Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 12, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-54286 | |
Entity Registrant Name | CEA INDUSTRIES INC. | |
Entity Central Index Key | 0001482541 | |
Entity Tax Identification Number | 27-3911608 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 385 South Pierce Avenue | |
Entity Address, Address Line Two | Suite C | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80027 | |
City Area Code | (303) | |
Local Phone Number | 993-5271 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,784,444 | |
Common Stock, $0.00001 Par Value [Member] | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | CEAD | |
Security Exchange Name | NASDAQ | |
Warrants to Purchase Common Stock [Member] | ||
Title of 12(b) Security | Warrants to purchase common stock | |
Trading Symbol | CEADW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 22,033,664 | $ 2,159,608 |
Accounts receivable (net of allowance for doubtful accounts of $159,744 and $181,942, respectively) | 191,002 | 179,444 |
Other receivables | 50,762 | |
Inventory, net | 1,005,918 | 378,326 |
Prepaid expenses and other | 1,774,219 | 1,273,720 |
Total Current Assets | 25,055,565 | 3,991,098 |
Noncurrent Assets | ||
Property and equipment, net | 77,239 | 77,346 |
Goodwill | 631,064 | 631,064 |
Intangible assets, net | 1,830 | 1,830 |
Deposits | 14,747 | 14,747 |
Operating lease right-of-use asset | 540,444 | 565,877 |
Total Noncurrent Assets | 1,265,324 | 1,290,864 |
TOTAL ASSETS | 26,320,889 | 5,281,962 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,389,028 | 1,345,589 |
Deferred revenue | 5,485,416 | 2,839,838 |
Accrued equity compensation | 83,625 | 83,625 |
Other liabilities | 37,078 | 37,078 |
Current portion of operating lease liability | 112,072 | 100,139 |
Total Current Liabilities | 7,107,219 | 4,406,269 |
NONCURRENT LIABILITIES | ||
Operating lease liability, net of current portion | 459,482 | 486,226 |
Total Noncurrent Liabilities | 459,482 | 486,226 |
TOTAL LIABILITIES | 7,566,701 | 4,892,495 |
Commitments and Contingencies (Note 7) | ||
TEMPORARY EQUITY | ||
Series B Redeemable Convertible Preferred Stock, $0.00001 par value; 0 and 3,300 issued and outstanding, respectively | 3,960,000 | |
Total Temporary Equity | 3,960,000 | |
SHAREHOLDERS’ EQUITY (DEFICIT) | ||
Preferred stock; 25,000,000 and 150,000,000 shares authorized, respectively | ||
Common stock, $0.00001 par value; 200,000,000 and 850,000,000 shares authorized, respectively; 7,784,444 and 1,600,835 shares issued and outstanding, respectively | 78 | 16 |
Additional paid in capital | 48,958,618 | 25,211,017 |
Accumulated deficit | (30,204,508) | (28,781,566) |
Total Shareholders’ Equity (Deficit) | 18,754,188 | (3,570,533) |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ 26,320,889 | $ 5,281,962 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, net | $ 159,744 | $ 181,942 |
Temporary equity, par value | $ 0.00001 | $ 0.00001 |
Temporary equity, shares issued | 0 | 3,300 |
Temporary equity, shares outstanding | 0 | 3,300 |
Preferred stock, shares authorized | 25,000,000 | 150,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 200,000,000 | 850,000,000 |
Common stock, shares issued | 7,784,444 | 1,600,835 |
Common stock, shares outstanding | 7,784,444 | 1,600,835 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue, net | $ 1,744,427 | $ 2,366,529 |
Cost of revenue | 1,653,919 | 2,021,923 |
Gross profit | 90,508 | 344,606 |
Operating expenses: | ||
Advertising and marketing expenses | 251,015 | 177,145 |
Product development costs | 138,918 | 112,638 |
Selling, general and administrative expenses | 1,311,777 | 740,473 |
Total operating expenses | 1,701,710 | 1,030,256 |
Operating loss | (1,611,202) | (685,650) |
Other income (expense): | ||
Other income (expense), net | 185,000 | (107,000) |
Interest income (expense),net | 3,260 | (718) |
Total other income (expense) | 188,260 | (107,718) |
Loss before provision for income taxes | (1,422,942) | (793,368) |
Income taxes | ||
Net loss | (1,422,942) | (793,368) |
Convertible preferred series B stock dividends | (35,984) | |
Deemed dividend on convertible preferred series B stock on down round | (439,999) | |
Net Loss Available to Common Shareholders | $ (1,898,925) | $ (793,368) |
Loss per common share – basic and dilutive | $ (0.41) | $ (0.50) |
Weighted average number of common shares outstanding, basic and dilutive | 4,622,427 | 1,576,844 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholder's Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock [Member]Series A Preferred Stock [Member] | Common Stock [Member] | Common Shares To Be Issued [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2020 | $ 420 | $ 16 | $ 26,107,159 | $ (27,443,643) | $ (1,336,048) | |
Balance, shares at Dec. 31, 2020 | 42,030,331 | 1,576,844 | ||||
Fair value of vested stock options granted to employees | 128,434 | 128,434 | ||||
Fair value of vested stock options granted to directors | 6,342 | 6,342 | ||||
Net loss | (793,368) | (793,368) | ||||
Common shares to be issued in settlement of legal dispute | $ 67,000 | 67,000 | ||||
Common shares to be issued in settlement of legal dispute, shares | 6,667 | |||||
Balance at Mar. 31, 2021 | $ 420 | $ 16 | $ 67,000 | 26,241,935 | (28,237,011) | (1,927,640) |
Balance, shares at Mar. 31, 2021 | 42,030,331 | 1,576,844 | 6,667 | |||
Balance at Dec. 31, 2021 | $ 16 | 25,211,017 | (28,781,566) | (3,570,533) | ||
Balance, shares at Dec. 31, 2021 | 1,600,835 | |||||
Fair value of vested stock options granted to employees | 32,938 | 32,938 | ||||
Fair value of vested stock options granted to directors | 29,656 | 29,656 | ||||
Common shares issued in settlement of restricted stock units issued to directors | $ 0 | 24,994 | 24,994 | |||
Common shares issued in settlement of restricted stock units issued to directors, shares | 3,367 | |||||
Fair value of restricted stock units issued to directors | 4,928 | 4,928 | ||||
Issuance of common shares to round up partial shares following reverse split | $ 0 | 0 | 0 | |||
Issuance of common shares to round up partial shares following reverse split, shares | 6,798 | |||||
Common shares and warrants issued for cash | $ 58 | 21,711,073 | 21,711,131 | |||
Common shares and warrants issued for cash, shares | 5,811,138 | |||||
Common shares and warrants issued on conversion of series B preferred stock | $ 4 | 1,979,996 | 1,980,000 | |||
Common shares and warrants issued on conversion of series B preferred stock, shares | 362,306 | |||||
Dividends on series B preferred stock | (35,984) | (35,984) | ||||
Net loss | (1,422,942) | (1,422,942) | ||||
Balance at Mar. 31, 2022 | $ 78 | $ 48,958,618 | $ (30,204,508) | $ 18,754,188 | ||
Balance, shares at Mar. 31, 2022 | 7,784,444 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (1,422,942) | $ (793,368) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and intangible asset amortization expense | 8,556 | 18,377 |
Share-based compensation | 92,517 | 6,342 |
Common stock issued for other expense | 67,000 | |
Provision for doubtful accounts | (22,168) | |
Provision for excess and obsolete inventory | 3,676 | (4,371) |
Loss on disposal of assets | 5,499 | |
Amortization of ROU asset | 25,433 | 49,051 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10,610 | 6,748 |
Inventory | (631,269) | (187,679) |
Prepaid expenses and other | (551,261) | (1,026,765) |
Accounts payable and accrued liabilities | 43,438 | 5,354 |
Deferred revenue | 2,645,579 | 2,362,905 |
Accrued interest | 718 | |
Lease deposit | (8,061) | |
Operating lease liability, net | (14,811) | (64,672) |
Accrued equity compensation | 52,794 | |
Net cash (used in)/provided by operating activities | 192,857 | 484,373 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (13,948) | (12,326) |
Net cash used in investing activities | (13,948) | (12,326) |
Cash Flows From Financing Activities | ||
Payment of dividends on series B preferred stock | (35,984) | |
Redemption of series B preferred stock | (1,980,000) | |
Cash proceeds on sale of common stock and warrants, net of expenses | 21,711,131 | |
Proceeds from issuance of note payable | 514,200 | |
Net cash provided by financing activities | 19,695,147 | 514,200 |
Net change in cash and cash equivalents | 19,874,056 | 986,247 |
Cash and cash equivalents, beginning of period | 2,159,608 | 2,284,881 |
Cash and cash equivalents, end of period | 22,033,664 | 3,271,128 |
Supplemental cash flow information: | ||
Interest paid | ||
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Conversion of series B preferred stock | 1,980,000 | |
Deemed dividend on series B preferred stock arising on down round | $ 439,999 |
General
General | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
General | Note 1 – General Description of Business CEA Industries Inc., formerly Surna Inc. (the “Company”), was incorporated in Nevada on October 15, 2009. We design, engineer and sell environmental control and other technologies for the Controlled Environment Agriculture (“CEA”) industry. The CEA industry is one of the fastest-growing sectors of the United States’ economy. From leafy greens (kale, Swiss chard, mustard, cress), microgreens (leafy greens harvested at the first true leaf stage), ethnic vegetables, ornamentals, and small fruits (such as strawberries, blackberries and raspberries) to bell peppers, cucumbers, tomatoes and cannabis and hemp, some producers grow crops indoors in response to market dynamics or as part of their preferred farming practice. In service of the CEA industry, our principal technologies include: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) LED lighting, benching and racking solutions for indoor cultivation, (v) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (vi) preventive maintenance services for CEA facilities Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada as well as other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities ranging from several thousand to more than 100,000 square feet. Headquartered in Louisville, Colorado, we leverage our experience in this space to bring value-added climate control solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. Although our customers do, we neither produce nor sell cannabis or its related products. Impact of the COVID-19 Pandemic on Our Business The impact of the government and the business economic response to the COVID-19 pandemic has affected demand across the majority of our markets and disrupted work on projects. The COVID-19 pandemic is expected to have continued adverse effects on our sales, project implementation, supply chain infrastructure, operating margins, and working capital. The resulting effects and uncertainties from the COVID-19 pandemic, including the depth and duration of the disruptions to customers and suppliers, its future effect on our business, on our results of operations, and on our financial condition, cannot be predicted. We expect that the economic disruptions will continue to have an effect on our business over the longer term. Despite this uncertainty, we continue to monitor costs and continue to take actions to reduce costs in order to mitigate the impact of the COVID-19 pandemic to the best of our ability. However, these actions may not be sufficient in the long run to avoid reduced sales, increased losses and reduced operating cash flows in our business. During the three months ended March 31, 2022, the Company experienced significant delays in the receipt of equipment it had ordered to meet its customer orders due to disruption and delays in its supply chain arising from the long-term effects of the COVID-19 pandemic. Consequently, our revenue recognition of these customer sales has been delayed until future periods when the shipment of these orders can be completed. Financial Statement Presentation The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are available to be issued. The Company continues to experience recurring losses since its inception. As a result, in order to continue as a going concern, the Company has been reliant on the ability to obtain additional sources of financing to fund growth. As indicated in Note 9 – Shareholders Equity (Deficit) below, on February 15, 2022, the Company received approximately $ 22,000,000 Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2021. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiaries, Hydro Innovations, LLC (“Hydro”) and Surna Cultivation Technologies LLC (“SCT”). Intercompany transactions, profit, and balances are eliminated in consolidation. Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022 As a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding as of December 31, 2021, was reduced from 240,125,224 1,600,835 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies. Cash, Cash Equivalents and Restricted Cash All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount of $ 250,000 22,034,000 21,784,000 Income (Loss) Per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in cases where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. During the three months ended March 31, 2022 and 2021, there were warrants and options outstanding to purchase Company common stock and shares of convertible preferred stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three-month period ended March 31, 2022, the Company incurred a net loss and consequently the common share equivalents of these potentially dilutive equity instruments have not been included in the calculations of loss per share because such inclusion would have been anti-dilutive. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) As of March 31, 2022, and 2021, there were respectively, 8,021,057 201,662 Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the three months ended March 31, 2022, the Company concluded that the projected impact of the COVID-19 pandemic on its sales, contract completion and revenues in the near term, together with the volatility in its share price during the quarter represented potential indicators of impairment. Accordingly, the Company performed an interim impairment analysis at March 31, 2022 and concluded that no impairment relating to goodwill existed at March 31, 2022. Temporary Equity Shares of preferred stock that are redeemable for cash or other assets are classified as temporary equity if they are redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, net of issuance costs, which is subsequently adjusted to redemption value (including the amount for dividends earned but not yet declared or paid) at each balance sheet date if the instrument is currently redeemable or if it is probable that the instrument will become redeemable. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source 2022 2021 For the Three Months Ended March 31, 2022 2021 Equipment and systems sales $ 1,642,572 $ 2,163,468 Engineering and other services 86,049 181,083 Shipping and handling 15,806 21,978 Total revenue $ 1,744,427 $ 2,366,529 Revenue Recognition Accounting Policy Summary The Company accounts for revenue in accordance with ASC 606. Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. The Company does not provide construction services or system installation services. Some of the Company’s contracts with customers contain a single performance obligation, typically engineering only services contracts. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and components and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each promise is fulfilled. Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as services are rendered or completed in exchange for consideration in an amount for which the Company expects to be entitled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Other Judgments and Assumptions The Company typically receives customer payments in advance of its performance of services or transfers of goods. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. Contract Assets and Contract Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company Contract assets include unbilled amounts where revenue recognized exceeds the amount billed to the customer and the right of payment is conditional, subject to completing a milestone, such as a phase of a project. The Company typically does not have material amounts of contract assets since revenue is recognized as control of goods are transferred or as services are performed. As of March 31, 2022, and 2021, the Company had no contract assets. Contract liabilities consist of advance payments in excess of revenue recognized. The Company’s contract liabilities are recorded as a current liability in deferred revenue in the consolidated balance sheets since the timing of when the Company expects to recognize revenue is generally less than one year. As of March 31, 2022, and December 31, 2021, deferred revenue, which was classified as a current liability, was $ 5,485,416 2,839,838 For the three months ended March 31, 2022, the Company recognized revenue of $ 1,162,374 1,880,634 Remaining Performance Obligations Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Further, based on the current economic climate, the uncertainty regarding the COVID-19 virus, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfill its backlog, and the Company may experience contract cancellations, project scope reductions and project delays. As of March 31, 2022, the Company’s remaining performance obligations, or backlog, was $ 11,179,000 There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at March 31, 2022, includes booked sales orders of $ 2,217,000 from several customers that the Company does not expect to be realized until 2023, if at all. Given the present economic uncertainty arising from the impact of the novel coronavirus COVID-19, the Company believes that several of its current contracts may be delayed or canceled. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) The remaining performance obligations expected to be recognized through 2023 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2022 2023 Total Remaining performance obligations related to engineering only paid contracts $ - $ - $ - Remaining performance obligations related to partial equipment paid contracts 8,962,000 2,217,000 11,179,000 Total remaining performance obligations $ 8,962,000 $ 2,217,000 $ 11,179,000 Product Warranty The Company warrants the products that it manufactures for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. The Company’s warranty provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within stated specification. The Company’s third-party suppliers also warrant their products under similar terms, which are passed through to the Company’s customers. The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue. The Company continues to assess the need to record a warranty reserve at the time of sale based on historical claims and other factors. As of March 31, 2022, and December 31, 2021, the Company had an accrued warranty reserve amount of $ 187,702 186,605 Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its condensed consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the “Black-Scholes Model”). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. During the three months ended March 31, 2022, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility ranged from 158.21 158.70 1.52 1.98 The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021: Schedule of Share-based Compensation Costs 2022 2021 For the Three Months Ended March 31, 2022 2021 Share-based compensation expense included in: Cost of revenue $ 791 $ 14,135 Advertising and marketing expenses 2,762 6,474 Product development costs - 6,694 Selling, general and administrative expenses 88,964 31,833 Total share-based compensation expense included in consolidated statement of operations $ 92,517 $ 59,136 Included in the expense for the three months ended March 31, 2021, is an accrual for $ 52,794 Concentrations One customer accounted for 35 38 16 11 Three customers accounted for 44 19 16 60 31 Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires companies to apply ASC 606, “Revenue from Contracts with Customers” to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. This creates an exception to the general recognition and measurement principle in ASC 805, which uses fair value. The guidance is effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted, and the guidance should be applied prospectively. The impact of the standard on Company’s consolidated financial statements is dependent on the size and frequency of any future acquisitions the Company may complete. In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Leases | Note 2 – Leases In February 2016 the FASB issued ASU 2016-02, Leases (Topic 842) The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the “package of practical expedients” which allow the Company to not reassess: (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new lease standard. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) On July 28, 2021, the Company entered into an agreement to lease 11,491 The New Facility Lease commenced on November 1, 2021 and continues through January 31, 2027 10,055 3 14,747 Upon commencement of the New Facility Lease, the Company recognized on the balance sheet an operating lease right-of-use asset and lease liability in the amount of $ 582,838 The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost As of March 31, 2022 Operating lease right-of-use asset $ 540,444 Operating lease liability, current $ 112,072 Operating lease liability, long-term $ 459,482 Remaining lease term 4.8 Discount rate 3.63 % For the Three Months Ended March 31, 2022 Operating cash outflow from operating lease $ 20,109 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Future annual minimum lease payments on the Facility Lease as of March 31, 2022 are as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2022 (excluding the three months ended March 31, 2022) $ 91,095 2023 124,897 2024 128,643 2025 132,503 2026 136,473 Thereafter 11,654 Total minimum lease payments 625,265 Less imputed interest (53,710 ) Present value of minimum lease payments $ 571,555 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 – Inventory Inventory consisted of the following: Schedule of Inventory March 31, December 31, 2022 2021 Finished goods $ 913,887 $ 272,199 Work in progress 971 1,050 Raw materials 186,115 196,456 Allowance for excess & obsolete inventory (95,055 ) (91,379 ) Inventory, net $ 1,005,918 $ 378,326 Overhead expenses of $ 16,555 13,589 The inventory balance at March 31, 2022 includes $ 692,195 Advance payments on inventory purchases are recorded in prepaid expenses until title for such inventory passes to the Company. Prepaid expenses included approximately $ 1,579,000 1,069,000 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment March 31, December 31, 2022 2021 Furniture and equipment $ 271,056 $ 274,472 Vehicles 15,000 15,000 Leasehold improvements - - Property and equipment, gross 286,056 289,472 Accumulated depreciation (208,817 ) (212,126 ) Property and equipment, net $ 77,239 $ 77,346 Depreciation expense was $ 8,556 1,214 304 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 5 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities March 31, December 31, 2022 2021 Accounts payable $ 729,040 $ 616,056 Sales commissions payable 9,107 27,592 Accrued payroll liabilities 266,456 322,873 Product warranty accrual 187,702 186,605 Other accrued expenses 196,723 192,463 Total $ 1,389,028 $ 1,345,589 |
Note Payable and Accrued Intere
Note Payable and Accrued Interest | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Note Payable and Accrued Interest | Note 6 – Note Payable and Accrued Interest On February 10, 2021, the Company entered into a note payable with its current bank in the principal amount of $ 514,200 The loan amount bears interest at 1 February 5, 2026 On November 30, 2021, the Company received notice from the bank that its loan received on February 10, 2021, in the principal amount of $ 514,200 and all accrued interest of $ 2,832 , was fully forgiven. This gain on loan forgiveness was recorded as Other Income in the Statement of Operations during the year ended December 31, 2021. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies Litigation The Company settled a litigation with a former employee effective March 30, 2021, which included the issuance of 6,667 107,000 6,667 67,000 From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred and the amount of the loss is known. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. Leases The Company has a lease agreement for its manufacturing and office space. Refer to Note 2 Leases Other Commitments In the ordinary course of business, the Company enters into commitments to purchase inventory and may also provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances. |
Temporary Equity
Temporary Equity | 3 Months Ended |
Mar. 31, 2022 | |
Temporary Equity | |
Temporary Equity | Note 8 – Temporary Equity On September 28, 2021, the Company sold to an institutional investor (the “Investor”), 3,300 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”), stated value $ 1,000 per share, convertible into 3,000,000 1,260,000 1,365,000 The Series B Preferred Stock had an annual dividend of 8 8.55 The Series B Preferred Stock was mandatorily convertible on the third anniversary of its issuance. All conversions of the Series B Preferred Stock were subject to a blocker provision of 4.99 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Probability of Redemption: As it was considered probable the Series B Preferred stock would become redeemable outside of the Company’s control, the Series B Preferred stock was disclosed as temporary equity and was initially adjusted as of September 30, 2021 to its redemption value of 120 % of the stated value of $ 1,000 per share, or $ 3,960,000 . As a result, the Company recorded a $ 2,262,847 non-cash redemption value adjustment during 2021. This redemption value adjustment is treated as similar to a dividend on the preferred stock for GAAP purposes; accordingly, the redemption value adjustment is therefore added to the “Net Loss” to arrive at “Net Loss Attributable to Common Shareholders ” On February 16, 2022, the Company redeemed 1,650 shares of its Series B Preferred Stock for payment of $ 2.016 million in cash, which included both principal and accrued dividends of approximately $ 36,000 On February 16, 2022, the remaining 1,650 shares of the Company’s Series B Preferred Stock were converted into 362,306 shares of common stock and 703,069 warrants; 170,382 of the warrants vested immediately, have an indefinite term and an exercise price of $ 0.01 (“pre-funded conversion warrants”), the balance of 532,688 warrants also vested immediately, have a term of 5 years and have an exercise price of $ 5.00 . The initial common stock conversion price for the shares of Series B Preferred Stock was $ 8.55 . However, the terms of the Series B preferred stock were such that the stock conversion price was to be reduced to 75% of the offering price in any subsequent qualified public offering of Company equity instruments, if lower than the common stock conversion price of $ 8.55 . The Company’s public offering that closed on February 15, 2022, was completed at an offering price of $ 4.13 . Accordingly, the initial common stock conversion price for the shares of Series B Preferred Stock was reduced from $ 8.55 to $ 3.0975 , representing 75% of the offering price of $ 4.13 . As a result, the Company recognized a deemed dividend of $ 439,999 to Series B Shareholders in respect of the additional shares of common stock and warrants they received on the conversion of their shares of Series B Preferred stock. As the Company does not have a balance of retained earnings, the deemed dividend was recorded against additional paid-in capital. The Company has no remaining Preferred Shares outstanding as of March 31, 2022. |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity (Deficit) | Note 9 – Stockholders’ Equity (Deficit) Directors Remuneration On January 3, 2022, the Company issued 3,125 4.80 five years On January 17, 2022, the Company issued an RSU grant of 3,367 1,684 1,683 1,684 Revised Compensation Plan On January 17, 2022, the Board of Directors revised the previously adopted compensation plan. This plan supersedes the plan adopted on August 20, 2021. The Plan is effective retroactively for the current independent directors and for independent directors elected or appointed after the Effective Date. 3,367 Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. The reverse stock split was implemented effective January 27, 2022. The par value for the Common Stock was not affected. As a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding at December 31, 2021 was reduced from 240,125,244 1,600,835 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Change in Authorized Share Capital In connection with the aforementioned reverse stock split, the Company’s Board of Directors approved the reduction of the authorized capital of the Company to 200,000,000 25,000,000 Equity Raise On February 10, 2022, the Company signed a firm commitment underwriting agreement for the public offering of shares of common stock and warrants, which closed on February 15, 2022. The Company received net proceeds of approximately $ 22 5,811,138 6,572,808 five years 5.00 290,557 5.1625 February 10, 2027 As of March 31, 2022, the Company had 200,000,000 .00001 7,784,444 No |
Equity Incentive Plans
Equity Incentive Plans | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Incentive Plans | Note 10 – Equity Incentive Plans 2017 Equity Incentive Plan Under the Company’s 2017 Equity Incentive Plan, as may be modified and amended by the Company from time to time (the “2017 Equity Plan”), the Board of Directors (the “Board”) (or the compensation committee of the Board, if one is established) may award stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock unit awards (“RSUs”), shares granted as a bonus or in lieu of another award, and other stock-based performance awards. The 2017 Equity Plan allocates 333,333 During the three months ended March 31, 2022, no shares or options were issued and 13,333 As of March 31,2022, of the 333,333 163,692 148,905 20,736 2021 Equity Incentive Plan On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which was approved by the stockholders on July 22, 2021. The 2021 Equity Plan permits the Board to grant awards of up to 666,667 i.e. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) During the three months ended March 31, 2022, the Company issued 3,367 During the three months ended March 31, 2022, the Company granted awards for 21,167 During the three months ended March 31, 2022, the Company granted awards for 6,250 As of March 31,2022, of the 666,667 10,170 33,408 40,816 3,367 578,906 There was $ 222,707 3 Non-Qualified and Incentive Stock Options A summary of the non-qualified stock options and incentive stock options granted to employees and consultants under the 2017 and 2021 Equity Plans during the three months ended March 31, 2022, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2021 158,174 $ 10.99 7.6 $ Granted 21,167 $ 3.55 9.8 $ 4,650 Exercised - $ - - $ - Forfeited (13,333 ) $ 9.15 0.0 $ - Expired - $ - - $ - Outstanding, March 31, 2022 166,007 $ 10.18 8.2 $ 4,650 Exercisable, March 31, 2022 118,828 $ 11.89 7.6 $ 610 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) During the three months ended March 31, 2022, we issued a total of 21,167 ● 6,167 three years 10 4.80 6.90 ● 15,000 The options vest as follows: 2,000 vested immediately, 3,000 on March 11, 2023, 5,000 on March 11, 2024, and 5,000 on March 11, 2025 10 2.20 ● During the three months ended March 31, 2022, 1,667 11,667 . A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 and 2021 Equity Plans for the three months ended March 31, 2022, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2021 41,846 $ 7.65 $ $ 320,122 Granted 21,167 $ 3.51 $ - $ 74,296 Vested (4,167 ) $ 4.50 $ - $ (18,751 ) Forfeited (11,667 ) $ 9.01 $ - $ (105,120 ) Expired - $ - $ - $ - Nonvested, March 31, 2022 47,179 $ 5.73 $ - $ 270,547 For the three months ended March 31, 2022 and March 31, 2021, the Company recorded $ 32,939 0 A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and the 2021 Equity Plan, during the three months ended March 31, 2022, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2021 50,872 $ 10.02 6.6 $ Granted 6,250 $ 4.80 9.8 $ - Exercised - $ - - $ - Forfeited/Cancelled - $ - - $ - Expired - $ - - $ - Outstanding, March 31, 2022 57,122 $ 9.44 6.7 $ - Exerciseable, March 31, 2022 57,122 $ 9.44 6.7 $ - A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan and the 2021 Equity Plan, for the three months ended March 31, 2022, are presented in the table below: CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2021 - $ - $ - $ - Granted 6,250 $ 4.80 $ (14,313 ) $ 29,688 Vested (6,250 ) $ 4.80 $ 14,313 $ (29,688 ) Forfeited - $ - $ - $ - Expired - $ - $ - $ - Nonvested, March 31, 2022 - $ - $ - During the three months ended March 31, 2022 and March 31, 2021, the Company incurred $ 29,656 6,342 6,250 3,333 Effective January 3, 2022, the Company issued 6,250 10 Restricted Stock Units Effective January 17,2022, the Company issued 6,734 3,367 3,367 The Company recorded $ 29,923 Schedule of Restricted Stock Units Activity Number of Units Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2021 - $ - $ Granted 6,734 $ 7.42 $ - Vested and settled with share issuance (3,367 ) $ 7.42 $ - Forfeited/canceled - $ - $ - Outstanding, March 31, 2022 3,367 $ 7.42 $ - CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2022 | |
Warrants | |
Warrants | Note 11 - Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the three months ended March 31, 2022: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Average Weighted Average Remaining Aggregate Number Exercise Life Intrinsic Outstanding Price In Months Value Outstanding at December 31, 2021 227,719 $ 9.59 33 $ 0 Issued 7,566,435 $ 4.89 58 * $ 425,955 Exercised - - - - Expired - - - - Outstanding at March 31, 2022 7,794,154 $ 5.03 58 * $ 425,955 * Excludes 170,382 The following table summarizes information about warrants outstanding at March 31, 2022: Schedule of Warrants Outstanding Warrants Weighted Average Exercise price Outstanding Months Outstanding 9.45 192,982 30 10.40 34,737 31 5.00 7,105,496 59 5.16 290,557 59 0.01 170,382 Indefinite Life 7,794,154 58 * * Excludes 170,382 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Q3 2021 Warrants Issued to Series B Preferred Stockholder On September 28, 2021, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the investor purchased from the Company 3,300 1,000 3,300,000 192,982 3,000,000 9.45 Q3 2021 Warrants Issued to Series B Preferred Placement Agent In connection with the sale of the shares of convertible Series B Preferred Stock described above, the Company issued 34,737 10.40 Q1 2022 Investor Warrants On February 15, 2022, the Company issued 5,811,138 24,000,000 4.13 5 years 5.00 Q1 2022 Overallotment Warrants Further on February 15, 2022, in connection the Company’s issuance of 5,811,138 24,000,000 4.13 761,670 15 0.01 5 years 5.00 Q1 2022 Underwriter Warrants Further on February 15, 2022, in connection the Company’s issuance of 5,811,138 24,000,000 4.13 290,557 5.1625 Q1 2022 Series B Preferred Shares Pre-Funded Conversion Warrants On February 16, 2022, in connection with the conversion of 1,650 362,306 170,382 0.01 CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Q1 2022 Series B Preferred Shares Conversion Warrants Further on February 16, 2022, in connection with the conversion of 1,650 362,306 532,688 5.00 5 years |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes As of March 31, 2022, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $ 22,514,000 , of which $ 11,196,000 will expire, if not utilized, in the years 2034 through 2037, however, NOLs generated subsequent to December 31, 2017 do not expire but may only be used against taxable income to 80 %. In response to the novel coronavirus COVID-19, the Coronavirus Aid, Relief, and Economic Security Act temporarily repealed the 80 % limitation for NOLs arising in 2018, 2019 and 2020. In addition, pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, use of the Company’s NOLs carryforwards may be limited in the event of cumulative changes in ownership of more than 50 % within a three-year period. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 % change, by value, in its equity ownership over a three-year period , the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. Our sale of securities, both in September 2021 and February 2022, will need to be considered for determination of any “ownership change” that we have undergone during a determination period. If an ownership change occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our future bottom-line operating results by effectively increasing our future tax obligations The Company must assess the likelihood that its net deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. Management’s judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred tax assets. The Company recorded a full valuation allowance as of March 31, 2022 and December 31, 2021. Based on the available evidence, the Company believes it is more likely than not that it will not be able to utilize its net deferred tax assets in the foreseeable future. The Company intends to maintain valuation allowances until sufficient evidence exists to support the reversal of such valuation allowances. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s plans. Should the actual amounts differ from the Company’s estimates, the carrying value of the Company’s deferred tax assets could be materially impacted. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 – Related Party Transactions The Company entered into a manufacturer representative agreement with RSX Enterprises (“RSX”) in March 2021 to become a non-exclusive representative for the Company to assist in marketing and soliciting orders. James R. Shipley, a current director of the Company, has a significant ownership interest in RSX. Under the manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada and Mexico and may receive a commission for qualified customer leads. The agreement had an initial term through December 31, 2021 with automatic one-year renewal terms unless prior notice is given 90 days prior to each annual expiration. During the three months ended March 31, 2022, the Company paid $ 7,555 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events In accordance with ASC 855, Subsequent Events On April 1, 2022, 31,793 10 2.51 |
General (Policies)
General (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business CEA Industries Inc., formerly Surna Inc. (the “Company”), was incorporated in Nevada on October 15, 2009. We design, engineer and sell environmental control and other technologies for the Controlled Environment Agriculture (“CEA”) industry. The CEA industry is one of the fastest-growing sectors of the United States’ economy. From leafy greens (kale, Swiss chard, mustard, cress), microgreens (leafy greens harvested at the first true leaf stage), ethnic vegetables, ornamentals, and small fruits (such as strawberries, blackberries and raspberries) to bell peppers, cucumbers, tomatoes and cannabis and hemp, some producers grow crops indoors in response to market dynamics or as part of their preferred farming practice. In service of the CEA industry, our principal technologies include: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) LED lighting, benching and racking solutions for indoor cultivation, (v) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (vi) preventive maintenance services for CEA facilities Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada as well as other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities ranging from several thousand to more than 100,000 square feet. Headquartered in Louisville, Colorado, we leverage our experience in this space to bring value-added climate control solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. Although our customers do, we neither produce nor sell cannabis or its related products. |
Impact of the COVID-19 Pandemic on Our Business | Impact of the COVID-19 Pandemic on Our Business The impact of the government and the business economic response to the COVID-19 pandemic has affected demand across the majority of our markets and disrupted work on projects. The COVID-19 pandemic is expected to have continued adverse effects on our sales, project implementation, supply chain infrastructure, operating margins, and working capital. The resulting effects and uncertainties from the COVID-19 pandemic, including the depth and duration of the disruptions to customers and suppliers, its future effect on our business, on our results of operations, and on our financial condition, cannot be predicted. We expect that the economic disruptions will continue to have an effect on our business over the longer term. Despite this uncertainty, we continue to monitor costs and continue to take actions to reduce costs in order to mitigate the impact of the COVID-19 pandemic to the best of our ability. However, these actions may not be sufficient in the long run to avoid reduced sales, increased losses and reduced operating cash flows in our business. During the three months ended March 31, 2022, the Company experienced significant delays in the receipt of equipment it had ordered to meet its customer orders due to disruption and delays in its supply chain arising from the long-term effects of the COVID-19 pandemic. Consequently, our revenue recognition of these customer sales has been delayed until future periods when the shipment of these orders can be completed. |
Financial Statement Presentation | Financial Statement Presentation The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are available to be issued. The Company continues to experience recurring losses since its inception. As a result, in order to continue as a going concern, the Company has been reliant on the ability to obtain additional sources of financing to fund growth. As indicated in Note 9 – Shareholders Equity (Deficit) below, on February 15, 2022, the Company received approximately $ 22,000,000 Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The balance sheet as of December 31, 2021 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2021. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) |
Principles | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiaries, Hydro Innovations, LLC (“Hydro”) and Surna Cultivation Technologies LLC (“SCT”). Intercompany transactions, profit, and balances are eliminated in consolidation. |
Reverse Stock Split | Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022 As a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding as of December 31, 2021, was reduced from 240,125,224 1,600,835 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. |
Use of Estimates | Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount of $ 250,000 22,034,000 21,784,000 |
Income (Loss) Per Common Share | Income (Loss) Per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in cases where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. During the three months ended March 31, 2022 and 2021, there were warrants and options outstanding to purchase Company common stock and shares of convertible preferred stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three-month period ended March 31, 2022, the Company incurred a net loss and consequently the common share equivalents of these potentially dilutive equity instruments have not been included in the calculations of loss per share because such inclusion would have been anti-dilutive. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) As of March 31, 2022, and 2021, there were respectively, 8,021,057 201,662 |
Goodwill | Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the three months ended March 31, 2022, the Company concluded that the projected impact of the COVID-19 pandemic on its sales, contract completion and revenues in the near term, together with the volatility in its share price during the quarter represented potential indicators of impairment. Accordingly, the Company performed an interim impairment analysis at March 31, 2022 and concluded that no impairment relating to goodwill existed at March 31, 2022. |
Temporary Equity | Temporary Equity Shares of preferred stock that are redeemable for cash or other assets are classified as temporary equity if they are redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, net of issuance costs, which is subsequently adjusted to redemption value (including the amount for dividends earned but not yet declared or paid) at each balance sheet date if the instrument is currently redeemable or if it is probable that the instrument will become redeemable. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source 2022 2021 For the Three Months Ended March 31, 2022 2021 Equipment and systems sales $ 1,642,572 $ 2,163,468 Engineering and other services 86,049 181,083 Shipping and handling 15,806 21,978 Total revenue $ 1,744,427 $ 2,366,529 Revenue Recognition Accounting Policy Summary The Company accounts for revenue in accordance with ASC 606. Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. The Company does not provide construction services or system installation services. Some of the Company’s contracts with customers contain a single performance obligation, typically engineering only services contracts. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and components and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each promise is fulfilled. Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as services are rendered or completed in exchange for consideration in an amount for which the Company expects to be entitled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Other Judgments and Assumptions The Company typically receives customer payments in advance of its performance of services or transfers of goods. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. Contract Assets and Contract Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company Contract assets include unbilled amounts where revenue recognized exceeds the amount billed to the customer and the right of payment is conditional, subject to completing a milestone, such as a phase of a project. The Company typically does not have material amounts of contract assets since revenue is recognized as control of goods are transferred or as services are performed. As of March 31, 2022, and 2021, the Company had no contract assets. Contract liabilities consist of advance payments in excess of revenue recognized. The Company’s contract liabilities are recorded as a current liability in deferred revenue in the consolidated balance sheets since the timing of when the Company expects to recognize revenue is generally less than one year. As of March 31, 2022, and December 31, 2021, deferred revenue, which was classified as a current liability, was $ 5,485,416 2,839,838 For the three months ended March 31, 2022, the Company recognized revenue of $ 1,162,374 1,880,634 Remaining Performance Obligations Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Further, based on the current economic climate, the uncertainty regarding the COVID-19 virus, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfill its backlog, and the Company may experience contract cancellations, project scope reductions and project delays. As of March 31, 2022, the Company’s remaining performance obligations, or backlog, was $ 11,179,000 There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at March 31, 2022, includes booked sales orders of $ 2,217,000 from several customers that the Company does not expect to be realized until 2023, if at all. Given the present economic uncertainty arising from the impact of the novel coronavirus COVID-19, the Company believes that several of its current contracts may be delayed or canceled. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) The remaining performance obligations expected to be recognized through 2023 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2022 2023 Total Remaining performance obligations related to engineering only paid contracts $ - $ - $ - Remaining performance obligations related to partial equipment paid contracts 8,962,000 2,217,000 11,179,000 Total remaining performance obligations $ 8,962,000 $ 2,217,000 $ 11,179,000 Product Warranty The Company warrants the products that it manufactures for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. The Company’s warranty provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within stated specification. The Company’s third-party suppliers also warrant their products under similar terms, which are passed through to the Company’s customers. The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue. The Company continues to assess the need to record a warranty reserve at the time of sale based on historical claims and other factors. As of March 31, 2022, and December 31, 2021, the Company had an accrued warranty reserve amount of $ 187,702 186,605 |
Accounting for Share-Based Compensation | Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its condensed consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the “Black-Scholes Model”). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. During the three months ended March 31, 2022, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility ranged from 158.21 158.70 1.52 1.98 The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021: Schedule of Share-based Compensation Costs 2022 2021 For the Three Months Ended March 31, 2022 2021 Share-based compensation expense included in: Cost of revenue $ 791 $ 14,135 Advertising and marketing expenses 2,762 6,474 Product development costs - 6,694 Selling, general and administrative expenses 88,964 31,833 Total share-based compensation expense included in consolidated statement of operations $ 92,517 $ 59,136 Included in the expense for the three months ended March 31, 2021, is an accrual for $ 52,794 |
Concentrations | Concentrations One customer accounted for 35 38 16 11 Three customers accounted for 44 19 16 60 31 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires companies to apply ASC 606, “Revenue from Contracts with Customers” to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. This creates an exception to the general recognition and measurement principle in ASC 805, which uses fair value. The guidance is effective for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted, and the guidance should be applied prospectively. The impact of the standard on Company’s consolidated financial statements is dependent on the size and frequency of any future acquisitions the Company may complete. In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. CEA Industries Inc. Notes to Condensed Consolidated Financial Statements March 31, 2022 (in US Dollars except share numbers) (Unaudited) In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
General (Tables)
General (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Revenue by Source | The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source 2022 2021 For the Three Months Ended March 31, 2022 2021 Equipment and systems sales $ 1,642,572 $ 2,163,468 Engineering and other services 86,049 181,083 Shipping and handling 15,806 21,978 Total revenue $ 1,744,427 $ 2,366,529 |
Schedule of Remaining Performance Obligations Expected to be Recognized | The remaining performance obligations expected to be recognized through 2023 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2022 2023 Total Remaining performance obligations related to engineering only paid contracts $ - $ - $ - Remaining performance obligations related to partial equipment paid contracts 8,962,000 2,217,000 11,179,000 Total remaining performance obligations $ 8,962,000 $ 2,217,000 $ 11,179,000 |
Schedule of Share-based Compensation Costs | The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021: Schedule of Share-based Compensation Costs 2022 2021 For the Three Months Ended March 31, 2022 2021 Share-based compensation expense included in: Cost of revenue $ 791 $ 14,135 Advertising and marketing expenses 2,762 6,474 Product development costs - 6,694 Selling, general and administrative expenses 88,964 31,833 Total share-based compensation expense included in consolidated statement of operations $ 92,517 $ 59,136 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Schedule of Lease Cost | The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost As of March 31, 2022 Operating lease right-of-use asset $ 540,444 Operating lease liability, current $ 112,072 Operating lease liability, long-term $ 459,482 Remaining lease term 4.8 Discount rate 3.63 % For the Three Months Ended March 31, 2022 Operating cash outflow from operating lease $ 20,109 |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments on the Facility Lease as of March 31, 2022 are as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2022 (excluding the three months ended March 31, 2022) $ 91,095 2023 124,897 2024 128,643 2025 132,503 2026 136,473 Thereafter 11,654 Total minimum lease payments 625,265 Less imputed interest (53,710 ) Present value of minimum lease payments $ 571,555 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory March 31, December 31, 2022 2021 Finished goods $ 913,887 $ 272,199 Work in progress 971 1,050 Raw materials 186,115 196,456 Allowance for excess & obsolete inventory (95,055 ) (91,379 ) Inventory, net $ 1,005,918 $ 378,326 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment March 31, December 31, 2022 2021 Furniture and equipment $ 271,056 $ 274,472 Vehicles 15,000 15,000 Leasehold improvements - - Property and equipment, gross 286,056 289,472 Accumulated depreciation (208,817 ) (212,126 ) Property and equipment, net $ 77,239 $ 77,346 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities March 31, December 31, 2022 2021 Accounts payable $ 729,040 $ 616,056 Sales commissions payable 9,107 27,592 Accrued payroll liabilities 266,456 322,873 Product warranty accrual 187,702 186,605 Other accrued expenses 196,723 192,463 Total $ 1,389,028 $ 1,345,589 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options and incentive stock options granted to employees and consultants under the 2017 and 2021 Equity Plans during the three months ended March 31, 2022, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2021 158,174 $ 10.99 7.6 $ Granted 21,167 $ 3.55 9.8 $ 4,650 Exercised - $ - - $ - Forfeited (13,333 ) $ 9.15 0.0 $ - Expired - $ - - $ - Outstanding, March 31, 2022 166,007 $ 10.18 8.2 $ 4,650 Exercisable, March 31, 2022 118,828 $ 11.89 7.6 $ 610 |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 and 2021 Equity Plans for the three months ended March 31, 2022, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2021 41,846 $ 7.65 $ $ 320,122 Granted 21,167 $ 3.51 $ - $ 74,296 Vested (4,167 ) $ 4.50 $ - $ (18,751 ) Forfeited (11,667 ) $ 9.01 $ - $ (105,120 ) Expired - $ - $ - $ - Nonvested, March 31, 2022 47,179 $ 5.73 $ - $ 270,547 |
Schedule of Restricted Stock Units Activity | Schedule of Restricted Stock Units Activity Number of Units Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2021 - $ - $ Granted 6,734 $ 7.42 $ - Vested and settled with share issuance (3,367 ) $ 7.42 $ - Forfeited/canceled - $ - $ - Outstanding, March 31, 2022 3,367 $ 7.42 $ - |
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and the 2021 Equity Plan, during the three months ended March 31, 2022, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2021 50,872 $ 10.02 6.6 $ Granted 6,250 $ 4.80 9.8 $ - Exercised - $ - - $ - Forfeited/Cancelled - $ - - $ - Expired - $ - - $ - Outstanding, March 31, 2022 57,122 $ 9.44 6.7 $ - Exerciseable, March 31, 2022 57,122 $ 9.44 6.7 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2021 - $ - $ - $ - Granted 6,250 $ 4.80 $ (14,313 ) $ 29,688 Vested (6,250 ) $ 4.80 $ 14,313 $ (29,688 ) Forfeited - $ - $ - $ - Expired - $ - $ - $ - Nonvested, March 31, 2022 - $ - $ - |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Warrants | |
Schedule of Outstanding Warrants to Purchase Common Stock | The following table summarizes information with respect to outstanding warrants to purchase common stock during the three months ended March 31, 2022: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Average Weighted Average Remaining Aggregate Number Exercise Life Intrinsic Outstanding Price In Months Value Outstanding at December 31, 2021 227,719 $ 9.59 33 $ 0 Issued 7,566,435 $ 4.89 58 * $ 425,955 Exercised - - - - Expired - - - - Outstanding at March 31, 2022 7,794,154 $ 5.03 58 * $ 425,955 * Excludes 170,382 |
Schedule of Warrants Outstanding | The following table summarizes information about warrants outstanding at March 31, 2022: Schedule of Warrants Outstanding Warrants Weighted Average Exercise price Outstanding Months Outstanding 9.45 192,982 30 10.40 34,737 31 5.00 7,105,496 59 5.16 290,557 59 0.01 170,382 Indefinite Life 7,794,154 58 * * Excludes 170,382 |
Schedule of Revenue by Source (
Schedule of Revenue by Source (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Total revenue | $ 1,744,427 | $ 2,366,529 |
Equipment And Systems Sales [Member] | ||
Product Information [Line Items] | ||
Total revenue | 1,642,572 | 2,163,468 |
Engineering and Other Services [Member] | ||
Product Information [Line Items] | ||
Total revenue | 86,049 | 181,083 |
Shipping and Handling [Member] | ||
Product Information [Line Items] | ||
Total revenue | $ 15,806 | $ 21,978 |
Schedule of Remaining Performan
Schedule of Remaining Performance Obligations Expected to be Recognized (Details) | Mar. 31, 2022USD ($) |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | |
Remaining performance obligations related to partial equipment paid contracts | 11,179,000 |
Total remaining performance obligations | 11,179,000 |
2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | |
Remaining performance obligations related to partial equipment paid contracts | 8,962,000 |
Total remaining performance obligations | 8,962,000 |
2023 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | |
Remaining performance obligations related to partial equipment paid contracts | 2,217,000 |
Total remaining performance obligations | $ 2,217,000 |
Schedule of Share-based Compens
Schedule of Share-based Compensation Costs (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Total share-based compensation expense included in consolidated statement of operations | $ 92,517 | $ 59,136 |
Cost of Sales [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 791 | 14,135 |
Advertising and Marketing Expenses [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 2,762 | 6,474 |
Product Development Costs [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 6,694 | |
Selling, General and Administrative Expenses [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | $ 88,964 | $ 31,833 |
General (Details Narrative)
General (Details Narrative) - USD ($) | Feb. 15, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 30, 2021 | Dec. 29, 2021 |
Product Information [Line Items] | ||||||
Proceeds from issuance of common stock | $ 22,000,000 | |||||
Reverse stock split description | On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022 | |||||
Common stock issued | 7,784,444 | 1,600,835 | 240,125,224 | 240,125,244 | ||
Common stock outstanding | 7,784,444 | 1,600,835 | 240,125,224 | 240,125,244 | ||
Federal insured amount | $ 250,000 | |||||
Cash balance, amount | 22,034,000 | |||||
Federal deposit insurance corporation premium expense | $ 21,784,000 | |||||
Potentially dilutive equity instruments that are convertible into common stock | 8,021,057 | 201,662 | ||||
Contract with Customer, Liability, Current | $ 5,485,416 | $ 2,839,838 | ||||
Revenue recognized | 1,162,374 | $ 1,880,634 | ||||
Revenue remaining performance obligation | 11,179,000 | |||||
Product Warranty Accrual, Current | 187,702 | $ 186,605 | ||||
Share-Based Payment Arrangement, Expense | $ 92,517 | $ 59,136 | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 35.00% | 38.00% | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 16.00% | |||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 11.00% | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 44.00% | 60.00% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 19.00% | 31.00% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 16.00% | |||||
2021 Annual Employee Incentive Compensation Plan [Member] | ||||||
Product Information [Line Items] | ||||||
Share-Based Payment Arrangement, Expense | $ 52,794 | |||||
Minimum [Member] | ||||||
Product Information [Line Items] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 158.21% | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.52% | |||||
Maximum [Member] | ||||||
Product Information [Line Items] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 158.70% | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.98% | |||||
2023 [Member] | ||||||
Product Information [Line Items] | ||||||
Revenue remaining performance obligation | $ 2,217,000 |
Schedule of Lease Cost (Details
Schedule of Lease Cost (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease right-of-use asset | $ 540,444 | $ 565,877 |
Operating lease liability, current | 112,072 | 100,139 |
Operating lease liability, long-term | $ 459,482 | $ 486,226 |
Remaning lease term | 4 years 9 months 18 days | |
Discount rate | 3.63% | |
Operating cash outflow from operating lease | $ 20,109 |
Schedule of Future Annual Minim
Schedule of Future Annual Minimum Lease Payments (Details) | Mar. 31, 2022USD ($) |
Leases | |
2022 (excluding the three months ended March 31, 2022) | $ 91,095 |
2023 | 124,897 |
2024 | 128,643 |
2025 | 132,503 |
2026 | 136,473 |
Thereafter | 11,654 |
Total minimum lease payments | 625,265 |
Less imputed interest | (53,710) |
Present value of minimum lease payments | $ 571,555 |
Leases (Details Narrative)
Leases (Details Narrative) | Jul. 28, 2021USD ($)ft² | Mar. 31, 2022USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Present value of minimum lease payments | $ 571,555 | |
New Facility Lease [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Area of land | ft² | 11,491 | |
Operating lease term description | The New Facility Lease commenced on November 1, 2021 and continues through January 31, 2027 | |
Lease rental expense | $ 10,055 | |
Increase in rent percent | 3.00% | |
Security deposit | $ 14,747 | |
Present value of minimum lease payments | $ 582,838 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 913,887 | $ 272,199 |
Work in progress | 971 | 1,050 |
Raw materials | 186,115 | 196,456 |
Allowance for excess & obsolete inventory | (95,055) | (91,379) |
Inventory, net | $ 1,005,918 | $ 378,326 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||
Overhead expenses | $ 16,555 | $ 13,589 |
Inventory in transit | 692,195 | |
Prepaid inventory expenses | $ 1,579,000 | $ 1,069,000 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 286,056 | $ 289,472 |
Accumulated depreciation | (208,817) | (212,126) |
Property and equipment, net | 77,239 | 77,346 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 271,056 | 274,472 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,000 | 15,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross |
Property and Equipment (Details
Property and Equipment (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | |
Depreciation expenses | $ 8,556 |
Cost of Sales [Member] | Property, Plant and Equipment [Member] | |
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | |
Depreciation expenses | 1,214 |
Inventory [Member] | Property, Plant and Equipment [Member] | |
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | |
Depreciation expenses | $ 304 |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 729,040 | $ 616,056 |
Sales commissions payable | 9,107 | 27,592 |
Accrued payroll liabilities | 266,456 | 322,873 |
Product warranty accrual | 187,702 | 186,605 |
Other accrued expenses | 196,723 | 192,463 |
Total | $ 1,389,028 | $ 1,345,589 |
Note Payable and Accrued Inte_2
Note Payable and Accrued Interest (Details Narrative) - USD ($) | Nov. 30, 2021 | Feb. 10, 2021 |
Debt Disclosure [Abstract] | ||
Note payable principal amount | $ 514,200 | $ 514,200 |
Loan interest rate | 1.00% | |
Loan due date | Feb. 5, 2026 | |
Debt Instrument, Increase, Accrued Interest | $ 2,832 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($)shares | |
Loss Contingencies [Line Items] | |
Common shares issued in settlement of legal dispute, value | $ 67,000 |
Other Expense [Member] | |
Loss Contingencies [Line Items] | |
Cost of settelement | $ 107,000 |
Common Stock [Member] | |
Loss Contingencies [Line Items] | |
Common shares issued in settlement of legal dispute, shares | shares | 6,667 |
Temporary Equity (Details Narra
Temporary Equity (Details Narrative) - USD ($) | Feb. 16, 2022 | Nov. 04, 2021 | Sep. 30, 2021 | Sep. 28, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Feb. 15, 2022 | Dec. 31, 2021 |
Temporary Equity, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | ||||||
Proceeds from Issuance of Redeemable Convertible Preferred Stock | $ 1,365,000 | $ 1,260,000 | ||||||
Dividends | $ 36,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||||||
Deemed dividend on series B preferred stock on down round | $ 439,999 | |||||||
Warrant [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period | 532,688 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 5 years | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price | $ 5 | |||||||
Series B Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary Equity, Shares Authorized | 3,300 | |||||||
Temporary Equity, Par or Stated Value Per Share | $ 1,000 | |||||||
Convertible Preferred Stock [Member] | ||||||||
Temporary Equity, Aggregate Amount of Redemption Requirement | $ 3,000,000 | |||||||
Series B Preferred Stock [Member] | ||||||||
Dividend rate percentage | 8.00% | |||||||
Conversion price | $ 8.55 | |||||||
Dividend rate percentage | 4.99% | |||||||
Debt Instrument, Redemption Price, Percentage | 120.00% | |||||||
Debt Instrument, Convertible, Liquidation Preference, Per Share | $ 1,000 | |||||||
Debt Instrument, Convertible, Liquidation Preference, Value | $ 3,960,000 | |||||||
Temporary equity noncash redemption value adjustment | $ 2,262,847 | |||||||
Stock Redeemed or Called During Period, Shares | 1,650 | |||||||
Stock Redeemed or Called During Period, Value | $ 2,016,000 | |||||||
Stock Issued During Period, Shares, Conversion of Units | 1,650 | |||||||
Preferred Stock, Convertible, Conversion Price | $ 8.55 | $ 4.13 | ||||||
Conversion price reduced offering price, percentage | 75.00% | |||||||
Series B Preferred Stock [Member] | Decrease In Common Stock Conversion Price [Member] | ||||||||
Preferred Stock, Convertible, Conversion Price | $ 3.0975 | |||||||
Series B Preferred Stock [Member] | Common Stock [Member] | ||||||||
Conversion of Stock, Shares Converted | 362,306 | |||||||
Series B Preferred Stock [Member] | Warrant [Member] | ||||||||
Conversion of Stock, Shares Converted | 703,069 | |||||||
Series B Preferred Stock [Member] | Warrant One [Member] | Indefinite Term [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period | 170,382 | |||||||
Exercise price, per share | $ 0.01 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Details Narrative) - USD ($) | Feb. 15, 2022 | Jan. 17, 2022 | Jan. 03, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 30, 2021 | Dec. 29, 2021 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Number of stock options issued | 163,692 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years | ||||||
Common stock, shares issued | 7,784,444 | 1,600,835 | 240,125,224 | 240,125,244 | |||
Common stock, shares outstanding | 7,784,444 | 1,600,835 | 240,125,224 | 240,125,244 | |||
Common stock, shares authorized | 200,000,000 | 850,000,000 | |||||
Preferred stock, shares authorized | 25,000,000 | 150,000,000 | |||||
Net proceeds from sale of common stock | $ 22,000,000 | ||||||
Number of shares sold | 6,572,808 | ||||||
Exercise price | $ 5.03 | $ 9.59 | |||||
Par value | $ 0.00001 | $ 0.00001 | |||||
Preferred stock, shares issued | 0 | ||||||
Preferred stock, shares outstanding | 0 | ||||||
Common Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Number of shares issued during the period | 5,811,138 | ||||||
Number of shares sold | 5,811,138 | ||||||
Warrant [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Warrant term | 5 years | ||||||
Exercise price | $ 5 | ||||||
Board of Directors Chairman [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock, shares authorized | 200,000,000 | ||||||
Preferred stock, shares authorized | 25,000,000 | ||||||
Underwriters [Member] | Warrant [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Exercise price | $ 5.1625 | ||||||
Stock issued during period, shares, issued for services | 290,557 | ||||||
Warrants maturity date | Feb. 10, 2027 | ||||||
2021 Equity Incentive Plan [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Number of stock options issued | 3,125 | ||||||
Exercise price | $ 4.80 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | ||||||
Number of shares issued during the period | 3,367 | ||||||
2021 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares, granted | 3,367 | ||||||
Number of shares issued during the period | 3,367 | ||||||
2021 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Two Directors [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares, vested | 1,684 | ||||||
2021 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | January 17, 2022 [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares, granted | 1,684 | ||||||
2021 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | January 17, 2023 [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares, granted | 1,683 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years | |
Number of Options, Forfeited | (13,333) | |
Number of Options, Outstanding Ending | 148,905 | |
Number of Options, Forfeited/Cancelled | 13,333 | |
Employees And Consultants [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options, Granted | 21,167 | |
Employees And Consultants [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 158,174 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 10.99 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 7 months 6 days | |
Aggregate Intrinsic Value, Outstanding Beginning | ||
Number of Options, Granted | 21,167 | |
Weighted Average Exercise Price, Granted | $ 3.55 | |
Weighted Average Remaining Contractual Term, Granted | 9 years 9 months 18 days | |
Aggregate Intrinsic Value, Exercised | $ 4,650 | |
Number of Options, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Remaining Contractual Term,Exercised | ||
Number of Options, Forfeited | (13,333) | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ 9.15 | |
Weighted Average Remaining Contractual Term,Forfeited | 0 years | |
Number of Options, Expired | ||
Weighted Average Exercise Price, Expired | ||
Weighted Average Remaining Contractual Term,Expired | ||
Number of Options, Outstanding Ending | 166,007 | |
Weighted Average Exercise Price, Outstanding Ending | $ 10.18 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 8 years 2 months 12 days | |
Aggregate Intrinsic Value, Outstanding Ending | $ 4,650 | |
Number of Options, Exercisable Ending | 118,828 | |
Weighted Average Exercise Price, Exercisable Ending | $ 11.89 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 7 years 7 months 6 days | |
Aggregate Intrinsic Value, Exercisable Ending | $ 610 | |
Number of Options, Forfeited/Cancelled | 13,333 | |
Directors [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options, Granted | 6,250 | |
Directors [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 50,872 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 10.02 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 7 months 6 days | |
Aggregate Intrinsic Value, Outstanding Beginning | ||
Number of Options, Granted | 6,250 | |
Weighted Average Exercise Price, Granted | $ 4.80 | |
Weighted Average Remaining Contractual Term, Granted | 9 years 9 months 18 days | |
Number of Options, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Number of Options, Forfeited | ||
Weighted Average Exercise Price, Forfeited/Cancelled | ||
Number of Options, Expired | ||
Weighted Average Exercise Price, Expired | ||
Number of Options, Outstanding Ending | 57,122 | |
Weighted Average Exercise Price, Outstanding Ending | $ 9.44 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 6 years 8 months 12 days | |
Aggregate Intrinsic Value, Outstanding Ending | ||
Number of Options, Exercisable Ending | 57,122 | |
Weighted Average Exercise Price, Exercisable Ending | $ 9.44 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 8 months 12 days | |
Aggregate Intrinsic Value, Exercisable Ending | ||
Number of Options, Forfeited/Cancelled | ||
Directors [Member] | Non-Qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Weighted Average Remaining Contractual Term,Expired |
Summary of Non-vested Non-quali
Summary of Non-vested Non-qualified Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Aggregated Intrinsic Value, Nonvested Granted | $ / shares | $ (14,313) |
2017 Equity Plan and 2021 Equity Plan [Member] | Employees And Consultants [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | 41,846 |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 7.65 |
Aggregated Intrinsic Value, Nonvested Beginning | |
Grant Date Fair Value Nonvested, Beginning | $ 320,122 |
Number of Options Nonvested, Beginning | shares | 21,167 |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 3.51 |
Grant Date Fair Value Nonvested, Granted | $ 74,296 |
Number of Options Nonvested, Beginning | shares | (4,167) |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 4.50 |
Grant Date Fair Value Nonvested, Vested | $ (18,751) |
Number of Options Nonvested, Forfeited | shares | (11,667) |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 9.01 |
Grant Date Fair Value Nonvested, Forfeited | $ (105,120) |
Number of Options Nonvested, Beginning | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Grant Date Fair Value Nonvested, Expired | |
Number of Options Nonvested, Beginning | shares | 47,179 |
Weighted Average Grant-Date Fair Value, Ending | $ / shares | $ 5.73 |
Aggregated Intrinsic Value, Nonvested Ending | |
Grant Date Fair Value Nonvested, Ending | $ 270,547 |
Number of Options Nonvested, Beginning | shares | 11,667 |
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Aggregated Intrinsic Value, Nonvested Beginning | |
Number of Options Nonvested, Beginning | shares | 6,250 |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 4.80 |
Grant Date Fair Value Nonvested, Granted | $ 29,688 |
Number of Options Nonvested, Beginning | shares | (6,250) |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 4.80 |
Grant Date Fair Value Nonvested, Vested | $ (29,688) |
Number of Options Nonvested, Forfeited | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Number of Options Nonvested, Beginning | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Number of Options Nonvested, Beginning | shares | |
Aggregated Intrinsic Value, Nonvested Ending | |
Grant Date Fair Value Nonvested, Ending | |
Grant Date Fair Value Nonvested, Beginning | |
Aggregated Intrinsic Value, Nonvested Vested | $ 14,313 |
Number of Options Nonvested, Beginning | shares |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units Activity (Details) - 2017 Equity Incentive Plan [Member] - Employees, Directors and Consultants [Member] - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Units, beginning | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Aggregate Intrinsic Value Nonvested, Beginning | $ | |
Number of Units, Granted | shares | 6,734 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | $ 7.42 |
Number of Units, Vested and settled with share issuance | shares | (3,367) |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | $ 7.42 |
Number of Units, Forfeited/canceled | shares | |
Weighted Average Grant-Date Fair Value, Forfeited/Canceled | $ / shares | |
Number of Units, ending | shares | 3,367 |
Weighted Average Grant-Date Fair Value,ending | $ / shares | $ 7.42 |
Aggregate Intrinsic Value Nonvested, ending | $ |
Equity Incentive Plans (Details
Equity Incentive Plans (Details Narrative) - USD ($) | Jan. 17, 2022 | Jan. 17, 2022 | Jan. 03, 2022 | Jan. 03, 2022 | Mar. 31, 2022 | Mar. 30, 2022 | Mar. 31, 2021 | Mar. 22, 2021 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 13,333 | |||||||
Number of shares authorized for equity awards | 333,333 | |||||||
Number of shares issued | 163,692 | |||||||
Number of option remain outstanding | 148,905 | |||||||
Shares available for future equity awards | 20,736 | |||||||
Unrecognized compensation expense | $ 222,707 | |||||||
Expected term years | 3 years | |||||||
Expected term years | 3 years | |||||||
Share based compensation | $ 92,517 | $ 6,342 | ||||||
Employees [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 21,167 | |||||||
Three New Employees [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 6,167 | |||||||
Expected term years | 10 years | |||||||
Exercise price, lower | $ 4.80 | |||||||
Exercise price, upper | $ 6.90 | |||||||
Cheif Financial Officer [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 15,000 | |||||||
Expected term years | 10 years | |||||||
Description,shares | The options vest as follows: 2,000 vested immediately, 3,000 on March 11, 2023, 5,000 on March 11, 2024, and 5,000 on March 11, 2025 | |||||||
Exercise price | $ 2.20 | |||||||
One Former Employee [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of options to purchase shares | 1,667 | |||||||
Issuance of stock, unvested | 11,667 | |||||||
2021 Equity Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 666,667 | |||||||
2017 Equity Incentive Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of options to purchase shares | 333,333 | |||||||
2017 Equity Incentive Plan [Member] | Director [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of options to purchase shares | 6,250 | 3,333 | ||||||
Share based compensation | $ 29,656 | $ 6,342 | ||||||
2017 Equity Incentive Plan [Member] | Non-Qualified Stock Options [Member] | Employees And Consultants [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share based compensation | $ 32,939 | $ 0 | ||||||
2021 Equity Incentive Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 3,125 | |||||||
Issuance of shares | 3,367 | |||||||
Expected term years | 5 years | |||||||
Exercise price | $ 4.80 | |||||||
2021 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 3,367 | 3,367 | ||||||
Issuance of shares | 3,367 | |||||||
2021 Equity Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares available for future equity awards | 578,906 | |||||||
Number of shares authorized | 666,667 | |||||||
2021 Equity Plan [Member] | Restricted Shares Issued [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of shares issued | 10,170 | |||||||
2021 Equity Plan [Member] | Non Qualified Stock Option [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of option remain outstanding | 33,408 | |||||||
2021 Equity Plan [Member] | Incentive Stock Option [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of option remain outstanding | 40,816 | |||||||
2021 Equity Plan [Member] | Employees [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 21,167 | |||||||
2021 Equity Plan [Member] | Directors [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 6,250 | |||||||
2021 Equity Plan [Member] | Restricted Stock Units (RSUs) [Member] | Incentive Stock Option [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of option remain outstanding | 3,367 | |||||||
2021 Equity Plan [Member] | Restricted Stock Units (RSUs) [Member] | Directors [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 3,367 | |||||||
Share based compensation | $ 29,923 | |||||||
Issuance of stock | $ 6,734 | |||||||
2021 Equity Plan [Member] | Vested [Member] | Directors [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of shares | 3,367 | |||||||
2021 Plan [Member] | Non-Qualified Stock Options [Member] | Director [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of options to purchase shares | 6,250 | |||||||
2021 Equity Plan [Member] | Non-Qualified Stock Options [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Expected term years | 10 years |
Schedule of Outstanding Warrant
Schedule of Outstanding Warrants to Purchase Common Stock (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)$ / sharesshares | ||
Warrants | ||
Warrants Outstanding, Beginning Balance | shares | 227,719 | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 9.59 | |
Weighted Average Life of Outstanding Warrants in Months, Beginning Balance | 33 months | |
Aggregate Intrinsic Value, Beginning Balance | $ | $ 0 | |
Warrants, issued | shares | 7,566,435 | |
Weighted Average Exercise Price, Issued | $ / shares | $ 4.89 | |
Weighted Average Life of Outstanding Warrants in Months, Issued | 58 months | [1] |
Aggregate Intrinsic Value, Issued | $ | $ 425,955 | |
Warrants, Exercised | shares | ||
Weighted Average Exercise Price, Exercised | $ / shares | ||
Aggregate Intrinsic Value, Exercised | $ | ||
Warrants, Expired | shares | ||
Weighted Average Exercise Price, Expired | $ / shares | ||
Aggregate Intrinsic Value, Expired | $ | ||
Warrants Outstanding, Ending Balance | shares | 7,794,154 | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 5.03 | |
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 58 months | [1],[2] |
Aggregate Intrinsic Value, Ending Balance | $ | $ 425,955 | |
[1] | Excludes 170,382 | |
[2] | Excludes 170,382 |
Schedule of Outstanding Warra_2
Schedule of Outstanding Warrants to Purchase Common Stock (Details) (Parenthetical) | Mar. 31, 2022shares |
Warrants | |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 170,382 |
Schedule of Warrants Outstandin
Schedule of Warrants Outstanding (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 5.03 | $ 9.59 | |
Warrants Outstanding | 7,794,154 | 227,719 | |
Weighted Average Life of Outstanding Warrants in Months | [1],[2] | 58 months | |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 170,382 | ||
Warrants Range [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 9.45 | ||
Warrants Outstanding | 192,982 | ||
Weighted Average Life of Outstanding Warrants in Months | 30 months | ||
Warrants Range One [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 10.40 | ||
Warrants Outstanding | 34,737 | ||
Weighted Average Life of Outstanding Warrants in Months | 31 months | ||
Warrants Range Two [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 5 | ||
Warrants Outstanding | 7,105,496 | ||
Weighted Average Life of Outstanding Warrants in Months | 59 months | ||
Warrants Range Three [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 5.16 | ||
Warrants Outstanding | 290,557 | ||
Weighted Average Life of Outstanding Warrants in Months | 59 months | ||
Warrants Range Four [Member] | |||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise price | $ 0.01 | ||
Warrants Outstanding | 170,382 | ||
Weighted Average Life of Outstanding Warrants in Months | Indefinite Life | ||
[1] | Excludes 170,382 | ||
[2] | Excludes 170,382 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Feb. 16, 2022 | Feb. 15, 2022 | Feb. 15, 2022 | Sep. 28, 2021 | Sep. 28, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Issuance of Value | $ 21,711,131 | ||||||
Exercise price | $ 5.03 | $ 9.59 | |||||
Issuance of warrants | 7,794,154 | 227,719 | |||||
2022 Investor Warrants [Member] | |||||||
Issuance of warrants | 5,811,138 | 5,811,138 | |||||
Exercise price | $ 5 | $ 5 | |||||
Proceeds from warrants issuance | $ 24,000,000 | ||||||
Issuance of per unit | $ 4.13 | $ 4.13 | |||||
Warrants term | 5 years | 5 years | |||||
2022 OverAllotment Warrants [Member] | |||||||
Issuance of shares | 761,670 | ||||||
Issuance of warrants | 5,811,138 | 5,811,138 | |||||
Exercise price | $ 5 | $ 5 | |||||
Proceeds from warrants issuance | $ 24,000,000 | ||||||
Issuance of per unit | $ 4.13 | $ 4.13 | |||||
Warrants term | 5 years | 5 years | |||||
Warrants percent | 1500.00% | 1500.00% | |||||
Warrant price per share | $ 0.01 | $ 0.01 | |||||
2022 UnderwriterWarrants [Member] | |||||||
Issuance of shares | 290,557 | ||||||
Issuance of warrants | 5,811,138 | 5,811,138 | |||||
Exercise price | $ 5.1625 | $ 5.1625 | |||||
Proceeds from warrants issuance | $ 24,000,000 | ||||||
Issuance of per unit | $ 4.13 | $ 4.13 | |||||
Common Stock [Member] | |||||||
Issuance of shares | 5,811,138 | ||||||
Issuance of Value | $ 58 | ||||||
Issuance of shares | 362,306 | 362,306 | |||||
Series B Preferred Shares Pre Funded Conversion Warrants [Member] | |||||||
Exercise price | $ 0.01 | ||||||
Issuance of shares | 170,382 | ||||||
Series B Preferred Shares Conversion Warrants [Member] | |||||||
Exercise price | $ 5 | ||||||
Warrants term | 5 years | 5 years | |||||
Issuance of shares | 532,688 | ||||||
Private Placement [Member] | Placement Agent Warrants [Member] | |||||||
Exercise price | $ 10.40 | $ 10.40 | |||||
Issuance of warrants | 34,737 | 34,737 | |||||
Series B Preferred Stock [Member] | |||||||
Issuance of shares | 1,650 | ||||||
Series B Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||
Issuance of shares | 3,300 | ||||||
Per share | $ 1,000 | $ 1,000 | |||||
Issuance of Value | $ 3,300,000 | ||||||
Purchase price | $ 3,000,000 | ||||||
Exercise price | $ 9.45 | $ 9.45 | |||||
Series B Preferred Stock [Member] | Securities Purchase Agreement [Member] | Maximum [Member] | |||||||
Issuance of warrants | 192,982 | 192,982 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating Loss Carryforwards | $ 22,514,000 |
Net operating loss carryforward expected to expire amount | $ 11,196,000 |
NOLs usage against taxable income percentage | 80.00% |
Equity Method Investment, Ownership Percentage | 50.00% |
Nols carryforwards term description | three-year period |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Consulting Agreement [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Payments for commissions | $ 7,555 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - $ / shares | Apr. 01, 2022 | Mar. 31, 2022 |
Subsequent Event [Line Items] | ||
Stock options vesting, period | 3 years | |
Subsequent Event [Member] | Employment Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Stock options vesting, period | 10 years | |
Exercise price per share | $ 2.51 | |
Subsequent Event [Member] | 21 Employees [Member] | Employment Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Non qualified stock options | 31,793 |