ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended | |||||
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _______ to __________ |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | o | Accelerated filer | o | ||||||||
x | Smaller reporting company | ||||||||||
Emerging Growth Company |
Page | ||||||||
ITEM 3. | ||||||||
[RESERVED] | ||||||||
ITEM 9C. | 39 | |||||||
ITEM 16 | FORM 10-K SUMMARY | 52 | ||||||
56 |
2022 | 2021 | 2020 | ||||||||||||||||||
High | Low | High | Low | High | Low | |||||||||||||||
First Quarter | $ | 2.15 | $ | 1.05 | $ | 8.51 | $ | 2.45 | $ | 0.21 | $ | 0.001 | ||||||||
Second Quarter | $ | 5.11 | $ | 2.56 | $ | 0.12 | $ | 0.03 | ||||||||||||
Third Quarter | $ | 3.24 | $ | 2.20 | $ | 0.08 | $ | 0.03 | ||||||||||||
Fourth Quarter | $ | 5.36 | $ | 1.84 | $ | 4.40 | $ | 0.04 |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted- average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||||||||
(a) | (b) | (c) | ||||||||||||||||||
Equity compensation plans approved by security holders | 1,790,000 | $ | 0.19 | 5,210,000 | ||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||
Total | 1,790,000 | $ | 0.19 | 5,210,000 |
Period | (a) Total number of shares (or units) purchased | (b) Average price paid per share (or unit) | (c) Total number of shares (or units) purchased as part of publicly announced plans or programs | (d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs | ||||||||||
Month #1 – October 1-31, 2021 | 0 | $0 | 0 | 0 | ||||||||||
Month #2 – November 1-30, 2021 | 0 | $0 | 0 | 0 | ||||||||||
Month #3 – December 1-31, 2021 | 0 | $0 | 0 | 0 | ||||||||||
Total | 0 | $0 |
Year Ended December 31, 2021 | Year Ended December 31, 2020 | $ Change | |||||||||||||||
Revenues, net | $ | 51,640,813 | $ | 33,454,349 | $ | 18,186,464 | |||||||||||
Costs of revenue | 43,942,815 | 28,090,722 | 15,852,093 | ||||||||||||||
Gross Profit | 7,697,998 | 5,363,627 | 2,334,371 | ||||||||||||||
Operating expenses: | |||||||||||||||||
General and administrative expenses | 27,987,920 | 9,695,891 | 18,292,029 | ||||||||||||||
Research and development | 1,464,918 | — | 1,464,918 | ||||||||||||||
Impairment loss of intangible asset and goodwill | 367,519 | 1,561,600 | (1,194,081) | ||||||||||||||
Total operating expenses | 29,820,357 | 11,257,491 | 18,562,866 | ||||||||||||||
Loss from operations | (22,122,359) | (5,893,864) | (16,228,495) | ||||||||||||||
Other income (expenses) | |||||||||||||||||
Interest expense | (3,289,233) | (5,463,597) | 2,174,364 | ||||||||||||||
Change in value of derivative liabilities | — | 2,298,609 | (2,298,609) | ||||||||||||||
Gain on extinguishment of debt | 803,079 | 344,704 | 458,375 | ||||||||||||||
Gain on forgiveness of debt | 3,896,108 | — | 3,896,108 | ||||||||||||||
Impairment loss on equity investment | (1,350,000) | — | (1,350,000) | ||||||||||||||
Change in fair value of contingent consideration | — | 500,000 | (500,000) | ||||||||||||||
Other income | 635,526 | 71,224 | 564,302 | ||||||||||||||
Total other income (expenses) | 695,480 | (2,249,060) | 2,944,540 | ||||||||||||||
Loss before income tax | (21,426,879) | (8,142,924) | (13,283,955) | ||||||||||||||
Income tax benefit | (1,943,741) | (495,076) | (1,448,665) | ||||||||||||||
Net loss | $ | (19,483,138) | $ | (7,647,848) | $ | (11,835,290) |
Customer list | 3-15 years | ||||
Non-compete agreements | 1-5 years | ||||
Software development | 5 years | ||||
Patent | 17 years | ||||
Proprietary technology | 15 years |
Name | Age | Board Member/Position | Committee Assigned | |||||||||||||||||
Kent B. Wilson | 49 | Director | None | |||||||||||||||||
Charles Winters | 45 | Director | None | |||||||||||||||||
Ian Kantrowitz | 42 | Director | None | |||||||||||||||||
Gerry Garcia**** | 41 | Chairwoman | AUD; Comp; NCG | |||||||||||||||||
Edmond Lew | 43 | Director | AUD; Comp; NCG | |||||||||||||||||
Christophe Jeunot | 50 | Director | AUD; Comp | |||||||||||||||||
Jonathan Withem | 33 | Director | AUD; Comp | |||||||||||||||||
Mike Loyd** | 45 | Director | AUD* | |||||||||||||||||
Andrew Call*** | 44 | Director | AUD* | |||||||||||||||||
Jeffrey Hail | 60 | Chief Operating Officer | N/A | |||||||||||||||||
Larry Zic | 60 | Chief Financial Officer | N/A | |||||||||||||||||
SaVonnah Osmanski | 26 | VP/Corporate Controller | N/A |
Director | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | |||||||||||||||||
Kent B. Wilson | ||||||||||||||||||||
Charles Winters | ||||||||||||||||||||
Ian Kantrowitz | ||||||||||||||||||||
Gerry Garcia(1)(2)(3) | X | X | X | |||||||||||||||||
Edmond Lew(2)(3) | X | X | X | |||||||||||||||||
Christophe Jeunot(2) | X | X |
Jonathan Withem(2) | X | X | ||||||||||||||||||
Mike Loyd(4) | X | |||||||||||||||||||
Andrew Call(5) | X |
Name and Principal Position | Number of Late Reports | Transactions not Reported in Timely Manner | Known Failures to File a Required Form | |||||||||||||||||
Kent Wilson, CEO, Director | 1 | 5 | None | |||||||||||||||||
Charles Winters, Director | 1 | 1 | None | |||||||||||||||||
Ian Kantrowitz, Director | 1 | 1 | None |
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Nonequity Incentive Plan Compensation | Deferred Compensation Earnings | All Other Compensation | Total | ||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||
Kent B. Wilson, Chief Executive Officer | 2021 | 424,485 | 784,297 | 164,885 | 0 | 0 | 0 | 0 | 1,373,667 | ||||||||||||||||||||
2020 | 300,000 | 0 | 46,300 | 0 | 0 | 0 | 204,073 | 550,373 | |||||||||||||||||||||
Jeff Hail, Chief Operating Officer | 2021 | 361,381 | 288,172 | 34,076 | 0 | 0 | 0 | 0 | 683,629 | ||||||||||||||||||||
2020 | 275,250 | 0 | 34,763 | 0 | 0 | 0 | 0 | 310,013 | |||||||||||||||||||||
Larry Zic, Chief Financial Officer | 2021 | 235,492 | 18,350 | 0 | 0 | 0 | 0 | 0 | 253,842 | ||||||||||||||||||||
2020 | 87,461 | 0 | 18,540 | 0 | 0 | 0 | 0 | 106,001 |
Name | Fees earned or paid in cash | Stock awards | Option awards | Non-equity incentive plan compensation | Nonqualified deferred compensation earnings | All other compensation | Total | |||||||||||||||||||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||||||
Ian Kantrowitz | $ | 46,430 | 16,489 | $ | 0 | $ | 0 | $ | 0 | $ | 413,185 | $ | 476,104 | |||||||||||||||||||||||||||||||
Kent Wilson | $ | 46,300 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 46,300 | |||||||||||||||||||||||||||||||
Charles Winters | $ | 46,015 | 34,076 | $ | 0 | $ | 0 | $ | 0 | $ | 219,086 | $ | 299,177 |
Name and Address of beneficial owner (1); Class of Securities | Title/Class of Security | Number of Shares | Beneficial Ownership of Shares Listed | Votes | Total Voting Power (2) | ||||||||||||
Kent B. Wilson Chief Executive Officer, Director | CLASS A | 1,723,321 | 1.06 | % | 1,723,321 | ||||||||||||
CLASS B | 3,285,449 | 38.43 | % | 32,854,490 | |||||||||||||
CLASS C | 1,290,169 | 10.28 | % | 6,450,845 | |||||||||||||
B Preferred | 2 | 40.00 | % | 248,333,792 | |||||||||||||
Total Votes | 289,362,448 | 31.07 | % | ||||||||||||||
Charles Winters, Director | CLASS A | 723,322 | 0.45 | % | 723,322 | ||||||||||||
CLASS B | 1,300,000 | 15.21 | % | 13,000,000 | |||||||||||||
CLASS C | 675,000 | 5.38 | % | 3,375,000 | |||||||||||||
B Preferred | 1 | 20.00 | % | 124,166,896 | |||||||||||||
Total Votes | 141,265,218 | 15.17 | % | ||||||||||||||
Ian Kantrowitz Director | CLASS A | 833,414 | 0.51 | % | 833,414 | ||||||||||||
CLASS B | 1,499,429 | 17.54 | % | 14,994,290 | |||||||||||||
CLASS C | 1,009,738 | 8.05 | % | 5,048,690 |
B Preferred | 1 | 20.00 | % | 124,166,896 | |||||||||||||
Total Votes | 145,043,290 | 15.58 | % | ||||||||||||||
Jeff Hail Chief Operating Officer | CLASS A | 541,000 | 0.33 | % | 541,000 | ||||||||||||
CLASS B | 1,124,211 | 13.15 | % | 11,242,110 | |||||||||||||
CLASS C | 788,000 | 6.28 | % | 3,940,000 | |||||||||||||
B Preferred | 1 | 20.00 | % | 124,166,896 | |||||||||||||
Total Votes | 139,890,006 | 15.02 | % | ||||||||||||||
Gerry Garcia Director | CLASS A | 10,000 | 0.0 | % | 10,000 | ||||||||||||
CLASS B | 0 | 0.0 | % | 0 | |||||||||||||
CLASS C | 0 | 0.0 | % | 0 | |||||||||||||
B Preferred | 0 | 0.0 | % | 0 | |||||||||||||
Total Votes | 10,000 | 0 | % | ||||||||||||||
Edmond Lew Director | CLASS A | 81,667 | 0.1 | % | 81,667 | ||||||||||||
CLASS B | 0 | 0.0 | % | 0 | |||||||||||||
CLASS C | 0 | 0.0 | % | 0 | |||||||||||||
B Preferred | 0 | 0.0 | % | 0 | |||||||||||||
Total Votes | 81,667 | 0.01 | % | ||||||||||||||
Christophe Jeunot Director | CLASS A | 122,236 | 0.1 | % | 122,236 | ||||||||||||
CLASS B | 0 | 0.0 | % | 0 | |||||||||||||
CLASS C | 0 | 0.0 | % | 0 | |||||||||||||
B Preferred | 0 | 0.0 | % | 0 | |||||||||||||
Total Votes | 122,236 | 0.01 | % | ||||||||||||||
Jonathan Withem Director | CLASS A | 0 | 0.0 | % | 0 | ||||||||||||
CLASS B | 0 | 0.0 | % | 0 | |||||||||||||
CLASS C | 0 | 0.0 | % | 0 | |||||||||||||
B Preferred | 0 | 0.0 | % | 0 | |||||||||||||
Total Votes | 0 | 0 | % | ||||||||||||||
Mike Loyd Director (3) | CLASS A | 0 | 0.0 | % | 0 | ||||||||||||
CLASS B | 0 | 0.0 | % | 0 | |||||||||||||
CLASS C | 0 | 0.0 | % | 0 | |||||||||||||
B Preferred | 0 | 0.0 | % | 0 | |||||||||||||
Total Votes | 0 | 0 | % | ||||||||||||||
Andrew Call Director (4) | CLASS A | 0 | 0.0 | % | 0 | ||||||||||||
CLASS B | 0 | 0.0 | % | 0 | |||||||||||||
CLASS C | 0 | 0.0 | % | 0 | |||||||||||||
B Preferred | 0 | 0.0 | % | 0 | |||||||||||||
Total Votes | 0 | 0 | % | ||||||||||||||
As a Group | CLASS A | 4,034,960 | 2.49 | % | 4,034,960 | ||||||||||||
9 PEOPLE | CLASS B | 7,209,089 | 84.34 | % | 72,090,890 | ||||||||||||
CLASS C | 3,762,907 | 29.99 | % | 18,814,535 | |||||||||||||
B Preferred | 5 | 100.00 | % | 620,834,480 | |||||||||||||
Total Votes | 715,774,865 | 77.56 | % |
Amount Owed | Shares Issued | |||||||
Kent Wilson | $ | 204,067 | 1,360,449 | |||||
Ian Kantrowitz | $ | 119,914 | 799,429 | |||||
Jeff Hail | $ | 116,132 | 774,212 | |||||
Shannon Rigby | $ | 73,344 | 488,960 | |||||
Charlie Winters | $ | 90,006 | 600,038 | |||||
TOTAL | $ | 603,463 | 4,023,088 |
Page | |||||
Financial Statements | |||||
Report of Independent Registered Public Accounting Firm (PCAOB ID: | F-2 | ||||
Consolidated Balance Sheets as of December 31, 2021, and 2020 | F-3 | ||||
Consolidated Statements of Operations for the Years Ended December 31, 2021, and 2020 | F-5 | ||||
Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Years Ended December 31, 2021, and 2020 | F-6 | ||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, and 2020 | F-9 | ||||
F-11 |
December 31, 2021 | December 31, 2020 | ||||||||||
As Restated | As Restated | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Contract assets | |||||||||||
Inventory, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Right of use assets, net | |||||||||||
Goodwill | |||||||||||
Other non-current assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Contract liabilities | |||||||||||
Notes payable, current portion | |||||||||||
Notes payable, related parties | |||||||||||
Convertible notes payable, current portion, net of discount of $ | |||||||||||
Line of credit, current portion | |||||||||||
Financing lease obligation, current portion | |||||||||||
Operating lease obligation, current portion | |||||||||||
Total current liabilities | |||||||||||
Notes payable, net of current portion | |||||||||||
Convertible notes payable, net of current portion | |||||||||||
Line of credit, net of current portion | |||||||||||
Financing lease obligations, net of current portion | |||||||||||
Operating lease obligations, net of current portion | |||||||||||
Series C and Series D preferred stock subject to redemption | |||||||||||
Deferred tax liability | |||||||||||
TOTAL LIABILITIES | |||||||||||
STOCKHOLDERS' EQUITY (DEFICIT): | |||||||||||
Preferred stock, $ | — | — | |||||||||
Series B preferred stock; $ | |||||||||||
Class A Common stock, $ | |||||||||||
Class B Common stock, $ | |||||||||||
Class C Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' equity (deficit) | ( |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | $ |
Years Ended December 31, | |||||||||||
2021 As Restated | 2020 As Restated | ||||||||||
Revenues, net | $ | $ | |||||||||
Cost of revenues | |||||||||||
Gross Profit | |||||||||||
Operating expenses: | |||||||||||
General and administrative expenses | |||||||||||
Research and development | |||||||||||
Impairment loss of intangible asset and goodwill | |||||||||||
Total operating expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Other income (expenses) | |||||||||||
Interest expense | ( | ( | |||||||||
Change in value of derivative liability | |||||||||||
Gain on extinguishment of debt | |||||||||||
Gain on forgiveness of debt | |||||||||||
Change in fair value of contingent consideration | |||||||||||
Impairment loss on equity investment | ( | ||||||||||
Other income | |||||||||||
Total other income (expenses) | ( | ||||||||||
Loss before income tax | ( | ( | |||||||||
Income tax (benefit) | ( | ( | |||||||||
Net loss | $ | ( | $ | ( | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
Basic loss per share | $ | ( | — | $ | ( | ||||||
Diluted loss per share | $ | ( | $ | ( |
Series B Preferred Stock | Class A Common Stock | Class B Common Stock | Class C Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for cash | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for convertible note payable and accrued interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for debt settlement | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for penalty interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of series B preferred stock for services | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beneficial conversion feature on convertible notes | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 (As Restated) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for cash | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for convertible note payable and accrued interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class C to Class A | — | — | — | — | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B to Class A | — | — | ( | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of class C common stock | — | — | — | — | — | — | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock for compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares of common stock and warrants for acquisition | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of series D preferred stock to Class A | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of series C preferred stock to Class A | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beneficial conversion feature on convertible notes | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 (As Restated) | $ | $ | $ | $ | $ | $ | ( | $ |
Years Ended December 31, | |||||||||||
2021 As Restated | 2020 As Restated | ||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to | |||||||||||
net cash used in operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Gain on extinguishment of debt | ( | ( | |||||||||
Gain on forgiveness of debt | ( | ||||||||||
Change in fair value of derivative liabilities | ( | ||||||||||
Change in goodwill value for inventory valuation | |||||||||||
Amortization of preferred stock subject to redemption | ( | ||||||||||
Income tax benefit | ( | ( | |||||||||
Common stock issued for services | |||||||||||
Preferred stock issued for services | |||||||||||
Change in fair value of contingent consideration | ( | ||||||||||
Bad debt expense | |||||||||||
Non-cash adjustment to debt booked to interest expense | |||||||||||
Stock issued for penalties | |||||||||||
Employee stock compensation | |||||||||||
Amortization of debt discounts | |||||||||||
Issuance of convertible debentures for interest | |||||||||||
Operating lease expense | |||||||||||
Impairment loss on equity investment | |||||||||||
Impairment loss of intangible asset and goodwill | |||||||||||
Write off of inventory | |||||||||||
Change in current assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventory | ( | ( | |||||||||
Contract assets | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Accrued expenses | |||||||||||
Contract liabilities | |||||||||||
Operating lease liability | ( | ( | |||||||||
Deposits | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
INVESTING ACTIVITIES: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cash paid for acquisitions | ( | ( | |||||||||
Cash paid for equity investment | ( | ||||||||||
Cash assumed in acquisition | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
FINANCING ACTIVITIES: | |||||||||||
Proceeds from the sale of common stock | |||||||||||
Proceeds from issuances of notes payable, related parties | |||||||||||
Proceeds from issuances of notes payable, non-related party | |||||||||||
Proceeds from issuances of convertible notes payable | |||||||||||
Proceeds from line of credit | |||||||||||
Repurchase of common stock | ( | ||||||||||
Proceeds from financing lease | |||||||||||
Repayments of notes payable, related party | ( | ( | |||||||||
Repayments of notes payable, non-related parties | ( | ( | |||||||||
Repayments of convertible notes payable | ( | ( | |||||||||
Repayment of line of credit | ( | ( | |||||||||
Cash paid on financing lease obligations | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
NET INCREASE IN CASH AND RESTRICTED CASH | |||||||||||
CASH AND RESTRICTED CASH, BEGINNING BALANCE | |||||||||||
CASH AND RESTRICTED CASH, ENDING BALANCE | |||||||||||
CASH PAID FOR: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: | |||||||||||
Penalty interest added to debt | $ | $ | |||||||||
Common stock issued for convertible note payable and accrued interest | $ | $ | |||||||||
Common stock issued for debt settlement | $ | $ | |||||||||
Issuance of note payable for acquisition | $ | $ | |||||||||
ROU asset and operating lease obligation recognized under Topic 842 | $ | $ | |||||||||
Common stock issued to settle unpaid salaries | $ | $ | |||||||||
Equipment purchased on financing lease | $ | $ | |||||||||
Other asset reclassified to fixed asset | $ | $ | |||||||||
Interest added to note payable - related party | $ | $ | |||||||||
Issuance of shares of series C preferred stock for acquisition | $ | $ | |||||||||
Beneficial conversion feature on convertible notes | $ | $ | |||||||||
Reduction of acquisition note payable for uncollectible accounts | $ | $ | |||||||||
Common stock issued for acquisition | $ | $ | |||||||||
Remeasurement of finance lease liability | $ | $ | |||||||||
Mortgage on property purchase | $ | $ | |||||||||
Accounts receivable converted to equity investment | $ | $ | |||||||||
Issuance of shares of series D preferred stock for acquisition | $ | $ | |||||||||
Notes payable issued to the Sellers for the purchase of DTI | $ | $ | |||||||||
Conversion of series D preferred stock for common stock | $ | $ | |||||||||
Conversion of series C preferred stock for common stock | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
2021 | 2020 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||||||||||||
Inventory, net | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Total current assets | ( | ||||||||||||||||||||||||||||||||||
Property and equipment, net | |||||||||||||||||||||||||||||||||||
Intangible assets, net | |||||||||||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||||||||||
Total assets | |||||||||||||||||||||||||||||||||||
Preferred stock subject to redemption | |||||||||||||||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||||||||||||
Total liabilities | |||||||||||||||||||||||||||||||||||
Series C preferred stock | ( | ||||||||||||||||||||||||||||||||||
Series D preferred stock | ( | ||||||||||||||||||||||||||||||||||
Additional paid-in capital | ( | ( | |||||||||||||||||||||||||||||||||
Accumulated deficit | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total stockholders' equity | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity |
2021 | 2020 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||||||||||||
General and administrative expenses | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Gain on forgiveness of debt | ( | ||||||||||||||||||||||||||||||||||
Total other income (expenses) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Loss before income tax | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Income tax (benefit) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Net loss | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Basic loss per share | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Diluted loss per share | ( | ( | ( | ( |
2021 | 2020 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||||||||||||||
Amortization | |||||||||||||||||||||||||||||||||||
(Gain) loss on forgiveness of debt | ( | ( | |||||||||||||||||||||||||||||||||
Amortization of preferred stock subject to redemption | ( | ( | |||||||||||||||||||||||||||||||||
Income tax benefit | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Net cash used in operating activities | ( | ( | ( | ( |
For the Years Ended December 31, 2021 and 2020 |
March 31, 2021 | June 30, 2021 | September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | |||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Intangibles, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock subject to redemption | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Additional paid-in capital | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated deficit | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Total stockholders' equity | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity |
Three Months Ended March 31, 2021 | |||||||||||||||||
As Previously Reported | Adjustments | As Restated | |||||||||||||||
Interest expense | $ | ( | $ | $ | ( | ||||||||||||
Gain on forgiveness of debt | ( | ||||||||||||||||
Total other income (expenses) | ( | ( | ( | ||||||||||||||
Loss before income taxes | ( | ( | ( | ||||||||||||||
Net loss | ( | ( | ( | ||||||||||||||
Basic loss per share | ( | ( | |||||||||||||||
Diluted loss per share | ( | ( |
For the Years Ended December 31, 2021 and 2020 |
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||||||||||||
Interest expense | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
Gain on forgiveness of debt | ( | ||||||||||||||||||||||||||||||||||
Total other income (expenses) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Income (loss) before income tax | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Net income (loss) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Basic loss per share | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Diluted loss per share | ( | ( | ( | ( |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||||||||||||
Interest expense | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
Gain on forgiveness of debt | ( | ( | |||||||||||||||||||||||||||||||||
Total other income (expenses) | ( | ( | |||||||||||||||||||||||||||||||||
Income (loss) before income tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Net income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Basic income (loss) per share | ( | ( | |||||||||||||||||||||||||||||||||
Diluted income/(loss) per share | ( | ( |
For the Years Ended December 31, 2021 and 2020 |
Three Months Ended March 31, 2021 | Six Months Ended June 30, 2021 | Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | |||||||||||||||||||||||||||||||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||
Amortization of preferred stock subject to redemption | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Gain on forgiveness of debt | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Net cash used in operating activities | ( | ( | ( | ( | ( | ( |
For the Years Ended December 31, 2021 and 2020 |
December 31, 2021 | December 31, 2020 | ||||||||||
Cash | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash and restricted cash shown in statement of cash flows | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
December 31, 2021 | December 31, 2020 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Reserve | ( | ||||||||||
Inventory, net | $ | $ |
Automobiles & Trucks | |||||
Buildings and improvements | |||||
Leasehold Improvements | |||||
Machinery and equipment |
For the Years Ended December 31, 2021 and 2020 |
December 31, 2021 | December 31, 2020 | ||||||||||
Automobiles and trucks | $ | $ | |||||||||
Machinery and equipment | |||||||||||
Office furniture and fixtures | |||||||||||
Buildings and improvements | |||||||||||
Total Property and equipment | |||||||||||
Less: Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Customer list | |||||
Non-compete agreements | |||||
Software development | |||||
Patents | |||||
Proprietary technology |
December 31, 2021 | December 31, 2020 | ||||||||||
Software | $ | $ | |||||||||
Non-compete agreement | |||||||||||
Customer list | |||||||||||
Patents, trademarks, and licenses | |||||||||||
Proprietary technology | |||||||||||
Total intangible assets | |||||||||||
Less: Accumulated amortization | ( | ( | |||||||||
Intangibles, net | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
Years Ending December 31, | ||||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Deposits | $ | $ | |||||||||
Other | |||||||||||
$ | $ |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
Year ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Sale of goods | |||||||||||
Circuit boards and cables | $ | $ | |||||||||
Dietary supplements | |||||||||||
Electronics | |||||||||||
Total sale of goods | |||||||||||
Sale of services | |||||||||||
Construction contracts | |||||||||||
Drone 3D mapping | |||||||||||
Total sale of services | |||||||||||
Total revenues | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
For the Year Ended December 31, 2021 | For the Year Ended December 31, 2020 | ||||||||||||||||||||||||||||||||||
Net loss | Shares | Per Share Amount | Net loss | Shares | Per Share Amount | ||||||||||||||||||||||||||||||
Basic EPS | |||||||||||||||||||||||||||||||||||
Loss available to stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Effect of Dilutive Securities | |||||||||||||||||||||||||||||||||||
Convertible debt | — | ( | — | ||||||||||||||||||||||||||||||||
Dilute EPS | |||||||||||||||||||||||||||||||||||
Loss available to stockholders plus assumed conversions | $ | ( | $ | ( | $ | ( | $ | ( |
For the Years Ended December 31, 2021 and 2020 |
Years Ending December 31, | Finance Leases | Operating Leases | ||||||||||||
2022 | $ | $ | ||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
Thereafter | ||||||||||||||
Total payments | ||||||||||||||
Less: imputed interest | ( | ( | ||||||||||||
Total obligation | ||||||||||||||
Less: current portion | ( | ( | ||||||||||||
Non-current capital leases obligations | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
Classification on Balance Sheet | December 31, 2021 | December 31, 2020 | ||||||||||||
Assets | ||||||||||||||
Operating lease assets | Operating lease right of use assets | $ | $ | |||||||||||
Total lease assets | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Current liabilities | ||||||||||||||
Operating lease liability | Current operating lease liability | $ | $ | |||||||||||
Noncurrent liabilities | ||||||||||||||
Operating lease liability | Long-term operating lease liability | |||||||||||||
Total lease liability | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
December 31, 2021 | December 31, 2020 | ||||||||||
Lines of credit, current portion | $ | $ | |||||||||
Equipment loans, current portion | |||||||||||
Term notes, current portion | |||||||||||
Total current | |||||||||||
PPP loans | |||||||||||
Line of credit, net of current portion | |||||||||||
Long-term portion of equipment loans and term notes | |||||||||||
Total notes payable | $ | $ |
Years Ending December 31, | ||||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total | $ |
For the Years Ended December 31, 2021 and 2020 |
December 31, 2021 | December 31, 2020 | ||||||||||
Notes payable; non-interest bearing; due upon demand; unsecured | $ | $ | |||||||||
Series of notes payable, bearing interest at rates from | |||||||||||
Total notes payable - related parties | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of | $ | $ | |||||||||
Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $ | |||||||||||
On December 7, 2018, the Company entered into a variable convertible note for $ | |||||||||||
On November 14, 2019, the Company issued convertible note for $ | |||||||||||
In December 2020 and January 2021, the Company issued convertible notes to individual investors totaling to $ | |||||||||||
Total convertible notes payable | |||||||||||
Less: discount on convertible notes payable | ( | ||||||||||
Total convertible notes payable, net of discount | |||||||||||
Less: current portion of convertible notes payable | ( | ||||||||||
Long-term portion of convertible notes payable | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
Balance outstanding, December 31, 2019 | $ | ||||
Issuance of convertible notes payable for cash | |||||
Non-cash extinguishment | ( | ||||
Repayment of notes | ( | ||||
Conversion of notes payable to common stock | ( | ||||
Penalty interest added to convertible note | |||||
Convertible note issued for interest | |||||
Settlement of convertible note | ( | ||||
Amortization of debt discounts | |||||
Discount from beneficial conversion feature | ( | ||||
Balance outstanding, December 31, 2020 | |||||
Issuance of convertible notes payable for cash | |||||
Repayment of notes | ( | ||||
Conversion of notes payable to common stock | ( | ||||
Amortization of debt discounts | |||||
Discount from beneficial conversion feature | ( | ||||
Balance outstanding, December 31, 2021 | $ |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
For the Years Ended December 31, 2021 and 2020 |
Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2019 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at December 31, 2020 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at December 31, 2021 | $ | $ | |||||||||||||||||||||
Vested and expected to vest at December 31, 2021 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2021 | $ | $ |
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||||||||||||||||
$ | $ | $ | |||||||||||||||||||||||||||
For the Years Ended December 31, 2021 and 2020 |
Warrants | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2019 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at December 31, 2020 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at December 31, 2021 | $ | $ | |||||||||||||||||||||
Vested and expected to vest at December 31, 2021 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2021 | $ | $ |
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||||||||||||||||
$ | $ | $ | |||||||||||||||||||||||||||
Stock price | $ | ||||
Risk-free interest rate | |||||
Expected life of the options | |||||
Expected volatility | |||||
Expected dividend yield |
For the Years Ended December 31, 2021 and 2020 |
Purchase Allocation | |||||
Cash | $ | ||||
Accounts receivable | |||||
Inventory | |||||
Property and equipment | |||||
Customer list | |||||
Goodwill | |||||
Accounts payable | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
$ |
Cash | $ | ||||
Seller notes | |||||
$ |
For the Years Ended December 31, 2021 and 2020 |
Purchase Allocation | |||||
Cash | $ | ||||
Inventory | |||||
Property and equipment | |||||
Patent | |||||
Non-solicitation covenant | |||||
Deferred tax liability | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
SBA loan (PPP funds) | ( | ||||
$ |
Series C Preferred Stock (1,714,286 shares) | $ | ||||
$ |
Purchase Allocation | |||||
Cash | $ | ||||
Property and equipment | |||||
Intellectual property | |||||
Non-compete agreement | |||||
Deferred tax liability | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
SBA loan (PPP funds) | ( | ||||
$ |
Series D Preferred Stock ( | $ | ||||
$ |
For the Years Ended December 31, 2021 and 2020 |
Purchase Allocation | |||||
Accounts receivable | $ | ||||
Property and equipment | |||||
Customer list | |||||
Non-compete agreement | |||||
Goodwill | |||||
Other asset | |||||
Accounts payable | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
Contract liabilities | ( | ||||
Notes payable | ( | ||||
$ |
Class A Common Stock ( | $ | ||||
Cash | |||||
$ |
Purchase Allocation | |||||
Accounts receivable | $ | ||||
Inventory | |||||
Property and equipment | |||||
Customer list | |||||
Proprietary technology | |||||
Non-compete agreement | |||||
Goodwill | |||||
Other assets | |||||
Accounts payable | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
Contract liabilities | ( | ||||
Notes payable | ( | ||||
$ |
For the Years Ended December 31, 2021 and 2020 |
Class A Common Stock ( | $ | ||||
Cash | |||||
$ |
Purchase Allocation | |||||
Accounts receivable | $ | ||||
Other asset | |||||
Proprietary technology | |||||
Tradename | |||||
Goodwill | |||||
Non-compete agreement | |||||
Accrued expenses and other current liabilities | ( | ||||
$ |
Cash | $ | ||||
Class A Common Stock ( | |||||
$ |
For the Years Ended December 31, 2021 and 2020 |
Purchase Allocation | |||||
Cash | $ | ||||
Accounts receivable | |||||
Inventory | |||||
Proprietary technology | |||||
Non-compete agreement | |||||
Goodwill | |||||
Deferred tax liability | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
$ |
Cash | $ | ||||
Class A Common Stock ( | |||||
$ |
For the Years Ended December 31, 2021 and 2020 |
Purchase Allocation | |||||
Accounts receivable | $ | ||||
Other current assets | |||||
Inventory | |||||
Property and equipment | |||||
Customer list | |||||
Trademark | |||||
Non-compete agreement | |||||
Goodwill | |||||
ROU asset | |||||
Accounts payable | ( | ||||
Accrued expenses and other current liabilities | ( | ||||
Customer deposits | ( | ||||
Operating lease liability | ( | ||||
Line of credit | ( | ||||
$ |
Cash | $ | ||||
Class A Common Stock ( | |||||
Warrants ( | |||||
Seller notes | |||||
$ |
Pro Forma Combined Financials (unaudited) | |||||||||||
Years Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Sales | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
Operating expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Net loss | ( | ( | |||||||||
Loss per share | ( | ( |
For the Years Ended December 31, 2021 and 2020 |
Accounts receivable owed from Amplifei | $ | ||||
Cash | |||||
Total | $ |
Year Ended December 31, 2021 | Year Ended December 31, 2020 | ||||||||||
Current expense (benefit) | |||||||||||
Federal | $ | $ | |||||||||
State | |||||||||||
Deferred benefit | |||||||||||
Federal | $ | ( | $ | ( | |||||||
State | ( | ||||||||||
( | ( | ||||||||||
Provision for income tax benefit | $ | ( | $ | ( |
For the Years Ended December 31, 2021 and 2020 |
Year Ended December 31, 2021 | Year Ended December 31, 2020 | ||||||||||||||||||||||
Amount | Percentage | Amount | Percentage | ||||||||||||||||||||
Pre-tax book loss | $ | ( | $ | ( | |||||||||||||||||||
Federal income tax at statutory rate | ( | % | ( | % | |||||||||||||||||||
State income tax benefit | ( | ( | % | ( | % | ||||||||||||||||||
Change in valuation allowance | ( | % | ( | % | |||||||||||||||||||
Other | ( | % | ( | % | |||||||||||||||||||
Provision for income tax benefit | $ | ( | $ | ( |
Year Ended December 31, 2021 | Year Ended December 31, 2020 | ||||||||||
Deferred tax asset: | |||||||||||
Accrued expenses and other | $ | $ | |||||||||
Loss carryforwards | |||||||||||
Stock based compensation | |||||||||||
Interest | |||||||||||
Total deferred tax asset | |||||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Fixed assets | ( | ( | |||||||||
Intangible assets and goodwill | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net non-current deferred tax liability | $ | ( | $ | ( |
For the Years Ended December 31, 2021 and 2020 |
December 30, 2021 | December 30, 2020 | ||||||||||
Unrecognized tax liabilities, beginning of the year | $ | $ | |||||||||
Increase related to prior year tax positions | |||||||||||
Increase related to current year tax positions | |||||||||||
Unrecognized tax liabilities, end of year | $ | $ |
For the Years Ended December 31, 2021 and 2020 |
Years Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Revenue | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
$ | $ | ||||||||||
Gross profit | |||||||||||
Construction Services | $ | ( | $ | ||||||||
Manufacturing | |||||||||||
Defense | |||||||||||
Technologies | |||||||||||
Aerospace | |||||||||||
$ | $ | ||||||||||
Income (loss) from operations | |||||||||||
Construction Services | $ | ( | $ | ( | |||||||
Manufacturing | ( | ( | |||||||||
Defense | ( | ||||||||||
Technologies | ( | ||||||||||
Aerospace | ( | ||||||||||
Unallocated and eliminations | ( | ( | |||||||||
$ | ( | $ | ( | ||||||||
Depreciation and amortization | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Aerospace | |||||||||||
Technologies | |||||||||||
Defense | |||||||||||
Unallocated | |||||||||||
$ | $ | ||||||||||
Interest Expenses | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Aerospace | |||||||||||
Technologies | |||||||||||
Defense | |||||||||||
Unallocated |
For the Years Ended December 31, 2021 and 2020 |
$ | $ | ||||||||||
Net income (loss) | |||||||||||
Construction Services | $ | ( | $ | ( | |||||||
Manufacturing | ( | ( | |||||||||
Aerospace | ( | ||||||||||
Technologies | ( | ||||||||||
Defense | ( | ||||||||||
Unallocated | ( | ( | |||||||||
$ | ( | $ | ( |
As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Total Assets | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Aerospace | |||||||||||
Technologies | |||||||||||
Defense | |||||||||||
Unallocated | |||||||||||
$ | $ | ||||||||||
Goodwill | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Aerospace | |||||||||||
Technologies | |||||||||||
Defense | |||||||||||
$ | $ | ||||||||||
Accounts receivable, net | |||||||||||
Construction Services | $ | $ | |||||||||
Manufacturing | |||||||||||
Aerospace | |||||||||||
Technologies | |||||||||||
Defense | |||||||||||
$ | $ |
For the Years Ended December 31, 2021 and 2020 |
Years Ending December 31, | ||||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
Total | $ |
For the Years Ended December 31, 2021 and 2020 |
Exhibit | |||||
Number | Description | ||||
2.1 | Impossible Aerospace Merger Agreement dated November 13, 2020 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | ||||
2.2 | Vayu (US) Merger Agreement dated December 29, 2020 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | ||||
2.3 | |||||
3.1 | Certificate of Incorporation of Alpine 4 Automotive Technologies Ltd. (incorporated by reference to Exhibit 3.1 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014). | ||||
3.2 | Certificate of Amendment to Certificate of Incorporation, dated June 27, 2014 (incorporated by reference to Exhibit 3.3 to Alpine 4’s Current Report on Form 8-K filed July 18, 2014). | ||||
3.3 | Certificate of Amendment to Certificate of Incorporation, dated June 30, 2014 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed July 18, 2014). | ||||
3.4 | Second Amended and Restated Certificate of Incorporation, dated August 24, 2015 (incorporated by reference to Exhibit 3.1 to Alpine 4’s Current Report on Form 8-K filed August 27, 2015) | ||||
3.5 | Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated December 15, 2017 | ||||
3.6 | By-Laws of Alpine 4 (incorporated by reference to Exhibit 3.2 to Alpine 4’s Registration Statement on Form 10, filed May 8, 2014). | ||||
3.7 | Series C Preferred Stock Certificate of Designation (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | ||||
3.8 | Series D Preferred Stock Certificate of Designation (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | ||||
3.9 | Certificate of Amendment to Certificate of Incorporation (Name Change) filed February 5, 2021 (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed February 8, 2021). | ||||
4.1 | Form of Placement Agent Warrant (incorporated by reference to Exhibit 3.4 to Alpine 4’s Current Report on Form 8-K filed February 12, 2021). | ||||
4.2 | |||||
4.3 | |||||
10.1 | Purchase Agreement, dated effective January 16, 2020, by and between Alpine 4 Technologies Ltd. and Lincoln Park Capital Fund, LLC (incorporated by reference to the Company’s Current Report filed with the SEC on January 23, 2020) | ||||
10.2 | Registration Rights Agreement, dated effective January 16, 2020, by and between Alpine 4 Technologies Ltd. and Lincoln Park Capital Fund, LLC (incorporated by reference to the Company’s Current Report filed with the SEC on January 23, 2020) | ||||
10.3 | FPCD Note - $350,000 (incorporated by reference to the Company’s Current Report filed with the SEC on November 25, 2019) | ||||
10.4 | FPCD Note - $600,000 (incorporated by reference to the Company’s Current Report filed with the SEC on November 25, 2019) | ||||
10.5 | Note Amendment – #1 (incorporated by reference to the Company’s Current Report filed with the SEC on November 25, 2019) | ||||
10.6 | Note Amendment - # 2 (incorporated by reference to the Company’s Current Report filed with the SEC on November 25, 2019) | ||||
10.7 | FPCD Note - $137,870.48 (incorporated by reference to the Company’s Current Report filed with the SEC on November 25, 2019) | ||||
10.8 | Note Amendment - $180,000 (incorporated by reference to the Company’s Current Report filed with the SEC on November 25, 2019) | ||||
10.9 | APF Securities Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 9, 2018) | ||||
10.10 | Secured Promissory Notes (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 9, 2018) | ||||
10.11 | Secured Convertible Notes (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 9, 2018) | ||||
10.12 | Security Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 9, 2018) | ||||
10.13 | Consulting Services Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 9, 2018) | ||||
10.14 | Purchase Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on February 24, 2020) | ||||
10.15 | Secured Promissory Note - $2,300,000 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on February 24, 2020) | ||||
10.16 | Security Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on February 24, 2020) | ||||
10.17 | Amendment to Purchase Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on February 24, 2020) | ||||
10.18 | Impossible Aerospace Consultant Agreement dated November 13, 2020 (incorporated by reference to Exhibit 10.1 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | ||||
10.19 | RSU Agreement dated November 13, 2020 (incorporated by reference to Exhibit 10.2 to Alpine 4’s Current Report on Form 8-K filed November 17, 2020). | ||||
10.20 | Vayu (US) Employment Agreement dated December 29, 2020 (incorporated by reference to Exhibit 10.1 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | ||||
10.21 | RSU Agreement dated December 29, 2020 (incorporated by reference to Exhibit 10.2 to Alpine 4’s Current Report on Form 8-K filed January 4, 2021). | ||||
10.22 | Form of Securities Purchase Agreement (AGP Transaction) (incorporated by reference to Exhibit 10.1 to Alpine 4’s Current Report on Form 8-K filed February 12, 2021). | ||||
10.23 | Form of Placement Agent Agreement (incorporated by reference to Exhibit 10.2 to Alpine 4’s Current Report on Form 8-K filed February 12, 2021). | ||||
10.24 | |||||
10.25 | |||||
10.26 | |||||
10.27 | |||||
10.28 | |||||
23 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101 INS | XBRL Instance Document* | ||||
101 SCH | XBRL Schema Document* | ||||
101 CAL | XBRL Calculation Linkbase Document* | ||||
101 DEF | XBRL Definition Linkbase Document* | ||||
101 LAB | XBRL Labels Linkbase Document* | ||||
101 PRE | XBRL Presentation Linkbase Document* |
Date: March 16, 2023 | By: | /s/ Kent B. Wilson | ||||||
Name: | Kent B. Wilson | |||||||
Title: | Chief Executive Officer (Principal Executive Officer), President, and Director | |||||||
Date: March 16, 2023 | By: | /s/ Larry Zic | ||||||
Name: | Larry Zic | |||||||
Title: | Chief Financial Officer (Principal Financial Officer) |
/s/ Kent B. Wilson Kent B. Wilson | Chief Executive Officer, President, Director | March 16, 2023 | ||||||
/s/ Ian Kantrowitz Ian Kantrowitz | Director | March 16, 2023 | ||||||
/s/ Gerry Garcia Gerry Garcia | Chairwoman of the Board | March 16, 2023 | ||||||
/s/ Edmond Lew Edmond Lew | Director | March 16, 2023 | ||||||
/s/ Christophe Jeunot Christophe Jenuot | Director | March 16, 2023 | ||||||
/s/ Jonathan Withem Jonathan Withem | Director | March 16, 2023 |
Dated: March 16, 2023 | ||||||||
By: | /s/ Kent B. Wilson | |||||||
Kent B. Wilson | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Dated: March 16, 2023 | ||||||||
By: | /s/ Larry Zic | |||||||
Larry Zic | ||||||||
Chief Financial Officer | ||||||||
Dated: March 16. 2023 | ||||||||
By: | /s/ Kent B. Wilson | |||||||
Kent B. Wilson | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Dated: March 16. 2023 | ||||||||
By: | /s/ Larry Zic | |||||||
Larry Zic | ||||||||
Chief Financial Officer | ||||||||
Cover - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Apr. 12, 2022 |
Jun. 30, 2021 |
|
Document Information [Line Items] | |||
Document Type | 10-K/A | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40913 | ||
Entity Registrant Name | Alpine 4 Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-5482689 | ||
Entity Address, Address Line One | 2525 E Arizona Biltmore Circle | ||
Entity Address, Address Line Two | Suite 237 | ||
Entity Address, City or Town | Phoenix | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85016 | ||
City Area Code | 480 | ||
Local Phone Number | 702-2431 | ||
Title of 12(b) Security | Class A Common Stock | ||
Trading Symbol | ALPP | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 463,512,811 | ||
Documents Incorporated by Reference | None. | ||
Entity Central Index Key | 0001606698 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | Alpine 4 Holdings, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (“Form 10-K/A”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Original Form 10-K”), as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 14, 2022, to amend and restate the Original Form 10-K as further described below.Restatement BackgroundIn the third quarter of 2022, the Company identified errors in the accounting for income taxes related to the deferred tax liabilities for certain acquisitions the Company made in 2020 and 2021, the classification of the Series C and Series D preferred shares issued in connection with these acquisitions, errors in the valuation of certain assets acquired for one of the acquisitions in 2021, and errors in the recording of forgiveness of PPP loans that were assumed as part of certain acquisitions in 2020 and 2021. As a result of the foregoing, upon completion of the materiality study on November 17th, 2022, the Company's Board of Directors concluded that the December 31, 2020, financial statements in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2020, the financial statements in the Quarterly Reports on Form 10-Q as of and for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, and the December 31, 2021 financial statements in the Original Form 10-K should no longer be relied upon.Accordingly, on November 18, 2022, the Company announced that it would restate its financial statements for the above-mentioned periods to correct such errors in this Form 10-K/A.Table of ContentsThe following items included in the Original Form 10-K are amended by this Amendment:–Part I, Item 1A. Risk Factors–Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations–Part II, Item 8. Financial Statements and Supplementary Data –Part II Item 9A. Controls and Procedures–Part IV Items 15. Exhibits and Financial Statement SchedulesThe particulars of the misstatements and their effect on the Company’s financials are summarized in Note 2 to the financial statements.This Form 10-K/A is presented as of the filing date of the Original Form 10-K, does not reflect events occurring after that date, and does not modify or update disclosures in any way other than as required to reflect the fiscal year 2020 and 2021 restatement described above. Accordingly, this Form 10-K/A should be read in conjunction with the Company’s filings with the SEC subsequent to the date on which the Company filed the Original Form 10-K. This Form 10-K/A sets forth the Original Form 10-K in its entirety, as amended to reflect the restated financial statements. as discussed above. However, as noted, this Form 10-K/A does not otherwise update or modify disclosures in the Original Form 10-K that are not related to the restated financial statements. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known to the Company after the filing of the Original Form 10-K, and such forward-looking statements should be read in their historical context. | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 162,210,355 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 8,548,088 | ||
Class C Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,500,200 |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | MaloneBailey, LLP |
Auditor Firm ID | 206 |
Auditor Location | Houston, Texas |
Organization and Basis of Presentation (As Restated) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation (As Restated) | Organization and Basis of Presentation (As Restated) Alpine 4 Holdings, Inc. (together with its subsidiaries, the “Company,” “we,” or “our”), was incorporated under the laws of the State of Delaware on April 22, 2014. The Company was formed to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business. On March 2, 2021, the Company changed its name from Alpine 4 Technologies Ltd. to Alpine 4 Holdings, Inc. Effective April 1, 2016, the Company purchased all of the outstanding capital stock of Quality Circuit Assembly, Inc., a California corporation (“QCA”). Effective January 1, 2019, the Company purchased all of the outstanding capital stock of Morris Sheet Metal Corp., an Indiana corporation (“MSM”), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation, Morris Enterprises LLC, an Indiana limited liability company and Morris Transportation LLC, an Indiana limited liability company (collectively “Morris”). Effective November 6, 2019, the Company purchased all of the outstanding capital stock and units of Deluxe Sheet Metal, Inc., an Indiana corporation, and DSM Holding, LLC, an Indiana limited liability company, and purchased certain real estate from Lonewolf Enterprises, LLC, an Indiana limited liability company (collectively “Deluxe”). Effective February 21, 2020, the Company purchased all of the outstanding units of Excel Fabrication, LLC., an Idaho Limited Liability Company (“Excel”). Effective December 15, 2020, the Company purchased the assets of Impossible Aerospace Corporation, a Delaware corporation (“IA”). Effective February 8, 2021, the Company purchased the assets of Vayu (US), Inc., a Delaware corporation (“Vayu”). On May 5, 2021, the Company acquired all of the outstanding shares of stock of Thermal Dynamics, Inc., a Delaware corporation (“TDI”). On May 10, 2021, the Company acquired all of the outstanding membership interests of KAI Enterprises, LLC, a Florida limited liability company, the sole asset of which was all of the outstanding membership interests of Alternative Laboratories, LLC, a Delaware limited liability company (“Alt Labs”). On October 20, 2021, the Company acquired 100% of the outstanding shares of Identified Technologies Corporation, a Delaware corporation (“Identified Technologies”). On November 29, 2021, the Company, and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 3, Inc. (“AC3”), entered into a merger agreement with ElecJet Corp., (“ElecJet”) and the three ElecJet shareholders. Pursuant to the agreement, AC3 merged with and into ElecJet with ElecJet being the surviving entity following the merger. On December 9, 2021, the Company, and A4 Technologies, Inc., a wholly owned subsidiary of the Company (“A4 Technologies”), entered into a Membership Interest Purchase Agreement with DTI Services Limited Liability Company (doing business as RCA Commercial Electronics), (“DTI”), Direct Tech Sales LLC, (also having an assumed business name of RCA Commercial Electronics), (“Direct Tech”), PMI Group, LLC, (“PMI”), Continu.Us, LLC, (“Continu.Us”), Solas Ray, LLC, (“Solas”), and the individual owners of the interests of the various entities. DTI, Direct Tech, PMI, Continu.Us, and Solas were each referred to in the Membership Interest Purchase Agreement collectively as “RCA.” Pursuant to the MIPA, the Company acquired all of the outstanding membership interests of RCA. As of the date of this Report, the Company was a holding company owning, directly or indirectly, fourteen companies: –A4 Corporate Services, LLC; –ALTIA, LLC; –Quality Circuit Assembly, Inc.; –Morris Sheet Metal, Corp; –JTD Spiral, Inc.; –Excel Construction Services, LLC; –SPECTRUMebos, Inc.; –Vayu (US) –Thermal Dynamics International, Inc.; –Alternative Laboratories, LLC.; –Identified Technologies, Corp.; –ElecJet Corp.; –DTI Services Limited Liability Company (doing business as RCA Commercial Electronics); and –Global Autonomous Corporation Basis of presentation The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Liquidity The Company’s financial statements are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board (the “FASB”), Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses and negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. While the Company experienced a loss for the year ended December 31, 2021, of $19.5 million, and had a negative cash flow used in operations, there were several significant one-time / non-recurring items included in the $19.5 million net loss. These non-recurring items totaled $8.4 million, consisting of $612 thousand in new acquisitions expenses captured in professional fees, and other costs, $1.8 million for repurchase of restricted stock units in March 2021, $3.0 million in write off of accounts receivables, $367 thousand in write off of intangibles and goodwill, $1.2 million to management for bonuses, and $1.4 million for a loss on equity investment. The Company received a total of approximately $76.4 million in 2021 in the following two transactions: –The Company raised approximately $67.1 million in net proceeds in connection with a registered direct offering of its stock and; –The Company raised approximately $9.3 million in net proceeds in connection with an equity line of credit financing arrangement. As of December 31, 2021, the Company has positive working capital of approximately $12.4 million. The Company has also secured bank financing totaling $18.8 million ($18.3 million in Lines of Credit and $0.5 million in capital expenditures lines of credit availability) of which $6.4 million was unused at December 31, 2021. The Company plans to continue to generate additional revenue (and improve cash flows from operations) partly from the acquisitions of six operating companies which closed in 2021 combined with improved gross profit performance from the existing operating companies. The Company also plans to continue to raise funds through debt financing and the sale of shares through its planned at-the-market offering. Based on the capital raise as indicated above and management’s plans to improve cash flows from operations, management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. Because of the above factors, the Company believes that this alleviates the substantial doubt in connection with the Company’s ability to continue as a going concern. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally.
|
Restatement of Previously Issued Financial Statements |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements In the course of preparing our interim financial statements for the third quarter of 2022, we identified the following misstatements that required restatement of our previously issued 2020 and 2021 financial statements as follows: a.Deferred tax liabilities amounting to $451,966 and 1,809,857 were not recognized in 2020 and 2021, respectively, for differences in the income tax treatment of intangible assets acquired from our acquisitions of IA, Vayu and Elecjet. Specifically, the recognition of deferred tax liabilities would result in an increase in goodwill and intangible assets as of December 31, 2021 and 2020, of $2,924,741 and $853,991, respectively, and the recognition of an income tax benefit from the release of our valuation allowance of $1,566,850 and $402,025, for the years ended December 31, 2021 and 2020, respectively. b.We had previously classified the Series C and Series D Preferred Stock (collectively, the “Preferred Shares”) issued in the acquisitions of IA and Vayu, respectively, under permanent equity. Due to certain provisions in the Preferred Shares where we could be required to issue a variable number of Class A common shares, we determined that the Preferred Shares should be classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity. As a result, the Company reclassed the fair value of the Series C Preferred Stock of $5,848,013 as of December 31, 2020, and the fair value of the Series D Preferred Stock of $6,653,309 as of March 31, 2021, from permanent equity to liability. Accretion to interest income of $545,509 was also recognized for the year ended December 31, 2021. c.We identified certain valuation-related errors in the determination of fair values related to the RCA acquisition. This resulted in a reduction in the fair value of inventory of $1,562,251 and a reduction in fair value of trademark of $1,180,000 with a corresponding increase to customer relationship of $1,900,000 and increase to goodwill of $842,251. d.When the Company acquired IA, Vayu, and Alt Labs, the Company assumed $444,850, $72,850, and $1,661,875, respectively, of PPP loan liability. The full amounts related to Vayu and Alt Labs were forgiven in 2021, in addition to $356,690 of the $444,850 related to IA. The Company initially recorded this as a gain on forgiveness of debt on the basis that the loan should be recorded at its fair value on the acquisition date without consideration of any potential future forgivable amount. However, under ASC 805, provisional amounts are estimated using the best information available as of the reporting date. As additional information is obtained during the measurement period, these amounts are adjusted through goodwill. Given the facts and circumstances at acquisition date, and since the forgiveness of Alt Labs’s PPP loans occurred during the measurement period, the amount forgiven of $1,661,875 should have been recorded as a reduction to goodwill instead of gain on forgiveness of debt. The Company also determined that the fair value of the PPP loans assumed in the IA and Vayu acquisitions should be $88,160 and $0, respectively, after further consideration of the facts and circumstances at the acquisition dates. As such, there should not have been a gain on forgiveness of debt recorded for the combined $429,540 that was forgiven during 2021. As such, there will be a decrease in forgiveness of debt of $2,091,415, a reduction in goodwill of $1,661,875 and a reduction to intangible assets of $429,540. The following tables summarize the effects of the restatements on each financial statement line item as of the dates and for the periods indicated. The effects of the restatement are incorporated within Notes 1, 3, 5, 8, 9, 10, 12 and 13. Consolidated Balance Sheets as of December 31,
Consolidated Statements of Operations for the Year Ended December 31,
Consolidated Statements of Cash Flows for the Year Ended December 31,
The impacts of the restatement have been reflected throughout the financial statements, including the applicable footnotes, as noted above. Restatement of Previously Issued Financial Statements (Unaudited) As a result of the misstatements noted above, we have restated our previously reported unaudited consolidated balance sheets as of March 31, 2021, June 30, 2021, and September 30, 2021. We have also restated the unaudited consolidated statements of operations for the three months ended March 31, 2021, the three and six months ended June 30, 2021, and the three and nine months ended September 30, 2021, and the unaudited consolidated statements of cash flow for the three months ended March 31, 2021, the six months ended June 30, 2021, and the nine months ended September 30, 2021, to recognize accreted interest income on the preferred stock subject to redemption and to properly reflect the gain on forgiveness of debt related to PPP loans that were assumed at the date of acquisition for IA, Vayu, and Alt Labs. The following tables present the impact of the restatements, to the applicable line items in the unaudited consolidated balance sheets, unaudited consolidated statements of operations, and unaudited consolidated statements of cash flow to the Company’s previously reported consolidated financial statements for the above mentioned periods: Consolidated Balance Sheets as of,
Consolidated Statement of Operations for the Three Months ended March 31, 2021
Consolidated Statements of Operations for the Three and Six Months ended June 30, 2021
Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2021
Consolidated Statements of Cash Flows for the Three, Six, and Nine Months Ended March 30, 2021, June 30, 2021, and September 30, 2021
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies (As Restated) | Summary of Significant Accounting Policies (As Restated) Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2021 and 2020. Significant intercompany balances and transactions have been eliminated. Use of estimates The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of long-lived assets, reserves for accounts receivable and inventory, valuation allowance for deferred tax assets, fair values assigned to intangible assets acquired, and impairment of long-lived assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2022 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2022 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2021. Reclassification Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. Advertising Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of December 31, 2021, and 2020, the Company had no cash equivalents. As of December 31, 2021, and 2020, the Company had $0 and $444,845 in restricted cash, respectively, for amounts held in escrow. The following table sets forth a reconciliation of cash, and restricted cash reported in the consolidated statements of cash flows that agrees to the total of those amounts presented in the consolidated statements of cash flows.
Major Customers The Company had no customers that made up over 10% of accounts receivable as of December 31, 2021. The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. For the year ended December 31, 2021, the Company had two customers that each made up 11% of total revenues. For the year ended December 31, 2020, the Company had one customer that made up 10% of total revenues For the year ended December 31, 2021, the Company had 9% of total revenues made up of government contracts. Major Customer by Segment Manufacturing The manufacturing segment had two customers that made up 31% and 20%, respectively, of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the manufacturing segment had four customer that made up a total of 65% of total manufacturing revenues. Aerospace The aerospace segment had one customer that made up 57% of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the aerospace segment had two customers that made up 26% and 10%, respectively, of total aerospace revenues. Construction The construction segment had two customers that made up over 25% and 17%, respectively, of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the construction segment had two customers that made up 28% and 18%, respectively, of total construction revenues. Defense Of the defense segment 100% of accounts receivables and defense revenues were related to government contracts. Technologies The Company had two customers that made up 14% and 30% of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the technology segment had two customers that made up 22% and 12%, respectively, of total technologies revenues. Accounts Receivable The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2021 and 2020, allowance for bad debt was $199,936 and $49,914, respectively. During the year ended December 31, 2021, the Company wrote off $3,028,757 to bad debts expense. Inventory Inventory for all subsidiaries is valued at weighted average. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. Inventory, net at December 31, 2021 and 2020 consists of:
Property and Equipment Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows:
Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2021 and 2020:
Included in Buildings and improvements in the above table are two buildings of $9,000,000 and $2,000,000 related to sale leaseback transactions in connection with the acquisitions of Deluxe and Excel. (See Note 4.) Purchased Intangibles and Other Long-Lived Assets (As Restated) The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows:
Intangible assets consisted of the following as of December 31, 2021 and 2020:
Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:
Other Long-Term Assets Other long-term assets consisted of the following as of December 31, 2021 and 2020:
Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During the year ended December 31, 2021, due to the significant impact of COVID-19, the Company determined that the customer list for Excel was impaired and took a charge to earnings of $359,890. During the year ended December 31, 2020, due to the loss of significant customers and the impact of COVID-19, the Company determined that the customer list for APF and Deluxe was impaired and took a charge to earnings of $671,500 and $450,000, respectively. Goodwill In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2021 and 2020, the reporting units with goodwill were QCA, Morris, Excel, Alt Labs, TDI, Identified Technology, ElecJet, and RCA. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. During the year ended December 31, 2021, the Company determined that the goodwill for Excel was impaired and took a charge to earnings of $7,629. During the year ended December 31, 2020, the Company determined that the goodwill for APF was impaired, as the company ceased operating as of August 31, 2020 and took a charge to earnings of $440,100. Leases The Company accounts for its leases under ASC 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Fair Value Measurement Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes payable and lines of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of December 31, 2021 and 2020, the Company had no financial assets or liabilities that were required to be fair valued on a recurring basis. Equity Investments The Company’s equity investments consist of investment in one private company in which the Company does not have the ability to exercise significant influence over their operating and financial activities. This investment is carried at cost as there is no market for the common stock and LLC membership units, accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, in accordance with the ASC 321 guidelines, the Company recognized a lost on impairment for the entire value of $1,350,000. The Company has adopted the provisions of ASU 2016-01 and values the investment using the measurement alternative, defined as costs, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Research and Development The Company focuses on quality control and development of new products and the improvement of existing products. All costs related to research and development activities are expensed as incurred. During the year ended December 31, 2021, research and development cost totaled $1,464,918. Revenue Recognition On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. Revenue is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: •executed contracts with the Company’s customers that it believes are legally enforceable; •identification of performance obligations in the respective contract; •determination of the transaction price for each performance obligation in the respective contract; •allocation the transaction price to each performance obligation; and •recognition of revenue only when the Company satisfies each performance obligation. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. QCA and Alt Labs QCA and Alt Labs are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. ElecJet ElecJet is a research and development of battery technology and development/sales of battery consumer products and recognizes revenue when the products have been shipped to the customer. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Identified Technologies IDT provides drone software and data for industrial job sites and recognizes revenue when the service has been provided to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial Direct Tech Sales RCA is engaged in the design, manufacture and wholesale distribution of commercial LED lighting and electronics such as televisions, mounting solutions, projectors and screens, audio equipment, digital signage, mobile audio and video systems, and all wire and connecting products throughout the United States of America. RCA recognizes revenue when the products have been shipped to the customer which is also when title transfers. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Morris, Deluxe, Excel and Thermal Dynamics For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Contract Assets and Contract Liabilities The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets. Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. Contract Retentions As of December 31, 2021 and 2020, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. The following table presents our revenues disaggregated by type:
Earnings (loss) per share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2021 and 2020:
Stock-based compensation The Company follows the guidelines in ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executives, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. Income taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. Related Party Disclosure ASC 850, Related Party Disclosures, requires companies to include in their financial statements disclosures of material related party transactions. The Company discloses all material related party transactions. Related parties are defined to include any principal owner, director or executive officer of the Company and any immediate family members of a principal owner, director or executive officer. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.
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Leases | Leases The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. As of December 31, 2021, the future minimum finance and operating lease payments are as follows:
Finance Leases On April 5, 2018, the Company acquired APF. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease. The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease. As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000. The payments related to this lease are reflected in the table above. As of October 1, 2020, the APF building lease was modified, assignment of the building was transferred to Excel Fabrication, LLC (“Excel”), and Quality Circuit Assembly, Inc. (“QCA”). As part of the modification, the lease was extended through 2037 and the payment terms were amended effective January 15, 2021. As a result of this amendment, the Company remeasured the finance lease liability and recorded an additional $279,287 to the related asset and finance lease liability on the date of the modification. On January 1, 2019, the Company acquired Morris. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Morris was sold for $3,267,000, and leased back to the company for a period of 15 years at a monthly rate of $27,500, subject to an annual increase of 2% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On November 6, 2019, the Company acquired Deluxe. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Deluxe was sold for $9,000,000, and leased back to the company for a period of 15 years at a monthly rate of $75,000, subject to an annual increase of 2.5% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On February 21, 2020, the Company acquired Excel. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Excel was sold for $2,000,000, and leased back to the Company for a period of 15 years at a monthly rate of $18,700 for the first five years, subject to annual increases throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. During the year ended December 31, 2020, the Company entered into three finance leases for equipment totaling $756,990. Each has a 60 month term with an interest rate ranging from 6.7% to 9%. Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of December 31, 2021:
During the year ended December 31, 2020, the Company amended its lease for its office space in Phoenix, Arizona through March 2025. As a result of this amendment, the Company remeasured the right of use asset and liability and recorded an additional $193,541 in right of use asset on the date of the modification. During the year ended December 31, 2021, the Company amended its lease for the warehouse in San Jose, California through September 30, 2022, with monthly lease payments of $31,746. On May 3, 2021, the Company entered into a lease agreement for the building on 4740 Cleveland in Ft. Myers, Florida. The lease had a term of 72 months with monthly payments ranging from $40,833 to $49,583 from May 2021 to July 2021 and $58,333 from August 2021 through the end of the term. The Company determined the lease to be an operating lease and recognized a right-of-use asset and operating lease liability of $3,689,634 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 3.96%. This lease was terminated on August 27, 2021, when the Company purchased the building. In December 2021, the Company acquired RCA. As part of this purchase the Company entered into a lease agreement for office and warehouse space under a non-cancellable operating lease. The lease has a term of 89 months with monthly payments ranging from $31,350 to $35,207. The Company determined the lease to be an operating lease and recognized a right-of-use asset of $1,196,764 and operating lease liability of $1,226,128 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 4%. The lease expense for the years ended December 31, 2021 and 2020 was $386,056 and $373,884, respectively. The cash paid under operating leases during the years ended December 31, 2021 and 2020 was $402,688 and $362,771, respectively. At December 31, 2021, the weighted average remaining lease terms were 3.2 years and the weighted average discount rate was 10%.
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Leases | Leases The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. As of December 31, 2021, the future minimum finance and operating lease payments are as follows:
Finance Leases On April 5, 2018, the Company acquired APF. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease. The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease. As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000. The payments related to this lease are reflected in the table above. As of October 1, 2020, the APF building lease was modified, assignment of the building was transferred to Excel Fabrication, LLC (“Excel”), and Quality Circuit Assembly, Inc. (“QCA”). As part of the modification, the lease was extended through 2037 and the payment terms were amended effective January 15, 2021. As a result of this amendment, the Company remeasured the finance lease liability and recorded an additional $279,287 to the related asset and finance lease liability on the date of the modification. On January 1, 2019, the Company acquired Morris. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Morris was sold for $3,267,000, and leased back to the company for a period of 15 years at a monthly rate of $27,500, subject to an annual increase of 2% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On November 6, 2019, the Company acquired Deluxe. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Deluxe was sold for $9,000,000, and leased back to the company for a period of 15 years at a monthly rate of $75,000, subject to an annual increase of 2.5% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On February 21, 2020, the Company acquired Excel. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Excel was sold for $2,000,000, and leased back to the Company for a period of 15 years at a monthly rate of $18,700 for the first five years, subject to annual increases throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. During the year ended December 31, 2020, the Company entered into three finance leases for equipment totaling $756,990. Each has a 60 month term with an interest rate ranging from 6.7% to 9%. Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of December 31, 2021:
During the year ended December 31, 2020, the Company amended its lease for its office space in Phoenix, Arizona through March 2025. As a result of this amendment, the Company remeasured the right of use asset and liability and recorded an additional $193,541 in right of use asset on the date of the modification. During the year ended December 31, 2021, the Company amended its lease for the warehouse in San Jose, California through September 30, 2022, with monthly lease payments of $31,746. On May 3, 2021, the Company entered into a lease agreement for the building on 4740 Cleveland in Ft. Myers, Florida. The lease had a term of 72 months with monthly payments ranging from $40,833 to $49,583 from May 2021 to July 2021 and $58,333 from August 2021 through the end of the term. The Company determined the lease to be an operating lease and recognized a right-of-use asset and operating lease liability of $3,689,634 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 3.96%. This lease was terminated on August 27, 2021, when the Company purchased the building. In December 2021, the Company acquired RCA. As part of this purchase the Company entered into a lease agreement for office and warehouse space under a non-cancellable operating lease. The lease has a term of 89 months with monthly payments ranging from $31,350 to $35,207. The Company determined the lease to be an operating lease and recognized a right-of-use asset of $1,196,764 and operating lease liability of $1,226,128 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 4%. The lease expense for the years ended December 31, 2021 and 2020 was $386,056 and $373,884, respectively. The cash paid under operating leases during the years ended December 31, 2021 and 2020 was $402,688 and $362,771, respectively. At December 31, 2021, the weighted average remaining lease terms were 3.2 years and the weighted average discount rate was 10%.
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt (As Restated) In May 2018, APF secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF’s outstanding accounts receivable. In February 2019 the Company moved the Crestmark line of credit to FSW with a variable interest and collateralized by APF’s accounts receivable. In January 2020 the Company received a default notice from Crestmark regarding noncompliance with certain loan covenants, including but not limited to, QCA’s failure to maintain a tangible net worth as contained in the loan agreement. QCA’s credit line with Crestmark totaled $2,800,000 and was restructured from an ABL line of credit to a ledger line of credit. In addition, a minimum interest of 7.75% interest was imposed; an exit fee of 1% through January 31, 2021 and the financial covenant replaced with a requirement for QCA to maintain a free cash flow of at least $1.00 beginning with QCA’s financial statements as of January 31, 2020. As of December 31, 2021, the outstanding balance was paid off and the line of credit was closed. On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES. The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020. The remaining principal and accrued interest is due on the 3-year anniversary. The Company is not current on its payments on the note. In August 2020, the company filed a lawsuit against Alan Martin regarding his note payable . The balance as of December 31, 2021, was $2,857,500 and accrued interest of $1,170,861 which is reflective in the current liabilities. The default rate is 10% and the daily late charge is $575. On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 (“Secured APF Notes”) as part of the consideration for the purchase of APF. The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF. The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding. During the year ended December 31, 2020, the Company amended both of the notes. The noteholders forgave all $450,000 of the $450,000 convertible notes (See Note 7) in exchange for an increase in their notes payable of $67,617. The principal amount of their notes payable was amended to $1,689,000 at 0% interest with weekly payments of $4,086 and the balance to be paid on May 27, 2022. The Company recognized a gain on settlement of debt of $382,384 related to these transactions. As of December 31, 2021, the balance of these notes were paid in full. On May 3, 2018, the Company entered into an equipment note with a lender for total borrowings of $630,750, which is secured by the equipment of APF. The note bears interest at 11.75% per annum and is payable in weekly payments of $3,795 commencing on the loan date through May 4, 2022. As of December 31, 2021, the balance of this note has been paid in full. In connection with the Morris acquisition in January 2019, the Company issued three subordinated secured promissory notes for an aggregate of $3,100,000. The notes bear interest at 4.25% per annum, require monthly payment for the first 35 months of $31,755 with any remaining principal and accrued interest due on the 3 year-anniversary. The Company also issued three supplemental notes payable for an aggregate of $350,000. The notes bear interest at 4.25% per annum and are due on the 1-year anniversary. In May 2020, the Company amended the three supplemental notes of $116,667 each with the sellers of Morris. The notes were due January 1, 2020. Each of the new notes as of the date of amendment had accrued interest of $2,703. This was added to the note resulting in the principal amount of each of the new notes equaling to $119,370. The amendment required an initial payment of $30,000 for each note, which was made on May 23, 2020, and 8 monthly installments of $10,000 with one final payment of $13,882 through January 2021. The amended notes have an interest rate of 6%. The Company is current on all of the respective subordinated notes and the supplemental notes have been paid in full as of the date of this report. As of December 31, 2021, the outstanding balance on these notes was $2,374,062. In connection with the Deluxe acquisition in November 2019, the Company issued two subordinated secured promissory notes to the seller. The first note for $1,900,000 bears interest at 4.25% per annum, require monthly payment for the first 35 months of $19,463 with any remaining principal and accrued interest due on the 3 year-anniversary. The second note for $496,343 bears interest at 8.75% and is due in January 2020. In January 2020, the Company entered into a debt conversion agreement with the seller which fully settled the second note. On April 8, 2021, the Company entered into a settlement agreement with the seller wherein the outstanding balance on the first note amounting to $1,883,418 including accrued interest and net other costs was settled in full through a payment of approximately $887,000 and the exchange of 1,617,067 shares of the Company’s Class C common shares held by the seller for the same number of shares of the Company’s Class A common stock. The Company recognized a gain on extinguishment of debt totaling $803,079 during the year ended December 31, 2021 as a result of the settlement of the note. In connection with the Excel acquisition in February 2020, the Company issued a subordinated secured promissory note to the seller. The note for $2,300,000 bears interest at 4.25% per annum, requires monthly interest only payments for 48 months and is due February 2024. The ending balance for this loan as of December 31, 2021 was $2,062,318. In November 2019, in connection with the termination of the lease for the San Diego building, the Company issued the landlord a note payable. The note is for $2,740,000, bears interest at 7% with monthly payments starting at $15,984 and is due in November 2034. As of December 31, 2021, the outstanding balance of the term note was paid in full. In January 2020, the Company entered into a $200,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $3,333 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full. In connection with the Excel acquisition, the Company entered into a $425,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $7,083 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full . In October 2019 Morris entered into an equipment finance note for $107,997 with an interest rate of 9.4% for 48 monthly payments with Bryn Mawr Equipment Finance Inc. The Company was current on this note as of December 31, 2021. The Company issued a $48,000 note in January 2020 to a private investor with an interest rate of 15% with a due date of 1 year. As of December 31, 2021, the balance of this note has been paid in full. In connection with the RCA acquisition in December 2021, the Company issued two subordinated secured promissory notes for an aggregate of $2,000,000. The notes bear interest at 3.75% per annum, require monthly payment of $19,590 for a term of 120 months. As of December 31, 2021, the Company was current on all of the respective subordinated notes. In April and May 2020, the Company received seven loans under the Paycheck Protection Program of the U.S. Coronavirus Aid, Relief and Economic Security (“CARES”) Act totaling $3,896,108. During the year ended December 31, 2021, the Company also acquired four loans with a book value totaling $1,799,725 due to acquisitions, and fair value of $65,000 at the time of acquisition. The loans have terms of 24 months and accrue interest at 1% per annum. The Company paid $88,160 for the PPP loan assumed in connection with the IA acquisition, and the remaining $356,690 was forgiven. The remaining ten loans were forgiven as provided by the CARES Act during the year ended December 31, 2021. The Company recognized a gain on forgiveness of debt of $3,896,108. The Company also assumed an Economic Injury Disaster Loan (EIDL) in connection with the Vayu acquisition, which was still outstanding as of December 31, 2021. During 2021, the Company entered into four revolving lines of credit totaling $18.3 million and two capital expenditures lines of credit totaling $0.5 million. The revolving lines of credit used as of December 31, 2021, totaled $10.1 million with an interest rate ranging from prime plus 2.50% - 4.25% and a term of to two years. As of December 31, 2021, the Company had $6.4 million in additional funds available to borrow. On August 27, 2021 the Company entered into $4.7 million agreement for the purchase of a building located at 4740 Cleveland in Ft. Myers, Florida. The loan bears interest at a rate of 3.95% per annum for a term of 10 years and requires monthly payments of $24,722. The loan is secured by the building and a guarantee by the Company. As of the December 31, 2021, the Company was current with this obligation. The outstanding balances for the loans as of December 31, 2021 and 2020 were as follows:
Future scheduled maturities of outstanding debt are as follows:
At December 31, 2021 and 2020, convertible notes payable consisted of the following:
(A) In May and June 2020 the Company amended the following seller notes: –The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020 was amended to extend the maturity date to May 4, 2027 at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2021 and 2020 was $0 and $735,329, respectively. –The convertible note with Mr. Hargreaves with a $551,001 balance as of June 5, 2020 was amended to extend the maturity date to June 5, 2026 at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2021 and 2021 was $0 and $556,135, respectively. A loss on extinguishment of debt of $192,272 was recognized on these transactions. The discounts on convertible notes payable arise from stock issued with notes payable, and beneficial conversion features. During the years ended December 31, 2021 and 2020, the Company issued convertible notes with a fixed conversion price. The beneficial conversion feature related to these convertible notes that have been recorded as a discount on the convertible notes and as a component of equity was $92,428 and $1,482,500 for the years ended December 31, 2021, and 2020, respectively. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the years ended December 31, 2021 and 2020 amounted to $1,436,052 and $985,709, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. There was no remaining unamortized discount balance for these notes as of December 31, 2021. A summary of the activity in the Company's convertible notes payable is provided below:
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Notes Payable, Related Parties |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable, Related Parties | Notes Payable, Related Parties At December 31, 2021 and 2020, notes payable due to related parties consisted of the following:
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Convertible Notes Payable |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable | Debt (As Restated) In May 2018, APF secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF’s outstanding accounts receivable. In February 2019 the Company moved the Crestmark line of credit to FSW with a variable interest and collateralized by APF’s accounts receivable. In January 2020 the Company received a default notice from Crestmark regarding noncompliance with certain loan covenants, including but not limited to, QCA’s failure to maintain a tangible net worth as contained in the loan agreement. QCA’s credit line with Crestmark totaled $2,800,000 and was restructured from an ABL line of credit to a ledger line of credit. In addition, a minimum interest of 7.75% interest was imposed; an exit fee of 1% through January 31, 2021 and the financial covenant replaced with a requirement for QCA to maintain a free cash flow of at least $1.00 beginning with QCA’s financial statements as of January 31, 2020. As of December 31, 2021, the outstanding balance was paid off and the line of credit was closed. On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES. The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020. The remaining principal and accrued interest is due on the 3-year anniversary. The Company is not current on its payments on the note. In August 2020, the company filed a lawsuit against Alan Martin regarding his note payable . The balance as of December 31, 2021, was $2,857,500 and accrued interest of $1,170,861 which is reflective in the current liabilities. The default rate is 10% and the daily late charge is $575. On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 (“Secured APF Notes”) as part of the consideration for the purchase of APF. The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF. The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding. During the year ended December 31, 2020, the Company amended both of the notes. The noteholders forgave all $450,000 of the $450,000 convertible notes (See Note 7) in exchange for an increase in their notes payable of $67,617. The principal amount of their notes payable was amended to $1,689,000 at 0% interest with weekly payments of $4,086 and the balance to be paid on May 27, 2022. The Company recognized a gain on settlement of debt of $382,384 related to these transactions. As of December 31, 2021, the balance of these notes were paid in full. On May 3, 2018, the Company entered into an equipment note with a lender for total borrowings of $630,750, which is secured by the equipment of APF. The note bears interest at 11.75% per annum and is payable in weekly payments of $3,795 commencing on the loan date through May 4, 2022. As of December 31, 2021, the balance of this note has been paid in full. In connection with the Morris acquisition in January 2019, the Company issued three subordinated secured promissory notes for an aggregate of $3,100,000. The notes bear interest at 4.25% per annum, require monthly payment for the first 35 months of $31,755 with any remaining principal and accrued interest due on the 3 year-anniversary. The Company also issued three supplemental notes payable for an aggregate of $350,000. The notes bear interest at 4.25% per annum and are due on the 1-year anniversary. In May 2020, the Company amended the three supplemental notes of $116,667 each with the sellers of Morris. The notes were due January 1, 2020. Each of the new notes as of the date of amendment had accrued interest of $2,703. This was added to the note resulting in the principal amount of each of the new notes equaling to $119,370. The amendment required an initial payment of $30,000 for each note, which was made on May 23, 2020, and 8 monthly installments of $10,000 with one final payment of $13,882 through January 2021. The amended notes have an interest rate of 6%. The Company is current on all of the respective subordinated notes and the supplemental notes have been paid in full as of the date of this report. As of December 31, 2021, the outstanding balance on these notes was $2,374,062. In connection with the Deluxe acquisition in November 2019, the Company issued two subordinated secured promissory notes to the seller. The first note for $1,900,000 bears interest at 4.25% per annum, require monthly payment for the first 35 months of $19,463 with any remaining principal and accrued interest due on the 3 year-anniversary. The second note for $496,343 bears interest at 8.75% and is due in January 2020. In January 2020, the Company entered into a debt conversion agreement with the seller which fully settled the second note. On April 8, 2021, the Company entered into a settlement agreement with the seller wherein the outstanding balance on the first note amounting to $1,883,418 including accrued interest and net other costs was settled in full through a payment of approximately $887,000 and the exchange of 1,617,067 shares of the Company’s Class C common shares held by the seller for the same number of shares of the Company’s Class A common stock. The Company recognized a gain on extinguishment of debt totaling $803,079 during the year ended December 31, 2021 as a result of the settlement of the note. In connection with the Excel acquisition in February 2020, the Company issued a subordinated secured promissory note to the seller. The note for $2,300,000 bears interest at 4.25% per annum, requires monthly interest only payments for 48 months and is due February 2024. The ending balance for this loan as of December 31, 2021 was $2,062,318. In November 2019, in connection with the termination of the lease for the San Diego building, the Company issued the landlord a note payable. The note is for $2,740,000, bears interest at 7% with monthly payments starting at $15,984 and is due in November 2034. As of December 31, 2021, the outstanding balance of the term note was paid in full. In January 2020, the Company entered into a $200,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $3,333 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full. In connection with the Excel acquisition, the Company entered into a $425,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $7,083 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full . In October 2019 Morris entered into an equipment finance note for $107,997 with an interest rate of 9.4% for 48 monthly payments with Bryn Mawr Equipment Finance Inc. The Company was current on this note as of December 31, 2021. The Company issued a $48,000 note in January 2020 to a private investor with an interest rate of 15% with a due date of 1 year. As of December 31, 2021, the balance of this note has been paid in full. In connection with the RCA acquisition in December 2021, the Company issued two subordinated secured promissory notes for an aggregate of $2,000,000. The notes bear interest at 3.75% per annum, require monthly payment of $19,590 for a term of 120 months. As of December 31, 2021, the Company was current on all of the respective subordinated notes. In April and May 2020, the Company received seven loans under the Paycheck Protection Program of the U.S. Coronavirus Aid, Relief and Economic Security (“CARES”) Act totaling $3,896,108. During the year ended December 31, 2021, the Company also acquired four loans with a book value totaling $1,799,725 due to acquisitions, and fair value of $65,000 at the time of acquisition. The loans have terms of 24 months and accrue interest at 1% per annum. The Company paid $88,160 for the PPP loan assumed in connection with the IA acquisition, and the remaining $356,690 was forgiven. The remaining ten loans were forgiven as provided by the CARES Act during the year ended December 31, 2021. The Company recognized a gain on forgiveness of debt of $3,896,108. The Company also assumed an Economic Injury Disaster Loan (EIDL) in connection with the Vayu acquisition, which was still outstanding as of December 31, 2021. During 2021, the Company entered into four revolving lines of credit totaling $18.3 million and two capital expenditures lines of credit totaling $0.5 million. The revolving lines of credit used as of December 31, 2021, totaled $10.1 million with an interest rate ranging from prime plus 2.50% - 4.25% and a term of to two years. As of December 31, 2021, the Company had $6.4 million in additional funds available to borrow. On August 27, 2021 the Company entered into $4.7 million agreement for the purchase of a building located at 4740 Cleveland in Ft. Myers, Florida. The loan bears interest at a rate of 3.95% per annum for a term of 10 years and requires monthly payments of $24,722. The loan is secured by the building and a guarantee by the Company. As of the December 31, 2021, the Company was current with this obligation. The outstanding balances for the loans as of December 31, 2021 and 2020 were as follows:
Future scheduled maturities of outstanding debt are as follows:
At December 31, 2021 and 2020, convertible notes payable consisted of the following:
(A) In May and June 2020 the Company amended the following seller notes: –The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020 was amended to extend the maturity date to May 4, 2027 at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2021 and 2020 was $0 and $735,329, respectively. –The convertible note with Mr. Hargreaves with a $551,001 balance as of June 5, 2020 was amended to extend the maturity date to June 5, 2026 at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2021 and 2021 was $0 and $556,135, respectively. A loss on extinguishment of debt of $192,272 was recognized on these transactions. The discounts on convertible notes payable arise from stock issued with notes payable, and beneficial conversion features. During the years ended December 31, 2021 and 2020, the Company issued convertible notes with a fixed conversion price. The beneficial conversion feature related to these convertible notes that have been recorded as a discount on the convertible notes and as a component of equity was $92,428 and $1,482,500 for the years ended December 31, 2021, and 2020, respectively. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the years ended December 31, 2021 and 2020 amounted to $1,436,052 and $985,709, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. There was no remaining unamortized discount balance for these notes as of December 31, 2021. A summary of the activity in the Company's convertible notes payable is provided below:
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Preferred Stock Subject to Redemption (As Restated) |
12 Months Ended |
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Dec. 31, 2021 | |
Equity [Abstract] | |
Preferred Stock Subject to Redemption (As Restated) | Preferred Stock Subject to Redemption (As Restated) Series C Preferred Stock The Company designated 2,028,572 shares of Series C Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series C Preferred Stock. If dividends are declared on the Company’s Class A, Class B, or Class C Common Stock, the holders of the Series C Preferred Stock will participate in such dividends on a per share basis, pari passu with the classes of Common Stock. Voting Rights - The Series C Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series C Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series C Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series C Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing. Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the holders of the Series C Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series C Preferred Stock. Conversion - The Series C Preferred Stock shall be convertible automatically into shares of the Company's Class A Common Stock (the “Automatic Conversion”) as follows: •Each share of Series C Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion Date”). •The number of shares of the Company’s Class A Common Stock into which the Series C Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series C Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price (“VWAP”) of the Trading Days prior to the Automatic Conversion Date. “VWAP” shall be defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the Trading Days prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange or trading medium. Restrictions on Resales of Class A Common Stock - The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 120-day period. Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series C Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days’ notice, at a redemption price per share of Series C Preferred Stock then issued and outstanding (the “Corporation Redemption Price”), equal to the stated value of $3.50 per share. As a result of this redemption, the fair value of the Series C shares is classified as a liability on the consolidated balance sheet. During the year ended December 31, 2020, the Company issued 1,714,286 shares of Series C Preferred Stock in connection with the acquisition of assets of IA that were valued at $5,848,013. The difference between the fair value and the redemption amount is accreted over a period of 24 months or upon conversion from Series C Preferred Stock to Class A Common stock. After 24 months the Series C Preferred Stock is automatically converted into Class A Common Stock. As of December 31, 2021, 1,704,137 of these shares were converted to Class A common stock. Prior to conversion the Company recognized accretion to interest expense in the amount of $69,661. As of December 31, 2021 and 2020, 10,149 and 1,714,286 shares of Series C Preferred Stock were outstanding, respectively. Series D Preferred Stock The Company designated 1,628,572 shares of Series D Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series D Preferred Stock. If dividends are declared on the Company’s Class A, Class B, or Class C Common Stock, the holders of the Series D Preferred Stock will participate in such dividends on a per share basis, pari passu with the Classes of Common Stock. Voting Rights - The Series D Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series D Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series D Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing. Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the holders of the Series D Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series D Preferred Stock. Conversion - The Series D Preferred Stock shall be convertible automatically into shares of the Company's Class A Common Stock (the “Automatic Conversion”) as follows: •Each share of Series D Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion Date”). •The number of shares of the Company’s Class A Common Stock into which the Series D Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series D Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price (“VWAP”) of the Trading Days prior to the Automatic Conversion Date. “VWAP” shall be defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the Trading Days prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange or trading medium. Restrictions on Resales of Class A Common Stock - The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 90-day period. Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series D Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days’ notice, at a redemption price per share of Series D Preferred Stock then issued and outstanding (the “Corporation Redemption Price”), equal to the stated value of $3.50 per share. As a result of this redemption, the fair value of the Series D shares is classified as a liability on the consolidated balance sheet. Registration Rights -The shares issued on conversion of the Series D Preferred Stock have piggyback registration rights beginning on that date which his six months after the date on which the Company’s Class A Common Stock trades on a national securities exchange, and are subject to standard underwriter holdback limitations During the year ended December 31, 2021, the Company issued 1,432,244 shares of Series D Preferred Stock in connection with the acquisition of assets of Vayu that were valued at $6,653,309. The difference between the fair value and the redemption amount is accreted over a period of 24 months or upon conversion from Series D Preferred Stock to Class A Common stock. After 24 months the Series D Preferred Stock is automatically converted into Class A Common Stock. As of December 31, 2021, 1,353,570 of these shares were converted to Class A common stock. Prior to conversion the Company recognized accretion to interest income in the amount of $615,170. As of December 31, 2021 and 2020, 78,674 and 0 shares of Series D Preferred Stock were outstanding, respectively.
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Stockholders' Equity (As Restated) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (As Restated) | Stockholders' Equity (As Restated) Preferred Stock The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred stock. Series B Preferred Stock The Company is authorized to issue 100 shares of Series B preferred stock. The Series B Preferred Stock has a $1.00 stated value and does not accrue dividends. The Series B has the following voting rights: •If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have that number of votes (identical in every other respect to the voting rights of the holders of all classes of Common Stock or series of preferred stock entitled to vote at any regular or special meeting of stockholders) equal to two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock. •If more than one share of Series B Preferred Stock is issued and outstanding at any time, then each individual share of Series B Preferred Stock shall have the voting rights equal to: Two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock divided by the number of shares of Series B Preferred Stock issued and outstanding at the time of voting. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the Holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company for each share of Series B Preferred Stock then held by the Holder an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable before any distribution or payment shall be made to the holders of any Junior Securities. The Series B Preferred Stock shall be convertible into shares of the Company's Class A Common Stock only as follows: •In the event that the Holder of Series B Preferred Stock ceases to be a director of the Company, upon such director's resignation or removal from the board by any means, the shares of Series B Preferred Stock held by such resigning or removed director shall convert automatically into that same number of shares of Class A Common Stock (i.e. on a one-for-one share basis). •Shares of Series B Preferred Stock converted into Class A Common Stock, canceled, or redeemed, shall be canceled and shall have the status of authorized but unissued shares of undesignated preferred stock. As of December 31, 2021 and 2020, 5 and 5 shares of Series B Preferred Stock were outstanding and were issued to officers for services rendered. Common Stock Pursuant to the Amended and Restated Certificate of Incorporation, the Company is authorized to issue three classes of common stock: Class A common stock, which has one vote per share, Class B common stock, which has ten votes per share and Class C common stock, which has five votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. Any holder of Class C common stock may convert 25% of his or her shares at any time after the 3rd to 6th anniversary into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. The Company had the following transactions in its common stock during the year ended December 31, 2021: •On February 11, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors to purchase 8,333,333 shares of the Company’s Class A common stock for aggregate gross proceeds of approximately $50 million. A.G.P./Alliance Global Partners served as the placement agent and received a cash fee of 7% of the aggregate gross proceeds and warrants to purchase shares of the Company’s Class A Common Stock equal to 5% of the number of shares sold in the offering with an exercise price of $6.60 per share and are not exercisable until August 16, 2021. Net proceeds from the sale of shares amounted to approximately $45 million. •In February 2021, the Company issued 1,524,064 shares of Class A common stock to an investor for cash for total proceeds of approximately $9.3 million. •During the year ended December 31, 2021, the Company issued 7,384,018 shares of Class A common stock for the conversion of total debt and accrued liabilities totaling $1,886,896. •On March 17, 2021, the Company repurchased 45,000 shares of Class C common stock for $185,850. •On May 5, 2021, the Company issued 281,223 shares of Class A common stock that were valued at $1,102,394 in connection with the acquisition of TDI. •On May 10, 2021, the Company issued 361,787 shares of Class A common stock that were valued at $1,432,677 in connection with the acquisition of Alt Labs. •On April 30, 2021, the Company issued 1,617,067 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class C common stock by the holder of the Class C common stock. •On May 17, 2021, the Company issued 350,000 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class B common stock by the holder of the Class B common stock. •On November 15, 2021 the Company issued 125,000 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class B common stock by the holder of the Class B common stock . •On October 20, 2021, the Company issued 888,881 shares of Class A common stock that were valued at $3,617,746 in connection with the acquisition of Identified Technology. •On November 9, 2021, the Company issued 2,409,248 shares of Class A common stock for no additional consideration upon conversion of 1,704,137 shares of Series D Preferred Stock and 1,353,570 shares of Series C Preferred Stock. •On November 26, 2021, the Company closed on a registered direct offering where it sold to certain investors a total of 8,571,430 shares of the Company’s Class A common stock and 4,285,715 warrant to purchase shares of Class A common stock for net proceeds of $22,189,152. •On November 29, 2021, the Company issued 1,803,279 shares of Class A common stock that were valued at $4,562,996 in connection with the ElecJet acquisition. •On November 29, 2021, the Company granted 983,636 contingent shares of Class A common stock that were valued at $2,488,599 in connection with the ElecJet acquisition. These contingent shares represent equity compensation for post-acquisition services and are accounted for under ASC 718. Management determined the performance conditions were deemed not probable and as such no expense was recognized on these awards for the year ended December 31, 2021. •On December 9, 2021, in connection with the acquisition of DTI Services Limited Liability Company, the Company issued 1,587,301 shares of its Class A Common Stock that were valued at $3,682,539. •On December 20, 2021, the Company issued 100,000 shares of Class A common stock in connection with the HWT legal proceedings. •On December 29, 2021, the Company issued 99,018 shares of Class A common stock to management in connection with the acquisition of DTI Services Limited Liability Company. The Company had the following transactions in its common stock during the year ended December 31, 2020: •issued 11,513,935 shares of Class A common stock for cash for total proceeds of $674,469; •issued 12,861,995 shares of Class A common stock for the conversion of convertible debt and accrued interest of $1,929,300; •issued 1,617,067 shares of Class A common stock and 1,617,067 shares of Class C common stock to the Seller of Deluxe for the settlement of debt of $485,120; the fair value of the stock was $330,528. The Company recognized a gain on the settlement of debt of $154,592; •issued 300,000 shares of Class A common stock with a fair value of $44,700 to a noteholder as penalty interest; •issued 4,023,088 shares of Class B common stock to settle unpaid salaries of $603,463; and •issued 2,590,000 shares of Class C common stock for compensation valued at $240,093. The value was determined based on the market value of the Company common stock on the grant date. Stock Options The Company has issued stock options to purchase shares of the Company’s Class A common stock issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date. The following summarizes the stock option activity for the years ended December 31, 2021 and 2020:
The following table summarizes information about options outstanding and exercisable as of December 31, 2021:
During the years ended December 31, 2021 and 2020, stock option expense amounted to $36,538 and $78,652, respectively. Unrecognized stock option expense as of December 31, 2021 amounted to $7,210, which will be recognized over a period extending through December 2022. Warrants The following summarizes the warrant activity for the year ended December 31, 2021:
The following table summarizes information about warrants outstanding and exercisable as of December 31, 2021:
During the year ended December 31, 2021, the Company issued 416,667 warrants to a placement agent in connection with sale of its common stock The warrants have an exercise price of $6.60, are exercisable as of August 16, 2021 and expire on February 16, 2025. The Company issued another 428,571 warrants to a placement agent in connection with the sale of its common stock. The warrants have an exercise price of $3.08, are exercisable as of May 26,2022 and expire November 22, 2026. The Company issued another 396,825 warrants in connection to the RCA acquisition. The warrants have an exercise price of $2.52, are exercisable as of December 9, 2021 and expire December 9, 2024. The fair value of the 416,667, 428,571, and the 396,825 warrants, issued to the placement agent and RCA sellers during the year ended December 31, 2021, are $2,498,637, $902,414, and $668,863 respectively and was determined using the Black-Scholes option pricing model with the following assumptions:
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Business Combinations (As Restated) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations (As Restated) | Business Combinations (As Restated) Excel On February 21, 2020, the Company purchased Excel. This acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.
The purchase price was paid as follows:
Simultaneous with the purchase of Excel, a building, owned by Excel prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years. The proceeds from the sale-leaseback of $2,000,000 were used to fund the cash consideration to the seller. The building and the lease is being treated as a financing lease (see Note 4). Impossible Aerospace On November 13, 2020, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 1, Inc. a Delaware corporation (“Merger Sub”), entered into a merger agreement (the “Agreement”) with IA pursuant to which IA merged with and into Merger Sub. The IA acquisition closed on December 15, 2020, and the Company added IA to the Company’s aerospace services portfolio of companies. Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of IA is in fact an asset purchase. Of the consideration given for the IA purchase more than 95% is concentrated in a single asset or a group of assets in Intellectual Property. And as such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was fair value of the preferred series C stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed of were as follows at the purchase date:
The purchase price was paid as follows:
Vayu (US) Effective February 8, 2021, the Company purchased the assets of Vayu. Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of Vayu was in fact an asset purchase. Of the consideration given for the Vayu acquisition more than 95% was concentrated in a single asset or a group of assets in Intellectual Property. As such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the fair value of the series D preferred stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed were as follows at the acquisition date:
The purchase price was paid as follows:
TDI On May 5, 2021, the Company closed on the acquisition of TDI. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.
The purchase price was paid as follows:
Alt Labs On May 10, 2021, the Company closed on the acquisition of Alt Labs. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.
The purchase price was paid as follows:
On May 4, 2021, the Company also entered into an agreement to acquire the 100% membership interest in 4740 Cleveland LLC (“Cleveland”), a Florida limited liability company that is the owner of the building currently being leased by Alt Labs, for a total purchase price of $7,000,000. In connection with this agreement, the Company placed in escrow the amount of $1,400,000 which will be applied to the purchase price upon closing. The Company closed on the purchase of the building in August 2021. Identified Technologies On October 20, 2021, the Company acquired Identified Technologies. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.
The purchase price was paid as follows:
ElectJet On November 29, 2021, the Company acquired ElecJet. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below.
The purchase price was paid as follows:
DTI Services (doing business as RCA Commercial Electronics) On December 13, 2021, the Company closed the acquisition of RCA. The acquisition was considered an acquisition of a business under ASC 805. The business combination is not yet complete and the amounts assigned to assets acquired and liabilities assumed are provisional. Therefore, this may result in future adjustments to the provisional amounts as new information is obtained about fact and circumstances that existed at the acquisition date. A summary of the purchase price allocation at fair value is presented below:
The purchase price was paid as follows:
The following are the unaudited pro forma results of operations for the years ended December 31, 2021 and 2020, as if Excel, IA, Vayu, TDI, Alt Labs, Identified Technology, Electjet, and RCA had been acquired on January 1, 2020. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated.
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Equity Investments | Equity Investments AmplifeiIntl LLC On September 15, 2021, A4 Manufacturing, Inc. entered into a Membership Interest Purchase Agreement acquiring approximately a 9% membership interest in AmplifeiIntl LLC (also doing business as Happinss) (“Amplifei”). The membership interest is non-voting and the Company does not have the ability to exercise significant influence over operating and financial activities. The equity investment is being valued using cost as there is no market for the membership units, and accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, the Company determined there was an impairment on this investment and took a loss against earnings of $1,350,000. The membership interest was paid for as follows:
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes (As Restated) | Income Taxes (As Restated) The components of the Company's income tax provision are as follows:
A reconciliation of the provision for income taxes with the expected provision for income taxes computed by applying the federal statutory income tax rate of 21% to the net loss before provision for income taxes is as follows:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's net deferred income taxes are as follows:
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted into law. The legislation contains a number of economic relief provisions in response to the COVID-19 pandemic, including the following tax related provisions; (1) ability to carryback tax losses five years for losses generated in tax year 2018 through 2020, (2) the ability for Corporations to elect to utilize the 2019 Adjusted Taxable Income and 50% limitation for Internal Revenue Code (“IRC”) Section 163(j) purposes, (3) a technical correction to the definition of Qualified Leasehold Improvement Property, and (4) the ability to defer employer payroll taxes for the period of March 27 to December 31, 2020. As of December 31, 2021, the provisions reflected in the Company’s income tax provision include the election to apply the 50% limitation for IRC Section 163(j) purposes. All other provisions enacted do not materially impact the Company. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the lack of sustained profitability in recent years. Such objective evidence limits the ability to consider other subjective evidence, such as the Company's projections for future growth. On the basis of this evaluation, as of December 31, 2021 and 2020, a valuation allowance of $9.9 million and $6.2 million, respectively, has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted based on changes in objective and subjective evidence in future years. If and when the Company determines the valuation allowance should be released (i.e., reduced), the adjustment would result in a tax benefit reported in that period’s consolidated statement of operations, the effect of which would be an increase in reported net income. The amount of any such tax benefit associated with release of the Company's valuation allowance in a particular reporting period may be material. The Company has gross federal and state net operating loss carryforwards of $63.4 million and $13.8 million , respectively, at December 31, 2021. Federal net operating loss carryforwards will begin to expire in 2034 while the state net operating losses will begin to expire in 2024. The Company has a gross interest limitation carryforward of $2.4 million under Section 163(j) for federal tax purposes at December 31, 2021. The Section 163(j) interest may be carried forward indefinitely. Under IRC Section 382 ("Section 382"), the annual utilization of the Company's federal net operating loss carryforwards and federal IRC Section 163(j) interest expense carryforward may be limited. The Company will be completing a Section 382 analysis to determine if any ownership shifts have occurred. With exceptions due to the generation and utilization of net operating losses or credits, as of December 31, 2021, Alpine 4 Holdings and Subsidiaries are no longer subject to federal or state examinations by taxing authorities for tax years before 2018 and 2017, respectively. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. Although the Company believes that it has appropriately reserved for its uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different than expectations. The Company will adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate, the closing of a statutory audit period or changes in applicable tax law. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences would impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to the reserves that are considered appropriate, as well as related net interest. The Company's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 31, 2021 or 2020 and has not recognized interest or penalties during the years ended December 31, 2021 and 2020, since there was no reduction of income taxes paid due to uncertain tax positions. The following table summarizes the activity related to the Company's gross unrecognized tax liabilities:
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industry Segments | Industry Segments (As Restated)The Company discloses segment information that is consistent with the way in which management operates and views its business. Effective during the quarter ended September 30, 2021, the Company has reduced its reportable segments to five operating segments as represented by the Company’s four silos: A4 Construction Services, Inc.; A4 Manufacturing, Inc.; A4 Aerospace Corporation; A4 Technologies, Inc; and A4 Defense Systems, Inc. The Company’s reportable segments for the years ended December 31, 2021 and 2020:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Licensing Agreement DTI has entered into licensing agreements with RCA Trademark Management for the licensing rights to the respective trademarks in the United States of America and Canada. The RCA licensing agreement was amended with Technicolor as licensor and expires December 31, 2024. DTI agrees to pay a royalty fee of 2.50% on net sales of the licensed products with a minimum annual payment of $420,000 for the years ended 2020 and 2021, $440,000 for the year ended 2022, and $460,000 for the year ended 2023, and $480,000 for the year ended 2024. Warranty Service Agreement DTI entered into a warranty service agreement to provide certain warranty services for a lighting supplier through December 31, 2024, except for one class of customer through 2030. In exchange for these services DTI receives annual payments as follows:
Royalty Agreement On November 28, 2021, the Company entered into a Royalty Agreement with the sellers of ElecJet. Upon closing the Company desires to build its initial factory (“Factory”) to manufacture batteries in the territory of the United States. The Company agrees to pay the sellers 1.5% of net sales for batteries produced by the Factory. Royalty payments shall continue to be paid for a period of ten years from the starting date, or until the total of the royalty payments equals $50 million, whichever occurs first. Legal Proceedings From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. As of the date of this Report, the Company was not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows, except as set forth below. In June 2020, the Company’s subsidiary Excel Fabrication, LLC filed a lawsuit against Fusion Mechanical, LLC, in the Fifth Judicial District Court, State of Idaho (Case Number CV42-20-2246). The Company claimed tortious interference and trade secret violations by the defendant. The defendant filed a motion to dismiss, which was denied by the Court. The defendant filed a second motion to dismiss and the Company filed a memorandum in response to the second motion to dismiss, for which a hearing was held on May 10, 2021. On June 11, 2021, the court issued a decision narrowing the claims of the plaintiffs to three items, breach of contract, good faith and fair dealings, and intentional interference for economic advantage. These were the Company’s three main points of contention. As of the date of this Report, discovery was proceeding. The Company intends to pursue vigorously its claims. In August 2020, the Company filed a lawsuit, in the United States District Court, District of Arizona (Case No.2:20-cv-01679-DJH), against Alan Martin, the seller of Horizon Well Testing LLC (“HWT”) dba Venture West Energy Services, LLC. The Company brought claims for breach of contract, including but not limited to breaches of the seller’s representations and warranties in the purchase agreement in connection with the acquisition of HWT. The defendant answered and counterclaimed, claiming breach by the Company of its obligation to issue a promissory note (to be issued in connection with the acquisition of HWT). As of the date of this Report, the discovery period had ended but no trial date had been scheduled. A summary judgement motion was filed on December 22, 2021, which was pending as of the date of this Report. In May 2021, the Company and several shareholders filed a lawsuit, in the United States District Court for the District of Arizona (Case number 2:21-cv-00886-MTL) against Fin Capital LLC ("Fin Cap"), and Grizzly Research LLC ("Grizzly") alleging securities fraud, tortious interference with business expectancy and libel and slander for disseminating false and misleading statements about Alpine 4 and its employees to manipulate the stock price and further their own financial interests.
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Subsequent Events |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In March 2022, the Company secured another $4.2 million in lines of credit for Alt Labs. The line of credit accrues interest at a rate of 2.5% above the greater of the prime rate or 3.25%. The line of credit matures on March 8, 2024. This line is secured by substantially all assets of the Alt Labs. In January 2022, the Company issued 72,152 shares of Class A common stock for no additional consideration upon conversion of 10,149 shares of Series C Preferred Stock and 78,674 shares of Series D Preferred Stock. In March 2022, the Company issued 39,386 shares of Class A Common Stock to management in connection with the acquisition of DTI Services Limited Liability Company.
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Summary of Significant Accounting Policies (As Restated) (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2021 and 2020. Significant intercompany balances and transactions have been eliminated. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of estimates | The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of long-lived assets, reserves for accounts receivable and inventory, valuation allowance for deferred tax assets, fair values assigned to intangible assets acquired, and impairment of long-lived assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification | Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising | Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash | Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory for all subsidiaries is valued at weighted average. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows:
Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset.
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Impairment of Long-Lived Assets | The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2021 and 2020, the reporting units with goodwill were QCA, Morris, Excel, Alt Labs, TDI, Identified Technology, ElecJet, and RCA.The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | The Company accounts for its leases under ASC 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes payable and lines of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates.
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Equity Investments | The Company’s equity investments consist of investment in one private company in which the Company does not have the ability to exercise significant influence over their operating and financial activities. This investment is carried at cost as there is no market for the common stock and LLC membership units, accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, in accordance with the ASC 321 guidelines, the Company recognized a lost on impairment for the entire value of $1,350,000. The Company has adopted the provisions of ASU 2016-01 and values the investment using the measurement alternative, defined as costs, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
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Research and Development | The Company focuses on quality control and development of new products and the improvement of existing products. All costs related to research and development activities are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. Revenue is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: •executed contracts with the Company’s customers that it believes are legally enforceable; •identification of performance obligations in the respective contract; •determination of the transaction price for each performance obligation in the respective contract; •allocation the transaction price to each performance obligation; and •recognition of revenue only when the Company satisfies each performance obligation. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. QCA and Alt Labs QCA and Alt Labs are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. ElecJet ElecJet is a research and development of battery technology and development/sales of battery consumer products and recognizes revenue when the products have been shipped to the customer. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Identified Technologies IDT provides drone software and data for industrial job sites and recognizes revenue when the service has been provided to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial Direct Tech Sales RCA is engaged in the design, manufacture and wholesale distribution of commercial LED lighting and electronics such as televisions, mounting solutions, projectors and screens, audio equipment, digital signage, mobile audio and video systems, and all wire and connecting products throughout the United States of America. RCA recognizes revenue when the products have been shipped to the customer which is also when title transfers. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Morris, Deluxe, Excel and Thermal Dynamics For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Contract Assets and Contract Liabilities The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets. Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. Contract Retentions As of December 31, 2021 and 2020, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. The following table presents our revenues disaggregated by type:
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Earnings (loss) per share | Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | The Company follows the guidelines in ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executives, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes | The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes.
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Related Party Disclosure | ASC 850, Related Party Disclosures, requires companies to include in their financial statements disclosures of material related party transactions. The Company discloses all material related party transactions. Related parties are defined to include any principal owner, director or executive officer of the Company and any immediate family members of a principal owner, director or executive officer. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.
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Restatement of Previously Issued Financial Statements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | The following tables summarize the effects of the restatements on each financial statement line item as of the dates and for the periods indicated. The effects of the restatement are incorporated within Notes 1, 3, 5, 8, 9, 10, 12 and 13. Consolidated Balance Sheets as of December 31,
Consolidated Statements of Operations for the Year Ended December 31,
Consolidated Statements of Cash Flows for the Year Ended December 31,
The following tables present the impact of the restatements, to the applicable line items in the unaudited consolidated balance sheets, unaudited consolidated statements of operations, and unaudited consolidated statements of cash flow to the Company’s previously reported consolidated financial statements for the above mentioned periods: Consolidated Balance Sheets as of,
Consolidated Statement of Operations for the Three Months ended March 31, 2021
Consolidated Statements of Operations for the Three and Six Months ended June 30, 2021
Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2021
Consolidated Statements of Cash Flows for the Three, Six, and Nine Months Ended March 30, 2021, June 30, 2021, and September 30, 2021
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Summary of Significant Accounting Policies (As Restated) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following table sets forth a reconciliation of cash, and restricted cash reported in the consolidated statements of cash flows that agrees to the total of those amounts presented in the consolidated statements of cash flows.
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Schedule of Restrictions on Cash and Cash Equivalents | The following table sets forth a reconciliation of cash, and restricted cash reported in the consolidated statements of cash flows that agrees to the total of those amounts presented in the consolidated statements of cash flows.
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Schedule of Inventory | Inventory, net at December 31, 2021 and 2020 consists of:
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Schedule of Property and Equipment | Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows:
Property and equipment consisted of the following as of December 31, 2021 and 2020:
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Schedule of Finite-Lived Intangible Assets | The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows:
Intangible assets consisted of the following as of December 31, 2021 and 2020:
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Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following as of December 31, 2021 and 2020:
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Schedule of Expected Amortization Expense of Intangible Assets | Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows:
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Schedule of Other Long-Term Assets | Other long-term assets consisted of the following as of December 31, 2021 and 2020:
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Disaggregation of Revenue | The following table presents our revenues disaggregated by type:
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Schedule of Computation of Basic and Diluted EPS | The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2021 and 2020:
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Leases (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Lease, Liability, Fiscal Year Maturity | As of December 31, 2021, the future minimum finance and operating lease payments are as follows:
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Lessee, Operating Lease, Liability, Maturity | As of December 31, 2021, the future minimum finance and operating lease payments are as follows:
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Schedule of Right of Use Assets and Lease Liabilities | The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of December 31, 2021:
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable | The outstanding balances for the loans as of December 31, 2021 and 2020 were as follows:
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Future Scheduled Maturities of Outstanding Notes Payable to Third Parties | Future scheduled maturities of outstanding debt are as follows:
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Notes Payable, Related Parties (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | At December 31, 2021 and 2020, notes payable due to related parties consisted of the following:
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Convertible Notes Payable (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Convertible Notes Payable | At December 31, 2021 and 2020, convertible notes payable consisted of the following:
(A) In May and June 2020 the Company amended the following seller notes: –The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020 was amended to extend the maturity date to May 4, 2027 at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2021 and 2020 was $0 and $735,329, respectively. –The convertible note with Mr. Hargreaves with a $551,001 balance as of June 5, 2020 was amended to extend the maturity date to June 5, 2026 at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2021 and 2021 was $0 and $556,135, respectively. A loss on extinguishment of debt of $192,272 was recognized on these transactions.
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Schedule of Activity of Convertible Notes Payable | A summary of the activity in the Company's convertible notes payable is provided below:
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Stockholders' Equity (As Restated) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option, Activity | The following summarizes the stock option activity for the years ended December 31, 2021 and 2020:
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Share-based Payment Arrangement, Option, Exercise Price Range | The following table summarizes information about options outstanding and exercisable as of December 31, 2021:
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Schedule of Stockholders' Equity Note, Warrants or Rights | The following summarizes the warrant activity for the year ended December 31, 2021:
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Schedule of Warrants Outstanding and Exercisable | The following table summarizes information about warrants outstanding and exercisable as of December 31, 2021:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the 416,667, 428,571, and the 396,825 warrants, issued to the placement agent and RCA sellers during the year ended December 31, 2021, are $2,498,637, $902,414, and $668,863 respectively and was determined using the Black-Scholes option pricing model with the following assumptions:
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Business Combinations (As Restated) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | A summary of the purchase price allocation at fair value is presented below.
The purchase price was paid as follows:
The purchase price was paid as follows:
The purchase price was paid as follows:
The purchase price was paid as follows:
The purchase price was paid as follows:
The purchase price was paid as follows:
The purchase price was paid as follows:
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Asset Acquisition | The assets acquired and liabilities assumed of were as follows at the purchase date:
The purchase price was paid as follows:
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Business And Asset Acquisition, Pro Forma Information | The following are the unaudited pro forma results of operations for the years ended December 31, 2021 and 2020, as if Excel, IA, Vayu, TDI, Alt Labs, Identified Technology, Electjet, and RCA had been acquired on January 1, 2020. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated.
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Equity Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||
Equity Securities without Readily Determinable Fair Value | The membership interest was paid for as follows:
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Income Taxes (As Restated) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | The components of the Company's income tax provision are as follows:
A reconciliation of the provision for income taxes with the expected provision for income taxes computed by applying the federal statutory income tax rate of 21% to the net loss before provision for income taxes is as follows:
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Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company's net deferred income taxes are as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to the Company's gross unrecognized tax liabilities:
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Industry Segments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The Company’s reportable segments for the years ended December 31, 2021 and 2020:
|
Commitment and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Annual Payments for Warranty Services | DTI entered into a warranty service agreement to provide certain warranty services for a lighting supplier through December 31, 2024, except for one class of customer through 2030. In exchange for these services DTI receives annual payments as follows:
|
Restatement of Previously Issued Financial Statements - Balance Sheet (Details) - USD ($) |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|---|
ASSETS | ||||||
Inventory, net | $ 24,419,654 | $ 2,666,602 | ||||
Total current assets | 42,844,307 | 10,623,776 | ||||
Property and equipment, net | 28,101,471 | $ 27,326,607 | $ 20,734,232 | $ 19,100,699 | 19,299,286 | |
Intangible assets, net | 39,180,664 | 30,782,772 | 31,221,823 | 16,371,611 | 8,597,075 | |
Goodwill | 22,680,084 | 5,016,662 | 5,866,454 | 2,084,982 | 2,084,982 | |
TOTAL ASSETS | 134,623,850 | 98,048,658 | 95,814,954 | 86,440,383 | 41,588,174 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Series C and Series D preferred stock subject to redemption | 400,092 | 12,011,499 | 12,197,558 | 12,383,616 | 5,848,013 | |
Deferred tax liability | 1,861,165 | 2,242,832 | 2,242,832 | 2,242,832 | 880,165 | |
TOTAL LIABILITIES | 63,133,806 | 61,184,138 | 61,130,397 | 52,777,234 | 55,822,454 | |
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 0 | 0 | 0 | |||
Additional paid-in capital | 130,348,267 | 83,805,812 | 83,443,846 | 79,481,817 | 25,144,136 | |
Accumulated deficit | (58,876,514) | (46,958,038) | (48,775,897) | (45,834,678) | (39,393,376) | |
Total stockholders' equity (deficit) | 71,490,044 | 36,864,520 | 34,684,557 | 33,663,149 | (14,234,280) | $ (11,970,142) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 134,623,850 | 98,048,658 | 95,814,954 | 86,440,383 | 41,588,174 | |
Series C Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 0 | 0 | ||||
Series D Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 0 | 0 | ||||
As Previously Reported | ||||||
ASSETS | ||||||
Inventory, net | 25,981,905 | 2,666,602 | ||||
Total current assets | 44,406,558 | 10,623,776 | ||||
Property and equipment, net | 28,096,562 | 27,320,596 | 20,728,221 | 19,094,688 | 19,299,286 | |
Intangible assets, net | 36,777,245 | 29,001,665 | 29,440,716 | 14,590,504 | 7,743,084 | |
Goodwill | 21,937,634 | 5,866,454 | 5,866,454 | 2,084,982 | 2,084,982 | |
TOTAL ASSETS | 133,035,323 | 97,111,332 | 94,027,836 | 84,653,265 | 40,734,183 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Series C and Series D preferred stock subject to redemption | 0 | 0 | 0 | 0 | 0 | |
Deferred tax liability | 51,308 | 428,199 | 428,199 | 428,199 | 428,199 | |
TOTAL LIABILITIES | 60,923,857 | 47,358,006 | 47,118,206 | 38,578,985 | 49,522,475 | |
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 314 | 314 | 314 | |||
Additional paid-in capital | 131,293,861 | 96,306,820 | 95,944,854 | 91,982,825 | 30,991,978 | |
Accumulated deficit | (59,200,693) | (46,570,554) | (49,052,146) | (45,924,869) | (39,795,401) | |
Total stockholders' equity (deficit) | 72,111,466 | 49,753,326 | 46,909,630 | 46,074,280 | (8,788,292) | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 133,035,323 | 97,111,332 | 94,027,836 | 84,653,265 | 40,734,183 | |
As Previously Reported | Series C Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 0 | 171 | ||||
As Previously Reported | Series D Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 7 | 0 | ||||
Adjustments | ||||||
ASSETS | ||||||
Inventory, net | (1,562,251) | 0 | ||||
Total current assets | (1,562,251) | 0 | ||||
Property and equipment, net | 4,909 | 6,011 | 6,011 | 6,011 | 0 | |
Intangible assets, net | 2,403,419 | 1,781,107 | 1,781,107 | 1,781,107 | 853,991 | |
Goodwill | 742,450 | (849,792) | 0 | 0 | 0 | |
TOTAL ASSETS | 1,588,527 | 937,326 | 1,787,118 | 1,787,118 | 853,991 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Series C and Series D preferred stock subject to redemption | 400,092 | 12,011,499 | 12,197,558 | 12,383,616 | 5,848,013 | |
Deferred tax liability | 1,809,857 | 1,814,633 | 1,814,633 | 1,814,633 | 451,966 | |
TOTAL LIABILITIES | 2,209,949 | 13,826,132 | 14,012,191 | 14,198,249 | 6,299,979 | |
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | (314) | (314) | (314) | |||
Additional paid-in capital | (945,594) | (12,501,008) | (12,501,008) | (12,501,008) | (5,847,842) | |
Accumulated deficit | 324,179 | (387,484) | 276,249 | 90,191 | 402,025 | |
Total stockholders' equity (deficit) | (621,422) | (12,888,806) | (12,225,073) | (12,411,131) | (5,445,988) | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 1,588,527 | $ 937,326 | $ 1,787,118 | $ 1,787,118 | 853,991 | |
Adjustments | Series C Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | 0 | (171) | ||||
Adjustments | Series D Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT): | ||||||
Preferred stock | $ (7) | $ 0 |
Restatement of Previously Issued Financial Statements - Income Statement (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Cost of revenues | $ 43,942,815 | $ 28,090,722 | |||||
Gross profit | 7,697,998 | 5,363,627 | |||||
General and administrative expenses | 27,987,920 | 9,695,891 | |||||
Total operating expenses | 29,820,357 | 11,257,491 | |||||
Income (loss) from operations | (22,122,359) | (5,893,864) | |||||
Interest expense | $ (351,823) | $ (1,030,529) | $ (1,354,017) | $ (2,384,546) | $ (2,736,369) | (3,289,233) | (5,463,597) |
Total other income (expenses) | 3,544,377 | (37,002) | (1,369,233) | (1,406,235) | 2,138,142 | 695,480 | (2,249,060) |
Gain on forgiveness of debt | 3,457,499 | 159,742 | 0 | 159,742 | 3,617,241 | 3,896,108 | 0 |
Loss before income tax | 1,871,917 | (2,941,219) | (6,441,302) | (9,382,521) | (7,510,604) | (21,426,879) | (8,142,924) |
Income tax (benefit) | (1,943,741) | (495,076) | |||||
Net loss | $ 1,817,859 | $ (2,941,219) | $ (6,441,302) | $ (9,382,521) | $ (7,564,662) | $ (19,483,138) | $ (7,647,848) |
Basic loss per share | |||||||
Basic (in dollars per share) | $ 0.01 | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.04) | $ (0.12) | $ (0.06) |
Diluted loss per share | |||||||
Diluted (in dollars per share) | $ 0.01 | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.04) | $ (0.12) | $ (0.06) |
As Previously Reported | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
General and administrative expenses | $ 27,889,130 | $ 9,695,891 | |||||
Total operating expenses | 29,721,567 | 11,257,491 | |||||
Income (loss) from operations | (22,023,569) | (5,893,864) | |||||
Interest expense | $ (537,882) | $ (1,216,587) | $ (1,471,723) | $ (2,688,310) | $ (3,226,192) | (3,834,742) | (5,463,597) |
Total other income (expenses) | 4,208,110 | (223,060) | (1,057,399) | (1,280,459) | 2,927,651 | 2,241,386 | (2,249,060) |
Gain on forgiveness of debt | 4,307,291 | 159,742 | 429,540 | 589,282 | 4,896,573 | 5,987,523 | 0 |
Loss before income tax | 2,535,650 | (3,127,277) | (6,129,468) | (9,256,745) | (6,721,095) | (19,782,183) | (8,142,924) |
Income tax (benefit) | (376,891) | (93,051) | |||||
Net loss | $ 2,481,592 | $ (3,127,277) | $ (6,129,468) | $ (9,256,745) | $ (6,775,153) | $ (19,405,292) | $ (8,049,873) |
Basic loss per share | |||||||
Basic (in dollars per share) | $ 0.01 | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.04) | $ (0.12) | $ (0.06) |
Diluted loss per share | |||||||
Diluted (in dollars per share) | $ 0.01 | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.04) | $ (0.12) | $ (0.06) |
Adjustments | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
General and administrative expenses | $ 98,790 | $ 0 | |||||
Total operating expenses | 98,790 | 0 | |||||
Income (loss) from operations | (98,790) | 0 | |||||
Interest expense | $ 186,059 | $ 186,058 | $ 117,706 | $ 303,764 | $ 489,823 | 545,509 | 0 |
Total other income (expenses) | (663,733) | 186,058 | (311,834) | (125,776) | (789,509) | (1,545,906) | 0 |
Gain on forgiveness of debt | (849,792) | 0 | (429,540) | (429,540) | (1,279,332) | (2,091,415) | 0 |
Loss before income tax | (663,733) | 186,058 | (311,834) | (125,776) | (789,509) | (1,644,696) | 0 |
Income tax (benefit) | (1,566,850) | (402,025) | |||||
Net loss | $ (663,733) | $ 186,058 | $ (311,834) | $ (125,776) | $ (789,509) | $ (77,846) | $ 402,025 |
Basic loss per share | |||||||
Basic (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Diluted loss per share | |||||||
Diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Restatement of Previously Issued Financial Statements - Cash Flow (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
OPERATING ACTIVITIES: | |||||||
Net loss | $ 1,817,859 | $ (2,941,219) | $ (6,441,302) | $ (9,382,521) | $ (7,564,662) | $ (19,483,138) | $ (7,647,848) |
Depreciation | 2,396,966 | 1,844,634 | |||||
Amortization | 1,757,393 | 225,628 | |||||
Gain on forgiveness of debt | (3,457,499) | (159,742) | 0 | (159,742) | (3,617,241) | (3,896,108) | 0 |
Amortization of preferred stock subject to redemption | (117,706) | (303,764) | (489,823) | (545,509) | 0 | ||
Income tax benefit | (1,943,741) | (495,076) | |||||
Net cash used in operating activities | (8,950,925) | (14,374,257) | (21,226,966) | (25,423,742) | (2,075,857) | ||
As Previously Reported | |||||||
OPERATING ACTIVITIES: | |||||||
Net loss | 2,481,592 | (3,127,277) | (6,129,468) | (9,256,745) | (6,775,153) | (19,405,292) | (8,049,873) |
Depreciation | 2,395,864 | 1,844,634 | |||||
Amortization | 1,659,705 | 225,628 | |||||
Gain on forgiveness of debt | (4,307,291) | (159,742) | (429,540) | (589,282) | (4,896,573) | (5,987,523) | 0 |
Amortization of preferred stock subject to redemption | 0 | 0 | 0 | 0 | 0 | ||
Income tax benefit | (376,891) | (93,051) | |||||
Net cash used in operating activities | (8,950,925) | (14,374,257) | (21,226,966) | (25,423,742) | (2,075,857) | ||
Adjustments | |||||||
OPERATING ACTIVITIES: | |||||||
Net loss | (663,733) | 186,058 | (311,834) | (125,776) | (789,509) | (77,846) | 402,025 |
Depreciation | 1,102 | 0 | |||||
Amortization | 97,688 | 0 | |||||
Gain on forgiveness of debt | $ 849,792 | $ 0 | 429,540 | 429,540 | 1,279,332 | 2,091,415 | 0 |
Amortization of preferred stock subject to redemption | (117,706) | (303,764) | (489,823) | (545,509) | 0 | ||
Income tax benefit | (1,566,850) | (402,025) | |||||
Net cash used in operating activities | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Significant Accounting Policies (As Restated) - Schedule of Reconciliation of Cash and Restricted Cash (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Accounting Policies [Abstract] | |||
Cash equivalents | $ 0 | $ 0 | |
Reconciliation of cash, cash equivalents, and restricted cash | |||
Cash | 3,715,666 | 277,738 | |
Restricted cash | 0 | 444,845 | |
Total cash and restricted cash shown in statement of cash flows | $ 3,715,666 | $ 722,583 | $ 302,486 |
Summary of Significant Accounting Policies (As Restated) - Accounts Receivable (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounting Policies [Abstract] | ||
Allowance for bad debt | $ 199,936 | $ 49,914 |
Write off of allowance for credit loss | $ 3,028,757 |
Summary of Significant Accounting Policies (As Restated) - Schedule of Inventory (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounting Policies [Abstract] | ||
Raw materials | $ 8,322,867 | $ 1,584,651 |
Work in process | 2,480,979 | 573,806 |
Finished goods | 14,829,365 | 508,145 |
Inventory gross | 25,633,211 | 2,666,602 |
Reserve | (1,213,557) | 0 |
Inventory, net | $ 24,419,654 | $ 2,666,602 |
Summary of Significant Accounting Policies (As Restated) - Schedule of Property and Equipment, Estimated Useful Lives (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Automobiles & Trucks | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property equipment, useful life | 5 years |
Automobiles & Trucks | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property equipment, useful life | 7 years |
Buildings and improvements | |
Property, Plant and Equipment [Line Items] | |
Property equipment, useful life | 39 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Property equipment, useful life | 15 years |
Machinery and equipment | |
Property, Plant and Equipment [Line Items] | |
Property equipment, useful life | 10 years |
Summary of Significant Accounting Policies (As Restated) - Schedule of Finite Lived Intangible Assets, Estimated Useful Lives (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Customer list | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 3 years |
Customer list | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 15 years |
Non-compete agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 1 year |
Non-compete agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
Software development | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
Patents | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 17 years |
Proprietary technology | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 15 years |
Summary of Significant Accounting Policies (As Restated) - Schedule of Intangible Assets (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 41,310,088 | $ 9,169,246 |
Less: Accumulated amortization | (2,129,424) | (572,171) |
Intangibles, net | 39,180,664 | 8,597,075 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 128,474 | 278,474 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 1,378,772 | 157,953 |
Customer list | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 13,011,187 | 2,031,187 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 7,174,912 | 6,701,632 |
Proprietary technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 19,616,743 | $ 0 |
Summary of Significant Accounting Policies (As Restated) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2022 | $ 3,016,058 | |
2023 | 3,045,243 | |
2024 | 3,025,381 | |
2025 | 2,812,882 | |
2026 | 2,788,590 | |
Thereafter | 24,492,510 | |
Intangibles, net | $ 39,180,664 | $ 8,597,075 |
Summary of Significant Accounting Policies (As Restated) - Schedule of Other Assets, Noncurrent (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounting Policies [Abstract] | ||
Deposits | $ 149,517 | $ 293,327 |
Other | 207,601 | 108,417 |
Other non-current assets | $ 357,118 | $ 401,744 |
Summary of Significant Accounting Policies (As Restated) - Impairment of Long-lived Assets (Details) - Customer list |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
APF | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of long-lived asset | $ 671,500 |
Deluxe | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of long-lived asset | 450,000 |
Excel | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of long-lived asset | $ 359,890 |
Summary of Significant Accounting Policies (As Restated) - Goodwill (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Excel | ||
Goodwill [Line Items] | ||
Impairment of goodwill | $ 7,629 | |
APF Reporting Unit | ||
Goodwill [Line Items] | ||
Impairment of goodwill | $ 440,100 |
Summary of Significant Accounting Policies (As Restated) - Research and Development (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounting Policies [Abstract] | ||
Research and development | $ 1,464,918 | $ 0 |
Summary of Significant Accounting Policies (As Restated) - Disaggregation of Revenue (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||
Revenues, net | $ 51,640,813 | $ 33,454,349 |
Product | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | 28,918,591 | 12,602,910 |
Product | Circuit Boards And Cables | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | 15,700,902 | 12,602,910 |
Product | Dietary Supplements | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | 11,674,220 | 0 |
Product | Electronics | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | 1,543,469 | 0 |
Service | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | 22,722,222 | 20,851,439 |
Service | Construction Concepts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | 22,462,399 | 20,851,439 |
Service | Drone 3D Mapping | ||
Disaggregation of Revenue [Line Items] | ||
Revenues, net | $ 259,823 | $ 0 |
Summary of Significant Accounting Policies (As Restated) - Schedule of Computation of Basic and Diluted EPS (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Basic EPS | |||||||
Loss available to stockholders | $ (19,483,138) | $ (7,647,848) | |||||
Loss available to stockholders (in shares) | 164,216,808 | 132,987,390 | |||||
Loss available to stockholders (in dollars per share) | $ 0.01 | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.04) | $ (0.12) | $ (0.06) |
Dilute EPS | |||||||
Effect of dilutive securities convertible debt | $ 0 | $ (1,001,192) | |||||
Effect of dilutive securities convertible debt (in shares) | 0 | 6,624,400 | |||||
Loss available to stockholders plus assumed conversions | $ (19,483,138) | $ (8,649,040) | |||||
Loss available to stockholders plus assumed conversions (in shares) | 164,216,808 | 139,611,790 | |||||
Loss available to stockholders plus assumed conversions (in dollars per share) | $ 0.01 | $ (0.02) | $ (0.04) | $ (0.06) | $ (0.04) | $ (0.12) | $ (0.06) |
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) |
Dec. 31, 2021 |
May 03, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Finance Leases | |||
2022 | $ 1,904,458 | ||
2023 | 1,927,351 | ||
2024 | 1,954,170 | ||
2025 | 1,882,226 | ||
2026 | 1,869,656 | ||
Thereafter | 16,768,517 | ||
Total payments | 26,306,378 | ||
Less: imputed interest | (10,337,568) | ||
Total obligation | 15,968,810 | ||
Less: current portion | (649,343) | $ (639,527) | |
Financing lease obligations, net of current portion | 15,319,467 | 15,687,176 | |
Operating Leases | |||
2022 | 504,885 | ||
2023 | 516,405 | ||
2024 | 528,059 | ||
2025 | 97,338 | ||
2026 | 0 | ||
Thereafter | 0 | ||
Total payments | 1,646,687 | ||
Less: imputed interest | (151,529) | ||
Total obligation | 1,495,158 | $ 3,689,634 | 603,530 |
Less: current portion | (428,596) | (334,500) | |
Operating lease obligations, net of current portion | $ 1,066,562 | $ 269,030 |
Leases - Schedule of Right of Use Assets and Lease Liabilities (Details) - USD ($) |
Dec. 31, 2021 |
May 03, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Assets | |||
Operating lease assets | $ 1,460,206 | $ 581,311 | |
Liabilities | |||
Current Operating lease liability | 428,596 | 334,500 | |
Non-current Operating lease liability | 1,066,562 | 269,030 | |
Total obligation | $ 1,495,158 | $ 3,689,634 | $ 603,530 |
Debt - Schedule of Notes Payable (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Total current | $ 10,164,013 | $ 7,100,911 |
Long-term Debt, Excluding Convertible Debt | ||
Debt Instrument [Line Items] | ||
Total | 24,230,169 | 22,302,361 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total current | 4,473,489 | 2,819,793 |
Long-term debt | 5,640,051 | 0 |
Total | 10,100,000 | |
Secured Debt and Notes Payable | ||
Debt Instrument [Line Items] | ||
Long-term debt | 8,426,105 | 10,860,494 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Total current | 61,640 | 245,388 |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Total current | 5,628,884 | 4,035,730 |
Total | 2,062,318 | |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 4,340,956 |
Debt - Future Scheduled Maturities of Outstanding Notes Payable (Details) - Long-term Debt, Excluding Convertible Debt - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
2022 | $ 10,164,013 | |
2023 | 5,874,596 | |
2024 | 3,844,706 | |
2025 | 129,849 | |
2026 | 135,072 | |
Thereafter | 4,081,933 | |
Total | $ 24,230,169 | $ 22,302,361 |
Convertible Notes Payable - Narrative (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||
Discount from beneficial conversion feature | $ 92,428 | $ 1,482,500 |
Amortization of debt discounts | 1,436,052 | 985,709 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Discount from beneficial conversion feature | 92,428 | 1,482,500 |
Amortization of debt discounts | 1,436,052 | 985,709 |
Unamortized discount | $ 0 | $ 1,343,624 |
Stockholders' Equity (As Restated) - Valuation Assumptions (Details) - Warrant |
12 Months Ended |
---|---|
Dec. 31, 2021
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum (as a percent) | 0.01% |
Risk-free interest rate, maximum (as a percent) | 1.02% |
Expected dividend yield (as a percent) | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock price (in dollars per share) | $ 2.51 |
Expected life of the options | 2 years |
Expected volatility (as a percent) | 159.00% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock price (in dollars per share) | $ 7.03 |
Expected life of the options | 5 years |
Expected volatility (as a percent) | 347.00% |
Business Combinations (As Restated) - Schedule of Pro Forma Information (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Business Combination and Asset Acquisition [Abstract] | ||
Sales | $ 98,321,144 | $ 102,892,997 |
Cost of goods sold | 75,523,745 | 78,037,039 |
Gross profit | 22,797,399 | 24,855,958 |
Operating expenses | 38,643,670 | 26,956,730 |
Loss from operations | (15,846,271) | (2,100,772) |
Net loss | $ (12,144,338) | $ (3,646,603) |
Loss per share (in dollars per share) | $ (0.06) | $ (0.02) |
Equity Investments (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Sep. 15, 2021 |
|
Debt and Equity Securities, FV-NI [Line Items] | |||
Membership interest in equity securities (as a percent) | 9.00% | ||
Equity securities, impairment loss | $ 1,350,000 | $ 0 | |
Equity Securities without Readily Determinable Fair Value, Amount | 1,350,000 | ||
Accounts Receivable | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Equity Securities without Readily Determinable Fair Value, Amount | 1,000,000 | ||
Cash | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Equity Securities without Readily Determinable Fair Value, Amount | $ 350,000 |
Income Taxes (As Restated) - Components of Income Tax Benefit (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current expense (benefit) | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Current Income Tax Expense (Benefit) | 0 | 0 |
Deferred benefit | ||
Federal | (1,616,916) | (812,782) |
State | (326,825) | 317,706 |
Income tax benefit | (1,943,741) | (495,076) |
Income Tax Expense (Benefit), Total | $ (1,943,741) | $ (495,076) |
Income Taxes (As Restated) - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|
Deferred tax asset: | |||||
Accrued expenses and other | $ 347,645 | $ 1,192 | |||
Loss carryforwards | 13,124,197 | 8,028,808 | |||
Stock based compensation | 90,293 | 80,912 | |||
Interest | 615,260 | 0 | |||
Total deferred tax asset | 14,177,395 | 8,110,912 | |||
Valuation allowance | (9,887,550) | (6,165,669) | |||
Net deferred tax assets | 4,289,845 | 1,945,243 | |||
Deferred tax liabilities: | |||||
Fixed assets | (365,922) | (758,399) | |||
Intangible assets and goodwill | (5,785,088) | (2,067,009) | |||
Total deferred tax liabilities | (6,151,010) | (2,825,408) | |||
Deferred tax liability | $ (1,861,165) | $ (2,242,832) | $ (2,242,832) | $ (2,242,832) | $ (880,165) |
Income Taxes (As Restated) - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Income Tax Contingency [Line Items] | ||
Valuation allowance | $ 9.9 | $ 6.2 |
Interest limitation | 2.4 | |
Domestic Tax Authority | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 63.4 | |
State and Local Jurisdiction | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | $ 13.8 |
Income Taxes (As Restated) - Unrecognized Tax Benefits (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax liabilities, beginning of the year | $ 0 | $ 0 |
Increase related to prior year tax positions | 0 | 0 |
Increase related to current year tax positions | 1,169,028 | 0 |
Unrecognized tax liabilities, end of year | $ 1,169,028 | $ 0 |
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands |
Nov. 28, 2021 |
Dec. 31, 2021 |
---|---|---|
Licensing Agreement | ||
Other Commitments [Line Items] | ||
Royalty fee | 2.50% | |
Minimum annual payment, year one | $ 420 | |
Minimum annual payment, year two | 420 | |
Minimum annual payment, year three | 440 | |
Minimum annual payment, year four | 460 | |
Minimum annual payment, year five | $ 480 | |
Royalty Agreements | ||
Other Commitments [Line Items] | ||
Payment as a percentage of net sales | 1.50% | |
Royalty agreement, term | 10 years | |
Total royalty payment | $ 50,000 |
Commitment and Contingencies - Annual Payments For Warranty Services (Details) |
Dec. 31, 2021
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 75,712 |
2024 | 66,626 |
Warranty Services Agreement, Annual Payment, To Be Received, Year Three | 59,964 |
Total | $ 202,302 |
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