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Future Equity Obligations | 6 Months Ended
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Jun. 30, 2023
Derivative Financial Instruments Indexed to, and Potentially Settled in, Entity's Own Stock [Abstract] |
Future Equity Obligations |
| 5. | FUTURE EQUITY OBLIGATIONS
In 2020, the Company initiated a Regulation Crowdfunding (“Regulation CF”) offering of Crowdfunding Simple Agreement for Future Equity (“Crowd SAFE”) securities. Each Crowd SAFE agreement, which provides the right of the investors to future equity in the Company, are subject to a valuation cap of $20,000,000. If there is an equity financing of at least $2,000,000 in gross proceeds before the instrument expires or is terminated, the Company may either continue the term of the Crowd SAFE without conversion, or issue to the investor a number of units of the CF Shadow Series, as applicable, sold in the equity financing. The CF Shadow Series represent the same type of equity interests sold (preferred or common securities) in the equity financing, however members in the Shadow Series shall have no voting rights. The number of units of the CF Shadow Series equal the purchase amount divided by the Conversion Price. The Conversion Price is equivalent to a) the Safe Price, defined as the valuation cap divided by the number of dilutive units outstanding, or b) the Discount Price, which is the price per unit of the equity interests sold multiplied by the discount rate of 90%; whichever calculation results in a greater number of equity interests. If the Company continues the term of the Crowd SAFE after the initial equity financing, and another equity financing occurs before the termination of the instrument, the Company may further continue the term of the Crowd SAFE or may issue the investor a number of units of the CF Shadow Series equal to the purchase amount by the first equity financing price. In 2022, the Company entered into SAFE agreements with several investors for total proceeds of $286,000. The agreements have a valuation cap of $50,000,000 and a discount of 20%. In October 2022, the Company issued an aggregate of 218,772 shares of common stock for the conversion of $668,898 of the 2020 and 2021 SAFEs previously issued. As of June 30, 2023 and December 31, 2022, the fair value of SAFEs was $659,408 and $539,582, respectively. See Note 4 for fair value disclosures. Upon the Company’s IPO in July 2023, all remaining outstanding SAFEs were converted into 164,852 shares of common stock (see Note 9).

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- Definition The entire disclosure for freestanding contract indexed to and potentially settled in entity's own stock. Includes, but is not limited to, strike price and number of shares to which contract is indexed, settlement date, and settlement alternatives. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815-40/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 + Details
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