Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Share Name	Share Symbol	Market	Type
KULR Technology Group Inc	AMEX:KULR	AMEX	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-0.0398	-8.66%	0.42	0.4842	0.36	0.4842	11,509,170	19:34:09

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number:

001-40454

KULR TECHNOLOGY GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware		81-1004273
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4863 Shawline Street, San Diego, California		92111
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 408-663-5247

(Former name, former address and former fiscal year, if changed since last report) N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	KULR	NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b- 2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 9, 2024, there were 192,989,619 shares outstanding.

Table of Contents

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION

	Item 1. Financial Statements.	3

	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3

	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2024	5

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023	6

	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	7

	Notes to Unaudited Condensed Consolidated Financial Statements	9

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	26

	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	37

	Item 4. Controls and Procedures.	37

PART II - OTHER INFORMATION

	Item 1. Legal Proceedings.	38

	Item 1A. Risk Factors.	38

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	38

	Item 3. Defaults Upon Senior Securities.	38

	Item 4. Mine Safety Disclosures.	38

	Item 5. Other Information.	38

	Item 6. Exhibits.	39

	SIGNATURES	40

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,		December 31,
	2024		2023
	(unaudited)
Assets
Current Assets:
Cash	$	1,016,943	$	1,194,764
Accounts receivable		1,927,203		901,672
Inventory		535,196		1,149,047
Inventory deposits		10,883		27,500
Prepaid expenses and other current assets		375,756		631,361
Total Current Assets		3,865,981		3,904,344
Property and equipment, net		3,774,695		4,698,144
Equipment deposits		1,360,092		1,332,436
Security deposits		98,371		10,228
Intangible assets, net		648,247		719,395
Right-of-use asset, net		1,478,413		129,202
Deferred financing costs, net		166,651		70,607
Total Assets	$	11,392,450	$	10,864,356

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	1,060,694	$	2,769,544
Accrued expenses and other current liabilities		3,750,871		3,463,344
Accrued issuable equity		82,116		13,002
Lease liabilities, current portion		487,369		102,186
Notes payable, net of discount, current portion		641,745		—
Prepaid advance liability, net of discount, current portion		—		—
Deferred revenue		224,664		551,021
Total Current Liabilities		6,247,459		6,899,097
Lease liabilities, non-current portion		1,059,898		—
Notes payable, non-current portion		250,000		250,000
Prepaid advance liability, net of discount		—		5,892,056
Accrued interest		—		5,899
Total Liabilities		7,557,357		13,047,052

Commitments and contingencies (Note 11)

Stockholders’ Equity (Deficit)
Preferred stock, $0.0001 par value, 20,000,000 shares authorized
Series A Preferred Stock, 1,000,000 shares designated; 730,000 and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively;		73		—
Series B Convertible Preferred Stock, 31,000 shares designated; none issued and outstanding at June 30, 2024 and December 31, 2023		—		—
Series C Preferred Stock, 400 shares designated; none issued and outstanding at June 30, 2024 and December 31, 2023		—		—
Series D Preferred Stock, 650 shares designated; none issued and outstanding at June 30, 2024 and December 31, 2023		—		—
Common stock, $0.0001 par value, 500,000,000 shares authorized; 188,086,914 and 187,955,752 shares issued and outstanding at June 30, 2024, respectively; 134,031,669 and 133,900,507 shares issued and outstanding at December 31, 2023, respectively		18,809		13,403
Additional paid-in capital		81,299,431		64,387,717
Treasury stock, at cost; 131,162 shares held at June 30, 2024 and December 31, 2023.		(296,222)		(296,222)
Accumulated deficit		(77,186,998)		(66,287,594)
Total Stockholders’ Equity (Deficit)		3,835,093		(2,182,696)
Total Liabilities and Stockholders’ Equity (Deficit)	$	11,392,450	$	10,864,356

The accompanying notes are an integral part of these condensed consolidated financial statements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue	$	2,432,005	$	2,695,506	$	4,181,109	$	4,455,308
Cost of revenue		1,859,377		1,693,318		3,097,692		2,809,732
Gross Profit		572,628		1,002,188		1,083,417		1,645,576

Operating Expenses
Research and development		1,305,186		1,924,138		2,259,811		3,729,153
Selling, general, and administrative		4,594,500		5,158,030		8,807,401		10,257,121
Total Operating Expenses		5,899,686		7,082,168		11,067,212		13,986,274
Loss From Operations		(5,327,058)		(6,079,980)		(9,983,795)		(12,340,698)

Other (Expense) Income
Interest expense		(33,534)		(197,110)		(166,236)		(357,041)
Amortization of debt discount		(527,199)		(214,554)		(702,276)		(460,874)
Loss on debt extinguishment		—		—		(31,358)		—
Change in fair value of accrued issuable equity		(2,737)		156,652		(15,739)		220,760
Total Other Expense, net		(563,470)		(255,012)		(915,609)		(597,155)
Net Loss	$	(5,890,528)	$	(6,334,992)	$	(10,899,404)	$	(12,937,853)

Net Loss Per Share
- Basic and Diluted	$	(0.03)	$	(0.05)	$	(0.07)	$	(0.11)

Weighted Average Number of Common Shares Outstanding
- Basic and Diluted		181,467,264		115,380,700		161,914,634		114,133,873

The accompanying notes are an integral part of these condensed consolidated financial statements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)


	FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024
	Series A						Additional							Total
	Preferred Stock			Common Stock			Paid-In		Treasury Stock			Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Deficit		Equity (Deficit)
Balance - January 1, 2024	—	$	—	134,031,669	$	13,403	$	64,387,717	131,162	$	(296,222)	$	(66,287,594)	$	(2,182,696)
Preferred stock issued for no consideration	730,000		73	—		—		(73)	—		—		—		—
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ⁽¹⁾	—		—	21,798,830		2,180		6,052,650	—		—		—		6,054,830
Common stock issued for cash pursuant to Advance Notices ⁽²⁾	—		—	19,228,351		1,923		2,904,490	—		—		—		2,906,413
Warrants issued in connection with note payable	—		—	—		—		—	—		—		—		—
Stock-based compensation:
Restricted stock awards exchanged for restricted stock units	—		—	(2,168,508)		(217)		217	—		—		—		—
Restricted stock units vested	—		—	384,627		38		(38)	—		—		—		—
Common stock issued for services	—		—	35,500		4		6,386	—		—		—		6,390
Amortization of restricted common stock	—		—	—		—		781,496	—		—		—		781,496
Amortization of stock options	—		—	—		—		32,041	—		—		—		32,041
Net loss	—		—	—		—		—	—		—		(5,008,876)		(5,008,876)
Balance - March 31, 2024	730,000		73	173,310,469		17,331		74,164,886	131,162		(296,222)		(71,296,470)		2,589,598
Warrants isued in connection with note payable	—		—	—		—		112,863	—		—		—		112,863
Common stock issued for cash pursuant to Advance Notices ⁽³⁾	—		—	14,632,295		1,464		6,140,043	—		—		—		6,141,507
Stock-based compensation:
Restricted stock units vested	—		—	70,000		7		(7)	—		—		—		—
Common stock issued for services	—		—	74,150		7		38,143	—		—		—		38,150
Amortization of restricted common stock	—		—	—		—		814,338	—		—		—		814,338
Amortization of stock options	—		—	—		—		29,165	—		—		—		29,165
Net loss	—		—	—		—		—	—		—		(5,890,528)		(5,890,528)
Balance - June 30, 2024	730,000	$	73	188,086,914	$	18,809	$	81,299,431	131,162	$	(296,222)	$	(77,186,998)	$	3,835,093

⁽¹⁾ Represents gross proceeds of $6,068,407, less issuance costs of $13,577.

⁽²⁾ Represents gross proceeds of $2,910,651, less issuance costs of $4,238.

⁽³⁾ Represents gross proceeds of $6,194,299, less issuance costs of $52,792.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY, continued

(unaudited)


	FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023
				Additional							Total
	Common Stock			Paid-In		Treasury Stock			Accumulated		Stockholders’
	Shares	Amount		Capital		Shares	Amount		Deficit		Equity
Balance - January 1, 2023	113,202,749	$	11,320	$	53,372,673	131,162	$	(296,222)	$	(42,594,038)	$	10,493,733
Common stock issued for the repayment of prepaid advance liability and related interest accrual	3,153,036		315		3,750,653	—		—		—		3,750,968
Shares repurchased for payroll taxes and canceled	(175,000)		(17)		(229,232)	—		—		—		(229,249)
Stock-based compensation:
Restricted stock awards granted	1,848,508		185		(185)	—		—		—		—
Unvested restricted stock awards canceled	(75,000)		(8)		8	—		—		—		—
Common stock issued for services	5,500		1		6,819	—		—		—		6,820
Amortization of restricted common stock	—		—		765,100	—		—		—		765,100
Amortization of stock options	—		—		40,605	—		—		—		40,605
Net loss	—		—		—	—		—		(6,602,861)		(6,602,861)
Balance - March 31, 2023	117,959,793		11,796		57,706,441	131,162		(296,222)		(49,196,899)		8,225,116
Common stock issued for the repayment of prepaid advance liability and related interest accrual	925,935		93		715,565	—		—		—		715,658
Stock-based compensation:
Amortization of restricted common stock	—		—		823,540	—		—		—		823,540
Amortization of stock options	—		—		44,311	—		—		—		44,311
Net loss	—		—		—	—		—		(6,334,992)		(6,334,992)
Balance - June 30, 2023	118,885,728	$	11,889	$	59,289,857	131,162	$	(296,222)	$	(55,531,891)	$	3,473,633

The accompanying notes are an integral part of these condensed consolidated financial statements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Six Months Ended
	June 30,
	2024		2023
Cash Flows From Operating Activities:
Net loss	$	(10,899,404)	$	(12,937,853)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		702,276		460,874
Non-cash lease expense		226,708		123,749
Loss on debt extinguishment		31,358		—
Depreciation and amortization expense		1,218,779		862,086
Change in fair value of accrued issuable equity		15,739		(220,760)
Stock-based compensation		1,754,955		1,966,929
Loss on disposal of property and equipment		20,866		—
Changes in operating assets and liabilities:
Accounts receivable		(1,025,531)		(1,046,532)
Inventory		613,851		581,634
Inventory deposits		16,617		240,532
Prepaid expenses and other current assets		255,605		(117,648)
Security deposits		(88,143)		(5,095)
Accounts payable		(1,768,098)		(643,578)
Accrued expenses and other current liabilities		183,164		1,029,513
Lease liabilities		(130,838)		(130,679)
Deferred revenue		(326,357)		(21,859)
Total Adjustments		1,700,951		3,079,166
Net Cash Used In Operating Activities		(9,198,453)		(9,858,687)

Cash Flows From Investing Activities:
Equipment deposits		(27,656)		(567,332)
Purchases of property and equipment		(135,367)		(192,644)
Acquisition of intangible assets		—		(135,000)
Net Cash Used In Investing Activities		(163,023)		(894,976)

Cash Flows from Financing Activities:
Proceeds from the SEPA		9,104,950		—
Proceeds from prepaid advance liability		—		2,000,000
Issuance costs on prepaid advance liability		—		(30,000)
Net proceeds from notes payable ⁽¹⁾		1,730,000		—
Issuance costs on notes payable		(126,100)		—
Repayments of notes payable		(1,525,195)		—
Repurchase of common stock		—		(229,249)
Net Cash Provided By Financing Activities		9,183,655		1,740,751
Net Decrease In Cash		(177,821)		(9,012,912)
Cash - Beginning of Period		1,194,764		10,333,563
Cash - End of Period	$	1,016,943	$	1,320,651

⁽¹⁾ Face value of $2,309,200, less $579,200 original issue discount.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

(unaudited)


	For the Six Months Ended
	June 30,
	2024		2023
Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for:
Interest	$	—	$	—
Taxes	$	—	$	—

Non-cash investing and financing activities:
Right-of-use asset for lease liability	$	1,575,919	$	51,154
Restricted stock awards converted to restricted stock units	$	217	$	—
Restricted stock units vested	$	45	$	—
Original issue discount on indebtedness	$	579,200	$	105,263
Common stock issued in satisfaction of prepaid advance liability and interest	$	6,068,407	$	4,466,626
Deposits applied to purchases of property and equipment	$	—	$	2,716,057
Additions to property and equipment included in accounts payable and accrued expenses	$	109,681	$	166,663
Equipment deposits included in accounts payable	$	—	$	171,444
Deferred financing costs charged to additional paid-in capital	$	70,607	$	—
Value of warrants issued in connection with notes payable	$	112,863	$	—
Accrued deferred financing costs	$	166,651	$	—
Preferred shares issued for no consideration	$	73	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization and Operations

KULR Technology Group, Inc., through its wholly-owned subsidiary, KULR Technology Corporation (collectively referred to as “KULR” or the “Company”), develops and commercializes high-performance thermal management technologies for electronics, batteries, and other components across a range of applications. Currently, the Company is focused on targeting both high performance aerospace and Department of Defense (“DOD”) applications, such as space exploration, satellite communications, and underwater vehicles, and applying them to mass market commercial applications, such as lithium-ion battery energy storage, electric vehicles, fifth generation (“5G”) communication, cloud computer infrastructure, consumer and industrial devices.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2024, and for the three and six months ended June 30, 2024 and 2023. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the operating results for the full year ending December 31, 2024, or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on April 12, 2024. The accompanying condensed consolidated balance sheet as of December 31, 2023, has been derived from the audited financial statements included in the Form 10-K.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Since the date of the Annual Report on Form 10-K for the year ended December 31, 2023, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note.

Going Concern and Management’s Liquidity Plans

As of June 30, 2024, the Company had cash of $1,016,943 and a working capital deficit of $2,381,478. For the six months ended June 30, 2024, the Company incurred a net loss of $10,899,404 and used cash in operating activities of $9,198,453.

The Company’s primary source of liquidity has historically been cash generated from equity and debt offerings along with cash flows from revenue. Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet future financial obligations as they become due within one year after the date that these financial statements are issued. The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. However, since the Company’s inception, we have had a history of recurring net losses from operations, recurring use of cash in operating activities and working capital deficits.

Future cash requirements for our current liabilities include $4,811,565 for accounts payable and accrued expenses, $784,006 for secured promissory notes (see Note 9 – Notes Payable) and $487,369 for future payments under operating leases. Future cash requirements for long-term liabilities include $1,059,898 for future payments under operating leases and $250,000 for unsecured promissory notes.

On December 20, 2023, the Company received a notice of noncompliance from NYSE Regulation (“NYSE”) stating it is not in compliance with Section 1003(a)(iii) in the NYSE American Company Guide (the “Company Guide”) since the Company reported stockholders’ equity of $1,200,172 at September 30, 2023, and losses from continuing operations and/or net losses in its five most recent fiscal years. On February 12, 2024, the Company received a second notice letter from NYSE stating it is not in compliance with Section 1003 (f)(v) of the Company guide since the Company’s securities were trading at an average of less than $0.20 per share for 30 days.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

On March 5, 2024, the Company received a notification from the NYSE that the Company’s plan to regain compliance with Section 1003 (a)(iii) of the Company Guide was accepted and so long as the Company meets its interim objectives, the Company will have until June 20, 2025, to regain compliance with the minimum stockholders’ equity requirement. On May 1, 2024, the Company received a notification from the NYSE stating that the Company had regained compliance with Section 1003 (f)(v) of the Company Guide, given the increase in the trading price of the Company’s securities.

The factors above raise substantial doubt about the Company’s ability to meet its obligations as they become due within the twelve months from the date these condensed consolidated financial statements are issued.

Management’s plans to mitigate the factors which raise substantial doubt include (i) revenue growth, (ii) reducing operating expenses through careful cost management, and (iii) raising additional funds through future financings.

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock having an aggregate offering price of up to $20,000,000 in “at the market” offerings through or to the Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of 3% of the gross proceeds of any shares of common stock sold under the Sales Agreement. During the period from July 3, 2024, through August 9, 2024, the Company issued a total of 4,953,867 shares of common stock pursuant to the Sales Agreement for aggregate proceeds of $1,416,940. See Note 12 – Subsequent Events – At the Market Offering for additional information.

The Company’s ability to continue as a going concern is dependent upon its ability to successfully execute the aforementioned initiatives. There is no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The aforementioned factors indicate that management’s plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Use of Estimates

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these unaudited condensed consolidated financial statements include, but are not limited to, fair value calculations for intangible assets, equity securities, stock-based compensation and the valuation allowance related to the Company’s deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consisted primarily of cash and accounts receivable. The Company’s concentrations of credit risk also include concentrations from key customers and vendors.

Cash Concentrations

A significant portion of the Company’s cash is held at one major financial institution. The Company has not experienced any losses in such accounts. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. There were uninsured balances of $516,943 and $694,764 as of June 30, 2024 and December 31, 2023, respectively.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Customer and Revenue Concentrations

The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:


	Revenue								Accounts Receivable
	For the Three Months Ended				For the Six Months Ended				As of		As of
	June 30,				June 30,				June 30,		December 31,
	2024		2023		2024		2023		2024		2023
Customer A	31	%	*		18	%	*		43	%	*
Customer B	19	%	*		11	%	*		24	%	*
Customer C	10	%	*		*		*		*		52	%
Customer D	*		46	%	*		63	%	*		20	%
Customer E	*		19	%	*		*		*		14	%
Customer F	*		17	%	*		10	%	*		*
Customer G	*		*		17	%	*		*		*
Total	60	%	82	%	46	%	73	%	67	%	86	%

*	Less than 10%

There is no assurance the Company will continue to receive significant revenue from any of these customers. Any reduction or delay in operating activity from any of the Company’s significant customers, or a delay or default in payment by any significant customer, or termination of agreements with significant customers, could materially harm the Company’s business and prospects. As a result of the Company’s significant customer concentrations, its gross profit and results from operations could fluctuate significantly due to changes in political, environmental, or economic conditions, or the loss of, reduction of business from, or less favorable terms with any of the Company’s significant customers.

Vendor Concentrations

The Company had vendors whose purchases of inventory individually represented 10% or more of the Company’s total purchases of inventory, for the three and six months ended June 30, 2024 and 2023, as follows:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Vendor A	19	%	*		29	%	*
Vendor B	19	%	*		28	%	*
Vendor C	*		16	%	*		14	%
Vendor D	*		10	%	*		*
	38	%	26	%	57	%	14	%

*	Less than 10%

Accounts Receivable

Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of June 30, 2024 and December 31, 2023, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Inventory

The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized. These costs consist of finished goods, raw materials, manufacturing-related costs, transportation and freight, and other indirect overhead costs.

Inventory is comprised of carbon fiber velvet (“CFV”) thermal interface solutions and internal short circuit batteries, which are available for sale, as well as raw materials and work in process related primarily to the manufacture of safe cases. Safe cases provide a safe and cost-effective solution to commercially store and transport lithium batteries and mitigate the impacts of cell-to-cell thermal runway propagation. Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. The cost of inventory that is sold to third parties is included within cost of revenue and the cost of inventory that is given as samples is included within operating expenses. The Company periodically reviews for slow-moving, excess or obsolete inventories. Products that are determined to be obsolete, if any, are written down to net realizable value. On occasion, the Company pays for inventory prior to receiving the goods. These payments are recorded as inventory deposits until the goods are received and these costs are included in the current asset section of the condensed consolidated balance sheets. As of June 30, 2024 and December 31, 2023, inventory deposits were $10,883 and $27,500, respectively. Finished goods inventory is held on-site at the San Diego, California and Webster, Texas locations. Certain raw materials are held off-site with certain contract manufacturers.

Inventory at June 30, 2024 and December 31, 2023 was comprised of the following:


	June 30,		December 31,
	2024		2023
Raw materials	$	409,168	$	322,111
Finished goods		126,028		826,936
Total inventory	$	535,196	$	1,149,047

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

The following five steps are applied to achieve that core principle:

●

Step 1: Identify the contract with the customer;

●

Step 2: Identify the performance obligations in the contract;

●

Step 3: Determine the transaction price;

●

Step 4: Allocate the transaction price to the performance obligations in the contract; and

●

Step 5: Recognize revenue when the company satisfies a performance obligation.

The Company recognizes revenue primarily from the following different types of contracts:

●

Product sales – Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time it ships the product to the customer.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

●

Contract services – Revenue is recognized pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract.

Contract services revenue that is recognized over time, may be recognized using the input method, based on labor hours expended, or using the output method based on milestones achieved, depending on the contract.

The following table summarizes the Company’s revenue recognized by type of contract in its condensed consolidated statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue Recognized at a Point in Time:
Product sales	$	1,134,769	$	1,957,370	$	1,749,862	$	3,586,628
Contract services		1,185,236		270,476		1,701,707		401,020
Total		2,320,005		2,227,846		3,451,569		3,987,648
Revenue Recognized Over Time:
Contract services		112,000		467,660		729,540		467,660
Total Revenue	$	2,432,005	$	2,695,506	$	4,181,109	$	4,455,308

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common and dilutive common-equivalent shares outstanding during each period.

The following table presents the computation of basic and diluted net loss per common share:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(5,890,528)	$	(6,334,992)	$	(10,899,404)	$	(12,937,853)

Denominator (weighted average quantities):
Common shares issued		182,151,812		118,617,860		162,824,020		116,846,331
Less: Treasury shares purchased		(131,162)		(131,162)		(131,162)		(131,162)
Less: Unvested restricted shares		(690,248)		(3,240,679)		(880,871)		(2,708,655)
Add: Accrued issuable equity		136,862		134,681		102,647		127,359
Denominator for basic and diluted net loss per share		181,467,264		115,380,700		161,914,634		114,133,873

Basic and diluted net loss per common share	$	(0.03)	$	(0.05)	$	(0.07)	$	(0.11)

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:


	June 30,
	2024	2023
Prepaid advance liability⁽¹⁾	—	10,168,469
Unvested restricted stock awards	650,000	3,116,008
Unvested restricted stock units	4,825,111	3,000,000
Options	702,716	795,216
Warrants	2,714,587	2,524,410
Total	8,892,414	19,604,103

⁽¹⁾Shares issuable estimated using the floor price of $0.75 per share pursuant to the supplemental agreement to the SEPA (see Note 6 – Prepaid Advance Liability).

Operating Leases

The Company leases properties under operating leases. For leases in effect upon adoption of Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” at January 1, 2020, and for any leases commencing thereafter, the Company recognizes a liability to make lease payments, the “lease liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”. The lease liability is measured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing rate. The right-of-use asset is measured at the amount of the lease liability adjusted for any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term, any unamortized initial direct costs, and any impairment of the right-of-use-asset. Operating lease expense consists of a single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. The Company elected the accounting policy to include both the lease and non-lease components of the agreements as a single component and account for them as a lease.

Reclassifications

Certain prior period balances have been reclassified to conform to the current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share.

Subsequent Events

The Company has evaluated subsequent events through the date on which these unaudited condensed consolidated financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed in Note 12 – Subsequent Events.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023 – 09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023–09.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for the Company in financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted this ASU on January 1, 2024, and the adoption did not have a material impact on its condensed consolidated financial statements.

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of June 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:


	June 30,		December 31,
	2024		2023
Compensation costs	$	225,000	$	375,000
Dues and subscriptions		55,189		50,689
Deferred expenses		53,247		59,089
Professional fees		13,506		24,125
Vendor receivables		7,389		1,995
Security deposits		5,095		55,308
Insurance		116		32,606
Conferences and seminars		—		19,338
Investor relations		—		1,512
Other		16,214		11,699
Total prepaid expenses and other current assets	$	375,756	$	631,361

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 4 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of June 30, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following:


	June 30,		December 31,
	2024		2023
Professional fees	$	2,094,938	$	1,875,000
Research and development		441,192		441,192
Payroll and vacation		412,974		504,748
Inventory purchases		291,925		145,949
Sales tax payable		110,473		46,901
Legal fees		110,000		117,640
Royalties		58,841		17,505
Board compensation		37,500		23,750
Securities fees		37,500		—
Refund due to customer		—		171,960
Cost of sales		—		28,663
Other		155,528		90,036
Total accrued expenses and other current liabilities		3,750,871		3,463,344
Add: Accrued interest, non-current		—		5,899
Total accrued expenses and other liabilities	$	3,750,871	$	3,469,243

NOTE 5 – ACCRUED ISSUABLE EQUITY

A summary of the accrued issuable equity activity during the six months ended June 30, 2024 is presented below:


	For the Six Months Ended
	June 30, 2024
Beginning balance at January 1, 2024	$	13,002
Additions		53,375
Mark-to-market		15,739
Fair value at June 30, 2024	$	82,116

During the six months ended June 30, 2024, the Company became obligated to issue a fixed number of shares of common stock of the Company as consideration for services provided by an employee pursuant to a contractual arrangement previously entered into with the employee. On the date the contract was entered into, the estimated fair value of the shares to be issued was an aggregate of $53,375 based on the quoted market prices of the shares.

The Company recorded losses in the aggregate amount of $2,737 and $15,739 during the three and six months ended June 30, 2024, respectively, and recorded gains in the aggregate amount of $156,652 and $220,760 during the three and six months ended June 30, 2023, respectively, related to changes in the fair value of accrued issuable equity (see Note 10 – Stockholders’ Equity, Stock-Based Compensation for additional details). The fair value of the accrued but unissued shares as of June 30, 2024, was $82,116, based on Level 1 inputs, which consist of quoted prices for the Company’s common stock in active markets.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 6 – PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

The Company’s prepaid advance liability, net of discount, consists of the following:


	Gross Amount of		Less:		Prepaid Advance
	Prepaid Advance		Debt		Liability,
	Liability		Discount		net of discount
Balance, January 1, 2024	$	5,918,430	$	(26,374)	$	5,892,056
Repayments pursuant to Advance Notices		(5,918,430)		—		(5,918,430)
Amortization of debt discount		—		26,374		26,374
Balance, June 30, 2024	$	—	$	—	$	—

On January 9, 2024, the Company entered into a letter agreement with Yorkville to defer the Company’s December 31, 2023 (the “December Payment”) payment of $2,000,000 plus accrued interest and a 5% cash payment premium until February 29, 2024. On February 13, 2024, the Company and Yorkville entered into another agreement to extend all payment due dates and defer all payment obligations to December 31, 2024.

During the six months ended June 30, 2024, the Company issued 55,659,476 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $15,173,357. Of the shares issued pursuant to the SEPA Advance Notices, 21,798,830 shares valued at $6,068,407 were issued in satisfaction of $5,918,430 of principal and $118,619 of accrued interest owed in connection with the Company’s prepaid advance liability. The Company recorded $31,358 in extinguishment loss and charged $13,577 of deferred financing costs to additional paid-in capital in connection with the shares issued in satisfaction of the prepaid advance liability. As of June 30, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA has been terminated. See Note 10 – Stockholders’ Equity (Deficit) - Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA for additional information.

The remaining 33,860,646 shares issued pursuant to the SEPA Advance Notices were issued for cash proceeds of $9,104,950, which was used to fund the operations of the Company. Deferred financing costs in the amount of $57,030 were charged to additional paid-in capital in connection with the shares issued for cash.

NOTE 7 – LEASES

On January 31, 2024, the initial lease for Webster, Texas dated January 18, 2023, expired.

On January 27, 2024, the Company entered into a lease agreement for new office space in Webster, Texas. The initial lease term is 63 months. The lease contains an option to renew for an additional 36 months, which is not reasonably certain to be exercised and therefore is not included in the measurement of the ROU asset and lease liability. Monthly rental payments under the new lease are $33,086, which is comprised of $21,950 of base rent and $11,136 of common area maintenance fees. No cash payments are due for the first three months of the lease. The Company determined that the value of the lease liability and related right-of-use asset at inception was $1,085,497, using an incremental borrowing rate of 10%. The Company paid a security deposit of $37,930 in connection with the Webster lease agreement which is recorded within the security deposits section of the balance sheet as of June 30, 2024.

The Company also leases office space at 4863 Shawline Street, San Diego, CA 92111, pursuant to an operating lease which expired May 31, 2024 (the “San Diego Lease”).

On January 25, 2024, the Company entered into an amendment to the lease dated April 5, 2021, for the facility located at 4863 Shawline Street, San Diego, CA 92111 (the “First Renewal”). Pursuant to the amendment, the lease is extended for a period of eighteen months commencing June 1, 2024, and terminating November 30, 2025. Monthly rental payments under the amendment are $29,337. The Company determined that the value of the modified lease liability and related right-of-use asset to be $490,422, using an incremental borrowing rate of 10%.

As of June 30, 2024, the Company does not have any financing leases.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

During the three and six months ended June 30, 2024, operating lease expense was $111,591 and $226,708, respectively. During the three and six months ended June 30, 2023, operating lease expense was $65,873 and $131,746, respectively.

Maturities of lease liabilities as of June 30, 2024, were as follows:


Year
July 1, 2024 through December 31, 2024	$	307,722
2025		601,196
2026		280,228
2027		289,008
2028		297,788
Thereafter		101,703
Total future minimum lease payments		1,877,645
Less: amount representing imputed interest		(330,378)
Present value of lease liabilities		1,547,267
Less: current portion		(487,369)
Lease liabilities, non current portion	$	1,059,898

Supplemental cash flow information related to the lease was as follows:


	For the Six Months Ended
	June 30,
	2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating activities	$	130,838		$	130,678
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	1,575,919		$	51,154
Weighted Average Remaining Lease Term (Years)
Operating leases		3.77	years		0.88	years
Weighted Average Discount Rate
Operating leases		10.0	%		5.0	%

NOTE 8 – RELATED PARTY TRANSACTIONS

During the three and six months ended June 30, 2023, the Company recognized expenses of $16,755 and $27,210, respectively, for consulting services provided by the father of the company’s Chief Technology Officer, which are included within selling, general and administrative expenses on the unaudited condensed consolidated statements of operations. For the three and six months ended June 30, 2024, there were no expenses with related parties.

As of June 30, 2024 and December 31, 2023, the Company did not have any accounts payable outstanding with related parties.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 9-NOTES PAYABLE

A summary of the notes payable activity during the six months ended June 30, 2024 is presented below:


	Notes		Debt
	Payable		Discount		Total
Outstanding, January 1, 2024	$	—	$	—		—
Proceeds from merchant cash advances		1,609,200		(529,200)		1,080,000
Proceeds from promissory notes		700,000		(50,000)		650,000
Issuance costs paid in cash		—		(53,200)		(53,200)
Issuance costs to be paid in equity		—		(112,863)		(112,863)
Underwriting fees paid in cash		—		(72,900)		(72,900)
Repayments in cash		(1,525,195)		—		(1,525,195)
Amortization of debt discount		—		675,902		675,902
Notes payable, current-portion		784,006		(142,261)		641,745
Add: Notes payable, non-current portion		250,000		—		250,000
Total notes payable as of June 30, 2024	$	1,034,006	$	(142,261)	$	891,745

On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) whereby the Company received $504,900 of cash (net of underwriting fees of $35,100), and paid finder’s fees in cash of $21,600 and additional finder’s fees to be issued in equity, with the obligation to repay a total of $804,600 over thirty-two weekly payments of $25,143.75, beginning January 30, 2024. The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, is being amortized over thirty-two weeks using the effective interest rate method and an annualized effective interest rate of 217%. The Cash Advance Agreement was secured by the Company’s accounts receivable and related cash receipts. On February 26, 2024, the parties added an addendum to the agreement for an early payoff discount whereby the Company will owe $756,000 if paid by March 22, 2024, or $783,000 if paid by April 22, 2024. The Company did not take advantage of the early payoff discount and will continue making weekly payments over the original thirty-two-week term. On July 11, 2024, the Company used proceeds from a new merchant cash advance to repay this cash advance in full. See Note 12 – Subsequent Events – Merchant Cash Advance for additional information.

On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the same lender mentioned above whereby the Company received $502,200 of cash (net of underwriting fees of $37,800), and paid finder’s fees in cash of $21,600 and additional finder’s fees to be issued in equity, with the obligation to repay a total of $804,600 over thirty weekly payments of $26,820, beginning February 29, 2024. The difference between the total repayment amount and the net proceeds received was accounted for as debt discount, and along with the finder’s fees, is being amortized over thirty weeks using the effective interest rate method and an annualized effective interest rate of 249%. The Second Cash Advance is secured by the Company’s accounts receivable and related cash receipts. On July 11, 2024, the terms of the agreement were revised whereby the weekly repayment amounts will be reduced from $26,820 to $15,620 and the repayment period will be extended from September 27, 2024, to November 15, 2024.

On April 4, 2024, the Company and the finder of the First and Second Cash Advance Agreements determined that the equity compensation would be by issuance of warrants to purchase up to 81,788 shares (the “First Warrant”) and up to 108,389 shares (the “Second Warrant”), respectively, of the Company’s common stock at an exercise price of $0.1852 per share and $0.139 per share, respectively. The First Warrant and the Second Warrant (collectively the “Warrants”) were exercisable immediately and expire on January 22, 2027 and February 26, 2027, respectively. The Warrants had a grant date fair value of $112,863. The value of the Warrants was recognized as additional debt discount, which will be amortized over the repayment period.

The Warrants contain a cashless exercise provision in the form of a net share settlement, whereby, if, at the time the holder exercises the Warrants, there is no effective registration statement registering the common stock subject to the Warrants, the holder may elect to receive the number of shares of the Company’s common stock determined according to a formula set forth in the warrant agreements.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following assumptions were used in the Black-Scholes Model to measure the fair value of the warrants:


Market price at measurement date	$	0.70
Exercise price	$	0.14 - $0.19
Risk free interest rate		4.52	%
Expected term (years)		2.8 - 2.9
Expected volatility		93	%

On April 2, 2024, the Company entered into an agreement (the “Promissory Note”), with a lender (the “Lender”), pursuant to which the Lender purchased an unsecured promissory note with an initial principal amount of $500,000, for cash proceeds of $440,000. The Company recorded a debt discount of $60,000, which consists of an original issue discount of $50,000 and cash issuance costs of $10,000. The Promissory Note carries an annual interest rate of 0%, which shall increase to 15% in the event of default, and has a maturity date of October 2, 2024, after which all outstanding principal and accrued interest will become immediately due. On May 28, 2024, the Company repaid the Promissory Note in full, and recognized $60,000 of amortization expense related to the debt discount.

On April 9, 2024, the Company entered into a note purchase agreement pursuant to which the Company issued an unsecured promissory note with an initial principal amount of $200,000 and which matures on the first anniversary of its issuance. The Company received cash proceeds of $200,000. The promissory note carries an annual interest rate of 16%. In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12% of the prepayment amount instead of 16%.

NOTE 10 - STOCKHOLDERS’ EQUITY (DEFICIT)

Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA

On May 13, 2022, the Company entered into the SEPA with Yorkville. Pursuant to the SEPA, the Company had the right, but not the obligation, to sell to Yorkville up to an aggregate of $50,000,000 of its shares of common stock, at the Company’s request any time during the commitment period commencing on May 13, 2022, and terminating on June 1, 2024.

Each sale (an “Advance”) that the Company requests under the SEPA (via an “Advance Notice”) may be for a number of shares of common stock with an aggregate value of up to $5,000,000. Shares are sold under the SEPA at 98.0% of the average of the volume-weighted average price (“VWAP”) during each of the three consecutive trading days commencing on the trading day following the Company’s submission of an Advance Notice to Yorkville. Advances are subject to certain limitations, including that Yorkville will not purchase any shares that would result in it owning more than 4.99% of the Company’s outstanding common stock at the time of an Advance, or more than the number of shares registered under the registration statement in effect at the time of the Advance.

During the six months ended June 30, 2024, the Company issued 55,659,476 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate gross proceeds of $15,173,357. Of the gross proceeds, $9,104,950 was retained by the Company to fund operations. The remaining proceeds were applied against the principal and interest owed in connection with the Prepaid Advance Liability. As of March 27, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA terminated on June 1, 2024. See Note 6 – Prepaid Advance Liability, for details related to a supplemental agreement to the SEPA.

Common Stock

During the six months ended June 30, 2024, the Company issued an aggregate of 79,650 shares of immediately vested common stock with a grant date value of $27,141 for legal services.

During the six months ended June 30, 2024, the Company issued 454,627 shares of common stock upon the vesting of restricted stock units previously granted.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

During the six months ended June 30, 2024, the Company issued 30,000 shares of immediately vested common stock with a grant date value of $17,400 as equity compensation to its independent members of the Board of Directors.

See Restricted Stock Awards, for details related to restricted equity grants and Note 6 - Prepaid Advance Liability for details related to additional share issuances.

Preferred Stock

On January 26, 2024, the Board of Directors (“Board”), approved, authorized, and ratified the issuance of 730,000 shares of previously designated Non-Convertible Series A Voting Preferred Stock to the Chairman and Chief Executive Officer of the Company, Michael Mo, for no consideration, subject to the Board reserving the full and unequivocal right to revoke, rescind, transfer or otherwise cancel the issued Non-convertible Series A Voting Preferred Stock in the event Michael Mo is removed from any position with the Company or resigns from all positions with the Company. The issuance of up to 1,000,000 shares of Non-Convertible Series A Voting Preferred Stock was previously approved and authorized by a vote of the majority stockholders of the Company.

Holders of Non-Convertible Series A Voting Preferred Stock shall not be entitled to dividends, shall not convert into another series or class of stock of the Company and have no rights to distributions in the event of any liquidation. Each record holder of Non-Convertible Series A Voting Preferred Stock shall have that number of votes (identical in every other respect to the voting rights of the holders of Common Stock entitled to vote at any regular or special meeting of the shareholders or by written consent) equal to one-hundred (100) votes per share of Non-Convertible Series A Voting Preferred Stock held by such record holder.

Treasury Stock

As of June 30, 2024 and December 31, 2023, the Company has 131,162 shares held in treasury recorded at their cost of $296,222.

Warrants

A summary of warrants activity during the six months ended June 30, 2024, is presented below:


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining	Intrinsic
	Warrants	Price		Term (Yrs)	Value
Outstanding, January 1, 2024	2,524,410	$	1.02
Issued	190,177		0.16
Exercised	—		—
Expired	—		—
Forfeited	—		—
Outstanding, June 30, 2024	2,714,587	$	0.96	1.6	$	45,858

Exercisable, June 30, 2024	2,714,587	$	0.96	1.6	$	45,858

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

A summary of outstanding and exercisable warrants as of June 30, 2024, is presented below:


Warrants Outstanding		Warrants Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Life	Number of
Price	Warrants	In Years	Warrants
$ 1.25	177,885	1.5	177,885
$ 1.00	2,346,525	1.5	2,346,525
$ 0.19	81,788	2.6	81,788
$ 0.14	108,389	2.7	108,389
	2,714,587	1.6	2,714,587

See Note 9 – Notes Payable for additional details related to the 2024 warrant issuances.

Stock Options

A summary of stock options activity during the six months ended June 30, 2024, is presented below:


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining	Intrinsic
	Options	Price		Term (Yrs)	Value
Outstanding, January 1, 2024	722,716	$	1.26
Granted	55,000		0.27
Forfeited	(75,000)		0.89
Outstanding, June 30, 2024	702,716	$	1.22	2.5	$	7,328

Exercisable, June 30, 2024	357,715	$	0.84	1.2	$	—

The following table presents information related to stock options as of June 30, 2024:


Options Outstanding		Options Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Term	Number of
Price	Options	In Years	Options
$0.19 - $0.99	322,986	0.4	201,735
$1.21 - $1.50	145,000	3.5	36,250
$1.55 - $1.99	80,000	2.8	30,000
$2.05 - $2.44	154,730	2.5	89,730
	702,716	1.2	357,715

For the three and six months ended June 30, 2024, the weighted average grant date fair value per share of options granted was $0.21 and $0.20, respectively, compared to $0.48 and $0.74, for the three and six months ended June 30, 2023.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company has computed the fair value of stock options granted using the Black-Scholes option pricing model. In applying the Black-Scholes option pricing model, the Company used the following range of assumptions:


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Risk free interest rate	4.75% - 4.81	%	4.07% - 4.52	%	4.27% - 4.81	%	3.92% - 4.52	%
Expected term (years)	3.8		3.5		3.8		3.5
Expected volatility	110	%	107	%	110% - 114	%	105% -107	%
Expected dividends	0	%	0	%	0	%	0	%

Option forfeitures are accounted for at the time of occurrence. The expected term used is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of employee option grants. The Company utilizes an expected volatility figure based on the historical volatility of its common stock over a period of time equivalent to the expected term of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

As of June 30, 2024, there was $238,418 of unrecognized stock-based compensation expense related to the above stock options, which will be recognized over the weighted average remaining vesting period of 2.1 years.

Restricted Stock Awards

The following table presents information related to restricted stock awards activity during the six months ended June 30, 2024:


	Shares of	Weighted Average
	Restricted	Grant Date
	Common Stock	Fair Value
Non-vested RSAs, January 1, 2024	3,381,008	$	1.53
RSAs exchanged for RSUs	(2,168,508)		0.94
Granted	—		—
Vested	(562,500)		2.60
Forfeited	—		—
Non-vested RSAs, June 30, 2024	650,000	$	2.53

During the six months ended June 30, 2024, the Company issued 2,168,508 restricted stock units in exchange for the same quantity of restricted stock awards. The exchange of RSAs for RSUs did not result in a modification of any other terms, such as the grant date fair value or vesting period.

As of June 30, 2024, there was $1,134,833 of unrecognized stock-based compensation expense related to restricted stock awards that will be recognized over the weighted average remaining vesting period of 0.91 years.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Restricted Stock Units

The following table presents information related to restricted stock units (“RSUs”) activity during the six months ended June 30, 2024:


	Number of	Weighted Average
	Restricted	Grant Date
	Common Units	Fair Value
Non-vested RSUs, January 1, 2024	2,250,000	$	2.05
RSAs exchanged for RSUs	2,168,508		0.94
Granted	851,230		0.38
Vested	(454,627)		0.94
Forfeited	—		—
Non-vested RSUs, June 30, 2024	4,815,111	$	1.36

As of June 30, 2024, there was $4,202,362 of unrecognized stock-based compensation expense related to restricted stock units that will be recognized over the weighted average remaining vesting period of 2.68 years.

Stock-Based Compensation

During the three and six months ended June 30, 2024, the Company recognized stock-based compensation expense of $909,026 and $1,754,955, respectively, related to restricted stock awards, restricted stock units, stock options and stock issued for services, of which $870,837 and $1,678,942, respectively, is included within selling, general and administrative expenses, and $38,189 and $76,013, respectively is included within research and development expenses in the unaudited condensed consolidated statements of operations.

During the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $964,201 and $1,966,929, respectively, related to restricted stock awards, restricted stock units, stock options and stock issued for services, of which $927,375 and $1,831,370, respectively, is included within selling, general and administrative expenses, and $36,826 and $52,986, respectively is included within research and development expenses in the unaudited condensed consolidated statements of operations.

The following table presents information related to stock-based compensation for the three and six months ended June 30, 2024 and 2023:


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Common stock for services (includes accrued, unissued shares)	$	65,523	$	96,350	$	97,915	$	210,800
Amortization of stock options		29,165		44,311		61,206		84,916
Amortization of restricted stock awards and units		814,338		823,540		1,595,834		1,588,640
Total	$	909,026	$	964,201	$	1,754,955	$	1,884,356

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company may be involved in litigation and arbitrations from time to time in the ordinary course of business. As of June 30, 2024, the Company was not involved in any ongoing litigation. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable.

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KULR TECHNOLOGY GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 12 - SUBSEQUENT EVENTS

At the Market Offering

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $20,000,000 in “at the market” offerings through or to the Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of 3% of the gross proceeds of any shares of common stock sold pursuant to the ATM. During the period from July 3, 2024, through August 9, 2024, the Company issued a total of 4,953,867 shares of common stock pursuant to the ATM for aggregate proceeds of $1,416,940.

Merchant Cash Advance

On July 11, 2024, the Company entered into a merchant cash advance agreement (the “Third Cash Advance Agreement”) whereby the Company received $758,850 of cash (net of underwriting fees of $40,000 and $201,150 used to pay the remaining balance of the first merchant cash advance), with the obligation to repay a total of $1,350,000 over forty-three weekly payments of $31,395, beginning July 18, 2024. The agreement contains an early payoff discount whereby the Company will owe $1,230,000 if paid by August 11, 2024, or $1,310,000 if paid by September 11, 2024. The Company does not anticipate taking advantage of the early payoff discount and will continue making weekly payments over the original forty-three-week term. In addition, the Third Cash Advance Agreement amended the Second Cash Advance Agreement to revise the repayment terms, whereby the weekly repayment amounts will be reduced from $26,820 to $15,620 and the repayment period will be extended from September 27, 2024, to November 15, 2024.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition of KULR Technology Group, Inc. (“KULR”) and its wholly-owned subsidiary, KULR Technology Corporation (“KTC”) (collectively referred to as “KULR” or the “Company”) as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Quarterly Report. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Quarterly Report, and other factors that we may not know. There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K which was filed with the SEC on April 12, 2024, unless disclosed elsewhere in this Quarterly Report.

Overview

KULR Technology Group, Inc., through our wholly owned subsidiary KULR Technology Corporation, maintains expertise in three key technology domain areas: (1) energy storage systems and recycling, (2) thermal management solutions, and (3) rotary system vibration reduction. Historically, KULR, focused on thermal energy management solutions for space and Department of Defense (DoD) applications, with recent expansion into energy storage and vibration reduction markets as the logical next step. Combined, this energy management platform consists of high-performance thermal management technologies for batteries and electronics, AI-powered battery management and vibration mitigation software solutions, and reusable energy storage modules. Our mission is to advance and apply these technologies to make our world more sustainable by using less energy; using energy more efficiently; making energy consumption safer and cooler; using less materials to achieve these goals; and completing the circular economy through recycling.

Active government initiatives propelled by industry and regulatory tailwinds are increasing demand for energy storage, battery recycling and clean energy, resulting in an expanding total addressable market for KULR’s solutions. According to Precedence Research, global energy storage systems market is to grow from $210B in 2021 to $435B by 2030. Global lithium-ion battery recycling industry is to grow from $4.6B in 2021 to $22.8B by 2030, according to Market and Markets Research. Additionally, the domain driving the growth of KULR’s battery design and production capabilities is the private space exploration market sector, which requires highly custom, safe, and reliable energy storage systems, and is expected to reach $1,110.8B by 2030 according to CoherentMI. The Company’s disruptive technologies strive to fulfill an addressable $24 billion thermal management systems market (estimated based on market data projections published by Converged Markets stating that the thermal management systems market size was projected to grow to $24.8 billion by 2025). E-aviation growth and continued reliance on traditional aviation vehicles drives an aircraft maintenance market size that is expected to reach $127.2B by 2032, an increase from $82.7B in 2023, according to Precedence Research. KULR VIBE, the Company’s rotary system vibration reduction software, positions KULR to access this market area.

As companies and governments around the world pledge to meet net zero emissions over the next few decades, KULR is uniquely positioned to accelerate the adoption of clean energy solutions and sustainable products and facilitate the migration to a global circular economy. The Company’s goal is to provide total battery safety solutions for more efficient battery systems, increased sustainability, and end-of-life battery management, making KULR a key technology solutions provider in the migration to a global circular economy.

KULR ONE and KULR ONE Design Solutions (K1DS)

KULR’s primary technical domain that is shaping the future landscape of the Company is safe, high-performance energy storage solutions. To effectively support and provide energy storage solutions, a holistic approach is necessary. Batteries are an interdisciplinary technology which require:

(1)

Multi-disciplinary expertise to address related electrical, thermal, mechanical, and electrochemical requirements,

(2)

Cell supply access to top-tier OEMs,

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(3)

Cell level testing capabilities to characterize performance, quality, and safety behavior at the cell level,

(4)

Expertise in early concept design, modeling, and analysis,

(5)

Rapid prototyping and production capabilities,

(6)

Pack and system level thermal, mechanical, electrical, and abuse testing capabilities,

(7)

Expertise in battery management, controls, and monitoring,

(8)

Ability to support beginning of life to end of life requirements for transport and recycling.

To address the need for a holistic approach, KULR developed a battery product and service portfolio over the course of the last decade that provides products, safety testing services, modeling and analysis services, electrical testing services, transport and recycling packaging and logistics, and battery design solutions. Collectively, this is referred to as KULR ONE Design Solutions (K1-DS), which is actively leveraged by the Company to facilitate engagement with customers no matter the battery life cycle phase they are in.

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Currently, the primary aspects of K1-DS utilized by industry are product sales of trigger cells and TRS, the safety testing methodologies, and the utilization of the K1-DS platform as a whole to develop customized energy storage solutions.

Internally, KULR has leveraged K1-DS to develop off the shelf KULR ONE architecture which represents a groundbreaking innovation that is driving the world’s transition to a more sustainable electrification economy. These revolutionary designs offer a unique combination of cutting-edge features, including unparalleled safety, exceptional performance, intelligent functionality, modular construction, reliability, and customizability. The KULR ONE battery packs have been engineered to meet the exacting demands of the world’s most demanding applications. As of now, the Company is focused on the KULR ONE Space for space exploration, the KULR ONE Guardian for military applications, and the KULR ONE Max for rack-style grid energy storage systems, also referred to as Battery Energy Storage Systems (BESS). These architectures collectively offer a comprehensive solution that addresses the critical need for safe and reliable energy storage in a wide range of industries, from aerospace and defense to electric vehicles and consumer electronics. One of the key features of the KULR ONE family of battery packs is the modularity and consistency of the architectures. This allows for greater flexibility as customers can easily adjust the size and configuration of the battery pack to suit their specific application requirements while still also benefitting from testing previously conducted by the KULR team for their specific architecture. In addition to offering exceptional performance and reliability, the KULR ONE battery packs are also designed with safety as a top priority. They incorporate state-of-the-art thermal management technology to prevent overheating and ensure safe operation even in the most challenging environments. Overall, the KULR ONE family of battery packs, depicted with the following picture, is at the forefront of the global drive towards sustainable electrification. With its unparalleled combination of safety, performance, intelligence, modularity, reliability, and customizability, KULR ONE is positioned to revolutionize the way we think about energy storage and powering the world’s most demanding applications.

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KULR VIBE Solution

During 2022, we acquired intellectual property from Vibetech International, LLC (“Vibetech”), which allows KULR to expand itself as a vertically integrated energy management company focused on sustainable energy solutions. For nearly twenty years, the primary application has been aviation. However, advances in measurement and computing technologies have allowed KULR VIBE to provide transformative and scalable solutions across transportation, renewable energy (wind farm), manufacturing, industrial, performance racing and autonomous aerial (drone) applications among others. KULR VIBE addresses one the most challenging issues with advanced machinery today; excessive energy robbing vibrations that are destructive to both the machinery and in many cases the operator. The KULR VIBE suite of technologies utilize proprietary sensor processes with advanced learning algorithms to both achieve precision balancing solutions, and successfully predict component failure based on its comprehensive database of vibration signatures. Its enhanced AI learning algorithms pinpoint areas where excess vibrations cause a loss of energy that can lead to system malfunctions, weakened performance, and maintenance issues.

This innovative technology can be utilized as a standalone solution or be paired with existing track and balance technology to facilitate vibration reduction, achieve increased energy production, and reduce mechanical failures thereby extending platform life. KULR VIBE recently balanced the motors and blades of a mission critical drone to demonstrate the benefits of the technology. The results were a 23% increase in battery life and a lift increase of 45%. Same motors, same blades, KULR VIBE optimized.

The KULR VIBE suite of products and services have provided vibration analysis and mitigation to global companies across multiple industries and sectors. According to Fact.MR, an insights-driven global market intelligence company, the global vibration motor market is forecasted to reach $24.1 billion by 2032.

The Future is Energy + AI

We believe the future of KULR is Energy + AI. We are building our AI infrastructure on industry leading Nvidia and AMD semiconductor platforms, and they are hosted on a hybrid of private cloud and Microsoft Azure. As the world faces shortages of both technical expertise to design batteries and raw materials to build batteries, KULR aims to address this need with KULR ONE AI (K1AI). The Company is collecting large quantities of performance and safety test datasets for the most highly used commercial lithium-ion cells and combining that data with AI techniques to drive battery design and reduce engineering touch time to market. This product is to target the following markets:

●

Aerospace and defense systems, such as CubeSat batteries meeting JSC 20793 safety requirements by NASA

●

Power tools and industrial equipment

●

High-performance electric vehicles

●

Electric vertical take-off and landing (“eVOTL”)

●

Electric micro-mobility vehicles

●

Residential and commercial energy storage systems

Recent Developments

Liability Repayment

During the six months ended June 30, 2024, the Company issued 55,659,476 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate proceeds of $15,173,357. Of the gross proceeds, $9,104,950 was retained by the Company to fund operations. The remaining proceeds were applied against the principal and interest owed in connection with the Prepaid Advance Liability and the Yorkville promissory note. The Prepaid Advance Liability and the related accrued interest was repaid in full during the first quarter of 2024, and the promissory note was repaid in full on May 28, 2024. The SEPA terminated June 1, 2024.

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At the Market Offering

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $20,000,000 in “at the market” offerings through or to the Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of 3% of the gross proceeds of any shares of common stock sold pursuant to the ATM. During the period from July 3, 2024, through August 9, 2024, the Company issued a total of 4,953,867 shares of common stock pursuant to the ATM for aggregate proceeds of $1,416,940.

Merchant Cash Advance Agreement and Finder’s Warrants

On January 22, 2024, the Company entered into a merchant cash advance agreement (the “Cash Advance Agreement”) with a lender, pursuant to which the Company received $504,900 of cash (net of underwriting fees of $35,100), with the obligation to repay a total of $804,600 over thirty-two weekly payments of $25,143.75, beginning January 30, 2024. The Cash Advance Agreement is secured by the Company’s accounts receivable and related cash receipts. On July 11, 2024, this merchant cash advance was repaid in full.

On February 26, 2024, the Company entered into a merchant cash advance agreement (the “Second Cash Advance Agreement”) with the lender mentioned above, pursuant to which the Company received $502,200 of cash (net of underwriting fees of $37,800), with the obligation to repay a total of $804,600 over thirty weekly payments of $26,820, beginning February 29, 2024. On July 11, 2024, the parties amended the agreement whereby the weekly repayment amount was reduced from $26,820 to $15,620 and the repayment due date was extended from September 27, 2024 to November 15, 2024. The Second Cash Advance Agreement is secured by the Company’s accounts receivable and related cash receipts.

On April 4, 2024, the finder of the First and Second Cash Advance Agreements, a FINRA registered financial advisor, accepted certain of the Finder’s fee as warrants to purchase up to 81,788 shares (the “First Warrant”) and 108,389 shares (the “Second Warrant”), respectively, of the Company’s common stock, at an exercise price of $0.1852 per share under the First Warrant, and $0.139 per share under the Second Warrant, respectively. The First Warrant and the Second Warrant were exercisable immediately, and expire on January 22, 2027 and February 26, 2027, respectively.

Promissory Notes

On April 2, 2024, the Company entered into an agreement (the “Promissory Note”), with a lender (the “Lender”), pursuant to which the Lender purchased an unsecured promissory note with an initial principal amount of $500,000. The Company received cash proceeds of $440,000, resulting in a debt discount of $60,000, made up of an original issue discount of $50,000 and cash issuance costs of $10,000. The Promissory Note carries an annual interest rate of 0%, which shall increase to 15% in the event of default, and has a maturity date of October 2, 2024, after which all outstanding principal and accrued interest will become immediately due. This promissory note was repaid in full on May 28, 2024.

Change in Compensation of CEO

Effective May 23, 2024, the Compensation Committee of the Board of Directors of the Company unanimously approved a change to the compensation payable to Michael Mo, the Chief Executive Officer (“CEO”). Consistent with the Company’s continued efforts to reduce its cash consumption, the CEO has voluntarily agreed to a reduction in the cash component of his annual compensation by

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approximately 33% or $112,345. In lieu of the reduced cash compensation, the CEO will receive restricted stock units of the Company for 286,230 shares of common stock that will vest after one year. This adjustment will aid the Company’s efforts in reducing its cash consumption, where such cash can be redirected towards other critical business needs and strategic initiatives. This step also aligns the CEO compensation more closely with the performance of the Company and the interest of its stockholders.

Resignation of Director

Effective April 15, 2024, Mr. Morio Kurosaki resigned as a director and all other positions of the Board. Mr. Kurosaki’s decision to resign is due to his other professional obligations and not due to any disagreement with the Company, the Board or any member of the Company’s management. Mr. Kurosaki served as the Chair of the Audit Committee and as a member of the Compensation Committee, and the Nominating & Corporate Governance Committee of the Board. On April 12, 2024, on the disinterested recommendation of the Compensation Committee, the Board unanimously approved and authorized the issuance of immediately vested equity compensation equal to 15,000 shares that are due and payable pursuant to his year-to-date services through the effective date of resignation.

Appointment of New Director

Effective April 15, 2024, upon the joint recommendation of the Nominating & Corporate Governance Committee and the Compensation Committee, the Board appointed Donna Haley Grier as a director of the Board to hold office until the earlier of the expiration of the term of office, a successor is duly elected and qualified, or the time of her death, resignation, disqualification, or removal. Ms. Grier was also appointed as the chair (and financial expert) of the Audit Committee of the Board, member of the Compensation Committee of the Board, and a member of the Nominating & Corporate Governance Committee of the Board. Ms. Grier will receive cash compensation equal to $17,500 per quarter and was granted 140,000 restricted stock units of the Company’s common stock, of which 35,000 shares vest each quarter, beginning on June 30, 2024.

Director Compensation

On April 12, 2024, on the disinterested recommendation of the Compensation Committee, the Board unanimously approved equity compensation grants to Dr. Joanna Massey issuable under the Company’s 2018 Equity Incentive Plan equal to (i) 15,000 immediately vested shares in connection with her year-to-date services through March 31, 2024; and (ii) 140,000 restricted stock units of the Company’s common stock, of which 35,000 shares vest each quarter, beginning on June 30, 2024.

Issuance of Non-Convertible Series A Voting Preferred Stock

On January 26, 2024, the Board of Directors (“Board”) of the Company, following extensive strategic evaluation, including consultation with advisors, approved, authorized, and ratified the issuance of 730,000 shares of previously designated Non-Convertible Series A Voting Preferred Stock to the Chairman and Chief Executive Officer of the Company, Michael Mo, subject to certain limitations as set forth below. The issuance of up to 1,000,000 shares of Non-Convertible Series A Voting Preferred Stock was previously approved and authorized by a vote of the majority of the stockholders of the Company.

The issuance is subject to the Board reserving the full and unequivocal right to revoke, rescind, transfer or otherwise cancel the issued Non-Convertible Series A Voting Preferred Stock in the event Michael Mo is removed from any position with the Company or resigns from all positions with the Company. This conditional arrangement is designed to ensure that the voting power conferred by the Non-Convertible Series A Voting Preferred Stock remains tied to the active leadership of the Company. This underscores the Board’s commitment to maintaining alignment with the long-term interests of the Company and its stockholders.

The Independent Members of the Board have determined that the issuance represents a pivotal strategic move to reinforce and enhance the Company’s flexibility to optimize the Company’s negotiating position in any potential current and/or future engagements with commercial, financial, and/or strategic parties, and to provide defenses against potential hostile third-party actions.

Recent Shareholder Vote by Majority Written Consent

On February 9, 2024, the shareholders of the Company, acted by way of majority written consent (in lieu of a special meeting of stockholders) to approve resolutions authorizing the Company’s Board of Directors to take the following actions: (1) to issue shares of Common Stock to current or future engagements with commercial or strategic parties, which may result in issuances of over 20% of the

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issued and outstanding shares of Common Stock; (2) to amend the Company’s Bylaws to decrease the number of shares of Common Stock needed to establish a quorum for meetings of stock holders to thirty-three-and-one-third percent (33 1/3 %) of the outstanding voting securities of the Company; (3) to amend the Certificate of Incorporation of the Company to effect a reverse split within a ratio range between 1-for-2 and 1-for-80, which the Company has not taken the required action to effect this reverse split; (4) to issue shares of common stock, in connection with an existing financing facility, which may result in the potential issuance of over 20% of the issued and outstanding shares. The resolution was approved by shareholders holding approximately in aggregate of 55.72% of ownership percentage of the voting stock as of February 9, 2024.

Risks Associated with Ongoing Conflicts

The short and long-term worldwide implications of Russia’s invasion of Ukraine are difficult to predict at this time. The imposition of sanctions on Russia by the United States or other countries and possible counter sanctions by Russia, and the resulting economic impacts on oil prices and other materials and goods, could affect the price of materials used in the manufacture of our product candidates. If the price of materials used in the manufacturing of our product candidates increase, that would adversely affect our business and the results of our operations.

Additionally, we do not have operations or material net sales in Israel or Gaza and we currently do not expect the recent hostilities in that region to have a material impact on our business.

We cannot predict how the events described above will evolve. If the events continue for a significant period of time or expand to other countries, and depending on the ultimate outcomes of these conflicts, which remain uncertain, they could heighten certain risks disclosed in Item 1A in our Annual Report on Form 10-K which was filed with the SEC on April 12, 2024, including, but not limited to, adverse effects on macroeconomic conditions, including increased inflation, constraints on the availability of commodities, supply chain disruption and decreased business spending; cyber-incidents; disruptions to our or our business partners’ global technology infrastructure, including through cyber-attack or cyber-intrusion; adverse changes in international trade policies and relations; claims, litigation and regulatory enforcement; our ability to implement and execute our business strategy; terrorist activities; our exposure to foreign currency fluctuations; reputational risk; and constraints, volatility, or disruption in the capital markets, any of which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Compliance with NYSE American Continued Listing Requirements

On December 20, 2023, the Company received a notice of noncompliance (the “Stockholders’ Equity Notice”) from NYSE Regulation (“NYSE”) stating that it is not in compliance with Section 1003(a)(i) in the NYSE American Company Guide (the “Company Guide”) since the Company reported stockholders’ equity of $1,200,172 on September 30, 2023, and losses from continuing operations and/or net losses in its five most recent fiscal years. Section 1003(a)(iii) of the Company Guide requires a listed company to have stockholders’ equity of $6 million or more if the listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years.

As required by the Stockholders’ Equity Notice, on January 19, 2024, the Company submitted a plan (the “Plan”) to NYSE advising of actions it has taken or will take to regain compliance with the continued listing standards by June 20, 2025. NYSE staff will review the Company periodically for compliance with the initiatives outlined in the Plan. If the Company is not in compliance with the continued listing standards by June 20, 2025, or if the Company does not make progress consistent with the Plan during the Plan period, NYSE staff will initiate delisting proceedings as appropriate.

On February 12, 2024, the Company received a notice letter (the “Letter”) from NYSE stating that it is not in compliance with Section 1003(f)(v) of the Company Guide since the Company’s securities were trading at an average of less than $0.20 per share for 30 days. However, on May 1, 2024, the Company received a notification from the NYSE stating that the Company had regained compliance with Section 1003 (f) (v) of the Company Guide given the increase in the trading price of the Company’s securities.

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Results of Operations

Three and Six Months Ended June 30, 2024, Compared With Three and Six Months Ended June 30, 2023

Revenue

Our revenues consisted of the following contract types:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Product sales	$	1,134,769	$	1,957,370	$	1,749,862	$	3,586,628
Contract services		1,297,236		738,136		2,431,247		868,680
Total Revenue	$	2,432,005	$	2,695,506	$	4,181,109	$	4,455,308

For the three months ended June 30, 2024 and 2023, we generated $2,432,005 and $2,695,506 of revenues from 27 and 19 customers, respectively, representing a decrease of $263,501, or 10%. For the six months ended June 30, 2024 and 2023, we generated $4,181,109 and $4,455,308 of revenues from 48 and 29 customers, respectively, representing a decrease of $274,199, or 6%.

Revenue from product sales during the three months ended June 30, 2024, decreased by $822,601 or 42% compared to the three months ended June 30, 2023. Product sales include the sales of our component product, internal short circuit (“ISC”) battery cells and devices, and patented TRS technology. We had 15 product sales customers in the second quarter of 2024, compared with 12 in the second quarter of 2023. The decline in product revenue can be attributed to several expected second quarter 2024 orders, which management now expects to receive in the second half of 2024. We can provide no assurance as to when we will receive the expected orders.

Revenue from product sales during the six months ended June 30, 2024, decreased by $1,836,766 or 51% compared to the six months ended June 30, 2023. We had 36 product sales customers in the first six months of 2024, compared with 22 in the first six months of 2023. The decline in product sales can be attributed to several expected first half 2024 orders, which management now expects to receive in the second half of 2024. We can provide no assurance as to when we will receive the expected orders.

Revenue from contract services during the three months ended June 30, 2024, increased by $559,100 or 76% compared to the three months ended June 30, 2023. Service revenues include certain research and development contracts and onsite engineering services. We had 14 contract services customers in the second quarter of 2024, compared with 7 in the second quarter of 2023. One large contract received during the second quarter of 2024 generated $460,000 of service revenues, while $217,689 of service revenues previously deferred, were also recognized during the three months ended June 30, 2024.

Revenue from contract services during the six months ended June 30, 2024, increased by $1,562,567 or 180% compared to the six months ended June 30, 2023. We had 21 contract services customers in the first six months of 2024, compared with 11 in the first six months of 2023. Five large contracts received during 2024 generated $1,113,871 of service revenues, while $529,880 of service revenues deferred at December 31, 2023 were recognized in the first six months of 2024.

Our customers and prospective customers are large organizations with multiple levels of management, controls/procedures, and contract evaluation/authorization. Furthermore, our solutions are new and do not necessarily fit into pre-existing patterns of purchase commitments. Accordingly, the business activity cycle between expression of initial customer interest to shipping, acceptance and billing can be lengthy, unpredictable, and lumpy, which can influence the timing, consistency and reporting of sales growth.

Cost of Revenue, Gross Profit and Gross Profit Margin

Cost of revenue consisted of the cost of our products as well as labor and production overhead expenses directly related to product sales or research contract services.

Product mix plays an important part in our reported average margins for any period. Because we are introducing new products at an early stage in our development cycle, the margins earned can vary significantly between periods, customers, products and services due to the learning process, customer negotiating strengths, and product mix, among other factors.

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For the three months ended June 30, 2024 and 2023, cost of revenues was $1,859,377 and $1,693,318, respectively, representing an increase of $166,059 or 10%. For the three months ended June 30, 2024 and 2023, gross profit was $572,628 and $1,002,188, respectively, a decline of $429,560 or 43%. Our gross profit margins were 24% and 37%, during the three months ended June 30, 2024 and 2023, respectively. The decrease in the current period profit margin was primarily due to (a) approximately $350,000 of labor and materials costs in the current period associated with a specific project which had no corresponding current period revenue; and (b) an approximately $80,000 increase in quarterly depreciation expense for revenue generating equipment that was put into service during the last month of the quarter ended March 31, 2023.

For the six months ended June 30, 2024 and 2023, cost of revenues was $3,097,692 and $2,809,732, respectively, representing an increase of $287,960 or 10%. For the six months ended June 30, 2024 and 2023, gross profit was $1,083,417 and $1,645,576, respectively, a decline of $562,159 or 34%. Our gross profit margins were 26% and 37%, during the six months ended June 30, 2024 and June 30, 2023, respectively. The decrease in the current period profit margin was primarily due to (a) approximately $600,000 of labor and materials costs in the current period associated with a specific project which had no corresponding current period revenue; and (b) an approximately $250,000 increase in quarterly depreciation expense for revenue generating equipment that was put into service during the last month of the quarter ended March 31, 2023.

Research and Development

Research and development (“R&D”) includes expenses incurred in connection with the R&D of our CFV thermal management solution, high-areal-capacity battery electrodes, and 3D engineering for a rechargeable battery, including non-cash stock-based compensation expenses. Research and development expenses are charged to operations as incurred.

For the three months ended June 30, 2024 and 2023, R&D expenses were $1,305,186 and $1,924,138, respectively, representing a decrease of $618,952 or 32%. The decrease was comprised primarily of $488,017 of labor costs allocated to cost of revenue due to the increase in service revenue, $171,905 related to a planned decrease in R&D consulting services to conserve cash and an $81,737 decrease in stock-based compensation, partially offset by an increase in building related expenses of approximately $149,000 for the facility in Texas.

For the six months ended June 30, 2024 and 2023, R&D expenses were $2,259,811 and $3,729,153, respectively, representing a decrease of $1,469,342 or 39%. The decrease was comprised primarily of $1,018,387 of labor costs allocated to cost of revenue due to the increase in service revenue, $599,351 related to a planned decrease in R&D consulting services to conserve cash, partially offset by an increase in building related expenses of approximately $190,000 for the facility in Texas.

We expect that our R&D expenses will increase as we expand our future operations and as our cash position improves.

Selling, General and Administrative

Selling, general and administrative expenses consisted primarily of stock-based compensation, marketing and advertising, salaries, payroll taxes and other benefits, Board compensation, accounting and tax, consulting fees, travel and entertainment, rent expense, office expenses, and legal and professional fees.

For the three months ended June 30, 2024 and 2023, selling, general and administrative expenses were $4,594,500 and $5,158,030, respectively, representing a decrease of $563,530 or 11%. The decrease is primarily due to a planned decrease in outsourced professional services of $533,052, a decrease of $56,538 for stock-based compensation, partially offset by an increase in building expenses of $53,254.

For the six months ended June 30, 2024 and 2023, selling, general and administrative expenses were $8,807,401 and $10,257,121, respectively, representing a decrease of $1,449,720 or 14%. The decrease is primarily due to a planned decrease in outsourced professional services of $1,106,778, a decrease in labor costs of $236,725 due to the workforce reduction in December of 2023 and a decrease of $48,412 for stock-based compensation.

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Other (Expense) Income

For the three months ended June 30, 2024 and 2023, other expense, net, was a net expense of $563,470 and $255,012, respectively, representing an increase of $308,458, or 121%. The change is primarily attributable to an increase of $312,644 for amortization of debt discount in connection with the Prepaid Advance Liability and notes payable, an increase of $159,389 for the change in fair value of accrued issuable equity, partially offset by a decrease in interest recorded in connection with the Prepaid Advance Liability of $163,576.

For the six months ended June 30, 2024 and 2023, other expense, net, was a net expense of $915,609 and $597,155, respectively, representing an increase of $318,454, or 53%. The change is primarily attributable to an increase of $241,402 for amortization of debt discount in connection with the Prepaid Advance Liability and notes payable, an increase of $236,499 for the change in fair value of accrued issuable equity and $31,358 related to a 2024 loss on the extinguishment of debt related to the Prepaid Advance Liability, partially offset by a decrease of $190,805 in interest recorded in connection with the Prepaid Advance Liability.

Liquidity and Capital Resources

As of June 30, 2024 and December 2023, we had cash balances of $1,016,943 and $1,194,764, respectively, and a working capital deficit of $2,381,478 and $2,994,753, respectively.

For the six months ended June 30, 2024 and 2023, net cash used in operating activities was $9,198,453 and $9,858,687, respectively. Our net cash used in operating activities for the six months ended June 30, 2024, was primarily attributable to our net loss of $10,899,404, adjusted for non-cash expenses in the aggregate amount of $3,970,681, plus $2,269,730 of net cash used to fund changes in the levels of operating assets and liabilities. Our net cash used in operating activities for the six months ended June 30, 2023, was primarily attributable to our net loss of $12,937,853, adjusted for non-cash expenses in the aggregate amount of $3,192,878, as well as $113,712 of net cash used to fund changes in the levels of operating assets and liabilities.

For the six months ended June 30, 2024 and 2023, net cash used in investing activities was $163,023 and $894,976, respectively. Net cash used in investing activities during the six months ended June 30, 2024, was related to purchases of property and equipment. Net cash used in investing activities during the six months ended June 30, 2023, included $759,976 related to purchases of property and equipment and $135,000 for the acquisition of intangible assets.

For the six months ended June 30, 2024 and 2023, net cash provided by financing activities was $9,183,655 and $1,740,751, respectively. Net cash provided by financing activities during the six months ended June 30, 2024, was due to proceeds from SEPA Advance Notices totaling $9,104,950, and net proceeds from notes payable totaling $1,730,000, partially offset by notes payable repayments of $1,525,195 and issuance costs on notes payable of $126,100. Net cash provided by financing activities during the six months ended June 30, 2023, was from proceeds from the second prepaid advance of $2,000,000, partially offset by $229,249 for the repurchase of common stock to pay tax on behalf of an employee for vested shares of restricted common stock and $30,000 for financing costs associated with the prepaid advance.

Future cash requirements for our current liabilities as of June 30, 2024, include $4,811,565 for accounts payable and accrued expenses, $784,006 for notes payable and $487,369 for operating leases.

Future cash requirements for long-term liabilities as of June 30, 2024, include $1,059,898 for operating leases, and $250,000 for notes payable.

Our primary source of liquidity has historically been cash generated from equity and debt offerings. Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations as they become due within one year after the date that the financial statements are issued. We have a history of recurring net losses, recurring use of cash in operations and declining working capital.

On April 2, 2024, the Company received cash proceeds of $440,000 related to an unsecured Promissory Note comprised of an initial principal amount of $500,000 and discount of $60,000. The Promissory Note carries an annual interest rate of 0% and increases to 15% in the event of default and has a maturity date of October 2, 2024. This note was fully repaid on May 28, 2024. See Note 9 – Notes Payable for additional information.

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On April 9, 2024, the Company received cash proceeds of $200,000 related to an unsecured Promissory Note which matures on the first anniversary of its issuance and carries an annual interest rate of 16%. In the event the promissory note is prepaid within 9 months of its issuance, the holder is entitled to the repayment of principal and cash payment of interest equal to 12% of the prepayment amount. See Note 9 – Notes Payable – for additional information.

Subsequent to June 30, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) to raise up to $20,000,000 through sales of the Company’s common stock. During the period from July 3, 2024, through August 9, 2024, the Company has sold 4,953,867 shares of common stock pursuant to this offering, with gross proceeds of $1,416,940.

On July 11, 2024, the Company entered into a third merchant cash advance agreement (the “Third Cash Advance Agreement”) with a lender, pursuant to which the Company received $758,850 of cash (net of underwriting fees of $40,000 and $201,150 used to pay the remaining balance of the first merchant cash advance), with the obligation to repay a total of $1,350,000 over forty-three weekly payments of $31,395, beginning July 18, 2024. The Third Cash Advance Agreement is secured by the Company’s accounts receivable and related cash receipts. In addition, on July 11, 2024, the Company fully repaid the balance on the first cash advance ($201,150) and amended the Second Cash Advance to reduce the weekly repayment amount from $26,820 to $15,620 and extend the repayment period from September 27, 2024 to November 15, 2024.

As of the date of the issuance of these consolidated financial statements, the Company has no additional commitments to obtain additional funding through future debt or equity financings, and there is no assurance that the Company will be able to obtain additional funds on commercially acceptable terms, if at all. Further, there is no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

Our unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Estimates

We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described in the notes to our financial statements.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company, as defined by Rule 229.10(f)(1) and are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our management, with the participation of our principal executive officer and principal financial officer, concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the second quarter of 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of the Effectiveness of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. A control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K which was filed with the SEC on April 12, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Pursuant to the January 2024 and February 2024 Merchant Cash Advance Agreements, on April 4, 2024, the Company issued and delivered certain warrants to purchase up to 108,389 and 81,788 shares of the Company’s common stock, to the FINRA-registered financial advisor that assisted with arranging the facility in satisfaction of certain fee obligations to the advisor. The warrants can be exercised for the issuance of shares, at an exercise price of $0.1852 and $0.139 per share, with expiration dates of January 22, 2027 and February 26, 2027, respectively.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangement

During the six months ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit No.		Description

31.1		Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2		Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

101.INS		Inline XBRL Instance*

101.SCH		Inline XBRL Taxonomy Extension Schema*

101.CAL		Inline XBRL Taxonomy Extension Calculation*

101.DEF		Inline XBRL Taxonomy Extension Definition*

101.LAB		Inline XBRL Taxonomy Extension Labels*

101.PRE		Inline XBRL Taxonomy Extension Presentation*

104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)*

*	Filed herewith.

**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 12, 2024	By:	/s/ Michael Mo
		Michael Mo
		Chief Executive Officer
		(Principal Executive Officer)

Dated: August 12, 2024	By:	/s/ Shawn Canter
		Shawn Canter
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

Certification of

Principal Executive Officer

of KULR TECHNOLOGY GROUP, INC.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael Mo, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of KULR Technology Group, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: August 12, 2024	By:	/s/ Michael Mo
		Michael Mo
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

Certification of

Principal Executive Officer

of KULR TECHNOLOGY GROUP, INC.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Shawn Canter, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of KULR Technology Group, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: August 12, 2024	By:	/s/ Shawn Canter
		Shawn Canter
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of KULR Technology Group, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.


Dated:	August 12, 2024	By:	/s/ Michael Mo
			Michael Mo
			Chief Executive Officer
			(Principal Executive Officer)


Dated:	August 12, 2024	By:	/s/ Shawn Canter
			Shawn Canter
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 09, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Entity File Number	001-40454
Entity Registrant Name	KULR Technology Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-1004273
Entity Address, Address Line One	4863 Shawline Street
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92111
City Area Code	408
Local Phone Number	663-5247
Title of 12(b) Security	Common Stock
Trading Symbol	KULR
Security Exchange Name	NYSE
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 Common Stock, Shares Outstanding		192,989,619
Entity Shell Company	false
Entity Central Index Key	0001662684
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current Assets:
Cash	$ 1,016,943	$ 1,194,764
Accounts receivable	1,927,203	901,672
Inventory	535,196	1,149,047
Inventory deposits	10,883	27,500
Prepaid expenses and other current assets	375,756	631,361
Total Current Assets	3,865,981	3,904,344
Property and equipment, net	3,774,695	4,698,144
Equipment deposits	1,360,092	1,332,436
Security deposits	98,371	10,228
Intangible assets, net	648,247	719,395
Right-of-use asset, net	1,478,413	129,202
Deferred financing costs, net	166,651	70,607
Total Assets	11,392,450	10,864,356
Current Liabilities:
Accounts payable	1,060,694	2,769,544
Accrued expenses and other current liabilities	3,750,871	3,463,344
Accrued issuable equity	82,116	13,002
Lease liabilities, current portion	487,369	102,186
Notes payable, net of discount, current portion	641,745
Deferred revenue	224,664	551,021
Total Current Liabilities	6,247,459	6,899,097
Lease liabilities, non-current portion	1,059,898
Notes payable, non-current portion	250,000	250,000
Prepaid advance liability, net of discount		5,892,056
Accrued interest		5,899
Total Liabilities	7,557,357	13,047,052
Commitments and contingencies (Note 11)
Stockholders' Equity (Deficit)
Preferred stock
Common stock, $0.0001 par value, 500,000,000 shares authorized; 188,086,914 and 187,955,752 shares issued and outstanding at June 30, 2024, respectively; 134,031,669 and 133,900,507 shares issued and outstanding at December 31, 2023, respectively	18,809	13,403
Additional paid-in capital	81,299,431	64,387,717
Treasury stock, at cost; 131,162 shares held at June 30, 2024 and December 31, 2023.	(296,222)	(296,222)
Accumulated deficit	(77,186,998)	(66,287,594)
Total Stockholders' Equity (Deficit)	3,835,093	(2,182,696)
Total Liabilities and Stockholders' Equity (Deficit)	11,392,450	10,864,356
Series A Preferred Stock
Stockholders' Equity (Deficit)
Preferred stock	73
Series B Convertible Preferred Stock
Stockholders' Equity (Deficit)
Preferred stock
Series C Preferred Stock
Stockholders' Equity (Deficit)
Preferred stock
Series D Preferred Stock
Stockholders' Equity (Deficit)
Preferred stock

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	188,086,914	134,031,669
Common stock, shares outstanding	187,955,752	133,900,507
Treasury stock, shares	131,162	131,162
Series A Preferred Stock
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	730,000	0
Preferred stock, shares outstanding	730,000	0
Series B Convertible Preferred Stock
Preferred stock, shares authorized	31,000	31,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series C Preferred Stock
Preferred stock, shares authorized	400	400
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series D Preferred Stock
Preferred stock, shares authorized	650	650
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 2,432,005	$ 2,695,506	$ 4,181,109	$ 4,455,308
Cost of revenue	1,859,377	1,693,318	3,097,692	2,809,732
Gross Profit	572,628	1,002,188	1,083,417	1,645,576
Operating Expenses
Research and development	1,305,186	1,924,138	2,259,811	3,729,153
Selling, general, and administrative	4,594,500	5,158,030	8,807,401	10,257,121
Total Operating Expenses	5,899,686	7,082,168	11,067,212	13,986,274
Loss From Operations	(5,327,058)	(6,079,980)	(9,983,795)	(12,340,698)
Other (Expense) Income
Interest expense	(33,534)	(197,110)	(166,236)	(357,041)
Amortization of debt discount	(527,199)	(214,554)	(702,276)	(460,874)
Loss on debt extinguishment			(31,358)
Change in fair value of accrued issuable equity	(2,737)	156,652	(15,739)	220,760
Total Other Expense, net	(563,470)	(255,012)	(915,609)	(597,155)
Net Loss	$ (5,890,528)	$ (6,334,992)	$ (10,899,404)	$ (12,937,853)
Net Loss Per Share - Basic (in dollars per share)	$ (0.03)	$ (0.05)	$ (0.07)	$ (0.11)
Net Loss Per Share - Diluted (in dollars per share)	$ (0.03)	$ (0.05)	$ (0.07)	$ (0.11)
Weighted Average Number of Common Shares Outstanding - Basic (in shares)	181,467,264	115,380,700	161,914,634	114,133,873
Weighted Average Number of Common Shares Outstanding - Diluted (in shares)	181,467,264	115,380,700	161,914,634	114,133,873

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)

Series A Convertible Preferred Stock

Convertible Preferred Stock

Common Stock

Additional Paid-In Capital

Restricted common stock

Additional Paid-In Capital

Stock options

Additional Paid-In Capital

Treasury Stock

Accumulated Deficit

Restricted common stock

Stock options

Total

Treasury stock, shares

131,162

Balance at beginning at Dec. 31, 2022

$ 11,320

$ 53,372,673

$ (296,222)

$ (42,594,038)

$ 10,493,733

Balance (in shares) at Dec. 31, 2022

113,202,749

Common stock issued for services (in shares)

5,500

Common stock issued for services

$ 1

6,819

6,820

Common stock issued for the repayment of prepaid advance liability and related interest accrual (in shares)

3,153,036

Common stock issued for the repayment of prepaid advance liability and related interest accrual

$ 315

3,750,653

3,750,968

Shares repurchased for payroll taxes and canceled (in shares)

(175,000)

Shares repurchased for payroll taxes and canceled

$ (17)

(229,232)

(229,249)

Restricted stock awards granted (in shares)

1,848,508

Restricted stock awards granted

$ 185

(185)

Unvested restricted stock awards canceled (in shares)

(75,000)

Unvested restricted stock awards canceled

$ (8)

Amortization

$ 765,100

$ 40,605

$ 765,100

$ 40,605

Net Income (Loss)

(6,602,861)

Balance (in shares) at Mar. 31, 2023

117,959,793

Balance at ending at Mar. 31, 2023

$ 11,796

57,706,441

(296,222)

(49,196,899)

8,225,116

Balance at beginning at Dec. 31, 2022

$ 11,320

53,372,673

(296,222)

(42,594,038)

10,493,733

Balance (in shares) at Dec. 31, 2022

113,202,749

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices

4,466,626

Net Income (Loss)

(12,937,853)

Balance (in shares) at Jun. 30, 2023

118,885,728

Balance at ending at Jun. 30, 2023

$ 11,889

59,289,857

$ (296,222)

(55,531,891)

3,473,633

Treasury stock, shares

131,162

Balance at beginning at Mar. 31, 2023

$ 11,796

57,706,441

$ (296,222)

(49,196,899)

8,225,116

Balance (in shares) at Mar. 31, 2023

117,959,793

Common stock issued for the repayment of prepaid advance liability and related interest accrual (in shares)

925,935

Common stock issued for the repayment of prepaid advance liability and related interest accrual

$ 93

715,565

715,658

Amortization

823,540

44,311

823,540

44,311

Net Income (Loss)

(6,334,992)

Balance (in shares) at Jun. 30, 2023

118,885,728

Balance at ending at Jun. 30, 2023

$ 11,889

59,289,857

$ (296,222)

(55,531,891)

$ 3,473,633

Treasury stock, shares

131,162

Treasury stock, shares

131,162

Balance at beginning at Dec. 31, 2023

$ 13,403

64,387,717

$ (296,222)

(66,287,594)

$ (2,182,696)

Balance (in shares) at Dec. 31, 2023

134,031,669

Preferred stock issued for no consideration (in shares)

730,000

Preferred stock issued for no consideration

$ 73

(73)

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ( in shares)

^[1]

21,798,830

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices

^[1]

$ 2,180

6,052,650

6,054,830

Common stock issued for cash pursuant to Advance Notices (in shares)

^[2]

19,228,351

Common stock issued for cash pursuant to Advance Notices

^[2]

$ 1,923

2,904,490

2,906,413

Restricted stock awards exchanged for restricted stock units (in shares)

2,168,508

Restricted stock awards exchanged for restricted stock units

$ (217)

217

Restricted stock units vested (in shares)

384,627

Restricted stock units vested

$ 38

(38)

Common stock issued for services (in shares)

35,500

Common stock issued for services

$ 4

6,386

6,390

Amortization

781,496

32,041

781,496

32,041

Net Income (Loss)

(5,008,876)

Balance (in shares) at Mar. 31, 2024

730,000

173,310,469

Balance at ending at Mar. 31, 2024

$ 73

$ 17,331

74,164,886

(296,222)

(71,296,470)

2,589,598

Balance at beginning at Dec. 31, 2023

$ 13,403

64,387,717

(296,222)

(66,287,594)

(2,182,696)

Balance (in shares) at Dec. 31, 2023

134,031,669

Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices

6,068,407

Net Income (Loss)

(10,899,404)

Balance (in shares) at Jun. 30, 2024

730,000

188,086,914

Balance at ending at Jun. 30, 2024

$ 73

$ 18,809

81,299,431

$ (296,222)

(77,186,998)

3,835,093

Treasury stock, shares

131,162

Balance at beginning at Mar. 31, 2024

$ 73

$ 17,331

74,164,886

$ (296,222)

(71,296,470)

2,589,598

Balance (in shares) at Mar. 31, 2024

730,000

173,310,469

Common stock issued for cash pursuant to Advance Notices (in shares)

^[3]

14,632,295

Common stock issued for cash pursuant to Advance Notices

^[3]

$ 1,464

6,140,043

6,141,507

Warrants issued in connection with note payable

112,863

Restricted stock units vested (in shares)

70,000

Restricted stock units vested

$ 7

(7)

Common stock issued for services (in shares)

74,150

Common stock issued for services

$ 7

38,143

38,150

Amortization

$ 814,338

$ 29,165

$ 814,338

$ 29,165

Net Income (Loss)

(5,890,528)

Balance (in shares) at Jun. 30, 2024

730,000

188,086,914

Balance at ending at Jun. 30, 2024

$ 73

$ 18,809

$ 81,299,431

$ (296,222)

$ (77,186,998)

$ 3,835,093

Treasury stock, shares

131,162

[1]	Represents gross proceeds of $6,068,407, less issuance costs of $13,577.
[2]	Represents gross proceeds of $2,910,651, less issuance costs of $4,238.
[3]	Represents gross proceeds of $6,194,299, less issuance costs of $52,792.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical)	3 Months Ended
	Mar. 31, 2024 USD ($)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Proceeds from issuance of common stock for repayment of prepaid advance	$ 6,068,407
Issuance costs on equity financing	13,577
Proceeds from common stock issued for cash pursuant to Advance Notices	2,910,651
Equity financing, issuance costs	$ 4,238

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)

6 Months Ended

Jun. 30, 2024

Jun. 30, 2023

Cash Flows From Operating Activities:

Net Income (Loss)

$ (10,899,404)

$ (12,937,853)

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of debt discount

702,276

460,874

Non-cash lease expense

226,708

123,749

Loss on debt extinguishment

31,358

Depreciation and amortization expense

1,218,779

862,086

Change in fair value of accrued issuable equity

15,739

(220,760)

Stock-based compensation

1,754,955

1,966,929

Loss on disposal of property and equipment

20,866

Changes in operating assets and liabilities:

Accounts receivable

(1,025,531)

(1,046,532)

Inventory

613,851

581,634

Inventory deposits

16,617

240,532

Prepaid expenses and other current assets

255,605

(117,648)

Security deposits

(88,143)

(5,095)

Accounts payable

(1,768,098)

(643,578)

Accrued expenses and other current liabilities

183,164

1,029,513

Lease liabilities

(130,838)

(130,679)

Deferred revenue

(326,357)

(21,859)

Total Adjustments

1,700,951

3,079,166

Net Cash Used In Operating Activities

(9,198,453)

(9,858,687)

Cash Flows From Investing Activities:

Equipment deposits

(27,656)

(567,332)

Purchases of property and equipment

(135,367)

(192,644)

Acquisition of intangible assets

(135,000)

Net Cash Used In Investing Activities

(163,023)

(894,976)

Cash Flows from Financing Activities:

Proceeds from the SEPA

9,104,950

Proceeds from prepaid advance liability

2,000,000

Issuance costs on prepaid advance liability

(30,000)

Net proceeds from notes payable

^[1]

1,730,000

Issuance costs on notes payable

(126,100)

Repayments of notes payable

(1,525,195)

Repurchase of common stock

(229,249)

Net Cash Provided By Financing Activities

9,183,655

1,740,751

Net Decrease In Cash

(177,821)

(9,012,912)

Cash - Beginning of Period

1,194,764

10,333,563

Cash - End of Period

1,016,943

1,320,651

Non-cash investing and financing activities:

Right-of-use asset for lease liability

1,575,919

51,154

Restricted stock units vested

Original issue discount on indebtedness

579,200

105,263

Common stock issued in satisfaction of prepaid advance liability and interest

6,068,407

4,466,626

Deposits applied to purchases of property and equipment

2,716,057

Capital Expenditures Incurred but Not yet Paid

109,681

166,663

Additions to property and equipment included in accounts payable and accrued expenses

109,681

166,663

Equipment deposits included in accounts payable

$ 171,444

Deferred financing costs charged to additional paid-in capital

70,607

Value of warrants issued in connection with notes payable

112,863

Accrued deferred financing costs

166,651

Preferred shares issued for no consideration

Restricted Stock Awards Conversion

Non-cash investing and financing activities:

Restricted stock awards converted to restricted stock units

$ 217

[1]	Face value of $2,309,200, less $579,200 original issue discount.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - Promissory Note	6 Months Ended
	Jun. 30, 2024 USD ($)
Initial principal amount	$ 2,309,200
Original issuance discount	$ 579,200

ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2024

ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

NOTE 1 ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization and Operations

Basis of Presentation

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going Concern and Management’s Liquidity Plans

Use of Estimates

Concentrations of Credit Risk

Cash Concentrations

Customer and Revenue Concentrations


	Revenue								Accounts Receivable
	For the Three Months Ended				For the Six Months Ended				As of		As of
	June 30,				June 30,				June 30,		December 31,
	2024		2023		2024		2023		2024		2023
Customer A	31	%	*		18	%	*		43	%	*
Customer B	19	%	*		11	%	*		24	%	*
Customer C	10	%	*		*		*		*		52	%
Customer D	*		46	%	*		63	%	*		20	%
Customer E	*		19	%	*		*		*		14	%
Customer F	*		17	%	*		10	%	*		*
Customer G	*		*		17	%	*		*		*
Total	60	%	82	%	46	%	73	%	67	%	86	%

*	Less than 10%

Vendor Concentrations


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Vendor A	19	%	*		29	%	*
Vendor B	19	%	*		28	%	*
Vendor C	*		16	%	*		14	%
Vendor D	*		10	%	*		*
	38	%	26	%	57	%	14	%

*	Less than 10%

Accounts Receivable

Inventory

Inventory at June 30, 2024 and December 31, 2023 was comprised of the following:


	June 30,		December 31,
	2024		2023
Raw materials	$	409,168	$	322,111
Finished goods		126,028		826,936
Total inventory	$	535,196	$	1,149,047

Revenue Recognition

The following five steps are applied to achieve that core principle:

●

Step 1: Identify the contract with the customer;

●

Step 2: Identify the performance obligations in the contract;

●

Step 3: Determine the transaction price;

●

Step 4: Allocate the transaction price to the performance obligations in the contract; and

●

Step 5: Recognize revenue when the company satisfies a performance obligation.

The Company recognizes revenue primarily from the following different types of contracts:

●

The following table summarizes the Company’s revenue recognized by type of contract in its condensed consolidated statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue Recognized at a Point in Time:
Product sales	$	1,134,769	$	1,957,370	$	1,749,862	$	3,586,628
Contract services		1,185,236		270,476		1,701,707		401,020
Total		2,320,005		2,227,846		3,451,569		3,987,648
Revenue Recognized Over Time:
Contract services		112,000		467,660		729,540		467,660
Total Revenue	$	2,432,005	$	2,695,506	$	4,181,109	$	4,455,308

Net Loss Per Common Share

The following table presents the computation of basic and diluted net loss per common share:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(5,890,528)	$	(6,334,992)	$	(10,899,404)	$	(12,937,853)

Denominator (weighted average quantities):
Common shares issued		182,151,812		118,617,860		162,824,020		116,846,331
Less: Treasury shares purchased		(131,162)		(131,162)		(131,162)		(131,162)
Less: Unvested restricted shares		(690,248)		(3,240,679)		(880,871)		(2,708,655)
Add: Accrued issuable equity		136,862		134,681		102,647		127,359
Denominator for basic and diluted net loss per share		181,467,264		115,380,700		161,914,634		114,133,873

Basic and diluted net loss per common share	$	(0.03)	$	(0.05)	$	(0.07)	$	(0.11)

The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:


	June 30,
	2024	2023
Prepaid advance liability⁽¹⁾	—	10,168,469
Unvested restricted stock awards	650,000	3,116,008
Unvested restricted stock units	4,825,111	3,000,000
Options	702,716	795,216
Warrants	2,714,587	2,524,410
Total	8,892,414	19,604,103

⁽¹⁾Shares issuable estimated using the floor price of $0.75 per share pursuant to the supplemental agreement to the SEPA (see Note 6 – Prepaid Advance Liability).

Operating Leases

Reclassifications

Subsequent Events

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

PREPAID EXPENSES AND OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2024

PREPAID EXPENSES AND OTHER CURRENT ASSETS

PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of June 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:


	June 30,		December 31,
	2024		2023
Compensation costs	$	225,000	$	375,000
Dues and subscriptions		55,189		50,689
Deferred expenses		53,247		59,089
Professional fees		13,506		24,125
Vendor receivables		7,389		1,995
Security deposits		5,095		55,308
Insurance		116		32,606
Conferences and seminars		—		19,338
Investor relations		—		1,512
Other		16,214		11,699
Total prepaid expenses and other current assets	$	375,756	$	631,361

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

6 Months Ended

Jun. 30, 2024

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

NOTE 4 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of June 30, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following:


	June 30,		December 31,
	2024		2023
Professional fees	$	2,094,938	$	1,875,000
Research and development		441,192		441,192
Payroll and vacation		412,974		504,748
Inventory purchases		291,925		145,949
Sales tax payable		110,473		46,901
Legal fees		110,000		117,640
Royalties		58,841		17,505
Board compensation		37,500		23,750
Securities fees		37,500		—
Refund due to customer		—		171,960
Cost of sales		—		28,663
Other		155,528		90,036
Total accrued expenses and other current liabilities		3,750,871		3,463,344
Add: Accrued interest, non-current		—		5,899
Total accrued expenses and other liabilities	$	3,750,871	$	3,469,243

ACCRUED ISSUABLE EQUITY

6 Months Ended

Jun. 30, 2024

ACCRUED ISSUABLE EQUITY

ACCRUED ISSUABLE EQUITY

NOTE 5 – ACCRUED ISSUABLE EQUITY

A summary of the accrued issuable equity activity during the six months ended June 30, 2024 is presented below:


	For the Six Months Ended
	June 30, 2024
Beginning balance at January 1, 2024	$	13,002
Additions		53,375
Mark-to-market		15,739
Fair value at June 30, 2024	$	82,116

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

6 Months Ended

Jun. 30, 2024

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

NOTE 6 – PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

The Company’s prepaid advance liability, net of discount, consists of the following:


	Gross Amount of		Less:		Prepaid Advance
	Prepaid Advance		Debt		Liability,
	Liability		Discount		net of discount
Balance, January 1, 2024	$	5,918,430	$	(26,374)	$	5,892,056
Repayments pursuant to Advance Notices		(5,918,430)		—		(5,918,430)
Amortization of debt discount		—		26,374		26,374
Balance, June 30, 2024	$	—	$	—	$	—

LEASES

6 Months Ended

Jun. 30, 2024

LEASES

LEASES

NOTE 7 – LEASES

On January 31, 2024, the initial lease for Webster, Texas dated January 18, 2023, expired.

The Company also leases office space at 4863 Shawline Street, San Diego, CA 92111, pursuant to an operating lease which expired May 31, 2024 (the “San Diego Lease”).

As of June 30, 2024, the Company does not have any financing leases.

Maturities of lease liabilities as of June 30, 2024, were as follows:


Year
July 1, 2024 through December 31, 2024	$	307,722
2025		601,196
2026		280,228
2027		289,008
2028		297,788
Thereafter		101,703
Total future minimum lease payments		1,877,645
Less: amount representing imputed interest		(330,378)
Present value of lease liabilities		1,547,267
Less: current portion		(487,369)
Lease liabilities, non current portion	$	1,059,898

Supplemental cash flow information related to the lease was as follows:


	For the Six Months Ended
	June 30,
	2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating activities	$	130,838		$	130,678
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	1,575,919		$	51,154
Weighted Average Remaining Lease Term (Years)
Operating leases		3.77	years		0.88	years
Weighted Average Discount Rate
Operating leases		10.0	%		5.0	%

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2024

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 8 – RELATED PARTY TRANSACTIONS

As of June 30, 2024 and December 31, 2023, the Company did not have any accounts payable outstanding with related parties.

NOTES PAYABLE

6 Months Ended

Jun. 30, 2024

NOTES PAYABLE

NOTES PAYABLE

NOTE 9-NOTES PAYABLE

A summary of the notes payable activity during the six months ended June 30, 2024 is presented below:


	Notes		Debt
	Payable		Discount		Total
Outstanding, January 1, 2024	$	—	$	—		—
Proceeds from merchant cash advances		1,609,200		(529,200)		1,080,000
Proceeds from promissory notes		700,000		(50,000)		650,000
Issuance costs paid in cash		—		(53,200)		(53,200)
Issuance costs to be paid in equity		—		(112,863)		(112,863)
Underwriting fees paid in cash		—		(72,900)		(72,900)
Repayments in cash		(1,525,195)		—		(1,525,195)
Amortization of debt discount		—		675,902		675,902
Notes payable, current-portion		784,006		(142,261)		641,745
Add: Notes payable, non-current portion		250,000		—		250,000
Total notes payable as of June 30, 2024	$	1,034,006	$	(142,261)	$	891,745

The following assumptions were used in the Black-Scholes Model to measure the fair value of the warrants:


Market price at measurement date	$	0.70
Exercise price	$	0.14 - $0.19
Risk free interest rate		4.52	%
Expected term (years)		2.8 - 2.9
Expected volatility		93	%

STOCKHOLDERS' EQUITY (DEFICIT)

6 Months Ended

Jun. 30, 2024

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIT)

NOTE 10 - STOCKHOLDERS’ EQUITY (DEFICIT)

Standby Equity Purchase Agreement (“SEPA”) and Supplemental SEPA

During the six months ended June 30, 2024, the Company issued 55,659,476 shares of common stock pursuant to SEPA Advance Notices submitted by the Company to Yorkville for aggregate gross proceeds of $15,173,357. Of the gross proceeds, $9,104,950 was retained by the Company to fund operations. The remaining proceeds were applied against the principal and interest owed in connection with the Prepaid Advance Liability. As of March 27, 2024, the Prepaid Advance Liability and the related accrued interest has been repaid in full and the SEPA terminated on June 1, 2024. See Note 6 – Prepaid Advance Liability, for details related to a supplemental agreement to the SEPA.

Common Stock

During the six months ended June 30, 2024, the Company issued an aggregate of 79,650 shares of immediately vested common stock with a grant date value of $27,141 for legal services.

During the six months ended June 30, 2024, the Company issued 454,627 shares of common stock upon the vesting of restricted stock units previously granted.

See Restricted Stock Awards, for details related to restricted equity grants and Note 6 - Prepaid Advance Liability for details related to additional share issuances.

Preferred Stock

Treasury Stock

As of June 30, 2024 and December 31, 2023, the Company has 131,162 shares held in treasury recorded at their cost of $296,222.

Warrants

A summary of warrants activity during the six months ended June 30, 2024, is presented below:


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining	Intrinsic
	Warrants	Price		Term (Yrs)	Value
Outstanding, January 1, 2024	2,524,410	$	1.02
Issued	190,177		0.16
Exercised	—		—
Expired	—		—
Forfeited	—		—
Outstanding, June 30, 2024	2,714,587	$	0.96	1.6	$	45,858

Exercisable, June 30, 2024	2,714,587	$	0.96	1.6	$	45,858

A summary of outstanding and exercisable warrants as of June 30, 2024, is presented below:


Warrants Outstanding		Warrants Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Life	Number of
Price	Warrants	In Years	Warrants
$ 1.25	177,885	1.5	177,885
$ 1.00	2,346,525	1.5	2,346,525
$ 0.19	81,788	2.6	81,788
$ 0.14	108,389	2.7	108,389
	2,714,587	1.6	2,714,587

See Note 9 – Notes Payable for additional details related to the 2024 warrant issuances.

Stock Options

A summary of stock options activity during the six months ended June 30, 2024, is presented below:


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining	Intrinsic
	Options	Price		Term (Yrs)	Value
Outstanding, January 1, 2024	722,716	$	1.26
Granted	55,000		0.27
Forfeited	(75,000)		0.89
Outstanding, June 30, 2024	702,716	$	1.22	2.5	$	7,328

Exercisable, June 30, 2024	357,715	$	0.84	1.2	$	—

The following table presents information related to stock options as of June 30, 2024:


Options Outstanding		Options Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Term	Number of
Price	Options	In Years	Options
$0.19 - $0.99	322,986	0.4	201,735
$1.21 - $1.50	145,000	3.5	36,250
$1.55 - $1.99	80,000	2.8	30,000
$2.05 - $2.44	154,730	2.5	89,730
	702,716	1.2	357,715


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Risk free interest rate	4.75% - 4.81	%	4.07% - 4.52	%	4.27% - 4.81	%	3.92% - 4.52	%
Expected term (years)	3.8		3.5		3.8		3.5
Expected volatility	110	%	107	%	110% - 114	%	105% -107	%
Expected dividends	0	%	0	%	0	%	0	%

Restricted Stock Awards

The following table presents information related to restricted stock awards activity during the six months ended June 30, 2024:


	Shares of	Weighted Average
	Restricted	Grant Date
	Common Stock	Fair Value
Non-vested RSAs, January 1, 2024	3,381,008	$	1.53
RSAs exchanged for RSUs	(2,168,508)		0.94
Granted	—		—
Vested	(562,500)		2.60
Forfeited	—		—
Non-vested RSAs, June 30, 2024	650,000	$	2.53

Restricted Stock Units

The following table presents information related to restricted stock units (“RSUs”) activity during the six months ended June 30, 2024:


	Number of	Weighted Average
	Restricted	Grant Date
	Common Units	Fair Value
Non-vested RSUs, January 1, 2024	2,250,000	$	2.05
RSAs exchanged for RSUs	2,168,508		0.94
Granted	851,230		0.38
Vested	(454,627)		0.94
Forfeited	—		—
Non-vested RSUs, June 30, 2024	4,815,111	$	1.36

Stock-Based Compensation

The following table presents information related to stock-based compensation for the three and six months ended June 30, 2024 and 2023:


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Common stock for services (includes accrued, unissued shares)	$	65,523	$	96,350	$	97,915	$	210,800
Amortization of stock options		29,165		44,311		61,206		84,916
Amortization of restricted stock awards and units		814,338		823,540		1,595,834		1,588,640
Total	$	909,026	$	964,201	$	1,754,955	$	1,884,356

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2024

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Legal Matters

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 12 - SUBSEQUENT EVENTS

At the Market Offering

On July 3, 2024, the Company entered into an At the Market Offering agreement (the “ATM”) with an agent (the “Agent”), pursuant to which the Company may, from time to time, sell shares of common stock for aggregate gross proceeds of up to $20,000,000 in “at the market” offerings through or to the Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of the sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of 3% of the gross proceeds of any shares of common stock sold pursuant to the ATM. During the period from July 3, 2024, through August 9, 2024, the Company issued a total of 4,953,867 shares of common stock pursuant to the ATM for aggregate proceeds of $1,416,940.

Merchant Cash Advance

Pay vs Performance Disclosure - USD ($)	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($)	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (5,890,528)	$ (5,008,876)	$ (6,334,992)	$ (6,602,861)	$ (10,899,404)	$ (12,937,853)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false	false
Non-Rule 10b5-1 Arrangement Adopted	false	false
Rule 10b5-1 Arrangement Terminated	false	false
Non-Rule 10b5-1 Arrangement Terminated	false	false

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going Concern and Management's Liquidity Plans

Going Concern and Management’s Liquidity Plans

Use of Estimates

Concentrations of Credit Risk

Cash Concentrations

Customer and Revenue Concentrations


	Revenue								Accounts Receivable
	For the Three Months Ended				For the Six Months Ended				As of		As of
	June 30,				June 30,				June 30,		December 31,
	2024		2023		2024		2023		2024		2023
Customer A	31	%	*		18	%	*		43	%	*
Customer B	19	%	*		11	%	*		24	%	*
Customer C	10	%	*		*		*		*		52	%
Customer D	*		46	%	*		63	%	*		20	%
Customer E	*		19	%	*		*		*		14	%
Customer F	*		17	%	*		10	%	*		*
Customer G	*		*		17	%	*		*		*
Total	60	%	82	%	46	%	73	%	67	%	86	%

*	Less than 10%

Vendor Concentrations


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Vendor A	19	%	*		29	%	*
Vendor B	19	%	*		28	%	*
Vendor C	*		16	%	*		14	%
Vendor D	*		10	%	*		*
	38	%	26	%	57	%	14	%

*	Less than 10%

Accounts Receivable

Inventory

Inventory at June 30, 2024 and December 31, 2023 was comprised of the following:


	June 30,		December 31,
	2024		2023
Raw materials	$	409,168	$	322,111
Finished goods		126,028		826,936
Total inventory	$	535,196	$	1,149,047

Revenue Recognition

The following five steps are applied to achieve that core principle:

●

Step 1: Identify the contract with the customer;

●

Step 2: Identify the performance obligations in the contract;

●

Step 3: Determine the transaction price;

●

Step 4: Allocate the transaction price to the performance obligations in the contract; and

●

Step 5: Recognize revenue when the company satisfies a performance obligation.

The Company recognizes revenue primarily from the following different types of contracts:

●

The following table summarizes the Company’s revenue recognized by type of contract in its condensed consolidated statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue Recognized at a Point in Time:
Product sales	$	1,134,769	$	1,957,370	$	1,749,862	$	3,586,628
Contract services		1,185,236		270,476		1,701,707		401,020
Total		2,320,005		2,227,846		3,451,569		3,987,648
Revenue Recognized Over Time:
Contract services		112,000		467,660		729,540		467,660
Total Revenue	$	2,432,005	$	2,695,506	$	4,181,109	$	4,455,308

Net Loss Per Common Share

The following table presents the computation of basic and diluted net loss per common share:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(5,890,528)	$	(6,334,992)	$	(10,899,404)	$	(12,937,853)

Denominator (weighted average quantities):
Common shares issued		182,151,812		118,617,860		162,824,020		116,846,331
Less: Treasury shares purchased		(131,162)		(131,162)		(131,162)		(131,162)
Less: Unvested restricted shares		(690,248)		(3,240,679)		(880,871)		(2,708,655)
Add: Accrued issuable equity		136,862		134,681		102,647		127,359
Denominator for basic and diluted net loss per share		181,467,264		115,380,700		161,914,634		114,133,873

Basic and diluted net loss per common share	$	(0.03)	$	(0.05)	$	(0.07)	$	(0.11)

The following shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:


	June 30,
	2024	2023
Prepaid advance liability⁽¹⁾	—	10,168,469
Unvested restricted stock awards	650,000	3,116,008
Unvested restricted stock units	4,825,111	3,000,000
Options	702,716	795,216
Warrants	2,714,587	2,524,410
Total	8,892,414	19,604,103

⁽¹⁾Shares issuable estimated using the floor price of $0.75 per share pursuant to the supplemental agreement to the SEPA (see Note 6 – Prepaid Advance Liability).

Operating Leases

Reclassifications

Subsequent Events

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of concentrations of credit risk


	Revenue								Accounts Receivable
	For the Three Months Ended				For the Six Months Ended				As of		As of
	June 30,				June 30,				June 30,		December 31,
	2024		2023		2024		2023		2024		2023
Customer A	31	%	*		18	%	*		43	%	*
Customer B	19	%	*		11	%	*		24	%	*
Customer C	10	%	*		*		*		*		52	%
Customer D	*		46	%	*		63	%	*		20	%
Customer E	*		19	%	*		*		*		14	%
Customer F	*		17	%	*		10	%	*		*
Customer G	*		*		17	%	*		*		*
Total	60	%	82	%	46	%	73	%	67	%	86	%

*	Less than 10%


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Vendor A	19	%	*		29	%	*
Vendor B	19	%	*		28	%	*
Vendor C	*		16	%	*		14	%
Vendor D	*		10	%	*		*
	38	%	26	%	57	%	14	%

*	Less than 10%

Schedule of inventory


	June 30,		December 31,
	2024		2023
Raw materials	$	409,168	$	322,111
Finished goods		126,028		826,936
Total inventory	$	535,196	$	1,149,047

Schedule of revenue recognized


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue Recognized at a Point in Time:
Product sales	$	1,134,769	$	1,957,370	$	1,749,862	$	3,586,628
Contract services		1,185,236		270,476		1,701,707		401,020
Total		2,320,005		2,227,846		3,451,569		3,987,648
Revenue Recognized Over Time:
Contract services		112,000		467,660		729,540		467,660
Total Revenue	$	2,432,005	$	2,695,506	$	4,181,109	$	4,455,308

Schedule of of basic and diluted net loss per common share


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(5,890,528)	$	(6,334,992)	$	(10,899,404)	$	(12,937,853)

Denominator (weighted average quantities):
Common shares issued		182,151,812		118,617,860		162,824,020		116,846,331
Less: Treasury shares purchased		(131,162)		(131,162)		(131,162)		(131,162)
Less: Unvested restricted shares		(690,248)		(3,240,679)		(880,871)		(2,708,655)
Add: Accrued issuable equity		136,862		134,681		102,647		127,359
Denominator for basic and diluted net loss per share		181,467,264		115,380,700		161,914,634		114,133,873

Basic and diluted net loss per common share	$	(0.03)	$	(0.05)	$	(0.07)	$	(0.11)

Schedule of shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive


	June 30,
	2024	2023
Prepaid advance liability⁽¹⁾	—	10,168,469
Unvested restricted stock awards	650,000	3,116,008
Unvested restricted stock units	4,825,111	3,000,000
Options	702,716	795,216
Warrants	2,714,587	2,524,410
Total	8,892,414	19,604,103

⁽¹⁾Shares issuable estimated using the floor price of $0.75 per share pursuant to the supplemental agreement to the SEPA (see Note 6 – Prepaid Advance Liability).

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

6 Months Ended

Jun. 30, 2024

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Schedule of prepaid expenses and other current assets


	June 30,		December 31,
	2024		2023
Compensation costs	$	225,000	$	375,000
Dues and subscriptions		55,189		50,689
Deferred expenses		53,247		59,089
Professional fees		13,506		24,125
Vendor receivables		7,389		1,995
Security deposits		5,095		55,308
Insurance		116		32,606
Conferences and seminars		—		19,338
Investor relations		—		1,512
Other		16,214		11,699
Total prepaid expenses and other current assets	$	375,756	$	631,361

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2024

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	June 30,		December 31,
	2024		2023
Professional fees	$	2,094,938	$	1,875,000
Research and development		441,192		441,192
Payroll and vacation		412,974		504,748
Inventory purchases		291,925		145,949
Sales tax payable		110,473		46,901
Legal fees		110,000		117,640
Royalties		58,841		17,505
Board compensation		37,500		23,750
Securities fees		37,500		—
Refund due to customer		—		171,960
Cost of sales		—		28,663
Other		155,528		90,036
Total accrued expenses and other current liabilities		3,750,871		3,463,344
Add: Accrued interest, non-current		—		5,899
Total accrued expenses and other liabilities	$	3,750,871	$	3,469,243

ACCRUED ISSUABLE EQUITY (Tables)

6 Months Ended

Jun. 30, 2024

ACCRUED ISSUABLE EQUITY

Summary of accrued issuable equity


	For the Six Months Ended
	June 30, 2024
Beginning balance at January 1, 2024	$	13,002
Additions		53,375
Mark-to-market		15,739
Fair value at June 30, 2024	$	82,116

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT (Tables)

6 Months Ended

Jun. 30, 2024

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT

Schedule of prepaid advance liability, net of discount


	Gross Amount of		Less:		Prepaid Advance
	Prepaid Advance		Debt		Liability,
	Liability		Discount		net of discount
Balance, January 1, 2024	$	5,918,430	$	(26,374)	$	5,892,056
Repayments pursuant to Advance Notices		(5,918,430)		—		(5,918,430)
Amortization of debt discount		—		26,374		26,374
Balance, June 30, 2024	$	—	$	—	$	—

LEASES (Tables)

6 Months Ended

Jun. 30, 2024

LEASES

Schedule of maturities of lease liabilities

Maturities of lease liabilities as of June 30, 2024, were as follows:


Year
July 1, 2024 through December 31, 2024	$	307,722
2025		601,196
2026		280,228
2027		289,008
2028		297,788
Thereafter		101,703
Total future minimum lease payments		1,877,645
Less: amount representing imputed interest		(330,378)
Present value of lease liabilities		1,547,267
Less: current portion		(487,369)
Lease liabilities, non current portion	$	1,059,898

Schedule of supplemental cash flow information related to the leases


	For the Six Months Ended
	June 30,
	2024			2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating activities	$	130,838		$	130,678
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	1,575,919		$	51,154
Weighted Average Remaining Lease Term (Years)
Operating leases		3.77	years		0.88	years
Weighted Average Discount Rate
Operating leases		10.0	%		5.0	%

NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2024

NOTES PAYABLE

Summary of notes payable activity


	Notes		Debt
	Payable		Discount		Total
Outstanding, January 1, 2024	$	—	$	—		—
Proceeds from merchant cash advances		1,609,200		(529,200)		1,080,000
Proceeds from promissory notes		700,000		(50,000)		650,000
Issuance costs paid in cash		—		(53,200)		(53,200)
Issuance costs to be paid in equity		—		(112,863)		(112,863)
Underwriting fees paid in cash		—		(72,900)		(72,900)
Repayments in cash		(1,525,195)		—		(1,525,195)
Amortization of debt discount		—		675,902		675,902
Notes payable, current-portion		784,006		(142,261)		641,745
Add: Notes payable, non-current portion		250,000		—		250,000
Total notes payable as of June 30, 2024	$	1,034,006	$	(142,261)	$	891,745

Schedule of range of assumptions used in the fair valuation of stock options


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Risk free interest rate	4.75% - 4.81	%	4.07% - 4.52	%	4.27% - 4.81	%	3.92% - 4.52	%
Expected term (years)	3.8		3.5		3.8		3.5
Expected volatility	110	%	107	%	110% - 114	%	105% -107	%
Expected dividends	0	%	0	%	0	%	0	%

Warrants

NOTES PAYABLE

Schedule of range of assumptions used in the fair valuation of stock options


Market price at measurement date	$	0.70
Exercise price	$	0.14 - $0.19
Risk free interest rate		4.52	%
Expected term (years)		2.8 - 2.9
Expected volatility		93	%

STOCKHOLDERS' EQUITY (DEFICIT) (Tables)

6 Months Ended

Jun. 30, 2024

STOCKHOLDERS' EQUITY (DEFICIT)

Summary of warrants activity


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining	Intrinsic
	Warrants	Price		Term (Yrs)	Value
Outstanding, January 1, 2024	2,524,410	$	1.02
Issued	190,177		0.16
Exercised	—		—
Expired	—		—
Forfeited	—		—
Outstanding, June 30, 2024	2,714,587	$	0.96	1.6	$	45,858

Exercisable, June 30, 2024	2,714,587	$	0.96	1.6	$	45,858

Summary of outstanding and exercisable warrants


Warrants Outstanding		Warrants Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Life	Number of
Price	Warrants	In Years	Warrants
$ 1.25	177,885	1.5	177,885
$ 1.00	2,346,525	1.5	2,346,525
$ 0.19	81,788	2.6	81,788
$ 0.14	108,389	2.7	108,389
	2,714,587	1.6	2,714,587

Summary of stock options activity


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining	Intrinsic
	Options	Price		Term (Yrs)	Value
Outstanding, January 1, 2024	722,716	$	1.26
Granted	55,000		0.27
Forfeited	(75,000)		0.89
Outstanding, June 30, 2024	702,716	$	1.22	2.5	$	7,328

Exercisable, June 30, 2024	357,715	$	0.84	1.2	$	—

Schedule of information related to stock options exercise price


Options Outstanding		Options Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Term	Number of
Price	Options	In Years	Options
$0.19 - $0.99	322,986	0.4	201,735
$1.21 - $1.50	145,000	3.5	36,250
$1.55 - $1.99	80,000	2.8	30,000
$2.05 - $2.44	154,730	2.5	89,730
	702,716	1.2	357,715

Schedule of range of assumptions used in the fair valuation of stock options


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Risk free interest rate	4.75% - 4.81	%	4.07% - 4.52	%	4.27% - 4.81	%	3.92% - 4.52	%
Expected term (years)	3.8		3.5		3.8		3.5
Expected volatility	110	%	107	%	110% - 114	%	105% -107	%
Expected dividends	0	%	0	%	0	%	0	%

Schedule of restricted stock awards (RSAs) activity


	Shares of	Weighted Average
	Restricted	Grant Date
	Common Stock	Fair Value
Non-vested RSAs, January 1, 2024	3,381,008	$	1.53
RSAs exchanged for RSUs	(2,168,508)		0.94
Granted	—		—
Vested	(562,500)		2.60
Forfeited	—		—
Non-vested RSAs, June 30, 2024	650,000	$	2.53

Schedule of restricted stock units (RSUs) activity


	Number of	Weighted Average
	Restricted	Grant Date
	Common Units	Fair Value
Non-vested RSUs, January 1, 2024	2,250,000	$	2.05
RSAs exchanged for RSUs	2,168,508		0.94
Granted	851,230		0.38
Vested	(454,627)		0.94
Forfeited	—		—
Non-vested RSUs, June 30, 2024	4,815,111	$	1.36

Schedule of information relating to stock -based compensation


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Common stock for services (includes accrued, unissued shares)	$	65,523	$	96,350	$	97,915	$	210,800
Amortization of stock options		29,165		44,311		61,206		84,916
Amortization of restricted stock awards and units		814,338		823,540		1,595,834		1,588,640
Total	$	909,026	$	964,201	$	1,754,955	$	1,884,356

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer, Revenue and Vendor Concentrations (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Revenue \| Total Customers \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	60.00%	82.00%	46.00%	73.00%
Revenue \| Customer A \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	31.00%		18.00%
Revenue \| Customer B \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	19.00%		11.00%
Revenue \| Customer C \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	10.00%
Revenue \| Customer D \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage		46.00%		63.00%
Revenue \| Customer E \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage		19.00%
Revenue \| Customer G \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage			17.00%
Revenue \| Customer F \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage		17.00%		10.00%
Account Receivables \| Total Customers \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage			67.00%		86.00%
Account Receivables \| Customer A \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage			43.00%
Account Receivables \| Customer B \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage			24.00%
Account Receivables \| Customer C \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage					52.00%
Account Receivables \| Customer D \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage					20.00%
Account Receivables \| Customer E \| Revenue Concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage					14.00%
Accounts Payable \| Vendor Concentrations \| Total Vendors
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	38.00%	26.00%	57.00%	14.00%
Accounts Payable \| Vendor Concentrations \| Vendor A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	19.00%		29.00%
Accounts Payable \| Vendor Concentrations \| Vendor B
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	19.00%		28.00%
Accounts Payable \| Vendor Concentrations \| Vendor C
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage		16.00%		14.00%
Accounts Payable \| Vendor Concentrations \| Vendor D
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage		10.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Raw materials	$ 409,168	$ 322,111
Finished goods	126,028	826,936
Total inventory	$ 535,196	$ 1,149,047

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Company's revenue recognized in its consolidated statements of operations (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total revenue	$ 2,432,005	$ 2,695,506	$ 4,181,109	$ 4,455,308
Revenues Recognized at a Point in Time
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total revenue	2,320,005	2,227,846	3,451,569	3,987,648
Revenues Recognized at a Point in Time \| Product sales
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total revenue	1,134,769	1,957,370	1,749,862	3,586,628
Revenues Recognized at a Point in Time \| Contract services
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total revenue	1,185,236	270,476	1,701,707	401,020
Revenues Recognized Over Time
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total revenue	2,432,005	2,695,506	4,181,109	4,455,308
Revenues Recognized Over Time \| Contract services
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total revenue	$ 112,000	$ 467,660	$ 729,540	$ 467,660

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of basic and diluted net loss per common share (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net Income (Loss)	$ (5,890,528)	$ (5,008,876)	$ (6,334,992)	$ (6,602,861)	$ (10,899,404)	$ (12,937,853)
Denominator (weighted average quantities):
Common shares issued	182,151,812		118,617,860		162,824,020	116,846,331
Less: Treasury shares purchased	(131,162)		(131,162)		(131,162)	(131,162)
Less: Unvested restricted shares	(690,248)		(3,240,679)		(880,871)	(2,708,655)
Add: Accrued issuable equity	136,862		134,681		102,647	127,359
Denominator for basic net loss per share	181,467,264		115,380,700		161,914,634	114,133,873
Denominator for diluted net loss per share	181,467,264		115,380,700		161,914,634	114,133,873
Basic net loss per common share (In dollars per share)	$ (0.03)		$ (0.05)		$ (0.07)	$ (0.11)
Diluted net loss per common share (In dollars per share)	$ (0.03)		$ (0.05)		$ (0.07)	$ (0.11)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shares were excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive (Details) - $ / shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares were excluded from the calculation of weighted average dilutive common shares	8,892,414	19,604,103
Floor price	$ 0.75
Prepaid advance liability
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares were excluded from the calculation of weighted average dilutive common shares		10,168,469
Unvested restricted stock awards
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares were excluded from the calculation of weighted average dilutive common shares	650,000	3,116,008
Unvested restricted stock units
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares were excluded from the calculation of weighted average dilutive common shares	4,825,111	3,000,000
Employee Stock Option
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares were excluded from the calculation of weighted average dilutive common shares	702,716	795,216
Warrants
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of shares were excluded from the calculation of weighted average dilutive common shares	2,714,587	2,524,410

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($)		1 Months Ended	3 Months Ended				6 Months Ended
	Jul. 03, 2024	Aug. 09, 2024	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023	Feb. 12, 2024	Dec. 31, 2023	Nov. 07, 2023	Dec. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash			$ 1,016,943				$ 1,016,943			$ 1,194,764
Working capital deficit			(2,381,478)				(2,381,478)
Net Income (Loss)			(5,890,528)	$ (5,008,876)	$ (6,334,992)	$ (6,602,861)	(10,899,404)	$ (12,937,853)
Cash in operations							9,198,453	9,858,687
Current liabilities include accounts payable and accrued expenses			4,811,565				4,811,565
Merchant cash advances			784,006				784,006
Lease liabilities, current portion			487,369				487,369			102,186
Lease liabilities, non-current portion			1,059,898				1,059,898
Stockholders' equity			3,835,093	2,589,598	$ 3,473,633	$ 8,225,116	3,835,093	$ 3,473,633		(2,182,696)		$ 10,493,733
Average trading price per share									$ 0.20
Proceeds from common stock issued for cash pursuant to Advance Notices			6,194,299	2,910,651
Underwritten limited public offering issuance costs			52,792	$ 4,238
Uninsured cash			516,943				516,943			694,764
Inventory deposits			10,883				10,883			$ 27,500
Yorkville
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Stockholders' equity			$ 1,200,172				1,200,172
Proceeds from common stock issued for cash pursuant to Advance Notices							15,173,357
Yorkville \| Payable on or before November 30, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Lease liabilities, current portion											$ 487,369
Yorkville \| Payable on or before January 31, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Lease liabilities, non-current portion											1,059,898
Promissory notes payable, non current											$ 250,000
ATM
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of Commission to Agent in Proportion to Gross Proceeds	3.00%
ATM \| Subsequent event
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Maximum aggregate offering price	$ 20,000,000
Common stock issued (in shares)		4,953,867
Proceeds from common stock issued for cash pursuant to Advance Notices		$ 1,416,940
SEPA \| Yorkville
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Proceeds from common stock issued for cash pursuant to Advance Notices							$ 15,173,357

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Compensation costs	$ 225,000	$ 375,000
Dues and subscriptions	55,189	50,689
Deferred expenses	53,247	59,089
Professional fees	13,506	24,125
Vendor receivables	7,389	1,995
Security deposits	5,095	55,308
Insurance	116	32,606
Conferences and seminars		19,338
Investor relations		1,512
Other	16,214	11,699
Total prepaid expenses and other current assets	$ 375,756	$ 631,361

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Professional fees	$ 2,094,938	$ 1,875,000
Research and development	441,192	441,192
Payroll and vacation	412,974	504,748
Inventory purchases	291,925	145,949
Sales tax payable	110,473	46,901
Legal fees	110,000	117,640
Royalties	58,841	17,505
Board compensation	37,500	23,750
Securities fees	37,500
Refund due to customer		171,960
Cost of sales		28,663
Other	155,528	90,036
Total accrued expenses and other current liabilities	3,750,871	3,463,344
Add: Accrued interest, non-current		5,899
Total accrued expenses and other liabilities	$ 3,750,871	$ 3,469,243

ACCRUED ISSUABLE EQUITY (Details) - USD ($)	3 Months Ended		6 Months Ended
ACCRUED ISSUABLE EQUITY (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
ACCRUED ISSUABLE EQUITY
Beginning balance at January 1, 2024			$ 13,002
Additions			53,375
Mark-to market	$ (2,737)	$ 156,652	15,739	$ 220,760
Fair value at March 31, 2024	$ 82,116		$ 82,116

ACCRUED ISSUABLE EQUITY - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
ACCRUED ISSUABLE EQUITY
Estimated fair value of shares			$ 53,375
Aggregate amount of mark-to market related to changes in fair value of accrued issuable equity	$ (2,737)	$ 156,652	15,739	$ 220,760
Fair value of unissued share	$ 82,116		$ 82,116

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT - Prepaid advance liability (Details)	6 Months Ended
	Jun. 30, 2024 USD ($)
PREPAID ADVANCE LIABILITY, NET OF DISCOUNT
Gross Amount of Prepaid Advance Liability	$ 5,918,430
Debt Discount	(26,374)
Prepaid Advance Liability, net of discount	5,892,056
Repayments pursuant to Advance Notices	(5,918,430)
Notes Payable
PREPAID ADVANCE LIABILITY, NET OF DISCOUNT
Amortization of debt discount	$ 26,374

PREPAID ADVANCE LIABILITY, NET OF DISCOUNT - Additional Information (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jan. 09, 2024
PREPAID ADVANCE LIABILITY, NET OF DISCOUNT
Proceeds from common stock issued for cash pursuant to Advance Notices	$ 6,194,299	$ 2,910,651
Common stock issued for the repayment of prepaid advance liability and related interest accrual			$ 715,658	$ 3,750,968
Loss on debt extinguishment					$ (31,358)
Yorkville
PREPAID ADVANCE LIABILITY, NET OF DISCOUNT
Prepaid advance						$ 2,000,000
Percentage of cash payment premium payable on or before December 31, 2023						5.00%
Number of shares issued (in shares)					55,659,476
Proceeds from common stock issued for cash pursuant to Advance Notices					$ 15,173,357
Common stock issued for the repayment of prepaid advance liability and related interest accrual pursuant to Advance Notices ( in shares)					21,798,830
Common stock issued for the repayment of prepaid advance liability and related interest accrual					$ 6,068,407
Common stock value issued for the repayment of prepaid advance liability					5,918,430
Common stock value issued for the repayment of prepaid advance liability					118,619
Loss on debt extinguishment					31,358
Net of cash issuance costs					$ 13,577
Common stock issued for cash pursuant to Advance Notices (in shares)					33,860,646
Gross proceeds from common stock retained to fund operations					$ 9,104,950
Amount of decrease in additional paid in capital					$ 57,030

LEASES - Additional Information (Details) - USD ($)			3 Months Ended		6 Months Ended
LEASES - Additional Information (Details) - USD ($)	Jan. 27, 2024	Jan. 25, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
LEASES
Cash payments due for first three months of the lease					$ 130,838	$ 130,678
Right-of-use asset for lease liability					1,575,919	51,154
Security deposit			$ 5,095		5,095		$ 55,308
Lease liabilities		$ 490,422	1,547,267		1,547,267
Right-of-use asset, net			1,478,413		1,478,413		$ 129,202
Operating lease expense			111,591	$ 65,873	226,708	$ 131,746
Lease agreement for office space in Webster, Texas
LEASES
Lease term (in years)	63 months
Renewal term (in years)	36 months
Monthly rental payments	$ 33,086
Lease base rent	21,950
Common area maintenance fees	11,136
Cash payments due for first three months of the lease	0
Right-of-use asset for lease liability	$ 1,085,497
Incremental borrowing rate (in %)	10.00%
Security deposit			$ 37,930		$ 37,930
Lease Facility Located At 4863 Shawline Street, San Diego, CA 92111
LEASES
Renewal term (in years)		18 months
Monthly rental payments		$ 29,337
Incremental borrowing rate (in %)		10.00%
Right-of-use asset, net		$ 490,422

LEASES - Maturities of lease liabilities (Details) - USD ($)	Jun. 30, 2024	Jan. 25, 2024	Dec. 31, 2023
LEASES
July 1, 2024 through December 31, 2024	$ 307,722
2025	601,196
2026	280,228
2027	289,008
2028	297,788
Thereafter	101,703
Total future minimum lease payments	1,877,645
Less: amount representing imputed interest	(330,378)
Present value of lease liabilities	1,547,267	$ 490,422
Less: current portion	(487,369)		$ (102,186)
Lease liabilities, non current portion	$ 1,059,898

LEASES - Supplemental cash flow information related to the leases (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating activities	$ 130,838	$ 130,678
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$ 1,575,919	$ 51,154
Weighted Average Remaining Lease Term (Years)
Operating leases	3 years 9 months 7 days	10 months 17 days
Weighted Average Discount Rate
Operating leases	10.00%	5.00%

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended		6 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
RELATED PARTY TRANSACTIONS
Accounts payable	$ 1,060,694		$ 1,060,694		$ 2,769,544
Chief Technology Officer CTO \| Consulting Agreements
RELATED PARTY TRANSACTIONS
Related party expenses	0	$ 16,755	0	$ 27,210
Related Party \| Consulting Agreements
RELATED PARTY TRANSACTIONS
Accounts payable	$ 0		$ 0		$ 0

NOTES PAYABLE - Summary of the notes payable activity (Details) - USD ($)

3 Months Ended

6 Months Ended

May 28, 2024

Apr. 29, 2024

Apr. 02, 2024

Jun. 30, 2024

Jun. 30, 2023

Jun. 30, 2024

Jun. 30, 2023

Dec. 31, 2023

NOTES PAYABLE

Net proceeds from notes payable

^[1]

$ 1,730,000

Issuance costs paid in cash

(53,200)

Issuance costs to be paid in equity

(112,863)

Underwriting fees paid in cash

(72,900)

Repayments in cash

(1,525,195)

Amortization of debt discount

$ 527,199

$ 214,554

702,276

$ 460,874

Notes payable, current-portion - Notes payable

784,006

Notes payable, current-portion - Debt discount

(142,261)

Notes payable, current-portion

641,745

Add: Notes payable, non-current portion - Notes Payable

250,000

Notes payable, non-current portion

250,000

$ 250,000

Ending balance of Note Payable gross

1,034,006

Ending balance of Debt Discount

(142,261)

Ending balance of Note Payable net

$ 891,745

891,745

Notes Payable

NOTES PAYABLE

Amortization of debt discount

675,902

Merchant cash advances

NOTES PAYABLE

Proceeds from notes payable gross

1,609,200

Debt discount on notes payable

(529,200)

Net proceeds from notes payable

1,080,000

Promissory Note

NOTES PAYABLE

Proceeds from notes payable gross

700,000

Debt discount on notes payable

(50,000)

Net proceeds from notes payable

$ 200,000

$ 440,000

$ 650,000

Amortization of debt discount

$ 60,000

Notes payable, current-portion - Debt discount

60,000

Ending balance of Note Payable net

$ 200,000

$ 500,000

[1]	Face value of $2,309,200, less $579,200 original issue discount.

NOTES PAYABLE (Details) - USD ($)				2 Months Ended
NOTES PAYABLE (Details) - USD ($)	Jul. 11, 2024	Feb. 26, 2024	Jan. 22, 2024	Nov. 15, 2024
NOTES PAYABLE
Proceeds from cash advance		$ 502,200	$ 504,900
Underwriting fees		37,800	35,100
Finder's fees		21,600	21,600
Total cash advance payable		804,600	804,600
Periodic payments on cash advances	$ 26,820	$ 26,820	$ 25,143.75	$ 15,620
Effective interest rate		249.00%	217.00%
If Cash Advance Repaid by March 22, 2024
NOTES PAYABLE
Total cash advance payable		$ 756,000
If Cash Advance Repaid by April 22, 2024
NOTES PAYABLE
Total cash advance payable		$ 783,000

NOTES PAYABLE - Warrants (Details) - USD ($)	Jun. 30, 2024	Apr. 04, 2024
Class of Warrant or Right [Line Items]
Grant date fair value of warrants	$ 45,858
Warrants
Class of Warrant or Right [Line Items]
Grant date fair value of warrants		$ 112,863
First Warrant
Class of Warrant or Right [Line Items]
Number of Warrants, Outstanding (in shares)		81,788
Exercise price (in dollars per share)		$ 0.1852
Second Warrant
Class of Warrant or Right [Line Items]
Number of Warrants, Outstanding (in shares)		108,389
Exercise price (in dollars per share)		$ 0.139

NOTES PAYABLE - Fair Value of warrants (Details)	Jun. 30, 2024 Y
Market price at measurement date
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	0.70
Exercise price \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	0.14
Exercise price \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	0.19
Risk free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	4.52
Expected term (years) \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	2.8
Expected term (years) \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	2.9
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrant measurement input	93

NOTES PAYABLE - Promissory Notes (Details) - USD ($)

3 Months Ended

6 Months Ended

May 28, 2024

Apr. 29, 2024

Apr. 02, 2024

Jun. 30, 2024

Jun. 30, 2023

Jun. 30, 2024

Jun. 30, 2023

NOTES PAYABLE

Initial principal amount

$ 891,745

Net cash proceeds

^[1]

1,730,000

Cash proceeds on discount

(142,261)

Amortization of debt discount

$ 527,199

$ 214,554

702,276

$ 460,874

Promissory Note

NOTES PAYABLE

Initial principal amount

$ 200,000

$ 500,000

Net cash proceeds

$ 200,000

440,000

650,000

Cash proceeds on discount

60,000

Original issuance discount

50,000

$ 579,200

Debt issuance cost

$ 10,000

Annual interest rate (percentage)

16.00%

Amortization of debt discount

$ 60,000

Promissory Note | Maximum

NOTES PAYABLE

Annual interest rate (percentage)

15.00%

Principal and cash payment interest rate

16.00%

Promissory Note | Minimum

NOTES PAYABLE

Annual interest rate (percentage)

0.00%

Principal and cash payment interest rate

12.00%

[1]	Face value of $2,309,200, less $579,200 original issue discount.

STOCKHOLDERS' EQUITY (DEFICIT) - Additional Information (Details)			3 Months Ended			6 Months Ended
	Jan. 26, 2024 USD ($) shares	May 13, 2022 USD ($)	Jun. 30, 2024 USD ($) $ / shares shares	Mar. 31, 2024 USD ($) shares	Mar. 31, 2023 USD ($) shares	Jun. 30, 2024 USD ($) Vote $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Jun. 30, 2023 shares	Dec. 31, 2022 shares
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value (in dollars per share) \| $ / shares			$ 0.0001			$ 0.0001	$ 0.0001
Proceeds from common stock issued for cash pursuant to Advance Notices \| $			$ 6,194,299	$ 2,910,651
Grant date value of common stock issued related to consulting services provided \| $			$ 38,150	$ 6,390	$ 6,820
Preferred stock, shares authorized			20,000,000			20,000,000	20,000,000
Treasury stock, shares			131,162			131,162	131,162
Independent Members of Board of Directors
STOCKHOLDERS' EQUITY (DEFICIT)
Number of shares of common stock issued related to consulting services provided (in shares)						30,000
Grant date value of common stock issued related to consulting services provided \| $						$ 17,400
Series A Preferred Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, shares authorized			1,000,000			1,000,000	1,000,000
Number of votes per share of preferred stock \| Vote						100
Series A Preferred Stock \| CEO
STOCKHOLDERS' EQUITY (DEFICIT)
Proceeds from sale of Convertible Preferred Stock and warrants \| $	$ 0
Preferred stock, shares authorized	730,000
Series B Convertible Preferred Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, shares authorized			31,000			31,000	31,000
Series C Preferred Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, shares authorized			400			400	400
Series D Preferred Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, shares authorized			650			650	650
Restricted stock awards
STOCKHOLDERS' EQUITY (DEFICIT)
Unrecognized stock-based compensation expense \| $			$ 1,134,833			$ 1,134,833
Weighted average remaining vesting period (in years)						10 months 28 days
Stock options
STOCKHOLDERS' EQUITY (DEFICIT)
Unrecognized stock-based compensation expense \| $			238,418			$ 238,418
Weighted average remaining vesting period (in years)						2 years 1 month 6 days
Restricted Stock Units
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock issued (in shares)						2,168,508
Unrecognized stock-based compensation expense \| $			$ 4,202,362			$ 4,202,362
Weighted average remaining vesting period (in years)						2 years 8 months 4 days
Common Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Number of shares of common stock issued related to consulting services provided (in shares)			74,150	35,500	5,500
Grant date value of common stock issued related to consulting services provided \| $			$ 7	$ 4	$ 1
Number of shares issued for common stock (in shares)			70,000	384,627
Common Stock \| Legal and consulting services
STOCKHOLDERS' EQUITY (DEFICIT)
Number of shares of common stock issued related to consulting services provided (in shares)						79,650
Grant date value of common stock issued related to consulting services provided \| $						$ 27,141
Common Stock \| Restricted Stock Units
STOCKHOLDERS' EQUITY (DEFICIT)
Number of shares issued for common stock (in shares)						454,627
Treasury Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Treasury stock, shares			131,162	131,162	131,162	131,162	131,162	131,162	131,162
Treasury stock, value \| $			$ 296,222			$ 296,222	$ 296,222
Maximum \| Series A Preferred Stock
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, shares authorized	1,000,000
Yorkville
STOCKHOLDERS' EQUITY (DEFICIT)
Number of shares issued (in shares)						55,659,476
Proceeds from common stock issued for cash pursuant to Advance Notices \| $						$ 15,173,357
Gross proceeds from common stock retained to fund operations \| $						$ 9,104,950
SEPA
STOCKHOLDERS' EQUITY (DEFICIT)
Value of shares to be issued \| $		$ 50,000,000
Maximum advance value of shares to be issued \| $		$ 5,000,000
Price per share to be issued on Market Price (in percent)		98.00%
Number of consecutive days		3 days
Threshold ownership percentage (in %)		4.99%
SEPA \| Yorkville
STOCKHOLDERS' EQUITY (DEFICIT)
Number of shares issued (in shares)						55,659,476
Proceeds from common stock issued for cash pursuant to Advance Notices \| $						$ 15,173,357
Gross proceeds from common stock retained to fund operations \| $						$ 9,104,950

STOCKHOLDERS' EQUITY (DEFICIT) - Summary of warrants activity (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares
STOCKHOLDERS' EQUITY (DEFICIT)
Number of Warrants, Outstanding at the beginning \| shares	2,524,410
Number of Warrants, Issued \| shares	190,177
Number of Warrants, Outstanding at the end \| shares	2,714,587
Number of Warrants, Exercisable at the end \| shares	2,714,587
Weighted Average Exercise Price, Outstanding, Beginning (in dollars per share) \| $ / shares	$ 1.02
Weighted Average Exercise Price, Issued (in dollars per share) \| $ / shares	0.16
Weighted Average Exercise Price, Outstanding, Ending (in dollars per share) \| $ / shares	0.96
Weighted Average Exercise Price, Exercisable at the end (in dollars per share) \| $ / shares	$ 0.96
Weighted Average Remaining Term, Outstanding at the end (in years)	1 year 7 months 6 days
Weighted Average Remaining Term, Exercisable at the end (in years)	1 year 7 months 6 days
Intrinsic Value, Outstanding at the end (in dollars) \| $	$ 45,858
Intrinsic Value, Exercisable at the end (in dollars) \| $	$ 45,858

STOCKHOLDERS' EQUITY (DEFICIT) - Outstanding and exercisable warrants (Details) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
STOCKHOLDERS' EQUITY (DEFICIT)
Outstanding Number of Warrants	2,714,587	2,524,410
Exercisable, Weighted Average Remaining Life (in years)	1 year 7 months 6 days
Exercisable, Number of Warrants (in shares)	2,714,587
Exercise Price, $ 1.25
STOCKHOLDERS' EQUITY (DEFICIT)
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.25
Outstanding Number of Warrants	177,885
Exercisable, Weighted Average Remaining Life (in years)	1 year 6 months
Exercisable, Number of Warrants (in shares)	177,885
Exercise Price, $ 1.00
STOCKHOLDERS' EQUITY (DEFICIT)
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.00
Outstanding Number of Warrants	2,346,525
Exercisable, Weighted Average Remaining Life (in years)	1 year 6 months
Exercisable, Number of Warrants (in shares)	2,346,525
Exercise Price, $ 0.19
STOCKHOLDERS' EQUITY (DEFICIT)
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.19
Outstanding Number of Warrants	81,788
Exercisable, Weighted Average Remaining Life (in years)	2 years 7 months 6 days
Exercisable, Number of Warrants (in shares)	81,788
Exercise Price, $ 0.14
STOCKHOLDERS' EQUITY (DEFICIT)
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.14
Outstanding Number of Warrants	108,389
Exercisable, Weighted Average Remaining Life (in years)	2 years 8 months 12 days
Exercisable, Number of Warrants (in shares)	108,389

STOCKHOLDERS' EQUITY (DEFICIT) - Summary of options activity (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares
STOCKHOLDERS' EQUITY (DEFICIT)
Number of Options, Outstanding \| shares	722,716
Number of Options, Granted \| shares	55,000
Number of Options, Forfeited \| shares	(75,000)
Number of Options, Outstanding \| shares	702,716
Number of Options, Exercisable \| shares	357,715
Weighted Average Exercise Price, Outstanding \| $ / shares	$ 1.26
Weighted Average Exercise Price, Granted \| $ / shares	0.27
Weighted Average Exercise Price, Forfeited \| $ / shares	0.89
Weighted Average Exercise Price Outstanding \| $ / shares	1.22
Weighted Average Exercise Price, Exercisable \| $ / shares	$ 0.84
Weighted Average Remaining Term, Outstanding	2 years 6 months
Weighted Average Remaining Term, Exercisable	1 year 2 months 12 days
Number of Options Intrinsic Value, Outstanding \| $	$ 7,328

STOCKHOLDERS' EQUITY (DEFICIT) - Options outstanding and exercisable related to stock options (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 0.84		$ 0.84
Options Outstanding, Number of Options	702,716		702,716		722,716
Options Exercisable, Weighted Average Remaining Term (In Years)			1 year 2 months 12 days
Options Exercisable Number of Options	357,715		357,715
Weighted average grant date fair value	$ 0.21	$ 0.48	$ 0.20	$ 0.74
$0.19 - $0.99
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Number of Options	322,986		322,986
Options Exercisable, Weighted Average Remaining Term (In Years)			4 months 24 days
Options Exercisable Number of Options	201,735		201,735
$0.19 - $0.99 \| Minimum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 0.19		$ 0.19
$0.19 - $0.99 \| Maximum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 0.99		$ 0.99
$1.21 - $1.50
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Number of Options	145,000		145,000
Options Exercisable, Weighted Average Remaining Term (In Years)			3 years 6 months
Options Exercisable Number of Options	36,250		36,250
$1.21 - $1.50 \| Minimum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 1.21		$ 1.21
$1.21 - $1.50 \| Maximum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 1.50		$ 1.50
$1.55 - $1.99
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Number of Options	80,000		80,000
Options Exercisable, Weighted Average Remaining Term (In Years)			2 years 9 months 18 days
Options Exercisable Number of Options	30,000		30,000
$1.55 - $1.99 \| Minimum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 1.55		$ 1.55
$1.55 - $1.99 \| Maximum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 1.99		$ 1.99
$2.05 - $2.44
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Number of Options	154,730		154,730
Options Exercisable, Weighted Average Remaining Term (In Years)			2 years 6 months
Options Exercisable Number of Options	89,730		89,730
$2.05 - $2.44 \| Minimum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 2.05		$ 2.05
$2.05 - $2.44 \| Maximum
STOCKHOLDERS' EQUITY (DEFICIT)
Options Outstanding, Exercise Price	$ 2.44		$ 2.44

STOCKHOLDERS' EQUITY (DEFICIT) - Fair value of stock options granted using the Black-Scholes options (Details) - Stock options	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
STOCKHOLDERS' EQUITY (DEFICIT)
Expected term (years)	3 years 9 months 18 days	3 years 6 months		3 years 6 months
Expected volatility	110.00%	107.00%
Expected dividends	0.00%	0.00%		0.00%
Minimum
STOCKHOLDERS' EQUITY (DEFICIT)
Risk free interest rate	4.75%	4.07%	4.27%	3.92%
Expected volatility			110.00%	105.00%
Maximum
STOCKHOLDERS' EQUITY (DEFICIT)
Risk free interest rate	4.81%	4.52%	4.81%	4.52%
Expected volatility			114.00%	107.00%

STOCKHOLDERS' EQUITY (DEFICIT) - Restricted stock awards and restricted stock units (Details)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Restricted stock awards
Shares of Restricted Common Stock/ Number of Restricted Common Units
Beginning balance (in shares) \| shares	3,381,008
RSAs exchanged for RSUs (in shares) \| shares	(2,168,508)
Vested (in shares) \| shares	(562,500)
Ending balance (in shares) \| shares	650,000
Weighted Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 1.53
RSAs exchanged for RSUs (in dollars per share) \| $ / shares	0.94
Vested (in dollars per share) \| $ / shares	2.60
Ending balance (in dollars per share) \| $ / shares	$ 2.53
Unvested restricted stock units
Shares of Restricted Common Stock/ Number of Restricted Common Units
Beginning balance (in shares) \| shares	2,250,000
RSAs exchanged for RSUs (in shares) \| shares	2,168,508
Granted (in shares) \| shares	851,230
Vested (in shares) \| shares	(454,627)
Ending balance (in shares) \| shares	4,815,111
Weighted Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share) \| $ / shares	$ 2.05
RSAs exchanged for RSUs (in dollars per share) \| $ / shares	0.94
Granted (in dollars per share) \| $ / shares	0.38
Vested (in dollars per share) \| $ / shares	0.94
Ending balance (in dollars per share) \| $ / shares	$ 1.36

STOCKHOLDERS' (DEFICIT) EQUITY - Stock-Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
STOCKHOLDERS' EQUITY (DEFICIT)
Stock-based compensation expense	$ 909,026	$ 964,201	$ 1,754,955	$ 1,884,356
Stock-based compensation			1,754,955	1,966,929
Selling, general and administrative expenses
STOCKHOLDERS' EQUITY (DEFICIT)
Stock-based compensation expense	870,837	927,375	1,678,942	1,831,370
Research and development expenses
STOCKHOLDERS' EQUITY (DEFICIT)
Stock-based compensation expense	38,189	36,826	76,013	52,986
Common stock for services (includes accrued, unissued shares)
STOCKHOLDERS' EQUITY (DEFICIT)
Stock-based compensation expense	65,523	96,350	97,915	210,800
Stock options
STOCKHOLDERS' EQUITY (DEFICIT)
Stock-based compensation expense	29,165	44,311	61,206	84,916
Restricted stock awards and units
STOCKHOLDERS' EQUITY (DEFICIT)
Stock-based compensation expense	$ 814,338	$ 823,540	$ 1,595,834	$ 1,588,640

SUBSEQUENT EVENTS - At the market offering (Details) - USD ($)		1 Months Ended	3 Months Ended
	Jul. 03, 2024	Aug. 09, 2024	Jun. 30, 2024	Mar. 31, 2024
SUBSEQUENT EVENTS
Aggregate proceeds			$ 6,194,299	$ 2,910,651
Subsequent event \| ATM
SUBSEQUENT EVENTS
Maximum aggregate offering price	$ 20,000,000
Commission paid to agent as a percentage of gross proceeds (in percent)	3.00%
Common stock issued (in shares)		4,953,867
Aggregate proceeds		$ 1,416,940

SUBSEQUENT EVENTS - Merchant Cash Advance (Details) - USD ($)				2 Months Ended
	Jul. 11, 2024	Feb. 26, 2024	Jan. 22, 2024	Nov. 15, 2024
SUBSEQUENT EVENTS
Proceeds from cash advance		$ 502,200	$ 504,900
Underwriting fees		37,800	35,100
Total cash advance payable		804,600	804,600
Periodic payments on cash advances	$ 26,820	$ 26,820	$ 25,143.75	$ 15,620
Subsequent event
SUBSEQUENT EVENTS
Proceeds from cash advance	758,850
Underwriting fees	40,000
Payment of remaining balance of first merchant cash advance	201,150
Total cash advance payable	1,350,000
Periodic payments on cash advances	31,395
Periodic payments on cash advances after amendment	15,620
Subsequent event \| If cash advance repaid by August 11 2024
SUBSEQUENT EVENTS
Total cash advance payable	1,230,000
Subsequent event \| If cash advance repaid by September 11 2024
SUBSEQUENT EVENTS
Total cash advance payable	$ 1,310,000

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