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BALANCE SHEET COMPONENTS | 3 Months Ended
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Mar. 31, 2025
Balance Sheet Related Disclosures [Abstract] |
BALANCE SHEET COMPONENTS | NOTE 3. BALANCE SHEET COMPONENTS As further described in Note 1, t he Company was in default under its lease, and the Landlord was in the process of pursuing available remedies in advance of the lease term that would otherwise expire in June 2025. In April 2025, the Landlord obtained a default judgment against the Company in the amount of $409,278. The Landlord may exercise rights under the lease agreement and applicable law with respect to a lessee in default and such lessee’s assets located on the premises, including the removal and disposal of inventories and property and equipment remaining on the property. As such, as of March 31, 2025, the Company determined that, based on the assumption that the Landlord would fully exercise its rights with respect to all assets remaining on the premises, (i) it no longer had control over the inventory and that recovery was not probable, therefore, inventory was written down to a net realizable value of zero, (ii) the carrying value of its property and equipment, all of which was at the leased location, was no longer recoverable, and the assets were written down to a net book value of zero, and (iii) the right-of-use asset associated with this lease was fully impaired, as the Company could no longer use the leased premises, each of which is recorded within l oss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025. Inventories, Net Inventories, net as of March 31, 2025 and December 31, 2024 consisted of the following:
|  | March 31, 2025 |  |  | December 31, 2024 |
Raw materials and supplies |  | $ | — |  |  | $ | 1,913,013 |
Work-in-process |  |  | — |  |  |  | 161,137 |
Finished goods |  |  | — |  |  |  | 613,786 |
Inventories, gross |  |  | — |  |  |  | 2,687,936 |
Less: inventory reserve |  |  | — |  |  |  | (1,161,469 | )
Inventories, net |  | $ | — |  |  | $ | 1,526,467 |
During the three months ended March 31, 2025 and 2024, the Company recorded net lower of cost or net realizable value ch arges of nil and $28,012, respectively. As of March 31, 2025, in connection with the lease default described above, inventory was written down to a net realizable value of zero through a $1,526,467 loss recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025. Property and Equipment, Net Property and equipment, net as of March 31, 2025 and December 31, 2024 consisted of the following:
|  | March 31, 2025 |  |  | December 31, 2024 |
Machinery and equipment |  | $ | 7,203,592 |  |  | $ | 7,203,592 |
Leasehold improvements |  |  | 897,948 |  |  |  | 897,948 |
Furniture and office equipment |  |  | 205,897 |  |  |  | 205,897 |
Computer equipment and software |  |  | 197,386 |  |  |  | 197,386 |
Property and equipment, gross |  |  | 8,504,823 |  |  |  | 8,504,823 |
Less: accumulated depreciation and amortization |  |  | (4,116,543 | ) |  |  | (3,670,094 | )
Less: impairment of property and equipment |  |  | (4,388,280 | ) |  |  | — |
Property and equipment, net |  | $ | — |  |  | $ | 4,834,729 |
Depreciation and amortization expense related to property and equipment was $446,449 and $256,895 during the three months ended March 31, 2025 and 2024, respectively. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 consisted of the following:
|  | March 31, 2025 |  |  | December 31, 2024 |
Prepaid insurance |  | $ | 168,063 |  |  | $ | 123,959 |
Other prepaid assets |  |  | 160,623 |  |  |  | 28,521 |
Other current assets |  |  | 51,850 |  |  |  | 10,269 |
Total prepaid expenses and other current assets |  | $ | 380,536 |  |  | $ | 162,749 |
Accrued Expenses Accrued expenses as of March 31, 2025 and December 31, 2024 consisted of the following:
|  | March 31, 2025 |  |  | December 31, 2024 |
Accrued legal, accounting and professional fees |  | $ | 2,648,037 |  |  | $ | 2,448,594 |
Accrued transaction costs related to the reverse recapitalization |  |  | 503,599 |  |  |  | 503,600 |
Accrued payroll and benefits |  |  | 341,956 |  |  |  | 357,953 |
Accrued lease-related payables |  |  | 289,558 |  |  |  | 54,288 |
Accrued taxes payable |  |  | 269,147 |  |  |  | 232,966 |
Accrued interest |  |  | 40,325 |  |  |  | 560,501 |
Other |  |  | 210,020 |  |  |  | 143,293 |
Total accrued expenses |  | $ | 4,302,642 |  |  | $ | 4,301,195 |

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- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 210 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/210/tableOfContent + Details
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