Duos Technologies (DUOT) 10-Q 14 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-55497
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	32256
City Area Code	(904)
Local Phone Number	296-2807
Title of 12(b) Security	Common Stock, par value $0.001
Trading Symbol	DUOT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,247,131

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash	$ 3,266,916	$ 1,121,092
Accounts receivable, net	258,874	3,418,263
Contract assets	1,346,731	425,722
Inventory	1,525,913	1,428,360
Prepaid expenses and other current assets	355,978	441,320
Total Current Assets	6,754,412	6,834,757
Property and equipment, net	555,485	629,490
Operating lease right of use asset	4,454,714	4,689,931
Security deposit	550,000	600,000
OTHER ASSETS:
Note receivable, net	151,875
Patents and trademarks, net	121,051	69,733
Software development costs, net	793,618	265,208
Total Other Assets	1,066,544	334,941
TOTAL ASSETS	13,381,155	13,089,119
CURRENT LIABILITIES:
Accounts payable	619,765	2,290,390
Notes payable - financing agreements	137,816	74,575
Accrued expenses	275,277	453,023
Equipment financing payable-current portion		22,851
Operating lease obligations-current portion	774,306	696,869
Contract liabilities	1,588,928	957,997
Total Current Liabilities	3,396,092	4,495,705
Operating lease obligations, less current portion	4,310,853	4,542,943
Total Liabilities	7,706,945	9,038,648
Commitments and Contingencies (Note 4)
STOCKHOLDERS' EQUITY:
Preferred stock, value
Common stock: $0.001 par value; 500,000,000 shares authorized, 7,248,455 and 7,156,856 shares issued, 7,247,131 and 7,155,552 shares outstanding at September 30, 2023 and December 31, 2022, respectively	7,248	7,156
Additional paid-in-capital	66,267,057	56,562,600
Accumulated deficit	(60,442,653)	(52,361,834)
Sub-total	5,831,662	4,207,923
Less:  Treasury stock (1,324 shares of common stock at September 30, 2023 and December 31, 2022)	(157,452)	(157,452)
Total Stockholders' Equity	5,674,210	4,050,471
Total Liabilities and Stockholders' Equity	13,381,155	13,089,119
Convertible Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value
Convertible Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value
Convertible Series C Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value
Convertible Series D Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	1	1
Convertible Series E Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	4
Convertible Series F Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	$ 5

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares designated	9,441,000	9,441,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	7,248,455	7,156,856
Common stock, shares outstanding	7,247,131	7,155,552
Treasury stock, shares	1,324	1,324
Convertible Series A Preferred Stock [Member]
Temporary equity, par value	$ 10	$ 10
Temporary equity, shares authorized	500,000	500,000
Temporary equity, shares issued	0	0
Temporary equity, shares outstanding	0	0
Preferred stock, conversion price per share	$ 6.30	$ 6.30
Convertible Series B Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares authorized	15,000	15,000
Preferred stock, conversion price per share	$ 7	$ 7
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Convertible Series C Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares authorized	5,000	5,000
Preferred stock, conversion price per share	$ 5.50	$ 5.50
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Convertible Series D Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares authorized	4,000	4,000
Preferred stock, conversion price per share	$ 3	$ 3
Preferred stock, shares issued	1,299	1,299
Preferred stock, shares outstanding	1,299	1,299
Convertible Series E Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, 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
Convertible Series F Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares authorized	5,000	5,000
Preferred stock, conversion price per share	$ 6.20	$ 6.20
Preferred stock, shares issued	5,000	0
Preferred stock, shares outstanding	5,000	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
REVENUES:
Total Revenues	$ 1,530,923	$ 4,022,238	$ 5,945,270	$ 9,078,696
COST OF REVENUES:
Total Cost of Revenues	1,304,335	2,922,686	4,940,173	6,474,464
GROSS MARGIN	226,588	1,099,552	1,005,097	2,604,232
OPERATING EXPENSES:
Sales and marketing	353,386	297,057	962,040	956,937
Research and development	450,006	329,424	1,392,692	1,296,480
General and administration	2,394,173	2,342,089	6,916,390	6,255,926
Total Operating Expenses	3,197,565	2,968,570	9,271,122	8,509,343
LOSS FROM OPERATIONS	(2,970,977)	(1,869,018)	(8,266,025)	(5,905,111)
OTHER INCOME (EXPENSES):
Interest expense	(1,406)	(2,057)	(5,816)	(7,943)
Other income, net	24,647	(53,993)	191,022	698
Total Other Income (Expenses)	23,241	(56,050)	185,206	(7,245)
NET LOSS	(2,947,736)	(1,925,068)	(8,080,819)	(5,912,356)
Product [Member]
REVENUES:
Total Revenues	705,849	2,709,899	3,404,107	6,273,213
COST OF REVENUES:
Total Cost of Revenues	883,836	2,176,761	3,723,151	5,016,551
Service, Other [Member]
REVENUES:
Total Revenues	825,074	1,312,339	2,541,163	2,805,483
COST OF REVENUES:
Total Cost of Revenues	$ 420,499	$ 745,925	$ 1,217,022	$ 1,457,913

CONSOLIDATED STATEMENTS OF OP_2

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net loss per share, Basic	$ (0.41)	$ (0.30)	$ (1.12)	$ (1.01)
Net loss per share, Diluted	$ (0.41)	$ (0.30)	$ (1.12)	$ (1.01)
Weighted average shares, Basic	7,240,632	6,450,180	7,189,256	5,859,375
Weighted average shares, Diluted	7,240,632	6,450,180	7,189,256	5,859,375

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]	Preferred Stock F [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member]	Total
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							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
Series C preferred stock converted to common stock		$ (2)				$ 455	(453)
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
Stock options compensation							188,232			188,232
Stock issued for services						$ 10	39,990			40,000
Stock issued for services, shares						10,668
Net loss								(1,342,672)		(1,342,672)
Ending balance, value at Jun. 30, 2022	$ 1					$ 6,107	52,467,039	(49,484,339)	(157,452)	2,831,356
Ending balance, shares at Jun. 30, 2022	851					6,107,209
Stock options compensation							153,367			153,367
Common stock issued for cash						$ 818	2,454,185			2,455,003
Common stock issued for cash, shares						818,335
Series B preferred stock converted to common stock	$ (1)					$ 122	(121)
Series B preferred stock converted to common stock, shares	(851)					121,572
Series D preferred stock issued for cash			$ 1				998,999			999,000
Series D preferred stock issued for cash, shares			999
Stock issuance cost							(260,816)			(260,816)
Stock issued for services						$ 10	39,990			40,000
Stock issued for services, shares						9,758
Net loss								(1,925,068)		(1,925,068)
Ending balance, value at Sep. 30, 2022			$ 1			$ 7,057	55,852,643	(51,409,407)	(157,452)	4,292,842
Ending balance, shares at Sep. 30, 2022			999			7,056,874
Beginning balance, value at Dec. 31, 2022			$ 1			$ 7,156	56,562,600	(52,361,834)	(157,452)	4,050,471
Beginning 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
Stock options compensation							161,399			161,399
Stock issuance cost							281,500			281,500
Stock issued for services						$ 6	32,494			32,500
Stock issued for services, shares						5,645
Stock issued under the Employee Stock Purchase Plan for cash and compensation						$ 66	183,199			183,265
Stock issued under the Employee Stock Purchase Plan for cash and compensation, shares						65,561
Net loss								(2,989,400)		(2,989,400)
Ending balance, value at Jun. 30, 2023			$ 1	$ 4		$ 7,240	61,029,659	(57,494,917)	(157,452)	3,384,535
Ending balance, shares at Jun. 30, 2023			1,299	4,000		7,240,545
Series F preferred stock issued					$ 5		4,999,995			5,000,000
Series F preferred stock issued, shares					5,000
Stock options compensation							164,118			164,118
Stock issued for services						$ 8	40,557			40,565
Stock issued for services, shares						7,910
Stock compensation under ESPP							32,728			32,728
Net loss								(2,947,736)		(2,947,736)
Ending balance, value at Sep. 30, 2023			$ 1	$ 4	$ 5	$ 7,248	$ 66,267,057	$ (60,442,653)	$ (157,452)	$ 5,674,210
Ending balance, shares at Sep. 30, 2023			1,299	4,000	5,000	7,248,455

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash from operating activities:
Net loss	$ (8,080,819)	$ (5,912,356)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	393,057	225,825
Stock based compensation	499,590	592,177
Stock issued for services	105,565	120,000
Amortization of operating lease right of use asset	235,217	198,790
Changes in assets and liabilities:
Accounts receivable	3,159,389	(454,431)
Note receivable	(151,875)
Contract assets	(921,009)	(820,938)
Inventory	(97,552)	(395,787)
Security deposit	50,000
Prepaid expenses and other current assets	543,793	15,539
Accounts payable	(1,670,625)	605,129
Accrued expenses	(178,081)	(136,180)
Operating lease obligation	(154,653)	60,668
Contract liabilities	630,931	2,051,109
Net cash used in operating activities	(5,637,072)	(3,850,455)
Cash flows from investing activities:
Purchase of patents/trademarks	(58,208)	(17,490)
Purchase of software development	(640,609)	(87,700)
Purchase of fixed assets	(199,618)	(311,327)
Net cash used in investing activities	(898,435)	(416,517)
Cash flows from financing activities:
Repayments of insurance and equipment financing	(395,221)	(303,492)
Repayment of finance lease	(22,851)	(69,325)
Proceeds from common stock issued		8,550,002
Stock issuance cost	(17,645)	(837,467)
Proceeds from shares issued under Employee Stock Purchase Plan	117,048
Proceeds from preferred stock issued	9,000,000	999,000
Net cash provided by financing activities	8,681,331	8,338,718
Net increase in cash	2,145,824	4,071,746
Cash, beginning of period	1,121,092	893,720
Cash, end of period	3,266,916	4,965,466
Supplemental Disclosure of Cash Flow Information:
Interest paid	5,816	8,045
Taxes paid		1,264
Supplemental Non-Cash Investing and Financing Activities:
Notes issued for financing of insurance premiums	$ 458,452	$ 353,244

NATURE OF OPERATIONS AND SUMMAR

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2023
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”), is a company that specializes in machine vision and artificial intelligence to analyze fast moving objects such as trains, trucks, automobiles, and aircraft. This technology can help improve safety, maintenance, and operating metrics. The Company is the inventor of the Railcar Inspection Portal (RIP) and is currently the rail industry leader for machine vision/camera wayside detection systems that include the use of Artificial Intelligence at speeds up to 125 mph. The RIP inspects a train at full speed from the top, sides, and bottom looking at FRA/AAR mandated safety inspection points. The system also detects illegal riders that assists law enforcement agencies. Each rail car is scanned with machine vision cameras and other sensors from the top, sides, and bottom and images are produced within seconds of passing that can be used by the customer to help prevent derailments, improve maintenance operations, and assist with security. The Company self-performs all aspects of hardware, software, IT, and Artificial Intelligence development and engineering and holds several patents and maintains significant intellectual property. The Company also has a proprietary portfolio of over 40 Artificial Intelligence “Use Cases” that automatically flag defects. The Company has deployed this system with several Class 1 and passenger customers and anticipates an increased demand in the future from rail operators, car owners, shippers, and law enforcement agencies. The Company has also developed the Automated Logistics Information System (ALIS) which automates gatehouse operations 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 throughput on each lane on which the technology is deployed. The Company expects to deploy an upgraded Truck Inspection Portal (TIP) which uses the same technology and lessons learned from the ALIS and RIP systems. The Company’s strategy is to expand our existing customer base in the Class 1, short line, and passenger space in North America; expand our subscription offering to car owners and shippers; and expand operations to meet the demand from international customers. The Company has prepared to respond and scale if necessary to react to increased demand from potential regulations that may be imposed around wayside detection technology. In the future the Company may put more emphasis on the trucking and intermodal sector with an updated Truck Inspection Portal solution. The Company continues to focus on operational and technical excellence, customer satisfaction, and maintaining a highly skilled and performance-based work force. 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 nine months ended September 30, 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 and notes receivable, valuation of common stock warrants received in exchange for an asset sale, 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 September 30, 2023, the balance in one financial institution exceeded federally insured limits by approximately $ 2,768,466 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 nine months ended September 30, 2023, two customers accounted for 55 29 25 21 19 19 30 At September 30, 2023, three customers accounted for 52 25 14 34 31 19 10 Geographic Concentration For the nine months ended September 30, 2023, approximately 37 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 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 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. Any inventory deemed to be obsolete is written off. 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. Stock-Based Compensation The Company accounts for 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 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. 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 to be both probable and reasonably estimable. 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 administration expenses in the consolidated statements of operations. Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing the 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 September 30, 2023, there were (i) an aggregate of 80,091 1,217,775 433,000 1,333,334 806,452 At September 30, 2022, there were (i) an aggregate of 1,376,466 926,266 333,000 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 is 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.

LIQUIDITY

LIQUIDITY	9 Months Ended
	Sep. 30, 2023
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 $ 8,080,819 5,637,072 3,358,320 60,442,653 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. In August 2023, the Company was successful in raising gross proceeds of $5,000,000 from the sale of Series F Convertible Preferred Stock. The Company was also successful in raising a further $2,500,000 from the sale of additional Series E Convertible Preferred Stock during November 2023. During the second quarter of 2023, the Company renewed its S-3 “shelf registration” statement allowing the Company to sell multiple forms of securities in addition to 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. Additionally, the Company has capacity on Series D and Series E to bolster liquidity, if needed, via private placements. 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, forthcoming with ongoing business 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 growth in its contracted backlog as well as positive signs from new commercial engagements that indicate improvements in future commercial opportunities for both one-time capital and recurring services revenues. 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, proactive management of our existing contracts, recent stock offerings and private placements as well as the availability to raise capital via our shelf registration indicate there is no substantial doubt for the Company to continue as a going concern for a period of twelve months from the issuance date of this report. 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 twelve 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 approximately the next twelve 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.

DEBT

DEBT	9 Months Ended
	Sep. 30, 2023
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 September 30, 2023 and December 31, 2022: Schedule of notes payable September 30, 2023 December 31, 2022 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 2,736 8.73 % $ — — Third Party - Insurance Note 2 79,146 8.00 % 17,753 6.24 % Third Party - Insurance Note 3 8,045 — 16,094 — Third Party - Insurance Note 4 47,889 — 40,728 — Total $ 137,816 $ 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 2,736 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 5,979 142,734 8.00 13,501 79,146 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 2,012 8,045 16,094 The Company entered into an agreement on February 3, 2022 with its insurance provider by issuing a note payable for the purchase of an insurance policy in the amount of $ 242,591 102,075 20,073 53,175 293,520 125,690 23,976 47,889 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 0 22,851

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2023
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 at lease commencement. Rent for the first eleven months of the term was calculated based on 30,000 600,000 50,000 4,454,714 As of September 30, 2023, 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 8.8 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 Nine Months Ended September 30, 2023 2022 Lease cost: Operating lease cost $ 586,228 $ 582,989 Short-term lease cost $ 56,052 $ 26,127 Other information: Operating cash outflow used for operating leases $ 505,664 $ 323,750 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 8.6 9.6 As of September 30, 2023, future minimum lease payments due under our operating leases are as follows: Schedule of future minimum lease payments Amount Calendar year: 2023 $ 191,205 2024 779,087 2025 798,556 2026 818,518 2027 838,984 Thereafter 4,043,427 Total undiscounted future minimum lease payments 7,469,777 Less: Impact of discounting (2,384,618 ) Total present value of operating lease obligations 5,085,159 Current portion (774,306) Operating lease obligations, less current portion $ 4,310,853 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 provided that he would receive separation payments over a 36-month period equal to his base salary plus $ 75,000 In accordance with the Separation Agreement, the Company paid to Mr. Arcaini the total sum of $ 747,788 124,631

STOCKHOLDERS_ EQUITY

STOCKHOLDERS’ EQUITY	9 Months Ended
	Sep. 30, 2023
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 1,000 Each share of Series C Convertible Preferred Stock has 172 votes 5.50 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 1,000 Each share of Series D Convertible Preferred Stock has 333 votes 3.00 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 Purchaser purchased 300 300,000 In connection with such Purchase Agreements, 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 September 30, 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 1,000 Each share of Series E Preferred Stock has 333 votes 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 The existing investor’s 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 Convertible Preferred Stock without the consent of the Purchaser. As of September 30, 2023 and December 31, 2022, respectively, there were 4,000 0 In connection with the Series E Convertible Preferred Stock issuance, the Company accrued estimated costs and charged additional paid-in capital of $ 299,145 17,645 281,500 Series F Convertible Preferred Stock On August 2, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an existing, accredited investor in the Company (the “Purchaser”). Pursuant to the Purchase Agreement, the Purchaser purchased 5,000 5,000,000 The Company's Board of Directors designated 5,000 1,000 6.20 The holders of the Series F 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 F Preferred Stock has 161 votes The Company also agreed that it will not, with certain exceptions, sell or issue common stock or Common Stock Equivalents (as defined in the Purchase Agreement relating to the Series F Preferred Stock) 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 F Preferred Stock without the consent of the holders. 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. 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. 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. As of September 30, 2023 and December 31, 2022, respectively, there were 5,000 0 Common stock issued Nine Months Ended September 30, 2022 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 September 30, 2022, the Company closed an offering of 818,335 2,455,003 3 2,194,187 Nine Months Ended September 30, 2023 On March 31, 2023, the Company issued 12,463 32,500 2.61 On June 30, 2023, the Company issued 5,645 32,500 5.76 On June 30, 2023, the Company issued 65,561 117,048 1.79 72,801 The Company issued 7,910 40,565 5.13 Employee Stock Purchase Plan In the fourth quarter of 2022, the board of directors adopted an Employee Stock Purchase Plan (“ESPP”) which, was effective as of January 1, 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 Under ASC 718-50 “Employee Share Purchase Plans” the plan is considered a compensatory plan and the compensation for each six-month offering period is computed based upon the grant date fair value of the estimated shares to be purchased based on the estimated payroll deduction withholdings. The grant date fair value was computed as the sum of (a) 15 85 15 As of the three months ended September 30, 2023, the Company has an accrued liability of $ 72,801 32,728 98,945 The Company computed the fair value of the look-back feature call and put options for January 1, 2023 to September 30, 2023 using a Black Scholes option pricing model using the following assumptions: Schedule of black scholes option pricing model At September 30, 2023 Grant date share price $ 2.10 5.13 Grant date exercise price $ 1.79 - $ 4.36 Expected term 0.25 0.5 Expected volatility 89.7 103.4 Risk-free rate 4.76 5.53 Expected dividend rate 0 % During the offer period, the Company records stock-based compensation pro rata as expense and a credit to additional paid-in capital. The Company issued 65,561 common shares on the option exercise date of June 30, 2023. The following table discloses relevant information for the ESPP at September 30, 2023 and for nine months then ended. Schedule of stock-based compensation At Cash payment received from employee withholdings $ 189,849 Cash from employee withholdings used to purchase shares under ESPP (117,048 ) Cash and ESPP employee withholding liability $ 72,801 For the Nine Months ended September 30, 2023 Cash from employee withholdings used to purchase ESPP shares $ 117,048 Stock based compensation expense 98,945 Total increase to equity for nine months ended September 30, 2023 $ 215,993 Stock-Based Compensation Stock-based compensation expense recognized under ASC 718-10 for the nine months ended September 30, 2023 and 2022, was $ 400,645 592,177 592,927 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 On April 1, 2023, the Board granted to certain key employees an aggregate of 353,117 4.22 60,000 293,117 567,569 On July 1, 2023, the Company awarded 50,000 On August 30, 2023, the Company awarded 70,000 As of September 30, 2023, and December 31, 2022, options to purchase a total of 1,217,775 926,266 581,325 269,658 271,266 882,636 495,000 160,000 160,000 Schedule of stock option issuance of shares 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 353,117 $ 4.22 4.5 $ — Exercised/Forfeited/Expired (61,608 ) $ 4.48 — $ — Outstanding at September 30, 2023 1,217,775 $ 5.37 3.0 $ — Exercisable at September 30, 2023 581,325 $ 5.38 2.1 $ — 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 September 30, 2023 80,091 $ 8.53 0.6 — Exercisable at September 30, 2023 80,091 $ 8.53 0.6 —

REVENUE AND CONTRACT ACCOUNTING

REVENUE AND CONTRACT ACCOUNTING	9 Months Ended
	Sep. 30, 2023
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 September 30, 2023 and December 31, 2022, contract assets on uncompleted contracts consisted of the following: Schedule of contract assets on uncompleted contracts September 30, 2023 December 31, 2022 Cumulative revenues recognized $ 8,594,322 $ 5,934,205 Less: Billings or cash received (7,247,591 ) (5,508,483 ) Contract assets $ 1,346,731 $ 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 September 30, 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 September 30, 2023 December 31, 2022 Billings and/or cash receipts on uncompleted contracts $ 972,908 $ 4,355,470 Less: Cumulative revenues recognized (199,976 ) (4,144,018 ) Contract liabilities, technology systems 772,932 211,452 Contract liabilities, services and consulting 815,996 746,545 Total contract liabilities $ 1,588,928 $ 957,997 Contract liabilities at December 31, 2022 were $ 957,997 211,452 636,822 The Company expects to recognize all contract liabilities within 12 months from the respective 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 September 30, 2023 Schedule of disaggregation of revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,333,556 $ 19,220 $ — $ 178,147 $ 1,530,923 Major Goods and Service Lines Turnkey Projects $ 705,849 $ — $ — $ — $ 705,849 Maintenance and Support 627,707 19,220 — — 646,927 Algorithms — — — 178,147 178,147 $ 1,333,556 $ 19,220 $ — $ 178,147 $ 1,530,923 Timing of Revenue Recognition Goods transferred over time $ 705,849 $ — $ — $ — $ 705,849 Services transferred over time 627,707 19,220 — 178,147 825,074 $ 1,333,556 $ 19,220 $ — $ 178,147 $ 1,530,923 For the Three Months Ended September 30, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 3,765,312 $ 32,821 $ 23,245 $ 200,860 $ 4,022,238 Major Goods and Service Lines Turnkey Projects $ 2,689,393 $ — $ 3,024 $ — $ 2,692,417 Maintenance and Support 1,075,919 32,821 20,221 183,378 1,312,339 Algorithms — — — 17,482 17,482 $ 3,765,312 $ 32,821 $ 23,245 $ 200,860 $ 4,022,238 Timing of Revenue Recognition Goods transferred over time $ 2,689,393 $ — $ 3,024 $ — $ 2,692,417 Goods delivered at point in time — — — 17,482 17,482 Services transferred over time 532,250 32,821 20,221 183,378 768,670 Services delivered at point in time 543,669 — — — 543,669 $ 3,765,312 $ 32,821 $ 23,245 $ 200,860 $ 4,022,238 For the Nine Months Ended September 30, 2023 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 5,247,291 $ 90,432 $ 11,353 $ 596,194 $ 5,945,270 Major Goods and Service Lines Turnkey Projects $ 3,390,555 $ 13,552 $ — $ — $ 3,404,107 Maintenance and Support 1,856,736 76,880 11,353 — 1,944,969 Algorithms — — — 596,194 596,194 $ 5,247,291 $ 90,432 $ 11,353 $ 596,194 $ 5,945,270 Timing of Revenue Recognition Goods transferred over time $ 3,390,555 $ 13,552 $ — $ — $ 3,404,107 Services transferred over time 1,856,736 76,880 11,353 596,194 2,541,163 $ 5,247,291 $ 90,432 $ 11,353 $ 596,194 $ 5,945,270 For the Nine Months Ended September 30, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 8,087,759 $ 76,818 $ 214,124 $ 699,995 $ 9,078,696 Major Goods and Service Lines Turnkey Projects $ 5,885,477 $ (498 ) $ 153,462 $ — $ 6,038,441 Maintenance and Support 2,202,282 77,316 60,662 465,223 2,805,483 Algorithms — — — 234,772 234,772 $ 8,087,759 $ 76,818 $ 214,124 $ 699,995 $ 9,078,696 Timing of Revenue Recognition Goods transferred over time $ 5,885,477 $ (498 ) $ 153,462 $ — $ 6,038,441 Goods delivered at point in time — — — 234,772 234,772 Services transferred over time 1,545,578 77,316 60,662 465,223 2,148,779 Services delivered at point in time 656,704 — — — 656,704 $ 8,087,759 $ 76,818 $ 214,124 $ 699,995 $ 9,078,696

DEFINED CONTRIBUTION PLAN

DEFINED CONTRIBUTION PLAN	9 Months Ended
	Sep. 30, 2023
Compensation Related Costs [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 nine months of service. During the three months ended September 30, 2023, the Company matched 100% of the first 4% of eligible employee compensation that was contributed to the 401(k) Plan. For the three and nine months ended September 30, 2023, the Company recognized expense for matching cash contributions to the 401(k) Plan totaling $ 59,508 and $ 158,852 , respectively.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8 – RELATED PARTY TRANSACTIONS There were no related party transactions for the periods reflected in this report.

SALE OF ASSETS

SALE OF ASSETS	9 Months Ended
	Sep. 30, 2023
Sale Of Assets
SALE OF ASSETS	NOTE 9 – SALE OF ASSETS On June 29, 2023, the Company completed a transaction whereby it sold assets related to its Integrated Correctional Automation System (iCAS) business with a single customer. In the fourth quarter of 2022, the Company elected to not renew a support contract due to the limited nature of the business. The transaction was completed with a third-party buyer of which the Company’s former Chief Financial Officer is a director. Said former officer did not participate in the transaction on behalf of the Company. The assets of the iCAS business were sold for a convertible promissory note with a principal amount of $ 165,000 10 0.003 55,000,000 The common stock purchase warrants are for a total of 55,000,000 0.01 The Company recognized a gain on sale of assets of $ 150,000 The original issue discount is being accrued into interest income over the term of the note. The note receivable was recorded as follows on September 30, 2023: Schedule of note receivable September 30, 2023 Convertible note receivable $ 165,000 Unamortized discount (13,125 ) Convertible note receivable, net $ 151,875

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 10 – SUBSEQUENT EVENTS On November 9, 2023, 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 2,500 1,000 2,500,000 The November 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 November Purchase Agreement) on or prior to June 30, 2024 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 Purchasers. The conversion price of the Series E Preferred Stock currently is $ 3.00 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. 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 3.00 The terms of the Series E Preferred Stock provide that, without shareholder approval (the "Stockholder Approval"), the Company may not issue upon the conversion of any shares of Series E Preferred Stock a number of shares of common stock which, when aggregated with any shares of common stock issued upon conversion of any other shares of Series E Preferred Stock, would exceed 1,430,484 To obtain the stockholder approval, 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”)) to seek approval for the conversion of Series E Preferred Stock into common stock above the allowed amount. 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. In connection with the Purchase Agreement of Series F Convertible Preferred Stock, completed on August 2, 2023, certain protections existed for the investor if the Company completed a share offering with an equivalent common stock price of less than the $ 6.20 5,000 1,000 3.00 5,000

NATURE OF OPERATIONS AND SUMM_2

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2023
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”), is a company that specializes in machine vision and artificial intelligence to analyze fast moving objects such as trains, trucks, automobiles, and aircraft. This technology can help improve safety, maintenance, and operating metrics. The Company is the inventor of the Railcar Inspection Portal (RIP) and is currently the rail industry leader for machine vision/camera wayside detection systems that include the use of Artificial Intelligence at speeds up to 125 mph. The RIP inspects a train at full speed from the top, sides, and bottom looking at FRA/AAR mandated safety inspection points. The system also detects illegal riders that assists law enforcement agencies. Each rail car is scanned with machine vision cameras and other sensors from the top, sides, and bottom and images are produced within seconds of passing that can be used by the customer to help prevent derailments, improve maintenance operations, and assist with security. The Company self-performs all aspects of hardware, software, IT, and Artificial Intelligence development and engineering and holds several patents and maintains significant intellectual property. The Company also has a proprietary portfolio of over 40 Artificial Intelligence “Use Cases” that automatically flag defects. The Company has deployed this system with several Class 1 and passenger customers and anticipates an increased demand in the future from rail operators, car owners, shippers, and law enforcement agencies. The Company has also developed the Automated Logistics Information System (ALIS) which automates gatehouse operations 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 throughput on each lane on which the technology is deployed. The Company expects to deploy an upgraded Truck Inspection Portal (TIP) which uses the same technology and lessons learned from the ALIS and RIP systems. The Company’s strategy is to expand our existing customer base in the Class 1, short line, and passenger space in North America; expand our subscription offering to car owners and shippers; and expand operations to meet the demand from international customers. The Company has prepared to respond and scale if necessary to react to increased demand from potential regulations that may be imposed around wayside detection technology. In the future the Company may put more emphasis on the trucking and intermodal sector with an updated Truck Inspection Portal solution. The Company continues to focus on operational and technical excellence, customer satisfaction, and maintaining a highly skilled and performance-based work force.
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 nine months ended September 30, 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	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	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 and notes receivable, valuation of common stock warrants received in exchange for an asset sale, 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	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 September 30, 2023, the balance in one financial institution exceeded federally insured limits by approximately $ 2,768,466 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 nine months ended September 30, 2023, two customers accounted for 55 29 25 21 19 19 30 At September 30, 2023, three customers accounted for 52 25 14 34 31 19 10 Geographic Concentration For the nine months ended September 30, 2023, approximately 37 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	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 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.
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. Any inventory deemed to be obsolete is written off. 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 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.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for 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 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.
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 to be both probable and reasonably estimable. 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.
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 administration expenses in the consolidated statements of operations.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings per share (EPS) are computed by dividing the 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 September 30, 2023, there were (i) an aggregate of 80,091 1,217,775 433,000 1,333,334 806,452 At September 30, 2022, there were (i) an aggregate of 1,376,466 926,266 333,000
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 is 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.

DEBT (Tables)

DEBT (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Schedule of notes payable	Schedule of notes payable September 30, 2023 December 31, 2022 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 2,736 8.73 % $ — — Third Party - Insurance Note 2 79,146 8.00 % 17,753 6.24 % Third Party - Insurance Note 3 8,045 — 16,094 — Third Party - Insurance Note 4 47,889 — 40,728 — Total $ 137,816 $ 74,575

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Schedule of supplemental information related to leases	Schedule of supplemental information related to leases Nine Months Ended September 30, 2023 2022 Lease cost: Operating lease cost $ 586,228 $ 582,989 Short-term lease cost $ 56,052 $ 26,127 Other information: Operating cash outflow used for operating leases $ 505,664 $ 323,750 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 8.6 9.6
Schedule of future minimum lease payments	Schedule of future minimum lease payments Amount Calendar year: 2023 $ 191,205 2024 779,087 2025 798,556 2026 818,518 2027 838,984 Thereafter 4,043,427 Total undiscounted future minimum lease payments 7,469,777 Less: Impact of discounting (2,384,618 ) Total present value of operating lease obligations 5,085,159 Current portion (774,306) Operating lease obligations, less current portion $ 4,310,853

STOCKHOLDERS_ EQUITY (Tables)

STOCKHOLDERS’ EQUITY (Tables)	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
Schedule of black scholes option pricing model	Schedule of black scholes option pricing model At September 30, 2023 Grant date share price $ 2.10 5.13 Grant date exercise price $ 1.79 - $ 4.36 Expected term 0.25 0.5 Expected volatility 89.7 103.4 Risk-free rate 4.76 5.53 Expected dividend rate 0 %
Schedule of stock-based compensation	Schedule of stock-based compensation At Cash payment received from employee withholdings $ 189,849 Cash from employee withholdings used to purchase shares under ESPP (117,048 ) Cash and ESPP employee withholding liability $ 72,801 For the Nine Months ended September 30, 2023 Cash from employee withholdings used to purchase ESPP shares $ 117,048 Stock based compensation expense 98,945 Total increase to equity for nine months ended September 30, 2023 $ 215,993
Schedule of stock option issuance of shares	Schedule of stock option issuance of shares 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 353,117 $ 4.22 4.5 $ — Exercised/Forfeited/Expired (61,608 ) $ 4.48 — $ — Outstanding at September 30, 2023 1,217,775 $ 5.37 3.0 $ — Exercisable at September 30, 2023 581,325 $ 5.38 2.1 $ —
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 September 30, 2023 80,091 $ 8.53 0.6 — Exercisable at September 30, 2023 80,091 $ 8.53 0.6 —

REVENUE AND CONTRACT ACCOUNTI_2

REVENUE AND CONTRACT ACCOUNTING (Tables)	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Schedule of contract assets on uncompleted contracts	Schedule of contract assets on uncompleted contracts September 30, 2023 December 31, 2022 Cumulative revenues recognized $ 8,594,322 $ 5,934,205 Less: Billings or cash received (7,247,591 ) (5,508,483 ) Contract assets $ 1,346,731 $ 425,722
Schedule of contract liabilities on uncompleted contracts	Schedule of contract liabilities on uncompleted contracts September 30, 2023 December 31, 2022 Billings and/or cash receipts on uncompleted contracts $ 972,908 $ 4,355,470 Less: Cumulative revenues recognized (199,976 ) (4,144,018 ) Contract liabilities, technology systems 772,932 211,452 Contract liabilities, services and consulting 815,996 746,545 Total contract liabilities $ 1,588,928 $ 957,997
Schedule of disaggregation of revenue	Schedule of disaggregation of revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,333,556 $ 19,220 $ — $ 178,147 $ 1,530,923 Major Goods and Service Lines Turnkey Projects $ 705,849 $ — $ — $ — $ 705,849 Maintenance and Support 627,707 19,220 — — 646,927 Algorithms — — — 178,147 178,147 $ 1,333,556 $ 19,220 $ — $ 178,147 $ 1,530,923 Timing of Revenue Recognition Goods transferred over time $ 705,849 $ — $ — $ — $ 705,849 Services transferred over time 627,707 19,220 — 178,147 825,074 $ 1,333,556 $ 19,220 $ — $ 178,147 $ 1,530,923 For the Three Months Ended September 30, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 3,765,312 $ 32,821 $ 23,245 $ 200,860 $ 4,022,238 Major Goods and Service Lines Turnkey Projects $ 2,689,393 $ — $ 3,024 $ — $ 2,692,417 Maintenance and Support 1,075,919 32,821 20,221 183,378 1,312,339 Algorithms — — — 17,482 17,482 $ 3,765,312 $ 32,821 $ 23,245 $ 200,860 $ 4,022,238 Timing of Revenue Recognition Goods transferred over time $ 2,689,393 $ — $ 3,024 $ — $ 2,692,417 Goods delivered at point in time — — — 17,482 17,482 Services transferred over time 532,250 32,821 20,221 183,378 768,670 Services delivered at point in time 543,669 — — — 543,669 $ 3,765,312 $ 32,821 $ 23,245 $ 200,860 $ 4,022,238 For the Nine Months Ended September 30, 2023 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 5,247,291 $ 90,432 $ 11,353 $ 596,194 $ 5,945,270 Major Goods and Service Lines Turnkey Projects $ 3,390,555 $ 13,552 $ — $ — $ 3,404,107 Maintenance and Support 1,856,736 76,880 11,353 — 1,944,969 Algorithms — — — 596,194 596,194 $ 5,247,291 $ 90,432 $ 11,353 $ 596,194 $ 5,945,270 Timing of Revenue Recognition Goods transferred over time $ 3,390,555 $ 13,552 $ — $ — $ 3,404,107 Services transferred over time 1,856,736 76,880 11,353 596,194 2,541,163 $ 5,247,291 $ 90,432 $ 11,353 $ 596,194 $ 5,945,270 For the Nine Months Ended September 30, 2022 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 8,087,759 $ 76,818 $ 214,124 $ 699,995 $ 9,078,696 Major Goods and Service Lines Turnkey Projects $ 5,885,477 $ (498 ) $ 153,462 $ — $ 6,038,441 Maintenance and Support 2,202,282 77,316 60,662 465,223 2,805,483 Algorithms — — — 234,772 234,772 $ 8,087,759 $ 76,818 $ 214,124 $ 699,995 $ 9,078,696 Timing of Revenue Recognition Goods transferred over time $ 5,885,477 $ (498 ) $ 153,462 $ — $ 6,038,441 Goods delivered at point in time — — — 234,772 234,772 Services transferred over time 1,545,578 77,316 60,662 465,223 2,148,779 Services delivered at point in time 656,704 — — — 656,704 $ 8,087,759 $ 76,818 $ 214,124 $ 699,995 $ 9,078,696

SALE OF ASSETS (Tables)

SALE OF ASSETS (Tables)	9 Months Ended
	Sep. 30, 2023
Sale Of Assets
Schedule of note receivable	Schedule of note receivable September 30, 2023 Convertible note receivable $ 165,000 Unamortized discount (13,125 ) Convertible note receivable, net $ 151,875

NATURE OF OPERATIONS AND SUMM_3

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Product Information [Line Items]
Federally insured limits	$ 2,768,466
Outstanding warrants	80,091	1,376,466
Series D Convertible Preferred Stock [Member]
Product Information [Line Items]
Common shares issuable conversion	433,000	333,000
Series E Convertible Preferred Stock [Member]
Product Information [Line Items]
Common shares issuable conversion	1,333,334
Series F Convertible Preferred Stock [Member]
Product Information [Line Items]
Common shares issuable conversion	806,452
Share-Based Payment Arrangement, Option [Member]
Product Information [Line Items]
Number of incentive stock options	1,217,775	926,266
Customer 1 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	55%	25%
Customer 1 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	52%		34%
Customer 2 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	29%	21%
Customer 2 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	25%		31%
Customer 3 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage		19%
Customer 3 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | UNITED STATES
Product Information [Line Items]
Concentration risk, percentage	37%
Customer 3 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	14%		19%
Customer 4 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage		19%
Customer 4 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | UNITED STATES
Product Information [Line Items]
Concentration risk, percentage		54%
Customer 4 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage			10%
Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	30%

LIQUIDITY (Details Narrative)

LIQUIDITY (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ 8,080,819
Cash used in operating activities	5,637,072	$ 3,850,455
Working capital surplus	3,358,320
Accumulated deficit	$ 60,442,653		$ 52,361,834

DEBT (Details - Schedule of not

DEBT (Details - Schedule of notes payable - financing agreements) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Notes Payable, Principal	$ 137,816	$ 74,575
Third Party Insurance Note One [Member]
Short-Term Debt [Line Items]
Notes Payable, Principal	$ 2,736
Notes Payable, Interest	8.73%
Third Party Insurance Note Two [Member]
Short-Term Debt [Line Items]
Notes Payable, Principal	$ 79,146	$ 17,753
Notes Payable, Interest	8%	6.24%
Third Party Insurance Note Three [Member]
Short-Term Debt [Line Items]
Notes Payable, Principal	$ 8,045	$ 16,094
Third Party Insurance Note Four [Member]
Short-Term Debt [Line Items]
Notes Payable, Principal	$ 47,889	$ 40,728

DEBT (Details Narrative)

DEBT (Details Narrative) - USD ($)								3 Months Ended	9 Months Ended
	Apr. 15, 2023	Feb. 03, 2023	Dec. 23, 2022	Sep. 15, 2022	Apr. 15, 2022	Feb. 03, 2022	May 22, 2020	Mar. 31, 2022	Sep. 30, 2022	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Purchase of an insurance policy						$ 242,591
Down payment paid								$ 102,075
Insurance monthly installments						$ 20,073
Received refund									$ 53,175
Third Party Insurance Note One [Member]
Short-Term Debt [Line Items]
Notes payable outstanding balance			$ 26,484							$ 2,736	$ 0
Interest rate			8.73%
Monthly installments of principal and interest			$ 2,755
Third Party Insurance Note Two [Member]
Short-Term Debt [Line Items]
Notes payable outstanding balance	$ 142,734				$ 63,766					79,146	17,753
Interest rate	8%				6.24%
Monthly installments of principal and interest	$ 13,501				$ 5,979
Third Party Insurance Note Three [Member]
Short-Term Debt [Line Items]
Notes payable outstanding balance				$ 24,140						8,045	16,094
Monthly installments of principal and interest				$ 2,012
Third Party Insurance Note Four [Member]
Short-Term Debt [Line Items]
Notes payable outstanding balance		$ 293,520								47,889	40,728
Monthly installments of principal and interest		23,976
Down payment paid		$ 125,690
Equipment Financing [Member]
Short-Term Debt [Line Items]
Notes payable outstanding balance							$ 121,637			$ 0	$ 22,851
Interest rate							9.90%
Monthly installments of principal and interest							$ 3,919

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details - Schedule of supplemental information related leases) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 586,228	$ 582,989
Short term lease Cost	56,052	26,127
Operating cash outflow used for operating leases	$ 505,664	$ 323,750
Weighted average discount rate	9%	9%
Weighted average remaining lease term	8 years 7 months 6 days	9 years 7 months 6 days

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details - Schedule of future minimum lease payments)	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 191,205
2024	779,087
2025	798,556
2026	818,518
2027	838,984
Thereafter	4,043,427
Total undiscounted future minimum lease payments	7,469,777
Less: Impact of discounting	(2,384,618)
Total present value of operating lease obligations	5,085,159
Current portion	(774,306)
Operating lease obligations, less current portion	$ 4,310,853

COMMITMENTS AND CONTINGENCIES_4

COMMITMENTS AND CONTINGENCIES (Details Narrative)			9 Months Ended
	Nov. 24, 2021 USD ($) ft²	Jul. 26, 2021 USD ($) ft²	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Mar. 01, 2021 USD ($)
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	$ 4,980,104		$ 4,454,714		$ 4,689,931
Rentable space | ft²	30,000
Security deposit payment		$ 600,000
Security deposit reduce amount		$ 50,000	50,000
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Compensation to be paid in addition to base salary in separation payments			75,000
Payment under the separation agreement			$ 747,788
Lump sum payment owed under separation agreement						$ 124,631

STOCKHOLDERS' EQUITY (Details -

STOCKHOLDERS' EQUITY (Details - Schedule of black sholes option pricing model) - Share-Based Payment Arrangement, Option [Member]	9 Months Ended
	Sep. 30, 2023 $ / shares
Expected dividend rate	0%
Minimum [Member]
Grant date share price	$ 2.10
Grant date exercise price	$ 1.79
Expected term	3 months
Expected volatility	89.70%
Risk-free rate	4.76%
Maximum [Member]
Grant date share price	$ 5.13
Grant date exercise price	$ 4.36
Expected term	6 months
Expected volatility	103.40%
Risk-free rate	5.53%

STOCKHOLDERS' EQUITY (Details_2

STOCKHOLDERS' EQUITY (Details - Schedule of stock-based compensation)	9 Months Ended
	Sep. 30, 2023 USD ($)
Equity [Abstract]
Cash payment received from employee withholdings	$ 189,849
Cash from employee withholdings used to purchase shares under ESPP	(117,048)
Cash and ESPP employee withholding liability	72,801
Cash from employee withholdings used to purchase ESPP shares	117,048
Stock based compensation expense	98,945
Total increase to equity for nine months ended September 30, 2023	$ 215,993

STOCKHOLDERS' EQUITY (Details_3

STOCKHOLDERS' EQUITY (Details - Schedule of options activity) - Share-Based Payment Arrangement, Option [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding beginning balance	926,266	431,266
Weighted average exercise price, Outstanding beginning balance	$ 5.74	$ 4.98
Weighted average remaining contractual term (Years), Outstanding beginning balance	3 years 3 months 18 days	3 years 4 months 24 days
Aggregate intrinsic value, Outstanding beginning balance	$ 0	$ 0
Number of options, Granted	353,117	685,000
Weighted average exercise price, Granted	$ 4.22	$ 6.41
Weighted average remaining contractual term (Years), Granted	4 years 6 months	4 years
Number of options, Exercised/Forfeited/Expired	(61,608)	(190,000)
Weighted average exercise price, Exercised/forfeited/expired	$ 4.48	$ 6.41
Outstanding ending balance	1,217,775	926,266
Weighted average exercise price, Outstanding ending balance	$ 5.37	$ 5.74
Weighted average remaining contractual term (Years), Outstanding ending balance	3 years	3 years 3 months 18 days
Aggregate intrinsic value, Outstanding ending balance	$ 0	$ 0
Number of options, Exercisable	581,325	404,599
Weighted average exercise price, Exercisable	$ 5.38	$ 5.02
Weighted average remaining contractual term (Years), Exercisable	2 years 1 month 6 days	3 years 3 months 18 days

STOCKHOLDERS' EQUITY (Details_4

STOCKHOLDERS' EQUITY (Details - Schedule of activity of warrants) - Warrant [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Outstanding beginning balance	147,591	1,376,466
Weighted average exercise price, Outstanding beginning balance	$ 8.63	$ 8.18
Weighted average remaining contractual term (Years), Outstanding ending balance	7 months 6 days	9 months 18 days	1 year 10 months 24 days
Aggregate intrinsic value, Outstanding beginning balance	$ 0	$ 0
Number of warrants, Warrants expired, forfeited, cancelled or exercised	(67,500)	(1,228,875)
Weighted average exercise price, Warrants expired, forfeited, cancelled or exercised	$ 0	$ 0
Number of warrants, Warrants issued	0	0
Weighted average exercise price, Warrants issued	$ 0	$ 0
Outstanding ending balance	80,091	147,591	1,376,466
Weighted average exercise price, Outstanding ending balance	$ 8.53	$ 8.63	$ 8.18
Aggregate intrinsic value, Outstanding ending balance	$ 0	$ 0	$ 0
Number of warrants, Exercisable	80,091	147,591
Weighted average exercise price, Exercisable	$ 8.53	$ 8.63
Weighted average remaining contractual term (Years), Exercisable	7 months 6 days	9 months 18 days
Aggregate intrinsic value, Exercisable	$ 0	$ 0

STOCKHOLDERS_ EQUITY (Details N

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)															1 Months Ended		3 Months Ended							9 Months Ended
	Aug. 30, 2023	Aug. 02, 2023	Jul. 02, 2023	Jun. 30, 2023	Apr. 02, 2023	Mar. 27, 2023	Oct. 29, 2022	Aug. 25, 2022	Feb. 21, 2022	Feb. 03, 2022	Jan. 11, 2022	Jan. 02, 2022	May 12, 2021	Feb. 26, 2021	Sep. 30, 2022	Jan. 31, 2022	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 28, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Preferred stock, shares authorized																	10,000,000			10,000,000				10,000,000
Preferred stock, par value																	$ 0.001			$ 0.001				$ 0.001
Conversion price																	$ 0.003							$ 0.003
Proceeds from convertible preferred stock		$ 5,000,000
Actual costs																	$ 17,645
Excess cost																	281,500
Series F preferred convertible preferred stock, Shares		5,000
Conversion of shares											710
Conversion price											$ 5.50
Number of shares issued, shares									198,750	1,325,000															818,335
Number of shares issued, value									$ 795,000	$ 5,300,000															$ 2,455,003
Purchase price per share									$ 4	$ 4					$ 3						$ 3				$ 3
Proceeds from offering cost									$ 739,350	$ 4,779,000															$ 2,194,187
Aggregate common stock									$ 50,000,000
Stock issued for services, value																	40,565	$ 32,500	$ 32,500		$ 40,000	$ 40,000	$ 40,000
Converted to common stock shares								121,572
Accrued liability																	72,801							$ 72,801
Stock-based compensation expense																	32,728			$ 25,000				98,945
Fair market value percentage																				85%
Common stock issued																				1,000,000
Total compensation cost																	$ 592,927							592,927
Non-qualified stock options, charge																								$ 499,590	592,177
Plan 2021 [Member]
Class of Stock [Line Items]
Number of shares issued, shares													1,000,000
Number of incentive stock options																	882,636			495,000				882,636
Plan 2016 [Member]
Class of Stock [Line Items]
Number of incentive stock options																	269,658			271,266				269,658
Non Plan [Member]
Class of Stock [Line Items]
Number of incentive stock options																	160,000			160,000				160,000
Employee Stock Purchase Plan [Member] | Call Option [Member]
Class of Stock [Line Items]
Purchase discount, percentage																								85%
Employee Stock Purchase Plan [Member] | Put Option [Member]
Class of Stock [Line Items]
Purchase discount, percentage																								15%
Share-Based Payment Arrangement, Option [Member]
Class of Stock [Line Items]
Purchase price per share				$ 1.79														$ 1.79
Stock issued for services , shares				65,561
Total employee participation amount				$ 117,048
Number of incentive stock options																	1,217,775			926,266				1,217,775				431,266
Number of incentive stock options																	581,325			404,599				581,325
Non Qualified Stock Options [Member]
Class of Stock [Line Items]
Options to purchase shares of common stock												665,000
Strike price					$ 4.22							$ 6.41
Shares available for grant												1,596,804
Expected term												3 years
Expected volatility												72%
Discount rate												0.97%
Non-qualified stock options, granted	70,000		50,000		353,117
Non-qualified stock options, forfeited					60,000
Non-qualified stock options, net issuance					293,117
Non-qualified stock options, charge					$ 567,569
Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services , shares																	7,910	5,645	12,463		9,758	10,668	7,198
Stock issued for services, value																	$ 8	$ 6	$ 12		$ 10	$ 10	$ 7
Common Stock [Member] | Employee Stock Purchase Plan [Member]
Class of Stock [Line Items]
Purchase discount, percentage																								15%
Director [Member]
Class of Stock [Line Items]
Stock issued for services , shares																					9,758	10,668	7,198
Stock issued for services, value																					$ 40,000	$ 40,000	$ 40,000
Three Directors [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services , shares																		5,645	12,463
Stock issued for services, value																		$ 32,500	$ 32,500
Weighted average price per share				$ 5.76														$ 5.76	$ 2.61
Four Directors [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services , shares																	7,910
Stock issued for services, value																	$ 40,565
Weighted average price per share																										$ 5.13
Employees And Directors [Member]
Class of Stock [Line Items]
Stock-based compensation expense																								$ 400,645	$ 592,177
Purchase Agreement [Member]
Class of Stock [Line Items]
Proceeds from convertible preferred stock														$ 4,500,000
Convertible Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized																	15,000			15,000				15,000
Preferred stock, par value																	$ 1,000			$ 1,000				$ 1,000
Preferred stock, shares issued																	0			0				0
Preferred stock, shares outstanding																	0			0				0
Preferred stock, conversion price per share																	$ 7			$ 7				$ 7
Converted to common stock shares								851
Series B Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Conversion of stock, value																								$ 1,000
Conversion price																	$ 7							$ 7
Convertible Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized																	5,000			5,000				5,000
Preferred stock, par value																	$ 1,000			$ 1,000				$ 1,000
Preferred stock, shares issued																	0			0				0
Preferred stock, shares outstanding																	0			0				0
Preferred stock voting rights																								Each share of Series C Convertible Preferred Stock has 172 votes
Preferred stock, conversion price per share																	$ 5.50			$ 5.50				$ 5.50
Series C preferred converted to common stock, shares																454,546
Conversion of shares											1,790
Convertible Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized																	4,000			4,000				4,000			4,000
Preferred stock, par value																	$ 1,000			$ 1,000				$ 1,000			$ 1,000
Preferred stock, shares issued																	1,299			1,299				1,299
Preferred stock, shares outstanding																	1,299			1,299				1,299
Preferred stock voting rights																								Each share of Series D Convertible Preferred Stock has 333 votes
Preferred stock, conversion price per share																	$ 3			$ 3				$ 3
Conversion price																	$ 3							$ 3
Series D Convertible Preferred Stock [Member] | Purchase Agreement [Member]
Class of Stock [Line Items]
Preferred stock, shares issued															999						999				999
Proceeds from convertible preferred stock															$ 999,000
Series D Convertible Preferred Stock [Member] | Private Placement [Member]
Class of Stock [Line Items]
Preferred stock, shares issued							300
Proceeds from convertible preferred stock							$ 300,000
Convertible Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized																	30,000			30,000				30,000
Preferred stock, par value						$ 1,000											$ 1,000			$ 1,000				$ 1,000
Preferred stock, shares issued						4,000											4,000			0				4,000
Preferred stock, shares outstanding																	4,000			0				4,000
Preferred stock voting rights																								Each share of Series E Preferred Stock has 333 votes
Preferred stock, conversion price per share																	$ 3			$ 3				$ 3
Additional paid-in capital																			$ 299,145
Series E Convertible Preferred Stock [Member] | Purchase Agreement [Member]
Class of Stock [Line Items]
Proceeds from convertible preferred stock						$ 4,000,000
Convertible Series F Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized																	5,000			5,000				5,000
Preferred stock, par value																	$ 1,000			$ 1,000				$ 1,000
Preferred stock, shares issued																	5,000			0				5,000
Preferred stock, shares outstanding																	5,000			0				5,000
Preferred stock voting rights																								Each share of Series F Preferred Stock has 161 votes
Preferred stock, conversion price per share																	$ 6.20			$ 6.20				$ 6.20
Conversion price																	$ 6.20							$ 6.20

REVENUE AND CONTRACT ACCOUNTI_3

REVENUE AND CONTRACT ACCOUNTING (Details - Contract assets) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Cumulative revenues recognized	$ 8,594,322	$ 5,934,205
Less: Billings or cash received	(7,247,591)	(5,508,483)
Contract assets	$ 1,346,731	$ 425,722

REVENUE AND CONTRACT ACCOUNTI_4

REVENUE AND CONTRACT ACCOUNTING (Details - Contract liabilities) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Billings and/or cash receipts on uncompleted contracts	$ 972,908	$ 4,355,470
Less: Cumulative revenues recognized	(199,976)	(4,144,018)
Contract liabilities, technology systems	772,932	211,452
Contract liabilities, services and consulting	815,996	746,545
Total contract liabilities	$ 1,588,928	$ 957,997

REVENUE AND CONTRACT ACCOUNTI_5

REVENUE AND CONTRACT ACCOUNTING (Details -Disaggregated revenue) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 1,530,923	$ 4,022,238	$ 5,945,270	$ 9,078,696
Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	705,849	2,692,417	3,404,107	6,038,441
Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	825,074	768,670	2,541,163	2,148,779
Goods Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue		17,482		234,772
Services Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue		543,669		656,704
Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	705,849	2,692,417	3,404,107	6,038,441
Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	646,927	1,312,339	1,944,969	2,805,483
Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	178,147	17,482	596,194	234,772
Rail [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,333,556	3,765,312	5,247,291	8,087,759
Rail [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	705,849	2,689,393	3,390,555	5,885,477
Rail [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	627,707	532,250	1,856,736	1,545,578
Rail [Member] | Goods Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
Rail [Member] | Services Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue		543,669		656,704
Rail [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	705,849	2,689,393	3,390,555	5,885,477
Rail [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	627,707	1,075,919	1,856,736	2,202,282
Rail [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue
Commercial [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,220	32,821	90,432	76,818
Commercial [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue			13,552	(498)
Commercial [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,220	32,821	76,880	77,316
Commercial [Member] | Goods Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
Commercial [Member] | Services Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
Commercial [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue			13,552	(498)
Commercial [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,220	32,821	76,880	77,316
Commercial [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue
Governments [Member]
Disaggregation of Revenue [Line Items]
Revenue		23,245	11,353	214,124
Governments [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue		3,024		153,462
Governments [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue		20,221	11,353	60,662
Governments [Member] | Goods Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
Governments [Member] | Services Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
Governments [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue		3,024		153,462
Governments [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue		20,221	11,353	60,662
Governments [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue
Artificial Intelligence [Member]
Disaggregation of Revenue [Line Items]
Revenue	178,147	200,860	596,194	699,995
Artificial Intelligence [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
Artificial Intelligence [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	178,147	183,378	596,194	465,223
Artificial Intelligence [Member] | Goods Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue		17,482		234,772
Artificial Intelligence [Member] | Services Delivered At Point In Time [Member]
Disaggregation of Revenue [Line Items]
Revenue
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		183,378		465,223
Artificial Intelligence [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	178,147	17,482	596,194	234,772
North America [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,530,923	4,022,238	5,945,270	9,078,696
North America [Member] | Rail [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,333,556	3,765,312	5,247,291	8,087,759
North America [Member] | Commercial [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,220	32,821	90,432	76,818
North America [Member] | Governments [Member]
Disaggregation of Revenue [Line Items]
Revenue		23,245	11,353	214,124
North America [Member] | Artificial Intelligence [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 178,147	$ 200,860	$ 596,194	$ 699,995

REVENUE AND CONTRACT ACCOUNTI_6

REVENUE AND CONTRACT ACCOUNTING (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract liabilities	$ 1,588,928	$ 957,997
Technology systems	772,932	$ 211,452
Consulting recognized	$ 636,822

DEFINED CONTRIBUTION PLAN (Deta

DEFINED CONTRIBUTION PLAN (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023
Compensation Related Costs [Abstract]
Cash contributions	$ 59,508	$ 158,852

SALE OF ASSETS (Details)

SALE OF ASSETS (Details)	Sep. 30, 2023 USD ($)
Sale Of Assets
Convertible note receivable	$ 165,000
Unamortized discount	(13,125)
Convertible note receivable, net	$ 151,875

SALE OF ASSETS (Details Narrati

SALE OF ASSETS (Details Narrative)	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Sale Of Assets
Principal amount | $	$ 165,000
Original issue discount	10%
Conversion price | $ / shares	$ 0.003
Common stock shares | shares	55,000,000
Purchase of common stock warrants | shares	55,000,000
Exercise price | $ / shares	$ 0.01
Sale of assets | $	$ 150,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)		9 Months Ended
	Nov. 09, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Feb. 21, 2022	Feb. 03, 2022
Subsequent Event [Line Items]
Share price			$ 3		$ 4	$ 4
Received proceeds		$ 9,000,000	$ 999,000
Preferred stock, par value		$ 0.001		$ 0.001
Additional shares				1,000,000
Series E Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, par value		1,000
Preferred stock, conversion price per share		3
Series F Convertible Preferred Stock [Member]
Subsequent Event [Line Items]
Share price		$ 6.20
Subsequent Event [Member] | Series E Convertible Preferred Stock [Member]
Subsequent Event [Line Items]
Shares sold to investors	2,500
Share price	$ 1,000
Received proceeds	$ 2,500,000
Conversion price	$ 3
Conversion shares	1,430,484
Additional shares	5,000
Common per share	$ 3
Subsequent Event [Member] | Series F Convertible Preferred Stock [Member]
Subsequent Event [Line Items]
Exchange shares	5,000