Duos Technologies (DUOT) 10-Q 13 Aug 24 2024 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2024	Aug. 09, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
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		7,689,969

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash	$ 506,114	$ 2,441,842
Accounts receivable, net	128,795	1,462,463
Contract assets	1,139,395	641,947
Inventory	1,060,373	1,526,165
Prepaid expenses and other current assets	436,066	184,478
Note receivable, net	157,500	0
Total Current Assets	3,428,243	6,256,895
Property and equipment, net	1,736,407	726,507
Operating lease right of use asset	4,204,593	4,373,155
Security deposit	500,000	550,000
OTHER ASSETS:
Note receivable, net	0	153,750
Intangible asset, net	10,688,359	0
Patents and trademarks, net	128,371	129,140
Software development costs, net	524,225	652,838
Total Other Assets	11,340,955	935,728
TOTAL ASSETS	21,210,198	12,842,285
CURRENT LIABILITIES:
Accounts payable	849,497	595,634
Notes payable - financing agreements	241,452	41,976
Accrued expenses	252,024	164,113
Operating lease obligations-current portion	788,801	779,087
Contract liabilities, current	3,676,567	1,666,243
Total Current Liabilities	5,808,341	3,247,053
Contract liabilities, less current portion	8,495,876	0
Operating lease obligations, less current portion	4,052,527	4,228,718
Total Liabilities	18,356,744	7,475,771
Commitments and Contingencies (Note 5)
STOCKHOLDERS' EQUITY:
Common stock: $0.001 par value; 500,000,000 shares authorized, 7,623,598 and 7,306,663 shares issued, 7,622,274 and 7,305,339 shares outstanding at June 30, 2024 and December 31, 2023, respectively	7,623	7,306
Additional paid-in-capital	72,563,300	69,120,199
Accumulated deficit	(69,560,032)	(63,603,552)
Sub-total	3,010,906	5,523,966
Less:  Treasury stock (1,324 shares of common stock at June 30, 2024 and December 31, 2023)	(157,452)	(157,452)
Total Stockholders' Equity	2,853,454	5,366,514
Total Liabilities and Stockholders' Equity	21,210,198	12,842,285
Convertible Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	0	0
Convertible Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	0	0
Convertible Series C Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	0	0
Convertible Series D Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	1	1
Convertible Series E Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	14	12
Convertible Series F Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred stock, value	$ 0	$ 0

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares available to be 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	7,623,598	7,306,663
Common stock, shares outstanding	7,622,274	7,305,339
Treasury stock, common shares	1,324	1,324
Convertible Series A Preferred Stock [Member]
Preferred stock, par value	$ 10	$ 10
Preferred stock, shares available to be designated	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, 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 available to be designated	15,000	15,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock, conversion price per share	$ 7	$ 7
Convertible Series C Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares available to be designated	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock, conversion price per share	$ 5.50	$ 5.50
Convertible Series D Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares available to be designated	4,000	4,000
Preferred stock, shares issued	1,519	1,299
Preferred stock, shares outstanding	1,519	1,299
Preferred stock, conversion price per share	$ 3	$ 3
Convertible Series E Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares available to be designated	30,000	30,000
Preferred stock, shares issued	13,625	11,500
Preferred stock, shares outstanding	13,625	11,500
Preferred stock, conversion price per share	$ 3	$ 3
Convertible Series F Preferred Stock [Member]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred stock, shares available to be designated	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock, conversion price per share	$ 6.20	$ 6.20

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
REVENUES:
Total Revenues	$ 1,510,496	$ 1,770,059	$ 2,581,176	$ 4,414,347
COST OF REVENUES:
Total Cost of Revenues	1,725,060	1,528,722	2,701,108	3,635,838
GROSS MARGIN	(214,564)	241,337	(119,932)	778,509
OPERATING EXPENSES:
Sales and marketing	712,456	301,077	1,265,942	608,654
Research and development	390,000	537,801	772,142	942,686
General and administration	1,899,396	2,550,709	3,819,446	4,522,217
Total Operating Expenses	3,001,852	3,389,587	5,857,530	6,073,557
LOSS FROM OPERATIONS	(3,216,416)	(3,148,250)	(5,977,462)	(5,295,048)
OTHER INCOME (EXPENSES):
Interest expense	(1,150)	(3,230)	(1,595)	(4,410)
Other income, net	13,395	162,080	22,577	166,375
Total Other Income (Expenses)	12,245	158,850	20,982	161,965
NET LOSS	$ (3,204,171)	$ (2,989,400)	$ (5,956,480)	$ (5,133,083)
Basic Net Loss Per Share	$ (0.43)	$ (0.42)	$ (0.81)	$ (0.72)
Diluted Net Loss Per Share	$ (0.43)	$ (0.42)	$ (0.81)	$ (0.72)
Weighted Average Shares-Basic	7,450,676	7,169,340	7,378,813	7,163,142
Weighted Average Shares-Diluted	7,450,676	7,169,340	7,378,813	7,163,142
Technology Service [Member]
REVENUES:
Total Revenues	$ 264,999	$ 870,494	$ 534,854	$ 2,698,258
COST OF REVENUES:
Total Cost of Revenues	780,912	1,072,106	1,364,349	2,839,315
Service, Other [Member]
REVENUES:
Total Revenues	1,245,497	899,565	2,046,322	1,716,089
COST OF REVENUES:
Total Cost of Revenues	$ 944,148	$ 456,616	$ 1,336,759	$ 796,523

STATEMENTS OF CHANGES IN STOCKH

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Preferred Stock B [Member]	Preferred Stock C [Member]	Preferred Stock D [Member]	Preferred Stock E [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member]	Total
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
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
Net loss									(5,133,083)
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
Beginning balance, value at Mar. 31, 2023			$ 1	$ 4	$ 7,168	60,371,067	(54,505,517)	(157,452)	5,715,271
Beginning 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
Beginning balance, value at Dec. 31, 2023			$ 1	$ 12	$ 7,306	69,120,199	(63,603,552)	(157,452)	5,366,514
Beginning balance, shares at Dec. 31, 2023			1,299	11,500	7,306,663
Series D preferred stock issued			$ 1			619,999			620,000
Series D preferred stock issued, shares			620
Series E preferred stock issued				$ 2		2,125,000			2,125,002
Series E preferred stock issued, shares				2,125
Stock options compensation						141,204			141,204
Stock issuance cost						(36,188)			(36,188)
Stock issued for services					$ 9	37,491			37,500
Stock issued for services, shares					8,655
Stock Compensation under ESPP						18,116			18,116
Net loss							(2,752,309)		(2,752,309)
Ending balance, value at Mar. 31, 2024			$ 2	$ 14	$ 7,315	72,025,821	(66,355,861)	(157,452)	5,519,839
Ending balance, shares at Mar. 31, 2024			1,919	13,625	7,315,318
Beginning balance, value at Dec. 31, 2023			$ 1	$ 12	$ 7,306	69,120,199	(63,603,552)	(157,452)	5,366,514
Beginning balance, shares at Dec. 31, 2023			1,299	11,500	7,306,663
Net loss									(5,956,480)
Ending balance, value at Jun. 30, 2024			$ 1	$ 14	$ 7,623	72,563,300	(69,560,032)	(157,452)	2,853,454
Ending balance, shares at Jun. 30, 2024			1,519	13,625	7,623,598
Beginning balance, value at Mar. 31, 2024			$ 2	$ 14	$ 7,315	72,025,821	(66,355,861)	(157,452)	5,519,839
Beginning balance, shares at Mar. 31, 2024			1,919	13,625	7,315,318
Series D preferred stock issued						250,000			250,000
Series D preferred stock issued, shares			250
Stock issuance cost						(40,000)			(40,000)
Stock issued for services					$ 15	42,485			42,500
Stock issued for services, shares					15,041
Stock issued under the Employee Stock Purchase Plan for cash and compensation					$ 38	109,780			109,818
Stock issued under the Employee Stock Purchase Plan for cash and compensation, shares					38,041
Series D preferred stock converted to common stock			$ (1)		$ 217	(216)
Series D preferred stock converted to common stock, shares			(650)		216,668
Common stock issued for cash					$ 38	115,525			115,563
Common stock issued for cash, shares					38,530
Stock options compensation						59,905			59,905
Net loss							(3,204,171)		(3,204,171)
Ending balance, value at Jun. 30, 2024			$ 1	$ 14	$ 7,623	$ 72,563,300	$ (69,560,032)	$ (157,452)	$ 2,853,454
Ending balance, shares at Jun. 30, 2024			1,519	13,625	7,623,598

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash from operating activities:
Net loss	$ (5,956,480)	$ (5,133,083)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	781,835	230,592
Stock based compensation	241,694	302,743
Stock issued for services	80,000	65,000
Amortization of operating lease right of use asset	168,562	155,338
Changes in assets and liabilities:
Accounts receivable	1,333,668	3,131,392
Note receivable	(3,750)	(150,625)
Contract assets	(497,448)	(581,069)
Inventory	165,792	(116,393)
Security deposit	50,000	50,000
Prepaid expenses and other current assets	175,073	403,225
Accounts payable	253,863	(1,530,361)
Accrued expenses	87,912	(150,914)
Operating lease obligation	(166,477)	(80,559)
Contract liabilities	(655,228)	1,481,643
Net cash used in operating activities	(3,940,984)	(1,923,071)
Cash flows from investing activities:
Purchase of patents/trademarks	(4,765)	(28,720)
Purchase of software development	0	(360,437)
Purchase of fixed assets	(884,520)	(159,203)
Net cash used in investing activities	(889,285)	(548,360)
Cash flows from financing activities:
Repayments on financing agreements	(227,184)	(273,965)
Repayment of finance lease	0	(22,851)
Proceeds from common stock issued	115,563	0
Stock issuance costs	(76,188)	(17,645)
Proceeds from shares issued under Employee Stock Purchase Plan	87,348	117,048
Proceeds from preferred stock issued	2,995,002	4,000,000
Net cash provided by financing activities	2,894,541	3,802,587
Net increase (decrease) in cash	(1,935,728)	1,331,156
Cash, beginning of period	2,441,842	1,121,092
Cash, end of period	506,114	2,452,248
Supplemental Disclosure of Cash Flow Information:
Interest paid	1,596	4,410
Taxes paid	5,055	0
Supplemental Non-Cash Investing and Financing Activities:
Notes issued for financing of insurance premiums	426,661	458,452
Transfer of inventory to fixed assets	300,000	0
Intangible asset acquired with contract liability	$ 11,161,428	$ 0

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (3,204,171)	$ (2,752,309)	$ (2,989,400)	$ (2,143,683)	$ (5,956,480)	$ (5,133,083)

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted [Flag]	false
Non-Rule 10b5-1 Arrangement Adopted [Flag]	false
Rule 10b5-1 Arrangement Terminated [Flag]	false
Non-Rule 10b5-1 Arrangement Terminated [Flag]	false

NATURE OF OPERATIONS AND SUMMAR

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2024
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 Duos Edge AI, Inc. (“Edge”) (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, which can assist law enforcement agencies. Each rail car is scanned with machine vision cameras and other sensors from the top, sides, and bottom, where images are produced within seconds of the railcar passing. These images can then 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, Information Technology (“IT”), and Artificial Intelligence development and engineering. The Company maintains significant intellectual property and continues to be awarded additional patents for both the technology and methodologies used. The Company also has a proprietary portfolio of approximately 53 Artificial Intelligence “Use Cases” that automatically flag defects. The Company has deployed this system with several Class 1 railroads and one major passenger carrier and anticipates an increased demand in the future from railcar operators, owners, shippers, transit railroads as well as law enforcement agencies. During the three months ended June 30, 2024, the Company initiated a study to determine how to expand its market reach into non-rail markets. Using the information technology (IT) investments already made into the RIP in conjunction with the recently awarded patents for both methodology and artificial intelligence, the Company has determined that its use of Edge Data Centers for the processing of large volumes of image data has broad applicability to enabling local, high-speed processing in similar environments as being undertaken at the 13 current RIPs, that is, in rural and underserved areas. Accordingly, the Company has recently announced that effective early in the third quarter, it will be expanding into the market for the provision of bespoke Edge Data Centers (EDCs) for certain markets including remote education and healthcare facilities as well as other applications where high-speed, local processing is required. 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 and significantly improve operations and security and, importantly, dramatically improve throughput on each lane on which the technology is deployed. The Company is not currently actively pursuing further customers for ALIS but will continue to analyze the potential market and, depending on market demand, may deploy an upgraded Truck Inspection Portal (TIP) which uses the same technology and lessons learned from the ALIS and RIP systems at some point in the future. The Company’s strategy for the rail industry is to expand beyond our existing customer base in the Class 1 and major passenger transit market and we expect to add additional users in the short line, industrial and regional transit markets in North America. In addition, we plan to expand our subscription offering to car owners and shippers and expand operations to meet the demand from international customers. The Company is prepared to respond and scale, if necessary, to react to increased demand for 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. The Company is also further investigating market opportunities for subsets of its technology including deployment and management of Edge Data Centers, a fundamental component of the distributed, rapid response data analysis used in the RIP. 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 six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 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, 2023 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024. Principles of Consolidation The unaudited consolidated financial statements include Duos Technologies Group, Inc. and its wholly owned subsidiaries, Duos Technologies, Inc. and Duos Edge AI, 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 initial valuation of a non-monetary transaction with a customer, valuation of intangible assets for impairment analysis, allowance on accounts receivable and notes receivable, valuation of common stock warrants received in exchange for an asset sale, valuation of deferred tax assets, and valuation of 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 June 30, 2024, the balance in one financial institution exceeded federally insured limits by approximately $ 163,603 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 six months ended June 30, 2024, three customers accounted for 43 25 18 61 25 At June 30, 2024, two customers accounted for 53 38 83 11 Geographic Concentration For the six months ended June 30, 2024, approximately 65 31 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 the 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 credit loss 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 the 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. Intangible Asset In May 2024, the Company recognized an intangible asset which represents digital image data rights received under a license agreement as non-monetary consideration under a five-year customer contract. The intangible asset will be amortized over the five-year contractual term. Long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life of the asset in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of impairment would be based on generally accepted valuation methodologies, as deemed appropriate. If the carrying amount is greater than the undiscounted cash flows, the carrying amount of the asset is reduced to the asset’s fair value. An impairment loss is recognized immediately as an operating expense in the consolidated statements of operations. Reversal of previously recorded impairment losses are prohibited. Software Development Costs Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be Sold, Leased, or Marketed), are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Software development costs are evaluated for impairment annually by comparing the net realizable value to the unamortized capitalized costs and writing these costs down to net realizable value. Stock-Based Compensation The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including stock options, restricted stock units, and employee stock purchases based on estimated fair values. The stock-based compensation carries a graded vesting feature subject to the condition of time of employment service with awarded stock-based compensation tranches vesting evenly upon the anniversary date of the award. The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. In accordance with ASC 718-10-35-8, the Company elected to recognize the fair value of the stock award using the graded vesting method as time of employment service is the criteria for vesting. 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 now bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “contract assets”. Any billings of customers more than recognized revenues are recorded as a liability in “contract liabilities”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined 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 three sources: (1) Professional Services (consulting and auditing); (2) Customer service training and (3) Maintenance/support. (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (3) Maintenance/support is an optional product sold to our software license customers under one-year or longer 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 the 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 as an expense when 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 June 30, 2024, there were (i) an aggregate of 44,644 1,340,903 506,333 4,541,667 At June 30, 2023, there were (i) an aggregate of 80,091 1,217,775 433,000 1,333,334 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 November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker. ASU 2023-07 is effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements. The Company has evaluated the disclosure impact of ASU 2023-07; and determined the standard will not have an impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Further, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 is effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is evaluating the disclosure impact of ASU 2023-09; however, the standard will not have an impact on the Company’s 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	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY	NOTE 2 – LIQUIDITY Under Accounting Codification ASC 205, Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. Management has assessed the Company’s ability to continue as a going concern in accordance with the requirement of ASC 205-40. As reflected in the accompanying consolidated financial statements, the Company had a net loss of $ 5,956,480 3,940,984 2,380,098 69,560,032 As previously noted, the Company was successful during 2023 in raising gross proceeds of over $11,500,000 from the sale of Series E and F Preferred Stock. Additionally, in the first and second quarters of 2024, the Company raised gross proceeds of $2,995,000 from the issuance of a combination of Series D and E Preferred Stock (See Note 6). As part of its strategy, the Company will endeavor to utilize the Preferred Series E and the remainder of the Series D as additional funding mechanisms. Additionally, during the second quarter of 2024 the Company entered into an ATM Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC (the “Sales Agent” or “ACM”) relating to the sale of our common stock, par value $ 0.001 7,500,000 2.2 December 31, 2025 10 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 and growing the Company sufficiently to generate enough revenue to attain consistently profitable operations. The Company cannot currently quantify the uncertainty related to previous supply chain delays or the persistence of inflation 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 experienced relatively steady contracted backlog as well as seen 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 the Sales Agreement indicate there is no substantial doubt that the Company can 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, continued in 2023, and will continue in 2024 and beyond. 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.

INTANGIBLE ASSET

INTANGIBLE ASSET	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSET	NOTE 3 – INTANGIBLE ASSET In May 2024, the Company recorded an intangible asset with a fair value of $ 11,161,428 5 The fair value of the asset was determined on the contract inception date based on the standalone selling price of the service and goods to be provided to the customer under the 5-year contract since the Company could not reasonably estimate the fair value of the data rights received. The non-monetary transaction was accounted for in accordance with Accounting Standards Codification (ASC) 606-10-32-21 through ASC 606-10-32-24. On the contract inception date, the Company also recorded an immediate amortization of the intangible asset of $ 199,008 11,161,428 199,008 5 In accordance with ASC 350-30-35-1, the amortization for the intangible asset is based on its useful life and the useful life of an intangible asset is the period over which it is expected to contribute directly or indirectly to the future cash flows of that entity. Accordingly, amortization of the intangible asset is recognized over the life of the contract of five years. In accordance with ASC 350-30-35-14, an intangible asset that is subject to amortization shall be reviewed for impairment if the carrying amount of the asset is not recoverable and exceeds its fair value. There is no indication of impairment at June 30, 2024. Intangible asset at June 30, 2024 and December 31, 2023 consists of: Schedule of intangible asset June 30, December 31, 2024 2023 Intangible Asset, gross $ 11,161,428 $ — Accumulated Amortization (473,069 ) — Intangible Asset, net $ 10,688,359 $ — Amortization of the intangible asset during the six months ended June 30, 2024 and June 30 2023, was $ 473,069 0 The future amortization of the intangible asset is as follows: Schedule of future amortization of intangible assets Calendar Year Amount 2024 $ 1,096,241 2025 2,192,484 2026 2,192,484 2027 2,192,484 2028 2,192,484 2029 822,182 Total Intangible Asset Amortization $ 10,688,359

DEBT

DEBT	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
DEBT	NOTE 4 – DEBT Notes Payable - Financing Agreements The Company’s notes payable relating to financing agreements classified as current liabilities consist of the following as of June 30, 2024 and December 31, 2023: Schedule of notes payable related to financing agreements June 30, 2024 December 31, 2023 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 124,311 8.25 % $ 39,968 8.00 % Third Party - Insurance Note 2 16,316 — 2,008 — Third Party - Insurance Note 3 100,825 — — — Total $ 241,452 — $ 41,976 — The Company entered into an agreement on April 15, 2023 with its insurance provider by issuing a note payable (Insurance Note 1) for the purchase of an insurance policy in the amount of $ 142,734 8.00 13,501 154,338 8.25 16,023 124,311 39,968 The Company renewed it’s agreement on February 3, 2023 with its insurance provider by issuing a note payable (Insurance Note 2) for the purchase of an insurance policy in the amount of $ 24,140 2,012 24,480 2,040 16,316 2,008 The Company entered into an agreement on February 3, 2024 with its insurance provider by issuing a note payable (Insurance Note 3) for the purchase of an insurance policy in the amount of $ 245,798 84,473 20,166 100,825 0

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 5 – COMMITMENTS AND CONTINGENCIES Operating Lease Obligations On July 26, 2021, the Company entered a new operating lease agreement for office and warehouse combination space of 40,000 4,980,104 at lease commencement. Rent for the first eleven months of the term was calculated based on 30,000 600,000 50,000 4,204,593 As of June 30, 2024, 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 7.9 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 Six Months Ended June 30, 2024 2023 Lease cost: Operating lease cost $ 390,819 $ 390,819 Short-term lease cost $ 10,916 $ 46,717 Other information: Operating cash outflow used for operating leases $ 388,734 $ 316,040 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 8.0 9.0 As of June 30, 2024, future minimum lease payments due under our operating leases are as follows: Schedule of future minimum lease payments due under the operating lease Amount Calendar year: 2024 $ 390,353 2025 798,556 2026 818,518 2027 838,984 2028 859,856 Thereafter 3,183,571 Total undiscounted future minimum lease payments 6,889,838 Less: Impact of discounting (2,048,510 ) Total present value of operating lease obligations 4,841,328 Current portion, operating lease obligation (788,801 ) Operating lease obligations, less current portion $ 4,052,527

STOCKHOLDERS_ EQUITY

STOCKHOLDERS’ EQUITY	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 6 – 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 999 999,000 300 300,000 On May 16, 2023, the Series D Convertible Preferred Stock was approved for conversion to common shares during the Company’s annual shareholder meeting. On March 22, 2024 and March 28, 2024, the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) with certain existing and other accredited investors (the “2024 Purchaser”). Pursuant to the Purchase Agreements, the 2024 Purchasers purchased an aggregate of 620 1,000 620,000 On April 3, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “2024 Purchaser”). Pursuant to the Purchase Agreement, the 2024 Purchasers purchased an aggregate of 250 1,000 250,000 In April and May of 2024, 650 216,668 1,519 1,299 In connection with such Purchase Agreements, the Company entered into Registration Rights Agreements and filed registration statements with the SEC 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 Agreements contain customary representations, warranties, agreements and indemnification rights and obligations of the parties. The Registration Rights Agreements contain provisions for liquidated damages equal to 1% multiplied by the aggregate subscription amount paid, paid each month, in the event certain deadlines are missed. Series E Convertible Preferred Stock The Company’s Board of Directors has designated 30,000 1,000 Each share of Series E Convertible Preferred Stock has 333 votes 3.00 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. 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 Convertible Preferred Stock without the consent of the Purchasers. The conversion price of the Series E Convertible Preferred Stock currently is $3.00 per share (subject to adjustment). If the company sells shares less than the then conversion price, then the series E conversion price will be amended to that lower share price. As of June 30, 2024 there were no share sales at less than the $3.00 conversion price and this anti-dilution provision expired. The Purchasers under the November Purchase Agreement also were the holders of the Company’s Series F Convertible Preferred Stock issued on August 1, 2023. The purchase agreement relating to the shares of Series F Convertible Preferred Stock required the consent of the holders in the event the Company were to issue common stock or rights to acquire common stock prior to December 31, 2023 at an effective price per share less than the then conversion price of the Series F Convertible Preferred Stock, which was $ 6.20 5,000 7,500 5,000 On March 22, 2024 and March 28, 2024, the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) with certain existing and other accredited investors (the “2024 Purchasers”). Pursuant to the Purchase Agreements, the 2024 Purchasers purchased an aggregate of 2,125 1,000 2,125,002 As of June 30, 2024 and December 31, 2023, respectively, there were 13,625 11,500 In connection with such Purchase Agreements, the Company also entered into Registration Rights Agreements with the Purchasers. Pursuant to the Registration Rights Agreements, the Company filed with the SEC registration statements covering the resale by the Purchasers of the shares of common stock into which the shares of Series E Convertible Preferred Stock are convertible. The Registration Rights Agreements contain customary representations, warranties, agreements and indemnification rights and obligations of the parties. The Registration Rights Agreements contain provisions for liquidated damages equal to 1% multiplied by the aggregate subscription amount paid, paid each month, in the event certain deadlines are missed. 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 had 161 votes The Company also agreed that it would 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 entitled 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. As a result of that agreement, upon the issuance of 2,500 3.00 5,000 5,000 0 As of June 30, 2024 and December 31, 2023, respectively, there were zero 0 0 Common stock issued Six Months Ended June 30, 2024 During the three months ended March 31, 2024, the Company issued 8,655 37,500 4.33 On April 23, 2024, two shareholders converted 147 78 225 225,000 3.00 49,000 26,000 On April 30, 2024, two shareholders converted 100 250 350 350,000 3.00 33,334 83,334 On May 7, 2024, a shareholder converted 75 75,000 3.00 On May 17, 2024, the Company entered into an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC, as sales agent (the “Agent”) providing for the sale by the Company of shares of our common stock, par value $ 0.001 7,500,000 7,500,000 On June 12, 2024, the Company issued 11,239 3.05 33,261 On June 13, 2024, the Company issued 9,747 3.15 29,626 On June 17, 2024, the Company issued 400 3.02 1,165 On June 18, 2024, the Company issued 1,534 3.03 4,507 On June 25, 2024, the Company issued 15,610 3.15 47,004 In summary during the three months ended June 30, 2024, the Company issued an aggregate of 38,530 115,563 During the three months ended June 30, 2024, the Company issued 15,041 42,500 2.83 On June 30, 2024, the Company issued 38,041 87,348 2.30 The Company also recognized compensation expense of $ 40,589 Six Months Ended June 30, 2023 During the three months ended March 31, 2023, the Company issued 12,463 32,500 2.61 During the three months ended 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 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 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 or the IRS allowable limit per calendar year. 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 (that is the first date of each offering period) fair value of the estimated shares to be purchased based on the estimated payroll deduction withholdings. Each grant date fair value is computed as the sum of (a) 15 85 15 The Company computed the fair value of the look-back feature call and put options for January 1, 2024 to June 30, 2024 using a Black Scholes option pricing model using the following assumptions: Schedule of black scholes option pricing model using assumptions At June 30, 2024 Grant date share price at January 1, 2024 $ 2.70 Grant date exercise price $ 2.30 Expected term 0.5 Expected volatility 67.3 % Risk-free rate 5.26 % Expected dividend rate 0 % During the offer period, the Company records stock-based compensation pro rata as an expense and a credit to additional paid-in capital. The Company issued 38,041 65,561 Schedule of stock-based compensation At Cash from employee withholdings used to purchase ESPP shares $ 87,348 Stock based compensation expense 40,589 Total charges related to the Employee Stock Purchase Plan $ 127,937 At June 30, 2023 Cash from employee withholdings used to purchase ESPP shares $ 117,048 Stock based compensation expense 66,217 Total charges related to the Employee Stock Purchase Plan $ 183,265 Stock-Based Compensation Stock-based compensation expense recognized under ASC 718-10 for the six months ended June 30, 2024 and 2023, was $ 201,109 236,527 315,069 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 As of June 30, 2024, and December 31, 2023, options to purchase a total of 1,340,903 1,387,775 850,629 269,658 269,658 741,245 788,117 330,000 330,000 Schedule of non-plan options Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value Outstanding at December 31, 2022 926,266 $ 5.74 3.3 $ — Granted 463,117 $ 4.22 4.35 $ — Forfeited (1,608 ) $ 14.00 — $ — Outstanding at December 31, 2023 1,387,775 $ 5.23 3.0 $ — Exercisable at December 31, 2023 581,324 $ 5.38 1.8 $ — Outstanding at December 31, 2023 1,387,775 $ 5.23 3.0 $ — Granted — $ — — $ — Exercised/Forfeited/Expired (46,872 ) $ 5.47 — $ — Outstanding at June 30, 2024 1,340,903 $ 5.22 2.5 $ — Exercisable at June 30, 2024 850,629 $ 5.43 1.8 $ — Warrants Schedule of warrants Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2022 147,591 $ 8.63 0.8 $ — Warrants expired, forfeited, cancelled or exercised (102,947 ) $ — — $ — Warrants issued — $ — — $ — Outstanding at December 31, 2023 44,644 $ 7.70 0.7 $ — Exercisable at December 31, 2023 44,644 $ 7.70 0.7 $ — Outstanding at December 31, 2023 44,644 $ 7.70 0.7 $ — Warrants expired, forfeited, cancelled or exercised — $ — — $ — Warrants issued — $ — — $ — Outstanding at June 30, 2024 44,644 $ 7.70 0.2 $ — Exercisable at June 30, 2024 44,644 $ 7.70 0.2 $ —

REVENUE AND CONTRACT ACCOUNTING

REVENUE AND CONTRACT ACCOUNTING	6 Months Ended
	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
REVENUE AND CONTRACT ACCOUNTING	NOTE 7 - 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 June 30, 2024 and December 31, 2023, contract assets on uncompleted contracts consisted of the following: Schedule of contracts assets on uncompleted contracts June 30, 2024 December 31, 2023 Cumulative revenues recognized $ 9,317,704 $ 8,820,256 Less: Billings or cash received (8,178,309 ) (8,178,309 ) Contract assets $ 1,139,395 $ 641,947 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 June 30, 2024 and December 31, 2023, contract liabilities on uncompleted contracts and contract liabilities on services and consulting consisted of the following: Schedule of contract liabilities on uncompleted contracts June 30, 2024 December 31, 2023 Billings and/or cash receipts on uncompleted contracts $ 1,264,658 $ 1,264,658 Less: Cumulative revenues recognized (237,382 ) (199,976 ) Contract liabilities, technology systems 1,027,276 1,064,682 Contract liabilities, services and consulting 2,649,291 601,561 Total contract liabilities, current $ 3,676,567 $ 1,666,243 Total contract liabilities, services and consulting, non-current $ 8,495,876 $ — Contract liabilities at December 31, 2023 were $ 1,666,243 37,407 442,610 The Company expects to recognize all current contract liabilities within 12 months from the respective consolidated balance sheet date. In May 2024, the Company recorded an initial deferred revenue as a contract liability in the amount of $ 11,161,428 199,008 2,192,483 8,495,876 As of June 30, 2024 the balance in contract liabilities pertaining to the agreement is as follows: Schedule of balance in contract liabilities Calendar Year Amount 2024 $ 1,096,241 2025 2,192,484 2026 2,192,484 2027 2,192,484 2028 2,192,484 2029 822,182 Total CN agreement Contract Liabilities $ 10,688,359 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 June 30, 2024 Schedule of disaggregation of revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,510,496 $ — $ — $ — $ 1,510,496 Major Goods and Service Lines Turnkey Projects $ 264,999 $ — $ — $ — $ 264,999 Maintenance and Support 1,041,661 — — — 1,041,661 Algorithms 203,836 — — — 203,836 $ 1,510,496 $ — $ — $ — $ 1,510,496 Timing of Revenue Recognition Goods transferred over time $ 264,999 $ — $ — $ — $ 264,999 Services transferred over time 1,245,497 — — — 1,245,497 $ 1,510,496 $ — $ — $ — $ 1,510,496 For the Three Months Ended June 30, 2023 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,537,286 $ 42,381 $ — $ 190,392 $ 1,770,059 Major Goods and Service Lines Turnkey Projects $ 856,942 $ 13,552 $ — $ — $ 870,494 Maintenance and Support 680,344 28,829 — — 709,173 Algorithms — — — 190,392 190,392 $ 1,537,286 $ 42,381 $ — $ 190,392 $ 1,770,059 Timing of Revenue Recognition Goods transferred over time $ 856,942 $ 13,552 $ — $ — $ 870,494 Services transferred over time 680,344 28,829 — 190,392 899,565 $ 1,537,286 $ 42,381 $ — $ 190,392 $ 1,770,059 For the Six Months Ended June 30, 2024 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 2,581,176 $ — $ — $ — $ 2,581,176 Major Goods and Service Lines Turnkey Projects $ 534,854 $ — $ — $ — $ 534,854 Maintenance and Support 1,643,283 — — — 1,643,283 Algorithms 403,039 — — — 403,039 $ 2,581,176 $ — $ — $ — $ 2,581,176 Timing of Revenue Recognition Goods transferred over time $ 534,854 $ — $ — $ — $ 534,854 Services transferred over time 2,049,322 — — — 2,046,322 $ 2,581,176 $ — $ — $ — $ 2,581,176 For the Six Months Ended June 30, 2023 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 3,913,735 $ 71,212 $ 11,353 $ 418,047 $ 4,414,347 Major Goods and Service Lines Turnkey Projects $ 2,684,706 $ 13,552 $ — $ — $ 2,698,258 Maintenance and Support 1,229,029 57,660 11,353 — 1,298,042 Algorithms — — — 418,047 418,047 $ 3,913,735 $ 71,212 $ 11,353 $ 418,047 $ 4,414,347 Timing of Revenue Recognition Goods transferred over time $ 2,684,706 $ 13,552 $ — $ — $ 2,698,258 Services transferred over time 1,229,029 57,660 11,353 418,047 1,716,089 $ 3,913,735 $ 71,212 $ 11,353 $ 418,047 $ 4,414,347

DEFINED CONTRIBUTION PLAN

DEFINED CONTRIBUTION PLAN	6 Months Ended
	Jun. 30, 2024
Retirement Benefits [Abstract]
DEFINED CONTRIBUTION PLAN	NOTE 8 – DEFINED CONTRIBUTION PLAN The Company has a 401(k)-retirement savings plan (the “401(k) Plan”) covering all eligible employees. The 401(k) Plan allows employees to defer a portion of their annual compensation, and the Company may match a portion of the employees’ contributions generally after the first six months of service. During the three months ended June 30, 2024, the Company matched 100% of the first 4% of eligible employee compensation that was contributed to the 401(k) Plan. For the three and six months ended June 30, 2024, the Company recognized expense for matching cash contributions to the 401(k) Plan totaling $ 56,340 111,438

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9 – RELATED PARTY TRANSACTIONS Frank Lonegro serves on the Board of Directors and is a member of the Audit Committee. Mr. Lonegro is the Chief Executive Officer of Landstar System, Inc. (“Landstar”), based in Jacksonville, Florida. The Company has previously utilized Landstar for shipping services including transporting large items. Most recently, Landstar was the designated vendor involved in shipping an Edge Data Center to an Amtrak site in Secaucus New Jersey. Mr. Lonegro was not involved in the selection of his company by Duos, with whom there was an existing relationship pre-dating Mr. Lonegro’s appointment to the Board of Duos. Mr. Lonegro did not participate in any Board discussions or votes relating to the selection of Landstar nor approval of the transactions with Landstar. The terms of these transactions were reviewed and approved by the management team, which concluded that they are fair and reasonable to the Company and on terms no less favorable than could have been obtained from an unaffiliated party. For the six months ended June 30, 2024 and June 30, 2023 the Company expensed $ 43,137 11,397 43,137 33,812

SALE OF ASSETS

SALE OF ASSETS	6 Months Ended
	Jun. 30, 2024
Sale Of Assets
SALE OF ASSETS	NOTE 10 – 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 and now current Chief Financial Officer is a director. Said 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 June 30, 2024: Schedule of note receivable June 30, 2024 Convertible note receivable $ 165,000 Unamortized discount (7,500 ) Convertible note receivable, net $ 157,500

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11 – SUBSEQUENT EVENTS On July 5, 2024, a holder of our Series D Preferred Stock converted 120 40,000 On July 22, 2024, the Company and Duos Edge AI, Inc. (“Edge”), a wholly owned subsidiary of the Company, entered into secured promissory notes (the “Notes”) with two institutional investors in the Company. Under the Notes, Edge received an aggregate of $ 2.2 December 31, 2025 10 300,000 3.00 5 18 75,000 Subsequent to the balance sheet date, in July 2024 the Company issued 27,695 3.04 81,495

NATURE OF OPERATIONS AND SUMM_2

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Duos Technologies Group, Inc. (the “Company”), through its operating subsidiaries, Duos Technologies, Inc. (“Duos”) and Duos Edge AI, Inc. (“Edge”) (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, which can assist law enforcement agencies. Each rail car is scanned with machine vision cameras and other sensors from the top, sides, and bottom, where images are produced within seconds of the railcar passing. These images can then 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, Information Technology (“IT”), and Artificial Intelligence development and engineering. The Company maintains significant intellectual property and continues to be awarded additional patents for both the technology and methodologies used. The Company also has a proprietary portfolio of approximately 53 Artificial Intelligence “Use Cases” that automatically flag defects. The Company has deployed this system with several Class 1 railroads and one major passenger carrier and anticipates an increased demand in the future from railcar operators, owners, shippers, transit railroads as well as law enforcement agencies. During the three months ended June 30, 2024, the Company initiated a study to determine how to expand its market reach into non-rail markets. Using the information technology (IT) investments already made into the RIP in conjunction with the recently awarded patents for both methodology and artificial intelligence, the Company has determined that its use of Edge Data Centers for the processing of large volumes of image data has broad applicability to enabling local, high-speed processing in similar environments as being undertaken at the 13 current RIPs, that is, in rural and underserved areas. Accordingly, the Company has recently announced that effective early in the third quarter, it will be expanding into the market for the provision of bespoke Edge Data Centers (EDCs) for certain markets including remote education and healthcare facilities as well as other applications where high-speed, local processing is required. 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 and significantly improve operations and security and, importantly, dramatically improve throughput on each lane on which the technology is deployed. The Company is not currently actively pursuing further customers for ALIS but will continue to analyze the potential market and, depending on market demand, may deploy an upgraded Truck Inspection Portal (TIP) which uses the same technology and lessons learned from the ALIS and RIP systems at some point in the future. The Company’s strategy for the rail industry is to expand beyond our existing customer base in the Class 1 and major passenger transit market and we expect to add additional users in the short line, industrial and regional transit markets in North America. In addition, we plan to expand our subscription offering to car owners and shippers and expand operations to meet the demand from international customers. The Company is prepared to respond and scale, if necessary, to react to increased demand for 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. The Company is also further investigating market opportunities for subsets of its technology including deployment and management of Edge Data Centers, a fundamental component of the distributed, rapid response data analysis used in the RIP.
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 six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 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, 2023 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2024.
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 Duos Edge AI, 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 initial valuation of a non-monetary transaction with a customer, valuation of intangible assets for impairment analysis, allowance on accounts receivable and notes receivable, valuation of common stock warrants received in exchange for an asset sale, valuation of deferred tax assets, and valuation of 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 June 30, 2024, the balance in one financial institution exceeded federally insured limits by approximately $ 163,603 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 six months ended June 30, 2024, three customers accounted for 43 25 18 61 25 At June 30, 2024, two customers accounted for 53 38 83 11 Geographic Concentration For the six months ended June 30, 2024, approximately 65 31 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 the 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 credit loss 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 the 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.
Intangible Asset	Intangible Asset In May 2024, the Company recognized an intangible asset which represents digital image data rights received under a license agreement as non-monetary consideration under a five-year customer contract. The intangible asset will be amortized over the five-year contractual term.
Long-lived assets	Long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life of the asset in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of impairment would be based on generally accepted valuation methodologies, as deemed appropriate. If the carrying amount is greater than the undiscounted cash flows, the carrying amount of the asset is reduced to the asset’s fair value. An impairment loss is recognized immediately as an operating expense in the consolidated statements of operations. Reversal of previously recorded impairment losses are prohibited.
Software Development Costs	Software Development Costs Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be Sold, Leased, or Marketed), are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Software development costs are evaluated for impairment annually by comparing the net realizable value to the unamortized capitalized costs and writing these costs down to net realizable value.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including stock options, restricted stock units, and employee stock purchases based on estimated fair values. The stock-based compensation carries a graded vesting feature subject to the condition of time of employment service with awarded stock-based compensation tranches vesting evenly upon the anniversary date of the award. The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. In accordance with ASC 718-10-35-8, the Company elected to recognize the fair value of the stock award using the graded vesting method as time of employment service is the criteria for vesting. 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 now bases its revenue recognition on ASC 606-10-25-27, where control of a good or service transfers over time if the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date including a profit margin or reasonable return on capital. Control is deemed to pass to the customer instantaneously as the goods are manufactured and revenue is recognized accordingly. In addition, the Company has adopted ASC 606-10-55-21 such that if the cost incurred is not proportionate to the progress in satisfying the performance obligation, we adjust the input method to recognize revenue only to the extent of the cost incurred. Therefore, the Company will recognize revenue at an equal amount to the cost of the goods to satisfy the performance obligation. To accurately reflect revenue recognition based on the input method, the Company has adopted the implementation guidance as set out in ASC-606-10-55-187 through 192. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred. Costs include direct material, direct labor, subcontract labor and other allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are also charged to the periods as incurred. Any recognized revenues that have not been billed to a customer are recorded as an asset in “contract assets”. Any billings of customers more than recognized revenues are recorded as a liability in “contract liabilities”. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined 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 three sources: (1) Professional Services (consulting and auditing); (2) Customer service training and (3) Maintenance/support. (1) Revenues for professional services, which are of short-term duration, are recognized when services are completed; (2) Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and (3) Maintenance/support is an optional product sold to our software license customers under one-year or longer 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 the 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 as an expense when 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 June 30, 2024, there were (i) an aggregate of 44,644 1,340,903 506,333 4,541,667 At June 30, 2023, there were (i) an aggregate of 80,091 1,217,775 433,000 1,333,334
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 November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker. ASU 2023-07 is effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements. The Company has evaluated the disclosure impact of ASU 2023-07; and determined the standard will not have an impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Further, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 is effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is evaluating the disclosure impact of ASU 2023-09; however, the standard will not have an impact on the Company’s 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.

INTANGIBLE ASSET (Tables)

INTANGIBLE ASSET (Tables)	6 Months Ended
	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible asset	Schedule of intangible asset June 30, December 31, 2024 2023 Intangible Asset, gross $ 11,161,428 $ — Accumulated Amortization (473,069 ) — Intangible Asset, net $ 10,688,359 $ —
Schedule of future amortization of intangible assets	Schedule of future amortization of intangible assets Calendar Year Amount 2024 $ 1,096,241 2025 2,192,484 2026 2,192,484 2027 2,192,484 2028 2,192,484 2029 822,182 Total Intangible Asset Amortization $ 10,688,359

DEBT (Tables)

DEBT (Tables)	6 Months Ended
	Jun. 30, 2024
Debt Disclosure [Abstract]
Schedule of notes payable related to financing agreements	Schedule of notes payable related to financing agreements June 30, 2024 December 31, 2023 Notes Payable Principal Interest Principal Interest Third Party - Insurance Note 1 $ 124,311 8.25 % $ 39,968 8.00 % Third Party - Insurance Note 2 16,316 — 2,008 — Third Party - Insurance Note 3 100,825 — — — Total $ 241,452 — $ 41,976 —

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Schedule of supplemental information related to leases	Schedule of supplemental information related to leases Six Months Ended June 30, 2024 2023 Lease cost: Operating lease cost $ 390,819 $ 390,819 Short-term lease cost $ 10,916 $ 46,717 Other information: Operating cash outflow used for operating leases $ 388,734 $ 316,040 Weighted average discount rate 9.0 % 9.0 % Weighted average remaining lease term 8.0 9.0
Schedule of future minimum lease payments due under the operating lease	Schedule of future minimum lease payments due under the operating lease Amount Calendar year: 2024 $ 390,353 2025 798,556 2026 818,518 2027 838,984 2028 859,856 Thereafter 3,183,571 Total undiscounted future minimum lease payments 6,889,838 Less: Impact of discounting (2,048,510 ) Total present value of operating lease obligations 4,841,328 Current portion, operating lease obligation (788,801 ) Operating lease obligations, less current portion $ 4,052,527

STOCKHOLDERS_ EQUITY (Tables)

STOCKHOLDERS’ EQUITY (Tables)	6 Months Ended
	Jun. 30, 2024
Equity [Abstract]
Schedule of black scholes option pricing model using assumptions	Schedule of black scholes option pricing model using assumptions At June 30, 2024 Grant date share price at January 1, 2024 $ 2.70 Grant date exercise price $ 2.30 Expected term 0.5 Expected volatility 67.3 % Risk-free rate 5.26 % Expected dividend rate 0 %
Schedule of stock-based compensation	Schedule of stock-based compensation At Cash from employee withholdings used to purchase ESPP shares $ 87,348 Stock based compensation expense 40,589 Total charges related to the Employee Stock Purchase Plan $ 127,937 At June 30, 2023 Cash from employee withholdings used to purchase ESPP shares $ 117,048 Stock based compensation expense 66,217 Total charges related to the Employee Stock Purchase Plan $ 183,265
Schedule of non-plan options	Schedule of non-plan options Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value Outstanding at December 31, 2022 926,266 $ 5.74 3.3 $ — Granted 463,117 $ 4.22 4.35 $ — Forfeited (1,608 ) $ 14.00 — $ — Outstanding at December 31, 2023 1,387,775 $ 5.23 3.0 $ — Exercisable at December 31, 2023 581,324 $ 5.38 1.8 $ — Outstanding at December 31, 2023 1,387,775 $ 5.23 3.0 $ — Granted — $ — — $ — Exercised/Forfeited/Expired (46,872 ) $ 5.47 — $ — Outstanding at June 30, 2024 1,340,903 $ 5.22 2.5 $ — Exercisable at June 30, 2024 850,629 $ 5.43 1.8 $ —
Schedule of warrants	Schedule of warrants Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Price Term (Years) Value Outstanding at December 31, 2022 147,591 $ 8.63 0.8 $ — Warrants expired, forfeited, cancelled or exercised (102,947 ) $ — — $ — Warrants issued — $ — — $ — Outstanding at December 31, 2023 44,644 $ 7.70 0.7 $ — Exercisable at December 31, 2023 44,644 $ 7.70 0.7 $ — Outstanding at December 31, 2023 44,644 $ 7.70 0.7 $ — Warrants expired, forfeited, cancelled or exercised — $ — — $ — Warrants issued — $ — — $ — Outstanding at June 30, 2024 44,644 $ 7.70 0.2 $ — Exercisable at June 30, 2024 44,644 $ 7.70 0.2 $ —

REVENUE AND CONTRACT ACCOUNTI_2

REVENUE AND CONTRACT ACCOUNTING (Tables)	6 Months Ended
	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
Schedule of contracts assets on uncompleted contracts	Schedule of contracts assets on uncompleted contracts June 30, 2024 December 31, 2023 Cumulative revenues recognized $ 9,317,704 $ 8,820,256 Less: Billings or cash received (8,178,309 ) (8,178,309 ) Contract assets $ 1,139,395 $ 641,947
Schedule of contract liabilities on uncompleted contracts	Schedule of contract liabilities on uncompleted contracts June 30, 2024 December 31, 2023 Billings and/or cash receipts on uncompleted contracts $ 1,264,658 $ 1,264,658 Less: Cumulative revenues recognized (237,382 ) (199,976 ) Contract liabilities, technology systems 1,027,276 1,064,682 Contract liabilities, services and consulting 2,649,291 601,561 Total contract liabilities, current $ 3,676,567 $ 1,666,243 Total contract liabilities, services and consulting, non-current $ 8,495,876 $ —
Schedule of balance in contract liabilities	Schedule of balance in contract liabilities Calendar Year Amount 2024 $ 1,096,241 2025 2,192,484 2026 2,192,484 2027 2,192,484 2028 2,192,484 2029 822,182 Total CN agreement Contract Liabilities $ 10,688,359
Schedule of disaggregation of revenue	Schedule of disaggregation of revenue Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,510,496 $ — $ — $ — $ 1,510,496 Major Goods and Service Lines Turnkey Projects $ 264,999 $ — $ — $ — $ 264,999 Maintenance and Support 1,041,661 — — — 1,041,661 Algorithms 203,836 — — — 203,836 $ 1,510,496 $ — $ — $ — $ 1,510,496 Timing of Revenue Recognition Goods transferred over time $ 264,999 $ — $ — $ — $ 264,999 Services transferred over time 1,245,497 — — — 1,245,497 $ 1,510,496 $ — $ — $ — $ 1,510,496 For the Three Months Ended June 30, 2023 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 1,537,286 $ 42,381 $ — $ 190,392 $ 1,770,059 Major Goods and Service Lines Turnkey Projects $ 856,942 $ 13,552 $ — $ — $ 870,494 Maintenance and Support 680,344 28,829 — — 709,173 Algorithms — — — 190,392 190,392 $ 1,537,286 $ 42,381 $ — $ 190,392 $ 1,770,059 Timing of Revenue Recognition Goods transferred over time $ 856,942 $ 13,552 $ — $ — $ 870,494 Services transferred over time 680,344 28,829 — 190,392 899,565 $ 1,537,286 $ 42,381 $ — $ 190,392 $ 1,770,059 For the Six Months Ended June 30, 2024 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 2,581,176 $ — $ — $ — $ 2,581,176 Major Goods and Service Lines Turnkey Projects $ 534,854 $ — $ — $ — $ 534,854 Maintenance and Support 1,643,283 — — — 1,643,283 Algorithms 403,039 — — — 403,039 $ 2,581,176 $ — $ — $ — $ 2,581,176 Timing of Revenue Recognition Goods transferred over time $ 534,854 $ — $ — $ — $ 534,854 Services transferred over time 2,049,322 — — — 2,046,322 $ 2,581,176 $ — $ — $ — $ 2,581,176 For the Six Months Ended June 30, 2023 Segments Rail Commercial Government Artificial Intelligence Total Primary Geographical Markets North America $ 3,913,735 $ 71,212 $ 11,353 $ 418,047 $ 4,414,347 Major Goods and Service Lines Turnkey Projects $ 2,684,706 $ 13,552 $ — $ — $ 2,698,258 Maintenance and Support 1,229,029 57,660 11,353 — 1,298,042 Algorithms — — — 418,047 418,047 $ 3,913,735 $ 71,212 $ 11,353 $ 418,047 $ 4,414,347 Timing of Revenue Recognition Goods transferred over time $ 2,684,706 $ 13,552 $ — $ — $ 2,698,258 Services transferred over time 1,229,029 57,660 11,353 418,047 1,716,089 $ 3,913,735 $ 71,212 $ 11,353 $ 418,047 $ 4,414,347

SALE OF ASSETS (Tables)

SALE OF ASSETS (Tables)	6 Months Ended
	Jun. 30, 2024
Sale Of Assets
Schedule of note receivable	Schedule of note receivable June 30, 2024 Convertible note receivable $ 165,000 Unamortized discount (7,500 ) Convertible note receivable, net $ 157,500

NATURE OF OPERATIONS AND SUMM_3

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Federally insured limits	$ 163,603
Share-Based Payment Arrangement, Option [Member]
Product Information [Line Items]
Number of incentive stock options	1,340,903	1,217,775
Common Stock [Member]
Product Information [Line Items]
Outstanding warrants	44,644	80,091
Series D Convertible Preferred Stock [Member]
Product Information [Line Items]
Common shares issuable upon conversion	506,333	433,000
Series E Convertible Preferred Stock [Member]
Product Information [Line Items]
Common shares issuable upon conversion	4,541,667	1,333,334
Customer 1 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	43%	61%
Customer 1 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	53%		83%
Customer 2 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	25%	25%
Customer 2 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	38%		11%
Customer 3 [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	18%
Three Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | UNITED STATES
Product Information [Line Items]
Concentration risk, percentage	65%	31%

LIQUIDITY (Details Narrative)

LIQUIDITY (Details Narrative) - USD ($)		6 Months Ended
	Jul. 22, 2024	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net loss		$ 5,956,480
Cash used in operating activities		3,940,984	$ 1,923,071
Working capital surplus		2,380,098
Accumulated deficit		$ 69,560,032		$ 63,603,552
Two Institutional Investors [Member] | Secured Promissory Notes [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Notes payable	$ 2,200,000
Maturity date	Dec. 31, 2025
Interest rate	10%
ATM Sales Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Sale of stock price		$ 0.001
Sale of stock aggregate offering price		$ 7,500,000

INTANGIBLE ASSET (Details)

INTANGIBLE ASSET (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Asset, gross	$ 11,161,428	$ 0
Accumulated Amortization	(473,069)	0
Intangible Asset, net	$ 10,688,359	$ 0

INTANGIBLE ASSET (Details - Fut

INTANGIBLE ASSET (Details - Future amortization) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 1,096,241
2025	2,192,484
2026	2,192,484
2027	2,192,484
2028	2,192,484
2029	822,182
Total Intangible Asset Amortization	$ 10,688,359	$ 0

INTANGIBLE ASSET (Details Narra

INTANGIBLE ASSET (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended
	May 31, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Intangible asset fair value		$ 11,161,428		$ 11,161,428		$ 0
Amortization of intangible asset				473,069	$ 0
Revenues		$ 1,510,496	$ 1,770,059	$ 2,581,176	$ 4,414,347
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset fair value	$ 11,161,428
Term of contract	5 years
Amortization of intangible asset	$ 199,008
Revenues	199,008
Deferred revenue	11,161,428
Recognized deferred revenue	$ 199,008
Term of deferred revenue	5 years

DEBT (Details - Notes payable f

DEBT (Details - Notes payable financing agreements) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Notes payable, Principal	$ 241,452	$ 41,976
Third Party - Insurance Note 1 [Member]
Short-Term Debt [Line Items]
Notes payable, Principal	$ 124,311	$ 39,968
Notes payable, Interest	8.25%	8%
Third Party - Insurance Note 2 [Member]
Short-Term Debt [Line Items]
Notes payable, Principal	$ 16,316	$ 2,008
Third Party - Insurance Note 3 [Member]
Short-Term Debt [Line Items]
Notes payable, Principal	$ 100,825	$ 0

DEBT (Details Narrative)

DEBT (Details Narrative) - USD ($)	Apr. 15, 2024	Feb. 03, 2024	Apr. 15, 2023	Jun. 30, 2024	Dec. 31, 2023
Third Party - Insurance Note 1 [Member]
Short-Term Debt [Line Items]
Purchase of insurance policy	$ 154,338		$ 142,734
Annual interest rate	8.25%		8%
Monthly installments	$ 16,023		$ 13,501
Notes payable				$ 124,311	$ 39,968
Third Party - Insurance Note 2 [Member]
Short-Term Debt [Line Items]
Purchase of insurance policy		$ 24,480
Monthly installments		2,040
Notes payable				16,316	2,008
Third Party - Insurance Note 2 [Member] | Renewed Agreement [Member]
Short-Term Debt [Line Items]
Purchase of insurance policy		24,140
Monthly installments		2,012
Third Party - Insurance Note 3 [Member]
Short-Term Debt [Line Items]
Purchase of insurance policy		245,798
Monthly installments		20,166
Notes payable				$ 100,825	$ 0
Down payment paid		$ 84,473

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details - Supplemental information related to leases) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Lease cost:
Operating lease cost	$ 390,819	$ 390,819
Short-term lease cost	10,916	46,717
Other information:
Operating cash outflow used for operating leases	$ 388,734	$ 316,040
Weighted average discount rate	9%	9%
Weighted average remaining lease term	8 years	9 years

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details - Future minimum lease payments) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
2024	$ 390,353
2025	798,556
2026	818,518
2027	838,984
2028	859,856
Thereafter	3,183,571
Total undiscounted future minimum lease payments	6,889,838
Less: Impact of discounting	(2,048,510)
Total present value of operating lease obligations	4,841,328
Current portion, operating lease obligation	(788,801)	$ (779,087)
Operating lease obligations, less current portion	$ 4,052,527	$ 4,228,718

COMMITMENTS AND CONTINGENCIES_4

COMMITMENTS AND CONTINGENCIES (Details Narrative)	Jul. 26, 2021 USD ($) ft²	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Area of lease | ft²	40,000
Accumulated amortization	$ 4,980,104	$ 4,204,593	$ 4,373,155
Rentable space | ft²	30,000
Security deposit payment	$ 600,000
Security deposit value	$ 50,000	$ 500,000	$ 550,000

STOCKHOLDERS' EQUITY (Details -

STOCKHOLDERS' EQUITY (Details - Assumptions ) - Share-Based Payment Arrangement, Option [Member]	6 Months Ended
	Jun. 30, 2024 $ / shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Grant date share price	$ 2.70
Grant date exercise price	$ 2.30
Expected term	6 months
Expected volatility	67.30%
Risk-free rate	5.26%
Expected dividend rate	0%

STOCKHOLDERS' EQUITY (Details_2

STOCKHOLDERS' EQUITY (Details - Employee stock purchase plan) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Equity [Abstract]
Cash from employee withholdings used to purchase ESPP shares	$ 87,348	$ 117,048
Stock based compensation expense	40,589	66,217
Total charges related to the Employee Stock Purchase Plan	$ 127,937	$ 183,265

STOCKHOLDERS' EQUITY (Details_3

STOCKHOLDERS' EQUITY (Details - Non plan options) - Share-Based Payment Arrangement, Option [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding beginning balance	1,387,775	926,266
Weighted average exercise price, Outstanding beginning balance	$ 5.23	$ 5.74
Weighted average remaining contractual term (Years)	2 years 6 months	3 years	3 years 3 months 18 days
Aggregate intrinsic value, Outstanding beginning balance	$ 0	$ 0
Number of options, Granted	0	463,117
Weighted average exercise price, Granted	$ 0	$ 4.22
Weighted average remaining contractual term (Years), Granted		4 years 4 months 6 days
Number of options, Exercised/Forfeited/Expired	(46,872)	(1,608)
Weighted average exercise price, Exercised/forfeited/expired	$ 5.47	$ 14
Outstanding ending balance	1,340,903	1,387,775	926,266
Weighted average exercise price, Outstanding ending balance	$ 5.22	$ 5.23	$ 5.74
Aggregate intrinsic value, Outstanding ending balance	$ 0	$ 0	$ 0
Number of options, Exercisable	850,629	581,324
Weighted average exercise price, Exercisable	$ 5.43	$ 5.38
Weighted average remaining contractual term (Years), Exercisable	1 year 9 months 18 days	1 year 9 months 18 days
Aggregate intrinsic value, Exercisable	$ 0	$ 0

STOCKHOLDERS' EQUITY (Details_4

STOCKHOLDERS' EQUITY (Details - Warrants) - Warrant [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Outstanding beginning balance	44,644	147,591
Weighted average exercise price, Outstanding beginning balance	$ 7.70	$ 8.63
Weighted average remaining contractual term (Years)	2 months 12 days	8 months 12 days	9 months 18 days
Aggregate intrinsic value, Outstanding beginning balance	$ 0	$ 0
Number of warrants, Warrants expired, forfeited, cancelled or exercised	0	(102,947)
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	44,644	44,644	147,591
Weighted average exercise price, Outstanding ending balance	$ 7.70	$ 7.70	$ 8.63
Aggregate intrinsic value, Outstanding ending balance	$ 0	$ 0	$ 0
Number of warrants, Exercisable	44,644	44,644
Weighted average exercise price, Exercisable	$ 7.70	$ 7.70
Weighted average remaining contractual term (Years), Exercisable	2 months 12 days	8 months 12 days
Aggregate intrinsic value, Exercisable	$ 0	$ 0

STOCKHOLDERS_ EQUITY (Details N

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)																		1 Months Ended		3 Months Ended					6 Months Ended
	Jun. 25, 2024	Jun. 18, 2024	Jun. 17, 2024	Jun. 13, 2024	Jun. 12, 2024	May 17, 2024	May 07, 2024	Apr. 30, 2024	Apr. 23, 2024	Apr. 03, 2024	Nov. 09, 2023	Aug. 02, 2023	Mar. 27, 2023	Oct. 29, 2022	Sep. 30, 2022	May 12, 2021	Feb. 26, 2021	May 31, 2024	Jan. 31, 2022	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Nov. 10, 2023	Sep. 28, 2022
Class of Stock [Line Items]
Preferred stock, shares designated																				9,441,000					9,441,000		9,441,000
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
Stock issued for services, value																				$ 42,500	$ 37,500	$ 32,500	$ 32,500
Common stock, par value																				$ 0.001					$ 0.001		$ 0.001
Employee contributions																									$ 87,348	$ 117,048
Recognized compensation expense																									40,589
Total compensation cost for stock options																				$ 315,069					$ 315,069
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%
Employee Stock Purchase Plan [Member]
Class of Stock [Line Items]
Stock issued under the Employee Stock Purchase Plan, shares																									38,041	65,561
Employee contributions																									$ 87,348	$ 117,048
Purchase price per share																				$ 2.30		$ 1.79			$ 2.30	$ 1.79
Plan, term																								10 years
Plan, description																									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 or the IRS allowable limit per calendar year.
Fair market value percentage																								85%
Maximum aggregate number of shares of common stock																				1,000,000					1,000,000
Plan 2021 [Member]
Class of Stock [Line Items]
Number of shares issued, shares																1,000,000
Number of incentive stock options																				741,245					741,245		788,117
Plan 2016 [Member]
Class of Stock [Line Items]
Number of incentive stock options																				269,658					269,658		269,658
Non Plan [Member]
Class of Stock [Line Items]
Number of incentive stock options																				330,000					330,000		330,000
At The Market [Member]
Class of Stock [Line Items]
Number of shares issued, shares	15,610	1,534	400	9,747	11,239															38,530
Share price	$ 3.15	$ 3.03	$ 3.02	$ 3.15	$ 3.05
Total net proceeds	$ 47,004	$ 4,507	$ 1,165	$ 29,626	$ 33,261															$ 115,563
Share-Based Payment Arrangement, Option [Member]
Class of Stock [Line Items]
Option exercise																									38,041	65,561
Number of incentive stock options																				1,340,903				926,266	1,340,903		1,387,775
Number of incentive stock options exercisable																				850,629					850,629
Sales Agreement [Member]
Class of Stock [Line Items]
Common stock, par value						$ 0.001
Aggregate sales						$ 7,500,000
Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services , shares																				15,041	8,655	5,645	12,463
Stock issued for services, value																				$ 15	$ 9	$ 6	$ 12
Stock issued under the Employee Stock Purchase Plan, shares																				38,041		65,561
Common Stock [Member] | Employee Stock Purchase Plan [Member]
Class of Stock [Line Items]
Purchase discount, percentage																									15%
Four Directors [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services , shares																					8,655
Stock issued for services, value																					$ 37,500
Weighted average price per share																				$ 4.33					$ 4.33
Three Directors [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued for services , shares																				15,041		5,645	12,463
Stock issued for services, value																				$ 42,500		$ 32,500	$ 32,500
Weighted average price per share																				$ 2.83		$ 5.76	$ 2.61		$ 2.83	$ 5.76
Employees And Directors [Member]
Class of Stock [Line Items]
Stock-based compensation expense																									$ 201,109	$ 236,527
Convertible Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated																				15,000					15,000		15,000
Preferred stock, par value																				$ 1,000					$ 1,000		$ 1,000
Converted value																									$ 1,000
Conversion price																				$ 7					$ 7
Preferred stock, shares issued																				0					0		0
Preferred stock, shares outstanding																				0					0		0
Preferred stock, conversion price per share																				$ 7					$ 7		$ 7
Convertible Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated																				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
Convertible Series C Preferred Stock [Member] | Purchase Agreement [Member]
Class of Stock [Line Items]
Proceeds from convertible preferred stock																	$ 4,500,000
Convertible Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated																				4,000					4,000		4,000
Preferred stock, par value																				$ 1,000					$ 1,000		$ 1,000		$ 1,000
Converted value							$ 75,000	$ 350,000	$ 225,000
Preferred stock, shares issued																				1,519					1,519		1,299
Preferred stock, shares outstanding																				1,519					1,519		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
Preferred stock conversion price							$ 3	$ 3	$ 3											3					$ 3
Number of shares issued, shares										250															620
Share price										$ 1,000										$ 1,000					$ 1,000
Total net proceeds										$ 250,000															$ 620,000
Converted shares								350	225
Convertible Series D Preferred Stock [Member] | One Shareholders [Member]
Class of Stock [Line Items]
Converted shares								100	147
Converted shares issued								33,334	49,000
Convertible Series D Preferred Stock [Member] | Two Shareholders [Member]
Class of Stock [Line Items]
Converted shares								250	78
Converted shares issued								83,334	26,000
Convertible Series D Preferred Stock [Member] | Shareholders [Member]
Class of Stock [Line Items]
Converted shares							75
Convertible Series D Preferred Stock [Member] | Purchase Agreement [Member]
Class of Stock [Line Items]
Preferred stock, shares issued														300	999
Proceeds from convertible preferred stock														$ 300,000	$ 999,000
Series E Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding								650										650
Converted shares								216,668										216,668
Convertible Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares designated																				30,000					30,000		30,000
Preferred stock, par value											$ 1,000		$ 1,000							$ 1,000					$ 1,000		$ 1,000
Preferred stock, shares issued													4,000							13,625					13,625		11,500
Preferred stock, shares outstanding																				13,625					13,625		11,500
Preferred stock voting rights																									Each share of Series E Convertible Preferred Stock has 333 votes
Preferred stock, conversion price per share																				$ 3					$ 3		$ 3
Proceeds from convertible preferred stock											$ 2,500,000
Preferred stock conversion price																				3					$ 3			$ 3
Number of shares issued, shares																									2,125
Share price																				$ 1,000					$ 1,000
Total net proceeds																									$ 2,125,002
Preferred convertible preferred stock, Shares											2,500
Additional shares																												7,500
Exchange of shares																												5,000
Convertible Series E 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 designated																				5,000					5,000		5,000
Preferred stock, par value																				$ 1,000					$ 1,000		$ 1,000	$ 6.20
Preferred stock, shares issued																				0					0		0
Preferred stock, shares outstanding																				0					0		0
Preferred stock voting rights																									Each share of Series F Preferred Stock had 161 votes
Preferred stock, conversion price per share																				$ 6.20					$ 6.20		$ 6.20
Proceeds from convertible preferred stock												$ 5,000,000
Preferred stock conversion price																				$ 6.20					$ 6.20
Number of shares exchanged																												5,000
Additional shares																												2,500
Number of shares cancelled																												5,000
Preferred convertible preferred stock, shares												5,000
Exchange of shares																												5,000
Shares outstanding																												0

REVENUE AND CONTRACT ACCOUNTI_3

REVENUE AND CONTRACT ACCOUNTING (Details - Contract assets) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Cumulative revenues recognized	$ 9,317,704	$ 8,820,256
Less: Billings or cash received	(8,178,309)	(8,178,309)
Contract assets	$ 1,139,395	$ 641,947

REVENUE AND CONTRACT ACCOUNTI_4

REVENUE AND CONTRACT ACCOUNTING (Details - Contract liabilities) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Billings and/or cash receipts on uncompleted contracts	$ 1,264,658	$ 1,264,658
Less: Cumulative revenues recognized	(237,382)	(199,976)
Contract liabilities, technology systems	1,027,276	1,064,682
Contract liabilities, services and consulting	2,649,291	601,561
Total contract liabilities, current	3,676,567	1,666,243
Total contract liabilities, services and consulting, non-current	$ 8,495,876	$ 0

REVENUE AND CONTRACT ACCOUNTI_5

REVENUE AND CONTRACT ACCOUNTING (Details - Contract liabilities agreement)	Jun. 30, 2024 USD ($)
Revenue from Contract with Customer [Abstract]
2024	$ 1,096,241
2025	2,192,484
2026	2,192,484
2027	2,192,484
2028	2,192,484
2029	822,182
Total CN agreement Contract Liabilities	$ 10,688,359

REVENUE AND CONTRACT ACCOUNTI_6

REVENUE AND CONTRACT ACCOUNTING (Details - Disaggregated revenue) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 1,510,496	$ 1,770,059	$ 2,581,176	$ 4,414,347
Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	264,999	870,494	534,854	2,698,258
Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,245,497	899,565	2,046,322	1,716,089
Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	264,999	870,494	534,854	2,698,258
Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,041,661	709,173	1,643,283	1,298,042
Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	203,836	190,392	403,039	418,047
Rail [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,510,496	1,537,286	2,581,176	3,913,735
Rail [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	264,999	856,942	534,854	2,684,706
Rail [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,245,497	680,344	2,049,322	1,229,029
Rail [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	264,999	856,942	534,854	2,684,706
Rail [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,041,661	680,344	1,643,283	1,229,029
Rail [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	203,836	0	403,039	0
Commercial [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	42,381	0	71,212
Commercial [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	13,552	0	13,552
Commercial [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	28,829	0	57,660
Commercial [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	13,552	0	13,552
Commercial [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	28,829	0	57,660
Commercial [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Governments [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	11,353
Governments [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Governments [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	11,353
Governments [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Governments [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	11,353
Governments [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Artificial Intelligence [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	190,392	0	418,047
Artificial Intelligence [Member] | Goods Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Artificial Intelligence [Member] | Services Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	190,392	0	418,047
Artificial Intelligence [Member] | Turnkey Projects [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Artificial Intelligence [Member] | Maintenance And Support [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Artificial Intelligence [Member] | Algorithms [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	190,392	0	418,047
North America [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,510,496	1,770,059	2,581,176	4,414,347
North America [Member] | Rail [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,510,496	1,537,286	2,581,176	3,913,735
North America [Member] | Commercial [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	42,381	0	71,212
North America [Member] | Governments [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	11,353
North America [Member] | Artificial Intelligence [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 0	$ 190,392	$ 0	$ 418,047

REVENUE AND CONTRACT ACCOUNTI_7

REVENUE AND CONTRACT ACCOUNTING (Details Narrative) - USD ($)	Jun. 30, 2024	May 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Contract liabilities	$ 3,676,567		$ 1,666,243
Contract liabilities for technology systems			$ 37,407
Services and consulting recognized	442,610
Current contract liabilities	2,192,483
Non-current contract liabilities	$ 8,495,876
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Deferred revenue		$ 11,161,428
Recognized deferred revenue		$ 199,008

DEFINED CONTRIBUTION PLAN (Deta

DEFINED CONTRIBUTION PLAN (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024
Retirement Benefits [Abstract]
Cash contributions	$ 56,340	$ 111,438

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Related Party Transactions [Abstract]
Related party expenses	$ 43,137	$ 11,397
Accounts payable	$ 43,137		$ 33,812

SALE OF ASSETS (Details)

SALE OF ASSETS (Details)	Jun. 30, 2024 USD ($)
Sale Of Assets
Convertible note receivable	$ 165,000
Unamortized discount	(7,500)
Convertible note receivable, net	$ 157,500

SALE OF ASSETS (Details Narrati

SALE OF ASSETS (Details Narrative)	6 Months Ended
	Jun. 30, 2024 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 asset | $	$ 150,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)			1 Months Ended	6 Months Ended
	Jul. 22, 2024	Jul. 05, 2024	Jul. 31, 2024	Jun. 30, 2024	Jun. 30, 2023
Subsequent Event [Line Items]
Net proceeds				$ 115,563	$ 0
Subsequent Event [Member]
Subsequent Event [Line Items]
Share issued			27,695
Weighted average price			$ 3.04
Net proceeds			$ 81,495
Subsequent Event [Member] | Secured Promissory Notes [Member]
Subsequent Event [Line Items]
Aggregate promissory note	$ 2,200,000
Maturity date	Dec. 31, 2025
Interest rate	10%
Warrants purchase	300,000
Warrants exercisable per share	$ 3
Warrant term	5 years
Interest rate notes increase	18%
Additional warrants purchase	75,000
Series D Preferred Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Conversion of shares common stock		120
Common Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Conversion of shares common stock		40,000