Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 16, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10,984,218 | ||
Entity Common Stock, Shares Outstanding (in shares) | 12,271,393 | ||
Documents Incorporated by Reference | The information required by Part III of this Annual Report on Form 10-K is incorporated by reference from the Registrant’s definitive proxy statement relating to the 2024 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates. | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001706524 | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 5041 |
Auditor Name | BF Borgers CPA PC |
Auditor Location | Lakewood, CO |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 1,112,504 | $ 12,008,003 |
Accounts receivable, net | 26,991,739 | 15,380,292 |
Contract receivables | 10,071,951 | 3,004,282 |
Prepaid expenses and other current assets | 2,775,682 | 4,164,960 |
Total current assets | 40,951,876 | 34,557,537 |
Non-current assets: | ||
Property and equipment, net | 1,419,393 | 1,307,146 |
Operating lease right of use assets, net | 2,041,217 | 2,618,825 |
Investments | 0 | 2,559,307 |
Goodwill | 15,572,050 | 15,572,050 |
Intangible assets, net | 4,394,507 | 5,450,687 |
Total non-current assets | 23,427,167 | 27,508,015 |
Total assets | 64,379,043 | 62,065,552 |
Current liabilities: | ||
Accounts payable | 25,411,243 | 9,960,364 |
Contract liabilities | 8,063,325 | 1,294,452 |
Accrued expenses | 4,071,231 | 3,196,961 |
Customer deposits | 603,046 | 2,571,161 |
Contingent consideration | 49,830 | 2,799,287 |
Notes payable | 3,204,840 | 3,832,682 |
Operating lease liabilities | 707,141 | 600,816 |
Total current liabilities | 42,110,656 | 24,255,723 |
Non-current liabilities: | ||
Operating lease liabilities | 1,380,362 | 2,044,782 |
Deferred tax liability | 817,419 | 1,033,283 |
Total non-current liabilities | 2,197,781 | 3,078,065 |
Total liabilities | 44,308,437 | 27,333,788 |
Commitments and contingencies (note 11) | ||
Shareholders’ equity: | ||
Preferred stock, $0.10 par value; 3,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2023, and 10,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value; 30,000,000 shares authorized; 13,522,669 issued and 12,072,836 outstanding as of December 31, 2023, and 100,000,000 shares authorized; 12,220,593 shares issued and 10,770,760 outstanding as of December 31, 2022 | 13,523 | 12,221 |
Additional paid-in capital | 88,901,583 | 84,882,982 |
Treasury shares, cost basis: 1,449,833 shares as of December 31, 2023 and 1,449,833 as of December 31, 2022 | (12,045,542) | (12,045,542) |
Accumulated deficit | (56,798,958) | (38,117,897) |
Total shareholders’ equity | 20,070,606 | 34,731,764 |
Total liabilities and shareholders’ equity | $ 64,379,043 | $ 62,065,552 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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) | 13,522,669 | 12,220,593 |
Common stock, shares outstanding (in shares) | 12,072,836 | 10,770,760 |
Treasury shares, cost basis (in shares) | 1,449,833 | 1,449,833 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues: | ||
Total revenues and other income | $ 71,542,773 | $ 67,029,934 |
Total cost of revenues | 61,251,211 | 52,824,215 |
Gross profit | 10,291,562 | 14,205,719 |
Operating expenses: | ||
General and administrative | 23,713,773 | 19,911,276 |
Stock-based compensation | 2,199,046 | 2,571,785 |
Intangible asset amortization | 1,056,180 | 1,059,779 |
Business development | 0 | 3,299,864 |
Total operating expenses | 26,968,999 | 26,842,704 |
Loss from operations | (16,677,437) | (12,636,985) |
Non-operating income (expenses): | ||
Interest expense | (271,686) | (54,579) |
Interest income | 173,895 | 329,012 |
Contingent consideration | (160,232) | (436,905) |
Write-down of investment | (258,492) | (2,660,933) |
Loss on settlement | (1,500,000) | 0 |
Other income (expense) | (202,973) | (139,611) |
Total non-operating income (expenses) | (2,219,488) | (2,963,016) |
Loss before income taxes | (18,896,925) | (15,600,001) |
Income tax benefit | 215,864 | 322,092 |
Net loss | (18,681,061) | (15,277,909) |
Comprehensive loss | $ (18,681,061) | $ (15,277,909) |
Loss per share – basic (in dollars per share) | $ (1.66) | $ (1.44) |
Loss per share – diluted (in dollars per share) | $ (1.66) | $ (1.44) |
Weighted average shares – basic (in shares) | 11,264,414 | 10,610,841 |
Weighted average shares – diluted (in shares) | 11,264,414 | 10,610,841 |
Equipment systems | ||
Revenues: | ||
Total revenues and other income | $ 12,675,645 | $ 33,333,574 |
Total cost of revenues | 11,085,306 | 27,963,258 |
Services | ||
Revenues: | ||
Total revenues and other income | 11,923,920 | 12,862,308 |
Total cost of revenues | 7,222,968 | 6,225,634 |
Construction design-build | ||
Revenues: | ||
Total revenues and other income | 46,254,967 | 19,822,901 |
Total cost of revenues | 42,442,858 | 17,905,172 |
Other | ||
Revenues: | ||
Total revenues and other income | 688,241 | 1,011,151 |
Total cost of revenues | $ 500,079 | $ 730,151 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - 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 | 2,571,785 | 2,571,785 | |||
Common stock repurchased | (4,362,052) | (4,362,052) | |||
Stock issued for contingent consideration (in shares) | 555,390 | ||||
Stock issued for contingent consideration | 3,603,813 | $ 555 | 3,603,258 | ||
Stock issued in conversion of warrants (in shares) | 34,863 | ||||
Stock issued in conversion of warrants | 0 | $ 35 | (35) | ||
Stock grant program vesting (in shares) | 37,675 | ||||
Stock grant program vesting | $ 0 | $ 38 | (38) | ||
Stock options exercised (in shares) | 4,555 | 4,555 | |||
Stock options exercised | $ 28,797 | $ 5 | 28,792 | ||
Net loss | $ (15,277,909) | (15,277,909) | |||
Ending balance (in shares) at Dec. 31, 2022 | 10,770,760 | 12,220,593 | |||
Ending 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 | 2,199,046 | 2,199,046 | |||
Stock issued for contingent consideration (in shares) | 897,581 | ||||
Stock issued for contingent consideration | 1,820,857 | $ 897 | 1,819,960 | ||
Stock grant program vesting (in shares) | 404,495 | ||||
Stock grant program vesting | $ 0 | $ 405 | (405) | ||
Stock options exercised (in shares) | 0 | ||||
Net loss | $ (18,681,061) | (18,681,061) | |||
Ending balance (in shares) at Dec. 31, 2023 | 12,072,836 | 13,522,669 | |||
Ending balance at Dec. 31, 2023 | $ 20,070,606 | $ 13,523 | $ 88,901,583 | $ (56,798,958) | $ (12,045,542) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (18,681,061) | $ (15,277,909) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,636,667 | 1,483,065 |
Deferred income tax benefit | (215,864) | (322,092) |
Stock-based compensation expense | 2,199,046 | 2,571,785 |
Impairment of investment | 258,492 | 2,660,933 |
Change in fair value of contingent consideration | 160,232 | 436,905 |
Other, net | 735,760 | 54,858 |
Changes in operating assets and liabilities (net of acquired amounts): | ||
Accounts receivable and contract receivables | (19,245,685) | (2,517,745) |
Prepaid expenses and other assets and property and equipment | 2,161,898 | 8,397,707 |
Accounts payable, contract liabilities, and accrued expenses | 23,374,027 | 1,087,807 |
Change in contingent consideration from indemnification | (917,699) | 0 |
Operating lease liability | (690,404) | (413,770) |
Customer deposits | (1,968,115) | (10,774,290) |
Net cash used in operating activities | (11,192,706) | (12,612,746) |
Cash flows from investing activities: | ||
Sale of investments | 2,326,472 | 0 |
Purchases of property and equipment | (615,170) | (580,347) |
Business combinations, net of cash acquired | 0 | (3,871,452) |
Net cash provided by (used in) investing activities | 1,711,302 | (4,451,799) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of offering costs | 0 | 28,796 |
Repurchase of common stock | 0 | (4,362,052) |
Additions to notes payable | 3,018,400 | 0 |
Repayment of finance lease ROU liability | (176,572) | (146,000) |
Payments to settle contingent consideration | (479,362) | (1,040,386) |
Repayments of notes payable | (3,776,561) | 0 |
Net cash used in financing activities | (1,414,095) | (5,519,642) |
Net change in cash | (10,895,499) | (22,584,187) |
Cash at beginning of period | 12,008,003 | 34,592,190 |
Cash at end of period | 1,112,504 | 12,008,003 |
Supplemental cash flow information: | ||
Cash paid for interest | 142,388 | 28,147 |
Net cash paid for income taxes | 185,910 | 16,253 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Stock issued for acquisitions | 0 | 3,603,813 |
Operating lease right of use assets and liabilities extension | $ 0 | $ 1,929,121 |
ORGANIZATION AND ACQUISITIONS,
ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, AND LIQUIDITY | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation, Business Combination, And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, AND LIQUIDITY | ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, 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 was initially to be paid out over four quarters beginning in January 2023. In the third quarter of 2023, a portion of that quarter’s note payment was extended to the first quarter of 2024. The Seller’s promissory note balances as of December 31, 2023, and December 31, 2022, were $575,240 and $3,832,682, respectively. The purchase price excludes up to $1.1 million of contingent consideration earnout that may become payable to the sellers 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/UG Construction, Inc. 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 provisions 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 following the closing of the Emerald acquisition. 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.Effective November 21, 2023, Emerald changed its name to UG Construction, Inc. 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 receivable $ 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. For the Years Ended 2023 2022 Revenues: Equipment systems 12,675,645 33,333,574 Services 11,923,920 12,862,308 Construction design-build 46,254,967 31,504,349 Other 688,241 1,011,151 Total revenues and other income 71,542,773 78,711,382 Net loss $ (18,681,061) $ (13,268,226) Acquired goodwill from Emerald represents the value expected to arise from organic growth and an opportunity to expand into a well-established market for the Company. 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 $2.4 million (the “Indemnified Loss”). In the second quarter of 2023, the Company 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 thereby resulting in a net amount due from the majority shareholder of Emerald to $1.4 million. 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 for 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 | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation, Principles of Consolidation and Business Combinations These consolidated financial statements include the accounts of urban-gro, Inc. and its wholly owned subsidiaries. They are presented in United States dollars and have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC for condensed financial reporting.The condensed consolidated financial statements are audited 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. Acquisitions of businesses are accounted for using the acquisition method of accounting (Accounting Standards Codification 805-10-225). The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred, liabilities incurred to the former owners of the acquired entities and the equity interests issued in exchange for control of the acquired entities. Acquisition related costs are recognized in net income (loss) as incurred. Use of Estimates In preparing consolidated financial statements in conformity with U.S. 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 consolidated financial statements and revenues and expenses during the reported periods. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under percentage of completion construction contracts, professional service contracts, estimated useful lives and potential impairment of long-lived assets and goodwill, inventory write-offs, allowance for deferred tax assets and deferred tax liabilities, 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 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. Functional and Reporting Currency and Foreign Currency Translation The functional and reporting currency of the Company and its subsidiaries is US dollars. All transactions in currencies other than US dollars are translated into US dollars on the date of the transaction. Any exchange gains and losses related to these transactions are recognized in the current period earnings as other income (expense). Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, promissory note and other current assets and liabilities. We value our financial assets and liabilities using fair value measurements. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated with observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. The carrying amount of our cash, accounts receivable, accounts payable, promissory note, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments as of December 31, 2023 and 2022. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments as of December 31, 2023 and 2022. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the years ended December 31, 2023 and 2022. Cash The Company considers all highly liquid short-term cash investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2023 and 2022, the Company did not maintain any cash equivalents. The Company maintains cash with financial institutions that may from time to time exceed federally-insured limits. The Company has Insured Cash Sweep programs in place with its financial institutions to ensure that these excess funds are also federally-insured. There are no restricted or compensating cash balances as of December 31, 2023. Accounts Receivable, Net Trade Accounts Receivable Trade accounts receivables are carried at the original invoiced amounts less an allowance for doubtful accounts. As of December 31, 2023 and 2022, the balance of allowance for doubtful accounts was $306,496 and $103,653, respectively. The allowance for doubtful accounts is calculated based on a detailed review of certain individual customer accounts and an estimation of the overall economic conditions affecting the Company’s customer base. The Company reviews a customer’s credit history before extending credit to the customer. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additions to the allowance would be required. A provision is made against accounts receivable to the extent they are considered unlikely to be collected. Occasionally, the Company will write off bad-debt directly to the bad-debt expense account when the balance is determined to be uncollectible. Bad-debt expense for the years ended December 31, 2023 and 2022 was $566,569 and $110,000, respectively. Non-trade Accounts Receivable Non-trade accounts receivable consist of amounts due to the Company outside of our normal operating business. As of December 31, 2023 and 2022, the Company had a total of $3,134,452 and $2,914,112 of non-trade accounts receivable, respectively. Non trade accounts receivable as of December 31, 2023 were comprised of the remaining Indemnified Loss receivable from the majority shareholder of Emerald further detailed in Note 1 – Organization, Acquisitions, and Liquidity and miscellaneous non-trade accounts receivable of $498,043. As of December 31, 2022, non-trade accounts receivables was 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. In connection with the settlement the Company recorded an impairment in the fourth quarter of 2022 of $950,576. Inventories Inventories, consisting entirely of finished goods, are stated at the lower of cost or net realizable value, with cost determined using the weighted average cost method. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold at the realization of change in value. Once written down, inventories are carried at this lower basis until sold or scrapped. Property, Plant, and Equipment, net Property and equipment is stated at cost less accumulated depreciation and impairment. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. No impairment charges were recorded for the years ended December 31, 2023 and 2022. The estimated useful lives for significant property and equipment categories are as follows: Computer and technology equipment 3 years Furniture and equipment 5 years Leasehold improvements Lease term Vehicles 3 years Other equipment 3 or 5 years Software 3 years Operating Lease Right of Use Assets Operating lease right of use assets are stated at cost less accumulated depreciation, amortization and impairment. The Company has various operating and finance equipment and office leases with an imputed annual interest rate of 8%. Intangible Assets The Company’s intangible assets, consist of legal fees for application of patents and trademarks, as well as customer relationships, trademarks and trade names and backlog from the acquisitions of DVO, 2WR and Emerald. Our patents and trademarks are recorded at cost, while the intangibles from our acquisitions are recorded at fair value and are amortized using the straight-line method over an estimated life, generally 5 years for patents, 5 years for trademarks and trade names, 7 years for customer relationships, and 1 year for backlog. Intangible assets are reported in the "Intangible Asset" line on the balance sheet. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually and at any time when events or circumstances suggest impairment may have occurred. The testing for impairment consists of a comparison of the fair value of the reporting unit with its carrying amount. If the carrying amount of the reporting unit, including goodwill, exceeds the fair value, an impairment will be recognized equal to the difference between the carrying value of the reporting unit’s goodwill and the implied fair value of the goodwill. In testing goodwill for impairment, we determine the estimated fair value of our reporting units based upon a discounted future cash flow analysis. Goodwill, trade names and patents are our only indefinite-lived intangible assets. Definite-lived intangible assets are amortized using the straight-line method over the shorter of their contractual term or estimated useful lives. Impairment of Long-lived Assets The Company evaluates potential impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment will be recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Investments Investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence are accounted for at cost with adjustments for observable changes in prices or impairments. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires that five basic steps be followed to recognize revenue: (1) a legally enforceable contract that meets criteria standards as to composition and substance is identified; (2) performance obligations relating to provision of goods or services to the customer are identified; (3) the transaction price, with consideration given to any variable, noncash, or other relevant consideration, is determined; (4) the transaction price is allocated to the performance obligations; and (5) revenue is recognized when control of goods or services is transferred to the customer with consideration given to whether that control happens over time or not. Determination of criteria (3) and (4) are based on judgments regarding the fixed nature of the selling prices of the services and products delivered and the collectability of those amounts. The Company derives revenue predominately from the sale of equipment systems, services, construction design-build, and from other various immaterial contracts with customers. Please refer to Note 3 - Revenue from Contracts with Customers for additional discussion. Customer Deposits For equipment systems contracts, the Company’s policy is to collect deposits from customers at the beginning of the contract. Please refer to Note 3 - Revenue from Contracts with Customers for further discussion of the Company's customer deposits. Cost of Revenues The Company’s policy is to recognize cost of revenues in the same manner as, and in conjunction with, revenue recognition. The Company’s cost of revenues includes the costs directly attributable to revenue recognized and includes expenses related to the purchasing of products and providing services, costs related to construction design-build contracts, fees for third-party commissions, and shipping costs. Total shipping costs included in the cost of revenues for the years ended December 31, 2023 and 2022 were $256,345 and $893,517, respectively. Advertising Costs The Company expenses advertising costs in the periods the costs are incurred. Prepayments made under contracts are included in prepaid expenses and expensed when the advertisement is run. Total advertising expense incurred for the years ended December 31, 2023 and 2022 was $516,522 and $504,738, respectively. Stock-Based Compensation The Company periodically issues shares of its common stock and stock options to employees, directors, and consultants in non-capital raising transactions for fees and services. The Company accounts for stock grants and stock options issued to employees and directors with the award being measured at its fair value at the date of grant and amortized ratably over the vesting period. The Company accounts for stock issued to consultants with the value of the stock compensation based upon the measurement date as determined at the grant date of the award. Warrants The Company estimates the fair value of warrants at the respective balance sheet dates using the Black-Scholes option-pricing model based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term, risk-free interest rate, and expected volatility of the price of the underlying common stock. There is a moderate degree of subjectivity involved when using option pricing models to estimate the warrants and the assumptions used in the Black-Scholes option-pricing model are moderately judgmental. Income Taxes The Company files income tax returns in the United States, Canada, and the Netherlands, and state and local tax returns in applicable jurisdictions. Provisions for current income tax liabilities, if any, would be calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings, if any, would also include deferred income tax provisions. Deferred income tax assets and liabilities, if any, would be computed on differences between the financial statement bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities would be included as a component of income tax expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates would be charged or credited to income tax expense in the period of enactment. Valuation allowances would be established for certain deferred tax assets when realization is not likely. Assets and liabilities would be established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions, in the judgment of the Company, do not meet a more-likely-than-not threshold based on the technical merits of the positions. Valuation allowances would be established for certain deferred tax assets when realization is not likely. Loss per Share The Company computes net loss per share by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share would be computed by dividing net loss by the weighted-average of all potentially dilutive shares of common stock that were outstanding during the periods presented. The diluted earnings per share calculation is not presented as it results in an anti-dilutive calculation of net loss per share. The treasury stock method would be used to calculate diluted earnings per share for potentially dilutive stock options and share purchase warrants. This method assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants would be used to purchase common shares at the average market price for the period. Recently Issued Accounting Pronouncements From time to time, the Financial Accounting Standards Board (the "FASB") or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, the Company believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Company’s financial statements upon adoption. In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not expect this ASU to have an impact on its consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires greater disaggregation of information in the effective tax rate reconciliation, income taxes paid disaggregated by jurisdiction, and certain other amendments related to income tax disclosures. This guidance will be effective for fiscal years beginning after December 15, 2024. The Company will be evaluating the impact of this ASU on its consolidated financial statements. There are other various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company's financial condition or the results of our operations. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2023 and 2022: For the year ended December 31, 2023 CEA Commercial Total Relative Percentage Equipment systems $ 12,675,645 $ — $ 12,675,645 18% Services 3,820,338 8,103,582 11,923,920 17% Construction design-build 4,391,087 41,863,880 46,254,967 65% Other 688,241 — 688,241 1% Total revenues and other income $ 21,575,311 $ 49,967,462 $ 71,542,773 100% Relative percentage 30 % 70 % 100 % Note: Percentages may not calculate due to rounding. For the year ended December 31, 2022 CEA Commercial Total Relative Percentage Equipment systems $ 33,333,574 $ — $ 33,333,574 50% Services 8,016,433 4,845,875 12,862,308 19% Construction design-build 1,664,538 18,158,363 19,822,901 30% Other 1,011,151 — 1,011,151 2% Total revenues and other income $ 44,025,696 $ 23,004,238 $ 67,029,934 100% Relative percentage 66 % 34 % 100 % Note: Percentages may not calculate due to rounding. 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 is fixed at the time of the contract and are not subject to discounts, incentives, payment bonuses, credits, and 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, the Company may receive 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: As of December 31, 2023 2022 Contract assets: Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage $ 9,364,915 $ 2,874,141 Retainage included in contract assets due to being conditional on something other than solely passage of time 707,036 130,141 Total contract assets $ 10,071,951 $ 3,004,282 As of December 31, 2023 2022 Contract liabilities: Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability) $ 8,009,018 $ 1,294,452 Retainage included in contract liabilities due to being conditional on something other than solely passage of time 54,307 — Total contract liabilities $ 8,063,325 $ 1,294,452 Trade accounts receivable, net of allowance for doubtful accounts, balances from contracts with customers within the accompanying balance sheets as of December 31, 2023, and 2022, were $23,857,287 and $12,466,180, respectively. 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. Of the outstanding customer deposit balance of $2,571,161 at December 31, 2022, $2,569,321 was recognized as revenue in the year ended December 31, 2023. Of the customer deposit balance of $13,345,451 at December 31, 2021, $13,186,579 was recognized as revenue in the year ended December 31, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS 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. Another director of the Company is working on a vertical farming innovation model with a group of CEA experts (“the CEA Consortium”). The CEA Consortium contracts services from the Company related to their business model. The table below presents the revenues for these related party entities for the twelve months ended December 31, 2023, and 2022: Twelve Months Ended 2023 2022 Revenues - Cloud 9 $ 462 $ 13,383 Revenues - Potco 987,268 12,480 Revenues - CEA Consortium $ 245,000 $ — Total revenues from related party transactions $ 1,232,730 $ 25,863 The table below presents the accounts receivable from these related party entities as of December 31, 2023, and December 31, 2022: December 31, 2023 December 31, 2022 Accounts receivable - Cloud 9 $ — $ 3,920 Accounts receivable - Potco 163,088 20,174 Accounts receivable - CEA Consortium $ 245,000 $ — Total accounts receivable due from related party transactions $ 408,088 $ 24,094 |
PREPAYMENTS & OTHER ASSETS
PREPAYMENTS & OTHER ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAYMENTS & OTHER ASSETS | PREPAYMENTS & OTHER ASSETS Prepayments and other assets are comprised of prepayments paid to vendors to initiate orders and prepaid services and fees. The prepaid balances are summarized as follows: As of December 31, 2023 2022 Vendor prepayments $ 1,124,118 $ 2,459,389 Prepaid services and fees 1,379,949 1,346,430 Inventories 228,858 320,372 Other assets 42,757 38,769 Total prepaid expenses and other assets $ 2,775,682 $ 4,164,960 |
PROPERTY PLANT & EQUIPMENT, NET
PROPERTY PLANT & EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY PLANT & EQUIPMENT, NET | PROPERTY PLANT & EQUIPMENT, NET Property Plant and Equipment balances are summarized as follows: As of December 31, 2023 2022 Computers and technology equipment $ 294,322 $ 232,405 Furniture and fixtures 325,485 234,389 Leasehold improvements 228,760 306,719 Vehicles 432,823 456,797 Software 1,087,569 685,580 Other equipment 145,951 58,525 Accumulated depreciation (1,095,517) (667,269) Total property plant and equipment, net $ 1,419,393 $ 1,307,146 Depreciation expense for the years ended December 31, 2023 and 2022 totaled $580,487 and $423,286, respectively. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The components of investments are summarized as follows: XS Financial Edyza Total Balances, as of December 31, 2022 $ 2,559,307 $ — $ 2,559,307 Impairment (258,492) — (258,492) Paid in kind interest 25,657 – 25,657 Sale of investment (2,326,472) $ — (2,326,472) Balances, as of December 31, 2023 $ — $ — $ — 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 $43,500,000 raised by XSF. Prior to any Nasdaq listing, the investment incurs 9.5% interest payable, of which, 7.5% is cash interest and 2.0%. is interest paid in kind. Subsequent to any Nasdaq listing, the investment incurs 8.0% interest. The debt matures on October 28, 2023, with a one-year option at the sole discretion of XSF to extend the maturity date. In addition, the Company received 1.25 million warrants denominated in Canadian dollars ("C$") with a C$0.45 share price as subject to the warrant instrument. No value was attributed to the warrants at the time of the investment. In August 2023, the Company entered into an agreement to sell back its investment to XSF for $2.3 million and cancel the warrants. The Company received the $2.3 million in proceeds on August 30, 2023. In connection with the agreement to sell the investment, the Company recorded an impairment loss of $0.3 million. 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. The Company notes that the intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery has 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. The impairment recorded was $1.7 million. |
GOODWILL & INTANGIBLE ASSETS
GOODWILL & INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL & INTANGIBLE ASSETS | GOODWILL & INTANGIBLE ASSETS Goodwill The Company has recorded goodwill in conjunction with acquisitions it has completed. The goodwill balances as of December 31, 2023 and 2022 were $15,572,050 and $15,572,050. Goodwill is not amortized. The Company did not record any impairment charges related to goodwill for the years ended December 31, 2023 and 2022. Intangible Assets Other Than Goodwill Intangible assets as of December 31, 2023 and 2022 consisted of the following: As of December 31, 2023 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (1,004,749) $ 3,207,351 Trademarks and trade names 1,778,000 (663,417) 1,114,583 Backlog and other 768,113 (723,831) 44,282 Total finite-lived intangible assets: 6,758,213 (2,391,997) 4,366,216 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 $ (2,391,997) $ 4,394,507 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 subject to amortization for the years ended December 31, 2023 and 2022 was $1,056,180 and $1,059,779, respectively. The estimated future amortization expense for intangible assets subject to amortization at December 31, 2023, is summarized below: For the years ending December 31, Estimated Future Amortization Expense 2024 $ 969,633 2025 959,788 2026 918,205 2027 693,555 2028 554,540 Thereafter 270,495 Total estimated future amortization expense $ 4,366,216 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses are summarized as follows: As of December 31, 2023 2022 Accrued operating expenses $ 834,144 $ 515,858 Accrued wages and related expenses 1,428,364 639,614 Accrued 401(k) 66,642 262,599 Accrued interest expense 26,000 — Accrued sales tax payable 1,716,081 1,778,890 Total accrued expenses $ 4,071,231 $ 3,196,961 Accrued sales tax payable is comprised of amounts due to various states and Canadian provinces for 2017 through 2023. |
PROMISSORY NOTE AND DEBT
PROMISSORY NOTE AND DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTE AND DEBT | PROMISSORY NOTE AND DEBT The table below shows outstanding promissory note and debt amounts as of December 31, 2023 and 2022. As of December 31, 2023 2022 Line of credit $ 2,500,000 $ — DVO note 575,240 3,832,682 Other financing agreements 129,600 – Total $ 3,204,840 $ 3,832,682 Less current maturities (3,204,840) (3,832,682) Long Term — – On December 13, 2023, UG Construction, Inc. d/b/a Emerald Construction Management, Inc. (“UG Construction”), a wholly owned subsidiary of the Company, entered into an interest only asset based revolving Loan Agreement (the “Line of Credit”) with Gemini Finance Corp. (“Lender”) pursuant to which Lender extended to UG Construction a secured line of credit in an amount not to exceed $10,000,000, to be used to assist UG Construction and the Company with cash management. Lender will consider requests for advances under the Line of Credit, which Lender may accept or reject in its discretion, until September 12, 2024 (the “Initial Term”), subject to an automatic extension for an additional nine-month term until May 12, 2025, provided that UG Construction is in compliance with all the terms of the applicable loan documents and Lender has not sent a written notice of non-renewal at least 60 days prior to expiration of the Initial Term. The Line of Credit contains standard events of default and representations and warranties by UG Construction and the Lender and the Company have entered into a Continuing Guaranty pursuant to which the Company will guarantee repayment of the loans associated with the Line of Credit (the “Guaranty Agreement”). Loans made under the Line of Credit shall be evidenced by a Secured Promissory Note - Revolving issued by UG Construction to the Lender (the “Promissory Note”), and each draw on the Promissory Note shall be due and payable on or before 180 days after such draw is funded to UG Construction; provided that, such draw is also subject to a mandatory pre-payment upon UG Construction’s receipt of payment for any invoice previously submitted and approved for financing by Lender. Lender will receive a security interest in UG Construction’s Collateral (as defined in the “Security Agreement” entered into as part of the Line of Credit). The Promissory Note earns interest at a monthly rate of one and seventy-five hundredths percent (1.75%). In connection with entering in the Line of Credit, the Company has agreed to issue to Bancroft Capital, LLC (the “Placement Agent”) cash and warrant compensation in two separate tranches, the first being earned upon closing of the Line of Credit and the remainder of which will be due if and when UG Construction draws more than $4,500,000 from the Line of Credit. Both instances are detailed as follows: 1. At closing of the Line of Credit, the Placement Agent earned a cash fee of $200,000. In addition to the cash fee, the Company will issue to the Placement Agent or its designees, $200,000 worth of warrants (the “Placement Agent’s Warrants”) to purchase the Company’s common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the Closing. The Placement Agent’s Warrants will be exercisable at any time and from time to time, in whole or in part, during the four and a half-year period commencing six (6) months from the date of issuance. The Placement Agent’s Warrants will provide for registration rights (including a one-time demand registration right and unlimited piggyback rights), cashless exercise and customary anti-dilution provisions (for stock dividends and splits) and anti-dilution protection (adjustment in the number and price of such warrants and the shares underlying such warrants) resulting from corporate events (which would include dividends, reorganizations, mergers, etc.). 2. If and when Emerald draws more than $4,500,000 from the Line of Credit, the Placement Agent will earn an additional cash fee of $200,000, and an additional $200,000 worth of Placement Agent’s Warrants to purchase the Company’s common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the date that the draws exceeding $4,500,000 were to take place. As part of the Asset Purchase Agreement of DVO, a non-negotiable promissory note in the aggregate principal amount of $3,806,250, payable to DVO was issued effective November 1, 2022 (the "DVO Promissory Note"). The principal amount, together with the simple interest accrued on the unpaid principal amount outstanding was to be paid by the Company on a quarterly basis for the first four consecutive quarters, with the first payment paid in January 2023, and the remaining three payments due ten days following the end of each subsequent fiscal quarter thereafter until the earlier of the end of the fourth full fiscal quarter following the closing date December 31, 2023 or the payment in full of all amounts due. In the third quarter of 2023, a portion of that quarter’s note payment was extended to the first quarter of 2024. The DVO Promissory Note may be prepaid in whole or in part at any time without premium or penalty; provided, that each payment shall be accompanied by payment of all unpaid costs, fees and expenses, if any, which are due plus all accrued and unpaid interest due as of the date of such prepayment. The outstanding principal balance under the DVO Promissory Note shall bear simple interest at a variable rate per annum equal to the rate of interest most recently published by JP Morgan Chase & Co. as the "prime rate" (the "Prime Rate"). Initially, interest will accrue at the Prime Rate as of the date of the DVO Promissory Note. The interest rate will be adjusted on a quarterly basis as of the first day of each full fiscal quarter following the first full fiscal quarter after the closing date to the then current Prime Rate. In connection with the extension of the DVO Promissory Note payment to the first quarter of 2024, the interest rate was revised to a fixed rate of 10%, with principal and interest to be paid on a weekly basis. The other financing agreements relate to short-term financing of the Company's insurance policies and are at an average interest rate of 13.6%. |
OPERATING LEASE LIABILITIES AND
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES | OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES The Company has seven operating office lease liabilities and one finance office lease liability with an imputed annual interest rate of 8%. 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 5 years, as of December 31, 2023. The following is a summary of operating lease liabilities: As of December 31, 2023 2022 Operating lease liabilities related to right of use assets $ 2,087,503 $ 2,645,598 Less current portion (707,141) (600,816) Long term $ 1,380,362 $ 2,044,782 The following is a schedule showing total future minimum lease payments: For the years ending December 31, Minimum Lease Payments 2024 $ 754,076 2025 573,133 2026 404,751 2027 346,812 2028 253,415 Thereafter 82,488 Total minimum lease payments $ 2,414,675 Less: Amount representing interest $ (327,172) Net lease obligations $ 2,087,503 From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no 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 paid $1,500,000 to Crest on September 7, 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 seven operating office lease liabilities and one finance office lease liability with an imputed annual interest rate of 8%. 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 5 years, as of December 31, 2023. The following is a summary of operating lease liabilities: As of December 31, 2023 2022 Operating lease liabilities related to right of use assets $ 2,087,503 $ 2,645,598 Less current portion (707,141) (600,816) Long term $ 1,380,362 $ 2,044,782 The following is a schedule showing total future minimum lease payments: For the years ending December 31, Minimum Lease Payments 2024 $ 754,076 2025 573,133 2026 404,751 2027 346,812 2028 253,415 Thereafter 82,488 Total minimum lease payments $ 2,414,675 Less: Amount representing interest $ (327,172) Net lease obligations $ 2,087,503 From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no 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 paid $1,500,000 to Crest on September 7, 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 | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES | RISKS AND UNCERTAINTIES Concentration Risk The tables below show 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 For the Years Ended Company Customer Number 2023 2022 C000001462 * 10 % C000001140 * 13 % C000002463 15 % * C000002187 28 % 17 % *Amounts less than 10% Customers exceeding 10% of accounts receivable As of December 31, Company Customer Number 2023 2022 C000002151 * 10 % C000002187 57 % 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 For the Years Ended Company Vendor Number 2023 2022 V000001029 * 13 % V000002275 11 % * *Amounts less than 10% Vendors exceeding 10% of accounts payable: As of December 31, Company Vendor Number 2023 2022 V000002275 13 % * V000001910 * 11 % *Amounts less than 10% Foreign Exchange Risk |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense for the years ended December 31, 2023 and 2022 was $2,199,046 and $2,571,785, respectively based on the vesting schedule of the stock grants and options. During the year ended December 31, 2023, 510,720 shares vested and were issued to employees and directors. During the year ended December 31, 2022, 62,172 shares vested and were issued to employees and directors. No cash flow effects are anticipated for stock grants. 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, stock grants 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 no less than the market 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. Stock grants and stock options are sometimes offered as part of an employment offer package, to ensure continuity of service or as a reward for performance. Stock grants and stock options typically require a 1 to 3 year period of continued employment or service performance before the stock grant of RSUs or stock option vests. The following schedule shows grants of RSU activity for the years ended December 31, 2023 and 2022: Number of Grants unissued as of December 31, 2021 153,673 Grants awarded 542,584 Forfeiture/cancelled (139,226) Grants vested (62,172) Grants unissued as of December 31, 2022 494,859 Grants awarded 633,269 Forfeiture/Cancelled (23,139) Grants vested (510,720) Grants unissued as of December 31, 2023 594,269 The following table summarizes grants of RSU vesting periods: Number of Unrecognized Stock As of December 31, 436,210 $ 890,461 2024 158,059 182,418 2025 594,269 $ 1,072,879 The following schedules show stock option activity for the years ended December 31, 2023 and 2022: Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Stock options outstanding as of December 31, 2021 641,337 7.55 $ 6.27 Issued 76,246 9.00 $ 10.48 Exercised (4,555) 0.00 $ 6.00 Forfeited (43,640) 6.25 $ 6.04 Stock options outstanding at December 31, 2022 669,388 7.85 $ 6.77 Stock options exercisable at December 31, 2022 618,651 6.74 $ 6.30 Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Stock options outstanding as of December 31, 2022 669,388 7.85 $ 6.77 Issued 0 0.00 $ — Exercised 0 0.00 $ — Forfeited (7,105) 0.00 $ 9.39 Stock options outstanding at December 31, 2023 662,283 7.85 $ 6.77 Stock options exercisable at December 31, 2023 655,538 7.85 $ 6.30 The following table summarizes stock option vesting periods under the Incentive Plans: Number of Unrecognized Stock As of December 31, 6,745 $ 29,372 2024 6,745 $ 29,372 The aggregate intrinsic value of the stock options outstanding and exercisable at December 31, 2023 is $0. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY On February 17, 2021, we completed an offering of 6,210,000 shares of our common stock, inclusive of the underwriters full over allotment, at $10.00 per share for total gross offering proceeds of $62,100,000. In connection with this offering, we received approval to list our common stock on the Nasdaq Capital Market under the symbol "UGRO." On May 24, 2021, we announced that 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 million increase to the stock repurchase, for a total of $10.5 million. During the twelve months ended December 31, 2023 the Company did not repurchase shares of common stock. During the twelve months ended December 31, 2022, the Company repurchased 594,918 shares of common stock at an average price per share of $7.33, for a total price of $4.4 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. As of December 31, 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 years ended December 31, 2023 and 2022: Number of shares Weighted Average Exercise Price Warrants outstanding as of December 31, 2021 374,088 $ 11.26 Exercised (18,196) $ 6.00 Terminated – cashless exercise (44,393) $ 6.00 Expired 0 $ — Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Warrants exercisable as of December 31, 2022 311,499 $ 12.32 Number of shares Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Exercised 0 $ — Terminated 0 $ — Issued for line of credit 175,531 $ 1.25 Expired loan extension (1,000) $ 6.00 Warrants outstanding as of December 31, 2023 486,030 $ 8.33 Warrants exercisable as of December 31, 2023 486,030 $ 8.33 The fair value of the warrants 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 contractual term of the options, the risk-free interest rate at the date of grant 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 warrants with the Black-Scholes option pricing model as the assumptions used are moderately judgmental. The weighted-average life of the warrants is 4.04 years. The aggregate intrinsic value of the warrants outstanding and exercisable at December 31, 2023 is $0. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company accounts for income taxes in accordance with the asset and liability method prescribed in ASC 740, "Accounting for Income Taxes." The Company has adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. Tax positions that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company had no tax positions relating to open income tax returns that were considered to be uncertain. 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 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 year ended December 31, 2023 relates to the reduction in the deferred tax liability associated with the amortization of the intangible assets from the acquisitions of the DVO, Emerald and 2WR Entities. As of December 31, 2023, the Company had approximately $35,479,242 of operating loss carryforwards for United States tax purposes, expiring as follows: • $2,182,354 expiring in 2037 • $33,296,888 with no expiration As of December 31, 2022, the Company had approximately $19,346,059 of operating loss carryforwards for United States tax purposes, expiring as follows: • $2,182,354 expiring in 2037 • $17,163,705 with no expiration Realization of operating loss carryforwards to offset future operating income for tax purposes are subject to various limitations including change of ownership and current year taxable income percentage limitations. The Company has no credit carryforwards for tax purposes. |
BUSINESS DEVELOPMENT
BUSINESS DEVELOPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS DEVELOPMENT | BUSINESS DEVELOPMENT During 2021, the Company purchased lights from one of its international vendors to fulfill an order for a major customer. Subsequent to the sale, delivery and installation of the lights, the customer noted the lights were not performing as the manufacturer had stipulated. The Company performed tests of the lights and confirmed the performance metrics did not meet the manufacturer’s specifications. The Company worked with the customer to determine a lighting solution of replacement lights, sourced from the vendor, that would meet their needs. The customer has been a key customer to the Company and the Company expects to continue to do significant business with the customer in the future. In order to immediately satisfy the customer in this matter, the Company agreed to supply the replacement lighting solution to the customer at the Company’s expense while the Company continues to work with the vendor to resolve the original defective lighting issue, including, claims for reimbursement of the expense. In total, the Company delivered $3.3 million of replacement lighting equipment to the customer and recorded the full amount as a business development expense during the year ended December 31, 2022. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
WARRANTS | STOCKHOLDERS’ EQUITY On February 17, 2021, we completed an offering of 6,210,000 shares of our common stock, inclusive of the underwriters full over allotment, at $10.00 per share for total gross offering proceeds of $62,100,000. In connection with this offering, we received approval to list our common stock on the Nasdaq Capital Market under the symbol "UGRO." On May 24, 2021, we announced that 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 million increase to the stock repurchase, for a total of $10.5 million. During the twelve months ended December 31, 2023 the Company did not repurchase shares of common stock. During the twelve months ended December 31, 2022, the Company repurchased 594,918 shares of common stock at an average price per share of $7.33, for a total price of $4.4 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. As of December 31, 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 years ended December 31, 2023 and 2022: Number of shares Weighted Average Exercise Price Warrants outstanding as of December 31, 2021 374,088 $ 11.26 Exercised (18,196) $ 6.00 Terminated – cashless exercise (44,393) $ 6.00 Expired 0 $ — Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Warrants exercisable as of December 31, 2022 311,499 $ 12.32 Number of shares Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Exercised 0 $ — Terminated 0 $ — Issued for line of credit 175,531 $ 1.25 Expired loan extension (1,000) $ 6.00 Warrants outstanding as of December 31, 2023 486,030 $ 8.33 Warrants exercisable as of December 31, 2023 486,030 $ 8.33 The fair value of the warrants 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 contractual term of the options, the risk-free interest rate at the date of grant 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 warrants with the Black-Scholes option pricing model as the assumptions used are moderately judgmental. The weighted-average life of the warrants is 4.04 years. The aggregate intrinsic value of the warrants outstanding and exercisable at December 31, 2023 is $0. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS None. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Principles of Consolidation | Basis of Presentation, Principles of Consolidation and Business Combinations |
Business Combinations | Acquisitions of businesses are accounted for using the acquisition method of accounting (Accounting Standards Codification 805-10-225). The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred, liabilities incurred to the former owners of the acquired entities and the equity interests issued in exchange for control of the acquired entities. Acquisition related costs are recognized in net income (loss) as incurred. |
Use of Estimates | Use of Estimates In preparing consolidated financial statements in conformity with U.S. 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 consolidated financial statements and revenues and expenses during the reported periods. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under percentage of completion construction contracts, professional service contracts, estimated useful lives and potential impairment of long-lived assets and goodwill, inventory write-offs, allowance for deferred tax assets and deferred tax liabilities, 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 and Revenue Recognition and Customer Deposits | Contract Assets and Liabilities The timing between when 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. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires that five basic steps be followed to recognize revenue: (1) a legally enforceable contract that meets criteria standards as to composition and substance is identified; (2) performance obligations relating to provision of goods or services to the customer are identified; (3) the transaction price, with consideration given to any variable, noncash, or other relevant consideration, is determined; (4) the transaction price is allocated to the performance obligations; and (5) revenue is recognized when control of goods or services is transferred to the customer with consideration given to whether that control happens over time or not. Determination of criteria (3) and (4) are based on judgments regarding the fixed nature of the selling prices of the services and products delivered and the collectability of those amounts. The Company derives revenue predominately from the sale of equipment systems, services, construction design-build, and from other various immaterial contracts with customers. Please refer to Note 3 - Revenue from Contracts with Customers for additional discussion. Customer Deposits For equipment systems contracts, the Company’s policy is to collect deposits from customers at the beginning of the contract. Please refer to Note 3 - Revenue from Contracts with Customers for further discussion of the Company's customer deposits. |
Functional and Reporting Currency and Foreign Currency Translation | Functional and Reporting Currency and Foreign Currency Translation The functional and reporting currency of the Company and its subsidiaries is US dollars. All transactions in currencies other than US dollars are translated into US dollars on the date of the transaction. Any exchange gains and losses related to these transactions are recognized in the current period earnings as other income (expense). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, promissory note and other current assets and liabilities. We value our financial assets and liabilities using fair value measurements. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated with observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. The carrying amount of our cash, accounts receivable, accounts payable, promissory note, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments as of December 31, 2023 and 2022. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments as of December 31, 2023 and 2022. |
Cash | Cash |
Accounts Receivable, Net | Accounts Receivable, Net Trade Accounts Receivable |
Inventories | Inventories Inventories, consisting entirely of finished goods, are stated at the lower of cost or net realizable value, with cost determined using the weighted average cost method. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold at the realization of change in value. Once written down, inventories are carried at this lower basis until sold or scrapped. |
Property, Plant, and Equipment, net | Property, Plant, and Equipment, net |
Operating Lease Right of Use Assets | Operating Lease Right of Use Assets |
Intangible Assets | Intangible Assets |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually and at any time when events or circumstances suggest impairment may have occurred. The testing for impairment consists of a comparison of the fair value of the reporting unit with its carrying amount. If the carrying amount of the reporting unit, including goodwill, exceeds the fair value, an impairment will be recognized equal to the difference between the carrying value of the reporting unit’s goodwill and the implied fair value of the goodwill. In testing goodwill for impairment, we determine the estimated fair value of our reporting units based upon a discounted future cash flow analysis. Goodwill, trade names and patents are our only indefinite-lived intangible assets. Definite-lived intangible assets are amortized using the straight-line method over the shorter of their contractual term or estimated useful lives. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company evaluates potential impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment will be recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
Investments | Investments Investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence are accounted for at cost with adjustments for observable changes in prices or impairments. |
Cost of Revenues | Cost of Revenues |
Advertising Costs | Advertising Costs |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues shares of its common stock and stock options to employees, directors, and consultants in non-capital raising transactions for fees and services. The Company accounts for stock grants and stock options issued to employees and directors with the award being measured at its fair value at the date of grant and amortized ratably over the vesting period. The Company accounts for stock issued to consultants with the value of the stock compensation based upon the measurement date as determined at the grant date of the award. |
Warrants | Warrants The Company estimates the fair value of warrants at the respective balance sheet dates using the Black-Scholes option-pricing model based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term, risk-free interest rate, and expected volatility of the price of the underlying common stock. There is a moderate degree of subjectivity involved when using option pricing models to estimate the warrants and the assumptions used in the Black-Scholes option-pricing model are moderately judgmental. |
Income Taxes | Income Taxes The Company files income tax returns in the United States, Canada, and the Netherlands, and state and local tax returns in applicable jurisdictions. Provisions for current income tax liabilities, if any, would be calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings, if any, would also include deferred income tax provisions. Deferred income tax assets and liabilities, if any, would be computed on differences between the financial statement bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities would be included as a component of income tax expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates would be charged or credited to income tax expense in the period of enactment. Valuation allowances would be established for certain deferred tax assets when realization is not likely. |
Loss Per Share | Loss per Share The Company computes net loss per share by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share would be computed by dividing net loss by the weighted-average of all potentially dilutive shares of common stock that were outstanding during the periods presented. The diluted earnings per share calculation is not presented as it results in an anti-dilutive calculation of net loss per share. The treasury stock method would be used to calculate diluted earnings per share for potentially dilutive stock options and share purchase warrants. This method assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants would be used to purchase common shares at the average market price for the period. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, the Financial Accounting Standards Board (the "FASB") or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, the Company believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Company’s financial statements upon adoption. In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not expect this ASU to have an impact on its consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires greater disaggregation of information in the effective tax rate reconciliation, income taxes paid disaggregated by jurisdiction, and certain other amendments related to income tax disclosures. This guidance will be effective for fiscal years beginning after December 15, 2024. The Company will be evaluating the impact of this ASU on its consolidated financial statements. There are other various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company's financial condition or the results of our operations. |
ORGANIZATION AND ACQUISITIONS_2
ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, AND LIQUIDITY (Tables) | 12 Months Ended |
Dec. 31, 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 receivable $ 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. For the Years Ended 2023 2022 Revenues: Equipment systems 12,675,645 33,333,574 Services 11,923,920 12,862,308 Construction design-build 46,254,967 31,504,349 Other 688,241 1,011,151 Total revenues and other income 71,542,773 78,711,382 Net loss $ (18,681,061) $ (13,268,226) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Useful Lives | The estimated useful lives for significant property and equipment categories are as follows: Computer and technology equipment 3 years Furniture and equipment 5 years Leasehold improvements Lease term Vehicles 3 years Other equipment 3 or 5 years Software 3 years Property Plant and Equipment balances are summarized as follows: As of December 31, 2023 2022 Computers and technology equipment $ 294,322 $ 232,405 Furniture and fixtures 325,485 234,389 Leasehold improvements 228,760 306,719 Vehicles 432,823 456,797 Software 1,087,569 685,580 Other equipment 145,951 58,525 Accumulated depreciation (1,095,517) (667,269) Total property plant and equipment, net $ 1,419,393 $ 1,307,146 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue, By Source | The table below presents the revenue by source for the years ended December 31, 2023 and 2022: For the year ended December 31, 2023 CEA Commercial Total Relative Percentage Equipment systems $ 12,675,645 $ — $ 12,675,645 18% Services 3,820,338 8,103,582 11,923,920 17% Construction design-build 4,391,087 41,863,880 46,254,967 65% Other 688,241 — 688,241 1% Total revenues and other income $ 21,575,311 $ 49,967,462 $ 71,542,773 100% Relative percentage 30 % 70 % 100 % Note: Percentages may not calculate due to rounding. For the year ended December 31, 2022 CEA Commercial Total Relative Percentage Equipment systems $ 33,333,574 $ — $ 33,333,574 50% Services 8,016,433 4,845,875 12,862,308 19% Construction design-build 1,664,538 18,158,363 19,822,901 30% Other 1,011,151 — 1,011,151 2% Total revenues and other income $ 44,025,696 $ 23,004,238 $ 67,029,934 100% Relative percentage 66 % 34 % 100 % Note: Percentages may not calculate due to rounding. |
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: As of December 31, 2023 2022 Contract assets: Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage $ 9,364,915 $ 2,874,141 Retainage included in contract assets due to being conditional on something other than solely passage of time 707,036 130,141 Total contract assets $ 10,071,951 $ 3,004,282 As of December 31, 2023 2022 Contract liabilities: Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability) $ 8,009,018 $ 1,294,452 Retainage included in contract liabilities due to being conditional on something other than solely passage of time 54,307 — Total contract liabilities $ 8,063,325 $ 1,294,452 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions on Financial Statements | The table below presents the revenues for these related party entities for the twelve months ended December 31, 2023, and 2022: Twelve Months Ended 2023 2022 Revenues - Cloud 9 $ 462 $ 13,383 Revenues - Potco 987,268 12,480 Revenues - CEA Consortium $ 245,000 $ — Total revenues from related party transactions $ 1,232,730 $ 25,863 The table below presents the accounts receivable from these related party entities as of December 31, 2023, and December 31, 2022: December 31, 2023 December 31, 2022 Accounts receivable - Cloud 9 $ — $ 3,920 Accounts receivable - Potco 163,088 20,174 Accounts receivable - CEA Consortium $ 245,000 $ — Total accounts receivable due from related party transactions $ 408,088 $ 24,094 |
PREPAYMENTS & OTHER ASSETS (Tab
PREPAYMENTS & OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepayments and Other Assets | Prepayments and other assets are comprised of prepayments paid to vendors to initiate orders and prepaid services and fees. The prepaid balances are summarized as follows: As of December 31, 2023 2022 Vendor prepayments $ 1,124,118 $ 2,459,389 Prepaid services and fees 1,379,949 1,346,430 Inventories 228,858 320,372 Other assets 42,757 38,769 Total prepaid expenses and other assets $ 2,775,682 $ 4,164,960 |
PROPERTY PLANT & EQUIPMENT, N_2
PROPERTY PLANT & EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant, and Equipment | The estimated useful lives for significant property and equipment categories are as follows: Computer and technology equipment 3 years Furniture and equipment 5 years Leasehold improvements Lease term Vehicles 3 years Other equipment 3 or 5 years Software 3 years Property Plant and Equipment balances are summarized as follows: As of December 31, 2023 2022 Computers and technology equipment $ 294,322 $ 232,405 Furniture and fixtures 325,485 234,389 Leasehold improvements 228,760 306,719 Vehicles 432,823 456,797 Software 1,087,569 685,580 Other equipment 145,951 58,525 Accumulated depreciation (1,095,517) (667,269) Total property plant and equipment, net $ 1,419,393 $ 1,307,146 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Components of Investments | The components of investments are summarized as follows: XS Financial Edyza Total Balances, as of December 31, 2022 $ 2,559,307 $ — $ 2,559,307 Impairment (258,492) — (258,492) Paid in kind interest 25,657 – 25,657 Sale of investment (2,326,472) $ — (2,326,472) Balances, as of December 31, 2023 $ — $ — $ — |
GOODWILL & INTANGIBLE ASSETS (T
GOODWILL & INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets as of December 31, 2023 and 2022 consisted of the following: As of December 31, 2023 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (1,004,749) $ 3,207,351 Trademarks and trade names 1,778,000 (663,417) 1,114,583 Backlog and other 768,113 (723,831) 44,282 Total finite-lived intangible assets: 6,758,213 (2,391,997) 4,366,216 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 $ (2,391,997) $ 4,394,507 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 December 31, 2023 and 2022 consisted of the following: As of December 31, 2023 Cost Accumulated Amortization Net Book Value Finite-lived intangible assets: Customer relationships $ 4,212,100 $ (1,004,749) $ 3,207,351 Trademarks and trade names 1,778,000 (663,417) 1,114,583 Backlog and other 768,113 (723,831) 44,282 Total finite-lived intangible assets: 6,758,213 (2,391,997) 4,366,216 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 $ (2,391,997) $ 4,394,507 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 at December 31, 2023, is summarized below: For the years ending December 31, Estimated Future Amortization Expense 2024 $ 969,633 2025 959,788 2026 918,205 2027 693,555 2028 554,540 Thereafter 270,495 Total estimated future amortization expense $ 4,366,216 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses are summarized as follows: As of December 31, 2023 2022 Accrued operating expenses $ 834,144 $ 515,858 Accrued wages and related expenses 1,428,364 639,614 Accrued 401(k) 66,642 262,599 Accrued interest expense 26,000 — Accrued sales tax payable 1,716,081 1,778,890 Total accrued expenses $ 4,071,231 $ 3,196,961 |
PROMISSORY NOTE AND DEBT (Table
PROMISSORY NOTE AND DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Promissory Note and Debt Amounts | The table below shows outstanding promissory note and debt amounts as of December 31, 2023 and 2022. As of December 31, 2023 2022 Line of credit $ 2,500,000 $ — DVO note 575,240 3,832,682 Other financing agreements 129,600 – Total $ 3,204,840 $ 3,832,682 Less current maturities (3,204,840) (3,832,682) Long Term — – |
OPERATING LEASE LIABILITIES A_2
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Operating Lease Liabilities | The following is a summary of operating lease liabilities: As of December 31, 2023 2022 Operating lease liabilities related to right of use assets $ 2,087,503 $ 2,645,598 Less current portion (707,141) (600,816) Long term $ 1,380,362 $ 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 2024 $ 754,076 2025 573,133 2026 404,751 2027 346,812 2028 253,415 Thereafter 82,488 Total minimum lease payments $ 2,414,675 Less: Amount representing interest $ (327,172) Net lease obligations $ 2,087,503 |
RISKS AND UNCERTAINTIES (Tables
RISKS AND UNCERTAINTIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risks | The tables below show 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 For the Years Ended Company Customer Number 2023 2022 C000001462 * 10 % C000001140 * 13 % C000002463 15 % * C000002187 28 % 17 % *Amounts less than 10% Customers exceeding 10% of accounts receivable As of December 31, Company Customer Number 2023 2022 C000002151 * 10 % C000002187 57 % 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 For the Years Ended Company Vendor Number 2023 2022 V000001029 * 13 % V000002275 11 % * *Amounts less than 10% Vendors exceeding 10% of accounts payable: As of December 31, Company Vendor Number 2023 2022 V000002275 13 % * V000001910 * 11 % *Amounts less than 10% |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of RSU Grants Activity | The following schedule shows grants of RSU activity for the years ended December 31, 2023 and 2022: Number of Grants unissued as of December 31, 2021 153,673 Grants awarded 542,584 Forfeiture/cancelled (139,226) Grants vested (62,172) Grants unissued as of December 31, 2022 494,859 Grants awarded 633,269 Forfeiture/Cancelled (23,139) Grants vested (510,720) Grants unissued as of December 31, 2023 594,269 |
Schedule of RSU Vesting Periods | The following table summarizes grants of RSU vesting periods: Number of Unrecognized Stock As of December 31, 436,210 $ 890,461 2024 158,059 182,418 2025 594,269 $ 1,072,879 The following table summarizes stock option vesting periods under the Incentive Plans: Number of Unrecognized Stock As of December 31, 6,745 $ 29,372 2024 6,745 $ 29,372 |
Schedule of Stock Option Activity | The following schedules show stock option activity for the years ended December 31, 2023 and 2022: Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Stock options outstanding as of December 31, 2021 641,337 7.55 $ 6.27 Issued 76,246 9.00 $ 10.48 Exercised (4,555) 0.00 $ 6.00 Forfeited (43,640) 6.25 $ 6.04 Stock options outstanding at December 31, 2022 669,388 7.85 $ 6.77 Stock options exercisable at December 31, 2022 618,651 6.74 $ 6.30 Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Stock options outstanding as of December 31, 2022 669,388 7.85 $ 6.77 Issued 0 0.00 $ — Exercised 0 0.00 $ — Forfeited (7,105) 0.00 $ 9.39 Stock options outstanding at December 31, 2023 662,283 7.85 $ 6.77 Stock options exercisable at December 31, 2023 655,538 7.85 $ 6.30 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Warrant Activity | The following table shows warrant activity for the years ended December 31, 2023 and 2022: Number of shares Weighted Average Exercise Price Warrants outstanding as of December 31, 2021 374,088 $ 11.26 Exercised (18,196) $ 6.00 Terminated – cashless exercise (44,393) $ 6.00 Expired 0 $ — Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Warrants exercisable as of December 31, 2022 311,499 $ 12.32 Number of shares Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 311,499 $ 12.32 Exercised 0 $ — Terminated 0 $ — Issued for line of credit 175,531 $ 1.25 Expired loan extension (1,000) $ 6.00 Warrants outstanding as of December 31, 2023 486,030 $ 8.33 Warrants exercisable as of December 31, 2023 486,030 $ 8.33 |
ORGANIZATION AND ACQUISITIONS_3
ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, AND LIQUIDITY - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||||
Oct. 31, 2022 USD ($) qtr | Apr. 29, 2022 USD ($) trading_day | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||
Notes payable | $ 3,204,840 | $ 3,832,682 | ||||
Acquisition, contingent consideration, liability, earnout fair value criteria, number of trading days prior to end of applicable quarter | trading_day | 10 | |||||
Acquisition, additional contingent consideration expense | 160,232 | 436,905 | ||||
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 | |||||
Notes payable | 575,240 | $ 3,832,682 | ||||
Acquisition, contingent consideration, range of outcome (up to) | $ 1,100,000 | |||||
Emerald | ||||||
Business Acquisition [Line Items] | ||||||
Business combination consideration transferred | $ 7,700,000 | |||||
Acquisition, cash payment | 3,400,000 | |||||
Acquisition, common stock consideration | 2,500,000 | |||||
Acquisition, contingent consideration, range of outcome (up to) | $ 2,000,000 | $ 1,400,000 | $ 2,400,000 | $ 1,200,000 | ||
Acquisition, contingent consideration, liability, earnout fair value criteria, number of trading days prior to end of applicable quarter | trading_day | 10 | |||||
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, offset indemnified loss | $ 1,000,000 | |||||
Acquisition, contingent consideration, liability, profit margin threshold, if circumstances met | 7% |
ORGANIZATION AND ACQUISITIONS_4
ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, AND LIQUIDITY - Schedule of Purchase Price Allocation (Details) - USD ($) | Dec. 31, 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 receivable | 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 AND ACQUISITIONS_5
ORGANIZATION AND ACQUISITIONS, BUSINESS PLAN, AND LIQUIDITY - Schedule of ProForma Information (Details) - Emerald - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Total revenues and other income | $ 71,542,773 | $ 78,711,382 |
Net loss | (18,681,061) | (13,268,226) |
Equipment systems | ||
Restructuring Cost and Reserve [Line Items] | ||
Total revenues and other income | 12,675,645 | 33,333,574 |
Services | ||
Restructuring Cost and Reserve [Line Items] | ||
Total revenues and other income | 11,923,920 | 12,862,308 |
Construction design-build | ||
Restructuring Cost and Reserve [Line Items] | ||
Total revenues and other income | 46,254,967 | 31,504,349 |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Total revenues and other income | $ 688,241 | $ 1,011,151 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 27, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||||
Accounts receivable, allowance for credit loss | $ 103,653 | $ 306,496 | $ 103,653 | |
Bad debt expense | 566,569 | 110,000 | ||
Non-trade receivable | 2,914,112 | 3,134,452 | 2,914,112 | |
Miscellaneous non-trade receivable | 514,112 | 498,043 | 514,112 | |
Legal settlement, receivable | 2,400,000 | 2,400,000 | ||
Cash payments received, settled litigation | $ 2,400,000 | |||
Legal settlement, impairment | $ 950,576 | |||
Property, plant, and equipment, impairment charges | $ 0 | 0 | ||
Operating lease, interest rate | 8% | |||
Finance lease, interest rate | 8% | |||
Total cost of revenues | $ 61,251,211 | 52,824,215 | ||
Advertising expense | 516,522 | 504,738 | ||
Shipping and Handling | ||||
Property, Plant and Equipment [Line Items] | ||||
Total cost of revenues | $ 256,345 | $ 893,517 | ||
Patents | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-lived intangible asset, useful life (in years) | 5 years | |||
Trademarks and trade names | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-lived intangible asset, useful life (in years) | 5 years | |||
Customer relationships | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-lived intangible asset, useful life (in years) | 7 years | |||
Backlog | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite-lived intangible asset, useful life (in years) | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Property and Equipment (Details) | Dec. 31, 2023 |
Computer and technology equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Furniture and equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Other equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Other equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 71,542,773 | $ 67,029,934 |
Relative percentage | 100% | 100% |
CEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 21,575,311 | $ 44,025,696 |
Relative percentage | 30% | 66% |
Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 49,967,462 | $ 23,004,238 |
Relative percentage | 70% | 34% |
Equipment systems | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 12,675,645 | $ 33,333,574 |
Relative percentage | 18% | 50% |
Equipment systems | CEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 12,675,645 | $ 33,333,574 |
Equipment systems | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | 0 | 0 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 11,923,920 | $ 12,862,308 |
Relative percentage | 17% | 19% |
Services | CEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 3,820,338 | $ 8,016,433 |
Services | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | 8,103,582 | 4,845,875 |
Construction design-build | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 46,254,967 | $ 19,822,901 |
Relative percentage | 65% | 30% |
Construction design-build | CEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 4,391,087 | $ 1,664,538 |
Construction design-build | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | 41,863,880 | 18,158,363 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 688,241 | $ 1,011,151 |
Relative percentage | 1% | 2% |
Other | CEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 688,241 | $ 1,011,151 |
Other | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues and other income | $ 0 | $ 0 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Contract Assets and Liabilities (Details) - USD ($) | Dec. 31, 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 | $ 9,364,915 | $ 2,874,141 |
Retainage included in contract assets due to being conditional on something other than solely passage of time | 707,036 | 130,141 |
Total contract assets | 10,071,951 | 3,004,282 |
Contract liabilities: | ||
Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability) | 8,009,018 | 1,294,452 |
Retainage included in contract liabilities due to being conditional on something other than solely passage of time | 54,307 | 0 |
Total contract liabilities | $ 8,063,325 | $ 1,294,452 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with customers, accounts receivable | $ 23,857,287 | $ 12,466,180 | |
Customer deposits | 603,046 | 2,571,161 | $ 13,345,451 |
Contract with customer, liability, revenue recognized, including opening balance | $ 2,569,321 | ||
Contract with customer, liability, revenue recognized | $ 13,186,579 |
RELATED PARTY TRANSACTIONS - Sc
RELATED PARTY TRANSACTIONS - Schedule of Related Party Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Total revenues from related party transactions | $ 71,542,773 | $ 67,029,934 |
Cloud 9 Support, PotCo LLC, And CEA Consortium | ||
Related Party Transaction [Line Items] | ||
Total revenues from related party transactions | 1,232,730 | 25,863 |
Revenues - Cloud 9 | ||
Related Party Transaction [Line Items] | ||
Total revenues from related party transactions | 462 | 13,383 |
Revenues - Potco | ||
Related Party Transaction [Line Items] | ||
Total revenues from related party transactions | 987,268 | 12,480 |
Revenues - CEA Consortium | ||
Related Party Transaction [Line Items] | ||
Total revenues from related party transactions | $ 245,000 | $ 0 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Schedule of Related Party Accounts Receivable (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | $ 26,991,739 | $ 15,380,292 |
Cloud 9 Support, PotCo LLC, And CEA Consortium | ||
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | 408,088 | 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 | 163,088 | 20,174 |
Accounts receivable - CEA Consortium | ||
Related Party Transaction [Line Items] | ||
Total accounts receivable due from related party transactions | $ 245,000 | $ 0 |
PREPAYMENTS & OTHER ASSETS - Sc
PREPAYMENTS & OTHER ASSETS - Schedule of Prepayments and Other Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Vendor prepayments | $ 1,124,118 | $ 2,459,389 |
Prepaid services and fees | 1,379,949 | 1,346,430 |
Inventories | 228,858 | 320,372 |
Other assets | 42,757 | 38,769 |
Total prepaid expenses and other assets | $ 2,775,682 | $ 4,164,960 |
PROPERTY PLANT & EQUIPMENT, N_3
PROPERTY PLANT & EQUIPMENT, NET - Schedule of Property, Plant & Equipment (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation | $ (1,095,517) | $ (667,269) |
Total property plant and equipment, net | 1,419,393 | 1,307,146 |
Computers and technology equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 294,322 | 232,405 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 325,485 | 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 | 432,823 | 456,797 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,087,569 | 685,580 |
Other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 145,951 | $ 58,525 |
PROPERTY PLANT & EQUIPMENT, N_4
PROPERTY PLANT & EQUIPMENT, NET - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 580,487 | $ 423,286 |
INVESTMENTS - Schedule of Compo
INVESTMENTS - Schedule of Components of Investments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Aug. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2023 | |
Equity Securities, FV-NI, Cost [Roll Forward] | |||
Balances, as of December 31, 2022 | $ 2,559,307 | ||
Impairment | (258,492) | ||
Paid in kind interest | 25,657 | ||
Sale of investment | (2,326,472) | ||
Balances, as of December 31, 2023 | 0 | ||
XS Financial | |||
Equity Securities, FV-NI, Cost [Roll Forward] | |||
Balances, as of December 31, 2022 | 2,559,307 | ||
Impairment | (258,492) | ||
Paid in kind interest | 25,657 | ||
Sale of investment | $ (2,300,000) | (2,326,472) | |
Balances, as of December 31, 2023 | 0 | ||
Edyza | |||
Equity Securities, FV-NI, Cost [Roll Forward] | |||
Balances, as of December 31, 2022 | 0 | ||
Impairment | $ (1,700,000) | 0 | |
Paid in kind interest | 0 | ||
Sale of investment | 0 | ||
Balances, as of December 31, 2023 | $ 0 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Aug. 30, 2023 USD ($) | Oct. 30, 2021 USD ($) shares | Aug. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares shares | Oct. 30, 2021 $ / shares | |
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Investments | $ 0 | $ 2,559,307 | ||||||
Class of warrant or right, outstanding (in shares) | shares | 486,030 | 311,499 | 374,088 | |||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 8.33 | $ 12.32 | $ 11.26 | |||||
Sale of investment | $ 2,326,472 | |||||||
Proceeds from sale of investment | 2,326,472 | $ 0 | ||||||
Impairment of investment | 258,492 | |||||||
Edyza | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Ownership, percent | 19.50% | |||||||
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 | |||||||
XS Financial | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Investments | $ 2,500,000 | 0 | 2,559,307 | |||||
Sale of investment | $ 2,300,000 | 2,326,472 | ||||||
Proceeds from sale of investment | $ 2,300,000 | |||||||
Impairment of investment | 258,492 | |||||||
Edyza | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Investments | 0 | $ 0 | ||||||
Sale of investment | 0 | |||||||
Impairment of investment | $ 1,700,000 | $ 0 |
GOODWILL & INTANGIBLE ASSETS -
GOODWILL & INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 15,572,050 | $ 15,572,050 |
Goodwill, impairment | 0 | 0 |
Intangible asset amortization | $ 1,056,180 | $ 1,059,779 |
GOODWILL & INTANGIBLE ASSETS _2
GOODWILL & INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 6,758,213 | $ 6,758,213 |
Accumulated Amortization | (2,391,997) | (1,335,817) |
Net Book Value | 4,366,216 | 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 | 4,394,507 | 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 | (1,004,749) | (401,997) |
Net Book Value | 3,207,351 | 3,810,103 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,778,000 | 1,778,000 |
Accumulated Amortization | (663,417) | (307,817) |
Net Book Value | 1,114,583 | 1,470,183 |
Backlog and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 768,113 | 768,113 |
Accumulated Amortization | (723,831) | (626,003) |
Net Book Value | $ 44,282 | $ 142,110 |
GOODWILL & INTANGIBLE ASSETS _3
GOODWILL & INTANGIBLE ASSETS - Schedule of Future Amortization Expenses of Intangible Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 969,633 | |
2025 | 959,788 | |
2026 | 918,205 | |
2027 | 693,555 | |
2028 | 554,540 | |
Thereafter | 270,495 | |
Net Book Value | $ 4,366,216 | $ 5,422,396 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued operating expenses | $ 834,144 | $ 515,858 |
Accrued wages and related expenses | 1,428,364 | 639,614 |
Accrued 401(k) | 66,642 | 262,599 |
Accrued interest expense | 26,000 | 0 |
Accrued sales tax payable | 1,716,081 | 1,778,890 |
Total accrued expenses | $ 4,071,231 | $ 3,196,961 |
PROMISSORY NOTE AND DEBT - Sche
PROMISSORY NOTE AND DEBT - Schedule of Debt (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Long Term And Short Term Debt Instruments [Line Items] | ||
Total | $ 3,204,840 | $ 3,832,682 |
Less current maturities | (3,204,840) | (3,832,682) |
Long Term | 0 | 0 |
Other financing agreements | ||
Schedule Of Long Term And Short Term Debt Instruments [Line Items] | ||
Short-term debt | 129,600 | 0 |
DVO note | DVO | ||
Schedule Of Long Term And Short Term Debt Instruments [Line Items] | ||
Long-term debt | 575,240 | 3,832,682 |
Revolving Facility | Line of credit | ||
Schedule Of Long Term And Short Term Debt Instruments [Line Items] | ||
Long-term debt | $ 2,500,000 | $ 0 |
PROMISSORY NOTE AND DEBT - Narr
PROMISSORY NOTE AND DEBT - Narrative (Details) | 3 Months Ended | |||
Dec. 13, 2023 USD ($) trading_day tranche | Nov. 01, 2022 USD ($) qtr | Mar. 31, 2024 | Dec. 31, 2023 | |
Other financing agreements | ||||
Line of Credit Facility [Line Items] | ||||
Debt, average interest rate | 13.60% | |||
Bancroft Capital, LLC | ||||
Line of Credit Facility [Line Items] | ||||
Cash and warrant compensation, number of separate tranches | tranche | 2 | |||
Cash and warrant compensation, payout criteria, line of credit drawn by borrower, amount to exceed | $ 4,500,000 | |||
Bancroft Capital, LLC | Tranche One | ||||
Line of Credit Facility [Line Items] | ||||
Value of warrants to be issued, if circumstances met | $ 200,000 | |||
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price, if trading day criteria met | 110% | |||
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price criteria, number of consecutive trading days | trading_day | 10 | |||
Warrants to be issued if criteria met, exercise period, number of months from the date of issuance | 6 months | |||
Bancroft Capital, LLC | Tranche Two | ||||
Line of Credit Facility [Line Items] | ||||
Cash and warrant compensation, payout criteria, line of credit drawn by borrower, amount to exceed | $ 4,500,000 | |||
Value of warrants to be issued, if circumstances met | $ 200,000 | |||
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price, if trading day criteria met | 110% | |||
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price criteria, number of consecutive trading days | trading_day | 10 | |||
Bancroft Capital, LLC | Tranche One | ||||
Line of Credit Facility [Line Items] | ||||
Cash and warrant compensation, cash fee earned | $ 200,000 | |||
Bancroft Capital, LLC | Tranche Two | ||||
Line of Credit Facility [Line Items] | ||||
Cash and warrant compensation, additional cash fee earned, If borrowing criteria met | 200,000 | |||
Line of credit | Revolving Facility | Loan Agreement | UG Construction, Inc. | Gemini Finance Corp. | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity (up to) | $ 10,000,000 | |||
Extension period following initial term | 9 months | |||
Debt, covenant, lender non-renewal written notice, minimum number of days prior to initial term expiration | 60 days | |||
Secured Promissory Note | UG Construction, Inc. | Gemini Finance Corp. | ||||
Line of Credit Facility [Line Items] | ||||
Maximum number of days draws due and payable | 180 days | |||
Debt, interest rate | 1.75% | |||
DVO note | DVO | ||||
Line of Credit Facility [Line Items] | ||||
Debt, face amount | $ 3,806,250 | |||
Debt, payment terms, number of consecutive quarters | qtr | 4 | |||
Debt, payment terms, remaining three payments, number of days following end of each fiscal quarter | 10 days | |||
DVO note | DVO | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Debt, interest rate during period | 10% |
OPERATING LEASE LIABILITIES A_3
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Aug. 11, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) lease | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Number of operating leases | lease | 7 | |||
Number of finance leases | lease | 1 | |||
Operating lease, interest rate | 8% | |||
Finance lease, interest rate | 8% | |||
Loss on settlement | $ | $ 1,500,000 | $ 0 | ||
Crest Ventures, LLC Litigation | Settled Litigation | ||||
Lessee, Lease, Description [Line Items] | ||||
Loss contingency, damages paid | $ | $ 1,500,000 | |||
Loss on settlement | $ | $ 1,500,000 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Finance lease, term of contract (minimum less than a year) | 1 year | |||
Operating lease, term of contract (minimum less than a year) | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Finance lease, term of contract (minimum less than a year) | 5 years | |||
Operating lease, term of contract (minimum less than a year) | 5 years | |||
2WR, Emerald, and DVO Acquisitions | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of operating leases acquired via business combinations | lease | 5 |
OPERATING LEASE LIABILITIES A_4
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease liabilities related to right of use assets | $ 2,087,503 | $ 2,645,598 |
Less current portion | (707,141) | (600,816) |
Long term | $ 1,380,362 | $ 2,044,782 |
OPERATING LEASE LIABILITIES A_5
OPERATING LEASE LIABILITIES AND COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 754,076 | |
2025 | 573,133 | |
2026 | 404,751 | |
2027 | 346,812 | |
2028 | 253,415 | |
Thereafter | 82,488 | |
Total minimum lease payments | 2,414,675 | |
Less: Amount representing interest | (327,172) | |
Net lease obligations | $ 2,087,503 | $ 2,645,598 |
RISKS AND UNCERTAINTIES - Sched
RISKS AND UNCERTAINTIES - Schedule of Concentration Risk (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Purchases | Supplier Concentration Risk | V000001029 | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13% | |
Purchases | Supplier Concentration Risk | V000002275 | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11% | |
Accounts Payable | Supplier Concentration Risk | V000002275 | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13% | |
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 | 10% | |
C000001140 | Revenue Benchmark | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13% | |
C000002463 | Revenue Benchmark | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15% | |
C000002187 | Revenue Benchmark | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 28% | 17% |
C000002187 | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 57% | 24% |
C000002151 | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 2,199,046 | $ 2,571,785 |
Stock options outstanding, aggregate intrinsic value | 0 | |
Stock options exercisable, aggregate intrinsic value | $ 0 | |
Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value assumptions, expected volatility rate | 100% | |
Minimum | Omnibus Incentive Plan | Stock Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting employment period (in years) | 1 year | |
Minimum | Omnibus Incentive Plan | Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting employment period (in years) | 1 year | |
Maximum | Omnibus Incentive Plan | Stock Grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting employment period (in years) | 3 years | |
Maximum | Omnibus Incentive Plan | Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting employment period (in years) | 3 years | |
Employees and Directors | Stock Grants | Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, vested and expected to vest, outstanding, number (in shares) | 510,720 | 62,172 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of RSU Grant Activity (Details) - Restricted Stock Units (RSUs) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Grants unissued, beginning balance (in shares) | 494,859 | 153,673 |
Grants awarded (in shares) | 633,269 | 542,584 |
Forfeiture/cancelled (in shares) | (23,139) | (139,226) |
Grants vested (in shares) | (510,720) | (62,172) |
Grants unissued, ending balance (in shares) | 594,269 | 494,859 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of RSU Vesting Periods (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2023 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 594,269 |
Unrecognized Stock Compensation Expense | $ | $ 1,072,879 |
Share-based Payment Arrangement, Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 436,210 |
Unrecognized Stock Compensation Expense | $ | $ 890,461 |
Share-based Payment Arrangement, Tranche Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 158,059 |
Unrecognized Stock Compensation Expense | $ | $ 182,418 |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | |||
Stock options outstanding, beginning balance (in shares) | 669,388 | 641,337 | |
Issued (in shares) | 0 | 76,246 | |
Exercised (in shares) | 0 | (4,555) | |
Forfeited (in shares) | (7,105) | (43,640) | |
Stock options outstanding, ending balance (in shares) | 662,283 | 669,388 | 641,337 |
Stock options exercisable (in shares) | 655,538 | 618,651 | |
Weighted Average Remaining Life (Years) | |||
Stock options outstanding, beginning balance (in years) | 7 years 10 months 6 days | 7 years 6 months 18 days | |
Issued (in years) | 0 years | 9 years | |
Exercised (in years) | 0 years | 0 years | |
Forfeited (in years) | 0 years | 6 years 3 months | |
Stock options outstanding, ending balance (in years) | 7 years 10 months 6 days | 7 years 10 months 6 days | |
Stock options exercisable (in years) | 7 years 10 months 6 days | 6 years 8 months 26 days | |
Weighted Average Exercise Price | |||
Stock options outstanding, beginning balance (in dollars per share) | $ 6.77 | $ 6.27 | |
Issued (in dollars per share) | 0 | 10.48 | |
Exercised (in dollars per share) | 0 | 6 | |
Forfeited (in dollars per share) | 9.39 | 6.04 | |
Stock options outstanding, ending balance (in dollars per share) | 6.77 | 6.77 | $ 6.27 |
Stock options exercisable (in dollars per share) | $ 6.30 | $ 6.30 |
STOCK-BASED COMPENSATION - Sc_4
STOCK-BASED COMPENSATION - Schedule of Stock Option Vesting Periods (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 6,745 |
Unrecognized Stock Compensation Expense | $ | $ 29,372 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 31 Months Ended | ||||||
May 24, 2021 | Feb. 17, 2021 | Feb. 28, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Sep. 12, 2022 | Feb. 02, 2022 | Jan. 18, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
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, average price per share (in dollars per share) | $ 8.50 | $ 7.33 | $ 8.25 | ||||||
Stock repurchased during period | $ 3,000,000 | $ 4,400,000 | $ 9,100,000 | ||||||
Stock repurchased (in shares) | 350,000 | 0 | 594,918 | 1,099,833 | |||||
Stock repurchase program, amount remaining under program | $ 1,400,000 | $ 1,400,000 | |||||||
IPO | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Sale of stock, number of shares issued (in shares) | 6,210,000 | ||||||||
Sale of stock, share price (in dollars per share) | $ 10 | ||||||||
Sale of stock, total gross offering proceeds | $ 62,100,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 35,479,242 | $ 19,346,059 |
Operating loss carryforwards, expiring in 2037 | 2,182,354 | 2,182,354 |
Operating loss carryforwards, with no expiration | 33,296,888 | $ 17,163,705 |
Tax credit carryforwards | $ 0 |
BUSINESS DEVELOPMENT (Details)
BUSINESS DEVELOPMENT (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 internationalVendor | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of international vendors | internationalVendor | 1 | ||
Business development | $ | $ 0 | $ 3,299,864 |
WARRANTS - Schedule of Warrant
WARRANTS - Schedule of Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of shares | ||
Warrants outstanding, beginning balance (in shares) | 311,499 | 374,088 |
Exercised (in shares) | 0 | (18,196) |
Terminated – cashless exercise (in shares) | (44,393) | |
Terminated (in shares) | 0 | |
Issued for line of credit (in shares) | 175,531 | |
Expired (in shares) | 0 | |
Expired loan extension (in shares) | (1,000) | |
Warrants outstanding, ending balance (in shares) | 486,030 | 311,499 |
Warrants exercisable (in shares) | 486,030 | 311,499 |
Weighted Average Exercise Price | ||
Warrants outstanding, beginning balance (in dollars per share) | $ 12.32 | $ 11.26 |
Exercised (in dollars per share) | 0 | 6 |
Terminated – cashless exercise (in dollars per share) | 6 | |
Terminated (in dollars per share) | 0 | |
Issued for line of credit (in dollars per share) | 1.25 | |
Expired (in dollars per share) | 0 | |
Expired loan extension (in dollars per share) | 6 | |
Warrants outstanding, ending balance (in dollars per share) | 8.33 | 12.32 |
Warrants exercisable (in dollars per share) | $ 8.33 | $ 12.32 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, weighted-average life | 4 years 14 days |
Warrants, outstanding, intrinsic value | $ 0 |
Warrants, exercisable, intrinsic value | $ 0 |
Measurement Input, Price Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 1 |