CPI Aerostructures (CVU) 10-Q 15 May 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2023	May 11, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
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	CVU
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		12,566,784

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current Assets:
Cash	$ 3,997,924	$ 3,847,225
Accounts receivable, net	5,483,915	4,857,772
Insurance recovery receivable	3,600,000	3,600,000
Contract assets	30,362,951	27,384,540
Inventory	2,334,567	2,493,069
Refundable income taxes	40,000	40,000
Prepaid expenses and other current assets	969,116	975,830
Total Current Assets	46,788,473	43,198,436
Operating lease right-of-use assets	6,071,158	6,526,627
Property and equipment, net	1,051,536	1,124,556
Deferred tax asset	6,374,470	6,574,463
Goodwill	1,784,254	1,784,254
Other assets	227,243	238,744
Total Assets	62,297,134	59,447,080
Current Liabilities:
Accounts payable	10,812,974	8,029,996
Accrued expenses	5,779,242	7,344,590
Litigation settlement obligation	3,600,000	3,600,000
Contract liabilities	7,493,821	6,001,726
Loss reserve	464,044	576,549
Current portion of line of credit	1,920,000	1,200,000
Current portion of long-term debt	1,097,841	1,719,766
Operating lease liabilities, current	1,872,484	1,817,811
Income tax payable	11,396	11,396
Total Current Liabilities	33,051,802	30,301,834
Line of credit	19,080,000	19,800,000
Long-term operating lease liabilities	4,597,328	5,077,235
Long-term debt, net of current portion	48,746	70,981
Total Liabilities	56,777,876	55,250,050
Shareholders’ Equity:
Common stock - $.001 par value; authorized 50,000,000 shares, 12,526,042 and 12,506,795 shares, respectively, issued and outstanding	12,526	12,507
Additional paid-in capital	73,528,353	73,189,449
Accumulated deficit	(68,021,621)	(69,004,926)
Total Shareholders’ Equity	5,519,258	4,197,030
Total Liabilities and Shareholders’ Equity	$ 62,297,134	$ 59,447,080

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
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	12,526,042	12,506,795
Common stock, issued	12,526,042	12,506,795

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue	$ 22,016,668	$ 20,135,097
Cost of sales	17,354,152	16,700,488
Gross profit	4,662,516	3,434,609
Selling, general and administrative expenses	2,869,058	3,137,657
Income from operations	1,793,458	296,952
Interest expense	610,896	328,608
Income (loss) before provision for income taxes	1,182,562	(31,656)
Provision for income taxes	199,257	1,275
Net income (loss)	$ 983,305	$ (32,931)
Income (loss) per common share, diluted:
Income (loss) per common share, diluted	$ 0.08	$ 0
Shares used in computing income (loss) per common share, basic:
Total shares	12,520,299	12,363,143
Shares used in computing income (loss) per common share, diluted	12,608,189	12,363,143
Unrestricted Shares [Member]
Income (loss) per common share, basic:
Income (loss) per common share, basic	$ 0.08	$ 0
Shares used in computing income (loss) per common share, basic:
Total shares	12,281,115	12,072,838
Restricted Shares [Member]
Income (loss) per common share, basic:
Income (loss) per common share, basic	$ 0.08	$ 0
Shares used in computing income (loss) per common share, basic:
Total shares	239,184	290,305

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
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
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, 2022	$ 12,507	73,189,449	(69,004,926)	$ 4,197,030
Beginning balance (in shares) at Dec. 31, 2022	12,506,795			12,506,795
Net Income			983,305	$ 983,305
Stock-based compensation expense	$ 19	338,904		338,923
Stock-based compensation expense (in shares)	19,247
Ending balance, value at Mar. 31, 2023	$ 12,526	$ 73,528,353	$ (68,021,621)	$ 5,519,258
Ending balance (in shares) at Mar. 31, 2023	12,526,042			12,526,042

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income (loss)	$ 983,305	$ (32,931)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	116,545	171,875
Amortization of debt issuance cost	65,835	66,166
Stock-based compensation	338,923	25,882
Deferred income taxes	199,993
Bad debt expense		3,189
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(626,143)	112,188
Increase in insurance receivable		(624,424)
Increase in contract assets	(2,978,411)	(1,296,830)
Decrease in inventory	158,502	331,795
Decrease in prepaid expenses and other assets	6,714	209,163
Decrease in operating right-of-use assets	455,469	435,968
Increase in accounts payable and accrued expenses	1,217,630	111,453
Increase (decrease) in contract liabilities	1,492,095	(1,754,748)
Increase in settlement of litigation obligation		596,741
Decrease in lease liabilities	(425,234)	(392,181)
Decrease in loss reserve	(112,505)	(408,922)
Net cash provided by (used in) operating activities	892,718	(2,445,616)
Cash flows from investing activities:
Purchase of property and equipment	(43,525)	(25,317)
Net cash used in investing activities	(43,525)	(25,317)
Cash flows from financing activities:
Payments on long-term debt	(644,160)	(905,023)
Debt issuance costs paid	(54,334)
Net cash used in financing activities	(698,494)	(905,023)
Net increase (decrease) in cash	150,699	(3,375,956)
Cash at beginning of period	3,847,225	6,308,866
Cash at end of period	3,997,924	2,932,910
Cash paid during the period for:
Interest	651,984	331,441
Income taxes		$ 1,275

INTERIM FINANCIAL STATEMENTS

INTERIM FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
INTERIM FINANCIAL STATEMENTS	1. INTERIM FINANCIAL STATEMENTS Basis of Presentation 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”, “we”, “us”, or “our”). The condensed consolidated interim financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 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, 2022 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, 2022 (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. 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 for purposes of making operating decisions and assessing financial performance. The Company has determined that it has a single operating and reportable segment. 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 March 31, 2023, the Company had $ 3,830,183 Recently Issued Accounting Standards - Adopted In the first quarter of 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), using a modified retrospective method, which did not result in a significant impact on the Company’s financial statements.

REVENUE RECOGNITION

REVENUE RECOGNITION	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
REVENUE RECOGNITION	2. REVENUE RECOGNITION 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. This is known as the over time revenue recognition. 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 as a percentage of total estimated costs at completion of the contract. 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 as well 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 typically 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. Contract gross profit margins are calculated using the estimated costs for either the individual contract or the portfolio as applicable. 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. 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 total estimated costs expected at completion 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 March 31, 2023 2022 Aerostructure $ 10,073,525 $ 9,186,793 Aerosystems 9,552,251 6,686,828 Kitting and Supply Chain Management 2,390,892 4,261,476 Total $ 22,016,668 $ 20,135,097 Three months ended March 31, 2023 2022 Revenue recognized using over time revenue recognition model $ 20,630,230 $ 18,495,197 Revenue recognized using point in time revenue recognition model 1,386,438 1,639,900 Total $ 22,016,668 $ 20,135,097 Transaction Price Allocated to Remaining Performance Obligations As of March 31, 2023, the aggregate amount of transaction price allocated to the remaining performance obligations was approximately $ 113.3 four years

CONTRACT ASSETS AND LIABILITIES

CONTRACT ASSETS AND LIABILITIES	3 Months Ended
	Mar. 31, 2023
Contract Assets And Liabilities
CONTRACT ASSETS AND LIABILITIES	3. CONTRACT ASSETS AND LIABILITIES Contract assets represent revenue recognized on contracts in excess of amounts invoiced to the customers and the Company’s right to consideration is conditional on something other than the passage of time. Amounts may not exceed their net realizable value. Under the typical payment terms of our government as well as military contractor contracts, the customer retains a portion of the contract price until completion of the contract, as a measure of protection for the customer. Our government and military contractor contracts therefore typically result in revenue recognized in excess of billings, which we present as contract assets. Contract assets are classified as current assets. 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 liabilities. Schedule of contract assets and liabilities March 31, December 31, 2023 2022 Contract assets $ 30,362,951 $ 27,384,540 Contract liabilities 7,493,821 6,001,726 Net Contract assets $ 22,869,130 $ 21,382,814 Revenue recognized for the three months ended March 31, 2023 and 2022 that was included in the contract liabilities balance as of January 1, 2023 and 2022, respectively, was approximately $ 1.5 2.5

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
INVENTORY	4. INVENTORY The components of inventory consisted of the following: March 31, 2023 December 31, 2022 Raw materials $ 1,921,845 $ 1,892,157 Work in progress 609,372 685,438 Finished goods 3,027,697 3,038,859 Gross inventory 5,558,914 5,616,454 Inventory reserves (3,224,347 ) (3,123,386 ) Inventory, net $ 2,334,567 $ 2,493,069

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	5. STOCK-BASED COMPENSATION Stock-based compensation expense for restricted stock in the consolidated statements of operations is summarized as follows: 2023 2022 Cost of sales $ 15,077 $ 13,534 Selling, general and administrative 323,846 12,348 Total stock-based compensation expense $ 338,923 $ 25,882 The Company grants restricted stock units (“RSUs”) to its board of directors as partial compensation. These RSUs vest quarterly on a straight-line basis over a one-year period. The Company grants shares of common stock (“Restricted Stock Awards”) to select employees. In the event that the employee’s employment is voluntarily terminated prior to certain vesting dates, portions of the shares may be forfeited. In addition, if certain Company performance criteria are not achieved, portions of these shares may be forfeited. 85,748 263,148 The following table summarizes activity related to outstanding RSUs and Restricted Stock Awards for the three months ended March 31, 2023: Restricted Stock Awards Weighted Average Grant Date Fair Value of Restricted Stock Awards RSUs Weighted Average Grant Date Fair Value of RSUs Non-vested – January 1, 2023 239,184 $ 2.32 — $ — Granted — $ — 162,188 $ 3.42 Vested — $ — (40,549 ) $ 3.42 Forfeited — $ — (33,749 ) $ 3.42 Non-vested – March 31, 2023 239,184 $ 2.32 87,890 $ 3.42 As of March 31, 2023, unamortized stock-based compensation costs related to restricted share arrangements was $ 313,582

FAIR VALUE

FAIR VALUE	3 Months Ended
	Mar. 31, 2023
Fair Value Disclosures [Abstract]
FAIR VALUE	6. FAIR VALUE Fair Value At March 31, 2023 and December 31, 2022, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments. March 31, 2023 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 22,146,587 $ 22,146,587 December 31, 2022 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 22,790,747 $ 22,790,747 We estimated the fair value of debt using market quotes and calculations based on market rates.

INCOME (LOSS) PER COMMON SHARE

INCOME (LOSS) PER COMMON SHARE	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
INCOME (LOSS) PER COMMON SHARE	7. INCOME (LOSS) PER COMMON SHARE The Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share” and uses the two-class method in the calculation of earnings per share. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. During the three months ended March 31, 2023 and 2022, respectively, and as of March 31, 2023 and 2022, respectively, the Company had restricted shares of common stock that were considered participating securities and unrestricted shares of common stock outstanding. Earnings and losses are shared pro rata. Basic and diluted income (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted income (loss) per common share is adjusted for the incremental shares attributed to unvested RSUs. Incremental shares of 87,890 142,587 For the three months ended March 31, 2023 and 2022, respectively, our income (loss) per common share was calculated as follows: Three months Three months Net income (loss) $ 983,305 $ (32,931 ) Income (loss) per common share, basic: Income (loss) per common share-unrestricted shares $ 0.08 $ (0.00 ) Income (loss) per common share-restricted shares $ 0.08 $ (0.00 ) Income (loss) per common share, diluted $ 0.08 $ (0.00 ) Shares used in computing income (loss) per common share, basic: Unrestricted shares 12,281,115 12,072,838 Restricted shares 239,184 290,305 Total shares 12,520,299 12,363,143 Shares used in computing income (loss) per common share, diluted 12,608,189 12,363,143

DEBT

DEBT	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
DEBT	8. DEBT On March 24, 2016, the Company entered into the 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”). The BankUnited Facility originally provided for a revolving credit loan commitment of $ 30 10 On March 23, 2023, the Company entered into a Twelfth Amendment to the Credit Agreement (the “Twelfth Amendment”). Under the Twelfth Amendment, the parties amended the Credit Agreement by : (a) extending the maturity date of the Company’s existing revolving line of credit and its existing term loan to November 30, 2024 20,520,000 19,800,000 19,080,000 18,360,000 17,640,000 250,000 116,667 133,333 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 Prime Rate + 3.50 8.00 11.50 As of March 31, 2023 and December 31, 2022, the Company had $ 21,000,000 1,920,000 19,080,000 The Term Loan had an aggregate principal amount of $ 983,333 1,583,333 The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows: For the Year Ending December 31, Remainder of 2023 $ 1,065,758 2024 51,801 2025 29,028 Total $ 1,146,587 Included in long-term debt are financing leases and other notes payable of $ 163,254 207,414 114,508 136,433 The Company has cumulatively paid approximately $ 962,000 119,000

MAJOR CUSTOMERS

MAJOR CUSTOMERS	3 Months Ended
	Mar. 31, 2023
Risks and Uncertainties [Abstract]
MAJOR CUSTOMERS	9. MAJOR CUSTOMERS During the three months ended March 31, 2023, our two largest customers accounted for 36 28 39 17 12 At March 31, 2023, 25 17 17 15 27 20 16 16 At March 31, 2023, 29 16 14 12 11 38 21 17 13

LEASES

LEASES	3 Months Ended
	Mar. 31, 2023
Leases
LEASES	10. LEASES The Company leases manufacturing and office space under an agreement classified as an operating lease. On November 10, 2021, the Company executed the second amendment to the lease agreement for its manufacturing and office space, which extends the lease agreement’s expiration date to April 30, 2026. The lease agreement does not include any renewal options. The agreement provides for an initial monthly base amount plus annual escalations through the term of the lease. 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 months ended March 31, 2023 and 2022, the Company’s operating lease expense was $ 546,082 534,991 Future minimum lease payments under non-cancellable operating leases as of March 31, 2023 were as follows: For the Year Ending December 31, Remainder of 2023 $ 1,624,406 2024 2,222,280 2025 2,276,850 2026 843,772 2027 109,394 Thereafter 7,331 Total undiscounted operating lease payments 7,084,033 Less imputed interest (614,221 ) Present value of operating lease payments $ 6,469,812 The following table sets forth the ROU assets and operating lease liabilities as of: March 31, December 31, Assets ROU assets, net $ 6,071,158 $ 6,526,627 Liabilities Current operating lease liabilities $ 1,872,484 $ 1,817,811 Long-term operating lease liabilities 4,597,328 5,077,235 Total lease liabilities $ 6,469,812 $ 6,895,046 The amortization expense of these assets under operating leases was $ 455,392 435,968 The Company’s weighted average remaining lease term for its operating leases is 3.2 5.4

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2023
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 March 31, 2023 and 2022 was $ 199,257 1,275 The effective income tax rate for the three months ended March 31, 2023 is 16.8 21 The difference between the Company’s statutory tax rate and its effective rate is due to R&D credit and permanent tax differences.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	12. COMMITMENTS AND CONTINGENCIES Class Action Lawsuit 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 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 current members of our board of directors and certain of our current and former 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 and all defendants had reached an agreement in principle with all plaintiffs to settle the 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 magistrate judge held a conference on September 9, 2022 in the consolidated federal action. On February 14, 2023, the magistrate judge recommended that the court grant the motion in its entirety. On March 6, 2023, the court granted preliminary approval of the proposed settlement. The proposed settlement is subject to final approval by the court. In addition to requiring final approval by the court, the proposed settlement is subject to certain conditions, including the filing with the SEC of the stipulation of settlement agreed to by the Company and plaintiff (the “Stipulation of Settlement”), and sending notice to potential class members. The terms of the proposed settlement are set forth in the Stipulation of Settlement. Should the proposed settlement receive final approval from the Court, it 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. In addition, the Company and/or its insurer have agreed to pay a total of $ 585,000 Litigation Settlement Obligation and Insurance Recovery Receivable Pertaining to the Class Action Lawsuit and Shareholder Derivative Action The attorneys’ fees for both the Class Action Lawsuit and the Shareholder Derivative Action will be covered and paid by our directors’ and officers’ insurance carrier, after satisfaction of our $ 750,000 750,000 750,000 3,600,000 3,600,000 following the transfer of the Settlement Amount to the Plaintiff from the escrow account established for this purpose.

INTERIM FINANCIAL STATEMENTS (P

INTERIM FINANCIAL STATEMENTS (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation 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”, “we”, “us”, or “our”). The condensed consolidated interim financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 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, 2022 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, 2022 (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. 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 for purposes of making operating decisions and assessing financial performance. The Company has determined that it has a single operating and reportable segment. 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 March 31, 2023, the Company had $ 3,830,183
Recently Issued Accounting Standards - Adopted	Recently Issued Accounting Standards - Adopted In the first quarter of 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), using a modified retrospective method, which did not result in a significant impact on the Company’s financial statements.

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	3 Months Ended
	Mar. 31, 2023
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 March 31, 2023 2022 Aerostructure $ 10,073,525 $ 9,186,793 Aerosystems 9,552,251 6,686,828 Kitting and Supply Chain Management 2,390,892 4,261,476 Total $ 22,016,668 $ 20,135,097 Three months ended March 31, 2023 2022 Revenue recognized using over time revenue recognition model $ 20,630,230 $ 18,495,197 Revenue recognized using point in time revenue recognition model 1,386,438 1,639,900 Total $ 22,016,668 $ 20,135,097

CONTRACT ASSETS AND LIABILITI_2

CONTRACT ASSETS AND LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2023
Contract Assets And Liabilities
Schedule of contract assets and liabilities	Schedule of contract assets and liabilities March 31, December 31, 2023 2022 Contract assets $ 30,362,951 $ 27,384,540 Contract liabilities 7,493,821 6,001,726 Net Contract assets $ 22,869,130 $ 21,382,814

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
The components of inventory consisted of the following:	The components of inventory consisted of the following: March 31, 2023 December 31, 2022 Raw materials $ 1,921,845 $ 1,892,157 Work in progress 609,372 685,438 Finished goods 3,027,697 3,038,859 Gross inventory 5,558,914 5,616,454 Inventory reserves (3,224,347 ) (3,123,386 ) Inventory, net $ 2,334,567 $ 2,493,069

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense for restricted stock in the consolidated statements of operations is summarized as follows:	Stock-based compensation expense for restricted stock in the consolidated statements of operations is summarized as follows: 2023 2022 Cost of sales $ 15,077 $ 13,534 Selling, general and administrative 323,846 12,348 Total stock-based compensation expense $ 338,923 $ 25,882
The following table summarizes activity related to outstanding RSUs and Restricted Stock Awards for the three months ended March 31, 2023:	The following table summarizes activity related to outstanding RSUs and Restricted Stock Awards for the three months ended March 31, 2023: Restricted Stock Awards Weighted Average Grant Date Fair Value of Restricted Stock Awards RSUs Weighted Average Grant Date Fair Value of RSUs Non-vested – January 1, 2023 239,184 $ 2.32 — $ — Granted — $ — 162,188 $ 3.42 Vested — $ — (40,549 ) $ 3.42 Forfeited — $ — (33,749 ) $ 3.42 Non-vested – March 31, 2023 239,184 $ 2.32 87,890 $ 3.42

FAIR VALUE (Tables)

FAIR VALUE (Tables)	3 Months Ended
	Mar. 31, 2023
Fair Value Disclosures [Abstract]
At March 31, 2023 and December 31, 2022, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments.	At March 31, 2023 and December 31, 2022, the fair values of cash, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these instruments. March 31, 2023 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 22,146,587 $ 22,146,587 December 31, 2022 Carrying Amount Fair Value Debt Short-term borrowings and long-term debt $ 22,790,747 $ 22,790,747

INCOME (LOSS) PER COMMON SHARE

INCOME (LOSS) PER COMMON SHARE (Tables)	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
For the three months ended March 31, 2023 and 2022, respectively, our income (loss) per common share was calculated as follows:	For the three months ended March 31, 2023 and 2022, respectively, our income (loss) per common share was calculated as follows: Three months Three months Net income (loss) $ 983,305 $ (32,931 ) Income (loss) per common share, basic: Income (loss) per common share-unrestricted shares $ 0.08 $ (0.00 ) Income (loss) per common share-restricted shares $ 0.08 $ (0.00 ) Income (loss) per common share, diluted $ 0.08 $ (0.00 ) Shares used in computing income (loss) per common share, basic: Unrestricted shares 12,281,115 12,072,838 Restricted shares 239,184 290,305 Total shares 12,520,299 12,363,143 Shares used in computing income (loss) per common share, diluted 12,608,189 12,363,143

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 31, 2023
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: For the Year Ending December 31, Remainder of 2023 $ 1,065,758 2024 51,801 2025 29,028 Total $ 1,146,587

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2023
Leases
Future minimum lease payments under non-cancellable operating leases as of March 31, 2023 were as follows:	Future minimum lease payments under non-cancellable operating leases as of March 31, 2023 were as follows: For the Year Ending December 31, Remainder of 2023 $ 1,624,406 2024 2,222,280 2025 2,276,850 2026 843,772 2027 109,394 Thereafter 7,331 Total undiscounted operating lease payments 7,084,033 Less imputed interest (614,221 ) Present value of operating lease payments $ 6,469,812
The following table sets forth the ROU assets and operating lease liabilities as of:	The following table sets forth the ROU assets and operating lease liabilities as of: March 31, December 31, Assets ROU assets, net $ 6,071,158 $ 6,526,627 Liabilities Current operating lease liabilities $ 1,872,484 $ 1,817,811 Long-term operating lease liabilities 4,597,328 5,077,235 Total lease liabilities $ 6,469,812 $ 6,895,046

INTERIM FINANCIAL STATEMENTS (D

INTERIM FINANCIAL STATEMENTS (Details Narrative)	Mar. 31, 2023 USD ($)
Accounting Policies [Abstract]
Uninsured balance	$ 3,830,183

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
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 22,016,668	$ 20,135,097
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	20,630,230	18,495,197
Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,386,438	1,639,900
Aerostructure [Member]
Disaggregation of Revenue [Line Items]
Revenue	10,073,525	9,186,793
Aerosystems [Member]
Disaggregation of Revenue [Line Items]
Revenue	9,552,251	6,686,828
Kitting and Supply Chain Management [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 2,390,892	$ 4,261,476

REVENUE RECOGNITION (Details Na

REVENUE RECOGNITION (Details Narrative) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 $ in Millions	Mar. 31, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 113.3
Performance obligations duration	4 years

Schedule of contract assets and

Schedule of contract assets and liabilities (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Contract Assets And Liabilities
Contract assets	$ 30,362,951	$ 27,384,540
Contract liabilities	7,493,821	6,001,726
Net Contract assets	$ 22,869,130	$ 21,382,814

CONTRACT ASSETS AND LIABILITI_3

CONTRACT ASSETS AND LIABILITIES (Details Narrative) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Contract Assets And Liabilities
Revenue recognized that was included in contract liabilities	$ 1.5	$ 2.5

The components of inventory con

The components of inventory consisted of the following: (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 1,921,845	$ 1,892,157
Work in progress	609,372	685,438
Finished goods	3,027,697	3,038,859
Gross inventory	5,558,914	5,616,454
Inventory reserves	(3,224,347)	(3,123,386)
Inventory, net	$ 2,334,567	$ 2,493,069

Stock-based compensation expens

Stock-based compensation expense for restricted stock in the consolidated statements of operations is summarized as follows: (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 338,923	$ 25,882
Cost of Sales [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	15,077	13,534
Selling, General and Administrative Expenses [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 323,846	$ 12,348

The following table summarizes

The following table summarizes activity related to outstanding RSUs and Restricted Stock Awards for the three months ended March 31, 2023: (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Non vested January 1, 2022 | shares	239,184
Non vested January 1, 2022 | $ / shares	$ 2.32
Granted | shares
Granted | $ / shares
Vested | shares
Vested | $ / shares
Forfeited | shares
Forfeited | $ / shares
Non vested December 31, 2022 | shares	239,184
Non vested December 31, 2022 | $ / shares	$ 2.32
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Non vested January 1, 2022 | shares
Non vested January 1, 2022 | $ / shares
Granted | shares	162,188
Granted | $ / shares	$ 3.42
Vested | shares	(40,549)
Vested | $ / shares	$ 3.42
Forfeited | shares	(33,749)
Forfeited | $ / shares	$ 3.42
Non vested December 31, 2022 | shares	87,890
Non vested December 31, 2022 | $ / shares	$ 3.42

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares forfeited	85,748
Stock-based compensation	$ (338,923)	$ (25,882)
Unamortized stock-based compensation costs	313,582
Selling, General and Administrative Expenses [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation	$ (323,846)	(12,348)
Forfeited Restricted Stock [Member] | Selling, General and Administrative Expenses [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation		$ 263,148

At March 31, 2023 and December

At March 31, 2023 and December 31, 2022, 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 ($)	Mar. 31, 2023	Dec. 31, 2022
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term borrowings and long-term debt	$ 22,146,587	$ 22,790,747
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term borrowings and long-term debt	$ 22,146,587	$ 22,790,747

For the three months ended Marc

For the three months ended March 31, 2023 and 2022, respectively, our income (loss) per common share was calculated as follows: (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income (loss)	$ 983,305	$ (32,931)
Income (loss) per common share, diluted
Income (loss) per common share, diluted	$ 0.08	$ 0
Shares used in computing income (loss) per common share, basic
Total shares	12,520,299	12,363,143
Shares used in computing income (loss) per common share, diluted	12,608,189	12,363,143
Unrestricted Shares [Member]
Income (loss) per common share, basic:
Income (loss) per common share, basic	$ 0.08	$ 0
Shares used in computing income (loss) per common share, basic
Total shares	12,281,115	12,072,838
Restricted Shares [Member]
Income (loss) per common share, basic:
Income (loss) per common share, basic	$ 0.08	$ 0
Shares used in computing income (loss) per common share, basic
Total shares	239,184	290,305

INCOME (LOSS) PER COMMON SHAR_2

INCOME (LOSS) PER COMMON SHARE (Details Narrative)	3 Months Ended
	Mar. 31, 2023 shares
Earnings Per Share [Abstract]
Incremental shares used in calculation of diluted income per common share	87,890
Incremental shares not used in calculation of diluted income per common share	142,587

The maturities of long-term deb

The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows: (Details)	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
Remainder of 2023	$ 1,065,758
2024	51,801
2025	29,028
Total	$ 1,146,587

DEBT (Details Narrative)

DEBT (Details Narrative)		3 Months Ended		84 Months Ended
	Mar. 23, 2023 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Mar. 24, 2016 USD ($)
Debt Instrument [Line Items]
Current portion of line of credit		$ 1,920,000		$ 1,920,000	$ 1,200,000
Line of credit		19,080,000		19,080,000	19,800,000
Financing leases and notes payable		163,254		163,254	207,414
Financing leases and notes payable current		114,508		$ 114,508	136,433
Payments of debt issuance costs		$ 54,334
Prime Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		8%		8%
Term loan [Member]
Debt Instrument [Line Items]
Aggregate principal balance		$ 983,333		$ 983,333	1,583,333
Bank United [Member]
Debt Instrument [Line Items]
Maximum leverage ratio, period 1		7.30		7.30
Maximum leverage ratio, period 2		6.30		6.30
Maximum leverage ratio, period 3		5		5
Maximum leverage ratio, period 4		4		4
Payments of debt issuance costs				$ 962,000
Debt issuance costs		$ 119,000		$ 119,000
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		1.5
Bank United [Member] | Debt Instrument, Redemption, Period Two [Member]
Debt Instrument [Line Items]
Minimum debt service coverage ratio future periods		0.95		0.95
Bank United [Member] | Debt Instrument, Redemption, Period Three [Member]
Debt Instrument [Line Items]
Minimum debt service coverage ratio future periods		1.5		1.5
Bank United [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity						$ 30,000,000
Amendment fee	$ 250,000
Outstanding loans		$ 21,000,000		$ 21,000,000	$ 21,000,000
Current portion of line of credit		1,920,000		1,920,000
Line of credit		$ 19,080,000		$ 19,080,000
Bank United [Member] | Revolving Credit Facility [Member] | Period One [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	20,520,000
Bank United [Member] | Revolving Credit Facility [Member] | Period Two [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	19,800,000
Bank United [Member] | Revolving Credit Facility [Member] | Period Three [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	19,080,000
Bank United [Member] | Revolving Credit Facility [Member] | Period Four [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	18,360,000
Bank United [Member] | Revolving Credit Facility [Member] | Period Five [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	17,640,000
Bank United [Member] | Revolving Credit Facility [Member] | First Installment [Member]
Debt Instrument [Line Items]
Amendment fee	116,667
Bank United [Member] | Revolving Credit Facility [Member] | Second Installment [Member]
Debt Instrument [Line Items]
Amendment fee	$ 133,333
Bank United [Member] | Term loan [Member]
Debt Instrument [Line Items]
Debt instrument, face amount						$ 10,000,000
Bank United [Member] | Revolving Loan and Term Loan [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Expiration Date	Nov. 30, 2024
Interest rate		11.50%		11.50%
Bank United [Member] | Revolving Loan and Term Loan [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Prime rate Plus		3.50%

MAJOR CUSTOMERS (Details Narrat

MAJOR CUSTOMERS (Details Narrative) - Customer Concentration Risk [Member]	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Revenue Benchmark [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	36%	39%
Revenue Benchmark [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	28%	17%
Revenue Benchmark [Member] | Customer Three [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage		12%
Contract Assets [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	25%		27%
Contract Assets [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	17%		20%
Contract Assets [Member] | Customer Three [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	17%		16%
Contract Assets [Member] | Customer Four [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	15%		16%
Accounts Receivable [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	29%		38%
Accounts Receivable [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	16%		21%
Accounts Receivable [Member] | Customer Three [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	14%		17%
Accounts Receivable [Member] | Customer Four [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	12%		13%
Accounts Receivable [Member] | Customer Five [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	11%

Future minimum lease payments u

Future minimum lease payments under non-cancellable operating leases as of March 31, 2023 were as follows: (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Leases
Remainder of 2023	$ 1,624,406
2024	2,222,280
2025	2,276,850
2026	843,772
2027	109,394
Thereafter	7,331
Total undiscounted operating lease payments	7,084,033
Less imputed interest	(614,221)
Present value of operating lease payments	$ 6,469,812	$ 6,895,046

The following table sets forth

The following table sets forth the ROU assets and operating lease liabilities as of: (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Assets
ROU assets, net	$ 6,071,158	$ 6,526,627
Liabilities
Current operating lease liabilities	1,872,484	1,817,811
Long-term operating lease liabilities	4,597,328	5,077,235
Total lease liabilities	$ 6,469,812	$ 6,895,046

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases
Operating lease expense	$ 546,082	$ 534,991
Amortization of operating lease assets	$ 455,392	$ 435,968
Weighted average remaining lease term operating leases	3 years 2 months 12 days
Weighted average discount rate for its operating leases	5.40%

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 199,257	$ 1,275
Effective income tax rate	16.80%
Statutory income tax rate	21%

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)			3 Months Ended
	Mar. 06, 2023	May 20, 2021	Mar. 31, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Settlement amount		$ 3,600,000
Legal Fees	$ 585,000
Covered settlement amount			$ 750,000
Directors and officers insurance retention amount			750,000
Litigation settlement obligation			3,600,000	$ 3,600,000
Insurance recovery receivable			$ 3,600,000	$ 3,600,000