10-Q/A

Fbacklog

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________.

Commission File Number: 001-39933

URBAN-GRO, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-5158469
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1751 Panorama Point, Unit G Lafayette, CO	80026	(720) 390-3880
(Address of principal executive offices)	(Zip Code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	UGRO	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of the registrant’s only class of common stock outstanding as of February 18, 2025 was 12,696,557 shares.

EXPLANATORY NOTE REGARDING THE RESTATEMENT

This Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) is being filed to amend and restate urban-gro, Inc.’s (together with its wholly owned subsidiaries, the “Company”) Quarterly Report on Form 10-Q for the three months ended March 31, 2024 (“Original Filing”), filed with the U.S. Securities and Exchange Commission (“SEC”) on April 30, 2024 (“Original Filing Date”).

In filing this Amendment No. 1, we are restating our previously issued Consolidated Financial Statements as of and for the three months ended March 31, 2024 (the “Affected Period”) to account for certain adjustments discovered during the Company’s re-audit of its financial statements issued in Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023. All material restatement information will be included in the Amended Reports, and we do not intend to separately amend other filings that we have previously filed with the SEC.

Accordingly, investors and other readers should rely only on the financial information and other disclosures regarding the periods described above in this Amendment No. 1 and in any other future filings with the SEC (as applicable) and should not rely on any previously issued or filed reports, press releases, corporate presentations or similar communications relating to the periods described above.

As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s principal executive officer and principal financial officer are providing new currently dated certifications required pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto.

Background of the Restatement

As reported on our Current Report on Form 8-K filed with the SEC on May 6, 2024, the Company dismissed its previous independent registered public accounting firm, BF Borgers CPA PC ("BF Borgers") as a result of the SEC instituting public administration and cease-and-desist proceedings against BF Borgers.

As reported on our Current Report on Form 8-K filed with the SEC on May 29, 2024, the Company announced that it had appointed Sadler, Gibb & Associates, LLC ("Sadler Gibb") as its new independent public accounting firm.

As described in our Current Report on Form 8-K filed with the SEC on August 14, 2024, during a re-audit of the Company’s 2023 financial statements, Sadler Gibb identified accounting errors related to deferred tax liabilities associated with historical share-purchase acquisitions made by the Company. Accounting for the initial deferred tax liabilities associated with the acquisitions was determined to be proper, but due to losses incurred by the Company following the acquisitions, the majority of the deferred tax liabilities that were recorded in connection with the share-purchase acquisition of each acquired company should have been recorded as income tax benefits to the statement of operations shortly after each acquisition. The Company was amortizing these deferred tax liabilities to the statement of operations corresponding to the amortization of the intangible assets with which they were associated. Due to this misstatement, effective August 12, 2024, the Audit Committee of the Company's Board of Directors ("Audit Committee"), in consultation with the Company's management and with Sadler Gibb, determined that the Company's previously issued audited consolidated financial statements as of and for the years ended December 31, 2022 and December 31, 2023 (the “Year-End Financial Statements”), the Company’s previously issued unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022, the three and six months ended June 30, 2022, and the three and nine months ended September 30, 2022 (the “2022 Interim Financial Statements”), the three months ended March 31, 2023, the three and six months ended June 30, 2023, and the three and nine months ended September 30, 2023 (the “2023 Interim Financial Statements”), and the three months ended March 31, 2024 (the “Q1 2024 Interim Financial Statements” and, together with the 2022 Interim Financial Statements and the 2023 Interim Financial Statements, the “Interim Financial Statements”) should no longer be relied upon and should be restated due to the foregoing accounting errors. Similarly, any previously issued or filed reports, press releases, earnings releases, investor presentations or other communications of the Company describing the Company’s financial results or other financial information relating to the periods covered by the Year-End Financial Statements or the Interim Financial Statements should no longer be relied upon. As Sadler Gibb continued their re-audit of the Year-End Financial Statements, additional accounting errors were identified that the Company determined needed to be corrected. Those corrections are included as part of this Amendment No. 2.

Internal Control Considerations

In light of the findings described above, the Audit Committee of the Company concluded that our management’s report on internal control over financial reporting as of March 31, 2024 should no longer be relied upon. 

In connection with the restatement, management has also concluded that the Company’s disclosure controls and procedures for the Affected Period were not effective because of material weaknesses in its internal controls over financial reporting. Refer to Item 4. “Controls and Procedures” of this Amendment No. 1 for additional details.

Items Amended in this Filing

This Amendment No. 1 amends and restates the following items of the Original Report:

•Part I - Item 1. Financial Statements and Supplementary Data

•Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

•Part I - Item 4. Controls and Procedures

•Part II - Item 1A. Risk Factors

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment No. 1 includes new certifications specified in Rule 13a-14 under the Exchange Act, from the Company’s Chief Executive Officer and Chief Financial Officer dated as of the date of this Amendment No. 1. This Amendment No. 1 also contains a report of Sadler, Gibb & Associates, LLC on the Unaudited Condensed Consolidated Financial Statements as of March 31, 2024 and and for the three months ended March 31, 2024, and a consent of Sadler, Gibb & Associates, LLC.

Pursuant to Rule 12b-15 under the Exchange Act, this Amendment No. 1 contains only the items and exhibits to the Original Form 10-Q that are being amended and restated, and unaffected items and exhibits are not included herein. This Amendment No. 1 continues to describe the conditions as of the date of the Original Form 10-Q and, except as set forth herein, we have not updated or modified the disclosures contained in the Original Form 10-Q to reflect any events that have occurred after the Original Form 10-Q. Accordingly, forward-looking statements included in this Amendment No. 1 may represent management’s views as of the Original Form 10-Q and should not be assumed to be accurate as of any date thereafter.

TABLE OF CONTENTS

Item No.		Page No.
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Unaudited Condensed Consolidated Balance Sheets	6
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	7
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity	8
	Unaudited Condensed Consolidated Statements of Cash Flows	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 4.	Controls and Procedures	30
	PART II. OTHER INFORMATION
Item 1A.	Risk Factors	31
Item 6.	Exhibits	31
	Signatures	32

2

CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q/A constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements related to future events, challenges we may face, business strategy, future performance, future operations, backlog, financial position, estimated or projected revenues and losses, projected costs, prospects, plans and objectives of management. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek,” “anticipate,” “plan,” “continue,” “estimate,” “expect,” “may,” “will,” “project,” “predict,” “potential,” “intend,” “could,” “should,” “believe,” and variations of such words or their negative and similar expressions. Forward-looking statements should not be read as a guarantee of future performance or results, and may not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on management’s belief, based on currently available information, as to the outcome and timing of future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed in such forward-looking statements. When evaluating forward-looking statements, you should consider the risk factors and other cautionary statements described in this Quarterly Report on Form 10-Q and under the heading “Risk Factors” in our Annual Report on Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023. We believe the expectations reflected in the forward-looking statements contained in this report are reasonable, but no assurance can be given that these expectations will prove to be correct. Forward-looking statements should not be unduly relied upon. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to:

•risks related to our operating strategy;

•competition for projects in our markets;

•our ability to predict and respond to new laws and governmental regulatory actions affecting our business, including foreign laws and governmental regulation;

•risks related to delays in the grant of necessary licenses to clients and delays in passage of legislation expected to benefit our clients, which could delay the funding and start of projects

•our ability to successfully develop new and/or enhancements to our product offerings and develop a product mix to meet demand;

•our ability to meet or exceed market expectations from analysts;

•unfavorable economic conditions, increases in interest rates and restrictive financing markets that may cause customers to cancel contracts reflected in our backlog or cause sales to decrease;

•our ability to successfully identify, manage and integrate acquisitions;

•our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;

•climate change and related laws and regulations;

•our ability to manage our supply chain in a manner that ensures that we are able to obtain adequate raw materials, equipment and essential supplies in a timely manner and at favorable prices;

•our ability to attract and retain key personnel;

•risks associated with concentration of a large portion of our business from a relatively small number of key clients/customers and the effect a loss of a key client/customer could have on our business;

•risks associated with customers or suppliers not fulfilling contracts;

•risks associated with reliance on key suppliers and risks such suppliers could change incentive programs that negatively affect our returns;

•the impact of inflation on costs of labor, raw materials and other items that are critical to our business;

•property damage and other claims and insurance coverage issues;

•the outcome of litigation or disputes;

•risks related to our information technology systems and infrastructure, including cybersecurity incidents;

3

•risks to our reputation from negative publicity, social media posts or negative interpretations of our Environmental, Social and Governance (ESG) efforts;

•our ability to maintain effective internal control over financial reporting; and

•other events outside of our control.

These factors are not necessarily all of the important factors that could cause actual results or events to differ materially from those expressed in the forward-looking statements. Other unknown or unpredictable factors could also cause actual results or events to differ materially from those expressed in the forward-looking statements. Our future results will depend upon various other risks and uncertainties, including those described in this Quarterly Report on Form 10-Q/A and in our Annual Report Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to consult any future disclosures we make on related subjects in future reports to the Securities and Exchange Commission (SEC).

4

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (unaudited)

5

URBAN-GRO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

	March 31, 2024		December 31, 2023
	(As Restated)		(As Restated)
ASSETS
Current assets:
Cash	648,597		1,074,842
Accounts receivable, net	18,325,178		21,648,901
Contract receivables	8,080,149		8,436,567
Prepaid expenses and other assets	2,555,059		1,751,564
Total current assets	29,608,983		32,911,874
Non-current assets:
Property and equipment, net	1,255,557		1,419,393
Operating lease right of use assets, net	1,918,532		2,041,217
Goodwill	9,688,975		9,688,975
Intangible assets, net	3,256,621		3,451,608
Total non-current assets	16,119,685		16,601,193
Total assets	$	45,728,668	$	49,513,067
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	23,842,794	$	24,203,769
Contract liabilities	$	3,575,529	3,950,133
Accrued expenses	$	5,070,635	5,284,278
Customer deposits	$	555,676	603,046
Contingent consideration	$	49,830	49,830
Notes payable	$	2,490,486	3,204,840
Operating lease liabilities	$	673,920	707,141
Total current liabilities	36,258,870		38,003,037
Non-current liabilities:
Operating lease liabilities, net of current portion	1,292,500		1,380,362
Deferred tax liability	(4,070)		44,313
Total non-current liabilities	1,288,430		1,424,675
Total liabilities	37,547,300		39,427,712
Commitments and contingencies (note 11)
Shareholders’ equity:
Preferred stock, $0.10 par value; 3,000,000 shares authorized; 0 and 0 shares issued and outstanding	—		—
Common stock, $0.001 par value; 30,000,000 shares authorized; 13,768,594 issued and 12,318,761 outstanding as of March 31, 2024, and 13,522,669 issued and 12,072,836 outstanding as of December 31, 2023	13,769		13,523
Additional paid-in capital	89,046,086		88,389,756
Treasury shares, cost basis: 1,449,833 shares as of March 31, 2024 and as of December 31, 2023	(12,045,542)		(12,045,542)
Accumulated deficit	(68,832,945)		(66,272,382)
Total shareholders’ equity	8,181,368		10,085,355
Total liabilities and shareholders’ equity	$	45,728,668	$	49,513,067

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements

6

URBAN-GRO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)

	Three Months Ended March 31,
	2024		2023
	(As Restated)		(As Restated)
Revenues:
Equipment systems	$	2,508,287	$	2,905,035
Services	3,133,793		3,470,653
Construction design-build	9,683,814		10,195,338
Other	75,141		183,745
Total revenues and other income	15,401,035		16,754,771
Cost of revenues:
Equipment systems	2,172,450		2,408,481
Services	1,508,449		1,974,538
Construction design-build	8,675,280		9,229,973
Other	53,399		133,142
Total cost of revenues	12,409,578		13,746,134
Gross profit	2,991,457		3,008,637
Operating expenses:
General and administrative	5,077,864		7,685,030
Depreciation and Amortization	390,250		404,069
Total operating expenses	5,468,114		8,089,099
Loss from operations	(2,476,657)		(5,080,462)
Non-operating income (expense):
Interest expense	(99,306)		(73,216)
Interest income	81		73,131
Contingent consideration	—		(160,232)
Other income (expense)	(33,064)		(10,422)
Total non-operating income (expense)	(132,289)		(170,739)
Loss before income taxes	(2,608,946)		(5,251,201)
Income tax benefit	48,383		—
Net loss	$	(2,560,563)	$	(5,251,201)
Comprehensive loss	$	(2,560,563)	$	(5,251,201)
Net loss per share - basic and diluted	$	(0.21)	$	(0.49)
Weighted average shares - basic and diluted	12,075,619		10,772,705

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements

7

URBAN-GRO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

(as restated)

	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Total Shareholders’ Equity
	Shares	Amount
Balance, December 31, 2023	13,522,669	$	13,523	$	88,389,756	$	(66,272,382)	$	(12,045,542)	$	10,085,355
Stock-based compensation	—	—		656,576		—		—		656,576
Stock grant program vesting	245,925	246		(246)		—		—		—
Net loss	—	—		—		(2,560,563)		—		(2,560,563)
Balance, March 31, 2024	13,768,594	$	13,769	$	89,046,086	$	(68,832,945)	$	(12,045,542)	$	8,181,368

	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Total Shareholders’ Equity
	Shares	Amount
Balance, December 31, 2022	12,292,104	$	12,292	$	84,189,965	$	(40,834,721)	$	(12,045,542)	$	31,321,994
Stock-based compensation	—	—		479,641		—		—		479,641
Stock grant program vesting	96,285	96		(96)		—		—		—
Stock issued for contingent consideration	64,224	64		191,855		—		—		191,919
Net loss	—	—		—		(5,251,201)		—		(5,251,201)
Balance, March 31, 2023	12,452,613	$	12,452	$	84,861,365	$	(46,085,922)	$	(12,045,542)	$	26,742,353

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements

8

URBAN-GRO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Three Months Ended
	March 31,
	2024		2023
	(As Restated)		(As Restated)
Cash flows from operating activities:
Net loss	$	(2,560,563)	$	(5,251,201)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	390,250		404,069
Amortization of right-of-use assets	134,054		87,426
Stock-based compensation expense	656,576		479,641
Change in fair value of contingent consideration	—		160,232
Interest income on investments	—		(12,792)
Changes in operating assets and liabilities (net of acquired amounts):
Accounts receivable and contract receivables	3,680,141		(6,502,104)
Prepaid expenses and other assets and property and equipment	(497,749)		(411,181)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(996,596)		7,751,597
Operating lease liability	(129,181)		(57,635)
Deferred tax liability	(48,383)		—
Net cash provided by (used in) operating activities	628,549		(3,351,948)
Cash flows from investing activities:
Refunds/(Purchases) of property and equipment	8,486		(138,010)
Net cash provided by (used in) investing activities	8,486		(138,010)
Cash flows from financing activities:
Additions to notes payable	2,000,000		—
Repayment of finance lease liability	(43,180)		(43,410)
Payments to settle contingent consideration	—		(230,309)
Repayment of notes payable	(3,020,100)		(924,469)
Net cash used in financing activities	(1,063,280)		(1,198,188)
Net change in cash	(426,245)		(4,688,146)
Cash at beginning of period	1,074,842		11,754,349
Cash at end of period	$	648,597	$	7,066,203
Supplemental cash flow information:
Cash paid for interest	$	159,366	$	6,475
Net cash paid for income taxes	$	—	$	23,487
Supplemental disclosure of non-cash investing and financing activities:
Stock issued for contingent consideration	$	—	$	191,854
Financing lease right-of-use asset and liability remeasurement	$	—	$	26,899

The accompanying unaudited notes are an integral part of these condensed consolidated financial statements

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URBAN-GRO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, ACQUISITIONS, AND LIQUIDITY

Organization

urban-gro, Inc. (together with its wholly owned subsidiaries, collectively "urban-gro," "we," "us," or the “Company") was originally formed on March 20, 2014, as a Colorado limited liability company. On March 10, 2017, we converted to a Colorado corporation and exchanged shares of our common stock for every member's interest issued and outstanding on the date of conversion. On October 29, 2020, we reincorporated as a Delaware corporation. On February 12, 2021, we completed an uplisting to the Nasdaq Capital Market ("Nasdaq") under the ticker symbol "UGRO".

urban-gro is an integrated professional services and design-build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture (“CEA”), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and a commitment to sustainability drive our team to provide exceptional customer experiences. To serve our horticulture clients, we engineer, design and manage the construction of indoor CEA facilities and then integrate complex environmental equipment systems into those facilities. Through this work, we create high-performance indoor cultivation facilities for our clients to grow specialty crops, including leafy greens, vegetables, herbs, and plant-based medicines. Our custom-tailored approach to design, construction, procurement, and equipment integration provides a single point of accountability across all aspects of indoor growing operations. We also help our clients achieve operational efficiency and economic advantages through a full spectrum of professional services and programs focused on facility optimization and environmental health. Further, we serve a broad range of commercial and governmental entities, providing them with planning, consulting, architectural, engineering and construction design-build services for their facilities. We aim to work with our clients from the inception of their project in a way that provides value throughout the life of their facility. We are a trusted partner and advisor to our clients and offer a complete set of engineering and managed services complemented by a vetted suite of select cultivation equipment systems.

Liquidity and Going Concern

The Company has produced multiple consecutive years of net losses and negative cash flows. The financial results described in these financial statements and our financial position as of March 31, 2024 raise substantial doubt about our ability to continue as a going concern. However, the Company has recently taken actions to strengthen its liquidity, including decreasing headcount and operating expenses to expedite the Company's path to cash flow positive results. If necessary, the Company will seek to raise capital by issuing additional equity shares either through a private placement or on the open market. The Company may also seek to obtain additional debt financing for which there can be no guarantee. Management has concluded that these recent positive steps alleviate any substantial doubt about the Company's ability to continue its operations, and meet its financial obligations, for twelve moths from the date these consolidated financial statements are issued.

NOTE 1A – RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

Restatement of Previously Filed Financial Statements

In connection with the re-audit of the financial statements for the year ended December 31, 2023, the Company identified certain adjustments to its deferred tax liabilities related to certain acquisitions. See the Explanatory Note in this Amendment No. 1 for further discussion. The following tables show the unaudited quarterly condensed consolidated financial information for the three months ended March 31, 2024. The accompanying applicable notes have been updated to reflect the effects of the restatement.

The amounts in the "As Reported" columns are amounts derived from the Company's previously filed financial statements in its Quarterly Report on Form 10-Q for the three month period ended March 31, 2024, originally filed with the Securities and Exchange Commission on April 30, 2024 (the “Original Form 10-Q”). The amounts in the "Restatement Adjustments" columns present the impact of the adjustments arising from the re-audit of the Company’s 2023 financial statements and re-review of the Company’s unaudited quarterly condensed consolidated financial information for the three months ended March 31, 2024. The amounts in the "As Restated" columns are the updated amounts including the impact from the Restatement Adjustments.

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	As of March 31, 2024
	As		Restatement		As
ASSETS	Reported		Adjustments		Restated
Current assets:
Cash	$	692,680	$	(44,083)	$	648,597
Accounts receivable, net	18,754,870		(429,692)		18,325,178
Contract receivables	10,174,845		(2,094,696)		8,080,149
Prepaid expenses and other current assets	3,606,595		(1,051,536)		2,555,059
Total current assets	33,228,990		(3,620,007)		29,608,983
Non-current assets:
Property and equipment, net	1,255,557		—		1,255,557
Operating lease right of use assets, net	1,918,532		—		1,918,532
Goodwill	15,572,050		(5,883,075)		9,688,975
Intangible assets, net	4,155,175		(898,554)		3,256,621
Total non-current assets	22,901,314		(6,781,629)		16,119,685
Total assets	$	56,130,304	$	(10,401,636)	$	45,728,668
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	24,987,061		(1,144,267)		23,842,794
Contract liabilities	3,093,242		482,287		3,575,529
Accrued expenses	3,632,874		1,437,761		5,070,635
Customer deposits	555,676		—		555,676
Contingent consideration	49,830		—		49,830
Notes payable	2,490,486		—		2,490,486
Operating lease liabilities	673,920		—		673,920
Total current liabilities	35,483,089		775,781		36,258,870
Non-current liabilities:
Operating lease liabilities, net of current portion	1,292,500		—		1,292,500
Deferred tax liability	769,036		(773,106)		(4,070)
Total non-current liabilities	2,061,536		(773,106)		1,288,430
Total liabilities	$	37,544,625	$	2,675	$	37,547,300
Commitments and contingencies (note 11)
Shareholders’ equity:
Preferred stock, $0.10 par value; 3,000,000 shares authorized; 0 and 0 shares issued and outstanding	—		—		—
Common stock, $0.001 par value; 30,000,000 shares authorized; 13,768,594 issued and 12,318,761 outstanding as of March 31, 2024, and 13,522,669 issued and 12,072,836 outstanding as of December 31, 2023	13,769		—		13,769
Additional paid-in capital	89,557,913		(511,827)		89,046,086
Treasury shares, cost basis: 1,449,833 shares as of March 31, 2024 and as of December 31, 2023	(12,045,542)		—		(12,045,542)
Accumulated deficit	(58,940,461)		(9,892,484)		(68,832,945)
Total shareholders’ equity	18,585,679		(10,404,311)		8,181,368
Total liabilities and shareholders’ equity	$	56,130,304	$	(10,401,636)	$	45,728,668

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	Three Months Ended March 31, 2024
	As			Restatement			As
	Reported			Adjustments			Restated
Revenues:
Equipment systems	$	2,508,287		$	—		$	2,508,287
Services	3,133,793			—			3,133,793
Construction design-build	9,825,457			(141,643)			9,683,814
Other	75,141			—			75,141
Total revenues and other income	15,542,678			(141,643)			15,401,035
Cost of revenues:
Equipment systems	2,172,383			67			2,172,450
Services	1,508,449			—			1,508,449
Construction design-build	8,692,432			(17,152)			8,675,280
Other	53,399			—			53,399
Total cost of revenues	12,426,663			(17,085)			12,409,578
Gross profit	3,116,015			(124,558)			2,991,457
	20		%	88		%	108		%
Operating expenses:
General and administrative	4,745,192			332,672			5,077,864
Depreciation and Amortization	434,595			(44,345)			390,250
Total operating expenses	5,179,787			288,327			5,468,114
Loss from operations	(2,063,772)			(412,885)			(2,476,657)
Non-operating income (expenses):
Interest expense	(99,306)			—			(99,306)
Interest income	81			—			81
Contingent consideration	—			—			—
Write-down of investment	—			—			—
Loss on settlement	—			—			—
Other income (expense)	(26,889)			(6,175)			(33,064)
Total non-operating income (expenses)	(126,114)			(6,175)			(132,289)
Loss before income taxes	(2,189,886)			(419,060)			(2,608,946)
Income tax benefit	48,383			—			48,383
Net loss	$	(2,141,503)		$	(419,060)		$	(2,560,563)
Comprehensive loss	$	(2,141,503)		$	(419,060)		$	(2,560,563)
Loss per share – basic and diluted	$	(0.18)		$	(0.03)		$	(0.21)
Weighted average shares – basic and diluted	12,075,619			12,075,619			12,075,619

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	For the Three Months Ended March 31, 2024
	As		Restatement		As
	Reported		Adjustments		Restated
Cash flows from operating activities:
Net loss	$	(2,141,503)	$	(419,060)	$	(2,560,563)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	434,595		(44,345)		390,250
Amortization of right-of-use assets	—		134,054		134,054
Stock-based compensation expense	656,576		—		656,576
Impairment of investment	—		—		—
Change in fair value of contingent consideration	—		—		—
PPP loan forgiveness	—		—		—
Interest income on investments	137,973		(137,973)		—
Changes in operating assets and liabilities (net of acquired amounts):
Accounts receivable and contract receivables	8,083,975		(4,403,834)		3,680,141
Prepaid expenses and other assets and property and equipment	(746,995)		249,246		(497,749)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(5,888,371)		4,891,775		(996,596)
Change in contingent consideration from indemnification	—		—		—
Operating lease liability	(158,644)		29,463		(129,181)
Deferred tax liability	(48,383)		—		(48,383)
Customer deposits	—		—		—
Net cash used in operating activities	329,223		299,326		628,549
Cash flows from investing activities:
Sale of investment	—		—		—
Refunds/(Purchases) of property and equipment	8,487		(1)		8,486
Business combinations, net of cash acquired	—		—		—
Net cash provided by (used in) investing activities	8,487		(1)		8,486
Cash flows from financing activities:
Proceeds from issuance of common stock	—		—		—
Repurchase of common stock	—		—		—
Additions to notes payable	3,024,223		(1,024,223)		2,000,000
Repayment of notes payable	(3,738,577)		718,477		(3,020,100)
Repayment of finance lease liability	(43,180)		—		(43,180)
Payments to settle contingent consideration	—		—		—
Net cash used in financing activities	(757,534)		(305,746)		(1,063,280)
Net change in cash	(419,824)		(6,421)		(426,245)
Cash at beginning of period	1,112,504		(37,662)		1,074,842
Cash at end of period	$	692,680	$	(44,083)	$	648,597

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Condensed Consolidated Financial Statements

The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for condensed financial reporting. The condensed consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of stockholders’ equity and condensed consolidated statements of cash flows for the periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s consolidated financial statements in the Company’s Annual Report Amendment No. 2 on Form 10-K/A for the year ended December 31, 2023.

Significant Accounting Policies

For a detailed discussion about the Company’s significant accounting policies, refer to Note 2 - “Summary of Significant Accounting Policies,” in the Company’s consolidated financial statements included in the Company’s Annual Report Amendment No. 2 on Form 10-K/A for the year ended December 31, 2023. During the three months ended March 31, 2024, there were no material changes made to the Company’s significant accounting policies.

Use of Estimates

In preparing condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under construction design-build contracts; estimated useful lives and potential impairment of long-lived assets, intangibles and goodwill; inventory write-offs; allowance for deferred tax assets; and allowance for bad debt.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Balance Sheet Classifications

The Company includes in current assets and liabilities the following amounts that are in connection with construction contracts that may extend beyond one year: contract assets and contract liabilities (including retainage invoiced to customers contingent upon anything other than the passage of time), capitalized costs to fulfill contracts, retainage payable to sub-contractors and accrued losses on uncompleted contracts. A one-year time period is used to classify all other current assets and liabilities when not otherwise prescribed by the applicable accounting principles.

Contract Assets and Liabilities

The timing between when the Company invoices for its construction design-build customers can create a contract asset or contract liability. Refer to Note 3 - Revenue from Contracts with Customers for further discussion of the Company's contract assets and liabilities.

Recently Issued Accounting Standards

From time to time, the Financial Accounting Standards Board (the "FASB") or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, the Company believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Company’s financial statements upon adoption.

Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company's financial condition or the results of our operations.

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NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company recognizes revenue predominantly from the sale of equipment systems, services, construction design-build, and from other various immaterial contracts with customers from its CEA and Commercial sectors. The table below presents the revenue by source for the three months ended March 31, 2024 and 2023:

	For the three months ended March 31, 2024
	CEA			Commercial			Total			Relative Percentage
Equipment systems	$	2,508,287		$	—		$	2,508,287		16%
Services	867,907			2,265,886			3,133,793			20%
Construction design-build	957,623			8,726,191			9,683,814			63%
Other	75,141			—			75,141			—%
Total revenues and other income	$	4,408,958		$	10,992,077		$	15,401,035		100%
Relative percentage	29		%	71		%	100		%

	For the three months ended March 31, 2023
	CEA			Commercial			Total			Relative Percentage
Equipment systems	$	2,905,035		$	—		$	2,905,035		17%
Services	1,577,026			1,893,627			3,470,653			21%
Construction design-build	383,524			9,811,814			10,195,338			61%
Other	183,745			—			183,745			1%
Total revenues and other income	$	5,049,330		$	11,705,441		$	16,754,771		100%
Relative percentage	30		%	70		%	100		%

Under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, a performance obligation is a promise in a contract with a customer, to transfer a distinct good or service to the customer. Equipment systems contracts are lump sum contracts, which require the performance of some, or all, of the obligations under the contract for a specified amount. Service revenue contracts, which include both architectural and engineering designs, generally contain multiple performance obligations which can span across multiple phases of a project and are generally set forth in the contract as distinct milestones. The majority of construction design-build contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Some contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the project life cycle (design and construction).

The transaction price for service contracts and construction design-build contracts is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. When there are multiple performance obligations under the same service contract, the Company allocates the transaction price to each performance obligation based on the standalone selling price. In general, payment terms are fixed at the time of the contract and are not subject to discounts, incentives, payment bonuses, credits, or penalties, unless negotiated in an amendment.

When establishing the selling price to the customer, the Company uses various observable inputs. For equipment systems, the stand-alone selling price is determined by forecasting the expected costs of the products, and then adding in the appropriate margins established by management. For service revenues and construction design-build revenues, the Company estimates the selling price by reference to certain physical characteristics of the project, which include the facility size, the complexity of the design, and the mechanical systems involved, which are indicative of the scope and complexity for those services. Significant judgments are typically not required with respect to the determination of the transaction price based on the nature of the selling prices of the products and services delivered and the collectability of those amounts. Accordingly, the Company does not consider estimates of variable consideration to be constrained.

The Company recognizes equipment systems, services, and construction design-build revenues when the performance obligation with the customer is satisfied. For satisfaction of equipment system revenues, the Company recognizes revenue when control of the promised good transfers to the customer, which predominately occurs at the time of shipment. For service revenues, satisfaction occurs as the services related to the distinct performance obligations are rendered or completed in exchange for consideration in an amount for which the Company is entitled. The time period between recognition and satisfaction of performance

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obligations is generally within the same reporting period; thus, there are no material unsatisfied or partially unsatisfied performance obligations for product or service revenues at the end of the reporting period.

Construction design-build revenues are recognized as the Company's obligations are satisfied over time, using the ratio of project costs incurred to estimated total costs for each contract because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed. This continuous transfer of control to the customer is further supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. This cost-to-cost measure is used for our construction design-build contracts because management considers it to be the best available measure of progress on these contracts.

Contract modifications through change orders, claims and incentives are routine in the performance of the Company’s construction design-build contracts to account for changes in the contract specifications or requirements. In most instances, contract modifications are not distinct from the existing contract due to the significant integration of services provided in the contract and are accounted for as a modification of the existing contract and performance obligation. Either the Company or its customers may initiate change orders, which may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Change orders that are unapproved as to both price and scope are evaluated as claims. The Company considers claims to be amounts in excess of approved contract prices that the Company seeks to collect from its customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs.

The timing of when the Company bills customers on long-term construction design-build contracts is generally dependent upon agreed-upon contractual terms, which may include milestone billings based on the completion of certain phases of the work, or when services are provided. When as a result of contingencies, billings cannot occur until after the related revenue has been recognized, the result is unbilled revenue, which is included in contract assets. Additionally, when the Company may receives advances or deposits from customers before revenue is recognized; the result is deferred revenue, which is included in contract liabilities. Retainage subject to conditions other than the passage of time are included in contract assets and contract liabilities.

Contract assets represent revenues recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts. Contract liabilities represent the Company’s obligation to perform on uncompleted contracts with customers for which the Company has received payment or for which contract receivables are outstanding.

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The following table provides information about contract assets and contract liabilities from contracts with customers:

	March 31, 2024		December 31, 2023
Contract assets
Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage	$	7,357,378	$	7,729,531
Retainage included in contract assets due to being conditional on something other than solely passage of time	$	722,771	$	707,036
Total contract assets	$	8,080,149	$	8,436,567
	March 31, 2024		December 31, 2023
Contract liabilities
Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage	$	3,502,427	$	3,895,826
Retainage included in contract liabilities due to being conditional on something other than solely passage of time	$	73,102	$	54,307
Total contract liabilities	$	3,575,529	$	3,950,133

For equipment systems contracts, the Company’s predominant policy is to collect deposits from customers at the beginning of the contract and the balance of the contract payment prior to shipping. The Company does, in some cases, collect deposits or retainers as down payments on service contracts. Consumable products orders may be paid for in advance of shipment or for recurring customers with credit, payment terms of 30 days or less may be extended by the Company. Customer payments that have been collected prior to the performance obligation being recognized are recorded as customer deposit liabilities on the balance sheet. When the performance obligation is satisfied and all the criteria for revenue recognition are met, revenue is recognized. In certain situations when the customer has paid the deposit and services have been performed but the customer chooses not to proceed with the contract, the Company is entitled to keep the deposit and recognize revenue.

NOTE 4 – RELATED PARTY TRANSACTIONS

A director of the Company is an owner of Cloud 9 Support, LLC (“Cloud 9”) and Potco LLC (“Potco”). Cloud 9 purchases materials from the Company for use with its customers and Potco purchases equipment from the Company for use in its cultivation facility. Another director of the Company is working on a vertical farming innovation model with a group of CEA experts (the “CEA Consortium”). The CEA Consortium contracts services from the Company related to their business model. The table below presents the revenues for these related party entities for the three months ended March 31, 2024, and 2023:

	Three Months Ended March 31,
	2024		2023
Revenue - Cloud 9	$	—	$	—
Revenue - Potco	$	—	$	479,897
Revenue - CEA Consortium	$	—	$	—
Total revenues from related party transactions	$	—	$	479,897

The table below presents the accounts receivable from these related party entities as of March 31, 2024, and December 31, 2023:

	March 31, 2024		December 31, 2023
Accounts receivable - Cloud 9	$	—	$	—
Accounts receivable - Potco	$	163,088	$	163,088
Accounts receivable - CEA Consortium	$	245,000	$	245,000
Total accounts receivable due from related party transactions	$	408,088	$	408,088

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NOTE 5 – PREPAID EXPENSES AND OTHER ASSETS

Prepayments and other assets are comprised of prepayments paid to vendors to initiate orders, prepaid services and fees, inventories, and other assets. These amounts are summarized as follows:

	March 31, 2024		December 31, 2023
Vendor prepayments	$	970,337	$	130,522
Prepaid services and fees	1,312,913		1,168,309
Inventories	236,814		228,858
Other assets	34,995		223,875
Total Prepaid expenses and other assets	$	2,555,059	$	1,751,564

NOTE 6 – PROPERTY AND EQUIPMENT, NET

Property and equipment balances are summarized as follows:

	March 31, 2024		December 31, 2023
Computers and technology equipment	$	297,592	$	294,322
Furniture and fixtures	325,485		325,485
Leasehold improvements	228,760		228,760
Vehicles	432,823		432,823
Software	1,075,813		1,087,569
Other equipment	145,950		145,951
Accumulated depreciation	(1,250,866)		(1,095,517)
Total Property and equipment, net	$	1,255,557	$	1,419,393

Depreciation expense for the three months ended March 31, 2024, and 2023 totaled $195,262 and $94,049, respectively.

NOTE 7 – INVESTMENTS

As of March 31, 2024 and December 31, 2023 the Company did not have any investments.

XS Financial

On October 30, 2021, the Company participated in a convertible note offering of Xtraction Services, Inc., a/k/a XS Financial Inc. (CSE: XSF) (OTCQB: XSHLF) ("XSF"), a specialty finance company providing CAPEX financing solutions, including equipment leasing, to CEA companies in the United States. The Company invested $2,500,000 of a total $43,500,000 raised by XSF. Prior to any Nasdaq listing, the investment incurs 9.5% interest payable, of which, 7.5% is cash interest and 2.0% is interest paid in kind. Subsequent to any Nasdaq listing by XSF, the investment incurs 8.0% cash interest. The debt matures on October 28, 2023, with a one-year option at the sole discretion of XSF to extend the maturity date. In addition, the Company received 1,250,000 warrants denominated in Canadian dollars ("C$") with a C$0.45 exercise price as subject to the warrant instrument. No value was attributed to the warrants at the time of the investment. In August 2023, the Company entered into an agreement to sell back its investment to XSF for $2.3 million and cancel the warrants. The Company received the $2.3 million in proceeds on August 30, 2023. In connection with the agreement to sell the investment, the Company recorded an impairment loss of $0.3 million.

NOTE 8 – GOODWILL & INTANGIBLE ASSETS

Goodwill

The Company has recorded goodwill in conjunction with the acquisitions it has completed. The goodwill balances as of March 31, 2024 and December 31, 2023 were $9,688,975 and $9,688,975, respectively. Goodwill is not amortized. The Company did not record any impairment charges related to goodwill for the three months ended March 31, 2024 and 2023.

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Intangible Assets Other Than Goodwill

Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:

	March 31, 2024
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	$	3,269,201	$	(1,110,830)	$	2,158,371
Trademarks and trade names	1,778,000		(752,317)		1,025,683
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,586,984)		3,184,054
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,586,984)	$	3,256,621

	December 31, 2023
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	3,269,201		(1,004,743)		2,264,458
Trademarks and trade names	1,778,000		(663,417)		1,114,583
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,391,997)		3,379,041
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,391,997)	$	3,451,608

Amortization expense for intangible assets subject to amortization for the three months ended March 31, 2024 and 2023 was $194,988 and $310,020, respectively. The estimated future amortization expense for intangible assets subject to amortization as of March 31, 2024, is summarized below:

For the years ending December 31,	Estimated Future Amortization Expense
Remainder of 2024	$	584,968
2025	779,948
2026	738,364
2027	513,714
2028	405,306
2029	161,754
Total estimated future amortization expense	$	3,184,054

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NOTE 9 – ACCRUED EXPENSES

Accrued expenses are summarized as follows:

	March 31, 2024		December 31, 2023
Accrued operating expenses	$	(16,714)	$	277,987
Accrued wages and related expenses	1,480,361		1,349,195
Business development accrual	340,335		376,816
Accrued interest expense	35,671		26,000
Accrued 401(k)	22,346		66,642
Accrued sales tax payable	3,208,636		3,187,638
Total accrued expenses	$	5,070,635	$	5,284,278

Accrued sales tax payable is comprised of amounts due to various states and Canadian provinces for 2017 through 2023.

NOTE 10 – NOTES PAYABLE

The table below shows outstanding notes payable amounts as of March 31, 2024 and December 31, 2023.

	As of
	March 31, 2024		December 31, 2023
Line of credit	$	2,000,000	$	2,500,000
DVO note	204,330		575,240
Other financing agreements	286,156		129,600
Total	$	2,490,486	$	3,204,840
Less current maturities	(2,490,486)		(3,204,840)
Long Term	—		–

On December 13, 2023, UG Construction, a wholly owned subsidiary of the Company, entered into an interest only asset based revolving Loan Agreement (the “Line of Credit”) with Gemini Finance Corp. (“Lender”) pursuant to which Lender extended to UG Construction a secured line of credit in an amount not to exceed $10,000,000, to be used to assist UG Construction and the Company with cash management. Lender will consider requests for advances under the Line of Credit, which Lender may accept or reject in its discretion, until September 12, 2024 (the “Initial Term”), subject to an automatic extension for an additional nine-month term until May 12, 2025, provided that UG Construction is in compliance with all the terms of the applicable loan documents and Lender has not sent a written notice of non-renewal at least 60 days prior to expiration of the Initial Term. The Line of Credit contains standard events of default and representations and warranties by UG Construction and the Lender and the Company have entered into a Continuing Guaranty pursuant to which the Company will guarantee repayment of the loans associated with the Line of Credit (the “Guaranty Agreement”).

Loans made under the Line of Credit shall be evidenced by a Secured Promissory Note - Revolving issued by UG Construction to the Lender (the “Promissory Note”), and each draw on the Promissory Note shall be due and payable on or before 180 days after such draw is funded to UG Construction; provided that, such draw is also subject to a mandatory prepayment upon UG Construction’s receipt of payment for any invoice previously submitted and approved for financing by Lender. Lender will receive a security interest in UG Construction’s Collateral (as defined in the “Security Agreement” entered into as part of the Line of Credit). The Promissory Note earns interest at a monthly rate of one and seventy-five hundredths percent (1.75%).

In connection with entering in the Line of Credit, the Company has agreed to issue to Bancroft Capital, LLC (the “Placement Agent”) cash and warrant compensation in two separate tranches, the first being earned upon closing of the Line of Credit and the remainder of which will be due if and when UG Construction draws more than $4,500,000 from the Line of Credit. Both instances are detailed as follows:

1.At closing of the Line of Credit, the Placement Agent earned a cash fee of $200,000. In addition to the cash fee, the Company will issue to the Placement Agent or its designees, $200,000 worth of warrants (the “Placement Agent’s Warrants”) to purchase the Company’s common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the Closing. The Placement Agent’s Warrants will be exercisable at any time

20

and from time to time, in whole or in part, during the four and a half-year period commencing six (6) months from the date of issuance. The Placement Agent’s Warrants will provide for registration rights (including a one-time demand registration right and unlimited piggyback rights), cashless exercise and customary anti-dilution provisions (for stock dividends and splits) and anti-dilution protection (adjustment in the number and price of such warrants and the shares underlying such warrants) resulting from corporate events (which would include dividends, reorganizations, mergers, etc.).

2.If and when Emerald draws more than $4,500,000 from the Line of Credit, the Placement Agent will earn an additional cash fee of $200,000, and an additional $200,000 worth of Placement Agent’s Warrants to purchase the Company’s common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the date that the draws exceeding $4,500,000 were to take place.

As part of the Asset Purchase Agreement of DVO, a non-negotiable promissory note in the aggregate principal amount of $3,806,250, payable to DVO was issued effective November 1, 2022 (the "DVO Promissory Note"). The principal amount, together with the simple interest accrued on the unpaid principal amount outstanding was to be paid by the Company on a quarterly basis for the first four consecutive quarters, with the first payment paid in January 2023, and the remaining three payments due ten days following the end of each subsequent fiscal quarter thereafter until the earlier of the end of the fourth full fiscal quarter following the closing date December 31, 2023 or the payment in full of all amounts due. In the third quarter ended September 30, 2023, a portion of that quarter’s note payment was extended to the first quarter ended March 31, 2024. The DVO Promissory Note may be prepaid in whole or in part at any time without premium or penalty; provided, that each payment shall be accompanied by payment of all unpaid costs, fees and expenses, if any, which are due plus all accrued and unpaid interest due as of the date of such prepayment.

The outstanding principal balance under the DVO Promissory Note shall bear simple interest at a variable rate per annum equal to the rate of interest most recently published by JP Morgan Chase & Co. as the "prime rate" (the "Prime Rate"). Initially, interest will accrue at the Prime Rate as of the date of the DVO Promissory Note. The interest rate will be adjusted on a quarterly basis as of the first day of each full fiscal quarter following the first full fiscal quarter after the closing date to the then current Prime Rate. In connection with the extension of the DVO Promissory Note payment to the first quarter ended March 31, 2024, the interest rate was revised to a fixed rate of 10%, with principal and interest to be paid on a weekly basis.

The other financing agreements relate to short-term financing of the Company's insurance policies and are at an average interest rate of 13.6%.

NOTE 11 – RIGHT OF USE ASSETS AND LIABILITIES

As of March 31, 2024, the Company has seven operating type leases with an imputed annual interest rate of 8.0%. Each of the Company's operating type leases are utilized as office space with one lease also including a warehouse for inventory. Five of the leases were acquired by the Company in connection with its various acquisitions. The remaining lease terms range from less than one year to 6 years, as of March 31, 2024. The following is a summary of operating lease liabilities:

	March 31, 2024		December 31, 2023
Operating lease liabilities related to right of use assets	$	1,966,420	$	2,087,503
Less current portion	(673,920)		(707,141)
Long term	$	1,292,500	$	1,380,362

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The following is a schedule showing total future minimum lease payments:

For the period ending March 31,	Minimum Lease Payments
Remainder of 2024	$	552,251
2025	573,133
2026	404,751
2027	346,812
2028	253,415
Thereafter	82,488
Total minimum lease payments	2,212,850
Less: Amount representing interest	(246,430)
Net lease obligations	$	1,966,420

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no ongoing legal proceedings for which management believes the ultimate outcome would have a material adverse effect on the Company’s results of operations and cash flows.

On August 11, 2023, the Company entered into a settlement agreement (the “Settlement Agreement”) with Crest Ventures, LLC (“Crest”) and Andrew Telsey to settle all claims in the litigation filed in the District Court for Arapahoe County, Colorado, Case No. 2021CV31301. Pursuant to the Settlement Agreement, the Company paid $1,500,000 to Crest on September 7, 2023. In connection with this settlement, the Company recorded a loss in the second quarter ended June 30, 2023 of $1,500,000 in accordance with GAAP related to loss contingencies.

NOTE 12 – RISKS AND UNCERTAINTIES

Concentration Risk

The table below shows customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented:

Customers exceeding 10% of revenue

	Three Months Ended March 31,
Company Customer Number	2024		2023
C000002187	42	%	43	%
C000002336	*		17	%
C000002596	13	%	*
C000002463	11	%	*
*Amounts less than 10%

Customers exceeding 10% of accounts receivable

	As of March 31,		As of December 31,
Company Customer Number	2024		2023
C000002187	*		57	%
C000002345	14	%	*
C000002596	13	%	*
*Amounts less than 10%

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The table below shows vendors who account for 10% or more of the Company’s total purchases and 10% or more of the Company’s accounts payable for the periods presented:

Vendors exceeding 10% of purchases

	Three Months Ended March 31,
Company Vendor Number	2024		2023
V000002275	*		19	%
V000002589	14	%	*
V000002503	14	%	*
*Amounts less than 10%

Vendors exceeding 10% of accounts payable

	As of March 31,		As of December 31,
Company Vendor Number	2024		2023
V000002275	14	%	13	%
*Amounts less than 10%

Foreign Exchange Risk

Although our revenues and expenses are expected to be predominantly denominated in United States dollars, we may be exposed to currency exchange fluctuations. Recent events in the global financial markets have been coupled with increased volatility in the currency markets. Fluctuations in the exchange rate between the U.S. dollar, the Canadian dollar, the Euro, and the currency of other regions in which we may operate may have a material adverse effect on our business, financial condition and operating results. We may, in the future, establish a program to hedge a portion of our foreign currency exposure with the objective of minimizing the impact of adverse foreign currency exchange movements. However, even if we develop a hedging program, it may not mitigate currency risks.

NOTE 13 – STOCK-BASED COMPENSATION

Based on the vesting schedule of the grants of restricted stock units (“RSU” or “RSUs”) and options, stock-based compensation expense for the three months ended March 31, 2024 and 2023 totaled $656,576 and $479,641, respectively.

The Company has adopted the 2021 Omnibus Stock Incentive Plan, as amended (the “Omnibus Incentive Plan”), which provides for the issuance of incentive stock options, grants of RSUs, and stock-based awards to employees, directors, and consultants of the Company to reward and attract employees and compensate the Company’s Board of Directors (the “Board”) and vendors when applicable. The Omnibus Incentive Plan is administered by the Company's Board. Grants of RSUs under the Omnibus Incentive Plan are valued at no less than the market price of the stock on the date of grant. The fair value of the options is calculated using the Black-Scholes pricing model based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the options, risk-free interest rate and expected volatility of the price of the underlying common stock of 100%. There is a moderate degree of subjectivity involved when estimating the value of stock options with the Black-Scholes option pricing model as the assumptions used are moderately judgmental. Grant of RSUs and stock options are sometimes offered as part of an employment offer package, to ensure continuity of service or as a reward for performance. Grants of RSUs and stock options typically require a 1 to 3 year period of continued employment or service performance before the grant of RSUs or stock options vest. No cash flow effects are anticipated for grants of RSUs or stock options.

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The following schedule shows grants of RSU activity for the three months ended March 31, 2024:

	Number of Shares
Grants of RSUs unvested as of December 31, 2023	580,292
Grants of RSUs	298,857
Forfeiture/cancelled	(27,159)
Grants of RSUs vested and issued	(375,177)
Grants of RSUs unvested as of March 31, 2024	476,813

The following table summarizes the vesting time periods of these unvested RSUs:

Number of Shares	Vesting Time Period
92,911	Remainder of 2024
169,556	2025
214,346	2026
476,813

The following schedule shows stock option activity for the three months ended March 31, 2024.

OPTIONS:	Number of Shares	Weighted Average Remaining Life (Years)	Weighted Average Exercise Price
Stock options outstanding as of December 31, 2023	501,829	4.67	$	6.81
Issued	—	0	$	—
Forfeited	(39,880)	0	$	6.52
Exercised	—	0	$	—
Stock options outstanding as of March 31, 2024	461,949	4.30	$	6.83
Stock options exercisable as of March 31, 2024	441,922	0	$	6.77

As of March 31, 2024, the Company has $0 in unrecognized stock-based compensation expense related to these stock options. The aggregate intrinsic value of the options outstanding and exercisable at March 31, 2024 is $0.

NOTE 14 – STOCKHOLDERS’ EQUITY

On May 24, 2021, the Board authorized a stock repurchase program to purchase up to $5.0 million of the currently outstanding shares of the Company’s common stock, over a period of 12 months through open market purchases, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. On January 18, 2022, the Board authorized a $2.0 million increase to the stock repurchase program, to a total of $7.0 million. On February 2, 2022, the Board authorized an additional $1.5 million increase to the stock repurchase, to a total of $8.5 million. On September 12, 2022, the Board authorized an additional $2 million increase to the stock repurchase, to a total of $10.5 million. In total, the Company has repurchased 1,099,833 shares of common stock at an average price per share of $8.25 for a total of $9.1 million, under this program.

The Company did not repurchase shares of common stock either during the three months ended March 31, 2024 or during the three months ended March 31, 2023. As of March 31, 2024, we have $1.4 million remaining under the repurchase program.

In February 2021, the Company repurchased 350,000 shares of common stock with an average price per share of $8.50, for a total of $3.0 million, outside of any stock repurchase or publicly announced program.

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NOTE 15 – WARRANTS

The following table shows warrant activity for the three months ended March 31, 2024.

	Number of Shares	Weighted Average Exercise Price
Warrants outstanding as of December 31, 2023	511,681	$	8.74
Issued	—	$	—
Exercised	—	$	—
Expired	—	$	—
Warrants outstanding as of March 31, 2024	511,681	$	8.74
Warrants exercisable as of March 31, 2024	336,150	$	12.65

The aggregate intrinsic value of the warrants outstanding and exercisable as of March 31, 2024 is $20,477.

NOTE 16 – INCOME TAXES

The Company has experienced cumulative losses for both book and tax purposes since inception. The potential future recovery of any tax assets that the Company may be entitled to due to these accumulated losses is uncertain and any tax assets that that the Company may be entitled to have been fully reserved based on management’s current estimates. Management intends to continue maintaining a full valuation allowance on the Company’s deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.The deferred income tax benefit for the three months ended March 31, 2024 and 2023 relates to the reduction in the deferred tax liability associated with the amortization of the intangible assets from the acquisitions of the 2WR Entities and Emerald. The Company records state income taxes paid during the year within the Other income (expense) financial statement line item.

NOTE 17 – SUBSEQUENT EVENTS

Term Loan

On October 1, 2024, urban-gro, Inc. (the “Company”) entered into an asset based term Loan Agreement (the “Loan”) with Grow Hill, LLC, a Washington limited liability company (the “Lender”) pursuant to which the Lender extended to the Company a secured loan of $2,100,000, to be used to assist the Company with cash management, including to support the Company’s growth in the cannabis industry. The Loan is for a term of 24 months and has an origination fee of $100,000, which was added to the amount of the Loan. There is no penalty to prepayment, except the Lender will receive at least $150,000 in minimum interest if Company chooses to prepay the Loan. The Loan contains standard events of default and representations and warranties by the Company and the Lender.

The Loan is evidenced by a Secured Promissory Note issued by the Company to the Lender (the “Grow Hill Promissory Note”). The Lender received a security interest in certain of the Company’s assets pursuant to a security agreement between the Company and the Lender (the “Security Agreement”), which does not include any assets of the Company’s subsidiaries, including those securing the Company’s existing line of credit. The Grow Hill Promissory Note accrues simple interest at an annual rate of fifteen percent (15%).

In connection with entering in the Loan, the Company issued to Lender a warrant (the “Warrant”) to purchase up to an aggregate of 160,000 shares of the Company’s common stock at an exercise price of $2.50 per share. The Warrant is exercisable immediately, will expire on the five (5) year anniversary of issuance, and is exercisable on a cashless basis at the election of the holder.

Modification of Agreement with Bancroft Related to Line of Credit

On October 2, 2024, the Company amended its agreement with the Placement Agent to modify the terms of the cash and warrant compensation associated with the Line of Credit. Under this amendment, the threshold at which the second tranche of cash and warrant compensation was increased such that under the new agreement the Company has to draw more than $6,000,000 from the Line of Credit in order for the Placement Agent to earn an additional cash fee of $200,000 and an additional $200,000 worth of Placement Agent's Warrants to purchase the Company's common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the date that the draws exceeding $6,000,000 were to take place.

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Increase in Shares Available to be Issued Under 2021 Omnibus Plan

In the Company's Annual Meeting on June 19, 2024 the Company’s shareholders approved an amendment to the Company's Omnibus 2021 Stock Incentive Plan (the “Plan") to increase the aggregate number of shares available for issuance under the Plan by 1,200,000 shares. All other descriptors of the Plan in Note 14 remain unchanged.

Equity Issuances After March 31, 2024

Subsequent to March 31, 2024, 952,194 RSUs were granted to employees, directors, and consultants with various vesting periods.

Settlement of Pullar Lawsuit

On May 5, 2022, Robert Pullar (“Pullar”) filed a lawsuit against urban-gro and Bradley Nattrass, in his capacity as the Company’s CEO, relating to a prior settlement agreement the Company had entered into with Pullar. On Friday, January 31, 2025, the parties entered a settlement agreement, without any admission of liability or wrongdoing, to settle all claims associated with the litigation in exchange for a cash payment by the Company to Pullar of $250,000 and an issuance of a warrant to purchase up to 75,000 shares of common stock with an exercise price per share of $1.00.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included herein. See also “Forward Looking Statements” on pages 3-4 of this Report.

OVERVIEW AND HISTORY

urban-gro is an integrated professional services and design-build firm. Our business focuses primarily on providing fee-based knowledge-based services as well as the value-added reselling of equipment. We derive income from our ability to generate revenue from our clients through the billing of our employees’ time spent on client projects. We offer value-added architectural, engineering, systems procurement and integration, and construction design-build solutions to customers operating in the controlled environment agriculture (“CEA”) and industrial and other commercial (“Commercial”) sectors. In the CEA sector, our clients include operators and facilitators in both the cannabis and produce markets in the United States, Canada, and Europe. In the Commercial sector, we work with leading food and beverage commercial packaged goods (“CPG”) companies in the United States, and clients in other commercial sectors including healthcare, higher education, and hospitality.

RESULTS OF OPERATIONS

Comparison of Results of Operations for the three months ended March 31, 2024 and 2023

During the three months ended March 31, 2024, we generated revenues of $15.4 million compared to revenues of $16.8 million during the three months ended March 31, 2023, a decrease of $1.4 million, or approximately 8%. This decrease in revenues is the result of the following changes in individual revenue components:

•Equipment systems revenue decreased $0.4 million due to continued negative market conditions in the CEA sector and a reduction in capital equipment spending by customers;

•Services revenue decreased $0.3 million due to continued negative market conditions in the CEA sector offset by an increase in revenue from commercial customers;

•Construction design-build revenue decreased $0.5 million due to decreases in our construction design-build revenue contracts, and:

•Other revenues decreased $0.1 million.

During the three months ended March 31, 2024, cost of revenues was $12.4 million compared to $13.7 million during the three months ended March 31, 2023, a decrease of $1.3 million, or approximately 10%. Gross profit was $3.0 million (approximately 19% of revenues) during the three months ended March 31, 2024, compared to $3.0 million (approximately 18% of revenue) during the three months ended March 31, 2023. This increase in gross profit as a percentage of revenues, even though revenues decreased, was primarily due to improved margins in Services and Construction design-build revenues associated with improved efficiencies in delivering Services revenues and higher margin Construction design-build projects as compared to the prior year.

Operating expenses decreased by $2.6 million, or approximately 32%, to $5.5 million for the three months ended March 31, 2024 compared to $8.1 million for the three months ended March 31, 2023. This overall decrease in operating expenses was the result of a $2.6 million decrease in general and administrative operating expenses due to decreases in salary and personnel related costs, including the elimination of the incentive retention plan in 2024.

Non-operating expense was $0.1 million for the three months ended March 31, 2024, compared to non-operating expense of $0.2 million for the three months ended March 31, 2023.

As a result of the above, for the three months ended March 31, 2024, we incurred a net loss of $2.6 million, or a net loss per share of $0.21, compared to a net loss of $5.3 million, or a net loss per share of $0.49 for the three months ended March 31, 2023.

NON-GAAP FINANCIAL MEASURES

The Company uses the supplemental financial measure of Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) as a measure of our operating performance. Adjusted EBITDA is not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and it is not a substitute for other measures prescribed by GAAP such as net income (loss), income (loss) from operations, and cash flows from operating activities. We define Adjusted EBITDA as net income (loss) attributable to urban-gro, Inc., determined in accordance with GAAP, excluding the effects of certain operating and non-operating expenses including, but not limited to, interest expense/income, income taxes/benefit, depreciation of tangible assets, amortization of intangible assets, impairment of investments, foreign exchange gains and losses, debt forgiveness

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and extinguishment, stock-based compensation expense, and non-recurring legal and acquisition costs, that we do not believe reflect our core operating performance.

Our Board and management team focus on Adjusted EBITDA as a key performance and compensation measure. We believe that Adjusted EBITDA assists us in comparing our operating performance over various reporting periods because it removes from our operating results the impact of items that our management believes do not reflect our core operating performance.

The following table reconciles net income (loss) attributable to the Company to Adjusted EBITDA for the periods presented:

	Three Months Ended March 31,
	2024		2023
Net loss (GAAP)	$	(2,560,563)	$	(5,251,201)
Interest expense	99,306		73,216
Interest income	(81)		(73,131)
Federal and state income tax (provisions)	(48,383)		—
Federal and state income tax payments	22,975		23,487
Depreciation and amortization	390,250		404,069
EBITDA (non-GAAP)	$	(2,096,496)	$	(4,823,560)
Non-recurring legal fees	225,378		216,739
One-time employee expense	—		—
Contingent consideration - change in fair value	—		160,232
Contingent consideration - DVO acquisition	74,806		46,267
Reduction in force costs	443,795		—
Retention incentive	—		450,000
Stock-based compensation	656,576		479,641
Transaction costs	—		35,078
Adjusted EBITDA (non-GAAP)	$	(695,941)	$	(3,435,603)

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LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2024, we had negative working capital of $6.6 million, compared to negative working capital of $5.1 million as of December 31, 2023, a decrease of $1.6 million. This decrease in working capital was primarily due to a decrease in accounts receivable, net and contract receivables of $3.3 million, offset by a decrease in accounts payable, accrued expenses, contract liabilities, and accrued expenses of $1.7 million. These changes were the result of cash collections from customers and cash payments to vendors on Construction design-build projects.

On December 13, 2023, UG Construction, Inc. ("UG Construction"), a wholly owned subsidiary of the Company, entered into an interest only asset based revolving loan agreement (the “Line of Credit") with Gemini Finance Corp. ("Lender") pursuant to which Lender extended to UG Construction the Line of Credit in an amount not to exceed $10.0 million to be used to assist UG Construction and the Company with cash management. Lender will consider requests under the Line of Credit, which Lender may accept or reject in its discretion, until September 12, 2024 (the “Initial Term"), subject to an automatic extension for an additional nine-month term until May 12, 2025, provided that UG Construction is in compliance with all the terms of the applicable loan documents and Lender has not sent a written notice of non-renewal at least 60 days prior to expiration of the Initial Term. The Line of Credit contains standard events of default and representations and warranties by UG Construction and the Lender and the Company has entered into a Continuing Guaranty pursuant to which the Company will guarantee repayment of the loans associated with the Line of Credit (the “Guaranty Agreement”). Loans made under the Line of Credit earns interest at a monthly rate of one and seventy-five hundredths percent (1.75%). As of March 31, 2024, we had borrowed $2.0 million under the Line of Credit.

As of March 31, 2024, we had cash of $0.6 million, which represented a decrease of $0.4 million from December 31, 2023 due to the following changes during the three months ended March 31, 2024:

•Net cash provided by operating activities was $0.6 million. This source of cash is the net effect of the net loss of $2.6 million, offset by non-cash expenses of $1.2 million, and a reduction in net operating assets and liabilities of $2.0 million. See the condensed consolidated statements of cash flows for further details on the non-cash expenses and net changes in operating assets and liabilities;

•Net cash used in investing activities was $0.0 million. We have no material commitments for capital expenditures as of March 31, 2024.

•Net cash used in financing activities was $1.1 million. Cash used from financing activities primarily relates to cash provided by our Line of Credit and other financing agreements of $3.0 million offset by $3.7 million of payments made on the Line of Credit and other financing agreements.

INFLATION

Inflation on the costs of labor, raw materials and other items that are critical to our business, has resulted in increased costs for our customers. In addition, the U.S. Government has responded to inflation by raising interest rates, which has increased the cost of capital for our customers. We believe this has resulted in some customers delaying projects, reducing the scope of projects or potentially canceling projects, as well as increased costs of our operations, which has negatively impacted the results of our operations during the quarter ended March 31, 2024. We maintain strategies to mitigate the impact of higher material, energy and commodity costs, including cost reduction, alternative sourcing strategies, and passing along cost increase to customers, which may offset only a portion of the adverse impact.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a detailed discussion about the Company’s significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. During the three months ended March 31, 2024, there were no material changes made to the Company’s significant accounting policies.

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OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

ITEM 4. CONTROLS AND PROCEDURES.

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Amendment No. 1.

These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO to allow timely decisions regarding required disclosure.

Based on such evaluation, at the time our Original Form 10-Q was filed on April 30, 2024, our CEO and CFO concluded, with reasonable assurance, that our disclosure controls and procedures were effective as of March 31, 2024. Subsequent to the original evaluation by our management team, our CEO and CFO have concluded that our disclosure controls and procedures were not effective as of March 31, 2024 because of the material weaknesses in our internal control over financial reporting described in the Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023.

We believe that our financial statements presented in this Amendment No. 1 fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2024, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Plan to Remediate the Material Weaknesses

As it relates to the material weaknesses that existed as of March 31, 2024, we are currently in the process of designing and implementing remediation plans and taking steps to address the root cause of the material weaknesses described in the Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023. There have been no changes to the remediation plan described in the Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023, each of which is incorporated herein by reference and which could materially affect our business, financial condition or future results. The risks described herein and in those filings are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. We do not believe that there have been any material changes from the risk factors previously disclosed in our Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023.

ITEM 6. EXHIBITS

Exhibit No.	Exhibit Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Schema Document
101.CAL	Inline XBRL Calculation Linkbase Document
101.DEF	Inline XBRL Definition Linkbase Document
101.LAB	Inline XBRL Label Linkbase Document
101.PRE	Inline XBRL Presentation Linkbase Document
104	Cover Page Interactive Data File (Embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 18, 2025.

URBAN-GRO, INC.
By:	/s/ Bradley Nattrass
	Bradley Nattrass
	Chairperson of the Board of Directors and Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Richard Akright
	Richard A. Akright
	Chief Financial Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradley Nattrass, certify that:

1.I have reviewed this quarterly report on Form 10-Q of urban-gro, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 18, 2025	/s/ Bradley Nattrass
	Bradley Nattrass
	Chairperson of the Board of Directors and Chief Executive Officer

EX-31.2

Exhibit31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard A. Akright, certify that:

1.I have reviewed this quarterly report on Form 10-Q of urban-gro, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 18, 2025	/s/ Richard A. Akright
	Richard A. Akright
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C., SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report of urban-gro, Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2024, as filed with the Securities and Exchange Commission on February 18, 2025, (the “Report”), we, the undersigned, in the capacities and on the date indicated below, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 18, 2025	/s/ Bradley Nattrass
	Bradley Nattrass
	Chairperson of the Board of Directors and Chief Executive Officer
Dated: February 18, 2025	/s/ Richard A. Akright
	Richard A. Akright
	Chief Financial Officer

XML

Cover - shares	3 Months Ended
	Mar. 31, 2024	Feb. 18, 2025
Cover [Abstract]
Document Type	10-Q/A
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-39933
Entity Registrant Name	URBAN-GRO, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-5158469
Entity Address, Address Line One	1751 Panorama Point
Entity Address, Address Line Two	Unit G
Entity Address, City or Town	Lafayette
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80026
City Area Code	720
Local Phone Number	390-3880
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	UGRO
Security Exchange Name	NASDAQ
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		12,696,557
Entity Central Index Key	0001706524
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	true
Amendment Description	This Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) is being filed to amend and restate urban-gro, Inc.’s (together with its wholly owned subsidiaries, the “Company”) Quarterly Report on Form 10-Q for the three months ended March 31, 2024 (“Original Filing”), filed with the U.S. Securities and Exchange Commission (“SEC”) on April 30, 2024 (“Original Filing Date”). In filing this Amendment No. 1, we are restating our previously issued Consolidated Financial Statements as of and for the three months ended March 31, 2024 (the “Affected Period”) to account for certain adjustments discovered during the Company’s re-audit of its financial statements issued in Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2023. All material restatement information will be included in the Amended Reports, and we do not intend to separately amend other filings that we have previously filed with the SEC.Accordingly, investors and other readers should rely only on the financial information and other disclosures regarding the periods described above in this Amendment No. 1 and in any other future filings with the SEC (as applicable) and should not rely on any previously issued or filed reports, press releases, corporate presentations or similar communications relating to the periods described above.As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s principal executive officer and principal financial officer are providing new currently dated certifications required pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto.

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash	$ 648,597	$ 1,074,842
Accounts receivable, net	18,325,178	21,648,901
Contract receivables	8,080,149	8,436,567
Prepaid expenses and other assets	2,555,059	1,751,564
Total current assets	29,608,983	32,911,874
Non-current assets:
Property and equipment, net	1,255,557	1,419,393
Operating lease right of use assets, net	1,918,532	2,041,217
Goodwill	9,688,975	9,688,975
Intangible assets, net	3,256,621	3,451,608
Total non-current assets	16,119,685	16,601,193
Total assets	45,728,668	49,513,067
Current liabilities:
Accounts payable	23,842,794	24,203,769
Contract liabilities	3,575,529	3,950,133
Accrued expenses	5,070,635	5,284,278
Customer deposits	555,676	603,046
Contingent consideration	49,830	49,830
Notes payable	2,490,486	3,204,840
Operating lease liabilities	673,920	707,141
Total current liabilities	36,258,870	38,003,037
Non-current liabilities:
Operating lease liabilities, net of current portion	1,292,500	1,380,362
Deferred tax liability	(4,070)
Deferred tax liability		44,313
Total non-current liabilities	1,288,430	1,424,675
Total liabilities	37,547,300	39,427,712
Commitments and contingencies (note 11)
Shareholders’ equity:
Preferred Stock, Value, Issued	0	0
Common Stock, Value, Issued	13,769	13,523
Additional Paid in Capital	89,046,086	88,389,756
Treasury Stock, Value	(12,045,542)	(12,045,542)
Accumulated deficit	(68,832,945)	(66,272,382)
Total shareholders’ equity	8,181,368	10,085,355
Total liabilities and shareholders’ equity	$ 45,728,668	$ 49,513,067

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	30,000,000	30,000,000
Common stock, shares issued (in shares)	13,768,594	13,522,669
Common stock, shares outstanding (in shares)	12,318,761	12,072,836
Treasury stock, shares, cost basis (in shares)	1,449,833	1,449,833

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenues:
Total revenues and other income	$ 15,401,035	$ 16,754,771
Total cost of revenues	12,409,578	13,746,134
Gross profit	2,991,457	3,008,637
Operating expenses:
General and administrative	5,077,864	7,685,030
Depreciation and amortization	390,250	404,069
Total operating expenses	5,468,114	8,089,099
Loss from operations	(2,476,657)	(5,080,462)
Non-operating income (expense):
Interest expense	(99,306)	(73,216)
Interest income	81	73,131
Contingent consideration	0	(160,232)
Other income (expense)	(33,064)	(10,422)
Total non-operating income (expense)	(132,289)	(170,739)
Loss before income taxes	(2,608,946)	(5,251,201)
Income tax benefit	48,383	0
Net loss	(2,560,563)	(5,251,201)
Comprehensive loss	$ (2,560,563)	$ (5,251,201)
Net loss per share – basic (in dollars per share)	$ (0.21)	$ (0.49)
Net loss per share – diluted (in dollars per share)	$ (0.21)	$ (0.49)
Weighted average shares – basic (in shares)	12,075,619	10,772,705
Weighted average shares – diluted (in shares)	12,075,619	10,772,705
Equipment systems
Revenues:
Total revenues and other income	$ 2,508,287	$ 2,905,035
Total cost of revenues	2,172,450	2,408,481
Services
Revenues:
Total revenues and other income	3,133,793	3,470,653
Total cost of revenues	1,508,449	1,974,538
Construction design-build
Revenues:
Total revenues and other income	9,683,814	10,195,338
Total cost of revenues	8,675,280	9,229,973
Other
Revenues:
Total revenues and other income	75,141	183,745
Total cost of revenues	$ 53,399	$ 133,142

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) - USD ($)	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Beginning balance (in shares) at Dec. 31, 2022		12,292,104
Beginning balance at Dec. 31, 2022	$ 31,321,994	$ 12,292	$ 84,189,965	$ (40,834,721)	$ (12,045,542)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	479,641		479,641
Stock grant program vesting (in shares)		96,285
Stock grant program vesting	0	$ 96	(96)
Stock issued for contingent consideration (in shares)		64,224
Stock issued for contingent consideration	191,919	$ 64	191,855
Net loss	(5,251,201)			(5,251,201)
Ending balance (in shares) at Mar. 31, 2023		12,452,613
Ending balance at Mar. 31, 2023	$ 26,742,353	$ 12,452	84,861,365	(46,085,922)	(12,045,542)
Beginning balance (in shares) at Dec. 31, 2023	12,072,836	13,522,669
Beginning balance at Dec. 31, 2023	$ 10,085,355	$ 13,523	88,389,756	(66,272,382)	(12,045,542)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	656,576		656,576
Stock grant program vesting (in shares)		245,925
Stock grant program vesting	0	$ 246	(246)
Net loss	$ (2,560,563)			(2,560,563)
Ending balance (in shares) at Mar. 31, 2024	12,318,761	13,768,594
Ending balance at Mar. 31, 2024	$ 8,181,368	$ 13,769	$ 89,046,086	$ (68,832,945)	$ (12,045,542)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (2,560,563)	$ (5,251,201)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	390,250	404,069
Amortization of right-of-use assets	134,054	87,426
Stock-based compensation expense	656,576	479,641
Change in fair value of contingent consideration	0	160,232
Interest income on investments	0	(12,792)
Changes in operating assets and liabilities (net of acquired amounts):
Accounts receivable and contract receivables	3,680,141	(6,502,104)
Prepaid expenses and other assets and property and equipment	(497,749)	(411,181)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(996,596)	7,751,597
Operating lease liability	(129,181)	(57,635)
Deferred tax liability	(48,383)	0
Net cash provided by (used in) operating activities	628,549	(3,351,948)
Cash flows from investing activities:
Refunds/(Purchases) of property and equipment	8,486
Refunds/(Purchases) of property and equipment		(138,010)
Net cash provided by (used in) investing activities	8,486	(138,010)
Cash flows from financing activities:
Additions to notes payable	2,000,000	0
Repayment of finance lease liability	(43,180)	(43,410)
Payments to settle contingent consideration	0	(230,309)
Repayment of notes payable	(3,020,100)	(924,469)
Net cash used in financing activities	(1,063,280)	(1,198,188)
Net change in cash	(426,245)	(4,688,146)
Cash at beginning of period	1,074,842	11,754,349
Cash at end of period	648,597	7,066,203
Supplemental cash flow information:
Cash paid for interest	159,366	6,475
Net cash paid for income taxes	0	23,487
Supplemental disclosure of non-cash investing and financing activities:
Stock issued for contingent consideration	0	191,854
Financing lease right-of-use asset and liability remeasurement	$ 0	$ 26,899

XML

ORGANIZATION, ACQUISITIONS, AND LIQUIDITY

3 Months Ended

Mar. 31, 2024

Organization, Consolidation, Business Combination, And Presentation Of Financial Statements [Abstract]

ORGANIZATION, ACQUISITIONS, AND LIQUIDITY

ORGANIZATION, ACQUISITIONS, AND LIQUIDITY

Organization

urban-gro, Inc. (together with its wholly owned subsidiaries, collectively "urban-gro," "we," "us," or the “Company") was originally formed on March 20, 2014, as a Colorado limited liability company. On March 10, 2017, we converted to a Colorado corporation and exchanged shares of our common stock for every member's interest issued and outstanding on the date of conversion. On October 29, 2020, we reincorporated as a Delaware corporation. On February 12, 2021, we completed an uplisting to the Nasdaq Capital Market ("Nasdaq") under the ticker symbol "UGRO".

urban-gro is an integrated professional services and design-build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture (“CEA”), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and a commitment to sustainability drive our team to provide exceptional customer experiences. To serve our horticulture clients, we engineer, design and manage the construction of indoor CEA facilities and then integrate complex environmental equipment systems into those facilities. Through this work, we create high-performance indoor cultivation facilities for our clients to grow specialty crops, including leafy greens, vegetables, herbs, and plant-based medicines. Our custom-tailored approach to design, construction, procurement, and equipment integration provides a single point of accountability across all aspects of indoor growing operations. We also help our clients achieve operational efficiency and economic advantages through a full spectrum of professional services and programs focused on facility optimization and environmental health. Further, we serve a broad range of commercial and governmental entities, providing them with planning, consulting, architectural, engineering and construction design-build services for their facilities. We aim to work with our clients from the inception of their project in a way that provides value throughout the life of their facility. We are a trusted partner and advisor to our clients and offer a complete set of engineering and managed services complemented by a vetted suite of select cultivation equipment systems.

Liquidity and Going Concern

The Company has produced multiple consecutive years of net losses and negative cash flows. The financial results described in these financial statements and our financial position as of March 31, 2024 raise substantial doubt about our ability to continue as a going concern. However, the Company has recently taken actions to strengthen its liquidity, including decreasing headcount and operating expenses to expedite the Company's path to cash flow positive results. If necessary, the Company will seek to raise capital by issuing additional equity shares either through a private placement or on the open market. The Company may also seek to obtain additional debt financing for which there can be no guarantee. Management has concluded that these recent positive steps alleviate any substantial doubt about the Company's ability to continue its operations, and meet its financial obligations, for twelve moths from the date these consolidated financial statements are issued.

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RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2024

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

Restatement of Previously Filed Financial Statements

In connection with the re-audit of the financial statements for the year ended December 31, 2023, the Company identified certain adjustments to its deferred tax liabilities related to certain acquisitions. See the Explanatory Note in this Amendment No. 1 for further discussion. The following tables show the unaudited quarterly condensed consolidated financial information for the three months ended March 31, 2024. The accompanying applicable notes have been updated to reflect the effects of the restatement.

The amounts in the "As Reported" columns are amounts derived from the Company's previously filed financial statements in its Quarterly Report on Form 10-Q for the three month period ended March 31, 2024, originally filed with the Securities and Exchange Commission on April 30, 2024 (the “Original Form 10-Q”). The amounts in the "Restatement Adjustments" columns present the impact of the adjustments arising from the re-audit of the Company’s 2023 financial statements and re-review of the Company’s unaudited quarterly condensed consolidated financial information for the three months ended March 31, 2024. The amounts in the "As Restated" columns are the updated amounts including the impact from the Restatement Adjustments.

	As of March 31, 2024
	As		Restatement		As
ASSETS	Reported		Adjustments		Restated
Current assets:
Cash	$	692,680	$	(44,083)	$	648,597
Accounts receivable, net	18,754,870		(429,692)		18,325,178
Contract receivables	10,174,845		(2,094,696)		8,080,149
Prepaid expenses and other current assets	3,606,595		(1,051,536)		2,555,059
Total current assets	33,228,990		(3,620,007)		29,608,983
Non-current assets:
Property and equipment, net	1,255,557		—		1,255,557
Operating lease right of use assets, net	1,918,532		—		1,918,532
Goodwill	15,572,050		(5,883,075)		9,688,975
Intangible assets, net	4,155,175		(898,554)		3,256,621
Total non-current assets	22,901,314		(6,781,629)		16,119,685
Total assets	$	56,130,304	$	(10,401,636)	$	45,728,668
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	24,987,061		(1,144,267)		23,842,794
Contract liabilities	3,093,242		482,287		3,575,529
Accrued expenses	3,632,874		1,437,761		5,070,635
Customer deposits	555,676		—		555,676
Contingent consideration	49,830		—		49,830
Notes payable	2,490,486		—		2,490,486
Operating lease liabilities	673,920		—		673,920
Total current liabilities	35,483,089		775,781		36,258,870
Non-current liabilities:
Operating lease liabilities, net of current portion	1,292,500		—		1,292,500
Deferred tax liability	769,036		(773,106)		(4,070)
Total non-current liabilities	2,061,536		(773,106)		1,288,430
Total liabilities	$	37,544,625	$	2,675	$	37,547,300
Commitments and contingencies (note 11)
Shareholders’ equity:
Preferred stock, $0.10 par value; 3,000,000 shares authorized; 0 and 0 shares issued and outstanding	—		—		—
Common stock, $0.001 par value; 30,000,000 shares authorized; 13,768,594 issued and 12,318,761 outstanding as of March 31, 2024, and 13,522,669 issued and 12,072,836 outstanding as of December 31, 2023	13,769		—		13,769
Additional paid-in capital	89,557,913		(511,827)		89,046,086
Treasury shares, cost basis: 1,449,833 shares as of March 31, 2024 and as of December 31, 2023	(12,045,542)		—		(12,045,542)
Accumulated deficit	(58,940,461)		(9,892,484)		(68,832,945)
Total shareholders’ equity	18,585,679		(10,404,311)		8,181,368
Total liabilities and shareholders’ equity	$	56,130,304	$	(10,401,636)	$	45,728,668

	Three Months Ended March 31, 2024
	As			Restatement			As
	Reported			Adjustments			Restated
Revenues:
Equipment systems	$	2,508,287		$	—		$	2,508,287
Services	3,133,793			—			3,133,793
Construction design-build	9,825,457			(141,643)			9,683,814
Other	75,141			—			75,141
Total revenues and other income	15,542,678			(141,643)			15,401,035
Cost of revenues:
Equipment systems	2,172,383			67			2,172,450
Services	1,508,449			—			1,508,449
Construction design-build	8,692,432			(17,152)			8,675,280
Other	53,399			—			53,399
Total cost of revenues	12,426,663			(17,085)			12,409,578
Gross profit	3,116,015			(124,558)			2,991,457
	20		%	88		%	108		%
Operating expenses:
General and administrative	4,745,192			332,672			5,077,864
Depreciation and Amortization	434,595			(44,345)			390,250
Total operating expenses	5,179,787			288,327			5,468,114
Loss from operations	(2,063,772)			(412,885)			(2,476,657)
Non-operating income (expenses):
Interest expense	(99,306)			—			(99,306)
Interest income	81			—			81
Contingent consideration	—			—			—
Write-down of investment	—			—			—
Loss on settlement	—			—			—
Other income (expense)	(26,889)			(6,175)			(33,064)
Total non-operating income (expenses)	(126,114)			(6,175)			(132,289)
Loss before income taxes	(2,189,886)			(419,060)			(2,608,946)
Income tax benefit	48,383			—			48,383
Net loss	$	(2,141,503)		$	(419,060)		$	(2,560,563)
Comprehensive loss	$	(2,141,503)		$	(419,060)		$	(2,560,563)
Loss per share – basic and diluted	$	(0.18)		$	(0.03)		$	(0.21)
Weighted average shares – basic and diluted	12,075,619			12,075,619			12,075,619

	For the Three Months Ended March 31, 2024
	As		Restatement		As
	Reported		Adjustments		Restated
Cash flows from operating activities:
Net loss	$	(2,141,503)	$	(419,060)	$	(2,560,563)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	434,595		(44,345)		390,250
Amortization of right-of-use assets	—		134,054		134,054
Stock-based compensation expense	656,576		—		656,576
Impairment of investment	—		—		—
Change in fair value of contingent consideration	—		—		—
PPP loan forgiveness	—		—		—
Interest income on investments	137,973		(137,973)		—
Changes in operating assets and liabilities (net of acquired amounts):
Accounts receivable and contract receivables	8,083,975		(4,403,834)		3,680,141
Prepaid expenses and other assets and property and equipment	(746,995)		249,246		(497,749)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(5,888,371)		4,891,775		(996,596)
Change in contingent consideration from indemnification	—		—		—
Operating lease liability	(158,644)		29,463		(129,181)
Deferred tax liability	(48,383)		—		(48,383)
Customer deposits	—		—		—
Net cash used in operating activities	329,223		299,326		628,549
Cash flows from investing activities:
Sale of investment	—		—		—
Refunds/(Purchases) of property and equipment	8,487		(1)		8,486
Business combinations, net of cash acquired	—		—		—
Net cash provided by (used in) investing activities	8,487		(1)		8,486
Cash flows from financing activities:
Proceeds from issuance of common stock	—		—		—
Repurchase of common stock	—		—		—
Additions to notes payable	3,024,223		(1,024,223)		2,000,000
Repayment of notes payable	(3,738,577)		718,477		(3,020,100)
Repayment of finance lease liability	(43,180)		—		(43,180)
Payments to settle contingent consideration	—		—		—
Net cash used in financing activities	(757,534)		(305,746)		(1,063,280)
Net change in cash	(419,824)		(6,421)		(426,245)
Cash at beginning of period	1,112,504		(37,662)		1,074,842
Cash at end of period	$	692,680	$	(44,083)	$	648,597

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Condensed Consolidated Financial Statements

The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for condensed financial reporting. The condensed consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of stockholders’ equity and condensed consolidated statements of cash flows for the periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s consolidated financial statements in the Company’s Annual Report Amendment No. 2 on Form 10-K/A for the year ended December 31, 2023.

Significant Accounting Policies

For a detailed discussion about the Company’s significant accounting policies, refer to Note 2 - “Summary of Significant Accounting Policies,” in the Company’s consolidated financial statements included in the Company’s Annual Report Amendment No. 2 on Form 10-K/A for the year ended December 31, 2023. During the three months ended March 31, 2024, there were no material changes made to the Company’s significant accounting policies.

Use of Estimates

In preparing condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under construction design-build contracts; estimated useful lives and potential impairment of long-lived assets, intangibles and goodwill; inventory write-offs; allowance for deferred tax assets; and allowance for bad debt.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Balance Sheet Classifications

The Company includes in current assets and liabilities the following amounts that are in connection with construction contracts that may extend beyond one year: contract assets and contract liabilities (including retainage invoiced to customers contingent upon anything other than the passage of time), capitalized costs to fulfill contracts, retainage payable to sub-contractors and accrued losses on uncompleted contracts. A one-year time period is used to classify all other current assets and liabilities when not otherwise prescribed by the applicable accounting principles.

Contract Assets and Liabilities

The timing between when the Company invoices for its construction design-build customers can create a contract asset or contract liability. Refer to Note 3 - Revenue from Contracts with Customers for further discussion of the Company's contract assets and liabilities.

Recently Issued Accounting Standards

From time to time, the Financial Accounting Standards Board (the "FASB") or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, the Company believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Company’s financial statements upon adoption.

Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company's financial condition or the results of our operations.

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REVENUE FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company recognizes revenue predominantly from the sale of equipment systems, services, construction design-build, and from other various immaterial contracts with customers from its CEA and Commercial sectors. The table below presents the revenue by source for the three months ended March 31, 2024 and 2023:

	For the three months ended March 31, 2024
	CEA			Commercial			Total			Relative Percentage
Equipment systems	$	2,508,287		$	—		$	2,508,287		16%
Services	867,907			2,265,886			3,133,793			20%
Construction design-build	957,623			8,726,191			9,683,814			63%
Other	75,141			—			75,141			—%
Total revenues and other income	$	4,408,958		$	10,992,077		$	15,401,035		100%
Relative percentage	29		%	71		%	100		%

	For the three months ended March 31, 2023
	CEA			Commercial			Total			Relative Percentage
Equipment systems	$	2,905,035		$	—		$	2,905,035		17%
Services	1,577,026			1,893,627			3,470,653			21%
Construction design-build	383,524			9,811,814			10,195,338			61%
Other	183,745			—			183,745			1%
Total revenues and other income	$	5,049,330		$	11,705,441		$	16,754,771		100%
Relative percentage	30		%	70		%	100		%

Under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, a performance obligation is a promise in a contract with a customer, to transfer a distinct good or service to the customer. Equipment systems contracts are lump sum contracts, which require the performance of some, or all, of the obligations under the contract for a specified amount. Service revenue contracts, which include both architectural and engineering designs, generally contain multiple performance obligations which can span across multiple phases of a project and are generally set forth in the contract as distinct milestones. The majority of construction design-build contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Some contracts have multiple performance obligations, most commonly due to the contract covering multiple phases of the project life cycle (design and construction).

The transaction price for service contracts and construction design-build contracts is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. When there are multiple performance obligations under the same service contract, the Company allocates the transaction price to each performance obligation based on the standalone selling price. In general, payment terms are fixed at the time of the contract and are not subject to discounts, incentives, payment bonuses, credits, or penalties, unless negotiated in an amendment.

When establishing the selling price to the customer, the Company uses various observable inputs. For equipment systems, the stand-alone selling price is determined by forecasting the expected costs of the products, and then adding in the appropriate margins established by management. For service revenues and construction design-build revenues, the Company estimates the selling price by reference to certain physical characteristics of the project, which include the facility size, the complexity of the design, and the mechanical systems involved, which are indicative of the scope and complexity for those services. Significant judgments are typically not required with respect to the determination of the transaction price based on the nature of the selling prices of the products and services delivered and the collectability of those amounts. Accordingly, the Company does not consider estimates of variable consideration to be constrained.

The Company recognizes equipment systems, services, and construction design-build revenues when the performance obligation with the customer is satisfied. For satisfaction of equipment system revenues, the Company recognizes revenue when control of the promised good transfers to the customer, which predominately occurs at the time of shipment. For service revenues, satisfaction occurs as the services related to the distinct performance obligations are rendered or completed in exchange for consideration in an amount for which the Company is entitled. The time period between recognition and satisfaction of performance

obligations is generally within the same reporting period; thus, there are no material unsatisfied or partially unsatisfied performance obligations for product or service revenues at the end of the reporting period.

Construction design-build revenues are recognized as the Company's obligations are satisfied over time, using the ratio of project costs incurred to estimated total costs for each contract because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed. This continuous transfer of control to the customer is further supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process. This cost-to-cost measure is used for our construction design-build contracts because management considers it to be the best available measure of progress on these contracts.

Contract modifications through change orders, claims and incentives are routine in the performance of the Company’s construction design-build contracts to account for changes in the contract specifications or requirements. In most instances, contract modifications are not distinct from the existing contract due to the significant integration of services provided in the contract and are accounted for as a modification of the existing contract and performance obligation. Either the Company or its customers may initiate change orders, which may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Change orders that are unapproved as to both price and scope are evaluated as claims. The Company considers claims to be amounts in excess of approved contract prices that the Company seeks to collect from its customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs.

The timing of when the Company bills customers on long-term construction design-build contracts is generally dependent upon agreed-upon contractual terms, which may include milestone billings based on the completion of certain phases of the work, or when services are provided. When as a result of contingencies, billings cannot occur until after the related revenue has been recognized, the result is unbilled revenue, which is included in contract assets. Additionally, when the Company may receives advances or deposits from customers before revenue is recognized; the result is deferred revenue, which is included in contract liabilities. Retainage subject to conditions other than the passage of time are included in contract assets and contract liabilities.

Contract assets represent revenues recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts. Contract liabilities represent the Company’s obligation to perform on uncompleted contracts with customers for which the Company has received payment or for which contract receivables are outstanding.

The following table provides information about contract assets and contract liabilities from contracts with customers:

	March 31, 2024		December 31, 2023
Contract assets
Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage	$	7,357,378	$	7,729,531
Retainage included in contract assets due to being conditional on something other than solely passage of time	$	722,771	$	707,036
Total contract assets	$	8,080,149	$	8,436,567
	March 31, 2024		December 31, 2023
Contract liabilities
Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage	$	3,502,427	$	3,895,826
Retainage included in contract liabilities due to being conditional on something other than solely passage of time	$	73,102	$	54,307
Total contract liabilities	$	3,575,529	$	3,950,133

For equipment systems contracts, the Company’s predominant policy is to collect deposits from customers at the beginning of the contract and the balance of the contract payment prior to shipping. The Company does, in some cases, collect deposits or retainers as down payments on service contracts. Consumable products orders may be paid for in advance of shipment or for recurring customers with credit, payment terms of 30 days or less may be extended by the Company. Customer payments that have been collected prior to the performance obligation being recognized are recorded as customer deposit liabilities on the balance sheet. When the performance obligation is satisfied and all the criteria for revenue recognition are met, revenue is recognized. In certain situations when the customer has paid the deposit and services have been performed but the customer chooses not to proceed with the contract, the Company is entitled to keep the deposit and recognize revenue.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

A director of the Company is an owner of Cloud 9 Support, LLC (“Cloud 9”) and Potco LLC (“Potco”). Cloud 9 purchases materials from the Company for use with its customers and Potco purchases equipment from the Company for use in its cultivation facility. Another director of the Company is working on a vertical farming innovation model with a group of CEA experts (the “CEA Consortium”). The CEA Consortium contracts services from the Company related to their business model. The table below presents the revenues for these related party entities for the three months ended March 31, 2024, and 2023:

	Three Months Ended March 31,
	2024		2023
Revenue - Cloud 9	$	—	$	—
Revenue - Potco	$	—	$	479,897
Revenue - CEA Consortium	$	—	$	—
Total revenues from related party transactions	$	—	$	479,897

The table below presents the accounts receivable from these related party entities as of March 31, 2024, and December 31, 2023:

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PREPAID EXPENSES AND OTHER ASSETS

3 Months Ended

Mar. 31, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES AND OTHER ASSETS

PREPAID EXPENSES AND OTHER ASSETS

Prepayments and other assets are comprised of prepayments paid to vendors to initiate orders, prepaid services and fees, inventories, and other assets. These amounts are summarized as follows:

	March 31, 2024		December 31, 2023
Vendor prepayments	$	970,337	$	130,522
Prepaid services and fees	1,312,913		1,168,309
Inventories	236,814		228,858
Other assets	34,995		223,875
Total Prepaid expenses and other assets	$	2,555,059	$	1,751,564

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PROPERTY AND EQUIPMENT, NET

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

Property and equipment balances are summarized as follows:

	March 31, 2024		December 31, 2023
Computers and technology equipment	$	297,592	$	294,322
Furniture and fixtures	325,485		325,485
Leasehold improvements	228,760		228,760
Vehicles	432,823		432,823
Software	1,075,813		1,087,569
Other equipment	145,950		145,951
Accumulated depreciation	(1,250,866)		(1,095,517)
Total Property and equipment, net	$	1,255,557	$	1,419,393

Depreciation expense for the three months ended March 31, 2024, and 2023 totaled $195,262 and $94,049, respectively.

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INVESTMENTS

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

As of March 31, 2024 and December 31, 2023 the Company did not have any investments.

XS Financial

On October 30, 2021, the Company participated in a convertible note offering of Xtraction Services, Inc., a/k/a XS Financial Inc. (CSE: XSF) (OTCQB: XSHLF) ("XSF"), a specialty finance company providing CAPEX financing solutions, including equipment leasing, to CEA companies in the United States. The Company invested $2,500,000 of a total $43,500,000 raised by XSF. Prior to any Nasdaq listing, the investment incurs 9.5% interest payable, of which, 7.5% is cash interest and 2.0% is interest paid in kind. Subsequent to any Nasdaq listing by XSF, the investment incurs 8.0% cash interest. The debt matures on October 28, 2023, with a one-year option at the sole discretion of XSF to extend the maturity date. In addition, the Company received 1,250,000 warrants denominated in Canadian dollars ("C$") with a C$0.45 exercise price as subject to the warrant instrument. No value was attributed to the warrants at the time of the investment. In August 2023, the Company entered into an agreement to sell back its investment to XSF for $2.3 million and cancel the warrants. The Company received the $2.3 million in proceeds on August 30, 2023. In connection with the agreement to sell the investment, the Company recorded an impairment loss of $0.3 million.

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GOODWILL & INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL & INTANGIBLE ASSETS

GOODWILL & INTANGIBLE ASSETS

Goodwill

The Company has recorded goodwill in conjunction with the acquisitions it has completed. The goodwill balances as of March 31, 2024 and December 31, 2023 were $9,688,975 and $9,688,975, respectively. Goodwill is not amortized. The Company did not record any impairment charges related to goodwill for the three months ended March 31, 2024 and 2023.

Intangible Assets Other Than Goodwill

Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:

	March 31, 2024
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	$	3,269,201	$	(1,110,830)	$	2,158,371
Trademarks and trade names	1,778,000		(752,317)		1,025,683
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,586,984)		3,184,054
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,586,984)	$	3,256,621

	December 31, 2023
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	3,269,201		(1,004,743)		2,264,458
Trademarks and trade names	1,778,000		(663,417)		1,114,583
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,391,997)		3,379,041
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,391,997)	$	3,451,608

Amortization expense for intangible assets subject to amortization for the three months ended March 31, 2024 and 2023 was $194,988 and $310,020, respectively. The estimated future amortization expense for intangible assets subject to amortization as of March 31, 2024, is summarized below:

For the years ending December 31,	Estimated Future Amortization Expense
Remainder of 2024	$	584,968
2025	779,948
2026	738,364
2027	513,714
2028	405,306
2029	161,754
Total estimated future amortization expense	$	3,184,054

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ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

ACCRUED EXPENSES

ACCRUED EXPENSES

Accrued expenses are summarized as follows:

	March 31, 2024		December 31, 2023
Accrued operating expenses	$	(16,714)	$	277,987
Accrued wages and related expenses	1,480,361		1,349,195
Business development accrual	340,335		376,816
Accrued interest expense	35,671		26,000
Accrued 401(k)	22,346		66,642
Accrued sales tax payable	3,208,636		3,187,638
Total accrued expenses	$	5,070,635	$	5,284,278

Accrued sales tax payable is comprised of amounts due to various states and Canadian provinces for 2017 through 2023

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NOTES PAYABLE

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTES PAYABLE

The table below shows outstanding notes payable amounts as of March 31, 2024 and December 31, 2023.

	As of
	March 31, 2024		December 31, 2023
Line of credit	$	2,000,000	$	2,500,000
DVO note	204,330		575,240
Other financing agreements	286,156		129,600
Total	$	2,490,486	$	3,204,840
Less current maturities	(2,490,486)		(3,204,840)
Long Term	—		–

On December 13, 2023, UG Construction, a wholly owned subsidiary of the Company, entered into an interest only asset based revolving Loan Agreement (the “Line of Credit”) with Gemini Finance Corp. (“Lender”) pursuant to which Lender extended to UG Construction a secured line of credit in an amount not to exceed $10,000,000, to be used to assist UG Construction and the Company with cash management. Lender will consider requests for advances under the Line of Credit, which Lender may accept or reject in its discretion, until September 12, 2024 (the “Initial Term”), subject to an automatic extension for an additional nine-month term until May 12, 2025, provided that UG Construction is in compliance with all the terms of the applicable loan documents and Lender has not sent a written notice of non-renewal at least 60 days prior to expiration of the Initial Term. The Line of Credit contains standard events of default and representations and warranties by UG Construction and the Lender and the Company have entered into a Continuing Guaranty pursuant to which the Company will guarantee repayment of the loans associated with the Line of Credit (the “Guaranty Agreement”).

Loans made under the Line of Credit shall be evidenced by a Secured Promissory Note - Revolving issued by UG Construction to the Lender (the “Promissory Note”), and each draw on the Promissory Note shall be due and payable on or before 180 days after such draw is funded to UG Construction; provided that, such draw is also subject to a mandatory prepayment upon UG Construction’s receipt of payment for any invoice previously submitted and approved for financing by Lender. Lender will receive a security interest in UG Construction’s Collateral (as defined in the “Security Agreement” entered into as part of the Line of Credit). The Promissory Note earns interest at a monthly rate of one and seventy-five hundredths percent (1.75%).

In connection with entering in the Line of Credit, the Company has agreed to issue to Bancroft Capital, LLC (the “Placement Agent”) cash and warrant compensation in two separate tranches, the first being earned upon closing of the Line of Credit and the remainder of which will be due if and when UG Construction draws more than $4,500,000 from the Line of Credit. Both instances are detailed as follows:

1.At closing of the Line of Credit, the Placement Agent earned a cash fee of $200,000. In addition to the cash fee, the Company will issue to the Placement Agent or its designees, $200,000 worth of warrants (the “Placement Agent’s Warrants”) to purchase the Company’s common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the Closing. The Placement Agent’s Warrants will be exercisable at any time

and from time to time, in whole or in part, during the four and a half-year period commencing six (6) months from the date of issuance. The Placement Agent’s Warrants will provide for registration rights (including a one-time demand registration right and unlimited piggyback rights), cashless exercise and customary anti-dilution provisions (for stock dividends and splits) and anti-dilution protection (adjustment in the number and price of such warrants and the shares underlying such warrants) resulting from corporate events (which would include dividends, reorganizations, mergers, etc.).

2.If and when Emerald draws more than $4,500,000 from the Line of Credit, the Placement Agent will earn an additional cash fee of $200,000, and an additional $200,000 worth of Placement Agent’s Warrants to purchase the Company’s common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the date that the draws exceeding $4,500,000 were to take place.

As part of the Asset Purchase Agreement of DVO, a non-negotiable promissory note in the aggregate principal amount of $3,806,250, payable to DVO was issued effective November 1, 2022 (the "DVO Promissory Note"). The principal amount, together with the simple interest accrued on the unpaid principal amount outstanding was to be paid by the Company on a quarterly basis for the first four consecutive quarters, with the first payment paid in January 2023, and the remaining three payments due ten days following the end of each subsequent fiscal quarter thereafter until the earlier of the end of the fourth full fiscal quarter following the closing date December 31, 2023 or the payment in full of all amounts due. In the third quarter ended September 30, 2023, a portion of that quarter’s note payment was extended to the first quarter ended March 31, 2024. The DVO Promissory Note may be prepaid in whole or in part at any time without premium or penalty; provided, that each payment shall be accompanied by payment of all unpaid costs, fees and expenses, if any, which are due plus all accrued and unpaid interest due as of the date of such prepayment.

The outstanding principal balance under the DVO Promissory Note shall bear simple interest at a variable rate per annum equal to the rate of interest most recently published by JP Morgan Chase & Co. as the "prime rate" (the "Prime Rate"). Initially, interest will accrue at the Prime Rate as of the date of the DVO Promissory Note. The interest rate will be adjusted on a quarterly basis as of the first day of each full fiscal quarter following the first full fiscal quarter after the closing date to the then current Prime Rate. In connection with the extension of the DVO Promissory Note payment to the first quarter ended March 31, 2024, the interest rate was revised to a fixed rate of 10%, with principal and interest to be paid on a weekly basis.

The other financing agreements relate to short-term financing of the Company's insurance policies and are at an average interest rate of 13.6%.

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RIGHT OF USE ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

RIGHT OF USE ASSETS AND LIABILITIES

RIGHT OF USE ASSETS AND LIABILITIES

As of March 31, 2024, the Company has seven operating type leases with an imputed annual interest rate of 8.0%. Each of the Company's operating type leases are utilized as office space with one lease also including a warehouse for inventory. Five of the leases were acquired by the Company in connection with its various acquisitions. The remaining lease terms range from less than one year to 6 years, as of March 31, 2024. The following is a summary of operating lease liabilities:

	March 31, 2024		December 31, 2023
Operating lease liabilities related to right of use assets	$	1,966,420	$	2,087,503
Less current portion	(673,920)		(707,141)
Long term	$	1,292,500	$	1,380,362

The following is a schedule showing total future minimum lease payments:

For the period ending March 31,	Minimum Lease Payments
Remainder of 2024	$	552,251
2025	573,133
2026	404,751
2027	346,812
2028	253,415
Thereafter	82,488
Total minimum lease payments	2,212,850
Less: Amount representing interest	(246,430)
Net lease obligations	$	1,966,420

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no ongoing legal proceedings for which management believes the ultimate outcome would have a material adverse effect on the Company’s results of operations and cash flows.

On August 11, 2023, the Company entered into a settlement agreement (the “Settlement Agreement”) with Crest Ventures, LLC (“Crest”) and Andrew Telsey to settle all claims in the litigation filed in the District Court for Arapahoe County, Colorado, Case No. 2021CV31301. Pursuant to the Settlement Agreement, the Company paid $1,500,000 to Crest on September 7, 2023. In connection with this settlement, the Company recorded a loss in the second quarter ended June 30, 2023 of $1,500,000 in accordance with GAAP related to loss contingencies.

RIGHT OF USE ASSETS AND LIABILITIES

RIGHT OF USE ASSETS AND LIABILITIES

As of March 31, 2024, the Company has seven operating type leases with an imputed annual interest rate of 8.0%. Each of the Company's operating type leases are utilized as office space with one lease also including a warehouse for inventory. Five of the leases were acquired by the Company in connection with its various acquisitions. The remaining lease terms range from less than one year to 6 years, as of March 31, 2024. The following is a summary of operating lease liabilities:

	March 31, 2024		December 31, 2023
Operating lease liabilities related to right of use assets	$	1,966,420	$	2,087,503
Less current portion	(673,920)		(707,141)
Long term	$	1,292,500	$	1,380,362

The following is a schedule showing total future minimum lease payments:

For the period ending March 31,	Minimum Lease Payments
Remainder of 2024	$	552,251
2025	573,133
2026	404,751
2027	346,812
2028	253,415
Thereafter	82,488
Total minimum lease payments	2,212,850
Less: Amount representing interest	(246,430)
Net lease obligations	$	1,966,420

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no ongoing legal proceedings for which management believes the ultimate outcome would have a material adverse effect on the Company’s results of operations and cash flows.

On August 11, 2023, the Company entered into a settlement agreement (the “Settlement Agreement”) with Crest Ventures, LLC (“Crest”) and Andrew Telsey to settle all claims in the litigation filed in the District Court for Arapahoe County, Colorado, Case No. 2021CV31301. Pursuant to the Settlement Agreement, the Company paid $1,500,000 to Crest on September 7, 2023. In connection with this settlement, the Company recorded a loss in the second quarter ended June 30, 2023 of $1,500,000 in accordance with GAAP related to loss contingencies.

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RISKS AND UNCERTAINTIES

3 Months Ended

Mar. 31, 2024

Risks and Uncertainties [Abstract]

RISKS AND UNCERTAINTIES

RISKS AND UNCERTAINTIES

Concentration Risk

The table below shows customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented:

Customers exceeding 10% of revenue

	Three Months Ended March 31,
Company Customer Number	2024		2023
C000002187	42	%	43	%
C000002336	*		17	%
C000002596	13	%	*
C000002463	11	%	*
*Amounts less than 10%

Customers exceeding 10% of accounts receivable

	As of March 31,		As of December 31,
Company Customer Number	2024		2023
C000002187	*		57	%
C000002345	14	%	*
C000002596	13	%	*
*Amounts less than 10%

The table below shows vendors who account for 10% or more of the Company’s total purchases and 10% or more of the Company’s accounts payable for the periods presented:

Vendors exceeding 10% of purchases

	Three Months Ended March 31,
Company Vendor Number	2024		2023
V000002275	*		19	%
V000002589	14	%	*
V000002503	14	%	*
*Amounts less than 10%

Vendors exceeding 10% of accounts payable

	As of March 31,		As of December 31,
Company Vendor Number	2024		2023
V000002275	14	%	13	%
*Amounts less than 10%

Foreign Exchange Risk

Although our revenues and expenses are expected to be predominantly denominated in United States dollars, we may be exposed to currency exchange fluctuations. Recent events in the global financial markets have been coupled with increased volatility in the currency markets. Fluctuations in the exchange rate between the U.S. dollar, the Canadian dollar, the Euro, and the currency of other regions in which we may operate may have a material adverse effect on our business, financial condition and operating results. We may, in the future, establish a program to hedge a portion of our foreign currency exposure with the objective of minimizing the impact of adverse foreign currency exchange movements. However, even if we develop a hedging program, it may not mitigate currency risks.

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Based on the vesting schedule of the grants of restricted stock units (“RSU” or “RSUs”) and options, stock-based compensation expense for the three months ended March 31, 2024 and 2023 totaled $656,576 and $479,641, respectively.

The Company has adopted the 2021 Omnibus Stock Incentive Plan, as amended (the “Omnibus Incentive Plan”), which provides for the issuance of incentive stock options, grants of RSUs, and stock-based awards to employees, directors, and consultants of the Company to reward and attract employees and compensate the Company’s Board of Directors (the “Board”) and vendors when applicable. The Omnibus Incentive Plan is administered by the Company's Board. Grants of RSUs under the Omnibus Incentive Plan are valued at no less than the market price of the stock on the date of grant. The fair value of the options is calculated using the Black-Scholes pricing model based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the options, risk-free interest rate and expected volatility of the price of the underlying common stock of 100%. There is a moderate degree of subjectivity involved when estimating the value of stock options with the Black-Scholes option pricing model as the assumptions used are moderately judgmental. Grant of RSUs and stock options are sometimes offered as part of an employment offer package, to ensure continuity of service or as a reward for performance. Grants of RSUs and stock options typically require a 1 to 3 year period of continued employment or service performance before the grant of RSUs or stock options vest. No cash flow effects are anticipated for grants of RSUs or stock options.

The following schedule shows grants of RSU activity for the three months ended March 31, 2024:

	Number of Shares
Grants of RSUs unvested as of December 31, 2023	580,292
Grants of RSUs	298,857
Forfeiture/cancelled	(27,159)
Grants of RSUs vested and issued	(375,177)
Grants of RSUs unvested as of March 31, 2024	476,813

The following table summarizes the vesting time periods of these unvested RSUs:

Number of Shares	Vesting Time Period
92,911	Remainder of 2024
169,556	2025
214,346	2026
476,813

The following schedule shows stock option activity for the three months ended March 31, 2024.

OPTIONS:	Number of Shares	Weighted Average Remaining Life (Years)	Weighted Average Exercise Price
Stock options outstanding as of December 31, 2023	501,829	4.67	$	6.81
Issued	—	0	$	—
Forfeited	(39,880)	0	$	6.52
Exercised	—	0	$	—
Stock options outstanding as of March 31, 2024	461,949	4.30	$	6.83
Stock options exercisable as of March 31, 2024	441,922	0	$	6.77

As of March 31, 2024, the Company has $0 in unrecognized stock-based compensation expense related to these stock options. The aggregate intrinsic value of the options outstanding and exercisable at March 31, 2024 is $0.

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STOCKHOLDERS’ EQUITY

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY

On May 24, 2021, the Board authorized a stock repurchase program to purchase up to $5.0 million of the currently outstanding shares of the Company’s common stock, over a period of 12 months through open market purchases, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. On January 18, 2022, the Board authorized a $2.0 million increase to the stock repurchase program, to a total of $7.0 million. On February 2, 2022, the Board authorized an additional $1.5 million increase to the stock repurchase, to a total of $8.5 million. On September 12, 2022, the Board authorized an additional $2 million increase to the stock repurchase, to a total of $10.5 million. In total, the Company has repurchased 1,099,833 shares of common stock at an average price per share of $8.25 for a total of $9.1 million, under this program.

The Company did not repurchase shares of common stock either during the three months ended March 31, 2024 or during the three months ended March 31, 2023. As of March 31, 2024, we have $1.4 million remaining under the repurchase program.

In February 2021, the Company repurchased 350,000 shares of common stock with an average price per share of $8.50, for a total of $3.0 million, outside of any stock repurchase or publicly announced program.

WARRANTS

The following table shows warrant activity for the three months ended March 31, 2024.

	Number of Shares	Weighted Average Exercise Price
Warrants outstanding as of December 31, 2023	511,681	$	8.74
Issued	—	$	—
Exercised	—	$	—
Expired	—	$	—
Warrants outstanding as of March 31, 2024	511,681	$	8.74
Warrants exercisable as of March 31, 2024	336,150	$	12.65

The aggregate intrinsic value of the warrants outstanding and exercisable as of March 31, 2024 is $20,477.

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WARRANTS

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

WARRANTS

STOCKHOLDERS’ EQUITY

On May 24, 2021, the Board authorized a stock repurchase program to purchase up to $5.0 million of the currently outstanding shares of the Company’s common stock, over a period of 12 months through open market purchases, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. On January 18, 2022, the Board authorized a $2.0 million increase to the stock repurchase program, to a total of $7.0 million. On February 2, 2022, the Board authorized an additional $1.5 million increase to the stock repurchase, to a total of $8.5 million. On September 12, 2022, the Board authorized an additional $2 million increase to the stock repurchase, to a total of $10.5 million. In total, the Company has repurchased 1,099,833 shares of common stock at an average price per share of $8.25 for a total of $9.1 million, under this program.

The Company did not repurchase shares of common stock either during the three months ended March 31, 2024 or during the three months ended March 31, 2023. As of March 31, 2024, we have $1.4 million remaining under the repurchase program.

In February 2021, the Company repurchased 350,000 shares of common stock with an average price per share of $8.50, for a total of $3.0 million, outside of any stock repurchase or publicly announced program.

WARRANTS

The following table shows warrant activity for the three months ended March 31, 2024.

	Number of Shares	Weighted Average Exercise Price
Warrants outstanding as of December 31, 2023	511,681	$	8.74
Issued	—	$	—
Exercised	—	$	—
Expired	—	$	—
Warrants outstanding as of March 31, 2024	511,681	$	8.74
Warrants exercisable as of March 31, 2024	336,150	$	12.65

The aggregate intrinsic value of the warrants outstanding and exercisable as of March 31, 2024 is $20,477.

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INCOME TAXES

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company has experienced cumulative losses for both book and tax purposes since inception. The potential future recovery of any tax assets that the Company may be entitled to due to these accumulated losses is uncertain and any tax assets that that the Company may be entitled to have been fully reserved based on management’s current estimates. Management intends to continue maintaining a full valuation allowance on the Company’s deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.The deferred income tax benefit for the three months ended March 31, 2024 and 2023 relates to the reduction in the deferred tax liability associated with the amortization of the intangible assets from the acquisitions of the 2WR Entities and Emerald. The Company records state income taxes paid during the year within the Other income (expense) financial statement line item.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Term Loan

On October 1, 2024, urban-gro, Inc. (the “Company”) entered into an asset based term Loan Agreement (the “Loan”) with Grow Hill, LLC, a Washington limited liability company (the “Lender”) pursuant to which the Lender extended to the Company a secured loan of $2,100,000, to be used to assist the Company with cash management, including to support the Company’s growth in the cannabis industry. The Loan is for a term of 24 months and has an origination fee of $100,000, which was added to the amount of the Loan. There is no penalty to prepayment, except the Lender will receive at least $150,000 in minimum interest if Company chooses to prepay the Loan. The Loan contains standard events of default and representations and warranties by the Company and the Lender.

The Loan is evidenced by a Secured Promissory Note issued by the Company to the Lender (the “Grow Hill Promissory Note”). The Lender received a security interest in certain of the Company’s assets pursuant to a security agreement between the Company and the Lender (the “Security Agreement”), which does not include any assets of the Company’s subsidiaries, including those securing the Company’s existing line of credit. The Grow Hill Promissory Note accrues simple interest at an annual rate of fifteen percent (15%).

In connection with entering in the Loan, the Company issued to Lender a warrant (the “Warrant”) to purchase up to an aggregate of 160,000 shares of the Company’s common stock at an exercise price of $2.50 per share. The Warrant is exercisable immediately, will expire on the five (5) year anniversary of issuance, and is exercisable on a cashless basis at the election of the holder.

Modification of Agreement with Bancroft Related to Line of Credit

On October 2, 2024, the Company amended its agreement with the Placement Agent to modify the terms of the cash and warrant compensation associated with the Line of Credit. Under this amendment, the threshold at which the second tranche of cash and warrant compensation was increased such that under the new agreement the Company has to draw more than $6,000,000 from the Line of Credit in order for the Placement Agent to earn an additional cash fee of $200,000 and an additional $200,000 worth of Placement Agent's Warrants to purchase the Company's common stock at a price per share equal to 110% of the daily volume weighted average closing price of the Company’s common stock on the Nasdaq exchange for a period consisting of ten (10) consecutive trading days ending on and inclusive of the trading day of the date that the draws exceeding $6,000,000 were to take place.

Increase in Shares Available to be Issued Under 2021 Omnibus Plan

In the Company's Annual Meeting on June 19, 2024 the Company’s shareholders approved an amendment to the Company's Omnibus 2021 Stock Incentive Plan (the “Plan") to increase the aggregate number of shares available for issuance under the Plan by 1,200,000 shares. All other descriptors of the Plan in Note 14 remain unchanged.

Equity Issuances After March 31, 2024

Subsequent to March 31, 2024, 952,194 RSUs were granted to employees, directors, and consultants with various vesting periods.

Settlement of Pullar Lawsuit

On May 5, 2022, Robert Pullar (“Pullar”) filed a lawsuit against urban-gro and Bradley Nattrass, in his capacity as the Company’s CEO, relating to a prior settlement agreement the Company had entered into with Pullar. On Friday, January 31, 2025, the parties entered a settlement agreement, without any admission of liability or wrongdoing, to settle all claims associated with the litigation in exchange for a cash payment by the Company to Pullar of $250,000 and an issuance of a warrant to purchase up to 75,000 shares of common stock with an exercise price per share of $1.00.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Unaudited Condensed Consolidated Financial Statements

Unaudited Condensed Consolidated Financial Statements

The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for condensed financial reporting. The condensed consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of stockholders’ equity and condensed consolidated statements of cash flows for the periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with regulations of the SEC.

Use of Estimates

Use of Estimates

In preparing condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated revenues earned under construction design-build contracts; estimated useful lives and potential impairment of long-lived assets, intangibles and goodwill; inventory write-offs; allowance for deferred tax assets; and allowance for bad debt.

Reclassification and Balance Sheet Classifications

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Balance Sheet Classifications

The Company includes in current assets and liabilities the following amounts that are in connection with construction contracts that may extend beyond one year: contract assets and contract liabilities (including retainage invoiced to customers contingent upon anything other than the passage of time), capitalized costs to fulfill contracts, retainage payable to sub-contractors and accrued losses on uncompleted contracts. A one-year time period is used to classify all other current assets and liabilities when not otherwise prescribed by the applicable accounting principles.

Contract Assets and Liabilities

Contract Assets and Liabilities

The timing between when the Company invoices for its construction design-build customers can create a contract asset or contract liability.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

From time to time, the Financial Accounting Standards Board (the "FASB") or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, the Company believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Company’s financial statements upon adoption.

Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company's financial condition or the results of our operations.

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RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

The following tables show the unaudited quarterly condensed consolidated financial information for the three months ended March 31, 2024. The accompanying applicable notes have been updated to reflect the effects of the restatement.

The amounts in the "As Reported" columns are amounts derived from the Company's previously filed financial statements in its Quarterly Report on Form 10-Q for the three month period ended March 31, 2024, originally filed with the Securities and Exchange Commission on April 30, 2024 (the “Original Form 10-Q”). The amounts in the "Restatement Adjustments" columns present the impact of the adjustments arising from the re-audit of the Company’s 2023 financial statements and re-review of the Company’s unaudited quarterly condensed consolidated financial information for the three months ended March 31, 2024. The amounts in the "As Restated" columns are the updated amounts including the impact from the Restatement Adjustments.

	As of March 31, 2024
	As		Restatement		As
ASSETS	Reported		Adjustments		Restated
Current assets:
Cash	$	692,680	$	(44,083)	$	648,597
Accounts receivable, net	18,754,870		(429,692)		18,325,178
Contract receivables	10,174,845		(2,094,696)		8,080,149
Prepaid expenses and other current assets	3,606,595		(1,051,536)		2,555,059
Total current assets	33,228,990		(3,620,007)		29,608,983
Non-current assets:
Property and equipment, net	1,255,557		—		1,255,557
Operating lease right of use assets, net	1,918,532		—		1,918,532
Goodwill	15,572,050		(5,883,075)		9,688,975
Intangible assets, net	4,155,175		(898,554)		3,256,621
Total non-current assets	22,901,314		(6,781,629)		16,119,685
Total assets	$	56,130,304	$	(10,401,636)	$	45,728,668
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	24,987,061		(1,144,267)		23,842,794
Contract liabilities	3,093,242		482,287		3,575,529
Accrued expenses	3,632,874		1,437,761		5,070,635
Customer deposits	555,676		—		555,676
Contingent consideration	49,830		—		49,830
Notes payable	2,490,486		—		2,490,486
Operating lease liabilities	673,920		—		673,920
Total current liabilities	35,483,089		775,781		36,258,870
Non-current liabilities:
Operating lease liabilities, net of current portion	1,292,500		—		1,292,500
Deferred tax liability	769,036		(773,106)		(4,070)
Total non-current liabilities	2,061,536		(773,106)		1,288,430
Total liabilities	$	37,544,625	$	2,675	$	37,547,300
Commitments and contingencies (note 11)
Shareholders’ equity:
Preferred stock, $0.10 par value; 3,000,000 shares authorized; 0 and 0 shares issued and outstanding	—		—		—
Common stock, $0.001 par value; 30,000,000 shares authorized; 13,768,594 issued and 12,318,761 outstanding as of March 31, 2024, and 13,522,669 issued and 12,072,836 outstanding as of December 31, 2023	13,769		—		13,769
Additional paid-in capital	89,557,913		(511,827)		89,046,086
Treasury shares, cost basis: 1,449,833 shares as of March 31, 2024 and as of December 31, 2023	(12,045,542)		—		(12,045,542)
Accumulated deficit	(58,940,461)		(9,892,484)		(68,832,945)
Total shareholders’ equity	18,585,679		(10,404,311)		8,181,368
Total liabilities and shareholders’ equity	$	56,130,304	$	(10,401,636)	$	45,728,668

	Three Months Ended March 31, 2024
	As			Restatement			As
	Reported			Adjustments			Restated
Revenues:
Equipment systems	$	2,508,287		$	—		$	2,508,287
Services	3,133,793			—			3,133,793
Construction design-build	9,825,457			(141,643)			9,683,814
Other	75,141			—			75,141
Total revenues and other income	15,542,678			(141,643)			15,401,035
Cost of revenues:
Equipment systems	2,172,383			67			2,172,450
Services	1,508,449			—			1,508,449
Construction design-build	8,692,432			(17,152)			8,675,280
Other	53,399			—			53,399
Total cost of revenues	12,426,663			(17,085)			12,409,578
Gross profit	3,116,015			(124,558)			2,991,457
	20		%	88		%	108		%
Operating expenses:
General and administrative	4,745,192			332,672			5,077,864
Depreciation and Amortization	434,595			(44,345)			390,250
Total operating expenses	5,179,787			288,327			5,468,114
Loss from operations	(2,063,772)			(412,885)			(2,476,657)
Non-operating income (expenses):
Interest expense	(99,306)			—			(99,306)
Interest income	81			—			81
Contingent consideration	—			—			—
Write-down of investment	—			—			—
Loss on settlement	—			—			—
Other income (expense)	(26,889)			(6,175)			(33,064)
Total non-operating income (expenses)	(126,114)			(6,175)			(132,289)
Loss before income taxes	(2,189,886)			(419,060)			(2,608,946)
Income tax benefit	48,383			—			48,383
Net loss	$	(2,141,503)		$	(419,060)		$	(2,560,563)
Comprehensive loss	$	(2,141,503)		$	(419,060)		$	(2,560,563)
Loss per share – basic and diluted	$	(0.18)		$	(0.03)		$	(0.21)
Weighted average shares – basic and diluted	12,075,619			12,075,619			12,075,619

	For the Three Months Ended March 31, 2024
	As		Restatement		As
	Reported		Adjustments		Restated
Cash flows from operating activities:
Net loss	$	(2,141,503)	$	(419,060)	$	(2,560,563)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	434,595		(44,345)		390,250
Amortization of right-of-use assets	—		134,054		134,054
Stock-based compensation expense	656,576		—		656,576
Impairment of investment	—		—		—
Change in fair value of contingent consideration	—		—		—
PPP loan forgiveness	—		—		—
Interest income on investments	137,973		(137,973)		—
Changes in operating assets and liabilities (net of acquired amounts):
Accounts receivable and contract receivables	8,083,975		(4,403,834)		3,680,141
Prepaid expenses and other assets and property and equipment	(746,995)		249,246		(497,749)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(5,888,371)		4,891,775		(996,596)
Change in contingent consideration from indemnification	—		—		—
Operating lease liability	(158,644)		29,463		(129,181)
Deferred tax liability	(48,383)		—		(48,383)
Customer deposits	—		—		—
Net cash used in operating activities	329,223		299,326		628,549
Cash flows from investing activities:
Sale of investment	—		—		—
Refunds/(Purchases) of property and equipment	8,487		(1)		8,486
Business combinations, net of cash acquired	—		—		—
Net cash provided by (used in) investing activities	8,487		(1)		8,486
Cash flows from financing activities:
Proceeds from issuance of common stock	—		—		—
Repurchase of common stock	—		—		—
Additions to notes payable	3,024,223		(1,024,223)		2,000,000
Repayment of notes payable	(3,738,577)		718,477		(3,020,100)
Repayment of finance lease liability	(43,180)		—		(43,180)
Payments to settle contingent consideration	—		—		—
Net cash used in financing activities	(757,534)		(305,746)		(1,063,280)
Net change in cash	(419,824)		(6,421)		(426,245)
Cash at beginning of period	1,112,504		(37,662)		1,074,842
Cash at end of period	$	692,680	$	(44,083)	$	648,597

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue, by Source

The table below presents the revenue by source for the three months ended March 31, 2024 and 2023:

	For the three months ended March 31, 2024
	CEA			Commercial			Total			Relative Percentage
Equipment systems	$	2,508,287		$	—		$	2,508,287		16%
Services	867,907			2,265,886			3,133,793			20%
Construction design-build	957,623			8,726,191			9,683,814			63%
Other	75,141			—			75,141			—%
Total revenues and other income	$	4,408,958		$	10,992,077		$	15,401,035		100%
Relative percentage	29		%	71		%	100		%

	For the three months ended March 31, 2023
	CEA			Commercial			Total			Relative Percentage
Equipment systems	$	2,905,035		$	—		$	2,905,035		17%
Services	1,577,026			1,893,627			3,470,653			21%
Construction design-build	383,524			9,811,814			10,195,338			61%
Other	183,745			—			183,745			1%
Total revenues and other income	$	5,049,330		$	11,705,441		$	16,754,771		100%
Relative percentage	30		%	70		%	100		%

Schedule of Contract Assets and Contract Liabilities from Contracts with Customers

The following table provides information about contract assets and contract liabilities from contracts with customers:

	March 31, 2024		December 31, 2023
Contract assets
Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage	$	7,357,378	$	7,729,531
Retainage included in contract assets due to being conditional on something other than solely passage of time	$	722,771	$	707,036
Total contract assets	$	8,080,149	$	8,436,567
	March 31, 2024		December 31, 2023
Contract liabilities
Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage	$	3,502,427	$	3,895,826
Retainage included in contract liabilities due to being conditional on something other than solely passage of time	$	73,102	$	54,307
Total contract liabilities	$	3,575,529	$	3,950,133

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RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Schedule of Related Party Transactions on Financial Statements

The table below presents the revenues for these related party entities for the three months ended March 31, 2024, and 2023:

	Three Months Ended March 31,
	2024		2023
Revenue - Cloud 9	$	—	$	—
Revenue - Potco	$	—	$	479,897
Revenue - CEA Consortium	$	—	$	—
Total revenues from related party transactions	$	—	$	479,897

The table below presents the accounts receivable from these related party entities as of March 31, 2024, and December 31, 2023:

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PREPAID EXPENSES AND OTHER ASSETS (Tables)

3 Months Ended

Mar. 31, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Assets

These amounts are summarized as follows:

	March 31, 2024		December 31, 2023
Vendor prepayments	$	970,337	$	130,522
Prepaid services and fees	1,312,913		1,168,309
Inventories	236,814		228,858
Other assets	34,995		223,875
Total Prepaid expenses and other assets	$	2,555,059	$	1,751,564

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PROPERTY AND EQUIPMENT, NET (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment Balances

Property and equipment balances are summarized as follows:

	March 31, 2024		December 31, 2023
Computers and technology equipment	$	297,592	$	294,322
Furniture and fixtures	325,485		325,485
Leasehold improvements	228,760		228,760
Vehicles	432,823		432,823
Software	1,075,813		1,087,569
Other equipment	145,950		145,951
Accumulated depreciation	(1,250,866)		(1,095,517)
Total Property and equipment, net	$	1,255,557	$	1,419,393

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GOODWILL & INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:

	March 31, 2024
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	$	3,269,201	$	(1,110,830)	$	2,158,371
Trademarks and trade names	1,778,000		(752,317)		1,025,683
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,586,984)		3,184,054
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,586,984)	$	3,256,621

	December 31, 2023
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	3,269,201		(1,004,743)		2,264,458
Trademarks and trade names	1,778,000		(663,417)		1,114,583
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,391,997)		3,379,041
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,391,997)	$	3,451,608

Schedule of Indefinite-Lived Intangible Assets

Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:

	March 31, 2024
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	$	3,269,201	$	(1,110,830)	$	2,158,371
Trademarks and trade names	1,778,000		(752,317)		1,025,683
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,586,984)		3,184,054
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,586,984)	$	3,256,621

	December 31, 2023
	Cost		Accumulated Amortization		Net Book Value
Finite-lived intangible assets:
Customer relationships	3,269,201		(1,004,743)		2,264,458
Trademarks and trade names	1,778,000		(663,417)		1,114,583
Backlog	707,400		(707,400)		—
Licenses	16,437		(16,437)		—
Total finite-lived intangible assets:	5,771,038		(2,391,997)		3,379,041
Indefinite-lived intangible assets:
Trade name	28,291		—		28,291
Patents	44,276		—		44,276
Total indefinite-lived intangible assets	72,567		—		72,567
Total intangible assets, net	$	5,843,605	$	(2,391,997)	$	3,451,608

Schedule of Future Amortization Expenses of Intangible Assets

The estimated future amortization expense for intangible assets subject to amortization as of March 31, 2024, is summarized below:

For the years ending December 31,	Estimated Future Amortization Expense
Remainder of 2024	$	584,968
2025	779,948
2026	738,364
2027	513,714
2028	405,306
2029	161,754
Total estimated future amortization expense	$	3,184,054

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ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses are summarized as follows:

	March 31, 2024		December 31, 2023
Accrued operating expenses	$	(16,714)	$	277,987
Accrued wages and related expenses	1,480,361		1,349,195
Business development accrual	340,335		376,816
Accrued interest expense	35,671		26,000
Accrued 401(k)	22,346		66,642
Accrued sales tax payable	3,208,636		3,187,638
Total accrued expenses	$	5,070,635	$	5,284,278

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NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of Outstanding Notes Payable

The table below shows outstanding notes payable amounts as of March 31, 2024 and December 31, 2023.

	As of
	March 31, 2024		December 31, 2023
Line of credit	$	2,000,000	$	2,500,000
DVO note	204,330		575,240
Other financing agreements	286,156		129,600
Total	$	2,490,486	$	3,204,840
Less current maturities	(2,490,486)		(3,204,840)
Long Term	—		–

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RIGHT OF USE ASSETS AND LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Summary of Operating Lease Liabilities

The following is a summary of operating lease liabilities:

	March 31, 2024		December 31, 2023
Operating lease liabilities related to right of use assets	$	1,966,420	$	2,087,503
Less current portion	(673,920)		(707,141)
Long term	$	1,292,500	$	1,380,362

Schedule of Future Minimum Rental Payments for Operating Leases

The following is a schedule showing total future minimum lease payments:

For the period ending March 31,	Minimum Lease Payments
Remainder of 2024	$	552,251
2025	573,133
2026	404,751
2027	346,812
2028	253,415
Thereafter	82,488
Total minimum lease payments	2,212,850
Less: Amount representing interest	(246,430)
Net lease obligations	$	1,966,420

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RISKS AND UNCERTAINTIES (Tables)

3 Months Ended

Mar. 31, 2024

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risks

The table below shows customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented:

Customers exceeding 10% of revenue

	Three Months Ended March 31,
Company Customer Number	2024		2023
C000002187	42	%	43	%
C000002336	*		17	%
C000002596	13	%	*
C000002463	11	%	*
*Amounts less than 10%

Customers exceeding 10% of accounts receivable

	As of March 31,		As of December 31,
Company Customer Number	2024		2023
C000002187	*		57	%
C000002345	14	%	*
C000002596	13	%	*
*Amounts less than 10%

The table below shows vendors who account for 10% or more of the Company’s total purchases and 10% or more of the Company’s accounts payable for the periods presented:

Vendors exceeding 10% of purchases

	Three Months Ended March 31,
Company Vendor Number	2024		2023
V000002275	*		19	%
V000002589	14	%	*
V000002503	14	%	*
*Amounts less than 10%

Vendors exceeding 10% of accounts payable

	As of March 31,		As of December 31,
Company Vendor Number	2024		2023
V000002275	14	%	13	%
*Amounts less than 10%

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Grants Activity

The following schedule shows grants of RSU activity for the three months ended March 31, 2024:

	Number of Shares
Grants of RSUs unvested as of December 31, 2023	580,292
Grants of RSUs	298,857
Forfeiture/cancelled	(27,159)
Grants of RSUs vested and issued	(375,177)
Grants of RSUs unvested as of March 31, 2024	476,813

Schedule of Vesting Periods

The following table summarizes the vesting time periods of these unvested RSUs:

Number of Shares	Vesting Time Period
92,911	Remainder of 2024
169,556	2025
214,346	2026
476,813

Schedule of Stock Option Activity

The following schedule shows stock option activity for the three months ended March 31, 2024.

OPTIONS:	Number of Shares	Weighted Average Remaining Life (Years)	Weighted Average Exercise Price
Stock options outstanding as of December 31, 2023	501,829	4.67	$	6.81
Issued	—	0	$	—
Forfeited	(39,880)	0	$	6.52
Exercised	—	0	$	—
Stock options outstanding as of March 31, 2024	461,949	4.30	$	6.83
Stock options exercisable as of March 31, 2024	441,922	0	$	6.77

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WARRANTS (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of Warrant Activity

The following table shows warrant activity for the three months ended March 31, 2024.

	Number of Shares	Weighted Average Exercise Price
Warrants outstanding as of December 31, 2023	511,681	$	8.74
Issued	—	$	—
Exercised	—	$	—
Expired	—	$	—
Warrants outstanding as of March 31, 2024	511,681	$	8.74
Warrants exercisable as of March 31, 2024	336,150	$	12.65

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RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS - Balance Sheets (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash	$ 648,597	$ 1,074,842
Accounts receivable, net	18,325,178	21,648,901
Contract receivables	8,080,149	8,436,567
Prepaid expenses and other assets	2,555,059	1,751,564
Total current assets	29,608,983	32,911,874
Property and equipment, net	1,255,557	1,419,393
Operating lease right of use assets, net	1,918,532	2,041,217
Goodwill	9,688,975	9,688,975
Intangible assets, net	3,256,621	3,451,608
Total non-current assets	16,119,685	16,601,193
Total assets	45,728,668	49,513,067
Accounts payable	23,842,794	24,203,769
Contract liabilities	3,575,529	3,950,133
Accrued expenses	5,070,635	5,284,278
Customer deposits	555,676	603,046
Contingent consideration	49,830	49,830
Notes payable	2,490,486	3,204,840
Operating lease liabilities	673,920	707,141
Total current liabilities	36,258,870	38,003,037
Long term	1,292,500	1,380,362
Deferred tax liability	(4,070)
Total non-current liabilities	1,288,430	1,424,675
Total liabilities	37,547,300	39,427,712
Commitments and contingencies (note 11)
Preferred Stock, Value, Issued	0	0
Common Stock, Value, Issued	13,769	13,523
Additional Paid in Capital	89,046,086	88,389,756
Treasury Stock, Value	(12,045,542)	(12,045,542)
Accumulated deficit	(68,832,945)	(66,272,382)
Stockholders' Equity Attributable to Parent	8,181,368	10,085,355	$ 26,742,353	$ 31,321,994
Liabilities and Equity	$ 45,728,668	$ 49,513,067
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash	$ 692,680
Accounts receivable, net	18,754,870
Contract receivables	10,174,845
Prepaid expenses and other assets	3,606,595
Total current assets	33,228,990
Property and equipment, net	1,255,557
Operating lease right of use assets, net	1,918,532
Goodwill	15,572,050
Intangible assets, net	4,155,175
Total non-current assets	22,901,314
Total assets	56,130,304
Accounts payable	24,987,061
Contract liabilities	3,093,242
Accrued expenses	3,632,874
Customer deposits	555,676
Contingent consideration	49,830
Notes payable	2,490,486
Operating lease liabilities	673,920
Total current liabilities	35,483,089
Long term	1,292,500
Deferred tax liability	769,036
Total non-current liabilities	2,061,536
Total liabilities	37,544,625
Commitments and contingencies (note 11)
Preferred Stock, Value, Issued	0
Common Stock, Value, Issued	13,769
Additional Paid in Capital	89,557,913
Treasury Stock, Value	(12,045,542)
Accumulated deficit	(58,940,461)
Stockholders' Equity Attributable to Parent	18,585,679
Liabilities and Equity	56,130,304
Restatement Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash	(44,083)
Accounts receivable, net	(429,692)
Contract receivables	(2,094,696)
Prepaid expenses and other assets	(1,051,536)
Total current assets	(3,620,007)
Property and equipment, net	0
Operating lease right of use assets, net	0
Goodwill	(5,883,075)
Intangible assets, net	(898,554)
Total non-current assets	(6,781,629)
Total assets	(10,401,636)
Accounts payable	(1,144,267)
Contract liabilities	482,287
Accrued expenses	1,437,761
Customer deposits	0
Contingent consideration	0
Notes payable	0
Operating lease liabilities	0
Total current liabilities	775,781
Long term	0
Deferred tax liability	(773,106)
Total non-current liabilities	(773,106)
Total liabilities	2,675
Commitments and contingencies (note 11)
Preferred Stock, Value, Issued	0
Common Stock, Value, Issued	0
Additional Paid in Capital	(511,827)
Treasury Stock, Value	0
Accumulated deficit	(9,892,484)
Stockholders' Equity Attributable to Parent	(10,404,311)
Liabilities and Equity	$ (10,401,636)

XML

RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS - Income Statements (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	$ 15,401,035	$ 16,754,771
Total cost of revenues	12,409,578	13,746,134
Gross profit	$ 2,991,457	3,008,637
Gross Profit Percentage	108.00%
General and administrative	$ 5,077,864	7,685,030
Depreciation and amortization	390,250	404,069
Total operating expenses	5,468,114	8,089,099
Loss from operations	(2,476,657)	(5,080,462)
Interest expense	(99,306)	(73,216)
Interest income	81	73,131
Contingent consideration	0	(160,232)
Write-down of investment	0
Loss on settlement	0
Other income (expense)	(33,064)	(10,422)
Total non-operating income (expense)	(132,289)	(170,739)
Loss before income taxes	(2,608,946)	(5,251,201)
Income tax benefit	48,383	0
Net loss	(2,560,563)	(5,251,201)
Comprehensive loss	$ (2,560,563)	$ (5,251,201)
Net loss per share – basic (in dollars per share)	$ (0.21)	$ (0.49)
Net loss per share – diluted (in dollars per share)	$ (0.21)	$ (0.49)
Weighted average shares – diluted (in shares)	12,075,619	10,772,705
Weighted average shares – basic (in shares)	12,075,619	10,772,705
Equipment systems
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	$ 2,508,287	$ 2,905,035
Total cost of revenues	2,172,450	2,408,481
Financial Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	3,133,793
Total cost of revenues	1,508,449
Construction design-build
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	9,683,814	10,195,338
Total cost of revenues	8,675,280	9,229,973
Other
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	75,141	183,745
Total cost of revenues	53,399	$ 133,142
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	15,542,678
Total cost of revenues	12,426,663
Gross profit	$ 3,116,015
Gross Profit Percentage	20.00%
General and administrative	$ 4,745,192
Depreciation and amortization	434,595
Total operating expenses	5,179,787
Loss from operations	(2,063,772)
Interest expense	(99,306)
Interest income	81
Contingent consideration	0
Write-down of investment	0
Loss on settlement	0
Other income (expense)	(26,889)
Total non-operating income (expense)	(126,114)
Loss before income taxes	(2,189,886)
Income tax benefit	48,383
Net loss	(2,141,503)
Comprehensive loss	$ (2,141,503)
Net loss per share – basic (in dollars per share)	$ (0.18)
Net loss per share – diluted (in dollars per share)	$ (0.18)
Weighted average shares – diluted (in shares)	12,075,619
Weighted average shares – basic (in shares)	12,075,619
As Reported | Equipment systems
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	$ 2,508,287
Total cost of revenues	2,172,383
As Reported | Financial Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	3,133,793
Total cost of revenues	1,508,449
As Reported | Construction design-build
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	9,825,457
Total cost of revenues	8,692,432
As Reported | Other
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	75,141
Total cost of revenues	53,399
Restatement Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	(141,643)
Total cost of revenues	(17,085)
Gross profit	$ (124,558)
Gross Profit Percentage	88.00%
General and administrative	$ 332,672
Depreciation and amortization	(44,345)
Total operating expenses	288,327
Loss from operations	(412,885)
Interest expense	0
Interest income	0
Contingent consideration	0
Write-down of investment	0
Loss on settlement	0
Other income (expense)	(6,175)
Total non-operating income (expense)	(6,175)
Loss before income taxes	(419,060)
Income tax benefit	0
Net loss	(419,060)
Comprehensive loss	$ (419,060)
Net loss per share – basic (in dollars per share)	$ (0.03)
Net loss per share – diluted (in dollars per share)	$ (0.03)
Weighted average shares – diluted (in shares)	12,075,619
Weighted average shares – basic (in shares)	12,075,619
Restatement Adjustments | Equipment systems
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	$ 0
Total cost of revenues	67
Restatement Adjustments | Financial Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	0
Total cost of revenues	0
Restatement Adjustments | Construction design-build
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	(141,643)
Total cost of revenues	(17,152)
Restatement Adjustments | Other
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenues and other income	0
Total cost of revenues	$ 0

XML

RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS - Cash Flow Statement (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	$ (2,560,563)	$ (5,251,201)
Depreciation and amortization	390,250	404,069
Amortization of right-of-use assets	134,054	87,426
Stock-based compensation expense	656,576	479,641
Impairment of investment	0
Acquisition, additional contingent consideration expense	0	160,232
PPP loan forgiveness	0
Interest income on investments	0	(12,792)
Accounts receivable and contract receivables	3,680,141	(6,502,104)
Prepaid expenses and other assets and property and equipment	(497,749)	(411,181)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(996,596)	7,751,597
Change in contingent consideration from indemnification	0
Operating lease liability	(129,181)	(57,635)
Deferred tax liability	(48,383)	0
Customer deposits	0
Net cash provided by (used in) operating activities	628,549	(3,351,948)
Sale of investment	0
Refunds/(Purchases) of property and equipment	8,486
Payments to Acquire Businesses, Net of Cash Acquired	0
Net cash provided by (used in) investing activities	8,486	(138,010)
Proceeds from issuance of common stock	0
Repurchase of common stock	0
Additions to notes payable	2,000,000	0
Repayment of notes payable	(3,020,100)	(924,469)
Repayment of finance lease liability	(43,180)	(43,410)
Payments to settle contingent consideration	0	(230,309)
Net cash used in financing activities	(1,063,280)	(1,198,188)
Net change in cash	(426,245)	(4,688,146)
Cash at beginning of period	1,074,842	11,754,349
Cash at end of period	648,597	$ 7,066,203
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	(2,141,503)
Depreciation and amortization	434,595
Amortization of right-of-use assets	0
Stock-based compensation expense	656,576
Impairment of investment	0
Acquisition, additional contingent consideration expense	0
PPP loan forgiveness	0
Interest income on investments	137,973
Accounts receivable and contract receivables	8,083,975
Prepaid expenses and other assets and property and equipment	(746,995)
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(5,888,371)
Change in contingent consideration from indemnification	0
Operating lease liability	(158,644)
Deferred tax liability	(48,383)
Customer deposits	0
Net cash provided by (used in) operating activities	329,223
Sale of investment	0
Refunds/(Purchases) of property and equipment	8,487
Payments to Acquire Businesses, Net of Cash Acquired	0
Net cash provided by (used in) investing activities	8,487
Proceeds from issuance of common stock	0
Repurchase of common stock	0
Additions to notes payable	3,024,223
Repayment of notes payable	(3,738,577)
Repayment of finance lease liability	(43,180)
Payments to settle contingent consideration	0
Net cash used in financing activities	(757,534)
Net change in cash	(419,824)
Cash at beginning of period	1,112,504
Cash at end of period	692,680
Restatement Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	(419,060)
Depreciation and amortization	(44,345)
Amortization of right-of-use assets	134,054
Stock-based compensation expense	0
Impairment of investment	0
Acquisition, additional contingent consideration expense	0
PPP loan forgiveness	0
Interest income on investments	(137,973)
Accounts receivable and contract receivables	(4,403,834)
Prepaid expenses and other assets and property and equipment	249,246
Accounts payable, contract liabilities, customer deposits, and accrued expenses	4,891,775
Change in contingent consideration from indemnification	0
Operating lease liability	29,463
Deferred tax liability	0
Customer deposits	0
Net cash provided by (used in) operating activities	299,326
Sale of investment	0
Refunds/(Purchases) of property and equipment	(1)
Payments to Acquire Businesses, Net of Cash Acquired	0
Net cash provided by (used in) investing activities	(1)
Proceeds from issuance of common stock	0
Repurchase of common stock	0
Additions to notes payable	(1,024,223)
Repayment of notes payable	718,477
Repayment of finance lease liability	0
Payments to settle contingent consideration	0
Net cash used in financing activities	(305,746)
Net change in cash	(6,421)
Cash at beginning of period	(37,662)
Cash at end of period	$ (44,083)

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 15,401,035	$ 16,754,771
Relative Percentage	100.00%	100.00%
CEA
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 4,408,958	$ 5,049,330
Relative Percentage	29.00%	30.00%
Commercial
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 10,992,077	$ 11,705,441
Relative Percentage	71.00%	70.00%
Equipment systems
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 2,508,287	$ 2,905,035
Relative Percentage	16.00%	17.00%
Equipment systems | CEA
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 2,508,287	$ 2,905,035
Equipment systems | Commercial
Disaggregation of Revenue [Line Items]
Total revenues and other income	0	0
Services
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 3,133,793	$ 3,470,653
Relative Percentage	20.00%	21.00%
Services | CEA
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 867,907	$ 1,577,026
Services | Commercial
Disaggregation of Revenue [Line Items]
Total revenues and other income	2,265,886	1,893,627
Construction design-build
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 9,683,814	$ 10,195,338
Relative Percentage	63.00%	61.00%
Construction design-build | CEA
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 957,623	$ 383,524
Construction design-build | Commercial
Disaggregation of Revenue [Line Items]
Total revenues and other income	8,726,191	9,811,814
Other
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 75,141	$ 183,745
Relative Percentage	0.00%	1.00%
Other | CEA
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 75,141	$ 183,745
Other | Commercial
Disaggregation of Revenue [Line Items]
Total revenues and other income	$ 0	$ 0

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Contract Assets and Liabilities (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Contract assets
Revenue recognized in excess of amounts paid or payable (contract receivables) to the Company on uncompleted contracts (contract asset), excluding retainage	$ 7,357,378	$ 7,729,531
Retainage included in contract assets due to being conditional on something other than solely passage of time	722,771	707,036
Total contract assets	8,080,149	8,436,567
Contract liabilities
Payments received or receivable (contract receivables) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage	3,502,427	3,895,826
Retainage included in contract liabilities due to being conditional on something other than solely passage of time	73,102	54,307
Total contract liabilities	$ 3,575,529	$ 3,950,133

XML

RELATED PARTY TRANSACTIONS - Schedule of Related Party Revenues (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Related Party Transaction [Line Items]
Revenue	$ 15,401,035	$ 16,754,771
Cloud 9 Support, PotCo LLC, and CEA Consortium
Related Party Transaction [Line Items]
Revenue	0	479,897
Revenue - Cloud 9
Related Party Transaction [Line Items]
Revenue	0	0
Revenue - Potco
Related Party Transaction [Line Items]
Revenue	0	479,897
Revenue - CEA Consortium
Related Party Transaction [Line Items]
Revenue	$ 0	$ 0

XML

RELATED PARTY TRANSACTIONS - Schedule of Related Party Accounts Receivable (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Related Party Transaction [Line Items]
Total accounts receivable due from related party transactions	$ 18,325,178	$ 21,648,901
Cloud 9 Support, PotCo LLC, and CEA Consortium
Related Party Transaction [Line Items]
Total accounts receivable due from related party transactions	408,088	408,088
Accounts receivable - Cloud 9
Related Party Transaction [Line Items]
Total accounts receivable due from related party transactions	0	0
Accounts receivable - Potco
Related Party Transaction [Line Items]
Total accounts receivable due from related party transactions	163,088	163,088
Accounts receivable - CEA Consortium
Related Party Transaction [Line Items]
Total accounts receivable due from related party transactions	$ 245,000	$ 245,000

XML

PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Vendor prepayments	$ 970,337	$ 130,522
Prepaid services and fees	1,312,913	1,168,309
Inventories	236,814	228,858
Other assets	34,995	223,875
Total Prepaid expenses and other assets	$ 2,555,059	$ 1,751,564

XML

PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (1,250,866)	$ (1,095,517)
Total Property and equipment, net	1,255,557	1,419,393
Computers and technology equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	297,592	294,322
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	325,485	325,485
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	228,760	228,760
Vehicles
Property, Plant and Equipment [Line Items]
Property and equipment, gross	432,823	432,823
Software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,075,813	1,087,569
Other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 145,950	$ 145,951

XML

PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation	$ 195,262	$ 94,049

XML

INVESTMENTS (Details)			1 Months Ended
	Aug. 30, 2023 USD ($)	Oct. 30, 2021 USD ($) shares	Aug. 30, 2023 USD ($)	Mar. 31, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares	Oct. 30, 2021 $ / shares
Debt and Equity Securities, FV-NI [Line Items]
Class of warrant or right, outstanding (in shares) | shares				511,681	511,681
Exercise price of warrants or rights (in dollars per share) | $ / shares				$ 8.74	$ 8.74
XS Financial, Inc.
Debt and Equity Securities, FV-NI [Line Items]
Class of warrant or right, outstanding (in shares) | shares		1,250,000
Exercise price of warrants or rights (in dollars per share) | $ / shares						$ 0.45
XS Financial, Inc. | Prior to Any NASDAQ Listing
Debt and Equity Securities, FV-NI [Line Items]
Debt, interest rate		9.50%
Debt, cash interest, interest rate		7.50%
Debt instrument, interest paid in kind, interest rate		2.00%
XS Financial, Inc. | Post Any Listing
Debt and Equity Securities, FV-NI [Line Items]
Debt, interest rate		8.00%
XS Financial, Inc. | Convertible Notes Payable | Convertible Debt
Debt and Equity Securities, FV-NI [Line Items]
Debt instrument, face amount		$ 43,500,000
Option to extend maturity date, period		1 year
XS Financial, Inc.
Debt and Equity Securities, FV-NI [Line Items]
Equity securities without readily determinable fair value		$ 2,500,000
Sale of investment			$ 2,300,000
Proceeds from sale of investment	$ 2,300,000
Impairment loss			$ 300,000

XML

GOODWILL & INTANGIBLE ASSETS - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 9,688,975		$ 9,688,975
Goodwill, impairment	0	$ 0
Depreciation and Amortization	$ 194,988	$ 310,020

XML

GOODWILL & INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 5,771,038	$ 5,771,038
Finite-Lived Intangible Assets, Accumulated Amortization	(2,586,984)	(2,391,997)
Finite-Lived Intangible Assets, Net, Total	3,184,054	3,379,041
Indefinite-lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	72,567	72,567
Intangible Assets, Gross (Excluding Goodwill), Total	5,843,605	5,843,605
Intangible Assets, Net (Excluding Goodwill), Total	3,256,621	3,451,608
Trade name
Indefinite-lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	28,291	28,291
Patents
Indefinite-lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	44,276	44,276
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	3,269,201	3,269,201
Finite-Lived Intangible Assets, Accumulated Amortization	(1,110,830)	(1,004,743)
Finite-Lived Intangible Assets, Net, Total	2,158,371	2,264,458
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	1,778,000	1,778,000
Finite-Lived Intangible Assets, Accumulated Amortization	(752,317)	(663,417)
Finite-Lived Intangible Assets, Net, Total	1,025,683	1,114,583
Backlog
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	707,400	707,400
Finite-Lived Intangible Assets, Accumulated Amortization	(707,400)	(707,400)
Finite-Lived Intangible Assets, Net, Total	0	0
License
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	16,437	16,437
Finite-Lived Intangible Assets, Accumulated Amortization	(16,437)	(16,437)
Finite-Lived Intangible Assets, Net, Total	$ 0	$ 0

XML

GOODWILL & INTANGIBLE ASSETS - Schedule of Future Amortization Expenses of Intangible Assets (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year	$ 584,968
Finite-Lived Intangible Asset, Expected Amortization, Year One	779,948
Finite-Lived Intangible Asset, Expected Amortization, Year Two	738,364
Finite-Lived Intangible Asset, Expected Amortization, Year Three	513,714
Finite-Lived Intangible Asset, Expected Amortization, Year Four	405,306
Finite-Lived Intangible Asset, Expected Amortization, Year Five	161,754
Finite-Lived Intangible Assets, Net, Total	$ 3,184,054	$ 3,379,041

XML

ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued operating expenses	$ (16,714)
Accrued operating expenses		$ 277,987
Accrued wages and related expenses	1,480,361	1,349,195
Business development accrual	340,335	376,816
Accrued interest expense	35,671	26,000
Accrued 401(k)	22,346	66,642
Accrued sales tax payable	3,208,636	3,187,638
Total accrued expenses	$ 5,070,635	$ 5,284,278

XML

NOTES PAYABLE - Schedule of Debt (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Schedule of Long-Term and Short-Term Debt Instruments [Line Items]
Total	$ 2,490,486	$ 3,204,840
Less current maturities	(2,490,486)	(3,204,840)
Long Term	0	0
Other financing agreements
Schedule of Long-Term and Short-Term Debt Instruments [Line Items]
Short-term debt	286,156	129,600
DVO note | DVO
Schedule of Long-Term and Short-Term Debt Instruments [Line Items]
Long-term debt	204,330	575,240
Revolving Facility | Line of credit
Schedule of Long-Term and Short-Term Debt Instruments [Line Items]
Long-term debt	$ 2,000,000	$ 2,500,000

XML

NOTES PAYABLE - Narrative (Details)			3 Months Ended
	Dec. 13, 2023 USD ($) tranche tradingDay	Nov. 01, 2022 USD ($) quarter	Mar. 31, 2024
Other financing agreements
Line of Credit Facility [Line Items]
Debt, average interest rate			13.60%
Bancroft Capital, LLC
Line of Credit Facility [Line Items]
Cash and warrant compensation, number of separate tranches | tranche	2
Cash and warrant compensation, payout criteria, line of credit drawn by borrower, amount to exceed	$ 4,500,000
Bancroft Capital, LLC | Tranche One
Line of Credit Facility [Line Items]
Value of warrants to be issued, if circumstances met	$ 200,000
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price, if trading day criteria met	110.00%
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price criteria, number of consecutive trading days | tradingDay	10
Warrants to be issued if criteria met, exercise period, number of months from the date of issuance	6 months
Bancroft Capital, LLC | Tranche Two
Line of Credit Facility [Line Items]
Cash and warrant compensation, payout criteria, line of credit drawn by borrower, amount to exceed	$ 4,500,000
Value of warrants to be issued, if circumstances met	$ 200,000
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price, if trading day criteria met	110.00%
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price criteria, number of consecutive trading days | tradingDay	10
Bancroft Capital, LLC | Tranche One
Line of Credit Facility [Line Items]
Cash and warrant compensation, cash fee earned	$ 200,000
Bancroft Capital, LLC | Tranche Two
Line of Credit Facility [Line Items]
Cash and warrant compensation, additional cash fee earned, If borrowing criteria met	200,000
Line of credit | Revolving Facility | Loan Agreement | UG Construction, Inc. | Gemini Finance Corp.
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity (up to)	$ 10,000,000
Extension period following initial term	9 months
Debt, covenant, lender non-renewal written notice, minimum number of days prior to initial term expiration	60 days
Secured Promissory Note | UG Construction, Inc. | Gemini Finance Corp.
Line of Credit Facility [Line Items]
Maximum number of days draws due and payable	180 days
Debt, interest rate	1.75%
DVO note | DVO
Line of Credit Facility [Line Items]
Debt, face amount		$ 3,806,250
Debt, payment terms, number of consecutive quarters | quarter		4
Debt, payment terms, remaining three payments, number of days following end of each fiscal quarter		10 days
Debt, interest rate during period			10.00%

XML

RIGHT OF USE ASSETS AND LIABILITIES - Narrative (Details)		3 Months Ended
	Sep. 07, 2023 USD ($)	Mar. 31, 2024 USD ($) lease	Jun. 30, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Number of operating leases | lease		7
Operating lease, interest rate		8.00%
Finance lease, interest rate		8.00%
Loss on settlement		$ 0
Crest Ventures, LLC Litigation | Settled Litigation
Lessee, Lease, Description [Line Items]
Loss contingency, damages paid	$ 1,500,000
Loss on settlement			$ 1,500,000
Minimum
Lessee, Lease, Description [Line Items]
Finance lease, term of contract (minimum less than a year)		1 year
Operating lease, term of contract (minimum less than a year)		1 year
Maximum
Lessee, Lease, Description [Line Items]
Finance lease, term of contract (minimum less than a year)		6 years
Operating lease, term of contract (minimum less than a year)		6 years
2WR, Emerald, and DVO Acquisitions
Lessee, Lease, Description [Line Items]
Number of operating leases acquired via business combinations | lease		5

XML

RIGHT OF USE ASSETS AND LIABILITIES - Schedule of Operating Lease Liabilities (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Leases [Abstract]
Operating lease liabilities related to right of use assets	$ 1,966,420	$ 2,087,503
Less current portion	(673,920)	(707,141)
Long term	$ 1,292,500	$ 1,380,362

XML

RIGHT OF USE ASSETS AND LIABILITIES - Schedule of Future Minimum Lease Payments (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 552,251
2025	573,133
2026	404,751
2027	346,812
2028	253,415
Thereafter	82,488
Total minimum lease payments	2,212,850
Less: Amount representing interest	(246,430)
Net lease obligations	$ 1,966,420	$ 2,087,503

XML

RISKS AND UNCERTAINTIES (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Purchases | Supplier Concentration Risk | Supplier One
Concentration Risk [Line Items]
Concentration risk, percentage		19.00%
Purchases | Supplier Concentration Risk | Supplier Two
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%
Purchases | Supplier Concentration Risk | Supplier Three
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%
Accounts Payable | Supplier Concentration Risk | Supplier One
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%	13.00%
Customer One | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	42.00%	43.00%
Customer One | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage			57.00%
Customer Two | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage		17.00%
Customer Two | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	14.00%
Customer Three | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	13.00%
Customer Three | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	13.00%
Customer Four | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%

XML

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 656,576	$ 479,641
Unrecognized stock-based compensation expense	0
Stock options outstanding, aggregate intrinsic value	0
Stock options exercisable, aggregate intrinsic value	$ 0
Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumptions, expected volatility rate	100.00%
Stock Grants | Minimum | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting employment period (in years)	1 year
Stock Grants | Maximum | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting employment period (in years)	3 years
Stock Options | Minimum | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting employment period (in years)	1 year
Stock Options | Maximum | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting employment period (in years)	3 years

XML

STOCK-BASED COMPENSATION - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs)	3 Months Ended
	Mar. 31, 2024 shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	580,292
Grants of RSUs (in shares)	298,857
Forfeiture/cancelled (in shares)	(27,159)
Grants of RESU vested and issued (in shares)	(375,177)
Ending balance (in shares)	476,813

XML

STOCK-BASED COMPENSATION - Schedule of RSU Vesting Periods (Details) - Restricted Stock Units (RSUs)	3 Months Ended
	Mar. 31, 2024 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares (in shares)	476,813
Vesting Period One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares (in shares)	92,911
Vesting Period Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares (in shares)	169,556
Vesting Period Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares (in shares)	214,346

XML

STOCK-BASED COMPENSATION - Schedule of Stock Option Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Number of Shares
Stock options outstanding, beginning balance (in shares)	501,829
Issued (in shares)	0
Forfeited (in shares)	(39,880)
Exercised (in shares)	0
Stock options outstanding, ending balance (in shares)	461,949	501,829
Stock options exercisable (in shares)	441,922
Weighted Average Remaining Life (Years)
Stock options outstanding (in years)	4 years 3 months 18 days	4 years 8 months 1 day
Issued (in years)	0 years
Forfeited (in years)	0 years
Exercised (in years)	0 years
Stock options exercisable, end of period (in years)	0 years
Weighted Average Exercise Price
Stock options outstanding, beginning balance (in dollars per share)	$ 6.81
Issued (in dollars per share)	0
Forfeited (in dollars per share)	6.52
Exercised (in dollars per share)	0
Stock options outstanding, ending balance (in dollars per share)	6.83	$ 6.81
Stock options exercisable (in dollars per share)	$ 6.77

XML

STOCKHOLDERS’ EQUITY (Details) - USD ($)		1 Months Ended	3 Months Ended		34 Months Ended
	May 24, 2021	Feb. 28, 2021	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Sep. 12, 2022	Feb. 02, 2022	Jan. 18, 2022
Equity [Abstract]
Stock repurchase program, authorized amount (up to)	$ 5,000,000.0					$ 10,500,000	$ 8,500,000	$ 7,000,000.0
Stock repurchase program, period in force	12 months
Stock repurchase program, increased authorized amount						$ 2,000,000	$ 1,500,000	$ 2,000,000.0
Stock repurchased (in shares)		350,000	0	0	1,099,833
Stock repurchased, average price per share (in dollars per share)		$ 8.50			$ 8.25
Stock repurchased during period		$ 3,000,000.0			$ 9,100,000
Stock repurchase program, amount remaining under program				$ 1,400,000

XML

WARRANTS - Schedule of Warrant Activity (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Number of Shares
Warrants outstanding, beginning balance (in shares) | shares	511,681
Issued (in shares) | shares	0
Exercised (in shares) | shares	0
Expired (in shares) | shares	0
Warrants outstanding, ending balance (in shares) | shares	511,681
Warrants exercisable (in shares) | shares	336,150
Weighted Average Exercise Price
Warrants outstanding, beginning balance (in dollars per share) | $ / shares	$ 8.74
Issued (in dollars per share) | $ / shares	0
Exercised (in dollars per share) | $ / shares	0
Expired (in dollars per share) | $ / shares	0
Warrants outstanding, ending balance (in dollars per share) | $ / shares	8.74
Warrants exercisable (in dollars per share) | $ / shares	$ 12.65

XML

WARRANTS - Narrative (Details)	Mar. 31, 2024 USD ($)
Equity [Abstract]
Warrants, outstanding, intrinsic value	$ 20,477
Warrants, exercisable, intrinsic value	$ 20,477

XML

SUBSEQUENT EVENTS (Details)				14 Months Ended
	Jan. 31, 2025 USD ($) $ / shares shares	Oct. 02, 2024 USD ($) tradingDay	Oct. 01, 2024 USD ($) $ / shares	Feb. 18, 2025 shares	Jun. 19, 2024 shares	Mar. 31, 2024 $ / shares	Dec. 31, 2023 $ / shares
Subsequent Event [Line Items]
Exercise price of warrants or rights (in dollars per share) | $ / shares						$ 8.74	$ 8.74
Subsequent Event
Subsequent Event [Line Items]
Value of warrants to be issued, if circumstances met		$ 200,000	$ 160,000
Class Of Warrant Or Right, Exercise Period, Number Of Years From The Date Of Issuance			5 years
Exercise price of warrants or rights (in dollars per share) | $ / shares	$ 1.00		$ 2.50
Cash and warrant compensation, payout criteria, line of credit drawn by borrower, amount to exceed		6,000,000
Cash and warrant compensation, additional cash fee earned, If borrowing criteria met		$ 200,000
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price, if trading day criteria met		110.00%
Warrants to be issued if criteria met, price of warrant, percent of daily volume weighted average closing price criteria, number of consecutive trading days | tradingDay		10
Number of shares authorized for issuance | shares					1,200,000
Grants of RSUs (in shares) | shares				952,194
Litigation settlement payment	$ 250,000
Number of securities called by warrants or rights (in shares) | shares	75,000
October 2024 Term Loan | Secured Debt | Subsequent Event
Subsequent Event [Line Items]
Debt instrument, face amount			$ 2,100,000
Debt Instrument, Term			24 months
Debt Issuance Costs, Gross			$ 100,000
Debt Instrument, Minimum Interest To Be Paid On Prepayment			$ 150,000
Grow Hill Promissory Note | Secured Debt | Subsequent Event
Subsequent Event [Line Items]
Debt, interest rate			15.00%