||||||
Common stock price per share | $ 2.72 | ||||||||
Underwriting Agreement [Member] | |||||||||
Stock Offerings (Textual) | |||||||||
Shares of common stock public offering | 9,000,000 | 3,749,996 | |||||||
Common stock of offering value | $ 10,400,000 | ||||||||
Purchase of common stock, shares | 2,812,497 | 3,749,996 | |||||||
Net of proceeds from issuance of initial public offering | $ 10,900,000 | ||||||||
Underwriting commitments, description | Pursuant to the Underwriting Agreement, the Company granted the Underwriter a 45-day option to purchase from the Company up to an additional 1,350,000 shares of Common Stock at the offering price to cover over allotments, if any. On August 14, 2018, the Underwriter exercised its over-allotment option and acquired an additional 1,288,800 shares of Common Stock at a price per share of $1.15 for aggregate gross proceeds of $1.4 million. | Each investor received a warrant to purchase 0.75 shares of the Company’s common stock at an exercise price of $3.80 per share, for each share of common stock. | |||||||
Warrants expiration term | 5 years | ||||||||
Warrants exercise price per share | $ 3.20 | ||||||||
Common stock price per share | $ 1.15 | $ 3.20 | |||||||
Minimum [Member] | |||||||||
Stock Offerings (Textual) | |||||||||
Strike price of warrants | $ 2.62 | ||||||||
Maximum [Member] | |||||||||
Stock Offerings (Textual) | |||||||||
Strike price of warrants | $ 3.80 |
Related Parties (Details)
Related Parties (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Related Parties (Textual) | |
Related party transaction, description | Assured Partners LP received revenue of approximately $79 thousand on insurance policies totaling approximately $658 thousand in premiums in 2018. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Feb. 11, 2019USD ($)$ / sharesshares |
Subsequent Events (Textual) | |
Common stock purchased | 1,499,684 |
Purchase price | $ | $ 1,365,000 |
Purchase price per share | $ / shares | $ 0.9501 |
Benjamin Samuels [Member] | |
Subsequent Events (Textual) | |
Common stock acquired | 841,928 |
Gerald Budde [Member] | |
Subsequent Events (Textual) | |
Common stock acquired | 26,310 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gross Loss | $ (15,190,392) | $ (14,478,403) | ||||||||
Net Loss | $ (36,502,316) | $ (41,216,788) | ||||||||
Quarterly Financial Data [Member] | ||||||||||
Sales | $ 21,263 | $ 10,997 | $ 170,684 | $ 560,229 | $ 5,150,423 | $ 3,066,000 | $ 252,000 | $ 1,570,037 | ||
Gross Loss | (11,085,205) | (1,465,825) | (1,485,221) | (1,154,141) | (6,500,345) | (4,492,082) | (743,925) | (2,742,051) | ||
Net Loss | $ (17,689,660) | $ (5,485,553) | $ (6,909,297) | $ (6,417,806) | $ (11,705,394) | $ (12,412,088) | $ (9,178,700) | $ (7,920,606) | ||
Basic and diluted loss per share | $ (0.28) | $ (0.12) | $ (0.18) | $ (0.16) | $ (0.32) | $ (0.35) | $ (0.26) | $ (0.24) |