Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-41526 | |
Entity Registrant Name | CASTELLUM, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 27-4079982 | |
Entity Address, Address Line One | 1934 Old Gallows Road | |
Entity Address, Address Line Two | Suite 350 | |
Entity Address, City or Town | Vienna | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22182 | |
City Area Code | 703 | |
Local Phone Number | 752-6157 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | CTM | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,109,928 | |
Entity Central Index Key | 0001877939 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash | $ 2,411,825 | $ 1,830,841 |
Accounts receivable | 6,365,657 | 6,883,566 |
Contract asset | 0 | 160,649 |
Prepaid income taxes | 0 | 216,909 |
Prepaid expenses and other current assets | 587,174 | 404,228 |
Total current assets | 9,364,656 | 9,496,193 |
Fixed assets, net | 229,083 | 310,170 |
Non-Current Assets: | ||
Right of use asset - operating lease | 1,218,342 | 613,143 |
Investment in captive insurance entity | 54,534 | 0 |
Intangible assets, net | 7,884,922 | 8,970,864 |
Goodwill | 10,716,907 | 10,716,907 |
Total non-current assets | 20,103,788 | 20,611,084 |
Total Assets | 29,468,444 | 30,107,277 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,020,643 | 784,965 |
Accrued payroll and payroll related expenses | 3,474,730 | 2,925,312 |
Income tax payable | 34,772 | 0 |
Contract liability | 77,012 | 0 |
Due to seller | 290,000 | 350,000 |
Obligation to issue common and preferred stock | 402,708 | 255,940 |
Contingent earnout | 0 | 380,000 |
Derivative liabilities | 55,000 | 157,600 |
Revolving credit facility | 1,529,818 | 625,025 |
Current portion of lease liability - operating lease | 292,091 | 185,263 |
Total current liabilities | 8,429,452 | 7,977,092 |
Non-Current Liabilities | ||
Deferred tax liability | 6,292 | 6,292 |
Lease liability - operating lease, net of current portion | 933,379 | 435,204 |
Due to Seller, net of current portion | 220,000 | 0 |
Contingent earnout, net of current portion | 0 | 340,000 |
Notes payable, related party, net of current portion | 400,000 | 400,000 |
Total non-current liabilities | 8,959,671 | 9,181,496 |
Total Liabilities | 17,389,123 | 17,158,588 |
Stockholders' Equity | ||
Common stock, par value, $0.0001, 3,000,000,000 shares authorized, 53,029,915 and 47,672,427 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 5,303 | 4,767 |
Additional paid in capital | 62,074,352 | 56,926,157 |
Accumulated deficit | (50,000,999) | (43,982,900) |
Total stockholders' equity | 12,079,321 | 12,948,689 |
Total Liabilities and Stockholders' Equity | 29,468,444 | 30,107,277 |
Related party | ||
Current Liabilities | ||
Current portion of convertible promissory notes - related parties, net of discount | 0 | 238,212 |
Non-Current Liabilities | ||
Notes payable, noncurrent | 0 | 2,000,000 |
Nonrelated Party | ||
Current Liabilities | ||
Current portion of notes payable, net of discount | 1,252,678 | 2,074,775 |
Non-Current Liabilities | ||
Notes payable, noncurrent | 7,400,000 | 6,000,000 |
Series A Preferred | ||
Stockholders' Equity | ||
Preferred stock, value, issued | 588 | 588 |
Series C Preferred | ||
Stockholders' Equity | ||
Preferred stock, value, issued | $ 77 | $ 77 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares, issued (in shares) | 53,029,915 | 53,029,915 |
Common stock, shares outstanding (in shares) | 47,672,427 | 47,672,427 |
Series A Preferred | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock par or stated value per share (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued (in shares) | 5,875,000 | 5,875,000 |
Preferred stock, shares outstanding (in shares) | 5,875,000 | 5,875,000 |
Series C Preferred | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock par or stated value per share (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued (in shares) | 770,000 | 770,000 |
Common stock, shares outstanding (in shares) | 770,000 | 770,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 11,522,388 | $ 12,475,802 | $ 22,857,441 | $ 22,412,815 |
Cost of Revenues | 6,849,180 | 7,263,984 | 13,668,812 | 13,163,215 |
Gross Profit | 4,673,208 | 5,211,818 | 9,188,629 | 9,249,600 |
Operating Expenses | ||||
Indirect costs | 2,211,640 | 2,241,460 | 4,702,330 | 4,452,339 |
Overhead | 512,261 | 536,937 | 968,881 | 1,004,619 |
General and administrative | 3,519,512 | 4,244,312 | 7,758,845 | 10,290,842 |
Gain from change in fair value of contingent earnout | 0 | 83,000 | 0 | 65,000 |
Total operating expenses | 6,243,413 | 7,105,709 | 13,430,056 | 15,812,800 |
Loss From Operations Before Other Income (Expense) | (1,570,205) | (1,893,891) | (4,241,427) | (6,563,200) |
Other Income (Expense) | ||||
Loss on induced conversion | 0 | 0 | 0 | (300,000) |
Loss on extinguishment of debt | 0 | 0 | (822,847) | 0 |
Gain from change in fair value of derivative liability | 56,000 | 593,000 | 102,400 | 844,625 |
Other income (expense), net | 2 | 0 | (1,073) | |
Interest expense, net of interest income | (211,999) | (810,837) | (742,192) | (1,641,115) |
Total other income (expense) | (155,999) | (217,835) | (1,462,639) | (1,097,563) |
Loss From Operations Before Benefit For Income Taxes | (1,726,204) | (2,111,726) | (5,704,066) | (7,660,763) |
Income tax (expense) benefit | (120,531) | 13,280 | (254,390) | 1,238,929 |
Net Loss | (1,846,735) | (2,098,446) | (5,958,456) | (6,421,834) |
Less: preferred stock dividends | 29,819 | 29,820 | 59,639 | 60,139 |
Net Loss To Common Shareholders | $ (1,876,554) | $ (2,128,266) | $ (6,018,095) | $ (6,481,973) |
Net Loss Per Share - Basic And Diluted | ||||
Net loss per share, basic (in usd per share) | $ (0.03) | $ (0.04) | $ (0.11) | $ (0.14) |
Net loss per share, diluted (in usd per share) | $ (0.03) | $ (0.04) | $ (0.11) | $ (0.14) |
Weighted average shares outstanding, basic (in shares) | 57,190,645 | 48,369,250 | 54,456,453 | 45,731,842 |
Weighted average shares outstanding, diluted (in shares) | 57,190,645 | 48,369,250 | 54,456,453 | 45,731,842 |
Consolidated Statement Of Chang
Consolidated Statement Of Changes In Stockholders' Equity (Unaudited) - USD ($) | Total | GTMR | Series C Preferred Subscription Agreements | Warrant | Private Warrant | Pre-Funded Warrants | Common Stock | Common Stock GTMR | Additional Paid-In Capital | Additional Paid-In Capital GTMR | Additional Paid-In Capital Series C Preferred Subscription Agreements | Additional Paid-In Capital Warrant | Additional Paid-In Capital Private Warrant | Additional Paid-In Capital Pre-Funded Warrants | Accumulated Deficit | Series A Preferred Preferred Stock | Series B Preferred Preferred Stock | Series C Preferred Preferred Stock |
Beginning balance (in shares) at Dec. 31, 2022 | 41,699,363 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Beginning balance at Dec. 31, 2022 | $ 17,531,916 | $ 4,170 | $ 43,621,651 | $ (26,094,570) | $ 588 | $ 0 | $ 77 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation - options | 2,436,299 | 2,436,299 | ||||||||||||||||
Stock-based compensation - warrants | $ 1,076,969 | $ 1,076,969 | ||||||||||||||||
Stock issued during period, shares, issued for services (in shares) | 125,504 | |||||||||||||||||
Stock issued during period, value, issued for services | 149,999 | $ 12 | 149,987 | |||||||||||||||
Shares issued to acquire GTMR (in shares) | 4,866,570 | |||||||||||||||||
Shares issued to acquire GTMR | $ 5,304,562 | $ 487 | $ 5,304,075 | |||||||||||||||
Shares issued in induced conversion (in shares) | 556,250 | |||||||||||||||||
Shares issued in induced conversion | 590,000 | $ 56 | 589,944 | |||||||||||||||
Loss on induced conversion | 300,000 | 300,000 | ||||||||||||||||
Extinguishment of debt discount - derivative liability | (171,128) | (171,128) | ||||||||||||||||
Extinguishment of debt discount - debt issuance costs | (8,034) | (8,034) | ||||||||||||||||
Extinguishment of derivative liability | $ 33,375 | $ 33,375 | ||||||||||||||||
Net loss for the period | (4,353,710) | (4,353,710) | ||||||||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 47,247,687 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Ending balance at Mar. 31, 2023 | 22,890,248 | $ 4,725 | 53,333,138 | (30,448,280) | $ 588 | $ 0 | $ 77 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 41,699,363 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Beginning balance at Dec. 31, 2022 | 17,531,916 | $ 4,170 | 43,621,651 | (26,094,570) | $ 588 | $ 0 | $ 77 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Extinguishment of debt discount - debt issuance costs | (8,034) | |||||||||||||||||
Net loss for the period | (6,481,973) | |||||||||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 47,373,712 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Ending balance at Jun. 30, 2023 | 22,052,145 | $ 4,737 | 54,623,289 | (32,576,546) | $ 588 | $ 0 | $ 77 | |||||||||||
Beginning balance (in shares) at Mar. 31, 2023 | 47,247,687 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Beginning balance at Mar. 31, 2023 | 22,890,248 | $ 4,725 | 53,333,138 | (30,448,280) | $ 588 | $ 0 | $ 77 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issued during period, value, issued for services | 1,089,163 | 1,089,163 | ||||||||||||||||
Share-based compensation - restricted stock and shares Issued for services (in shares) | 63,025 | |||||||||||||||||
Stock-based compensation - restricted stock and shares issued for services | 75,000 | $ 6 | 74,994 | |||||||||||||||
Shares issued in private placement (in shares) | 63,000 | |||||||||||||||||
Shares issued in private placement | 126,000 | $ 6 | 125,994 | |||||||||||||||
Net loss for the period | (2,128,266) | (2,128,266) | ||||||||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 47,373,712 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Ending balance at Jun. 30, 2023 | 22,052,145 | $ 4,737 | 54,623,289 | (32,576,546) | $ 588 | $ 0 | $ 77 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 47,672,427 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Beginning balance at Dec. 31, 2023 | 12,948,689 | $ 4,767 | 56,926,161 | (43,982,904) | $ 588 | $ 0 | $ 77 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation - options | 1,657,822 | 1,657,822 | ||||||||||||||||
Stock issued during period, shares, new issues (in shares) | 5,357,487 | |||||||||||||||||
Stock issued during period, value, new issues | 755,767 | $ 536 | 755,231 | |||||||||||||||
Warrants issues (in shares) | $ 1,081,471 | $ 525,905 | $ 1,081,471 | $ 525,905 | ||||||||||||||
Net loss for the period | (4,141,541) | (4,141,541) | ||||||||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 53,029,914 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Ending balance at Mar. 31, 2024 | 12,828,113 | $ 5,303 | 60,946,590 | (48,124,445) | $ 588 | $ 0 | $ 77 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 47,672,427 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Beginning balance at Dec. 31, 2023 | 12,948,689 | $ 4,767 | 56,926,161 | (43,982,904) | $ 588 | $ 0 | $ 77 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Extinguishment of debt discount - debt issuance costs | $ 0 | |||||||||||||||||
Stock issued during period, shares, new issues (in shares) | 5,357,488 | |||||||||||||||||
Net loss for the period | $ (6,018,095) | |||||||||||||||||
Ending balance (in shares) at Jun. 30, 2024 | 53,029,914 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Ending balance at Jun. 30, 2024 | 12,079,321 | $ 5,303 | 62,074,352 | (50,000,999) | $ 588 | $ 0 | $ 77 | |||||||||||
Beginning balance (in shares) at Mar. 31, 2024 | 53,029,914 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Beginning balance at Mar. 31, 2024 | 12,828,113 | $ 5,303 | 60,946,590 | (48,124,445) | $ 588 | $ 0 | $ 77 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock-based compensation - options | 1,127,762 | 1,127,762 | ||||||||||||||||
Net loss for the period | (1,876,554) | (1,876,554) | ||||||||||||||||
Ending balance (in shares) at Jun. 30, 2024 | 53,029,914 | 5,875,000 | 0 | 770,000 | ||||||||||||||
Ending balance at Jun. 30, 2024 | $ 12,079,321 | $ 5,303 | $ 62,074,352 | $ (50,000,999) | $ 588 | $ 0 | $ 77 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash Flow From Operating Activities | ||
Net loss | $ (5,958,456) | $ (6,421,834) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,167,029 | 1,190,974 |
Amortization of discounts, premium and deferred costs | 1,118,194 | 1,147,921 |
Stock-based compensation | 2,932,356 | 4,938,021 |
Deferred tax provision | 0 | (1,089,677) |
Lease cost | 144,212 | 1,006 |
Change in fair value of contingent earnout | 0 | 65,000 |
Change in fair value of derivative liability | (102,400) | (844,625) |
Gain on lease termination | (9,225) | 0 |
Changes in assets and liabilities | ||
Accounts receivable | 517,909 | (473,170) |
Proceeds from factoring accounts receivable | 0 | 411,975 |
Prepaid expenses and other current assets | 40,382 | (12,564) |
Contract asset (liability) | 237,661 | (378,258) |
Accounts payable and accrued expenses | 819,867 | (399,820) |
Lease liability | (135,183) | 0 |
Net cash provided by (used in) operating activities | 772,346 | (1,865,051) |
Cash Flows From Investing Activities | ||
Acquisition of business, cash paid to seller | 0 | (470,233) |
Cash paid to seller from factoring | 0 | (411,975) |
Cash received in acquisition of GTMR | 0 | 475,000 |
Purchases of fixed assets | 0 | (20,526) |
Investment in captive insurance entity | (54,534) | 0 |
Net cash used in investing activities | (54,534) | (427,734) |
Cash Flows From Financing Activities | ||
Proceeds from revolving credit line | 904,793 | 325,000 |
Payment of debt issuance costs | (6,422) | (15,000) |
Proceeds from issuance of common stock, prefunded warrants and regular warrants, net of issuance costs | 2,363,143 | 126,000 |
Proceeds from notes payable | 0 | 1,200,000 |
Preferred stock dividend | (59,639) | (60,139) |
Repayment of amounts due to seller | (560,000) | (280,000) |
Loss on induced conversion | 300,000 | |
Net cash provided by (used in) financing activities | (136,828) | 641,566 |
Net increase (decrease ) in cash | 580,984 | (1,651,219) |
Cash - Beginning of Period | 1,830,841 | 4,640,896 |
Cash - End of Period | 2,411,825 | 2,989,677 |
Supplemental Disclosures | ||
Cash paid for interest expense | (415,397) | (490,875) |
Cash refunded (paid) from income taxes | (3,535) | 4,751 |
Summary of Non-Cash Activities: | ||
Debt discount on note payable applied to obligation to issue common stock | 0 | 28,000 |
Derivative liability incurred for note payable | 0 | 421,000 |
Extinguishment of debt discount - derivative liability | 0 | 171,128 |
Extinguishment of debt discount - debt issuance costs | 0 | 8,034 |
Extinguishment of derivative liability on Crom note | 0 | 33,375 |
Derecognition of lease liability | 396,388 | 0 |
Derecognition of right of use asset | 387,164 | 0 |
Related Parties | ||
Cash Flows From Financing Activities | ||
Extinguishment of conversion option on note payable | (809,617) | 0 |
Nonrelated Parties | ||
Cash Flows From Financing Activities | ||
Repayment of note payable | $ (1,969,086) | $ (954,295) |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Castellum, Inc. (the “Company”) is focused on building a large, successful technology company in the areas of cybersecurity, information technology, electronic warfare, information warfare, and information operations with businesses in the defense, federal, civilian, and commercial markets (the "Markets"). Services include intelligence analysis, software development, software engineering, program management, strategic and mission planning, information assurance, cybersecurity and policy support, data analytics, and model based systems engineering ("MBSE"). These services, which largely focus on securing data and establishing related policies, are applicable to customers in the United States ("U.S.") government, financial services, healthcare, and other users of large data applications. The services can be delivered to legacy, customer owned networks, or customers who rely upon cloud-based infrastructures. The Company works with multiple business brokers and contacts within its business network to identify potential acquisitions. Since November 2019, the Company has made the following acquisitions that specialize in the areas noted above: • Corvus Consulting, LLC (“Corvus”), • Mainnerve Federal Services, Inc. dba MFSI Government Group (“MFSI"), • Merrison Technologies, LLC ("Merrison"), • Specialty Systems, Inc. (“SSI”), • the business assets of Pax River from The Albers Group (“Pax River”), • Lexington Solutions Group, LLC (“LSG”), and • Global Technology and Management Resources, Inc. ("GTMR"). With the exception of Pax River, all of these acquisitions were considered business combinations under Topic 805 Business Combinations of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). See Note 3 , “Acquisitions” for greater detail on the GTMR acquisition. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation for Interim Periods Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year then ended. We have continued to follow the accounting policies set forth in those financial statements. Business Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) and in deciding how to allocate resources and in assessing performance. The Company’s CODM, the Chief Executive Officer, conducts a review of the consolidated results of operations to make decisions. The Company maintains one operating and reportable segment, which is the delivery of products and services in the Markets. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, the acquired value of the intangible assets and goodwill, impaired value of intangible assets, self-insurance expense and accruals, liabilities to accrue, cost incurred in the satisfaction of performance obligations, fair value for consideration elements of business combinations, permanent and temporary differences related to income taxes, and determination of the fair value of stock awards. Actual results could differ from these estimates. Revenue Recognition The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . The Company accounts for a contract with a customer that is within the scope of this Topic only when the five steps of revenue recognition under ASC 606 are met. The five core principles will be evaluated for each service provided by the Company and is further supported by applicable guidance in ASC 606 to support the Company’s recognition of revenue. Revenue is derived primarily from services provided to the Federal government. The Company enters into agreements with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services and solutions are transferred to the customer. The Company also evaluates whether two or more agreements should be accounted for as one single contract. When determining the total transaction price, the Company identifies both fixed and variable consideration elements within the contract. The Company estimates variable consideration as the most likely amount to which the Company expects to be entitled, limited to the extent that it is probable that a significant reversal will not occur in a subsequent period. At contract inception, the Company determines whether the goods or services to be provided are to be accounted for as a single performance obligation or as multiple performance obligations. For most contracts, the customers require the Company to perform several tasks in providing an integrated output and, hence, each of these contracts are deemed as having only one performance obligation. When contracts are separated into multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. This evaluation requires professional judgment, and it may impact the timing and pattern of revenue recognition. If multiple performance obligations are identified, the Company generally uses the cost plus a margin approach to determine the relative standalone selling price of each performance obligation. The Company does not assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between when payment by the client and the transfer of promised services to the client occur will be less than one year. The Company currently generates its revenue from three different types of contractual arrangements: cost plus fixed fee (“CPFF”), firm-fixed-price contracts (“FFP”), and time-and-materials (“T&M”) contracts. The Company generally recognizes revenue over time as control is transferred to the customer, based on the extent of progress towards satisfaction of the performance obligation. The selection of the method used to measure progress requires judgment and is dependent on the contract type and the nature of the goods or services to be provided. For CPFF contracts, the Company uses input progress measures to derive revenue based on hours worked on contract performance as follows: direct costs plus Defense Contract Audit Agency (“DCAA”) approved provisional burdens plus a fee. The provisional indirect rates are adjusted and billed at actual at year end. Revenue from FFP contracts is generally recognized ratably over the contract term, using a time-based measure of progress, even if billing is based on other metrics or milestones, including specific deliverables. For T&M contracts, the Company uses input progress measures to estimate revenue earned based on hours worked on contract performance at negotiated billing rates, plus direct costs and indirect cost burdens associated with materials and the direct expenses incurred in performance of the contract. These arrangements generally qualify for the “right-to-invoice” practical expedient where revenue is recognized in proportion to billable consideration. FFP Level-Of-Effort contracts are substantially similar to T&M contracts except that the Company is required to deliver a specified level-of-effort over a stated period. For these contracts, the Company estimates revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required manpower. Revenue generated by contract support service contracts is recognized over time as services are provided, based on the transfer of control. Revenue generated by FFP contracts is recognized over time as performance obligations are satisfied. Most contracts do not contain variable consideration and contract modifications are generally minimal. For these reasons, there is not a significant impact of electing these transition practical expedients. Revenue generated from contracts with Federal, state, and local governments is recorded over time, rather than at a point in time. Under the contract support services contracts, the Company performs software design work as it is assigned by the customer, and bills the customer, generally semi-monthly, on either a CPFF or T&M basis, as labor hours are expended. Certain other government contracts for software development have specific deliverables and are structured as FFP contracts, which are generally billed as the performance obligations under the contract are met. Revenue recognition under FFP contracts requires judgment to allocate the transaction price to the performance obligations. Contracts may have terms of up to five years. Contract accounting requires judgment relative to assessing risks and estimating contract revenue, as well as costs and assumptions for schedule and technical issues. Due to the size and nature of contracts, estimates of revenue and costs are subject to a number of variables. For contract change orders, claims, or similar items, judgment is required for estimating the amounts, assessing the potential for realization and determining whether realization is probable. Estimates of total contract revenue and costs are continuously monitored during the term of the contract and are subject to revision as the contract progresses. From time to time, facts develop that require revisions of revenue recognized or cost estimates. To the extent that a revised estimate affects the current or an earlier period, the cumulative effect of the revision is recognized in the period in which the facts requiring the revision become known. The Company accounts for contract costs in accordance with ASC Topic 340-40, Contracts with Customers . The Company recognizes the cost of sales of a contract as an expense when incurred or at the time a performance obligation is satisfied. The Company recognizes an asset from the costs to fulfill a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future, and the costs are expected to be recovered. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained. The following table disaggregates the Company’s revenue by contract type for the six months ended June 30: 2024 2023 Revenue: Time and material $ 12,691,564 $ 12,934,662 Firm fixed price 1,512,416 1,641,322 Cost plus fixed fee 8,653,461 7,836,831 Total $ 22,857,441 $ 22,412,815 Accounting for Income Taxes Income taxes are accounted for under the asset and liability method. We estimate our income taxes in each of the jurisdictions where the Company operates. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. We are subject to income taxes in the federal and state tax jurisdictions based upon our business operations in those jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized up on ultimate settlement with the related tax authority. Management evaluates its tax positions on a quarterly basis. The Company files income tax returns in the U.S. Federal tax jurisdiction and various state tax jurisdictions. The federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities, generally for three years after they were filed. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update requires disaggregated information about a reporting entity’s effective tax rate reconciliations as well as information on income taxes paid. This update is effective for annual periods beginning in our fiscal year ending December 31, 2025. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures. Reclassification Adjustment The Company has reclassified certain amounts in the 2023 financial statements to comply with the 2024 presentation. These principally relate to classification of “Gain on Disposal of Fixed Assets” to “Other” on our consolidated statements of operations. The reclassifications had no impact on total net loss or net cash flows for the six months ended June 30, 2024 and 2023. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Acquisition | Acquisition Since January 1, 2023, the Company has completed the following acquisition to achieve its business purposes as discussed in Note 1 . GTMR On March 22, 2023, the Company entered into an agreement and plan of merger with GTMR (the "GTMR Acquisition"). The GTMR Acquisition was accounted for as a business combination whereby GTMR became a 100% owned subsidiary of the Company. The Company acquired GTMR to expand its capabilities, increase market share, gain access to new contracts, and achieve cost efficiencies through synergies and economies of scale. The following represents the assets and liabilities acquired in this acquisition: March 31, 2023 Adjustments March 22, 2024 Cash $ 475,000 $ — $ 475,000 Accounts receivable and other receivables 1,380,203 (9,384) 1,370,819 Income tax receivable 155,449 (127,992) 27,457 Prepaid expenses 116,892 (30,856) 86,036 Other asset 17,182 — 17,182 Furniture and equipment 163,301 103,760 267,061 Right of use asset – operating lease — 641,392 641,392 Customer relationships 2,426,000 — 2,426,000 Right of use asset - finance lease — 17,456 17,456 Tradename 517,000 — 517,000 Backlog 1,774,000 — 1,774,000 Goodwill 1,822,466 279,571 2,102,037 Deferred tax liability (1,244,368) (242,093) (1,486,461) Lease liability – operating lease (17,608) (603,799) (621,407) Lease liability – finance lease — (12,549) (12,549) Accounts payable and accrued expenses $ (1,030,957) $ 141,341 $ (889,616) Net assets acquired $ 6,554,560 $ 156,847 $ 6,711,407 The consideration paid for GTMR was as follows: Cash $ 470,233 Due to Seller 350,000 Other consideration 17,791 Cash from factoring 411,975 Common stock 5,304,561 Accounts receivable note 156,847 Total consideration paid $ 6,711,407 The GTMR Acquisition has been accounted for under the acquisition method of accounting. Under the acquisition method of accounting, the total acquisition consideration price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair value measurements utilize estimates based on key assumptions of the GTMR Acquisition, and historical and current market data. The excess of the purchase price over the total of the estimated fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill. To determine the fair values of tangible and intangible assets acquired and liabilities assumed for GTMR, we engaged a third-party independent valuation specialist. Intangible assets, which are primarily comprised of customer relationships and backlog, were valued using the excess earnings discounted cash flow method. On the date of the GTMR Acquisition, the Company simultaneously factored $411,975 of the accounts receivable from GTMR to finance the GTMR Acquisition. The Company paid $185,896 in transaction costs of GTMR, which was excluded from the purchase price, issued an accounts receivable note (the “Accounts Receivable Note”), and held back $350,000, the details of which have been discussed in amounts Due to Seller in Note 10 , "Due to Seller and Contingent Earnout." As of June 30, 2024, the remaining balance under this note is $50,000. During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The measurement period for the GTMR Acquisition closed as of March 22, 2024. During the measurement period, the Company recorded several adjustments to goodwill as a result of GTMR's adoption of ASC 842, tax adjustments, and an update to the fair value of acquired furniture and equipment. These measurement period adjustments were subsequently identified as a result of the completion of third party accounting evaluation. The Company also recorded a measurement period adjustment to goodwill as a result of finalizing the transaction price. The Company entered into the Accounts Receivable Note due to the sellers four months after the closing date of the transaction, subject to the adjustment of any net working capital deficiencies. This amount was determined to be $156,847. The following table shows unaudited pro-forma results for the six months ended June 30, 2023, as if the acquisition of GTMR had occurred on January 1, 2023. These unaudited pro forma results of operations are based on the historical financial statements of each of the companies. For the six months ended June 30, 2023 Revenues $ 25,379,875 Net loss $ (6,293,003) Net loss per share - basic $ (0.15) |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets Fixed assets consisted of the following as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Equipment and software $ 258,091 $ 258,091 Furniture 43,119 43,119 Automobile 43,928 43,928 Leasehold improvements 192,959 192,959 Total fixed assets 538,097 538,097 Accumulated depreciation (309,014) (227,927) Fixed assets, net $ 229,083 $ 310,170 Depreciation expense for the three and six months ended June 30, 2024, was $39,826 and $81,087, and depreciation expense for the three and six months ended June 30, 2023, was $46,364 and $66,299, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets consisted of the following as of June 30, 2024 and December 31, 2023: June 30, December 31, Customer relationships 4.5– 15 years $ 11,961,000 $ 11,961,000 Tradename 4.5 years 783,000 783,000 Trademark 10-15 years 533,863 533,864 Backlog 2-5 years 3,210,000 3,210,000 Non-compete agreement 3-5 years 684,000 684,000 17,171,863 17,171,864 Accumulated amortization (9,286,941) (8,201,000) Intangible assets, net $ 7,884,922 $ 8,970,864 The intangible assets with the exception of the trademarks were recorded as part of the acquisitions of Corvus, MFSI, Merrison, SSI, LSG, and GTMR. Amortization expense for the three and six months ended June 30, 2024 was $529,218 and $1,085,942, respectively, and amortization expense for the three and six months ended June 30, 2023 was $634,044 and $1,124,675, respectively. The intangible assets are being amortized based on the estimated future lives as noted above. Future amortization of the intangible assets for the next five years as of June 30 are as follows: Remainder of the year ending December 31, 2024 $ 988,744 Year ending 2025 1,453,000 Year ending 2026 1,242,863 Year ending 2027 1,034,302 Year ending 2028 543,592 Year ending 2029 and thereafter 2,622,421 Total $ 7,884,922 The activity of goodwill for the six months ended June 30, 2024, is as follows: Corvus SSI MFSI Total December 31, 2023 $ 1,958,741 $ 8,718,093 $ 40,073 $ 10,716,907 Goodwill acquired through acquisitions — — — — June 30, 2024 $ 1,958,741 $ 8,718,093 $ 40,073 $ 10,716,907 When the Company acquires a controlling financial interest through a business combination, the Company uses the acquisition method of accounting to allocate the purchase consideration to the assets acquired and liabilities assumed, which are recorded at fair value. Any excess of purchase consideration over the net fair value of the net assets acquired is recognized as goodwill. There were no additions of goodwill for the six months ended June 30, 2024. The Company has not disposed of any entities, nor has the Company recognized impairment on goodwill for the periods presented. |
Convertible Promissory Notes -
Convertible Promissory Notes - Related Party | 6 Months Ended |
Jun. 30, 2024 | |
Convertible Notes Payable [Abstract] | |
Convertible Promissory Notes – Related Party | Convertible Promissory Note - Related Party We had the following promissory note as of June 30, 2024 and December 31, 2023: June 30, December 31, Convertible note payable with a trust related to one of the Company’s directors, convertible at $0.26 per share, at 5% interest (amended April 4, 2022, maturity date September 30, 2024) — 3,209,617 Less: Beneficial conversion feature discount — (971,405) $ — $ 2,238,212 Interest expense which includes amortization of discount for the three and six months ended June 30, 2024, was $0 and $245,438, respectively, and interest expense which includes amortization of discount for the three and six months ended June 30, 2023 was $336,202 and $676,322, respectively. There was no accrued interest on the note payable as of June 30, 2024. The amount of the beneficial conversion feature ("BCF") discount recorded was evaluated for characteristics of liability or equity and was determined to be equity under ASC 470 and ASC 480. The Company recognized this as additional paid in capital, and the discount was being amortized over the life of the note. On February 22, 2024, the Company entered into an agreement to amend the related party convertible promissory note with the Buckhout Charitable Remainder Trust, resulting in the elimination of the BCF discount feature, change in the interest rate, extension of the term, and change in the payoff schedule. As part of this amendment, a partial payment of $809,617 was made on the date of the agreement, resulting in an outstanding balance of $2,400,000 as of that date. The change in terms of the note were evaluated for characteristics of modification or extinguishment, and it was determined that under ASC 470, the debt amendment was considered to be an extinguishment, thus the amended note is considered a new note. As of February 22, 2024, the remaining unamortized carrying value of the BCF was $761,783, which was treated as a loss on debt extinguishment on the income statement. Concurrent with this amendment, we determined that the trustee of the Buckhout Charitable Remainder Trust (who resigned as an officer of the Company) is no longer a related party to the Company. See Note 7 |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2024 | |
Notes Payable [Abstract] | |
Notes Payable | Notes Payable Our notes payable consists of the following as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, Note payable at 7% originally due November 2023, maturing September 30, 2024 (a) $ — $ 5,600,000 Note payable at 10% interest dated February 28, 2022 and matures the earlier of (i) September 30, 2024 or (ii) the acceleration of the obligations as contemplated under the promissory note including the successful completion of an equity offering of at least $15,000,000 (b) — 400,000 Note payable at 7.5% dated February 22, 2024, maturing August 31, 2026 (c) 6,000,000 - Note payable at 12% interest dated April 6, 2023 and matures the earlier of (i) September 30, 2024 or (ii) the acceleration of the obligations as contemplated under the promissory note (d) — 400,000 Convertible note payable, convertible at $1.60 per share, at 7%, maturing April 4, 2023 (e) — 840,000 Promissory note payable (f) 2,400,000 — Term note payable, at prime plus 3% interest, applied on a deferred basis (11.50% at June 30, 2024 and 6.25% at December 31, 2023) maturing August 11, 2024 (g) 252,678 981,764 Total Notes Payable 8,652,678 8,221,764 Less: Debt Discount — (146,989) $ 8,652,678 $ 8,074,775 (a) On August 12, 2021, the note payable was amended to extend the maturity date to September 30, 2024 (the "Eisiminger Note 1"). It was determined that under ASC 470, the debt amendment was considered a modification. The amount of the debt discount recorded related to the warrants granted to the note holder was evaluated for characteristics of liability or equity and was determined to be equity under ASC 470 and ASC 480 and the entire balance was fully amortized as of December 31, 2023. On February 22, 2024, the Company entered into an agreement to amend the Eisiminger Note 1, resulting in a change to the interest rate and an extension of the maturity date. The amended note was evaluated for characteristics of debt modification or extinguishment and it was determined that under ASC 470, the debt amendment was considered an extinguishment. As a result of the amendment, the Eisiminger Note 1 was combined with Eisiminger Note 2 as defined and described in (b) below, resulting in a new note, (the "2024 Eisiminger Note"). See (c) below. (b) On February 28, 2022, the Company was obligated to issue 125,000 shares of common stock as further consideration for making this loan to the Company (the "Eisiminger Note 2"). The shares were issued in April 2022. On February 22, 2024, the Company entered into an agreement to amend the Eisiminger Note 2 resulting in a change to the interest rate and an extension of the maturity date. The Eisiminger Note 2 was evaluated for characteristics of debt modification or extinguishment and it was determined that under ASC 470, the debt amendment was considered an extinguishment. Therefore, the remaining unamortized debt discount balance of $61,263 was recorded as a loss in the income statement. As a result of the amendment, the principal balances of the Eisiminger Note 2 was combined with the Eisminger Note 1 as described in (a) above, resulting in the 2024 Eisiminger Note. See (c) below. (c) On February 22, 2024, as a result of amending the Eisiminger Note 1 and the Eisiminger Note 2, the Company entered into the 2024 Eisiminger Note, with a principal balance of $6,000,000, maturing on August 31, 2026, and bearing interest at 7.5% per annum until February 1, 2025, after which the interest rate will increase to 8% per annum. (d) On April 6, 2023, the Company entered into a promissory note with a principal balance of $400,000 bearing interest at 12% per annum (the "Eisiminger Note 3"). On February 22, 2024, the Company paid the outstanding principal and accrued interest owed on the Eisiminger Note 3. (e) On February 13, 2023, the Company entered into a series of transactions with Crom Cortana Fund LLC (“Crom”), the primary purpose of which is related to the GTMR Acquisition entered into on March 22, 2023. In connection therewith, the Company and Crom entered into an agreement to pay off the amount owed to Crom under the terms of the convertible promissory note in the original principal amount of $1,050,000 due April 4, 2023 ("Prior Crom Note"). In consideration of a $300,000 cash payment and 556,250 shares of common stock representing conversion of the remaining principal balance thereunder, the Company’s obligations under the Prior Crom Note are deemed satisfied reducing the balance to zero; we induced conversion of the debt, which effectively extinguished the debt. Simultaneously therewith, the parties entered into the Securities Purchase Agreement (the “2023 SPA”) pursuant to which Crom purchased (a) a convertible promissory note in the principal amount of $840,000 (the “2023 Note Payable”), which matures February 13, 2024 and bears interest at a per annum rate equal to 10% to be paid monthly, and (b) a warrant pursuant to which Crom has the right to purchase up to 700,000 shares of the Company’s common stock (the “2023 Warrant”) at an exercise price of $1.38 which expires 60 months from the date of issuance. The proceeds of the 2023 Note Payable were used primarily to fund the GTMR Acquisition, as well as fund the aforementioned debt repayment. On January 25, 2024, the Company paid the outstanding principal and accrued interest owed on the 2023 Note Payable to Crom. (f) On February 22, 2024, the Company and the Buckhout Charitable Remainder Trust entered into a new note payable in the principal amount of $2,400,000 (the "Buckhout February 2024 Note") which matures on August 31, 2026, and accrues interest at a per annum rate of 5% through January 1, 2025, 8% per annum through January 1, 2026, and 12% per annum thereafter. The principal amount will be amortized at the rate of $100,000 per month, commencing in September 2024 until the final payment is made in August 2026. The terms of the new note payable to the Buckhout Charitable Remainder Trust do not permit the principal amount to be converted into common stock. Refer to Note 6 , "Convertible Promissory Notes - Related Party" for relevant information regarding the previous note with the Buckhout Charitable Remainder Trust. (g) Refer to Note 16, "Subsequent Events" for information about early payoff of this note. Interest expense which includes amortization of discount for the three and six months ended June 30, 2024 was $150,456 and $383,966, respectively, and $809,663 and $1,634,783 for the three and six months ended June 30, 2023, respectively. Accrued interest on the notes payable as of June 30, 2024 was $0. |
Note Payable - Related Party
Note Payable - Related Party | 6 Months Ended |
Jun. 30, 2024 | |
NOTE PAYABLE RELATED PARTY [Abstract] | |
Note Payable - Related Party | Note Payable – Related Party The Company entered into a note payable with a related party in August 2021 with balances as of June 30, 2024 (unaudited) and December 31, 2023, as follows: June 30, December 31, Note payable at 5%, amended to ultimately mature in March 31, 2026 $ 400,000 $ 400,000 On February 16, 2024, the Company entered into a letter agreement to (i) extend the maturity date from December 31, 2024 to August 1, 2025 and (ii) require subsequent monthly principal payments of $50,000 for eight months commencing on the maturity date, with the final payment by March 31, 2026. All other terms of the note payable remain unchanged. As a result, the balance is reflected in non-current liabilities. |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility On April 4, 2022, the Company secured a $950,000 revolving credit facility with Live Oak Banking Company ("Live Oak Bank" and the “Revolving Credit Facility”). The Revolving Credit Facility was to mature on March 28, 2029, and draws on it are charged interest at the rate of prime plus 2.75% per annum. Interest is payable monthly. As of December 31, 2023, the Company had $625,025 outstanding on the Revolving Credit Facility. On February 22, 2024 the Company entered into a $4,000,000 revolving credit facility with Live Oak Bank that bears interest at prime plus 2% interest and matures on February 22, 2025 (the “New Live Oak Revolver"). The New Live Oak Revolver replaces the Revolving Credit Facility. The Company rolled over the principal balance outstanding of approximately $625,000 on the Revolving Credit Facility and was advanced an additional amount of $904,793, the majority of which was used to make the partial payment on the convertible promissory note with the Buckhout Charitable Remainder Trust. See Note 6 , "Convertible Promissory Notes - Related Party". As of June 30, 2024, the total amount outstanding on the New Live Oak Revolver was $1,529,818. |
Due To Seller And Contingent Ea
Due To Seller And Contingent Earnout | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Due To Seller And Contingent Earnout | Due to Seller and Contingent Earnout As part of the GTMR Acquisition, the Company was obligated to pay $1,250,000 which included $350,000 held back to satisfy any net working capital deficiencies. This balance was originally scheduled to be paid six months following the closing date, however, payment had been postponed and the unpaid balance of $350,000 will accrue interest at an annual rate equal to the rate of interest announced publicly by Citibank N.A. in New York, plus 2% until it is paid in full in July of 2024. As of June 30, 2024, the remaining unpaid balance of $50,000, is recorded as Due to Seller in current liabilities on the Company's Consolidated Balance Sheets. Refer to Note 16, "Subsequent Events" for information of full repayment of this liability in July 2024. As part of the acquisition of SSI (the "SSI Acquisition"), the Company was obligated to pay an earnout contingent on the results of operations of SSI through August 2023. On February 15, 2024, the Company entered into an agreement with the former shareholders of SSI concerning the amount and timing of the contingent earnout included in total consideration for the SSI Acquisition in August 12, 2021. The parties agreed to settle the amount for a total of $720,000, with an initial payment of $180,000 that was made by the Company at signing of the agreement, plus starting in March 2024, monthly payments of $20,000 plus interest payable at 5% per annum for 27 months. As a result, $240,000 is recorded as Due to Seller in current liabilities and $220,000 is reflected in non-current liabilities as of June 30, 2024. Prior to the February 15, 2024 agreement, this earnout was recorded as Contingent Earnout on the Consolidated Balance Sheets. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity January 2024 Registered Offering On January 25, 2024 the Company entered into a securities purchase agreement (the “SPA”) with an institutional investor, pursuant to which the Company agreed to sell and issue, in a registered direct offering, an aggregate of (i) 5,243,967 shares of the Company’s common stock, at a purchase price of $0.32 per share and (ii) 3,193,534 pre-funded warrants (the “Pre-funded Warrant(s)”) to purchase up to an aggregate of 3,193,534 shares of common stock for aggregate gross proceeds to the Company of approximately $2.7 million, before deducting the placement agent fees and estimated offering expenses payable by the Company (the “Registered Offering”). The Pre-funded Warrants were sold at an offering price of $0.319 per Pre-funded Warrant and are exercisable at a price of $0.001 per share. In a concurrent private placement, the Company agreed to issue to the same institutional investor, for each ordinary share and Pre-funded Warrant purchased in the offering, an additional ordinary share purchase warrant (“Regular Warrants”). The Regular Warrants have an exercise price of $0.35 and are exercisable to purchase an aggregate of 8,437,501 shares of common stock. Preferred Stock The Company has 50,000,000 shares of preferred stock authorized. The Company has designated a Series A Preferred Stock, Series B Preferred Stock, and a Series C Preferred Stock. Series A Preferred Stock The Company has designated 10,000,000 shares of Series A Preferred Stock, par value of $0.0001. As of June 30, 2024 and December 31, 2023, the Company has 5,875,000 shares of Series A Preferred Stock issued and outstanding, which is convertible into 587,500 shares of the Company's common stock. For the six months ended June 30, 2024, the Company recognized $36,539 in Series A dividends, all of which have been paid as of June 30, 2024. Series B Preferred Stock The Company has designated 10,000,000 shares of Series B Preferred Stock, par value of $0.0001. As of June 30, 2024 and December 31, 2023, the Company has 0 shares of Series B Preferred Stock issued and outstanding. Series C Preferred Stock The Company has designated 10,000,000 shares of Series C Preferred Stock, par value of $0.0001. As of June 30, 2024 and December 31, 2023, the Company has 770,000 shares of Series C Preferred Stock issued and outstanding, which is convertible into 481,250 shares of the Company's common stock. For the six months ended June 30, 2024, the Company recognized $23,100 in Series C dividends, all of which have been paid as of June 30, 2024. Common Stock The Company has 3,000,000,000 shares of common stock, par value $0.0001 authorized. The Company has 53,029,915 and 47,672,427 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively. During the six months ended June 30, 2024, 5,357,488 shares of common stock were issued, all in connection with the SPA. During the six months ended June 30, 2024, the Company recorded an obligation to issue 515,464 restricted shares of common stock, that vest ratably over a period of one year, to its Board of Directors for their service on the Board from January 1, 2024, through June 30, 2024. The total expense booked to record this obligation was $146,768. The shares were not issued as of June 30, 2024. Once issued, any unvested restricted shares of common stock are forfeited upon termination of the Board members position on the Board of Directors prior to the end of 2024. Warrants The following table represents a summary of warrants for the six months ended June 30, 2024 and the year ended December 31, 2023: Six Months Ended Year Ended Number Weighted Number Weighted Beginning balance 7,444,698 $ 1.68 5,678,836 $ 1.84 Warrants 8,437,501 0.25 1,765,862 1.17 Pre-funded Warrants 3,193,534 0.09 — — Total Granted 11,631,035 0.34 1,765,862 1.17 Warrants — — — — Pre-funded Warrants (113,521) 0.32 — — Total Exercised (113,521) 0.32 — — Ending balance 18,962,212 $ 0.87 7,444,698 $ 1.68 Warrants exercisable 18,962,212 7,444,698 Intrinsic value of warrants $ 202,872 $ 327,214 Weighted Average Remaining Contractual Life (Years) 4.52 4.70 The Pre-funded Warrants that the Company sold related to the Registered Offering were immediately exercisable and do not have an expiration date. As noted above, the Company sold Pre-funded Warrants to purchase up to an aggregate of 3,193,534 shares of common stock at an offering price of $0.319 per Pre-funded Warrant, which are exercisable at a price of $0.001 per share, of which 113,521 were exercised on February 6, 2024. See Note 16 , "Subsequent Events" for additional information regarding exercise of the remaining Pre-funded warrants in July 2024. The Regular Warrants related to the Registered Offering became exercisable on March 20, 2024, upon effectiveness of shareholder approval which was obtained on February 12, 2024. The Regular Warrants expire on March 20, 2029, and have an exercise price of $0.35 per share. The Warrants and the Pre-funded Warrants do not require a cash settlement for the warrants. Based on the terms of the agreements, both the warrants and the Pre-funded warrants were freestanding, equity-linked instruments that represented separate units of account. The Company allocated the value of the net proceeds from the offering to the ordinary shares and warrants and Pre-funded warrants based on relative fair value. The value allocated to the warrants and Pre-funded warrants was recorded in Additional Paid-In Capital in the consolidated balance sheets. Options The Company on November 9, 2021, approved the 2021 Stock Incentive Plan (the "Plan"), that authorized the Company to issue up to 2,500,000 shares of the Company's common stock in the form of restricted stock, stock options, and other stock awards as set forth in the Plan. On November 9, 2023 the Board of Directors approved an amendment to the Plan to increase the aggregate number of shares available for issuance from 2,500,000 to 6,000,000 (the "Amended Plan"), which was approved by the Company's shareholders at its annual meeting on May 29, 2024. As of June, 30, 2024, 2,132,500 stock options have been granted under the Amended Plan. See Note 16 , "Subsequent Events" for additional information regarding options granted to board members and officers in July 2024. The following represents a summary of options for the six months ended June 30, 2024 and the year ended December 31, 2023: Number Weighted Weighted-Average Remaining Contractual Term (in Years) Weighted Outstanding, December 31, 2023 8,243,437 $ 2.41 4.98 $ 3.58 Granted 150,000 0.35 6.92 0.31 Exercised — — — — Forfeited (65,938) 1.72 — — Outstanding. March 31, 2024 8,327,499 $ 2.38 4.76 $ 3.55 Granted — — — — Exercised — — — — Forfeited (150,000) 0.35 — — Outstanding, June 30, 2024 8,177,499 $ 2.42 4.47 $ 3.61 As of June 30, 2024 Vested and exercisable 5,196,972 $ 2.44 4.28 $ 3.14 During the six months ended June 30, 2024, the Company recognized $1,127,760 of noncash stock based compensation related to the vesting of service-based stock options. No options were exercised during the six months ended June 30, 2024. The fair value of each option and warrant is estimated using the Black-Scholes valuation model. Changes to these inputs could produce a significantly higher or lower fair value measurement. The following assumptions were used for the periods as follows: Six Months Ended Year Expected term 7 years 7 years Expected volatility 120.97% – 166.14% 161.61% – 166.14% Expected dividend yield — — Risk-free interest rate 3.48% – 4.08% 3.48% - 3.89% |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. U.S. GAAP sets forth a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels are as follows: Level 1 – defined as observable inputs, such as quoted market prices in active markets. Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 – defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. Our financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and cash equivalents, accounts receivable, accounts payable, contingent consideration, and derivative liabilities. The estimated fair value of cash and cash equivalents, accounts receivable, and accounts payable approximates their carrying value. On April 4, 2022, the Company issued common stock, a convertible note, and warrants in a SPA with Crom (“2022 Crom SPA”). The Company had evaluated the conversion option liability in the convertible note and the warrants to determine proper accounting treatment and determined them to be derivative liabilities ("Derivative Liabilities"). On February 13, 2023, the 2022 Crom SPA was terminated through an induced conversion thereby extinguishing the conversion option liability associated with the 2022 Crom note; the warrants were not affected. Concurrent with the termination of the 2022 Crom SPA, the Company issued common stock, the 2023 Note Payable, and warrants in the 2023 SPA with Crom. The Company evaluated the conversion option in the 2023 Note Payable and these warrants to determine proper accounting treatment and determined them to be derivative liabilities (also “Derivative Liabilities”). The Derivative Liabilities had and have been accounted for utilizing ASC 815 “Derivatives and Hedgin g.” On February 13, 2024, the Company paid the outstanding principal and accrued interest owed on the 2023 Note Payable to Crom, thereby extinguishing the conversion feature associated with this note; the warrants were not affected. The Company recognized liabilities for the estimated fair values of the Derivative Liabilities. The estimated fair values of these liabilities were calculated using a binomial pricing model with key input variables by an independent third party, as of the date of issuance, with changes in fair value recorded as gains or losses on revaluation in other income (expense). The Company determined that the significant inputs used to value the Derivative Liabilities fall within Level 3 of the fair value hierarchy. As a result, the Company has determined that the valuation of its Derivative Liabilities are classified in Level 3 of the fair value hierarchy as shown in the table below: Fair Value Measurements at June 30, 2024 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 55,000 $ 55,000 Fair Value Measurements at December 31, 2023 Level 1 Level 2 Level 3 Total Derivative Liabilities $ - $ - $ 157,600 $ 157,600 The Company’s derivative liabilities as of June 30, 2024 and December 31, 2023 associated with the Derivative Liabilities are as follows. June 30, 2024 December 31, Inception Fair value of 656,250 warrants issued on April 4, 2022 $ 20,000 $ 66,000 $ 378,000 Fair value of conversion option of Crom convertible note — 200 162,000 Fair value of 700,000 warrants issued on February 13, 2023 35,000 91,400 259,000 $ 55,000 $ 157,600 Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each Derivative Instrument is estimated using a binomial valuation model. The following assumptions were used for the period as follows: June 30, Expected term - warrants 2.76 years - 3.60 years Stock price as of measurement date $ 0.19 Volatility (observed) 120.40% - 125.92% Incremental discount 5.0 % Selected volatility – post haircut 93.7% - 98.4% Risk-free interest rate 4.41% - 4.51% |
Concentrations
Concentrations | 6 Months Ended |
Jun. 30, 2024 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations Concentration of Credit Risk. The Company’s customer base is concentrated with a relatively small number of customers. The Company does not generally require collateral or other security to support accounts receivable. To reduce credit risk, the Company performs ongoing credit evaluations on its customers’ financial condition. The Company establishes allowance for credit losses based upon factors surrounding the credit risk of customers, historical trends, and other information. For the six months ended June 30, 2024, the Company had three customers representing 55% of revenue earned, and for the six months ended June 30, 2023, the Company had two customers representing 44% of revenue earned. Any customer that represents 10% or greater of total revenue represents a risk. The Company also has three customers that represent 48% and three customers that represent 54% of the total accounts receivable as of June 30, 2024, and December 31, 2023, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's quarterly provision for income taxes is measured using an estimated annual effective tax rate adjusted for discrete items that occur within the quarter. The effective income tax rate was (7.00)% and (0.70)% for the three months ended June 30, 2024, and 2023, respectively. The increase in the effective tax for the three months ended June 30, 2024, was primarily due to the decrease in permanent adjustments offset by increased profitability during the year as the Company maintains a full valuation allowance against its' deferred tax assets. The effective income tax rate was (4.50)% and 16.40% for the six months ended June 30, 2024, and 2023, |
Factoring of Accounts Receivabl
Factoring of Accounts Receivable | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
Factoring of Accounts Receivable | Factoring of Accounts Receivable On January 24, 2023, GTMR (acquired by the Company on March 22, 2023 and discussed in Note 3 , "Acquisitions" entered into a factoring agreement (the “Factoring Agreement”) with Republic Capital Access LLC (“RCA”) wherein GTMR agreed to sell certain of its accounts receivable, up to a limit of $1,000,000 without recourse. During the six-months ended June 30, 2023, total receivables sold under the Factoring Agreement was $1,335,813. Without recourse indicates that the Company assigns and transfers its rights, title, and interest in and to the accounts receivable to RCA, meaning that the Company will not be liable to repay all or any portion of the advance amount if any portion of the accounts receivable is not paid by the Company’s customer(s). Information on accounts receivable identified for factoring are provided and verified by RCA prior to being accepted for factoring. Pursuant to the Factoring Agreement, the Company received an initial payment of 90% or 85% on prime contracts or subcontracts, respectively. The remaining balance of the receivable is paid upon receipt of payment by RCA, less RCA factoring fees. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Factoring fees paid under this arrangement were $8,257 for the six months ended June 30, 2023. The Company did not factor any receivables under the Factoring Agreement for the three- and six-months ended June 30, 2024. The Company terminated this agreement in February 2024. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 1, 2024 the Company entered into a one-year employment agreement with Glen R. Ives (the "Ives Employment Agreement") to serve as President and Chief Executive Officer of the Company, at which time Mark Fuller resigned from those positions. Mr. Fuller will remain a member of the board of directors of the Company. Pursuant to the Ives Employment Agreement, Mr. Ives will be entitled to an annual base salary of $300,000, and will be eligible for a maximum annual cash incentive and discretionary bonus equal to up to 100% of his annual base salary. To be eligible to receive the annual cash incentive bonus amount, which is up to 50% of his annual base salary, the Company must achieve certain performance thresholds. The discretionary bonus, which is also equal to up to 50% of his base salary, is at the sole discretion of the Company's Compensation, Culture, and People Committee (the "Compensation Committee"). Additionally, Mr. Ives will be granted stock options under the Amended Plan to purchase 750,000 shares of the Company's restricted common stock at an exercise price of $0.212. The stock options vest ratably over the one-year employment period and expire on June 30, 2031. Upon a change of control, as defined in the Amended Plan, all unvested options issued to Mr. Ives shall become fully vested upon such change of control. On July 1, 2024 the Company also entered into a nine-month employment agreement with Jay O. Wright (the "Wright Employment Agreement"), who serves as the Company's General Counsel and Executive Vice President-Strategy, pursuant to which Mr. Wright will be entitled to an annual base salary of $270,000, a monthly health insurance stipend of $4,000, and an annual discretionary bonus at the sole discretion of the Company's Compensation Committee. If Messrs. Ives and Wright terminate their employment with the Company without good reason or their employment is terminated (i) as a result of their death, (ii) by the Company after a determination of a disability, or (iii) by the Company for cause, the Company will pay or provide Messrs. Ives and Wright (a) those benefits as required by law, (b) for any earned but unpaid base salary, (c) for the reimbursement of unreimbursed business expenses, and (d) for the payment of unpaid performance bonus for any fiscal year ended prior to the termination date. In addition, if Messrs. Ives’s or Wright's employment is terminated by the Company without cause or by him for good reason, then Messrs. Ives and Wright shall be entitled to receive the executives' base salary for a period equal to the earlier of (x) twelve (12) months following the termination date and (y) the date on which the employment period would have expired had the employment period not been terminated earlier by the Company without cause or by Messrs. Ives or Wright without good reason (the “Executives' Severance Payments”). In order to qualify for the Executives' Severance Payments the executive must execute and not revoke a mutual release agreement in a form reasonably acceptable to the Company. The Ives Employment Agreement and the Wright Employment Agreement each contain customary confidentiality restrictions, non-disparagement covenants, and non-solicitation covenants with respect to our employees, consultants, and customers and permit Mr. Ives and Mr. Wright to participate in those benefit plans generally available to all employees of the Company. The term note payable with a balance of $252,678 as of June 30, 2024, at 3% maturing August 11, 2024, as discussed under Note 7 , "Notes Payable", was repaid in full on July 8, 2024, to Live Oak Bank. As of July 11, 2024, the remaining balance of $50,000 due to the seller of GTMR as discussed under Note 10 , "Due to Seller and Contingent Earnout", was repaid in full. As of July 2024, the remaining 3,080,013 Pre-funded Warrants discussed under Note 11 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Basis of Presentation for Interim Periods. | Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation for Interim Periods Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year then ended. We have continued to follow the accounting policies set forth in those financial statements. |
Business Segments | Business Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) and in deciding how to allocate resources and in assessing performance. The Company’s CODM, the Chief Executive Officer, conducts a review of the consolidated results of operations to make decisions. The Company maintains one operating and reportable segment, which is the delivery of products and services in the Markets. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, the acquired value of the intangible assets and goodwill, impaired value of intangible assets, self-insurance expense and accruals, liabilities to accrue, cost incurred in the satisfaction of performance obligations, fair value for consideration elements of business combinations, permanent and temporary differences related to income taxes, and determination of the fair value of stock awards. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . The Company accounts for a contract with a customer that is within the scope of this Topic only when the five steps of revenue recognition under ASC 606 are met. The five core principles will be evaluated for each service provided by the Company and is further supported by applicable guidance in ASC 606 to support the Company’s recognition of revenue. Revenue is derived primarily from services provided to the Federal government. The Company enters into agreements with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services and solutions are transferred to the customer. The Company also evaluates whether two or more agreements should be accounted for as one single contract. When determining the total transaction price, the Company identifies both fixed and variable consideration elements within the contract. The Company estimates variable consideration as the most likely amount to which the Company expects to be entitled, limited to the extent that it is probable that a significant reversal will not occur in a subsequent period. At contract inception, the Company determines whether the goods or services to be provided are to be accounted for as a single performance obligation or as multiple performance obligations. For most contracts, the customers require the Company to perform several tasks in providing an integrated output and, hence, each of these contracts are deemed as having only one performance obligation. When contracts are separated into multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. This evaluation requires professional judgment, and it may impact the timing and pattern of revenue recognition. If multiple performance obligations are identified, the Company generally uses the cost plus a margin approach to determine the relative standalone selling price of each performance obligation. The Company does not assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between when payment by the client and the transfer of promised services to the client occur will be less than one year. The Company currently generates its revenue from three different types of contractual arrangements: cost plus fixed fee (“CPFF”), firm-fixed-price contracts (“FFP”), and time-and-materials (“T&M”) contracts. The Company generally recognizes revenue over time as control is transferred to the customer, based on the extent of progress towards satisfaction of the performance obligation. The selection of the method used to measure progress requires judgment and is dependent on the contract type and the nature of the goods or services to be provided. For CPFF contracts, the Company uses input progress measures to derive revenue based on hours worked on contract performance as follows: direct costs plus Defense Contract Audit Agency (“DCAA”) approved provisional burdens plus a fee. The provisional indirect rates are adjusted and billed at actual at year end. Revenue from FFP contracts is generally recognized ratably over the contract term, using a time-based measure of progress, even if billing is based on other metrics or milestones, including specific deliverables. For T&M contracts, the Company uses input progress measures to estimate revenue earned based on hours worked on contract performance at negotiated billing rates, plus direct costs and indirect cost burdens associated with materials and the direct expenses incurred in performance of the contract. These arrangements generally qualify for the “right-to-invoice” practical expedient where revenue is recognized in proportion to billable consideration. FFP Level-Of-Effort contracts are substantially similar to T&M contracts except that the Company is required to deliver a specified level-of-effort over a stated period. For these contracts, the Company estimates revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required manpower. Revenue generated by contract support service contracts is recognized over time as services are provided, based on the transfer of control. Revenue generated by FFP contracts is recognized over time as performance obligations are satisfied. Most contracts do not contain variable consideration and contract modifications are generally minimal. For these reasons, there is not a significant impact of electing these transition practical expedients. Revenue generated from contracts with Federal, state, and local governments is recorded over time, rather than at a point in time. Under the contract support services contracts, the Company performs software design work as it is assigned by the customer, and bills the customer, generally semi-monthly, on either a CPFF or T&M basis, as labor hours are expended. Certain other government contracts for software development have specific deliverables and are structured as FFP contracts, which are generally billed as the performance obligations under the contract are met. Revenue recognition under FFP contracts requires judgment to allocate the transaction price to the performance obligations. Contracts may have terms of up to five years. Contract accounting requires judgment relative to assessing risks and estimating contract revenue, as well as costs and assumptions for schedule and technical issues. Due to the size and nature of contracts, estimates of revenue and costs are subject to a number of variables. For contract change orders, claims, or similar items, judgment is required for estimating the amounts, assessing the potential for realization and determining whether realization is probable. Estimates of total contract revenue and costs are continuously monitored during the term of the contract and are subject to revision as the contract progresses. From time to time, facts develop that require revisions of revenue recognized or cost estimates. To the extent that a revised estimate affects the current or an earlier period, the cumulative effect of the revision is recognized in the period in which the facts requiring the revision become known. The Company accounts for contract costs in accordance with ASC Topic 340-40, Contracts with Customers . The Company recognizes the cost of sales of a contract as an expense when incurred or at the time a performance obligation is satisfied. The Company recognizes an asset from the costs to fulfill a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future, and the costs are expected to be recovered. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained. The following table disaggregates the Company’s revenue by contract type for the six months ended June 30: 2024 2023 Revenue: Time and material $ 12,691,564 $ 12,934,662 Firm fixed price 1,512,416 1,641,322 Cost plus fixed fee 8,653,461 7,836,831 Total $ 22,857,441 $ 22,412,815 |
Accounting for Income Taxes | Accounting for Income Taxes Income taxes are accounted for under the asset and liability method. We estimate our income taxes in each of the jurisdictions where the Company operates. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. We are subject to income taxes in the federal and state tax jurisdictions based upon our business operations in those jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized up on ultimate settlement with the related tax authority. Management evaluates its tax positions on a quarterly basis. The Company files income tax returns in the U.S. Federal tax jurisdiction and various state tax jurisdictions. The federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities, generally for three years after they were filed. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update requires disaggregated information about a reporting entity’s effective tax rate reconciliations as well as information on income taxes paid. This update is effective for annual periods beginning in our fiscal year ending December 31, 2025. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures. |
Reclassification Adjustment | Reclassification Adjustment The Company has reclassified certain amounts in the 2023 financial statements to comply with the 2024 presentation. These principally relate to classification of “Gain on Disposal of Fixed Assets” to “Other” on our consolidated statements of operations. The reclassifications had no impact on total net loss or net cash flows for the six months ended June 30, 2024 and 2023. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Company's Revenue By Contract Type | The following table disaggregates the Company’s revenue by contract type for the six months ended June 30: 2024 2023 Revenue: Time and material $ 12,691,564 $ 12,934,662 Firm fixed price 1,512,416 1,641,322 Cost plus fixed fee 8,653,461 7,836,831 Total $ 22,857,441 $ 22,412,815 |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisition, Pro Forma Information | These unaudited pro forma results of operations are based on the historical financial statements of each of the companies. For the six months ended June 30, 2023 Revenues $ 25,379,875 Net loss $ (6,293,003) Net loss per share - basic $ (0.15) |
GTMR | |
Business Acquisition [Line Items] | |
Schedule of Assets and Liabilities Acquired | The following represents the assets and liabilities acquired in this acquisition: March 31, 2023 Adjustments March 22, 2024 Cash $ 475,000 $ — $ 475,000 Accounts receivable and other receivables 1,380,203 (9,384) 1,370,819 Income tax receivable 155,449 (127,992) 27,457 Prepaid expenses 116,892 (30,856) 86,036 Other asset 17,182 — 17,182 Furniture and equipment 163,301 103,760 267,061 Right of use asset – operating lease — 641,392 641,392 Customer relationships 2,426,000 — 2,426,000 Right of use asset - finance lease — 17,456 17,456 Tradename 517,000 — 517,000 Backlog 1,774,000 — 1,774,000 Goodwill 1,822,466 279,571 2,102,037 Deferred tax liability (1,244,368) (242,093) (1,486,461) Lease liability – operating lease (17,608) (603,799) (621,407) Lease liability – finance lease — (12,549) (12,549) Accounts payable and accrued expenses $ (1,030,957) $ 141,341 $ (889,616) Net assets acquired $ 6,554,560 $ 156,847 $ 6,711,407 The consideration paid for GTMR was as follows: Cash $ 470,233 Due to Seller 350,000 Other consideration 17,791 Cash from factoring 411,975 Common stock 5,304,561 Accounts receivable note 156,847 Total consideration paid $ 6,711,407 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Summary of Fixed Assets | Fixed assets consisted of the following as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 Equipment and software $ 258,091 $ 258,091 Furniture 43,119 43,119 Automobile 43,928 43,928 Leasehold improvements 192,959 192,959 Total fixed assets 538,097 538,097 Accumulated depreciation (309,014) (227,927) Fixed assets, net $ 229,083 $ 310,170 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following as of June 30, 2024 and December 31, 2023: June 30, December 31, Customer relationships 4.5– 15 years $ 11,961,000 $ 11,961,000 Tradename 4.5 years 783,000 783,000 Trademark 10-15 years 533,863 533,864 Backlog 2-5 years 3,210,000 3,210,000 Non-compete agreement 3-5 years 684,000 684,000 17,171,863 17,171,864 Accumulated amortization (9,286,941) (8,201,000) Intangible assets, net $ 7,884,922 $ 8,970,864 |
Schedule of Future Amortization of Intangible Assets | Future amortization of the intangible assets for the next five years as of June 30 are as follows: Remainder of the year ending December 31, 2024 $ 988,744 Year ending 2025 1,453,000 Year ending 2026 1,242,863 Year ending 2027 1,034,302 Year ending 2028 543,592 Year ending 2029 and thereafter 2,622,421 Total $ 7,884,922 |
Schedule of Goodwill | The activity of goodwill for the six months ended June 30, 2024, is as follows: Corvus SSI MFSI Total December 31, 2023 $ 1,958,741 $ 8,718,093 $ 40,073 $ 10,716,907 Goodwill acquired through acquisitions — — — — June 30, 2024 $ 1,958,741 $ 8,718,093 $ 40,073 $ 10,716,907 |
Convertible Promissory Notes _2
Convertible Promissory Notes - Related Party (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Convertible Notes Payable [Abstract] | |
Schedule of convertible promissory notes, Related party | We had the following promissory note as of June 30, 2024 and December 31, 2023: June 30, December 31, Convertible note payable with a trust related to one of the Company’s directors, convertible at $0.26 per share, at 5% interest (amended April 4, 2022, maturity date September 30, 2024) — 3,209,617 Less: Beneficial conversion feature discount — (971,405) $ — $ 2,238,212 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Notes Payable [Abstract] | |
Schedule of notes payable | Our notes payable consists of the following as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, Note payable at 7% originally due November 2023, maturing September 30, 2024 (a) $ — $ 5,600,000 Note payable at 10% interest dated February 28, 2022 and matures the earlier of (i) September 30, 2024 or (ii) the acceleration of the obligations as contemplated under the promissory note including the successful completion of an equity offering of at least $15,000,000 (b) — 400,000 Note payable at 7.5% dated February 22, 2024, maturing August 31, 2026 (c) 6,000,000 - Note payable at 12% interest dated April 6, 2023 and matures the earlier of (i) September 30, 2024 or (ii) the acceleration of the obligations as contemplated under the promissory note (d) — 400,000 Convertible note payable, convertible at $1.60 per share, at 7%, maturing April 4, 2023 (e) — 840,000 Promissory note payable (f) 2,400,000 — Term note payable, at prime plus 3% interest, applied on a deferred basis (11.50% at June 30, 2024 and 6.25% at December 31, 2023) maturing August 11, 2024 (g) 252,678 981,764 Total Notes Payable 8,652,678 8,221,764 Less: Debt Discount — (146,989) $ 8,652,678 $ 8,074,775 (a) On August 12, 2021, the note payable was amended to extend the maturity date to September 30, 2024 (the "Eisiminger Note 1"). It was determined that under ASC 470, the debt amendment was considered a modification. The amount of the debt discount recorded related to the warrants granted to the note holder was evaluated for characteristics of liability or equity and was determined to be equity under ASC 470 and ASC 480 and the entire balance was fully amortized as of December 31, 2023. On February 22, 2024, the Company entered into an agreement to amend the Eisiminger Note 1, resulting in a change to the interest rate and an extension of the maturity date. The amended note was evaluated for characteristics of debt modification or extinguishment and it was determined that under ASC 470, the debt amendment was considered an extinguishment. As a result of the amendment, the Eisiminger Note 1 was combined with Eisiminger Note 2 as defined and described in (b) below, resulting in a new note, (the "2024 Eisiminger Note"). See (c) below. (b) On February 28, 2022, the Company was obligated to issue 125,000 shares of common stock as further consideration for making this loan to the Company (the "Eisiminger Note 2"). The shares were issued in April 2022. On February 22, 2024, the Company entered into an agreement to amend the Eisiminger Note 2 resulting in a change to the interest rate and an extension of the maturity date. The Eisiminger Note 2 was evaluated for characteristics of debt modification or extinguishment and it was determined that under ASC 470, the debt amendment was considered an extinguishment. Therefore, the remaining unamortized debt discount balance of $61,263 was recorded as a loss in the income statement. As a result of the amendment, the principal balances of the Eisiminger Note 2 was combined with the Eisminger Note 1 as described in (a) above, resulting in the 2024 Eisiminger Note. See (c) below. (c) On February 22, 2024, as a result of amending the Eisiminger Note 1 and the Eisiminger Note 2, the Company entered into the 2024 Eisiminger Note, with a principal balance of $6,000,000, maturing on August 31, 2026, and bearing interest at 7.5% per annum until February 1, 2025, after which the interest rate will increase to 8% per annum. (d) On April 6, 2023, the Company entered into a promissory note with a principal balance of $400,000 bearing interest at 12% per annum (the "Eisiminger Note 3"). On February 22, 2024, the Company paid the outstanding principal and accrued interest owed on the Eisiminger Note 3. (e) On February 13, 2023, the Company entered into a series of transactions with Crom Cortana Fund LLC (“Crom”), the primary purpose of which is related to the GTMR Acquisition entered into on March 22, 2023. In connection therewith, the Company and Crom entered into an agreement to pay off the amount owed to Crom under the terms of the convertible promissory note in the original principal amount of $1,050,000 due April 4, 2023 ("Prior Crom Note"). In consideration of a $300,000 cash payment and 556,250 shares of common stock representing conversion of the remaining principal balance thereunder, the Company’s obligations under the Prior Crom Note are deemed satisfied reducing the balance to zero; we induced conversion of the debt, which effectively extinguished the debt. Simultaneously therewith, the parties entered into the Securities Purchase Agreement (the “2023 SPA”) pursuant to which Crom purchased (a) a convertible promissory note in the principal amount of $840,000 (the “2023 Note Payable”), which matures February 13, 2024 and bears interest at a per annum rate equal to 10% to be paid monthly, and (b) a warrant pursuant to which Crom has the right to purchase up to 700,000 shares of the Company’s common stock (the “2023 Warrant”) at an exercise price of $1.38 which expires 60 months from the date of issuance. The proceeds of the 2023 Note Payable were used primarily to fund the GTMR Acquisition, as well as fund the aforementioned debt repayment. On January 25, 2024, the Company paid the outstanding principal and accrued interest owed on the 2023 Note Payable to Crom. (f) On February 22, 2024, the Company and the Buckhout Charitable Remainder Trust entered into a new note payable in the principal amount of $2,400,000 (the "Buckhout February 2024 Note") which matures on August 31, 2026, and accrues interest at a per annum rate of 5% through January 1, 2025, 8% per annum through January 1, 2026, and 12% per annum thereafter. The principal amount will be amortized at the rate of $100,000 per month, commencing in September 2024 until the final payment is made in August 2026. The terms of the new note payable to the Buckhout Charitable Remainder Trust do not permit the principal amount to be converted into common stock. Refer to Note 6 , "Convertible Promissory Notes - Related Party" for relevant information regarding the previous note with the Buckhout Charitable Remainder Trust. (g) Refer to Note 16, |
Note Payable - Related Party (T
Note Payable - Related Party (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
NOTE PAYABLE RELATED PARTY [Abstract] | |
Schedule of notes payable to related party | The Company entered into a note payable with a related party in August 2021 with balances as of June 30, 2024 (unaudited) and December 31, 2023, as follows: June 30, December 31, Note payable at 5%, amended to ultimately mature in March 31, 2026 $ 400,000 $ 400,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of Warrants | The following table represents a summary of warrants for the six months ended June 30, 2024 and the year ended December 31, 2023: Six Months Ended Year Ended Number Weighted Number Weighted Beginning balance 7,444,698 $ 1.68 5,678,836 $ 1.84 Warrants 8,437,501 0.25 1,765,862 1.17 Pre-funded Warrants 3,193,534 0.09 — — Total Granted 11,631,035 0.34 1,765,862 1.17 Warrants — — — — Pre-funded Warrants (113,521) 0.32 — — Total Exercised (113,521) 0.32 — — Ending balance 18,962,212 $ 0.87 7,444,698 $ 1.68 Warrants exercisable 18,962,212 7,444,698 Intrinsic value of warrants $ 202,872 $ 327,214 Weighted Average Remaining Contractual Life (Years) 4.52 4.70 The Pre-funded Warrants that the Company sold related to the Registered Offering were immediately exercisable and do not have an expiration date. As noted above, the Company sold Pre-funded Warrants to purchase up to an aggregate of 3,193,534 shares of common stock at an offering price of $0.319 per Pre-funded Warrant, which are exercisable at a price of $0.001 per share, of which 113,521 were exercised on February 6, 2024. See Note 16 , "Subsequent Events" for additional information regarding exercise of the remaining Pre-funded warrants in July 2024. The Regular Warrants related to the Registered Offering became exercisable on March 20, 2024, upon effectiveness of shareholder approval which was obtained on February 12, 2024. The Regular Warrants expire on March 20, 2029, and have an exercise price of $0.35 per share. |
Schedule of Options | The following represents a summary of options for the six months ended June 30, 2024 and the year ended December 31, 2023: Number Weighted Weighted-Average Remaining Contractual Term (in Years) Weighted Outstanding, December 31, 2023 8,243,437 $ 2.41 4.98 $ 3.58 Granted 150,000 0.35 6.92 0.31 Exercised — — — — Forfeited (65,938) 1.72 — — Outstanding. March 31, 2024 8,327,499 $ 2.38 4.76 $ 3.55 Granted — — — — Exercised — — — — Forfeited (150,000) 0.35 — — Outstanding, June 30, 2024 8,177,499 $ 2.42 4.47 $ 3.61 As of June 30, 2024 Vested and exercisable 5,196,972 $ 2.44 4.28 $ 3.14 |
Schedule of Stock Options, Valuation Assumptions | The following assumptions were used for the periods as follows: Six Months Ended Year Expected term 7 years 7 years Expected volatility 120.97% – 166.14% 161.61% – 166.14% Expected dividend yield — — Risk-free interest rate 3.48% – 4.08% 3.48% - 3.89% |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of derivative liabilities and the contingent earnout fall | As a result, the Company has determined that the valuation of its Derivative Liabilities are classified in Level 3 of the fair value hierarchy as shown in the table below: Fair Value Measurements at June 30, 2024 Level 1 Level 2 Level 3 Total Derivative Liabilities $ — $ — $ 55,000 $ 55,000 Fair Value Measurements at December 31, 2023 Level 1 Level 2 Level 3 Total Derivative Liabilities $ - $ - $ 157,600 $ 157,600 |
Summary of derivative liabilities | The Company’s derivative liabilities as of June 30, 2024 and December 31, 2023 associated with the Derivative Liabilities are as follows. June 30, 2024 December 31, Inception Fair value of 656,250 warrants issued on April 4, 2022 $ 20,000 $ 66,000 $ 378,000 Fair value of conversion option of Crom convertible note — 200 162,000 Fair value of 700,000 warrants issued on February 13, 2023 35,000 91,400 259,000 $ 55,000 $ 157,600 |
Summary of fair value measurements | Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each Derivative Instrument is estimated using a binomial valuation model. The following assumptions were used for the period as follows: June 30, Expected term - warrants 2.76 years - 3.60 years Stock price as of measurement date $ 0.19 Volatility (observed) 120.40% - 125.92% Incremental discount 5.0 % Selected volatility – post haircut 93.7% - 98.4% Risk-free interest rate 4.41% - 4.51% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2024 segment contractualArrangementType | |
Accounting Policies [Line Items] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Number of contractual arrangement types | contractualArrangementType | 3 |
Maximum | |
Accounting Policies [Line Items] | |
Contract term | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Company's Revenue By Contract Type (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Accounting Policies [Line Items] | ||
Revenue from contract with customer, excluding assessed tax | $ 22,857,441 | $ 22,412,815 |
Time and material | ||
Accounting Policies [Line Items] | ||
Revenue from contract with customer, excluding assessed tax | 12,691,564 | 12,934,662 |
Firm fixed price | ||
Accounting Policies [Line Items] | ||
Revenue from contract with customer, excluding assessed tax | 1,512,416 | 1,641,322 |
Cost plus fixed fee | ||
Accounting Policies [Line Items] | ||
Revenue from contract with customer, excluding assessed tax | $ 8,653,461 | $ 7,836,831 |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) | 6 Months Ended | |||
Mar. 22, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||||
Cash paid to seller from factoring | $ 0 | $ 411,975 | ||
Due to seller | $ 350,000 | 290,000 | $ 350,000 | |
GTMR | ||||
Business Acquisition [Line Items] | ||||
Business acquisition percentage of voting interests acquired | 100% | |||
Cash paid to seller from factoring | $ 411,975 | |||
Business combination transaction costs incurred | 185,896 | |||
Accounts receivable note | 156,847 | |||
GTMR | Seller Payable | ||||
Business Acquisition [Line Items] | ||||
Due to seller | $ 350,000 | $ 50,000 |
Acquisition - Schedule of Asset
Acquisition - Schedule of Assets and Liabilities Acquired (Detail) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Mar. 22, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Mar. 22, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | ||||||
Furniture and equipment | $ 538,097 | $ 538,097 | ||||
Goodwill | 10,716,907 | $ 10,716,907 | ||||
The consideration paid for the acquisition | ||||||
Cash | 0 | $ 470,233 | ||||
Cash paid to seller from factoring | $ 0 | $ 411,975 | ||||
GTMR | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 475,000 | $ 475,000 | ||||
Adjustment to cash | 0 | |||||
Accounts receivable and other receivables | 1,370,819 | 1,380,203 | ||||
Adjustment to accounts receivable other receivables | (9,384) | |||||
Income tax receivable | 27,457 | 155,449 | ||||
Adjustment to income tax receivable | (127,992) | |||||
Prepaid expenses | 86,036 | 116,892 | ||||
Adjustment to prepaid expenses | (30,856) | |||||
Other asset | 17,182 | 17,182 | ||||
Adjustment to other asset | 0 | |||||
Furniture and equipment | 267,061 | 163,301 | ||||
Adjustment to furniture and equipment | 103,760 | |||||
Right of use asset – operating lease | 641,392 | 0 | ||||
Adjustment to right of use asset - operating lease | 641,392 | |||||
Right of use asset - finance lease | 17,456 | 0 | ||||
Adjustment to right of use asset - finance lease | 17,456 | |||||
Goodwill | 2,102,037 | 1,822,466 | ||||
Adjustment to goodwill | 279,571 | |||||
Deferred tax liability | (1,486,461) | (1,244,368) | ||||
Adjustment to deferred tax liability | (242,093) | |||||
Lease liability – operating lease | (621,407) | (17,608) | ||||
Adjustment to lease liability - operating lease | (603,799) | |||||
Lease liability – finance lease | (12,549) | 0 | ||||
Adjustment to lease liability - finance lease | (12,549) | |||||
Accounts payable and accrued expenses | (889,616) | (1,030,957) | ||||
Adjustment to accounts payable and accrued expenses | 141,341 | |||||
Net assets acquired | 6,711,407 | 6,554,560 | ||||
Net assets acquired | 156,847 | |||||
The consideration paid for the acquisition | ||||||
Cash | $ 470,233 | |||||
Due to Seller | 350,000 | |||||
Other consideration | 17,791 | |||||
Cash paid to seller from factoring | 411,975 | |||||
Common stock | 5,304,561 | |||||
Accounts receivable note | 156,847 | |||||
Total | $ 6,711,407 | |||||
GTMR | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangibles | 2,426,000 | 2,426,000 | ||||
Adjustment to intangibles | 0 | |||||
GTMR | Tradename | ||||||
Business Acquisition [Line Items] | ||||||
Intangibles | 517,000 | 517,000 | ||||
Adjustment to intangibles | 0 | |||||
GTMR | Backlog | ||||||
Business Acquisition [Line Items] | ||||||
Intangibles | 1,774,000 | $ 1,774,000 | ||||
Adjustment to intangibles | $ 0 |
Acquisition - Schedule of Busin
Acquisition - Schedule of Business Acquisition, Pro Forma Information (Detail) | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Revenues | $ 25,379,875 |
Net loss | $ (6,293,003) |
Net loss per share - basic (in usd per share) | $ / shares | $ (0.15) |
Fixed Assets - Summary of Fixed
Fixed Assets - Summary of Fixed Assets (Detail) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 538,097 | $ 538,097 |
Accumulated depreciation | (309,014) | (227,927) |
Fixed assets, net | 229,083 | 310,170 |
Equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 258,091 | 258,091 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 43,119 | 43,119 |
Automobile | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 43,928 | 43,928 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 192,959 | $ 192,959 |
Fixed Assets - Additional Infor
Fixed Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 39,826 | $ 46,364 | $ 81,087 | $ 66,299 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Intangible Assets (Detail) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 17,171,863 | $ 17,171,864 |
Accumulated amortization | (9,286,941) | (8,201,000) |
Intangible assets, net | 7,884,922 | 8,970,864 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 11,961,000 | 11,961,000 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 4 years 6 months | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 15 years | |
Tradename | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 4 years 6 months | |
Intangible assets, gross | $ 783,000 | 783,000 |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 533,863 | 533,864 |
Trademark | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 10 years | |
Trademark | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 15 years | |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 3,210,000 | 3,210,000 |
Backlog | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 2 years | |
Backlog | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 5 years | |
Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 684,000 | $ 684,000 |
Non-compete agreement | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 3 years | |
Non-compete agreement | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, useful life | 5 years |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||||
Amortization of intangible assets | $ 529,218 | $ 634,044 | $ 1,085,942 | $ 1,124,675 |
Goodwill acquired through acquisitions | $ 0 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Future Amortization of Intangible Assets (Detail) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of the year ending December 31, 2024 | $ 988,744 | |
Year ending 2025 | 1,453,000 | |
Year ending 2025 | 1,242,863 | |
Year ending 2026 | 1,034,302 | |
Year ending 2027 | 543,592 | |
Year ending 2029 and thereafter | 2,622,421 | |
Intangible assets, net | $ 7,884,922 | $ 8,970,864 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Schedule of Goodwill (Detail) | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Balance – beginning of period | $ 10,716,907 |
Goodwill acquired through acquisitions | 0 |
Balance – ending of period | 10,716,907 |
Corvus | |
Goodwill [Roll Forward] | |
Balance – beginning of period | 1,958,741 |
Goodwill acquired through acquisitions | 0 |
Balance – ending of period | 1,958,741 |
SSI | |
Goodwill [Roll Forward] | |
Balance – beginning of period | 8,718,093 |
Goodwill acquired through acquisitions | 0 |
Balance – ending of period | 8,718,093 |
MFSI | |
Goodwill [Roll Forward] | |
Balance – beginning of period | 40,073 |
Goodwill acquired through acquisitions | 0 |
Balance – ending of period | $ 40,073 |
Convertible Promissory Notes _3
Convertible Promissory Notes - Related Parties - Schedule of Convertible Promissory Notes, Related Party (Detail) - Convertible note payable to related party - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | $ 3,209,617 |
Less: Beneficial conversion feature discount | 0 | (971,405) |
Total | $ 0 | $ 2,238,212 |
Convertible Promissory Notes _4
Convertible Promissory Notes - Related Parties - Schedule of Convertible Promissory Notes, Related Party Additional Information (Details) - Convertible note payable to related party - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Convertible note payable, convertible price (in usd per share) | $ 0.26 | $ 0.26 |
Promissory note, interest rate | 5% | 5% |
Convertible Promissory Notes _5
Convertible Promissory Notes - Related Party - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Feb. 22, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||||
Interest expense | $ 68,541 | |||||
Interest payable | $ 0 | 0 | ||||
Total Notes Payable | 8,652,678 | 8,652,678 | $ 8,221,764 | |||
Loss on extinguishment of debt | 0 | $ 0 | 822,847 | $ 0 | ||
Promissory Note | Convertibles Maturing February 13, 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 809,617 | |||||
Total Notes Payable | 2,400,000 | 2,400,000 | 2,400,000 | $ 0 | ||
Loss on extinguishment of debt | $ 761,783 | |||||
Convertible note payable to related party | ||||||
Debt Instrument [Line Items] | ||||||
Interest payable | 0 | 0 | ||||
Convertible note payable to related party | Convertible debt pursuant to debt amendment conversion price 0.26 per share | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense | $ 0 | $ 336,202 | $ 245,438 | $ 676,322 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Detail) - USD ($) | Jun. 30, 2024 | Feb. 22, 2024 | Dec. 31, 2023 |
Schedule Of Notes Payable [Line Items] | |||
Total Notes Payable | $ 8,652,678 | $ 8,221,764 | |
Less: Debt Discount | 0 | (146,989) | |
Long-term debt, total | 8,652,678 | 8,074,775 | |
Term Note Payable | |||
Schedule Of Notes Payable [Line Items] | |||
Total Notes Payable | 252,678 | 981,764 | |
Convertibles Maturing April 4, 2023 | Convertible Notes Payable | |||
Schedule Of Notes Payable [Line Items] | |||
Total Notes Payable | 0 | 840,000 | |
Convertibles Maturing February 13, 2024 | Promissory Note | |||
Schedule Of Notes Payable [Line Items] | |||
Total Notes Payable | $ 2,400,000 | $ 2,400,000 | $ 0 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable - Additional Information (Detail) - USD ($) | 6 Months Ended | 24 Months Ended | ||||||||||
Dec. 13, 2023 | Jun. 30, 2024 | Aug. 31, 2026 | Jan. 02, 2026 | Jan. 01, 2026 | Feb. 02, 2025 | Feb. 22, 2024 | Dec. 31, 2023 | Apr. 06, 2023 | Apr. 04, 2022 | Feb. 28, 2022 | Feb. 22, 2022 | |
Debt Instrument [Line Items] | ||||||||||||
Common stock, shares, issued (in shares) | 53,029,915 | 53,029,915 | ||||||||||
Debt discount | $ 0 | $ 146,989 | ||||||||||
Notes payable | $ 8,652,678 | 8,221,764 | ||||||||||
Convertible Notes, Warrants | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants (in shares) | 700,000 | |||||||||||
Exercise price of warrants or rights (in usd per share) | $ 1.38 | |||||||||||
Note Payable Maturing The Earlier Of September 30, 2024 Or Completion Of Equity Offering | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt discount | $ 61,263 | |||||||||||
Notes Payable | Note Payable Maturing September 30, 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 7% | |||||||||||
Notes payable | $ 0 | 5,600,000 | ||||||||||
Notes Payable | Note Payable Maturing August 31, 2026 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 7.50% | 7.50% | ||||||||||
Notes payable | $ 6,000,000 | 0 | ||||||||||
Notes Payable | Note Payable Maturing August 31, 2026 | Forecast | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 8% | |||||||||||
Convertible Notes Payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Convertible notes payable | $ 0 | $ 1,050,000 | ||||||||||
Conversion of stock, amount issued | $ 300,000 | |||||||||||
Conversion of stock, shares issued (in shares) | 556,250 | |||||||||||
Convertible Notes Payable | Convertibles Maturing April 4, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 7% | |||||||||||
Debt instrument, convertible, conversion price (in usd per share) | $ 1.60 | |||||||||||
Notes payable | $ 0 | 840,000 | ||||||||||
Convertible Notes Payable | Crom | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, term | 60 months | |||||||||||
Convertible Notes Payable | Crom | Convbertibles Maturing February 13, 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 10% | |||||||||||
Promissory Note | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 12% | |||||||||||
Common stock, shares, issued (in shares) | 125,000 | |||||||||||
Promissory Note | Note Payable Maturing The Earlier Of September 30, 2024 Or Completion Of Equity Offering | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 10% | |||||||||||
Common stock, shares, issued (in shares) | 15,000,000 | |||||||||||
Notes payable | $ 0 | 400,000 | ||||||||||
Promissory Note | Note Payable Maturing The Earlier Of September 30, 2024 Or Acceleration Of Obligations | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 12% | |||||||||||
Notes payable | $ 0 | 400,000 | ||||||||||
Promissory Note | Convertibles Maturing February 13, 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 5% | |||||||||||
Notes payable | $ 2,400,000 | $ 2,400,000 | $ 0 | |||||||||
Promissory Note | Convertibles Maturing February 13, 2024 | Forecast | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 12% | 8% | ||||||||||
Debt instrument, periodic payment | $ 100,000 | |||||||||||
Term Note Payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3% | |||||||||||
Debt instrument, interest rate, effective percentage | 11.50% | 6.25% | ||||||||||
Notes payable | $ 252,678 | $ 981,764 | ||||||||||
Promissory Note, Dated April 6, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Notes payable | $ 400,000 |
Notes Payable - Additional Info
Notes Payable - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2025 | Dec. 31, 2024 | |
Schedule Of Notes Payable [Line Items] | |||||||
Interest expense, debt | $ 150,456 | $ 809,663 | $ 383,966 | $ 1,634,783 | |||
Accrued interest payable current | $ 0 | $ 0 | |||||
Convertible Notes Payable | Subsequent Event | |||||||
Schedule Of Notes Payable [Line Items] | |||||||
Promissory note, monthly principal | $ 252,679 | ||||||
Forecast | Convertible Notes Payable | |||||||
Schedule Of Notes Payable [Line Items] | |||||||
Promissory note, monthly principal | $ 1,200,000 | $ 652,678 |
Note Payable - Related Party -
Note Payable - Related Party - Schedule Of Notes Payable To Related Party (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule of notes payable to related party [Line Items] | ||
Total Notes Payable | $ 8,652,678 | $ 8,221,764 |
SSI | Note payable | ||
Schedule of notes payable to related party [Line Items] | ||
Interest rate | 5% | 5% |
SSI | Related party | ||
Schedule of notes payable to related party [Line Items] | ||
Total Notes Payable | $ 400,000 | $ 400,000 |
Note Payable - Related Party _2
Note Payable - Related Party - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Feb. 16, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Schedule of notes payable to related party [Line Items] | |||||
Interest expense | $ 68,541 | ||||
Note payable | |||||
Schedule of notes payable to related party [Line Items] | |||||
Debt instrument, periodic payment | $ 50,000 | ||||
Debt instrument, term | 8 months | ||||
Related party | |||||
Schedule of notes payable to related party [Line Items] | |||||
Interest expense | $ 4,973 | $ 4,984 | $ 9,945 | $ 9,912 |
Revolving Credit Facility - Add
Revolving Credit Facility - Additional Information (Detail) - USD ($) | 6 Months Ended | |||
Feb. 22, 2024 | Apr. 04, 2022 | Jun. 30, 2024 | Dec. 31, 2023 | |
Line of Credit Facility [Line Items] | ||||
Interest expense | $ 68,541 | |||
Interest payable | 0 | |||
Note payable | ||||
Line of Credit Facility [Line Items] | ||||
Long-term line of credit | $ 1,529,818 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2% | |||
Amount rolled over | $ 625,000 | $ 625,025 | ||
Borrowing capacity | 4,000,000 | |||
Revolving Credit Facility | Live Oak Bank | ||||
Line of Credit Facility [Line Items] | ||||
Long-term line of credit | $ 950,000 | |||
Basis spread on variable rate | 2.75% | |||
Proceeds from lines of credit | $ 904,793 |
Due To Seller And Contingent _2
Due To Seller And Contingent Earnout - Additional Information (Detail) | 6 Months Ended | |||
Feb. 15, 2024 USD ($) | Mar. 22, 2023 USD ($) | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | ||||
Due to seller | $ 350,000 | $ 290,000 | $ 350,000 | |
Settlement | $ 720,000 | |||
Settlement, initial payment | 180,000 | |||
Settlement, periodic payment amount | $ 20,000 | |||
Settlement, interest percent | 0.05 | |||
Settlement, term | 27 months | |||
Due to Seller, net of current portion | 220,000 | 0 | ||
GTMR | ||||
Business Acquisition [Line Items] | ||||
Due to seller | $ 1,250,000 | |||
Consideration payable term | 6 months | |||
GTMR | Seller Payable | ||||
Business Acquisition [Line Items] | ||||
Due to seller | $ 350,000 | $ 50,000 | ||
Basis spread on variable rate | 2% | |||
Global Technology Management Resources, Inc | Related party | ||||
Business Acquisition [Line Items] | ||||
Due to seller | $ 350,000 | |||
SSI | ||||
Business Acquisition [Line Items] | ||||
Due to seller | $ 240,000 | |||
Due to Seller, net of current portion | $ 220,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | 6 Months Ended | 12 Months Ended | |||||
Jan. 25, 2024 USD ($) $ / shares shares | Oct. 17, 2022 | Oct. 13, 2022 | Jun. 30, 2024 USD ($) $ / shares shares | Dec. 31, 2023 $ / shares shares | Nov. 09, 2023 shares | Nov. 09, 2021 shares | |
Class of Stock [Line Items] | |||||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 0.32 | ||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||
Common stock, shares outstanding (in shares) | 47,672,427 | 47,672,427 | |||||
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 | |||||
Common stock par or stated value per share (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares, issued (in shares) | 53,029,915 | 53,029,915 | |||||
Stock issued during period, shares, new issues (in shares) | 5,357,488 | ||||||
Shares issued in exercise of stock options (in shares) | 113,521 | 0 | |||||
Number of options granted (in shares) | 11,631,035 | 1,765,862 | |||||
Service-Based Stock Option | |||||||
Class of Stock [Line Items] | |||||||
Non-cash stock based compensation | $ | $ 1,127,760 | ||||||
Shares issued in exercise of stock options (in shares) | 0 | ||||||
Restricted Stock | |||||||
Class of Stock [Line Items] | |||||||
Equity instruments other than options, grants in period (in shares) | 515,464 | ||||||
Vesting period | 1 year | ||||||
Non-cash stock based compensation | $ | $ 146,768 | ||||||
Stock Incentive Plan | |||||||
Class of Stock [Line Items] | |||||||
Equity instruments other than options, grants in period (in shares) | 2,132,500 | ||||||
Number of shares authorized (in shares) | 6,000,000 | 2,500,000 | |||||
Series A Preferred | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||||
Preferred stock par or stated value per share (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares outstanding (in shares) | 5,875,000 | 5,875,000 | |||||
Preferred stock, shares issued (in shares) | 5,875,000 | 5,875,000 | |||||
Conversion of stock, shares converted (in shares) | 587,500 | ||||||
Dividends | $ | $ 36,539 | ||||||
Series B Preferred | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||
Series C Preferred | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||||
Preferred stock par or stated value per share (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares issued (in shares) | 770,000 | 770,000 | |||||
Conversion of stock, shares converted (in shares) | 481,250 | ||||||
Dividends | $ | $ 23,100 | ||||||
Common stock, shares outstanding (in shares) | 770,000 | 770,000 | |||||
Warrant | |||||||
Class of Stock [Line Items] | |||||||
Exercise price of warrants or rights (in usd per share) | $ / shares | $ 0.35 | ||||||
Convertible Notes Payable | |||||||
Class of Stock [Line Items] | |||||||
Exercise price of warrants or rights (in usd per share) | $ / shares | $ 0.319 | ||||||
Pre-Funded Warrants | |||||||
Class of Stock [Line Items] | |||||||
Warrants (in shares) | 3,193,534 | ||||||
Exercise price of warrants or rights (in usd per share) | $ / shares | $ 0.001 | ||||||
Warrant | |||||||
Class of Stock [Line Items] | |||||||
Warrants (in shares) | 8,437,501 | ||||||
Exercise price of warrants or rights (in usd per share) | $ / shares | $ 0.35 | ||||||
Convertible Notes Payable | |||||||
Class of Stock [Line Items] | |||||||
Number of warrants issued | 3,193,534 | ||||||
SPA Agreement | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued in transaction (in shares) | 5,243,967 | ||||||
Proceeds from issuance of common stock | $ | $ 2,700,000 | ||||||
IPO | CISD | |||||||
Class of Stock [Line Items] | |||||||
Stock split ratio | 0.05 | 0.05 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of warrants (Detail) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | |
Number | ||
Granted (in shares) | 11,631,035 | 1,765,862 |
Options exercised in period (in shares) | (113,521) | 0 |
Weighted Average Exercise Price | ||
Granted (in usd per share) | $ / shares | $ 0.34 | $ 1.17 |
Exercised (in usd per share) | $ / shares | $ 0.32 | $ 0 |
Warrant | ||
Number | ||
Beginning balance (in shares) | 7,444,698 | 5,678,836 |
Granted (in shares) | 8,437,501 | 1,765,862 |
Options exercised in period (in shares) | 0 | 0 |
Ending balance (in shares) | 18,962,212 | 7,444,698 |
Warrants exercisable (in shares) | 18,962,212 | 7,444,698 |
Intrinsic value of warrants | $ | $ 202,872 | $ 327,214 |
Weighted Average Remaining Contractual Life (Years) | 4 years 6 months 7 days | 4 years 8 months 12 days |
Weighted Average Exercise Price | ||
Beginning balance (in usd per share) | $ / shares | $ 1.68 | $ 1.84 |
Granted (in usd per share) | $ / shares | 0.25 | 1.17 |
Exercised (in usd per share) | $ / shares | 0 | 0 |
Ending balance (in usd per share) | $ / shares | $ 0.87 | $ 1.68 |
Pre-Funded Warrant | ||
Number | ||
Granted (in shares) | 3,193,534 | 0 |
Options exercised in period (in shares) | (113,521) | 0 |
Weighted Average Exercise Price | ||
Granted (in usd per share) | $ / shares | $ 0.09 | $ 0 |
Exercised (in usd per share) | $ / shares | $ 0.32 | $ 0 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of options (Detail) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Number | ||||
Granted (in shares) | 11,631,035 | 1,765,862 | ||
Weighted Average Exercise Price | ||||
Granted (in usd per share) | $ 0.34 | $ 1.17 | ||
Options | ||||
Number | ||||
Beginning balance (in shares) | 8,327,499 | 8,243,437 | 8,243,437 | |
Granted (in shares) | 150,000 | |||
Forfeited (in shares) | (150,000) | (65,938) | ||
Ending balance (in shares) | 8,177,499 | 8,327,499 | 8,177,499 | 8,243,437 |
Vested options (in shares) | 5,196,972 | 5,196,972 | ||
Weighted Average Exercise Price | ||||
Beginning balance (in usd per share) | $ 2.38 | $ 2.41 | $ 2.41 | |
Granted (in usd per share) | 0.35 | |||
Forfeited (in usd per share) | 0.35 | 1.72 | ||
Ending balance (in usd per share) | 2.42 | $ 2.38 | 2.42 | $ 2.41 |
Weighted average exercise price, vested and expected to vest (in usd per share) | $ 2.44 | $ 2.44 | ||
Weighted-Average Remaining Contractual Term (in Years) | ||||
Weighted average remaining contractual term (in years) | 4 years 5 months 19 days | 4 years 9 months 3 days | 4 years 11 months 23 days | |
Weighted average remaining contractual term, granted (in years) | 6 years 11 months 1 day | |||
Weighted average remaining contractual term, vested and exercisable (in years) | 4 years 3 months 10 days | |||
Weighted Average Fair Value | ||||
Beginning weighted average fair value (in usd per share) | $ 3.55 | $ 3.58 | $ 3.58 | |
Weighted average fair value, granted (in usd per share) | 0.31 | |||
Ending weighted average fair value (in usd per share) | 3.61 | $ 3.55 | 3.61 | $ 3.58 |
Weighted average fair value, vested and exercisable (in usd per share) | $ 3.14 | $ 3.14 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Stock Options, Valuation Assumptions (Detail) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Equity [Abstract] | ||
Expected term | 7 years | 7 years |
Expected volatility minimum | 120.97% | 161.61% |
Expected volatility maximum | 166.14% | 166.14% |
Expected dividend yield | 0% | 0% |
Risk-free interest rate minimum | 3.48% | 3.48% |
Risk-free interest rate maximum | 4.08% | 3.89% |
Fair Value - Summary of Derivat
Fair Value - Summary of Derivative Liabilities and the Contingent Earn out Fall (Detail) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liabilities | $ 55,000 | $ 157,600 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative liabilities | Derivative liabilities |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liabilities | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liabilities | $ 55,000 | $ 157,600 |
Fair Value - Summary of Deriv_2
Fair Value - Summary of Derivative liabilities (Detail) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Feb. 13, 2023 | Apr. 04, 2022 |
Derivative [Line Items] | ||||
Derivative liabilities | $ 55,000 | $ 157,600 | ||
Convertible note | Crom Cortana Fund LLC | ||||
Derivative [Line Items] | ||||
Derivative liabilities | 0 | 200 | 162,000 | |
Warrants | Convertibles Maturing April 4, 2023 | ||||
Derivative [Line Items] | ||||
Derivative liabilities | 20,000 | 66,000 | $ 378,000 | |
Warrants (in shares) | 656,250 | |||
Warrants | Convertibles Maturing February 13, 2024 | ||||
Derivative [Line Items] | ||||
Derivative liabilities | $ 35,000 | $ 91,400 | $ 259,000 | |
Warrants (in shares) | 700,000 |
Fair Value - Summary of Fair Va
Fair Value - Summary of Fair Value Measurements (Detail) | Jun. 30, 2024 USD ($) |
Expected term - warrants | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, term | 2 years 9 months 3 days |
Expected term - warrants | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, term | 3 years 7 months 6 days |
Stock price as of measurement date | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 0.19 |
Volatility (observed) | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 1.2040 |
Volatility (observed) | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 1.2592 |
Incremental discount | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 0.050 |
Selected volatility – post haircut | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 0.937 |
Selected volatility – post haircut | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 0.984 |
Risk-free interest rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 0.0441 |
Risk-free interest rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liability, measurement input | 0.0451 |
Concentrations - Additional Inf
Concentrations - Additional Information (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Three Customers | Revenue, Product and Service Benchmark | Revenue from Rights Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 55% | ||
Three Customers | Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 48% | 54% | |
Two Customers | Revenue, Product and Service Benchmark | Revenue from Rights Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 44% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Business Acquisition [Line Items] | ||||
Effective income tax rate, percent | (7.00%) | (0.70%) | (4.50%) | 16.40% |
Income tax benefit | $ (120,531) | $ 13,280 | $ (254,390) | $ 1,238,929 |
GTMR | ||||
Business Acquisition [Line Items] | ||||
Income tax benefit | $ 1,200,000 |
Factoring of Accounts Receiva_2
Factoring of Accounts Receivable (Details) | 3 Months Ended | 6 Months Ended | |
Jan. 24, 2023 USD ($) | Mar. 31, 2023 | Jun. 30, 2024 USD ($) | |
Factoring Agreement [Line Items] | |||
Factoring agreement, accounts receivable sold during period | $ 1,335,813 | ||
Factoring agreement, fees | $ 8,257 | ||
Maximum | |||
Factoring Agreement [Line Items] | |||
Factoring agreement, accounts receivable sold | $ 1,000,000 | ||
Initial payment | 0.90 | ||
Minimum | |||
Factoring Agreement [Line Items] | |||
Initial payment | 0.85 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 11, 2024 | Jul. 01, 2024 | Mar. 22, 2023 | Jul. 31, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | ||||||
Number of options granted (in shares) | 11,631,035 | 1,765,862 | ||||
Notes payable | $ 8,652,678 | $ 8,221,764 | ||||
Term Note Payable | ||||||
Subsequent Event [Line Items] | ||||||
Notes payable | $ 252,678 | $ 981,764 | ||||
Basis spread on variable rate | 3% | |||||
GTMR | ||||||
Subsequent Event [Line Items] | ||||||
Due to seller | $ 1,250,000 | |||||
Subsequent Event | Pre-Funded Warrants | ||||||
Subsequent Event [Line Items] | ||||||
Warrants exercised (in shares) | 3,080,013 | |||||
Subsequent Event | GTMR | ||||||
Subsequent Event [Line Items] | ||||||
Due to seller | $ 50,000 | |||||
Subsequent Event | Ives Employment Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Employment agreement, term | 1 year | |||||
Base salary | $ 300,000 | |||||
Cash bonus | 50% | |||||
Number of options granted (in shares) | 750,000 | |||||
Exercise price (in usd per share) | $ 0.212 | |||||
Subsequent Event | Ives Employment Agreement | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Cash bonus | 100% | |||||
Subsequent Event | Wright Employment Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Employment agreement, term | 9 months | |||||
Base salary | $ 270,000 | |||||
Health insurance expense | $ 4,000 |