Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 21, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41276 | ||
Entity Registrant Name | SKYX Platforms Corp. | ||
Entity Central Index Key | 0001598981 | ||
Entity Tax Identification Number | 46-3645414 | ||
Entity Incorporation, State or Country Code | FL | ||
Entity Address, Address Line One | 2855 W. McNab Road | ||
Entity Address, City or Town | Pompano Beach | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33069 | ||
City Area Code | (855) | ||
Local Phone Number | 759-7584 | ||
Title of 12(b) Security | Common Stock, no par value per share | ||
Trading Symbol | SKYX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 176,373,385 | ||
Entity Common Stock, Shares Outstanding | 96,870,902 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 2738 | ||
Auditor Name | M&K CPAS, PLLC | ||
Auditor Location | The Woodlands, TX |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 16,810,983 | $ 6,720,543 |
Restricted cash | 2,750,000 | |
Account receivable, net | 3,384,976 | |
Investments, available-for-sale | 7,373,956 | |
Inventory | 3,425,734 | 1,923,540 |
Deferred cost of revenues | 224,445 | |
Prepaid expenses and other assets | 721,717 | 311,618 |
Total current assets | 27,317,855 | 16,329,657 |
Long-term assets: | ||
Furniture and equipment, net | 436,587 | 215,998 |
Restricted cash | 2,869,270 | 2,741,054 |
Right of use assets | 21,214,652 | 23,045,293 |
Intangibles, definite life | 8,141,032 | 662,802 |
Goodwill | 16,157,000 | |
Other assets | 204,807 | 182,306 |
Total long-term assets | 49,023,348 | 26,847,453 |
Total Assets | 76,341,203 | 43,177,110 |
Current liabilities: | ||
Accounts payable and accrued expenses | 12,388,475 | 1,949,823 |
Notes payable, current | 5,724,129 | 405,931 |
Operating lease liabilities, current | 1,898,428 | 1,130,624 |
Royalty obligations, current | 800,000 | 2,638,000 |
Consideration payable | 730,999 | |
Deferred revenues | 1,475,519 | |
Total current liabilities | 24,192,550 | 7,424,378 |
Long term liabilities: | ||
Long term accrued expenses | 744,953 | |
Notes payable | 1,016,924 | 4,867,004 |
Consideration payable | 3,038,430 | |
Operating lease liabilities | 22,267,558 | 22,758,496 |
Convertible notes | 5,758,778 | |
Royalty obligations | 3,100,000 | |
Total long-term liabilities | 35,926,643 | 27,625,500 |
Total liabilities | 60,119,193 | 35,049,878 |
Commitments and Contingent Liabilities: | ||
Redeemable preferred stock - subject to redemption: $0 par value; 0 and 20,000,000 shares authorized; 0 and 880,400 and 12,376,536 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 220,099 | |
Stockholders’ Equity (Deficit): | ||
Common stock and additional paid-in capital: $0 par value, 500,000,000 shares authorized; 93,473,433 and 82,907,541 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 162,025,024 | 114,039,638 |
Accumulated deficit | (145,803,014) | (106,070,358) |
Accumulated other comprehensive loss | (62,147) | |
Total stockholders’ equity (deficit) | 16,222,010 | 7,907,133 |
Non-controlling interest | ||
Total equity (deficit) | 16,222,010 | 7,907,133 |
Total Liabilities and Stockholders’ Equity (Deficit) | 76,341,203 | 43,177,110 |
Related Party [Member] | ||
Current liabilities: | ||
Convertible notes | 825,000 | 950,000 |
Nonrelated Party [Member] | ||
Current liabilities: | ||
Convertible notes | $ 350,000 | $ 350,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Temporary equity, par value | $ 0 | $ 0 |
Temporary equity, shares authorized | 20,000,000 | 20,000,000 |
Temporary equity, shares issued | 880,400 | 12,376,536 |
Temporary equity, shares outstanding | 880,400 | 12,376,536 |
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 93,473,433 | 82,907,541 |
Common stock, shares outstanding | 93,473,433 | 82,907,541 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Revenue | $ 58,785,762 | $ 32,022 |
Cost of revenues | 40,749,913 | 18,913 |
Gross profit (loss) | 18,035,849 | 13,109 |
Selling and marketing expenses | 18,805,069 | 7,991,487 |
Total expenses, net | 55,861,055 | 26,638,291 |
Loss from operations | (37,825,206) | (26,625,182) |
Other income / (expense) | ||
Interest expense, net | (3,109,307) | (589,009) |
Gain on extinguishment of debt | 1,201,857 | 178,250 |
Other income | ||
Total other expense, net | (1,907,450) | (410,759) |
Net loss | (39,732,656) | (27,035,941) |
Common stock issued pursuant to antidilutive provisions | 4,691,022 | |
Non-controlling interest | 35,442 | |
Preferred dividends | 38,055 | |
Net loss attributed to common stockholders | (39,732,656) | (31,800,460) |
Unrealized loss on debt securities | 62,147 | (62,147) |
Net comprehensive loss attributed to common stockholders | $ (39,670,509) | $ (31,862,607) |
Net loss per share - basic | $ (0.45) | $ (0.40) |
Net loss per share - diluted | $ (0.45) | $ (0.40) |
Weighted average number of common shares outstanding- basic | 88,370,852 | 79,492,181 |
Weighted average number of common shares outstanding- diluted | 88,370,852 | 79,492,181 |
Related Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
General and administrative expenses | $ 248,215 | |
Nonrelated Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
General and administrative expenses | $ 37,055,986 | $ 18,398,589 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock Including Additional Paid in Capital [Member] | Common Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2021 | $ 70,880,386 | $ (74,269,898) | $ (3,389,512) | ||
Balance, shares at Dec. 31, 2021 | 66,295,288 | ||||
Common stock issued pursuant to offerings, shares | 1,650,000 | ||||
Common stock issued pursuant to services, shares | 1,057,293 | ||||
Common stock issued pursuant to conversion of preferred stock, shares | 12,376,536 | ||||
Common stock issued pursuant to exercise of options and warrants | 862,301 | 1,193,351 | |||
Common stock issued pursuant to acquisition, shares | |||||
Common stock issued pursuant to extinguishment of debt, shares | |||||
Common stock issued pursuant to antidilutive provisions, shares | 335,073 | ||||
Common stock issued pursuant to offerings | $ 20,552,000 | ||||
Common stock issued pursuant to services | 13,959,795 | ||||
Common stock issued pursuant to conversion of preferred stock | 3,094,134 | ||||
Debt discount | |||||
Common stock issued pursuant to acquisition | |||||
Common stock issued pursuant to extinguishment of debt | |||||
Common stock issued pursuant to antidilutive provisions | 4,691,022 | (4,691,022) | |||
Net loss | (27,035,941) | (27,035,941) | |||
Non-controlling interest | (35,442) | ||||
Preferred dividends | (38,055) | ||||
Other comprehensive loss | (62,147) | ||||
Balance at Dec. 31, 2022 | $ 114,039,638 | (106,070,358) | (62,147) | 7,907,133 | |
Balance, shares at Dec. 31, 2022 | 82,907,541 | ||||
Common stock issued pursuant to offerings, shares | 4,359,832 | ||||
Common stock issued pursuant to services, shares | 2,827,662 | ||||
Common stock issued pursuant to conversion of preferred stock, shares | 880,400 | ||||
Common stock issued pursuant to exercise of options and warrants | |||||
Common stock issued pursuant to acquisition, shares | 1,923,285 | ||||
Common stock issued pursuant to extinguishment of debt, shares | 574,713 | ||||
Common stock issued pursuant to antidilutive provisions, shares | |||||
Common stock issued pursuant to offerings | $ 9,289,857 | ||||
Common stock issued pursuant to services | 17,977,252 | ||||
Common stock issued pursuant to conversion of preferred stock | 220,100 | ||||
Debt discount | 5,569,978 | ||||
Common stock issued pursuant to acquisition | 12,887,968 | ||||
Common stock issued pursuant to extinguishment of debt | 2,040,231 | ||||
Common stock issued pursuant to antidilutive provisions | |||||
Net loss | (39,732,656) | (39,732,656) | |||
Non-controlling interest | |||||
Preferred dividends | |||||
Other comprehensive loss | 62,147 | ||||
Balance at Dec. 31, 2023 | $ 162,025,024 | $ (145,803,014) | $ 16,222,010 | ||
Balance, shares at Dec. 31, 2023 | 93,473,433 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (39,732,656) | $ (27,035,941) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,885,856 | 883,231 |
Amortization of debt discount | 1,365,789 | |
Gain on forgiveness of debt | (1,201,857) | (178,250) |
Share-based payments | 17,977,252 | 13,959,796 |
Change in operating assets and liabilities: | ||
Inventory | 283,911 | (1,004,889) |
Accounts receivable | (863,217) | |
Prepaid expenses and other assets | (218,127) | (270,600) |
Deferred charges | 1,258,636 | |
Deferred revenues | (453,514) | |
Operating lease liabilities | (687,849) | (109,895) |
Accretion operating lease liabilities | 890,474 | 377,748 |
Other assets | (180,132) | |
Royalty obligation | 1,262,000 | (1,200,000) |
Consideration payable | ||
Accounts payable and accrued expenses | 4,235,229 | 920,486 |
Net cash used in operating activities | (12,998,073) | (13,838,446) |
Cash flows from investing activities: | ||
Purchase of debt securities | (136,033) | (7,436,103) |
Proceeds from disposition of debt securities | 7,572,136 | |
Acquisition, net of cash acquired | (4,206,200) | |
Purchase of property and equipment | 10,194 | (312,689) |
Payment of patent costs and other intangibles | (307,625) | |
Net cash provided by (used in) investing activities | 3,240,097 | (8,056,417) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock- offerings | 9,820,846 | 23,100,000 |
Placement cost | (530,989) | (2,548,000) |
Proceeds from exercise of options and warrants | 862,301 | |
Proceeds from line of credit | 6,500,000 | |
Proceeds from issuance of convertible notes | 10,350,000 | |
Dividends paid | (38,055) | |
Principal repayments of notes payable | (3,413,225) | (446,035) |
Net cash provided by financing activities | 22,726,632 | 20,930,211 |
Change in cash and cash equivalents, and restricted cash | 12,968,656 | (964,652) |
Cash, cash equivalents and restricted cash at beginning of year | 9,461,597 | 10,426,249 |
Cash, cash equivalents and restricted cash at end of year | 22,430,253 | 9,461,597 |
Supplementary disclosure of non-cash financing activities: | ||
Preferred stock conversion to common | 220,100 | 3,094,134 |
Assets acquiring excluding identifiable intangible assets and goodwill and cash | 7,090,094 | |
Liabilities assumed and consideration payable | 19,755,903 | |
Identifiable intangible assets and goodwill | 19,993,525 | |
Debt discount | 5,569,978 | |
Common stock issued pursuant to antidilutive provisions | 4,691,022 | |
Fair value of shares issued pursuant to acquisition | 7,327,716 | |
Common stock pursuant to extinguishment of debt | 2,040,231 | |
Right-of-use assets and operating lease liabilities | 23,621,267 | |
Cash paid during period for: | ||
Interest | 1,094,458 | 303,957 |
Taxes |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) Attributable to Parent | $ (39,732,656) | $ (27,035,941) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 ORGANIZATION AND NATURE OF OPERATIONS SKYX Platforms Corp., a corporation (the “Company”), was incorporated in Florida in May 2004. The Company maintains offices in Sacramento, California, Johns Creek, Georgia, Miami and Pompano Beach, Florida, New York City, and Guangdong Province, China. The Company has a series of advanced-safe-smart platform technologies. The Company’s first-generation technologies enable light fixtures, ceiling fans and other electrically wired products to be installed safely and plugged-in to a ceiling’s electrical outlet box within seconds, and without the need to touch hazardous wires. The plug and play technology method is a universal power-plug device that has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play installation of light fixtures and ceiling fans in just seconds. The plug and play power-plug technology, eliminates the need of touching hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products. In recent years the Company has expanded the capabilities of its power-plug product, to include its second generation advanced-safe and quick universal installation methods, as well as advanced-smart capabilities. The smart features include control of light fixtures and ceiling fans by the SkyHome App, through WIFI, Bluetooth Low Energy and voice control. It allows scheduling, energy savings eco mode, dimming, back-up emergency light, night light, light color changing and much more. The Company’s third-generation technology is an all-in-one safe and smart-advanced platform that is designed to enhance all-around safety and lifestyle of homes and other buildings. Since April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties. Going Concern The Company’s liquidity’s sources include $ 22.4 5.6 3.1 13.0 13.8 22.7 20.9 Management intends to mitigate such conditions by continuing to support its continued growth by decreasing its cash used in operating activities through increased revenues and increased margins fr |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the Company’s significant accounting policies: Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) under the accrual basis of accounting. Non-controlling Interest The Company owns 98.8 . Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates. Reclassifications For comparability, reclassifications of certain prior-year balances were made to conform with current-year presentations, such as certain expenses previously included in cost of revenues and reclassified as general, and administrative expenses in 2022 and sales and marketing expenses which were previously included in selling, general, and administrative expenses in 2022. Basis of Consolidation The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2022 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28 to December 31, 2023. All intercompany balances and transactions have been eliminated in consolidation. Business Combination The Company accounts for its business acquisitions under the acquisition method of accounting. This method requires recording of acquired assets and assumed liabilities at their acquisition date fair values. The excess of the purchase price over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Results of operations related to the business combination are included prospectively beginning with the date of acquisition and transaction costs and transaction costs related to business combinations are recorded within selling, general, and administrative expenses. The Company acquired the outstanding units of Belami, Inc (“Belami”) and its subsidiaries on April 28, 2023. Belami is an online retailer and e-commerce provider specializing in home lighting, ceiling fans, and other home furnishings. The initial allocation of purchase price is subject to adjustment through April 2024. The allocation of purchase price may vary based on the number and fair value of the shares to be issued in April 2024. The initial allocation of the purchase price is as follows: SCHEDULE OF INITIAL ALLOCATION OF PURCHASE PRICE Assets acquired excluding identifiable intangible assets and goodwill $ 6,863,011 Customer relationships 4,500,000 E-commerce technology platforms 3,900,000 Goodwill 16,157,000 Assumed liabilities (10,943,450 ) Total Assets Acquired $ 20,476,561 Consideration: Cash outlay, net of cash acquired $ 4,206,200 Consideration payable 3,382,393 Shares of common stock 12,887,968 Total purchase price $ 20,476,561 Consideration payable primarily consists of the fair value of cash and amounting to $ 3.1 750,000 6 The goodwill recognized, none of which is deductible for income tax purposes, is attributable to the assembled workforce of Belami and to expected synergies and other benefits that the Company believes will result from combining its operations with Belami’s. The intangible assets recognized are primarily attributable to expected increased margins that the Company believes will result from Belami’s existing customer relationships and increased margins from the e-commerce technology platforms Belami has developed over the years. Cash, Cash Equivalents, and restricted cash. The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At December 31, 2023 and December 31, 2022, the Company’s cash composition was follows: SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2023 December 31, 2022 Cash and cash equivalents $ 16,810,983 $ 6,720,543 Restricted cash 5,619,270 2,741,054 Total cash, cash equivalents and restricted cash $ 22,430,253 $ 9,461,597 Restricted Cash The Company issued a letter of credit of $ 2.8 2.8 750,000 2.0 Customer Contracts Balances Accounts receivables are recorded in the period when the right to receive payment or other consideration becomes unconditional. Accounts receivables are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts based upon an estimate of probable credit losses in existing accounts receivable. The majority of the Company’s accounts receivable are from third-party payers and are paid within a few days from the order date. The Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, historical experience, and currently available evidence. As of December 31, 2023, and December 31, 2022, the Company’s allowance for doubtful accounts was $ 54,987 0 182,584 0 The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. As of December 31, 2023, the deferred revenues amounted to $ 1,475,519 no The costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet. Such charges include the carrying value of related inventory, freight, and sales charges. The deferred charges amounted to $ 224,445 no Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3 7 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand. SCHEDULE OF INVENTORY December 31, 2023 December 31, 2022 Inventory, component parts $ 930,252 $ 1,923,540 Inventory, finished goods 2,495,482 - Inventory- total $ 3,425,734 1,923,540 The Company will maintain an allowance based on specific inventory items that are obsolete. The Company tracks inventory as it is repurposed ,disposed, scrapped, or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. Losses from subsequent measurement of inventory amounted to $ 1.3 0 Securities Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses included in accumulated other comprehensive income. Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are not deemed to be other-than—temporary) reported as a component of other comprehensive income (loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based on the first-in, first-out method. The Company evaluates its available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value. Corporate, state and local government debt securities consist of debt from relatively large corporate organizations and certain state and local governmental agencies. The Company reviews trading activity and pricing for each of the debt securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists to support Level I classification of these securities. When sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs at dates other than the measurement dates. As a result, the Company classifies its debt securities as Level I and Level II of the fair value hierarchy. Management does not believe that its investment in debt securities were impaired as of December 31, 2022. Intangible Assets Intangible assets were recorded in connection with the acquisition of Belami. Intangible assets with finite lives, which consist of customer relationships and e-commerce technology platforms, are being amortized over their estimated useful lives on a straight-line basis. Such intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining estimated useful life through undiscounted estimated future cash flows. If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. Estimated future cash flows are based on trends of historical performance and the Company’s estimate of future performance, considering existing and anticipated competitive and economic conditions. The Company developed various patents for an installation device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States Patent and Trademark Office for these patents have been capitalized. Patent costs are amortized using the straight-line method over the related 15 The Company incurs certain legal and related costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. The Company also capitalizes legal costs incurred in the defense of the Company’s patents when it is believed that the future economic benefit of the patent will be maintained or increased, and a successful defense is probable. Capitalized patent defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of future economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome of litigation could result in a material impairment charge up to the carrying value of these assets. Management has determined that there was no Goodwill Goodwill, which was recorded in connection with the acquisition of Belami, is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill represents the excess of the purchase price of Belami over the fair value of its identifiable net assets acquired. Goodwill is tested for impairment at the reporting unit level. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. If the carrying amount of the reporting unit’s net assets exceeds its fair value, then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over its implied fair value. After an impairment loss is recognized, the adjusted carrying amount of goodwill is its new accounting basis. Accounting guidance on the testing of goodwill for impairment allows entities testing goodwill for impairment the option of performing a qualitative assessment to determine the likelihood of goodwill impairment and whether it is necessary to perform such two-step impairment test. The initial carrying value of goodwill associated with the Belami acquisition may vary during the first year of initial purchase (through April 2024) if the carrying value of the assets acquired or assumed liabilities or the fair value of the shares issuable in April 2024 varies from the initial allocation of assets previously performed or based on the number of shares the Company has to issue in April 2024. Management has determined that there was no GE Agreements The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products. A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement under similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of Sky’s Standard and Smart plug-and-play products set forth in a statement of work in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work. A letter agreement dated November 28, 2023. The agreement expires on December 15, 2027 and includes a Repayment Plan Under U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, SQL’s revised royalty payment obligation is $ 2.7 in the aggregate (the “Royalty Payment”) payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and $ 1.4 million payable in 2027. Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: ● Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. ● Level 2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable – related party, and GE royalty obligation, approximate their fair values because of the short maturity of these instruments. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported as charges or credits to income. As of December 31, 2023, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion features on warrants, options, estricted stock units, and convertible notes. These shares have been reserved for issuance by the Company’s stock transfer agent, and accordingly, no derivative liability has been calculated on these shares. Extinguishments of Liabilities The Company accounts for extinguishments of liabilities in accordance with ASC 405-20 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized. Stock-based Compensation The Company periodically issues common stock, RSUs and stock options to officers, directors, employees and consultants for services rendered. The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered. In June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees subject to certain exceptions. The Company adopted ASU 2018-07 with respect to grants of shares of common stock of the Company made in January 2019. The adoption of ASU 2018-07 did not have a material impact on the consolidated financial statements. Prior to the adoption of ASU 2018-07 in January 2019, stock-based awards granted to non-employees were accounted for in accordance with ASU 505-50 – Equity-Based Payments to Non-Employees (“ASU 505-50”). ASU 505-50 measures stock-based compensation at either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is completed. The expense resulting from share-based payments is recorded in operating expenses in the statements of operations. Revenue Recognition The Company currently generates revenues substantially from home lighting, ceiling fans, and smart products through its family of internet sites and marketplaces. A substantial portion of the Company’s customers’ orders are made and paid contemporaneously by credit card and shipped through third-party delivery providers. The Company recognizes revenues once it concludes that the control of the product is transferred to the customer, which is upon delivery. The Company records reductions to revenue for estimated customer sales returns and replacements, net of sales tax. The Company receives rebate and cooperative allowances based on a percentage of periodic purchases from certain vendors. These vendor considerations are reflected as a reduction of costs of revenues. The vendor considerations, the rights of returns and replacements are based upon estimates that are determined by historical experience, contractual terms, and current market conditions. The primary factors affecting the Company’s accrual for estimated customer rights of returns include estimated customer return rates as well as the number of units shipped that have a right of return that have not expired as of the measurement date. Cost of Revenues Cost of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage and obsolescence. These costs include the costs of purchased products, inbound freight, and custom duties. Selling, General and Administrative Expenses Shipping and handling costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative expenses. Additionally, selling, general and administrative expenses include marketing, professional fees, distribution, warehouse costs, and other related selling costs. Selling expenses include costs incurred in the selling of merchandise. General and administrative expenses include costs incurred in the administration or general operations of the business. Stock compensation expense consists of non-cash charges resulting from the issuance of stock units and stock options that are disclosed in the selling, general and administrative expenses and included as operating expenses. Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carrybacks and carryforwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In the management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting periods ended December 31, 2023, and 2022. Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows. Comprehensive Income or loss Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’ equity section of the statements of financial condition. Such items along with net income are components of comprehensive income. Loss Per Share Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the years ended December 31, 2023, and 2022, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, a separate computation of diluted earnings (loss) per share is not presented for the periods presented. The Company had the following anti-dilutive common stock equivalents at December, 2023 and 2022: SCHEDULE OF EARNING (LOSS) PER SHARE December 31, December 31, Stock warrants 2,063,522 1,928,211 Stock options 35,807,476 33,289,250 Convertible notes 3,920,005 86,668 Preferred stock - 880,400 Total 41,791,003 36,164,529 Anti-dilutive common stock equivalents at December 31, 2023 excludes shares issuable in April 2024 pursuant to the business combination of Belami which range between 1,390,065 1,853,421 Recently Issued Accounting Pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements. Change in Accounting Principles Historically, the Company recognized its revenues of products shipped by third-party providers upon shipment. During the second quarter of 2023, the Company changed its revenue recognition policy as it believes that it is preferable to recognize the revenues of products shipped by such third-party providers upon delivery. This revenue recognition method is consistent with the method used by Belami. The change in accounting principle does not significantly impact on the revenues historically recorded by the Company. |
DEBT SECURITIES
DEBT SECURITIES | 12 Months Ended |
Dec. 31, 2023 | |
Debt Securities | |
DEBT SECURITIES | NOTE 3 DEBT SECURITIES The components of investments as of December 31, 2022, were as follows: SCHEDULE OF COMPONENTS OF INVESTMENTS Fair value level Cost Unrealized loss Carrying value Corporate debt securities Level 1 $ 3,537,556 $ (56,710 ) $ 3,480,846 State and local government debt securities Level 1 908,354 (5,437 ) 902,917 State and local government debt securities Level 2 2,945,648 – 2,945,648 Accrued interest Level 1 44,545 - 44,545 Total $ 7,436,103 $ (62,147 ) $ 7,373,956 The Company disposed of its portfolio of debt securities during 2023. |
FURNITURE AND EQUIPMENT
FURNITURE AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE AND EQUIPMENT | NOTE 4 FURNITURE AND EQUIPMENT Furniture and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT December 31, December 31, Machinery and equipment $ 282,799 $ 67,419 Computer equipment 6,846 6,846 Furniture and fixtures 36,059 36,059 Tooling and production 642,509 534,204 Software development costs 109,096 – Leasehold improvements 30,553 30,553 Total 1,107,862 675,081 Less: accumulated depreciation (671,275 ) (459,083 ) Total, net $ 436,587 $ 215,998 Depreciation expenses amounted to $ 93,693 70,767 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 5 INTANGIBLE ASSETS AND GOODWILL Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS December 31, December 31, Patents and trademarks (useful life 15 $ 1,040,927 $ 869,822 Customer relationships (useful life 7 4,500,000 – E-commerce technology platforms (useful life 4 3,900,000 – Total 3,900,000 – Less: accumulated amortization (1,299,895 ) (207,020 ) Total, net $ 8,141,032 $ 662,802 Amortization expense on intangible assets was $ 1,092,876 51,634 The following table sets forth the estimated amortization expense for the next five years: SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE Twelve months ended December 31, 2024 $ 1,673,613 2025 1,673,613 2026 1,673,613 2027 1,511,113 2028 698,613 2029 698,613 Goodwill increased by $ 16.2 |
DEBTS
DEBTS | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBTS | NOTE 6 DEBTS The following table presents the details of the principal outstanding: SCHEDULE OF DEBT TABLE December 31, 2023 December 31, 2022 APR at December 31, 2023 Maturity Collateral Notes payable $ – $ 5,115,000 8.00 % Satisfied prior to maturity Substantially all Company assets Convertible Notes (b) 11,525,000 1,300,000 6.00 10.00 % September 2023-March 2026 Substantially all company assets Notes payable to financial institutions a) 6,348,104 – 7.93 8.5 August 2024-August 2026 Inventory, accounts receivable, cash ,Notes payable to Belami sellers 247,927 – 7.93 % April 2024 – SBA-related loans (c) 145,022 157,835 3.75 % April 2025-November 2052 Substantially all Company assets Total $ 18,266,053 $ 6,572,835 Unamortized debt discount (4,591,222 ) – Debt, net of Unamortized debt Discount 13,674,831 6,572,835 SCHEDULE OF INTEREST EXPENSE For the year period ended December 31, December 31, Interest expense, net 3,109,307 589,009 Interest expense is recognized as net of interest income which amounted to $ 451,703 188,132 As of December 31, 2023, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS 2024 6,899,129 2025 642,648 2026 10,583,359 2027 3,040 2028 and thereafter 137,877 Total $ 18,266,053 (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate. (b) Included in Convertible Notes are loans provided to the Company from one director, two officers and two investors. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 15 All convertible notes are convertible at a price ranging between $ 2.70 15 During 2023, the Company issued convertible promissory notes for $ 10.4 1,391,667 2.70 5.6 700,000 (c) The Small Business Administration forgave approximately $ 178,000 |
OPERATING LEASE LIABILITIES
OPERATING LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Operating Lease Liabilities | |
OPERATING LEASE LIABILITIES | NOTE 7 OPERATING LEASE LIABILITIES In April 2022, the Company entered into a 58-month lease related to certain office and showroom space pursuant to a sublease that expires in February 2027. The Company recognized a right-of-use asset and a liability of $ 1,428,764 In September 2022, the Company entered in a 124-month lease related to its future headquarters offices and showrooms space. The Company recognized a right-of-use asset and a liability of $ 22,192,503 2.7 The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of December 31, 2023: SCHEDULE OF LEASE COST OPERATING LEASE December 31, Lease costs: Cash paid for operating lease liabilities $ 687,849 Right-of-use assets obtained in exchange for new operating lease obligations 21,214,652 Fixed rent payment $ 280,218 Lease – Depreciation expense $ 1,870,393 years ended December 31, Other information: Weighted-average discount rate 6.41 % Weighted-average remaining lease term (in months) 102 SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation 2024 1,898,428 2025 2,119,073 2026 2,357,033 2027 2,288,363 2028 and thereafter 15,503,089 Total $ 24,165,986 |
ROYALTY OBLIGATIONS
ROYALTY OBLIGATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Royalty Obligations | |
ROYALTY OBLIGATIONS | NOTE 8 ROYALTY OBLIGATIONS The Company had a license agreement with General Electric (“GE”) which provided, among other things, for rights to market certain of the Company’s products displaying the GE brand in consideration of royalty payments to GE. The agreement expired in 2023. The Company owes $ 2.5 million to GE pursuant to the license agreement. The payments associated with this debt are payable in quarterly tranches aggregating $ 0.8 million during 2024 and 2025 and $ 0.9 1.4 million pursuant to its agreements with GE which is payable in 2027 which is recorded as an accounts payable in the accompanying balance sheet as of December 31, 2023. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 9 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES December 31, December 31, Accrued interest, convertible notes $ 744,953 $ 104,735 Trade payables 11,513,918 1,369,702 Accrued compensation 874,557 475,417 Total $ 13,133,428 $ 1,949,823 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 INCOME TAXES Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled. On December 31, 2023, the Company had a net operating loss carryforward of approximately $ 37,502,020 available to offset future taxable income indefinitely. Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of the Internal Revenue Code. On December 31, 2022, the Company had a net operating loss carryforward of approximately $ 27,035,941 available to offset future taxable income indefinitely. Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of the Internal Revenue Code. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2023, and 2022. The effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2023 and December 31, 2022 were approximately as follows: SCHEDULE OF DEFERRED TAX ASSETS December 31 2023 2022 Net operating loss carryforward $ 28,012,804 $ 17,293,894 Stock-based compensation 5,018,041 2,392,262 Rights of use assets (6,135,853 ) (5,886,344 ) Operating lease liabilities 6,989,458 6,101,878 Less Valuation Allowance (33,884,451 ) (19,901,690 ) Total Deferred Tax Assets – Net $ — $ — The Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2023 and December 31, 2022 and the reconciliation is as follows. SCHEDULE OF INCOME TAX RATE RECONCILIATION 2023 2022 Computed statutory tax benefit – Federal $ (10,885,333 ) $ (5,977,363 ) Computed statutory tax benefit – State (1,775,915 ) (1,292,961 ) Permanent difference (1,321,512 ) - Change in valuation allowance 13,982,761 7,270,323 $ –– $ –– |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS Convertible Notes Due to Related Parties Convertible notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers. The outstanding principal on the convertible promissory notes, associated with related parties was $ 825,000 1,300,000 151,081 104,735 Initial Public Offering The Company issued 455,353 6,374,942 The Company issued 95,386 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 12 STOCKHOLDERS’ EQUITY (A) Common Stock The Company issued the following common stock during 2023, and 2022: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ (Issued) Range of Value Per Share 2023 Equity Transactions Common stock issued pursuant to acquisition 1,923,285 12,887,968 $ 6.7 Common stock issued, pursuant to services provided 2,827,662 17,977,252 1.22 3.82 Conversion of preferred stock 880,400 220,100 0.25 Issuance of common stock pursuant to offering, net 4,359,832 9,289,857 1.45 3.25 Common stock issued pursuant to extinguishment of debt 574,713 2,040,231 3.55 Transaction Type Shares Issued Valuation $(Issued) Range of Value Per Share 2022 Equity Transactions Common stock issued per exercise of options and warrants 599,651 $ 862,301 $ 0.10 14.0 Common stock issued per exercise of warrants, cashless 437,711 — — Common stock issued, pursuant to services provided 1,057,293 8,235,880 2.0 14.0 Conversion of preferred stock 12,376,536 3,094,134 0.25 Issuance of common stock pursuant to offering, net 1,650,000 23,100,000 14.0 Issuance of common stock, pursuant to anti-dilutive provisions 335,073 4,691,022 14.0 The Company issued 335,073 The Company satisfied its obligations under a note payable, initially maturing in September 2026, amounting to $ 6.2 2 574,713 1,201,857 Valuation of the common stock issued pursuant to acquisition includes the carrying value of shares issuable in April 2024. The Company anticipates that the number of shares of its common stock issuable in April 2024 will range between 1,390,066 1,853,421 5,560,262 (B) Preferred Stock The following is a summary of the Company’s Preferred SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2022 880,400 $ 220,100 $ 0.25 Preferred Stock conversions 880,400 220,100 0.25 Preferred Stock Balance at December 31, 2023 — $ — $ 0.25 Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2021 13,256,936 $ 3,314,233 $ 0.25 2022 Preferred Stock conversions (12,376,536 ) (3,094,133 ) 0.25 Preferred Stock Balance at December 31, 2022 880,400 $ 220,100 $ 0.25 The Series A Preferred Stock was convertible at the holder’s option. The Company could repurchase shares of the Preferred Stock for $ 3.50 0.25 Holders of preferred stock converted 880,400 12,376,536 no (C) Stock Options The following is a summary of the Company’s stock option activity during 2023 and 2022: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2023 33,289,250 $ 7.73 –– $ Exercised – 1.49 –– –– Granted 3,264,728 2.47 –– –– Forfeited (746,502 ) 4.23 –– Outstanding, December 31, 2023 35,807,476 $ 7.33 2.7788 $ 2,998,980 Exercisable, December 31, 2023 13,242,119 $ 4.3 2.1793 $ 2,938,370 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2022 21,927,182 $ 3.36 –– $ Exercised (635,640 ) 1.49 –– $ –– Granted 13,832,500 11.74 –– –– Forfeited (1,834,792 ) 3.81 –– –– Outstanding, December 31, 2022 33,289,250 $ 7.73 3.43 $ 5,994,300 Exercisable, December 31, 2022 12,236,672 $ 3.92 2.7 $ 5,994,300 The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2023 and 2022: SCHEDULE OF BLACK SCHOLES PRICING MODEL December 31, December 31, Range Range Stock price $ 3.81 $ 6.5 12.34 Exercise price $ 0 14 $ 0.1 14 Expected life (in years) 5.00 1.5 5.8 Volatility 55.23 % 10 31 % Risk-fee interest rate 4.91 % 1.37 2.97 % Dividend yield — — The Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during a term comparable to the expected term of stock option issued. The Company relies on the expected volatility of comparable publicly traded companies within its industry sector, which is deemed more relevant, to compute its expected volatility. Unamortized future option expense was $ 13.0 61 1.4 (D) Warrants Issued The following is a summary of the Company’s warrant activity during 2023 and 2022: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2023 1,908,211 $ 5.45 Issued 1,391,667 3.0 Exercised — — Forfeited 1,236,356 2.80 Balance, December 31, 2023 2,063,522 $ 5.76 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2022 2,127,895 $ 5.4 Issued 608,961 3.3 Exercised (597,021 ) 3.3 Forfeited/Cancelled (231,624 ) 9.8 Balance, December 31, 2022 1,908,211 $ 5.45 During 2023, the Company issued convertible promissory notes for $ 10.4 1,391,667 3 2.70 5.6 During 2022, the Company issued 608,961 3 9.80 18.2 (E) Restricted stock units A summary of the Company’s non-vested restricted stock units during 2023 and 2022 are as follows SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units, January 1, 2023 2,516,461 $ 8.39 Granted 5,895,095 1.54 Vested (3,168,053 ) 3.24 Forfeited (307,681 ) 8.92 Non-Vested restricted stock units, December 31, 2023 4,935,822 7.99 Non-vested restricted stock units, January 1, 2022 770,500 3.3 Granted 2,659,109 9.2 Vested (912,548 ) 6.5 Forfeited (600 ) 2.5 Non-vested restricted stock units December 31, 2022 2,516,461 8.39 The weighted-average remaining contractual life of the restricted units as of December 31, 2023 is 1.85 One RSU and RSA gives the right to one share of the Company’s common stock. RSU and RSAs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period. For the years ended December 31, 2023, and 2022, the Company recognized compensation expense of $ 18.0 million, and $ 14.0 million , respectively, related to RSUs, RSAs and stock options |
CONCENTRATIONS OF RISKS
CONCENTRATIONS OF RISKS | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISKS | NOTE 13 CONCENTRATIONS OF RISKS Major Customers and Accounts Receivable The Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue. The Company had one third-party payor accounts receivable balance representing 24 Liquidity The Company’s cash and cash equivalents are held primarily with two financial institutions. The Company has deposits which exceed the amount insured by the FDIC. To reduce the risk associated with the failure of such counterparties, the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits. Product and Geographic Markets The Company generates its income primarily from lighting and heating products sold primarily in the United States. |
PROFORMA FINANCIAL STATEMENTS (
PROFORMA FINANCIAL STATEMENTS (unaudited) | 12 Months Ended |
Dec. 31, 2023 | |
Proforma Financial Statements | |
PROFORMA FINANCIAL STATEMENTS (unaudited) | NOTE 14 PROFORMA FINANCIAL STATEMENTS (unaudited) The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2022: SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION 2023 2022 Twelve-month period ended 2023 2022 Revenues $ 82,823,223 $ 88,824,119 Net loss $ (39,495,552 ) $ (27,001,995 ) Basic and diluted loss per share $ (0.43 ) $ (0.32 ) Weighted average number of shares outstanding- basic and diluted 92,768,792 84,064,095 These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results to reflect, among other things, 1) additional amortization that would have been charged assuming the fair value adjustments to amortizable intangible assets had been applied, 2) the shares issued and issuable by the Company to acquire Belami, 3) fair value of the initial grant and options to Belami employees, and 4) the increase in interest expense related to the issuance of convertible notes payable, including amortization of debt discount. Furthermore, it excludes transaction costs related to the Belami acquisition. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have resulted had the acquisition occurred on the date indicated or that may result in the future. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENTS Management has evaluated subsequent events through April 1, 2024, which is the date the consolidated financial statements were available to be issued. There were no significant subsequent events that required adjustment to or disclosure in the consolidated financial statements with the exception of the following: The Company generated proceeds of $ 3.6 2,733,361 The selling shareholders of Belami agreed to extend the payment of the Company’s consideration payable of $ 3.1 10 3 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) under the accrual basis of accounting. |
Non-controlling Interest | Non-controlling Interest The Company owns 98.8 . |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future nonconforming events. Accordingly, actual results could differ significantly from estimates. |
Reclassifications | Reclassifications For comparability, reclassifications of certain prior-year balances were made to conform with current-year presentations, such as certain expenses previously included in cost of revenues and reclassified as general, and administrative expenses in 2022 and sales and marketing expenses which were previously included in selling, general, and administrative expenses in 2022. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC from January 1, 2022 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and Confero Group LLC from April 28 to December 31, 2023. All intercompany balances and transactions have been eliminated in consolidation. |
Business Combination | Business Combination The Company accounts for its business acquisitions under the acquisition method of accounting. This method requires recording of acquired assets and assumed liabilities at their acquisition date fair values. The excess of the purchase price over the fair value of the assets acquired and liabilities assumed is recorded as goodwill. Results of operations related to the business combination are included prospectively beginning with the date of acquisition and transaction costs and transaction costs related to business combinations are recorded within selling, general, and administrative expenses. The Company acquired the outstanding units of Belami, Inc (“Belami”) and its subsidiaries on April 28, 2023. Belami is an online retailer and e-commerce provider specializing in home lighting, ceiling fans, and other home furnishings. The initial allocation of purchase price is subject to adjustment through April 2024. The allocation of purchase price may vary based on the number and fair value of the shares to be issued in April 2024. The initial allocation of the purchase price is as follows: SCHEDULE OF INITIAL ALLOCATION OF PURCHASE PRICE Assets acquired excluding identifiable intangible assets and goodwill $ 6,863,011 Customer relationships 4,500,000 E-commerce technology platforms 3,900,000 Goodwill 16,157,000 Assumed liabilities (10,943,450 ) Total Assets Acquired $ 20,476,561 Consideration: Cash outlay, net of cash acquired $ 4,206,200 Consideration payable 3,382,393 Shares of common stock 12,887,968 Total purchase price $ 20,476,561 Consideration payable primarily consists of the fair value of cash and amounting to $ 3.1 750,000 6 The goodwill recognized, none of which is deductible for income tax purposes, is attributable to the assembled workforce of Belami and to expected synergies and other benefits that the Company believes will result from combining its operations with Belami’s. The intangible assets recognized are primarily attributable to expected increased margins that the Company believes will result from Belami’s existing customer relationships and increased margins from the e-commerce technology platforms Belami has developed over the years. |
Cash, Cash Equivalents, and restricted cash. | Cash, Cash Equivalents, and restricted cash. The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At December 31, 2023 and December 31, 2022, the Company’s cash composition was follows: SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2023 December 31, 2022 Cash and cash equivalents $ 16,810,983 $ 6,720,543 Restricted cash 5,619,270 2,741,054 Total cash, cash equivalents and restricted cash $ 22,430,253 $ 9,461,597 |
Restricted Cash | Restricted Cash The Company issued a letter of credit of $ 2.8 2.8 750,000 2.0 |
Customer Contracts Balances | Customer Contracts Balances Accounts receivables are recorded in the period when the right to receive payment or other consideration becomes unconditional. Accounts receivables are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts based upon an estimate of probable credit losses in existing accounts receivable. The majority of the Company’s accounts receivable are from third-party payers and are paid within a few days from the order date. The Company determines the allowance based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, historical experience, and currently available evidence. As of December 31, 2023, and December 31, 2022, the Company’s allowance for doubtful accounts was $ 54,987 0 182,584 0 The Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement date. Such amounts are recognized as deferred revenues in the accompanying balance sheet. As of December 31, 2023, the deferred revenues amounted to $ 1,475,519 no The costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet. Such charges include the carrying value of related inventory, freight, and sales charges. The deferred charges amounted to $ 224,445 no Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3 7 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations. |
Inventory | Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand. SCHEDULE OF INVENTORY December 31, 2023 December 31, 2022 Inventory, component parts $ 930,252 $ 1,923,540 Inventory, finished goods 2,495,482 - Inventory- total $ 3,425,734 1,923,540 The Company will maintain an allowance based on specific inventory items that are obsolete. The Company tracks inventory as it is repurposed ,disposed, scrapped, or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. Losses from subsequent measurement of inventory amounted to $ 1.3 0 |
Securities | Securities Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses included in accumulated other comprehensive income. Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are not deemed to be other-than—temporary) reported as a component of other comprehensive income (loss). Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based on the first-in, first-out method. The Company evaluates its available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and the Company’s ability and intent to hold the investment for sufficient time for its market value to recover. For impairments that are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value of the investment then becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value. Corporate, state and local government debt securities consist of debt from relatively large corporate organizations and certain state and local governmental agencies. The Company reviews trading activity and pricing for each of the debt securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists to support Level I classification of these securities. When sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs at dates other than the measurement dates. As a result, the Company classifies its debt securities as Level I and Level II of the fair value hierarchy. Management does not believe that its investment in debt securities were impaired as of December 31, 2022. |
Intangible Assets | Intangible Assets Intangible assets were recorded in connection with the acquisition of Belami. Intangible assets with finite lives, which consist of customer relationships and e-commerce technology platforms, are being amortized over their estimated useful lives on a straight-line basis. Such intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining estimated useful life through undiscounted estimated future cash flows. If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. Estimated future cash flows are based on trends of historical performance and the Company’s estimate of future performance, considering existing and anticipated competitive and economic conditions. The Company developed various patents for an installation device used in light fixtures and ceiling fans. Costs incurred for submitting the applications to the United States Patent and Trademark Office for these patents have been capitalized. Patent costs are amortized using the straight-line method over the related 15 The Company incurs certain legal and related costs in connection with patent applications. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. The Company also capitalizes legal costs incurred in the defense of the Company’s patents when it is believed that the future economic benefit of the patent will be maintained or increased, and a successful defense is probable. Capitalized patent defense costs are amortized over the remaining expected life of the related patent. The Company’s assessment of future economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome of litigation could result in a material impairment charge up to the carrying value of these assets. Management has determined that there was no |
Goodwill | Goodwill Goodwill, which was recorded in connection with the acquisition of Belami, is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill represents the excess of the purchase price of Belami over the fair value of its identifiable net assets acquired. Goodwill is tested for impairment at the reporting unit level. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. If the carrying amount of the reporting unit’s net assets exceeds its fair value, then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over its implied fair value. After an impairment loss is recognized, the adjusted carrying amount of goodwill is its new accounting basis. Accounting guidance on the testing of goodwill for impairment allows entities testing goodwill for impairment the option of performing a qualitative assessment to determine the likelihood of goodwill impairment and whether it is necessary to perform such two-step impairment test. The initial carrying value of goodwill associated with the Belami acquisition may vary during the first year of initial purchase (through April 2024) if the carrying value of the assets acquired or assumed liabilities or the fair value of the shares issuable in April 2024 varies from the initial allocation of assets previously performed or based on the number of shares the Company has to issue in April 2024. Management has determined that there was no |
GE Agreements | GE Agreements The Company has two U.S. and global agreements with General Electric (“GE”) related to the Company’s products. A U.S. and Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement under similar terms. The agreement expires on December 4, 2028 and includes automatic renewal provisions. Pursuant to such agreement, GE’s licensing team has the rights to exclusively license certain of Sky’s Standard and Smart plug-and-play products set forth in a statement of work in the U.S. and worldwide. Pursuant to the agreement, the Company expects that GE’s licensing team will seek and arrange licensee partners for our products in the U.S. and globally, including negotiating agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting in auditing product quality control under the “Six Sigma” guidelines. For products licensed to third parties, the Company and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in the applicable statement of work. A letter agreement dated November 28, 2023. The agreement expires on December 15, 2027 and includes a Repayment Plan Under U.S. and Global Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc. Under this new payment arrangement, SQL’s revised royalty payment obligation is $ 2.7 in the aggregate (the “Royalty Payment”) payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and $ 1.4 million payable in 2027. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: ● Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. ● Level 2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable – related party, and GE royalty obligation, approximate their fair values because of the short maturity of these instruments. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported as charges or credits to income. As of December 31, 2023, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion features on warrants, options, estricted stock units, and convertible notes. These shares have been reserved for issuance by the Company’s stock transfer agent, and accordingly, no derivative liability has been calculated on these shares. |
Extinguishments of Liabilities | Extinguishments of Liabilities The Company accounts for extinguishments of liabilities in accordance with ASC 405-20 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized. |
Stock-based Compensation | Stock-based Compensation The Company periodically issues common stock, RSUs and stock options to officers, directors, employees and consultants for services rendered. The Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation. Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award. Stock-based awards to employees are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events. Additionally, stock-based awards to non-employees are expensed over the period in which the related services are rendered. In June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees subject to certain exceptions. The Company adopted ASU 2018-07 with respect to grants of shares of common stock of the Company made in January 2019. The adoption of ASU 2018-07 did not have a material impact on the consolidated financial statements. Prior to the adoption of ASU 2018-07 in January 2019, stock-based awards granted to non-employees were accounted for in accordance with ASU 505-50 – Equity-Based Payments to Non-Employees (“ASU 505-50”). ASU 505-50 measures stock-based compensation at either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is completed. The expense resulting from share-based payments is recorded in operating expenses in the statements of operations. |
Revenue Recognition | Revenue Recognition The Company currently generates revenues substantially from home lighting, ceiling fans, and smart products through its family of internet sites and marketplaces. A substantial portion of the Company’s customers’ orders are made and paid contemporaneously by credit card and shipped through third-party delivery providers. The Company recognizes revenues once it concludes that the control of the product is transferred to the customer, which is upon delivery. The Company records reductions to revenue for estimated customer sales returns and replacements, net of sales tax. The Company receives rebate and cooperative allowances based on a percentage of periodic purchases from certain vendors. These vendor considerations are reflected as a reduction of costs of revenues. The vendor considerations, the rights of returns and replacements are based upon estimates that are determined by historical experience, contractual terms, and current market conditions. The primary factors affecting the Company’s accrual for estimated customer rights of returns include estimated customer return rates as well as the number of units shipped that have a right of return that have not expired as of the measurement date. |
Cost of Revenues | Cost of Revenues Cost of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage and obsolescence. These costs include the costs of purchased products, inbound freight, and custom duties. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Shipping and handling costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative expenses. Additionally, selling, general and administrative expenses include marketing, professional fees, distribution, warehouse costs, and other related selling costs. Selling expenses include costs incurred in the selling of merchandise. General and administrative expenses include costs incurred in the administration or general operations of the business. Stock compensation expense consists of non-cash charges resulting from the issuance of stock units and stock options that are disclosed in the selling, general and administrative expenses and included as operating expenses. |
Income Tax Provision | Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carrybacks and carryforwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In the management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. |
Uncertain Tax Positions | Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting periods ended December 31, 2023, and 2022. |
Contingencies | Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows. |
Comprehensive Income or loss | Comprehensive Income or loss Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’ equity section of the statements of financial condition. Such items along with net income are components of comprehensive income. |
Loss Per Share | Loss Per Share Basic net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the “treasury stock” method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the years ended December 31, 2023, and 2022, the Company recognized net loss and a dilutive net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period. Therefore, a separate computation of diluted earnings (loss) per share is not presented for the periods presented. The Company had the following anti-dilutive common stock equivalents at December, 2023 and 2022: SCHEDULE OF EARNING (LOSS) PER SHARE December 31, December 31, Stock warrants 2,063,522 1,928,211 Stock options 35,807,476 33,289,250 Convertible notes 3,920,005 86,668 Preferred stock - 880,400 Total 41,791,003 36,164,529 Anti-dilutive common stock equivalents at December 31, 2023 excludes shares issuable in April 2024 pursuant to the business combination of Belami which range between 1,390,065 1,853,421 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements. |
Change in Accounting Principles | Change in Accounting Principles Historically, the Company recognized its revenues of products shipped by third-party providers upon shipment. During the second quarter of 2023, the Company changed its revenue recognition policy as it believes that it is preferable to recognize the revenues of products shipped by such third-party providers upon delivery. This revenue recognition method is consistent with the method used by Belami. The change in accounting principle does not significantly impact on the revenues historically recorded by the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF INITIAL ALLOCATION OF PURCHASE PRICE | SCHEDULE OF INITIAL ALLOCATION OF PURCHASE PRICE Assets acquired excluding identifiable intangible assets and goodwill $ 6,863,011 Customer relationships 4,500,000 E-commerce technology platforms 3,900,000 Goodwill 16,157,000 Assumed liabilities (10,943,450 ) Total Assets Acquired $ 20,476,561 Consideration: Cash outlay, net of cash acquired $ 4,206,200 Consideration payable 3,382,393 Shares of common stock 12,887,968 Total purchase price $ 20,476,561 |
SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH | The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. At December 31, 2023 and December 31, 2022, the Company’s cash composition was follows: SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH December 31, 2023 December 31, 2022 Cash and cash equivalents $ 16,810,983 $ 6,720,543 Restricted cash 5,619,270 2,741,054 Total cash, cash equivalents and restricted cash $ 22,430,253 $ 9,461,597 |
SCHEDULE OF INVENTORY | SCHEDULE OF INVENTORY December 31, 2023 December 31, 2022 Inventory, component parts $ 930,252 $ 1,923,540 Inventory, finished goods 2,495,482 - Inventory- total $ 3,425,734 1,923,540 |
SCHEDULE OF EARNING (LOSS) PER SHARE | The Company had the following anti-dilutive common stock equivalents at December, 2023 and 2022: SCHEDULE OF EARNING (LOSS) PER SHARE December 31, December 31, Stock warrants 2,063,522 1,928,211 Stock options 35,807,476 33,289,250 Convertible notes 3,920,005 86,668 Preferred stock - 880,400 Total 41,791,003 36,164,529 |
DEBT SECURITIES (Tables)
DEBT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Securities | |
SCHEDULE OF COMPONENTS OF INVESTMENTS | The components of investments as of December 31, 2022, were as follows: SCHEDULE OF COMPONENTS OF INVESTMENTS Fair value level Cost Unrealized loss Carrying value Corporate debt securities Level 1 $ 3,537,556 $ (56,710 ) $ 3,480,846 State and local government debt securities Level 1 908,354 (5,437 ) 902,917 State and local government debt securities Level 2 2,945,648 – 2,945,648 Accrued interest Level 1 44,545 - 44,545 Total $ 7,436,103 $ (62,147 ) $ 7,373,956 |
FURNITURE AND EQUIPMENT (Tables
FURNITURE AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF FURNITURE AND EQUIPMENT | Furniture and equipment consisted of the following: SCHEDULE OF FURNITURE AND EQUIPMENT December 31, December 31, Machinery and equipment $ 282,799 $ 67,419 Computer equipment 6,846 6,846 Furniture and fixtures 36,059 36,059 Tooling and production 642,509 534,204 Software development costs 109,096 – Leasehold improvements 30,553 30,553 Total 1,107,862 675,081 Less: accumulated depreciation (671,275 ) (459,083 ) Total, net $ 436,587 $ 215,998 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS December 31, December 31, Patents and trademarks (useful life 15 $ 1,040,927 $ 869,822 Customer relationships (useful life 7 4,500,000 – E-commerce technology platforms (useful life 4 3,900,000 – Total 3,900,000 – Less: accumulated amortization (1,299,895 ) (207,020 ) Total, net $ 8,141,032 $ 662,802 |
SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE | The following table sets forth the estimated amortization expense for the next five years: SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE Twelve months ended December 31, 2024 $ 1,673,613 2025 1,673,613 2026 1,673,613 2027 1,511,113 2028 698,613 2029 698,613 |
DEBTS (Tables)
DEBTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT TABLE | The following table presents the details of the principal outstanding: SCHEDULE OF DEBT TABLE December 31, 2023 December 31, 2022 APR at December 31, 2023 Maturity Collateral Notes payable $ – $ 5,115,000 8.00 % Satisfied prior to maturity Substantially all Company assets Convertible Notes (b) 11,525,000 1,300,000 6.00 10.00 % September 2023-March 2026 Substantially all company assets Notes payable to financial institutions a) 6,348,104 – 7.93 8.5 August 2024-August 2026 Inventory, accounts receivable, cash ,Notes payable to Belami sellers 247,927 – 7.93 % April 2024 – SBA-related loans (c) 145,022 157,835 3.75 % April 2025-November 2052 Substantially all Company assets Total $ 18,266,053 $ 6,572,835 Unamortized debt discount (4,591,222 ) – Debt, net of Unamortized debt Discount 13,674,831 6,572,835 |
SCHEDULE OF INTEREST EXPENSE | SCHEDULE OF INTEREST EXPENSE For the year period ended December 31, December 31, Interest expense, net 3,109,307 589,009 |
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS | As of December 31, 2023, the expected future principal payments for the Company’s debt are due as follows: SCHEDULE OF FUTURE PRINCIPAL PAYMENTS 2024 6,899,129 2025 642,648 2026 10,583,359 2027 3,040 2028 and thereafter 137,877 Total $ 18,266,053 (a) The unpaid principal bears annual interest at the Wall Street Journal prime rate. (b) Included in Convertible Notes are loans provided to the Company from one director, two officers and two investors. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 15 All convertible notes are convertible at a price ranging between $ 2.70 15 During 2023, the Company issued convertible promissory notes for $ 10.4 1,391,667 2.70 5.6 700,000 (c) The Small Business Administration forgave approximately $ 178,000 |
OPERATING LEASE LIABILITIES (Ta
OPERATING LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating Lease Liabilities | |
SCHEDULE OF LEASE COST OPERATING LEASE | The following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these leases as of December 31, 2023: SCHEDULE OF LEASE COST OPERATING LEASE December 31, Lease costs: Cash paid for operating lease liabilities $ 687,849 Right-of-use assets obtained in exchange for new operating lease obligations 21,214,652 Fixed rent payment $ 280,218 Lease – Depreciation expense $ 1,870,393 years ended December 31, Other information: Weighted-average discount rate 6.41 % Weighted-average remaining lease term (in months) 102 |
SCHEDULE OF MINIMUM LEASE OBLIGATION | SCHEDULE OF MINIMUM LEASE OBLIGATION Minimum Lease obligation 2024 1,898,428 2025 2,119,073 2026 2,357,033 2027 2,288,363 2028 and thereafter 15,503,089 Total $ 24,165,986 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES December 31, December 31, Accrued interest, convertible notes $ 744,953 $ 104,735 Trade payables 11,513,918 1,369,702 Accrued compensation 874,557 475,417 Total $ 13,133,428 $ 1,949,823 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF DEFERRED TAX ASSETS | SCHEDULE OF DEFERRED TAX ASSETS December 31 2023 2022 Net operating loss carryforward $ 28,012,804 $ 17,293,894 Stock-based compensation 5,018,041 2,392,262 Rights of use assets (6,135,853 ) (5,886,344 ) Operating lease liabilities 6,989,458 6,101,878 Less Valuation Allowance (33,884,451 ) (19,901,690 ) Total Deferred Tax Assets – Net $ — $ — |
SCHEDULE OF INCOME TAX RATE RECONCILIATION | The Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2023 and December 31, 2022 and the reconciliation is as follows. SCHEDULE OF INCOME TAX RATE RECONCILIATION 2023 2022 Computed statutory tax benefit – Federal $ (10,885,333 ) $ (5,977,363 ) Computed statutory tax benefit – State (1,775,915 ) (1,292,961 ) Permanent difference (1,321,512 ) - Change in valuation allowance 13,982,761 7,270,323 $ –– $ –– |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SCHEDULE OF COMMON STOCK | The Company issued the following common stock during 2023, and 2022: SCHEDULE OF COMMON STOCK Transaction Type Shares Issued Valuation $ (Issued) Range of Value Per Share 2023 Equity Transactions Common stock issued pursuant to acquisition 1,923,285 12,887,968 $ 6.7 Common stock issued, pursuant to services provided 2,827,662 17,977,252 1.22 3.82 Conversion of preferred stock 880,400 220,100 0.25 Issuance of common stock pursuant to offering, net 4,359,832 9,289,857 1.45 3.25 Common stock issued pursuant to extinguishment of debt 574,713 2,040,231 3.55 Transaction Type Shares Issued Valuation $(Issued) Range of Value Per Share 2022 Equity Transactions Common stock issued per exercise of options and warrants 599,651 $ 862,301 $ 0.10 14.0 Common stock issued per exercise of warrants, cashless 437,711 — — Common stock issued, pursuant to services provided 1,057,293 8,235,880 2.0 14.0 Conversion of preferred stock 12,376,536 3,094,134 0.25 Issuance of common stock pursuant to offering, net 1,650,000 23,100,000 14.0 Issuance of common stock, pursuant to anti-dilutive provisions 335,073 4,691,022 14.0 |
SCHEDULE OF PREFERRED STOCK ACTIVITY | The following is a summary of the Company’s Preferred SCHEDULE OF PREFERRED STOCK ACTIVITY Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2022 880,400 $ 220,100 $ 0.25 Preferred Stock conversions 880,400 220,100 0.25 Preferred Stock Balance at December 31, 2023 — $ — $ 0.25 Transaction Type Quantity Carrying Value Value per Share Preferred Stock Balance at December 31, 2021 13,256,936 $ 3,314,233 $ 0.25 2022 Preferred Stock conversions (12,376,536 ) (3,094,133 ) 0.25 Preferred Stock Balance at December 31, 2022 880,400 $ 220,100 $ 0.25 |
SCHEDULE OF STOCK OPTION ACTIVITY | The following is a summary of the Company’s stock option activity during 2023 and 2022: SCHEDULE OF STOCK OPTION ACTIVITY Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2023 33,289,250 $ 7.73 –– $ Exercised – 1.49 –– –– Granted 3,264,728 2.47 –– –– Forfeited (746,502 ) 4.23 –– Outstanding, December 31, 2023 35,807,476 $ 7.33 2.7788 $ 2,998,980 Exercisable, December 31, 2023 13,242,119 $ 4.3 2.1793 $ 2,938,370 Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding, January 1, 2022 21,927,182 $ 3.36 –– $ Exercised (635,640 ) 1.49 –– $ –– Granted 13,832,500 11.74 –– –– Forfeited (1,834,792 ) 3.81 –– –– Outstanding, December 31, 2022 33,289,250 $ 7.73 3.43 $ 5,994,300 Exercisable, December 31, 2022 12,236,672 $ 3.92 2.7 $ 5,994,300 |
SCHEDULE OF BLACK SCHOLES PRICING MODEL | SCHEDULE OF BLACK SCHOLES PRICING MODEL December 31, December 31, Range Range Stock price $ 3.81 $ 6.5 12.34 Exercise price $ 0 14 $ 0.1 14 Expected life (in years) 5.00 1.5 5.8 Volatility 55.23 % 10 31 % Risk-fee interest rate 4.91 % 1.37 2.97 % Dividend yield — — |
SCHEDULE OF WARRANT ACTIVITY | The following is a summary of the Company’s warrant activity during 2023 and 2022: SCHEDULE OF WARRANT ACTIVITY Number of Warrants Weighted Average Exercise Price Balance, January 1, 2023 1,908,211 $ 5.45 Issued 1,391,667 3.0 Exercised — — Forfeited 1,236,356 2.80 Balance, December 31, 2023 2,063,522 $ 5.76 Number of Warrants Weighted Average Exercise Price Balance, January 1, 2022 2,127,895 $ 5.4 Issued 608,961 3.3 Exercised (597,021 ) 3.3 Forfeited/Cancelled (231,624 ) 9.8 Balance, December 31, 2022 1,908,211 $ 5.45 |
SCHEDULE OF NON-VESTED RESTRICTED STOCK | A summary of the Company’s non-vested restricted stock units during 2023 and 2022 are as follows SCHEDULE OF NON-VESTED RESTRICTED STOCK Shares Weighted Average Grant Due Fair Value Non-vested restricted stock units, January 1, 2023 2,516,461 $ 8.39 Granted 5,895,095 1.54 Vested (3,168,053 ) 3.24 Forfeited (307,681 ) 8.92 Non-Vested restricted stock units, December 31, 2023 4,935,822 7.99 Non-vested restricted stock units, January 1, 2022 770,500 3.3 Granted 2,659,109 9.2 Vested (912,548 ) 6.5 Forfeited (600 ) 2.5 Non-vested restricted stock units December 31, 2022 2,516,461 8.39 |
PROFORMA FINANCIAL STATEMENTS_2
PROFORMA FINANCIAL STATEMENTS (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Proforma Financial Statements | |
SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION | The following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2022: SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION 2023 2022 Twelve-month period ended 2023 2022 Revenues $ 82,823,223 $ 88,824,119 Net loss $ (39,495,552 ) $ (27,001,995 ) Basic and diluted loss per share $ (0.43 ) $ (0.32 ) Weighted average number of shares outstanding- basic and diluted 92,768,792 84,064,095 |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Restricted cash and cash equivalents | $ 22,400,000 | |
Restricted cash | 5,600,000 | |
Working capital | 3,100,000 | |
Net cash used in operating activities | 12,998,073 | $ 13,838,446 |
Net cash provided by financing activities | $ 22,726,632 | $ 20,930,211 |
SCHEDULE OF INITIAL ALLOCATION
SCHEDULE OF INITIAL ALLOCATION OF PURCHASE PRICE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Goodwill | $ 16,157,000 | |
Belami [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Assets acquired excluding identifiable intangible assets and goodwill | 6,863,011 | |
Goodwill | 16,157,000 | |
Assumed liabilities | (10,943,450) | |
Total Assets Acquired | 20,476,561 | |
Cash outlay, net of cash acquired | 4,206,200 | |
Consideration payable | 3,382,393 | |
Shares of common stock | 12,887,968 | |
Total purchase price | 20,476,561 | |
Belami [Member] | Customer Relationships [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Intangibles assets | 4,500,000 | |
Belami [Member] | E Commerce Technology Platforms [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Intangibles assets | $ 3,900,000 |
SCHEDULE OF CASH EQUIVALENTS AN
SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 16,810,983 | $ 6,720,543 | |
Restricted cash | 5,619,270 | 2,741,054 | $ 2,800,000 |
Total cash, cash equivalents and restricted cash | $ 22,430,253 | $ 9,461,597 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Inventory, component parts | $ 930,252 | $ 1,923,540 |
Inventory, finished goods | 2,495,482 | |
Inventory- total | $ 3,425,734 | $ 1,923,540 |
SCHEDULE OF EARNING (LOSS) PER
SCHEDULE OF EARNING (LOSS) PER SHARE (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 41,791,003 | 36,164,529 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,063,522 | 1,928,211 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 35,807,476 | 33,289,250 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 3,920,005 | 86,668 |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 880,400 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 15, 2026 | Dec. 15, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Ownership in subsidiary companies, percentage | 98.80% | ||||
Escrow deposit | $ 750,000 | ||||
Restricted cash | 5,619,270 | $ 2,741,054 | $ 2,800,000 | ||
Restricted investments | 2,800,000 | 2,800,000 | |||
Line of credit | 2,000,000 | ||||
Allowance for doubtful accounts | 54,987 | 0 | |||
Allowance for sales returns | 182,584 | 0 | |||
Deferred revenues | 1,475,519 | 0 | |||
Deferred charges | 224,445 | ||||
Inventory gross | $ 1,300,000 | 0 | |||
Intangible assets amortization period | 15 years | ||||
Impairment of intangible assets | $ 0 | 0 | |||
Goodwill, impairment loss | $ 0 | $ 0 | |||
Stock warrants | 41,791,003 | 36,164,529 | |||
Subsequent Event [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Royalty payment | $ 1,400,000 | ||||
Global Trademark Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Royalty payment | $ 2,700,000 | ||||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment useful life | 3 years | ||||
Stock warrants | 1,390,065 | ||||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment useful life | 7 years | ||||
Stock warrants | 1,853,421 | ||||
Belami [Member] | April 2024 [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Fair value of the cash | $ 3,100,000 | ||||
Business combination contingent consideration discounted effective rate | 6% | ||||
Belami [Member] | July 2024 [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Escrow deposit | $ 750,000 |
SCHEDULE OF COMPONENTS OF INVES
SCHEDULE OF COMPONENTS OF INVESTMENTS (Details) | Dec. 31, 2023 USD ($) |
Platform Operator, Crypto-Asset [Line Items] | |
Cost | $ 7,436,103 |
Unrealized loss | (62,147) |
Debt Securities, Available-for-Sale | 7,373,956 |
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Cost | 3,537,556 |
Unrealized loss | (56,710) |
Debt Securities, Available-for-Sale | 3,480,846 |
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Cost | 908,354 |
Unrealized loss | (5,437) |
Debt Securities, Available-for-Sale | 902,917 |
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Cost | 2,945,648 |
Unrealized loss | |
Debt Securities, Available-for-Sale | 2,945,648 |
Fair Value, Inputs, Level 2 [Member] | Accrued Interest [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
Cost | 44,545 |
Unrealized loss | |
Debt Securities, Available-for-Sale | $ 44,545 |
SCHEDULE OF FURNITURE AND EQUIP
SCHEDULE OF FURNITURE AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,107,862 | $ 675,081 |
Less: accumulated depreciation | (671,275) | (459,083) |
Total, net | 436,587 | 215,998 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 282,799 | 67,419 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 6,846 | 6,846 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 36,059 | 36,059 |
Tooling And Production [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 642,509 | 534,204 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 109,096 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 30,553 | $ 30,553 |
FURNITURE AND EQUIPMENT (Detail
FURNITURE AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 93,693 | $ 70,767 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (1,299,895) | $ (207,020) |
Total, net | 8,141,032 | 662,802 |
Patents And Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 1,040,927 | 869,822 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 4,500,000 | |
E Commerce Technology Platforms [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 3,900,000 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) (Parenthetical) | Dec. 31, 2023 |
Patents And Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 7 years |
E Commerce Technology Platforms [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 4 years |
SCHEDULE OF INTANGIBLE ASSETS A
SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE (Details) | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 1,673,613 |
2025 | 1,673,613 |
2026 | 1,673,613 |
2027 | 1,511,113 |
2028 | 698,613 |
2029 | $ 698,613 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 1,092,876 | $ 51,634 |
Increase good will | $ 16,200,000 |
SCHEDULE OF DEBT TABLE (Details
SCHEDULE OF DEBT TABLE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Short-Term Debt [Line Items] | |||
Total | $ 18,266,053 | $ 6,572,835 | |
Unamortized debt discount | (4,591,222) | ||
Debt, net of Unamortized debt Discount | 13,674,831 | 6,572,835 | |
Notes Payable [Member] | |||
Short-Term Debt [Line Items] | |||
Total | 5,115,000 | ||
Debt instrument interest rate stated percentage | 8% | ||
Maturity date description | Satisfied prior to maturity | ||
Convertible Notes [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [1] | $ 11,525,000 | 1,300,000 |
Debt instrument interest rate stated percentage | 6% | ||
Maturity date description | [1] | September 2023-March 2026 | |
Convertible Notes [Member] | Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [1] | 6% | |
Convertible Notes [Member] | Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [1] | 10% | |
Notespayble Financial Institutions [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [2] | $ 6,348,104 | |
Maturity date description | [2] | August 2024-August 2026 | |
Notespayble Financial Institutions [Member] | Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [2] | 7.93% | |
Notespayble Financial Institutions [Member] | Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Debt instrument interest rate stated percentage | [2] | 8.50% | |
Notes Payble Belami Sellers [Member] | |||
Short-Term Debt [Line Items] | |||
Total | $ 247,927 | ||
Debt instrument interest rate stated percentage | 7.93% | ||
SBA Related Loans [Member] | |||
Short-Term Debt [Line Items] | |||
Total | [3] | $ 145,022 | $ 157,835 |
Debt instrument interest rate stated percentage | [3] | 3.75% | |
Maturity date description | [3] | April 2025-November 2052 | |
[1]Included in Convertible Notes are loans provided to the Company from one director, two officers and two investors. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 15 178,000 |
SCHEDULE OF INTEREST EXPENSE (D
SCHEDULE OF INTEREST EXPENSE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 3,109,307 | $ 589,009 |
SCHEDULE OF FUTURE PRINCIPAL PA
SCHEDULE OF FUTURE PRINCIPAL PAYMENTS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 6,899,129 | |
2025 | 642,648 | |
2026 | 10,583,359 | |
2027 | 3,040 | |
2028 and thereafter | 137,877 | |
Total | $ 18,266,053 | $ 6,572,835 |
SCHEDULE OF DEBT TABLE (Detai_2
SCHEDULE OF DEBT TABLE (Details) (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Convertible Notes [Member] | |||
Short-Term Debt [Line Items] | |||
Bears interest at a rate of percentage | 6% | ||
Debt Instrument conversion price | $ 15 | ||
Convertible notes payable | $ 10,400,000 | ||
Warrants issued | 1,391,667 | 608,961 | |
Warrant exercise price | $ 2.70 | ||
Debt instrument convertible beneficial conversion feature | $ 5,600,000 | ||
Amortization of debt discount | $ 700,000 | ||
Warrants term | 3 years | 3 years | |
Convertible Notes [Member] | Minimum [Member] | |||
Short-Term Debt [Line Items] | |||
Bears interest at a rate of percentage | [1] | 6% | |
Debt Instrument conversion price | $ 2.70 | ||
Warrant exercise price | $ 9.80 | ||
Convertible Notes [Member] | Maximum [Member] | |||
Short-Term Debt [Line Items] | |||
Bears interest at a rate of percentage | [1] | 10% | |
Debt Instrument conversion price | $ 15 | ||
Warrant exercise price | $ 18.2 | ||
PPP Loans [Member] | |||
Short-Term Debt [Line Items] | |||
Other income | $ 178,000 | ||
[1]Included in Convertible Notes are loans provided to the Company from one director, two officers and two investors. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 15 |
DEBTS (Details Narrative)
DEBTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 451,703 | $ 188,132 |
SCHEDULE OF LEASE COST OPERATIN
SCHEDULE OF LEASE COST OPERATING LEASE (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Operating Lease Liabilities | |
Cash paid for operating lease liabilities | $ 687,849 |
Right-of-use assets obtained in exchange for new operating lease obligations | 21,214,652 |
Fixed rent payment | 280,218 |
Lease - Depreciation expense | $ 1,870,393 |
Operating lease, weighted average discount rate, percentage | 6.41% |
Operating lease, weighted average remaining lease term | 102 months |
SCHEDULE OF MINIMUM LEASE OBLIG
SCHEDULE OF MINIMUM LEASE OBLIGATION (Details) | Dec. 31, 2023 USD ($) |
Operating Lease Liabilities | |
2024 | $ 1,898,428 |
2025 | 2,119,073 |
2026 | 2,357,033 |
2027 | 2,288,363 |
2028 and thereafter | 15,503,089 |
Total | $ 24,165,986 |
OPERATING LEASE LIABILITIES (De
OPERATING LEASE LIABILITIES (Details Narrative) - USD ($) | Sep. 30, 2022 | Apr. 30, 2022 |
Lessee, Lease, Description [Line Items] | ||
Letter of credit | $ 2,700,000 | |
58-Month Lease [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, liability | $ 1,428,764 | |
124-Month Lease [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, liability | $ 22,192,503 |
ROYALTY OBLIGATIONS (Details Na
ROYALTY OBLIGATIONS (Details Narrative) - License Agreement [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Proceeds from Royalties Received | $ 2.5 |
Accounts Payable | 1.4 |
2024 through 2026 [Member] | Minimum [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Debt, Current | 0.8 |
2024 through 2026 [Member] | Maximum [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Debt, Current | $ 0.9 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued interest, convertible notes | $ 744,953 | $ 104,735 |
Trade payables | 11,513,918 | 1,369,702 |
Accrued compensation | 874,557 | 475,417 |
Total | $ 13,133,428 | $ 1,949,823 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 28,012,804 | $ 17,293,894 |
Stock-based compensation | 5,018,041 | 2,392,262 |
Rights of use assets | (6,135,853) | (5,886,344) |
Operating lease liabilities | 6,989,458 | 6,101,878 |
Less Valuation Allowance | (33,884,451) | (19,901,690) |
Total Deferred Tax Assets - Net |
SCHEDULE OF INCOME TAX RATE REC
SCHEDULE OF INCOME TAX RATE RECONCILIATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Computed statutory tax benefit – Federal | $ (10,885,333) | $ (5,977,363) |
Computed statutory tax benefit – State | (1,775,915) | (1,292,961) |
Permanent difference | (1,321,512) | |
Change in valuation allowance | 13,982,761 | 7,270,323 |
Income tax expense benefit | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards | $ 37,502,020 | $ 27,035,941 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Accrued interest | $ 744,953 | $ 104,735 | |
Number of shares issued | 574,713 | ||
IPO [Member] | |||
Related Party Transaction [Line Items] | |||
Number of shares issued | 455,353 | ||
Proceeds from IPO | 6,374,942 | ||
Chief Executive Officer [Member] | Two Directors [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transactions amount | $ 825,000 | 1,300,000 | |
Accrued interest | $ 151,081 | $ 104,735 | |
Director [Member] | IPO [Member] | |||
Related Party Transaction [Line Items] | |||
Number of shares issued | 95,386 |
SCHEDULE OF COMMON STOCK (Detai
SCHEDULE OF COMMON STOCK (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Issuance of common stock pursuant to offering, net, Shares Issued | 574,713 | ||
Issuance of common stock pursuant to offering, net, Valuation issued | $ 2,000,000 | ||
Common Stock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued pursuant to acquisition, Shares Issued | 1,923,285 | ||
Common stock issued, pursuant to services provided, Shares Issued | 2,827,662 | 1,057,293 | |
Conversion of preferred stock, Shares Issued | 880,400 | 12,376,536 | |
Issuance of common stock pursuant to offering, net, Shares Issued | 4,359,832 | 1,650,000 | |
Common stock issued per exercise of warrants, cashless, Shares Issued | 574,713 | ||
Common Stock [Member] | 2023 Equity Transactions [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued pursuant to acquisition, Shares Issued | 1,923,285 | ||
Common stock issued pursuant to acquisition, Valuation issued | $ 12,887,968 | ||
Common stock issued per exercise of options and warrants, Range of value per share | $ 6.7 | ||
Common stock issued, pursuant to services provided, Shares Issued | 2,827,662 | ||
Common stock issued, pursuant to services provided, Valuation issued | $ 17,977,252 | ||
Conversion of preferred stock, Shares Issued | 880,400 | ||
Conversion of preferred stock, Valuation issued | $ 220,100 | ||
Conversion of preferred stock, Range of value per share | $ 0.25 | ||
Issuance of common stock pursuant to offering, net, Shares Issued | 4,359,832 | ||
Issuance of common stock pursuant to offering, net, Valuation issued | $ 9,289,857 | ||
Common stock issued pursuant to extinguishment of debt, Shares Issued | 574,713 | ||
Common stock issued pursuant to extinguishment of debt, Valuation issued | $ 2,040,231 | ||
Issuance of common stock, pursuant to anti-dilutive provisions, Range of value per share | $ 3.55 | ||
Common Stock [Member] | 2023 Equity Transactions [Member] | Minimum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued, pursuant to services provided, Range of value per share | 1.22 | ||
Issuance of common stock pursuant to offering, net, Range of value per share | 1.45 | ||
Common Stock [Member] | 2023 Equity Transactions [Member] | Maximum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued, pursuant to services provided, Range of value per share | 3.82 | ||
Issuance of common stock pursuant to offering, net, Range of value per share | $ 3.25 | ||
Common Stock [Member] | 2022 Equity Transactions [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued, pursuant to services provided, Shares Issued | 1,057,293 | ||
Common stock issued, pursuant to services provided, Valuation issued | $ 8,235,880 | ||
Conversion of preferred stock, Shares Issued | 12,376,536 | ||
Conversion of preferred stock, Valuation issued | $ 3,094,134 | ||
Conversion of preferred stock, Range of value per share | $ 0.25 | ||
Issuance of common stock pursuant to offering, net, Shares Issued | 1,650,000 | ||
Issuance of common stock pursuant to offering, net, Valuation issued | $ 23,100,000 | ||
Issuance of common stock pursuant to offering, net, Range of value per share | $ 14 | ||
Issuance of common stock, pursuant to anti-dilutive provisions, Range of value per share | $ 14 | ||
Common stock issued per exercise of options and warrants, Shares Issued | 599,651 | ||
Common stock issued per exercise of options and warrants, Valuation Issued | $ 862,301 | ||
Common stock issued per exercise of warrants, cashless, Shares Issued | 437,711 | ||
Common stock issued per exercise of warrants, cashless, Valuation Issued | |||
Common stock issued per exercise of warrants, cashless, Range of Value Per Share | |||
Issuance of common stock, pursuant to anti-dilutive provisions, Shares Issued | 335,073 | ||
Issuance of common stock, pursuant to anti-dilutive provisions, Valuation issued | $ 4,691,022 | ||
Common Stock [Member] | 2022 Equity Transactions [Member] | Minimum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued per exercise of options and warrants, Range of value per share | $ 0.10 | ||
Common stock issued, pursuant to services provided, Range of value per share | 2 | ||
Common Stock [Member] | 2022 Equity Transactions [Member] | Maximum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock issued per exercise of options and warrants, Range of value per share | 14 | ||
Common stock issued, pursuant to services provided, Range of value per share | $ 14 |
SCHEDULE OF PREFERRED STOCK ACT
SCHEDULE OF PREFERRED STOCK ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Preferred Stock beginning, shares outstanding | 12,376,536 | |
Preferred Stock ending, shares outstanding | 880,400 | 12,376,536 |
Preferred Stock [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Preferred Stock beginning, shares outstanding | 880,400 | 13,256,936 |
Preferred Stock beginning, Valuation | $ 220,100 | $ 3,314,233 |
Preferred Stock, Value per Share | $ 0.25 | $ 0.25 |
Preferred stock redemption shares | 880,400 | (12,376,536) |
Preferred stock redemption shares, Valuation | $ 220,100 | $ 3,094,133 |
Preferred stock redemption, Value per Share | $ 0.25 | $ 0.25 |
Preferred Stock ending, shares outstanding | 880,400 | |
Preferred Stock ending, Valuation | $ 220,100 | |
Preferred Stock, Value per Share | $ 0.25 | $ 0.25 |
Preferred stock, Valuation | $ (220,100) | $ (3,094,133) |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Number of shares, outstanding | 33,289,250 | 21,927,182 |
Weighted Average Exercise Price, Outstanding beginning | $ 7.73 | $ 3.36 |
Number of shares, Exercised | (635,640) | |
Weighted Average Exercise Price, Exercised | $ 1.49 | $ 1.49 |
Number of shares, Granted | 3,264,728 | 13,832,500 |
Weighted Average Exercise Price, Granted | $ 2.47 | $ 11.74 |
Number of shares, Forfeited | (746,502) | (1,834,792) |
Weighted Average Exercise Price, Forfeited | $ 4.23 | $ 3.81 |
Number of shares, outstanding | 35,807,476 | 33,289,250 |
Weighted Average Exercise Price, Outstanding Ending | $ 7.33 | $ 7.73 |
Weighted Average Remaining Contractual Life in Years, Outstanding ending | 2 years 9 months 10 days | 3 years 5 months 4 days |
Aggregate Intrinsic value, Outstanding ending | $ 2,998,980 | $ 5,994,300 |
Number of shares, Exercisable | 13,242,119 | 12,236,672 |
Weighted Average Exercise Price, Exercisable ending | $ 4.3 | $ 3.92 |
Weighted Average Remaining Contractual Life in Years, Exercisable ending | 2 years 2 months 4 days | 2 years 8 months 12 days |
Aggregate Intrinsic value, Exercisable ending | $ 2,938,370 | $ 5,994,300 |
SCHEDULE OF BLACK SCHOLES PRICI
SCHEDULE OF BLACK SCHOLES PRICING MODEL (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share price | $ 3.81 | |
Expected term (in years) | 5 years | |
Expected volatility | 55.23% | |
Risk-fee interest rate | 4.91% | |
Dividend yield | ||
Minimum [Member] | ||
Share price | $ 6.5 | |
Exercise price | $ 0 | $ 0.1 |
Expected term (in years) | 1 year 6 months | |
Expected volatility | 10% | |
Risk-fee interest rate | 1.37% | |
Maximum [Member] | ||
Share price | $ 12.34 | |
Exercise price | $ 14 | $ 14 |
Expected term (in years) | 5 years 9 months 18 days | |
Expected volatility | 31% | |
Risk-fee interest rate | 2.97% |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Number of Warrants, Beginning balance | 1,908,211 | 2,127,895 |
Weighted average exercise price outstanding | $ 5.45 | $ 5.4 |
Number of Warrants, Issued | 1,391,667 | 608,961 |
Weighted Average Exercise Price, Issued | $ 3 | $ 3.3 |
Number of Warrants, Exercised | (597,021) | |
Weighted Average Exercise Price, Exercised | $ 3.3 | |
Number of Warrants, Forfeited | (1,236,356) | (231,624) |
Weighted Average Exercise Price, Forfeited | $ 2.80 | $ 9.8 |
Number of Warrants, Ending balance | 2,063,522 | 1,908,211 |
Weighted average exercise price outstanding | $ 5.76 | $ 5.45 |
SCHEDULE OF NON-VESTED RESTRICT
SCHEDULE OF NON-VESTED RESTRICTED STOCK (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-vested restricted stock units, granted | 3,264,728 | 13,832,500 |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-vested restricted stock units, beginning balance | 2,516,461 | 770,500 |
Non-vested restricted stock units, Weighted average grant due fair value, beginning balance | $ 8.39 | $ 3.3 |
Non-vested restricted stock units, granted | 5,895,095 | 2,659,109 |
Non-vested restricted stock units, Weighted average grant due fair value, granted | $ 1.54 | $ 9.2 |
Non-vested restricted stock units, vested | (3,168,053) | (912,548) |
Non-vested restricted stock units, Weighted average grant due fair value, vested | $ 3.24 | $ 6.5 |
Non-vested restricted stock units, forfeited | (307,681) | (600) |
Non-vested restricted stock units, Weighted average grant due fair value, forfeited | $ 8.92 | $ 2.5 |
Non-vested restricted stock units, ending balance | 4,935,822 | 2,516,461 |
Non-vested restricted stock units, Weighted average grant due fair value, ending balance | $ 7.99 | $ 8.39 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 01, 2024 | Apr. 30, 2024 | Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Number of shares issued | 574,713 | ||||
Notes payable | $ 6,200,000 | ||||
Common stock carrying value | 2,000,000 | ||||
Gain on extinguishment of debt | $ 1,201,857 | $ 1,201,857 | $ 178,250 | ||
Unamortized future option expense | 13,000,000 | ||||
Unamortized future option expense excluding market based options | $ 61,000,000 | ||||
Weighted average period | 1 year 4 months 24 days | ||||
Weighted-average remaining contractual life | 1 year 10 months 6 days | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Share-Based Payment Arrangement, Noncash Expense | $ 18,000,000 | $ 14,000,000 | |||
Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 3.50 | ||||
Sale of stock, price per share | $ 0.25 | ||||
Conversion of stock shares | 880,400 | 12,376,536 | |||
Subsequent Event [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Number of shares issued | 2,733,361 | ||||
Common stock carrying value | $ 5,560,262 | ||||
Subsequent Event [Member] | Minimum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Number of shares issued | 1,390,066 | ||||
Subsequent Event [Member] | Maximum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Number of shares issued | 1,853,421 | ||||
Stockholders [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Number of shares issued | 335,073 |
CONCENTRATIONS OF RISKS (Detail
CONCENTRATIONS OF RISKS (Details Narrative) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Third Party Payor [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 24% |
SCHEDULE OF PROFORMA CONSOLIDAT
SCHEDULE OF PROFORMA CONSOLIDATED RESULTS OF OPERATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Proforma Financial Statements | ||
Revenues | $ 82,823,223 | $ 88,824,119 |
Net loss | $ (39,495,552) | $ (27,001,995) |
Basic loss per share | $ (0.43) | $ (0.32) |
Diluted loss per share | (0.43) | (0.32) |
Weighted average number of shares outstanding basic | 92,768,792 | 84,064,095 |
Weighted average number of shares outstanding diluted | $ 92,768,792 | $ 84,064,095 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 01, 2024 | Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Proceeds from issuance of common stock | $ 9,820,846 | $ 23,100,000 | ||
Number of shares issued | 574,713 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Proceeds from issuance of common stock | $ 3,600,000 | |||
Number of shares issued | 2,733,361 | |||
Assets acquisitions consideration transferred | $ 3,100,000 | |||
Annual interest rate | 10% | |||
Convertible conversion price | $ 3 |