Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40867 | |
Entity Registrant Name | Volcon, Inc. | |
Entity Central Index Key | 0001829794 | |
Entity Tax Identification Number | 84-4882689 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 2590 Oakmont Drive | |
Entity Address, Address Line Two | Suite 520 | |
Entity Address, City or Town | Round Rock | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78665 | |
City Area Code | (512) | |
Local Phone Number | 400-4271 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | VLCN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,207,622 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 13,999,965 | $ 5,572,199 |
Accounts receivable | 107,982 | 25,585 |
Inventory | 3,728,446 | 2,209,015 |
Inventory deposits | 1,587,656 | 1,981,397 |
Prepaid expenses and other current assets | 1,749,570 | 1,092,860 |
Total current assets | 21,173,619 | 10,881,057 |
Long term assets: | ||
Property and equipment, net | 921,835 | 809,734 |
Intangible assets, net | 10,172 | 18,053 |
Other long-term assets | 742,263 | 732,810 |
Right of use assets - operating leases | 2,199,009 | 2,182,612 |
Total assets | 25,046,898 | 14,624,265 |
Current liabilities: | ||
Accounts payable | 1,489,200 | 1,454,103 |
Accrued liabilities | 1,863,240 | 771,631 |
Accrued purchase commitments | 899,194 | 1,506,976 |
Current portion of notes payable | 16,961 | 17,201 |
Right of use operating lease liabilities, short term | 584,083 | 456,207 |
Customer deposits | 1,060,724 | 2,277,607 |
Total current liabilities | 5,913,402 | 6,483,725 |
Notes payable, net of discount and current portion | 64,260 | 68,785 |
Right of use operating lease liabilities, long term | 1,697,983 | 1,767,506 |
Total liabilities | 7,675,645 | 8,320,017 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity: | ||
Preferred stock: $0.00001 par value, 5,000,000 shares authorized, 2,900,000 shares designated no shares outstanding | 0 | 0 |
Common stock: $0.00001 par value, 100,000,000 shares authorized, 24,109,244 shares issued and outstanding as of March 31, 2022, 17,309,187 issued and outstanding as of December 31, 2021 | 195 | 128 |
Additional paid-in capital | 67,482,925 | 47,803,643 |
Accumulated deficit | (50,111,867) | (41,499,522) |
Total stockholders’ equity | 17,371,253 | 6,304,249 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 25,046,898 | $ 14,624,265 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares authorized (in shares) | 2,900,000 | 2,900,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 24,109,244 | 17,309,187 |
Common stock, shares outstanding (in shares) | 24,109,244 | 17,309,187 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 1,184,502 | $ 0 |
Cost of goods sold | (3,527,715) | 0 |
Gross margin | (2,343,213) | 0 |
Operating expenses: | ||
Sales and marketing | 1,014,906 | 343,279 |
Product development | 2,495,712 | 1,560,115 |
General and administrative expenses | 2,794,940 | 13,398,371 |
Total operating expenses | 6,305,558 | 15,301,765 |
Loss from operations | (8,648,771) | (15,301,765) |
Other income (expense) | 41,117 | |
Interest expense | (4,691) | (17,922) |
Total other expense | 36,426 | (17,922) |
Loss before provision for income taxes | (8,612,345) | (15,319,687) |
Provision for income taxes | 0 | 0 |
Net loss | $ (8,612,345) | $ (15,319,687) |
Net loss per common share – basic | $ (0.40) | $ (7.69) |
Net loss per common share – diluted | $ (0.40) | $ (7.69) |
Weighted average common shares outstanding – basic | 21,745,089 | 1,992,160 |
Weighted average common shares outstanding – diluted | 21,745,089 | 1,992,160 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Series A Preferred Stocks [Member] | Series B Preferred Stocks [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 8 | $ 232,550 | $ (1,374,413) | $ (1,141,855) | ||
Beginning balance, shares at Dec. 31, 2020 | 1,937,500 | |||||
Proceeds from WeFunder offering, net of issuance costs of $53,500 | 2,205,440 | 2,205,440 | ||||
Issuance of series A preferred stock, net of issuance costs of $205,470 | 4 | 2,464,504 | 2,464,508 | |||
Issuance of series A preferred stock, net of issuance costs, shares | 79,750 | 415,287 | ||||
Conversion of WeFunder offering to series A preferred stock | $ 4 | (4) | ||||
Conversion of WeFunder offering to series A preferred stock, shares | 351,832 | |||||
Conversion of SAFE Liability to series A preferred stock | $ 4 | 1,999,996 | 2,000,000 | |||
Conversion of SAFE Liability to series A preferred stock, shares | 424,269 | |||||
Issuance of series B preferred stock, net of issuance costs of $70,803 | $ 5 | 4,276,688 | 4,276,693 | |||
Issuance of series B preferred stock, net of issuance costs, shares | 457,688 | |||||
Stock-based compensation | 13,202,878 | 13,202,878 | ||||
Net loss | (15,319,687) | (15,319,687) | ||||
Ending balance, value at Mar. 31, 2021 | $ 8 | $ 12 | $ 5 | 24,382,051 | (16,694,100) | 7,687,976 |
Ending balance, shares at Mar. 31, 2021 | 2,017,250 | 1,191,388 | 457,688 | |||
Beginning balance, value at Dec. 31, 2021 | $ 128 | 47,803,643 | (41,499,522) | 6,304,249 | ||
Beginning balance, shares at Dec. 31, 2021 | 17,309,187 | |||||
Issuance of common stock for public offering, net of issuance costs of $1,910,883 | $ 67 | 18,089,117 | 18,089,184 | |||
Issuance of common stock for public offering, net of issuance costs, shares | 6,666,667 | |||||
Issuance of common stock for exercise of warrants | ||||||
Issuance of common stock for exercise of warrants, shares | 6,247 | |||||
Issuance of common stock for exercise of stock options and restricted options | 15,000 | 15,000 | ||||
Issuance of common stock for exercise of stock options and restricted options, shares | 82,520 | |||||
Stock-based compensation | 1,575,165 | 1,575,165 | ||||
Stock-based compensation, shares | 44,623 | |||||
Net loss | (8,612,345) | (8,612,345) | ||||
Ending balance, value at Mar. 31, 2022 | $ 195 | $ 67,482,925 | $ (50,111,867) | $ 17,371,253 | ||
Ending balance, shares at Mar. 31, 2022 | 24,109,244 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Payments of Stock Issuance Costs | $ 1,910,803 | |
Series A Preferred Stocks [Member] | ||
Payments of Stock Issuance Costs | $ 205,470 | |
Series B Preferred Stocks [Member] | ||
Payments of Stock Issuance Costs | 70,803 | |
WeFunder Offering [Member] | ||
Payments of Stock Issuance Costs | $ 53,500 | |
Common Stock With Initial Public Offering [Member] | ||
Payments of Stock Issuance Costs | $ 1,910,883 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flow from operating activities: | ||
Net loss | $ (8,612,345) | $ (15,319,687) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 1,575,165 | 13,202,878 |
Loss on disposal of tooling | 0 | 140,000 |
Write off of intangible assets | 6,427 | 0 |
Amortization of right of use assets | 158,672 | 19,946 |
Depreciation and amortization | 112,980 | 15,053 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (82,397) | (21,455) |
Inventory | (1,519,431) | (172,890) |
Inventory deposits | 393,741 | (394,451) |
Prepaid assets and other current assets | (656,709) | 67,582 |
Other assets | (9,453) | (657,449) |
Accounts payable | 35,097 | 85,164 |
Accrued liabilities | 483,830 | 0 |
Right of use liabilities - operating leases | (116,716) | (36,135) |
Customer deposits | (1,216,883) | 74,250 |
Net cash provided by (used in) operating activities | (9,448,022) | (2,997,194) |
Cash flow from investing activities: | ||
Purchase of property and equipment | (223,632) | (107,701) |
Purchase of intangible assets | 0 | (20,501) |
Net cash used by investing activities | (223,632) | (128,202) |
Cash flow from financing activities: | ||
Repayment of notes payable | (4,764) | (1,795) |
Proceeds from WeFunder offering, net of offering costs of $53,500 | 0 | 2,205,440 |
Proceeds from issuance of Series A preferred stock, net of $205,470 of issuance costs | 0 | 2,464,508 |
Proceeds from issuance of Series B preferred stock, net of $890,026 of issuance costs | 0 | 4,276,693 |
Proceeds from issuance of common stock from public offering, net of issuance costs of $1,910,803 | 18,089,184 | 0 |
Proceeds from exercise of stock options | 15,000 | 0 |
Net cash provided by financing activities | 18,099,420 | 8,944,846 |
NET CHANGE IN CASH | 8,427,766 | 5,819,449 |
CASH AT BEGINNING OF PERIOD | 5,572,199 | 536,082 |
CASH AT END OF PERIOD | 13,999,965 | 6,355,531 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,060 | 14,946 |
Cash paid for income taxes | 0 | 0 |
Non-cash transactions | ||
Conversion of SAFE liability to Series A preferred stock | $ 0 | $ 2,000,000 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Securities Financing Transaction [Line Items] | |||
Payments of Stock Issuance Costs | $ 1,910,803 | ||
Series A Preferred Stock [Member] | |||
Securities Financing Transaction [Line Items] | |||
Payments of Stock Issuance Costs | $ 205,470 | $ 205,470 | |
Series B Preferred Stock [Member] | |||
Securities Financing Transaction [Line Items] | |||
Payments of Stock Issuance Costs | 890,026 | ||
WeFunder Offering [Member] | |||
Securities Financing Transaction [Line Items] | |||
Payments of Stock Issuance Costs | $ 53,500 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN Organization and Nature of Operations Volcon, Inc. (“Volcon”) was formed on February 21, 2020, as a Delaware Corporation, under the name Frog ePowersports, Inc. The Company was renamed Volcon on October 1, 2020. Volcon is a developer and manufacturer of all-electric off road powersport vehicles. On January 5, 2021, the Company created Volcon ePowersports, LLC, (“Volcon LLC”) a Colorado wholly owned subsidiary of the Company, to sell Volcon vehicles and accessories in the United States. Going Concern The accompanying interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and has generated negative cash flows from operations since inception and will need to obtain additional funding in 2022 to continue its operations. Due to these conditions, this raises substantial doubt about the Company’s ability to continue as a going concern. Management intends to finance operating costs over the next twelve months with loans or the sale of equity. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern. Impact of COVID-19 The outbreak of the 2019 novel coronavirus disease (“COVID-19”), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread, has severely impacted the U.S. and world economies. Economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for the Company’s products and the Company’s operating results. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s products; (ii) potential disruption to the Company’s supply chain and distribution network; and (iii) disruption in the production of the Company’s vehicles due to employee illness or government regulations regarding social distancing and workplace requirements. Impact of Russia and Ukraine Conflict |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Unaudited Financial Information The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission ("SEC") on March 23, 2022. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted from this report on Form 10-Q pursuant to the rules and regulations of the SEC. Results for the interim periods in this report are not necessarily indicative of future financial results and have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to present fairly our interim consolidated financial statements as of March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 and 2021. These adjustments are of a normal recurring nature and consistent with the adjustments recorded to prepare the annual audited consolidated financial statements as of December 31, 2021. Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts, transactions and balances have been eliminated in consolidation. Stock Dividend On July 27, 2021, the board of directors approved a common stock dividend of 1.5 shares for each share of common stock. The Company has accounted for this as a stock split since all common stock shares, warrants, options and restricted stock unit amounts and common stock per share amounts have been adjusted for this stock dividend. All periods presented have been adjusted to reflect this stock dividend. As a result of the stock dividend, Series A and Series B preferred stock converted at a ratio of 2.5 common shares for each preferred share outstanding upon completion of the Company’s initial public offering completed in October 2021. Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities as of the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise 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 confirming events. Accordingly, actual results could differ significantly from those estimates. Cash and cash equivalents Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. Revenue recognition For sales directly to consumers, revenue is recognized when the Company transfers control of the product to the customer and the 14-day acceptance period has expired, or earlier acceptance has been received from the customer. For sales to dealers or distributors revenue is recognized when transfer of control of the product is made. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring control of vehicles, parts, and accessories. Consideration that is received in advance of the transfer of goods is recorded as customer deposits until delivery has occurred or the customer cancels their order and the consideration is returned to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. If a right of return exists, the Company adjusts revenue for the estimated effect of returns. Until the Company develops sales history, it will estimate expected returns based on industry data for sales returns as a percent of sales, type of product, and a projection of this experience into the future. The Company’s sales do not have a financing component. Sales promotions and incentives. Shipping and handling charges and costs. Product warranties The Company provides a one-year warranty on vehicles, and a two-year warranty on the battery pack. The Company accrues warranty reserves at the time revenue is recognized. Warranty reserves include the Company’s best estimate of the projected cost to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the evaluation of historical data. The Company reviews its reserves quarterly to ensure that the accruals are adequate to meet expected future warranty obligations and will adjust estimates as needed. Factors that could have an impact on the warranty reserve include the following: changes in manufacturing quality, shifts in product mix, changes in warranty coverage periods, product recalls and changes in sales volume. Warranty expense is recorded as a component of cost of goods sold in the statement of operations and is recognized as a current liability. Inventory and Inventory Deposits The Company purchases parts and assembles the Grunt in a leased facility. Raw materials inventory costs include the cost of parts, including duties, tariffs and shipping. Work in process and finished goods include the cost of parts, labor and manufacturing overhead costs associated with the assembly of the vehicle. Finished goods also include accessories for the vehicle and branded merchandise such as hats and shirts. Certain vendors require the Company to pay an upfront deposit before they will manufacture and ship our parts or accessories. These payments are classified as inventory deposits in the balance sheet until title and risk of loss transfers to the Company, at which time they are classified as inventory. Inventories and inventory deposits are stated at the lower of cost (first-in, first-out method) or net realizable value. Property and equipment Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows: Schedule of estimated useful lives for property, plant and equipment Category Estimated Machinery, tooling and equipment 3 7 Vehicles 5 Internal use manufactured vehicles 1 Furniture & Fixtures 5 Computers 3 Leasehold improvements are depreciated over the shorter period of their estimated useful life or term of the lease. Intangible assets Long-lived assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical carrying cost value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to the carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Leases Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component. ASC 842 defines initial direct costs as only the incremental costs of signing a lease. Initial direct costs related to leasing that are not incremental are expensed as general and administrative expense in our statements of operations. The Company’s operating lease agreements primarily consist of leased real estate and are included within ROU assets – operating leases and ROU lease liabilities – operating leases on the balance sheets. The Company’s lease agreements may include options to extend the lease, which are not included in minimum lease payments unless they are reasonably certain to be exercised at lease commencement. The Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Research and development expenses The Company records research and development expenses in the period in which they are incurred as a component of product development expenses. Income taxes Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on the differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to an asset or liability based on the expected reversal dates of the specific temporary differences. Fair value of financial instruments The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Stock-based compensation The Company has a stock-based incentive award plan for employees, consultants and directors. The Company measures stock-based compensation at the estimated fair value on the grant date and recognizes the amortization of stock-based compensation expense on a straight-line basis over the requisite service period, or when it is probable criteria will be achieved for performance-based awards. Fair value is determined based on assumptions related to the fair value of the Company common stock, stock volatility and risk-free rate of return. The Company has elected to recognize forfeitures when realized. Recently issued accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consists of the following: Schedule of inventory March 31, December 31, 2021 Raw materials $ 2,968,263 $ 1,822,306 Work in process 187,476 45,444 Finished goods 572,707 341,265 Total inventory $ 3,728,446 $ 2,209,015 The Company has purchase commitments for future payments due for inventory where initial deposits were paid as of March 31, 2022. The total additional payments due subsequent to March 31, 2022 are $ 1,774,960 |
LONG _ LIVED ASSETS
LONG – LIVED ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
LONG – LIVED ASSETS | NOTE 4 – LONG – LIVED ASSETS Property and equipment Property and equipment consist of the following: Schedule of property and equipment March 31, 2022 December 31, 2021 Machinery, tooling and equipment $ 598,954 $ 554,378 Vehicles 156,648 148,460 Internal use manufactured vehicles 134,558 73,500 Fixtures & furniture 91,252 75,935 Leasehold improvements 91,212 60,248 Computers 128,130 88,610 1,200,754 1,001,130 Less: Accumulated depreciation (278,919 ) (191,397 ) Total property and equipment $ 921,835 $ 809,734 Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 111,527 14,328 Intangible assets Intangible assets consist of the following: Schedule of Finite-Lived Intangible Assets March 31, 2022 December 31, 2021 Domain names $ 17,438 $ 17,438 Software – 13,125 17,438 30,563 Less: Accumulated amortization (7,266 ) (12,510 ) Total intangible assets $ 10,172 $ 18,053 Amortization expense for the three months ended March 31, 2022 and 2021 was $ 1,453 725 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE Notes Payable In December 2020, the Company entered into a financing arrangement for $ 75,702 8.64 1,211 72 30,942 7.64 753 48 The following table provides the maturities of these notes payable as of March 31, 2022: Schedule of maturities for notes payable Remainder of 2022 $ 17,764 2023 23,685 2024 23,685 2025 17,664 2026 14,654 Total future payments 97,452 Less: Interest (15,634 ) Total notes payable 81,818 Less current portion (16,961 ) Long-term notes payable $ 64,857 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS The Company subleased warehouse and office space on a month to month basis from a company owned by a consultant who was also the Company’s former Chief Operating Officer and his spouse. Monthly rent was $ 11,120 In January 2022, the Company executed a lease assignment with the ultimate landlord of this facility. The lease will expire on December 31, 2023 15,317 9,453 5,864 11,120 33,360 In November 2020, the Company entered into an operating lease with an entity controlled by the Company’s two founders for its future headquarters and production facility in Liberty Hill, Texas. The lease has a lease term of 5 years, and monthly payments ranging from approximately $15,000 per month to $17,000 per month over the lease term. In February 2021, the Company entered into an amendment of the lease related to its future headquarters to expand the leased premises. The Company paid an additional security deposit of $ 139,230 315,588 3,930,170 In October 2021, the Company began discussions for an additional amendment to the lease, in anticipation of manufacturing the Stag at this location, which would result in the monthly payment increasing to $100,000 for the first year of the lease and increasing annually throughout the term of the lease to $107,000 in the final year. Monthly payments for the initial lease and the amended agreement begin at the time a certificate of occupancy is received by the landlord. The Company evaluated the cost of this facility in relation to other lower cost options, including having a third-party manufacture the Stag, and determined that it would be in the best interest of the Company to terminate this agreement and informed the landlord that we would be terminating the lease on April 27, 2022. The Company is currently in negotiations to determine the amount of the security deposit and prepaid rent that will be returned to the Company as certain survey, architecture and construction design costs were incurred that will be paid by the Company. In June 2021, the Company entered into an agreement with a company controlled by the Company’s Chairman and founding stockholder to lease office space for $2,000 per month for a period of one year. Total expense recorded for this lease for the three months ended March 31, 2022 was $ 6,000 On August 28, 2020, the Company entered into consulting agreements with Pink Possum, LLC (“Pink Possum”) an entity controlled by Mr. Okonsky, and Highbridge Consultants, LLC (“Highbridge”), an entity controlled by Mr. James, pursuant to which Messrs. Okonsky and James provide the Company with services. In consideration for entering into the consulting agreements, the Company issued the two entities ten-year warrants to purchase the Company’s common stock at an exercise price of $0.004 per share. The number of shares of common stock issuable pursuant to the warrants was based on the number of shares of the Company’s common stock outstanding at the time of exercise and provided that Pink Possum and Highbridge would receive 18.75% and 25%, respectively, of the Company’s shares of common stock outstanding at the time of exercise on a fully diluted basis. On March 26, 2021 and March 25, 2021, respectively, Pink Possum and Highbridge entered into amendments to the consulting agreements agreeing to exchange the original warrants for new ten-year warrants to purchase 4,750,000 6,250,000 0.98 5.6 7.4 5,507,575 In addition, pursuant to the consulting agreements, upon the occurrence of a Fundamental Transaction (as defined below) for an aggregate gross sales price of $100.0 million or more, each entity will receive a cash payment equal to 1% of such gross sales price. For the purposes of the consulting agreements, “Fundamental Transaction” means any of the following: (i) a consolidation or merger involving the Company if the holders of the voting securities of the Company that are outstanding immediately prior to the consummation of such consolidation or merger do not, immediately after the consummation of such consolidation or merger, hold voting securities that collectively possess at least a majority of the voting power of all the outstanding securities of the surviving entity of such consolidation or merger or such surviving entity’s parent entity; (ii) a transfer or issuance (in a single transaction or series of related transactions) by one or more of the Company and its stockholders to one person or to any group of persons acting in concert, of shares of the Company’s capital stock then collectively possessing 50% or more of the voting power of all then outstanding shares of the Company’s capital stock (computed on an as-converted to common stock basis); or (iii) any sale, license, lease, assignment or other disposition of all or substantially all of the assets of the Company. Furthermore, commencing upon the completion of the Company’s initial public offering of the shares of our common stock, if the Company’s market capitalization exceeds $ 300.0 Also see “Note 7 -- Stockholders’ Equity” |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 7 – STOCKHOLDERS’ EQUITY The Company is authorized to issue up to 100,000,000 0.00001 5,000,000 0.00001 Common stock In October 2021, the Company completed its initial public offering and sold 3,226,875 15.9 2,949,882 162,594 981,871 5,743,175 On February 1, 2022, the Company sold 6,666,667 18,089,184 1,910,803 333,334 3.75 The underwriting agreement provided the underwriter with the option to sell an additional 1,000,000 3.00 The Company’s officers and directors agreed not to sell any shares for 90 days following this offering. The Company has agreed not to issue any shares for a period of twelve months following the offering, other than for the purposes of shares issued related to the 2021 Plan or for an acquisition or merger, without the consent of the underwriter. SAFE Agreements During the period ended December 31, 2020, the Company entered into SAFE agreements (Simple Agreement for Future Equity) with investors through an exchange for cash investments totaling $ 2,000,000 2,000,000 424,269 In January 2021, the Company completed a WeFunder SAFE offering which was convertible into shares of the Company’s preferred stock upon specified future financing events. The Company received gross proceeds of $ 2,258,940 53,500 351,832 Preferred Stock In 2021, the Company designated 1,400,000 415,287 2,669,978 205,470 79,750 79,775 5 2.57 49,743 In 2021, the Company designated 1,500,000 0.00001 9.50 457,688 4,347,495 70,802 648,139 6,157,842 819,224 123,296 197,277 5 3.80 182,281 As noted above, the Series A and Series B Preferred stock was converted to shares of common stock upon the closing of the Company’s initial public offering in October 2021. Warrants During the year ended December 31, 2021, the Company issued fully vested warrants to purchase 150,000 317,018 236,220 6,250 Entities controlled by the Company’s two founders, who are both directors and one of which is the Chairman of the Board, each entered into an anti-dilution warrant with the Company. In the event of their ownership of the Company’s fully diluted capitalization being less than 25% or 18.75%, each individual would have received common stock warrants with an exercise price of $0.0041 to purchase sufficient shares to return them to those ownership percentages. The warrants were fully vested upon grant and have an exercise period of 10 years from the date of grant. As of December 31, 2020, no warrants were owed to the two founders. As discussed below, subsequent to December 31, 2020, the anti-dilution warrants were exchanged for a fixed number of warrants. In March 2021, the Company agreed to exchange the two anti-dilution warrants that were issued to entities controlled by the Company’s two founders for a total of 11,000,000 0.98 10 During the three months ended March 31, 2022 and 2021, the Company recognized expense of $ 7,302 13,098,176 The following is the activity related to common stock warrants during the three months ended March 31, 2022: Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2022 5,174,209 $ 1.16 Granted 333,334 3.75 Canceled – – Expired – – Exercised (6,250 ) $ 0.004 Outstanding at March 31, 2022 5,501,293 $ 1.31 8.53 $ 4,749,456 Exercisable at March 31, 2022 5,501,293 $ 1.31 8.53 $ 4,749,456 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 8 – STOCK-BASED COMPENSATION In January 2021, the Company’s board of directors adopted the Volcon, Inc. 2021 Stock Plan, (the “2021 Plan”). The 2021 Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, and restricted stock unit awards to employees, members of the board of directors and consultants (including restricted stock units issued prior to the adoption of the plan as further discussed below). The Company has reserved a total of 3,000,000 97,219 Restricted Stock Units The following is the restricted stock unit activity for the three months ended March 31, 2022: Schedule of restricted stock unit activity Outstanding January 1, 2022 350,000 Granted 35,000 Vested – Canceled (50,000 ) Outstanding March 31, 2022 335,000 In January 2022, the Company modified the vesting terms of 100,000 25,000 1,126,250 25,000 10,000 During the three months ended March 31, 2022 and 2021, the Company recognized expenses of $ 316,887 99,181 396,087 Performance shares In January 2021, the Board of Directors authorized 250,000 162,507 594,775 The remaining 87,493 Stock Options The following summarizes activity relating to common stock options to employees and consultants for services during the three months ended March 31, 2022: Schedule of stock option activity Common Stock Options Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2022 1,964,045 $ 3.33 Granted 605,704 $ 6.91 Forfeited (177,500 ) $ 1.12 Exercised (22,520 ) $ 1.00 Outstanding at March 31, 2022 2,369,729 $ – $ Exercisable at March 31, 2022 69,980 $ 9.46 $ 736,710 The Company valued the options using an estimated fair value of the shares of common stock between $ 0.98 5.00 71 105 0.77 0.85 6 1,168,926 5,521 4,997,997 Total stock-based compensation recorded for the three months ended March 31, 2022 and 2021 for all stock based compensation awards, including warrants, has been recorded as follows: Schedule of stock-based compensation expense 2022 2021 Cost of Goods Sold $ 222,507 $ – Sales and Marketing 273,326 47,726 Product Development 346,144 26,757 General and Administrative 733,188 13,128,395 Total $ 1,575,165 $ 13,202,878 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | NOTE 9 – LOSS PER COMMON SHARE The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. Common shares consisting of common stock warrants, stock options and restricted stock units totaling 8,206,032 12,151,590 Schedule of earnings per share Three months ended Three months ended March 31, 2022 March 31, 2021 Numerator: Net loss $ 8,612,344 $ 15,319,687 Denominator: Denominator for basic and diluted net loss per common share - weighted average of common shares 21,745,089 1,992,160 Basic and diluted net loss per common share $ (0.40 ) $ (7.69 ) |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company's financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. Due to losses since inception and for all periods presented, no income tax benefit or expense has been recognized as a full valuation allowance has been established for any tax benefit that would have been recognized for the loss in any period presented. Significant components of the Company's deferred tax assets and liabilities at March 31, 2022 and December 31, 2021 are as follows: Schedule of deferred tax assets and liabilities March 31, 2022 December 31, 2021 Deferred tax assets Net operating losses $ 6,480,303 $ 5,078,075 Depreciation and amortization 58,216 46,030 Research & development credit 592,276 592,276 Lease liability 479,234 466,980 Stock-based compensation 3,156,912 2,872,973 Accrued expenses 579,445 478,171 Other 336 336 Total 11,346,722 9,534,840 Valuation allowance (10,884,930 ) (9,076,492 ) Net deferred tax asset 461,792 458,348 Deferred tax liabilities Right of use assets (461,792 ) (458,348 ) Total net deferred taxes deferred tax liabilities $ – $ – Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences will not be realized in the foreseeable future. The Company believes that carryforward limitations will be applied to the historical net operating losses due to the recent change of control transition. The Company's cumulative net operating loss carry forward of approximately $ 30,858,584 The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
LEASES | NOTE 11 – LEASES The components of lease cost for operating leases for the three months ended March 31, 2022 and 2021 were as follows: Schedule of lease cost for operating leases 2022 2021 Lease Cost Operating lease cost $ 158,672 $ 37,025 Short-term lease cost 17,120 33,360 Variable lease cost – – Sublease income – – Total lease cost $ 175,792 $ 70,385 Supplemental cash flow information related to leases for the three months ended March 31, 2022, was as follows: Schedule of supplemental cash flow information related to leases March 31, 2022 Other Lease Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116,716 The following table summarizes the lease-related assets and liabilities recorded on the balance sheet at March 31, 2022 and December 31, 2021: Schedule of lease-related assets and liabilities March 31, 2022 December 31, 2021 Lease Position Operating Leases Operating lease right-of-use assets $ 2,199,009 $ 2,182,612 Right of use liabilities operating leases short term 584,083 456,207 Right of use liabilities operating leases long term 1,697,983 1,767,506 Total operating lease liabilities $ 2,282,066 $ 2,223,713 The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company recognized an initial right of use asset and lease liability of $143,540 for leases entered into during the three months ended March 31, 2022. Schedule of right of use asset and lease liability Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 3.4 Weighted-average discount rate Operating leases 5.5 The following table provides the maturities of lease liabilities at March 31, 2022: Schedule of maturities of lease liabilities Operating Leases Remainder of 2022 $ 655,456 2023 1,184,013 2024 1,143,179 2025 1,117,782 2026 922,774 Total future undiscounted lease payments 5,023,204 Less: Interest (557,898 ) Present value of lease liabilities $ 4,465,306 Note that amounts above include future payments for a lease signed as of December 31, 2021 related to a facility to be constructed in Liberty Hill, Texas by an entity associated with the Company’s founders (see Note 6) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Interim Unaudited Financial Information | Interim Unaudited Financial Information The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission ("SEC") on March 23, 2022. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted from this report on Form 10-Q pursuant to the rules and regulations of the SEC. Results for the interim periods in this report are not necessarily indicative of future financial results and have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary to present fairly our interim consolidated financial statements as of March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 and 2021. These adjustments are of a normal recurring nature and consistent with the adjustments recorded to prepare the annual audited consolidated financial statements as of December 31, 2021. |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts, transactions and balances have been eliminated in consolidation. |
Stock Dividend | Stock Dividend On July 27, 2021, the board of directors approved a common stock dividend of 1.5 shares for each share of common stock. The Company has accounted for this as a stock split since all common stock shares, warrants, options and restricted stock unit amounts and common stock per share amounts have been adjusted for this stock dividend. All periods presented have been adjusted to reflect this stock dividend. As a result of the stock dividend, Series A and Series B preferred stock converted at a ratio of 2.5 common shares for each preferred share outstanding upon completion of the Company’s initial public offering completed in October 2021. |
Use of estimates | Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities as of the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise 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 confirming events. Accordingly, actual results could differ significantly from those estimates. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. |
Revenue recognition | Revenue recognition For sales directly to consumers, revenue is recognized when the Company transfers control of the product to the customer and the 14-day acceptance period has expired, or earlier acceptance has been received from the customer. For sales to dealers or distributors revenue is recognized when transfer of control of the product is made. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring control of vehicles, parts, and accessories. Consideration that is received in advance of the transfer of goods is recorded as customer deposits until delivery has occurred or the customer cancels their order and the consideration is returned to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. If a right of return exists, the Company adjusts revenue for the estimated effect of returns. Until the Company develops sales history, it will estimate expected returns based on industry data for sales returns as a percent of sales, type of product, and a projection of this experience into the future. The Company’s sales do not have a financing component. Sales promotions and incentives. Shipping and handling charges and costs. |
Product warranties | Product warranties The Company provides a one-year warranty on vehicles, and a two-year warranty on the battery pack. The Company accrues warranty reserves at the time revenue is recognized. Warranty reserves include the Company’s best estimate of the projected cost to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the evaluation of historical data. The Company reviews its reserves quarterly to ensure that the accruals are adequate to meet expected future warranty obligations and will adjust estimates as needed. Factors that could have an impact on the warranty reserve include the following: changes in manufacturing quality, shifts in product mix, changes in warranty coverage periods, product recalls and changes in sales volume. Warranty expense is recorded as a component of cost of goods sold in the statement of operations and is recognized as a current liability. |
Inventory and Inventory Deposits | Inventory and Inventory Deposits The Company purchases parts and assembles the Grunt in a leased facility. Raw materials inventory costs include the cost of parts, including duties, tariffs and shipping. Work in process and finished goods include the cost of parts, labor and manufacturing overhead costs associated with the assembly of the vehicle. Finished goods also include accessories for the vehicle and branded merchandise such as hats and shirts. Certain vendors require the Company to pay an upfront deposit before they will manufacture and ship our parts or accessories. These payments are classified as inventory deposits in the balance sheet until title and risk of loss transfers to the Company, at which time they are classified as inventory. Inventories and inventory deposits are stated at the lower of cost (first-in, first-out method) or net realizable value. |
Property and equipment | Property and equipment Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows: Schedule of estimated useful lives for property, plant and equipment Category Estimated Machinery, tooling and equipment 3 7 Vehicles 5 Internal use manufactured vehicles 1 Furniture & Fixtures 5 Computers 3 Leasehold improvements are depreciated over the shorter period of their estimated useful life or term of the lease. |
Intangible assets | Intangible assets |
Long-lived assets | Long-lived assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical carrying cost value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to the carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. |
Leases | Leases Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component. ASC 842 defines initial direct costs as only the incremental costs of signing a lease. Initial direct costs related to leasing that are not incremental are expensed as general and administrative expense in our statements of operations. The Company’s operating lease agreements primarily consist of leased real estate and are included within ROU assets – operating leases and ROU lease liabilities – operating leases on the balance sheets. The Company’s lease agreements may include options to extend the lease, which are not included in minimum lease payments unless they are reasonably certain to be exercised at lease commencement. The Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. |
Research and development expenses | Research and development expenses The Company records research and development expenses in the period in which they are incurred as a component of product development expenses. |
Income taxes | Income taxes Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on the differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to an asset or liability based on the expected reversal dates of the specific temporary differences. |
Fair value of financial instruments | Fair value of financial instruments The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
Stock-based compensation | Stock-based compensation The Company has a stock-based incentive award plan for employees, consultants and directors. The Company measures stock-based compensation at the estimated fair value on the grant date and recognizes the amortization of stock-based compensation expense on a straight-line basis over the requisite service period, or when it is probable criteria will be achieved for performance-based awards. Fair value is determined based on assumptions related to the fair value of the Company common stock, stock volatility and risk-free rate of return. The Company has elected to recognize forfeitures when realized. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives for property, plant and equipment | Schedule of estimated useful lives for property, plant and equipment Category Estimated Machinery, tooling and equipment 3 7 Vehicles 5 Internal use manufactured vehicles 1 Furniture & Fixtures 5 Computers 3 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Schedule of inventory March 31, December 31, 2021 Raw materials $ 2,968,263 $ 1,822,306 Work in process 187,476 45,444 Finished goods 572,707 341,265 Total inventory $ 3,728,446 $ 2,209,015 |
LONG _ LIVED ASSETS (Tables)
LONG – LIVED ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment March 31, 2022 December 31, 2021 Machinery, tooling and equipment $ 598,954 $ 554,378 Vehicles 156,648 148,460 Internal use manufactured vehicles 134,558 73,500 Fixtures & furniture 91,252 75,935 Leasehold improvements 91,212 60,248 Computers 128,130 88,610 1,200,754 1,001,130 Less: Accumulated depreciation (278,919 ) (191,397 ) Total property and equipment $ 921,835 $ 809,734 |
Schedule of Finite-Lived Intangible Assets | Schedule of Finite-Lived Intangible Assets March 31, 2022 December 31, 2021 Domain names $ 17,438 $ 17,438 Software – 13,125 17,438 30,563 Less: Accumulated amortization (7,266 ) (12,510 ) Total intangible assets $ 10,172 $ 18,053 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of maturities for notes payable | Schedule of maturities for notes payable Remainder of 2022 $ 17,764 2023 23,685 2024 23,685 2025 17,664 2026 14,654 Total future payments 97,452 Less: Interest (15,634 ) Total notes payable 81,818 Less current portion (16,961 ) Long-term notes payable $ 64,857 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of warrant activity | Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2022 5,174,209 $ 1.16 Granted 333,334 3.75 Canceled – – Expired – – Exercised (6,250 ) $ 0.004 Outstanding at March 31, 2022 5,501,293 $ 1.31 8.53 $ 4,749,456 Exercisable at March 31, 2022 5,501,293 $ 1.31 8.53 $ 4,749,456 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of restricted stock unit activity | Schedule of restricted stock unit activity Outstanding January 1, 2022 350,000 Granted 35,000 Vested – Canceled (50,000 ) Outstanding March 31, 2022 335,000 |
Schedule of stock option activity | Schedule of stock option activity Common Stock Options Shares Weighted Weighted Intrinsic Value Outstanding at January 1, 2022 1,964,045 $ 3.33 Granted 605,704 $ 6.91 Forfeited (177,500 ) $ 1.12 Exercised (22,520 ) $ 1.00 Outstanding at March 31, 2022 2,369,729 $ – $ Exercisable at March 31, 2022 69,980 $ 9.46 $ 736,710 |
Schedule of stock-based compensation expense | Schedule of stock-based compensation expense 2022 2021 Cost of Goods Sold $ 222,507 $ – Sales and Marketing 273,326 47,726 Product Development 346,144 26,757 General and Administrative 733,188 13,128,395 Total $ 1,575,165 $ 13,202,878 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Schedule of earnings per share Three months ended Three months ended March 31, 2022 March 31, 2021 Numerator: Net loss $ 8,612,344 $ 15,319,687 Denominator: Denominator for basic and diluted net loss per common share - weighted average of common shares 21,745,089 1,992,160 Basic and diluted net loss per common share $ (0.40 ) $ (7.69 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities March 31, 2022 December 31, 2021 Deferred tax assets Net operating losses $ 6,480,303 $ 5,078,075 Depreciation and amortization 58,216 46,030 Research & development credit 592,276 592,276 Lease liability 479,234 466,980 Stock-based compensation 3,156,912 2,872,973 Accrued expenses 579,445 478,171 Other 336 336 Total 11,346,722 9,534,840 Valuation allowance (10,884,930 ) (9,076,492 ) Net deferred tax asset 461,792 458,348 Deferred tax liabilities Right of use assets (461,792 ) (458,348 ) Total net deferred taxes deferred tax liabilities $ – $ – |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Schedule of lease cost for operating leases | Schedule of lease cost for operating leases 2022 2021 Lease Cost Operating lease cost $ 158,672 $ 37,025 Short-term lease cost 17,120 33,360 Variable lease cost – – Sublease income – – Total lease cost $ 175,792 $ 70,385 |
Schedule of supplemental cash flow information related to leases | Schedule of supplemental cash flow information related to leases March 31, 2022 Other Lease Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116,716 |
Schedule of lease-related assets and liabilities | Schedule of lease-related assets and liabilities March 31, 2022 December 31, 2021 Lease Position Operating Leases Operating lease right-of-use assets $ 2,199,009 $ 2,182,612 Right of use liabilities operating leases short term 584,083 456,207 Right of use liabilities operating leases long term 1,697,983 1,767,506 Total operating lease liabilities $ 2,282,066 $ 2,223,713 |
Schedule of right of use asset and lease liability | Schedule of right of use asset and lease liability Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 3.4 Weighted-average discount rate Operating leases 5.5 |
Schedule of maturities of lease liabilities | Schedule of maturities of lease liabilities Operating Leases Remainder of 2022 $ 655,456 2023 1,184,013 2024 1,143,179 2025 1,117,782 2026 922,774 Total future undiscounted lease payments 5,023,204 Less: Interest (557,898 ) Present value of lease liabilities $ 4,465,306 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 7 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Internal Use Manufactured Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 1 year |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,968,263 | $ 1,822,306 |
Work in process | 187,476 | 45,444 |
Finished goods | 572,707 | 341,265 |
Total inventory | $ 3,728,446 | $ 2,209,015 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) | Mar. 31, 2022USD ($) |
Inventory Disclosure [Abstract] | |
Inventory purchase commitment | $ 1,774,960 |
LONG - LIVED ASSETS (Details)
LONG - LIVED ASSETS (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 1,200,754 | $ 1,001,130 |
Less: Accumulated depreciation | (278,919) | (191,397) |
Total property, plant and equipment | 921,835 | 809,734 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 598,954 | 554,378 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 156,648 | 148,460 |
Internal Use Manufactured Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 134,558 | 73,500 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 91,252 | 75,935 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | 91,212 | 60,248 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 128,130 | $ 88,610 |
LONG - LIVED ASSETS (Details-1)
LONG - LIVED ASSETS (Details-1) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 17,438 | $ 30,563 |
Less Accumulated amortization | (7,266) | (12,510) |
Total intangible assets | 10,172 | 18,053 |
Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 17,438 | 17,438 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 0 | $ 13,125 |
LONG _ LIVED ASSETS (Details Na
LONG – LIVED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 111,527 | $ 14,328 |
Amortization expense | $ 1,453 | $ 725 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2022 | $ 17,764 |
2023 | 23,685 |
2024 | 23,685 |
2025 | 17,664 |
2026 | 14,654 |
Total future payments | 97,452 |
Less: Interest | 15,634 |
Total notes payable | 81,818 |
Less current portion | (16,961) |
Long-term notes payable | $ 64,857 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Apr. 30, 2021 | Dec. 31, 2020 |
Vehicle Financing [Member] | ||
Debt Instrument [Line Items] | ||
Financing lease liability | $ 75,702 | |
Debt Instrument, Interest Rate, Stated Percentage | 8.64% | |
Debt Instrument, Periodic Payment | $ 1,211 | |
Debt Instrument, Term | 72 months | |
Vehicle Financing 2 [Member] | ||
Debt Instrument [Line Items] | ||
Financing lease liability | $ 30,942 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.64% | |
Debt Instrument, Periodic Payment | $ 753 | |
Debt Instrument, Term | 48 months |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Dec. 20, 2021 | Nov. 30, 2020 | Mar. 26, 2021 | Mar. 25, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Related Party Transaction [Line Items] | ||||||
Rent expenses | $ 11,120 | |||||
Related party expenses | 11,120 | $ 33,360 | ||||
Lessee, Operating Lease, Liability, to be Paid | 5,023,204 | |||||
Share-Based compensation expense | 1,575,165 | 13,202,878 | ||||
Issuance of common stock for public offering | $ 18,089,184 | |||||
Initial Public Offering [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants issued, shares | 162,594 | |||||
Initial Public Offering [Member] | Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Issuance of common stock for public offering | $ 300,000 | |||||
Pink Possum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Share-Based compensation expense | 5,600,000 | |||||
Highbridge [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Share-Based compensation expense | $ 7,400,000 | |||||
Pink Possum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants issued, shares | 4,750,000 | |||||
Exercise price | $ 0.98 | $ 0.98 | ||||
Highbridge [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants issued, shares | 6,250,000 | |||||
Number of shares issued | 5,507,575 | |||||
Warehouse And Office Space [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Lease Expiration Date | Dec. 31, 2023 | |||||
Payment of security deposit | $ 15,317 | |||||
Warehouse And Office Space [Member] | Leasehold Improvements [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payment of security deposit | 9,453 | |||||
Warehouse And Office Space [Member] | Equipment Installed [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payment of security deposit | 5,864 | |||||
Future Headquarters And Production Facility [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payment of security deposit | $ 139,230 | |||||
Payments for prepaid rent | $ 315,588 | |||||
Lessee, Operating Lease, Liability, to be Paid | 3,930,170 | |||||
Office Space [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating Lease, Expense | $ 6,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Weighted average remaining life, Exercisable | 9 years 5 months 15 days |
Common Stock Warrants [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 5,174,209 |
Weighted average exercise price, outstanding | $ / shares | $ 1.16 |
Granted | 333,334 |
Weighted average exercise price, granted | $ / shares | $ 3.75 |
Cancelled | 0 |
Expired | 0 |
Exercised | (6,250) |
Weighted average exercise price, exercised | $ / shares | $ 0.004 |
Class of Warrant or Right, Outstanding | 5,501,293 |
Weighted average exercise price, outstanding | $ / shares | $ 1.31 |
Weighted average remaining life | 8 years 6 months 10 days |
Intrinsic Value, outstanding | $ | $ 4,749,456 |
Exercisable | 5,501,293 |
Weighted average exercise price, exercisable | $ / shares | $ 1.31 |
Weighted average remaining life, Exercisable | 8 years 6 months 10 days |
Intrinsic Value, exercisable | $ | $ 4,749,456 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Feb. 01, 2022 | May 31, 2021 | Mar. 31, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Feb. 28, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | May 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||||||||
Proceeds from Issuance Initial Public Offering | $ 18,089,184 | $ 0 | |||||||||
Payments of Stock Issuance Costs | $ 1,910,803 | ||||||||||
Underwriter commissions and expenses | $ 1,910,803 | ||||||||||
Preferred stock designated | 2,900,000 | 2,900,000 | |||||||||
Proceeds from warrant exercises | $ 6,250 | ||||||||||
Other expense | $ 1,575,165 | 13,202,878 | |||||||||
Safe Agreements [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Cash investments | 2,000,000 | ||||||||||
Other Liabilities, Current | $ 2,000,000 | ||||||||||
Over-Allotment Option [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares sold | 1,000,000 | ||||||||||
Sale of stock, per shares | $ 3 | ||||||||||
Common Stock Warrants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Granted | 333,334 | ||||||||||
Weighted average exercise price, granted | $ 3.75 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.31 | $ 1.16 | |||||||||
Other expense | $ 7,302 | $ 13,098,176 | |||||||||
Common Stock Warrants [Member] | Company Founders [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrants issued shares | 11,000,000 | ||||||||||
Warrants and Rights Outstanding, Term | 10 years | 10 years | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.98 | $ 0.98 | |||||||||
Common Stock Warrants [Member] | Consultants [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrants issued shares | 150,000 | ||||||||||
Warrant [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrants converted, shares | 317,018 | ||||||||||
Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 6,666,667 | 6,666,667 | |||||||||
Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock issued from warrants converted | 236,220 | ||||||||||
Common Stock [Member] | Two Financial Brokers [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 123,296 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 415,287 | ||||||||||
Payments of Stock Issuance Costs | $ 205,470 | $ 205,470 | |||||||||
Preferred stock designated | 1,400,000 | ||||||||||
Gross proceeds | $ 2,669,978 | ||||||||||
Series A Preferred Stock [Member] | Safe Agreements [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 424,269 | ||||||||||
Series B Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, par value (in dollars per share) | $ 0.00001 | ||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 648,139 | 457,688 | |||||||||
Payments of Stock Issuance Costs | $ 890,026 | ||||||||||
Preferred stock designated | 1,500,000 | ||||||||||
Gross proceeds | $ 6,157,842 | 4,347,495 | |||||||||
Preferred stock, par value | $ 9.50 | ||||||||||
Payment of Financing and Stock Issuance Costs | $ 819,224 | $ 70,802 | |||||||||
Warrants [Member] | Two Financial Brokers [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Warrants issued shares | 197,277 | ||||||||||
Fair value of warrants issued | $ 182,281 | ||||||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.80 | $ 3.80 | |||||||||
Initial Public Offering [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 3,226,875 | ||||||||||
Proceeds from Issuance Initial Public Offering | $ 18,089,184 | $ 15,900 | |||||||||
Payments of Stock Issuance Costs | $ 2,949,882 | ||||||||||
Warrants issued shares | 162,594 | ||||||||||
Fair value of warrants issued | $ 981,871 | ||||||||||
Initial Public Offering [Member] | Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock issued from warrants converted | 5,743,175 | ||||||||||
WeFunder SAFE Offering [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Payments of Stock Issuance Costs | $ 53,500 | ||||||||||
Proceeds from Issuance or Sale of Equity | $ 2,258,940 | ||||||||||
WeFunder SAFE Offering [Member] | Series A Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 351,832 | ||||||||||
Series A Preferred Stock Offering [Member] | Common Stock [Member] | One Financial Broker [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 79,750 | ||||||||||
Series A Preferred Stock Offering [Member] | Common Stock Warrants [Member] | One Financial Broker [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of series B preferred stock, net of issuance costs, shares | 79,775 | ||||||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.57 | $ 2.57 | |||||||||
Number of shares exercised | $ 49,743 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details - Restricted stock unit activity) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2022shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Outstanding at Beginning Balance | 350,000 |
Granted | 35,000 |
Vested | 0 |
Cancelled | (50,000) |
Outstanding at Ending Balance | 335,000 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details - Stock option activity) | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Weighted average remaining life in years, exercisable | 9 years 5 months 15 days |
Intrinsic value, exercisable | $ | $ 736,710 |
Equity Option [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Outstanding at beginning of period | 1,964,045 |
Outstanding at beginning of period | $ / shares | $ 3.33 |
Granted | 605,704 |
Granted | $ / shares | $ 6.91 |
Forfeited | (177,500) |
Forfeited | $ / shares | $ 1.12 |
Exercised | (22,520) |
Exercised | $ / shares | $ 1 |
Outstanding at end of period | 2,369,729 |
Outstanding at end of period | $ / shares | |
Exercisable at end of period | 69,980 |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details - Stock based compensation) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total | $ 6,305,558 | $ 15,301,765 |
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total | 1,575,165 | 13,202,878 |
Cost of Sales [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total | 222,507 | 0 |
Selling and Marketing Expense [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total | 273,326 | 47,726 |
In Process Research and Development [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total | 346,144 | 26,757 |
General and Administrative Expense [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total | $ 733,188 | $ 13,128,395 |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
May 31, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Jan. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Common stock shares reserved | 3,000,000 | ||||||
Shares available for issuance | 97,219 | ||||||
Additional modification expenses | $ 1,126,250 | ||||||
Share-Based compensation expense | $ 1,575,165 | $ 13,202,878 | |||||
Volatility minimum | 71.00% | ||||||
Volatility rate maximum | 105.00% | ||||||
Risk free interest rate minimum | 0.77% | ||||||
Risk free interest rate maximum | 0.85% | ||||||
Estimated life | 6 years | ||||||
Additional common stock options expenses | $ 4,997,997 | ||||||
Minimum [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Estimated fair value | $ 0.98 | ||||||
Maximum [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Estimated fair value | $ 5 | ||||||
2021 Plan [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Common stock shares reserved for future issuance | 250,000 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Stock Issued During Period, Value, Restricted Stock Award, Shares | 100,000 | ||||||
Granted | 10,000 | 25,000 | |||||
Share-Based compensation expense | $ 316,887 | 99,181 | |||||
Additional compensation expense | $ 396,087 | ||||||
Awards granted | 35,000 | ||||||
Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Granted | 25,000 | ||||||
Performance Shares [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Shares available for issuance | 87,493 | ||||||
Share-Based compensation expense | $ 594,775 | ||||||
Awards granted | 162,507 | ||||||
Equity Option [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-Based compensation expense | $ 1,168,926 | $ 5,521 |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss | $ 8,612,344 | $ 15,319,687 |
Denominator: | ||
Denominator for basic and diluted net loss per common share - weighted average of common shares | 21,745,089 | 1,992,160 |
Basic and diluted net loss per common share | $ (0.40) | $ (7.69) |
LOSS PER COMMON SHARE (Details
LOSS PER COMMON SHARE (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,206,032 | 12,151,590 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating losses | $ 6,480,303 | $ 5,078,075 |
Depreciation and amortization | 58,216 | 46,030 |
Research & development credit | 592,276 | 592,276 |
Lease liability | 479,234 | 466,980 |
Stock-based compensation | 3,156,912 | 2,872,973 |
Accrued expenses | 579,445 | 478,171 |
Other | 336 | 336 |
Total | 11,346,722 | 9,534,840 |
Valuation allowance | (10,884,930) | (9,076,492) |
Net deferred tax asset | 461,792 | 458,348 |
Right of use assets | 461,792 | 458,348 |
Total net deferred taxes deferred tax liabilities | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Mar. 31, 2022USD ($) |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forward | $ 30,858,584 |
LEASES (Details - Lease cost)
LEASES (Details - Lease cost) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lease Cost | ||
Operating lease cost | $ 158,672 | $ 37,025 |
Short-term lease cost | 17,120 | 33,360 |
Variable lease cost | 0 | 0 |
Sublease income | 0 | 0 |
Total lease cost | $ 175,792 | $ 70,385 |
LEASES (Details - Supplemental
LEASES (Details - Supplemental cash flow information related to leases) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 116,716 |
LEASES (Details - Lease-related
LEASES (Details - Lease-related assets and liabilities) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Operating lease right-of-use assets | $ 2,199,009 | $ 2,182,612 |
Right of use liabilities operating leases short term | 584,083 | 456,207 |
Right of use liabilities operating leases long term | 1,697,983 | 1,767,506 |
Total operating lease liabilities | $ 2,282,066 | $ 2,223,713 |
LEASES (Details - Other informa
LEASES (Details - Other information) | Mar. 31, 2022 |
Leases | |
Weighted-average remaining lease term Operating leases | 3 years 4 months 24 days |
Weighted-average discount rate Operating leases | 5.50% |
LEASES (Details - Maturities of
LEASES (Details - Maturities of lease liabilities) | Mar. 31, 2022USD ($) |
Leases | |
Remainder of 2022 | $ 655,456 |
2023 | 1,184,013 |
2024 | 1,143,179 |
2025 | 1,117,782 |
2026 | 922,774 |
Total future undiscounted lease payments | 5,023,204 |
Less: Interest | (557,898) |
Present value of lease liabilities | $ 4,465,306 |