Cover
Cover | 3 Months Ended |
Mar. 31, 2023 | |
Cover [Abstract] | |
Document Type | S-1 |
Amendment Flag | false |
Entity Registrant Name | DUOS TECHNOLOGIES GROUP, INC. |
Entity Central Index Key | 0001396536 |
Entity Tax Identification Number | 65-0493217 |
Entity Incorporation, State or Country Code | FL |
Entity Address, Address Line One | 7660 Centurion Parkway |
Entity Address, Address Line Two | Suite 100 |
Entity Address, City or Town | Jacksonville |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 33256 |
City Area Code | (904) |
Local Phone Number | 652-1637 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | |||
Cash | $ 4,340,947 | $ 1,121,092 | $ 893,720 |
Accounts receivable | 717,346 | 3,418,263 | 1,738,543 |
Contract assets | 1,426,312 | 425,722 | 3,449 |
Inventory | 1,529,530 | 1,428,360 | 298,338 |
Prepaid expenses and other current assets | 532,381 | 441,320 | 354,613 |
Total Current Assets | 8,546,516 | 6,834,757 | 3,288,663 |
Property and equipment, net | 579,689 | 629,490 | 603,253 |
Operating lease right of use asset | 4,612,830 | 4,689,931 | 4,925,765 |
Security deposit | 600,000 | 600,000 | 600,000 |
Software development costs, net | 454,280 | 265,208 | |
Patents and trademarks, net | 75,017 | 69,733 | 66,482 |
TOTAL ASSETS | 14,868,332 | 13,089,119 | 9,484,163 |
CURRENT LIABILITIES: | |||
Accounts payable | 1,282,184 | 2,290,390 | 1,044,500 |
Notes payable - financing agreements | 193,094 | 74,575 | 52,503 |
Accrued expenses | 367,652 | 453,023 | 618,093 |
Equipment financing payable-current portion | 11,566 | 22,851 | 80,335 |
Operating lease obligations-current portion | 764,820 | 696,869 | 315,302 |
Contract liabilities | 2,066,861 | 957,997 | 1,829,311 |
Total Current Liabilities | 4,686,177 | 4,495,705 | 3,940,044 |
Equipment financing agreement, less current portion | 22,851 | ||
Operating lease obligations, less current portion | 4,466,884 | 4,542,943 | 4,739,783 |
Total Liabilities | 9,153,061 | 9,038,648 | 8,702,678 |
Commitments and Contingencies (Note 4) | |||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | |||
Common stock: $0.001 par value; 500,000,000 shares authorized, 7,169,339 and 7,156,876 shares issued, 7,168,015 and 7,155,552 shares outstanding at March 31, 2023 and December 31, 2022, respectively | 7,168 | 7,156 | 4,111 |
Additional paid-in-capital | 60,371,067 | 56,562,600 | 46,431,874 |
Accumulated deficit | (54,505,517) | (52,361,834) | (45,497,051) |
Sub-total | 5,872,723 | 4,207,923 | 938,937 |
Less: Treasury stock (1,324 shares of common stock at March 31, 2023 and December 31, 2022) | (157,452) | (157,452) | (157,452) |
Total Stockholders’ Equity | 5,715,271 | 4,050,471 | 781,485 |
Total Liabilities and Stockholders’ Equity | 14,868,332 | 13,089,119 | 9,484,163 |
Convertible Series A Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | |||
Convertible Series B Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | 1 | ||
Convertible Series C Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | 2 | ||
Convertible Series D Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | 1 | 1 | |
Convertible Series E Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY: | |||
Preferred Stock, Value, Issued | $ 4 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Designated | 9,476,000 | 9,476,000 | |
Preferred Stock, Shares Issued | 0 | ||
Preferred Stock, Shares Outstanding | 0 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 7,169,339 | 7,156,876 | 4,111,047 |
Common Stock, Shares, Outstanding | 7,168,015 | 7,155,552 | 4,109,723 |
Treasury Stock, Common, Shares | 1,324 | 1,324 | 1,324 |
Preferred Stock, Shares Designated | 9,446,000 | 9,446,000 | |
Convertible Series A Preferred Stock [Member] | |||
Temporary Equity, Par or Stated Value Per Share | $ 10 | $ 10 | $ 10 |
Temporary Equity, Shares Authorized | 500,000 | 500,000 | 500,000 |
Temporary Equity, Shares Issued | 0 | 0 | 0 |
Temporary Equity, Shares Outstanding | 0 | 0 | 0 |
Preferred stock, conversion price per share | $ 6.30 | $ 6.30 | $ 6.30 |
Convertible Series B Preferred Stock [Member] | |||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 |
Preferred Stock, Shares Authorized | 15,000 | 15,000 | 15,000 |
Preferred stock, conversion price per share | $ 7 | $ 7 | $ 7 |
Preferred Stock, Shares Issued | 0 | 0 | 851 |
Preferred Stock, Shares Outstanding | 0 | 0 | 851 |
Convertible Series C Preferred Stock [Member] | |||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 |
Preferred Stock, Shares Authorized | 5,000 | 5,000 | 5,000 |
Preferred stock, conversion price per share | $ 5.50 | $ 5.50 | $ 5.50 |
Preferred Stock, Shares Issued | 0 | 0 | 2,500 |
Preferred Stock, Shares Outstanding | 0 | 0 | 2,500 |
Convertible Series D Preferred Stock [Member] | |||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 |
Preferred Stock, Shares Authorized | 4,000 | 4,000 | 4,000 |
Preferred stock, conversion price per share | $ 3 | $ 3 | $ 3 |
Preferred Stock, Shares Issued | 1,299 | 1,299 | 0 |
Preferred Stock, Shares Outstanding | 1,299 | 1,299 | 0 |
Convertible Series E Preferred Stock [Member] | |||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | |
Temporary Equity, Shares Authorized | 30,000 | 30,000 | |
Preferred stock, conversion price per share | $ 3 | $ 3 | |
Preferred Stock, Shares Issued | 4,000 | 0 | |
Preferred Stock, Shares Outstanding | 4,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUES: | ||||
Total Revenues | $ 2,644,288 | $ 1,439,316 | $ 15,012,366 | $ 8,259,917 |
COST OF REVENUES: | ||||
Total Cost of Revenues | 2,107,116 | 1,217,250 | 10,264,263 | 6,220,373 |
GROSS MARGIN | 537,172 | 222,066 | 4,748,103 | 2,039,544 |
OPERATING EXPENSES: | ||||
Sales and marketing | 307,577 | 283,894 | 1,337,186 | 1,233,851 |
Research and development | 404,885 | 436,717 | 1,651,064 | 2,515,630 |
General and Administrative Costs | 1,971,508 | 2,143,073 | 8,625,002 | 5,747,014 |
Total Operating Expenses | 2,683,970 | 2,863,684 | 11,613,252 | 9,496,495 |
LOSS FROM OPERATIONS | (2,146,798) | (2,641,618) | (6,865,149) | (7,456,951) |
OTHER INCOME (EXPENSES): | ||||
Interest expense | (1,180) | (3,180) | (9,191) | (20,268) |
Other income, net | 4,295 | 182 | 9,557 | 1,468,318 |
Total Other Income (Expenses) | 3,115 | (2,998) | 366 | 1,448,050 |
NET LOSS | $ (2,143,683) | $ (2,644,616) | $ (6,864,783) | $ (6,008,901) |
Basic | $ (0.30) | $ (0.49) | $ (1.11) | $ (1.63) |
Diluted | $ (0.30) | $ (0.49) | $ (1.11) | $ (1.63) |
Basic | 7,156,876 | 5,353,620 | 6,175,193 | 3,694,293 |
Diluted | 7,156,876 | 5,353,620 | 6,175,193 | 3,694,293 |
Product [Member] | ||||
REVENUES: | ||||
Total Revenues | $ 1,827,764 | $ 783,269 | $ 11,190,292 | $ 5,871,666 |
COST OF REVENUES: | ||||
Total Cost of Revenues | 1,767,209 | 865,488 | 8,376,649 | 4,728,197 |
Service, Other [Member] | ||||
REVENUES: | ||||
Total Revenues | 816,524 | 656,047 | 3,822,074 | 2,388,251 |
COST OF REVENUES: | ||||
Total Cost of Revenues | $ 339,907 | $ 351,762 | $ 1,887,614 | $ 1,492,176 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock B [Member] | Preferred Stock C [Member] | Preferred Stock D [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stocks [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 2 | $ 3,536 | $ 41,525,872 | $ (39,488,150) | $ (157,452) | $ 1,883,808 | ||
Beginning balance, shares at Dec. 31, 2020 | 1,705 | 3,535,339 | ||||||
Stock options granted to employees | 262,411 | 262,411 | ||||||
Series C Preferred stock issued for cash | 4 | 4,499,996 | 4,500,000 | |||||
Series C preferred converted to common stock | $ (2) | $ 364 | (362) | |||||
Series C preferred stock converted to common stock, shares | (2,000) | 363,636 | ||||||
Common stock issued for cashless warrants exercised | $ 50 | (50) | ||||||
Common stock issued for cashless warrants exercised, shares | 50,588 | |||||||
Common stock issued for services | $ 24 | 144,143 | 144,167 | |||||
Common stock issued for services, shares | 24,541 | |||||||
Common stock issued for cashless employee stock options exercised | $ 15 | (15) | ||||||
Common stock issued for cashless employee stock options exercised ,shares | 14,576 | |||||||
Rounding-split in 2020 | $ 0 | 0 | 0 | |||||
Rounding-split in 2020 ,shares | 367 | |||||||
Series B preferred converted to common stock | $ (1) | $ 122 | (121) | |||||
Series B convertible preferred converted to common stock, Shares | (854) | 122,000 | ||||||
Net loss | (6,008,901) | |||||||
Ending balance, value at Dec. 31, 2021 | $ 1 | $ 2 | $ 4,111 | 46,431,874 | (45,497,051) | (157,452) | 781,485 | |
Ending balance, shares at Dec. 31, 2021 | 851 | 2,500 | 4,111,047 | |||||
Series C preferred converted to common stock | $ (2) | $ 455 | (453) | 0 | ||||
Series C preferred stock converted to common stock, shares | (2,500) | 454,546 | ||||||
Stock options compensation | 250,577 | 250,577 | ||||||
Common stock issued for cash | $ 1,524 | 6,093,476 | 6,095,000 | |||||
Common stock issued for cash, shares | 1,523,750 | |||||||
Stock issuance cost | (576,650) | (576,650) | ||||||
Stock issued for services | $ 7 | 39,993 | 40,000 | |||||
Stock issued for services , shares | 7,198 | |||||||
Net loss | (2,644,616) | (2,644,616) | ||||||
Ending balance, value at Mar. 31, 2022 | $ 1 | $ 6,097 | 52,238,817 | (48,141,667) | (157,452) | 3,945,796 | ||
Ending balance, shares at Mar. 31, 2022 | 851 | 6,096,541 | ||||||
Beginning balance, value at Dec. 31, 2021 | $ 1 | $ 2 | $ 4,111 | 46,431,874 | (45,497,051) | (157,452) | 781,485 | |
Beginning balance, shares at Dec. 31, 2021 | 851 | 2,500 | 4,111,047 | |||||
Series C Preferred stock issued for cash, shares | 4,500 | |||||||
Series C preferred converted to common stock | $ (2) | $ 455 | (453) | |||||
Series C preferred stock converted to common stock, shares | (2,500) | 454,546 | ||||||
Series B preferred converted to common stock | $ (1) | $ 122 | (121) | |||||
Series B convertible preferred converted to common stock, Shares | (851) | 121,572 | ||||||
Series D preferred stock issued for cash | $ 1 | 1,298,999 | 1,299,000 | |||||
Series D preferred stock issued for cash, shares | 1,299 | |||||||
Stock options compensation | 819,191 | 819,191 | ||||||
Common stock issued for cash | $ 2,425 | 8,798,579 | 8,801,004 | |||||
Common stock issued for cash, shares | 2,425,752 | |||||||
Stock issuance cost | (942,926) | (942,926) | ||||||
Stock issued for services | $ 43 | 157,457 | 157,500 | |||||
Stock issued for services , shares | 43,959 | |||||||
Net loss | (6,864,783) | (6,864,783) | ||||||
Ending balance, value at Dec. 31, 2022 | $ 1 | $ 7,156 | 56,562,600 | (52,361,834) | (157,452) | 4,050,471 | ||
Ending balance, shares at Dec. 31, 2022 | 1,299 | 7,156,876 | ||||||
Stock options compensation | 75,128 | 75,128 | ||||||
Stock issuance cost | (299,145) | (299,145) | ||||||
Stock issued for services | $ 12 | 32,488 | 32,500 | |||||
Stock issued for services , shares | 12,463 | |||||||
Net loss | (2,143,683) | (2,143,683) | ||||||
Ending balance, value at Mar. 31, 2023 | $ 1 | $ 7,168 | $ 60,371,067 | $ (54,505,517) | $ (157,452) | $ 5,715,271 | ||
Ending balance, shares at Mar. 31, 2023 | 1,299 | 7,169,339 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash from operating activities: | ||||
Net loss | $ (2,143,683) | $ (2,644,616) | $ (6,864,783) | $ (6,008,901) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Bad debt expense | 76,046 | |||
Depreciation and amortization | 116,588 | 73,628 | 350,192 | 275,346 |
Loss on disposal of assets | 14,454 | |||
Stock based compensation | 75,128 | 250,577 | 819,191 | 262,411 |
Stock issued for services | 32,500 | 40,000 | 157,500 | 144,167 |
PPP loan forgiveness including accrued interest | (1,421,577) | |||
Amortization of operating lease right of use asset | 77,101 | 77,636 | 235,834 | 250,482 |
Changes in assets and liabilities: | ||||
Accounts receivable | 2,700,917 | 1,449,908 | (1,679,720) | (611,023) |
Contract assets | (1,000,590) | (264,223) | (422,273) | 99,009 |
Inventory | (101,167) | (24,426) | (1,130,022) | (185,915) |
Prepaid expenses and other current assets | 228,941 | (264,687) | 266,539 | 423,905 |
Security deposit | (600,000) | |||
Accounts payable | (1,008,207) | (95,708) | 1,245,890 | 445,184 |
Accounts payable-related party | (7,700) | |||
Payroll taxes payable | (3,146) | |||
Accrued expenses | (85,371) | (30,622) | (165,069) | (408,692) |
Operating lease obligation | (8,107) | 70,094 | 184,728 | (127,816) |
Contract liabilities | 1,108,864 | 534,706 | (871,314) | 804,388 |
Net cash used in operating activities | (7,086) | (827,733) | (7,873,307) | (6,579,378) |
Cash flows from investing activities: | ||||
Purchase of patents/trademarks | (7,339) | (600) | (18,190) | (7,435) |
Purchase of software development | (212,067) | (281,783) | ||
Purchase of fixed assets | (41,738) | (101,478) | (344,915) | (545,505) |
Net cash used in investing activities | (261,144) | (102,078) | (644,888) | (552,940) |
Cash flows from financing activities: | ||||
Repayments of insurance and equipment financing | (201,485) | (128,437) | (331,175) | (353,444) |
Repayment of finance lease | (11,285) | (23,959) | (80,335) | (89,618) |
Proceeds from common stock issued | 6,095,000 | 8,801,003 | ||
Issuance cost | (299,145) | (576,650) | (942,926) | |
Proceeds from preferred stock issued | 4,000,000 | 1,299,000 | 4,500,000 | |
Net cash provided by financing activities | 3,488,085 | 5,365,954 | 8,745,567 | 4,056,938 |
Net increase in cash | 3,219,855 | 4,436,143 | 227,372 | (3,075,380) |
Cash, beginning of period | 1,121,092 | 893,720 | 893,720 | 3,969,100 |
Cash, end of period | 4,340,947 | 5,329,863 | 1,121,092 | 893,720 |
Supplemental Disclosure of Cash Flow Information: | ||||
Interest paid | 1,180 | 3,180 | 9,292 | 30,817 |
Taxes paid | 1,264 | |||
Supplemental Non-Cash Investing and Financing Activities: | ||||
Lease right of use asset and liability | 4,980,104 | |||
Notes issued for financing of insurance premiums | $ 320,004 | $ 242,591 | $ 353,244 | $ 363,005 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock B [Member] | Preferred Stock C [Member] | Preferred Stock D [Member] | Preferred Stock E [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stocks [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 2 | $ 3,536 | $ 41,525,872 | $ (39,488,150) | $ (157,452) | $ 1,883,808 | |||
Beginning balance, shares at Dec. 31, 2020 | 1,705 | 3,535,339 | |||||||
Series C preferred stock converted into common stock | $ (2) | $ 364 | (362) | ||||||
Series C preferred stock converted to common stock, shares | (2,000) | 363,636 | |||||||
Net loss | (6,008,901) | ||||||||
Ending balance, value at Dec. 31, 2021 | $ 1 | $ 2 | $ 4,111 | 46,431,874 | (45,497,051) | (157,452) | 781,485 | ||
Ending balance, shares at Dec. 31, 2021 | 851 | 2,500 | 4,111,047 | ||||||
Stock options compensation | 250,577 | 250,577 | |||||||
Common stock issued | $ 1,524 | 6,093,476 | 6,095,000 | ||||||
Common stock issued, shares | 1,523,750 | ||||||||
Series C preferred stock converted into common stock | $ (2) | $ 455 | (453) | 0 | |||||
Series C preferred stock converted to common stock, shares | (2,500) | 454,546 | |||||||
Stock issuance cost | (576,650) | (576,650) | |||||||
Stock issued for services | $ 7 | 39,993 | 40,000 | ||||||
Stock issued for services , shares | 7,198 | ||||||||
Net loss | (2,644,616) | (2,644,616) | |||||||
Ending balance, value at Mar. 31, 2022 | $ 1 | $ 6,097 | 52,238,817 | (48,141,667) | (157,452) | 3,945,796 | |||
Ending balance, shares at Mar. 31, 2022 | 851 | 6,096,541 | |||||||
Beginning balance, value at Dec. 31, 2021 | $ 1 | $ 2 | $ 4,111 | 46,431,874 | (45,497,051) | (157,452) | 781,485 | ||
Beginning balance, shares at Dec. 31, 2021 | 851 | 2,500 | 4,111,047 | ||||||
Stock options compensation | 819,191 | 819,191 | |||||||
Common stock issued | $ 2,425 | 8,798,579 | 8,801,004 | ||||||
Common stock issued, shares | 2,425,752 | ||||||||
Series C preferred stock converted into common stock | $ (2) | $ 455 | (453) | ||||||
Series C preferred stock converted to common stock, shares | (2,500) | 454,546 | |||||||
Stock issuance cost | (942,926) | (942,926) | |||||||
Stock issued for services | $ 43 | 157,457 | 157,500 | ||||||
Stock issued for services , shares | 43,959 | ||||||||
Net loss | (6,864,783) | (6,864,783) | |||||||
Ending balance, value at Dec. 31, 2022 | $ 1 | $ 7,156 | 56,562,600 | (52,361,834) | (157,452) | 4,050,471 | |||
Ending balance, shares at Dec. 31, 2022 | 1,299 | 7,156,876 | |||||||
Series E preferred stock issued | $ 4 | 3,999,996 | 4,000,000 | ||||||
Series E preferred stock issued, shares | 4,000 | ||||||||
Stock options compensation | 75,128 | 75,128 | |||||||
Stock issuance cost | (299,145) | (299,145) | |||||||
Stock issued for services | $ 12 | 32,488 | 32,500 | ||||||
Stock issued for services , shares | 12,463 | ||||||||
Net loss | (2,143,683) | (2,143,683) | |||||||
Ending balance, value at Mar. 31, 2023 | $ 1 | $ 4 | $ 7,168 | $ 60,371,067 | $ (54,505,517) | $ (157,452) | $ 5,715,271 | ||
Ending balance, shares at Mar. 31, 2023 | 1,299 | 4,000 | 7,169,339 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Duos Technologies Group, Inc. (the “Company”), through its operating subsidiaries, Duos Technologies, Inc. (“Duos”) and TrueVue360, Inc. (“TrueVue360”) (collectively the “Company”), develops and deploys vision based analytical technology solutions that will help to transform precision railroading, logistics and inter-modal transportation operations. Additionally, these unique patented solutions can be employed into many other industries. The Company has developed the Railcar Inspection Portal (RIP) that provides both freight and transit railroad customers and select government agencies the ability to conduct fully automated inspections of trains while they are in transit. The system, which incorporates a variety of sophisticated optical technologies, illumination and other sensors, scans each passing railcar to create an extremely high-resolution image set from a variety of angles including the undercarriage. These images are then processed through various methods of artificial intelligence (“AI”) algorithms to identify specific defects and/or areas of interest on each railcar. This is all accomplished within minutes of a railcar passing through our portal. This solution has the potential to transform the railroad industry by increasing safety, improving efficiency and reducing costs. The Company has successfully deployed this system with several Class 1 railroad customers and anticipates an increased demand in the future. Government agencies can conduct digital inspections combined with the incorporated AI to improve rail traffic flow across borders which also directly benefits the Class 1 railroads through increasing their velocity. The Company has also developed the Automated Logistics Information System (ALIS) which automates and reduces/removes personnel from gatehouses where trucks enter and exit large logistics and intermodal facilities. This solution also incorporates sensors and data points as necessary for each operation and directly interconnects with backend logistics databases and processes to streamline operations and significantly improve operations and security and importantly dramatically improves the vehicle throughput on each lane on which the technology is deployed. The Company has built a portfolio of IP and patented solutions that creates “actionable intelligence” using two core native platforms called Centraco® and Praesidium™. All solutions provided include a variant of both applications. Centraco is designed primarily as the user interface to all our systems as well as the backend connection to third-party applications and databases through both Application Programming Interfaces (APIs) and Software Development Kits (SDKs). This interface is browser based and hosted within each one of our systems and solutions. It is typically also customized for each unique customer and application. Praesidium typically resides as middleware in our systems and manages the various image capture devices and some sensors for input into the Centraco software. The Company also developed a proprietary Artificial Intelligence (AI) software platform, Truevue360™ with the objective of focusing the Company’s advanced intelligent technologies in the areas of AI, deep machine learning and advanced multi-layered algorithms to further support our solutions. The Company’s strategy is to deliver operational and technical excellence to our customers, expand our RIP and ALIS solutions into current and new customers focused in the Rail, Logistics and U.S. Government Sectors, offer both one-time equipment sales and capital lease pricing models, and longer-term offer subscription pricing, to customers that increases recurring revenue, grows backlog and improves profitability, responsibly grow the business both organically and through selective acquisitions, and promote a performance-based work force where employees enjoy their work and are incentivized to excel and remain with the Company. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future period. These unaudited consolidated financial statements and the unaudited condensed notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2023. Principles of Consolidation The unaudited consolidated financial statements include Duos Technologies Group, Inc. and its wholly owned subsidiaries, Duos Technologies, Inc and TrueVue360 Inc. All inter-company transactions and balances are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The most significant estimates in the accompanying unaudited consolidated financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of intangible and other long-lived assets, estimates of net contract revenues and the total estimated costs to determine progress towards contract completion, valuation of inventory, estimates of the valuation of right of use assets and corresponding lease liabilities, valuation of warrants issued with debt and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Concentrations Cash Concentrations Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. We have not experienced any losses related to these balances. As of March 31, 2023, the balance in one financial institution exceeded federally insured limits by approximately $ 3,907,000 Significant Customers and Concentration of Credit Risk The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For the three months ended March 31, 2023, two customers accounted for 70 20 35 24 13 11 30 At March 31, 2023, three customers accounted for 59 15 11 34 31 19 10 Geographic Concentration For the three months ended March 31, 2023, approximately 25 54 Significant Vendors and Concentration of Credit Risk In some instances, the Company relies on a limited pool of vendors for key components related to the manufacturing of its subsystems. These vendors are primarily focused on camera, server and lighting technologies integral to the Company’s solution. Where possible, the Company seeks multiple vendors for key components to mitigate vendor concentration risk. Fair Value of Financial Instruments and Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions that the market participants would use in the valuation of the asset or liability based on the best available information. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The estimated fair value of certain financial instruments, including accounts receivable, prepaid expense, accounts payable, accrued expenses and notes payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. Accounts Receivable On January 1, 2023, the Company adopted ASC 326, “Financial Instruments - Credit Losses”. In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses). The amount of the allowance is determined principally on the basis of past collection experience and known financial factors regarding specific customers. Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on the account, historical trends are evaluated, and specific customer issues are reviewed to arrive at appropriate allowances. The Company reviews its accounts to estimate losses resulting from the inability of its customers to make required payments. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. Inventory Inventory consists primarily of spare parts and consumables and long lead time components to be used in the production of our technology systems or in connection with maintenance agreements with customers. Inventory is stated at the lower of cost or net realizable value. Inventory cost is primarily determined using the weighted average cost method. Software Development Costs Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be Sold, Leased, or Marketed), are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Revenue Recognition The Company follows Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), that affects the timing of when certain types of revenues will be recognized. The basic principles in ASC 606 include the following: a contract with a customer creates distinct contract assets and performance obligations, satisfaction of a performance obligation creates revenue, and a performance obligation is satisfied upon transfer of control to a good or service to a customer. Revenue is recognized by evaluating our revenue contracts with customers based on the five-step model under ASC 606: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue when (or as) each performance obligation is satisfied. The Company generates revenue from four sources: (1) Technology Systems (2) AI Technologies (3) Technical Support (4) Consulting Services Technology Systems For revenues related to technology systems, the Company recognizes revenue over time using a cost-based input methodology in which significant judgment is required to estimate costs to complete projects. These estimated costs are then used to determine the progress towards contract completion and the corresponding amount of revenue to recognize. Accordingly, the Company bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “contract assets”. Any billings of customers more than recognized revenues are recorded as a liability in “contract liabilities”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. AI Technologies The Company has revenue from applications that incorporate artificial intelligence (AI) in the form of predetermined algorithms which provide important operating information to the users of our systems. The revenue generated from these applications of AI consists of a fixed fee related to the design, development, testing and incorporation of new algorithms into the system, which is recognized as revenue at a point in time upon acceptance, as well as an annual application maintenance fee, which is recognized as revenue ratably over the contracted maintenance term. Technical Support Technical support services are provided on both an as-needed and extended-term basis and may include providing both parts and labor. Maintenance and technical support provided outside of a maintenance contract are on an “as-requested” basis, and revenue is recognized over time as the services are provided. Revenue for maintenance and technical support provided on an extended-term basis is recognized over time ratably over the term of the contract. Consulting Services The Company’s consulting services business generates revenues under contracts with customers from four sources: (1) Professional Services (consulting and auditing); (2) Software licensing with optional hardware sales; (3) Customer service training and (4) Maintenance/support. (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) For all periods reflected in this report, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third-party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer; (3) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (4) Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. Multiple Performance Obligations and Allocation of Transaction Price Arrangements with customers may involve multiple performance obligations including project revenue and maintenance services in our Technology Systems business. Maintenance will occur after the project is completed and may be provided on an extended-term basis or on an as-needed basis. In our consulting services business, multiple performance obligations may include any of the above four sources. Training and maintenance on software products may occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for a multiple performance obligations arrangement is as follows: Each performance obligation is accounted for separately when each has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each performance obligation is recognized using the applicable criteria under GAAP as discussed above for performance obligations sold in single performance obligation arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells its various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of performance obligations relative selling price allocation. The Company only sells maintenance services or spare parts based on its established rates after it has completed a system integration project for a customer. The customer is not required to purchase maintenance services. All elements in multiple performance obligations arrangements with Company customers qualify as separate units of account for revenue recognition purposes. Leases The Company follows ASC 842 “Leases”. This guidance requires lessees to recognize right-of-use (“ROU”) assets and lease liabilities for most operating leases. In addition, this guidance requires that lessors separate lease and non-lease components in a contract in accordance with the revenue guidance in ASC 606. The Company made an accounting policy election to not recognize short-term leases with terms of twelve months or less on the balance sheet and instead recognize the lease payments in expense as incurred. The Company has also elected to account for real estate leases that contain both lease and non-lease components as a single lease component. At the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. Operating ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date to determine the present value of future payments. The lease term includes all periods covered by renewal and termination options where the Company is reasonably certain to exercise the renewal options or not to exercise the termination options. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations. Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss applicable to common stock by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stock by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise or conversion of stock options, stock warrants, convertible debt instruments, convertible preferred stock or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At March 31, 2023, there were (i) an aggregate of 80,091 924,658 433,000 1,333,334 At March 31, 2022, there were (i) an aggregate of 1,376,466 1,096,266 121,571 Recent Accounting Pronouncements From time to time, the FASB or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of an Accounting Standards Update (“ASU”). In August 2020, the FASB issued an accounting pronouncement (ASU 2020-06) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity's own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity's own equity. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. The Company early adopted this pronouncement for our fiscal year beginning January 1, 2022, and it did not have a material effect on our audited consolidated financial statements. In May 2021, the FASB issued an accounting pronouncement (ASU 2021-04) related to modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. The pronouncement states that an entity should treat the modification as an exchange of the original instrument for a new instrument, and the effect of the modification should be calculated as the difference between the fair value of the modified instrument and the fair value of that instrument immediately before modification. An entity should then recognize the effect of the modification on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021. The pronouncement will be applied prospectively to all modifications that occur after the initial date of adoption. We adopted this pronouncement for our fiscal year beginning January 1, 2022, and it did not have a material effect on our audited consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements. | NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Duos Technologies Group, Inc. (the “Company”), through its operating subsidiaries, Duos Technologies, Inc. (“Duos”) and TrueVue360, Inc. (“TrueVue360”) (collectively the “Company”), develops and deploys vision based analytical technology solutions that will help to transform precision railroading, logistics and inter-modal transportation operations. Additionally, these unique patented solutions can be employed into many other industries. The Company has developed the Railcar Inspection Portal (RIP) that provides both freight and transit railroad customers and select government agencies the ability to conduct fully automated inspections of trains while they are in transit. The system, which incorporates a variety of sophisticated optical technologies, illumination and other sensors, scans each passing railcar to create an extremely high-resolution image set from a variety of angles including the undercarriage. These images are then processed through various methods of artificial intelligence (“AI”) algorithms to identify specific defects and/or areas of interest on each railcar. This is all accomplished within minutes of a railcar passing through our portal. This solution has the potential to transform the railroad industry by increasing safety, improving efficiency and reducing costs. The Company has successfully deployed this system with several Class 1 railroad customers and anticipates an increased demand in the future. Government agencies can conduct digital inspections combined with the incorporated AI to improve rail traffic flow across borders which also directly benefits the Class 1 railroads through increasing their velocity. The Company has also developed the Automated Logistics Information System (ALIS) which automates and reduces/removes personnel from gatehouses where trucks enter and exit large logistics and intermodal facilities. This solution also incorporates sensors and data points as necessary for each operation and directly interconnects with backend logistics databases and processes to streamline operations and significantly improve operations and security and importantly dramatically improves the vehicle throughput on each lane on which the technology is deployed. The Company has built a portfolio of IP and patented solutions that creates “actionable intelligence” using two core native platforms called Centraco® and Praesidium™. All solutions provided include a variant of both applications. Centraco is designed primarily as the user interface to all our systems as well as the backend connection to third-party applications and databases through both Application Programming Interfaces (APIs) and Software Development Kits (SDKs). This interface is browser based and hosted within each one of our systems and solutions. It is typically also customized for each unique customer and application. Praesidium typically resides as middleware in our systems and manages the various image capture devices and some sensors for input into the Centraco software. The Company also developed a proprietary Artificial Intelligence (AI) software platform, Truevue360™ with the objective of focusing the Company’s advanced intelligent technologies in the areas of AI, deep machine learning and advanced multi-layered algorithms to further support our solutions. Through September 30, 2021, the Company also provided professional and consulting services for large data centers and had developed a system for the automation of asset information marketed as DcVue™. The Company had deployed its DcVue software at one beta site. This software was used by Duos’ consulting auditing teams. DcVue was based upon the Company’s OSPI patent which was awarded in 2010. The Company offered DcVue available for license to our customers as a licensed software product. The Company ceased offering this product in 2021. The Company’s strategy is to deliver operational and technical excellence to our customers, expand our RIP and ALIS solutions into current and new customers focused in the Rail, Logistics and U.S. Government Sectors, offer both one-time equipment sales and capital lease pricing models, and longer-term offer subscription pricing, to customers that increases recurring revenue, grows backlog and improves profitability, responsibly grow the business both organically and through selective acquisitions, and promote a performance-based work force where employees enjoy their work and are incentivized to excel and remain with the Company. Reclassifications The Company reclassified $ 850,999 2,499,998 The Company reclassified certain operating expenses for the year ended December 31, 2021 to conform to 2022 classification. There was no net effect on the total expenses of such reclassification. The following table reflects the reclassification adjustment effect for the year ended December 31, 2021: Schedule of Reclassifications Before Reclassification After Reclassification For the Year Ended For the Year Ended December 31, December 31, 2021 2021 REVENUES: REVENUES: Technology systems $ 5,871,666 Technology systems $ 5,871,666 Technical support 2,388,251 Services and consulting 2,388,251 Total Revenue 8,259,917 Total Revenue 8,259,917 COST OF REVENUES: COST OF REVENUES: Technology systems 7,151,276 Technology systems 4,728,197 Technical support 1,369,985 Services and consulting 1,492,176 Overhead 2,297,826 — — Total Cost of Revenues 10,819,087 Total Cost of Revenues 6,220,373 GROSS MARGIN (2,559,170) GROSS MARGIN 2,039,544 OPERATING EXPENSES: OPERATING EXPENSES: Sales and marketing 1,233,851 Sales and marketing 1,233,851 Research and development 251,563 Research and development 2,515,630 General and administration 3,412,367 General and administration 5,747,014 Total Operating Expenses 4,897,781 Total Operating Expenses 9,496,495 LOSS FROM OPERATIONS $ (7,456,951 ) LOSS FROM OPERATIONS $ (7,456,951 ) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Duos Technologies, Inc. and TrueVue360, Inc. All inter-company transactions and balances are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 may differ from these estimates. The most significant estimates in the accompanying consolidated financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of intangible and other long-lived assets, estimates of net contract revenues and the total estimated costs to determine progress towards contract completion, valuation of inventory, estimates of the valuation of right of use assets and corresponding lease liabilities, valuation of warrants and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Concentrations Cash Concentrations Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. We have not experienced any losses related to these balances. As of December 31, 2022, the Company had balances in a financial institution which combined exceeded federally insured limits by approximately $ 688,000 Significant Customers and Concentration of Credit Risk The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For the year ended December 31, 2022, four customers accounted for 42 18 14 14 83 At December 31, 2022, four customers accounted for 34 31 19 10 81 10 Geographic Concentration Approximately 41 86 Significant Vendors and Concentration In some instances, the Company relies on a limited pool of vendors for key components related to the manufacturing of its subsystems. These vendors are primarily focused on camera, server and lighting technologies integral to the Company’s solution where possible, the Company seeks multiple vendors for key components to mitigate vendor concentration risk. Fair Value of Financial Instruments and Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions that the market participants would use in the asset or liability based on the best available information. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The estimated fair value of certain financial instruments, including accounts receivable, prepaid expenses, accounts payable, accrued expenses and notes payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. Accounts Receivable Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on accounts, historical trends are evaluated, and specific customer issues are reviewed to arrive at appropriate allowances. The Company reviews its accounts to estimate losses resulting from the inability of its customers to make required payments. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. Inventory Inventory consists primarily of spare parts, consumables and long-lead components to be used in the production of our technology systems or in connection with maintenance agreements with customers. Inventory is stated at the lower of cost or net realizable value. Any inventory determined to be obsolete is written off. Inventory cost is primarily determined using the weighted average cost method. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment (three 3 5 Software Development Costs Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be Sold, Leased, or Marketed) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Patents and Trademarks Patents and trademarks which are stated at amortized cost, relate to the development of video surveillance security system technology and are being amortized over 17 Long-Lived Assets The Company evaluates the recoverability of its property, equipment, and other long-lived assets in accordance with FASB ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets”, which requires recognition of impairment of long-lived assets in the event the net book values of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. This guidance requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Product Warranties The Company has a 90 12 36 Loan Costs Loan costs paid to lenders, or third parties are recorded as debt discounts to the related loans and amortized to interest expense over the loan term. Sales Returns Our systems are sold as integrated systems and there are no sales returns allowed. Revenue Recognition The Company follows Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), that affects the timing of when certain types of revenues will be recognized. The basic principles in ASC 606 include the following: a contract with a customer creates distinct contract assets and performance obligations, satisfaction of a performance obligation creates revenue, and a performance obligation is satisfied upon transfer of control to a good or service to a customer. Revenue is recognized by evaluating our revenue contracts with customers based on the five-step model under ASC 606: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue when (or as) each performance obligation is satisfied. The Company generates revenue from four sources: (1) Technology Systems (2) AI Technologies (3) Technical Support (4) Consulting Services Technology Systems For revenues related to technology systems, the Company recognizes revenue over time using a cost-based input methodology in which significant judgment is required to estimate costs to complete projects. These estimated costs are then used to determine the progress towards contract completion and the corresponding amount of revenue to recognize. Accordingly, the Company now bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “contract assets”. Any billings of customers more than recognized revenues are recorded as a liability in “contract liabilities”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. AI Technologies The Company has revenue from applications that incorporate artificial intelligence (AI) in the form of predetermined algorithms which provide important operating information to the users of our systems. The revenue generated from these applications of AI consists of a fixed fee related to the design, development, testing and incorporation of new algorithms into the system, which is recognized as revenue at a point in time upon acceptance, as well as an annual application maintenance fee, which is recognized as revenue ratably over the contracted maintenance term. Technical Support Technical support services are provided on both an as-needed and extended-term basis and may include providing both parts and labor. Maintenance and technical support provided outside of a maintenance contract are on an “as-requested” basis, and revenue is recognized over time as the services are provided. Revenue for maintenance and technical support provided on an extended-term basis is recognized over time ratably over the term of the contract. Consulting Services The Company’s consulting services business generates revenues under contracts with customers from four sources: (1) Professional Services (consulting and auditing); (2) Software licensing with optional hardware sales; (3) Customer service training and (4) Maintenance support. (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) For all periods reflected in this report, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third-party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer; (3) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (4) Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. Multiple Performance Obligations and Allocation of Transaction Price Arrangements with customers may involve multiple performance obligations including project revenue and maintenance services in our Technology Systems business. Maintenance will occur after the project is completed and may be provided on an extended-term basis or on an as-needed basis. In our consulting services business, multiple performance obligations may include any of the above four sources. Training and maintenance on software products may occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for a multiple performance obligations arrangement is as follows: Each performance obligation is accounted for separately when each has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each performance obligations is recognized using the applicable criteria under GAAP as discussed above for performance obligations sold in single performance obligation arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells its various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of performance obligations relative selling price allocation. The Company only sells maintenance services or spare parts based on its established rates after it has completed a system integration project for a customer. The customer is not required to purchase maintenance services. All elements in multiple performance obligations arrangements with Company customers qualify as separate units of account for revenue recognition purposes. Advertising The Company expenses the cost of advertising. During the years ended December 31, 2022 and 2021, there were no Stock Based Compensation The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718-10, “ Share-Based Payment The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding a number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. Income Taxes The Company accounts for income taxes in accordance with the Financial Accounting Standards Board FASB Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company evaluates all significant tax positions as required by ASC 740. As of December 31, 2022, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability, nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year. Any penalties and interest assessed by income taxing authorities are included in operating expenses. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. Tax years 2019, 2020 and 2021 remain open for potential audit. Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss applicable to common stock by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stock by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible debt instruments, convertible preferred stock or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At December 31, 2022, there was an aggregate of 147,591 926,266 433,000 At December 31, 2021, there was an aggregate of 1,376,466 431,266 121,571 454,546 Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize right-of-use (“ROU”) assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this guidance effective January 1, 2019, using the modified retrospective method, whereby a cumulative effect adjustment was made as of the date of initial application. The Company also applied the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and (ii) initial direct costs for any existing leases. The Company made an accounting policy election to not recognize short-term leases with terms of twelve months or less on the balance sheet and instead recognize the lease payments in expense as incurred. The Company has also elected to account for real estate leases that contain both lease and non-lease components as a single lease component. The adoption of ASU 2016-02 did not materially affect our consolidated statement of operations or our consolidated statement of cash flows. For contracts entered into on or after the effective date, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. Operating ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date to determine the present value of future payments. The lease term includes all periods covered by renewal and termination options where the Company is reasonably certain to exercise the renewal options or not to exercise the termination options. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations. Recent Accounting Pronouncements From time to time, the FASB or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of an Accounting Standards Update (“ASU”). In August 2020, the FASB issued an accounting pronouncement (ASU 2020-06) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity's own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity's own equity. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. During 2022, the Company did not issue any convertible instruments or contracts and does not foresee any such issuances in the near future. In May 2021, the FASB issued an accounting pronouncement (ASU 2021-04) related to modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. The pronouncement states that an entity should treat the modification as an exchange of the original instrument for a new instrument, and the effect of the modification should be calculated as the difference between the fair value of the modified instrument and the fair value of that instrument immediately before modification. An entity should then recognize the effect of the modification on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021. During 2022, the Company did not issue any equity classified written call options or warrant during the year and does not foresee any issuances in the near future. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements. |
LIQUIDITY
LIQUIDITY | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
LIQUIDITY | NOTE 2 – LIQUIDITY As reflected in the accompanying consolidated financial statements, the Company had a net loss of $ 2,143,683 7,086 3,860,339 54,505,517 As previously noted, the Company raised $4,500,000 from existing shareholders through the issuance of Series C Convertible Preferred Stock during 2021. Additionally, the Company was successful during 2022 in raising gross proceeds of over $10,100,000 from the sale of both common shares and Series D Preferred Stock. Additionally, late in the first quarter of 2023, the Company raised gross proceeds of $4,000,000 from the issuance of Series E Preferred Stock. As part of its strategy, the Company will endeavor to utilize the Preferred Series E and the remainder of the Series D as additional funding mechanisms. Additionally, during the second quarter of 2023, the Company will again have access to its S-3 “shelf registration” statement allowing the Company to sell additional common shares. At the time of this filing, the Company estimates that it has available capacity on its shelf registration which it can utilize to bolster working capital and growth of the business in the event it did not have an uptake in the preferred classes of shares previously noted. Although additional investment is not assured, the Company is comfortable that it would be able to raise sufficient capital to support expanded operations based on an anticipated increase in business activity. In the long run, the continuation of the Company as a going concern is dependent upon the ability of the Company to continue executing its business plan, generate enough revenue, and attain consistently profitable operations. Although the lingering effects of the global pandemic related to the coronavirus (Covid-19) continue to affect our operations, particularly in our supply chain, we now believe that this is expected to be an ongoing issue and our working capital assumptions reflect this new reality. The Company cannot currently quantify the uncertainty related to the ongoing supply chain delays or inflationary increases and their effects on our customers in the coming quarters. We have analyzed our cash flow under “stress test” conditions and have determined that we have sufficient liquid assets on hand or available via the capital markets to maintain operations for at least twelve months from the date of this report. In addition, management has been taking and continues to take actions including, but not limited to, elimination of certain costs that do not contribute to short term revenue, and re-aligning both management and staffing with a focus on improving certain skill sets necessary to build growth and profitability and focusing product strategy on opportunities that are likely to bear results in the relatively short term. The Company believes that, as described above, it will have sufficient sources of working capital to meet its obligations over the following twelve months. In the last twelve months the Company has seen significant growth in its contracted backlog as well as positive signs from new commercial engagements that indicate improvements in future commercial opportunities. Management believes that, at this time, the conditions in our market space with ongoing contract delays, the consequent need to procure certain materials in advance of a binding contract and the additional time needed to execute on new contracts previously reported have put a strain on our cash reserves. However, recent common stock offerings and private placements as well as the availability to raise capital via its shelf registration indicate there is no substantial doubt for the Company to continue as a going concern for a period of twelve months. We continue executing the plan to grow our business and achieve profitability. The Company may selectively look at opportunities for fund raising in the future. Management has extensively evaluated our requirements for the next 12 months and has determined that the Company currently has sufficient cash and access to capital to operate for at least that period. While no assurance can be provided, management believes that these actions provide the opportunity for the Company to continue as a going concern and to grow its business and achieve profitability with access to additional capital funding. Ultimately the continuation of the Company as a going concern is dependent upon the ability of the Company to continue executing the plan described above which was put in place in late 2022 and will continue in 2023 and beyond. As a result, we expect to generate sufficient revenue and to attain profitable operations with less net cash used in operating activities in the next 12 months. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | NOTE 2 – LIQUIDITY As reflected in the accompanying consolidated financial statements, the Company had a net loss of $ 6,864,783 7,873,307 2,339,052 52,361,834 As previously noted, the Company raised $4,500,000 from existing shareholders through the issuance of Series C Convertible Preferred Stock during 2021. Additionally, the Company was successful during 2022 in raising gross proceeds of over $10,100,000 from the sale of both common shares and Series D Preferred Stock. Additionally, late in the first quarter of 2023, the Company raised gross proceeds of $4,000,000 from the issuance of Series E Preferred Stock (See Note 16). As part of its strategy, the Company will endeavor to utilize the Preferred Series E and the remainder of the Series D as additional funding mechanisms. Additionally, during the second quarter of 2023, the Company will again have access to its S-3 “shelf registration” statement allowing the Company to sell additional common shares. At the time of this document, the Company estimates that it has available capacity on its shelf registration which it can utilize to bolster working capital and growth of the business in the event it did not have an uptake in the preferred classes of shares previously noted. Although additional investment is not assured, the Company is comfortable that it would be able to raise sufficient capital to support expanded operations based on an anticipated increase in business activity. In the long run, the continuation of the Company as a going concern is dependent upon the ability of the Company to continue executing its business plan, generate enough revenue, and attain consistently profitable operations. Although the lingering effects of the global pandemic related to the coronavirus (Covid-19) continue to affect our operations, particularly in our supply chain, we now believe that this is expected to be an ongoing issue and our working capital assumptions reflect this new reality. The Company cannot currently quantify the uncertainty related to the ongoing supply chain issues and its effects on our customers in the coming quarters. We have analyzed our cash flow under “stress test” conditions and have determined that we have sufficient liquid assets on hand or available via the capital markets to maintain operations for at least twelve months from the date of this report. In addition, management has been taking and continues to take actions including, but not limited to, elimination of certain costs that do not contribute to short term revenue, and re-aligning both management and staffing with a focus on improving certain skill sets necessary to build growth and profitability and focusing product strategy on opportunities that are likely to bear results in the relatively short term. The Company believes that, with the combination of Series E Preferred Stock offering coupled with an S-3 shelf registration availability starting in the second quarter of 2023, it will have sufficient working capital to meet its obligations over the following twelve months. In the last twelve months the Company has seen significant growth in its contracted backlog as well as positive signs from new commercial engagements that indicate improvements in future commercial opportunities. Management believes that, at this time, the conditions in our market space with ongoing contract delays, the consequent need to procure certain materials in advance of a binding contract and the additional time needed to execute on new contracts previously reported have put a strain on our cash reserves. However, recent common stock offerings and private placements as well as the availability to raise capital via its shelf registration indicate there is no substantial doubt for the Company to continue as a going concern for a period of twelve months. We continue executing the plan to grow our business and achieve profitability. The Company may selectively look at opportunities for fund raising in the future. Management has extensively evaluated our requirements for the next 12 months and has determined that the Company currently has sufficient cash and access to capital to operate for at least that period. While no assurance can be provided, management believes that these actions provide the opportunity for the Company to continue as a going concern and to grow its business and achieve profitability with access to additional capital funding. Ultimately the continuation of the Company as a going concern is dependent upon the ability of the Company to continue executing the plan described above which was put in place in late 2022 and will continue in 2023 and beyond. As a result, we expect to generate sufficient revenue and to attain profitable operations with minimal cash use in the next 12 months. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable were as follows at December 31, 2022 and 2021: Schedule of Accounts Receivable December 31, December 31, 2022 2021 Accounts receivable $ 3,418,263 $ 1,738,543 Allowance for doubtful accounts — — Accounts Receivable, Net $ 3,418,263 $ 1,738,543 The Company’s bad debt expense was zero in 2022 and there was bad debt expense related to accounts receivable of $ 76,046 in 2021. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT The major classes of property and equipment are as follows at December 31, 2022 and 2021: Schedule of major classes of property and equipment December 31, December 31, 2022 2021 Furniture, fixtures and equipment $ 1,606,451 $ 1,264,001 Less: Accumulated depreciation (976,961 ) (660,748 ) Furniture, fixtures and equipment, Net $ 629,490 $ 603,253 Depreciation expense 319,928 269,978 |
PATENTS AND TRADEMARKS
PATENTS AND TRADEMARKS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENTS AND TRADEMARKS | NOTE 5 – PATENTS AND TRADEMARKS Schedule of patents and trademarks December 31, December 31, 2022 2021 Patents and trademarks $ 326,145 $ 309,205 Less: Accumulated amortization (256,412 ) (242,723 ) Patents and trademarks, Net $ 69,733 $ 66,482 Amortization expense in 2022 and 2021 was $ 13,688 5,368 |
SOFTWARE DEVELOPMENT COSTS
SOFTWARE DEVELOPMENT COSTS | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
SOFTWARE DEVELOPMENT COSTS | NOTE 6 – SOFTWARE DEVELOPMENT COSTS In 2018, the Company capitalized $ 60,000 281,783 Schedule of Software Development Costs December 31, December 31, 2022 2021 Software development costs $ 341,784 $ 60,000 Less: Accumulated amortization (76,576 ) (60,000 ) Software Development Costs, net $ 265,208 $ — Amortization of software development costs in 2022 and 2021 was $ 16,576 0 |
DEBT
DEBT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
DEBT | NOTE 3 – DEBT Notes Payable - Financing Agreements The Company’s notes payable relating to financing agreements classified as current liabilities consist of the following as of March 31, 2023 and December 31, 2022: Schedule of Notes Payable - Financing Agreements March 31, 2023 December 31, 2022 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 18,737 8.73 % $ — — Third Party - Insurance Note 2 — 17,753 6.24 % Third Party - Insurance Note 3 6,526 16,094 — Third Party - Insurance Note 4 167,830 — 40,728 — Total $ 193,094 $ 74,575 The Company entered into an agreement on December 23, 2022 with its insurance provider by issuing a $ 26,484 8.73 2,755 18,737 0 The Company entered into an agreement on April 15, 2022 with its insurance provider by issuing a note payable (Insurance Note 2) for the purchase of an insurance policy in the amount of $ 63,766 6.24 5,979 0 17,753 The Company entered into an agreement on September 15, 2022 with its insurance provider by issuing a note payable (Insurance Note 3) for the purchase of an insurance policy in the amount of $ 24,140 4,024 6,526 16,094 The Company entered into an agreement on February 3, 2022 with its insurance provider by issuing a note payable (Insurance Note 4) for the purchase of an insurance policy in the amount of $ 242,591 20,073 293,520 23,976 167,830 40,728 Equipment Financing The Company entered into an agreement on May 22, 2020 with an equipment financing company by issuing a $ 121,637 9.90 3,919 11,566 22,851 At March 31, 2023, future minimum lease payments due under the equipment financing is as follows: Schedule of Future Minimum Lease Payments Under Finance Lease Calendar year: Amount 2023 11,757 Total minimum equipment financing payments $ 11,757 Less: interest (191 ) Total equipment financing at March 31, 2023 $ 11,566 Less: current portion of equipment financing (11,566 ) Long term portion of equipment financing $ — | NOTE 7 – DEBT Notes Payable – Insurance Premium Financing Agreements The Company’s notes payable relating to financing agreements classified as current liabilities consist of the following as of: Schedule of Notes Payable - Financing Agreements December 31, 2022 December 31, 2021 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ — — $ 22,266 7.75 % Third Party - Insurance Note 2 17,753 6.24 % 12,667 6.24 % Third Party - Insurance Note 3 16,094 — 17,570 — Third Party - Insurance Note 4 40,728 — — — Total $ 74,575 $ 52,503 The Company entered into an agreement on December 23, 2021 with its insurance provider by issuing a $ 22,266 7.75 2,104 22,266 The Company entered into an agreement on April 15, 2021 with its insurance provider by issuing a note payable (Insurance Note 2) for the purchase of an insurance policy in the amount of $ 62,041 6.24 6,383 63,766 6.24 5,979 17,753 12,667 The Company entered into an agreement on September 15, 2021, with its insurance provider by issuing a note payable (Insurance Note 3) for the purchase of an insurance policy in the amount of $ 19,965 1,997 24,140 2,012 16,094 17,570 The Company entered into an agreement on February 3, 2021 with its insurance provider by issuing a note payable (Insurance Note 4) for the purchase of an insurance policy in the amount of $ 215,654 17,899 242,591 20,074 40,728 0 Equipment Financing The Company entered into an agreement on August 26, 2019 with an equipment financing company by issuing a $ 147,899 12.72 4,963 121,637 9.90 3,919 22,851 103,186 At December 31, 2022, future minimum lease payments due under the equipment financing is as follows: Schedule of Future Minimum Lease Payments Under Finance Lease Calendar year: Amount 2023 23,515 Total minimum equipment financing payments $ 23,515 Less: interest (664 ) Total equipment financing at December 31, 2022 $ 22,851 Less: current portion of equipment financing (22,851 ) Long-term portion of equipment financing $ — Notes Payable – PPP Loan On April 23, 2020, the Company entered into a promissory note (the “Note”) with BBVA USA, which provided for a loan in the amount of $ 1,410,270 1.00 0 0 |
REVENUES AND CONTRACT ACCOUNTIN
REVENUES AND CONTRACT ACCOUNTING | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
REVENUES AND CONTRACT ACCOUNTING | NOTE 6 - REVENUE AND CONTRACT ACCOUNTING Revenue Recognition and Contract Accounting The Company generates revenue from four sources: (1) Technology Systems; (2) AI Technology which is included in the consolidated statements of operations line-item Technology Systems; (3) Technical Support; and (4) Consulting Services which is included in the consolidated statements of operations line-item Services and Consulting. Contract assets and contract liabilities on uncompleted contracts for revenues recognized over time are as follows: Contract Assets Contract assets on uncompleted contracts represent cumulative revenues recognized in excess of billings and/or cash received on uncompleted contracts accounted for under the cost-to-cost input method, which recognizes revenue based on the ratio of cost incurred to total estimated costs. At March 31, 2023 and December 31, 2022, contract assets on uncompleted contracts consisted of the following: Schedule Of Contract Assets On Uncompleted Contracts March 31, 2023 December 31, 2022 Cumulative revenues recognized $ 7,144,602 $ 5,934,205 Less: Billings or cash received (5,718,290 ) (5,508,483 ) Contract assets $ 1,426,312 $ 425,722 Contract Liabilities Contract liabilities, on uncompleted contracts represent billings and/or cash received that exceed cumulative revenues recognized on uncompleted contracts accounted for under the cost-to-cost input method, which recognizes revenues based on the ratio of the cost incurred to total estimated costs. Contract liabilities on services and consulting revenues represent billings and/or cash received in excess of revenue recognized on service agreements that are not accounted for under the cost-to-cost input method. At March 31, 2023 and December 31, 2022, contract liabilities on uncompleted contracts and contract liabilities on services and consulting consisted of the following: Schedule of Contract Liabilities on Uncompleted Contracts March 31, 2023 December 31, 2022 Billings and/or cash receipts on uncompleted contracts $ 323,207 $ 4,355,470 Less: Cumulative revenues recognized (262,988 ) (4,144,018 ) Contract liabilities, technology systems 60,219 211,452 Contract liabilities, services and consulting 2,006,642 746,545 Total contract liabilities $ 2,066,861 $ 957,997 Contract Liabilities at December 31, 2022 were $ 957,997 151,233 248,856 The Company expects to recognize all contract liabilities within 12 months from the consolidated balance sheet date. Disaggregation of Revenue The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures. Qualitative: 1. We have four distinct revenue sources: a. Technology Systems (Turnkey, engineered projects); b. AI Technology (Associated maintenance and support services); c. Technical Support (Licensing and professional services related to auditing of data center assets); and d. Consulting Services (Predetermined algorithms to provide important operating information to the users of our systems). 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, commercial, government, banking and IT suppliers. 4. Our services & maintenance contracts are fixed price and fall into two duration types: a. Turnkey engineered projects and professional service contracts that are less than one year in duration and are typically one to two quarters in length; and b. Maintenance and support contracts ranging from one to five years in length Quantitative: For the Three Months Ended March 31, 2023 Schedule of Disaggregation of Revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Major Goods and Service Lines Turnkey Projects $ 1,827,764 $ — $ — $ — $ 1,827,764 Maintenance and Support 548,685 28,831 11,353 — 588,869 Algorithms — — — 227,655 227,655 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Timing of Revenue Recognition Goods transferred over time $ 1,827,764 $ — $ — $ — $ 1,827,764 Services transferred over time 548,685 28,831 11,353 227,655 816,524 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 For the Three Months Ended March 31, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Major Goods and Service Lines Turnkey Projects $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Maintenance and Support 486,616 17,798 20,221 131,412 656,047 Algorithms — — — 131,189 131,189 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Timing of Revenue Recognition Goods transferred over time $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Goods delivered at point in time $ — — — 131,189 131,189 Services transferred over time 486,616 17,798 20,221 131,412 656,047 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 | NOTE 8 – REVENUES AND CONTRACT ACCOUNTING The Company generates revenue from four sources: (1) Technology Systems; (2) AI Technology which is included in the consolidated statements of operations line-item Technology Systems; (3) Technical Support; and (4) Consulting Services which is included in the consolidated statements of operations line-item Services and Consulting. Contract assets and contract liabilities on uncompleted contracts for revenues recognized over time are as follows: Contract Assets Contract assets on uncompleted contracts represent cumulative revenues recognized in excess of billings and/or cash received on uncompleted contracts accounted for under the cost-to-cost input method which recognizes revenue based on the ratio of costs incurred to total estimated costs. At December 31, 2022 and 2021, contract assets on uncompleted contracts consisted of the following: Schedule Of Contract Assets On Uncompleted Contracts 2022 2021 Cumulative revenues recognized $ 5,934,205 $ 5,266,930 Less: Billings or cash received (5,508,483 ) (5,263,481 ) Contract Assets $ 425,722 $ 3,449 Contract Liabilities Contract liabilities on uncompleted contracts represent billings and/or cash received that exceed cumulative revenues recognized on uncompleted contracts accounted for under the cost-to-cost input method. Contract liabilities on services and consulting revenues represent billings and/or cash received in excess of revenue recognized on service agreements that are not accounted for under the cost-to-cost input method. The Company expects to recognize all contract liabilities within 12 months from the consolidated balance sheet date. At December 31, 2022 and 2021, contract liabilities on uncompleted contracts consisted of the following: Schedule of Contract Liabilities on Uncompleted Contracts 2022 2021 Billings and/or cash receipts on uncompleted contracts $ 4,355,470 $ 4,473,726 Less: Cumulative revenues (4,144,018 ) (3,041,088 ) Contract liabilities, technology systems $ 211,452 $ 1,232,638 Contract Liabilities, services and consulting 746,545 596,673 Total Contract Liabilities $ 957,997 $ 1,829,311 Disaggregation of Revenue The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures. Qualitative: 1. We have four distinct revenue sources: a. Technology Systems (Turnkey, engineered projects); b. AI Technology (Associated maintenance and support services); c. Technical Support (Licensing and professional services related to auditing of data center assets); and d. Consulting Services (Predetermined algorithms to provide important operating information to the users of our systems). 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, commercial, government, banking and IT suppliers. 4. Our technology systems and equipment projects fall into two types: a. Transfer of goods and services are over time. b. Goods delivered at point in time. 5. Our services & maintenance contracts are fixed price and fall into two duration types: a. Turnkey engineered projects and professional service contracts that are less than one year in duration and are typically one to two quarters in length; and b. Maintenance and support contracts ranging from one to five years in length. Quantitative: For the Year Ended December 31, 2022 Schedule of Disaggregation of Revenue Segments Rail Commercial Petrochemical Government Banking/Other IT Artificial Total Primary Geographical Markets North America $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Major Goods and Service Lines Turnkey Projects $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Maintenance & Support 2,921,084 106,146 — 80,884 — — — 3,108,114 Data Center Auditing Services — — — — — — — — Software License — — — — — — — — Algorithms — — — — — — 713,960 713,960 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Timing of Revenue Recognition Goods transferred over time $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Services transferred over time 2,921,084 106,146 — 80,884 — — 713,960 3,822,074 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Quantitative: For the Year Ended December 31, 2021 Segments Rail Commercial Petrochemical Government Banking IT Artificial Total Primary Geographical Markets North America $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Major Goods and Service Lines Turnkey Projects $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ — $ — $ 5,518,004 Maintenance & Support 1,628,179 185,686 (867 ) 80,885 21,803 — 341,915 2,257,601 Data Center Auditing Services — — — — — 131,537 — 131,537 Software License — — — — — 3,180 — 3,180 Algorithms — — — — — — 349,595 349,595 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Timing of Revenue Recognition Goods transferred over time $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ 131,537 $ 349,595 $ 5,999,136 Services transferred over time 1,628,179 185,686 (867 ) 80,885 21,803 3,180 341,915 2,260,781 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Segment Information The Company operates in one reportable segment. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
DEFERRED COMPENSATION | NOTE 9 – DEFERRED COMPENSATION As of December 31, 2022, and 2021, the Company has accrued $ 297,620 505,896 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 4 – COMMITMENTS AND CONTINGENCIES Operating Lease Obligations On July 26, 2021, the Company entered into a new operating lease agreement for office and warehouse combination space of 40,000 4,980,104 30,000 600,000 4,612,830 As of March 31, 2023, the office and warehouse lease is the Company’s only lease with a term greater than twelve months. The office and warehouse lease have a remaining term of approximately 9.3 years and includes an option to extend for two renewal terms of five years each. The renewal options are not reasonably certain to be exercised, and therefore, they are not included when determining the lease term used to establish the right of use asset and lease liability. The Company also has several short-term leases, primarily related to equipment. The Company made an accounting policy election to not recognize short-term leases with terms of twelve months or less on the consolidated balance sheet and instead recognize the lease payments in expense as incurred. The Company has also elected to account for real estate leases that contain both lease and non-lease components (such as common area maintenance) as a single lease component. The following table shows supplemental information related to leases: Schedule of supplemental information related to leases Three Months Ended March 31, 2023 2022 Lease cost: Operating lease cost $ 195,409 $ 193,980 Short-term lease cost 7,104 6,749 Other information: Operating cash outflow used for operating leases 126,416 46,250 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 9.2 10.2 As of March 31, 2023, future minimum lease payments due under our operating leases are as follows: Schedule of future minimum lease payments for non-cancellable operating leases Amount Calendar year: 2023 $ 570,453 2024 779,087 2025 798,556 2026 818,518 2027 838,984 Thereafter 4,043,427 Total undiscounted future minimum lease payments 7,849,025 Less: Impact of discounting (2,617,321 ) Total present value of operating lease obligations 5,231,704 Current portion (764,820 ) Operating lease obligations, less current portion $ 4,466,884 Executive Severance Agreement Pursuant to a separation agreement with Gianni Arcaini, our former Chief Executive Officer and Chairman of the Board (the “Separation Agreement”), Mr. Arcaini’s employment with the Company ended on September 1, 2020 (“Separation Date”). The Separation Agreement provides that he will receive separation payments over a 36-month period equal to his base salary plus $ 75,000 In accordance with the Separation Agreement, the Company will pay to Mr. Arcaini the total sum of $ 747,788 124,631 114,275 1,200 400 | NOTE 10 – COMMITMENTS AND CONTINGENCIES Operating Lease Obligations On July 26, 2021, the Company entered a new operating lease agreement for office and warehouse combination space of 40,000 4,980,104 30,000 600,000 4,689,931 As of December 31, 2022, the office and warehouse lease is the Company’s only lease with a term greater than twelve months. The office and warehouse lease has a remaining term of approximately 9.5 years and includes an option to extend for two renewal terms of five years each. The renewal options are not reasonably certain to be exercised, and therefore, they are not included when determining the lease term used to establish the right-of use asset and lease liability. The Company also has several short-term leases, primarily related to equipment. The Company made an accounting policy election to not recognize short-term leases with terms of twelve months or less on the consolidated balance sheet and instead recognize the lease payments in expense as incurred. The Company has also elected to account for real estate leases that contain both lease and non-lease components (such as common area maintenance) as a single lease component. The following table shows supplemental information related to leases: Schedule of supplemental information related to leases Year Ended December 31, 2022 2021 Lease cost: Operating lease cost $ 782,591 $ 414,085 Short-term lease cost 33,751 21,628 Other information: Operating cash outflow used for operating leases 416,250 285,959 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 9.5 10.4 At December 31, 2022, future minimum lease payments due under the operating lease are as follows: Schedule of future minimum lease payments for non-cancellable operating leases As of December 31, 2022 Fiscal year: 2023 $ 696,869 2024 779,087 2025 798,556 2026 818,518 2027 838,984 Thereafter 4,043,427 Total undiscounted future minimum lease payments 7,975,441 Less: Impact of discounting (2,735,629 ) Total present value of operating lease liability 5,239,812 Current portion (696,869 ) Operating lease liability, less current portion $ 4,542,943 Executive Severance Agreement On April 1, 2018, the Company entered into an employment agreement (the “Arcaini Employment Agreement”) with Gianni B. Arcaini, pursuant to which Mr. Arcaini served as Chief Executive Officer and Chairman of the Board of Directors of the Company. Under the Arcaini Employment Agreement, Mr. Arcaini was paid an annual salary of $ 249,260 18,000 1 As previously disclosed, on July 10, 2020, the Company announced that Mr. Arcaini would retire from these positions, effective as of September 1, 2020 (the “CEO Transition”). In order to facilitate a transition of his duties, the Company and Mr. Arcaini entered into a separation agreement which became effective as of July 10, 2020 (the “Separation Agreement”). Pursuant to the Separation Agreement, Mr. Arcaini’s employment with the Company ended on September 1, 2020 and he will receive separation payments over a 36-month period equal to his base salary plus $ 75,000 In accordance with the Separation Agreement, the Company will pay to Mr. Arcaini the total sum of $ 747,788 124,631 228,673 1,200 50,358 95,127 17,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 – INCOME TAXES The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets (liabilities) at December 31, 2022 and 2021 consist of net operating loss carryforwards and differences in the book basis and tax basis of intangible assets. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2022 and 2021 were as follows: Schedule of difference between income taxes at effective statutory rate and provision for income taxes Years Ended December 31, 2022 2021 Income tax benefit at U.S. statutory rate of 21% $ (1,441,624 ) $ (1,261,869 ) State income taxes (247,135 ) (216,321 ) Non-deductible expenses 201,521 64,553 Change in valuation allowance 1,487,238 1,413,637 Total provision for income tax $ — $ — The Company’s approximate net deferred tax assets as of December 31, 2022 and 2021 were as follows: Schedule of net deferred tax assets December 31, 2022 2021 Deferred Tax Asset (Liability): Net operating loss carryforward $ 9,772,854 $ 8,247,427 Intangible assets (32,656 ) 5,553 9,740,198 8,252,960 Valuation allowance (9,740,198 ) (8,252,960 ) Net deferred tax assets $ — $ — The gross operating loss carryforward was approximately $ 39,727,050 33,522,769 1,487,238 The potential tax benefit arising from the net operating loss carryforward of $ 4,357,876 5,382,322 Additionally, the future utilization of the net operating loss carryforward to offset future taxable income is subject to an annual limitation as a result of ownership or business changes that may occur in the future. The Company has not conducted a study to determine the limitations on the utilization of these net operating loss carryforwards. If necessary, the deferred tax assets will be reduced by any carryforward that may not be utilized or expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2021, 2020 and 2019 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
STOCKHOLDERS’ EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY Series B Convertible Preferred Stock The following summary of certain terms and provisions of our Series B Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is subject to, and qualified in its entirety by reference to, the terms and provisions set forth in our certificate of designation of preferences, rights and limitations of Series B Convertible Preferred Stock (the “Series B Convertible Preferred Certificate of Designation”) as previously filed. Subject to the limitations prescribed by our articles of incorporation, our board of directors is authorized to establish the number of shares constituting each series of preferred stock and to fix the designations, powers, preferences, and rights of the shares of each of those series and the qualifications, limitations and restrictions of each of those series, all without any further vote or action by our stockholders. Our board of directors designated 15,000 10,000,000 1,000 Each share of Series B Convertible Preferred Stock was convertible at any time at the holder’s option into a number of shares of common stock equal to $ 1,000 7.00 0 0 Series C Convertible Preferred Stock The Company’s Board of Directors designated 5,000 shares as the Series C Convertible Preferred Stock (the “Series C Convertible Preferred Stock”). Each share of the Series C Convertible Preferred Stock has a stated value of $1,000. The holders of the Series C Convertible Preferred Stock, the holders of the common stock and the holders of any other class or series of shares entitled to vote with the common stock shall vote together as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series C Convertible Preferred Stock has 172 votes (subject to adjustment); provided that in no event may a holder of Series C Convertible Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation (as defined in the Certificate of Designation and as described below). Each share of Series C Convertible Preferred Stock is convertible, at any time and from time to time, at the option of the holder, into that number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share ($1,000) by the conversion price, which is $5.50 (subject to adjustment). The Company shall not effect any conversion of the Series C Convertible Preferred Stock, and a holder shall not have the right to convert any portion of the Series C Convertible Preferred Stock, to the extent that after giving effect to the conversion sought by the holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the “Beneficial Ownership Limitation”). All holders of the Series C Preferred Stock have elected the 19.99% Beneficial Ownership Limitation. On February 26, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain existing investors in the Company (the “Purchasers”). Pursuant to the Purchase Agreement, the Purchasers purchased 4,500 shares of a newly authorized Series C Convertible Preferred Stock, and the Company received proceeds of $ 4,500,000 454,546 0 0 In connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers. Pursuant to the Registration Rights Agreement, the Company filed with the SEC a registration statement covering the resale by the Purchasers of the shares of common stock into which the shares of Series C Convertible Preferred Stock were convertible. The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. Series D Convertible Preferred Stock On September 28, 2022, the Company amended its articles of incorporation to designate 4,000 shares as the Series D Convertible Preferred Stock (the “Series D Convertible Preferred Stock”). Each share of the Series D Convertible Preferred Stock has a stated value of $1,000. The holders of the Series D Convertible Preferred Stock, the holders of the common stock and the holders of any other class or series of shares entitled to vote with the common stock shall vote together as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series D Convertible Preferred Stock has 333 votes (subject to standard anti-dilution adjustment); provided that in no event may a holder of Series D Convertible Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation (as defined in the Certificate of Designation and as described below). Each share of Series D Convertible Preferred Stock is convertible, subject to shareholder approval (which has not yet been granted); at any time and from time to time, at the option of the holder, into that number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share ($1,000) by the conversion price, which is $3.00 (subject to adjustment). The Company shall not effect any conversion of the Series D Convertible Preferred Stock, and a holder shall not have the right to convert any portion of the Series D Convertible Preferred Stock, to the extent that after giving effect to the conversion sought by the holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the “Beneficial Ownership Limitation”). All holders of the Series D Preferred Stock have elected the 19.99% Beneficial Ownership Limitation. The Company shall, subject to shareholder approval, reserve and keep available out of its authorized and unissued Common Stock, solely for the issuance upon the conversion of the Series D Convertible Preferred Stock, such a number of shares of Common Stock as shall from time to time be issuable upon the conversion of all of the shares of the Series D Convertible Preferred Stock then outstanding. Additionally, the Series D Convertible Preferred Stock does not have the right to dividends and in the event of an involuntary liquidation, the Series D shares shall be treated as a pro rata equivalent of common stock outstanding at the date of the liquidation event and have no liquidation preference. On September 30, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain existing investors in the Company (the “Purchasers”). Pursuant to the Purchase Agreement, the Purchasers purchased 999 999,000 On October 29, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a certain existing investor in the Company (the “Purchaser”). Pursuant to the Purchase Agreement, the Purchasers purchased 300 300,000 In connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers. Pursuant to the Registration Rights Agreement, the Company filed with the SEC a registration statement covering the resale by the Purchasers of the shares of common stock into which the shares of Series D Convertible Preferred Stock are convertible. The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. As of March 31, 2023 and December 31, 2022, respectively, there were 1,299 1,299 Series E Convertible Preferred Stock The Company’s Board of Directors has designated 30,000 shares as the Series E Convertible Preferred Stock. Each share of the Series E Convertible Preferred Stock has a stated value of $1,000. The holders of the Series E Convertible Preferred Stock, the holders of the common stock and the holders of any other class or series of shares entitled to vote with the common stock shall vote as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series E Preferred Stock has 333 votes (subject to adjustment); provided that in no event may a holder of Series E Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation (as defined in the Certificate of Designation). Each share of Series E Convertible Preferred Stock is convertible, subject to shareholder approval (which has not yet been granted); at any time and from time to time, at the option of the holder, into that number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share ($1,000) by the conversion price, which is $3.00 (subject to standard anti dilution provisions). The Company shall not effect any conversion of the Series E Convertible Preferred Stock, and the holder shall not have the right to convert any portion of the Series E Convertible Preferred Stock, to the extent that after giving effect to the conversion sought by the holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the “Beneficial Ownership Limitation”). The Company on March 27, 2023 entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an existing investor in the Company (the “Purchaser”). Pursuant to the Purchase Agreement, the Purchaser purchased 4,000 1,000 4,000,000 In connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers. Pursuant to the Registration Rights Agreement, the Company shall file with the SEC a registration statement covering the resale by the Purchasers of the shares of common stock into which the shares of Series E Preferred Stock are convertible. Subject to certain conditions, the Company must cause the registration statement to be declared effective by 90 days after closing (or in the event of a full review by the SEC, by 120 days). The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. Under the Purchase Agreement, the Company is required to hold a meeting of shareholders at the earliest practical date, but in no event later than 120 days after closing (or 150 days in the event of a review of the proxy statement by the Securities and Exchange Commission (the “SEC”)). As described below, the terms of the Series E Preferred Stock limit its convertibility until the Company receives shareholder approval (the “Stockholder Approval”). If the Company does not obtain the Stockholder Approval at the first meeting, it is required to hold shareholder meetings every four months until the Stockholder Approval is obtained. As of March 31, 2023 and December 31, 2022, respectively, there were 4,000 0 The existing investors Purchase Agreement also provides that the Company will not, with certain exceptions, sell or issue common stock or Common Stock Equivalents (as defined in the Purchase Agreement) on or prior to December 31, 2023 that entitles any person to acquire shares of common stock at an effective price per share less than the then conversion price of the Series E Preferred Stock without the consent of the Purchaser. The Registration Rights Agreement contains provisions for liquidated damages equal to 1% multiplied by the aggregate subscription amount paid, paid each month, in the event certain deadlines are missed. Common stock issued Three Months Ended March 31, 2022 During the three months ended March 31, 2022, shareholders converted 710 1,790 5.50 On February 3, 2022, the Company closed an offering of 1,325,000 5,300,000 4 4,779,000 On February 21, 2022, the Company closed on an “over-allotment” offering of 198,750 795,000 4 739,350 50,000,000 On March 31, 2022, the Company issued 7,198 40,000 Three Months Ended March 31, 2023 During the three months ended March 31, 2023, the Company issued 12,463 32,500 2.61 Employee Stock Purchase Plan In the fourth quarter of 2022, the board of directors adopted an Employee Stock Purchase Plan (“ESPP”) which, subject to shareholder approval, was effective as of 1 January 2023 with a term of 10 years. The ESPP allows eligible employees to purchase shares of the Company's common stock at a discounted price, through payroll deductions from a minimum of 1% and up to 25% of their eligible compensation up to a maximum of $ 25,000 85 1,000,000 Stock-Based Compensation Stock-based compensation expense recognized under ASC 718-10 for the three months ended March 31, 2023 and 2022, was $ 75,128 250,577 350,876 On May 12, 2021, the Board adopted, with shareholder approval, the 2021 Equity Incentive Plan (the “2021 Plan”) providing for the issuance of up to 1,000,000 On January 1, 2022, the Company awarded certain senior management and key employees non-qualified stock options under the 2021 Plan. Specifically, a total of 665,000 6.41 1,596,804 3.0 72 0.97 As of March 31, 2023, and December 31, 2022, options to purchase a total of 924,658 926,266 271,266 269,658 160,000 160,000 Schedule of stock option issuance of shares Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value Outstanding at December 31, 2021 431,266 $ 4.98 3.4 — Granted 685,000 $ 6.41 4.0 — Forfeited (190,000 ) $ 6.41 — — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 — Exercisable at December 31, 2022 404,599 $ 5.02 3.3 — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 — Granted — — — — Exercised/Forfeited/Expired (1,608 ) $ 14.00 — — Outstanding at March 31, 2023 924,658 $ 5.73 3.0 — Exercisable at March 31, 2023 574,658 $ 5.36 3.0 — Warrants Schedule of Warrants Outstanding Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Warrants expired, forfeited, cancelled or exercised (1,228,875 ) — — — Warrants issued — — — — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Exercisable at December 31, 2022 147,591 $ 8.63 0.8 — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Warrants expired, forfeited, cancelled or exercised (67,500 ) — — — Warrants issued — — — — Outstanding at March 31, 2023 80,091 $ 8.53 1.1 — Exercisable at March 31, 2023 80,091 $ 8.53 1.1 — | NOTE 12 – STOCKHOLDERS’ EQUITY 2016 Equity Plan We maintained the 2016 Equity Incentive Plan (the “2016 Plan”) for employees, officers, directors and other entities and individuals whose efforts contribute to our success. The 2016 Plan terminated pursuant to its terms on December 31, 2020, although all outstanding awards on such date continue in full force and effect. 2021 Equity Plan On May 12, 2021, the Board adopted, with shareholder approval as of July 15, 2021, the 2021 Equity Incentive Plan (the “2021 Plan”) providing for the issuance of up to 1,000,000 General Description of the 2021 Plan The following is a summary of the material provisions of the 2021 Plan and is qualified in its entirety by reference to the complete text of the 2021 Plan, which you are encouraged to read in full. Administration The 2021 Plan is administered by the Compensation Committee of the Board, which consists of three members of the Board, each of whom is a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act and an “outside director” within the meaning of Code Section 162(m). Among other things, the Compensation Committee has complete discretion, subject to the express limits of the 2021 Plan, to determine the directors, employees and nonemployee consultants to be granted an award, the type of award to be granted, the terms and conditions of the award, the form of payment to be made and/or the number of shares of Common Stock subject to each award, the exercise price of each option and base price of each stock appreciation right (“SAR”), the term of each award, the vesting schedule for an award, whether to accelerate vesting, the value of the Common Stock underlying the award, and the required withholding, if any. The Compensation Committee may amend, modify or terminate any outstanding award, provided that the participant’s consent to such action is required if the action would impair the participant’s rights or entitlements with respect to that award. The Compensation Committee is also authorized to construe the award agreements and may prescribe rules relating to the 2021 Plan. Notwithstanding the foregoing, the Compensation Committee does not have any authority to grant or modify an award under the 2021 Plan with terms or conditions that would cause the grant, vesting or exercise thereof to be considered nonqualified “deferred compensation” subject to Code Section 409A. Grant of Awards; Shares Available for Awards The 2021 Plan provides for the grant of stock options, SARs, performance share awards, performance unit awards, distribution equivalent right awards, restricted stock awards, restricted stock unit awards and unrestricted stock awards to non-employee directors, officers, employees and nonemployee consultants of the Company or its affiliates. We have reserved a total of 1,000,000 Stock Options The 2021 Plan provides for either “incentive stock options” (“ISOs”), which are intended to meet the requirements for special federal income tax treatment under the Code, or “nonqualified stock options” (“NQSOs”). On May 12, 2021, the 2021 Plan was approved by shareholders and adopted by the board of directors. Stock options may be granted on such terms and conditions as the Compensation Committee may determine; provided, however, that the per share exercise price under a stock option may not be less than the fair market value of a share of the Company’s Common Stock on the date of grant and the term of the stock option may not exceed 10 years more than 10% of the total combined voting power of all classes of capital stock 100,000 Stock Appreciation Rights An SAR entitles the participant, upon exercise, to receive an amount, in cash or stock or a combination thereof, equal to the increase in the fair market value of the underlying Common Stock between the date of grant and the date of exercise. SARs may be granted in tandem with, or independently of, stock options granted under the 2021 Plan. An SAR granted in tandem with a stock option (i) is exercisable only at such times, and to the extent, that the related stock option is exercisable in accordance with the procedure for exercise of the related stock option; (ii) terminates upon termination or exercise of the related stock option (likewise, the Common Stock option granted in tandem with a SAR terminates upon exercise of the SAR); (iii) is transferable only with the related stock option; and (iv) if the related stock option is an ISO, may be exercised only when the value of the stock subject to the stock option exceeds the exercise price of the stock option. An SAR that is not granted in tandem with a stock option is exercisable at such times as the Compensation Committee may specify. Performance Share and Performance Unit Awards Performance share and performance unit awards entitle the participant to receive cash or shares of our Common Stock upon the attainment of specified performance goals. In the case of performance units, the right to acquire the units is denominated in cash values. Restricted Stock Awards and Restricted Stock Unit Awards A restricted stock award is a grant or sale of Common Stock to the participant, subject to our right to repurchase all or part of the shares at their purchase price (or to require forfeiture of such shares if issued to the participant at no cost) in the event that conditions specified by the Compensation Committee in the award are not satisfied prior to the end of the time period during which the shares subject to the award may be repurchased by or forfeited to us. Our restricted stock unit entitles the participant to receive a cash payment equal to the fair market value of a share of Common Stock for each restricted stock unit subject to such restricted stock unit award, if the participant satisfies the applicable vesting requirement. Unrestricted Stock Awards An unrestricted stock award is a grant or sale of shares of our Common Stock to the participant that is not subject to transfer, forfeiture or other restrictions, in consideration for past services rendered to the Company or an affiliate or for other valid consideration. Amendment and Termination The Compensation Committee may adopt, amend and rescind rules relating to the administration of the 2021 Plan, and amend, suspend or terminate the 2021 Plan, but no such amendment, rescission, suspension or termination will be made that materially and adversely impairs the rights of any participant with respect to any award received thereby under the 2021 Plan without the participant’s consent, other than amendments that are necessary to permit the granting of awards in compliance with applicable laws. Series B Convertible Preferred Stock The following summary of certain terms and provisions of our Series B Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is subject to, and qualified in its entirety by reference to, the terms and provisions set forth in our certificate of designation of preferences, rights, and limitations of Series B Convertible Preferred Stock (the “Series B Convertible Preferred Certificate of Designation”) as previously filed. Subject to the limitations prescribed by our articles of incorporation, our board of directors is authorized to establish the number of shares constituting each series of preferred stock and to fix the designations, powers, preferences, and rights of the shares of each of those series and the qualifications, limitations and restrictions of each of those series, all without any further vote or action by our stockholders. Our board of directors has designated 15,000 10,000,000 Each share of Series B Convertible Preferred Stock is convertible at any time at the holder’s option into a number of shares of common stock equal to $ 1,000 7.00 2,830 2,830,000 1,000 854 122,000 851 121,572 0 851 Series C Convertible Preferred Stock On February 26, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain existing investors in the Company (the “Purchasers”). Pursuant to the Purchase Agreement, the Purchasers purchased 4,500 4,500,000 Under the Purchase Agreement, the Company was required to hold a meeting of shareholders at the earliest practical date, and such meeting occurred on July 15, 2021. Nasdaq Marketplace Rule 5635(d) limits the number of shares of common stock (or securities that are convertible into common stock) without shareholder approval and the terms of the Series C Convertible Preferred Stock limit its convertibility to a number of shares less than the 20% limit, until the Stockholder Approval is obtained. The Company obtained shareholder approval (the “Stockholder Approval”) in order to issue shares of common stock underlying the Series C Convertible Preferred Stock at a price less than the greater of book or market value which equal 20% or more of the number of shares of common stock outstanding before the issuance. As described below, the terms of the Series C Convertible Preferred Stock limited its convertibility to a number of shares less than the 20% limit, until the Stockholder Approval was obtained. In connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers. Pursuant to the Registration Rights Agreement, the Company filed with the SEC a registration statement covering the resale by the Purchasers of the shares of common stock into which the shares of Series C Convertible Preferred Stock are convertible. The Company caused the registration statement to be declared effective on June 3, 2021. The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. The Company’s Board of Directors has designated 5,000 shares as the Series C Convertible Preferred Stock. Each share of the Series C Convertible Preferred Stock has a stated value of $1,000. The holders of the Series C Convertible Preferred Stock, the holders of the common stock and the holders of any other class or series of shares entitled to vote with the common stock shall vote together as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series C Convertible Preferred Stock had 172 votes (subject to adjustment); provided that in no event may a holder of Series C Convertible Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation (as defined in the Certificate of Designation and as described below). Each share of Series C Convertible Preferred Stock is convertible, at any time and from time to time, at the option of the holder, into that number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share ($1,000) by the conversion price, which is $5.50 (subject to adjustment). The Company shall not effect any conversion of the Series C Convertible Preferred Stock, and a holder shall not have the right to convert any portion of the Series C Convertible Preferred Stock, to the extent that after giving effect to the conversion sought by the holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the “Beneficial Ownership Limitation”). All holders of the Series C Preferred Stock elected the 19.99% Beneficial Ownership Limitation. In 2021, 2,000 363,636 2,500 454,546 0 2,500 Series D Convertible Preferred Stock On September 28, 2022 the Company amended its articles of incorporation to designate 4,000 shares as the Series D Convertible Preferred Stock (the “Series D Convertible Preferred Stock”). Each share of the Series D Convertible Preferred Stock has a stated value of $1,000. The holders of the Series D Convertible Preferred Stock, the holders of the common stock and the holders of any other class or series of shares entitled to vote with the common stock shall vote together as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series D Convertible Preferred Stock has 333 votes (subject to standard anti-dilution adjustment); provided that in no event may a holder of Series D Convertible Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation (as defined in the Certificate of Designation and as described below). Each share of Series D Convertible Preferred Stock is convertible, subject to shareholder approval (which has not yet been granted); at any time and from time to time, at the option of the holder, into that number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share ($1,000) by the conversion price, which is $3.00 (subject to standard anti-dilution). The Company shall not effect any conversion of the Series D Convertible Preferred Stock, and a holder shall not have the right to convert any portion of the Series D Convertible Preferred Stock, to the extent that after giving effect to the conversion sought by the holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the “Beneficial Ownership Limitation”). All holders of the Series D Preferred Stock have elected the 19.99% Beneficial Ownership Limitation. The Company shall, subject to shareholder approval, reserve and keep available out of its authorized and unissued Common Stock, solely for the issuance upon the conversion of the Series D Convertible Preferred Stock, such a number of shares of Common Stock as shall from time to time be issuable upon the conversion of all of the shares of the Series D Convertible Preferred Stock then outstanding. Additionally, the Series D Convertible Preferred Stock does not have the right to dividends and in the event of an involuntary liquidation, the Series D shares shall be treated as a pro rata equivalent of common stock outstanding at the date of the liquidation event and have no liquidation preference. On September 30, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain existing investors in the Company (the “Purchasers”). Pursuant to the Purchase Agreement, the Purchasers purchased 999 818,355 3,454,003 999,000 1,000 On October 29, 2022, the Company sold to an existing investor in the Company and two other accredited investors in a private placement 83,667 3.00 300 1,000 551,001 300,000 In connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers. Pursuant to the Registration Rights Agreement, the Company filed with the SEC a registration statement covering the resale by the Purchasers of the shares of common stock issued pursuant to the Purchase Agreements and the shares of common stock into which the shares of Series D Convertible Preferred Stock are convertible. The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. Common stock issued for Private Placements, Preferred Stock Conversions, Services and Settlements 2022 Transactions On January 11, 2022, shareholders converted 710 1,790 5.50 On February 3, 2022, the Company closed an offering of 1,325,000 5,300,000 4 4,779,000 On February 21, 2022, the Company closed on an “over-allotment” offering of 198,750 795,000 4 739,350 50,000,000 On March 31, 2022, the Company issued 7,198 40,000 On June 30, 2022, the Company issued 10,668 40,000 On August 25, 2022, 121,572 851 On September 30, 2022, the Company issued 9,758 40,000 On December 30, 2022, the Company issued 16,335 37,500 On September 30, 2022, we sold to certain existing investors in the Company in a private placement 818,335 3.00 999 1,000 3,454,003 260,816 257,240 On October 29, 2022, we sold to an existing investor in the Company and two accredited investors in a private placement 83,667 3.00 300 1,000 551,001 105,460 2021 Transactions The Company issued 4,032 30,000 The Company issued 7,223 45,000 The Company issued 3,726 19,167 The Company issued 9,560 50,000 Stock-Based Compensation Stock-based compensation expense recognized under ASC 718-10 for the year ended December 31, 2022 and 2021, was $ 819,191 262,411 426,004 3.3 Treasury Stock In August 2016, the Company’s Board of Directors approved a new class of Preferred Stock, “Series A”. For shareholders who invested in previous private placements, the Company was offering on a case-by-case basis, the ability to convert the existing amount invested into an equivalent amount in the Series A on the condition that they invest an equivalent additional amount in the Series A. In December of 2017, the Company redeemed all of the Series A and continues to hold 235 148,000 84 7.00 140 6.30 115 10.08 753 9.09 1,324 157,452 |
COMMON STOCK OPTIONS AND WARRAN
COMMON STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
COMMON STOCK OPTIONS AND WARRANTS | NOTE 13 – COMMON STOCK OPTIONS AND WARRANTS Options 2022 During the first quarter of 2022, the Company’s Board of Directors granted 665,000 20,000 6.41 1,596,804 33,096 819,191 426,004 2.0 During the second quarter of 2022, three former staff members forfeited 110,000 80,000 2021 During the first quarter of 2021, the Company’s Board of Directors granted 20,000 4.32 52,758 7,685 45,073 2.75 During the second quarter of 2021, five former staff members and one contractor exercised 31,710 and forfeited 8,922 63,860 During the third quarter of 2021, the shareholders approved the issuance of up to one million shares or share equivalents in the form of stock options for the purposes of share issuance for compensation to Board Members and grants to certain staff members for recruiting and retention. On July 14, 2021, the Company filed an S-8 registration statement in concert with the 2021 Equity Incentive Plan which was deemed effective on August 5, 2021. The plan covers a period of ten years. Schedule of Options Activity Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Years) Value Outstanding at December 31, 2020 451,898 $ 5.06 4.2 — Granted 20,000 $ 4.32 4.0 — Forfeited (40,632 ) $ 14.00 — — Outstanding at December 31, 2021 431,266 $ 4.98 3.4 $ 197,506 Exercisable at December 31, 2021 312,310 $ 5.25 3.4 — Outstanding at December 31, 2021 431,266 $ 4.98 3.4 — Granted 685,000 $ 6.41 4.0 — Exercised/Forfeited (190,000 ) $ 6.41 — — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 $ 0 Exercisable at December 31, 2022 404,599 $ 5.02 3.3 — The fair value of the incentive stock option grants for the years ended December 31, 2022 and 2021 were estimated using the following weighted- average assumptions: Schedule of Fair Value Assumptions For the Years Ended 2022 2021 Risk free interest rate 0.97 3.15 0.18 Expected term in years 3.25 3.50 3.50 Dividend yield — — Volatility of common stock 72 80 91.6 Warrants 2022 During the fourth quarter of 2022, warrants held by 63 holders representing 1,228,875 2021 During the second quarter of 2021, warrants representing 205,574 7.70 9.25 11.14 50,588 Schedule of Warrants Outstanding Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2020 1,587,553 $ 8.62 2.0 — Warrants expired, forfeited, cancelled or exercised (232,517 ) Warrants issued 21,430 $ 7.70 1.9 — Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Exercisable at December 31, 2021 1,376,466 $ 8.18 1.9 — Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Warrants expired, forfeited, cancelled or exercised (1,228,875 ) — Warrants issued 0 $ — — — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Exercisable at December 31, 2022 147,591 $ 8.63 0.8 — |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
DEFINED CONTRIBUTION PLAN | NOTE 7 – DEFINED CONTRIBUTION PLAN The Company has a 401(k)-retirement savings plan (the “401(k) Plan”) covering all eligible employees. The 401(k) Plan allows employees to defer a portion of their annual compensation, and the Company may match a portion of the employees’ contributions generally after the first six months of service. During the three months ended March 31, 2023, the Company matched 100% of the first 4% of eligible employee compensation that was contributed to the 401(k) Plan. For the three months ended March 31, 2023, the Company recognized expense for matching cash contributions to the 401(k) Plan totaling $ 42,241 | NOTE 14 – DEFINED CONTRIBUTION PLAN The Company has a 401(k)-retirement savings plan (the “401(k) Plan”) covering all eligible employees. The 401(k) Plan allows employees to defer a portion of their annual compensation, and the Company may match a portion of the employees’ contributions generally after the first six months of service. During the year ended December 31, 2022, the Company matched 100% of the first 4% of eligible employee compensation that was contributed to the 401(k) Plan. For the year ended December 31, 2022, the Company recognized expense for matching cash contributions to the 401(k) Plan totaling $ 155,766 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS On August 1, 2012, the Company entered into an independent contractor master services agreement (the “Services Agreement”) with Luceon, LLC, a Florida limited liability company, owned by our former Chief Technology Officer, David Ponevac. The Services Agreement provided that Luceon would provide support services including management, coordination or software development services and related services to duos. In January 2019, additional services were contracted with Luceon for TrueVue360™ primarily for software development through the provision of 7 additional full-time contractors located in Slovakia at a cost of $ 16,250 25,583 7,480 20,986 93,422 335,334 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS On February 1, 2023, the board of directors authorized management to reserve an additional 150,000 4.22 On November 9, 2022 the board of directors adopted, subject to shareholder approval, the Employee Stock Purchase Plan (“ESPP”) which would become effective as of January 1, 2023. The ESPP provisions for the issuance of up to 1,000,000 On March 27, 2023, as previously disclosed, the Company sold to an existing, accredited investor in the Company in a private placement 4,000 shares of Series E Preferred Stock at a price of $1,000 a share, resulting in gross proceeds of $4,000,000 to the Company. The issuance of the Series E Preferred Stock was accompanied with a stock purchase agreement containing certain rights pertaining to the accredited investor and a registration rights agreement. The Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an existing investor in the Company (the “Purchaser”). Pursuant to the Purchase Agreement, the Purchaser purchased 4,000 shares of a newly authorized Series E Convertible Preferred Stock (the “Series E Convertible Preferred Stock”), and the Company received proceeds of $4,000,000. The Purchase Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. In connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers. Pursuant to the Registration Rights Agreement, the Company shall file with the SEC a registration statement covering the resale by the Purchasers of the shares of common stock into which the shares of Series E Preferred Stock are convertible. Subject to certain conditions, the Company must cause the registration statement to be declared effective by 90 days after closing (or in the event of a full review by the SEC, by 120 days). The Registration Rights Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. Under the Purchase Agreement, the Company is required to hold a meeting of shareholders at the earliest practical date, but in no event later than 120 days after closing (or 150 days in the event of a review of the proxy statement by the Securities and Exchange Commission (the “SEC”)). As described below, the terms of the Series E Preferred Stock limit its convertibility until the Company receives shareholder approval (the “Stockholder Approval”). If the Company does not obtain the Stockholder Approval at the first meeting, it is required to hold shareholder meetings every four months until the Stockholder Approval is obtained. The Company’s Board of Directors has designated 30,000 shares as the Series E Convertible Preferred Stock. Each share of the Series E Convertible Preferred Stock has a stated value of $1,000. The holder of the Series E Convertible Preferred Stock, the holder of the common stock and the holder of any other class or series of shares entitled to vote with the common stock shall vote as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series E Convertible Preferred Stock is convertible, at any time and from time to time, at the option of the holder, into that number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share ($1,000) by the conversion price, which is $3.00 (subject to standard anti-dilution other than provisions described below in the Purchase Agreement). The Company shall not effect any conversion of the Series E Convertible Preferred Stock, and the holder shall not have the right to convert any portion of the Series E Convertible Preferred Stock, to the extent that after giving effect to the conversion sought by the holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the “Beneficial Ownership Limitation”). The holder of the Series E Preferred Stock, the holders of the common stock and the holders of any other class or series of shares entitled to vote with the common stock shall vote together as one class on all matters submitted to a vote of shareholders of the Company. Each share of Series E Preferred Stock has 333 votes (subject to adjustment); provided that in no event may a holder of Series E Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation (as defined in the Certificate of Designation). The Purchase Agreement also provides that the Company will not, with certain exceptions, sell or issue common stock or Common Stock Equivalents (as defined in the Purchase Agreement) on or prior to December 31, 2023 that entitles any person to acquire shares of common stock at an effective price per share less than the then conversion price of the Series E Preferred Stock without the consent of the Purchaser. The Registration Rights Agreement contains provisions for liquidated damages equal to 1% multiplied by the aggregate subscription amount paid, paid each month, in the event certain deadlines are missed. |
REVENUE AND CONTRACT ACCOUNTING
REVENUE AND CONTRACT ACCOUNTING | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
REVENUE AND CONTRACT ACCOUNTING | NOTE 6 - REVENUE AND CONTRACT ACCOUNTING Revenue Recognition and Contract Accounting The Company generates revenue from four sources: (1) Technology Systems; (2) AI Technology which is included in the consolidated statements of operations line-item Technology Systems; (3) Technical Support; and (4) Consulting Services which is included in the consolidated statements of operations line-item Services and Consulting. Contract assets and contract liabilities on uncompleted contracts for revenues recognized over time are as follows: Contract Assets Contract assets on uncompleted contracts represent cumulative revenues recognized in excess of billings and/or cash received on uncompleted contracts accounted for under the cost-to-cost input method, which recognizes revenue based on the ratio of cost incurred to total estimated costs. At March 31, 2023 and December 31, 2022, contract assets on uncompleted contracts consisted of the following: Schedule Of Contract Assets On Uncompleted Contracts March 31, 2023 December 31, 2022 Cumulative revenues recognized $ 7,144,602 $ 5,934,205 Less: Billings or cash received (5,718,290 ) (5,508,483 ) Contract assets $ 1,426,312 $ 425,722 Contract Liabilities Contract liabilities, on uncompleted contracts represent billings and/or cash received that exceed cumulative revenues recognized on uncompleted contracts accounted for under the cost-to-cost input method, which recognizes revenues based on the ratio of the cost incurred to total estimated costs. Contract liabilities on services and consulting revenues represent billings and/or cash received in excess of revenue recognized on service agreements that are not accounted for under the cost-to-cost input method. At March 31, 2023 and December 31, 2022, contract liabilities on uncompleted contracts and contract liabilities on services and consulting consisted of the following: Schedule of Contract Liabilities on Uncompleted Contracts March 31, 2023 December 31, 2022 Billings and/or cash receipts on uncompleted contracts $ 323,207 $ 4,355,470 Less: Cumulative revenues recognized (262,988 ) (4,144,018 ) Contract liabilities, technology systems 60,219 211,452 Contract liabilities, services and consulting 2,006,642 746,545 Total contract liabilities $ 2,066,861 $ 957,997 Contract Liabilities at December 31, 2022 were $ 957,997 151,233 248,856 The Company expects to recognize all contract liabilities within 12 months from the consolidated balance sheet date. Disaggregation of Revenue The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures. Qualitative: 1. We have four distinct revenue sources: a. Technology Systems (Turnkey, engineered projects); b. AI Technology (Associated maintenance and support services); c. Technical Support (Licensing and professional services related to auditing of data center assets); and d. Consulting Services (Predetermined algorithms to provide important operating information to the users of our systems). 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, commercial, government, banking and IT suppliers. 4. Our services & maintenance contracts are fixed price and fall into two duration types: a. Turnkey engineered projects and professional service contracts that are less than one year in duration and are typically one to two quarters in length; and b. Maintenance and support contracts ranging from one to five years in length Quantitative: For the Three Months Ended March 31, 2023 Schedule of Disaggregation of Revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Major Goods and Service Lines Turnkey Projects $ 1,827,764 $ — $ — $ — $ 1,827,764 Maintenance and Support 548,685 28,831 11,353 — 588,869 Algorithms — — — 227,655 227,655 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Timing of Revenue Recognition Goods transferred over time $ 1,827,764 $ — $ — $ — $ 1,827,764 Services transferred over time 548,685 28,831 11,353 227,655 816,524 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 For the Three Months Ended March 31, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Major Goods and Service Lines Turnkey Projects $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Maintenance and Support 486,616 17,798 20,221 131,412 656,047 Algorithms — — — 131,189 131,189 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Timing of Revenue Recognition Goods transferred over time $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Goods delivered at point in time $ — — — 131,189 131,189 Services transferred over time 486,616 17,798 20,221 131,412 656,047 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 | NOTE 8 – REVENUES AND CONTRACT ACCOUNTING The Company generates revenue from four sources: (1) Technology Systems; (2) AI Technology which is included in the consolidated statements of operations line-item Technology Systems; (3) Technical Support; and (4) Consulting Services which is included in the consolidated statements of operations line-item Services and Consulting. Contract assets and contract liabilities on uncompleted contracts for revenues recognized over time are as follows: Contract Assets Contract assets on uncompleted contracts represent cumulative revenues recognized in excess of billings and/or cash received on uncompleted contracts accounted for under the cost-to-cost input method which recognizes revenue based on the ratio of costs incurred to total estimated costs. At December 31, 2022 and 2021, contract assets on uncompleted contracts consisted of the following: Schedule Of Contract Assets On Uncompleted Contracts 2022 2021 Cumulative revenues recognized $ 5,934,205 $ 5,266,930 Less: Billings or cash received (5,508,483 ) (5,263,481 ) Contract Assets $ 425,722 $ 3,449 Contract Liabilities Contract liabilities on uncompleted contracts represent billings and/or cash received that exceed cumulative revenues recognized on uncompleted contracts accounted for under the cost-to-cost input method. Contract liabilities on services and consulting revenues represent billings and/or cash received in excess of revenue recognized on service agreements that are not accounted for under the cost-to-cost input method. The Company expects to recognize all contract liabilities within 12 months from the consolidated balance sheet date. At December 31, 2022 and 2021, contract liabilities on uncompleted contracts consisted of the following: Schedule of Contract Liabilities on Uncompleted Contracts 2022 2021 Billings and/or cash receipts on uncompleted contracts $ 4,355,470 $ 4,473,726 Less: Cumulative revenues (4,144,018 ) (3,041,088 ) Contract liabilities, technology systems $ 211,452 $ 1,232,638 Contract Liabilities, services and consulting 746,545 596,673 Total Contract Liabilities $ 957,997 $ 1,829,311 Disaggregation of Revenue The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures. Qualitative: 1. We have four distinct revenue sources: a. Technology Systems (Turnkey, engineered projects); b. AI Technology (Associated maintenance and support services); c. Technical Support (Licensing and professional services related to auditing of data center assets); and d. Consulting Services (Predetermined algorithms to provide important operating information to the users of our systems). 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, commercial, government, banking and IT suppliers. 4. Our technology systems and equipment projects fall into two types: a. Transfer of goods and services are over time. b. Goods delivered at point in time. 5. Our services & maintenance contracts are fixed price and fall into two duration types: a. Turnkey engineered projects and professional service contracts that are less than one year in duration and are typically one to two quarters in length; and b. Maintenance and support contracts ranging from one to five years in length. Quantitative: For the Year Ended December 31, 2022 Schedule of Disaggregation of Revenue Segments Rail Commercial Petrochemical Government Banking/Other IT Artificial Total Primary Geographical Markets North America $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Major Goods and Service Lines Turnkey Projects $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Maintenance & Support 2,921,084 106,146 — 80,884 — — — 3,108,114 Data Center Auditing Services — — — — — — — — Software License — — — — — — — — Algorithms — — — — — — 713,960 713,960 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Timing of Revenue Recognition Goods transferred over time $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Services transferred over time 2,921,084 106,146 — 80,884 — — 713,960 3,822,074 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Quantitative: For the Year Ended December 31, 2021 Segments Rail Commercial Petrochemical Government Banking IT Artificial Total Primary Geographical Markets North America $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Major Goods and Service Lines Turnkey Projects $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ — $ — $ 5,518,004 Maintenance & Support 1,628,179 185,686 (867 ) 80,885 21,803 — 341,915 2,257,601 Data Center Auditing Services — — — — — 131,537 — 131,537 Software License — — — — — 3,180 — 3,180 Algorithms — — — — — — 349,595 349,595 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Timing of Revenue Recognition Goods transferred over time $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ 131,537 $ 349,595 $ 5,999,136 Services transferred over time 1,628,179 185,686 (867 ) 80,885 21,803 3,180 341,915 2,260,781 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Segment Information The Company operates in one reportable segment. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Nature of Operations | Nature of Operations Duos Technologies Group, Inc. (the “Company”), through its operating subsidiaries, Duos Technologies, Inc. (“Duos”) and TrueVue360, Inc. (“TrueVue360”) (collectively the “Company”), develops and deploys vision based analytical technology solutions that will help to transform precision railroading, logistics and inter-modal transportation operations. Additionally, these unique patented solutions can be employed into many other industries. The Company has developed the Railcar Inspection Portal (RIP) that provides both freight and transit railroad customers and select government agencies the ability to conduct fully automated inspections of trains while they are in transit. The system, which incorporates a variety of sophisticated optical technologies, illumination and other sensors, scans each passing railcar to create an extremely high-resolution image set from a variety of angles including the undercarriage. These images are then processed through various methods of artificial intelligence (“AI”) algorithms to identify specific defects and/or areas of interest on each railcar. This is all accomplished within minutes of a railcar passing through our portal. This solution has the potential to transform the railroad industry by increasing safety, improving efficiency and reducing costs. The Company has successfully deployed this system with several Class 1 railroad customers and anticipates an increased demand in the future. Government agencies can conduct digital inspections combined with the incorporated AI to improve rail traffic flow across borders which also directly benefits the Class 1 railroads through increasing their velocity. The Company has also developed the Automated Logistics Information System (ALIS) which automates and reduces/removes personnel from gatehouses where trucks enter and exit large logistics and intermodal facilities. This solution also incorporates sensors and data points as necessary for each operation and directly interconnects with backend logistics databases and processes to streamline operations and significantly improve operations and security and importantly dramatically improves the vehicle throughput on each lane on which the technology is deployed. The Company has built a portfolio of IP and patented solutions that creates “actionable intelligence” using two core native platforms called Centraco® and Praesidium™. All solutions provided include a variant of both applications. Centraco is designed primarily as the user interface to all our systems as well as the backend connection to third-party applications and databases through both Application Programming Interfaces (APIs) and Software Development Kits (SDKs). This interface is browser based and hosted within each one of our systems and solutions. It is typically also customized for each unique customer and application. Praesidium typically resides as middleware in our systems and manages the various image capture devices and some sensors for input into the Centraco software. The Company also developed a proprietary Artificial Intelligence (AI) software platform, Truevue360™ with the objective of focusing the Company’s advanced intelligent technologies in the areas of AI, deep machine learning and advanced multi-layered algorithms to further support our solutions. The Company’s strategy is to deliver operational and technical excellence to our customers, expand our RIP and ALIS solutions into current and new customers focused in the Rail, Logistics and U.S. Government Sectors, offer both one-time equipment sales and capital lease pricing models, and longer-term offer subscription pricing, to customers that increases recurring revenue, grows backlog and improves profitability, responsibly grow the business both organically and through selective acquisitions, and promote a performance-based work force where employees enjoy their work and are incentivized to excel and remain with the Company. | Nature of Operations Duos Technologies Group, Inc. (the “Company”), through its operating subsidiaries, Duos Technologies, Inc. (“Duos”) and TrueVue360, Inc. (“TrueVue360”) (collectively the “Company”), develops and deploys vision based analytical technology solutions that will help to transform precision railroading, logistics and inter-modal transportation operations. Additionally, these unique patented solutions can be employed into many other industries. The Company has developed the Railcar Inspection Portal (RIP) that provides both freight and transit railroad customers and select government agencies the ability to conduct fully automated inspections of trains while they are in transit. The system, which incorporates a variety of sophisticated optical technologies, illumination and other sensors, scans each passing railcar to create an extremely high-resolution image set from a variety of angles including the undercarriage. These images are then processed through various methods of artificial intelligence (“AI”) algorithms to identify specific defects and/or areas of interest on each railcar. This is all accomplished within minutes of a railcar passing through our portal. This solution has the potential to transform the railroad industry by increasing safety, improving efficiency and reducing costs. The Company has successfully deployed this system with several Class 1 railroad customers and anticipates an increased demand in the future. Government agencies can conduct digital inspections combined with the incorporated AI to improve rail traffic flow across borders which also directly benefits the Class 1 railroads through increasing their velocity. The Company has also developed the Automated Logistics Information System (ALIS) which automates and reduces/removes personnel from gatehouses where trucks enter and exit large logistics and intermodal facilities. This solution also incorporates sensors and data points as necessary for each operation and directly interconnects with backend logistics databases and processes to streamline operations and significantly improve operations and security and importantly dramatically improves the vehicle throughput on each lane on which the technology is deployed. The Company has built a portfolio of IP and patented solutions that creates “actionable intelligence” using two core native platforms called Centraco® and Praesidium™. All solutions provided include a variant of both applications. Centraco is designed primarily as the user interface to all our systems as well as the backend connection to third-party applications and databases through both Application Programming Interfaces (APIs) and Software Development Kits (SDKs). This interface is browser based and hosted within each one of our systems and solutions. It is typically also customized for each unique customer and application. Praesidium typically resides as middleware in our systems and manages the various image capture devices and some sensors for input into the Centraco software. The Company also developed a proprietary Artificial Intelligence (AI) software platform, Truevue360™ with the objective of focusing the Company’s advanced intelligent technologies in the areas of AI, deep machine learning and advanced multi-layered algorithms to further support our solutions. Through September 30, 2021, the Company also provided professional and consulting services for large data centers and had developed a system for the automation of asset information marketed as DcVue™. The Company had deployed its DcVue software at one beta site. This software was used by Duos’ consulting auditing teams. DcVue was based upon the Company’s OSPI patent which was awarded in 2010. The Company offered DcVue available for license to our customers as a licensed software product. The Company ceased offering this product in 2021. The Company’s strategy is to deliver operational and technical excellence to our customers, expand our RIP and ALIS solutions into current and new customers focused in the Rail, Logistics and U.S. Government Sectors, offer both one-time equipment sales and capital lease pricing models, and longer-term offer subscription pricing, to customers that increases recurring revenue, grows backlog and improves profitability, responsibly grow the business both organically and through selective acquisitions, and promote a performance-based work force where employees enjoy their work and are incentivized to excel and remain with the Company. |
Reclassifications | Reclassifications The Company reclassified $ 850,999 2,499,998 The Company reclassified certain operating expenses for the year ended December 31, 2021 to conform to 2022 classification. There was no net effect on the total expenses of such reclassification. The following table reflects the reclassification adjustment effect for the year ended December 31, 2021: Schedule of Reclassifications Before Reclassification After Reclassification For the Year Ended For the Year Ended December 31, December 31, 2021 2021 REVENUES: REVENUES: Technology systems $ 5,871,666 Technology systems $ 5,871,666 Technical support 2,388,251 Services and consulting 2,388,251 Total Revenue 8,259,917 Total Revenue 8,259,917 COST OF REVENUES: COST OF REVENUES: Technology systems 7,151,276 Technology systems 4,728,197 Technical support 1,369,985 Services and consulting 1,492,176 Overhead 2,297,826 — — Total Cost of Revenues 10,819,087 Total Cost of Revenues 6,220,373 GROSS MARGIN (2,559,170) GROSS MARGIN 2,039,544 OPERATING EXPENSES: OPERATING EXPENSES: Sales and marketing 1,233,851 Sales and marketing 1,233,851 Research and development 251,563 Research and development 2,515,630 General and administration 3,412,367 General and administration 5,747,014 Total Operating Expenses 4,897,781 Total Operating Expenses 9,496,495 LOSS FROM OPERATIONS $ (7,456,951 ) LOSS FROM OPERATIONS $ (7,456,951 ) | |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements include Duos Technologies Group, Inc. and its wholly owned subsidiaries, Duos Technologies, Inc and TrueVue360 Inc. All inter-company transactions and balances are eliminated in consolidation. | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Duos Technologies, Inc. and TrueVue360, Inc. All inter-company transactions and balances are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The most significant estimates in the accompanying unaudited consolidated financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of intangible and other long-lived assets, estimates of net contract revenues and the total estimated costs to determine progress towards contract completion, valuation of inventory, estimates of the valuation of right of use assets and corresponding lease liabilities, valuation of warrants issued with debt and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 may differ from these estimates. The most significant estimates in the accompanying consolidated financial statements include the allowance on accounts receivable, valuation of deferred tax assets, valuation of intangible and other long-lived assets, estimates of net contract revenues and the total estimated costs to determine progress towards contract completion, valuation of inventory, estimates of the valuation of right of use assets and corresponding lease liabilities, valuation of warrants and valuation of stock-based awards. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. |
Concentrations | Concentrations Cash Concentrations Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. We have not experienced any losses related to these balances. As of March 31, 2023, the balance in one financial institution exceeded federally insured limits by approximately $ 3,907,000 Significant Customers and Concentration of Credit Risk The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For the three months ended March 31, 2023, two customers accounted for 70 20 35 24 13 11 30 At March 31, 2023, three customers accounted for 59 15 11 34 31 19 10 Geographic Concentration For the three months ended March 31, 2023, approximately 25 54 Significant Vendors and Concentration of Credit Risk In some instances, the Company relies on a limited pool of vendors for key components related to the manufacturing of its subsystems. These vendors are primarily focused on camera, server and lighting technologies integral to the Company’s solution. Where possible, the Company seeks multiple vendors for key components to mitigate vendor concentration risk. | Concentrations Cash Concentrations Cash is maintained at financial institutions and at times, balances may exceed federally insured limits. We have not experienced any losses related to these balances. As of December 31, 2022, the Company had balances in a financial institution which combined exceeded federally insured limits by approximately $ 688,000 Significant Customers and Concentration of Credit Risk The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For the year ended December 31, 2022, four customers accounted for 42 18 14 14 83 At December 31, 2022, four customers accounted for 34 31 19 10 81 10 Geographic Concentration Approximately 41 86 Significant Vendors and Concentration In some instances, the Company relies on a limited pool of vendors for key components related to the manufacturing of its subsystems. These vendors are primarily focused on camera, server and lighting technologies integral to the Company’s solution where possible, the Company seeks multiple vendors for key components to mitigate vendor concentration risk. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions that the market participants would use in the valuation of the asset or liability based on the best available information. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The estimated fair value of certain financial instruments, including accounts receivable, prepaid expense, accounts payable, accrued expenses and notes payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | Fair Value of Financial Instruments and Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions that the market participants would use in the asset or liability based on the best available information. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The estimated fair value of certain financial instruments, including accounts receivable, prepaid expenses, accounts payable, accrued expenses and notes payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. |
Accounts Receivable | Accounts Receivable On January 1, 2023, the Company adopted ASC 326, “Financial Instruments - Credit Losses”. In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses). The amount of the allowance is determined principally on the basis of past collection experience and known financial factors regarding specific customers. Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on the account, historical trends are evaluated, and specific customer issues are reviewed to arrive at appropriate allowances. The Company reviews its accounts to estimate losses resulting from the inability of its customers to make required payments. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. | Accounts Receivable Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. In determining the collections on accounts, historical trends are evaluated, and specific customer issues are reviewed to arrive at appropriate allowances. The Company reviews its accounts to estimate losses resulting from the inability of its customers to make required payments. Any required allowance is based on specific analysis of past due accounts and also considers historical trends of write-offs. Past due status is based on how recently payments have been received from customers. |
Inventory | Inventory Inventory consists primarily of spare parts and consumables and long lead time components to be used in the production of our technology systems or in connection with maintenance agreements with customers. Inventory is stated at the lower of cost or net realizable value. Inventory cost is primarily determined using the weighted average cost method. | Inventory Inventory consists primarily of spare parts, consumables and long-lead components to be used in the production of our technology systems or in connection with maintenance agreements with customers. Inventory is stated at the lower of cost or net realizable value. Any inventory determined to be obsolete is written off. Inventory cost is primarily determined using the weighted average cost method. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment (three 3 5 | |
Software Development Costs | Software Development Costs Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be Sold, Leased, or Marketed), are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. | Software Development Costs Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be Sold, Leased, or Marketed) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. |
Patents and Trademarks | Patents and Trademarks Patents and trademarks which are stated at amortized cost, relate to the development of video surveillance security system technology and are being amortized over 17 | |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of its property, equipment, and other long-lived assets in accordance with FASB ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets”, which requires recognition of impairment of long-lived assets in the event the net book values of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. This guidance requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. | |
Product Warranties | Product Warranties The Company has a 90 12 36 | |
Loan Costs | Loan Costs Loan costs paid to lenders, or third parties are recorded as debt discounts to the related loans and amortized to interest expense over the loan term. | |
Sales Returns | Sales Returns Our systems are sold as integrated systems and there are no sales returns allowed. | |
Revenue Recognition | Revenue Recognition The Company follows Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), that affects the timing of when certain types of revenues will be recognized. The basic principles in ASC 606 include the following: a contract with a customer creates distinct contract assets and performance obligations, satisfaction of a performance obligation creates revenue, and a performance obligation is satisfied upon transfer of control to a good or service to a customer. Revenue is recognized by evaluating our revenue contracts with customers based on the five-step model under ASC 606: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue when (or as) each performance obligation is satisfied. The Company generates revenue from four sources: (1) Technology Systems (2) AI Technologies (3) Technical Support (4) Consulting Services Technology Systems For revenues related to technology systems, the Company recognizes revenue over time using a cost-based input methodology in which significant judgment is required to estimate costs to complete projects. These estimated costs are then used to determine the progress towards contract completion and the corresponding amount of revenue to recognize. Accordingly, the Company bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “contract assets”. Any billings of customers more than recognized revenues are recorded as a liability in “contract liabilities”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. AI Technologies The Company has revenue from applications that incorporate artificial intelligence (AI) in the form of predetermined algorithms which provide important operating information to the users of our systems. The revenue generated from these applications of AI consists of a fixed fee related to the design, development, testing and incorporation of new algorithms into the system, which is recognized as revenue at a point in time upon acceptance, as well as an annual application maintenance fee, which is recognized as revenue ratably over the contracted maintenance term. Technical Support Technical support services are provided on both an as-needed and extended-term basis and may include providing both parts and labor. Maintenance and technical support provided outside of a maintenance contract are on an “as-requested” basis, and revenue is recognized over time as the services are provided. Revenue for maintenance and technical support provided on an extended-term basis is recognized over time ratably over the term of the contract. Consulting Services The Company’s consulting services business generates revenues under contracts with customers from four sources: (1) Professional Services (consulting and auditing); (2) Software licensing with optional hardware sales; (3) Customer service training and (4) Maintenance/support. (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) For all periods reflected in this report, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third-party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer; (3) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (4) Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. | Revenue Recognition The Company follows Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), that affects the timing of when certain types of revenues will be recognized. The basic principles in ASC 606 include the following: a contract with a customer creates distinct contract assets and performance obligations, satisfaction of a performance obligation creates revenue, and a performance obligation is satisfied upon transfer of control to a good or service to a customer. Revenue is recognized by evaluating our revenue contracts with customers based on the five-step model under ASC 606: 1. Identify the contract with the customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to separate performance obligations; and 5. Recognize revenue when (or as) each performance obligation is satisfied. The Company generates revenue from four sources: (1) Technology Systems (2) AI Technologies (3) Technical Support (4) Consulting Services Technology Systems For revenues related to technology systems, the Company recognizes revenue over time using a cost-based input methodology in which significant judgment is required to estimate costs to complete projects. These estimated costs are then used to determine the progress towards contract completion and the corresponding amount of revenue to recognize. Accordingly, the Company now bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “contract assets”. Any billings of customers more than recognized revenues are recorded as a liability in “contract liabilities”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. AI Technologies The Company has revenue from applications that incorporate artificial intelligence (AI) in the form of predetermined algorithms which provide important operating information to the users of our systems. The revenue generated from these applications of AI consists of a fixed fee related to the design, development, testing and incorporation of new algorithms into the system, which is recognized as revenue at a point in time upon acceptance, as well as an annual application maintenance fee, which is recognized as revenue ratably over the contracted maintenance term. Technical Support Technical support services are provided on both an as-needed and extended-term basis and may include providing both parts and labor. Maintenance and technical support provided outside of a maintenance contract are on an “as-requested” basis, and revenue is recognized over time as the services are provided. Revenue for maintenance and technical support provided on an extended-term basis is recognized over time ratably over the term of the contract. Consulting Services The Company’s consulting services business generates revenues under contracts with customers from four sources: (1) Professional Services (consulting and auditing); (2) Software licensing with optional hardware sales; (3) Customer service training and (4) Maintenance support. (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) For all periods reflected in this report, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third-party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer; (3) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (4) Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term. |
Multiple Performance Obligations and Allocation of Transaction Price | Multiple Performance Obligations and Allocation of Transaction Price Arrangements with customers may involve multiple performance obligations including project revenue and maintenance services in our Technology Systems business. Maintenance will occur after the project is completed and may be provided on an extended-term basis or on an as-needed basis. In our consulting services business, multiple performance obligations may include any of the above four sources. Training and maintenance on software products may occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for a multiple performance obligations arrangement is as follows: Each performance obligation is accounted for separately when each has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each performance obligation is recognized using the applicable criteria under GAAP as discussed above for performance obligations sold in single performance obligation arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells its various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of performance obligations relative selling price allocation. The Company only sells maintenance services or spare parts based on its established rates after it has completed a system integration project for a customer. The customer is not required to purchase maintenance services. All elements in multiple performance obligations arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | Multiple Performance Obligations and Allocation of Transaction Price Arrangements with customers may involve multiple performance obligations including project revenue and maintenance services in our Technology Systems business. Maintenance will occur after the project is completed and may be provided on an extended-term basis or on an as-needed basis. In our consulting services business, multiple performance obligations may include any of the above four sources. Training and maintenance on software products may occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for a multiple performance obligations arrangement is as follows: Each performance obligation is accounted for separately when each has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each performance obligations is recognized using the applicable criteria under GAAP as discussed above for performance obligations sold in single performance obligation arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company sells its various services and software and hardware products at established prices on a standalone basis which provides Company specific objective evidence of selling price for purposes of performance obligations relative selling price allocation. The Company only sells maintenance services or spare parts based on its established rates after it has completed a system integration project for a customer. The customer is not required to purchase maintenance services. All elements in multiple performance obligations arrangements with Company customers qualify as separate units of account for revenue recognition purposes. |
Advertising | Advertising The Company expenses the cost of advertising. During the years ended December 31, 2022 and 2021, there were no | |
Stock Based Compensation | Stock Based Compensation The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718-10, “ Share-Based Payment The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding a number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with the Financial Accounting Standards Board FASB Accounting Standards Codification (“ASC”) 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company evaluates all significant tax positions as required by ASC 740. As of December 31, 2022, the Company does not believe that it has taken any positions that would require the recording of any additional tax liability, nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year. Any penalties and interest assessed by income taxing authorities are included in operating expenses. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. Tax years 2019, 2020 and 2021 remain open for potential audit. | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss applicable to common stock by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stock by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise or conversion of stock options, stock warrants, convertible debt instruments, convertible preferred stock or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At March 31, 2023, there were (i) an aggregate of 80,091 924,658 433,000 1,333,334 At March 31, 2022, there were (i) an aggregate of 1,376,466 1,096,266 121,571 | Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing net loss applicable to common stock by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stock by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible debt instruments, convertible preferred stock or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. At December 31, 2022, there was an aggregate of 147,591 926,266 433,000 At December 31, 2021, there was an aggregate of 1,376,466 431,266 121,571 454,546 |
Leases | Leases The Company follows ASC 842 “Leases”. This guidance requires lessees to recognize right-of-use (“ROU”) assets and lease liabilities for most operating leases. In addition, this guidance requires that lessors separate lease and non-lease components in a contract in accordance with the revenue guidance in ASC 606. The Company made an accounting policy election to not recognize short-term leases with terms of twelve months or less on the balance sheet and instead recognize the lease payments in expense as incurred. The Company has also elected to account for real estate leases that contain both lease and non-lease components as a single lease component. At the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. Operating ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date to determine the present value of future payments. The lease term includes all periods covered by renewal and termination options where the Company is reasonably certain to exercise the renewal options or not to exercise the termination options. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations. | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize right-of-use (“ROU”) assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this guidance effective January 1, 2019, using the modified retrospective method, whereby a cumulative effect adjustment was made as of the date of initial application. The Company also applied the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and (ii) initial direct costs for any existing leases. The Company made an accounting policy election to not recognize short-term leases with terms of twelve months or less on the balance sheet and instead recognize the lease payments in expense as incurred. The Company has also elected to account for real estate leases that contain both lease and non-lease components as a single lease component. The adoption of ASU 2016-02 did not materially affect our consolidated statement of operations or our consolidated statement of cash flows. For contracts entered into on or after the effective date, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. Operating ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date to determine the present value of future payments. The lease term includes all periods covered by renewal and termination options where the Company is reasonably certain to exercise the renewal options or not to exercise the termination options. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, the FASB or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of an Accounting Standards Update (“ASU”). In August 2020, the FASB issued an accounting pronouncement (ASU 2020-06) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity's own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity's own equity. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. The Company early adopted this pronouncement for our fiscal year beginning January 1, 2022, and it did not have a material effect on our audited consolidated financial statements. In May 2021, the FASB issued an accounting pronouncement (ASU 2021-04) related to modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. The pronouncement states that an entity should treat the modification as an exchange of the original instrument for a new instrument, and the effect of the modification should be calculated as the difference between the fair value of the modified instrument and the fair value of that instrument immediately before modification. An entity should then recognize the effect of the modification on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021. The pronouncement will be applied prospectively to all modifications that occur after the initial date of adoption. We adopted this pronouncement for our fiscal year beginning January 1, 2022, and it did not have a material effect on our audited consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements. | Recent Accounting Pronouncements From time to time, the FASB or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of an Accounting Standards Update (“ASU”). In August 2020, the FASB issued an accounting pronouncement (ASU 2020-06) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity's own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity's own equity. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. During 2022, the Company did not issue any convertible instruments or contracts and does not foresee any such issuances in the near future. In May 2021, the FASB issued an accounting pronouncement (ASU 2021-04) related to modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. The pronouncement states that an entity should treat the modification as an exchange of the original instrument for a new instrument, and the effect of the modification should be calculated as the difference between the fair value of the modified instrument and the fair value of that instrument immediately before modification. An entity should then recognize the effect of the modification on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021. During 2022, the Company did not issue any equity classified written call options or warrant during the year and does not foresee any issuances in the near future. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future period. These unaudited consolidated financial statements and the unaudited condensed notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2023. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Reclassifications | Schedule of Reclassifications Before Reclassification After Reclassification For the Year Ended For the Year Ended December 31, December 31, 2021 2021 REVENUES: REVENUES: Technology systems $ 5,871,666 Technology systems $ 5,871,666 Technical support 2,388,251 Services and consulting 2,388,251 Total Revenue 8,259,917 Total Revenue 8,259,917 COST OF REVENUES: COST OF REVENUES: Technology systems 7,151,276 Technology systems 4,728,197 Technical support 1,369,985 Services and consulting 1,492,176 Overhead 2,297,826 — — Total Cost of Revenues 10,819,087 Total Cost of Revenues 6,220,373 GROSS MARGIN (2,559,170) GROSS MARGIN 2,039,544 OPERATING EXPENSES: OPERATING EXPENSES: Sales and marketing 1,233,851 Sales and marketing 1,233,851 Research and development 251,563 Research and development 2,515,630 General and administration 3,412,367 General and administration 5,747,014 Total Operating Expenses 4,897,781 Total Operating Expenses 9,496,495 LOSS FROM OPERATIONS $ (7,456,951 ) LOSS FROM OPERATIONS $ (7,456,951 ) |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Schedule of Accounts Receivable December 31, December 31, 2022 2021 Accounts receivable $ 3,418,263 $ 1,738,543 Allowance for doubtful accounts — — Accounts Receivable, Net $ 3,418,263 $ 1,738,543 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of major classes of property and equipment | Schedule of major classes of property and equipment December 31, December 31, 2022 2021 Furniture, fixtures and equipment $ 1,606,451 $ 1,264,001 Less: Accumulated depreciation (976,961 ) (660,748 ) Furniture, fixtures and equipment, Net $ 629,490 $ 603,253 |
PATENTS AND TRADEMARKS (Tables)
PATENTS AND TRADEMARKS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of patents and trademarks | Schedule of patents and trademarks December 31, December 31, 2022 2021 Patents and trademarks $ 326,145 $ 309,205 Less: Accumulated amortization (256,412 ) (242,723 ) Patents and trademarks, Net $ 69,733 $ 66,482 |
SOFTWARE DEVELOPMENT COSTS (Tab
SOFTWARE DEVELOPMENT COSTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Schedule of Software Development Costs | Schedule of Software Development Costs December 31, December 31, 2022 2021 Software development costs $ 341,784 $ 60,000 Less: Accumulated amortization (76,576 ) (60,000 ) Software Development Costs, net $ 265,208 $ — |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Schedule of Notes Payable - Financing Agreements | Schedule of Notes Payable - Financing Agreements March 31, 2023 December 31, 2022 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 18,737 8.73 % $ — — Third Party - Insurance Note 2 — 17,753 6.24 % Third Party - Insurance Note 3 6,526 16,094 — Third Party - Insurance Note 4 167,830 — 40,728 — Total $ 193,094 $ 74,575 | Schedule of Notes Payable - Financing Agreements December 31, 2022 December 31, 2021 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ — — $ 22,266 7.75 % Third Party - Insurance Note 2 17,753 6.24 % 12,667 6.24 % Third Party - Insurance Note 3 16,094 — 17,570 — Third Party - Insurance Note 4 40,728 — — — Total $ 74,575 $ 52,503 |
Schedule of Future Minimum Lease Payments Under Finance Lease | Schedule of Future Minimum Lease Payments Under Finance Lease Calendar year: Amount 2023 11,757 Total minimum equipment financing payments $ 11,757 Less: interest (191 ) Total equipment financing at March 31, 2023 $ 11,566 Less: current portion of equipment financing (11,566 ) Long term portion of equipment financing $ — | Schedule of Future Minimum Lease Payments Under Finance Lease Calendar year: Amount 2023 23,515 Total minimum equipment financing payments $ 23,515 Less: interest (664 ) Total equipment financing at December 31, 2022 $ 22,851 Less: current portion of equipment financing (22,851 ) Long-term portion of equipment financing $ — |
REVENUES AND CONTRACT ACCOUNT_2
REVENUES AND CONTRACT ACCOUNTING (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Schedule Of Contract Assets On Uncompleted Contracts | Schedule Of Contract Assets On Uncompleted Contracts March 31, 2023 December 31, 2022 Cumulative revenues recognized $ 7,144,602 $ 5,934,205 Less: Billings or cash received (5,718,290 ) (5,508,483 ) Contract assets $ 1,426,312 $ 425,722 | Schedule Of Contract Assets On Uncompleted Contracts 2022 2021 Cumulative revenues recognized $ 5,934,205 $ 5,266,930 Less: Billings or cash received (5,508,483 ) (5,263,481 ) Contract Assets $ 425,722 $ 3,449 |
Schedule of Contract Liabilities on Uncompleted Contracts | Schedule of Contract Liabilities on Uncompleted Contracts March 31, 2023 December 31, 2022 Billings and/or cash receipts on uncompleted contracts $ 323,207 $ 4,355,470 Less: Cumulative revenues recognized (262,988 ) (4,144,018 ) Contract liabilities, technology systems 60,219 211,452 Contract liabilities, services and consulting 2,006,642 746,545 Total contract liabilities $ 2,066,861 $ 957,997 | Schedule of Contract Liabilities on Uncompleted Contracts 2022 2021 Billings and/or cash receipts on uncompleted contracts $ 4,355,470 $ 4,473,726 Less: Cumulative revenues (4,144,018 ) (3,041,088 ) Contract liabilities, technology systems $ 211,452 $ 1,232,638 Contract Liabilities, services and consulting 746,545 596,673 Total Contract Liabilities $ 957,997 $ 1,829,311 |
Schedule of Disaggregation of Revenue | Schedule of Disaggregation of Revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Major Goods and Service Lines Turnkey Projects $ 1,827,764 $ — $ — $ — $ 1,827,764 Maintenance and Support 548,685 28,831 11,353 — 588,869 Algorithms — — — 227,655 227,655 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Timing of Revenue Recognition Goods transferred over time $ 1,827,764 $ — $ — $ — $ 1,827,764 Services transferred over time 548,685 28,831 11,353 227,655 816,524 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 For the Three Months Ended March 31, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Major Goods and Service Lines Turnkey Projects $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Maintenance and Support 486,616 17,798 20,221 131,412 656,047 Algorithms — — — 131,189 131,189 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Timing of Revenue Recognition Goods transferred over time $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Goods delivered at point in time $ — — — 131,189 131,189 Services transferred over time 486,616 17,798 20,221 131,412 656,047 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 | Schedule of Disaggregation of Revenue Segments Rail Commercial Petrochemical Government Banking/Other IT Artificial Total Primary Geographical Markets North America $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Major Goods and Service Lines Turnkey Projects $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Maintenance & Support 2,921,084 106,146 — 80,884 — — — 3,108,114 Data Center Auditing Services — — — — — — — — Software License — — — — — — — — Algorithms — — — — — — 713,960 713,960 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Timing of Revenue Recognition Goods transferred over time $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Services transferred over time 2,921,084 106,146 — 80,884 — — 713,960 3,822,074 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Quantitative: For the Year Ended December 31, 2021 Segments Rail Commercial Petrochemical Government Banking IT Artificial Total Primary Geographical Markets North America $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Major Goods and Service Lines Turnkey Projects $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ — $ — $ 5,518,004 Maintenance & Support 1,628,179 185,686 (867 ) 80,885 21,803 — 341,915 2,257,601 Data Center Auditing Services — — — — — 131,537 — 131,537 Software License — — — — — 3,180 — 3,180 Algorithms — — — — — — 349,595 349,595 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Timing of Revenue Recognition Goods transferred over time $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ 131,537 $ 349,595 $ 5,999,136 Services transferred over time 1,628,179 185,686 (867 ) 80,885 21,803 3,180 341,915 2,260,781 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule of supplemental information related to leases | Schedule of supplemental information related to leases Three Months Ended March 31, 2023 2022 Lease cost: Operating lease cost $ 195,409 $ 193,980 Short-term lease cost 7,104 6,749 Other information: Operating cash outflow used for operating leases 126,416 46,250 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 9.2 10.2 | Schedule of supplemental information related to leases Year Ended December 31, 2022 2021 Lease cost: Operating lease cost $ 782,591 $ 414,085 Short-term lease cost 33,751 21,628 Other information: Operating cash outflow used for operating leases 416,250 285,959 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 9.5 10.4 |
Schedule of future minimum lease payments for non-cancellable operating leases | Schedule of future minimum lease payments for non-cancellable operating leases Amount Calendar year: 2023 $ 570,453 2024 779,087 2025 798,556 2026 818,518 2027 838,984 Thereafter 4,043,427 Total undiscounted future minimum lease payments 7,849,025 Less: Impact of discounting (2,617,321 ) Total present value of operating lease obligations 5,231,704 Current portion (764,820 ) Operating lease obligations, less current portion $ 4,466,884 | Schedule of future minimum lease payments for non-cancellable operating leases As of December 31, 2022 Fiscal year: 2023 $ 696,869 2024 779,087 2025 798,556 2026 818,518 2027 838,984 Thereafter 4,043,427 Total undiscounted future minimum lease payments 7,975,441 Less: Impact of discounting (2,735,629 ) Total present value of operating lease liability 5,239,812 Current portion (696,869 ) Operating lease liability, less current portion $ 4,542,943 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of difference between income taxes at effective statutory rate and provision for income taxes | Schedule of difference between income taxes at effective statutory rate and provision for income taxes Years Ended December 31, 2022 2021 Income tax benefit at U.S. statutory rate of 21% $ (1,441,624 ) $ (1,261,869 ) State income taxes (247,135 ) (216,321 ) Non-deductible expenses 201,521 64,553 Change in valuation allowance 1,487,238 1,413,637 Total provision for income tax $ — $ — |
Schedule of net deferred tax assets | Schedule of net deferred tax assets December 31, 2022 2021 Deferred Tax Asset (Liability): Net operating loss carryforward $ 9,772,854 $ 8,247,427 Intangible assets (32,656 ) 5,553 9,740,198 8,252,960 Valuation allowance (9,740,198 ) (8,252,960 ) Net deferred tax assets $ — $ — |
COMMON STOCK OPTIONS AND WARR_2
COMMON STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Schedule of Options Activity | Schedule of stock option issuance of shares Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value Outstanding at December 31, 2021 431,266 $ 4.98 3.4 — Granted 685,000 $ 6.41 4.0 — Forfeited (190,000 ) $ 6.41 — — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 — Exercisable at December 31, 2022 404,599 $ 5.02 3.3 — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 — Granted — — — — Exercised/Forfeited/Expired (1,608 ) $ 14.00 — — Outstanding at March 31, 2023 924,658 $ 5.73 3.0 — Exercisable at March 31, 2023 574,658 $ 5.36 3.0 — | Schedule of Options Activity Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Years) Value Outstanding at December 31, 2020 451,898 $ 5.06 4.2 — Granted 20,000 $ 4.32 4.0 — Forfeited (40,632 ) $ 14.00 — — Outstanding at December 31, 2021 431,266 $ 4.98 3.4 $ 197,506 Exercisable at December 31, 2021 312,310 $ 5.25 3.4 — Outstanding at December 31, 2021 431,266 $ 4.98 3.4 — Granted 685,000 $ 6.41 4.0 — Exercised/Forfeited (190,000 ) $ 6.41 — — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 $ 0 Exercisable at December 31, 2022 404,599 $ 5.02 3.3 — |
Schedule of Fair Value Assumptions | Schedule of Fair Value Assumptions For the Years Ended 2022 2021 Risk free interest rate 0.97 3.15 0.18 Expected term in years 3.25 3.50 3.50 Dividend yield — — Volatility of common stock 72 80 91.6 | |
Schedule of Warrants Outstanding | Schedule of Warrants Outstanding Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Warrants expired, forfeited, cancelled or exercised (1,228,875 ) — — — Warrants issued — — — — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Exercisable at December 31, 2022 147,591 $ 8.63 0.8 — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Warrants expired, forfeited, cancelled or exercised (67,500 ) — — — Warrants issued — — — — Outstanding at March 31, 2023 80,091 $ 8.53 1.1 — Exercisable at March 31, 2023 80,091 $ 8.53 1.1 — | Schedule of Warrants Outstanding Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2020 1,587,553 $ 8.62 2.0 — Warrants expired, forfeited, cancelled or exercised (232,517 ) Warrants issued 21,430 $ 7.70 1.9 — Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Exercisable at December 31, 2021 1,376,466 $ 8.18 1.9 — Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Warrants expired, forfeited, cancelled or exercised (1,228,875 ) — Warrants issued 0 $ — — — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Exercisable at December 31, 2022 147,591 $ 8.63 0.8 — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Schedule of stock option issuance of shares | Schedule of stock option issuance of shares Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value Outstanding at December 31, 2021 431,266 $ 4.98 3.4 — Granted 685,000 $ 6.41 4.0 — Forfeited (190,000 ) $ 6.41 — — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 — Exercisable at December 31, 2022 404,599 $ 5.02 3.3 — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 — Granted — — — — Exercised/Forfeited/Expired (1,608 ) $ 14.00 — — Outstanding at March 31, 2023 924,658 $ 5.73 3.0 — Exercisable at March 31, 2023 574,658 $ 5.36 3.0 — | Schedule of Options Activity Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Years) Value Outstanding at December 31, 2020 451,898 $ 5.06 4.2 — Granted 20,000 $ 4.32 4.0 — Forfeited (40,632 ) $ 14.00 — — Outstanding at December 31, 2021 431,266 $ 4.98 3.4 $ 197,506 Exercisable at December 31, 2021 312,310 $ 5.25 3.4 — Outstanding at December 31, 2021 431,266 $ 4.98 3.4 — Granted 685,000 $ 6.41 4.0 — Exercised/Forfeited (190,000 ) $ 6.41 — — Outstanding at December 31, 2022 926,266 $ 5.74 3.3 $ 0 Exercisable at December 31, 2022 404,599 $ 5.02 3.3 — |
Schedule of Warrants Outstanding | Schedule of Warrants Outstanding Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Warrants expired, forfeited, cancelled or exercised (1,228,875 ) — — — Warrants issued — — — — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Exercisable at December 31, 2022 147,591 $ 8.63 0.8 — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Warrants expired, forfeited, cancelled or exercised (67,500 ) — — — Warrants issued — — — — Outstanding at March 31, 2023 80,091 $ 8.53 1.1 — Exercisable at March 31, 2023 80,091 $ 8.53 1.1 — | Schedule of Warrants Outstanding Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2020 1,587,553 $ 8.62 2.0 — Warrants expired, forfeited, cancelled or exercised (232,517 ) Warrants issued 21,430 $ 7.70 1.9 — Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Exercisable at December 31, 2021 1,376,466 $ 8.18 1.9 — Outstanding at December 31, 2021 1,376,466 $ 8.18 1.9 — Warrants expired, forfeited, cancelled or exercised (1,228,875 ) — Warrants issued 0 $ — — — Outstanding at December 31, 2022 147,591 $ 8.63 0.8 — Exercisable at December 31, 2022 147,591 $ 8.63 0.8 — |
REVENUE AND CONTRACT ACCOUNTI_2
REVENUE AND CONTRACT ACCOUNTING (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Schedule Of Contract Assets On Uncompleted Contracts | Schedule Of Contract Assets On Uncompleted Contracts March 31, 2023 December 31, 2022 Cumulative revenues recognized $ 7,144,602 $ 5,934,205 Less: Billings or cash received (5,718,290 ) (5,508,483 ) Contract assets $ 1,426,312 $ 425,722 | Schedule Of Contract Assets On Uncompleted Contracts 2022 2021 Cumulative revenues recognized $ 5,934,205 $ 5,266,930 Less: Billings or cash received (5,508,483 ) (5,263,481 ) Contract Assets $ 425,722 $ 3,449 |
Schedule of Contract Liabilities on Uncompleted Contracts | Schedule of Contract Liabilities on Uncompleted Contracts March 31, 2023 December 31, 2022 Billings and/or cash receipts on uncompleted contracts $ 323,207 $ 4,355,470 Less: Cumulative revenues recognized (262,988 ) (4,144,018 ) Contract liabilities, technology systems 60,219 211,452 Contract liabilities, services and consulting 2,006,642 746,545 Total contract liabilities $ 2,066,861 $ 957,997 | Schedule of Contract Liabilities on Uncompleted Contracts 2022 2021 Billings and/or cash receipts on uncompleted contracts $ 4,355,470 $ 4,473,726 Less: Cumulative revenues (4,144,018 ) (3,041,088 ) Contract liabilities, technology systems $ 211,452 $ 1,232,638 Contract Liabilities, services and consulting 746,545 596,673 Total Contract Liabilities $ 957,997 $ 1,829,311 |
Schedule of Disaggregation of Revenue | Schedule of Disaggregation of Revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Major Goods and Service Lines Turnkey Projects $ 1,827,764 $ — $ — $ — $ 1,827,764 Maintenance and Support 548,685 28,831 11,353 — 588,869 Algorithms — — — 227,655 227,655 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 Timing of Revenue Recognition Goods transferred over time $ 1,827,764 $ — $ — $ — $ 1,827,764 Services transferred over time 548,685 28,831 11,353 227,655 816,524 $ 2,376,449 $ 28,831 $ 11,353 $ 227,655 $ 2,644,288 For the Three Months Ended March 31, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Major Goods and Service Lines Turnkey Projects $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Maintenance and Support 486,616 17,798 20,221 131,412 656,047 Algorithms — — — 131,189 131,189 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 Timing of Revenue Recognition Goods transferred over time $ 520,657 $ (498 ) $ 131,921 $ — $ 652,080 Goods delivered at point in time $ — — — 131,189 131,189 Services transferred over time 486,616 17,798 20,221 131,412 656,047 $ 1,007,273 $ 17,300 $ 152,142 $ 262,601 $ 1,439,316 | Schedule of Disaggregation of Revenue Segments Rail Commercial Petrochemical Government Banking/Other IT Artificial Total Primary Geographical Markets North America $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Major Goods and Service Lines Turnkey Projects $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Maintenance & Support 2,921,084 106,146 — 80,884 — — — 3,108,114 Data Center Auditing Services — — — — — — — — Software License — — — — — — — — Algorithms — — — — — — 713,960 713,960 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Timing of Revenue Recognition Goods transferred over time $ 10,789,693 $ 9,297 $ — $ 156,530 $ — $ — $ 234,772 $ 11,190,292 Services transferred over time 2,921,084 106,146 — 80,884 — — 713,960 3,822,074 $ 13,710,777 $ 115,443 $ — $ 237,414 $ — $ — $ 948,732 $ 15,012,366 Quantitative: For the Year Ended December 31, 2021 Segments Rail Commercial Petrochemical Government Banking IT Artificial Total Primary Geographical Markets North America $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Major Goods and Service Lines Turnkey Projects $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ — $ — $ 5,518,004 Maintenance & Support 1,628,179 185,686 (867 ) 80,885 21,803 — 341,915 2,257,601 Data Center Auditing Services — — — — — 131,537 — 131,537 Software License — — — — — 3,180 — 3,180 Algorithms — — — — — — 349,595 349,595 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 Timing of Revenue Recognition Goods transferred over time $ 5,255,491 $ 27,831 $ — $ 233,145 $ 1,537 $ 131,537 $ 349,595 $ 5,999,136 Services transferred over time 1,628,179 185,686 (867 ) 80,885 21,803 3,180 341,915 2,260,781 $ 6,883,670 $ 213,517 $ (867 ) $ 314,030 $ 23,340 $ 134,717 $ 691,510 $ 8,259,917 |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Schedule of Reclassifications) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||
Total Revenues | $ 2,644,288 | $ 1,439,316 | $ 15,012,366 | $ 8,259,917 |
Total Cost of Revenues | 2,107,116 | 1,217,250 | 10,264,263 | 6,220,373 |
GROSS MARGIN | 537,172 | 222,066 | 4,748,103 | 2,039,544 |
Sales and marketing | 307,577 | 283,894 | 1,337,186 | 1,233,851 |
Research and development | 404,885 | 436,717 | 1,651,064 | 2,515,630 |
Administration | 1,971,508 | 2,143,073 | 8,625,002 | 5,747,014 |
Total Operating Expenses | 2,683,970 | 2,863,684 | 11,613,252 | 9,496,495 |
LOSS FROM OPERATIONS | (2,146,798) | (2,641,618) | (6,865,149) | (7,456,951) |
Previously Reported [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 8,259,917 | |||
Total Cost of Revenues | 10,819,087 | |||
GROSS MARGIN | (2,559,170) | |||
Sales and marketing | 1,233,851 | |||
Research and development | 251,563 | |||
Administration | 3,412,367 | |||
Total Operating Expenses | 4,897,781 | |||
LOSS FROM OPERATIONS | (7,456,951) | |||
Revision of Prior Period, Adjustment [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 8,259,917 | |||
Total Cost of Revenues | 6,220,373 | |||
GROSS MARGIN | 2,039,544 | |||
Sales and marketing | 1,233,851 | |||
Research and development | 2,515,630 | |||
Administration | 5,747,014 | |||
Total Operating Expenses | 9,496,495 | |||
LOSS FROM OPERATIONS | (7,456,951) | |||
Product [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 1,827,764 | 783,269 | 11,190,292 | 5,871,666 |
Total Cost of Revenues | 1,767,209 | 865,488 | 8,376,649 | 4,728,197 |
Product [Member] | Previously Reported [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 5,871,666 | |||
Total Cost of Revenues | 7,151,276 | |||
Product [Member] | Revision of Prior Period, Adjustment [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 5,871,666 | |||
Total Cost of Revenues | 4,728,197 | |||
Service, Other [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 816,524 | 656,047 | 3,822,074 | 2,388,251 |
Total Cost of Revenues | $ 339,907 | $ 351,762 | $ 1,887,614 | 1,492,176 |
Service, Other [Member] | Previously Reported [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 2,388,251 | |||
Total Cost of Revenues | 1,369,985 | |||
Service, Other [Member] | Revision of Prior Period, Adjustment [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 2,388,251 | |||
Total Cost of Revenues | 1,492,176 | |||
Overhead [Member] | Previously Reported [Member] | ||||
Product Information [Line Items] | ||||
Total Cost of Revenues | $ 2,297,826 |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | |||||
Convertible Stock | |||||
Cash, Uninsured Amount | $ 3,907,000 | $ 688,000 | |||
Product warranty Period | 90 days | ||||
Advertising cost | $ 0 | $ 0 | |||
Number of Warrants Outstanding | 80,091 | 1,376,466 | 147,591 | 1,376,466 | |
Share-Based Payment Arrangement, Option [Member] | |||||
Product Information [Line Items] | |||||
Option outstanding | 924,658 | 926,266 | 431,266 | 451,898 | |
Employee Stock Options [Member] | |||||
Product Information [Line Items] | |||||
Option outstanding | 924,658 | 926,266 | |||
Number of incentive stock options | 924,658 | 1,096,266 | |||
Patents And Trademarks [Member] | |||||
Product Information [Line Items] | |||||
Estimated economic life of the property and equipment | 17 years | ||||
Minimum [Member] | |||||
Product Information [Line Items] | |||||
Estimated economic life of the property and equipment | 3 years | ||||
Product warranty Period | 12 months | ||||
Maximum [Member] | |||||
Product Information [Line Items] | |||||
Estimated economic life of the property and equipment | 5 years | ||||
Product warranty Period | 36 months | ||||
UNITED STATES | |||||
Product Information [Line Items] | |||||
Concentration percentage | 25% | 54% | 41% | 86% | |
Customer 1 [Member] | Revenue Benchmark [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 70% | 35% | 42% | ||
Customer 1 [Member] | Accounts Receivable [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 59% | 34% | 34% | 81% | |
Customer 2 [Member] | Revenue Benchmark [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 20% | 24% | 18% | ||
Customer 2 [Member] | Accounts Receivable [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 15% | 31% | 31% | 10% | |
Customer 3 [Member] | Revenue Benchmark [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 30% | 13% | 14% | 83% | |
Customer 3 [Member] | Accounts Receivable [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 11% | 19% | 19% | ||
Customer 4 [Member] | Revenue Benchmark [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 11% | 14% | |||
Customer 4 [Member] | Accounts Receivable [Member] | |||||
Product Information [Line Items] | |||||
Concentration percentage | 10% | 10% | |||
Series B Preferred Convertible Stock [Member] | |||||
Product Information [Line Items] | |||||
Convertible Stock | $ 850,999 | ||||
Series C Preferred Convertible Stock [Member] | |||||
Product Information [Line Items] | |||||
Convertible Stock | $ 2,499,998 | ||||
Series D Convertible Preferred Stock [Member] | |||||
Product Information [Line Items] | |||||
Convertible common shares issued upon conversion | 433,000 | ||||
Common shares issuable conversion | 433,000 | ||||
Series B Convertible Preferred Stock [Member] | |||||
Product Information [Line Items] | |||||
Convertible common shares issued upon conversion | 121,571 | ||||
Common shares issuable conversion | 121,571 | ||||
Series C Convertible Preferred Stock [Member] | |||||
Product Information [Line Items] | |||||
Convertible common shares issued upon conversion | 454,546 | ||||
Series E Convertible Preferred Stock [Member] | |||||
Product Information [Line Items] | |||||
Common shares issuable conversion | 1,333,334 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net Income (Loss) Attributable to Parent | $ 2,143,683 | $ 2,644,616 | $ 6,864,783 | $ 6,008,901 |
Cash used in operating activities | 7,086 | $ 827,733 | 7,873,307 | 6,579,378 |
Working capital deficit | 3,860,339 | 2,339,052 | ||
Retained Earnings (Accumulated Deficit) | $ 54,505,517 | $ 52,361,834 | $ 45,497,051 |
ACCOUNTS RECEIVABLE (Details- S
ACCOUNTS RECEIVABLE (Details- Schedule of Accounts Receivable) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable | $ 3,418,263 | $ 1,738,543 |
Allowance for doubtful accounts | ||
Accounts Receivable, Net | $ 3,418,263 | $ 1,738,543 |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Receivables [Abstract] | ||
Doubtful accounts | $ 76,046 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details-Schedule of major classes of property and equipment) (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | |||
Furniture, fixtures and equipment | $ 1,606,451 | $ 1,264,001 | |
Less: Accumulated depreciation | (976,961) | (660,748) | |
Furniture, fixtures and equipment, Net | $ 579,689 | $ 629,490 | $ 603,253 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 319,928 | $ 269,978 |
PATENTS AND TRADEMARKS (Details
PATENTS AND TRADEMARKS (Details - Schedule of patents and trademarks) (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Patents and trademarks | $ 326,145 | $ 309,205 | |
Less: Accumulated amortization | (256,412) | (242,723) | |
Patents and trademarks, Net | $ 75,017 | $ 69,733 | $ 66,482 |
PATENTS AND TRADEMARKS (Detai_2
PATENTS AND TRADEMARKS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of patents | $ 13,688 | $ 5,368 |
SOFTWARE DEVELOPMENT COSTS (Det
SOFTWARE DEVELOPMENT COSTS (Details - Schedule of Software Development Costs) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Research and Development [Abstract] | ||
Software development costs | $ 341,784 | $ 60,000 |
Less: Accumulated amortization | (76,576) | (60,000) |
Software Development Costs, net | $ 265,208 |
SOFTWARE DEVELOPMENT COSTS (D_2
SOFTWARE DEVELOPMENT COSTS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Research and Development [Abstract] | |||||
Capitalized development of new software products | $ 454,280 | $ 265,208 | $ 60,000 | ||
Capitalized software products | $ 212,067 | 281,783 | |||
Amortization expense of software development costs | $ 16,576 | $ 0 |
DEBT (Details - Schedule of Not
DEBT (Details - Schedule of Notes Payable - Financing Agreements) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | |||
Notes Payable, Principal | $ 193,094 | $ 74,575 | $ 52,503 |
Notes Payable, Principal | 193,094 | 74,575 | |
Third Party Insurance Note One [Member] | |||
Short-Term Debt [Line Items] | |||
Notes Payable, Principal | $ 18,737 | $ 22,266 | |
Notes Payable, Interest | 8.73% | 7.75% | |
Third Party Insurance Note Two [Member] | |||
Short-Term Debt [Line Items] | |||
Notes Payable, Principal | $ 17,753 | $ 12,667 | |
Notes Payable, Interest | 6.24% | 6.24% | |
Third Party Insurance Note Three [Member] | |||
Short-Term Debt [Line Items] | |||
Notes Payable, Principal | 6,526 | $ 16,094 | $ 17,570 |
Third Party Insurance Note Four [Member] | |||
Short-Term Debt [Line Items] | |||
Notes Payable, Principal | $ 167,830 | $ 40,728 |
DEBT (Details - Schedule of N_2
DEBT (Details - Schedule of Notes Payable - Related Parties) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | |||
2023 | $ 23,515 | ||
Total minimum equipment financing payments | $ 11,757 | 23,515 | |
Less: interest | (191) | (664) | |
Total equipment financing at March 31, 2023 | 11,566 | 22,851 | |
Less: current portion of equipment financing | (11,566) | (22,851) | $ (80,335) |
Long term portion of equipment financing | $ 22,851 | ||
2023 | $ 11,757 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||||||||||||||
Apr. 15, 2022 | Feb. 03, 2022 | Apr. 15, 2021 | Apr. 06, 2021 | Feb. 03, 2020 | Dec. 23, 2022 | Sep. 23, 2022 | Sep. 15, 2022 | Dec. 23, 2021 | Sep. 15, 2021 | May 22, 2020 | Apr. 23, 2020 | Aug. 26, 2019 | Mar. 31, 2022 | Mar. 31, 2023 | Feb. 03, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 03, 2021 | |
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | $ 242,591 | $ 293,520 | |||||||||||||||||
Promissory Note [Member] | Paycheck Protection Program [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Debt Instrument, Face Amount | $ 1,410,270 | ||||||||||||||||||
Debt Instrument, Interest Rate During Period | 1% | ||||||||||||||||||
Third Party Insurance Note One [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | $ 26,484 | $ 22,266 | $ 18,737 | $ 0 | $ 22,266 | ||||||||||||||
Interest rate | 8.73% | 7.75% | |||||||||||||||||
Monthly installments of principal and interest | $ 2,755 | $ 2,104 | |||||||||||||||||
Third Party Insurance Note Two [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | $ 63,766 | $ 62,041 | 0 | 17,753 | 12,667 | ||||||||||||||
Interest rate | 6.24% | 6.24% | |||||||||||||||||
Monthly installments of principal and interest | $ 5,979 | $ 6,383 | |||||||||||||||||
Third Party Insurance Note Three [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | 242,591 | $ 24,140 | $ 24,140 | $ 19,965 | 6,526 | 16,094 | 17,570 | ||||||||||||
Monthly installments of principal and interest | $ 2,012 | $ 4,024 | $ 1,997 | ||||||||||||||||
Third Party Insurance Note Four [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | 167,830 | 40,728 | 0 | $ 215,654 | |||||||||||||||
Monthly installments of principal and interest | $ 23,976 | $ 17,899 | $ 20,074 | $ 20,073 | |||||||||||||||
Equipment Financing [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | $ 121,637 | $ 147,899 | $ 11,566 | 22,851 | 103,186 | ||||||||||||||
Interest rate | 9.90% | 12.72% | |||||||||||||||||
Monthly installments of principal and interest | $ 3,919 | $ 4,963 | |||||||||||||||||
Notes Payable [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Notes payable outstanding balance | $ 0 | $ 0 |
REVENUES AND CONTRACT ACCOUNT_3
REVENUES AND CONTRACT ACCOUNTING (Details - Contract Assets) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | |||
Cumulative revenues recognized | $ 7,144,602 | $ 5,934,205 | $ 5,266,930 |
Less: Billings or cash received | (5,718,290) | (5,508,483) | (5,263,481) |
Contract assets | $ 1,426,312 | $ 425,722 | $ 3,449 |
REVENUES AND CONTRACT ACCOUNT_4
REVENUES AND CONTRACT ACCOUNTING (Details - Contract Liabilities) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | |||
Billings and/or cash receipts on uncompleted contracts | $ 4,355,470 | $ 4,473,726 | |
Less: Cumulative revenues | (4,144,018) | (3,041,088) | |
Contract liabilities, technology systems | 211,452 | 1,232,638 | |
Contract liabilities, services and consulting | $ 2,006,642 | 746,545 | 596,673 |
Total contract liabilities | 2,066,861 | 957,997 | $ 1,829,311 |
Billings and/or cash receipts on uncompleted contracts | 323,207 | 4,355,470 | |
Less: Cumulative revenues recognized | (262,988) | (4,144,018) | |
Contract liabilities, technology systems | $ 60,219 | $ 211,452 |
REVENUES AND CONTRACT ACCOUNT_5
REVENUES AND CONTRACT ACCOUNTING (Details -Disaggregated Revenue) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2,644,288 | $ 1,439,316 | $ 15,012,366 | $ 8,259,917 |
Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,190,292 | 5,999,136 | ||
Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 816,524 | 656,047 | 3,822,074 | 2,260,781 |
Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,827,764 | 652,080 | 11,190,292 | 5,518,004 |
Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 588,869 | 656,047 | 3,108,114 | 2,257,601 |
Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 131,537 | |||
Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,180 | |||
Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 227,655 | 131,189 | 713,960 | 349,595 |
Rail [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,376,449 | 1,007,273 | 13,710,777 | 6,883,670 |
Rail [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10,789,693 | 5,255,491 | ||
Rail [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 548,685 | 486,616 | 2,921,084 | 1,628,179 |
Rail [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,827,764 | 520,657 | 10,789,693 | 5,255,491 |
Rail [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 548,685 | 486,616 | 2,921,084 | 1,628,179 |
Rail [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Rail [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Rail [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 28,831 | 17,300 | 115,443 | 213,517 |
Commercial [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,297 | 27,831 | ||
Commercial [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 28,831 | 17,798 | 106,146 | 185,686 |
Commercial [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (498) | 9,297 | 27,831 | |
Commercial [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 28,831 | 17,798 | 106,146 | 185,686 |
Commercial [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Commercial [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Commercial [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Petrochemical [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (867) | |||
Petrochemical [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Petrochemical [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (867) | |||
Petrochemical [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Petrochemical [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (867) | |||
Petrochemical [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Petrochemical [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Petrochemical [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Governments [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,353 | 152,142 | 237,414 | 314,030 |
Governments [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 156,530 | 233,145 | ||
Governments [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,353 | 20,221 | 80,884 | 80,885 |
Governments [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 131,921 | 156,530 | 233,145 | |
Governments [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,353 | 20,221 | 80,884 | 80,885 |
Governments [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Governments [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Governments [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Banking Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 23,340 | |||
Banking Other [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,537 | |||
Banking Other [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21,803 | |||
Banking Other [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,537 | |||
Banking Other [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21,803 | |||
Banking Other [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Banking Other [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Banking Other [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
It Suppliers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 134,717 | |||
It Suppliers [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 131,537 | |||
It Suppliers [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,180 | |||
It Suppliers [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
It Suppliers [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
It Suppliers [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 131,537 | |||
It Suppliers [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,180 | |||
It Suppliers [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
A I [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 948,732 | 691,510 | ||
A I [Member] | Goods Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 234,772 | 349,595 | ||
A I [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 713,960 | 341,915 | ||
A I [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 234,772 | |||
A I [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 341,915 | |||
A I [Member] | Data Center Auditing Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
A I [Member] | Software License [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
A I [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 713,960 | 349,595 | ||
Artificial Intelligence [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 227,655 | 262,601 | ||
Artificial Intelligence [Member] | Services Transferred Over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 227,655 | 131,412 | ||
Artificial Intelligence [Member] | Turnkey Projects [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | ||||
Artificial Intelligence [Member] | Maintenance And Support [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 131,412 | |||
Artificial Intelligence [Member] | Algorithms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 227,655 | 131,189 | ||
North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,644,288 | 1,439,316 | 15,012,366 | 8,259,917 |
North America [Member] | Rail [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,376,449 | 1,007,273 | 13,710,777 | 6,883,670 |
North America [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 28,831 | 17,300 | 115,443 | 213,517 |
North America [Member] | Petrochemical [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (867) | |||
North America [Member] | Governments [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,353 | 152,142 | 237,414 | 314,030 |
North America [Member] | Banking Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 23,340 | |||
North America [Member] | It Suppliers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 134,717 | |||
North America [Member] | A I [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 948,732 | $ 691,510 | ||
North America [Member] | Artificial Intelligence [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 227,655 | $ 262,601 |
DEFERRED COMPENSATION (Details
DEFERRED COMPENSATION (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Compensation Related Costs [Abstract] | ||
Accrued deferred compensation | $ 297,620 | $ 505,896 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details - Schedule of Supplemental Information Related Leases) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 195,409 | $ 193,980 | $ 782,591 | $ 414,085 |
Short term lease Cost | 7,104 | 6,749 | 33,751 | 21,628 |
Operating cash outflow used for operating leases | $ 126,416 | $ 46,250 | $ 416,250 | $ 285,959 |
Weighted average discount rate | 9% | 9% | 9% | 9% |
Weighted average remaining lease term | 9 years 2 months 12 days | 10 years 2 months 12 days | 9 years 6 months | 10 years 4 months 24 days |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details - Schedule of Future Minimum Lease Payments) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Nov. 24, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
2023 | $ 570,453 | $ 696,869 | |
2024 | 779,087 | 779,087 | |
2025 | 798,556 | 798,556 | |
2026 | 818,518 | 818,518 | |
2027 | 838,984 | 838,984 | |
Thereafter | 4,043,427 | 4,043,427 | |
Total undiscounted future minimum lease payments | 7,849,025 | 7,975,441 | |
Less: Impact of discounting | (2,617,321) | (2,735,629) | |
Total present value of operating lease obligations | 5,231,704 | 5,239,812 | $ 4,980,104 |
Current portion | 764,820 | (696,869) | |
Operating lease obligations, less current portion | $ 4,466,884 | $ 4,542,943 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 3 Months Ended | ||||||
Jul. 10, 2020 USD ($) shares | Jul. 26, 2021 USD ($) ft² | Apr. 30, 2018 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 24, 2021 USD ($) | Mar. 02, 2021 USD ($) | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||||
Area of Lease | ft² | 40,000 | |||||||
Operating lease right of use asset | $ 4,612,830 | $ 4,689,931 | $ 4,925,765 | $ 4,980,104 | ||||
Operating lease liability | 5,231,704 | 5,239,812 | 4,980,104 | |||||
Rentable Space | ft² | 30,000 | |||||||
Security Deposit payment | $ 600,000 | |||||||
Accrued Liabilities, Current | 367,652 | 453,023 | $ 618,093 | |||||
Operating lease right of use assets | $ 4,980,104 | |||||||
Chief Executive Officer [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||||||
Annual salary | $ 249,260 | |||||||
Annual Car allowance | $ 18,000 | |||||||
Percentage of gross revenue | 1% | |||||||
Compensation to be paid in addition to base salary in separation payments | $ 75,000 | 75,000 | ||||||
One-time charge which will be amortized in equal amounts over the 36-month term of the separation agreement | 747,788 | 747,788 | ||||||
Lump sum payment owed under separation agreement | $ 124,631 | |||||||
Accrued Liabilities, Current | 114,275 | $ 228,673 | ||||||
Current life insurance | $ 1,200 | 1,200 | ||||||
Unvested options amount | shares | 50,358 | |||||||
Value of unvested options exercisable | $ 95,127 | |||||||
Legal Fees | $ 17,000 | $ 400 |
INCOME TAXES (Details - Schedul
INCOME TAXES (Details - Schedule of provision for income taxes) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at U.S. statutory rate of 21% | $ (1,441,624) | $ (1,261,869) |
State income taxes | (247,135) | (216,321) |
Non-deductible expenses | 201,521 | 64,553 |
Change in valuation allowance | 1,487,238 | 1,413,637 |
Total provision for income tax |
INCOME TAXES (Details - Sched_2
INCOME TAXES (Details - Schedule of deferred tax assets) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 9,772,854 | $ 8,247,427 |
Intangible assets | (32,656) | 5,553 |
Gross deferred tax assets | 9,740,198 | 8,252,960 |
Valuation allowance | (9,740,198) | (8,252,960) |
Net deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Gross operating loss carry forward | $ 39,727,050 | $ 33,522,769 |
Increase in tax asset valuation allowance | 1,487,238 | |
Potential tax benefit arising from net operating loss carryforward | 4,357,876 | |
Potential tax benefit arising from net operating loss carryforward within annual usage limitations | $ 5,382,322 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Mar. 27, 2023 | Oct. 29, 2022 | Feb. 03, 2022 | Jan. 11, 2022 | Nov. 05, 2021 | Aug. 05, 2021 | May 12, 2021 | Nov. 24, 2017 | Dec. 31, 2022 | Dec. 30, 2022 | Oct. 29, 2022 | Sep. 30, 2022 | Aug. 25, 2022 | Feb. 21, 2022 | Jan. 31, 2022 | Feb. 26, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Shares available for grant | 1,000,000 | 1,596,804 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||
Preferred stock authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||||||||
Preferred stock, shares issued | 0 | ||||||||||||||||||||||||||
Strike price | $ 6.41 | ||||||||||||||||||||||||||
Preferred shares outstanding | 0 | ||||||||||||||||||||||||||
Common shares issued | 7,156,876 | 7,169,339 | 7,156,876 | 7,156,876 | 4,111,047 | ||||||||||||||||||||||
Gross proceeds from sale of preferred and common stock | $ 4,000,000 | $ 1,299,000 | $ 4,500,000 | ||||||||||||||||||||||||
Share price | $ 4 | $ 4 | |||||||||||||||||||||||||
Conversion stock shares | 710 | 710 | |||||||||||||||||||||||||
Conversion price | $ 5.50 | $ 5.50 | |||||||||||||||||||||||||
Number of shares issued | 1,325,000 | 198,750 | |||||||||||||||||||||||||
Common stock issued for services, value | $ 5,300,000 | $ 795,000 | |||||||||||||||||||||||||
Proceeds from offering cost | $ 4,779,000 | $ 739,350 | |||||||||||||||||||||||||
Number of shares issued at shares | 198,750 | ||||||||||||||||||||||||||
Aggregate common stock | $ 50,000,000 | ||||||||||||||||||||||||||
Stock issued for services | $ 40,000 | ||||||||||||||||||||||||||
Converted to common stock shares | 121,572 | ||||||||||||||||||||||||||
Stock issued for services | $ 32,500 | $ 40,000 | 157,500 | ||||||||||||||||||||||||
Accrued offering costs | $ 260,816 | 260,816 | |||||||||||||||||||||||||
Offering costs | $ 105,460 | $ 105,460 | $ 257,240 | $ 257,240 | |||||||||||||||||||||||
Total compensation cost for stock options | $ 426,004 | $ 426,004 | $ 426,004 | ||||||||||||||||||||||||
Vesting term | 3 years 3 months 18 days | ||||||||||||||||||||||||||
Treasury stock shares | 1,324 | 1,324 | 1,324 | 1,324 | 1,324 | 235 | |||||||||||||||||||||
Treasury stock | $ 157,452 | $ 157,452 | $ 157,452 | $ 157,452 | $ 157,452 | $ 148,000 | |||||||||||||||||||||
Preferred Stock value | $ 1,000 | ||||||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||
Share price | $ 4 | ||||||||||||||||||||||||||
Proceeds from offering cost | $ 739,350 | ||||||||||||||||||||||||||
Employee compensation | $ 25,000 | ||||||||||||||||||||||||||
Fair market value percentage | 85% | ||||||||||||||||||||||||||
Common Stock issued | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||||||||||||
Total compensation cost | $ 350,876 | ||||||||||||||||||||||||||
Options to purchase shares of common stock | 665,000 | ||||||||||||||||||||||||||
Expected term | 3 years | ||||||||||||||||||||||||||
Expected volatility | 72% | ||||||||||||||||||||||||||
Discount rate | 0.97% | ||||||||||||||||||||||||||
Employee Stock Options [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Number of incentive stock options | 926,266 | 924,658 | 926,266 | 926,266 | |||||||||||||||||||||||
Shareholders One [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Repurchase of common stock | $ 115 | $ 84 | |||||||||||||||||||||||||
Market value of stock repurchased | $ 10.08 | $ 7 | |||||||||||||||||||||||||
Shareholders Two [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Repurchase of common stock | $ 753 | $ 140 | |||||||||||||||||||||||||
Market value of stock repurchased | $ 9.09 | $ 6.30 | |||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Private placement sold | 83,667 | 818,335 | |||||||||||||||||||||||||
Share price | $ 3 | $ 3 | $ 3 | $ 3 | |||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Common stock issued for services, shares | 12,463 | 9,758 | 7,198 | 43,959 | |||||||||||||||||||||||
Stock issued for services | $ 12 | $ 7 | $ 43 | ||||||||||||||||||||||||
Number of shares issued | 1,523,750 | 2,425,752 | |||||||||||||||||||||||||
Stock issued for services , shares | 12,463 | ||||||||||||||||||||||||||
Weighted average price per share | $ 2.61 | ||||||||||||||||||||||||||
Director [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Common stock issued for services, shares | 16,335 | 10,668 | 7,198 | ||||||||||||||||||||||||
Stock issued for services | $ 40,000 | $ 40,000 | |||||||||||||||||||||||||
Stock issued for services | $ 37,500 | ||||||||||||||||||||||||||
Stock issued for services , shares | 7,198 | ||||||||||||||||||||||||||
Board of Directors Chairman [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Strike price | $ 4.32 | ||||||||||||||||||||||||||
Common stock issued for services, shares | 3,726 | 4,032 | 7,223 | 9,560 | |||||||||||||||||||||||
Stock issued for services | $ 19,167 | $ 30,000 | $ 45,000 | $ 50,000 | |||||||||||||||||||||||
Stock-based compensation expense | $ 7,685 | ||||||||||||||||||||||||||
Employees And Directors [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Stock-based compensation expense | $ 75,128 | $ 250,577 | $ 819,191 | $ 262,411 | |||||||||||||||||||||||
Purchase Agreement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 4,500,000 | ||||||||||||||||||||||||||
Convertible Series B Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock authorized | 15,000 | 15,000 | 15,000 | 15,000 | 15,000 | ||||||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | 0 | 851 | ||||||||||||||||||||||
Preferred shares outstanding | 0 | 0 | 0 | 0 | 851 | ||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Conversion amount | $ 1,000 | $ 1,000 | |||||||||||||||||||||||||
Conversion price | $ 7 | $ 7 | $ 7 | $ 7 | |||||||||||||||||||||||
Conversion stock shares | 851 | 854 | |||||||||||||||||||||||||
Converted shares | 121,572 | 122,000 | |||||||||||||||||||||||||
Converted to common stock shares | 851 | ||||||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | Equity Unit Purchase Agreements [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Conversion amount | $ 2,830,000 | ||||||||||||||||||||||||||
Preferred stock, shares issued | 2,830 | ||||||||||||||||||||||||||
Strike price | $ 1,000 | ||||||||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Conversion stock shares | 2,500 | 2,000 | |||||||||||||||||||||||||
Converted shares | 454,546 | 363,636 | |||||||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | Purchase Agreement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock, shares issued | 4,500 | ||||||||||||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 4,500,000 | ||||||||||||||||||||||||||
Convertible Series C Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock authorized | 5,000 | 5,000 | 5,000 | 5,000 | 5,000 | ||||||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | 0 | 2,500 | ||||||||||||||||||||||
Preferred shares outstanding | 0 | 0 | 0 | 0 | 2,500 | ||||||||||||||||||||||
Conversion stock shares | 1,790 | 1,790 | |||||||||||||||||||||||||
Series C preferred converted to common stock, shares | 454,546 | ||||||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||||||||
Series D Convertible Preferred Stock [Member] | Purchase Agreement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock, shares issued | 300 | 300 | 999 | 999 | |||||||||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 999,000 | ||||||||||||||||||||||||||
Gross proceeds from sale of preferred and common stock | $ 300,000 | $ 3,454,003 | |||||||||||||||||||||||||
Share price | $ 1,000 | $ 1,000 | |||||||||||||||||||||||||
Series D Convertible Preferred Stock [Member] | Private Placement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock, shares issued | 300 | 300 | |||||||||||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 300,000 | ||||||||||||||||||||||||||
Gross proceeds from sale of preferred and common stock | $ 551,001 | ||||||||||||||||||||||||||
Share price | $ 1,000 | $ 1,000 | |||||||||||||||||||||||||
Common Stock [Member] | Purchase Agreement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Common shares issued | 818,355 | 818,355 | |||||||||||||||||||||||||
Common Stock [Member] | Private Placement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Private placement sold | 83,667 | ||||||||||||||||||||||||||
Share price | $ 3 | 3 | |||||||||||||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Share price | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||||||||||||||||
Number of shares issued | 300 | 999 | |||||||||||||||||||||||||
Gross proceeds private placement | $ 551,001 | $ 3,454,003 | |||||||||||||||||||||||||
Convertible Series D Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock authorized | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 | ||||||||||||||||||||||
Preferred stock, shares issued | 1,299 | 1,299 | 1,299 | 1,299 | 0 | ||||||||||||||||||||||
Preferred shares outstanding | 1,299 | 1,299 | 1,299 | 1,299 | 0 | ||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||||||||
Series E Convertible Preferred Stock [Member] | Purchase Agreement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock, shares issued | 4,000 | ||||||||||||||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 4,000,000 | ||||||||||||||||||||||||||
Convertible Series E Preferred Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Preferred stock, shares issued | 0 | 4,000 | 0 | 0 | |||||||||||||||||||||||
Preferred shares outstanding | 0 | 4,000 | 0 | 0 | |||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||||||||
Share-Based Payment Arrangement, Option [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Common stock on the date of grant, term of the stock option | not exceed 10 years | ||||||||||||||||||||||||||
Voting rights | more than 10% of the total combined voting power of all classes of capital stock | ||||||||||||||||||||||||||
Aggregate fair market value of common stock | $ 100,000 | ||||||||||||||||||||||||||
Two Thousands Twenty One Equity Incentive Plan [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of Common stock under Awards | 1,000,000 | ||||||||||||||||||||||||||
Plan 2021 [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Number of shares issued | 1,000,000 | ||||||||||||||||||||||||||
Plan 2016 [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Number of incentive stock options | 269,658 | 271,266 | 269,658 | 269,658 | |||||||||||||||||||||||
Non Plan [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Number of incentive stock options | 160,000 | 160,000 | 160,000 | 160,000 |
COMMON STOCK OPTIONS AND WARR_3
COMMON STOCK OPTIONS AND WARRANTS (Details - Schedule of Options Activity) - Share-Based Payment Arrangement, Option [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Outstanding at the beginning of the year | 926,266 | 431,266 | 451,898 | |
Outstanding at the beginning of the year | $ 5.74 | $ 4.98 | $ 5.06 | |
Outstanding | 3 years | 3 years 4 months 24 days | 3 years 4 months 24 days | 4 years 2 months 12 days |
Granted | 685,000 | 20,000 | ||
Granted | $ 6.41 | $ 4.32 | ||
Granted | 4 years | 4 years | ||
Forfeited | (1,608) | (190,000) | (40,632) | |
Forfeited | $ 14 | $ 6.41 | $ 14 | |
Outstanding | $ 0 | $ 197,506 | ||
Exercisable at end of period | 574,658 | 404,599 | 312,310 | |
Exercisable at end of period | $ 5.36 | $ 5.02 | $ 5.25 | |
Exercisable | 3 years | 3 years 3 months 18 days | 3 years 4 months 24 days | |
Exercisable | ||||
Cancelled/Forfeited | (190,000) | |||
Cancelled/Forfeited | $ 6.41 | |||
Outstanding at the end of the year | 924,658 | 926,266 | 431,266 | 451,898 |
Outstanding at the end of the year | $ 5.73 | $ 5.74 | $ 4.98 | $ 5.06 |
Outstanding | 3 years 3 months 18 days |
COMMON STOCK OPTIONS AND WARR_4
COMMON STOCK OPTIONS AND WARRANTS (Details - Schedule of Fair Value Assumptions) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected term in years | 3 years | ||
Volatility of common stock | 72% | ||
Share-Based Payment Arrangement, Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Risk free interest rate | 0.18% | ||
Expected term in years | 3 years 6 months | ||
Dividend yield | |||
Volatility of common stock | 91.60% | ||
Minimum [Member] | Share-Based Payment Arrangement, Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Risk free interest rate | 0.97% | ||
Expected term in years | 3 years 3 months | ||
Volatility of common stock | 72% | ||
Maximum [Member] | Share-Based Payment Arrangement, Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Risk free interest rate | 3.15% | ||
Expected term in years | 3 years 6 months | ||
Volatility of common stock | 80% |
COMMON STOCK OPTIONS AND WARR_5
COMMON STOCK OPTIONS AND WARRANTS (Details - Schedule of activity of warrants) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jan. 11, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Warrants issued | 710 | 710 | |||
Warrant [Member] | |||||
Outstanding at the beginning of the year | 147,591 | 1,376,466 | 1,587,553 | ||
Outstanding at the beginning of the year | $ 8.63 | $ 8.18 | $ 8.62 | ||
Outstanding at end of period | 1 year 1 month 6 days | 9 months 18 days | 1 year 10 months 24 days | 2 years | |
Warrants expired, forfeited, cancelled or exercised | (67,500) | (1,228,875) | (232,517) | ||
Warrants issued | 0 | 21,430 | |||
Warrants issued | $ 7.70 | ||||
Warrant issued | 1 year 10 months 24 days | ||||
Outstanding at the end of the year | 80,091 | 147,591 | 1,376,466 | 1,587,553 | |
Outstanding at the end of the year | $ 8.63 | $ 8.18 | $ 8.62 | ||
Exercisable | 80,091 | 147,591 | 1,376,466 | ||
Exercisable at end of period | $ 8.53 | $ 8.63 | $ 8.18 | ||
Outstanding at end of period | 1 year 1 month 6 days | 9 months 18 days | 1 year 10 months 24 days | ||
Exercisable | |||||
Outstanding at the beginning of the year | 1 year 10 months 24 days | ||||
Outstanding at the beginning of the year | $ 8.63 | $ 8.18 | |||
Outstanding | |||||
Warrants expired, forfeited, cancelled or exercised | |||||
Outstanding at end of period | 9 months 18 days | ||||
Outstanding at the ending of the year | $ 8.53 | $ 8.63 | $ 8.18 |
COMMON STOCK OPTIONS AND WARR_6
COMMON STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 02, 2022 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 21, 2022 | Feb. 03, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Strike price | $ 6.41 | ||||||||||
Proceeds from Issuance or Sale of Equity | $ 4,000,000 | $ 1,299,000 | $ 4,500,000 | ||||||||
Share price | $ 4 | $ 4 | |||||||||
Warrant [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Shares expired | 67,500 | 1,228,875 | 232,517 | ||||||||
Options [Member] | Former Staff [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 110,000 | 8,922 | |||||||||
Proceeds from Issuance or Sale of Equity | $ 63,860 | ||||||||||
Options [Member] | Two Employees [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 80,000 | ||||||||||
Warrant [Member] | Seven Holder [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Warrant exercised | 205,574 | ||||||||||
Warrant exercise price | $ 7.70 | ||||||||||
Total common stock | 50,588 | ||||||||||
Warrant [Member] | Seven Holder [Member] | Minimum [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Share price | $ 9.25 | ||||||||||
Warrant [Member] | Seven Holder [Member] | Maximum [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Share price | $ 11.14 | ||||||||||
Management [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Options granted | 20,000 | 665,000 | |||||||||
Strike price | $ 6.41 | ||||||||||
Stock option plan expense | $ 33,096 | $ 1,596,804 | |||||||||
Stock-based compensation expense | 819,191 | ||||||||||
Unamortized expense | $ 426,004 | ||||||||||
Total compensation cost for stock options not yet recognized, period | 2 years | ||||||||||
Board of Directors Chairman [Member] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||
Options granted | 20,000 | ||||||||||
Strike price | $ 4.32 | ||||||||||
Stock option plan expense | $ 52,758 | ||||||||||
Stock-based compensation expense | 7,685 | ||||||||||
Unamortized expense | $ 45,073 | ||||||||||
Total compensation cost for stock options not yet recognized, period | 2 years 9 months |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Cash contributions | $ 42,241 | $ 155,766 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 02, 2021 | |
Related party cost | $ 25,583 | $ 16,250 | $ 93,422 | $ 335,334 | ||
Accounts payable | $ 20,986 | |||||
Contractors [Member] | ||||||
Related party cost | $ 7,480 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - $ / shares | Mar. 27, 2023 | Feb. 01, 2023 | Dec. 31, 2022 | Nov. 09, 2022 | Feb. 21, 2022 | Feb. 03, 2022 |
Subsequent Event [Line Items] | ||||||
Number of shares issued | 1,000,000 | |||||
Share price | $ 4 | $ 4 | ||||
Employee Stock Purchase Plan [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares issued | 1,000,000 | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares issued | 150,000 | |||||
Share price | $ 4.22 | |||||
Security purchase agreement, description | Pursuant to the Purchase Agreement, the Purchaser purchased 4,000 shares of a newly authorized Series E Convertible Preferred Stock (the “Series E Convertible Preferred Stock”), and the Company received proceeds of $4,000,000. The Purchase Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties. |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Schedule of Options Activity) - Share-Based Payment Arrangement, Option [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Outstanding at the beginning of the year | 926,266 | 431,266 | 451,898 | |
Outstanding at the beginning of the year | $ 5.74 | $ 4.98 | $ 5.06 | |
Outstanding | 3 years | 3 years 4 months 24 days | 3 years 4 months 24 days | 4 years 2 months 12 days |
Granted | 685,000 | 20,000 | ||
Granted | $ 6.41 | $ 4.32 | ||
Granted | 4 years | 4 years | ||
Forfeited | (1,608) | (190,000) | (40,632) | |
Forfeited | $ 14 | $ 6.41 | $ 14 | |
Outstanding at the end of the year | 924,658 | 926,266 | 431,266 | 451,898 |
Outstanding at the end of the year | $ 5.73 | $ 5.74 | $ 4.98 | $ 5.06 |
Outstanding | 3 years 3 months 18 days | |||
Exercisable at end of period | 574,658 | 404,599 | 312,310 | |
Exercisable at end of period | $ 5.36 | $ 5.02 | $ 5.25 | |
Exercisable | 3 years | 3 years 3 months 18 days | 3 years 4 months 24 days | |
Outstanding | 3 years 3 months 18 days | |||
Outstanding | $ 0 | $ 197,506 |
REVENUE AND CONTRACT ACCOUNTI_3
REVENUE AND CONTRACT ACCOUNTING (Details Narrative) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities | $ 957,997 |
Technology systems | 151,233 |
Consulting recognized | $ 248,856 |