Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 15, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41154 | ||
Entity Registrant Name | SIDUS SPACE, INC. | ||
Entity Central Index Key | 0001879726 | ||
Entity Tax Identification Number | 46-0628183 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 150 N. Sykes Creek Parkway | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | Merritt Island | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32953 | ||
City Area Code | (321) | ||
Local Phone Number | 450-5633 | ||
Title of 12(b) Security | Class A Common stock, $0.0001 par value | ||
Trading Symbol | SIDU | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 22,684,332 | ||
Documents Incorporated by Reference [Text Block] | None | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 5041 | ||
Auditor Name | BF Borgers CPA PC | ||
Auditor Location | Lakewood, CO | ||
Common Class A [Member] | |||
Entity Common Stock, Shares Outstanding | 25,272,736 | ||
Common Class B [Member] | |||
Entity Common Stock, Shares Outstanding | 10,000,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 2,295,259 | $ 13,710,845 |
Accounts receivable, net | 850,340 | 130,856 |
Accounts receivable - related parties | 168,170 | 443,282 |
Inventory | 583,437 | 127,502 |
Contract asset | 60,932 | |
Contract asset - related party | 14,982 | |
Prepaid and other current assets | 3,476,748 | 1,595,099 |
Total current assets | 7,449,868 | 16,007,584 |
Property and equipment, net | 2,554,992 | 775,070 |
Operating lease right-of-use assets | 249,937 | 504,811 |
Other | 42,778 | 12,486 |
Total Assets | 10,297,575 | 17,299,951 |
Current Liabilities | ||
Accounts payable and other current liabilities | 3,415,845 | 1,845,460 |
Accounts payable and accrued interest - related party | 566,636 | 588,797 |
Contract liability | 60,932 | |
Contract liability - related party | 14,982 | 63,411 |
Factoring liability | 502,349 | |
Note payable | 1,599,150 | |
Notes payable - related party | 1,000,000 | |
Operating lease liability | 199,158 | 261,674 |
Finance lease liability | 50,927 | |
Total Current Liabilities | 6,359,052 | 3,810,269 |
Note payable - non-current | 1,120,051 | |
Notes payable - related party - non-current | 1,350,000 | |
Operating lease liability - non-current | 63,310 | 262,468 |
Finance lease liability - non-current | 97,092 | |
Total Liabilities | 6,422,362 | 6,639,880 |
Commitments and contingencies | ||
Stockholders’ Equity | ||
Additional paid-in capital | 32,129,257 | 26,074,292 |
Accumulated deficit | (28,255,846) | (15,415,878) |
Total Stockholders’ Equity | 3,875,213 | 10,660,071 |
Total Liabilities and Stockholders’ Equity | 10,297,575 | 17,299,951 |
Common Class A [Member] | ||
Stockholders’ Equity | ||
Common stock value | 802 | 657 |
Common Class B [Member] | ||
Stockholders’ Equity | ||
Common stock value | $ 1,000 | $ 1,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par or stated value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 110,000,000 | 110,000,000 |
Common stock, par or stated value per share | $ 0.0001 | $ 0.0001 |
Common Class A [Member] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 8,022,736 | 6,574,040 |
Common stock, shares issued | 8,022,736 | 6,574,040 |
Common Class B [Member] | ||
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares outstanding | 10,000,000 | 10,000,000 |
Common stock, shares issued | 10,000,000 | 10,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 6,250,780 | $ 789,400 |
Revenue - related parties | 1,042,628 | 619,324 |
Total - revenue | 7,293,408 | 1,408,724 |
Cost of revenue | 5,855,275 | 1,775,299 |
Gross profit (loss) | 1,438,133 | (366,575) |
Operating expenses | ||
Payroll expenses | 5,553,025 | 1,503,236 |
Sales and marketing expenses | 559,096 | 71,111 |
Lease expense | 338,389 | 253,311 |
Depreciation expense | 138,930 | 34,767 |
Professional fees | 2,461,077 | 335,604 |
General and administrative expense | 4,431,915 | 948,928 |
Total operating expenses | 13,482,432 | 3,146,957 |
Net loss from operations | (12,044,299) | (3,513,532) |
Other income (expense) | ||
Other expense | (504) | |
Interest expense | (781,376) | (42,882) |
Interest expense - related party | (54,145) | |
Factoring expense | (14,293) | |
Gain on forgiveness of PPP loan | 633,830 | |
Finance expense | (768,905) | |
Total other expense | (795,669) | (232,606) |
Loss before income taxes | (12,839,968) | (3,746,138) |
Provision for income taxes | ||
Net loss | $ (12,839,968) | $ (3,746,138) |
Basic and diluted loss per Common Share | $ (0.75) | $ (0.34) |
Basic and diluted weighted average number of common shares outstanding | 17,165,781 | 11,161,181 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Class A [Member] Common Stock [Member] | Common Class A [Member] | Common Class B [Member] Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 1,000 | $ 5,083,280 | $ (11,669,740) | $ (6,585,460) | ||
Beginning balance, shares at Dec. 31, 2020 | 10,000,000 | |||||
Class A common stock issued for cash | $ 600 | $ 6,574,040 | 16,254,635 | 16,255,235 | ||
Class A common stock issued for cash, shares | 6,000,000 | |||||
Class A common stock issued for service | $ 20 | 199,980 | 200,000 | |||
Class A common stock issued for service, shares | 200,000 | |||||
Class A common stock issued for exercised cashless warrant | $ 37 | (37) | ||||
Class A common stock issued for exercised cashless warrant, shares | 374,040 | |||||
Warrant issued for finance expense | 768,905 | 768,905 | ||||
Debt forgiveness -related party | 3,767,529 | 3,767,529 | ||||
Net loss | (3,746,138) | (3,746,138) | ||||
Ending balance, value at Dec. 31, 2021 | $ 657 | $ 1,000 | 26,074,292 | (15,415,878) | 10,660,071 | |
Ending balance, shares at Dec. 31, 2021 | 6,574,040 | 10,000,000 | ||||
Class A common stock issued for cash | $ 115 | $ 1,448,696 | 3,221,240 | 3,221,355 | ||
Class A common stock issued for cash, shares | 1,148,696 | |||||
Class A common stock issued for service | $ 30 | 1,208,970 | 1,209,000 | |||
Class A common stock issued for service, shares | 300,000 | |||||
Debt forgiveness -related party | 1,624,755 | 1,624,755 | ||||
Net loss | (12,839,968) | (12,839,968) | ||||
Ending balance, value at Dec. 31, 2022 | $ 802 | $ 1,000 | $ 32,129,257 | $ (28,255,846) | $ 3,875,213 | |
Ending balance, shares at Dec. 31, 2022 | 8,022,736 | 10,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (12,839,968) | $ (3,746,138) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 1,209,000 | 200,000 |
Finance Expense | 768,905 | |
Depreciation and amortization | 319,936 | 394,968 |
Bad debt | 22,500 | 618 |
Lease liability amortization | (6,800) | 10,063 |
Gain on forgiveness of PPP loan | (633,830) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (741,984) | 32,907 |
Accounts receivable - related party | 275,112 | (267,513) |
Inventory | (455,935) | 78,440 |
Contract asset | (60,932) | |
Contract asset - related party | (14,982) | |
Prepaid expenses and other assets | (1,911,941) | (1,580,805) |
Accounts payable and accrued liabilities | 2,049,484 | 1,605,399 |
Accounts payable and accrued liabilities - related party | 50,099 | 588,797 |
Contract liability | 60,932 | |
Contract liability - related party | (48,429) | 63,411 |
Net Cash used in Operating Activities | (12,093,908) | (2,484,778) |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (2,099,858) | (217,840) |
Net Cash used in Investing Activities | (2,099,858) | (217,840) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance from common stock | 3,221,355 | 16,255,235 |
Due to shareholder | 171,272 | |
Proceeds from factoring agreement | 502,349 | |
Proceeds from notes payable | 307,610 | |
Repayment of notes payable | (16,266) | |
Payment of lease liabilities | (148,019) | (74,550) |
Repayment of notes payable - related party | (797,505) | (250,000) |
Net Cash provided by Financing Activities | 2,778,180 | 16,393,301 |
Net change in cash | (11,415,586) | 13,690,683 |
Cash, beginning of year | 13,710,845 | 20,162 |
Cash, end of year | 2,295,259 | 13,710,845 |
Supplemental cash flow information | ||
Cash paid for interest | 284,178 | 6,713 |
Cash paid for taxes | ||
Non-cash Investing and Financing transactions: | ||
Debt forgiveness – related party | 1,624,755 | 3,767,530 |
Note payable - related party issued exchange with due to shareholder | 4,000,000 | |
Initial recognition of right-of-use asset | $ 399,372 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business Organization Sidus Space Inc. (“Sidus”, “we”, “us” or the “Company”), was formed as Craig Technologies Aerospace Solutions, LLC, in the state of Florida, on July 17, 2012. On April 16, 2021, the Company filed a Certificate of Conversion to register and incorporate with the state of Delaware and on August 13, 2021 changed the company name to Sidus Space, Inc. Description of Business The Company is a vertically integrated provider of Space-as-a-Service solutions including end-to-end satellite support. The company combines mission critical hardware manufacturing; multi-disciplinary engineering services; satellite design, manufacture, launch planning, mission operations and in-orbit support; and space-based data collection with a vision to enable space flight heritage status for new technologies and deliver data and predictive analytics to both domestic and global customers. We have over ten (10) years of commercial, military and government manufacturing experience combined with space qualification experience, existing customers and pipeline, and International Space Station (ISS) heritage hardware. We support Commercial Space, Aerospace, Defense, Underwater Marine and other commercial and government customers. In addition, Sidus Space is building a Multi-Mission Satellite constellation using our hybrid 3D printed multipurpose satellite to provide continuous, near real-time Earth Observation and Internet-of-Things (IOT) data for the global space economy. Sidus Space has designed and is manufacturing LizzieSat (LS) for its LEO satellite constellation operating in diverse orbits (28°-98° inclination, 300-650km altitude) as approved by the International Telecommunication Union (ITU) in February 2021. LS is expected to begin operations in 2023. Initial launches are planned via NASA CRS2 program agreement and launch service rideshare contracts. Each LS is 100kg with 20kg dedicated to payloads including remote sensing instruments. Payloads (Sidus or customer owned) can collect data over multiple Earth based locations, record it onboard, and downlink via ground passes to Sidus Mission Control Center (MCC) in Merritt Island, FL. Leveraging our existing manufacturing operations, flight hardware manufacturing experience and commercial off the shelf subsystem hardware, we believe we can deliver customer sensors to orbit in months, rather than years. In addition, we intend on delivering high-impact data for insights on aviation, maritime, weather, space services, earth intelligence and observation, financial technology (Fintech) and the Internet of Things. While our business has historically been centered on the design and manufacture of space hardware, our expansion into manufacture of spacecraft as well as on-orbit constellation management services and space data applications has led us to innovating in the area of space data applications. We continue to patent our products including our satellites, external platforms and other innovations. Sidus offerings include a broad area of market sub-segments, such as: ● Satellite operators ● Value-added services ● Subsystems and components ● Satellite manufacturer ● Access to space through the ISS and commercial launch provider partnership Each of these areas and initiatives addresses a critical component of our cradle-to-grave solution and value proposition for the space economy as a Space-as-a-Service company. |
Summary of Signification Accoun
Summary of Signification Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Signification Accounting Policies | Note 2. Summary of Signification Accounting Policies Basis of Presentation The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end. Going Concern For the year ended December 31, 2022 the Company had a net loss of $ 12.8 million. We have non-recurring one-time expenses of $ 1.9 million included in our net loss. For the year ended December 31, 2022, the Company had negative cash flow from operating activities of $ 12.1 million. We have non-recurring one-time expenses of $ 700,000 included in our cash flow from operating activities. The Company plans to fund its cash flow needs through current cash on hand and future debt and/or equity financings which it may obtain through one or more public or private equity offerings, debt financings, government or other third-party funding, strategic alliances or collaboration agreements. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its projects and services which could adversely affect its future business prospects and its ability to continue as a going concern. 5.2 Principles of Consolidation The consolidated financial statements include the variable interest entity (“VIE”), Aurea Alas Limited (“Aurea”), of which we are the primary beneficiary. Aurea is a Limited company organized in the Isle of Man, which entered into a license agreement with a third party vendor, whereby they licensed the rights to use certain available radio frequency spectrum for satellite communications. All intercompany transactions and balances have been eliminated on consolidation. For entities determined to be VIEs, an evaluation is required to determine whether the Company is the primary beneficiary. The Company evaluates its economic interests in the entity specifically determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE (“the benefits”). When making the determination on whether the benefits received from an entity are significant, the Company considers the total economics of the entity, and analyzes whether the Company’s share of the economics is significant. The Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis. Use of Estimates The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of expenses during the reporting period. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations,, the fair value of and/or potential impairment of property and equipment; product life cycles; useful lives of our property and equipment; allowances for doubtful accounts; the market value of, and demand for, our inventory; fair value calculation of warrant; and the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns. Cash and Cash Equivalents For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company had no Accounts Receivable Accounts receivable are stated at the amount of consideration from customers of which the Company has an unconditional right to receive plus any accrued and unpaid interest. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. The Company sells certain accounts receivable with recourse in order to accelerate the receipt of cash. Bad Debt and Allowance for Doubtful Accounts Historically the Company has been able to collect all past due amounts and has not written off past due invoices, therefore there is limited historical data on the company’s historical losses or expected losses at this time. In compliance with GAAP the Company has determined the following policy will be followed regarding outstanding customer invoices. An allowance for doubtful accounts has been established to reflect the anticipated uncollectible value of the related receivable account. Review procedures have been established to provide a realistic reserve based on past collection experience and anticipated losses on the receivables. The company will utilize the allowance method based on accounts receivable aging in order to accrue bad debt expense and the contra balance sheet account, allowance for doubtful accounts. The accounts receivable aging will be reviewed quarterly and necessary adjustments made to the allowance for doubtful accounts account balance. The Company will review their policy annually to determine if adjustments should be made based on more recent accounts receivable trends. During the years ended December 31, 2022 and 2021, the Company recorded bad debt of $ 22,500 618 Contract Assets and Contract Liabilities The amounts included within contract assets and contract liabilities are related to the company’s long-term construction contracts. Retainage for which the company has an unconditional right to payment that is only subject to the passage of time is classified as contracts receivable. Retainage subject to conditions other than the passage of time are included in contract assets and contract liabilities on a net basis at the individual contract level. Contract assets represent revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts. Contract liabilities represent the company’s obligation to perform on uncompleted contracts with customers for which the company has received payment or for which contracts receivable are outstanding. Inventory Inventory consists of finished goods and work in progress and consists of estimated revenue calculated on a percentage of completion based on direct labor and materials in relation to the total contract value. The Company does not maintain raw materials. Property and Equipment Property and equipment, consisting mostly of plant and machinery, motor vehicles and computer equipment, is recorded at cost reduced by accumulated depreciation and impairment, if any. Construction in progress generally involves short-term capital projects and is not depreciated until the development has reached completion and the asset has been put into service. Depreciation expense is recognized over the assets’ estimated useful lives of three to ten years using the straight-line method. Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: ● Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and ● Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. The Company’s financial instruments, including cash, accounts receivable, prepaid expense and other current assets, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2022 and 2021, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Revenue Recognition The Company adopted ASC 606 – Revenue from Contracts with Customers using the modified retrospective transition approach. The core principle of ASC 606 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled for exchange of those goods or services. The Company’s updated accounting policies and related disclosures are set forth below, including the disclosure for disaggregated revenue. The impact of adopting ASC 606 was not material to the Consolidated Financial Statements. Revenue from the Company is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● Allocation of the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s revenue category, is summarized below: Revenues from fixed price contracts that are still in progress at month end are recognized on the percentage-of-completion method, measured by the percentage of total costs incurred to date to the estimated total costs for each contract. This method is used because management considers total costs to be the best available measure of progress on these contracts. Revenue from fixed price contracts and time-and-materials contracts that are completed in the month the work was started are recognized when the work is shipped. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. Revenues from fixed price service contracts that contain provisions for milestone payments are recognized at the time of the milestone being met and payment received. This method is used because management considers that the payments are nonrefundable unless the entity fails to perform as promised. If the customer terminates the contract, the Company is entitled only to retain any progress payments received from the customer and the Company has no further rights to compensation from the customer. Even though the payments made by the customer are nonrefundable, the cumulative amount of those payments is not expected, at all times throughout the contract, to at least correspond to the amount that would be necessary to compensate the Company for performance completed to date. Accordingly, the Company accounts for the progress under the contract as a performance obligation satisfied at a point in time. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. Cost of revenue Costs are recognized when incurred. Cost of revenue consists of direct labor, subcontract, materials, depreciation on machinery and equipment, and other direct costs. Net Income (Loss) Per Share of Common Stock The Company has adopted ASC Topic 260, “Earnings per Share” no Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight-line basis over the lease term in our statement of operations. Income Taxes The Company adopted FASB ASC 740, Income Taxes, at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of December 31, 2022 or December 31, 2021. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants was estimated using a Black-Scholes pricing model. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments Credit Losses —Measurement of Credit Losses on Financial Instruments. In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. This ASU is currently not expected to have a material impact on our consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Note 3. Variable Interest Entity The consolidated financial statements include Aurea Alas Limited, which is a variable interest entity of which we are the primary beneficiary, and on August 26, 2020, the Company entered into a licensing agreement with Aurea. Aurea is a Limited company organized in the Isle of Man, which entered into a license agreement with a third-party vendor, whereby they licensed the rights to use certain available radio frequency spectrum for satellite communications. The Company is responsible for 100% of the operations of Aurea and derives 100% of the net profits or losses derived from the business operations. The assets, liabilities and the operations of Aurea from the date of inception (July 20, 2020), were included in the Company’s consolidated financial statements. Through a declaration of trust, 100% If facts and circumstances change such that the conclusion to consolidate the VIE has changed, the Company shall disclose the primary factors that caused the change and the effect on the Company’s financial statements in the periods when the change occurs. As of December 31, 2022 and 2021, Aurea’s assets and liabilities are as follows: Schedule of Variable Interest Entities Assets and Liabilities December 31, December 31, 2022 2021 Assets Cash $ 76,517 $ 67,754 Prepaid and other current assets 11,394 10,585 Total Assets $ 87,911 $ 78,339 Liability Accounts payable and other current liabilities $ 29,005 $ 63,091 For the years ended December 31, 2022 and 2021, Aurea’s net loss was $ 136,344 40,592 |
Prepaid expense and Other curre
Prepaid expense and Other current assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense And Other Current Assets | |
Prepaid expense and Other current assets | Note 4. Prepaid expense and Other current assets As of December 31, 2022 and 2021, prepaid expense and other current assets are as follows: Schedule of Prepaid Expense and Other Current Assets December 31, December 31, 2022 2021 Prepaid insurance $ 994,450 $ 1,538,612 Prepaid components 950,679 - Prepaid satellite service and licenses 1,367,125 - Other prepaid expense 110,984 49,582 VAT receivable 7,204 6,905 Other current assets 46,306 - Total $ 3,476,748 $ 1,595,099 During the years ended December 31, 2022 and 2021, the Company recorded interest expense of $ 23,407 1,958 As of December 31, 2022 and 2021, other prepaid expense included, software subscriptions of $ 107,000 27,000 0 22,000 0 19,000 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 5. Inventory As of December 31, 2022 and 2021, inventory is as follows: Schedule of Inventory December 31, December 31, Work in Process $ 583,437 $ 127,502 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6. Property and Equipment At December 31, 2022 and 2021, property and equipment consisted of the following: Schedule of Property and Equipment December 31, December 31, 2022 2021 Office equipment $ 17,061 $ 17,061 Computer equipment 37,296 14,907 Vehicle 28,143 28,143 Software 158,212 93,012 Machinery 3,386,111 3,280,911 Leasehold improvements 372,867 198,645 R&D software 386,182 - Construction in progress 1,497,276 150,611 Property and equipment, gross 5,883,148 3,783,290 Accumulated depreciation (3,328,156 ) (3,008,220 ) Property and equipment, net of accumulated depreciation $ 2,554,992 $ 775,070 As of December 31, 2022, construction in progress represents components to be used in the manufacturing of our satellites. As of December 31, 2021, construction in progress represented leasehold improvements in process for office space. Depreciation expense of property and equipment for the years ended December 31, 2022 and 2021 is $ 319,936 394,968 During the years ended December 31, 2022 and 2021, the Company purchased assets of $ 2,099,858 217,840 |
Accounts payable and other curr
Accounts payable and other current liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts payable and other current liabilities | Note 7. Accounts payable and other current liabilities At December 31, 2022 and 2021, accounts payable and other current liabilities consisted of the following: Schedule of Accounts payable and other current liabilities December 31, December 31, 2022 2021 Accounts payable $ 1,483,467 $ 225,271 Payroll liabilities 820,451 220,914 Credit cards 44,650 44,510 Other payable 239,110 23,016 Insurance payable 828,167 1,331,749 Total accrued expenses and other liabilities $ 3,415,845 $ 1,845,460 |
Factoring liability
Factoring liability | 12 Months Ended |
Dec. 31, 2022 | |
Factoring Liability | |
Factoring liability | Note 8. Factoring liability The Company is party to a purchase and sale agreement with an unrelated lender (the “Factor”) whereby the Factor will purchase certain accounts receivable for a purchase price of up to 90% 2 15.2% Additionally, in the event of default the Lender at its option can increase the loan interest rate by 5% per annum for each month or partial month default on outstanding balances. 502,349 14,293 |
Contract assets and liabilities
Contract assets and liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract assets and liabilities | Note 9. Contract assets and liabilities At December 31, 2022 and 2021, contract assets and contract liabilities consisted of the following: Schedule of Contract Assets and Liabilities Contract assets December 31, December 31, Revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts (contract asset), excluding retainage $ - $ - Retainage included in contract assets due to being conditional on something other than solely passage of time 60,932 - Retainage included in contract assets due to being conditional on something other than solely passage of time – related party 14,982 Total contract assets $ 75,914 $ - Contract liabilities December 31, December 31, Payments received or receivable (contracts receivable) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage $ - $ 63,411 Retainage included in contract liabilities due to being conditional on something other than solely passage of time 60,932 - Retainage included in contract liabilities due to being conditional on something other than solely passage of time – Related party 14,982 Total contact liabilities $ 75,914 $ 63,411 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | Note 10. Leases Operating lease We have a noncancelable operating lease entered in November 2016 for our office facility that expires in July 2021. and has renewal options to May 2023. 10,392 2.5% 53,697 56,103 178,408 185,210 In May 2021, we entered into a new lease agreement for our office and warehouse space that expires in May 2024. The Company shall have the option to terminate the lease after 12 months and 24 months from the commencement date. 11,855.42 2.5% 196,240 206,365 399,372 399,372 As of December 31, 2022 and 2021, the remaining right of use asset and lease liability was $ 249,937 504,811 262,468 524,142 We recognized total lease expense of approximately $ 338,389 253,311 10,000 Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at December 31, 2022 were as follows: Summary of Future Minimum Lease Payments Under Operating Leases Total Year Ending December 31, 2023 $ 205,987 2024 63,835 Thereafter - Total undiscounted lease payments 269,822 Less: Imputed interest (7,354 ) Operating lease liabilities 262,468 Operating lease liability - current 199,158 Operating lease liability - non-current $ 63,310 The following summarizes other supplemental information about the Company’s operating lease as of December 31, 2022: Summary of Other Supplemental Information Weighted average discount rate 4.86 % Weighted average remaining lease term (years) 1.20 Finance lease The Company leases machinery and office equipment under non-cancellable finance lease arrangements. The term of those capital leases is at the range from 59 83 4% 6% During the year ended December 31, 2022, the Company fully paid off the two outstanding finance leases totaling $ 148,019 As of December 31, 2021, finance lease assets are included in property and equipment as follows: Schedule of Finance Lease Assets in Property and Equipment December 31, 2021 Machinery $ 585,563 Accumulated depreciation (455,899 ) Finance lease assets, net of accumulated depreciation $ 129,664 During the years ended December 31, 2022 and 2021, the Company recorded depreciation of finance lease assets of $ 49,076 147,435 1,891 8,393 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 11. Notes Payable Decathlon Note On December 1, 2021, we entered into a Loan Assignment and Assumption Agreement, or Loan Assignment, with Decathlon Alpha IV, L.P., or Decathlon and Craig Technical Consulting, Inc (“CTC”) pursuant to which we assumed $ 1,106,164 1.4 1,106,164 293,836 Management believes that the assumption of the Decathlon Note from CTC is in our best interests because in connection therewith, Decathlon released us from a cross-collateralization agreement it was a party to with CTC for a loan of a greater amount. Also in connection with the Loan Assignment on December 3, 2021, we entered into a Revenue Loan and Security Agreement, or RLSA, with Decathlon and our CEO, Carol Craig, pursuant to which we pay interest based on a minimum rate of one (1) times the amount advanced and make monthly payments based on a percentage of our revenue calculated as an amount equal to the product of (i) all revenue for the immediately preceding month multiplied by (ii) the Applicable Revenue Percentage, defined as 4% December 9, 2023 293,836 1,106,164 During the years ended December 31, 2022 and 2021, the Company recorded interest expense of $ 738,048 13,887 258,949 2,069 1,599,150 1,120,051 2.2 PPP Loan On April 14, 2020, the Company borrowed a loan in the amount of $ 322,045 1.0% In February 2021, the U.S. Small Business Administration has remitted to the Lender the principal and interest for forgiveness of the Borrower’s PPP Loan. On February 13, 2021, the Company borrowed a loan in the amount of $ 307,610 1,760 During the year ended December 31, 2021, the principal amount of $ 629,655 4,175 Loan Payable The Company borrowed $ 297,250 16,266 4.098% 0 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12. Related Party Transactions Revenue and Accounts Receivable The Company recognized revenue of $ 1,042,628 619,324 168,170 443,282 14,982 63,411 Accounts Payable As of December 31, 2022, and 2021, the Company owed $ 566,636 588,797 Note Payable – Related Party On May 1, 2021, the Company converted $ 4 3,473,693 September 30, 2025 250,000 On December 1, 2021, in connection with the assumption of the Decathlon Note, the Company reduced the principal of the Note Payable – related party by recording a reclassification of $ 1,106,164 293,836 During the years ended December 31, 2022 and 2021, the Company recorded interest expense of $ 0 54,145 During the year ended December 31, 2022, the Company repaid $ 797,505 1,624,755 As of December 31, 2022, and 2021, the Company had note payable – related party current of $ 0 1,000,000 0 1,350,000 Cost of Revenue For the year ended December 31, 2022 and 2021, the Company recorded cost of revenue to Craig Technical Consulting, Inc. of $ 136,363 0 12,267 0 Professional Service Agreements A Professional Services Agreement, effective November 15, 2021, was made, between the Company and Craig Technical Consulting, Inc. The period of performance for this Agreement was December 1, 2021, through November 30, 2022. The agreement was amended and the term of agreement was extended to November 30, 2023. During the year ended December 31, 2022 and 2021, the Company recorded professional services of $ 160,475 7,054 Sublease On August 1, 2021, the Company entered into a Sublease Agreement with its related party Majority Shareholder (“Sublandlord”), whereby the Company shall sublease certain offices, rooms and shared use of common spaces located at 150 Sykes Creek Parkway, Merritt Island, FL. The Lease is a month-to-month lease and may be terminated with 30 day’s notice to the Sublandlord. The monthly rent shall be $ 4,570 4,707 4,847 56,349 22,850 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Litigation The Company is currently involved in various civil litigation in the normal course of business none of which is considered material. License Agreement The consolidated financial statements include Aurea Alas Limited, which is a variable interest entity of which we are the primary beneficiary (see Note 3). On August 18, 2020, Aurea entered into a license agreement with a third-party vendor (the “Vendor”), whereby they licensed the rights to use certain available radio frequency spectrum for satellite communications. The Company shall pay an annual Reservation Fee of $ 120,000 120,000 120,000 110,000 |
Stockholder_s Equity
Stockholder’s Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholder’s Equity | Note 14. Stockholder’s Equity Authorized Capital Stock On August 31, 2021, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the State of Delaware to authorize the Company to issue 36,000,000 25,000,000 10,000,000 1,000,000 The Class B Common Stock is entitled to 10 votes for every 1 vote of the Class A Common Stock. On December 16, 2021, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the State of Delaware to authorize the Company to issue 115,000,000 100,000,000 10,000,000 5,000,000 The Class B Common Stock is entitled to 10 votes for every 1 vote of the Class A Common Stock. In April 2021, as part of the share conversion, the Company converted the 100% 85,000 0.0001 Class A Common Stock The Company had 8,022,736 6,574,040 Committed Equity Facility On August 10, 2022, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with B. Riley Principal Capital II, LLC (“B. Riley”). Pursuant to the Purchase Agreement, subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company will have the right to sell to B. Riley, up to the lesser of (i) $ 30,000,000 0.0001 Under the applicable Nasdaq rules, in no event may the Company issue to B. Riley under the Purchase Agreement more than 3,373,121 19.99% During the year ended December 31, 2022, the Company issued 1,448,696 ● 300,000 1,209,000 ● 1,148,696 90,367 3,596,355 375,000 3,221,355 During the year ended December 31, 2021, the Company issued 6,574,040 ● During August and September 2021, the Company sold 3,000,000 1.00 2,694,335 ● On September 22, 2021, the Board of Directors approved an issuance of 200,000 200,000 ● On December 16, 2021, the Company sold 3,000,000 5.00 13,560,900 ● During December 2021, the Company issued 374,040 Class B Common Sock In April 2021, as part of the share conversion, the Company converted the 100% 85,000 0.0001 On August 16, 2021, all 85,000 0.0001 10,000,000 0.0001 The Company had 10,000,000 Warrants During August, September and December 2021, the Company issued a total of 420,000 five years 1.00 5.00 768,905 no The Company utilizes the Black-Scholes model to value its warrants. The Company utilized the following assumptions: Schedule of Warrant Valuation Assumption Year ended December 31, 2021 Expected term 5 Expected average volatility 43 69 % Expected dividend yield - Risk-free interest rate 0.77 1.21 % |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income tax | Note 15. Income tax The Company has not made a provision for income taxes for the year ended December 31, 2022, and 2021, since the Company has the benefit of net operating losses in these periods and the Company changed from a limited liability partnership to a C corporation during 2021. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize deferred income tax assets arising as a result of net operating losses carried forward, the Company has not recorded any deferred income tax assets as of December 31, 2022. The Company has incurred a net operating loss of $ 12,839,968 A reconciliation between expected income taxes, computed at the federal income tax rate of 21 5.5 3.5 Schedule of Income Tax Reconciliation Income Tax Net Expenses Year Ended Year Ended December 31, December 31, 2022 2021 Loss for the year $ (12,839,968 ) $ (3,746,138 ) Income tax (recovery) at statutory rate $ (2,689,782 ) (786,700 ) State income tax expense, net of federal tax effect (704,467 ) (131,100 ) Permanent difference and other - - Change in valuation allowance 3,394,249 917,800 Income tax expense per books $ - $ - Net deferred tax assets consist of the following components as of: Schedule of Net Deferred Tax Assets December 31, December 31, 2022 2021 Non-operating loss carryforward $ 4,312,049 $ 917,800 Valuation allowance (4,312,049 ) (917,800 ) Net deferred tax asset $ - $ - |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16. Subsequent Events On January 30, 2023, the Company offered an aggregate of up to 2,640,000 12,360,000 2,250,000 17,250,000 0.30 Warrants equal to 4% of the number of securities issued by the Company in the offering at an exercise price of 125% of the offering price per share was issued to the underwriter 5.2 4.6 |
Summary of Signification Acco_2
Summary of Signification Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end. |
Going Concern | Going Concern For the year ended December 31, 2022 the Company had a net loss of $ 12.8 million. We have non-recurring one-time expenses of $ 1.9 million included in our net loss. For the year ended December 31, 2022, the Company had negative cash flow from operating activities of $ 12.1 million. We have non-recurring one-time expenses of $ 700,000 included in our cash flow from operating activities. The Company plans to fund its cash flow needs through current cash on hand and future debt and/or equity financings which it may obtain through one or more public or private equity offerings, debt financings, government or other third-party funding, strategic alliances or collaboration agreements. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its projects and services which could adversely affect its future business prospects and its ability to continue as a going concern. 5.2 |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the variable interest entity (“VIE”), Aurea Alas Limited (“Aurea”), of which we are the primary beneficiary. Aurea is a Limited company organized in the Isle of Man, which entered into a license agreement with a third party vendor, whereby they licensed the rights to use certain available radio frequency spectrum for satellite communications. All intercompany transactions and balances have been eliminated on consolidation. For entities determined to be VIEs, an evaluation is required to determine whether the Company is the primary beneficiary. The Company evaluates its economic interests in the entity specifically determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE (“the benefits”). When making the determination on whether the benefits received from an entity are significant, the Company considers the total economics of the entity, and analyzes whether the Company’s share of the economics is significant. The Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of expenses during the reporting period. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations,, the fair value of and/or potential impairment of property and equipment; product life cycles; useful lives of our property and equipment; allowances for doubtful accounts; the market value of, and demand for, our inventory; fair value calculation of warrant; and the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company had no |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount of consideration from customers of which the Company has an unconditional right to receive plus any accrued and unpaid interest. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. The Company sells certain accounts receivable with recourse in order to accelerate the receipt of cash. |
Bad Debt and Allowance for Doubtful Accounts | Bad Debt and Allowance for Doubtful Accounts Historically the Company has been able to collect all past due amounts and has not written off past due invoices, therefore there is limited historical data on the company’s historical losses or expected losses at this time. In compliance with GAAP the Company has determined the following policy will be followed regarding outstanding customer invoices. An allowance for doubtful accounts has been established to reflect the anticipated uncollectible value of the related receivable account. Review procedures have been established to provide a realistic reserve based on past collection experience and anticipated losses on the receivables. The company will utilize the allowance method based on accounts receivable aging in order to accrue bad debt expense and the contra balance sheet account, allowance for doubtful accounts. The accounts receivable aging will be reviewed quarterly and necessary adjustments made to the allowance for doubtful accounts account balance. The Company will review their policy annually to determine if adjustments should be made based on more recent accounts receivable trends. During the years ended December 31, 2022 and 2021, the Company recorded bad debt of $ 22,500 618 |
Contract Assets and Contract Liabilities | Contract Assets and Contract Liabilities The amounts included within contract assets and contract liabilities are related to the company’s long-term construction contracts. Retainage for which the company has an unconditional right to payment that is only subject to the passage of time is classified as contracts receivable. Retainage subject to conditions other than the passage of time are included in contract assets and contract liabilities on a net basis at the individual contract level. Contract assets represent revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts. Contract liabilities represent the company’s obligation to perform on uncompleted contracts with customers for which the company has received payment or for which contracts receivable are outstanding. |
Inventory | Inventory Inventory consists of finished goods and work in progress and consists of estimated revenue calculated on a percentage of completion based on direct labor and materials in relation to the total contract value. The Company does not maintain raw materials. |
Property and Equipment | Property and Equipment Property and equipment, consisting mostly of plant and machinery, motor vehicles and computer equipment, is recorded at cost reduced by accumulated depreciation and impairment, if any. Construction in progress generally involves short-term capital projects and is not depreciated until the development has reached completion and the asset has been put into service. Depreciation expense is recognized over the assets’ estimated useful lives of three to ten years using the straight-line method. |
Long-Lived Assets | Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. |
Fair Value Measurements | Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: ● Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and ● Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. The Company’s financial instruments, including cash, accounts receivable, prepaid expense and other current assets, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2022 and 2021, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. |
Revenue Recognition | Revenue Recognition The Company adopted ASC 606 – Revenue from Contracts with Customers using the modified retrospective transition approach. The core principle of ASC 606 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled for exchange of those goods or services. The Company’s updated accounting policies and related disclosures are set forth below, including the disclosure for disaggregated revenue. The impact of adopting ASC 606 was not material to the Consolidated Financial Statements. Revenue from the Company is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● Allocation of the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s revenue category, is summarized below: Revenues from fixed price contracts that are still in progress at month end are recognized on the percentage-of-completion method, measured by the percentage of total costs incurred to date to the estimated total costs for each contract. This method is used because management considers total costs to be the best available measure of progress on these contracts. Revenue from fixed price contracts and time-and-materials contracts that are completed in the month the work was started are recognized when the work is shipped. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. Revenues from fixed price service contracts that contain provisions for milestone payments are recognized at the time of the milestone being met and payment received. This method is used because management considers that the payments are nonrefundable unless the entity fails to perform as promised. If the customer terminates the contract, the Company is entitled only to retain any progress payments received from the customer and the Company has no further rights to compensation from the customer. Even though the payments made by the customer are nonrefundable, the cumulative amount of those payments is not expected, at all times throughout the contract, to at least correspond to the amount that would be necessary to compensate the Company for performance completed to date. Accordingly, the Company accounts for the progress under the contract as a performance obligation satisfied at a point in time. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. |
Cost of revenue | Cost of revenue Costs are recognized when incurred. Cost of revenue consists of direct labor, subcontract, materials, depreciation on machinery and equipment, and other direct costs. |
Net Income (Loss) Per Share of Common Stock | Net Income (Loss) Per Share of Common Stock The Company has adopted ASC Topic 260, “Earnings per Share” no |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight-line basis over the lease term in our statement of operations. |
Income Taxes | Income Taxes The Company adopted FASB ASC 740, Income Taxes, at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of December 31, 2022 or December 31, 2021. |
Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants was estimated using a Black-Scholes pricing model. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments Credit Losses —Measurement of Credit Losses on Financial Instruments. In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. This ASU is currently not expected to have a material impact on our consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities Assets and Liabilities | As of December 31, 2022 and 2021, Aurea’s assets and liabilities are as follows: Schedule of Variable Interest Entities Assets and Liabilities December 31, December 31, 2022 2021 Assets Cash $ 76,517 $ 67,754 Prepaid and other current assets 11,394 10,585 Total Assets $ 87,911 $ 78,339 Liability Accounts payable and other current liabilities $ 29,005 $ 63,091 |
Prepaid expense and Other cur_2
Prepaid expense and Other current assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense And Other Current Assets | |
Schedule of Prepaid Expense and Other Current Assets | As of December 31, 2022 and 2021, prepaid expense and other current assets are as follows: Schedule of Prepaid Expense and Other Current Assets December 31, December 31, 2022 2021 Prepaid insurance $ 994,450 $ 1,538,612 Prepaid components 950,679 - Prepaid satellite service and licenses 1,367,125 - Other prepaid expense 110,984 49,582 VAT receivable 7,204 6,905 Other current assets 46,306 - Total $ 3,476,748 $ 1,595,099 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of December 31, 2022 and 2021, inventory is as follows: Schedule of Inventory December 31, December 31, Work in Process $ 583,437 $ 127,502 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | At December 31, 2022 and 2021, property and equipment consisted of the following: Schedule of Property and Equipment December 31, December 31, 2022 2021 Office equipment $ 17,061 $ 17,061 Computer equipment 37,296 14,907 Vehicle 28,143 28,143 Software 158,212 93,012 Machinery 3,386,111 3,280,911 Leasehold improvements 372,867 198,645 R&D software 386,182 - Construction in progress 1,497,276 150,611 Property and equipment, gross 5,883,148 3,783,290 Accumulated depreciation (3,328,156 ) (3,008,220 ) Property and equipment, net of accumulated depreciation $ 2,554,992 $ 775,070 |
Accounts payable and other cu_2
Accounts payable and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts payable and other current liabilities | At December 31, 2022 and 2021, accounts payable and other current liabilities consisted of the following: Schedule of Accounts payable and other current liabilities December 31, December 31, 2022 2021 Accounts payable $ 1,483,467 $ 225,271 Payroll liabilities 820,451 220,914 Credit cards 44,650 44,510 Other payable 239,110 23,016 Insurance payable 828,167 1,331,749 Total accrued expenses and other liabilities $ 3,415,845 $ 1,845,460 |
Contract assets and liabiliti_2
Contract assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Liabilities | At December 31, 2022 and 2021, contract assets and contract liabilities consisted of the following: Schedule of Contract Assets and Liabilities Contract assets December 31, December 31, Revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts (contract asset), excluding retainage $ - $ - Retainage included in contract assets due to being conditional on something other than solely passage of time 60,932 - Retainage included in contract assets due to being conditional on something other than solely passage of time – related party 14,982 Total contract assets $ 75,914 $ - Contract liabilities December 31, December 31, Payments received or receivable (contracts receivable) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage $ - $ 63,411 Retainage included in contract liabilities due to being conditional on something other than solely passage of time 60,932 - Retainage included in contract liabilities due to being conditional on something other than solely passage of time – Related party 14,982 Total contact liabilities $ 75,914 $ 63,411 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Summary of Future Minimum Lease Payments Under Operating Leases | Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at December 31, 2022 were as follows: Summary of Future Minimum Lease Payments Under Operating Leases Total Year Ending December 31, 2023 $ 205,987 2024 63,835 Thereafter - Total undiscounted lease payments 269,822 Less: Imputed interest (7,354 ) Operating lease liabilities 262,468 Operating lease liability - current 199,158 Operating lease liability - non-current $ 63,310 |
Summary of Other Supplemental Information | The following summarizes other supplemental information about the Company’s operating lease as of December 31, 2022: Summary of Other Supplemental Information Weighted average discount rate 4.86 % Weighted average remaining lease term (years) 1.20 |
Schedule of Finance Lease Assets in Property and Equipment | As of December 31, 2021, finance lease assets are included in property and equipment as follows: Schedule of Finance Lease Assets in Property and Equipment December 31, 2021 Machinery $ 585,563 Accumulated depreciation (455,899 ) Finance lease assets, net of accumulated depreciation $ 129,664 |
Stockholder_s Equity (Tables)
Stockholder’s Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Warrant Valuation Assumption | The Company utilizes the Black-Scholes model to value its warrants. The Company utilized the following assumptions: Schedule of Warrant Valuation Assumption Year ended December 31, 2021 Expected term 5 Expected average volatility 43 69 % Expected dividend yield - Risk-free interest rate 0.77 1.21 % |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Reconciliation Income Tax Net Expenses | A reconciliation between expected income taxes, computed at the federal income tax rate of 21 5.5 3.5 Schedule of Income Tax Reconciliation Income Tax Net Expenses Year Ended Year Ended December 31, December 31, 2022 2021 Loss for the year $ (12,839,968 ) $ (3,746,138 ) Income tax (recovery) at statutory rate $ (2,689,782 ) (786,700 ) State income tax expense, net of federal tax effect (704,467 ) (131,100 ) Permanent difference and other - - Change in valuation allowance 3,394,249 917,800 Income tax expense per books $ - $ - |
Schedule of Net Deferred Tax Assets | Net deferred tax assets consist of the following components as of: Schedule of Net Deferred Tax Assets December 31, December 31, 2022 2021 Non-operating loss carryforward $ 4,312,049 $ 917,800 Valuation allowance (4,312,049 ) (917,800 ) Net deferred tax asset $ - $ - |
Summary of Signification Acco_3
Summary of Signification Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Income (Loss) Attributable to Parent | $ 12,839,968 | $ 3,746,138 | |
Noninterest Expense | 1,900,000 | ||
Net Cash Provided by (Used in) Operating Activities | 12,093,908 | 2,484,778 | |
Cash and cash equivalents | 0 | 0 | |
Bad debt | $ 22,500 | $ 618 | |
Property plant and equipment, estimated useful lives | Depreciation expense is recognized over the assets’ estimated useful lives of three to ten years using the straight-line method. | ||
Potentially dilutive shares of common stock outstanding | 0 | 0 | |
Subsequent Event [Member] | |||
Proceeds from initial public offerings | $ 5,200,000 | ||
Revision of Prior Period, Adjustment [Member] | |||
Noninterest Expense Investment Advisory Fees | $ 700,000 |
Schedule of Variable Interest E
Schedule of Variable Interest Entities Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash | $ 2,295,259 | $ 13,710,845 |
Prepaid and other current assets | 3,476,748 | 1,595,099 |
Total Assets | 10,297,575 | 17,299,951 |
Liability | ||
Accounts payable and other current liabilities | 3,415,845 | 1,845,460 |
Variable Interest Entity, Primary Beneficiary [Member] | Aurea [Member] | ||
Assets | ||
Cash | 76,517 | 67,754 |
Prepaid and other current assets | 11,394 | 10,585 |
Total Assets | 87,911 | 78,339 |
Liability | ||
Accounts payable and other current liabilities | $ 29,005 | $ 63,091 |
Variable Interest Entity (Detai
Variable Interest Entity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Variable interest entity, term | The consolidated financial statements include Aurea Alas Limited, which is a variable interest entity of which we are the primary beneficiary, and on August 26, 2020, the Company entered into a licensing agreement with Aurea. Aurea is a Limited company organized in the Isle of Man, which entered into a license agreement with a third-party vendor, whereby they licensed the rights to use certain available radio frequency spectrum for satellite communications. The Company is responsible for 100% of the operations of Aurea and derives 100% of the net profits or losses derived from the business operations. The assets, liabilities and the operations of Aurea from the date of inception (July 20, 2020), were included in the Company’s consolidated financial statements. | |
Net loss | $ (12,839,968) | $ (3,746,138) |
Variable Interest Entity, Primary Beneficiary [Member] | Aurea [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Net loss | $ 136,344 | $ 40,592 |
Aurea Shareholders [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Voting rights percent | 100% |
Schedule of Prepaid Expense and
Schedule of Prepaid Expense and Other Current Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense And Other Current Assets | ||
Prepaid insurance | $ 994,450 | $ 1,538,612 |
Prepaid components | 950,679 | |
Prepaid satellite service and licenses | 1,367,125 | |
Other prepaid expense | 110,984 | 49,582 |
VAT receivable | 7,204 | 6,905 |
Other current assets | $ 46,306 |
Prepaid expense and Other cur_3
Prepaid expense and Other current assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Interest expense | $ 23,407 | $ 1,958 |
Other Prepaid Expense [Member] | ||
Software subscriptions | 107,000 | 27,000 |
Prepaid rent | 0 | 22,000 |
Prepaid property insurance | $ 0 | $ 19,000 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Work in Process | $ 583,437 | $ 127,502 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,883,148 | $ 3,783,290 |
Accumulated depreciation | (3,328,156) | (3,008,220) |
Property and equipment, net of accumulated depreciation | 2,554,992 | 775,070 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,061 | 17,061 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 37,296 | 14,907 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 28,143 | 28,143 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 158,212 | 93,012 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,386,111 | 3,280,911 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 372,867 | 198,645 |
Research And Development Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 386,182 | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,497,276 | $ 150,611 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 319,936 | $ 394,968 |
Purchased assets | $ 2,099,858 | $ 217,840 |
Schedule of Accounts payable an
Schedule of Accounts payable and other current liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 1,483,467 | $ 225,271 |
Payroll liabilities | 820,451 | 220,914 |
Credit cards | 44,650 | 44,510 |
Other payable | 239,110 | 23,016 |
Insurance payable | 828,167 | 1,331,749 |
Accounts payable and other current liabilities | $ 3,415,845 | $ 1,845,460 |
Factoring liability (Details Na
Factoring liability (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revolving line of credit | $ 2,000,000 | |
Line of credit interest rate | 15.20% | |
Line of credit facility interest rate description | Additionally, in the event of default the Lender at its option can increase the loan interest rate by 5% per annum for each month or partial month default on outstanding balances. | |
Factoring liability | $ 502,349 | |
Cost and Interest Incurred on Factoring Liability | $ 14,293 | |
Maximum [Member] | ||
Percentage of face amount of purchase price for accounts receivable | 90% |
Schedule of Contract Assets and
Schedule of Contract Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts (contract asset), excluding retainage | ||
Retainage included in contract assets due to being conditional on something other than solely passage of time | 60,932 | |
Retainage included in contract assets due to being conditional on something other than solely passage of time – related party | 14,982 | |
Total contract assets | 75,914 | |
Payments received or receivable (contracts receivable) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage | 63,411 | |
Retainage included in contract liabilities due to being conditional on something other than solely passage of time | 60,932 | |
Retainage included in contract liabilities due to being conditional on something other than solely passage of time – Related party | 14,982 | |
Total contact liabilities | $ 75,914 | $ 63,411 |
Summary of Future Minimum Lease
Summary of Future Minimum Lease Payments Under Operating Leases (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
2023 | $ 205,987 | |
2024 | 63,835 | |
Thereafter | ||
Total undiscounted lease payments | 269,822 | |
Less: Imputed interest | (7,354) | |
Operating lease liabilities | 262,468 | |
Operating lease liability - current | 199,158 | $ 261,674 |
Operating lease liability - non-current | $ 63,310 | $ 262,468 |
Summary of Other Supplemental I
Summary of Other Supplemental Information (Details) | Dec. 31, 2022 |
Leases | |
Weighted average discount rate | 4.86% |
Weighted average remaining lease term (years) | 1 year 2 months 12 days |
Schedule of Finance Lease Asset
Schedule of Finance Lease Assets in Property and Equipment (Details) | Dec. 31, 2021 USD ($) |
Leases | |
Machinery | $ 585,563 |
Accumulated depreciation | (455,899) |
Finance lease assets, net of accumulated depreciation | $ 129,664 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Base rent expense | $ 4,570 | ||
Right of use asset | $ 249,937 | $ 504,811 | |
Lease liability | 262,468 | ||
Operating lease expense | 338,389 | 253,311 | |
Security deposit | 10,000 | 10,000 | |
Finance leases | 148,019 | ||
Depreciation of finance lease assets | 49,076 | 147,435 | |
Finance lease interest expense | $ 1,891 | 8,393 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capital leases term | 59 months | ||
Finance lease annual interest | 4% | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capital leases term | 83 months | ||
Finance lease annual interest | 6% | ||
New Lease Agreement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Base rent expense | $ 11,855.42 | ||
Increased base rent percentage | 2.50% | ||
Right of use asset | $ 249,937 | 262,468 | |
Lease liability | $ 504,811 | 524,142 | |
Lessee, operating lease, option to terminate | In May 2021, we entered into a new lease agreement for our office and warehouse space that expires in May 2024. The Company shall have the option to terminate the lease after 12 months and 24 months from the commencement date. | ||
Recognized a right of use assets | $ 196,240 | 399,372 | |
Recognized a right of use lease liabilities | $ 206,365 | 399,372 | |
Office Facility [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Lessee, operating lease, description | We have a noncancelable operating lease entered in November 2016 for our office facility that expires in July 2021. and has renewal options to May 2023. | ||
Base rent expense | $ 10,392 | ||
Increased base rent percentage | 2.50% | ||
Right of use asset | $ 53,697 | 178,408 | |
Lease liability | $ 56,103 | $ 185,210 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 03, 2021 | Dec. 01, 2021 | May 01, 2021 | May 31, 2016 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 13, 2021 | Apr. 14, 2020 | |
Short-Term Debt [Line Items] | ||||||||
Loans payable | $ 0 | |||||||
Note payable related party current | 1,000,000 | |||||||
Note payable related party noncurrent | 1,350,000 | |||||||
Interest expense | 0 | 54,145 | ||||||
Notes payable | 1,120,051 | |||||||
Proceeds from loan | $ 297,250 | |||||||
Repayments of debt | $ 16,266 | |||||||
Loans payable interest rate | 4.098% | |||||||
Paycheck Protection Program Loan [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Loans payable | $ 307,610 | $ 322,045 | ||||||
Interest expense | $ 1,760 | |||||||
Debt bearing interest rate | 1% | |||||||
Debt principal amount | 629,655 | |||||||
Accrued interest | 4,175 | |||||||
Decathlon Alpha IV, L.P. [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Loans payable | $ 1,106,164 | |||||||
Note payable related party current | 1,400,000 | 0 | 1,000,000 | |||||
Note payable related party noncurrent | 1,106,164 | 0 | 1,350,000 | |||||
Forgiveness of notes payable | $ 293,836 | $ 293,836 | 293,836 | |||||
Revenue percentage | 4% | |||||||
Debt instrument, maturity date | Dec. 09, 2023 | Sep. 30, 2025 | ||||||
Interest expense | 738,048 | 13,887 | ||||||
Principal amount | 258,949 | 2,069 | ||||||
Notes payable principal amount and interest | 1,599,150 | $ 1,120,051 | ||||||
Notes payable | $ 2,200,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 03, 2021 | Dec. 01, 2021 | May 01, 2021 | Jan. 31, 2022 | Jan. 31, 2024 | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||||
Accounts receivable - related parties | $ 168,170 | $ 443,282 | ||||||
Contract liabilities, related party | 14,982 | 63,411 | ||||||
Repayments of notes payable | 16,266 | |||||||
Notes payable, related party noncurrent | 1,350,000 | |||||||
Interest expense debt | 0 | 54,145 | ||||||
Repayments of notes payable related party | 797,505 | 250,000 | ||||||
Debt forgiveness related party | 1,624,755 | 3,767,530 | ||||||
Notes payable, related party noncurrent | 1,000,000 | |||||||
Cost of revenue | 5,855,275 | 1,775,299 | ||||||
General and administrative expense | 4,431,915 | 948,928 | ||||||
Professional services | 2,461,077 | 335,604 | ||||||
Monthly rent | $ 4,570 | |||||||
Sub lease expense | 56,349 | 22,850 | ||||||
Forecast [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Monthly rent | $ 4,847 | |||||||
Subsequent Event [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Monthly rent | $ 4,707 | |||||||
Craig Technical Consulting Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Contract with customer liability revenue recognized | 1,042,628 | 619,324 | ||||||
Accounts receivable - related parties | 168,170 | 443,282 | ||||||
Contract liabilities, related party | 14,982 | 63,411 | ||||||
Accounts payable | $ 4,000,000 | 566,636 | 588,797 | |||||
Debt instrument, decrease, forgiveness | $ 3,473,693 | |||||||
Decathlon Alpha IV, L.P. [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Debt instrument, decrease, forgiveness | $ 293,836 | $ 293,836 | 293,836 | |||||
Debt instrument, maturity date | Dec. 09, 2023 | Sep. 30, 2025 | ||||||
Repayments of notes payable | $ 250,000 | |||||||
Notes payable, related party noncurrent | 1,106,164 | 0 | 1,350,000 | |||||
Interest expense debt | 738,048 | 13,887 | ||||||
Notes payable, related party noncurrent | $ 1,400,000 | 0 | 1,000,000 | |||||
Cost of revenue | 136,363 | 0 | ||||||
General and administrative expense | 12,267 | 0 | ||||||
Professional services | $ 160,475 | $ 7,054 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 18, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Other general and administrative expenses | $ 120,000 | $ 110,000 | |
License Agreement Terms [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Reservation fee | $ 120,000 | ||
License fee | $ 120,000 |
Schedule of Warrant Valuation A
Schedule of Warrant Valuation Assumption (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Expected term | 5 years |
Expected average volatility rate minimum | 43% |
Expected average volatility rate maximum | 69% |
Expected dividend yield | |
Risk-free interest rate - minimum | 0.77% |
Risk-free interest rate - maximum | 1.21% |
Stockholder_s Equity (Details N
Stockholder’s Equity (Details Narrative) - USD ($) | 2 Months Ended | 12 Months Ended | ||||||||
Aug. 10, 2022 | Dec. 16, 2021 | Sep. 22, 2021 | Aug. 30, 2021 | Aug. 16, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | Apr. 30, 2021 | |
Class of Stock [Line Items] | ||||||||||
Common stock, shares authorized | 115,000,000 | 110,000,000 | 110,000,000 | 36,000,000 | ||||||
Preferred stock, shares issued | 0 | 0 | 1,000,000 | |||||||
Common stock voting rights, description | The Class B Common Stock is entitled to 10 votes for every 1 vote of the Class A Common Stock. | The Class B Common Stock is entitled to 10 votes for every 1 vote of the Class A Common Stock. | ||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||||||
Common stock, shares issued | 85,000 | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Stock issued during period value new issues | $ 3,221,355 | $ 16,255,235 | ||||||||
Aggregate proceeds from issuance of shares | $ 3,221,355 | $ 16,255,235 | ||||||||
Number of warrants issued | 420,000 | |||||||||
Warrants period | 5 years | |||||||||
Warrants exercise price | $ 1 | |||||||||
Warrants exercise price, increase | $ 5 | |||||||||
Fair value of warrants | $ 768,905 | |||||||||
Warrants outstanding | 0 | |||||||||
Craig Technical Consulting Inc [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of outstanding shares of common stock | 100% | |||||||||
B Riley [Member] | Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of outstanding shares of common stock | 19.99% | |||||||||
Common stock issued during period | 3,373,121 | |||||||||
Common Class A [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 25,000,000 | ||||||
Common stock, shares issued | 8,022,736 | 6,574,040 | ||||||||
Common stock, shares outstanding | 8,022,736 | 6,574,040 | ||||||||
Stock issued during period value new issues | $ 1,448,696 | $ 6,574,040 | ||||||||
Common stock issued during period | 3,000,000 | 3,000,000 | ||||||||
Aggregate proceeds from issuance of shares | $ 13,560,900 | $ 2,694,335 | ||||||||
Sale of stock price per share | $ 5 | $ 1 | ||||||||
Restricted stock issued during period, shares | 200,000 | |||||||||
Restricted stock issued during period | $ 200,000 | |||||||||
Number of warrants issued | 374,040 | |||||||||
Common Class A [Member] | 2021 Omnibus Equity Incentive Plan [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted shares for consulting services, shares | 300,000 | |||||||||
Restricted shares for consulting services, value | $ 1,209,000 | |||||||||
Common Class A [Member] | Purchase Agreement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, par value | $ 0.0001 | |||||||||
Stock issued during period value new issues | $ 30,000,000 | |||||||||
Common stock issued during period | 1,148,696 | |||||||||
Aggregate proceeds from issuance of shares | $ 3,596,355 | |||||||||
Share issuance costs | 375,000 | |||||||||
Net procceds from issuance of shares | $ 3,221,355 | |||||||||
Common Class A [Member] | Purchase Agreement [Member] | Over-Allotment Option [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock issued during period | 90,367 | |||||||||
Common Class B [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||
Common stock, shares issued | 85,000 | 10,000,000 | 10,000,000 | |||||||
Common stock, par value | $ 0.0001 | |||||||||
Common stock, shares outstanding | 85,000 | 10,000,000 | 10,000,000 | |||||||
Common stock issued during period | 10,000,000 | |||||||||
Sale of stock price per share | $ 0.0001 | |||||||||
Common Class B [Member] | Craig Technical Consulting Inc [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, shares issued | 85,000 | |||||||||
Common stock, par value | $ 0.0001 | |||||||||
Membership interest | 100% |
Schedule of Income Tax Reconcil
Schedule of Income Tax Reconciliation Income Tax Net Expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Loss for the year | $ (12,839,968) | $ (3,746,138) |
Income tax (recovery) at statutory rate | (2,689,782) | (786,700) |
State income tax expense, net of federal tax effect | (704,467) | (131,100) |
Permanent difference and other | ||
Change in valuation allowance | 3,394,249 | 917,800 |
Income tax expense per books |
Schedule of Net Deferred Tax As
Schedule of Net Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Non-operating loss carryforward | $ 4,312,049 | $ 917,800 |
Valuation allowance | (4,312,049) | (917,800) |
Net deferred tax asset |
Income tax (Details Narrative)
Income tax (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carryforwards | $ 12,839,968 | |
Federal income tax rate | 21% | |
State income tax rate | 5.50% | 3.50% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | |||||
Jan. 30, 2023 | Dec. 16, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | |
Subsequent Event [Line Items] | ||||||
Number of shares offrered | 115,000,000 | 110,000,000 | 110,000,000 | 36,000,000 | ||
Number of warrants purchased for shares | 420,000 | |||||
Purchase price | $ 1 | |||||
Common Class A [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares offrered | 100,000,000 | 100,000,000 | 100,000,000 | 25,000,000 | ||
Number of warrants purchased for shares | 374,040 | |||||
Number of shares offrered | 3,000,000 | 3,000,000 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Warrants, description | Warrants equal to 4% of the number of securities issued by the Company in the offering at an exercise price of 125% of the offering price per share was issued to the underwriter | |||||
Subsequent Event [Member] | Common Class A [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares offrered | 2,640,000 | |||||
Number of warrants purchased for shares | 12,360,000 | |||||
Number of shares offrered | 17,250,000 | |||||
Purchase price | $ 0.30 | |||||
Gross proceeds from issue of warrants | $ 5.2 | |||||
Net proceeds from issue of warrants | $ 4.6 | |||||
Subsequent Event [Member] | Common Class A [Member] | Over-Allotment Option [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of warrants purchased for shares | 2,250,000 |