Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Sep. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-11398 | |
Entity Registrant Name | CPI AEROSTRUCTURES, INC. | |
Entity Central Index Key | 0000889348 | |
Entity Tax Identification Number | 11-2520310 | |
Entity Incorporation, State or Country Code | NY | |
Entity Address, Address Line One | 91 Heartland Blvd. | |
Entity Address, City or Town | Edgewood | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11717 | |
City Area Code | (631) | |
Local Phone Number | 586-5200 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | CVUA | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,335,896 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 2,626,061 | $ 6,308,866 |
Accounts receivable, net | 4,846,553 | 4,967,714 |
Insurance recovery receivable | 3,500,693 | 2,850,000 |
Contract assets | 27,491,183 | 24,459,339 |
Inventory | 3,587,781 | 4,028,925 |
Refundable income taxes | 42,335 | 40,000 |
Prepaid expenses and other current assets | 508,968 | 625,075 |
Total current assets | 42,603,574 | 43,279,919 |
Operating lease right-of-use assets | 6,937,956 | 7,796,768 |
Property and equipment, net | 1,390,929 | 1,646,863 |
Intangibles, net | 62,500 | 125,000 |
Goodwill | 1,784,254 | 1,784,254 |
Other assets | 325,854 | 372,741 |
Total assets | 53,105,067 | 55,005,545 |
Current Liabilities: | ||
Accounts payable | 11,293,990 | 10,429,018 |
Accrued expenses | 5,110,731 | 6,102,587 |
Litigation settlement obligation | 3,600,000 | 3,003,259 |
Contract liabilities | 5,027,832 | 5,122,766 |
Loss reserve | 918,548 | 1,495,714 |
Current portion of long-term debt | 3,332,391 | 3,365,181 |
Operating lease liabilities | 1,641,243 | 1,580,453 |
Income tax payable | 5,165 | |
Total current liabilities | 30,924,735 | 31,104,143 |
Line of credit | 21,000,000 | 21,250,000 |
Long-term operating lease liabilities | 5,604,664 | 6,445,728 |
Long-term debt, net of current portion | 262,656 | 1,540,747 |
Total liabilities | 57,792,055 | 60,340,618 |
Shareholders’ Deficit: | ||
Common stock - $.001 par value; authorized 50,000,000 shares, 12,449,327 and 12,335,683 shares, respectively, issued and outstanding | 12,449 | 12,336 |
Additional paid-in capital | 72,997,009 | 72,833,742 |
Accumulated deficit | (77,696,446) | (78,181,151) |
Total Shareholders’ Deficit | (4,686,988) | (5,335,073) |
Total Liabilities and Shareholders’ Deficit | $ 53,105,067 | $ 55,005,545 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, outstanding | 12,449,327 | 12,335,683 |
Common stock, issued | 12,449,327 | 12,335,683 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 18,925,406 | $ 22,301,190 | $ 39,060,503 | $ 53,119,936 |
Cost of sales | 15,265,716 | 18,704,588 | 31,966,204 | 44,603,246 |
Gross profit | 3,659,690 | 3,596,602 | 7,094,299 | 8,516,690 |
Selling, general and administrative expenses | 2,697,392 | 2,677,688 | 5,835,049 | 6,068,494 |
Income from operations | 962,298 | 918,914 | 1,259,250 | 2,448,196 |
Interest expense | 438,437 | 293,685 | 767,045 | 588,174 |
Income before provision for income taxes | 523,861 | 625,229 | 492,205 | 1,860,022 |
Provision for income taxes | 6,225 | 2,078 | 7,500 | 4,328 |
Net income | $ 517,636 | $ 623,151 | $ 484,705 | $ 1,855,694 |
Income per common share – basic | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.15 |
Income per common share – diluted | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.15 |
Shares used in computing loss per common share: | ||||
Basic | 12,439,000 | 12,188,197 | 12,401,281 | 12,086,299 |
Diluted | 12,534,058 | 12,255,950 | 12,496,339 | 12,154,052 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (UNAUDITED) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 11,951 | $ 72,005,841 | $ (85,001,524) | $ (12,983,732) |
Beginning balance (in shares) at Dec. 31, 2020 | 11,951,271 | |||
Net Income | 1,232,543 | 1,232,543 | ||
Stock-based compensation expense | $ 34 | 343,693 | 343,727 | |
Stock-based compensation expense (in shares) | 33,881 | |||
Ending balance, value at Mar. 31, 2021 | $ 11,985 | 72,349,534 | (83,768,981) | (11,407,462) |
Ending balance (in shares) at Mar. 31, 2021 | 11,985,152 | |||
Beginning balance, value at Dec. 31, 2020 | $ 11,951 | 72,005,841 | (85,001,524) | (12,983,732) |
Beginning balance (in shares) at Dec. 31, 2020 | 11,951,271 | |||
Net Income | 1,855,694 | |||
Ending balance, value at Jun. 30, 2021 | $ 12,268 | 72,574,307 | (83,145,830) | (10,559,255) |
Ending balance (in shares) at Jun. 30, 2021 | 12,267,930 | |||
Beginning balance, value at Mar. 31, 2021 | $ 11,985 | 72,349,534 | (83,768,981) | (11,407,462) |
Beginning balance (in shares) at Mar. 31, 2021 | 11,985,152 | |||
Net Income | 623,151 | 623,151 | ||
Common stock forfeited | $ (42) | (42) | ||
Common stock forfeited shares (in shares) | (41,199) | |||
Stock-based compensation expense | $ 325 | 224,773 | 225,098 | |
Stock-based compensation expense (in shares) | 323,977 | |||
Ending balance, value at Jun. 30, 2021 | $ 12,268 | 72,574,307 | (83,145,830) | (10,559,255) |
Ending balance (in shares) at Jun. 30, 2021 | 12,267,930 | |||
Beginning balance, value at Dec. 31, 2021 | $ 12,336 | 72,833,742 | (78,181,151) | $ (5,335,073) |
Beginning balance (in shares) at Dec. 31, 2021 | 12,335,683 | 12,335,683 | ||
Net Income | (32,931) | $ (32,931) | ||
Stock-based compensation expense | $ 47 | 25,835 | 25,882 | |
Stock-based compensation expense (in shares) | 47,527 | |||
Ending balance, value at Mar. 31, 2022 | $ 12,383 | 72,859,577 | (78,214,082) | (5,342,122) |
Ending balance (in shares) at Mar. 31, 2022 | 12,383,210 | |||
Beginning balance, value at Dec. 31, 2021 | $ 12,336 | 72,833,742 | (78,181,151) | $ (5,335,073) |
Beginning balance (in shares) at Dec. 31, 2021 | 12,335,683 | 12,335,683 | ||
Net Income | $ 484,705 | |||
Ending balance, value at Jun. 30, 2022 | $ 12,449 | 72,997,009 | (77,696,446) | $ (4,686,988) |
Ending balance (in shares) at Jun. 30, 2022 | 12,449,327 | 12,449,327 | ||
Beginning balance, value at Mar. 31, 2022 | $ 12,383 | 72,859,577 | (78,214,082) | $ (5,342,122) |
Beginning balance (in shares) at Mar. 31, 2022 | 12,383,210 | |||
Net Income | 517,636 | 517,636 | ||
Stock-based compensation expense | $ 66 | 137,432 | 137,498 | |
Stock-based compensation expense (in shares) | 66,117 | |||
Ending balance, value at Jun. 30, 2022 | $ 12,449 | $ 72,997,009 | $ (77,696,446) | $ (4,686,988) |
Ending balance (in shares) at Jun. 30, 2022 | 12,449,327 | 12,449,327 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 484,705 | $ 1,855,694 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 343,750 | 530,843 |
Amortization of debt issuance cost | 46,888 | 28,107 |
Cash expended less than (in excess) of rent expense | 78,538 | (48,670) |
Stock-based compensation | 163,380 | 568,783 |
Bad debt expense | 3,189 | 127,413 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 117,972 | (2,235,735) |
Increase in contract assets | (3,031,844) | (4,266,430) |
Decrease in inventory | 441,144 | 1,105,127 |
Decrease (increase) in prepaid expenses and other assets | 116,107 | (271,157) |
Increase in refundable income taxes | (2,335) | (647) |
(Decrease) increase in accounts payable and accrued expenses | (126,884) | 69,246 |
Decrease in contract liabilities | (94,934) | (124,976) |
Increase in insurance receivable | (650,693) | (2,850,000) |
Increase in settlement of litigation obligation | 596,741 | 3,371,162 |
Decrease in income taxes payable | (5,165) | (948) |
Decrease in loss reserve | (577,166) | (344,443) |
Net cash used in operating activities | (2,096,607) | (2,486,631) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (25,317) | (11,952) |
Net cash used in investing activities | (25,317) | (11,952) |
Cash flows from financing activities: | ||
Payments on long-term debt | (1,560,881) | (1,196,276) |
Proceeds from line of credit | 261,315 | |
Net cash used in financing activities | (1,560,881) | (934,961) |
Net decrease in cash | (3,682,805) | (3,433,544) |
Cash at beginning of period | 6,308,866 | 6,033,537 |
Cash at end of period | 2,626,061 | 2,599,993 |
Cash paid during the period for: | ||
Interest | 645,423 | 588,174 |
Income taxes | $ 5,923 |
INTERIM FINANCIAL STATEMENTS
INTERIM FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
INTERIM FINANCIAL STATEMENTS | 1. INTERIM FINANCIAL STATEMENTS The Company consists of CPI Aerostructures, Inc. (“CPI Aero”), Welding Metallurgy, Inc. (“WMI”), a wholly owned subsidiary of CPI Aero, and Compac Development Corporation, a wholly owned subsidiary of WMI (collectively, the “Company”). An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance. The Company has determined that it has a single operating and reportable segment. The consolidated financial statements of the Company as of June 30, 2022 and for the six months ended June 30, 2022 and 2021 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and notes normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations. The consolidated balance sheet at December 31, 2021 has been derived from audited consolidated financial statements, but does not include all of the information and notes required by U.S. GAAP. The Company believes that the disclosures are adequate to make the information presented not misleading. All adjustments that, in the opinion of the management, are necessary for a fair presentation for the periods presented have been reflected. Such adjustments are of a normal, recurring nature. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”). The results of operations for interim periods are not necessarily indicative of the operating results to be expected for the full year or any other interim period. The Company maintains its cash in four financial institutions. The balances are insured by the Federal Deposit Insurance Corporation. From time to time, the Company’s balances may exceed insurance limits. As of June 30, 2022, the Company had $ 2,417,087 The Company currently has a shareholders’ deficit and has experienced losses from operations and negative cash flows from operations in prior periods that collectively represent significant risk to the Company to continue to operate as a going concern. To address this risk, the Company has (i) negotiated and executed a further amendment to its Amended and Restated Credit Agreement with the lenders named therein and BankUnited N.A. as Sole Arranger, Agent and Collateral Agent (as amended from time to time, the “Credit Agreement” or the “BankUnited Facility”), effective April 12, 2022 which extended the maturity date of the credit facility to September 30, 2023, (ii) obtained and is seeking additional progress payment and advance payment customer contract funding provisions, (iii) maintained procedures to reduce investments in inventory and contract assets, (iv) remained focused on its military segment which has proven to be less susceptible to COVID-19 related impacts and (v) maintained a strong (approximately $ 133 99 The outbreak of the COVID-19 coronavirus was declared a pandemic by the World Health Organization during our first quarter of 2020. During the latter part of that quarter and subsequent to that quarter end, the COVID-19 pandemic grew, causing non-essential businesses to shut down and many people to observe the shelter-in-place directive from our state government. Our business and operations and the industries in which we operate have been impacted by public and private sector policies and initiatives in the U.S. to address the transmission of COVID-19, such as the imposition of travel restrictions and the adoption of remote work. The COVID-19 pandemic has contributed to a general slowdown in the global economy, has adversely impacted the businesses of certain of our customers and suppliers, and, if it continues for an extended period of time, it could adversely impact our results of operations and financial condition. In response to the COVID-19 impact on our business, we have been and continue to actively mitigate costs. We have also been taking actions to preserve capital and protect the long-term needs of our businesses, including negotiating progress payments with our customers and reducing discretionary spending. For more information on the current and potential impact of the COVID-19 pandemic on our business, see Risk Factors included in Part I, Item 1A of our Form 10-K. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 2. REVENUE RECOGNITION The Company recognizes revenue when it transfers control of a promised good or service to a customer in an amount that reflects the consideration it expects to be entitled to in exchange for the good or service. The majority of the Company’s performance obligations are satisfied over time as the Company (i) sells products with no alternative use to the Company and (ii) has an enforceable right to recover costs incurred plus a reasonable profit margin for work completed to date. Under the over time revenue recognition model, revenue and gross profit are recognized over the contract period as work is performed based on actual costs incurred and an estimate of costs to complete and resulting total estimated costs at completion. The Company also has contracts that are considered point in time. Under the point in time revenue recognition model, revenue is recognized when control of the components has transferred to the customer; in most cases this will be based on shipping terms. Contracts with Customers and Performance Obligations The majority of the Company’s revenues are from long-term contracts with the U.S. government, military and commercial contractors. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For the Company, the contract under Accounting Standards Codification Topic 606 (“ASC 606”) is typically established upon execution of a purchase order either in accordance with a long-term customer contract or on a standalone basis. To determine the proper revenue recognition for our contracts, we must evaluate whether two or more contracts should be combined and accounted for as a single contract, and whether the combined or single contract should be accounted for as one performance obligation or more than one performance obligation. This evaluation requires significant judgment, and the decision to combine a group of contracts or to separate a contract into multiple performance obligations could change the amount of revenue and profit recorded in a period. A performance obligation is a promise within a contract to transfer a distinct good or service to the customer in exchange for payment and is the unit of account for recognizing revenue. The Company’s performance obligations in its contracts with customers are typically the sale of each individual product contemplated in the contract or a single performance obligation representing a series of products when the contract contains multiple products that are substantially the same. The Company has elected to account for shipping performed after control over a product has transferred to a customer as fulfillment activities. When revenue is recognized in advance of incurring shipping costs, the costs related to the shipping are accrued. Shipping costs are included in costs of sales. The Company provides warranties on many of its products; however, since customers cannot purchase such warranties separately and they do not provide services beyond standard assurances, warranties are not separate performance obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. For contracts with more than one performance obligation, the Company allocates the transaction price to each performance obligation based on its estimated standalone selling price. When standalone selling prices are not available, the transaction price is allocated using an expected cost plus margin approach as pricing for such contracts is typically negotiated on the basis of cost. The contracts with the U.S. government and military contractors are subject to the Federal Acquisition Regulation, which provides guidance on the types of costs that are allowable in establishing prices for goods and services provided under U.S. government contracts. The pricing for commercial contracts is based on the specific negotiations with each customer and any taxes imposed by governmental authorities are excluded from revenue. The transaction price is primarily comprised of fixed consideration as the customer typically pays a fixed fee for each product sold. The Company does not adjust the amount of revenue to be recognized under a customer contract for the effects of the time value of money when the timing difference between receipt of payment and transferring the good or service is less than one year. The majority of the Company’s performance obligations are satisfied over time as the Company (i) sells products with no alternative use to the Company and (ii) has an enforceable right to recover costs incurred plus a reasonable profit margin for work completed to date. The Company uses the cost-to-cost input method to measure progress for its performance obligations because it best depicts the transfer of control to the customer which occurs as the Company incurs costs on its contracts. The Company generally utilizes the portfolio approach to estimate the amount of revenue to recognize for its contracts and groups contracts together that have similar characteristics. Significant judgment is used to determine which contracts are grouped together to form a portfolio. The portfolio approach is utilized only when the result of the accounting is not expected to be materially different than if applied to individual contracts. The Company’s contracts are often modified to account for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, are recognized prospectively when the remaining goods or services are distinct and on a cumulative catch-up basis when the remaining goods or services are not distinct. The Company also has contracts that are considered point in time. Under the point in time revenue recognition model, revenue is recognized when control of the components has transferred to the customer; in most cases this will be based on shipping terms. Contract Estimates Certain contracts contain forms of variable consideration, such as price discounts and performance penalties. The Company generally estimates variable consideration using the most likely amount based on an assessment of all available information (i.e., historical experience, current and forecasted performance) and only to the extent it is probable that a significant reversal of revenue recognized will not occur when the uncertainty is resolved. In applying the cost-to-cost input method, the Company compares the actual costs incurred relative to the total estimated costs expected at completion to determine its progress towards satisfying its performance obligation and to calculate the corresponding amount of revenue to recognize. For any costs incurred that do not depict the Company’s performance in transferring control of goods or services to the customer, the Company excludes such costs from its input method measure of progress as the amounts are not reflected in the price of the contract. Costs that are inputs to the satisfaction of a performance obligation include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs. Changes to the original estimates may be required during the life of the contract. Estimates are reviewed quarterly and the effect of any change in the estimated gross margin percentage for a contract is reflected in revenue in the period the change becomes known. ASC 606 involves considerable use of estimates and judgment in determining revenues, costs and profits and in assigning the amounts to accounting periods. For instance, management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from the customer, and overhead cost rates, among other variables. The Company continually evaluates all of the factors related to the assumptions, risks and uncertainties inherent with the application of the cost-to-cost input method; however, it cannot be assured that estimates will be accurate. If estimates are not accurate, or a contract is terminated which will affect estimates at completion, the Company is required to adjust revenue in the period the change is determined. When changes are required for the estimated total revenue on a contract, these changes are recognized on a cumulative catch-up basis in the current period. A significant change in one or more estimates could affect the profitability of one or more of our performance obligations. If estimates of total costs to be incurred exceed estimates of total consideration the Company expects to receive, a provision for the remaining loss on the contract is recorded in the period in which the loss becomes evident. Capitalized Contract Acquisition Costs and Fulfillment Costs Contract acquisition costs are those incremental costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. The Company does not typically incur contract acquisition costs or contract fulfillment costs that are subject to capitalization in accordance with the guidance in Accounting Standards Codification Subtopic 340-40, “Other Assets and Deferred Costs—Contracts with Customers.” Disaggregation of Revenue The following tables present the Company’s revenue disaggregated by contract type and revenue recognition method: Three months ended Six months ended 2022 2021 2022 2021 Aerostructures $ 9,819,902 $ 8,255,406 $ 19,006,695 $ 16,882,354 Aerosystems 5,984,045 6,167,283 12,670,873 16,171,720 Kitting and Supply Chain Management 3,121,459 7,878,501 7,382,935 20,065,862 $ 18,925,406 $ 22,301,190 $ 39,060,503 $ 53,119,936 Three months ended Six months ended 2022 2021 2022 2021 Revenue recognized using over time revenue recognition model $ 16,565,696 $ 19,628,721 $ 35,060,893 $ 47,931,650 Revenue recognized using point in time revenue recognition model 2,359,710 2,672,469 3,999,610 5,188,286 $ 18,925,406 $ 22,301,190 $ 39,060,503 $ 53,119,936 Transaction Price Allocated to Remaining Performance Obligations Our backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. Backlog is converted into revenue in future periods as work is performed. As of June 30, 2022, the aggregate amount of transaction price allocated to the remaining performance obligations was approximately $ 133 30 |
CONTRACT ASSETS AND CONTRACT LI
CONTRACT ASSETS AND CONTRACT LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
Contract Assets And Contract Liabilities | |
CONTRACT ASSETS AND CONTRACT LIABILITIES | 3. CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets represent revenue recognized on contracts in excess of amounts invoiced to the customers and the where the Company’s right to consideration is conditional on something other than the passage of time. Amounts may not exceed their net realizable value. Our government contracts therefore typically result in revenue recognized in excess of billings, which we present as contract assets. Contract assets are classified as current. The Company’s contract liabilities represent customer payments received or due from the customer in excess of revenue recognized. Contract liabilities are classified as current. Schedule of contract assets and liabilities June 30, December 31, 2022 2021 Contract assets $ 27,491,183 $ 24,459,339 Contract liabilities 5,027,832 5,122,766 Net Contract assets $ 22,463,351 $ 19,336,573 Revenue recognized for the periods ended June 30, 2022 and 2021 that was included in the contract liabilities balance as of January 1, 2022 and 2021, respectively, was approximately $ 3.2 million 1.5 million |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 4. INVENTORY The components of inventory consisted of the following: June 30, 2022 December 31, 2021 Raw materials $ 3,374,769 $ 3,603,359 Work in progress 1,171,432 1,413,672 Finished goods 1,906,271 1,998,049 Gross inventory 6,452,472 7,015,080 Inventory reserves (2,864,691 ) (2,986,155 ) Inventory, net $ 3,587,781 $ 4,028,925 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 5. STOCK-BASED COMPENSATION The Company accounts for stock-based compensation based on the fair value of the stock or stock-based instrument on the date of grant. The Company recognized a net total of $137,498 $225,098 163,381 568,825 During the three and six months ended June 30, 2022, the Company granted 0 190,114 0 135,512 114,000 333,000 147,902 432,345 During the three and six months ended June 30, 2022, the Company granted 0 18,588 17,000 (189,000) 85,748 ($263,000) 6,000 20,000 63,653 112,102 13,543 24,378 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 6. FAIR VALUE Fair Value At June 30, 2022 and December 31, 2021, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments. June 30, 2022 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 24,595,047 $ 24,595,047 December 31, 2021 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 26,155,928 $ 26,155,928 We estimated the fair value of debt using market quotes and calculations based on market rates. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | 7. INCOME PER COMMON SHARE Basic and diluted income per common share for the three and six months ended June 30, 2022 and 2021 is computed using the weighted average number of common shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock, as well as unvested RSUs. Incremental shares of 95,058 142,587 67,753 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | 8. DEBT Credit Facility On March 24, 2016, the Company entered into the Credit Agreement. The BankUnited Facility originally provided for a revolving credit loan commitment of $ 30 10 On May 11, 2021, the Company entered into the Seventh Amendment (defined below). Under the Seventh Amendment, the parties amended the Credit Agreement by (a) extending the maturity date of the Revolving Loan and the Term Loan to July 31, 2022 On October 28, 2021, the Company entered into the Eighth Amendment (defined below). Under the Eighth Amendment, the parties amended the Credit Agreement by (a) extending the maturity date of the Revolving Loan and the Term Loan to December 31, 2022 24 21 3 750,000 250,000 200,000 250,000 On April 12, 2022 the Company entered into the Ninth Amendment (defined below). Under the Ninth Amendment, the parties amended the Credit Agreement by (a) extending the maturity date of the Revolving Loan and the Term Loan to September 30, 2023 750,000 250,000 200,000 2.5 5 6 7 8 On August 19, 2022, we entered into the Tenth Amendment (defined below). Under the Tenth Amendment, the parties amended the Credit Agreement by (a) increasing the maximum leverage ratio applicable for the fiscal quarter ending September 30, 2022 to 5.0 566,024.81 367,044.51 795,997.06 The Credit Agreement, as amended, requires us to maintain the following financial covenants (subject to the exclusions provided for in the previous paragraph): (a) minimum debt service coverage ratio of no less than 1.5 0.95 1.5 7.30 6.30 5.0 4.0 1.00 1 The BankUnited Facility is secured by all of the Company’s assets and both the Revolving Loan and Term Loan bear interest at the rate of 7.25 2.50 As of June 30, 2022, the Company had $ 21,000,000 21,250,000 The Term Loan, as amended by the Tenth Amendment, had an aggregate principal amount of $ 3,283,333 4,483,333 PPP Loan On April 10, 2020, we entered into the Paycheck Protection Program loan (“PPP Loan”), with BNB Bank (now part of Dime Community Bank (“Dime”)) as the lender, in an aggregate principal amount of $ 4,795,000 1 two years On November 2, 2020, the Company applied to the lender for full forgiveness of the PPP Loan as calculated in accordance with the terms of the CARES Act, as modified by the Paycheck Protection Flexibility Act. All amounts have been classified as current or long term in accordance with the Note terms. On July 13, 2021, the Company received notification through Dime that the PPP Loan and accrued interest thereon had been fully forgiven by the SBA and that the forgiveness payment date was July 1, 2021. The forgiveness of the PPP Loan was recognized as other income during the Company’s third fiscal quarter ending September 30, 2021. The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows: Twelve months ending June 30, 2023 $ 3,332,391 2024 221,171 2025 30,663 2026 10,822 Total $ 3,595,047 Included in the long-term debt are financing leases and other notes payable of $ 311,714 422,595 182,391 215,181 The Company has cumulatively paid $ 908,000 217,774 |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | 9. MAJOR CUSTOMERS During the six months ended June 30, 2022, the Company’s three largest customers accounted for 36 14 11 35 23 At June 30, 2022, 25 25 16 10 34 16 12 At June 30, 2022, 24 17 13 13 30 23 18 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
LEASES | 10. LEASES The Company leases a building and equipment. Under ASC 842, at contract inception we determine whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are included in ROU (right-of-use) assets and operating lease liabilities in our consolidated balance sheets. The Company leases manufacturing and office space under an agreement classified as an operating lease. The lease agreement, as amended, expires on April 30, 2026 In addition to the monthly base amounts in the lease agreement, the Company is required to pay real estate taxes and operating expenses during the lease terms. The Company also leases office equipment in agreements classified as operating leases. For the three and six months ended June 30, 2022, the Company’s operating lease expense was $ 516,920 1,051,911 Future minimum lease payments under non-cancellable operating leases as of June 30, 2022 were as follows: Twelve months ending June 30, 2023 $ 1,967,171 2024 2,079,572 2025 2,130,223 2026 1,817,820 Total undiscounted operating lease payments 7,994,786 Less imputed interest (between 4.0 6.0 (748,879) Present value of operating lease payments $ 7,245,907 The following table sets forth the ROU assets and operating lease liabilities as of June 30, 2022: Assets ROU assets-net $ 6,937,956 Liabilities Current operating lease liabilities $ 1,641,243 Long-term operating lease liabilities 5,604,664 Total ROU liabilities $ 7,245,907 The Company’s weighted average remaining lease term for its operating leases is 3.8 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES Income taxes are accounted for under the asset and liability method whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to the temporary differences between the consolidated financial statements carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply 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 the period that includes the enactment date. 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. The Company’s policy is to record estimated interest and penalties related to uncertain tax positions in income tax expense. The provision for income tax for the three months ended June 30, 2022 and 2021 was $ 6,225 2,078 7,500 4,328 The difference between the Company’s statutory tax rate and its effective rate is due to the valuation allowance taken on the Company’s net operating loss carryforwards. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Class Action Lawsuit As previously disclosed, a consolidated class action lawsuit (captioned Rodriguez v. CPI Aerostructures, Inc., et al. On May 20, 2021, the parties reached a settlement in the amount of $ 3,600,000 750,000 At June 30, 2022, in order to reflect the amounts owed from our directors’ and officers’ insurance carrier and to the Plaintiffs, we have recorded to our balance sheet a litigation settlement obligation of $ 3,600,000 3,500,693 Shareholder Derivative Action Four shareholder derivative actions, each based on substantially the same facts as those alleged in the class action discussed above, have been filed against certain of our current and former directors and officers. The first action (captioned Moulton v. McCrosson, et.al. The second action (captioned Woodyard v. McCrosson, et al. The third action (captioned Berger v. McCrosson, et al. On March 19, 2021, the parties to the Moulton and Berger In re CPI Aerostructures Stockholder Derivative Litigation The fourth action (captioned Wurst v. Bazaar, et al. On June 13, 2022, the plaintiffs in the consolidated federal action informed the Court that the Company (as nominal defendant) and all individual defendants had reached an agreement in principle with all plaintiffs to settle the four shareholder derivative lawsuits described above. On June 16, 2022, the plaintiffs in the consolidated federal action filed an unopposed motion for preliminary approval of the settlement. On July 22, 2022, the Court referred the motion to the magistrate judge; the motion remains pending. The magistrate judge held a conference on September 9, 2022 in the consolidated federal action. The settlement is subject to Court approval and, if approved, will result in the dismissal of the shareholder derivative lawsuits. As part of the proposed settlement, the Company has agreed to undertake (or confirm that it has undertaken already) certain corporate governance reforms and to pay attorneys’ fees to plaintiffs’ counsel. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
The following tables present the Company’s revenue disaggregated by contract type and revenue recognition method: | The following tables present the Company’s revenue disaggregated by contract type and revenue recognition method: Three months ended Six months ended 2022 2021 2022 2021 Aerostructures $ 9,819,902 $ 8,255,406 $ 19,006,695 $ 16,882,354 Aerosystems 5,984,045 6,167,283 12,670,873 16,171,720 Kitting and Supply Chain Management 3,121,459 7,878,501 7,382,935 20,065,862 $ 18,925,406 $ 22,301,190 $ 39,060,503 $ 53,119,936 Three months ended Six months ended 2022 2021 2022 2021 Revenue recognized using over time revenue recognition model $ 16,565,696 $ 19,628,721 $ 35,060,893 $ 47,931,650 Revenue recognized using point in time revenue recognition model 2,359,710 2,672,469 3,999,610 5,188,286 $ 18,925,406 $ 22,301,190 $ 39,060,503 $ 53,119,936 |
CONTRACT ASSETS AND CONTRACT _2
CONTRACT ASSETS AND CONTRACT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Contract Assets And Contract Liabilities | |
Schedule of contract assets and liabilities | Schedule of contract assets and liabilities June 30, December 31, 2022 2021 Contract assets $ 27,491,183 $ 24,459,339 Contract liabilities 5,027,832 5,122,766 Net Contract assets $ 22,463,351 $ 19,336,573 |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
The components of inventory consisted of the following: | The components of inventory consisted of the following: June 30, 2022 December 31, 2021 Raw materials $ 3,374,769 $ 3,603,359 Work in progress 1,171,432 1,413,672 Finished goods 1,906,271 1,998,049 Gross inventory 6,452,472 7,015,080 Inventory reserves (2,864,691 ) (2,986,155 ) Inventory, net $ 3,587,781 $ 4,028,925 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
At June 30, 2022 and December 31, 2021, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments. | At June 30, 2022 and December 31, 2021, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments. June 30, 2022 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 24,595,047 $ 24,595,047 December 31, 2021 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 26,155,928 $ 26,155,928 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows: | The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows: Twelve months ending June 30, 2023 $ 3,332,391 2024 221,171 2025 30,663 2026 10,822 Total $ 3,595,047 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Future minimum lease payments under non-cancellable operating leases as of June 30, 2022 were as follows: | Future minimum lease payments under non-cancellable operating leases as of June 30, 2022 were as follows: Twelve months ending June 30, 2023 $ 1,967,171 2024 2,079,572 2025 2,130,223 2026 1,817,820 Total undiscounted operating lease payments 7,994,786 Less imputed interest (between 4.0 6.0 (748,879) Present value of operating lease payments $ 7,245,907 |
The following table sets forth the ROU assets and operating lease liabilities as of June 30, 2022: | The following table sets forth the ROU assets and operating lease liabilities as of June 30, 2022: Assets ROU assets-net $ 6,937,956 Liabilities Current operating lease liabilities $ 1,641,243 Long-term operating lease liabilities 5,604,664 Total ROU liabilities $ 7,245,907 |
INTERIM FINANCIAL STATEMENTS (D
INTERIM FINANCIAL STATEMENTS (Details Narrative) | Jun. 30, 2022 USD ($) |
Accounting Policies [Abstract] | |
Cash uninsured amount | $ 2,417,087 |
Funded orders backlog | $ 133,000,000 |
Percentage of funded orders for military programs | 99% |
The following tables present th
The following tables present the Company’s revenue disaggregated by contract type and revenue recognition method: (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 18,925,406 | $ 22,301,190 | $ 39,060,503 | $ 53,119,936 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 16,565,696 | 19,628,721 | 35,060,893 | 47,931,650 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,359,710 | 2,672,469 | 3,999,610 | 5,188,286 |
Aerostructure [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,819,902 | 8,255,406 | 19,006,695 | 16,882,354 |
Aerosystems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,984,045 | 6,167,283 | 12,670,873 | 16,171,720 |
Kitting and Supply Chain Management [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,121,459 | $ 7,878,501 | $ 7,382,935 | $ 20,065,862 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) $ in Millions | Jun. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 133 |
Fiscal Year 2022 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation recognition percentage | 30% |
Schedule of contract assets and
Schedule of contract assets and liabilities (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Contract Assets And Contract Liabilities | ||
Contract assets | $ 27,491,183 | $ 24,459,339 |
Contract liabilities | 5,027,832 | 5,122,766 |
Net Contract assets | $ 22,463,351 | $ 19,336,573 |
CONTRACT ASSETS AND CONTRACT _3
CONTRACT ASSETS AND CONTRACT LIABILITIES (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Contract Assets And Contract Liabilities | ||
Revenue recognized that was included in contract liabilities | $ 3,200,000 | $ 1,500,000 |
The components of inventory con
The components of inventory consisted of the following: (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,374,769 | $ 3,603,359 |
Work in progress | 1,171,432 | 1,413,672 |
Finished goods | 1,906,271 | 1,998,049 |
Gross inventory | 6,452,472 | 7,015,080 |
Inventory reserves | (2,864,691) | (2,986,155) |
Inventory, net | $ 3,587,781 | $ 4,028,925 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 137,498 | $ 225,098 | $ 163,381 | $ 568,825 | |
Stock-based compensation | $ 163,380 | $ 568,783 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Grants in period | 0 | 0 | 190,114 | 135,512 | |
Stock-based compensation | $ 114,000 | $ 147,902 | $ 333,000 | $ 432,345 | |
Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Grants in period | 0 | 18,588 | |||
Shares forfeited | 85,748 | ||||
Restricted Stock [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 17,000 | 63,653 | $ (189,000) | 112,102 | |
Restricted Stock [Member] | Cost of Sales [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 6,000 | $ 13,543 | $ 20,000 | $ 24,378 | |
Forfeited Restricted Stock [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ (263,000) |
At June 30, 2022 and December 3
At June 30, 2022 and December 31, 2021, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments. (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term borrowings and long-term debt | $ 24,595,047 | $ 26,155,928 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term borrowings and long-term debt | $ 24,595,047 | $ 26,155,928 |
INCOME PER COMMON SHARE (Detail
INCOME PER COMMON SHARE (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Incremental shares used in calculation of diluted income | 95,058 | 67,753 | 67,753 | |
Anti-dilutive shares | 142,587 |
The maturities of long-term deb
The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows: (Details) | Jun. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 3,332,391 |
2024 | 221,171 |
2025 | 30,663 |
2026 | 10,822 |
Total | $ 3,595,047 |
DEBT (Details Narrative)
DEBT (Details Narrative) | 6 Months Ended | 75 Months Ended | ||||||||
Aug. 19, 2022 USD ($) | Apr. 12, 2022 USD ($) | Oct. 28, 2021 USD ($) | May 11, 2021 | Apr. 10, 2020 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 26, 2021 USD ($) | Mar. 24, 2016 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Long-term debt and lease obligation | $ 311,714 | $ 311,714 | $ 422,595 | |||||||
Long-term debt and lease obligation, current | 182,391 | 182,391 | $ 215,181 | |||||||
Bank United [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum leverage ratio, period 1 | 7.30 | |||||||||
Maximum leverage ratio, period 2 | 6.30 | |||||||||
Maximum leverage ratio, period 3 | 5 | |||||||||
Maximum leverage ratio, period 4 | 4 | |||||||||
Payments of debt issuance costs | 908,000 | |||||||||
Debt issuance costs | 217,774 | 217,774 | ||||||||
Bank United [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Net income required under agreement | 1 | |||||||||
Minimum adjusted EBITDA | 1,000,000 | |||||||||
Bank United [Member] | Debt Instrument, Redemption, Period One [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum debt service coverage ratio future periods | 1.5 | |||||||||
Bank United [Member] | Debt Instrument, Redemption, Period Two [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum debt service coverage ratio future periods | 0.95 | |||||||||
Bank United [Member] | Debt Instrument, Redemption, Period Four [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum debt service coverage ratio future periods | 1.5 | |||||||||
Bank United [Member] | Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 21,000,000 | $ 24,000,000 | $ 30,000,000 | |||||||
Liquidity covenant eliminated | 3,000,000 | |||||||||
Oustanding loans | 21,000,000 | 21,000,000 | $ 21,250,000 | |||||||
Bank United [Member] | Term loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 10,000,000 | |||||||||
Repayment of principal under agreement | $ 750,000 | 750,000 | ||||||||
Repayment of principal installment under agreement | 250,000 | 250,000 | ||||||||
Debt instrument, periodic payment, principal | $ 200,000 | 200,000 | ||||||||
Amendment fee | $ 250,000 | |||||||||
Aggregate principal amount | $ 3,283,333 | $ 3,283,333 | $ 4,483,333 | |||||||
Bank United [Member] | Term loan [Member] | Prime Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prime rate Plus | 2.50% | |||||||||
Bank United [Member] | Term loan [Member] | Prime Rate One [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prime rate Plus | 5% | |||||||||
Bank United [Member] | Term loan [Member] | Prime Rate Period Two [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prime rate Plus | 6% | |||||||||
Bank United [Member] | Term loan [Member] | Prime Rate Period Three [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prime rate Plus | 7% | |||||||||
Bank United [Member] | Term loan [Member] | Prime Rate Period Four [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prime rate Plus | 8% | |||||||||
Bank United [Member] | Revolving Loan and Term Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Expiration date | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 31, 2022 | |||||||
Interest rate | 7.25% | 7.25% | ||||||||
Bank United [Member] | Revolving Loan and Term Loan [Member] | Subsequent Event [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum leverage ratio | 5 | |||||||||
Losses incurred | $ 566,024.81 | |||||||||
Reserves | 367,044.51 | |||||||||
Expenses Under Agreement | $ 795,997.06 | |||||||||
Bank United [Member] | Revolving Loan and Term Loan [Member] | Prime Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prime rate Plus | 2.50% | |||||||||
BNB Bank [Member] | PPP Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 4,795,000 | |||||||||
Debt instrument, interest rate | 1% | |||||||||
Debt instrument, term | 2 years |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) - Customer Concentration Risk [Member] | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Revenue Benchmark [Member] | Customer One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 36% | 35% | |
Revenue Benchmark [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 14% | 23% | |
Revenue Benchmark [Member] | Customer Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11% | ||
Contract Assets [Member] | Customer One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 25% | 34% | |
Contract Assets [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 25% | 16% | |
Contract Assets [Member] | Customer Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16% | 12% | |
Contract Assets [Member] | Customer Four [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10% | ||
Accounts Receivable [Member] | Customer One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 24% | 30% | |
Accounts Receivable [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17% | 23% | |
Accounts Receivable [Member] | Customer Three [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13% | 18% | |
Accounts Receivable [Member] | Customer Four [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13% |
Future minimum lease payments u
Future minimum lease payments under non-cancellable operating leases as of June 30, 2022 were as follows: (Details) | Jun. 30, 2022 USD ($) |
2023 | $ 1,967,171 |
2024 | 2,079,572 |
2025 | 2,130,223 |
2026 | 1,817,820 |
Total undiscounted operating lease payments | 7,994,786 |
Less imputed interest (between 4.0% - 6.0%) | (748,879) |
Present value of operating lease payments | $ 7,245,907 |
Minimum [Member] | |
Interest rate | 4% |
Maximum [Member] | |
Interest rate | 6% |
The following table sets forth
The following table sets forth the ROU assets and operating lease liabilities as of June 30, 2022: (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Leases | ||
ROU assets-net | $ 6,937,956 | $ 7,796,768 |
Current operating lease liabilities | 1,641,243 | 1,580,453 |
Long-term operating lease liabilities | 5,604,664 | $ 6,445,728 |
Total ROU liabilities | $ 7,245,907 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Leases | ||
Lease expiration date | Apr. 30, 2026 | |
Lease expense | $ 516,920 | $ 1,051,911 |
Weighted average remaining lease term operating leases | 3 years 9 months 18 days | 3 years 9 months 18 days |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 6,225 | $ 2,078 | $ 7,500 | $ 4,328 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | May 20, 2021 | Jun. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Settlement amount | $ 3,600,000 | ||
Directors and officers insurance retention amount | $ 750,000 | ||
Litigation settlement obligation | 3,600,000 | $ 3,003,259 | |
Insurance recovery receivable | $ 3,500,693 | $ 2,850,000 |