Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39933 | |
Entity Registrant Name | URBAN-GRO, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5158469 | |
Entity Address, Address Line One | 1751 Panorama Point | |
Entity Address, Address Line Two | Unit G | |
Entity Address, City or Town | Lafayette | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80026 | |
City Area Code | 720 | |
Local Phone Number | 390-3880 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | UGRO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 11,670,580 | |
Entity Central Index Key | 0001706524 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 8,559,181 | $ 12,008,003 |
Accounts receivable, net | 15,475,146 | 15,380,292 |
Contract receivables | 6,948,417 | 3,004,282 |
Prepaid expenses and other assets | 3,540,554 | 4,164,960 |
Total current assets | 34,523,298 | 34,557,537 |
Non-current assets: | ||
Property and equipment, net | 1,332,908 | 1,307,146 |
Operating lease right of use assets, net | 2,396,668 | 2,618,825 |
Investments | 2,584,964 | 2,559,307 |
Goodwill | 15,572,050 | 15,572,050 |
Intangible assets, net | 4,876,503 | 5,450,687 |
Total non-current assets | 26,763,093 | 27,508,015 |
Total assets | 61,286,391 | 62,065,552 |
Current liabilities: | ||
Accounts payable | 18,552,579 | 9,960,364 |
Accrued expenses | 5,183,451 | 3,196,961 |
Contract liabilities | 3,344,832 | 1,294,452 |
Customer deposits | 1,940,394 | 2,571,161 |
Contingent consideration | 238,621 | 2,799,287 |
Promissory note | 1,941,188 | 3,832,682 |
Operating lease liabilities | 617,815 | 600,816 |
Total current liabilities | 31,818,880 | 24,255,723 |
Non-current liabilities: | ||
Operating lease liabilities | 1,822,754 | 2,044,782 |
Deferred tax liability | 914,185 | 1,033,283 |
Total non-current liabilities | 2,736,939 | 3,078,065 |
Commitments and contingencies (note 10) | ||
Stockholders’ equity | ||
Preferred stock, $0.10 par value; 3,000,000 shares and 10,000,000 shares authorized as of June 30, 2023, and December 31, 2022, respectively; 0 shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 30,000,000 shares and 100,000,000 shares authorized as of June 30, 2023, and December 31, 2022, respectively; 13,056,409 shares issued and 11,606,576 shares outstanding as of June 30, 2023; 12,220,593 shares issued and 10,770,760 shares outstanding as of December 31, 2022 | 13,056 | 12,221 |
Additional paid-in capital | 87,468,937 | 84,882,982 |
Treasury shares, cost basis: 1,449,833 shares as of June 30, 2023, and as of December 31, 2022 | (12,045,542) | (12,045,542) |
Accumulated deficit | (48,705,879) | (38,117,897) |
Total stockholders’ equity | 26,730,572 | 34,731,764 |
Total liabilities and stockholders’ equity | $ 61,286,391 | $ 62,065,552 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 3,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 30,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 13,056,409 | 12,220,593 |
Common stock, shares outstanding (in shares) | 11,606,576 | 10,770,760 |
Treasury stock, shares, cost basis (in shares) | 1,449,833 | 1,449,833 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Total revenues and other income | $ 18,837,544 | $ 16,281,503 | $ 35,602,930 | $ 37,334,371 |
Total cost of revenues | 15,962,910 | 12,779,557 | 29,886,448 | 28,930,405 |
Gross profit | 2,874,634 | 3,501,946 | 5,716,482 | 8,403,966 |
Operating expenses: | ||||
General and administrative | 5,874,346 | 4,240,658 | 12,973,204 | 8,965,957 |
Stock-based compensation | 622,547 | 882,000 | 1,102,188 | 1,764,000 |
Intangible asset amortization | 264,165 | 306,225 | 574,184 | 468,725 |
Total operating expenses | 6,761,058 | 5,428,883 | 14,649,576 | 11,198,682 |
Loss from operations | (3,886,424) | (1,926,937) | (8,933,094) | (2,794,716) |
Non-operating income (expense): | ||||
Interest expense | (44,989) | (7,658) | (118,205) | (15,317) |
Interest income | 75,061 | 47,275 | 148,191 | 127,126 |
Contingent consideration | 0 | 0 | (160,232) | 0 |
Loss on settlement | (1,500,000) | 0 | (1,500,000) | 0 |
Other income (expense) | (140,947) | 71,563 | (143,739) | 62,874 |
Total non-operating income (expense) | (1,610,875) | 111,180 | (1,773,985) | 174,683 |
Loss before income taxes | (5,497,299) | (1,815,757) | (10,707,079) | (2,620,033) |
Income tax benefit | 53,966 | 76,453 | 119,097 | 184,512 |
Net loss | (5,443,333) | (1,739,304) | (10,587,982) | (2,435,521) |
Comprehensive loss | $ (5,443,333) | $ (1,739,304) | $ (10,587,982) | $ (2,435,521) |
Loss per share – basic (in dollars per share) | $ (0.50) | $ (0.17) | $ (0.97) | $ (0.23) |
Loss per share – diluted (in dollars per share) | $ (0.50) | $ (0.17) | $ (0.97) | $ (0.23) |
Weighted average shares – basic (in shares) | 10,945,978 | 10,508,972 | 10,859,820 | 10,527,975 |
Weighted average shares – diluted (in shares) | 10,945,978 | 10,508,972 | 10,859,820 | 10,527,975 |
Equipment systems | ||||
Revenues: | ||||
Total revenues and other income | $ 4,619,887 | $ 10,077,572 | $ 7,531,711 | $ 27,144,916 |
Total cost of revenues | 4,008,911 | 8,617,945 | 6,521,587 | 22,920,542 |
Services | ||||
Revenues: | ||||
Total revenues and other income | 3,034,574 | 3,027,556 | 6,505,227 | 6,666,062 |
Total cost of revenues | 1,972,844 | 1,279,492 | 3,947,382 | 2,880,920 |
Construction design-build | ||||
Revenues: | ||||
Total revenues and other income | 11,048,997 | 2,917,321 | 21,254,949 | 2,917,321 |
Total cost of revenues | 9,888,907 | 2,692,700 | 19,192,615 | 2,692,700 |
Other | ||||
Revenues: | ||||
Total revenues and other income | 134,086 | 259,054 | 311,043 | 606,072 |
Total cost of revenues | $ 92,248 | $ 189,420 | $ 224,864 | $ 436,243 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2021 | 11,588,110 | ||||
Beginning balance at Dec. 31, 2021 | $ 48,167,330 | $ 11,588 | $ 78,679,220 | $ (22,839,988) | $ (7,683,490) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 882,000 | 882,000 | |||
Treasury stock | (3,773,177) | (3,773,177) | |||
Stock exercised (in shares) | 4,555 | ||||
Stock exercised | 28,797 | $ 5 | 28,792 | ||
Stock issued with exercise of warrants (in shares) | 34,863 | ||||
Stock issued with exercise of warrants | 0 | $ 35 | (35) | ||
Net loss | (696,217) | (696,217) | |||
Ending balance (in shares) at Mar. 31, 2022 | 11,627,528 | ||||
Ending balance at Mar. 31, 2022 | 44,608,733 | $ 11,628 | 79,589,977 | (23,536,205) | (11,456,667) |
Beginning balance (in shares) at Dec. 31, 2021 | 11,588,110 | ||||
Beginning balance at Dec. 31, 2021 | 48,167,330 | $ 11,588 | 78,679,220 | (22,839,988) | (7,683,490) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (2,435,521) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 11,911,043 | ||||
Ending balance at Jun. 30, 2022 | 46,251,429 | $ 11,911 | 82,971,694 | (25,275,509) | (11,456,667) |
Beginning balance (in shares) at Mar. 31, 2022 | 11,627,528 | ||||
Beginning balance at Mar. 31, 2022 | 44,608,733 | $ 11,628 | 79,589,977 | (23,536,205) | (11,456,667) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 882,000 | 882,000 | |||
Stock issued for contingent consideration (in shares) | 283,515 | ||||
Stock issued for contingent consideration | 2,500,000 | $ 283 | 2,499,717 | ||
Net loss | (1,739,304) | (1,739,304) | |||
Ending balance (in shares) at Jun. 30, 2022 | 11,911,043 | ||||
Ending balance at Jun. 30, 2022 | $ 46,251,429 | $ 11,911 | 82,971,694 | (25,275,509) | (11,456,667) |
Beginning balance (in shares) at Dec. 31, 2022 | 10,770,760 | 12,220,593 | |||
Beginning balance at Dec. 31, 2022 | $ 34,731,764 | $ 12,221 | 84,882,982 | (38,117,897) | (12,045,542) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 479,641 | 479,641 | |||
Stock grant program vesting (in shares) | 103,572 | ||||
Stock grant program vesting | 0 | $ 103 | (103) | ||
Stock issued for contingent consideration (in shares) | 64,224 | ||||
Stock issued for contingent consideration | 191,919 | $ 64 | 191,855 | ||
Net loss | (5,144,649) | (5,144,649) | |||
Ending balance (in shares) at Mar. 31, 2023 | 12,388,389 | ||||
Ending balance at Mar. 31, 2023 | $ 30,258,675 | $ 12,388 | 85,554,375 | (43,262,546) | (12,045,542) |
Beginning balance (in shares) at Dec. 31, 2022 | 10,770,760 | 12,220,593 | |||
Beginning balance at Dec. 31, 2022 | $ 34,731,764 | $ 12,221 | 84,882,982 | (38,117,897) | (12,045,542) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock exercised (in shares) | 0 | ||||
Net loss | $ (10,587,982) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 11,606,576 | 13,056,409 | |||
Ending balance at Jun. 30, 2023 | $ 26,730,572 | $ 13,056 | 87,468,937 | (48,705,879) | (12,045,542) |
Beginning balance (in shares) at Mar. 31, 2023 | 12,388,389 | ||||
Beginning balance at Mar. 31, 2023 | 30,258,675 | $ 12,388 | 85,554,375 | (43,262,546) | (12,045,542) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 622,547 | 622,547 | |||
Stock grant program vesting (in shares) | 86,020 | ||||
Stock grant program vesting | 0 | $ 86 | (86) | ||
Stock issued for contingent consideration (in shares) | 582,000 | ||||
Stock issued for contingent consideration | 1,292,683 | $ 582 | 1,292,101 | ||
Net loss | $ (5,443,333) | (5,443,333) | |||
Ending balance (in shares) at Jun. 30, 2023 | 11,606,576 | 13,056,409 | |||
Ending balance at Jun. 30, 2023 | $ 26,730,572 | $ 13,056 | $ 87,468,937 | $ (48,705,879) | $ (12,045,542) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (10,587,982) | $ (2,435,521) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 828,232 | 589,835 |
Deferred income tax benefit | (119,097) | (184,512) |
Stock-based compensation expense | 1,102,188 | 1,764,000 |
Loss on settlement | 1,500,000 | 0 |
Change in fair value of contingent consideration | 160,232 | 0 |
Other, net | 472,277 | (54,942) |
Changes in operating assets and liabilities (net of acquired amounts): | ||
Accounts receivable and contract receivables | (4,424,814) | 663,955 |
Prepaid expenses and other assets and property and equipment | 1,030,205 | 6,275,332 |
Accounts payable, contract liabilities, and accrued expenses | 11,289,944 | (1,320,152) |
Change in contingent consideration from indemnification | (917,699) | 0 |
Operating lease liability | (360,787) | (163,054) |
Customer deposits | (630,767) | (10,059,378) |
Net cash used in operating activities | (658,068) | (4,924,437) |
Cash flows from investing activities: | ||
Business combinations, net of cash acquired | 0 | (2,709,148) |
Purchases of property and equipment | (226,700) | (374,630) |
Net cash used in investing activities | (226,700) | (3,083,778) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 0 | 28,797 |
Repurchase of common stock | 0 | (3,773,177) |
Repayment of finance lease ROU liability | (88,299) | (72,000) |
Payments to settle contingent consideration | (479,457) | 0 |
Repayment of promissory note | (1,996,298) | 0 |
Net cash used in financing activities | (2,564,054) | (3,816,380) |
Net change in cash | (3,448,822) | (11,824,595) |
Cash at beginning of period | 12,008,003 | 34,592,190 |
Cash at end of period | 8,559,181 | 22,767,595 |
Supplemental cash flow information: | ||
Cash paid for interest | 13,402 | 15,317 |
Net cash paid for income taxes | 134,252 | 52,733 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Stock issued for acquisitions | 0 | 2,500,000 |
Operating lease right of use assets and liabilities extension | $ 295,631 | $ 55,297 |
ORGANIZATION, ACQUISITIONS, AND
ORGANIZATION, ACQUISITIONS, AND LIQUIDITY | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation, Business Combination, And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION, ACQUISITIONS, AND LIQUIDITY | ORGANIZATION, ACQUISITIONS, AND LIQUIDITY Organization urban-gro, Inc. (“we,” “us,” “our,” the “Company,” or “urban-gro”) is an integrated professional services and design-build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture (“CEA”), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and a commitment to sustainability drive our team to provide exceptional customer experiences. To serve our horticulture clients, we engineer, design and manage the construction of indoor CEA facilities and then integrate complex environmental equipment systems into those facilities. Through this work, we create high-performance indoor cultivation facilities for our clients to grow specialty crops, including leafy greens, vegetables, herbs, and plant-based medicines. Our custom-tailored approach to design, construction, procurement, and equipment integration provides a single point of accountability across all aspects of indoor growing operations. We also help our clients achieve operational efficiency and economic advantages through a full spectrum of professional services and programs focused on facility optimization and environmental health which establish facilities that allow clients to manage, operate and perform at the highest level throughout their entire cultivation lifecycle once they are up and running. Further, we serve a broad range of commercial and governmental entities, providing them with planning, consulting, architectural, engineering and construction design-build services for their facilities. We aim to work with our clients from the inception of their project in a way that provides value throughout the life of their facility. We are a trusted partner and advisor to our clients and offer a complete set of engineering and managed services complemented by a vetted suite of select cultivation equipment systems. Acquisitions DVO Effective October 31, 2022, the Company entered into an agreement with Dawson Van Orden, Inc. ("Seller" or "DVO") and DVO's shareholders (the "DVO Shareholders") to acquire substantially all of the operating assets and liabilities of DVO, a Texas based engineering firm with significant experience in indoor CEA. The purchase price of $6.1 million, after working capital adjustments, was comprised of (i) $1.2 million in cash, (ii) a $3.8 million Seller's promissory note, and (iii) $1.1 million of the Company's common stock. The Seller's promissory note is to be paid out over four quarters beginning in January 2023. The Seller’s promissory note balances as of June 30, 2023, and December 31, 2022, were $1,941,188 and $3,832,682 , respectively. The purchase price excludes up to $1.1 million of contingent consideration earnout that may become payable to the Seller dependent on the continued employment of the DVO Shareholders. The contingent consideration earnout is payable, at the Company’s discretion, in cash or shares of the Company’s common stock with the value of such shares being determined based upon the volume-weighted average price ("VWAP") of the Company’s common stock in the ten trading days prior to the end of the applicable quarter for which the quarterly gross profit is calculated. The Company accounted for the acquisition as follows: Purchase price $ 6,072,366 Allocation of purchase price: Accounts receivable, net $ 1,134,909 Right of use asset $ 1,197,310 Property and equipment $ 229,058 Goodwill $ 3,444,926 Intangible assets $ 1,276,000 Accrued expenses $ (12,527) Right of use liability $ (1,197,310) Pro-forma disclosure of the DVO acquisition is not required as the historical results of DVO were not material to the Company's consolidated financial statements. Acquired goodwill from DVO represents the value expected to arise from organic growth and an opportunity to expand into a well-established market for the Company. Emerald Effective April 29, 2022, the Company acquired all of the issued and outstanding capital stock of Emerald Construction Management, Inc. (“Emerald”) from its shareholders (the “Emerald Sellers”). The purchase price of $7.7 million, after working capital adjustments, was comprised of (i) $3.4 million in cash, (ii) $2.5 million of the Company’s common stock, and (iii) $1.8 million of estimated contingent consideration earnout payable to the Emerald Sellers over the term of the earnout. The total contingent earnout payable to the Emerald Sellers is $2.0 million. Effective January 1, 2023, the terms of the contingent consideration earnout provision were amended providing for the entire contingent consideration of up to $2.0 million to be earned based solely on the continued employment of the Emerald Sellers for a two-year period. This resulted in the Company recording additional contingent consideration expense of $160,232 in the first quarter of 2023. Per the amendment, the remaining contingent consideration earnout is payable quarterly, at the Company’s discretion, in cash or in shares of the Company’s common stock with the value of such shares being determined based upon the VWAP of the Company’s common stock in the ten trading days prior to the end of the applicable quarter. The Company accounted for the acquisition as follows: Purchase Price $ 7,671,557 Allocation of Purchase Price: Cash $ 622,641 Accounts receivable, net $ 2,666,811 Contract receivables $ 494,456 Prepayments and other assets $ 38,086 Property and equipment $ 403,008 Right of use asset $ 82,408 Goodwill $ 4,135,006 Intangible assets $ 3,659,000 Accrued expenses $ (2,361,302) Contract liabilities $ (1,071,399) Right of use liability $ (82,408) Deferred tax liability $ (914,750) The following pro-forma amounts reflect the Company’s results as if the acquisition of Emerald had occurred on January 1, 2022. These pro-forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of the acquisition to reflect the additional amortization of intangibles. Three Months Ended Six Months Ended 2023 2022 2023 2022 Revenues: Equipment systems $ 4,619,887 $ 10,077,572 $ 7,531,711 $ 27,144,916 Services 3,034,574 3,027,556 6,505,227 6,666,062 Construction design-build 11,048,997 5,353,905 21,254,949 14,598,769 Other 134,086 259,054 311,043 606,072 Total revenues and other income 18,837,544 18,718,087 35,602,930 49,015,819 Net loss $ (5,443,333) $ (1,556,748) $ (10,587,982) $ (1,456,161) Acquired goodwill from Emerald represents the value expected to arise from organic growth and an opportunity for the Company to expand into a well-established market. Per the Emerald Acquisition Agreement and Plan of Merger (the “Emerald Acquisition Agreement”), when the Company acquired all of the issued and outstanding capital stock of Emerald, the Emerald Sellers indemnified the Company for any material liabilities, losses, and actions or inaction which took place prior to the acquisition and that were not disclosed as part of the transaction. To that end, a pre-acquisition Emerald project incurred a substantial loss that was not disclosed in the Emerald Acquisition Agreement. The majority shareholder of Emerald has agreed to indemnify the Company for the loss, which is currently estimated to be $2.2 million (the “Indemnified Loss”). The Company has offset $1.0 million of the Indemnified Loss against the total remaining contingent consideration and certain other liabilities owed to the majority shareholder of Emerald. Further, the Company has agreed to satisfy up to $1.2 million of the Indemnified Loss in the event a certain Emerald project is above a 7% profit margin, on a dollar to dollar basis. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are available to be issued. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Condensed Consolidated Financial Statements The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for condensed financial reporting. The condensed consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of stockholders’ equity and condensed consolidated statements of cash flows for the periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Significant Accounting Policies For a detailed discussion about the Company’s significant accounting policies, refer to Note 2 — Summary of Significant Accounting Policies , in the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. During the six months ended June 30, 2023, there were no material changes made to the Company’s significant accounting policies. Use of Estimates In preparing condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under construction design-build contracts; estimated useful lives and potential impairment of long-lived assets, intangibles and goodwill; inventory write-offs; allowance for deferred tax assets; and allowance for bad debt. Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Balance Sheet Classifications The Company includes in current assets and liabilities the following amounts that are in connection with construction contracts that may extend beyond one year: contract assets and contract liabilities (including retainage invoiced to customers contingent upon anything other than the passage of time), capitalized costs to fulfill contracts, retainage payable to sub-contractors and accrued losses on uncompleted contracts. A one-year time period is used to classify all other current assets and liabilities when not otherwise prescribed by the applicable accounting principles. Contract Assets and Liabilities The timing between when the Company collects cash from its construction design-build customers can create a contract asset or contract liability. Please refer to Note 3 - Revenue from Contracts with Customers for further discussion of the Company's contract assets and liabilities. Recently Issued Accounting Standards As of June 30, 2023, and through the filing of this report, no Accounting Standards Updates have been issued and not yet adopted that are applicable to the Company and that would have a material effect on the Company’s unaudited condensed consolidated financial statements and related disclosures. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS The Company recognizes revenue predominantly from the sale of equipment systems, services, construction design-build, and from other various immaterial contracts with customers from its CEA and Commercial sectors. The table below presents the revenue by source for the three and six months ended June 30, 2023, and 2022: CEA Commercial Total For the three months ended For the three months ended For the three months ended 2023 2022 2023 2022 2023 2022 Equipment systems $ 4,619,887 $ 10,077,572 $ — $ — $ 4,619,887 $ 10,077,572 Services 1,255,978 1,931,465 1,778,596 1,096,091 3,034,574 3,027,556 Construction design-build 414,717 802,874 10,634,280 2,114,447 11,048,997 2,917,321 Other 134,086 259,054 — — 134,086 259,054 Total revenues and other income $ 6,424,668 $ 13,070,965 $ 12,412,876 $ 3,210,538 $ 18,837,544 $ 16,281,503 Relative percentage 34 % 80 % 66 % 20 % 100 % 100 % CEA Commercial Total For the six months ended For the six months ended For the six months ended 2023 2022 2023 2022 2023 2022 Equipment systems $ 7,531,711 $ 27,144,916 $ — $ — $ 7,531,711 $ 27,144,916 Services 2,813,153 4,062,139 3,692,074 2,603,923 6,505,227 6,666,062 Construction design-build 786,560 802,874 20,468,389 2,114,447 21,254,949 2,917,321 Other 311,043 606,072 — — 311,043 606,072 Total revenues and other income $ 11,442,467 $ 32,616,001 $ 24,160,463 $ 4,718,370 $ 35,602,930 $ 37,334,371 Relative percentage 32 % 87 % 68 % 13 % 100 % 100 % Under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , a performance obligation is a promise in a contract with a customer, to transfer a distinct good or service to the customer. Equipment systems contracts are lump sum contracts, which require the performance of some, or all, of the obligations under the contract for a specified amount. Service revenue contracts, which include both architectural and engineering designs, generally contain multiple performance obligations which can span across multiple phases of a project and are generally set forth in the contract as distinct milestones. The majority of construction design-build contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Some contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the project life cycle (design and construction). The transaction price for service contracts and construction design-build contracts is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. When there are multiple performance obligations under the same service contract, the Company allocates the transaction price to each performance obligation based on the standalone selling price. In general, payment terms are fixed at the time of the contract and are not subject to discounts, incentives, payment bonuses, credits or penalties, unless negotiated in an amendment. When establishing the selling price to the customer, the Company uses various observable inputs. For equipment systems, the stand-alone selling price is determined by forecasting the expected costs of the products, and then adding in the appropriate margins established by management. For service revenues and construction design-build revenues, the Company estimates the selling price by reference to certain physical characteristics of the project, which include the facility size, the complexity of the design, and the mechanical systems involved, which are indicative of the scope and complexity for those services. Significant judgments are typically not required with respect to the determination of the transaction price based on the nature of the selling prices of the products and services delivered and the collectability of those amounts. Accordingly, the Company does not consider estimates of variable consideration to be constrained. The Company recognizes equipment systems, services, and construction design-build revenues when the performance obligation with the customer is satisfied. For satisfaction of equipment system revenues, the Company recognizes revenue when control of the promised good transfers to the customer, which predominately occurs at the time of shipment. For service revenues, satisfaction occurs as the services related to the distinct performance obligations are rendered or completed in exchange for consideration in an amount for which the Company is entitled. The time period between recognition and satisfaction of performance obligations is generally within the same reporting period; thus, there are no material unsatisfied or partially unsatisfied performance obligations for product or service revenues at the end of the reporting period. Construction design-build revenues are recognized as the Company's obligations are satisfied over time, using the ratio of project costs incurred to estimated total costs for each contract because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed. This continuous transfer of control to the customer is further supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. This cost-to-cost measure is used for our construction design-build contracts because management considers it to be the best available measure of progress on these contracts. Contract modifications through change orders, claims and incentives are routine in the performance of the Company’s construction design-build contracts to account for changes in the contract specifications or requirements. In most instances, contract modifications are not distinct from the existing contract due to the significant integration of services provided in the contract and are accounted for as a modification of the existing contract and performance obligation. Either the Company or its customers may initiate change orders, which may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Change orders that are unapproved as to both price and scope are evaluated as claims. The Company considers claims to be amounts in excess of approved contract prices that the Company seeks to collect from its customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. The timing of when the Company bills customers on long-term construction design-build contracts is generally dependent upon agreed-upon contractual terms, which may include milestone billings based on the completion of certain phases of the work, or when services are provided. When as a result of contingencies, billings cannot occur until after the related revenue has been recognized, the result is unbilled revenue which is included in contract assets. Additionally, when the Company receives advances or deposits from customers before revenue is recognized, the result is deferred revenue which is included in contract liabilities. Retainage subject to conditions other than the passage of time are included in contract assets and contract liabilities. Contract assets represent revenues recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts. Contract liabilities represent the Company’s obligation to perform on uncompleted contracts with customers for which the Company has received payment or for which contract receivables are outstanding. The following table provides information about contract assets and contract liabilities from contracts with customers: June 30, December 31, 2022 Contract assets: Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage $ 6,702,100 $ 2,874,141 Retainage included in contract assets due to being conditional on something other than solely passage of time 246,317 130,141 Total contract assets $ 6,948,417 $ 3,004,282 June 30, December 31, 2022 Contract liabilities: Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability) $ 3,312,396 $ 1,294,452 Retainage included in contract liabilities due to being conditional on something other than solely passage of time 32,436 — Total contract liabilities $ 3,344,832 $ 1,294,452 Trade accounts receivable, net of allowance for doubtful accounts, balances from contracts with customers within the accompanying condensed consolidated balance sheets as of June 30, 2023, and December 31, 2022, were $14,242,229 and $12,466,180, respectively. Non-trade accounts receivable as of June 30, 2023, and December 31, 2022, were $1,232,917 and $2,914,112, respectively. Non-trade accounts receivables as of June 30, 2023, were comprised of the remaining Indemnified Loss receivable from the majority shareholder of Emerald further detailed in Note 1 – Organization, Acquisitions, and Liquidity . Non-trade accounts receivables as of December 31, 2022, were comprised of miscellaneous non-trade accounts receivables totaling $514,112 and non-trade accounts receivable related to litigation involving fraudulent wire transactions of $2,400,000. On March 27, 2023, the Company entered into an agreement to settle this litigation and received a cash payment of $2,400,000 on March 27, 2023. For equipment systems contracts, the Company’s predominant policy is to collect deposits from customers at the beginning of the contract and the balance of the contract payment prior to shipping. The Company does, in some cases, collect deposits or retainers as down payments on service contracts. Consumable products orders may be paid for in advance of shipment or for recurring customers with credit, payment terms of 30 days or less may be extended by the Company. Customer payments that have been collected prior to the performance obligation being recognized are recorded as customer deposit liabilities on the balance sheet. When the performance obligation is satisfied and all the criteria for revenue recognition are met, revenue is recognized. In certain situations when the customer has paid the deposit and services have been performed but the customer chooses not to proceed with the contract, the Company is entitled to keep the deposit and recognize revenue. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS James Lowe, a director of the Company, is an owner of Cloud 9 Support, LLC (“Cloud 9”) and Potco LLC (“Potco”). Cloud 9 purchases materials from the Company for use with its customers and Potco purchases equipment from the Company for use in its cultivation facility. The table below presents the revenues for Cloud 9 and Potco for the three and six months ended June 30, 2023, and 2022: Three Months Ended Six Months Ended 2023 2022 2023 2022 Revenues - Cloud 9 $ 462 $ 5,606 $ 462 $ 11,813 Revenues - Potco 398,712 — 935,164 11,400 Total revenues from related party transactions $ 399,174 $ 5,606 $ 935,626 $ 23,213 The table below presents the accounts receivable for Cloud 9 and Potco for as of June 30, 2023, and December 31, 2022: June 30, December 31, 2022 Accounts receivable - Cloud 9 $ — $ 3,920 Accounts receivable - Potco 188,512 20,174 Total accounts receivable due from related party transactions $ 188,512 $ 24,094 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets are comprised of prepayments paid to vendors to initiate orders, prepaid services and fees, inventories, and other assets. The prepaid expenses and other assets balances are summarized as follows: June 30, December 31, 2022 Vendor prepayments $ 2,314,800 $ 2,459,389 Prepaid services and fees 885,416 1,346,430 Inventories 300,520 320,372 Other assets 39,818 38,769 Total Prepaid expenses and other assets $ 3,540,554 $ 4,164,960 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment balances are summarized as follows: June 30, December 31, 2022 Computers and technology equipment $ 264,197 $ 232,405 Furniture and fixtures 321,859 234,389 Leasehold improvements 228,760 306,719 Vehicles 452,822 456,797 Software 874,153 685,580 Other equipment 58,526 58,525 Accumulated depreciation (867,409) (667,269) Total Property and equipment, net $ 1,332,908 $ 1,307,146 Depreciation expense totaled $159,995 and $65,335 for the three months ended June 30, 2023, and 2022, respectively, and totaled $254,048 and $121,113 for the six months ended June 30, 2023, and 2022, respectively. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The components of investments as of June 30, 2023, and December 31, 2022, are summarized as follows: Edyza XS Financial Total Balances as of December 31, 2022 $ — $ 2,559,307 $ 2,559,307 Paid-in-kind interest — 25,657 25,657 Balances as of June 30, 2023 $ — $ 2,584,964 $ 2,584,964 Edyza The Company has a strategic investment in Edyza, Inc. (“Edyza”), a hardware and software technology company that enables dense sensor networks in agriculture, healthcare, and other environments that require precise micro-climate monitoring. The Company measures this investment at cost, less any impairment changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. During the third quarter of 2022, the Company fully impaired this investment, resulting in an impairment recorded of $1.7 million. The Company determined that the intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery had passed, causing an “other than temporary loss.” The Company will continue to monitor any future changes to this impairment and seek to recover any remaining value of its 19.5% ownership. XS Financial On October 30, 2021, the Company participated in a convertible note offering of Xtraction Services, Inc., a/k/a XS Financial Inc. (CSE: XSF) (OTCQB: XSHLF) ("XSF"), a specialty finance company providing CAPEX financing solutions, including equipment leasing, to CEA companies in the United States. The Company invested $2,500,000 of a total $43,500,000 raised by XSF. Prior to any Nasdaq listing, the investment incurs 9.5% interest payable, of which, 7.5% is cash interest and 2.0% is interest paid in kind. Subsequent to any Nasdaq listing by XSF, the investment incurs 8.0% cash interest. The debt matures on October 28, 2023, with a one-year option at the sole discretion of XSF to extend the maturity date. In addition, the Company received 1,250,000 warrants denominated in Canadian dollars ("C$") with a C$0.45 exercise price as subject to the warrant instrument. No value was attributed to the warrants at the time of the investment. |
GOODWILL & INTANGIBLE ASSETS
GOODWILL & INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL & INTANGIBLE ASSETS | GOODWILL & INTANGIBLE ASSETS Goodwill The Company has recorded goodwill in conjunction with the acquisitions it has completed. The goodwill balances as of June 30, 2023, and December 31, 2022, were $15,572,050 and $15,572,050, respectively. Goodwill is not amortized. The Company did not record any impairment charges related to goodwill for the three or six months ended June 30, 2023, and 2022. Intangible Assets Other Than Goodwill Intangible assets as of June 30, 2023, and December 31, 2022, consisted of the following: As of June 30, 2023 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (703,885) $ 3,508,215 Trademarks and trade names 1,778,000 (485,617) 1,292,383 Backlog and other 768,113 (720,499) 47,614 Total finite-lived intangible assets: 6,758,213 (1,910,001) 4,848,212 Indefinite-lived intangible assets: Trade name 28,291 — 28,291 Total indefinite-lived intangible assets 28,291 — 28,291 Total intangible assets, net $ 6,786,504 $ (1,910,001) $ 4,876,503 As of December 31, 2022 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (401,997) $ 3,810,103 Trademarks and trade names 1,778,000 (307,817) 1,470,183 Backlog and other 768,113 (626,003) 142,110 Total finite-lived intangible assets: 6,758,213 (1,335,817) 5,422,396 Indefinite-lived intangible assets: Trade name 28,291 — 28,291 Total indefinite-lived intangible assets 28,291 — 28,291 Total intangible assets, net $ 6,786,504 $ (1,335,817) $ 5,450,687 Amortization expense for intangible assets totaled $264,165 and $306,225 for the three months ended June 30, 2023, and 2022, respectively, and totaled $574,184 and $468,725 for the six months ended June 30, 2023, and 2022, respectively. The estimated future amortization expense for intangible assets subject to amortization as of June 30, 2023, is summarized below: For the years ending December 31, Estimated Future Remainder of 2023 $ 491,841 2024 959,788 2025 959,788 2026 918,205 2027 693,555 Thereafter 825,035 Total estimated future amortization expense $ 4,848,212 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses are summarized as follows: June 30, December 31, Accrued operating expenses $ 527,690 $ 515,858 Loss on settlement 1,500,000 — Accrued wages and related expenses 1,134,304 639,614 Accrued 401(k) 66,004 262,599 Accrued sales tax payable 1,955,453 1,778,890 Total accrued expenses $ 5,183,451 $ 3,196,961 Accrued sales tax payable is comprised of amounts due to various states and Canadian provinces from the year ended 2015 through June 30, 2023 . |
OPERATING LEASE LIABILITIES AND
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES | OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES The Company has eight operating office lease liabilities and one finance office lease liability with an imputed annual interest rate of 8.0%. Five of the leases were assigned to the Company in connection with the acquisitions of 2WR, Emerald, and DVO. The remaining lease terms range from less than a year to 6 years, as of June 30, 2023. The following is a summary of operating lease liabilities: June 30, December 31, Operating lease liabilities related to right of use assets $ 2,440,569 $ 2,645,598 Less current operating lease liabilities (617,815) (600,816) Non-current operating lease liabilities $ 1,822,754 $ 2,044,782 The following is a schedule showing total future minimum lease payments: For the years ending December 31, Minimum Lease Payments Remainder of 2023 $ 417,885 2024 754,076 2025 573,133 2026 404,751 2027 346,812 Thereafter 335,903 Total minimum lease payments 2,832,560 Less: Amount representing interest (391,991) Net lease obligations $ 2,440,569 From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no ongoing legal proceedings for which management believes the ultimate outcome would have a material adverse effect on the Company’s results of operations and cash flows. On August 11, 2023, the Company entered into a settlement agreement (the “Settlement Agreement”) with Crest Ventures, LLC (“Crest”) and Andrew Telsey to settle all claims in the litigation filed in the District Court for Arapahoe County, Colorado, Case No. 2021CV31301. Pursuant to the Settlement Agreement, the Company has agreed to pay $1,500,000 to Crest by September 10, 2023. In connection with this settlement, the Company recorded a loss in the second quarter of 2023 of $1,500,000 in accordance with GAAP related to loss contingencies. |
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES | OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES The Company has eight operating office lease liabilities and one finance office lease liability with an imputed annual interest rate of 8.0%. Five of the leases were assigned to the Company in connection with the acquisitions of 2WR, Emerald, and DVO. The remaining lease terms range from less than a year to 6 years, as of June 30, 2023. The following is a summary of operating lease liabilities: June 30, December 31, Operating lease liabilities related to right of use assets $ 2,440,569 $ 2,645,598 Less current operating lease liabilities (617,815) (600,816) Non-current operating lease liabilities $ 1,822,754 $ 2,044,782 The following is a schedule showing total future minimum lease payments: For the years ending December 31, Minimum Lease Payments Remainder of 2023 $ 417,885 2024 754,076 2025 573,133 2026 404,751 2027 346,812 Thereafter 335,903 Total minimum lease payments 2,832,560 Less: Amount representing interest (391,991) Net lease obligations $ 2,440,569 From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no ongoing legal proceedings for which management believes the ultimate outcome would have a material adverse effect on the Company’s results of operations and cash flows. On August 11, 2023, the Company entered into a settlement agreement (the “Settlement Agreement”) with Crest Ventures, LLC (“Crest”) and Andrew Telsey to settle all claims in the litigation filed in the District Court for Arapahoe County, Colorado, Case No. 2021CV31301. Pursuant to the Settlement Agreement, the Company has agreed to pay $1,500,000 to Crest by September 10, 2023. In connection with this settlement, the Company recorded a loss in the second quarter of 2023 of $1,500,000 in accordance with GAAP related to loss contingencies. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES | RISKS AND UNCERTAINTIES Concentration Risk The table below shows customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented: Customers exceeding 10% of revenue Three Months Ended Six Months Ended Company Customer Number 2023 2022 2023 2022 C000001462 * * * 16 % C000001140 * 25 % * 20 % C000002187 26 % * 26 % * C000000819 * 14 % * * C000002393 14 % * * * C000002463 * * 12 % * *Amounts less than 10% Customers exceeding 10% of accounts receivable Company Customer Number June 30, December 31, C000002151 * 10 % C000002187 37 % 24 % *Amounts less than 10% The table below shows vendors who account for 10% or more of the Company’s total purchases and 10% or more of the Company’s accounts payable for the periods presented: Vendors exceeding 10% of purchases Three Months Ended Six Months Ended Company Vendor Number 2023 2022 2023 2022 V000001029 * 23 % * 25 % V000000453 * * * 12 % V000002275 * * 11 % * V000001280 * 19 % * * *Amounts less than 10% Vendors exceeding 10% of accounts payable Company Vendor Number June 30, December 31, V000001910 * 11 % V000002275 21 % * *Amounts less than 10% Foreign Exchange Risk Although our revenues and expenses are expected to be predominantly denominated in United States dollars, we may be exposed to currency exchange fluctuations. Recent events in the global financial markets have been coupled with increased volatility in the currency markets. Fluctuations in the exchange rate between the U.S. dollar, the Canadian dollar, the Euro, and the currency of other regions in which we may operate may have a material adverse effect on our business, financial condition and operating results. We may, in the future, establish a program to hedge a portion of our foreign currency exposure with the objective of minimizing the impact of adverse foreign currency exchange movements. However, even if we develop a hedging program, it may not mitigate currency risks. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Based on the vesting schedule of the grants of restricted stock units (“RSU” or “RSUs”) and options, stock-based compensation expense totaled $622,547 and $882,000 for the three months ended June 30, 2023, and 2022, respectively, and totaled $1,102,188 and $1,764,000 for the six months ended June 30, 2023, and 2022, respectively. The Company has adopted the 2021 Omnibus Stock Incentive Plan, as amended (the “Omnibus Incentive Plan”), which provides for the issuance of incentive stock options, grants of RSUs, and stock-based awards to employees, directors, and consultants of the Company to reward and attract employees and compensate the Company’s Board of Directors (the “Board”) and vendors when applicable. The Omnibus Incentive Plan is administered by the Company's Board. Grants of RSUs under the Omnibus Incentive Plan are valued at the price of the stock on the date of grant. The fair value of the options is calculated using the Black-Scholes pricing model based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the options, risk-free interest rate and expected volatility of the price of the underlying common stock of 100%. There is a moderate degree of subjectivity involved when estimating the value of stock options with the Black-Scholes option pricing model as the assumptions used are moderately judgmental. Grants of RSUs and stock options are sometimes offered as part of an employment offer package, to ensure continuity of service or as a reward for performance. Grants of RSUs and stock options typically require a 1-to-3-year period of continued employment or service performance before the grant of RSUs or stock options vest. No cash flow effects are anticipated for grants of RSUs or stock options. The following schedule shows grants of RSU activity for the six months ended June 30, 2023: Number of Grants of RSUs unvested as of December 31, 2022 494,859 Grants of RSUs 524,829 Forfeiture/cancelled (6,733) Grants of RSUs vested and issued (189,592) Grants of RSUs unvested as of June 30, 2023 823,363 As of June 30, 2023, the Company has $2.0 million in unrecognized stock-based compensation expense related to these grants of RSUs. The following schedule shows stock option activity for the six months ended June 30, 2023. Number of Shares Weighted Weighted Stock options outstanding as of December 31, 2022 669,388 7.9 $ 6.77 Issued — 0 $ — Forfeited (2,803) 0 $ 9.39 Exercised — 0 $ — Stock options outstanding as of June 30, 2023 666,585 7.4 $ 6.77 Stock options exercisable as of June 30, 2023 618,651 6.3 $ 6.30 As of June 30, 2023, the Company has $0.1 million in unrecognized stock-based compensation expense related to these stock options. The aggregate intrinsic value of the options outstanding and exercisable as of June 30, 2023, is $0. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY On May 24, 2021, the Board authorized a stock repurchase program to purchase up to $5.0 million of the currently outstanding shares of the Company’s common stock, over a period of 12 months through open market purchases, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. On January 18, 2022, the Board authorized a $2.0 million increase to the stock repurchase program, to a total of $7.0 million. On February 2, 2022, the Board authorized an additional $1.5 million increase to the stock repurchase, to a total of $8.5 million. On September 12, 2022, the Board authorized an additional $2.0 million increase to the stock repurchase, to a total of $10.5 million. In total, the Company has repurchased 1,099,833 shares of common stock at an average price per share of $8.25 for a total of $9.1 million, under this program. During the six months ended June 30, 2023, the Company did not repurchase shares of common stock. During the six months ended June 30, 2022, the Company repurchased 419,088 shares of common stock at an average price per share of $9.02, for a total price of $3.8 million under this program. As of June 30, 2023, we have $1.4 million remaining under the repurchase program. In February 2021, the Company repurchased 350,000 shares of common stock with an average price per share of $8.50, for a total of $3.0 million, outside of any stock repurchase or publicly announced program. The following table shows warrant activity for the six months ended June 30, 2023. Number of Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Exercised — $ — Expired (1,000) $ 6.00 Warrants outstanding as of June 30, 2023 310,499 $ 12.34 Warrants exercisable as of June 30, 2023 310,499 $ 12.34 The weighted-average life of the warrants is 2.2 years. The aggregate intrinsic value of the warrants outstanding and exercisable as of June 30, 2023, is $0. |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
WARRANTS | STOCKHOLDERS’ EQUITY On May 24, 2021, the Board authorized a stock repurchase program to purchase up to $5.0 million of the currently outstanding shares of the Company’s common stock, over a period of 12 months through open market purchases, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. On January 18, 2022, the Board authorized a $2.0 million increase to the stock repurchase program, to a total of $7.0 million. On February 2, 2022, the Board authorized an additional $1.5 million increase to the stock repurchase, to a total of $8.5 million. On September 12, 2022, the Board authorized an additional $2.0 million increase to the stock repurchase, to a total of $10.5 million. In total, the Company has repurchased 1,099,833 shares of common stock at an average price per share of $8.25 for a total of $9.1 million, under this program. During the six months ended June 30, 2023, the Company did not repurchase shares of common stock. During the six months ended June 30, 2022, the Company repurchased 419,088 shares of common stock at an average price per share of $9.02, for a total price of $3.8 million under this program. As of June 30, 2023, we have $1.4 million remaining under the repurchase program. In February 2021, the Company repurchased 350,000 shares of common stock with an average price per share of $8.50, for a total of $3.0 million, outside of any stock repurchase or publicly announced program. The following table shows warrant activity for the six months ended June 30, 2023. Number of Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Exercised — $ — Expired (1,000) $ 6.00 Warrants outstanding as of June 30, 2023 310,499 $ 12.34 Warrants exercisable as of June 30, 2023 310,499 $ 12.34 The weighted-average life of the warrants is 2.2 years. The aggregate intrinsic value of the warrants outstanding and exercisable as of June 30, 2023, is $0. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company has experienced cumulative losses for both book and tax purposes since inception. The potential future recovery of any tax assets that the Company may be entitled to due to these accumulated losses is uncertain and any tax assets that the Company may be entitled to have been fully reserved based on management’s current estimates. Management intends to continue maintaining a full valuation allowance on the Company’s deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The deferred income tax benefit for the three and six months ended June 30, 2023, and 2022 relates to the reduction in the deferred tax liability associated with the amortization of the intangible assets from the acquisitions of the 2WR Entities and Emerald. The Company records state income taxes paid during the year within the Other income (expense) financial statement line item. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn August 11, 2023, the Company entered into the Settlement Agreement with Crest and Andrew Telsey to settle all claims in the litigation filed in the District Court for Arapahoe County, Colorado, Case No. 2021CV31301. Pursuant to the Settlement Agreement, the Company has agreed to pay $1,500,000 to Crest by September 10, 2023. In connection with this settlement, the Company recorded a loss in the second quarter of 2023 of $1,500,000 in accordance with GAAP related to loss contingencies. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Unaudited Condensed Consolidated Financial Statements | Unaudited Condensed Consolidated Financial StatementsThe Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for condensed financial reporting. The condensed consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of stockholders’ equity and condensed consolidated statements of cash flows for the periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with regulations of the SEC. |
Use of Estimates | Use of Estimates In preparing condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under construction design-build contracts; estimated useful lives and potential impairment of long-lived assets, intangibles and goodwill; inventory write-offs; allowance for deferred tax assets; and allowance for bad debt. |
Reclassification and Balance Sheet Classifications | Reclassification Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Balance Sheet Classifications The Company includes in current assets and liabilities the following amounts that are in connection with construction contracts that may extend beyond one year: contract assets and contract liabilities (including retainage invoiced to customers contingent upon anything other than the passage of time), capitalized costs to fulfill contracts, retainage payable to sub-contractors and accrued losses on uncompleted contracts. A one-year time period is used to classify all other current assets and liabilities when not otherwise prescribed by the applicable accounting principles. |
Contract Assets and Liabilities | Contract Assets and LiabilitiesThe timing between when the Company collects cash from its construction design-build customers can create a contract asset or contract liability. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards As of June 30, 2023, and through the filing of this report, no Accounting Standards Updates have been issued and not yet adopted that are applicable to the Company and that would have a material effect on the Company’s unaudited condensed consolidated financial statements and related disclosures. |
ORGANIZATION, ACQUISITIONS, A_2
ORGANIZATION, ACQUISITIONS, AND LIQUIDITY (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation, Business Combination, And Presentation Of Financial Statements [Abstract] | |
Schedule of Purchase Price Allocation | The Company accounted for the acquisition as follows: Purchase price $ 6,072,366 Allocation of purchase price: Accounts receivable, net $ 1,134,909 Right of use asset $ 1,197,310 Property and equipment $ 229,058 Goodwill $ 3,444,926 Intangible assets $ 1,276,000 Accrued expenses $ (12,527) Right of use liability $ (1,197,310) The Company accounted for the acquisition as follows: Purchase Price $ 7,671,557 Allocation of Purchase Price: Cash $ 622,641 Accounts receivable, net $ 2,666,811 Contract receivables $ 494,456 Prepayments and other assets $ 38,086 Property and equipment $ 403,008 Right of use asset $ 82,408 Goodwill $ 4,135,006 Intangible assets $ 3,659,000 Accrued expenses $ (2,361,302) Contract liabilities $ (1,071,399) Right of use liability $ (82,408) Deferred tax liability $ (914,750) |
Schedule of Pro Forma Information | The following pro-forma amounts reflect the Company’s results as if the acquisition of Emerald had occurred on January 1, 2022. These pro-forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of the acquisition to reflect the additional amortization of intangibles. Three Months Ended Six Months Ended 2023 2022 2023 2022 Revenues: Equipment systems $ 4,619,887 $ 10,077,572 $ 7,531,711 $ 27,144,916 Services 3,034,574 3,027,556 6,505,227 6,666,062 Construction design-build 11,048,997 5,353,905 21,254,949 14,598,769 Other 134,086 259,054 311,043 606,072 Total revenues and other income 18,837,544 18,718,087 35,602,930 49,015,819 Net loss $ (5,443,333) $ (1,556,748) $ (10,587,982) $ (1,456,161) |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue, By Source | The table below presents the revenue by source for the three and six months ended June 30, 2023, and 2022: CEA Commercial Total For the three months ended For the three months ended For the three months ended 2023 2022 2023 2022 2023 2022 Equipment systems $ 4,619,887 $ 10,077,572 $ — $ — $ 4,619,887 $ 10,077,572 Services 1,255,978 1,931,465 1,778,596 1,096,091 3,034,574 3,027,556 Construction design-build 414,717 802,874 10,634,280 2,114,447 11,048,997 2,917,321 Other 134,086 259,054 — — 134,086 259,054 Total revenues and other income $ 6,424,668 $ 13,070,965 $ 12,412,876 $ 3,210,538 $ 18,837,544 $ 16,281,503 Relative percentage 34 % 80 % 66 % 20 % 100 % 100 % CEA Commercial Total For the six months ended For the six months ended For the six months ended 2023 2022 2023 2022 2023 2022 Equipment systems $ 7,531,711 $ 27,144,916 $ — $ — $ 7,531,711 $ 27,144,916 Services 2,813,153 4,062,139 3,692,074 2,603,923 6,505,227 6,666,062 Construction design-build 786,560 802,874 20,468,389 2,114,447 21,254,949 2,917,321 Other 311,043 606,072 — — 311,043 606,072 Total revenues and other income $ 11,442,467 $ 32,616,001 $ 24,160,463 $ 4,718,370 $ 35,602,930 $ 37,334,371 Relative percentage 32 % 87 % 68 % 13 % 100 % 100 % |
Schedule of Contract Assets and Contract Liabilities from Contracts with Customers | The following table provides information about contract assets and contract liabilities from contracts with customers: June 30, December 31, 2022 Contract assets: Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage $ 6,702,100 $ 2,874,141 Retainage included in contract assets due to being conditional on something other than solely passage of time 246,317 130,141 Total contract assets $ 6,948,417 $ 3,004,282 June 30, December 31, 2022 Contract liabilities: Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability) $ 3,312,396 $ 1,294,452 Retainage included in contract liabilities due to being conditional on something other than solely passage of time 32,436 — Total contract liabilities $ 3,344,832 $ 1,294,452 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions on Financial Statements | The table below presents the revenues for Cloud 9 and Potco for the three and six months ended June 30, 2023, and 2022: Three Months Ended Six Months Ended 2023 2022 2023 2022 Revenues - Cloud 9 $ 462 $ 5,606 $ 462 $ 11,813 Revenues - Potco 398,712 — 935,164 11,400 Total revenues from related party transactions $ 399,174 $ 5,606 $ 935,626 $ 23,213 The table below presents the accounts receivable for Cloud 9 and Potco for as of June 30, 2023, and December 31, 2022: June 30, December 31, 2022 Accounts receivable - Cloud 9 $ — $ 3,920 Accounts receivable - Potco 188,512 20,174 Total accounts receivable due from related party transactions $ 188,512 $ 24,094 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Assets | The prepaid expenses and other assets balances are summarized as follows: June 30, December 31, 2022 Vendor prepayments $ 2,314,800 $ 2,459,389 Prepaid services and fees 885,416 1,346,430 Inventories 300,520 320,372 Other assets 39,818 38,769 Total Prepaid expenses and other assets $ 3,540,554 $ 4,164,960 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment Balances | Property and equipment balances are summarized as follows: June 30, December 31, 2022 Computers and technology equipment $ 264,197 $ 232,405 Furniture and fixtures 321,859 234,389 Leasehold improvements 228,760 306,719 Vehicles 452,822 456,797 Software 874,153 685,580 Other equipment 58,526 58,525 Accumulated depreciation (867,409) (667,269) Total Property and equipment, net $ 1,332,908 $ 1,307,146 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Components of Investments | The components of investments as of June 30, 2023, and December 31, 2022, are summarized as follows: Edyza XS Financial Total Balances as of December 31, 2022 $ — $ 2,559,307 $ 2,559,307 Paid-in-kind interest — 25,657 25,657 Balances as of June 30, 2023 $ — $ 2,584,964 $ 2,584,964 |
GOODWILL & INTANGIBLE ASSETS (T
GOODWILL & INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets as of June 30, 2023, and December 31, 2022, consisted of the following: As of June 30, 2023 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (703,885) $ 3,508,215 Trademarks and trade names 1,778,000 (485,617) 1,292,383 Backlog and other 768,113 (720,499) 47,614 Total finite-lived intangible assets: 6,758,213 (1,910,001) 4,848,212 Indefinite-lived intangible assets: Trade name 28,291 — 28,291 Total indefinite-lived intangible assets 28,291 — 28,291 Total intangible assets, net $ 6,786,504 $ (1,910,001) $ 4,876,503 As of December 31, 2022 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (401,997) $ 3,810,103 Trademarks and trade names 1,778,000 (307,817) 1,470,183 Backlog and other 768,113 (626,003) 142,110 Total finite-lived intangible assets: 6,758,213 (1,335,817) 5,422,396 Indefinite-lived intangible assets: Trade name 28,291 — 28,291 Total indefinite-lived intangible assets 28,291 — 28,291 Total intangible assets, net $ 6,786,504 $ (1,335,817) $ 5,450,687 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets as of June 30, 2023, and December 31, 2022, consisted of the following: As of June 30, 2023 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (703,885) $ 3,508,215 Trademarks and trade names 1,778,000 (485,617) 1,292,383 Backlog and other 768,113 (720,499) 47,614 Total finite-lived intangible assets: 6,758,213 (1,910,001) 4,848,212 Indefinite-lived intangible assets: Trade name 28,291 — 28,291 Total indefinite-lived intangible assets 28,291 — 28,291 Total intangible assets, net $ 6,786,504 $ (1,910,001) $ 4,876,503 As of December 31, 2022 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (401,997) $ 3,810,103 Trademarks and trade names 1,778,000 (307,817) 1,470,183 Backlog and other 768,113 (626,003) 142,110 Total finite-lived intangible assets: 6,758,213 (1,335,817) 5,422,396 Indefinite-lived intangible assets: Trade name 28,291 — 28,291 Total indefinite-lived intangible assets 28,291 — 28,291 Total intangible assets, net $ 6,786,504 $ (1,335,817) $ 5,450,687 |
Schedule of Future Amortization Expenses of Intangible Assets | The estimated future amortization expense for intangible assets subject to amortization as of June 30, 2023, is summarized below: For the years ending December 31, Estimated Future Remainder of 2023 $ 491,841 2024 959,788 2025 959,788 2026 918,205 2027 693,555 Thereafter 825,035 Total estimated future amortization expense $ 4,848,212 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses are summarized as follows: June 30, December 31, Accrued operating expenses $ 527,690 $ 515,858 Loss on settlement 1,500,000 — Accrued wages and related expenses 1,134,304 639,614 Accrued 401(k) 66,004 262,599 Accrued sales tax payable 1,955,453 1,778,890 Total accrued expenses $ 5,183,451 $ 3,196,961 |
OPERATING LEASE LIABILITIES A_2
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Summary of Operating Lease Liabilities | The following is a summary of operating lease liabilities: June 30, December 31, Operating lease liabilities related to right of use assets $ 2,440,569 $ 2,645,598 Less current operating lease liabilities (617,815) (600,816) Non-current operating lease liabilities $ 1,822,754 $ 2,044,782 |
Schedule of Future Minimum Rental Payments for Operating Leases | The following is a schedule showing total future minimum lease payments: For the years ending December 31, Minimum Lease Payments Remainder of 2023 $ 417,885 2024 754,076 2025 573,133 2026 404,751 2027 346,812 Thereafter 335,903 Total minimum lease payments 2,832,560 Less: Amount representing interest (391,991) Net lease obligations $ 2,440,569 |
RISKS AND UNCERTAINTIES (Tables
RISKS AND UNCERTAINTIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risks | The table below shows customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented: Customers exceeding 10% of revenue Three Months Ended Six Months Ended Company Customer Number 2023 2022 2023 2022 C000001462 * * * 16 % C000001140 * 25 % * 20 % C000002187 26 % * 26 % * C000000819 * 14 % * * C000002393 14 % * * * C000002463 * * 12 % * *Amounts less than 10% Customers exceeding 10% of accounts receivable Company Customer Number June 30, December 31, C000002151 * 10 % C000002187 37 % 24 % *Amounts less than 10% The table below shows vendors who account for 10% or more of the Company’s total purchases and 10% or more of the Company’s accounts payable for the periods presented: Vendors exceeding 10% of purchases Three Months Ended Six Months Ended Company Vendor Number 2023 2022 2023 2022 V000001029 * 23 % * 25 % V000000453 * * * 12 % V000002275 * * 11 % * V000001280 * 19 % * * *Amounts less than 10% Vendors exceeding 10% of accounts payable Company Vendor Number June 30, December 31, V000001910 * 11 % V000002275 21 % * *Amounts less than 10% |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of RSU Grants Activity | The following schedule shows grants of RSU activity for the six months ended June 30, 2023: Number of Grants of RSUs unvested as of December 31, 2022 494,859 Grants of RSUs 524,829 Forfeiture/cancelled (6,733) Grants of RSUs vested and issued (189,592) Grants of RSUs unvested as of June 30, 2023 823,363 |
Schedule of Stock Option Activity | The following schedule shows stock option activity for the six months ended June 30, 2023. Number of Shares Weighted Weighted Stock options outstanding as of December 31, 2022 669,388 7.9 $ 6.77 Issued — 0 $ — Forfeited (2,803) 0 $ 9.39 Exercised — 0 $ — Stock options outstanding as of June 30, 2023 666,585 7.4 $ 6.77 Stock options exercisable as of June 30, 2023 618,651 6.3 $ 6.30 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Warrant Activity | The following table shows warrant activity for the six months ended June 30, 2023. Number of Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Exercised — $ — Expired (1,000) $ 6.00 Warrants outstanding as of June 30, 2023 310,499 $ 12.34 Warrants exercisable as of June 30, 2023 310,499 $ 12.34 |
ORGANIZATION, ACQUISITIONS, A_3
ORGANIZATION, ACQUISITIONS, AND LIQUIDITY - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||||
Oct. 31, 2022 USD ($) qtr | Apr. 29, 2022 USD ($) trading_day | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Promissory note | $ 1,941,188 | $ 1,941,188 | $ 3,832,682 | |||||
Acquisition, additional contingent consideration expense | 0 | $ 0 | 160,232 | $ 0 | ||||
DVO | ||||||||
Business Acquisition [Line Items] | ||||||||
Business combination consideration transferred | $ 6,100,000 | |||||||
Acquisition, cash payment | 1,200,000 | |||||||
Acquisition, liabilities incurred, promissory note | 3,800,000 | |||||||
Acquisition, common stock consideration | $ 1,100,000 | |||||||
Acquisition, liabilities incurred, promissory note, number of quarters to be paid | qtr | 4 | |||||||
Acquisition, contingent consideration, range of outcome (up to) | $ 1,100,000 | |||||||
Purchase price | $ 6,072,366 | |||||||
Emerald | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition, cash payment | $ 3,400,000 | |||||||
Acquisition, common stock consideration | 2,500,000 | |||||||
Acquisition, contingent consideration, range of outcome (up to) | 2,000,000 | 1,200,000 | $ 2,200,000 | $ 1,200,000 | ||||
Purchase price | 7,671,557 | |||||||
Acquisition, estimated contingent consideration, liability | $ 1,800,000 | |||||||
Acquisition, contingent consideration, range of outcome, performance period following the closing | 2 years | |||||||
Acquisition, additional contingent consideration expense | $ 160,232 | |||||||
Acquisition, contingent consideration, liability, earnout fair value criteria, number of trading days prior to end of applicable quarter | trading_day | 10 | |||||||
Acquisition, offset indemnified loss | $ 1,000,000 | |||||||
Acquisition, contingent consideration, liability, profit margin threshold, if circumstances met | 7% | 7% |
ORGANIZATION, ACQUISITIONS, A_4
ORGANIZATION, ACQUISITIONS, AND LIQUIDITY - Schedule of Purchase Price Allocation (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Oct. 31, 2022 | Apr. 29, 2022 |
Allocation of purchase price: | ||||
Goodwill | $ 15,572,050 | $ 15,572,050 | ||
DVO | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 6,072,366 | |||
Allocation of purchase price: | ||||
Accounts receivable, net | 1,134,909 | |||
Right of use asset | 1,197,310 | |||
Property and equipment | 229,058 | |||
Goodwill | 3,444,926 | |||
Intangible assets | 1,276,000 | |||
Accrued expenses | (12,527) | |||
Right of use liability | $ (1,197,310) | |||
Emerald | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 7,671,557 | |||
Allocation of purchase price: | ||||
Cash | 622,641 | |||
Accounts receivable, net | 2,666,811 | |||
Contract receivables | 494,456 | |||
Prepayments and other assets | 38,086 | |||
Right of use asset | 82,408 | |||
Property and equipment | 403,008 | |||
Goodwill | 4,135,006 | |||
Intangible assets | 3,659,000 | |||
Accrued expenses | (2,361,302) | |||
Contract liabilities | (1,071,399) | |||
Right of use liability | (82,408) | |||
Deferred tax liability | $ (914,750) |
ORGANIZATION, ACQUISITIONS, A_5
ORGANIZATION, ACQUISITIONS, AND LIQUIDITY - Schedule of ProForma Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | $ 18,837,544 | $ 16,281,503 | $ 35,602,930 | $ 37,334,371 |
Equipment systems | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 4,619,887 | 10,077,572 | 7,531,711 | 27,144,916 |
Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 3,034,574 | 3,027,556 | 6,505,227 | 6,666,062 |
Construction design-build | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 11,048,997 | 2,917,321 | 21,254,949 | 2,917,321 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 134,086 | 259,054 | 311,043 | 606,072 |
Emerald | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 18,837,544 | 18,718,087 | 35,602,930 | 49,015,819 |
Net loss | (5,443,333) | (1,556,748) | (10,587,982) | (1,456,161) |
Emerald | Equipment systems | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 4,619,887 | 10,077,572 | 7,531,711 | 27,144,916 |
Emerald | Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 3,034,574 | 3,027,556 | 6,505,227 | 6,666,062 |
Emerald | Construction design-build | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | 11,048,997 | 5,353,905 | 21,254,949 | 14,598,769 |
Emerald | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total revenues and other income | $ 134,086 | $ 259,054 | $ 311,043 | $ 606,072 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | $ 18,837,544 | $ 16,281,503 | $ 35,602,930 | $ 37,334,371 |
Relative percentage | 100% | 100% | 100% | 100% |
CEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | $ 6,424,668 | $ 13,070,965 | $ 11,442,467 | $ 32,616,001 |
Relative percentage | 34% | 80% | 32% | 87% |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | $ 12,412,876 | $ 3,210,538 | $ 24,160,463 | $ 4,718,370 |
Relative percentage | 66% | 20% | 68% | 13% |
Equipment systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | $ 4,619,887 | $ 10,077,572 | $ 7,531,711 | $ 27,144,916 |
Equipment systems | CEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 4,619,887 | 10,077,572 | 7,531,711 | 27,144,916 |
Equipment systems | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 0 | 0 | 0 | 0 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 3,034,574 | 3,027,556 | 6,505,227 | 6,666,062 |
Services | CEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 1,255,978 | 1,931,465 | 2,813,153 | 4,062,139 |
Services | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 1,778,596 | 1,096,091 | 3,692,074 | 2,603,923 |
Construction design-build | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 11,048,997 | 2,917,321 | 21,254,949 | 2,917,321 |
Construction design-build | CEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 414,717 | 802,874 | 786,560 | 802,874 |
Construction design-build | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 10,634,280 | 2,114,447 | 20,468,389 | 2,114,447 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 134,086 | 259,054 | 311,043 | 606,072 |
Other | CEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | 134,086 | 259,054 | 311,043 | 606,072 |
Other | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues and other income | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Contract Assets and Liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Contract assets: | ||
Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage | $ 6,702,100 | $ 2,874,141 |
Retainage included in contract assets due to being conditional on something other than solely passage of time | 246,317 | 130,141 |
Total contract assets | 6,948,417 | 3,004,282 |
Contract liabilities: | ||
Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability) | 3,312,396 | 1,294,452 |
Retainage included in contract liabilities due to being conditional on something other than solely passage of time | 32,436 | 0 |
Total contract liabilities | $ 3,344,832 | $ 1,294,452 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) | Mar. 27, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | |||
Trade accounts receivable | $ 14,242,229 | $ 12,466,180 | |
Non-trade accounts receivable | $ 1,232,917 | 2,914,112 | |
Non-trade accounts receivable, miscellaneous | 514,112 | ||
Non-trade accounts receivable, legal settlement | $ 2,400,000 | ||
Cash payments received, settled litigation | $ 2,400,000 |
RELATED PARTY TRANSACTIONS - Sc
RELATED PARTY TRANSACTIONS - Schedule of Related Party Revenues (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Total revenues from related party transactions | $ 18,837,544 | $ 16,281,503 | $ 35,602,930 | $ 37,334,371 |
Cloud 9 Support and PotCo LLC | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from related party transactions | 399,174 | 5,606 | 935,626 | 23,213 |
Revenues - Cloud 9 | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from related party transactions | 462 | 5,606 | 462 | 11,813 |
Revenues - Potco | ||||
Related Party Transaction [Line Items] | ||||
Total revenues from related party transactions | $ 398,712 | $ 0 | $ 935,164 | $ 11,400 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Schedule of Related Party Accounts Receivable (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | $ 15,475,146 | $ 15,380,292 |
Accounts receivable - Cloud 9 and Potco | ||
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | 188,512 | 24,094 |
Accounts receivable - Cloud 9 | ||
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | 0 | 3,920 |
Accounts receivable - Potco | ||
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | $ 188,512 | $ 20,174 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS - Schedule of Prepaid Expenses and Other Assets (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Vendor prepayments | $ 2,314,800 | $ 2,459,389 |
Prepaid services and fees | 885,416 | 1,346,430 |
Inventories | 300,520 | 320,372 |
Other assets | 39,818 | 38,769 |
Total Prepaid expenses and other assets | $ 3,540,554 | $ 4,164,960 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation | $ (867,409) | $ (667,269) |
Total Property and equipment, net | 1,332,908 | 1,307,146 |
Computers and technology equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 264,197 | 232,405 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 321,859 | 234,389 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 228,760 | 306,719 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 452,822 | 456,797 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 874,153 | 685,580 |
Other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 58,526 | $ 58,525 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 159,995 | $ 65,335 | $ 254,048 | $ 121,113 |
INVESTMENTS - Schedule of Compo
INVESTMENTS - Schedule of Components of Investments (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Equity Securities, FV-NI, Cost [Roll Forward] | |
Balances as of December 31, 2022 | $ 2,559,307 |
Paid-in-kind interest | 25,657 |
Balances as of June 30, 2023 | 2,584,964 |
Edyza | |
Equity Securities, FV-NI, Cost [Roll Forward] | |
Balances as of December 31, 2022 | 0 |
Paid-in-kind interest | 0 |
Balances as of June 30, 2023 | 0 |
XS Financial | |
Equity Securities, FV-NI, Cost [Roll Forward] | |
Balances as of December 31, 2022 | 2,559,307 |
Paid-in-kind interest | 25,657 |
Balances as of June 30, 2023 | $ 2,584,964 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) | 3 Months Ended | ||||
Oct. 30, 2021 USD ($) shares | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Oct. 30, 2021 $ / shares | |
Debt and Equity Securities, FV-NI [Line Items] | |||||
Investments | $ 2,584,964 | $ 2,559,307 | |||
Class of warrant or right, outstanding (in shares) | shares | 310,499 | 311,499 | |||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 12.34 | $ 12.32 | |||
XS Financial | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Class of warrant or right, outstanding (in shares) | shares | 1,250,000 | ||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 0.45 | ||||
XS Financial | Prior to Any NASDAQ Listing | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Debt, interest rate | 9.50% | ||||
Debt, cash interest, interest rate | 7.50% | ||||
Debt instrument, interest paid in kind, interest rate | 2% | ||||
XS Financial | Post Any Listing | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Debt, interest rate | 8% | ||||
XS Financial | Convertible Notes Payable | Convertible Debt | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Debt instrument, face amount | $ 43,500,000 | ||||
Option to extend maturity date, period | 1 year | ||||
Edyza | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Impairment loss | $ 1,700,000 | ||||
Investments | $ 0 | $ 0 | |||
XS Financial | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Investments | $ 2,500,000 | $ 2,584,964 | $ 2,559,307 | ||
Edyza | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Ownership, percent | 19.50% |
GOODWILL & INTANGIBLE ASSETS -
GOODWILL & INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 15,572,050 | $ 15,572,050 | $ 15,572,050 | ||
Goodwill, impairment | 0 | $ 0 | |||
Intangible asset amortization | $ 264,165 | $ 306,225 | $ 574,184 | $ 468,725 |
GOODWILL & INTANGIBLE ASSETS _2
GOODWILL & INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 6,758,213 | $ 6,758,213 |
Accumulated Amortization | (1,910,001) | (1,335,817) |
Net Book Value | 4,848,212 | 5,422,396 |
Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | 28,291 | 28,291 |
Cost | 6,786,504 | 6,786,504 |
Net Book Value | 4,876,503 | 5,450,687 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | 28,291 | 28,291 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,212,100 | 4,212,100 |
Accumulated Amortization | (703,885) | (401,997) |
Net Book Value | 3,508,215 | 3,810,103 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,778,000 | 1,778,000 |
Accumulated Amortization | (485,617) | (307,817) |
Net Book Value | 1,292,383 | 1,470,183 |
Backlog and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 768,113 | 768,113 |
Accumulated Amortization | (720,499) | (626,003) |
Net Book Value | $ 47,614 | $ 142,110 |
GOODWILL & INTANGIBLE ASSETS _3
GOODWILL & INTANGIBLE ASSETS - Schedule of Future Amortization Expenses of Intangible Assets (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 491,841 | |
2024 | 959,788 | |
2025 | 959,788 | |
2026 | 918,205 | |
2027 | 693,555 | |
Thereafter | 825,035 | |
Net Book Value | $ 4,848,212 | $ 5,422,396 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued operating expenses | $ 527,690 | $ 515,858 |
Loss on settlement | 1,500,000 | 0 |
Accrued wages and related expenses | 1,134,304 | 639,614 |
Accrued 401(k) | 66,004 | 262,599 |
Accrued sales tax payable | 1,955,453 | 1,778,890 |
Total accrued expenses | $ 5,183,451 | $ 3,196,961 |
OPERATING LEASE LIABILITIES A_3
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Aug. 11, 2023 USD ($) | Jun. 30, 2023 USD ($) lease | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) lease | Jun. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Number of operating leases | lease | 8 | 8 | |||
Number of finance leases | lease | 1 | 1 | |||
Operating lease, interest rate | 8% | 8% | |||
Finance lease, interest rate | 8% | 8% | |||
Loss on settlement | $ | $ 1,500,000 | $ 0 | $ 1,500,000 | $ 0 | |
Crest Ventures, LLC Litigation | Settled Litigation | |||||
Lessee, Lease, Description [Line Items] | |||||
Loss on settlement | $ | $ 1,500,000 | ||||
Crest Ventures, LLC Litigation | Settled Litigation | Subsequent Events | |||||
Lessee, Lease, Description [Line Items] | |||||
Loss contingency, damages awarded | $ | $ 1,500,000 | ||||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Finance lease, term of contract (minimum less than a year) | 1 year | 1 year | |||
Operating lease, term of contract (minimum less than a year) | 1 year | 1 year | |||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Finance lease, term of contract (minimum less than a year) | 6 years | 6 years | |||
Operating lease, term of contract (minimum less than a year) | 6 years | 6 years | |||
2WR, Emerald, and DVO Acquisitions | |||||
Lessee, Lease, Description [Line Items] | |||||
Number of operating leases acquired via business combinations | lease | 5 | 5 |
OPERATING LEASE LIABILITIES A_4
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease liabilities related to right of use assets | $ 2,440,569 | $ 2,645,598 |
Less current operating lease liabilities | (617,815) | (600,816) |
Non-current operating lease liabilities | $ 1,822,754 | $ 2,044,782 |
OPERATING LEASE LIABILITIES A_5
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Remainder of 2023 | $ 417,885 | |
2024 | 754,076 | |
2025 | 573,133 | |
2026 | 404,751 | |
2027 | 346,812 | |
Thereafter | 335,903 | |
Total minimum lease payments | 2,832,560 | |
Less: Amount representing interest | (391,991) | |
Net lease obligations | $ 2,440,569 | $ 2,645,598 |
RISKS AND UNCERTAINTIES - Sched
RISKS AND UNCERTAINTIES - Schedule of Concentration Risk (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Purchases | Supplier Concentration Risk | V000001029 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 23% | 25% | |||
Purchases | Supplier Concentration Risk | V000000453 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12% | ||||
Purchases | Supplier Concentration Risk | V000002275 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11% | ||||
Purchases | Supplier Concentration Risk | V000001280 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 19% | ||||
Accounts Payable | Supplier Concentration Risk | V000002275 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 21% | ||||
Accounts Payable | Supplier Concentration Risk | V000001910 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11% | ||||
C000001462 | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 16% | ||||
C000001140 | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 25% | 20% | |||
C000002187 | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 26% | 26% | |||
C000002187 | Accounts Receivable | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 37% | 24% | |||
C000000819 | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 14% | ||||
C000002393 | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 14% | ||||
C000002463 | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12% | ||||
C000002151 | Accounts Receivable | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10% |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 622,547 | $ 882,000 | $ 1,102,188 | $ 1,764,000 |
Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 622,547 | $ 882,000 | $ 1,102,188 | $ 1,764,000 |
Fair value assumptions, expected volatility rate | 100% | |||
Unrecognized compensation expense, options | 100,000 | $ 100,000 | ||
Stock options outstanding, aggregate intrinsic value | 0 | 0 | ||
Stock options exercisable, aggregate intrinsic value | 0 | 0 | ||
Restricted Stock Units (RSUs) | Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 2,000,000 | $ 2,000,000 | ||
Restricted Stock Units (RSUs) | Minimum | Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting employment period (in years) | 1 year | |||
Restricted Stock Units (RSUs) | Maximum | Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting employment period (in years) | 3 years | |||
Stock Options | Minimum | Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting employment period (in years) | 1 year | |||
Stock Options | Maximum | Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting employment period (in years) | 3 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of RSU Grant Activity (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2023 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Grants of RSUs unvested, beginning balance (in shares) | 494,859 |
Grants of RSUs (in shares) | 524,829 |
Forfeiture/cancelled (in shares) | (6,733) |
Grants of RSUs vested and issued (in shares) | (189,592) |
Grants of RSUs unvested, ending balance (in shares) | 823,363 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Stock Option Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Stock options outstanding, beginning balance (in shares) | 669,388 | |
Issued (in shares) | 0 | |
Forfeited (in shares) | (2,803) | |
Exercised (in shares) | 0 | |
Stock options outstanding, ending balance (in shares) | 666,585 | 669,388 |
Stock options exercisable (in shares) | 618,651 | |
Weighted Average Remaining Life (Years) | ||
Stock options outstanding (in years) | 7 years 4 months 24 days | 7 years 10 months 24 days |
Issued (in years) | 0 years | |
Forfeited (in years) | 0 years | |
Exercised (in years) | 0 years | |
Stock options exercisable, end of period (in years) | 6 years 3 months 18 days | |
Weighted Average Exercise Price | ||
Stock options outstanding, beginning balance (in dollars per share) | $ 6.77 | |
Issued (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 9.39 | |
Exercised (in dollars per share) | 0 | |
Stock options outstanding, ending balance (in dollars per share) | 6.77 | $ 6.77 |
Stock options exercisable (in dollars per share) | $ 6.30 |
STOCKHOLDERS_ EQUITY (Details)
STOCKHOLDERS’ EQUITY (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 25 Months Ended | |||||
May 24, 2021 | Feb. 28, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Sep. 12, 2022 | Feb. 02, 2022 | Jan. 18, 2022 | |
Equity [Abstract] | ||||||||
Stock repurchase program, authorized amount (up to) | $ 5,000,000 | $ 10,500,000 | $ 8,500,000 | $ 7,000,000 | ||||
Stock repurchase program, period in force | 12 months | |||||||
Stock repurchase program, increased authorized amount | $ 2,000,000 | $ 1,500,000 | $ 2,000,000 | |||||
Stock repurchased (in shares) | 350,000 | 0 | 419,088 | 1,099,833 | ||||
Stock repurchased, average price per share (in dollars per share) | $ 8.50 | $ 9.02 | $ 8.25 | |||||
Stock repurchased during period | $ 3,000,000 | $ 3,800,000 | $ 9,100,000 | |||||
Stock repurchase program, amount remaining under program | $ 1,400,000 | $ 1,400,000 |
WARRANTS - Schedule of Warrant
WARRANTS - Schedule of Warrant Activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of Shares | |
Warrants outstanding, beginning balance (in shares) | shares | 311,499 |
Exercised (in shares) | shares | 0 |
Expired (in shares) | shares | (1,000) |
Warrants outstanding, ending balance (in shares) | shares | 310,499 |
Warrants exercisable (in shares) | shares | 310,499 |
Weighted Average Exercise Price | |
Warrants outstanding, beginning balance (in dollars per share) | $ / shares | $ 12.32 |
Exercised (in dollars per share) | $ / shares | 0 |
Expired (in dollars per share) | $ / shares | 6 |
Warrants outstanding, ending balance (in dollars per share) | $ / shares | 12.34 |
Warrants exercisable (in dollars per share) | $ / shares | $ 12.34 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Equity [Abstract] | |
Warrants, weighted-average life | 2 years 2 months 12 days |
Warrants, outstanding, intrinsic value | $ 0 |
Warrants, exercisable, intrinsic value | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 11, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Subsequent Event [Line Items] | |||||
Loss on settlement | $ 1,500,000 | $ 0 | $ 1,500,000 | $ 0 | |
Crest Ventures, LLC Litigation | Settled Litigation | |||||
Subsequent Event [Line Items] | |||||
Loss on settlement | $ 1,500,000 | ||||
Subsequent Events | Crest Ventures, LLC Litigation | Settled Litigation | |||||
Subsequent Event [Line Items] | |||||
Loss contingency, damages awarded | $ 1,500,000 |