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1. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed financial statements of Reed’s, Inc. (the “Company”, “we”, “us”, or “our”), have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. These condensed financial statements should be read in conjunction with the financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on May 15, 2023. The accompanying condensed financial statements are unaudited, but in the opinion of management contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position as of March 31, 2023, and the results of its operations and its cash flows for the three months ended March 31, 2023 and 2022. The balance sheet as of December 31, 2022 is derived from the Company’s audited financial statements. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2023. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the three months ended March 31, 2023, the Company recorded a net loss of $4,357, and at March 31, 2023, had a stockholders’ deficit of $12,322. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2022, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As of March 31, 2023, we had a cash balance of $467, with $62 of current availability, and $5,084 of additional borrowing capacity. Historically, we have financed our operations through public and private sales of common stock, issuance of preferred and common stock, convertible debt instruments, term loans and credit lines from financial institutions, and cash generated from operations. To alleviate these conditions, management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from financial institutions. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. We have also taken decisive action to improve our margins, including fully outsourcing our manufacturing process, streamlining our product portfolio, negotiating improved vendor contracts and restructuring our selling prices. Recent Trends - Market Conditions During the period ended December 31, 2022, the COVID-19 pandemic continued to impact our operating results and the Company anticipates a residual effect for the balance of the year. In addition, the pandemic could cause reduced demand for our products if, for example, the pandemic results in a recessionary economic environment which negatively affects the consumers who purchase our products. Based on the recent increase in demand for our products, we believe that over the long term, there will continue to be strong demand for our products. Although the U.S. economy continued to grow during the first quarter of 2023, the higher inflation, the actions by the Federal Reserve to address inflation, and rising energy prices create uncertainty about the future economic environment which will continue to evolve and may impact our business in future periods. We have experienced supply chain challenges, including increased lead times, as well as inflation of raw materials, logistics and labor costs due to availability constraints and high demand. Although we regularly monitor companies in our supply chain, and use alternative suppliers when necessary and available, supply chain constraints could cause a disruption in our ability to obtain raw materials required to manufacture our products and adversely affect our operations. We expect the inflationary trends and supply chain pressures to continue throughout 2023. During the period ended March 31, 2023, the Company experienced moderation from the elevated freight costs experienced in 2022. The average cost of shipping and handling for the period ended March 31, 2023, was $3.46 per case, as compared to $3.90 per case for the period ended March 31, 2022. Although the Company has experienced decreases in freight costs over the last three quarters, in the Company’s opinion there remains a volatile environment and the Company will continue to monitor pricing and availability in transportation. Mitigation plans have been implemented to manage this risk. Although, the Company has been negatively impacted by supply chain challenges impacting our ability to benefit from strong demand for, and increased sales of our product. The disruption caused by labor shortages, significant raw material cost inflation, logistics issues and increased freight costs, and ongoing port congestion, resulted in suppressed margins and net income. The Company has experienced moderation in inflation and anticipates this to continue throughout 2023. Our ability to operate without significant incremental negative operational impact from the COVID-19 pandemic will in part depend on our ability to protect our employees and protect our supply chain. The Company has endeavored to follow the recommended actions of government and health authorities to protect our employees. Since the inception of the COVID-19 pandemic and through March 31, 2023, we maintained the consistency of our operations during the onset of the COVID-19 pandemic. We will continue to innovate in managing our business, coordinating with our employees and suppliers to do our part to be responsible to our employees and business partners in responding to our customers and suppliers. However, the uncertainty resulting from the pandemic could result in an unforeseen disruption to our workforce and supply chain (for example an inability of a key supplier or transportation supplier to source and transport materials) that could negatively impact our operations. We have not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. Reverse Stock Split At a special meeting of shareholders held on January 24, 2023, the Company’s shareholders granted the Company’s board of directors the discretion to effect a reverse stock split of the common stock through an amendment to the Company’s Certificate of Incorporation, as amended, at a ratio of any ratio not less than 1-for-6 and not more than 1-for-50, at any time on or prior to January 24, 2024, with the exact ratio to be set at a whole number within this range by the board of directors in its sole discretion. On January 25, 2023, the Company announced that its board of directors approved a 1-for-50 reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share. The authorized number of shares of common stock were not affected by the reverse stock split. No fractional shares were issued in connection with the reverse stock split, as all fractional shares were rounded up to the next whole share. Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the above-described reverse stock split for all periods presented. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term tangible and intangible assets, the valuation allowance for deferred tax assets, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and assumptions used in valuing warrant liabilities, and assumptions used in the determination of the Company’s liquidity. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“ASC 606”). Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfilment activity rather than a promised service to the customer. All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. The Company does not allow for returns, except for damaged products when the damage occurred pre-fulfilment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis. Loss per Common Share Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted earnings (loss) per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is antidilutive. For the periods ended March 31, 2023 and 2022, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: <p id="xdx_89D_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_zb1wya13MRa8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"> Schedule of Potentially Dilutive Securities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_493_20230101__20230331_zPEXumPr24Ai" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20220101__20220331_zFlbhz4U0Wpb" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_403_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zQfXVgvmSk67" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Warrants</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">235,946</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">276,715</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_ztEgUXlVNqIk" style="vertical-align: bottom; background-color: White"> <td>Options</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">174,460</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">202,904</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--ConvertibleNotesPayableMember_zwYMiz0YzYW5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Convertible note payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,257,491</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_zarSidTOZeKj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested restricted common stock</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">710</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7,526</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockEquivalentOfSeriesAConvertiblePreferredStockMember_z5xumX8PAtmg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Common stock equivalent of Series A Convertible Preferred stock</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">753</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">753</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_i_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,669,360</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">487,898</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Stock Compensation Expense The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. Advertising Costs Advertising costs are expensed as incurred and are included in selling and marketing expense. Advertising costs aggregated $55 and $312 for the three months ended March 31, 2023 and 2022, respectively. Concentrations Net sales. During the three months ended March 31, 2023, the Company’s two largest customers accounted for <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zhjWD7A0vtC3" title="Concentration risk percentage">18% and <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_z8PY15ZIt8F7" title="Concentration risk percentage">13% of net sales, respectively. During the three months ended March 31, 2022, the Company’s two largest customers accounted for <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zQRhjXHwYAJe" title="Concentration risk percentage">18% and <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zu6OK4kd7j5e" title="Concentration risk percentage">12% of net sales, respectively. No other customers exceeded 10% of net sales in either period. Accounts receivable. As of March 31, 2023, the Company had accounts receivable from two customers which comprised <span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zkZGEPpt3xm" title="Concentration risk, percentage">18% and <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zFMIAIE4P3W7" title="Concentration risk, percentage">11% of its gross accounts receivable. As of December 31, 2022, the Company had accounts receivable from two customers which comprised <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zPU0rP4JquH2" title="Concentration risk, percentage">19% and <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zzI3sj3WGlrl" title="Concentration risk, percentage">11% of its gross accounts receivable, respectively. No other customers exceeded 10% of gross accounts receivable in either period. During the three months ended March 31, 2023 and the year ended December 31, 2022, the Company utilized six separate co-packers for most its production and bottling of beverage products in the United States. The Company utilizes co-packers to produce 100% of its products. The Company has long-standing relationships with two different co-packers, and in conjunction with the sale of its manufacturing plant we entered into a third co-packing agreement with California Custom Beverage LLC (“CCB”), the purchaser of the plant (see Note 11). CCB is <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20230101__20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zBn8F4bDgPEg" title="Concentration risk, percentage">100% owned by Chris Reed, founder of the Company and formerly Chief Executive Officer, Chairman, director, and most recently, Chief Innovation Officer. Although there are other packers, a change in co-packers may cause a delay in the production process, which could ultimately affect operating results. Purchases from vendors. During the three months ended March 31, 2023, the Company’s largest vendor accounted for approximately <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zPrrhxezrSk2" title="Percentage of sale accounted to customer">11% of all purchases. During the three months ended March 31, 2022, the Company’s largest vendor accounted for approximately <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zXFarhHr1lO4" title="Percentage of sale accounted to customer">13% of all purchases. No other vendors exceeded 10% of all purchases in either period. Fair Value of Financial Instruments The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates. Recent Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s financial statement presentation or disclosures. In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company adopted this standard effective January 1, 2023 and there was no material impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Basis of Presentation The accompanying condensed financial statements of Reed’s, Inc. (the “Company”, “we”, “us”, or “our”), have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. These condensed financial statements should be read in conjunction with the financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on May 15, 2023. The accompanying condensed financial statements are unaudited, but in the opinion of management contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position as of March 31, 2023, and the results of its operations and its cash flows for the three months ended March 31, 2023 and 2022. The balance sheet as of December 31, 2022 is derived from the Company’s audited financial statements. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2023.

Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the three months ended March 31, 2023, the Company recorded a net loss of $4,357, and at March 31, 2023, had a stockholders’ deficit of $12,322. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2022, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As of March 31, 2023, we had a cash balance of $467, with $62 of current availability, and $5,084 of additional borrowing capacity. Historically, we have financed our operations through public and private sales of common stock, issuance of preferred and common stock, convertible debt instruments, term loans and credit lines from financial institutions, and cash generated from operations. To alleviate these conditions, management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from financial institutions. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. We have also taken decisive action to improve our margins, including fully outsourcing our manufacturing process, streamlining our product portfolio, negotiating improved vendor contracts and restructuring our selling prices.

-4357000

-12322000

467000

62000

5084000

Recent Trends - Market Conditions During the period ended December 31, 2022, the COVID-19 pandemic continued to impact our operating results and the Company anticipates a residual effect for the balance of the year. In addition, the pandemic could cause reduced demand for our products if, for example, the pandemic results in a recessionary economic environment which negatively affects the consumers who purchase our products. Based on the recent increase in demand for our products, we believe that over the long term, there will continue to be strong demand for our products. Although the U.S. economy continued to grow during the first quarter of 2023, the higher inflation, the actions by the Federal Reserve to address inflation, and rising energy prices create uncertainty about the future economic environment which will continue to evolve and may impact our business in future periods. We have experienced supply chain challenges, including increased lead times, as well as inflation of raw materials, logistics and labor costs due to availability constraints and high demand. Although we regularly monitor companies in our supply chain, and use alternative suppliers when necessary and available, supply chain constraints could cause a disruption in our ability to obtain raw materials required to manufacture our products and adversely affect our operations. We expect the inflationary trends and supply chain pressures to continue throughout 2023. During the period ended March 31, 2023, the Company experienced moderation from the elevated freight costs experienced in 2022. The average cost of shipping and handling for the period ended March 31, 2023, was $3.46 per case, as compared to $3.90 per case for the period ended March 31, 2022. Although the Company has experienced decreases in freight costs over the last three quarters, in the Company’s opinion there remains a volatile environment and the Company will continue to monitor pricing and availability in transportation. Mitigation plans have been implemented to manage this risk. Although, the Company has been negatively impacted by supply chain challenges impacting our ability to benefit from strong demand for, and increased sales of our product. The disruption caused by labor shortages, significant raw material cost inflation, logistics issues and increased freight costs, and ongoing port congestion, resulted in suppressed margins and net income. The Company has experienced moderation in inflation and anticipates this to continue throughout 2023. Our ability to operate without significant incremental negative operational impact from the COVID-19 pandemic will in part depend on our ability to protect our employees and protect our supply chain. The Company has endeavored to follow the recommended actions of government and health authorities to protect our employees. Since the inception of the COVID-19 pandemic and through March 31, 2023, we maintained the consistency of our operations during the onset of the COVID-19 pandemic. We will continue to innovate in managing our business, coordinating with our employees and suppliers to do our part to be responsible to our employees and business partners in responding to our customers and suppliers. However, the uncertainty resulting from the pandemic could result in an unforeseen disruption to our workforce and supply chain (for example an inability of a key supplier or transportation supplier to source and transport materials) that could negatively impact our operations. We have not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. 3.46 3.90 Reverse Stock Split At a special meeting of shareholders held on January 24, 2023, the Company’s shareholders granted the Company’s board of directors the discretion to effect a reverse stock split of the common stock through an amendment to the Company’s Certificate of Incorporation, as amended, at a ratio of any ratio not less than 1-for-6 and not more than 1-for-50, at any time on or prior to January 24, 2024, with the exact ratio to be set at a whole number within this range by the board of directors in its sole discretion. On January 25, 2023, the Company announced that its board of directors approved a 1-for-50 reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share. The authorized number of shares of common stock were not affected by the reverse stock split. No fractional shares were issued in connection with the reverse stock split, as all fractional shares were rounded up to the next whole share. Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the above-described reverse stock split for all periods presented.

1-for-6 and not more than 1-for-50

1-for-50 reverse stock split

0.0001

Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term tangible and intangible assets, the valuation allowance for deferred tax assets, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and assumptions used in valuing warrant liabilities, and assumptions used in the determination of the Company’s liquidity.

Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“ASC 606”). Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfilment activity rather than a promised service to the customer. All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them. The Company does not allow for returns, except for damaged products when the damage occurred pre-fulfilment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.

Loss per Common Share Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted earnings (loss) per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is antidilutive. For the periods ended March 31, 2023 and 2022, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: <p id="xdx_89D_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_zb1wya13MRa8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"> Schedule of Potentially Dilutive Securities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_493_20230101__20230331_zPEXumPr24Ai" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20220101__20220331_zFlbhz4U0Wpb" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_403_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zQfXVgvmSk67" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Warrants</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">235,946</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">276,715</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_ztEgUXlVNqIk" style="vertical-align: bottom; background-color: White"> <td>Options</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">174,460</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">202,904</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--ConvertibleNotesPayableMember_zwYMiz0YzYW5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Convertible note payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,257,491</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_zarSidTOZeKj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested restricted common stock</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">710</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7,526</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockEquivalentOfSeriesAConvertiblePreferredStockMember_z5xumX8PAtmg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Common stock equivalent of Series A Convertible Preferred stock</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">753</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">753</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_i_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,669,360</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">487,898</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<p id="xdx_89D_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_zb1wya13MRa8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"> Schedule of Potentially Dilutive Securities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_493_20230101__20230331_zPEXumPr24Ai" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20220101__20220331_zFlbhz4U0Wpb" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_403_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zQfXVgvmSk67" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Warrants</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">235,946</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">276,715</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--StockOptionMember_ztEgUXlVNqIk" style="vertical-align: bottom; background-color: White"> <td>Options</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">174,460</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">202,904</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--ConvertibleNotesPayableMember_zwYMiz0YzYW5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Convertible note payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,257,491</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--UnvestedRestrictedCommonStockMember_zarSidTOZeKj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested restricted common stock</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">710</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7,526</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_hus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockEquivalentOfSeriesAConvertiblePreferredStockMember_z5xumX8PAtmg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Common stock equivalent of Series A Convertible Preferred stock</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">753</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">753</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_i_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,669,360</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">487,898</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

235946000

276715000

174460000

202904000

1257491000

710000

7526000

753000

1669360000

487898000

Stock Compensation Expense The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.

Advertising Costs Advertising costs are expensed as incurred and are included in selling and marketing expense. Advertising costs aggregated $55 and $312 for the three months ended March 31, 2023 and 2022, respectively.

55000

312000

Concentrations Net sales. During the three months ended March 31, 2023, the Company’s two largest customers accounted for <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zhjWD7A0vtC3" title="Concentration risk percentage">18% and <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_z8PY15ZIt8F7" title="Concentration risk percentage">13% of net sales, respectively. During the three months ended March 31, 2022, the Company’s two largest customers accounted for <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zQRhjXHwYAJe" title="Concentration risk percentage">18% and <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20220331__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zu6OK4kd7j5e" title="Concentration risk percentage">12% of net sales, respectively. No other customers exceeded 10% of net sales in either period. Accounts receivable. As of March 31, 2023, the Company had accounts receivable from two customers which comprised <span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zkZGEPpt3xm" title="Concentration risk, percentage">18% and <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zFMIAIE4P3W7" title="Concentration risk, percentage">11% of its gross accounts receivable. As of December 31, 2022, the Company had accounts receivable from two customers which comprised <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zPU0rP4JquH2" title="Concentration risk, percentage">19% and <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zzI3sj3WGlrl" title="Concentration risk, percentage">11% of its gross accounts receivable, respectively. No other customers exceeded 10% of gross accounts receivable in either period. During the three months ended March 31, 2023 and the year ended December 31, 2022, the Company utilized six separate co-packers for most its production and bottling of beverage products in the United States. The Company utilizes co-packers to produce 100% of its products. The Company has long-standing relationships with two different co-packers, and in conjunction with the sale of its manufacturing plant we entered into a third co-packing agreement with California Custom Beverage LLC (“CCB”), the purchaser of the plant (see Note 11). CCB is <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20230101__20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember_zBn8F4bDgPEg" title="Concentration risk, percentage">100% owned by Chris Reed, founder of the Company and formerly Chief Executive Officer, Chairman, director, and most recently, Chief Innovation Officer. Although there are other packers, a change in co-packers may cause a delay in the production process, which could ultimately affect operating results. Purchases from vendors. During the three months ended March 31, 2023, the Company’s largest vendor accounted for approximately <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20230101__20230331__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zPrrhxezrSk2" title="Percentage of sale accounted to customer">11% of all purchases. During the three months ended March 31, 2022, the Company’s largest vendor accounted for approximately <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20220331__srt--MajorCustomersAxis__custom--VendorOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember_zXFarhHr1lO4" title="Percentage of sale accounted to customer">13% of all purchases. No other vendors exceeded 10% of all purchases in either period.

0.18

0.13

0.18

0.12

0.18

0.11

0.19

0.11

0.13

Fair Value of Financial Instruments The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.

Recent Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s financial statement presentation or disclosures. In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company adopted this standard effective January 1, 2023 and there was no material impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

2. Inventory Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, net of write downs, and is comprised of the following (in thousands): Schedule of Inventory <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20230331_zafOs6QsMgCb" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20221231_zJVVw8c0UK01" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_405_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINz4dt_zAVtgXZcRXP7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Raw materials and packaging</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">7,178</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">8,526</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINz4dt_zKLsmCp6fM91" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Finished products</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,123</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,649</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--InventoryNet_iTI_pn3n3_mtINz4dt_z0neJrSoJwdb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">15,301</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">16,175</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, net of write downs, and is comprised of the following (in thousands): Schedule of Inventory <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20230331_zafOs6QsMgCb" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20221231_zJVVw8c0UK01" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_405_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINz4dt_zAVtgXZcRXP7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Raw materials and packaging</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">7,178</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">8,526</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINz4dt_zKLsmCp6fM91" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Finished products</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,123</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,649</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--InventoryNet_iTI_pn3n3_mtINz4dt_z0neJrSoJwdb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">15,301</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">16,175</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

7178000

8526000

8123000

7649000

15301000

16175000

3. Property and Equipment Property and equipment is comprised of the following (in thousands): Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49C_20230331_zu3MX6JniaP1" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20221231_zBfjOndsQvSc" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_409_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderOperatingLeasesMember_zuRJaL5Vb8qg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Right-of-use assets under operating leases</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">724</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">724</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerHardwareAndSoftwareMember_zSRTFox0Qpcj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Computer hardware and software</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">400</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">400</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_zC2U319Ct8tc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Machinery and equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">429</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">429</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_maPPAENzorg_z2DlSRSuHwT" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total cost</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,553</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,553</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pn3n3_di_msPPAENzorg_zKqyPsJM7rF1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(867</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(787</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--PropertyPlantAndEquipmentNet_iTI_pn3n3_mtPPAENzorg_zUbv2WIz6c36" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Net book value</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">686</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">766</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Depreciation expense for the three months ended March 31, 2023 and 2022 was $47 and $25, respectively, and amortization of right-of-use assets for the three months ended March 31, 2022 and 2021 was $32 and $27, respectively.

Property and equipment is comprised of the following (in thousands): Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49C_20230331_zu3MX6JniaP1" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20221231_zBfjOndsQvSc" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_409_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--RightOfUseAssetsUnderOperatingLeasesMember_zuRJaL5Vb8qg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Right-of-use assets under operating leases</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">724</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">724</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerHardwareAndSoftwareMember_zSRTFox0Qpcj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Computer hardware and software</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">400</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">400</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember_zC2U319Ct8tc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Machinery and equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">429</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">429</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--PropertyPlantAndEquipmentGross_iI_pn3n3_maPPAENzorg_z2DlSRSuHwT" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total cost</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,553</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,553</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pn3n3_di_msPPAENzorg_zKqyPsJM7rF1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(867</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(787</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--PropertyPlantAndEquipmentNet_iTI_pn3n3_mtPPAENzorg_zUbv2WIz6c36" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Net book value</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">686</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">766</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

724000

400000

429000

1553000

867000

787000

686000

766000

47000

25000

32000

27000

4. Intangible Assets Intangible assets consist of the following (in thousands): Summary of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20230331_zFYV6NsNhhj3" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20221231_zlOzhmua1Czg" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_403_eus-gaap--IndefiniteLivedTradeNames_iI_pn3n3_maILIAEzdvn_zckpm6vOo64j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Brand names</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--IndefiniteLivedTrademarks_iI_pn3n3_maILIAEzdvn_zNNb6IH2Kp66" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Trademarks</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">50</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">50</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--IndefiniteLivedIntangibleAssetsExcludingGoodwill_iTI_pn3n3_mtILIAEzdvn_z7Kr9ehUn2ia" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">626</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">626</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

Intangible assets consist of the following (in thousands): Summary of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20230331_zFYV6NsNhhj3" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20221231_zlOzhmua1Czg" style="border-bottom: Black 1.5pt solid; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_403_eus-gaap--IndefiniteLivedTradeNames_iI_pn3n3_maILIAEzdvn_zckpm6vOo64j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Brand names</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">576</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--IndefiniteLivedTrademarks_iI_pn3n3_maILIAEzdvn_zNNb6IH2Kp66" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Trademarks</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">50</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">50</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--IndefiniteLivedIntangibleAssetsExcludingGoodwill_iTI_pn3n3_mtILIAEzdvn_z7Kr9ehUn2ia" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">626</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">626</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

576000

50000

626000

5. Line of Credit Amounts outstanding under the Company’s credit facilities are as follows (in thousands): Schedule of Amount Outstanding Under Credit Facilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Line of credit – Alterna Capital Solutions</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20230331__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zmBayIASHv3k" style="width: 16%; text-align: right" title="Total">7,915</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20221231__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zurvFg2UTC3f" style="width: 16%; text-align: right" title="Total">11,337</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Capitalized financing costs</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--DeferredFinanceCostsCurrentNet_iNI_pn3n3_di0_c20230331_zyGgKRWEV9Q" style="border-bottom: Black 1.5pt solid; text-align: right" title="Capitalized financing costs">(322</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--DeferredFinanceCostsCurrentNet_iNI_pn3n3_di0_c20221231_zPKbkmNkCOxc" style="border-bottom: Black 1.5pt solid; text-align: right" title="Capitalized financing costs">(363</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98E_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20230331_zJItTVBCb83l" style="border-bottom: Black 2.5pt double; text-align: right" title="Total">7,593</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98F_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20221231_zdYYMKYCGB6" style="border-bottom: Black 2.5pt double; text-align: right" title="Total">10,974</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Alterna Capital Solutions On March 28, 2022, the Company entered into a financing agreement with Alterna Capital Solutions (“ACS”), for a line of credit to replace its existing credit facility. The ACS line of credit is for a term of 3 years, provides for borrowings of up to $<span id="xdx_901_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_pn3n3_c20220328__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_z8e70GoXRY1e" title="Line of credit facility, maximum borrowing capacity">13,000, and is secured by eligible accounts receivable and inventory. An over advance rider provides for up to $<span id="xdx_904_eus-gaap--LineOfCreditFacilityMaximumAmountOutstandingDuringPeriod_pn3n3_c20220327__20220328__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_ze5QVlZC2MZe" title="Line of credit facility, maximum amount outstanding during period">400 of additional borrowing above the collateralized base (the “Over Advance”) up to a total borrowing of $<span id="xdx_90F_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_pn3n3_c20220328__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zoBV64UPchxc" title="Line of credit facility, maximum borrowing capacity">13,000. At March 31, 2023, $<span id="xdx_903_eus-gaap--LineOfCreditFacilityCurrentBorrowingCapacity_iI_pn3n3_c20230331__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zHsDEiNJHOZb" title="Line of credit facility, borrowing capacity">62 of current availability and $<span id="xdx_90C_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_pn3n3_c20230331__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zJgOPAv2gQ5c" title="Line of credit facility, borrowing capacity">5,084 of borrowing capacity was available under the financing agreement. <span id="xdx_90C_eus-gaap--LineOfCreditFacilityInterestRateDescription_c20220327__20220328__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zhbBKtNJwtsa" title="Line of credit facility, interest rate description">Borrowings based on receivables bears an interest of prime plus 4.75% but not less than 8.0% (12.75% at March 31, 2023 and 12.25% at December 31, 2022). Borrowings based on inventory bears an interest of prime plus 5.25% but not less than 8.5% (13.40% at March 31, 2023 and 12.90% at December 31, 2022). The additional over advance rider bears a rate of prime plus 12.75%, but not less than 16.00% (18.00% at March 31, 2023 and 18.00% at December 31, 2022). Additionally, the line of credit is subject to monthly monitoring fee of $1 with a minimum usage requirement on the credit facility. A loan balance of less than $1,500 will bear interest at a rate in line with account receivables advances plus the monthly monitoring fee of $1. The Company incurred $483 of direct costs of the transaction, consisting primarily of broker, bank and legal fees. These costs have been capitalized and are being amortized over the <span id="xdx_907_ecustom--AmortizationOfLineOfCreditPeriod_dtY_c20220327__20220328__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_znsxkhOE7iE2" title="Amortization of line of credit period">3-year life of the ACS agreement. The unamortized debt discount balance was $<span id="xdx_901_eus-gaap--AmortizationOfDebtDiscountPremium_pn3n3_c20220101__20221231__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zf8QBh5MRms6" title="Amortization of debt discount">363 at December 31, 2022. For the three months ended March 31, 2023, amortization of debt discount was $<span id="xdx_90D_eus-gaap--AmortizationOfDebtDiscountPremium_pn3n3_c20230101__20230331__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_ztgKHckHYA8k" title="Amortization of debt discount">41, and as of March 31, 2023, the remaining unamortized debt discount balance is $<span id="xdx_904_ecustom--DebtInstrumentRemainingUnamortizedDiscount_iI_pn3n3_c20230331__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zMx18RJxVbdg" title="Remaining unamortized debt discount amount">322.

Amounts outstanding under the Company’s credit facilities are as follows (in thousands): Schedule of Amount Outstanding Under Credit Facilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Line of credit – Alterna Capital Solutions</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20230331__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zmBayIASHv3k" style="width: 16%; text-align: right" title="Total">7,915</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20221231__us-gaap--LineOfCreditFacilityAxis__custom--AlternaCapitalSolutionsMember_zurvFg2UTC3f" style="width: 16%; text-align: right" title="Total">11,337</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Capitalized financing costs</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--DeferredFinanceCostsCurrentNet_iNI_pn3n3_di0_c20230331_zyGgKRWEV9Q" style="border-bottom: Black 1.5pt solid; text-align: right" title="Capitalized financing costs">(322</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--DeferredFinanceCostsCurrentNet_iNI_pn3n3_di0_c20221231_zPKbkmNkCOxc" style="border-bottom: Black 1.5pt solid; text-align: right" title="Capitalized financing costs">(363</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98E_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20230331_zJItTVBCb83l" style="border-bottom: Black 2.5pt double; text-align: right" title="Total">7,593</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98F_eus-gaap--LinesOfCreditCurrent_iI_pn3n3_c20221231_zdYYMKYCGB6" style="border-bottom: Black 2.5pt double; text-align: right" title="Total">10,974</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

7915000

11337000

322000

363000

7593000

10974000

P3Y

13000000

400000

13000000

62000

5084000

Borrowings based on receivables bears an interest of prime plus 4.75% but not less than 8.0% (12.75% at March 31, 2023 and 12.25% at December 31, 2022). Borrowings based on inventory bears an interest of prime plus 5.25% but not less than 8.5% (13.40% at March 31, 2023 and 12.90% at December 31, 2022). The additional over advance rider bears a rate of prime plus 12.75%, but not less than 16.00% (18.00% at March 31, 2023 and 18.00% at December 31, 2022). Additionally, the line of credit is subject to monthly monitoring fee of $1 with a minimum usage requirement on the credit facility

1500000

1000

483000

P3Y

363000

41000

322000

6. Secured Convertible Notes Payable Amounts outstanding under secured convertible notes payable are as follows (in thousands): Schedule of Debt <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20230331_zbgWjfKK4fK3" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20221231_ztfZ23A4fGK7" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_402_eus-gaap--SecuredDebt_iI_pn3n3_maCNPzwQW_zgEzJGrRTW47" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Secured Convertible Note Payable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">13,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">10,450</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--InterestPayableCurrentAndNoncurrent_iI_pn3n3_maCNPzwQW_zgRe811erj94" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accrued interest</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,165</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,052</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredFinanceCostsNet_iNI_pn3n3_di_msCNPzwQW_zN8aolXsBwHh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Capitalized financing costs</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,154</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(976</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_402_eus-gaap--ConvertibleNotesPayable_iTI_pn3n3_mtCNPzwQW_zm8UYqldvhYb" style="vertical-align: bottom; background-color: White"> <td>Total</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">14,011</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">10,526</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--ConvertibleNotesPayableCurrent_iNI_pn3n3_di_zsXNfAVxRjk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Current portion</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,485</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,434</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--ConvertibleLongTermNotesPayable_iI_pn3n3_z59erWFtAdA8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Long term portion</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,526</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,092</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Secured Convertible Note Payable In May 2022, the Company entered into a note purchase agreement and agreed to issue $11,250 of secured convertible promissory notes (the “Notes”) to entities affiliated with Whitebox Advisors, LLC (collectively, “Whitebox”). The Notes bear interest at a rate of 10% per annum (with 5% per annum payable in cash and 5% per annum payable in kind (“PIK”) by adding such PIK interest to the principal amount of the Notes). The Notes are secured by substantially all of the Company’s assets (including all of its intellectual property) and are subject to a collateral sharing agreement with ACS, the Company’s existing secured lender (see Note 5). The Notes mature on May 9, 2025. On May 9, 2022, the Company issued $11,250 of Notes to Whitebox. In September 2022, the Company issued an additional $<span id="xdx_90F_eus-gaap--SecuredDebt_iI_pn3n3_c20220930__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--SeptemberTwoThousandTwentyTwoNotesMember_zxwjDChC0Rw3" title="Secured convertible promissory notes">2,500 of Notes to Whitebox (the “September 2022 Notes”). The net proceeds from the issuance of the Notes and September 2022 Notes, after deducting placement agent fees and other debt issuance costs, was approximately $<span id="xdx_90A_eus-gaap--ProceedsFromIssuanceOfSecuredDebt_pn3n3_c20220901__20220930__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--SeptemberTwoThousandTwentyTwoNotesMember_z8uvXtVIVNia" title="Proceeds from issuance of notes">12,430. In November 2022, the Company paid off the $<span id="xdx_900_eus-gaap--StockIssuedDuringPeriodValueNewIssues_pn3n3_dd_c20221101__20221130__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--SeptemberTwoThousandTwentyTwoNotesMember_zMTJK7UpYgle" title="Common stock paid, value">2,500 of September 2022 Notes in cash. Beginning in August 2022, $11,250 of the Notes have an amortization feature which requires the Company to make monthly payments of principal of $200 plus accrued interest, payable in cash or in shares of the Company’s common stock at the option of the Company. Amortization payments that are paid in shares are priced at <span id="xdx_906_eus-gaap--DebtInstrumentConvertibleThresholdPercentageOfStockPriceTrigger_pid_dp_uPure_c20220801__20220831__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_zwHlbqaoaRTa" title="Weighted average interest">90% of the average of the daily volume weighted average prices of the Company’s common stock during the five trading days prior to the date of amortization payment. During the year ended December 31, 2022, the Company made monthly amortization principal payments aggregating $800, made up of $600 in cash, and the issuance of <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_dd_c20220101__20221231__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_zbw9kcUfYoef" title="Common stock paid, shares">32,362 shares of common stock valued at $200. At December 31, 2022, the principal balance of the Notes was $10,450. On February 10, 2023, the Company entered into a Partial Option Exercise and Second Amendment to the 10% Convertible Notes with Whitebox. The Notes were amended so if the Company experiences a fundamental change as defined, the holders of the notes have the right to require the Company to repurchase the notes for cash at a repurchase price equal to <span id="xdx_90F_ecustom--PercentageOfRepurchasePrice_pid_dp_uPure_c20230209__20230210__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_zYrD31geg427" title="Percentage of repurchase price">110% (amended from <span id="xdx_909_ecustom--PercentageOfRepurchasePrice_pid_dp_uPure_c20220101__20221231__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_znNwRJvdDj44" title="Percentage of repurchase price">100%) of the principal amount, plus accrued interest. In addition, Whitebox exercised a partial option to purchase $<span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodValueStockOptionsExercised_pn3n3_c20230209__20230210__us-gaap--DebtInstrumentAxis__custom--OptionNotesMember__us-gaap--DebtInstrumentAxis__custom--FebruaryTwoThousandTwentyThreeNotesMember_zUa3qDJZrB9l" title="Options to purchase">2,550 of additional notes (the “February 2023 Notes”) from the Company. The February 2023 Notes bear interest at <span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pid_dp_uPure_c20230210__us-gaap--DebtInstrumentAxis__custom--OptionNotesMember__us-gaap--DebtInstrumentAxis__custom--FebruaryTwoThousandTwentyThreeNotesMember_z3wCC1BCdqu8" title="Debt instrument rate">10% per annum. payable in cash and mature on June 20, 2023. No amortization payments (as defined in the Notes) are payable on the February 2023 Notes, and the February 2023 Notes may be prepaid without premium or penalty. On February 13, 2023, the Company entered into a Limited Waiver and Deferral Agreement with Whitebox. Whitebox waived the Company’s covenant violation of its Excess ABL Amount at November 30, 2022, December 31, 2022, and January 31, 2023, and deferred payment of the <span id="xdx_906_ecustom--PercentageForDeferredPayment_iI_pid_dp_uPure_c20230213__us-gaap--TypeOfArrangementAxis__custom--LimitedWaiverAndDeferralAgreementMember_zHo30icII6ma" title="Percentage for deferred payment">10% fee for the Excess ABL Amount until June 2023. In addition, Whitebox also temporarily waived any requirement that the Company repurchase the Notes in the event of fundamental change (as defined in the Notes), through April 1, 2023, subject to the terms and conditions contained therein. As an inducement, the Company issued an aggregate of <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20230213__20230213__us-gaap--TypeOfArrangementAxis__custom--LimitedWaiverAndDeferralAgreementMember_zxe2LFj0Nol7" title="Number of common stock issued">82,438 shares of common stock to the holders with a fair value of $<span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodValueNewIssues_pn3n3_c20230213__20230213__us-gaap--TypeOfArrangementAxis__custom--LimitedWaiverAndDeferralAgreementMember_zmpJX8b6wm3g" title="Number of common stock issued, value">273. These costs have been capitalized and are being amortized over the term of the waiver. For the three months ended March 31, 2023, amortization of interest was $<span id="xdx_907_eus-gaap--InterestExpenseDebtExcludingAmortization_pn3n3_c20230101__20230331__us-gaap--TypeOfArrangementAxis__custom--LimitedWaiverAndDeferralAgreementMember_zAhBHyduL0O6" title="Amortization of interest">96. The shares issued and the shares of common stock issuable upon conversion of the Option Notes are registrable and subject to that certain Registration Rights Agreement dated May 9, 2023. At March 31, 2023, the principal balance of the Notes and February 2023 Notes was $<span id="xdx_90F_eus-gaap--DebtInstrumentFaceAmount_iI_c20230331__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember__us-gaap--DebtInstrumentAxis__custom--FebruaryTwoThousandTwentyThreeNotesMember_z3uULc1L2IWg" title="Principal balance">13,000. Upon conversion, holders of the Note are entitled to receive an interest make-whole payment, as defined. The make-whole amount is equal to the sum of the remaining scheduled payments of interest on the Notes to be converted that would be due if such notes matured May 9, 2025, payable, at the Company’s option in cash or in shares of common stock. At December 31, 2022, the balance of accrued interest was $1,052. During the three months ended March 31, 2023, the Company recorded interest of $1,113, made up of $366 of interest on the Notes, and $747 related to the excess line of credit debt fee. At March 31, 2023, the balance of accrued interest was $2,165. <span id="xdx_909_eus-gaap--DebtConversionConvertedInstrumentType_c20230101__20230331__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_zvpgoObs8zmc" title="Debt instrument conversion, description">The initial conversion rate of the Notes is 0.08306 shares of the Company’s common stock per one dollar of principal converted, or approximately $12.04 per share, subject to customary anti-dilution adjustments. In addition, if certain corporate events occur that constitute a make-whole fundamental change as defined, then the note holders are, under certain circumstances, are entitled to an increase in the conversion rate, limited to 0.12155 shares of Common Stock per one dollar of principal, or approximately $8.23 per share. The Company’s ability to settle conversions and make amortization payments and interest make-whole payments using shares of the Company’s common stock is subject to certain limitations set forth in the Notes. If the Company experiences a fundamental change as defined, the holders of the notes have the right to require the Company to repurchase the notes for cash at a repurchase price equal to <span id="xdx_904_ecustom--PercentageOfRepurchasePrice_pid_dp_uPure_c20230101__20230331__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_zMWnY49bF8Ah" title="Percentage of repurchase price">100% of the principal amount, plus accrued interest thereon. At March 31, 2023, the Notes, including accrued interest, are convertible into <span id="xdx_90A_eus-gaap--DebtConversionConvertedInstrumentSharesIssued1_pid_c20230101__20230331__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_z69rYm3BuGq5" title="Debt conversion into shares">1,257,491 shares of the Company’s common stock pursuant to a share conversion cap limit as defined in the Notes. The unamortized debt discount was $976 at December 31, 2022. During the three months ended March 31, 2023, the Company incurred $145 of direct costs of the transactions, consisting primarily of placement agent fees and other offering expenses and the issuance of 82,438 valued at $273 as inducement for the aforementioned waiver. These costs have been capitalized and are being amortized over the term of the Notes and waiver period. For the three months ended March 31, 2023, amortization of debt discount was $<span id="xdx_908_eus-gaap--AmortizationOfDebtDiscountPremium_pn3n3_c20230101__20230331__us-gaap--TypeOfArrangementAxis__custom--NotePurchaseAgreementMember_zEAmjzHnVOUi" title="Amortization of debt discount">240, and as of March 31, 2023, the remaining unamortized debt discount balance is $1,154.

Amounts outstanding under secured convertible notes payable are as follows (in thousands): Schedule of Debt <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20230331_zbgWjfKK4fK3" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20221231_ztfZ23A4fGK7" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_402_eus-gaap--SecuredDebt_iI_pn3n3_maCNPzwQW_zgEzJGrRTW47" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Secured Convertible Note Payable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">13,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">10,450</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--InterestPayableCurrentAndNoncurrent_iI_pn3n3_maCNPzwQW_zgRe811erj94" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accrued interest</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,165</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,052</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredFinanceCostsNet_iNI_pn3n3_di_msCNPzwQW_zN8aolXsBwHh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Capitalized financing costs</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,154</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(976</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_402_eus-gaap--ConvertibleNotesPayable_iTI_pn3n3_mtCNPzwQW_zm8UYqldvhYb" style="vertical-align: bottom; background-color: White"> <td>Total</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">14,011</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">10,526</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--ConvertibleNotesPayableCurrent_iNI_pn3n3_di_zsXNfAVxRjk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Current portion</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(5,485</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,434</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--ConvertibleLongTermNotesPayable_iI_pn3n3_z59erWFtAdA8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Long term portion</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,526</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,092</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

13000000

10450000

2165000

1052000

1154000

976000

14011000

10526000

5485000

2434000

8526000

8092000

11250000

The Notes bear interest at a rate of 10% per annum (with 5% per annum payable in cash and 5% per annum payable in kind (“PIK”) by adding such PIK interest to the principal amount of the Notes)

2025-05-09

11250000

2500000

12430000

2500000

11250000

200000

0.90

800000

600000

32362

200000

10450000

0.10

1.10 1

2550000

0.10

82438

273000

96000

13000

2025-05-09

1052000

1113000

366000

747000

2165000

The initial conversion rate of the Notes is 0.08306 shares of the Company’s common stock per one dollar of principal converted, or approximately $12.04 per share, subject to customary anti-dilution adjustments. In addition, if certain corporate events occur that constitute a make-whole fundamental change as defined, then the note holders are, under certain circumstances, are entitled to an increase in the conversion rate, limited to 0.12155 shares of Common Stock per one dollar of principal, or approximately $8.23 per share

1257491

976000

145000

82438

273000

240000

1154000

7. Leases Liabilities During the three months ended March 31, 2023 and 2022, lease costs totaled $32 and $27, respectively. As of December 31, 2022, operating lease liabilities totaled $394. During the three months ended March 31, 2023, the Company made payments of $44 towards its operating lease liability. As of March 31, 2023, operating lease liabilities totaled $350. As of March 31, 2023, the weighted average remaining lease terms for an operating lease are 1.76 years. As of March 31, 2023, the weighted average discount rate on the operating lease is 12.60%.

32000

27000

394000

44000

350000

P1Y9M3D

0.1260

8. Stockholder’s Equity During the three months ended March 31, 2023, the Company repurchased 274 shares of common stock from an officer for $1 based on the market value of share on the date repurchased. The Company retired the shares.

274

1000

9. Stock-Based Compensation Restricted common stock The following table summarizes restricted stock activity during the three months ended March 31, 2023: Summary of Non-vested Restricted Stock Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Unvested Shares</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Issuable Shares</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Fair Value at Date of Issuance</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Weighted Average Grant Date Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Balance, December 31, 2022</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_989_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zqhYwL9dgtte" style="width: 12%; text-align: right" title="Unvested Shares, beginning balance">1,460</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98A_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zKAygSFawnc3" style="width: 12%; text-align: right" title="Issuable Shares, beginning balance">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iS_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zjmeN6GaKck1" style="width: 12%; text-align: right" title="Fair Value at Date of Issuance, beginning balance">26.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zqhxsnUtxjUd" style="width: 12%; text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, beginning balance">44.75</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zPOTajjURMtg" style="text-align: right" title="Unvested Shares, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zTAfL3JeBBUd" style="text-align: right" title="Issuable Shares, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedGranted_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_ziUSxI8gRGz5" style="text-align: right" title="Fair Value at Date of Issuance, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt">Vested</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_iN_pid_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zjS4kUDx2o99" style="text-align: right" title="Unvested Shares, Vested">(750</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfIssuableShares_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zysKmil7Odh7" style="text-align: right" title="Issuable Shares, Vested">750</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zoMYZGIy99m2" style="text-align: right" title="Fair Value at Date of Issuance, Vested">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Forfeited</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedNumberOfShares_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zSiZbyHdPTgb" style="text-align: right" title="Unvested Shares, Forfeited">-</td><td style="text-align: left"> </td><td style="font-size: 11pt"> </td> <td style="font-size: 11pt; text-align: left"> </td><td id="xdx_988_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesForfeitedInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zq5W7F6eoxX4" style="font-size: 11pt; text-align: right" title="Issuable Shares, Forfeited">-</td><td style="font-size: 11pt; text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedForfeited_iN_pn3n3_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z9dcnj3qlqu" style="text-align: right" title="Fair Value at Date of Issuance, Forfeited">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; padding-bottom: 1.5pt">Issued</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z0InI5dTzM5a" style="border-bottom: Black 1.5pt solid; text-align: right" title="Unvested Shares, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesIssuedInPeriodGross_iN_pid_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zIHWuo5JdpD1" style="border-bottom: Black 1.5pt solid; text-align: right" title="Issuable Shares, Issued">(750</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98C_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedIssued_iN_pn3n3_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zBd6N9SH05ma" style="border-bottom: Black 1.5pt solid; text-align: right" title="Fair Value at Date of Issuance, Issued">(6.00</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Balance, March 31, 2023</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_988_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zyKUsCOXHnk6" style="border-bottom: Black 2.5pt double; text-align: right" title="Unvested Shares, ending balance">710</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_986_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zoWWvVlsSbr8" style="border-bottom: Black 2.5pt double; text-align: right" title="Issuable Shares, ending balance">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_989_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iE_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zSDcwkdf21Ki" style="border-bottom: Black 2.5pt double; text-align: right" title="Fair Value at Date of Issuance, ending balance">20.00</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98A_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zhGBB8xjbMO6" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, ending balance">44.75</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The total fair value of restricted common stock vesting during the three months ended March 31, 2023 and 2022, was $<span id="xdx_90B_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zsRgMCXHOCF9" title="Number of restricted shares, value">4 and $<span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_c20220101__20220331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zKepQwqMJnC1" title="Number of restricted shares, value">66, respectively, and is included in general and administrative expenses in the accompanying statements of operations. As of March 31, 2023, the amount of unvested compensation related to issuances of restricted common stock was $<span id="xdx_903_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_pn3n3_c20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z4DoB3z18R11" title="Aggregate value of unvested compensation">20, which will be recognized as an expense in future periods as the shares vest. When calculating basic loss per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date. Stock options The following table summarizes stock option activity during the three months ended March 31, 2023: Schedule of Stock Option Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2022</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z2SNl00YKn1c" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning balance">164,423</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zuUJaWCYKwP" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Beginning">48.90</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zSd9kSxrgQsc" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning">7.58</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z9EmoXyXsnDe" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Beginning">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zVoZWFJp3EHb" style="text-align: right" title="Shares, Granted">10,037</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zvW0t2ZWOY98" style="text-align: right" title="Weighted-Average Exercise Price, Granted">4.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zAF94qZxbk5" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_ztvMl2ST4FSa" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested forfeited</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zkX6XQbtmmOc" style="text-align: right" title="Shares, Unvested forfeited">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z9YTMEtHPXIc" style="text-align: right" title="Weighted-Average Exercise Price, Unvested forfeited">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Vested forfeited</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriod_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zxhyAq7UYtMj" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Vested forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_989_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zvEDp1qr8MMa" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Vested forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Outstanding at March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zokyJJjusar5" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">174,460</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zIjfxCeyd1Ak" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Ending">46.34</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_904_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTermEnding1_dtY_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z273mWlE5KT" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending">7.47</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zFRVpb2VdES" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Exercisable at March 31, 2023</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zIwpHC2j7xjj" style="border-bottom: Black 2.5pt double; text-align: right" title="Shares, Exercisable">102,520</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zsHxWcMvpyqa" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">54.41</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1_dtY_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z63qbKqbFRPf" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">6.86</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1_iE_pn3n3_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_znmhvM4p4fUk" style="border-bottom: Black 2.5pt double; text-align: right" title="Aggregate Intrinsic Value, Ending balance">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> During the three months ended March 31, 2023, the Company approved options exercisable into <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesEmployeeBenefitPlan_pid_c20230101__20230331__us-gaap--PlanNameAxis__custom--TwoThousandTwentyEquityIncentivePlanMember_zV0MmXgXXbv6" title="Options exercisable">10,037 shares to be issued pursuant to Reed’s 2020 Equity Incentive Plan. <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesEmployeeBenefitPlan_pid_c20230101__20230331__us-gaap--PlanNameAxis__custom--TwoThousandTwentyEquityIncentivePlanMember__srt--TitleOfIndividualAxis__custom--EmployeesMember_za5WHnlcwQp5" title="Stock issued during period shares employee benefit plan">10,037 options were issued to employees, 5,016 options vesting annually over a <span id="xdx_907_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1_dxL_c20230101__20230331__us-gaap--PlanNameAxis__custom--TwoThousandTwentyEquityIncentivePlanMember__srt--TitleOfIndividualAxis__custom--EmployeesMember_zT4pCJzx1Tv7" title="Vesting period::XDX::P4Y">four-year vesting period, and <span id="xdx_90D_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_pid_c20230101__20230331__srt--TitleOfIndividualAxis__custom--BoardOfDirectorsMember_z373V8tAnIs" title="Number of stock option shares vested">5,021 options vesting based on performance criteria to be established by the board of directors. The stock options are exercisable at a price of $4.50 per share and expire in <span id="xdx_90E_eus-gaap--SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTerm2_dc_c20230101__20230331_zHo5iTH38Ob5" title="Expiration years">ten years. The total fair value of these options at grant date was approximately $32, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price of $4.50 share, expected term of six years, volatility of 82%, dividend rate of 0%, and weighted average risk-free interest rate of <span id="xdx_905_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pid_dp_uPure_c20230101__20230331_zQoY9q1yNYUl" title="Weighted average risk-free interest rate">3.59%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award. During the three months ended March 31, 2023 and 2022, the Company recognized $229 and $225 of compensation expense relating to vested stock options. As of March 31, 2023, the aggregate amount of unvested compensation related to stock options was approximately $<span id="xdx_909_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_pn3n3_c20230331__us-gaap--AwardTypeAxis__us-gaap--EmployeeStockOptionMember_z6Yt9Fc6m78d" title="Aggregate value of unvested compensation">1,039 which will be recognized as an expense as the options vest in future periods through March 28, 2027. As of March 31, 2023, the outstanding and exercisable options have no intrinsic value. The aggregate intrinsic value was calculated as the difference between the closing market price as of March 31, 2023, which was $3.45, and the exercise price of the outstanding stock options.

The following table summarizes restricted stock activity during the three months ended March 31, 2023: Summary of Non-vested Restricted Stock Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Unvested Shares</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Issuable Shares</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Fair Value at Date of Issuance</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Weighted Average Grant Date Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Balance, December 31, 2022</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_989_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zqhYwL9dgtte" style="width: 12%; text-align: right" title="Unvested Shares, beginning balance">1,460</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98A_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zKAygSFawnc3" style="width: 12%; text-align: right" title="Issuable Shares, beginning balance">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iS_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zjmeN6GaKck1" style="width: 12%; text-align: right" title="Fair Value at Date of Issuance, beginning balance">26.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zqhxsnUtxjUd" style="width: 12%; text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, beginning balance">44.75</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zPOTajjURMtg" style="text-align: right" title="Unvested Shares, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zTAfL3JeBBUd" style="text-align: right" title="Issuable Shares, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedGranted_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_ziUSxI8gRGz5" style="text-align: right" title="Fair Value at Date of Issuance, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt">Vested</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_iN_pid_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zjS4kUDx2o99" style="text-align: right" title="Unvested Shares, Vested">(750</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfIssuableShares_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zysKmil7Odh7" style="text-align: right" title="Issuable Shares, Vested">750</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zoMYZGIy99m2" style="text-align: right" title="Fair Value at Date of Issuance, Vested">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Forfeited</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedNumberOfShares_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zSiZbyHdPTgb" style="text-align: right" title="Unvested Shares, Forfeited">-</td><td style="text-align: left"> </td><td style="font-size: 11pt"> </td> <td style="font-size: 11pt; text-align: left"> </td><td id="xdx_988_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesForfeitedInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zq5W7F6eoxX4" style="font-size: 11pt; text-align: right" title="Issuable Shares, Forfeited">-</td><td style="font-size: 11pt; text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedForfeited_iN_pn3n3_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z9dcnj3qlqu" style="text-align: right" title="Fair Value at Date of Issuance, Forfeited">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; padding-bottom: 1.5pt">Issued</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_z0InI5dTzM5a" style="border-bottom: Black 1.5pt solid; text-align: right" title="Unvested Shares, Issued">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_982_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsNonvestedIssuableSharesIssuedInPeriodGross_iN_pid_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zIHWuo5JdpD1" style="border-bottom: Black 1.5pt solid; text-align: right" title="Issuable Shares, Issued">(750</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98C_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedIssued_iN_pn3n3_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zBd6N9SH05ma" style="border-bottom: Black 1.5pt solid; text-align: right" title="Fair Value at Date of Issuance, Issued">(6.00</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Balance, March 31, 2023</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_988_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfShares_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zyKUsCOXHnk6" style="border-bottom: Black 2.5pt double; text-align: right" title="Unvested Shares, ending balance">710</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_986_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedNumberOfIssuableShares_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zoWWvVlsSbr8" style="border-bottom: Black 2.5pt double; text-align: right" title="Issuable Shares, ending balance">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_989_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedFairValue_iE_pn3n3_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zSDcwkdf21Ki" style="border-bottom: Black 2.5pt double; text-align: right" title="Fair Value at Date of Issuance, ending balance">20.00</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98A_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockMember_zhGBB8xjbMO6" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Grant Date Fair Value, Unvested, ending balance">44.75</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

1460

26000.00

44.75

750

750 750 6000.00

710

20000.00

44.75

4000

66000

20000

The following table summarizes stock option activity during the three months ended March 31, 2023: Schedule of Stock Option Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2022</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z2SNl00YKn1c" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning balance">164,423</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zuUJaWCYKwP" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Beginning">48.90</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zSd9kSxrgQsc" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning">7.58</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z9EmoXyXsnDe" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Beginning">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zVoZWFJp3EHb" style="text-align: right" title="Shares, Granted">10,037</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zvW0t2ZWOY98" style="text-align: right" title="Weighted-Average Exercise Price, Granted">4.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zAF94qZxbk5" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_ztvMl2ST4FSa" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unvested forfeited</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zkX6XQbtmmOc" style="text-align: right" title="Shares, Unvested forfeited">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z9YTMEtHPXIc" style="text-align: right" title="Weighted-Average Exercise Price, Unvested forfeited">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Vested forfeited</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriod_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zxhyAq7UYtMj" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Vested forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_989_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedForfeituresAndExpirationsInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zvEDp1qr8MMa" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Vested forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Outstanding at March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zokyJJjusar5" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">174,460</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zIjfxCeyd1Ak" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Outstanding, Ending">46.34</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_904_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTermEnding1_dtY_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z273mWlE5KT" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending">7.47</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zFRVpb2VdES" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Shares Outstanding, Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Exercisable at March 31, 2023</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zIwpHC2j7xjj" style="border-bottom: Black 2.5pt double; text-align: right" title="Shares, Exercisable">102,520</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_zsHxWcMvpyqa" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">54.41</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1_dtY_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_z63qbKqbFRPf" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">6.86</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1_iE_pn3n3_c20230101__20230331__us-gaap--DerivativeInstrumentRiskAxis__us-gaap--StockOptionMember_znmhvM4p4fUk" style="border-bottom: Black 2.5pt double; text-align: right" title="Aggregate Intrinsic Value, Ending balance">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

164423

48.90

P7Y6M29D

10037

4.50

174460

46.34

P7Y5M19D

102520

54.41

P6Y10M9D

10037

5016

5021

4.50

P10Y

32000

4.50

0.82

0.0359

229000 225000

1039000

3.45

10. Stock Warrants The Company’s warrant activity during the three months ended March 31, 2023 is as follows: Schedule of Warrant Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2022</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iS_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zBkeF3h1MYT4" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning Balance">235,946</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iS_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_znnHiATgbCa" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding Beginning Balance">16.99</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90E_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms_dtY_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z40a4hORR28" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance">4.20</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_983_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iS_pn3n3_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zEifyPmGoDOk" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value, Outstanding Beginning">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesGranted_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zSzD7jaCcudj" style="text-align: right" title="Shares, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesGrantedWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zN0IwnPs5pNb" style="text-align: right" title="Weighted-Average Exercise Price, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercised_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zA8vUHqIWXZe" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisedWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z7dQrzo0QdOh" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Forfeited</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfitedOrExpired_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zw8mzZ4x5VX6" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98B_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfeitedWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zvA6Dbjp5ff3" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Outstanding at March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zUJtEiWUMC4f" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">235,946</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zikpFePQ6DK7" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Outstanding Ending Balance">16.99</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_903_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms1_dtY_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_znJ4KgsFTRZi" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance">4.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zuFQBiv9kFna" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Outstanding Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Exercisable at March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_989_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisable_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_ziurI0G7Vyo2" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Exercisable, Ending Balance">235,946</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_98C_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisableWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zUnbOsyAA1q5" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">16.99</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_90C_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisableWeightedAverageRemainingContractualTerms_dtY_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zdFeJPoEKYE9" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">4.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisableAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zc2ArIYcTpDf" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Exercisable">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> As of March 31, 2023, the outstanding and exercisable warrants have no aggregate intrinsic value. The aggregate intrinsic value was calculated as the difference between the closing market price as of March 31, 2023, which was $3.45, and the exercise price of the Company’s warrants to purchase common stock.

The Company’s warrant activity during the three months ended March 31, 2023 is as follows: Schedule of Warrant Activity <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Exercise Price</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Weighted- Average Remaining Contractual Terms (Years)</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate Intrinsic Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 36%">Outstanding at December 31, 2022</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_987_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iS_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zBkeF3h1MYT4" style="width: 12%; text-align: right" title="Shares Outstanding, Beginning Balance">235,946</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iS_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_znnHiATgbCa" style="width: 12%; text-align: right" title="Weighted-Average Exercise Price, Outstanding Beginning Balance">16.99</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90E_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms_dtY_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z40a4hORR28" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance">4.20</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_983_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iS_pn3n3_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zEifyPmGoDOk" style="width: 12%; text-align: right" title="Aggregate Intrinsic Value, Outstanding Beginning">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesGranted_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zSzD7jaCcudj" style="text-align: right" title="Shares, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesGrantedWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zN0IwnPs5pNb" style="text-align: right" title="Weighted-Average Exercise Price, Granted">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercised_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zA8vUHqIWXZe" style="text-align: right" title="Shares, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisedWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_z7dQrzo0QdOh" style="text-align: right" title="Weighted-Average Exercise Price, Exercised">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Forfeited</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfitedOrExpired_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zw8mzZ4x5VX6" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares, Forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98B_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesForfeitedWeightedAverageExercisePrice_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zvA6Dbjp5ff3" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Forfeited">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Outstanding at March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zUJtEiWUMC4f" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Outstanding, Ending Balance">235,946</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zikpFePQ6DK7" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Outstanding Ending Balance">16.99</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_903_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingWeightedAverageRemainingContractualTerms1_dtY_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_znJ4KgsFTRZi" title="Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance">4.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_988_ecustom--ClassOfWarrantOrRightNumberOfSecuritieOutstandingAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zuFQBiv9kFna" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Outstanding Ending">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Exercisable at March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td id="xdx_989_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisable_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_ziurI0G7Vyo2" style="border-bottom: Black 1.5pt solid; text-align: right" title="Shares Exercisable, Ending Balance">235,946</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_98C_ecustom--ClassOfWarrantOrRightNumberOfSecuritiesExercisableWeightedAverageExercisePrice_iE_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zUnbOsyAA1q5" style="border-bottom: Black 1.5pt solid; text-align: right" title="Weighted-Average Exercise Price, Exercisable Ending Balance">16.99</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_90C_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisableWeightedAverageRemainingContractualTerms_dtY_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zdFeJPoEKYE9" title="Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance">4.20</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td id="xdx_980_ecustom--ClassOfWarrantOrRightNumberOfSecuritieExercisableAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--WarrantMember_zc2ArIYcTpDf" style="border-bottom: Black 1.5pt solid; text-align: right" title="Aggregate Intrinsic Value, Exercisable">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table>

235946

16.99 P4Y2M12D

235946

16.99 P4Y2M12D 235946 16.99 P4Y2M12D

3.45

11. Transactions with California Custom Beverage, LLC, former related party In December 2018, the Company signed a co-packing agreement with California Custom Beverage, LLC’s (“CCB”), an entity owned by Christopher J. Reed, a former related party, pursuant to which CCB agreed to produce certain products for the Company for agreed fees. The co-packing agreement, as amended, includes certain provisions for product inputs, shrinkage, and quality assurance. Also beginning in 2019, CCB agreed to pay the Company a <span id="xdx_906_ecustom--RoyaltyPercentage_iI_dp_uPure_c20181231__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zmUY9VeOlmb" title="Royalty percentage">5% royalty through 2021 on certain private label sales made by CCB. During the three months ended March 31, 2023 and 2022, the Company incurred co-packing fees due to CCB of $<span id="xdx_90F_eus-gaap--OtherLiabilities_iI_c20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__us-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_z0tzYQyOBWF1" title="Copacking fees">428 and $<span id="xdx_901_eus-gaap--OtherLiabilities_iI_pn3n3_c20220331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember__us-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_z6TPwRSHF008" title="Copacking fees">636, respectively. As of March 31, 2023 and 2022, the aggregate of co-packing fees payable to CCB were $<span id="xdx_907_eus-gaap--NotesPayable_iI_pn3n3_c20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zlRtYXBO9zlg" title="Notes payable">1,859 and $<span id="xdx_904_eus-gaap--NotesPayable_iI_pn3n3_c20220331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zdPQTTiu7kW8" title="Notes payable">2,025, respectively. At March 31, 2023 and December 31, 2022, the Company had also recorded receivables from CCB of $<span id="xdx_907_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zTNBmUEcepnb" title="Receivables">1,315 and $<span id="xdx_90C_eus-gaap--ReceivablesNetCurrent_iI_pn3n3_c20221231__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zfLN8yIbAP6e" title="Receivables">1,315, respectively, including royalty receivable of $<span id="xdx_906_ecustom--RoyaltyReceivable_pn3n3_c20230101__20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_ztskNONfrZb4" title="Royalty receivable">297 and $<span id="xdx_904_ecustom--RoyaltyReceivable_pn3n3_c20220101__20221231__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zvNJyuUxZ9vj" title="Royalty receivable">297, and charge backs of certain costs management determined were permittable under the co-packing agreement of $<span id="xdx_906_ecustom--CopackingFees_c20230101__20230331__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_z4CaJcCnff4g" title="Copacking fees">1,018 and $<span id="xdx_907_ecustom--CopackingFees_c20220101__20221231__srt--TitleOfIndividualAxis__custom--ChristopherJReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zZxQnappjeaa" title="Copacking fees">1,018, respectively. At March 31, 2023 and December 31, 2022, accounts receivable due from and accounts payable due to CCB were as follows: Schedule of Related Parties <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49A_20230331_zPRgkv1i2kF8" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20221231_zmFe2ByAZxVg" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_40F_eus-gaap--OtherReceivablesNetCurrent_iI_pn3n3_hus-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zjiuF2a3bxie" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Accounts receivable, net of provision of $<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIFJlbGF0ZWQgUGFydGllcyAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_ecustom--ProvisionForReceivableWithFormerRelatedParty_pn3n3_c20230101__20230331_zYDQzmCb14z" title="Net of provision">538 and $<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIFJlbGF0ZWQgUGFydGllcyAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_ecustom--ProvisionForReceivableWithFormerRelatedParty_pn3n3_c20220101__20221231_z28BqdJay44f" title="Net of provision">538 at March 31, 2023 and December 31, 2022, respectively</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">777</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">777</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--OtherLiabilitiesCurrent_iNI_pn3n3_di_hus-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zirQLj82PSE1" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Accounts payable</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,859</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,025</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40C_eus-gaap--OtherReceivables_iNTI_pn3n3_di_hus-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zidqRkyQ4hR4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Net (payable) receivable</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,082</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,248</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> </table> At December 31, 2022, CCB disputes that it owes $<span id="xdx_903_eus-gaap--OtherReceivables_iI_pn3n3_c20221231__us-gaap--RelatedPartyTransactionAxis__custom--CaliforniaCustomBeverageLLCMember__us-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zBFPQjliW6jh" title="Net receivable">1,043 of the $1,315 recorded as receivable by the Company. The Company believes that it will prevail in this dispute, however, as of March 31, 2023 and December 31, 2022, due to the uncertainty about the ultimate amount that will be settled, the Company has provided a reserve for $<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIFJlbGF0ZWQgUGFydGllcyAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_ecustom--ProvisionForReceivableWithFormerRelatedParty_pn3n3_c20230101__20230331_zVhnGQpx7Ua6" title="Provision for disputed receivable with former related party"><span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIFJlbGF0ZWQgUGFydGllcyAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_903_ecustom--ProvisionForReceivableWithFormerRelatedParty_pn3n3_c20220101__20221231_zN8A9YOtUhF2" title="Provision for disputed receivable with former related party">538 based on management’s estimate. In addition, on April 19, 2023, the Company received a letter from CCB demanding payment of various amounts, including the $1,859 and $2,025 outstanding at March 31, 2023 and December 31, 2022, respectively. The Company has determined that the probability of realizing any loss on the demand from CCB is remote and therefore has not recorded any additional accruals related to the demand.

0.05

428

636000

1859000

2025000

1315000

297000 297000 1018 1018

At March 31, 2023 and December 31, 2022, accounts receivable due from and accounts payable due to CCB were as follows: Schedule of Related Parties <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49A_20230331_zPRgkv1i2kF8" style="border-bottom: Black 1.5pt solid; text-align: center">March 31, 2023</td><td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20221231_zmFe2ByAZxVg" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr id="xdx_40F_eus-gaap--OtherReceivablesNetCurrent_iI_pn3n3_hus-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zjiuF2a3bxie" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Accounts receivable, net of provision of $<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIFJlbGF0ZWQgUGFydGllcyAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_ecustom--ProvisionForReceivableWithFormerRelatedParty_pn3n3_c20230101__20230331_zYDQzmCb14z" title="Net of provision">538 and $<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIFJlbGF0ZWQgUGFydGllcyAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_ecustom--ProvisionForReceivableWithFormerRelatedParty_pn3n3_c20220101__20221231_z28BqdJay44f" title="Net of provision">538 at March 31, 2023 and December 31, 2022, respectively</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">777</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">777</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--OtherLiabilitiesCurrent_iNI_pn3n3_di_hus-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zirQLj82PSE1" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Accounts payable</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,859</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,025</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40C_eus-gaap--OtherReceivables_iNTI_pn3n3_di_hus-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zidqRkyQ4hR4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Net (payable) receivable</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,082</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,248</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> </table>

538000 538000

777000

1859000

2025000

1082000

1248000

1043000

1315000

538000 538000

1859000

2025000

12. Commitments and Contingencies In 2018, CCB assumed the monthly payments on our lease obligation for a Los Angeles manufacturing plant, and our release from the obligation by the lessor, however, is dependent upon CCB’s deposit of $<span id="xdx_90C_eus-gaap--SecurityDeposit_iI_pn3n3_c20181231__srt--TitleOfIndividualAxis__custom--ChrisReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zaG3wFUZUpel" title="Deposit of security with lessor">1,200 of security with the lessor. As of March 31, 2023, $<span id="xdx_900_eus-gaap--SecurityDeposit_iI_pn3n3_c20230331__srt--TitleOfIndividualAxis__custom--ChrisReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zehoWZTXv85i" title="Deposit of security with lessor">800 has been deposited with the lessor and Chris J. Reed has placed approximately <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20230101__20230331__srt--TitleOfIndividualAxis__custom--ChrisReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zzN9rQusiVt7" title="Number of common stock value placed">7,260 shares of the Company’s common stock valued at $<span id="xdx_908_eus-gaap--StockIssuedDuringPeriodValueNewIssues_pn3n3_c20230101__20230331__srt--TitleOfIndividualAxis__custom--ChrisReedMember__dei--LegalEntityAxis__custom--CaliforniaCustomBeverageLLCMember_zjarPTJku753" title="Value of stock placed">25 that remain in escrow with the lessor. From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is estimable and the loss is probable. We believe that there are no material litigation matters at the current time. Although the results of such litigation matters and claims cannot be predicted with certainty, we believe that the final outcome of such claims and proceedings will not have a material adverse impact on our financial position, liquidity, or results of operations.

1200000

800000

7260

25000

13. Subsequent Events On May 25, 2023, the Company entered into a Securities Purchase Agreement with D&D Source of Life Holding Ltd., as the lead investor, and certain of Reed’s affiliates pursuant to which the investors agreed to purchase an aggregate of <span id="xdx_90B_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20230524__20230525__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--DDSourceofLifeHoldingLtdMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z3JgqRecybr7" title="Common shares issued for cash">1,566,732 shares of Reed’s common stock and warrants to purchase <span id="xdx_90A_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_c20230525__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--DDSourceofLifeHoldingLtdMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z6YwIWhJHuo9" title="Warrants to purchase stock">313,346 shares of Common Stock. The purchase price per share of Common Stock and associated warrant was $<span id="xdx_90A_eus-gaap--SharePrice_iI_pid_c20230525__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--DDSourceofLifeHoldingLtdMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zeSZDbXbFnge" title="Share price">2.585. The gross proceeds to the Company, before deducting offering expenses, are approximately $<span id="xdx_90A_eus-gaap--ProceedsFromIssuanceOfPrivatePlacement_c20230524__20230525__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--DDSourceofLifeHoldingLtdMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zrOGiRggY4dl" title="Proceeds from issuance of private placement">4,100. The warrants are exercisable for a term of <span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dc_c20230525__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--DDSourceofLifeHoldingLtdMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zUnuwl9lVJ98" title="Warrant term">three years at a per share exercise price of $<span id="xdx_906_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_pid_c20230525__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--DDSourceofLifeHoldingLtdMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z0eUaZB4p7l8" title="Exercise price of warrants">2.50. On May 25, 2023, in order to induce the lead investor to subscribe, the Company granted the lead investor certain preemptive rights and agreed to support the lead investor’s nomination of two board designees, one of which shall be an independent director. On May 30, 2023, the Company entered into a Partial Option Exercise and Third Amendment to 10% Convertible Notes (the Notes, see Note 6) with Whitebox a Limited Waiver and Deferral Agreement. Whitebox exercised a partial option to purchase an aggregate of approximately $<span id="xdx_902_eus-gaap--StockIssuedDuringPeriodValueStockOptionsExercised_c20230529__20230530__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--DebtInstrumentAxis__custom--OptionNotesMember_zbslHR74Vc96" title="Common shares issued on exercise of options">1,500 of additional notes (the “Option Notes”) from the Company. The Option Notes bear interest at <span id="xdx_901_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230530__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--DebtInstrumentAxis__custom--OptionNotesMember_zXpt7Rrt22Xg" title="Debt instrument rate">10% per annum. payable in cash and mature on <span id="xdx_90A_eus-gaap--DebtInstrumentMaturityDate_dd_c20230529__20230530__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--DebtInstrumentAxis__custom--OptionNotesMember_zbpmT8nzpQK1" title="Debt instrument, maturity date">September 29, 2023. No amortization payments (as defined in the Notes) are payable on the Option Notes, and the Option Notes may be prepaid without premium or penalty. The shares issued and the shares of common stock issuable upon conversion of the Option Notes are registrable and subject to that certain Registration Rights Agreement dated May 25, 2023.

1566732

313346

2.585

4100

P3Y

2.50

1500

0.10

2023-09-29